UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2015~~2016.

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

For the transition period from _______ to _______.

Commission File Number: 000-55288

UBIQUITY, INC.

(Exact name of registrant as specified in its charter)

Nevada		99-0371375
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

9801 Research Drive

Irvine, CA 92618

(Address of principal executive offices) (Zip Code)

(949) 489 - 7600

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

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

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ] (do not check if smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of ~~April~~July 1812, ~~2016,~~2017 there were ~~220~~306,~~316~~261,~~435~~ 178 shares of common stock, $0.001 par value issued and outstanding.

UBIQUITY, INC.

TABLE OF CONTENTS

FORM 10-Q REPORT

~~September~~March 3031, ~~2015~~2016

		Page Number
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited).	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	4
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	913
Item 4.	Controls and Procedures.	913
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings.	1014
Item 1A.	Risk Factors.	1220
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	1220
Item 3.	Defaults Upon Senior Securities.	1220
Item 4.	Mine Safety Disclosures.	1220
Item 5.	Other Information.	1220
Item 6.	Exhibits.	1221
SIGNATURES		1322

USE OF CERTAIN DEFINED TERMS

Except as otherwise indicated by the context, references in this report to “we,” “us,” “our,” “Ubiquity-NV,” “our Company,” or “the Company” are to the business of Ubiquity, Inc. and its wholly-owned subsidiaries.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

UBIQUITY, INC.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2015~~2016

(UNAUDITED)

CONTENTS

	PAGE	~~PAGE~~
Condensed Consolidated Balance Sheets as of September 30, 2015 and December 31, 2014 (Unaudited)		F-1
Condensed Consolidated Balance Sheets as of March 31, 2016 (Unaudited) and December 31, 2015	F-1
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2015 and 2014 (restated) (Unaudited)		F-2
Condensed Consolidated Statements of Operations for the three months ended March 31, 2016 (Unaudited) and 2015	F-2
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2015 and 2014 (restated) (Unaudited)		F-3
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 (Unaudited) and 2015	F-3
Notes to the Condensed Consolidated Financial Statements (Unaudited)	F-4 - F-34	~~F-4 - F-26~~

UBIQUITY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS

	March 31, 2016			December 31, 2015
	(Unaudited)
Assets:
Cash and cash equivalents	$	45,050		$	193,839
Accounts receivable, net		2,700			2,700
Prepaid expenses		70,202			45,202
Loans receivable - related parties		7,700			-
Total current assets		125,652			241,741

Property and equipment, net		400,249			448,327
Other assets:
Other assets		203,494			107,364
Intangible assets, net		405,252			405,252
Total assets	$	1,134,647		$	1,202,684

Liabilities and Stockholders’ Deficit:
Current liabilities
Accounts payable	$	1,539,756		$	1,449,973
Accrued expenses		3,157,654			3,594,682
Accrued legal		7,700,000			7,700,000
Credit cards payable		667,596			543,915
Loans payable - related parties		727,969			712,018
Convertible notes, net discounts of $164,557 and $361,944, respectively		3,321,607			3,043,132
Derivative liabilities		8,845,033			6,785,665
Total current liabilities		25,959,615			23,829,385

Commitments and contingencies

Stockholders’ Deficit:
Preferred stock, par value $0.001, 10,000,000 shares authorized, 2,001,000 and 2,001,000 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively		2,001			2,001
Common stock, par value $0.001, 800,000,000 shares authorized, 238,545,375 and 197,237,138 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively		238,545			197,237
Additional paid-in capital		161,675,968			159,716,329
Subscription receivable		(118,000	)		(173,000	)
Accumulated deficit		(187,748,482	)		(182,869,268	)
Total Ubiquity, Inc. stockholders’ deficit		(25,949,968	)		(23,126,701	)
Non-controlling interest		1,125,000			500,000
Total stockholders’ deficit		(24,824,968	)		(22,626,701	)
Total liabilities and stockholders’ deficit	$	1,134,647		$	1,202,684

~~(UNAUDITED)~~See accompanying notes to the consolidated financial statements.

	September 30, 2015			December 31, 2014
Assets:
Cash and cash equivalents	$	142,190		$	102,286
Accounts receivable, net		3,750			-
Prepaid expenses		39,433			39,433
Loans receivable - related parties		279,031			247,461
Other current assets		100			100
Total current assets		464,504			389,280
Property and equipment, net		613,117			751,184
Other assets:
Other assets		58,993			58,993
Intangible assets, net		5,207,002			7,085,070
Total assets	$	6,343,616		$	8,284,527
Liabilities and Stockholders’ Equity (Deficit):
Current liabilities
Accounts payable	$	734,356		$	577,990
Accrued expenses		2,487,951			1,909,354
Credit cards payable		1,030,595			825,854
Loans payable - related parties		359,198			48,251
Convertible notes, net discounts of $806,117 and $3,119, respectively		2,115,719			200,881
Derivative liabilities		3,732,919			-
Total current liabilities		10,460,738			3,562,330
Accrued expenses, long-term		-			4,120,120
Total liabilities		10,460,738			7,682,450
Commitments and contingencies
Stockholders’ Equity (Deficit):
Preferred stock, par value $0.001, 10,000,000 shares authorized, 500 and no shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively		1			-
Common stock, par value $0.001, 800,000,000 shares authorized, 154,815,056 and 104,502,111 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively		154,815			104,502
Additional paid-in capital		156,982,871			151,758,762
Subscription Receivable		(28,000	)		-
Accumulated deficit		(161,226,809	)		(146,383,599	)
Total stockholders’ equity (deficit)		(4,117,122	)		5,479,665
Non-controlling interest		-			(4,877,588	)
Total liabilities and stockholders’ equity (deficit)	$	6,343,616		$	8,284,527

See accompanying notes to the condensed consolidated financial statements.

F-1

UBIQUITY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended September 30, 2015			Three Months Ended September 30, 2014			Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014
	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
				(restated)						(restated)
Revenues	$	28,085		$	4,569
Revenues	$	9,400		$	29,585		$	34,800		$	62,735
		28,085			4,569
		9,400			29,585			34,800			62,735
Costs of sales		2,326			6,854
Costs of sales		1,039			45,712			8,815			140,814
Gross profit (loss)		25,759			(2,285	)
Gross profit (loss)		8,361			(16,127	)		25,985			(78,079	)
Operating expenses:
Operating expenses:
Meals and entertainment		15,375			21,813
Meals and entertainment		5,601			9,159			31,442			49,064
Marketing		132,778			14,535
Marketing		1,715			77,564			30,139			145,525
Outside services		32,249			143,439
Outside services		15,373			99,783			203,915			373,890
Development expense		-			-
Payroll expense		~~474~~592,~~658~~236			1683,~~304,897~~886			~~1,693,173~~			~~2,990,029~~
Stock-based compensation		~~727~~679,~~834~~862			31,~~038~~419,~~837~~378			~~3,150,148~~			~~9,464,216~~
Office and computer		7146,~~048~~594			~~161~~124,~~680~~617			~~239,762~~			~~316,817~~
Professional fees		~~311~~459,~~787~~669			~~455~~709,~~015~~228			~~1,508,328~~			~~1,325,896~~
Rent		~~183~~164,~~043~~187			~~153~~174,~~115~~809			~~516,549~~			~~404,398~~
Travel		1824,~~293~~396			6210,~~390~~813			~~55,446~~			~~265,250~~
Taxes		391,~~417~~133			612,~~798~~171			~~57,769~~			~~12,017~~
Charitable contributions		615,~~345~~082			158,708			~~26,553~~			~~41,323~~
Depreciation and amortization		399,213			484,086			1,295,153			1,302,260
Bad debt expense		-			-
Other operating expenses		78,791			74,142			418,477			258,345
Depreciation and amortization		245,465			449,199
Total operating expenses		2,333,118			5,943,174			9,226,854			16,949,030
Other operating expenses		127,961			238,094
Operating loss		(2,324,757	)		(5,959,301	)		(9,200,869	)		(17,027,109	)
Total operating expenses		2,536,987			4,010,690
Other income and (expense):
Operating loss		(2,511,228	)		(4,012,975	)
Interest expense		(1,001,236	)		(1,733	)		(2,943,350	)		(4,110	)
Other income and (expense):
Loss on impairment of intangible assets		-			-			(940,000	)		-
Interest expense		(308,618	)		(160,381	)
Change in fair market value of derivative liabilities		(125,481	)		-			(2,031,960	)		-
Loss on impairment of intangible assets		-			-
Other income		-			-			11,339			-
Change in fair market value of derivative liabilities		(2,059,368	)		(512,696	)
Total other income (expense)		(1,126,717	)		(1,733	)		(5,903,971	)		(4,110	)
Loss on forgiveness of note receivable - related party		-			-
Loss before provision for income taxes		(3,451,474	)		(5,961,034	)		(15,104,840	)		(17,031,219	)
Loss on guarantee		-			-
Provision for income taxes		-			-			-			-
Other income		-			2,898
Net loss	$	(3,451,474	)	$	(5,961,034	)	$	(15,104,840	)	$	(17,031,219	)
Total other expense		(2,367,986	)		(670,179	)
Loss attributable to non-controlling interest		-			273,160			261,630			866,244
Loss before provision for income taxes		(4,879,214	)		(4,683,154	)
Loss attributable to Ubiquity, Inc.	$	(3,451,474	)	$	(5,687,874	)	$	(14,843,210	)	$	(16,164,975	)
Provision for income taxes		-			-
Net loss per share: basic and diluted	$	(0.03	)	$	(0.06	)	$	(0.13	)	$	(0.18	)
Net loss	$	(4,879,214	)	$	(4,683,154	)
Weighted average number of shares outstanding: basic and diluted		135,094,849			97,652,314			119,476,078			94,966,769
Loss attributable to non-controlling interest		-			261,630
Loss attributable to Ubiquity, Inc.	$	(4,879,214	)	$	(4,421,524	)
Net loss per share: basic and diluted	$	(0.02	)	$	(0.04	)
Weighted average number of shares outstanding: basic and diluted		221,367,942			105,972,195

See accompanying notes to the consolidated financial statements.

F-2

UBIQUITY, INC.

~~CONDENSED~~ CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Nine Months Ended September 30, 2015			For the Nine Months Ended September 30, 2014
	For the Three Months Ended March 31, 2016			For the Three Months Ended March 31, 2015
				(restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(154,~~104~~834,~~840~~703	)	$	(174,~~031~~683,~~219~~154	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		148,~~295,153~~078			1449,~~302,260~~199
Stock-based compensation		3679,~~150,148~~862			91,~~464~~419,~~216~~378
Additional fair value related to exchange of options for accrued officer salaries		41,006			-
Common stock issued for settlements		456,881			-
Common stock issued for extension of convertible note payable		127,530			-
Loss on change in fair market value of derivative liabilities		2,059,368			512,696
Loss on change in fair market value of derivative liabilities		2,031,960			-
Principle increase due to default on convertible notes payable		136,540			-
Principle increase due to default on convertible notes payable		716,605			-
Amortization of debt discount		197,387			136,949
Gain on extinguishment		(8,441	)		-
Amortization of debt discount		1,613,822			-
Loss on impairment of intangible assets		940,000			-
Changes in operating assets and liabilities:
Accounts receivable		(3,750	)		(9,000	)
Prepaid expenses		(25,000	)		-
Prepaid expenses		-			(26,867	)
Accounts payable		89,346			47,946
Other current assets		-			5,400
Accrued expenses		(311,231	)		130,465
Accounts payable		162,350			(289,735	)
Credit cards payable		123,681			(26,466	)
Accrued expenses		849,046			968,805
Net cash used in operating activities		(1,379,791	)		(2,012,987	)
Credit cards payable		204,741			(33,712	)
Net cash used in operating activities		(3,984,670	)		(5,649,852	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Repayment from (loans to) related parties		(31,570	)		(419,536	)
Repayment of (loans to) related parties		(7,700	)		12,630
Purchase of property and equipment		-			(47,702	)
Other assets		(96,130	)		-
Other assets		-			(58,993	)
Purchase/acquisition of intangible assets		(0	)		(149,047	)
Purchase/acquisition of intangible assets		(219,681	)		(397,001	)
Net cash used in investing activities		(103,830	)		(136,417	)
Cash from SME		-			19,727
Net cash used in investing activities		(251,251	)		(903,505	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable		~~2,168,476~~-			-1,455,250
Payments on convertible notes payable		(~~329~~170,~~120~~000	)		-
Proceeds from loans payable - related party		~~734~~75,~~494~~225			~~221~~207,~~272~~500
Payments on loans payable - related party		(~~388~~58,~~525~~837	)		-(85,309	)
Proceeds from sale of common stock		21,~~090~~532,~~500~~955			6517,~~513,578~~500
Non-controlling interest		-
Net cash provided by financing activities		1,379,343			2,094,941
Net cash provided by financing activities		4,275,825			6,734,850
Change in cash and cash equivalents		(148,789	)		(54,463	)
Change in cash and cash equivalents		39,904			181,493
Cash and cash equivalents, beginning of period		193,839			102,286
Cash and cash equivalents, beginning of period		102,286			74,300
Cash and cash equivalents, end of period	$	45,050		$	47,823
Cash and cash equivalents, end of period	$	142,190		$	255,793
Supplemental disclosures of cash flow information:
Cash paid for interest	$	~~78,598~~-		$	~~5,000~~-
Cash paid for income taxes	$	-		$	-
Non-cash investing and financing activities:
Value of embedded conversion feature for debt discount	$	~~2,051,477~~-		$	-740,750
Conversion notes payable, accrued interest, accounts payable and derivative liabilities into common stock	$	297,292		$	-
Subscription receivable	$	-		$	30,000
Conversion related party notes payable into common stock	$	57,500		$	-
Conversion notes payable, accrued interest, accounts payable and derivative liabilities into common stock	$	11,249		$	-
Common stock issued with convertible debt	$	206,657		$	-
Conversion of accrued wages into stock options	$	-		$	1,118,500
Conversion of accrued wages into stock options	$	1,118,500		$	-
Increase in convertible notes payable due to penalties and accrued interest	$	262,337		$	-
Accounts payable exchanged for convertible note and BCF recorded	$	119,226			-
Reclass of derivative liability to equity upon payment of convertible note payable	$	350,518			-
Value of common stock issued for assets	$	-		$	2,250,000

See accompanying notes to ~~condensed consolidated~~ financial statements.

F-3

UBIQUITY, INC.

NOTES TO THE ~~CONDENSED~~ CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, 2015

(UNAUDITED)

NOTE 1 - COMPANY OVERVIEW

Ubiquity, Inc. (“Ubiquity” or the “Company”) isprovides ~~focused on providing~~ a platform ~~which~~that enables ~~anyone~~users to connect to internet-based content on any type of device. Ubiquity’s unique technology and robust patent portfolio has led to the development of the Company’s signature product, the Sprocket. The Sprocket can be easily downloaded onto any type of device (such as mobile phone, tablet, laptop, smart TV, VR and AR devices, gaming consoles etc.) and then easily customized to provide the user with ~~easy~~ access to all web-based content, social media outlets, video-based content, private networks, social networks, personalized files, intelligent search, and virtually all other media. In short, the Sprocket provides easy and expedited access to content in the manner and choices selected by the user. The Sprocket also provides detailed analytics and data on the end-users, delivering tremendous value as a marketing tool to the content providers and advertisers.

~~The~~Ubiquity ~~Company~~expects ~~believes~~new itmarkets ~~can~~to ~~license~~be ~~the~~created ~~Sprocket~~and ~~platform~~existing markets to ~~third-party~~be ~~companies~~disrupted by Virtual Reality (“VR”) , ~~such~~Augmented Reality (“AR”) and Mixed Reality (“MR”) as ~~telecom~~used ~~companies~~in ~~and~~the ~~large~~Sprocket ~~enterprises~~platform. There are many examples of how (“VR”), ~~enabling~~(“AR”) ~~these~~and ~~customers~~(“MR”) tocan ~~develop~~reshape ~~personalized~~existing ~~applications~~forms ~~either~~of ~~for~~entertainment ~~their~~and ~~customer~~commerce ~~base~~- from buying a new home, interacting with a doctor, or ~~within~~watching ~~their~~a ~~enterprise~~football game. ItAs ~~is envisioned~~the technology advances, we believe that ~~the~~price ~~end-user~~points will ~~pay~~decline, aand ~~nominal~~an ~~monthly~~entire new ~~fee~~marketplace ~~for~~of applications (both business and consumer) will enter the ~~Sprocket,~~market. ~~that~~Ubiquity ~~nominal~~believes ~~fee~~VR/AR ~~would~~has the potential to spawn a multibillion-dollar industry, and may possibly be ~~multiplied~~as bygame changing as the ~~total number~~advent of ~~users,~~the ~~resulting~~PC. VR (which immerses the user in a ~~potentially~~virtual ~~substantial~~world) ~~license~~and ~~fee~~AR to(immerses the ~~Company~~user inwhich overlays digital information onto the ~~form~~physical world) is driving a trend towards the adoption of ~~recurring~~software ~~revenue~~and applications delivered via head-mounted-devices (HMDs) as a new computing form factor.

The Company has developed several unique products that function very effectively on the Sprocket platform, such as GiftSender (a mobile wallet); Monkeybars (a social mobility distribution platform); and, its own video search engine. The Sprocket platform is also a powerful incubator. ThirdF-party developers can use its common standard to develop effective apps that address any range of users’ needs and applications. The Company also has proprietary video intelligence software which it proposes to sell to government customers.4

Ubiquity has adapted its platforms to include the advancement of Virtual, Augmented and Mixed reality. It has excited the public for decades, and is happening now due to the alignment of ecosystem drivers and technology advancements enabling the delivery of products and services via this medium. Currently, mobile technologies are accelerating the adoption of products and services designed to stimulate our human senses with realistic feedback that is truly immersive and that allows intuitive interactions. We believe desktop, video, shopping, entertainment, travel, education and training, fitness, and healthcare applications can be materially enhanced by Virtual, (VR) Augmented (AR) and Mixed reality (MR). Ubiquity aims to capitalize on the evolving use cases, the potential market disruption, and the challenge of moving from science fiction to widespread adoption.

Virtual, Augmented and Mixed reality is essentially an artificial, software-created environment presented to users in such an immersive way that it is accepted by the user as real. By stimulating the senses of sight and sound –and sometimes touch– we can interact with these environments in much the same way as we would the real world.

Immersion enhances everyday experiences, making them more realistic, engaging, and satisfying. VR, AR and MR provide the ultimate level of immersion, creating a sense of physical presence in real or imagined worlds. They bring a new paradigm for how we can interact with the world, offering unprecedented experiences and unlimited possibilities that will enhance our lives in many ways.

Organization of Company

UBIQUITY

On March 5, 2013, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ubiquity Acquisition Corporation, a Nevada corporation and wholly-owned subsidiary of the Company (“Acquisition Sub”), and Ubiquity Broadcasting Corporation, a Delaware corporation (“Ubiquity-DE”).

Pursuant to the terms of the Merger Agreement, Acquisition Sub merged with and into Ubiquity-DE in a statutory reverse triangular merger (the “Merger”), with Ubiquity-DE surviving as a wholly-owned subsidiary of the Company. At the closing of the Merger on September 20, 2013 (the “Closing Date”), we issued Ubiquity-DE shareholders one share of our common stock, par value $0.001 per share for each share of Ubiquity-DE’s common stock, par value $0.001 (the “Share Exchange”). As a result of the Merger, we ceased our prior operations and became a multimedia company focused on the intersection of cloud-based cross platform applications synchronized across all screens for enhancing the digital lifestyle.

The transaction was regarded as a reverse merger whereby Ubiquity-DE was considered to be the accounting acquirer as its management retained control of the Company after the Share Exchange.

OnSPONSOR December 31, 2014, effective March 31, 2015, the Company entered into a Share Exchange Agreement (the “Agreement”) with Sponsor Me, Inc. (“Sponsor Me”), a Nevada corporation, and a related party, which resulted in the acquisition of 100% of the issued and outstanding equity securities of Sponsor Me. Pursuant to the terms of the Agreement, the Company acquired all of the outstanding capital stock of Sponsor Me from the Sponsor Me shareholders for an aggregate purchase price of 3,878,467 shares, or 3.59% of the Company’s common stock. In addition, in connection with the transaction, the Company forgave notes accounts/receivables due from Sponsor Me and SC Business, Inc., and members or SME management and SME consultants, who are also members of Ubiquity management, forgave approximately $3.2M in accrued salary and related payroll taxes. The Company recorded the acquisition of the remaining non-controlling interest as an equity transaction in accordance with Accounting Standards Codification (“ASC”) 810.ME

FOn December 31, 2014, the Company entered into a Share Exchange Agreement with Sponsor Me, Inc., and a Nevada corporation (“Sponsor Me”). Sponsor Me is a related party as Brenden Garrison was the CEO of Sponsor Me and is also the CFO of the Company. The Effective Date of the transaction was March 31, 2015 and resulted in the acquisition of Sponsor Me. Pursuant to the terms of the Share Exchange Agreement, Ubiquity acquired all of the outstanding capital stock of Sponsor Me from the Sponsor Me shareholders for an aggregate of 3,878,467 shares, or 3.59% of the Company’s common stock at that time, and Sponsor Me became a wholly-4owned subsidiary of the Company.

~~Sponsor~~In Meaddition, isin aconnection ~~new~~with ~~kind~~the oftransaction, ~~digital~~the ~~publishing~~Company ~~company~~forgave ~~that~~notes/accounts ~~combines~~receivables ~~expert~~due ~~editorial~~from ~~with~~Sponsor ~~ecommerce~~Me ~~for~~and ~~distribution~~SC onBusiness, Inc., ~~mobile~~and members of SME management and ~~social platforms.~~SME ~~Sponsor~~consultants, Mewho are also members of Ubiquity management, ~~Inc~~forgave approximately $3.2M in isaccrued ~~considered~~salary aand related ~~party.~~expenses, ~~Brenden~~Christopher Carmichael forgave $1,470,863, Connie Jordan forgave $1,198,565, and Brenden Garrison isforgave $257,026 and the ~~CEO~~Company was relieved of ~~Sponsor~~paying Mepayroll ~~and~~liabilities isaccrued ~~also~~in the ~~CFO~~amount of ~~the Company~~$313,136. ~~Christopher~~On ~~Carmichael~~the closing isdate athe ~~consultant~~management of ~~Sponsor~~SME Merelinquished ~~and~~all isshares ~~also~~held ~~the~~as ~~CEO~~follows: ofChristopher ~~the~~Carmichael ~~Company~~cancelled 19,800,000 ~~and~~in Sponsor Me, Inc. Connie Jordan iscancelled a19,800,000 ~~consultant and~~shares ain ~~director of~~ Sponsor Me, Inc. and isBrenden ~~also~~Garrison ~~Senior~~cancelled ~~Executive~~25,000 ~~Vice~~shares ~~president~~in ofSponsor Me, ~~the Company~~Inc., Inowning ~~addition~~an aggregate 39,625,000 shares in Sponsor Me, ~~has~~Inc. aand ~~similar shareholder~~did ~~group~~not ~~including~~receive ~~the~~any ~~Company’s~~additional ~~CEO~~shares ~~and~~in ~~EVP~~Ubiquity, Inc. or ~~Thus,~~any ~~the~~other ~~Company~~compensation ~~accounted~~in ~~for~~Ubiquity, ~~the~~Inc. ~~acquisition~~as part of ~~Sponsor~~the MeShare ~~as an~~Exchange ~~entity~~Agreement. ~~under~~The ~~common~~Company ~~control~~recorded ~~using~~the acquisition of the remaining ~~carry~~non-controlling ~~over~~interest ~~basis~~as ~~related~~an toequity ~~Sponsor~~transaction ~~Me’s~~in ~~assets~~accordance ~~and~~with ~~liabilities~~Accounting Standards Codification (“ASC”) 810.

AsSprocket ofHK ~~March 31, 2015, the carrying value of Sponsor Me’s assets and liabilities were as follows:~~Limited

	March 31, 2015
Current Assets	$	4,188
Non-Current Assets		8,267
Current Liabilities		(108,434	)
Current Liabilities - Related Parties		(10,000	)
Net Current Liabilities	$	(105,979	)

On March 3, 2015 Sprocket HK Limited was incorporated in Hong Kong. Ubiquity, Inc. held a 51% non-dilutable stake in Sprocket HK Limited.

AtOn March 3113, 2015 Ubiquity, Inc. entered into a Non-Exclusive Commercial Technology License Agreement (the ~~following~~“License ~~entry~~Agreement”) with ~~was~~Sprocket ~~recorded~~HK ~~due~~Limited (“Sprocket”), a Hong Kong limited liability company. Pursuant to the ~~forgiveness~~terms of ~~accrued~~the ~~wages~~Agreement, the Company agreed to grant to Sprocket a domestic and ~~taxes~~international ~~due~~non-exclusive license to ~~officers~~make, use, copy and distribute products and services based upon the technology owned by the Company. Sprocket will also negotiate licenses with third parties, subject to ~~remove~~the terms and conditions set forth in the License Agreement. The minimum cash flow to Ubiquity, Inc. is expected to be generated from the ~~Non~~licensing agreement is $100,000 and carries a revenue share agreement where Sprocket HK will pay Ubiquity, Inc. 60% of all net revenue proceeds of all licensed and sub-~~controlling~~licensed ~~interest:~~technology either directly or indirectly. The cash flow generated from this agreement can be for general expenses and working capital in Ubiquity, Inc. There were no significant operations at this entity for the period ended March 31, 2016 and 2016.

	March 31, 2015
Accrued Wages to Officers	$	(2,926,456	)
Accrued Taxes on Wages to Officers		(313,136	)
Removal of Non-Controlling Interest		5,139,218
Reduction of Additional Paid-in Capital	$	1,899,626

Effective June 28, 2016, the Company terminated its license agreement with Sprocket HK due to the material breach for non-payment of its initial minimum cash payment of $100,000.00,, not properly issuing the agreed 51% stake in Sprocket HK, and failure to provide Ubiquity the contractually agreed upon representation on the board of directors The Company sent out a notice to cure the material breach and no remedy was made within the contractual agreement of 30 days.

InAlthough ~~addition~~the Company never received its 51% stake of Sprocket HK, nor did Chris Carmichael receive the ~~operations~~board seat in Sprocket HK that was a material part of ~~Sponsor~~the Mecompensation ~~are~~outlined ~~included~~in ~~within~~the ~~these~~Sprocket ~~financial~~HK ~~statements~~License ~~and~~agreement, ~~thus~~on August 15, 2016, a ~~pro-forma~~director ~~for~~of Sprocket HK sent a letter to the ~~three~~Company ~~and~~stating ~~nine months~~Ubiquity’s ~~ended~~shares ~~September~~are 30cancelled in the Sprocket HK entity, ~~2015~~effectively ~~and~~confirming the ~~2014~~termination isof ~~not~~the ~~required~~arrangement.

~~Going~~Sprocket ~~Concern~~Wearables, Inc.

~~The~~On ~~accompanying~~September ~~consolidated~~18, ~~financial~~2015, ~~statements~~the ~~have~~Company ~~been~~entered ~~prepared~~into ~~assuming~~a ~~that~~Mobile ~~the~~Applications ~~Company~~Development ~~will~~and ~~continue~~Services asAgreement a(“Agreement”) with ~~going~~Appetizer ~~concern~~Mobile LLC (“Appetizer”). Under the terms of the Agreement, Appetizer will provide all necessary development Asservices ~~shown~~related to mobile applications for the use of the Company’s signature product, the “Sprocket”, in wearable tech devices. Specifically, the ~~accompanying~~first ~~consolidated~~project ~~financial~~will ~~statements~~be for the integration of the Sprocket into the Apple Watch. Pursuant to the Agreement, the Company ~~has~~formed ~~negative~~a ~~working~~new ~~capital~~corporation, ~~and~~Sprocket ~~operating~~Wearables, ~~losses~~Inc. on September 25, 2015 (“Sprocket Wearable’s”). ~~and~~Appetizer ~~has~~will ~~not~~initially ~~yet~~own ~~produced~~twenty ~~continuing~~five ~~revenues~~percent ~~from~~(25%) ~~operations.~~of ~~These~~the ~~factors~~issued ~~raise~~shares ~~substantial~~of ~~doubt~~Sprocket ~~about~~Wearables. As of March 31, 2016, the Company’s ~~ability~~owns to62%, ~~continue~~Appetizer asMobile aowns ~~going~~26% ~~concern~~and other investors own 12% through the investment of $1M in cash. As of March 31, 2016, investments of $1,125,000 have been received As of July 3, 2017, an additional $1,982,500 has been received.

~~The~~On ~~consolidated~~September ~~financial~~25, ~~statements~~2015, ~~do not include any adjustments relating to the recoverability and classification of recorded assets~~Ubiquity, ~~or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern~~Inc. ~~The~~entered ~~Company~~into isan ~~currently~~exclusive inlicense ~~various~~agreement ~~negotiations~~with ~~for the licensing of their~~ Sprocket ~~product~~Wearable’s ~~line, however, no formal terms have been agreed upon~~Inc. ToThe ~~date revenues from licensing agreements have not been sufficient to fund operations.~~agreement ~~Thus,~~calls ~~until~~for ~~the~~a ~~Company~~15% ~~can~~royalty ~~generate~~of ~~sufficient cash flows to fund operations,~~ the ~~Company~~gross issales ~~dependent~~of onall ~~raising~~licensed ~~additional capital~~goods ~~through~~and ~~debt~~services and~~/or~~ ~~equity~~an ~~transactions.~~initial Inlicense ~~addition,~~non-refundable ~~the~~entry ~~Company may have to renegotiate current convertible debt obligations,~~fee ~~reduce certain overhead costs through the deferral~~ of ~~salaries and other means~~$1, ~~and settle liabilities through negotiation. Currently~~500, ~~the Company does not have any commitments or assurances for additional capital~~000, ~~other~~which ~~than disclosed above, nor can the Company provide assurance that such financing~~ will be ~~available~~used ~~to it on favorable terms, or~~ at ~~all.~~the ~~If,~~corporate ~~after~~level ~~utilizing~~for ~~the~~general ~~existing sources~~working of capital ~~available~~purposes. toThis ~~the Company~~$1,500,000 ~~further~~in ~~capital~~licensing ~~needs are identified and the Company~~ revenue is ~~not~~eliminated ~~successful~~ in ~~obtaining the~~consolidation ~~financing,~~as it ~~may~~is bea ~~forced~~consolidated ~~to curtail its existing or planned future operations~~entity. ~~Subsequent to quarter end, the Company raised $0 in convertible notes payable, and $1,966,505 from the sale of common stock.~~

F-5

~~The~~Going ability of the Company to continue as a going concern is dependent upon the Company’s ability to attain a satisfactory level of profitability and obtain suitable and adequate financing. There can be no assurance that management’s plan will be successful.Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying condensed consolidated financial statements, the Company has negative working capital and operating losses, and has not yet produced continuing revenues from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern. The Company is currently in various negotiations for the licensing of their Sprocket product line, however, no formal terms have been agreed upon. To date revenues from licensing agreements have not been sufficient to fund operations. Thus, until the Company can generate sufficient cash flows to fund operations, the Company is dependent on raising additional capital through debt and/or equity transactions. In addition, the Company may have to renegotiate current convertible debt obligations, reduce certain overhead costs through the deferral of salaries and other means, and settle liabilities through negotiation. Currently, the Company does not have any commitments or assurances for additional capital, other than disclosed above, nor can the Company provide assurance that such financing will be available to it on favorable terms, or at all. If, after utilizing the existing sources of capital available to the Company, further capital needs are identified and the Company is not successful in obtaining the financing, it may be forced to curtail its existing or planned future operations. Subsequent to quarter end, the Company raised $3,867,788 from the issuance of common stock.

F-6

The Company has not generated any profit from operations since its inception. The Company expects its operating expenses will increase over the next 12 months to continue its development activities. Based on its average monthly expenses and current burn rate, it estimates it will need to raise an additional $10,000,000 to $15,000,000 over the next 24 months. This amount could increase if it encounters difficulties that it cannot anticipate at this time or if it acquires other businesses. The Company expects to raise money through equity financing via the sale of its common stock. Should it be unable to raise the money that it needs in order to continue to operate its business, it will be forced to delay, scale back or eliminate some or all of its proposed operations. Failure to raise additional capital required to run its operations could have a material adverse effect on the Company’s business and its continued operation

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Consolidated Financial Statements

The accompanying unaudited interim condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim consolidated financial statements have been included. Such adjustments consist of normal recurring adjustments. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, ~~2014~~2015. The results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 are not indicative of the results that may be expected for the full year.

Basis of Presentation

The interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars.

Principles of Consolidation

The accompanying interim consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Ubiquity Broadcasting Corp., Sprocket Wearables, Inc., and Sponsor Me, Inc. (“SME”) for all periods presented~~, and its majority owned subsidiaries Sprocket HK Limited and Sprocket Wearables, Inc~~. ~~(see below).~~ Prior to March 31, 2015, the Company did not have an equity ownership in SME. However, since SME was primarily owned by officers of the Company, the Company had the power to make decisions that were most significant to SME and was expected to absorb the losses of SME. The Company determined that as of January 1, 2014, SME should be consolidated in with the Company’s operations. This determination was based upon the fact that the Company was the primary funding source for SME’s operations. Prior to 2014, SME funded operations through the sale of SME common stock. Effective March 31, 2015, the Company acquired SME; see above for additional information. All material inter-company accounts and transactions have been eliminated in consolidation.

~~Sprocket HK Limited~~F-7

OnVariable ~~March~~Interest 3,Entity ~~2015, Sprocket HK Limited was incorporated in Hong Kong. Ubiquity, Inc. holds a 51% non-dilutable stake in Sprocket HK Limited.~~Considerations

OnSponsor March 13, 2015, Ubiquity, Inc. entered into a Non-Exclusive Commercial Technology License Agreement (the “License Agreement”) with Sprocket HK Limited (“Sprocket”), a Hong Kong limited liability company. Pursuant to the terms of the License Agreement, the Company agreed to grant to Sprocket a domestic and international non-exclusive license to make, use, copy and distribute products and services based upon the technology owned by the Company. Sprocket will also negotiate licenses with third parties, subject to the terms and conditions set forth in the License Agreement. The minimum cash flow expected to be generated from the Licensing Agreement to Ubiquity, Inc. is $100,000 and carries a revenue share agreement where Sprocket will pay Ubiquity, Inc 60% of all net revenue proceeds of all licensed and sub-licensed technology either directly or indirectly. The cash flow generated from this agreement can be for general expenses and working capital in Ubiquity, Inc. There were no operations at this entity for the period ended September 30, 2015.Me:

~~Sprocket~~U.S ~~Wearables~~GAAP require that if an entity is the primary beneficiary of a variable interest entity (“VIE”), the entity should consolidate the assets, liabilities and results of operations of the VIE in its consolidated financial statements. Ubiquity, Inc. considers itself to be the primary beneficiary of SME, and accordingly, has consolidated these entities beginning in January 2014, with the equity interests of the unaffiliated investors in SME presented as Non-controlling Interests in the accompanying interim consolidated financial statements.

On September 18, 2015, the Company entered into a Mobile Applications Development and Services Agreement (“Agreement”) with Appetizer Mobile LLC (“Appetizer”). Under the terms of the Agreement Appetizer will provide all necessary development services related to mobile applications for the use of the Company’s signature product, the “Sprocket”, in wearable tech devices. Specifically, the first project will be for the integration of the Sprocket into the Apple Watch, which is expected to be completed in early 2016 Pursuant to the Agreement, the Company formed a new corporation Sprocket Wearables, Inc. on September 25, 2015 (“Sprocket Wearable’s”). Appetizer will initially own twenty five percent (25%) of the issued shares of Sprocket Wearables and will head the wearable division. As of September 30, 2015, 2016 the Company owns 65%, Appetizer Mobile owns 25% and other investors are expected to own 10% through the investment of $1M in cash. As of September 30, 2015, investments of $300,000 has been received. As of April 18, 2016, $1.1M investment has been received.

On September 25, 2015, Ubiquity, Inc entered into an exclusive license agreement with Sprocket Wearable’s Inc. The agreement calls for a 15% royalty of the gross sales of all licensed goods and services and an initial license non-refundable entry fee of $1,500,000 (ONE MILLION FIVE HUNDRED THOUSAND DOLLARS), which will be used at the Corporate level for general working capital purposes.

There were no operations for this entity, other than the investments received and agreements entered into, during the three and nine months ended September 30, 2015.

F-6

Variable Interest Entity

Generally accepted accounting principles require that if an entity is the primary beneficiary of a variable interest entity (“VIE”), the entity should consolidate the assets, liabilities and results of operations of the VIE in its consolidated financial statements. Ubiquity, Inc. considers itself to be the primary beneficiary of SME, and accordingly, has consolidated these entities beginning in January 2014, with the equity interests of the unaffiliated investors in SME presented as Non-controlling Interests in the accompanying interim consolidated financial statements.

Under ASC 810-10 the Primary Beneficiary is the party that has both of the following:

1. The power to make decisions regarding the activities that most significantly impact the success of the VIE, and

2. The obligation to absorb losses or rights to receive benefits of the entity that could potentially be significant to the VIE.

Ubiquity satisfies the second condition because as the primary source of capital beginning in 2014, Ubiquity, Inc. is expected to absorb the losses that will be significant to the VIE. On March 31, 2015, SME was acquired by Ubiquity and thus the VIE was eliminated.

Non-Controlling Interests

Non-controlling interest disclosed within the condensed consolidated statements of operations represents the minority ownership’s 100% share of net losses of SME incurred during ~~the~~ three months ended March 31, ~~2014, the nine months ended September 30, 2014 and the three months ended March 31,~~ 2015. On March 31, 2015, SME was acquired by Ubiquity and thus the non-controlling interest was eliminated on that date.

Ubiquity, Inc. ~~owns~~does ~~51%~~not ofown Sprocket HK Limited ~~which~~as isof ~~consolidated~~August ~~into~~2016 due to the ~~accompanying~~breach ~~financial~~of ~~statements.~~the ~~However~~agreement ~~there~~and ~~were~~failure noto ~~operations~~provide required financial atinformation, ~~this~~which ~~entity~~is ~~for~~not consolidated into the ~~three~~accompanying ~~and~~consolidated ~~nine~~financial ~~months~~statements. ~~ended~~See ~~September~~above ~~30,~~for ~~2015~~additional information.

~~Ubiquity, Inc. owns 65% of~~ Sprocket ~~Wearables, Inc. which is consolidated into the accompanying financial statements. However there were~~ ~~no operations at this entity for the three and nine months ended September 30, 2015.~~HK:

U.S. GAAP requires that if an entity is the primary beneficiary of a variable interest entity (“VIE”), the entity should consolidate the assets, liabilities and results of operations of the VIE in its consolidated financial statements.

F-8

Under ASC 810-10 the Primary Beneficiary is the party that has both of the following:

1. The power to make decisions regarding the activities that most significantly impact the success of the VIE, and

2. The obligation to absorb losses or rights to receive benefits of the entity that could potentially be significant to the VIE.

Ubiquity, Inc. does not consider itself to be the primary beneficiary of Sprocket HK. Based on the above, the accounts of Sprocket HK were not consolidated in the accompanying consolidated financial statements,

When multiple parties make decisions over different activities of the entity, only the party with power to direct the activities that most significantly impacts the entity’s economic performance will have satisfied the first condition. The Company does not have the power to direct the most significant activities of Sprocket HK. Originally the Company was formed with the intent of giving Ubiquity, Inc. a 51% stake in Sprocket HK, as well as a Board of Directors seat of Sprocket HK; however the Company was never given shares nor was a board of director seat granted.

Ubiquity also does not satisfy the second condition either. Ubiquity, Inc. is not expected to absorb any gains or losses that will be significant to the VIE. On June 28, 2016 Ubiquity ceased doing all business altogether due to a material breach of its licensing agreement. Accordingly, the Company accounts for Sprocket HK under the cost method of accounting. The investment balance was $0 at December 31, 2015 and March 31, 2016.

Cash and Cash Equivalents

For purposes of the accompanying consolidated financial statements, the Company considers all highly liquid instruments with an initial maturity of three months or less to be cash equivalents.

~~Accounts Receivable and Allowance for Doubtful Accounts~~F-9

Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded. The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors, including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates. The allowance for doubtful accounts was $70,000 at September 30, 2015 and December 31, 2014.

F-7

Property and Equipment

The capital assets are being depreciated over their estimated useful lives of, three to fifteen years using the straight-line method of depreciation for book purposes. The cost of leasehold improvements is amortized over the lesser of the length of the related leases or the estimated useful lives of the assets.

Maintenance and repairs are charged to operations when incurred. Betterments and renewals are capitalized. When equipment and leasehold improvements are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operations.

Software Development Costs

Research and development costs are charged to expense as incurred. However, the costs incurred for the development of computer software that will be sold, leased, or otherwise marketed are capitalized when technological feasibility has been established. These capitalized costs are subject to an ongoing assessment of recoverability based on anticipated future revenues and changes in hardware and software technologies. Amortization of capitalized software development costs begins when the product is available for general release to customers and revenues are generated. Amortization is computed as the ratio of current gross revenues for a product to the total of current and anticipated future gross revenues for the product. Amortization of capitalized software development costs for purchased technology that is technologically feasible at the time of purchase begins upon purchase and for internally developed costs, when the product is available for release to customers. Amortization is computed using a straight-line method over the estimated useful life of five (5) years.

During the three and nine months ended September 30, 2015 and 2014, the Company incurred development costs in which were expensed of $180,383, $418,477, $74,142 and $258,345, respectively.

Intangible Assets

Intangible assets are amortized using the straight-line method over periods ranging from five to fifteen years. The Company periodically evaluates the recoverability of intangible assets and takes into account events or circumstances that warrant revised estimates of useful lives or that indicate impairment exists. The majority of Ubiquity’s intangible assets are subject to amortization. See Note 5 for additional information.

Impairment of Long-Lived Assets

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell. See Note 5 for additional information.

Derivative Financial Instruments

The Company does not use derivative financial instruments to hedge exposures to cash-flow risks or market-risks that may affect the fair values of our financial instruments. However, under the provisions ASC 815 – “Derivatives and Hedging” certain financial instruments that have characteristics of a derivative, as defined by ASC 815, such as embedded conversion features on our Convertible Notes, that are potentially settled in the Company’s own common stock, are classified as liabilities when either (a) the holder possesses rights to net-cash settlement or (b) physical or net-share settlement is not within the Company’s control. In such instances, net-cash settlement is assumed for financial accounting and reporting purposes, even when the terms of the underlying contracts do not provide for net-cash settlement. Derivative financial instruments are initially recorded, and continuously carried, at fair value each reporting period.

F-8

The value of the embedded conversion feature is determined using the Black-Scholes option pricing model. All future changes in the fair value of the embedded conversion feature will be recognized currently in earnings until the note is converted or redeemed. Determining the fair value of derivative financial instruments involves judgment and the use of certain relevant assumptions including, but not limited to, interest rate risk, credit risk, volatility and other factors. The use of different assumptions could have a material effect on the estimated fair value amounts.

Fair Value of Financial Instruments

The Company follows the guidance of ASC 820: Fair Value Measurement and Disclosure. Fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability and are developed based on market data obtained from sources independent of our Company. Unobservable inputs are inputs that reflect our Company’s assumptions about the factors market participants would use in valuing the asset or liability. The guidance establishes three levels of inputs that may be used to measure fair value:

F-10

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

As of September 30, 2015, the Company’s derivative liabilities are considered a level 3 financial instrument, see Note 7 for discussion of valuation. As of December 31, 2014, we did not have any level 1, 2, or 3 assets or liabilities.

The carrying amounts reflected in the balance sheets for cash, prepaid expenses, other assets, accounts payable, accrued expenses, and notes payable approximate the respective fair values due to the short maturities of these items.

Revenue Recognition

The Company recognizes revenue when (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured. Revenue from packaged product sales to distributors and resellers is usually recorded when related products are shipped. However, when the revenue recognition criteria required for distributor and reseller arrangements are not met, revenue is recognized as payments are received. Revenues from the licensing the rights to technology and/or patents are typically recorded when access to the technology and/or patents is is provided.

Cost of Revenue

Cost of revenue includes the direct costs to distribute the product and the direct costs to provide online services, production, consulting, product support, licensing opportunities, training and certification of sub-contractors.

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs were $450 and $14,535 for the three months ended March 31, 2016 and 2015, respectively.

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with the guidance of ASC Topic 718: “Compensation - Stock Compensation”, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the consolidated financial statements based on their fair values. The Company generally estimates the grant date fair value of stock options using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model is affected by the Company’s stock price on the date of grant, the expected stock price volatility over the expected term of the award, the risk-free interest rate for the expected term of the award and expected dividends. The Company recognizes stock-based compensation expense on a straight-line basis over the service period of the award.

F-9

The Company follows ASC Topic 505-50, formerly EITF 96-18, “Accounting for Equity Instruments that are Issued to Other than Employees for Acquiring, or in Conjunction with Selling Goods and Services,” for stock options and warrants issued to consultants and other non-employees. In accordance with ASC Topic 505-50, these stock options and warrants issued as compensation for services provided to the Company are accounted for based upon the fair value of the services provided or the estimated fair market value of the option or warrant, whichever can be more clearly determined. The fair value of the equity instrument is charged directly to compensation expense and additional paid-in capital over the period during which services are rendered.

Common stock issued in connection with services whereby the performance is complete and for asset acquisitions are typically valued using the closing market price of the Company’s common stock on the date of the agreement.

In accordance with the guidance, an asset acquired in exchange for issuance of fully vested, non-forfeitable equity instruments should not be presented or classified as an offset to equity on the grantor’s balance sheet once the equity instrument is granted for accounting purposes. Accordingly, the Company has accounted for certain issuances as prepaid assets in the accompanying consolidated balance sheets.

~~Income Taxes~~F-11

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

The Company’s income tax returns are based on calculations and assumptions that are subject to examination by the Internal Revenue Service and other tax authorities. In addition, the calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax regulations. The Company recognizes liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While the Company believes it has appropriate support for the positions taken on its tax returns, the Company regularly assesses the potential outcomes of examinations by tax authorities in determining the adequacy of its provision for income taxes. The Company continually assesses the likelihood and amount of potential adjustments and adjusts the income tax provision, income taxes payable and deferred taxes in the period in which the facts that give rise to a revision become known. To date there have been no uncertain tax positions.

Concentration of Credit Risks

The Company maintains its cash and cash equivalents in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts; however, amounts in excess of the federally insured limit may be at risk if the bank experiences financial difficulties.

Use of Estimates

Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Examples include estimates of loss contingencies and product life cycles, valuation of the Company’s common stock and common stock options, derivative liabilities, and assumptions such as the elements comprising a software arrangement, including the distinction between upgrades/enhancements and new products; when the Company reaches technological feasibility for its products; the potential outcome of the future tax consequences of events that have been recognized in the Company’s consolidated financial statements or tax returns; and determining when investment impairments are other-than-temporary. Actual results and outcomes may differ from these estimates and assumptions.

F-10

Earnings per Common and Common Equivalent Share

The computation of basic earnings per common share is computed using the weighted average number of common shares outstanding during the year. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the year plus common stock equivalents which would arise from the exercise of warrants and stock options outstanding using the treasury stock method and the average market price per share during the year. Convertible notes payable, options, warrants and convertible preferred stock which are common stock equivalents are not included in the diluted earnings per share calculation for the three and nine months ended September 30, 2015 and 2014, respectively, since their effect is anti-dilutive.

Recently Issued Accounting Guidance

In May 2014, the ~~Financial Accounting Standards Board (~~FASB) issued Accounting Standards Update No. 2014-909, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-909”)., ~~ASU~~which ~~2014-9~~amends ~~outlines~~the aexisting ~~single~~accounting ~~comprehensive~~standards ~~model~~ for ~~entities to use in accounting for~~ revenue recognition. ~~Under~~ASU ~~the~~2014-09 ~~guidance, revenue~~ is ~~recognized~~based ~~when~~on aprinciples ~~company~~that govern ~~transfers~~the ~~promised~~recognition ~~goods~~of orrevenue ~~services~~at ~~to customers in~~ an amount ~~that~~an ~~reflects~~entity ~~the consideration to which the company~~ expects to be entitled inwhen ~~exchange~~products ~~for~~are ~~those~~transferred ~~goods~~to ~~or services~~customers. ASU ~~Effective~~2014-09 ~~July~~will 9,be ~~2015~~effective ~~due~~for tothe anCompany ~~extension~~beginning byin ~~the~~its ~~FASB,~~first ~~the~~quarter ~~standard~~of is2017. ~~effective~~Early ~~for~~adoption ~~public~~is ~~entities~~not ~~with~~permitted. ~~annual~~The ~~and~~new ~~interim~~revenue ~~reporting~~standard ~~periods~~may ~~beginning~~be ~~after~~applied ~~December~~retrospectively ~~15,~~to ~~2017.~~each ~~Entities~~prior ~~have~~period ~~the~~presented ~~option~~or ofretrospectively ~~using~~with ~~either~~the acumulative ~~full~~effect ~~retrospective or a modified~~recognized ~~retrospective~~as ~~approach~~of tothe ~~adopt~~date ~~the~~of ~~guidance~~adoption. WeThe ~~are~~Company’s ~~currently~~adoption ~~evaluating implementation methods and the effect that implementation~~ of this standard ~~will~~did not have a material impact on ~~our~~the Company’s consolidated financial statements ~~upon adoption~~.

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-15, Going Concern (Subtopic 205-40) (“ASU 2014-15”). ASU 2014-15 requires management of all entities to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the consolidated financial statements are issued (or available to be issued when applicable). The guidance is effective for fiscal years beginning after December 15, 2016 and for interim periods within that fiscal year. We do not expect the adoption of this guidance to have a material effect on our consolidated financial statements as we currently disclose that there is substantial doubt regarding our ability to continue as a going concern.

NOTE 3 - PREPAID EXPENSES

Prepaid expenses consisted of payroll deposits as of September 30, 2015 and December 31, 2014.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment recorded at cost consisted of the following as of September 30, 2015 and December 31, 2014:

	September 30, 2015			December 31, 2014
Machinery and equipment	$	486,122		$	486,122
Office equipment		881,100			881,100
Leasehold improvements		641,599			641,599
Subtotal		2,008,821			2,008,821
Accumulated depreciation		(1,395,704	)		(1,257,637	)
Property and equipment, net	$	613,117		$	751,184

Depreciation expense was $45,000, $56,805, $138,067 and $170,415 for the three and nine months ended September 30, 2015 and 2014, respectively.

NOTE 5 - INTANGIBLE ASSETS

The Company’s capitalized costs in relation to developing and acquiring intangible assets, consisted of the following as of September 30, 2015 and December 31, 2014:

	September 30, 2015			December 31, 2014
Patents and trademarks	$	1,413,606		$	1,337,798
Media projects		776,728			650,735
Sprocket Asset Group		7,353,020			8,275,804
Subtotal, intangible assets		9,543,354			10,264,337
Accumulated amortization		(4,336,352	)		(3,179,267
Intangible assets, net	$	5,207,002		$	7,085,070

Amortization expense for all intangible assets was $354,213, $427,281, $1,157,086 and $1,131,845 for the three and nine months ended September 30, 2015 and 2014, respectively. The Sprocket Asset Group consists of the Invicta Immersive Property, Think Mobile Giftsender, Think Media, Digital Magazine, and a portion of the websites that were previously reported.

F-11

Management reviews intangible assets with finite lives for impairment whenever events or changes in circumstances indicate the carrying value of the intangible assets may not be recoverable. Recoverability of the intangible assets is measured by comparing the carrying amount of the assets to the future estimated undiscounted cash flows that the asset is expected to generate. If the estimated undiscounted future cash flows are less than the carrying amount, these intangible assets with finite lives are considered to be impaired. The amount of the impairment is measured as the difference between the carrying amount of these assets and their estimated fair value. The fair value of the asset is estimated based on discounted future cash flows using a discount rate commensurate with the risk. Our estimate of future cash flows requires assumptions and judgment, including forecasting future sales and expenses and estimating useful lives of the assets. The use of different assumptions, estimates or judgments, such as the estimated future cash flows or the discount rate used to discount such cash flows, could significantly increase or decrease the estimated fair value of the intangible assets with finite lives. Intangible assets primarily consist of the Sprocket Asset Group, internally developed Intellectual Property, acquired Intellectual Property, and a robust portfolio of patents , which are referred to as the Sprocket Asset Group.

At June 30, 2015, due to delays in finalizing contracts with potential customers in which the Company had been negotiating with for periods ranging from six months to a year, the Company determined impairment might be present. These delays extended the initial period by 6 months in which the Company projected cash flows to commence from these contracts. In addition, the expected life of the Sprocket Asset Group continued to remain the same, thus, decreasing the total expected undiscounted cash flows related to the assets.

Thus, at June 30, 2015, the Company performed a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the Sprocket Asset Group to their carrying amounts. Future undiscounted cash flows related to the Sprocket Asset Group were estimated using the most recent contracts in which were being actively negotiated for the Sprocket through the Company and its affiliates at the time of the analysis, including a 10% growth rate. Projections for Sprocket Wearable’s are based upon management’s projections of future contracts. The significant terms within the negotiated contracts were formulated by management, the board of directors, advisory group, and various consultants in which spent a significant amount of time researching the industry.

The future cash flow projections included estimated revenue projections which were based upon an expected per user charge times the number of users. Expected per user chargers were based upon amounts being negotiated within the contracts. The total expected users were determined based upon the estimated needs of the potential customers. Significant costs included within the undiscounted cash flows related to costs to carry and support the contract needs. In addition, due to the volatility of the operations, the Company has updated its models on multiple occasions. As of June 30, 2015 the Company’s cash flow model did not indicate an impairment was necessary. However, as noted above, based on the delay of entering into a definitive contract, the Company recorded an impairment was necessary to acknowledge the delay. Accordingly, although the Company deems the recoverability probable, an impairment of 20% of the net asset balance was recorded as of June 30, 2015.

At September 30, 2015, the Company expects future estimated undiscounted cash flows to cover the carrying value of the Sprocket Asset Group. This determination was based upon the fact that the Company entered into a contact with a customer in which the expected undiscounted cash flows will be sufficient to cover the carrying value of the assets. Cash flows from this contract are expected to begin being realized in 2016.

The estimated amortization expense over the next five fiscal years approximates:

2015 (remaining three months)			400,000
2016			1,600,000
2017			1,400,000
2018			900,000
2019			200,000

NOTE 6 - ACCRUED EXPENSES

Accrued expenses consisted of the following as of September 30, 2015 and December 31, 2014:

	September 30, 2015		December 31, 2014
Salaries and wages - Ubiquity, Inc.	$	566,063	$	559,704
Payroll and other taxes		1,099,215		1,145,125
Accrued consulting fee - BOD Member		375,000		150,000
Accrued interest		289,249		-
Accrued rent		91,000		52,558
Other		67,424		1,967
Total current accrued expenses		2,487,951		1,909,354
Salaries and wages, long-term - Ubiquity, Inc.		-		1,000,000
Salaries and wages, long-term - Sponsor Me, Inc.		-		3,120,120
Total accrued expenses	$	2,487,951	$	6,029,474

F-12

~~The~~In ~~Company’s~~August ~~Chief~~2014, ~~Executive~~the ~~Officer~~FASB ~~and~~issued ~~Senior~~guidance ~~Executive~~that ~~Vice~~requires ~~President~~management ~~are~~to ~~paid~~evaluate aswhether ~~consultants~~there ~~and~~are ~~thus~~conditions ~~the~~or ~~required~~events ~~payroll taxes~~that ~~are~~raise ~~not~~substantial doubt ~~withheld~~about ~~and~~an ~~remitted~~entity’s ability to ~~the~~continue ~~appropriate~~as ~~taxing~~a ~~authorities~~going concern. ~~The~~If ~~Company~~such ~~issues~~conditions ~~these~~or ~~individuals~~events ~~1099s~~exist, ~~which~~disclosures ~~represent~~are required ~~amounts~~that ~~paid~~enable tousers ~~them.~~of Inthe ~~connection~~financial ~~with~~statements ~~this,~~to understand the ~~Company~~nature ~~accrues~~of ~~estimated~~the ~~taxes~~conditions ~~and~~or ~~penalties~~evens, ~~due~~management’s toevaluation of ~~taxing~~the ~~authorities~~circumstances ~~in which~~and ~~would~~management’s beplans ~~potentially~~to ~~due~~mitigate if the ~~taxing~~conditions ~~authorities~~or ~~were~~events tothat ~~require~~raise ~~the~~substantial ~~Company~~doubt about the entity’s ability to ~~pay~~continue ifas ~~the~~a ~~individuals~~going ~~were deemed employees~~concern. The Company ~~accrues~~will ~~the~~be ~~taxes~~required ~~at the time in which the amounts payable~~ to ~~the~~perform ~~individuals~~an isannual ~~recorded.~~assessment ~~See~~of ~~Note~~its ~~8 for~~ability ~~discussion related~~ to ~~compensation~~continue ~~either~~as ~~paid~~a ~~and/or~~going ~~accrued~~concern ~~for~~when ~~related~~this ~~parties.~~standard Asbecomes ofeffective ~~September~~on 30January 1, ~~2015~~2017. ~~and~~The ~~December~~Company’s ~~31, 2014,~~adoption ~~total~~of ~~amounts~~this ~~accrued~~guidance ~~related~~did tonot ~~potential~~have ~~payroll~~a ~~taxes~~material ~~and~~impact ~~penalties~~on ~~were~~the ~~$844,453~~Company’s ~~and~~consolidated ~~$890,623,~~financial ~~respectively~~statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update simplify the presentation of deferred taxes by requiring deferred tax assets and liabilities be classified as noncurrent on the balance sheet. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The guidance is not expected to have a material impact on the Company’s consolidated financial statements. The Company’s adoption of this guidance did not have a material impact on the Company’s consolidated financial statements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-02 “Leases (Topic 842)” (“ASU 2016-02”), which requires lessees to put most leases on the balance sheet but recognize expense on the income statement in a manner similar to current accounting. For lessors, ASU 2016-02 also modifies the classification criteria and the accounting for sales-type and direct financing leases. The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements and is effective in the first quarter of 2019. Early adoption of ASU 2016-02 is permitted; however the Company plans to adopt the standard in the first quarter of 2019. The Company is evaluating the impact of ASU 2016-02.

The following standards were effective for and adopted by the Company in 2017. The adoption of these standards did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows:

Update 2017-04—Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment

A public business entity that is an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.A public business entity that is not an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. All other entities, including not-for-profit entities, that are adopting the amendments in this Update should do so Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is evaluating the impact of ASU 2017-04.

F-13

Update 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting

Effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period, for public business entities for reporting periods for which financial statements have not yet been issued. The Company is evaluating the impact of ASU 2017-09.

Update 2017-01—Business Combinations (Topic 805): Clarifying the Definition of a Business

Public business entities should apply the amendments in this Update to annual periods beginning after December 15, 2017, including interim periods within those periods. The Company is evaluating the impact of ASU 2017-14.

Update 2016-17—Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control

The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The Company’s adoption of this guidance did not have a material impact on the Company’s consolidated financial statements

Update 2016-09—Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting

For public business entities, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted for any entity in any interim or annual period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The Company’s adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

Update 2016-07—Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting

Effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. The Company’s adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

F-14

NOTE 3 - INTANGIBLE ASSETS

The Company’s capitalized costs in relation to developing and acquiring intangible assets, consisted of the following as of March 31, 2016 and December 31, 2015:

	March 31, 2016		December 31, 2015
Patents and trademarks	$	0	$	0
Media projects		405,252		405,252
Sprocket Asset Group		0		0
Subtotal, intangible assets		405,252		402,252
Accumulated amortization				0
Intangible assets, net	$	405,252	$	402,252

Amortization expense for all intangible assets was $0 and $405,406 for the three months ended March 31, 2016 and 2015, respectively. The amortization expense is zero for the period ending March 31, 2016 as the Company impaired its intangible assets at December 31, 2015, see below.

During the process of preparing the 2015 consolidated financial statements, it became apparent that the recoverability of the Sprocket Asset Group was not reasonably assured, as a result of its foreign entity and partner Sprocket HK and iWebgate (ASX:IWG) dba Netlinkz (ASX:NET) and its arranged licensing agreement terms being breached by the licensee. As a consequence, management is unable to estimate expected cash flows with any certainty. As a result of such subsequent developments, management has concluded that, as of December 31, 2015, the remaining carrying value of the sprocket asset group was fully impaired. Based on the information available at the time of our filings prior to December 31, 2015, management does not feel that such full impairment was appropriate for such prior filings. The loss on impairment for 2015 was ($5,422,055).

NOTE 4- ACCRUED EXPENSES

Accrued expenses consisted of the following as of March 31, 2016 and December 31, 2015:

	March 31, 2016		December 31, 2015
Salaries and wages - Ubiquity, Inc.	$	734,455	$	564,767
Payroll and other taxes		1,192,943		1,169,197
Accrued consulting fee		341,877		791,877
Accrued interest		493,528		459,068
Accrued rent		96,152		93,575
Stock Px Guarantee		205,700		205,700
Other		93,000		310,499
Total current accrued expenses		3,157,654		3,594,682

The Company’s Chief Executive Officer and Senior Executive Vice President are paid as consultants and thus the required payroll taxes are not withheld and remitted to the appropriate taxing authorities. The Company issues these individuals 1099s which represent amounts paid to them. In connection with this, the Company accrues estimated taxes and penalties due to taxing authorities in which would be potentially due if the taxing authorities were to require the Company’s to pay if the individuals were deemed employees. The Company accrues the taxes at the time in which the amounts payable to the individuals is recorded. See Note 8 for discussion related to compensation either paid and/or accrued for related parties. As of December 31, 2015 and 2014, total amounts accrued related to potential payroll taxes and penalties were $868,075 and $890,623, respectively. The California Employment Development Department has confirmed final balances for the tax years ending 2009 through March 31, 2017 for a total owing $225,555. The Company has a higher accrual for what is actually owed as when the above mentioned Officer and Vice President start receiving payment of their accrued salary it will match with the correct period.

F-15

In February 2015, the Company’s Chief Executive Officer forgave accrued salary and bonuses of $1 million dollars in exchange for options to purchase 2,561,856 shares of common stock with an exercise price of $0.485 per share. The options vest immediately and have a five year life. The Company valued the options at $1,159,506 using the Black Scholes Option Pricing model; see Note 9 for variables used. In addition, accrued payroll taxes and penalties related to the forgiven salary and bonus of $118,000 were re-classed as the payroll amounts were not paid. The difference between the salary and taxes forgiven and the fair market value of the options of $41,006 was recorded as additional compensation expense.

~~NOTE~~See 7Note 6 for discussion related to the accrued consulting fee - ~~NOTES~~BOD ~~PAYABLE~~Member and the portion of Salaries and wages - Ubiquity due to the Company’s officers.

See Note 8 for discussion related to the stock purchase guarantee.

NOTE 5 - CONVERTIBLE NOTES PAYABLE

Convertible Notes Payable - Variable Conversion Price

At various times to fund operations, the Company issues convertible notes payable in which the conversion features are variable. In addition, some of these convertible notes payable have issuance discounts and other fees withheld. During the ~~nine~~three months ~~ended~~ ~~September~~ended 30March 31, ~~2015~~2016, the Company ~~issued~~did ~~convertible~~not ~~notes~~issue ~~payable~~any ~~with~~convertible ~~principal amounts aggregating $2,380,350 in which proceeds of $2,168,475 were received~~notes. The convertible notes payable incur interest rates ranging from 1% to 12% per annum with due dates ranging from August 2015 to ~~April~~January 2017. The convertible notes payable are convertible into common stock of the Company at discounts ranging from 55-65% of either the lowest closing prices in the 20 days before the conversion date, the lowest trading price in the 25 days before the conversion date, or the volume-weighted average price of the three days before the conversion date. Certain of these notes are convertible immediately upon issuance, while others do not become convertible for a period of 180 days after issuance. Derivative accounting applies upon the conversion feature being available to the holder, as it is variable and does not have a floor as to the number of common shares in which could be converted. The Company has recorded, or will record, a derivative liability in connection with the convertible notes payable on the date they become convertible. The combination of the original issue discount (“OID”), fees paid and allocation to the derivative liabilities resulted in discounts to the convertible notes payable. The discounts are being amortized over the term of the convertible notes payable. InSubsequent addition, the Company issued 450,000 shares of common stock in connection with some of the convertible notes. The Company valued the common stock at $125,625 based upon the closing market price on the date of the transaction. The value of the common stock was recorded as a discount to ~~the~~ ~~notes~~March ~~payable. On April 15~~31, 2015, ~~the default provision of~~ all convertible notes payable ~~were~~are ~~triggered~~in default due to the Company’s ~~delinquency~~ ~~in filing their annual report. Thus, as~~ delinquency of ~~April~~its ~~15,~~public 2015, all convertible notes payable became convertible; interest rates were increased at rates ranging from 12% to 24% per annum; and the principal balances were increased at rates ranging from 110% to 150% totaling $716,605 in additional principalfilings. ~~The increase in principal was recorded as interest expense during the nine months ended September 30, 2015.~~

~~Including~~As ~~the convertible notes payable discussed in the preceding paragraph, as~~ of ~~September~~March 3031, ~~2015~~2016, the Company has $23,~~921~~486,~~835~~ 163 in principal and interest of convertible notes payable with remaining discounts of $~~806~~164,~~117~~557. These notes also contain various default provisions including increases to the interest rate ranging from 0% to 16% and increases to the principal balance ranging from ~~110~~10% to 150% ~~which were triggered on April 15, 2015 as discussed above~~.

During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, $~~697~~197,~~733,~~387 ~~$0,~~and $1136,~~586,629~~949 ~~and $0~~ of the discount was amortized to interest expense, respectively. As of ~~September~~March 3031, ~~2015~~2016, the unamortized debt discount was $~~806~~164,~~117~~557. ~~The Company is amortizing using the straight line method due to the short term of the notes.~~

During the nine months ended September 30, 2015, principal of $50,000 was converted into 1,552,701 shares of common stock. In connection with this conversion, the Company determined the fair market value of common stock to be $353,883 based upon the closing market price on the date of conversion. In connection with the conversion, the Company relieved derivative liabilities of $231,292 and recorded a gain on extinguishment of $8,441 which represented the difference between the fair market value of the common stock and the convertible notes and derivative liabilities extinguished.

During the nine months ended September 30, 2015, principal of $125,120 of convertible notes were repaid. In connection with these repayments, derivative liabilities of $119,226 were reclassed to equity as the convertible note in which the derivative liabilities corresponded to were repaid and thus the conversion feature was eliminated.

At various times during the nine months ended September 30, 2015, the Company issued a total of 925,000 shares of common stock to various holders of the convertible notes payable. The issuances related to various penalties, settlements, etc related to the convertible notes payable being in default. The Company valued the shares at $229,623 based upon the closing market price of the Company's common stock on the date of the transaction. The value of the common stock was immediately expensed as interest expense.

F-13

Derivative Liabilities

In connection with convertible notes payable, the Company records derivative liabilities for the conversion feature. The derivative liabilities are valued on the date the convertible note payable become convertible and revalued at each reporting period. During the ~~nine~~three months ended ~~September~~March 3031, 2015, the Company recorded ~~initial~~ derivative liabilities of $31,~~267~~027,~~843~~204 based upon the following Black-Scholes option pricing model average assumptions: an exercise price of $0.~~0853~~2035 to $1.00 our stock price on the date of grant ($0.1544 to $0.57), expected dividend yield of 0%, expected volatility of 132% to ~~200~~189%, risk free interest rates ranging from 0.23% to 0.56% and expected terms ranging from ~~one (~~1) to ~~two (~~2) years. Upon initial valuation, the derivative liability exceeded the face value of certain of the convertible note payables by approximately $1463,~~363,~~000, which was recorded as a day one loss on derivative liability.

On September 30, 2015, the derivative liabilities were revalued at $3,732,919 resulting in a loss of $815,595 related to the change in fair market value of the derivative liabilities for the nine months ended September 30, 2015. The derivative liabilities were revalued using the BlackF-Scholes option pricing model with the following average assumptions: an exercise price of $0.04 to $0.15, our stock price on the date of valuation, expected dividend yield of 0%, expected volatility of 143% to 188%, risk-free interest rates ranging from 0.23% to 0.58%, and an expected terms ranging from 0.10 to 1.83 years.16

~~Other~~On March ~~Notes~~31, ~~Payable~~2015, ~~Transactions~~the derivative liabilities were revalued at $1,253,446 resulting in a loss of $226,242 related to the change in fair market value of the derivative liabilities. The derivative liabilities were revalued using the Black-Scholes option pricing model with the following average assumptions: an exercise price of $0.1375 to $0.17, our stock price on the date of valuation ($0.325), expected dividend yield of 0%, expected volatility of 154% to 197%, risk-free interest rates ranging from 0.23% to 0.56%, and an expected terms ranging from 0.87 to 1.85 years.

On March ~~February 11~~31, ~~2014~~2016, the ~~Company entered~~derivative ~~into~~liabilities anwere ~~agreement~~revalued ~~with~~at ~~a law firm in which~~ $278,~~249~~845,033 resulting in ~~accounts~~a ~~payable~~loss ~~was~~of ~~converted~~$2,059,368 related to athe ~~convertible promissory note~~change in ~~the~~fair ~~same~~market ~~amount.~~value ~~Under the terms~~ of the ~~agreement,~~derivative ~~the note was immediately convertible at $0~~liabilities.~~001~~ ~~per share, incurred interest at 10% and due upon demand.~~ The ~~Company~~derivative ~~didn't~~liabilities ~~account~~were ~~for~~revalued ~~the~~using ~~transaction until~~ the ~~nine~~Black-Scholes ~~months~~option ~~ended September 30,~~pricing ~~2015~~model ~~when~~with ~~a conversion was requested and~~ the ~~oversight~~following ~~was~~average ~~identified.~~assumptions: ~~The~~an ~~Company~~exercise ~~determined~~price ~~that a beneficial conversion feature~~ of $270.12,~~249~~ ~~should~~our ~~have~~stock ~~been~~price ~~recorded~~on ~~and immediately expensed as interest expense at~~ the ~~time~~date of ~~the~~valuation ~~original agreement~~($0. ~~The amount was recorded during the nine months ended September 30~~325), ~~2015 as the amount is immaterial to the three~~expected ~~and~~dividend ~~nine~~yield ~~months~~of ~~ended September 30~~0%, ~~2015~~expected ~~and~~volatility ~~2014. During the nine months ended September 30, 2015, assignees~~ of ~~the~~154% ~~holder converted~~to ~~$16~~197%,~~000~~ ofrisk-free ~~the~~interest ~~balance~~rates ~~into~~ranging ~~16,000,000~~from ~~shares of common stock~~0.12% Asto ~~of September 30~~0.56%, ~~2015,~~and ~~$11,249~~an ~~was due on the~~expected ~~note~~terms ~~and~~ranging isfrom ~~included~~0.87 ~~within~~to ~~convertible~~1.85 ~~notes payable~~years.

In July 2015 the company entered into a note payable in the amount of $20,000 with a related party that is due on demand.

Future Potential Dilution

Most of the Company’s convertible notes payable contain adjustable conversion terms with significant discounts to market. As of ~~September~~July 303, ~~2015,~~2017 the Company’s convertible notes payable are potentially convertible into an aggregate of approximately 68 90 million shares of common stock. In addition, due to the variable conversion prices on some of the Company’s convertible notes, the number of common shares issuable is dependent upon the traded price of the Company’s common stock.

NOTE 86 - RELATED PARTY TRANSACTIONS

Compensation Related

UBIQUITY, INC.

SC Business, Inc.

SC Business, Inc. (“SC”) is an entity owned by the Company’s CFO, Brenden Garrison. At times SC charges Ubiquity for tax/consulting work. In order to assist the Company in accessing its credit card lines (as provided by the Carmichael family – see “Loans Payable – Related Parties” below), SC Business periodically charges the Company’s credit cards and remits the related funds, net of fees, back to Ubiquity or to SME. ~~The following is a summary of the transactions between the parties during the three and nine months ended September 30, 2015 and 2014:~~

	2015			2014
Receivable from SC Business, beginning of the year	$	1,279,681		$	437,812
Amount charged on Ubiquity Credit Cards by SC Business	$	4,003,565		$	1,324,482
Amounts remitted back to Ubiquity		(3,538,180	)		(604,368	)
Amounts retained by SC for settlements of Brenden Garrison’s accrued salary and reimbursements(2015) and amounts due SC (2014)		(129,497	)		(49,011	)
PayPal and other fees incurred by SC Business		(143,438	)		(46,357	)
Receivable from SC Business	$	1,472,231		$	1,062,559	(1)
Amounts remitted to SME	$	182,550		$	437,047

The following is a summary of the transactions between the parties during the three months ended March 31, 2016 and 2015:

	*2016*			*2015*
Receivable from SC Business, beginning of the year	$	1,707,634		$	1,279,681
Amount charged on Ubiquity Credit Cards by SC Business	$	1,296,319		$	1,398,162
Amounts remitted back to Ubiquity		(1,256,970	)		(1,127,947	)
Amounts retained by SC for settlements of Brenden Garrison’s accrued salary (2016) and amounts due SC (2015)		(0	)		(56,614	)
PayPal and other fees incurred by SC Business		(27,657	)		(51,551	)

Receivable from SC Business	$	1,719,327		$	1,441,731	(1)
Amounts remitted to SME	$	13,200		$	152,050

(1) The substance of this receivable is that it is due from SME based on the balance being related to amounts remitted from Ubiquity to SME. See Note 2 for related elimination of the related balance upon the acquisition of SME. Accordingly, such amounts are eliminated in the consolidation of SME.

F-17

Max Gan

Max Gan is an employee of the Company. Max Gan loans the company money periodically and also assists the Company in accessing its credit card lines, Max Gan ~~periodically charges~~charged the Company’s credit cards through PayPal. Max Gan, then remits the related amount charged, net of fees, back to Ubiquity. The following is a summary of the transactions between the parties during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015:

F-14

	*2016*			*2015*
Receivable from Max Gan, beginning of year	$	0		$	247,461
Amount charged on Ubiquity Credit Cards	$	35,200		$	232,289
Amounts remitted back to Ubiquity		(35,000	)		(246,620	)
PayPal and other fees incurred		(0	)		(8,177	)
Interest Service fees charged	$	0		$	0

Receivable from Max Gan, end of period	$	200		$	224,953

	2015			2014
Receivable from Max Gan, beginning of year	$	247,461		$	125,920
Amount charged on Ubiquity Credit Cards	$	684,434		$	460,674
Amounts remitted back to Ubiquity		(638,788	)		(281,986	)
PayPal and other fees incurred		(24,055	)		(16,124	)
Interest Service fees charged	$	0		$	0
Receivable from Max Gan, end of period	$	269,153		$	288,485

Nicholas Mitsakos

Nicholas Mitsakos iswas the Company’s Co-Chairman of the Board. The Company entered into a directors retention agreement with Mitsakos on March 22, 2013 for the issuance of 250,000 shares of common stock as amended in July 2013 for the issuance of an additional 250,000 shares of common stock. Finally, the agreement was amended in December 2013, which calls for monthly payments of $25,000 beginning in January 2014. During the three ~~and~~ ~~nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, the Company recorded expense of $~~75,000,~~0 ~~$225,000,~~and $75,000 ~~and $225~~,~~000,~~ respectively, under the contract. As of ~~September~~March 3031, ~~2015~~2016 and December 31, ~~2014~~2015, the cash amounts owed under the contract were $~~375,000~~ 0 and $~~150~~450,000, respectively. On January 4, 2016 Nicholas Mitsakos converted his outstanding debt of $456,881 to 1,986,439 common shares of stock at the rate $0.23 cents per share.

Carmichael Enterprises

This entity is owned by Al Carmichael, who is the father of our CEO, Chris Carmichael. Al Carmichael is ~~the~~one ~~signor~~of ~~for~~the signors of the Company’s business credit cards. In exchange for providing the Company with the access to the related credit lines, the Company pays him a monthly fee of $2,500 per month. During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, the Company expensed $7,500, and $227,500 in consulting fees, of which $~~7,500~~0 and $220 was due,~~500 in~~ ~~consulting~~respectively. ~~fees~~In addition, ~~and~~the Company owed him $1016,000 and $1016,000, in reference to a note payable at ~~September~~December 30March 31, ~~2015~~2016 and December 31, ~~2014~~ 2015, respectively. On October 24, 2016, Albert Carmichael filed a UCC-1 financing statement for amounts owed relating to a personal loan to the Company as well as certain credit being secured for the Company listing the Company’s fixed assets as collateral.

Brittany Carmichael

Brittany Carmichael is the daughter of our interim CEO, Chris Carmichael and ~~provides~~provided secretarial, administrative, and marketing support for the Company. The Company expensed approximately ~~$11,014,~~ $3313,~~320,~~406 ~~$11,360~~ and $285,~~467~~195 related to her salary, ~~and~~reimbursed ~~personal~~ expenses, and beneficial payments charged against her salary during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively. Effective November 30, 2016, Brittany no longer provided services to the Company.

Cameron Carmichael

Cameron Carmichael is the son of our interim CEO, Chris Carmichael, and ~~provides~~provided studio related services to the Company. The Company expensed approximately $~~1,772, $15,202, $~~7,~~576~~231 and $233,~~054~~322 related to his salary, ~~and~~reimbursed ~~personal~~ expenses, ~~charged~~and beneficial payments against his salary during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively. Effective March 1, 2017, Cameron no longer provided services to the Company.

Shane Carmichael

Shane Carmichael is the son of our interim CEO, Chris Carmichael, and ~~provides~~provided studio related services to the Company. The Company expensed approximately $910,~~233,~~360 ~~$30,480, $15,720~~ and $4314,~~944~~757 related to his salary, ~~personal~~reimbursed expenses, and beneficial payments charged against his salary during the three ~~and nine~~ months ended ~~September~~ 30March 31, ~~2015~~2016 and ~~2014~~2015. Effective December 31, ~~respectively~~2016, Shane no longer provided services to the Company.

F-1518

Christopher Carmichael & Connie Jordan

The following is a summary of compensation paid and amounts payable to Christopher Carmichael and Connie Jordan for the three months ended March 31, ~~2015~~2016 and ~~2014, and September 30,~~ 2015 ~~and 2014~~:

	Christopher			Christopher
	Carmichael			Carmichael			Connie Jordan			Connie Jordan
	3/31/2014			3/31/2015			3/31/2014			3/31/2015
	3/31/2015			3/31/2016			3/31/2015			3/31/2016
Beginning Accrued Balance	$	12,~~053~~705,~~398~~365		$	2348,~~705,365~~746		$	~~181~~1,~~241~~199,523		$	162,~~199,523~~448
Add SME * - January 1, 2014	$	1,220,863		$	-		$	971,065		$	-
Salary - Ubiquity, Inc. Period Ending March 31st	$	142,151		$	133,050		$	71,914		$	66,100
Salary - Ubiquity, Inc. Period Ending March 31	$	140,790		$	142,151		$	70,715		$	71,914
Sponsor Me, Inc. Period Ending March 31st	$	50,000		$	0		$	47,500		$	0
Sponsor Me, Inc. Period Ending March 31	$	50,000		$	50,000		$	45,000		$	47,500
Director Fees - Period Ending March 31st	$	-		$	0		$	-		$	0
Director Fees - Period Ending March 31	$	-		$	-		$	-		$	-
Bonus	$	10,875		$	870		$	3,263		$	373
Bonus	$	87,332		$	10,875		$	29,324		$	3,263
Other	$	(1,000,000)-		$		{1}	$	-		$
Other	$	-		$	(1,000,000	){1}	$	-		$	-
Subtotal	$	1,908,391		$	482,666		$	1,322,199		$	128,921
Subtotal	$	2,552,383		$	1,908,391		$	1,297,346		$	1,322,199
Payments	$	(237,233	)	$	(232,708)		$	(69,803	)	$	(71,143)
Payments	$	(179,605	)	$	(237,233	)	$	(133,198	)	$	(69,803	)
SME Amounts Forgiven in Share Exchange Agreement	$	(1,470,863	)	$	0		$	(1,198,565	)	$	0
SME Amounts Forgiven in Share Exchange Agreement	$	(1,261,213	)	$	(1,470,863	)	$	(1,019,088	)	$	(1,198,565	)
Accrual - Ending March 31	$	200,295		$	249,958		$	53,831		$	57,778
Accrual - Ending March 31	$	1,111,565		$	200,295		$	145,060		$	53,831

{1} Salary and bonuses forgiven for the exchange to purchase options, see note 6.

	Christopher Carmichael 6/30/2014		Christopher Carmichael 6/30/2015		Connie Jordan 6/30/2014		Connie Jordan 6/30/2015
Beginning Accrued Balance	$	1,111,565	$	200,295	$	145,060	$	53,831
Add SME - January 1, 2014		0		0		0		0
Salary - Ubiquity, Inc. Period Ending September 30th		141,545		162,289		68,931		87,981
Director Fees - Period Ending September 30th		15,000		0		0		0
Bonus		131,410		457		39,423		196
Other		0		0		0		0
Subtotal		1,399,520		363,041		253,415		142,007
Payments		223,901		106,844		142,946		18,500
Accrual Ending September 30th, less SME Forgiven Balance		1,175,619		256,197		110,469		123,507

{1} Salary and bonuses forgiven for the exchange to purchase options, see note 6

	Christopher Carmichael		Christopher Carmichael		Connie Jordan		Connie Jordan
	9/30/2014		9/30/2015		9/30/2014		9/30/2015
Beginning Accrued Balance	$	1,175,618	$	256,197	$	110,469	$	123,508
Add SME - January 1, 2014		0.00		0.00		0.00		0.00
Salary - Ubiquity, Inc. Period Ending September 30th		133,050		133,050		66,100		66,100
Sponsor Me, Inc. Period Ending September 30th		50,000		0.00		45,000		0.00
Director Fees - Period Ending September 30th		7,500		0.00		0.00		0.00
Bonus		122,037		236		36,611		101
Other		0.00		0.00		0.00		0.00
Subtotal		1,488,205		389,247		258,179		189,608.01
Payments		255,087		197,000		102,711		66,099.99
Accrual - Ending September 30th		1,233,118		192,482		155,468		123,609.02

* Payments do not include amounts SME paid an aggregate of approximately $14,489 and $20,386 in benefits for the three months ended March 31, 2016 and 2015, respectively.

{1} Salary and bonuses forgiven for the exchange to purchase options, see note 6

* Payments do not include amounts SME paid an aggregate of approximately $24,084, $44,470, $17,880 and $38,741 in benefits for the three and nine months ended September 30, 2015 and 2014, respectively.

* At September 30, 2015 our CEO Chris Carmichael had loaned the company $264,172.

Annual Salary

On December 20, 2013, effective January 1, 2014, the Board of Directors approved to increase Christopher Carmichael, the Company’s CEO, annual salary from $420,000 to $525,000. Additionally, the CEO receives and accrues a medical allowance of $1,200 per month. In addition, the CEO receives an annual option grant of ~~300,000 options prior to January 1, 2014 and~~ 600,000 ~~subsequently~~.

The Company’s CFO receives an annual salary of $225,000 and an annual option grant of 150,000 shares ~~prior to January 1, 2014 and 150,000 subsequently~~.

The Company’s Senior Executive Vice President, Connie Jordan, ~~receives~~received an annual salary of $250,000 (during the ~~years~~ year ended December 31, ~~2014 and 2013)~~2015. Additionally, the Senior Executive Vice President receives and accrues a medical allowance of $1,200 per month and an annual option grant of ~~200,000 prior to January 1, 2014 and~~ 300,000 ~~subsequently~~.

Bonus

During the three months ~~and nine months~~ ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, the CEO earned bonuses of $~~236,~~870 and $1110,~~568~~875, ~~$122,037~~ ~~and $340,779,~~ respectively, in connection with the bonus provisions of his related employment agreement (see Note 108). During the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, the Senior Executive Vice President earned bonuses of $~~101,~~373 and $3,~~560~~263, ~~$36,611 and $105,359,~~ respectively, in connection with the bonus provisions of her related employment agreement (see Note 108). The Company accounts for the bonuses as payroll expense.

F-19

Accrued Amounts Payable to CEO and Senior Executive Vice President

As of ~~September~~March 3031, ~~2015~~2016 and December 31, ~~2014~~2015, amounts payable to the CEO related to the items discussed above were $~~192~~249,~~482~~ 958 and $1348,~~274~~746,~~852,~~ respectively. ~~See Note 6 for discussion related to $1,000,000 of salary and bonus payable to the CEO exchanged for options to purchase shares of the Company’s common stock.~~ As of ~~September~~March 3031, ~~2015~~2016 and December 31, ~~2014~~2015, amounts payable to the Senior Executive Vice President related to the items discussed above were $~~123~~57,~~609~~778 and $4862,~~458~~448, respectively.

For the year ended December 31, 2015, Chris Carmichael loaned Ubiquity $1,204,905 and at December 31, 2015 was owed $609,172. The loans are memorialized by contracts bearing 8% interest annually.

On June 9, 2016, Christopher Carmichael filed a UCC-1 financing statement for his amounts owed as an officer director and loans to the Company totaling over $2,000,000 owed at the time, listing the Company’s intellectual property and other fixed assets as collateral. Chris Carmichael had previously loaned the Company $14,571,612 through personal loans and amounts secured by his family for business expenses for the two years ended December 31, 2015 and 2014 respectively, including $8,065,771 for the year ended December 31, 2015 and $1,398,444 for the quarter ended March 31, 2016.

On June 15, 2016 Sprocket Wearables, Inc. entered into a consulting agreement with Moveo Inc., a company owned and controlled by Chris Carmichael and Connie Jordan with terms of $25,000 per month to be paid by Sprocket Wearables, Inc. and an issuance of 3,000,000 restricted common shares of Sprocket Wearables Inc. The agreement has a 2 year term.

Board of Director Fees

Effective July 1, 2014, the Company revised its policy for providing compensation to members of the board of directors. Each independent board member receives an annual fee ~~off~~of $25,000 payable annually and additional compensation annually ranging from $5,000 - $10,000 depending on the board members participation in the Company’s various committees. In addition, effective July 1, 2014, the Company officers who also reside on the board of directors do not receive compensation. During the three ~~and nine~~ months ended ~~September~~ 30March 31, 2016 ~~2015~~ and ~~2014~~2015, the Company accrued $2118,~~250,~~446 and $21,250, ~~$42,500 and $42,500,~~ respectively, in connection with amounts due to non -officer board of director members. As of ~~September~~March 3031, ~~2015~~2016 and December 31, ~~2014~~2015, $~~125~~235,~~000~~946 and $82217,500 was included within accrued expenses on the accompanying balance sheet.

~~F-16~~Loans

~~UBIQUITY~~The Carmichael Family has personally guaranteed two Company credit cards and has allowed the Company use of their personal credit cards as needed. Total lines of credit personally guaranteed by the Carmichael family are up to $800,000 per month and is memorialized ~~INC~~in a formal agreement. Of which a total loaned from the use of these guaranteed cards was $1,398,444 and $6,824,866 during the periods ended March 31, 2016 and December 31, 2015, respectively.

The ~~Carmichael~~Company ~~Family~~had ~~has~~certain ~~personally~~notes ~~guaranteed~~payable ~~two~~outstanding ~~Company~~to ~~credit~~related ~~cards~~parties as of March 31, 2016 and ~~has~~December ~~allowed~~31, 2015. During the periods ended March 31, 2016 and December 31, 2015, the Company ~~use~~borrowed of$0 ~~their~~and ~~personal~~$1,204,905 ~~credit~~from Chris Carmichael for which payments were ~~cards~~made asof ~~needed.~~$0 ~~Total~~and ~~lines~~$605,172, respectively. As of ~~credit~~March ~~personally~~31, ~~guaranteed~~2016 byand ~~the~~December ~~Carmichael~~31, ~~family~~2015, ~~are~~Christopher upCarmichael towas owed $~~800~~609,~~000~~172 and $609,172, respectively. The amounts were unsecured, incurred interest at 8% per ~~month~~annum and isdue ~~memorialized~~on demand. During the periods inended aMarch ~~formal~~31, ~~loan~~2016 ~~agreement.~~and ~~See~~March ~~Note~~31, 92015, ~~for~~the ~~discussion~~Company recorded accrued interest of ~~options~~$0 ~~granted~~as ~~during~~contributed capital as the interest ~~nine~~on ~~months~~the ~~ended~~notes ~~September~~payable ~~30,~~was ~~2015~~forgiven. inThe ~~connection with~~proceeds ~~this~~were ~~guarantee~~used for operations.

~~The~~Albert ~~Company~~Carmichael, ~~had~~a ~~certain~~family ~~notes~~member ~~payable~~of ~~outstanding~~the toCompany’s ~~related~~CEO, ~~parties~~was asowed ~~of September 30~~$16,000 ~~2015~~ and ~~December 31~~$16,000 ~~2014.~~as ~~During~~of ~~the~~March ~~periods ended September 30~~31, ~~2015~~2016 and December 31, ~~2014~~2015, respectively. ~~the~~The ~~Company~~amounts ~~borrowed~~are ~~$545~~unsecured,~~904~~ ~~and~~non-interest ~~$225,000~~bearing ~~from~~and ~~Chris~~due ~~Carmichael~~on ~~for~~demand. ~~which payments~~The proceeds were ~~made~~used offor ~~$281,732 and $232,000, respectively~~operations. AsOn ~~of September 30~~October 24, ~~2015 and December 31~~2016, ~~2014,~~Albert ~~Christopher~~ Carmichael ~~was~~filed ~~owed~~a ~~$264,172~~UCC-1 ~~and~~financing ~~$0,~~statement ~~respectively.~~for ~~The~~ amounts ~~were~~owed ~~unsecured,~~relating ~~incurred~~to ~~interest~~a atpersonal 8%loan ~~per~~to ~~annum~~the ~~and~~Company ~~due~~as well onas ~~demand.~~certain ~~During~~credit ~~the~~being ~~period~~secured ~~ended~~for ~~September~~the ~~30,~~Company ~~2015,~~listing the Company’s ~~recorded~~fixed ~~accrued~~assets ~~interest~~as ~~of $4,759~~collateral. ~~The proceeds were used for operations.~~

~~Albert~~Non-officer ~~Carmichael,~~employees ~~a family member~~ of the Company’s ~~CEO,~~were ~~was~~ owed $1078,~~000~~042 and $1074,~~000~~394 as of ~~September~~March 3031, ~~2015~~2016 and December 31, ~~2014~~ 2015, respectively. The amounts are unsecured, non-interest bearing and due on demand. The proceeds were used for operations.

~~Employees, consultants or shareholders of the Company were owed $85,026 and $28,250 as of September 30, 2015 and December 31, 2014, respectively. The amounts are unsecured, non~~F-interest bearing and due on demand. However, the Company is recording interest at 8%, which is consistent with other related party loans, for a total accrued interest of $3,706 as of September 30, 2015. The proceeds were used for operations. In addition, during the nine months ended September 30, 2015, the Company issued 736,834 share of common stock in settlement of $57,500 in principal balance. The Company valued the shares of common stock at $81,032 based upon the closing market price on the date of issuance. The excess fair market value of the common stock over the amount relived of $23,532 was recorded as interest expense.20

InNOTE ~~February~~7 ~~2014,~~- ~~the~~STOCKHOLDERS’ Company received a $50,000 loan from a shareholder. The proceeds from the loan were used for operations and were expected to be paid back on demand. No formal terms were ever entered into in connection with the loan. During the year ended December 31, 2014, the Company repaid the $50,000 loan and an additional $5,000 which was accounted for as interest expense.EQUITY

NOTE 9 - STOCKHOLDERS’ EQUITY

Reverse Stock Split

On April 21, 2014, the Company received approval from the Financial Industry Regulatory Authority (“FINRA”) to effectuate a reverse split of 3.5 to 1 (the “Reverse Split”) in which each shareholder will be issued one (1) share of common stock in exchange for 3.5 shares of their currently issued common stock. The stock split has been retroactively applied to this filing.

Preferred Stock

In February 2015, the board of directors approved the designation of 500 shares of preferred stock, par value $0.001 per share, of the Company as Series A Preferred Stock. The Series A Preferred stock receive no dividends or liquidation preferences. Each share is entitled to the equivalent of 1,000,000 votes of common stock.

On March 6, 2015, the Company issued the CEO and the SEVP 250 shares each of Series A Preferred Stock. In connection with this issuance, the Company valued the shares at $295,918. The shares were valued under the provisions ASC 820 Fair Value Measurements taking into account the control premium associated with the voting provisions of the Series A. The Company expensed the value of the Series A upon issuance as there were no additional performance requirements.

~~F-17~~On December 31, 2015 the company issued 1,500,000 Series A preferred shares to Christopher Carmichael and 500,000 Series A preferred shares to Connie Jordan at valued at $24,745.

Proceeds from Sales of Common Stock

During the ~~nine~~periods ~~months~~ ended ~~September~~March 3031, ~~2015~~ 2016 and ~~2014~~2015, the Company issued 2425,~~111~~422,~~667~~658 and 62,~~612~~183,~~372~~333 shares of common stock for cash proceeds of $2907,~~090,500~~955 and $6517,~~263~~500,~~578,~~ respectively. ~~As of September 30, 2015, the Company recorded a subscription receivable of $28,000 for the issuance of shares of common stock for which the cash was received subsequent to September 30, 2015.~~ In addition, as of ~~September~~March 3031, ~~2015 and~~2016 ~~2014,~~ the Company ~~received~~has ~~cash~~a ~~proceeds~~subscription ofreceivable ~~$20,000 and $250,000 in which the shares~~ of ~~common stock had not been~~ issued as of September 30, 2015 and 2014, respectively, but were subsequently issued. During the nine months ended September 30, 2014, 1,664,000 shares of SME’s common stock were issued for cash proceeds of $~~193~~118,000. In addition, as of September 30, the Company received cash proceeds from Sprocket Wearables, Inc. of $135,000 in which the shares of common stock in Sprocket Wearables had not been issued as of September 30, but were subsequently issued.

During the period ended March 31, 2016 Sprocket Wearables Inc. issued 750,000 shares of common stock for cash proceeds of $625,000

Common Stock Issued for Services and Settlement

During the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, the Company issued 34,~~945~~636,~~111~~439 and ~~999~~700,~~872~~000 shares of common stock for services ~~and settlement~~. The Company determined the value of such shares to be $1,~~475~~018,~~686~~231 and $6364,~~798,306~~000 for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~ 2016 and ~~2014~~2015, respectively. The values were based upon the fair market value of the Company’s common stock on the date of performance, which in most cases is the agreement date. Services performed in connection with these issuances relate to assignment to the board of directors, advisory services related to listing on a national exchange, marketing, broadcasting and production related services.

On March 22, 2013, the Company entered into an agreement to retain a new co-chairman of the board. The agreement granted 285,714 shares of common stock valued at $0.54 per share for services to be rendered over a twelve month period. In July 2013, the agreement was amended to grant an additional 285,714 shares for services through February 2014 with a fair market value of $0.66. The value of the shares were recorded as a prepaid asset of $1,052,500 and was being amortized over the period of service. During the nine months ended September 30, 2014, stock based compensation expense of $263,125 was recorded.

See Note 7 for additional issuances of common stock.

Options

During the year ended December 31, ~~2014~~2015, the Company granted options to purchase 23,~~536~~007,~~321~~231 shares of common stock to the board of directors and employees, including 850,000 to the CEO and 550,000 to the EVP for board of director and employment services; 150,000 to ~~the~~ the CFO, 269,331 to the CEO in connection with guarantees made on Company loans/credit cards; 32,767 to the CEO in connection ~~with~~ with the Monkey Bars asset acquisition and 684,223 to employees and other board members. The options were valued at $3,827,938 on the grant date using the Black-Scholes option-pricing model with the following assumptions: exercise prices ranging from $0.87 to to $2.41; dividend yield of 0%; expected volatility of 163%; risk-free interest rates of 0.12% and expected life of 60 months. During the three and nine months ended September 30, 2015 and 2014, the Company recorded $202,972, $686,177, $608,916 and $2,331,085 in compensation expense in connection with the options, respectively. The Company expects to record the remaining unamortized portion of $338,286 during the year ending December 31, 2015.

During the nine months ended September 30, 2015, the Company granted options to purchase 1,125,000 shares of common stock to the board of directors and employees, including 600,000 to the CEO and 300,000 to the EVP, 150,000 to the CFO in connection with their employment; 2,561,856 to the CEO in connection with the forgiveness of $1.0 million in accrued salary (see Note 6); and 75,000 to an employee. The options were valued at $765,927 on the grant date using the BlackF-Scholes option-pricing model with the following assumptions: exercise prices ranging from $0.49 to $0.67; dividend yield of 0%; expected volatility of 164.0%; risk-free interest rates of 0.12% and expected life of 60 months. During the three and nine months ended September 30, 2015, the Company recorded $160,219 and $511,920 in compensation expense in connection with the options, respectively. The Company expects to record the remaining unamortized portion of $160,219 during the year ending December 31, 2015.21

During the ~~nine~~years ~~months~~ ended ~~September~~December 3031, 2015, the Company granted options to purchase 1,~~993~~125,~~057~~000 shares of common stock to the ~~CEO in~~board ~~connection~~of ~~with~~directors and ~~the~~employees, ~~Company’s~~including ~~use~~600,000 ofto the CEO’s ~~personal~~and ~~credit~~300,000 ~~card.~~to ~~Under~~ the ~~terms~~EVP, ~~of the arrangement~~150,000 ~~the~~to ~~Company issues options which represent 10% of~~ the ~~balance~~CFO onin ~~the~~connection ~~credit~~with ~~card~~their atemployment; ~~the~~2,561,856 to ~~end of~~ the ~~month.~~CEO ~~The~~in ~~exercise~~connection ~~price~~with ~~represents~~ the ~~closing~~ ~~market~~forgiveness ~~price~~ of ~~the~~$1.0 ~~Company’s~~million ~~common~~in ~~stock~~accrued atsalary ~~the~~and ~~close~~75,000 ofto ~~the~~an ~~month~~employee. The options ~~are immediately vested. The options~~ were valued at $~~522~~765,~~277~~927 on the grant date using the Black-Scholes option-pricing model with the following assumptions: exercise prices ranging from $0.1149 to $0.67; dividend yield of 0%; expected volatility ~~ranging~~of ~~from 162~~164.0% ~~- 165%~~; risk-free interest rates of 0.12% and expected life of 60 months. During the ~~three~~year ~~and nine months~~ ended ~~September~~December 3031, 2015, the Company recorded $~~111~~634,~~079 and~~101 ~~$522,277~~ in compensation expense in connection with the options. The Company expects to record the remaining unamortized portion of $111,079 ~~respectively~~during the year ending December 31, 2016.

FDuring the year ended December 31, 2015, the Company granted options to purchase 1,993,057 shares of common stock to the CEO in connection with the Company’s use of the CEO’s personal credit card. Under the terms of the arrangement, the Company issues options which represent 10% of the balance on the credit card at the end of the month. The exercise price represents the closing market price of the Company’s common stock at the close of the month. The options are immediately vested. The options were valued at $522,277 on the grant date using the Black-18Scholes option-pricing model with the following assumptions: exercise prices ranging from $0.11 to $0.67; dividend yield of 0%; expected volatility ranging from 162% - 165%; risk-free interest rates of 0.12% and expected life of 60 months. During the year ended December 31, 2015, the Company recorded $522,277 in compensation expense in connection with the options, respectively.

The aggregate intrinsic values of the options on the date of grant were $0 as the Company issues options at the then fair market value of common stock. As of ~~September~~December 3031, 2015, all options were exercisable at prices above the fair market value of the Company’s common stock.

~~NOTE~~During 10the three months ended March 31, 2016, the Company granted options to purchase 1,125,000 shares of common stock to the board of directors and employees, including 600,000 to the CEO, 400,000 to the EVP, 150,000 to the CFO and 75,000 to an employee in connection with their employment. The options were valued at $118,512 on the grant date using the Black-Scholes ~~COMMITMENTS~~option-pricing model ~~AND~~with ~~CONTINGENCIES~~the following assumptions: exercise prices ranging from $0.11 to $0.67; dividend yield of 0%; expected volatility ranging from 162% - 165%; risk-free interest rates of 0.12% and expected life of 60 months. During the quarter ended March 31, 2016, the Company recorded $118,512 in compensation expense in connection with the options.

The aggregate intrinsic values of the options on the date of grant were $0 as the Company issues options at the then fair market value of common stock. As of March 31, 2016, all options were exercisable at prices above the fair market value of the Company’s common stock.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

Employment Agreements

On ~~September~~March 41, ~~2013~~2015, the ~~Company~~board ~~entered~~modified ~~into an employment agreement with~~ Christopher Carmichael~~, the Company~~’s ~~Chief~~employment ~~Executive Officer,~~agreement to ~~perform~~reflect the ~~services~~same ~~and~~base ~~duties~~salary ~~that~~of ~~are~~$525,000 annually ~~normally~~but ~~and~~a ~~customarily~~different ~~associated~~bonus ~~with~~structure ~~this~~focusing ~~position~~on ~~as well as other associated duties as our Board reasonably determine (~~the ~~“Carmichael~~revenue ~~Agreement”).~~performance ~~The effective date~~ of the ~~Carmichael Agreement is July 1, 2013 and has a five (5) year term~~Company. ~~The~~He ~~Carmichael~~also ~~Agreement~~is ~~called~~to ~~for~~receive ~~an initial base salary of $420~~600,000 ~~payable in~~options ~~equal~~annually. ~~semi-monthly~~Beginning ~~installments~~March in1, ~~accordance~~2015, ~~with the Company’s usual practice. The~~ Carmichael ~~Agreement~~receives ~~also~~three ~~calls for annual cash bonuses that are equal to two~~ and ~~one~~a half percent (23.5%) of ~~the pretax~~ gross revenue; ~~a three percent (3%) override of gross license fees derived~~ from ~~the~~any ~~Company’s products~~ and ~~services;~~all ~~five percent (5%) success fee of the gross private~~corporate ~~placement~~activities ~~capital~~worldwide ~~contributions~~and ~~received~~a bytwo ~~the Company though tied to performance;~~ and, a ~~three~~half percent (32.5%) gross override of the ~~gross~~ book value derived from all cashless transactions ~~of the Company. Moreover, the Carmichael Agreement called for the grant~~ ~~of an option to purchase 300,000 shares of the Company’s common stock at an exercise price of $2~~t.50 ~~per share. As further compensation,~~ Mr. Carmichael is also awarded twenty percent of all gross revenues associated with the project known as “106 Yards”. OnAll ~~January~~cashless 1,transactions ~~2014,~~are ~~Christopher~~paid ~~Carmichael’s~~out ~~employment~~as ~~contract~~common ~~was~~stock. ~~amended~~Upon totermination ~~reflect an annual base salary~~ of ~~$525,000 with bonus compensation of one and one half percent (1.5%) of~~ the ~~gross~~amended ~~revenue~~agreement, of the Company, ais 3%obligated ~~gross override of license~~to ~~fees~~pay ~~derived~~employee ~~from~~any ~~the~~outstanding ~~Company’s~~liabilities ~~products~~owed ~~and~~to ~~services~~him and aamounts ~~five~~owed ~~percent~~per ~~(5%) success fee of~~ the ~~gross~~contract ~~private placement capital contributions received by the Company though tied~~ to ~~performance; and, a three percent (3%) override of~~ the ~~gross~~end ~~book value derived from all cashless transactions~~ of the ~~Company~~term. On March 1, 2015, the board modified ~~Christopher~~Connie ~~Carmichael~~Jordan’s employment agreement to reflect the same base salary of $250,000 annually but a different bonus structure focusing on the revenue performance of the Company. ~~He also is to receive 600,000 options annually.~~ Beginning March 1, 2015, ~~Carmichael~~Jordan receives ~~three~~one and a half percent (31.5%) of gross revenue from any and all corporate activities worldwide and a ~~two~~three ~~and a half~~ percent (~~2.5~~3%) gross override of ~~the~~ ~~book~~revenue ~~value derived~~ resulting from ~~all cashless transactions and~~ the ~~(5%)~~successful ~~success~~patent ~~fee~~prosecution, ~~was terminated with this March 1~~litigation, ~~2015~~settlement ~~amendment. All~~or ~~cashless~~actions ~~transactions~~taken ~~are~~by ~~paid~~the ~~out as common stock~~Company. Upon termination of the amended agreement, the Company is obligated to pay employee any outstanding liabilities owed to ~~him~~her and amounts owed per the contract to the end of the term. She also is to receive 300,000 options.

On March 15, 2012, the Company renewed an employment agreement with Connie Jordan, the Company’s Senior Executive Vice President of Intellectual Property and Transmedia, to perform the services and duties that are normally and customarily associated with this position as well as other associated duties as our Board reasonably determine (the “Jordan Agreement”). The effective date of the Jordan Agreement is March 15, 2012 and has a three (3) year term. The Jordan Agreement called for an initial base salary of $198,000 payable in equal semiF-monthly installments in accordance with the Company’s usual practice. The Jordan Agreement also called for an annual cash bonus that is equal to one percent (1%) of the pretax gross revenue; and, one and one half percent (1.5%) of the net capital contributions received by the Company from strategic partners though tied to performance. Moreover, the Jordan Agreement called for the grant of an option to purchase 200,000 shares of the Company’s common stock at an exercise price of $2.50 per share. On January 1, 2014, Connie Jordan’s employment contract was amended to reflect an annual base salary of $250,000 with bonus compensation of one percent (1.0%) of the gross revenue of the Company, a one and a half percent (1.5%) gross override of license fees derived from the Company’s products and or services and a one and a half percent (1.5%) success fee of the gross private placement capital contributions received by the Company. She also is to receive 300,000 options annually. On March 1, 2015, the board modified Connie Jordan’s her employment agreement to reflect the same base salary but a different bonus structure focusing on the revenue performance of the Company. Beginning March 1, 2015, Jordan receives one and a half percent (1.5%) of gross revenue from any and all corporate activities worldwide and a three percent (3%) gross override of revenue resulting from the successful patent prosecution, litigation, settlement or actions taken by the Company, and the (1.5%) success fee was terminated with this March 1, 2015 amendment. Upon termination of the amended agreement, the Company is obligated to pay employee any outstanding liabilities owed to her and amounts owed per the contract to the end of the term.22

~~F-19~~On January 1, 2014, Brenden Garrison’s employment contract was amended to reflect an annual base salary of $225,000 with additional compensation of 150,000 options annually.

On January 1, 2012, as amended on August 151, 2013, the Company entered into an employment agreement with ~~Brenden~~Bryan ~~Garrison,~~Harpole (the ~~Company’s Chief Financial Officer,~~“Harpole Agreement”) to ~~perform~~be ~~the~~employed ~~services and duties that are normally and customarily associated with this position~~ as ~~well~~the asCompany’s ~~other~~general ~~associated duties~~studio asmanager ~~our~~on ~~Board~~an ~~reasonably~~at ~~determine~~will ~~(the~~basis. ~~“Garrison Agreement”)~~Mr. ~~The~~Harpole ~~Garrison~~received ~~Agreement called for~~ an ~~initial~~annual ~~base~~ salary of $150,000 ~~payable~~and inis ~~equal~~eligible ~~semi-monthly~~for ~~installments~~certain inbonuses ~~accordance~~including ~~with the Company’s usual practice. The Garrison Agreement also calls for~~ an annual bonus in the form of stock options to purchase 75,000 shares at an exercise price of $4.00. OnHarpole ~~January~~receives 1,a ~~2014,~~one ~~Brenden~~percent ~~Garrison’s~~(1%) ~~employment~~gross ~~contract~~override ~~was~~for ~~amended~~all revenue relating to ~~reflect~~studio anrevenues. Effective ~~annual~~April, ~~base~~2016, ~~salary~~Mr. ofHarpole ~~$225,000 with~~no ~~bonus~~longer ~~compensation~~provided ofservices ~~150~~to the Company,~~000~~ ~~options~~and ~~annually~~the employment agreement was terminated.

OnThe ~~January~~foregoing 1,descriptions ~~2012,~~of asthe ~~amended~~terms onof ~~August~~the 1,Carmichael ~~2013~~Agreement, ~~the~~Jordan ~~Company~~Agreement, ~~entered~~Garrison ~~into~~Agreement, anand ~~employment agreement with Bryan~~ Harpole ~~(the~~Agreement ~~“Harpole~~do ~~Agreement”)~~not purport to be ~~employed~~complete asand ~~the~~are ~~Company’s~~qualified ~~general~~in ~~studio~~their ~~manager~~entirety onby anreference atto ~~will~~the ~~basis.~~provisions ~~Mr.~~of ~~Harpole~~such ~~will~~agreements ~~receive~~filed anas Exhibits ~~annual~~10.1 ~~salary~~10.2, ~~of $150~~10.3,~~000~~ and is10.4 ~~eligible~~to ~~for certain bonuses including an annual bonus in~~ the ~~form~~December of31, ~~stock~~2015 ~~options to purchase 75~~10-K,~~000~~ ~~shares at an exercise price of $4~~respectively.~~00. Harpole receives a one percent (1%) gross override for all revenue relating to studio revenues.~~

The foregoing descriptions of the terms of the Carmichael Agreement, Jordan Agreement, Garrison Agreement, and Harpole Agreement do not purport to be complete and are qualified in their entirety by reference to the provisions of such agreements filed as Exhibits 10.1 10.2, 10.3, and 10.4 to the 10-K, respectively, are incorporated by reference herein.

Other Contingencies

At the time of death of the former President of Ubiquity, Gregory Crotty had accrued $93,743 in salary, 22,857 Common Shares of Ubiquity Broadcasting Corporation, and had 200,929 options to purchase Ubiquity Broadcasting Corporation Common Shares at $5.25 per share. He also had 42,857 shares of common stock issued in his name. Ubiquity will have to issue these shares and pay the balance of his accrued salary to the proper beneficiary once established. As of ~~September~~June 3029, ~~2015,~~2017 an established beneficiary has yet to be named. All 200,929 options expired as of December 31, 2011 and are not included in total options outstanding.

During the first quarter of 2013, the Employment Development Department of the State of California (the “EDD”) notified the Company that it proposed to categorize our independent contractors as employees and proposed an assessment of additional employment taxes in the amount of $305,885, which represented a contingent liability. The Company filed a formal petition as of April 22, 2013. The Company has recorded a provision for the assessment as an accrued expense even though the Company believes the independent contractors do not meet the definition of an employee. In a letter from the EDD dated July 21, 2015, the EDD issued a final assessment of employment taxes in the amount of $36,128 for the period from October 1, 2009 to September 30, 2012. AsFor ~~resolution~~the onperiod ~~all~~April ~~periods~~1, ~~has~~2013 ~~not~~to ~~been~~December ~~attained~~31, 2015, the ~~Company~~EDD ~~has~~issued ~~included~~a ~~approximately~~notice of adjustment with an amount due of $~~844~~39,~~453~~427.21, and for the subsequent periods up to March 31, 2017 the amount owed was $~~890~~150,~~363~~339. As of ~~estimated~~December ~~taxes~~31, ~~penalties~~2015 and ~~interest in~~2014, ~~accrued~~total ~~expenses~~amounts inaccrued on the accompanying consolidated ~~balance~~financial ~~sheet~~statements asrelated ofto ~~September~~potential ~~30,~~payroll ~~2015~~taxes and ~~December~~penalties 31were $868,075 ~~2014~~and $890,623, respectively. The California Employment Development Department has confirmed final balances for the tax years ended 2009 through March 31, 2017 for a total owing $225,555. The Company has a higher accrual for what is actually owed as when the above mentioned Officer and Vice President start receiving payment for their accrued salary it will match with the correct period.

F-20

Litigation

Think Design Media, Inc. and Related Entities

As previously disclosed in the Company’s Quarterly Report for September 30, 2015 on February 26, 2015, the Company, Think Mobile, Inc., Think Design Media, Inc. and all other parties to the lawsuits submitted to the Superior Court of California, County of Orange a request for dismissal of all actions between the parties, after executing a Confidential Settlement Agreement and Release (the “Agreement”). As part of the Agreement, the lawsuits were settled and the Company obtained a full release from all defendants to such lawsuits.

F-23

Other

Ubiquity v. Castro:

On or about July 2014, Ubiquity filed a demand for arbitration with ~~JAMS~~Judicial Arbitration and Mediation Services (‘JAMS’) against Lawrence E. Castro (“Castro”) for breach of the settlement agreement dated August 19, 2013, which was executed to settle and resolve a dispute between ~~the~~Ubiquity ~~Company~~ and Castro regarding a prior “Work for Hire” relationship between the parties (the “Castro Settlement”). Under the Castro Settlement, the Company paid Castro monetary compensation in exchange for providing certain agreements and assurances designed to protect certain intellectual property, business plans, road maps, vendors, investor relationships, employee relationships, contractors and work in progress. The arbitration complaint filed by ~~the~~Ubiquity ~~Company~~ alleges that Castro breached the Castro Settlement and is seeking damages in the amount of $176,763, plus interest, representing the stated damages in the settlement agreement of what ~~the~~Ubiquity ~~Company~~ has paid to Castro. ~~The~~Ubiquity ~~Company is~~ also ~~seeking~~seeked injunctive relief, actual losses incurred by Castro’s breach, and damages for unjust enrichment, including expenses and other sundry damages. The arbitration is currently in the discovery phase, which will enable both Castro and the Company to obtain documents and further evidence supporting their respective cases, as the disclosure of witnesses. In February 2016, Castro’s attorneys filed a motion with the arbitrator to withdraw, which motion was granted. Castro presently is in pro per. The arbitrator has ordered Castro until April 29, 2016, if he intends to retain counsel. On June 1, 2016, the arbitrator will set an arbitration date for the hearing on this matter.

Ubiquity was awarded a final amended award on January 6, 2017 for attorney’s fees of $32,919 and costs of $10,219 along with the original award for damages of $176,763. Interest is awarded as allowed on unpaid balances until paid in full. Total award less interest is $219,901.

Kay Strategies v. Ubiquity:

Kay Strategies filed a complaint against the Company and its officers and directors for various violations of federal and state securities law, in the District Court for the Southern District of California. The Company and its officers and directors thereafter moved to dismiss the complaint under FRCP 12(b)(5) and 12(b)(6). Kay Strategies chose instead to amend voluntarily. Kay Strategies then filed a First Amended Complaint, alleging the same federal and state securities violations. The amended pleading essentially alleges that Kay Strategies purchased restricted Ubiquity stock from a third party. Kay Strategies’ personal representatives allegedly advised it that they were orally informed by Ubiquity’s outside securities’ attorney that it would lift the stock restrictions by a certain date, which did not occur, allegedly causing Kay Strategies damages. Kay Strategies contends that it would not have purchased the Ubiquity stock from the third party had it not had this assurance. The Company denies that it ever made such a guarantee or represented same to Kay Strategies’ representative. Ubiquity also contends that if outside counsel made any statements [which the Company denies happening], counsel was never authorized to do so. Prior to the stock purchase, no authorized director, officer or agent of the Company met with or discussed with anyone at Kay Strategies its prospective purchase of the Company’s stock from any third party. Ubiquity recently filed another FRCP 12(b)(6) motion challenging the efficacy of these allegations. The district court ~~thereafter~~ dismissed Kay Strategies’ ~~First~~first and second Amended Complaint without prejudice. On July 15, 2016, the court issued an order denying the Motion to Dismiss Claims against the Defendants, and directed Defendants to answer on or before August 15, 2016. On August 12, 2016, Defendants filed their Answer to the Amended Complaint.

On November 18, 2016, an Early Neutral Evaluation Conference and Case Management Conference were held before Magistrate Judge Louisa S. Porter. The case did not settle. A scheduling order issued thereafter on November 21, 2016. A Mandatory Settlement Conference is scheduled for October 2, 2017 at 10:00 a.m.

Kay Strategies is seeking $1,667,893 in compensatory damages and also undisclosed punitive damages and other court related costs. The Company has accrued all amounts due under the agreement.

Typenex v. Ubiquity:

On August 14, 2015, the Company was served with a demand for arbitration by Typenex Co-Investment, LLC (“Typenex”). Typenex was the holder of one of the many convertible notes issued by the Company. Typenex was claiming, among other things, that the Company is in breach of the convertible note issued in its favor (the “Note”), and that it is entitled to an injunction against the Company enjoining it from, among other things, up to and until the Note is paid in full (i) issuing any other convertible debt with a variable interest rate; (ii) paying any cash to the holders of any other convertible notes issued by the Company; and, (iii) issuing any additional shares of stock to the holders of any other variable interest rate convertible notes issued by the Company. The arbitrator issued an interim injunction for the equitable relief described above. Arbitration finally took place on March 22, 2016, and the arbitrator tentatively awarded Typenex damages, attorney fees and costs of $767,960.42, less $150,000~~.00~~, for a total award of $617,960.42. In addition, the arbitrator awarded Typenex costs. Finally, the arbitrator ~~kept~~ kept in place the prior interim restraining orders. Though Chris Carmichael also was named a defendant, he was dismissed by Typenex prior to the arbitration hearing. On April 19, 2016, Typenex filed a petition in the Third Judicial District Court in and for Salt Lake County, Utah to confirm the award. Ubiquity intends to respond and object to the petition. While the Company admittedly owes the principal on the Note, the Company believes the arbitrator erred in awarding any damages or interest thereon. Error is further ascribed to the arbitrator’s continuance of injunctive relief. The Company and Typenex are currently circulating settlement terms to resolve this matter. The Company has accrued all amounts due under the convertible note agreement.

F-24

Avant Garde v. Ubiquity:

Avant Garde initiated litigation against the Company, for the recovery of the Company’s lease of its office space in Irvine, California, claiming the Company’s failed to timely pay its September 2015 rent, allegedly one day late, under the applicable lease. When Ubiquity failed ~~inadvertantly~~inadvertently to timely answer the unlawful detainer suit, the Company was defaulted. Instead of moving to to set aside the default, the Company entered into two forbearance agreements, both of which lapsed. The Company then moved the ~~Orange~~ Orange County Superior Court for an order restoring the lease, which motion was denied. The court thereafter stayed the action ~~pending~~ pending the outcome of an appeal challenging the denial filed by Ubiquity. ~~The~~On ~~stay~~March is14, ~~still~~2016, inUbiquity ~~effect~~paid an additional $150,000 for an increased security deposit until the appeal is finalized. The ~~appeal~~Court ~~should~~of beAppeals ~~heard~~issued inits decision affirming the trial ~~about~~court’s ~~eight~~order ~~months~~denying Ubiquity’s Petition for relief from judgment declaring the release forfeited. The Opinion was issued on February 17, 2017 and made final April 21, 2017. On ~~March~~May 1417, ~~2016~~2017 ~~Ubiquity~~Avant ~~paid~~Garde anentered ~~additional~~into a settlement agreement with the Company reinstating the lease with the original terms and conditions of the lease. The lease will be up for renewal January 2020. The Company must provide a $150,000 ~~for~~letter anof ~~increased~~credit ~~security~~to ~~deposit~~its ~~until~~landlord ~~the~~by ~~appeal is~~June ~~finalized~~30, 2017 or it risks default on the lease.

Vista Capital

On March 10, 2016, Vista Capital Investments, LLC (“Vista”) filed suit against the Company for breach of contract, unjust enrichment, declaratory relief, promissory estoppel, fraud, negligent misrepresentation and civil conspiracy in the Superior Court, Central Division, For the County of San Diego, California. The genesis of the suit is Vista’s allegations that the Company breached two Convertible Notes, one for $100,000 and the other for $50,000, by failing to timely repay these notes, when Vista declared the notes all due and payable after the Company failed to make timely filings with the SEC. The Company denies any wrongdoing, and intends to challenge the complaint by demurrer. The Company currently has a settlement offer being circulated to dismiss all claims. The Company has accrued all amounts due under the convertible note agreement.

Keener Litigation

On March 1015, 2016 ~~Vista Capital Investments~~, ~~LLC~~Justin Keener (“~~Vista~~Keener”) ~~filed~~dba ~~suit~~JMJ ~~against~~Financial, sued the Company for breach of contract, ~~unjust enrichment,~~arising ~~declaratory~~out ~~relief,~~of a ~~promissory estoppel~~$300,000 ~~fraud,~~convertible ~~negligent~~note ~~misrepresentation~~representing ~~and~~capital ~~civil~~infusions ~~conspiracy~~by inKeener ~~the~~into ~~Superior Court, Central Division, For~~ the ~~County Of San Diego, California~~Company. ~~The~~Keener ~~genesis~~alleges of the ~~suit~~Company ishas ~~Vista’s~~failed ~~allegations~~to timely ~~that~~repay the ~~Company breached two Convertible Notes~~note, ~~one~~after ~~for~~Keener ~~$100,000~~demanded ~~and~~payment of the ~~other~~entire ~~for~~principal ~~$50,000,~~and byinterest ~~failing~~under tothe ~~timely~~note ~~repay~~due ~~these~~to ~~notes,~~the ~~when Vista~~Company’s ~~declared~~default ~~the~~of ~~notes~~certain ~~all~~other ~~due~~provisions ~~and~~of ~~payable after~~ the ~~Company~~note, ~~allegedly~~which, ~~failed~~as toalleged, ~~make~~accelerated ~~timely~~the ~~filings~~note ~~with~~repayments. ~~the~~A ~~SEC.~~Default ~~The~~judgment ~~Company~~was ~~denies~~entered ~~any~~against ~~wrongdoing~~Ubiquity on February 9, ~~and~~2017. ~~intends~~Ubiquity tois ~~challenge~~in the ~~complaint~~process byof ~~demurrer.~~setting ~~Vista~~aside ~~also~~the ~~seeks~~default ~~fraud~~judgment ~~damages~~so ~~against~~that ~~Chris~~a ~~Carmichael,~~reduced ~~the~~settlement ~~Company’s~~can ~~CEO,~~be ~~for~~negotiated ~~allegedly~~between ~~representing~~the ~~that~~parties. ~~the~~The Company ~~would~~has ~~remain~~accrued ~~current~~all inamounts ~~its~~due ~~SEC~~under ~~filings if~~ the ~~Loans~~convertible ~~were~~note ~~made~~agreement.

Keener Litigation

On March 15, 2016, Justin Keener (“Keener”) sued the Company for breach of contract, arising out of a $300,000.00 convertible note representing capital infusions by Keener into the Company. Keener alleges the Company has failed to timely repay the note, after Keener demanded payment of the entire principal and interest under the note due to the Company’s default of certain other provisions of the note, which, as alleged, accelerated the note repayments.

F-21

Firstfire Global Opportunities Litigation

On March 28, 2016, Firstfire Global Opportunities Fund LLC (“Firstfire”) filed suit against ~~the~~Ubiquity ~~Company~~ for breach of a ~~securities~~ securities purchase agreement, dated March 17, 2015, and a $140,250~~.00~~ senior convertible note (issued on March 17, 2015), attorneys’ fees and unjust enrichment in the Supreme Court of New York, New York County. Firstfire contends that ~~the~~Ubiquity ~~Company~~ breached the note by failing to timely repay “any amount towards the aggregate sum that Firstfire is owed,” the total of which is $304.889.88.

F-25

A Judgment in the total amount of $315,406.24 was issued on August 10, 2016. The Company is currently negotiating the debt and in the process of having the default set aside. The Company has accrued all amounts due under the convertible note agreement and judgment.

Brett and Mark Tomberlin Lawsuit

On April 8, 2016, a lawsuit was filed in the Orange County Superior Court by Brett and Mark Tomberlin, seeking damages for Ubiquity’s failure to timely repay under eight promissory notes totaling $184,450. They also claim that they were misled into believing that the notes would be paid timely. The Company denies the allegations. AtThe ~~present,~~company and ~~without~~the ~~admitting~~Tomberlin’s settled ~~liability~~for the following: (i) Ubiquity sells all rights of Queen Mary to Brett Tomberlin; (ii) Ubiquity transfers to Brett Tomberlin Bill of Sale and Short Form Bill of Sale of the Project; (iii) if the Project is produced and released, Ubiquity will receive 5% of 100% of Net Proceeds arising from the ~~Company~~Picture; (iv) If the Picture is produced and ~~Mr.~~released, ~~Tomberlin~~IDW ~~are~~Productions will accord Connie Jordan Carmichael and Christopher Carmichael an executive producer credit on the screen in ~~settlement~~the ~~negotiations.~~motion Inpicture; (v) Tomberlin shall pay Ubiquity $150,000 for Ubiquity’s actions; (vi) Tomberlin dismisses lawsuit and forgives the ~~meantime~~promissory notes; (vii) Tomberlin as a part of the mutual release, releases any claims that may arise as a part of the ~~Company~~termination ~~intends~~of tohis ~~demurrer~~employment from tothe company (viii) Ubiquity will indemnify Tomberlin of all claims, losses, etc. regarding Ubiquity’s warranties and representations in the ~~complaint~~Agreement; and (ix) Mutual release of the parties. The case was settled May 27, 2016 and dismissed May 31, 2016.

R Squared Partners, LLC Litigation

On April 20, 2016, R Squared Partners, LLC (“R Squared”) filed suit in the Supreme Court of New York, County of New York against Ubiquity and its CEO, Chris Carmichael, for breach of contract, breach of the implied covenant, unjust enrichment, specific performance, fraud, negligent misrepresentation, and civil conspiracy. The complaint essentially alleges that ~~the~~Ubiquity ~~Company~~ entered into a purchase and note transaction with R Squared whereby R Squared loaned the Company $140,250~~.00~~, which was due on September 20, 2015. R Squared alleges that, except for a $20,000~~.00~~ payment, the Company has not timely repaid the principal or interest on on the note. R Squared also ~~avers~~claims that the Company defaulted under other terms of the purchase agreement, including ~~the Company~~Ubiquity’s failure to obtain certain insurance policies, reduction of the book – value of certain of its assets, impairing its ability to pay its debts, and failure to honor R Squared’s third party participation rights by entering into third party financing agreements, though R Squared alleges that it has lost “not less than” $500,000.~~00.~~ R Squared also seeks sundry injunctive relief, restraining ~~the~~Ubiquity ~~Company~~ and Carmichael from entering into future third party agreements and stock issuances. Finally, R Squared seeks undefined fraud damages against ~~the~~Ubiquity ~~Company~~ and its CEO arising out of ~~the Company~~Ubiquity’s and Carmichael alleged representations, as manifested in the purchase agreement.

On October 27, 2016, the Court entered judgment in favor of R Squared Partners, LLC and against Ubiquity Inc. in the amount of $140,250 plus interest at 15% per annum from September 20, 2015 through entry of judgment. The Court also awarded R Squared Partners, LLC $17,500 in attorneys’ fees, per the terms of the promissory note.

In this order, the Court also ordered that the clerk sever and enter judgment dismissing all claims against Christopher Carmichael, finding that Plaintiff had failed to prove that Carmichael acted in any capacity other than as CEO of Ubiquity or that any basis for individual liability exists.

The Company is currently engaged in settlement discussions to exhaust this debt. The Company has accrued all amounts due under the convertible note agreement and judgment.

North Matter:

On October 10, 2014, the Company was served with a complaint filed on September 13, 2014 by a former consultant against the Company, in the Superior Court of Arizona, Maricopa County. The complaint alleges that the consultant was to receive warrants to purchase 1,142,857 shares of common stock as a commencement fees for services in which commenced on December 15, 2006. On October 28, 2016 North was awarded a $7,700,000 default judgment. The Company still believes the claim is without merit; inand ~~addition,~~also still believes the statute of limitations has passed. The Company ~~does~~recorded ~~not~~a ~~believe~~$7.7M ~~that~~loss contingency on the books as of December 31, 2015. The Company filed a ~~loss~~motion isto ~~probable~~vacate the default judgment and dismiss the action on March 30, 2017; the default judgment was vacated on July 10, 2017 and nothe ~~accrual~~case ~~for~~in ~~loss~~the ~~contingency~~Northern District of Illinois has been ~~made~~dismissed. The Company is currently assessing the accounting treatment of this dismissal to be reported in its 2017 financial statements.

~~Financing~~F-26

OnPillar ~~November~~Marketing 10, 2014, the Company engaged Deutsche Bank Securities Inc. to perform such financial advisory and investment banking services as the Company reasonably and specifically requests and as Deutsche Bank agrees. Deutsche Bank is engaged on a non-exclusive basis to provide advisory and investment banking services with respect to the exploration of strategic alternatives that may lead to a possible transaction, through sale, merger, joint venture or otherwise, whether effected in a single transaction or a series of related transactions, in which 40% or more of the voting power of the Company or all or a substantial portion of its business or assets are combined with or transferred to any company that is an acquisition target or another person or entity.Group:

~~Conversant~~On June 17, 2016 Pillar Marketing sent a demand for arbitration stemming from an alleged breach of contract from an agreement, dated ~~Inc~~April 23, 2015, for $45,000 of services. ~~Acquisition~~The company has not recorded a loss or contingency for this amount as it does not feel the balance is owed, and ~~Subsequent~~is ~~Termination~~unable to predict the outcome of the demand. On July 18, 2016, Pillar Marketing Group filed a demand for arbitration with AAA. No arbitration is currently scheduled.

OnLG ~~January~~Capital 27Funding, 2015, Ubiquity entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ubiquity Merger Sub, Inc., a wholly owned subsidiary of Ubiquity (“Merger Sub”), and Coversant, Inc. (“Coversant”), providing for the merger of Merger Sub with and into Coversant (the “Merger”), with Coversant surviving the Merger as a wholly owned subsidiary of Ubiquity. Coversant’s SoapBox platform is an Internet of Things Service Bus (IoT-SB) that securely and efficiently connects things (devices, sensors, actuators) to humans, applications and databases for analysis and controls of devices. SoapBox is designed to federate disparate systems and allow organizations to utilize current legacy equipment that are not able to communicate with each other to now do so with, in most cases, not having to upgrade hardware or software on the systems themselves.LLC

~~F-22~~On June 14, 2016, LG Capital Funding, LLC sued Ubiquity, Inc. claiming that Ubiquity owes LG Capital $238,508.71 under the provisions of the Convertible Promissory Note (due on April 17, 2016), due to default of filing requirements of Section 8 of the note. Ubiquity originally received $100,000 on the disputed note, and is unable to predict the outcome of the suit. The Company has accrued all amounts due under the convertible note agreement.

OnJustin ~~September 8~~Sundquist, ~~2015~~Henry ~~the Merger Agreement was terminated. The Company had not taken any steps to integrate Conversant into the operations of the Company~~Kingi, and ~~the~~Eagle ~~Company~~Flights ~~has~~Stunts, ~~not yet utilized any of the assets of Conversant or combined the financial results of Conversant into the financials of the Company~~Inc. ~~The Company believes that the termination of the Merger Agreement will not have a material effect on its operations.~~

~~NOTE~~On 11August -9, ~~RESTATED~~2016, ~~BALANCES~~the above filed a fraud and securities fraud action against Ubiquity. Plaintiffs were looking for rescission of their purchases of Ubiquity common stock, and payment to them by Ubiquity of the consideration given for such stock, plus interest at the legal rate. On October 3, 2016, the case filed by Justin Sundquist and Henry Kingi had been dismissed voluntarily, without prejudice. On October 14, 2016 the case filed by Justin Sundquist and Henry Kingi was moved to the San Diego United States District court in accordance with the low number rule. In January 2017, the court granted The Company’s motion to compel arbitration in Delaware. Mr. Kingi and Mr. Sundquist have filed for Arbitration with the American Arbitration Association claiming damages of approximately $1.8 million dollars representing approximately 1,444,000 common shares purchased and issued between May 2013 and November 2014. There are no future hearings on calendar, and the Company is unable to predict the future outcome.

~~The~~Bryan Board of Directors of Ubiquity, Inc. determined, that the accounting for certain intangible assets, the valuation of certain equity instruments, the non-consolidation of SME that certain amounts were not properly accounted for in prior years and that the financial statement for the three months ended September 30, 2014 were materially misstated. The following is a summary of the changes in balances from the Company’s previously issued financials for the three and nine months ended September 30, 2014 compared to the balances contained in the accompanying consolidated financial statements, which reflect the adjustments necessary to conform to the audited 2014 balances.Harpole

~~Statement~~On May 25, 2016, Bryan Harpole filed a lawsuit claiming a breach of ~~Operations~~the ~~for~~Employment Agreement, dated January 1, 2012 and related Amendment, dated July 25, 2013. His unconfirmed claims include the ~~three~~following ~~months~~payments: ~~ended~~unpaid ~~September~~salary (including statutory penalties according to proof pursuant to Labor Code 201 et seq amount undetermined), unpaid commissions ($4,268.25), unpaid bonuses ($55,548.30), unpaid ~~2014:~~vacation ($12,694) and sick ($1,731) days, medical insurance premiums ($5,100) and failure to deliver common stock (options) ($25,500) in accordance with the agreement Mr. Harpole would have been required to make full payment of the options as defined in the stock option agreement and Company’s demand after 30 days of his employment ceasing in the amount of $551,000.00 for the entirety of his 225,000 options or any portion thereof. As of the date of this filing no payment or payment arrangement has been made by Mr. Harpole, thus rendering the options invalid. Total damages include, but not limited to, $104,841.55 of salary amounts including statutory penalties plus possible court costs. He also sued for workers’ compensation benefits but was denied by the insurance carrier as being a false claim on July 25, 2016. Following rounds of demurrers, Bryan Harpole filed a Second Amended Complaint on March 13, 2017, removing the claims asserted against the officers and directors of the Company. This Complaint asserts a single cause of action for Breach of Contract against Ubiquity, Inc. This complaint claims the same damages as previously filed.

	Originally Filed Three Months Ended September 30, 2014			Adjustments			As Filed Herein Three Months Ended September 30, 2014
Revenues - related party	$	-				(A)	$	-
Meals and entertainment		7,696			1,463	(A)		9,159
Marketing		74,564			3,000	(A)		77,564
Outside and development services		9,605			90,178	(B)		99,783
Payroll expense		928,874			217,375	(A)		1,304,897
					158,648	(C)
Stock-based compensation		2,769,660			269,177	(D)		3,038,837
					-	(E)
Office and computer		159,432			2,248	(A)		161,680
Professional fees		446,635			8,380	(A)		455,015
					-	(F)
Rent		153,115			-	(A)		153,115
Travel		61,645			745	(A)		62,390
Taxes		6,798			-	(A)		6,798
Charitable contributions		15,708			-	(A)		15,708
Bad debt expense		-			-			-
Depreciation and amortization		413,352			24,382	(A)		484,086
					46,352	(B)
Other operating expenses		60,307			13,835	(A)		74,142
Interest expense		-			(1,733	)(A)		(1,733	)
Net loss	$	(5,123,518	)	$	(837,516	)	$	(5,961,034	)
Basic and diluted loss per share	$	(0.05	)				$	(0.06	)
Weighted average shares outstanding		98,602,314			(950,000	)(G)		97,652,314

Iconic Holdings, LLC

~~F-23~~On June 3, 2016, Iconic Holdings, LLC sued the Company, claiming that Ubiquity owes Iconic $400,000 under the provisions of the Convertible Promissory Note due to default of filing requirements of Section 2.00(e)(vi) of the Note. Ubiquity originally received $97,500 on the disputed note. The Company is currently in settlement discussions, and has accrued all amounts due under the convertible note agreement.

~~Statement of Operations for the nine months ended September 30, 2014:~~F-27

	Originally Filed Nine Months Ended September 30, 2014			Adjustments			As Filed Herein Nine Months Ended September 30, 2014
Revenues - related party	$	250,000		$	(250,000	)(A)	$	-
Meals and entertainment		42,967			6,097	(A)		49,064
Marketing		135,506			10,019	(A)		145,525
Outside and development services		35,371			338,519	(B)		373,890
Payroll expense		1,884,501			662,510	(A)		2,990,029
					443,018	(C)
Stock-based compensation		7,550,306			1,891,585	(D)		9,464,216
					22,325	(E)
Office and computer		305,656			11,161	(A)		316,817
Professional fees		1,278,735			47,161	(A)		1,325,896
					-	(F)
Rent		404,398			-	(A)		404,398
Travel		246,989			18,261	(A)		265,250
Taxes		9,109			2,908	(A)		12,017
Depreciation and amortization		1,183,806			73,143	(A)		1,302,260
					45,311	(B)
Other operating expenses		227,621			30,724	(A)		258,345
Interest expense		-			(4,110	)(A)		(4,110	)
Net loss	$	(13,174,217	)	$	(3,857,002	)	$	(17,031,219	)
Basic and diluted loss per share	$	(0.14	)				$	(0.18	)
Weighted average shares outstanding		95,916,769			(950,000	)(G)		94,966,769

American States Insurance Company

~~Statement~~One June 9, 2016 America States Insurance Company filed a breach of ~~Cash~~contract ~~Flows:~~against Ubiquity for a total potential amount owed of $44,904.73. The company contends it cancelled the agreements and is unable to determine the outcome of the breach of contract claim.

	Originally Filed Nine Months Ended September 30, 2014			Adjustments			As Filed Herein Nine Months Ended September 30, 2014
Net loss	$	(13,174,217	)		(3,857,002	)	$	(17,031,219	)
Depreciation and amortization		1,183,806			73,143	(A)		1,302,260
					45,311	(B)
Stock-based compensation		7,550,306			1,891,585	(D)		9,464,216
					22,325	(E)
Accounts receivable		(9,000	)		-			(9,000	)
Accounts receivable - related party		(100,000	)		100,000	(A)		-
Prepaid expenses		(26,867	)		-			(26,867	)
Other current assets		-			5,400	(A)		5,400
Accounts payable		(301,746	)		12,011	(A)		(289,735	)
Accrued expenses		670,742			298,063	(A)		968,805
Credit cards payable		(33,712	)		-	(A)		(33,712	)
Net cash used in operating activities	$	(4,240,688	)	$	(1,409,164	)	$	(5,649,852	)

De Lage Landen Financial Services, Inc.

~~F-24~~On January 29, 2016, De Lage Landen claimed the Company breached its leasing agreement dated on or about May 17, 2011 and claim breached damages of $29,396.37. The Company has not accounted for an accrual for this claim as it us unable to determine the outcome at this time. The Company contends it does not owe the balance as the lease was terminated.

	Originally Filed Nine Months Ended September 30, 2014			Adjustments			As Filed Herein Nine Months Ended September 30, 2014
Loans to related parties	$	(787,311	)		367,775	(A)	$	(419,536	)
Purchase of property and equipment		(47,702	)		-			(47,702	)
Other assets		(53,493	)		(5,500	)(A)		(58,993	)
Acquisition of intangible assets		(735,520	)		338,519	(B)		(397,001	)
					-	(A)
Cash from SME		-			19,727	(A)		19,727
Net cash used in investing activities	$	(1,624,026	)	$	720,521		$	(903,505	)

William Alessi

	Originally Filed Nine Months Ended September 30, 2014			Adjustments			As Filed Herein Nine Months Ended September 30, 2014
Net proceeds from loan payable - related party	$	168,000			53,272	(A)	$	221,272
Equity issuance costs		(443,018	)		443,018	(C)		-
Proceeds from sale of common stock		6,320,578			193,000	(A)		6,513,578
		-			-	(G)
Net cash provided by financing activities	$	6,045,560		$	689,290		$	6,734,850

William Alessi alleges that Ubiquity hired him to work as a consultant on May 21, 2015 and agreed to pay him 1,160,000 shares of common stock for the service period from May 21, 2015 to May 20, 2016. Alessi contends that the stock was trading at $.36 per share and was worth $417,600. The Company contends it issued such shares in September 2015 in accordance with the contract and does not owe anything further.

~~The following is a description of the restated September 30, 2014 as filed herein.~~F-28

~~(A)~~NOTE ~~The~~9 differences reflect the consolidation of SME effective January 1, 2014 and the change to SME’s accounts during the three and nine months ended September 30, 2014. At the time, the Company did not have an equity ownership in SME. However, since SME was primarily owned by officers of the Company. The Company determined that as of January 1, 2014, SME should be consolidated in with the Company’s operations. This determination was based upon the fact that the Company was the primary funding source for SME’s operations. Prior to 2014, SME funded operations through the sale of SME common stock. In addition, all inter-~~company transactions~~ ~~between~~SUBSEQUENT ~~SME and Ubiquity were eliminated.~~EVENTS

~~(B)~~Convertible To correct amortization expense on intangible assets. The Company adjusted amortization expense for the three and nine months ended September 30, 2014. The change was primarily due to the reduction in carrying value of the intangible assets prior to December 31, 2012, offset by a decrease in estimated life of such asset from fifteen to five year. In addition, the Company expensed $90,178 and $338,519 in development expenses in which had been previously capitalized during the three months ended September 30, 2014, respectively.Note

~~(C)~~On ToOctober ~~correct~~21, ~~bonuses~~2016, ~~recorded~~the asCompany entered into an ~~offset~~agreement with a debt holder in which $5,466 in accounts payable was converted to a ~~equity~~convertible ~~rather~~promissory ~~than~~note ~~expense~~in the same amount. ~~Previously,~~Under the ~~bonuses~~terms ~~had~~of ~~been~~the ~~recorded~~agreement, asthe annote ~~offset~~was immediately convertible at $0.001 toper ~~the~~share, ~~proceeds~~incurred ~~recorded~~interest ~~within~~at ~~additional~~10% ~~paid~~and indue ~~capital~~upon demand. The ~~correction~~Company ~~increased~~accounted for the ~~net~~transaction ~~loss~~in ~~for~~ the ~~three~~quarter ~~and~~ended ~~nine months~~December ~~ended~~31, ~~September~~2016 ~~30,~~when ~~2014~~a byconversion was requested. The Company determined that a beneficial conversion feature of $~~158~~5,~~648~~466 will be recorded and immediately expensed as interest expense at the time of the original agreement. Assignees of the holder converted $~~443~~5,~~018~~466 of the balance into 5,466,000 ~~respectively~~shares of common stock, on October 21, 2016.

(D) To correct stock based compensation related to options granted to management and employees. Initially, the options issuable under employment contract were valued at the end of the year. However, beginning in 2014 the options were valued at the beginning of the year and expensed over the course of the year. This change caused additional expense of $269,177 and $1,891,585 to be recorded within the three and nine months ended September 30, 2014, respectively.

(E) To correct stock based compensation related to common stock issued for services. In connection with a services agreement with Nick Mitsakos with a one year term entered into during 2013. Initially, the Company recorded the unamortized portion of $312,500 as deferred stock based compensation. To correct, the Company recorded the remaining amortization as a prepaid, amortizing over the term of the agreement. The adjustment increased compensation expense during the three and nine months ended September 30, 2014 by $0 and $22,325, respectively.

(F) To correct amounts accrued under Nick Mitsakos’ consulting contract in which were earned during the three months ended March 31, 2014 but recorded within the three months September 30, 2014.

F-25

(G) To correct the par value of shares incorrectly shown as outstanding as of December 31, 2013 in which were never issued. The shares were not split effected during the 4:1 forward split and thus causing the error. In addition, the item had an impact on the weighted average shares outstanding of approximately 950,000 common shares.

NOTE 12 - SUBSEQUENT EVENTS

Sales of Common Stock

Subsequent to ~~September~~March 3031, ~~2015~~2016, the Company issued approximately 5553,~~164~~768,~~252~~790 shares of common stock for cash proceeds of $13,~~822~~867,~~530~~788. Each ~~sale~~ sale was made pursuant to a Securities Purchase Agreement the Company has used for previous sales of its common stock and containing terms, conditions, representations, and warranties typically found in similar transactions. Each sale was an exempt private placement with offers and sales made only to “accredited investors” without the use of public advertising and without registration under the Securities Act in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws.

See Note 2 for proceeds received subsequent to September 30, 2015 related to Sprocket Wearables.

Common stock issued for services

Subsequent to ~~September~~March 3031, ~~2015~~2016, the Company issued approximately 115,~~250~~409,~~000~~712 shares of common stock for services.

~~Common stock issued for retirement of debt.~~Licensing

~~Subsequent~~On May to5, ~~September~~2016 ~~30,~~(the ~~2015~~“Effective Date”) Ubiquity, Inc. (the “Company”) entered into a Non-Exclusive ~~issued~~License ~~approximately~~Agreement 1(the “License Agreement”) with Dash Radio,~~361~~ Inc. (“Dash Radio”),~~834~~ ~~shares~~a Delaware corporation. Pursuant to the terms of ~~common~~the ~~stock~~License Agreement, the Company agreed to grant to Dash Radio worldwide non-exclusive license to use its patents and trademarks of the Sprocket technology. As consideration for the ~~retirement~~granting the non-exclusive license, Dash Radio shall pay royalties to the Company equal to (1) 5% of the gross sales of the Dash Radio App, (2) an entry fee equal to one hundred thousand dollars ($100,000). In addition, Dash Radio shall maintain a ~~portion~~minimum sales volume of the ~~company’s~~licensed ~~accounts~~goods as described below. If Dash Radio fails to reach the minimum sales volume at any time, then a royalty on the difference between the minimum sales and the actual sales shall be due and payable 10 days after the close of the calendar year in which the sales took place.

~~Subsequent~~On toApril ~~September 30~~24, ~~2015~~2017, the Company ~~issued~~entered ~~approximately~~into 1an exclusive license agreement with ADGUILD Japan,~~986~~ L.T.D. until December 31,~~439~~ ~~shares~~2021 primarily licensing its Sprocket, Immersive, and Lifestyle Patents in a predetermined territory. The License has a non-refundable entry fee in the amount of ~~common~~$3,000,000.00 ~~stock~~(THREE ~~for~~MILLION DOLLARS) to be paid out over the ~~retirement~~term of athe ~~portion~~agreement. The Company will also receive royalties of 5% of the gross sales of all licensing related revenue with minimum sales requirements each year as follows, ~~Company’s~~$575,000 ~~accounts~~for ~~payable~~2017, $1,250,000 for 2018, $1,500,000 for 2019, $1,750,000 for 2020, and $2,250,000 for 2021.

~~Common Stock Issued to the~~ Board of ~~Directors:~~Director Activity

~~Subsequent~~On February to1, ~~September 30~~2016, ~~2015~~the Board of Directors (the “Board”) of Ubiquity, Inc. (the “Company”), appointed Greg ~~issued~~Jones, ~~approximately~~62, 5as a new member of the Board. He has held key positions in the development of finance,~~650~~ technology and marketing companies in Asia,~~500~~ ~~shares~~U.S., and Australia. Since 2013, Mr. Jones has served as Principal of ~~common~~Kee Capital Group, where he has assisted in raising finances for various infrastructure projects and developed markets in consumer products leasing for SME’s in Asia and developed a leasing organization for major items including aviation products, locomotives and rolling stock. toSince 2012, Mr. Jones has also served as the ~~Board~~Chairman of ~~Directors~~Strategic Marketing Services International Limited, located in Hong Kong, where he designed for brand development and marketing of various products for private companies and agencies. He has also currently serves as a Director of the Australian College of Arts International Pty Limited, Ausmusic Limited, and Wallace Wine Company.

~~Preferred Shares issued to Officers:~~F-29

~~Subsequent~~On June to1, ~~September 30~~2016, ~~2015~~Webb Blessley resigned as a member of the Board of Directors (the “Board”) of Ubiquity, Inc. (the “Company”). ~~issued~~Mr. ~~approximately~~Blessley’s ~~500~~resignation ~~shares~~was ofnot ~~Series~~related Ato ~~Preferred~~any ~~Voting~~disagreement ~~Stock~~with ~~and~~the 2Company on any matter relating to the Company’s operations,~~000,000~~ ~~shares~~policies ofand ~~Series~~practices. AThe ~~Preferred~~Company ~~Stock~~accepted Mr. Blessley’s resignation and expressed appreciation for the services he performed as a director. Mr. Blessley also resigned from his duties as Secretary and Treasurer.

June 8, 2016 - As a part of the corporate restructuring plan of Ubiquity, Inc. (the “Company”), on June 8, 2016, Nick Mitsakos, who was presently Co-Chairman was appointed as Interim Chief Executive Officer and will remain as Co-Chairman of the Company. Mr. Carmichael who has served the dual roles of CEO and Creative Architect relinquished the role of CEO and remained Co-Chairman and continue to serve as Chief Creative Architect of the Company. Mr. Carmichael’s relinquishing of his role as CEO was not related to any disagreement with the Company on any matter relating to the Company’s operations, policies and practices. The Company expressed appreciation for the services Mr. Carmichael performed as a Chief Executive Officer.

June 10, 2016 - As a part of the corporate restructuring plan of Ubiquity, Inc. (the “Company”), on June 10, 2016, Greg Jones relinquished his role as a board member of Ubiquity, Inc. and rescinded all contracts between himself and Ubiquity, Inc. Mr. Jones departure was not related to any disagreement with the Company on any matter relating to the Company’s operations, policies and practices. The Company expressed appreciation for the services Mr. Jones performed as a Board Member.

June 20, 2016 - As a part of the corporate restructuring and growth plan of Ubiquity, Inc. (the “Company”), on June 20, 2016, Jonathan Kalbfield signed his contract to become Ubiquity, Inc’s. Chief Technology Officer.

August 12, 2016 - Nicholas Mitsakos resigned as the Interim Chief Executive Officer and as the Co-Chairman and member of the Board of Directors of Ubiquity, Inc. effective August 12, 2016. Mr. Mitsakos’ resignation was not related to any disagreement with the Company on any matter relating to the Company’s operations, policies and practices. While serving on the board of directors and as CEO of the company, Mitsakos failed to advise the board of his SEC investigation into a company owned and solely controlled by Mitsakos known as Matrix Capital. Matrix Capital has never had any affiliation with Ubiquity, its Officers, Directors, or Shareholders whatsoever.

On August 15, 2016, the Board of Directors (the “Board”) of Ubiquity, Inc. (the “Company”), appointed Bola Ajere, 68, as a new member of the Board. Bola Ajere is the President & CEO and founder of the AMC Consulting Group, a management and technology consulting company based in Los Angeles, California, specializing in Information Technology, Corporate Governance, Risk Management and Regulatory Compliance Programs. He is also the CEO and founder of the Sierra Madre Group, an Intellectual Property Management and manufacturing company. Recently, he founded the AMC Online Media Services Company, a professional online interactive media company based in Los Angeles, California.

On April 20, 2017, the Board of Directors (the “Board”) of Ubiquity, Inc. (the “Company”) voted to appoint Robert B. Fernander to fill a vacancy on the Company’s Board. The Company entered into a Board of Directors Retention Agreement (the “Retention Agreement”) with Mr. Fernander, pursuant to which the Company agreed to grant 250,000 shares of the Company’s Common Stock for the first year of service under the Retention Agreement, and an additional 250,000 shares of the Company’s Common Stock for each year of service as a director thereafter.

Mr. Fernander has not been appointed to any committees of the Board at this time; however, the Company expects that he will be appointed to one or more Board committees in the future. There are no arrangements or understandings between Mr. Fernander and any other persons pursuant to which Mr. Fernander was appointed a director of the Company.

Potential/Actual Board Resignations

Bola Ajere has resigned from his respective position as an independent board member from the Ubiquity Inc. He will consider rejoining the board if Ubiquity Inc. is able to obtain a D & O insurance with a coverage of $5 million.

F-30

On May 25, 2017 Mr. Robert Fernander expressed his intentions to resign from the Board of Directors, should Ubiquity be unable to secure adequate levels of directors and officers Insurance.

Interim CEO Appointment

On June 20, 2017, at the request of the majority of the Company’s shareholders current chairman Christopher Carmichael has agreed to become the Company’s Interim Chief Executive Officer and will remain as Chairman of the Company. Mr. Carmichael who has previously served the dual roles of CEO and Creative Architect will retain the role of interim CEO, Chief Creative Architect, and Chairman until the shareholders meeting.

Suspension of Trading

On March 20, 2017, the Securities and Exchange Commission (“SEC”) announced the temporary suspension of trading in the securities of Ubiquity, Inc., a Nevada corporation (the “Company or “Ubiquity”) (OTC Link: UBIQ), pursuant to Section 12(k) of the Securities Exchange Act of 1934 (“Exchange Act”). The trading suspension commenced at 9:30 a.m. EDT on March 20, 2017, and terminated at 11:59 p.m. EDT on March 31, 2017. The trading suspension may be extended by the SEC for a period of up to thirty (30) calendar days.

The SEC stated the following in its release (Release No. 80275)

The Commission temporarily suspended trading in the securities of Ubiquity due to a lack of current and accurate information about the company because Ubiquity is delinquent in its requisite periodic filings with the Commission pursuant to Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder. This order was entered pursuant to Section 12(k) of the Exchange Act.

Periodic Reports that Have Not Been Filed

Ubiquity has not filed its Annual Report on Form 10K as of, and for the annual period\ending D December 31, 2016, respectively; or any of the quarterly reports on Form 10Q required under the Exchange Act for 2016.

Administrative Hearing that May Result in Revocation of Registration Under the Exchange Act

Additionally, on March 20, 2017, Ubiquity was named as a respondent in an Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Exchange Act, File No. 3-17884 (the “Order”). The SEC stated in the Order,

In view of the allegations made by the Division of Enforcement, the Commission deems it necessary and appropriate for the protection of investors that public administrative proceedings be instituted to determine [among other things]: … B. Whether it is necessary and appropriate for the protection of investors to suspend for a period not exceeding twelve months, or revoke the registration, of each class of securities registered pursuant to Section 12 of the Exchange Act of the Respondent, and any successor under Exchange Act Rules 12b-2 or 12g-3, regardless of corporate name.

A related Administrative Procedures Ruling was issued on March 21 and provides that the administrative hearing will be held on April 17, 2017. A pre-hearing conference will be scheduled as required under this Administrative Procedures Ruling.

If Ubiquity’s registration under Section 12(j) of the Exchange Act is revoked, then Ubiquity’s periodic reporting obligations under the Exchange Act will terminate and the trading of Ubiquity’s securities will cease unless Ubiquity is able to otherwise register its securities.

F-31

The Company is assessing its best course of action under the current circumstances to preserve the value of the Company for its shareholders, including participation in the administrative hearing. There can be no assurance that Company will be able to prevail at the administrative hearing or that the registration of each class of its securities registered pursuant to Section 12 of the Exchange Act will not be revoked.

Suspension of Trading and Pending Administrative Hearing.

As disclosed on March 20, 2017 in the Form 8-K filed by Ubiquity, Inc., a Nevada corporation (the “Company” or “Ubiquity”) (OTC Link: UBIQ), on March 20, 2017, the Securities and Exchange Commission (“SEC”) announced the temporary suspension of trading in the securities of the Company pursuant to Section 12(k) of the Securities Exchange Act of 1934 (“Exchange Act”). The trading suspension commenced at 9:30 a.m. EDT on March 20, 2017, and would terminate at 11:59 p.m. EDT on March 31, 2017. The trading suspension may be extended by the SEC for a period of up to 30 calendar days. As stated in its release, the SEC temporarily suspended trading in the securities of Ubiquity due to a lack of current and accurate information about the company.

The Company also disclosed that it was named as a respondent in an Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Exchange Act, File No. 3-17884 (the “Hearing”). The purpose of the Hearing before an Administrative Law Judge is to determine whether it is necessary and appropriate for the protection of investors to suspend for a period not exceeding twelve months or revoke the registration, of each class of securities of the Company registered pursuant to Section 12 of the Exchange Act. The hearing was originally scheduled for April 17, 2017, but the new motion for summary disposition and the SEC’s reply will be due July 10 and July 17, 2017 respectively.

Through its counsel, the Company has been in contact with the SEC regarding the upcoming hearing. In these communications, the Company has informed the SEC of its plan to get current on outstanding Section 12 filings and become fully compliant as soon as is reasonably practicable.

The Restructuring Plan

In addition, the Company is currently indebted in the amount of approximately $3.1 million to certain hedge funds and other investors holding convertible debt securities and warrants of the Company. Substantially all of these obligations are currently in default, either by reason of non-payment or alleged breaches of covenants contained in the various investment agreements.

Since 2015, the Company has been named as a defendant in 16 lawsuits filed by various third parties, primarily consisting of holders of its debt securities, alleging damages in excess of $3.0 million. In addition, due in part to its prior lack of funds to defend certain all claims, in some cases, default judgments aggregating approximately $8.0 million were entered against the Company. The Company has recently retained or is in the process of retaining litigation counsel for all such matters to the extent they are not resolved in the near future. Litigation counsel is in the process of evaluating the Company’s positions in such matters, including the possibility of seeking to vacate the default judgments.

Although the Company believes that under its proposed Restructuring Plan set forth below (the “Restructuring Plan”), most, if not all, of the litigation relating to investors who provided debt or equity financing to the Company can be settled on commercially reasonable terms, there can be no assurance that the Company will be able to settle any of such claims or vacate any default judgments.

As indicated in our March 24, 2017 Form 8-K, Ubiquity was unable to file its Annual Reports on Form 10-K as of, and for the annual periods ending December 31, 2015 and December 31, 2016 or the quarterly reports on Form 10-Q required under the Exchange Act during 2016, for several reasons, including inability to obtain requisite financial information from a Non-U.S. entity. We recently were able to obtain such financial information and commenced all procedures necessary to enable us to prepare such financial statements, including our unaudited financial statements for the three months ended March 31, 2017.

F-32

The Company intends to undertake a Restructuring Plan described in order to (a) ultimately achieve compliance with its reporting obligation under the Exchange Act, (b) settle all, if not substantially all, of its outstanding litigation, and (c) implement its business plan to commercialize its patent portfolio and provide software as a service (SaaS), mobility as a service (MaaS), virtual and augmented reality products and services.

Such Restructuring Plan contemplates the following actions to be taken by the Company:

Compliance with Exchange Act Reporting Requirements.

The Company is currently working with its securities counsel and its independent auditors to complete and file with the SEC as soon as reasonably practicable, its past due periodic SEC required filings.

In the event that the Company’s registration under Section 12 of the Exchange Act is revoked, or if the Company ultimately elects to voluntarily delist its securities under the Exchange Act, the Company will nevertheless undertake to complete as soon as reasonably practicable its audited and unaudited financial statements for the past due fiscal years and interim periods. The Company will then seek to relist its securities under Section 12 of the Exchange Act, by filing a registration statement under either the Securities Act of 1933, as amended, or the Exchange Act.

However, if the Company’s registration under Section 12 of the Exchange Act is revoked, or if the Company ultimately elects to voluntarily delist its securities under the Exchange Act, even if we comply with our commitments set forth above and in our Restructuring Plan, there can be no assurance that the Company’s will ever be able to relist its securities for trading under Section 12 of the Exchange Act.

Equity Financing

Under our proposed Restructuring Plan, the Company will undertake to obtain commitments from strategic investors for a private placement equity financing of between $5.0 million and $10.0 million. In such connection, the management of the Company has sent proposed subscription documents to prospective investors, under which such investors would subscribe to purchase Common Stock at $0.25 per share (subject to certain “make-whole” share adjustments provided therein). All funds provided with subscriptions would be placed into a special escrow account acceptable to such investors, and shall be released to the Company only upon consummation of the Restructuring Plan described herein, including the filing of all SEC Reports and (if applicable) relisting of the Company securities under Section 12 of the Exchange Act. In addition, such subscription agreement provides that each subscribing investor will have the option, exercisable within ten days of receipt of either (a) the Company’s 2016 Form 10-K Annual Report and the Form 10-Q Quarterly Report for the three months ended March 31, 2017, or (b) a registration statement covering Company securities declared effective by the SEC, to rescind his or its investment in Company securities.

There can be no assurance that the Company will be able to obtain subscriptions for the contemplated minimum $5,000,000 of equity financing on the above contemplated terms, if at all.

Settlements with Creditors.

Subject to establishment of an escrow account with a minimum of $5,000,000, the Company will then seek to negotiate settlements with its creditors which would include payment or restructuring of the terms of convertible notes currently in default. There can be no assurance that the Company will be able to effect such settlements on terms acceptable to the Company, if at all.

F-33

Reverse Stock Split.

Simultaneous with the filing of the SEC Reports under the Exchange Act or in connection with any subsequent registration statement filed with the SEC, the board of directors of the Company is considering filing an amendment to the Articles of Incorporation of the Company to affect a 1:16 to 1:20 reverse stock split of its 800,000,000 authorized shares of Common Stock, and 290,760,132 issued and outstanding shares of Common Stock. Upon conversion of outstanding convertible notes and warrants approximately an additional 60,000,000 shares of Common Stock are also subject to issuance.

If such reverse stock split is implemented, the Company would have authorized 53,333,333 shares of Common Stock and 10,000,000 shares of Preferred Stock authorized under its restated Articles of Incorporation, and approximately 19,384,000 shares of Common Stock and 500 shares of preferred stock issued and outstanding. Each of the 500 shares of such outstanding preferred stock carries with it 1,000,000 votes at any regular or special stockholders meeting or in connection with any consents required by stockholders. All 500 shares of such preferred Stock are owned by Christopher Carmichael, Board of Director and Connie Jordan, the Executive Vice President of the Company.

Stockholders Meeting.

At such time as the Company has completed its audited financial statements for the fiscal years ended December 31, 2015 and December 31, 2016 and its unaudited interim financial statements, the Company will call a stockholders meeting to (a) elect a board of directors, which will include, in addition to the current board members, three independent directors; and (b) ratify prior transactions, including the Restructuring Plan. In any event, whether or not the Restructuring Plan has been accomplished, the Company will nonetheless hold its annual stockholders meeting on or about September 5, 2017, or as soon thereafter as is practicable.

There can be no assurance that all or any material portion of the Company’s proposed Restructuring Plan will be accomplished if at all. The failure to achieve all or substantially all of the provisions of such Restructuring Plan would have a material and adverse effect on the Company and put its ability to continue its business operations into substantial doubt; as a result of which current investors in the Company could lose their entire investment.

Suspension of Trading and Pending Administrative Hearing.

As disclosed on March 20, 2017 in the Form 8-K filed by Ubiquity, Inc., a Nevada corporation (the “Company” or “Ubiquity”) (OTC Link: UBIQ), on March 20, 2017, the Securities and Exchange Commission (“SEC”) announced the temporary suspension of trading in the securities of the Company pursuant to Section 12(k) of the Securities Exchange Act of 1934 (“Exchange Act”). As stated in its release, the SEC temporarily suspended trading in the securities of Ubiquity due to a lack of current and accurate information about the Company.

The Company also disclosed that it was named as a respondent in an Order Instituting Administrative Proceedings (the OIP”) and Notice of Hearing Pursuant to Section 12(j) of the Exchange Act, File No. 3-17884 (the “Hearing”). The purpose of the Hearing before an Administrative Law Judge is to determine whether it is necessary and appropriate for the protection of investors to suspend for a period not exceeding twelve months or revoke the registration, of each class of securities of the Company registered pursuant to Section 12 of the Exchange Act. The Hearing was originally scheduled for April 17, 2017.

On April 7, 2017, the Company, which has been delinquent in its periodic filings following its report for the quarter ended September 30, 2015, filed its Answer to the OIP and advised the SEC and the Administrative Law Judge that it plans to become current by June 30, 2017. On April 11, 2017, the Administrative Law Judge vacated the April 17, 2017 hearing date and issued a scheduling order for the SEC’s intended motion for summary disposition, pursuant to 17 C.F.R. § 201.250(b). The SEC served the Company on June 15, 2017. The Company’s opposition to the SEC’s motion and the SEC’s reply will be due on July 10, 2017, and July 17, 2017, respectively.

Other

In accordance with ASC 855-10, the Company has analyzed its operations subsequent to ~~September~~March 3031, ~~2015~~2016 through the date these consolidated financial statements were issued and has determined that it does not have any material subsequent events to disclose other than the events described above.

F-2634

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

Cautionary Notice Regarding Forward Looking Statements

The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

This filing contains a number of forward-looking statements which reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

Readers should not place undue reliance on these forward-looking statements, which are based on management’s current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below), and apply only as of the date of this filing. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Overview

Ubiquity, Inc. (the “Company,” “Ubiquity,”, “We,” or “Us”), was incorporated in the State of Nevada on December 2, 2011. On March 5, 2013, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ubiquity Acquisition Corporation, a Nevada corporation and wholly-owned subsidiary of the Company (“Acquisition Sub”), and Ubiquity Broadcasting Corporation, a Delaware corporation (“Ubiquity-DE”).

The transaction was regarded as a reverse merger whereby Ubiquity-DE was considered to be the accounting acquirer as its management retained control of the Company after the Share Exchange.

Business

4Ubiquity expects new markets to be created and existing markets to be disrupted by Virtual Reality (“VR”), Augmented Reality (“AR”) and Mixed Reality (“MR”) as used in the Sprocket platform. There are many examples of how (“VR”), (“AR”) and (“MR”) can reshape existing forms of entertainment and commerce - from buying a new home, interacting with a doctor, or watching a football game. As the technology advances, we believe that price points will decline, and an entire new marketplace of applications (both business and consumer) will enter the market. Ubiquity believes VR/AR has the potential to spawn a multibillion-dollar industry, and may possibly be as game changing as the advent of the PC. VR (which immerses the user in a virtual world) and AR (immerses the user which overlays digital information onto the physical world) is driving a trend towards the adoption of software and applications delivered via head-mounted-devices (HMDs) as a new computing form factor.

~~The~~Ubiquity ~~Company~~has ~~believes~~adapted itits ~~can~~platforms ~~license~~to include the ~~Sprocket~~advancement ~~platform~~of toVirtual, ~~third-party~~Augmented ~~companies,~~and ~~such~~Mixed asreality. ~~telecom~~It ~~companies~~has ~~and~~excited ~~large~~the ~~enterprises~~public for decades, ~~enabling~~and ~~these~~is ~~customers~~happening now due to ~~develop~~the ~~personalized~~alignment ~~applications~~of ~~either~~ecosystem ~~for~~drivers ~~their~~and ~~customer~~technology ~~base~~advancements orenabling ~~within~~the ~~their~~delivery ~~enterprise.~~of Itproducts isand ~~envisioned~~services ~~that~~via this medium. Currently, mobile technologies are accelerating the ~~end-user~~adoption ~~will~~of ~~pay~~products aand ~~nominal~~services ~~monthly~~designed ~~fee~~to ~~for~~stimulate our ~~the~~human ~~Sprocket,~~senses with realistic feedback that ~~nominal~~is ~~fee~~truly ~~would~~immersive beand ~~multiplied~~that byallows ~~the~~intuitive ~~total~~interactions. We believe desktop, video, ~~number~~shopping, ofentertainment, ~~users~~travel, ~~resulting~~education inand atraining, ~~potentially~~fitness, ~~substantial~~and ~~license~~healthcare ~~fee~~applications can be materially enhanced by Virtual, (VR) Augmented (AR) and Mixed reality (MR). Ubiquity aims to capitalize on the ~~Company~~evolving inuse cases, the ~~form~~potential market disruption, and the challenge of ~~recurring~~moving ~~revenue~~from science fiction to widespread adoption.

~~The~~Virtual, ~~Company~~Augmented ~~has~~and ~~developed~~Mixed ~~several~~reality ~~unique~~is ~~products~~essentially ~~that~~an ~~function~~artificial, ~~very~~software-created ~~effectively~~environment onpresented ~~the~~to ~~Sprocket~~users ~~platform,~~in such asan ~~GiftSender (a mobile~~immersive ~~wallet);~~way ~~Monkeybars~~that (ait ~~social~~is ~~mobility~~accepted ~~distribution~~by ~~platform);~~the ~~and,~~user ~~its~~as ~~own video search engine~~real. ~~The~~By ~~Sprocket~~stimulating ~~platform~~the issenses ~~also a~~of ~~powerful~~sight ~~incubator.~~and ~~Third-party~~sound ~~developers~~–and ~~can~~sometimes ~~use~~touch– ~~its common standard to develop effective apps that address any range of users’~~we ~~needs~~can ~~and~~interact ~~applications.~~with ~~The~~these ~~Company~~environments ~~also~~in ~~has~~much ~~proprietary~~the ~~video~~same ~~intelligence~~way ~~software~~as ~~which~~we itwould ~~proposes~~the toreal ~~sell to government customers~~world.

~~The~~Immersion ~~Company~~enhances iseveryday committed to bringing the best user experience to its customers through its innovative products and services. The Company’s business strategy leverages its unique ability to design and develop its own proprietary platformsexperiences, ~~software~~making ~~applications,~~them ~~and services~~more ~~to provide its customers new products and solutions with superior ease-of-use~~realistic, ~~seamless integration~~engaging, and ~~innovative design~~satisfying. ~~The~~ ~~Company believes continual investment in research and development~~VR, ~~marketing~~AR and ~~advertising~~MR isprovide ~~critical to~~ the ~~development and~~ultimate ~~sale~~ level of ~~innovative~~immersion, ~~products~~creating ~~and~~a ~~technologies.~~sense ~~As part~~ of ~~its~~physical ~~strategy,~~presence ~~the~~in ~~Company~~real ~~continues~~or toimagined ~~expand its platform for the discovery and delivery of third-party digital content and applications~~worlds. ~~The~~They ~~Company~~bring ~~also supports~~ a ~~community~~new paradigm for ~~the~~how ~~development of~~we ~~third-party~~can ~~software~~interact with ~~and hardware products and digital content that complement~~ the ~~Company’s~~world, ~~offerings.~~offering ~~The~~unprecedented ~~Company’s strategy~~experiences ~~also includes expanding its distribution network to effectively reach more customers~~ and tounlimited ~~serve~~possibilities asthat awill ~~gateway~~enhance ~~for~~our ~~new business~~lives ~~opportunities~~in ~~worldwide~~many ways.

Recent Developments

Acquisition of Sponsor Me, Inc.

On December 31, 2014, the Company entered into a Share Exchange Agreement (the “Exchange Agreement”) with Sponsor Me, Inc. (“Sponsor Me”), a Nevada corporation, a related party. The Effective Date of the transaction was March 31, 2015 (the “Effective Date”) and resulted in the acquisition (the “Acquisition”) of Sponsor Me. Pursuant to the terms of the Exchange Agreement, Ubiquity acquired all of the outstanding capital stock of Sponsor Me from the Sponsor Me shareholders for an aggregate of 3,878,467 shares, or 3.59% of the Company’s common stock.

~~Sprocket~~Recent HKDevelopments

On ~~March~~November 1310, 2015, (the ~~“Effective~~Company ~~Date”)~~issued ~~Ubiquity, Inc. has entered into~~ a ~~Non-Exclusive~~Press ~~Commercial~~Release ~~Technology~~announcing ~~License Agreement~~that (the ~~“License~~U.S. ~~Agreement”)~~Patent ~~with~~and ~~Sprocket~~Trademark HKOffice ~~Limited~~ (~~“Sprocket HK”~~USPTO), aissued ~~Hong Kong limited liability~~three ~~company.~~key ~~Pursuant~~patents tocovering the ~~terms of the License Agreement, the~~ Company’s ~~agreed~~technology tofor ~~grant~~video tocompression ~~Sprocket a domestic~~ and ~~international non-exclusive~~enhancement ~~license to make, use, copy~~ and ~~distribute~~wireless ~~products~~communications ~~and~~for ~~services based upon~~ the ~~technology owned by the Company.~~ ~~Sprocket~~medical ~~HK will also negotiate licenses with third parties, subject to the terms and conditions set forth in the License Agreement~~industry. The ~~license~~four ~~grant~~patents ~~is conditioned on the parties’ mutual approval of a “Corporate Memo of Understanding” within 30 calendar days from the Effective Date of the License Agreement.~~are:

~~Sprocket HK~~● ~~was~~U.S. ~~established~~Patent toNo. ~~create~~8,983,535 B2: covers Medical Scan Clip-on – a ~~footprint~~device inthat scans medical parameters and communications via a cell phone; the ~~Asian~~cell ~~pacific~~phone ~~marketplace.~~can ~~Under~~communicate the ~~terms~~parameters ofto ~~its~~remote ~~license~~locations ~~agreement~~and/or ~~Sprocket~~can ~~HK will~~analyze ~~endeavor~~them. to● ~~secure~~U.S. ~~licensing~~Patent ~~revenue~~No. of9,106,925 ~~Sprocket~~B2: ~~and~~covers ~~engage~~WEAV ~~foreign~~Video ~~distribution~~Compression ~~licensees~~System – a compression system using super compression. ~~Ubiquity~~● ~~Inc~~U.S. ~~has~~Patent aNo. ~~51%~~8,929,434 ~~non~~B2: ~~diluteable share~~covers ~~ownership~~Video ~~and~~Enhancement isInternet Media Experience in Converting High Definition Formats to ~~receive~~Video ~~60%~~Formats of– ~~the~~an ~~gross~~image ~~revenue~~or ~~derived~~video from ~~the~~a ~~licensing~~cell ofphone is processed to expand the IPimage ~~(Sprocket)~~in a way to display it on a high definition video screen. ● U.S. Patent No. 9,648,114: covers the Social Media Timeline

~~Strategic~~Board ~~Capital~~Member ~~Management (SCM) have invested a significant amount of capital into Ubiquity, Inc.~~ and Sprocket HK was established assuming the value amount that was invested by SCM and it’s investors. Other significant shareholders in Sprocket HK are SCM, TLC, Pty, Ltd, ARIE Fund. Members of TLC Pty Ltd are composed of Strategic Capital Management ~~investors and executives. The managing member of ARIE fund is James Tsiolis who also holds one of the 3 board seats of Sprocket HK.~~

~~Sprocket~~On HKFebruary ~~has~~1, ~~secured~~2016, ~~its~~the ~~first~~Board ~~licensee~~of ~~iWebgate~~Directors ~~that~~(the ~~put~~“Board”) ~~the~~of ~~Sprocket~~Ubiquity, ~~into~~Inc. ~~their~~appointed ~~mobile~~Greg ~~containers.~~Jones, ~~iWebgate~~62, ~~intends~~as toa ~~distribute~~new member ~~their~~of ~~containers~~the toBoard. ~~telco’s~~He has held key positions in the development of finance, technology and ~~government~~marketing ~~agencys~~companies in Asia, U.S., Inand ~~May~~Australia. Since 2013, Mr. Jones has served as Principal of ~~2015~~Kee ~~iWebgate~~Capital ~~announced~~Group, itwhere ~~had~~he ~~entered~~has ~~into~~assisted anin ~~agreement~~raising tofinances for various infrastructure ~~distribute~~projects ~~its~~and ~~mobile~~developed ~~container~~markets ~~including~~in ~~the~~consumer ~~Sprocket~~products toleasing ~~Australia~~for SME’s ~~telcom~~in ~~Telstra~~Asia and developed a leasing organization for major items including aviation products, locomotives and rolling stock. ~~Ubiquity~~Since 2012, ~~Inc~~Mr. ~~will~~Jones inhas ~~effect~~also ~~receive 60%~~served ofas the ~~licensing~~Chairman ~~fee~~of ~~from~~Strategic Marketing ~~this~~Services ~~deal~~International ~~once~~Limited, ~~monetary~~located ~~considerations~~in ~~are~~Hong ~~derived~~Kong, where he designed for brand development and marketing of various products for private companies and agencies. ~~iWebgate~~He ~~Ltd~~has isalso ~~listed~~currently onserves ~~the~~as ~~ASX~~a ~~under~~Director of the Australian College of Arts International ~~symbol~~Pty ~~IWG~~Limited, Ausmusic Limited, and Wallace Wine Company.

~~Sprocket~~June ~~Wearable~~10, 2016 - As a part of the corporate restructuring plan of Ubiquity, Inc., on June 10, 2016, Greg Jones relinquished his role as a board member of Ubiquity, Inc. and rescinded all contracts between himself and Ubiquity, Inc. Mr. Jones departure was not related to any disagreement with the Company on any matter relating to the Company’s operations, policies and practices. The Company expressed appreciation for the services Mr. Jones performed as a Board Member.

On ~~September~~June 181, ~~2015~~2016, ~~Ubiquity,~~Webb ~~Inc.~~Blessley ~~(the~~resigned ~~“Company”)~~as ~~entered into~~ a ~~Mobile~~member ~~Applications~~of ~~Development~~the ~~and~~B ~~Services Agreement~~ (the “~~Agreement~~Board”) ~~with~~of ~~Appetizer~~Ubiquity, ~~Mobile~~Inc. ~~LLC (“Appetizer”)~~Mr. ~~Under~~Blessley’s ~~the terms of the Agreement~~resignation ~~Appetizer~~was ~~will~~not ~~provide~~related ~~all~~to ~~necessary~~any ~~development~~disagreement ~~services~~with ~~related~~the toCompany ~~mobile~~on ~~applications~~any ~~for~~matter ~~the~~relating ~~use~~to of the Company’s ~~signature product~~operations, ~~the~~policies ~~“Sprocket”,~~and ~~in wearable tech devices~~practices. ~~Specifically, the first project will be for the integration of~~ ~~the~~The ~~Sprocket into the Apple Watch, which is expected to be completed in early 2016 Pursuant to the Agreement, the~~ Company ~~formed a~~accepted ~~new corporation Sprocket Wearables, Inc~~Mr. ~~on September 25, 2015 (“Sprocket Wearable~~Blessley’s~~”).~~ ~~Appetizer~~resignation ~~will initially~~and ~~own~~expressed ~~twenty~~appreciation ~~five~~for ~~percent (25%) of~~ the ~~issued~~services ~~shares~~he ofperformed ~~Sprocket~~as ~~Wearables~~a ~~and will head the wearable division~~director. ~~As of~~ ~~January~~Mr. ~~25,~~Blessley ~~2016~~also ~~the~~resigned ~~Company~~from ~~owns~~his ~~65%,~~duties ~~Appetizer~~as ~~Mobile~~Secretary ~~owns 25%~~ and ~~other investors own 10% through the investment of $1M in cash of which $900,000 has been received~~Treasurer.

June 8, 2016 - As a part of the corporate restructuring plan of Ubiquity, Inc. on June 8, 2016, Nick Mitsakos, who was presently Co-Chairman was appointed as Interim Chief Executive Officer and remained as Co-Chairman of the Company. Mr. Carmichael who has served the dual roles of CEO and Creative Architect will relinquish the role of CEO and will remain Co-Chairman and will continue to serve as Chief Creative Architect of the Company. Mr. Carmichael’s relinquishing of his role as CEO was not related to any disagreement with the Company on any matter relating to the Company’s operations, policies and practices. The Company expressed appreciation for the services Mr. Carmichael performed as a Chief Executive Officer.

June 20, 2016 - As a part of the corporate restructuring and growth plan of Ubiquity, Inc. on June 20, 2016, Jonathan Kalbfield signed his contract to become Ubiquity, Inc’s. Chief Technology Officer.

On April 20, 2017, the Board of Ubiquity, Inc. voted to appoint Robert B. Fernander to fill a vacancy on the Company’s Board. The Company entered into a Board of Directors Retention Agreement (the “Retention Agreement”) with Mr. Fernander, pursuant to which the Company agreed to grant 250,000 shares of the Company’s Common Stock for the first year of service under the Retention Agreement, and an additional 250,000 shares of the Company’s Common Stock for each year of service as a director thereafter.

On August 15, 2016, the Board of Ubiquity, Inc. appointed Bola Ajere, 68, as a new member of the Board. Bola Ajere is the President & CEO and founder of the AMC Consulting Group, a management and technology consulting company based in Los Angeles, California, specializing in Information Technology, Corporate Governance, Risk Management and Regulatory Compliance Programs. He is also the CEO and founder of the Sierra Madre Group, an Intellectual Property Management and manufacturing company.

Potential/Actual Board Resignations

On May 25, 2017 Mr. Robert Fernander expressed his intentions to resign from the Board of Directors, should Ubiquity be unable to secure adequate levels of Directors and Officers Insurance.

Interim CEO Appointment

One June 20, 2017, at the request of the majority of the Company’s shareholders current chairman Christopher Carmichael has agreed to become the Company’s Interim Chief Executive Officer and will remain as Chairman of the Company. Mr. Carmichael who has previously served the dual roles of CEO and Creative Architect will retain the role of interim CEO, Chief Creative Architect, and Chairman until the shareholders meeting.

Judgment vacated and case dismissed

On July 10, 2017, the default judgment previously entered on October 28, 2016 in the matter entitled Gerald D.W. North v. Ubiquity, Inc., et al, Case Number 16 C 5698, in the United Stated District Court of the Northern District of Illinois, was vacated, and the case dismissed for lack of personal jurisdiction over the Company. The default judgment for $7.7 million was reflected on the Company’s financial statements and notes thereto for the periods through December 31, 2015, and the financial impact of the dismissal will be reflected on the Company’s quarterly report for the period ended September 30, 2017, and thereafter.

License Agreements

On May 5, 2016 (the “Effective Date”), Ubiquity, Inc. entered into a Non-Exclusive License Agreement (the “License Agreement”) with Dash Radio, Inc. (“Dash Radio”), a Delaware corporation. Pursuant to the terms of the License Agreement, the Company agreed to grant to Dash Radio worldwide non-exclusive license to use its patents and trademarks of the Sprocket technology. As consideration for the granting the non-exclusive license, Dash Radio shall pay royalties to the Company equal to (1) 5% of the gross sales of the Dash Radio App, (2) an entry fee equal to one hundred thousand dollars ($100,000). In addition, Dash Radio shall maintain a minimum sales volume of the licensed goods as described below. If Dash Radio fails to reach the minimum sales volume at any time, then a royalty on the difference between the minimum sales and the actual sales shall be due and payable 10 days after the close of the calendar year in which the sales took place. Dash Radio has failed to reach minimum sales requirements through June 12, 2017.

On April 24, 2017, the Company entered into an exclusive license agreement with ADGUILD Japan, L.T.D. until December 31, 2021 primarily licensing its Sprocket, Immersive, and Lifestyle Patents in a predetermined territory. The License has a non-refundable entry fee in the amount of $3,000,000.00 (THREE MILLION DOLLARS) to be paid out over the term of the agreement. The Company will also receive royalties of 5% of the gross sales of all licensing related revenue with minimum sales requirements each year as follows, $575,000 for 2017, $1,250,000 for 2018, $1,500,000 for 2019, $1,750,000 for 2020, and $2,250,000 for 2021.

Suspension of Trading

On March 20, 2017, the (“SEC”) announced the temporary suspension of trading in the securities of Ubiquity, Inc., (OTC Link: UBIQ), pursuant to Section 12(k) of the Securities Exchange Act of 1934 (“Exchange Act”). The trading suspension commenced at 9:30 a.m. EDT on March 20, 2017, and terminated at 11:59 p.m. EDT on March 31, 2017. The trading suspension may be extended by the SEC for a period of up to thirty (30) calendar days.

The SEC stated the following in its release (Release No. 80275)

The Commission temporarily suspended trading in the securities of Ubiquity due to a lack of current and accurate information about the Company because Ubiquity is delinquent in its requisite periodic filings with the Commission pursuant to Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder. This order was entered pursuant to Section 12(k) of the Exchange Act.

Periodic Reports that Have Not Been Filed

Ubiquity has not filed its Annual Report on Form 10K as of, and for the annual period ending December 31, 2016, or any of the quarterly reports on Form 10Q required under the Exchange Act for fiscal 2016.

The Company was previously not able to obtain the requisite financial information from a non-U.S entity that the Company consolidated in order to prepare its 2015 financial statements and other disclosures that are required to be included in these Exchange Act reports. As a result of this significant issue, the Company could not have confidence that such disclosures would be true and correct in all material respects, despite the Company’s diligent efforts to obtain such information from its non-U.S. entity.

Administrative Hearing that May Result in Revocation of Registration Under the Exchange Act

A related Administrative Procedures Ruling was issued on March 21 and provides that the administrative hearing was originally scheduled for April 17, 2017, but the new motion for summary disposition and the SEC’s reply will be due July 10 and July 17, 2017 respectively.

On April 7, 2017, the Company, which has been delinquent in its periodic filings following its report for the quarter ended September 30, 2015, filed its Answer to the OIP and advised the SEC and the Administrative Law Judge that it plans to become current by June 30, 2017. On April 11, 2017, the Administrative Law Judge vacated the April 17, 2017 hearing date and issued a scheduling order for the SEC’s intended motion for summary disposition, pursuant to 17 C.F.R. § 201.250(b). The SEC must file its motion by June 15, 2017. The Company’s opposition to the SEC’s motion and the SEC’s reply will be due on July 10, 2017, and July 17, 2017, respectively.

Appointment of New Transfer Agent

In March 2017, the Company terminated V Stock Transfer Company as its transfer agent and appointed Transfer Online as its transfer agent. Transfer Online provides free online access for stockholders to retrieve account information, share balance and history of transactions. Stockholders may contact Transfer Online at info@transferonline.com or by calling the Transfer Online help center at 503.227.2950, and asking for the Company’s dedicated account executive, Carolyn Hall.

The Restructuring Plan

As indicated in our March 24, 2017 Form 8-K, Ubiquity was unable to file its Annual Reports on Form 10-K as of, and for the annual periods ended December 31, 2015 and December 31, 2016 or the quarterly reports on Form 10-Q required under the Exchange Act during 2016, for several reasons including its inability to obtain requisite financial information from a Non-U.S. entity. We recently were able to obtain such financial information and have commenced all procedures necessary to enable us to prepare such financial statements, including our unaudited consolidated financial statements for the three months ended March 31, 2017.

Our Restructuring Plan consists of the following actions to be taken by the Company:

Compliance with Exchange Act Reporting Requirements.

The Company as soon as is reasonably practicable, its past due periodic SEC required filings.

In the event that the Company’s registration under Section 12 of the Exchange Act is revoked, or if the Company ultimately elects to voluntarily delist its securities under the Exchange Act, the Company will nevertheless undertake to complete its audited and unaudited financial statements for the past due fiscal years and interim periods. The Company will then seek to relist its securities under Section 12 of the Exchange Act, by filing a registration statement under either the Securities Act of 1933, as amended, or the Exchange Act.

Equity Financing

Under our proposed Restructuring Plan, the Company will undertake to obtain commitments from strategic investors for a private placement equity financing of between $5.0 million and $10.0 million. In such connection, the management of the Company has sent proposed subscription documents to prospective investors, under which such investors would subscribe to purchase Common Stock at $0.25 per share (subject to certain “make-whole” share adjustments provided therein). All funds provided with subscriptions would be placed into a special escrow account acceptable to such investors, and shall be released to the Company only upon consummation of the Restructuring Plan described herein, including the filing of all SEC Reports and (if applicable) relisting of the Company’s securities under Section 12 of the Exchange Act. In addition, such subscription agreement provides that each subscribing investor will have the option, exercisable within ten days of receipt of either (a) the Company’s 2016 Form 10-K Annual Report and the Form 10-Q Quarterly Report for the three months ended March 31, 2017, or (b) a registration statement covering Company securities declared effective by the SEC, to rescind his or its investment in the Company’s securities.

There can be no assurance that the Company will be able to obtain subscriptions for the contemplated minimum $5,000,000 of equity financing on the above contemplated terms, if at all.

Settlements with Creditors.

Stockholders Meeting.

At such time as the Company has completed its audited consolidated financial statements for the fiscal years ended December 31, 2015 and December 31, 2016 and its unaudited interim financial statements, the Company will call a stockholders meeting to (a) elect board of directors, which will include, in addition to the current board members, three independent directors; and (b) ratify prior transactions, including the Restructuring Plan. In any event, whether or not the Restructuring Plan has been accomplished, the Company will nonetheless hold its annual stockholders meeting on or about September 5, 2017, or as soon thereafter as is practicable.

There can be no assurance that all or any material portion of the Company’s proposed Restructuring Plan will be accomplished if at all. The failure to achieve all or substantially all of the provisions of such Restructuring Plan would have a material and adverse effect on the Company and put its ability to continue its business operations into substantial doubt; as a result of which, current investors in the Company could lose their entire investment

Other Arrangements

Ubiquity entered into a Mandate agreement with Strategic Capital Management, Ltd., (“SCM”) on February 3, 2016 (the “SCM Agreement”). The SCM Agreement provided, in part, for the following:

● SCM agreed to acquire certain Convertible Notes in the approximate outstanding balance of $3.5 Million and the notes were to be retired without conversion.

● Manage the commercialization of the Company’s Sprocket products and technology through Sprocket HK Limited and iWebGate dba Netlinkz (ASX:NET) and establish new royalty agreements in order that any revenue generated through the commercialization can be provided to Ubiquity under a royalty percentage.

● Among other things SCM was to provide capital raising, debt restructuring and specific corporate advisory services leading to the commercialization of the Company’s products and services offerings.

In connection with the SCM Agreement, SCM entered in to agreements to purchase convertible promissory notes issued to Ubiquity, Inc. from Vista Capital, First Fire Global, Blue Citi, JDF Capital and Call and Jensen. In connection with these purchases, SCM made small payments against the notes. These purchase agreements did not release the Company from its obligations under the notes, and the assignments of such notes to SCM was not effective until full payment of the note by SCM. Unfortunately, SCM did not complete its purchase of such promissory notes, defaulting on their agreements, and as a result Ubiquity was sued by certain noteholders for performance of its obligations to certain convertible note holders. Vista Capital and Firstfire Global sued the Company for the balance of the note for non-payment (see legal section).

Plan of Operations

~~Creating~~The ~~IoT~~Company ~~(“Internet~~manages ofits ~~Things”)~~business ~~for~~under ~~emerging~~one ~~businesses~~operating insegment ~~social,~~which ~~mobile,~~is ~~analytics,~~based &on ~~cloud,~~a ~~the~~number ~~Company~~of isits aproducts ~~leader~~and services offered. The inCompany ~~Multiscreen~~has asdetermined athat ~~Service~~its ~~(“MaaS”)~~products, ~~creating~~services, aand ~~comprehensive~~platforms ~~“full~~include ~~stack”~~Sprocket, ~~engagement~~Video ~~platform~~Intelligence, ~~for~~and ~~multiscreen application~~Digital ~~environments.~~Content Production. The Company isexpects the ~~first~~nature ~~fully~~and ~~integrated~~location ~~enterprise~~of ~~platform~~its ~~that~~customers ~~enables~~in ~~brands~~the toAmerica’s, ~~capture~~Canada, ~~engage~~Europe, ~~manage~~ Japan and ~~monetize~~Asia ~~their~~Pacific ~~anywhere anytime users~~including Australia. ~~Ubiquity’s~~The ~~intellectual~~Company ~~property~~is ~~and~~committed ~~unique~~to ~~cloud-based~~bringing ~~technology~~the ~~combines MaaS~~best ~~with~~user ~~SaaS~~experience to ~~enable~~ its customers tothrough ~~structure~~its ~~their content and data in a mobile cloud to deliver~~ innovative ~~user experiences~~products ~~to their multiscreen communities~~ and ~~audiences worldwide~~services. The Company’s ~~products~~business ~~and~~strategy ~~services~~leverages ~~include~~its ~~the~~unique ~~Sprocket~~ability ~~Platform, with~~to adesign ~~uniform~~and ~~comprehensive~~develop ~~warehouse~~its ~~data~~own ~~analytics format; GiftSender, a mobile wallet; Monkeybars, a social mobility distribution~~ platform~~; and~~, ~~proprietary video intelligence~~ software~~. The Company sells to small and mid-size business (“SMB”),~~ ~~digital media~~application, ~~education, enterprise,~~ and ~~government~~services ~~customers.~~to ~~The~~provide ~~company~~its ~~also~~customers ~~operates~~new aproducts ~~multimedia~~and ~~studio~~solutions ~~division~~with ~~pushing the~~superior ~~creative boundaries~~ ease-of ~~film~~-use, ~~digital~~seamless ~~media~~integration, ~~interactive content,~~ and ~~both~~innovative ~~augmented and virtual reality~~design.

Results of Operations

Comparison for the three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015

Net Revenue

Net revenues were $928,~~400~~085 for the three months ended ~~September~~March 3031, ~~2015~~2016 as compared to $294,~~585~~569 for the three months ended ~~September 30,~~March ~~2014~~31, ~~a decrease of $20~~2015,~~185 or 68%. This decrease is primarily attributable to the Company having historically experienced~~ ~~inconsistent~~an ~~revenue~~increase ~~streams. This inconsistency is related to the event driven nature~~ of ~~its historical revenue. Going forward~~$23, ~~management anticipates earning revenue from a variety of new sources developed through its Ubiquity Labs products and services~~516.

6The increase primarily relates to the increased bookings of the Ubiquity Studios.

This inconsistency is related to the event driven nature of its historical revenue. Going forward, management anticipates earning revenue from its studio related services and sprocket technology by way of licensing revenue.

Total Cost of Sales

Cost of sales was $12,~~039~~326 for the three months ended ~~September~~March 3031, ~~2015~~2016 as compared to $456,~~712~~854 for the three months ended ~~September 30~~March 31, ~~2014~~ 2015 a decrease of $444,~~673~~528 or 9834%. The decrease is primarily attributable to athe ~~base~~use ~~level~~ of ~~fixed~~contracted ~~costs~~labor ~~regardless~~versus ofcarrying ~~the amount~~a offull ~~revenues generated. These fixed costs increased during 2014 due to the increase in personnel and has since decreased~~time ~~due~~production ~~to the limited amount of expenditures required in deriving the revenues recorded~~staff.

Gross Profit (Loss)

Gross profit (loss) was $825,~~361~~759 for the three months ended ~~September~~March 3031, ~~2015~~2016 as compared to gross profit (loss) of ($162,~~127~~285) for ~~the~~ the three months ended ~~September~~March 3031, ~~2014~~2015 an increase of $2423,~~488~~474 or ~~152~~1,127%. The increase primarily relates to the increased bookings of the Ubiquity Studios.

Operating Expenses

Operating expense were $2,~~333~~536,~~118~~987 for the three months ended ~~September~~March 3031, ~~2015~~2016 as compared to $54,~~943~~010,~~174~~690 for the three months ended ~~September~~ 30March 31, ~~2014~~2015 a decrease of $31,~~610~~473,~~056~~703 or 6163%. For the three months ended ~~September~~March 3031, ~~2015~~2016, operating expense primarily ~~consisted~~ consisted of stock-based compensation of $~~727~~679,~~834~~862, which is dependent upon when we grant common stock and options for services and when the services are performed; payroll expense of $~~474~~592,~~658~~236 which decreased from the prior like period due to a decrease in personnel and salaries for our management team; professional fees of $~~311~~459,~~787~~669 which ~~was~~decreased ~~consistent~~from ~~with~~ the prior ~~year~~like period due to reduced costs incurred by us in connection with our recent public filings and legal costs in connection with recent lawsuits filed.

Impairment Loss

During the three months ended September 30, 2015, the Company completed its impairment analysis of its intangible assets, which showed that anticipated revenue streams to be derived from certain of its intangible assets may be delayed. No such impairment was necessary during the three months ended September 30, 2014.

Comparison for the nine months ended September 30, 2015 and 2014

Net Revenue

Net revenues were $34,800 for the nine months ended September 30, 2015 as compared to $62,735 for the nine months ended September 30, 2014, a decrease of $27,935 or 45%. This decrease is primarily attributable to the Company having historically experienced inconsistent revenue streams. This inconsistency is related to the event driven nature of its historical revenue. Going forward, management anticipates earning revenue from a variety of new sources developed through its Ubiquity Labs products and services.

Total Cost of Sales

Cost of sales was $8,815 for the nine months ended September 30, 2015 as compared to $140,814 for the nine months ended September 30, 2014 a decrease of $131,999 or 94%. The decrease is primarily attributable to a base level of fixed costs regardless of the amount of revenues generated. These fixed costs increased during 2014 due to the increase in personnel and has since decreased due to the limited amount of expenditures required to in deriving the revenues recorded.

Gross Profit (Loss)

Gross profit (loss) was $25,985 for the nine months ended September 30, 2015 as compared to gross profit (loss) of ($78,079) for the nine months ended September 30, 2014 an increase of $104,064 or 133%.

Operating Expenses

Operating expense were $9,226,854 for the nine months ended September 30, 2015 as compared to $16,949,030 for the nine months ended September 30, 2014 a decrease of $7,722,176 or 46%. For the nine months ended September 30, 2015, operating expense primarily consisted of stock-based compensation of $3,150,148, which is dependent upon when we grant common stock and options for services and when the services are performed; payroll expense of $1,693,173 which decreased from the prior like period due to a decrease in personnel and salaries for our management team; professional fees of $1,508,328 which increased from the prior like period due to significant costs incurred by us in connection with our recent public filings and legal costs in connection with recent lawsuits filed.

Impairment Loss

During the nine months ended September 30, 2015, the Company completed its impairment analysis of its intangible assets, which showed that anticipated revenue streams to be derived from certain of its intangible assets may be delayed. Management feels it is likely to meet its revenue projections moving forward, however, due to the fact that the timing of anticipated revenues has been extended, the Company determined that a one-time impairment of the Sprocket Asset Group was appropriate to reflect this difference in timing. No such impairment was necessary during the nine months ended September 30, 2014.

Liquidity and Capital Resources

Cash requirements for, but not limited to, working capital, capital expenditures, and debt repayments have been funded from cash balances on hand, sales of common stock, revolver borrowings including the use of credit cards, loans from officers, and notes payable.

At ~~September~~March 3031, ~~2015~~2016, Ubiquity had cash and cash equivalents of $~~142~~45,~~190~~050 as compared to $~~102~~193,~~286~~839 as of December 31, ~~2014~~2015, representing ana ~~increase~~decrease of $39148,~~904~~789.

The cash flow used in operating activities decreased to $31,~~984~~379,~~670~~791 for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 compared to $52,~~649~~012,~~852~~ 987 for the ~~nine~~three months ended ~~September 30~~March 31, ~~2014~~2015. Our net loss during the ~~nine~~three months ended ~~September~~March 3031, 2015 and 2016 had the biggest impact on our cash used in operating activities as to date we have not generated sufficient revenues to cover our operating expenditures.

The cash flow used in investing activities decreased to net cash used of $~~251~~103,~~251~~830 for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~ 2016, as compared to net cash used of $~~903~~136,~~505~~ 417 for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015. ~~During~~We ~~2014,~~continue weto ~~were~~expend ~~still~~monies ~~developing our Sprocket platform~~ in ~~which~~connection with ~~higher~~the development ~~costs~~ ~~were~~of ~~incurred.~~our Inintangible ~~addition,~~assets weon ~~loaned~~an ~~monies~~as toneeded ~~related parties in which was a significant use of capital~~basis.

The cash flow provided by financing activities decreased to ~~net cash provided of~~ $41,~~275~~379,~~825~~343 for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016, as compared to net cash provided of $62,~~734~~094,~~850~~941 for the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2015. Due to the loss from operations, we continue to raise capital ~~through~~ through the sale of our common stock and issuance of notes payable in order to fund operations. Capital is raised on an as needed basis.

Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying condensed consolidated financial statements, the Company has negative working capital, has incurred operating losses since inception, and has not yet produced significant continuing revenues from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern. Management anticipates that it will be able to raise additional working capital through the issuance of stock and through additional loans from investors.12

The ability of the Company to continue as a going concern is dependent upon the Company’s ability to attain a satisfactory level of profitability and obtain suitable and adequate financing. There can be no assurance that management’s plan will be successful.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flows.

Critical Accounting Policies

Our significant accounting policies are presented in our notes to financial statements for the period ended ~~September~~March 3031, ~~2015~~2016 and ~~fiscal~~ fiscal year ended December 31, ~~2014~~2015, which are contained in the Company’s ~~2014~~2015 Annual Report on Form 10-K. The significant ~~accounting~~ accounting policies that are most critical and aid in fully understanding and evaluating the reported financial results include the following:

The Company prepares its financial statements in conformity with GAAP. These principles require 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Management believes that these estimates are reasonable and have been discussed with our board of directors; however, actual results could differ from those estimates.

We issue restricted stock to consultants for various services. Cost for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a Smaller Reporting Company and are not required to provide the information under this item.

Item 4. Controls and Procedures.

Disclosure of controls and procedures.

As required by Rule 13a-15 or Rule 15d-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, including our principal executive officer and principal accounting officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing evaluation, we have concluded that our disclosure controls and procedures were not effective as of September 30, 2015 and that they do not allow for information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission (“SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the us in the reports that we file or submit under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive and Principal Accounting & Financial Officers as appropriate to allow timely decisions regarding required disclosure.13

The material weaknesses relate to the following:

We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

1.	We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2.	We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

3.	We do not have adequate review and supervision procedures for financial reporting functions. The review and supervision function of internal control relates to the accuracy of financial information reported. The failure to review and supervise could allow the reporting of inaccurate or incomplete financial information. Due to our size and nature, review and supervision may not always be possible or economically feasible. Management evaluated the impact of the significant number of adjustments as a result of our review and concluded that the resulting control deficiency represented a material weakness.

	To address these material weaknesses, management performed additional analyses and other procedures to ensure that the consolidated financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. We engaged a third party that specializes in technical accounting and financial reporting to assist us in preparation of our quarterly and annual consolidated financial statements and to assist us in documenting our internal controls. However, for the foreseeable future due to our limited accounting personnel we will continue to have limited segregation of duties.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented. We engaged a third party that specializes in technical accounting and financial reporting to assist us in preparation of our quarterly and annual financial statements and to assist us in documenting our internal controls. However, for the foreseeable future due to our limited accounting personnel we will continue to have limited segregation of duties.

Changes in internal controls over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Litigation

Think Design Media, Inc. and Related Entities

Other

Ubiquity v. Castro:

On or about July 2014, Ubiquity filed a demand for arbitration with Judicial Arbitration and Mediation Services (‘JAMS’) against Lawrence E. Castro (“Castro”) for breach of the settlement agreement dated August 19, 2013, which was executed to settle and resolve a dispute between ~~the~~Ubiquity ~~Company~~ and Castro regarding a prior “Work for Hire” relationship between the parties (the “Castro Settlement”). Under the Castro Settlement, the Company paid Castro monetary compensation in exchange for providing certain agreements and assurances designed to protect certain intellectual property, business plans, road maps, vendors, investor relationships, employee relationships, ~~contractors~~ contractors and work in progress. The arbitration complaint filed by ~~the~~Ubiquity ~~Company~~ alleges that Castro breached the Castro Settlement and is seeking damages in the amount of $176,763, plus interest, representing the stated damages in the settlement agreement of what ~~the Company~~ Ubiquity has paid to Castro. ~~The~~Ubiquity ~~Company is~~ also ~~seeking~~seeked injunctive relief, actual losses incurred by Castro’s breach, and damages for unjust enrichment, including expenses and other sundry damages. The arbitration is currently in the discovery phase, which will enable both Castro and the Company to obtain documents and further evidence supporting their respective cases, as the disclosure of witnesses. In February 2016, Castro’s attorneys filed a motion with the arbitrator to withdraw, which motion was granted. Castro presently is in pro per. The arbitrator has ordered Castro until April 29, 2016, if he intends to retain counsel. On June 1, 2016, the arbitrator will set an arbitration date for the hearing on this matter.

Kay Strategies v. Ubiquity:

Kay Strategies is seeking $1,667,893 in compensatory damages and also undisclosed punitive damages and other court related costs. The Company has accrued all amounts due under the agreement.

Typenex v. Ubiquity:

Avant Garde v. Ubiquity:

1016

Vista Capital

Keener Litigation

Keener Litigation

Firstfire Global Opportunities Litigation

Brett and Mark Tomberlin Lawsuit

R Squared Partners, LLC Litigation

The Company is currently engaged in settlement discussions to exhaust this debt. The Company has accrued all amounts due under the convertible note agreement and judgment.

North Matter:

11Pillar Marketing Group:

On June 17, 2016 Pillar Marketing sent a demand for arbitration stemming from an alleged breach of contract from an agreement, dated April 23, 2015, for $45,000 of services. The company has not recorded a loss or contingency for this amount as it does not feel the balance is owed, and is unable to predict the outcome of the demand. On July 18, 2016, Pillar Marketing Group filed a demand for arbitration with AAA. No arbitration is currently scheduled.

LG Capital Funding, LLC

On June 14, 2016, LG Capital Funding, LLC sued Ubiquity, Inc. claiming that Ubiquity owes LG Capital $238,508.71 under the provisions of the Convertible Promissory Note (due on April 17, 2016), due to default of filing requirements of Section 8 of the note. Ubiquity originally received $100,000 on the disputed note, and is unable to predict the outcome of the suit. The Company has accrued all amounts due under the convertible note agreement.

Justin Sundquist, Henry Kingi, and Eagle Flights Stunts, Inc.

On August 9, 2016, the above filed a fraud and securities fraud action against Ubiquity. Plaintiffs were looking for rescission of their purchases of Ubiquity common stock, and payment to them by Ubiquity of the consideration given for such stock, plus interest at the legal rate. On October 3, 2016, the case filed by Justin Sundquist and Henry Kingi had been dismissed voluntarily, without prejudice. On October 14, 2016 the case filed by Justin Sundquist and Henry Kingi was moved to the San Diego United States District court in accordance with the low number rule. In January 2017, the court granted The Company’s motion to compel arbitration in Delaware. Mr. Kingi and Mr. Sundquist have filed for Arbitration with the American Arbitration Association claiming damages of approximately $1.8 million dollars representing approximately 1,444,000 common shares purchased and issued between May 2013 and November 2014. There are no future hearings on calendar, and the Company is unable to predict the future outcome.

Bryan Harpole

On May 25, 2016, Bryan Harpole filed a lawsuit claiming a breach of the Employment Agreement, dated January 1, 2012 and related Amendment, dated July 25, 2013. His unconfirmed claims include the following payments: unpaid salary (including statutory penalties according to proof pursuant to Labor Code 201 et seq amount undetermined), unpaid commissions ($4,268.25), unpaid bonuses ($55,548.30), unpaid vacation ($12,694) and sick ($1,731) days, medical insurance premiums ($5,100) and failure to deliver common stock (options) ($25,500) in accordance with the agreement Mr. Harpole would have been required to make full payment of the options as defined in the stock option agreement and Company’s demand after 30 days of his employment ceasing in the amount of $551,000.00 for the entirety of his 225,000 options or any portion thereof. As of the date of this filing no payment or payment arrangement has been made by Mr. Harpole, thus rendering the options invalid. Total damages include, but not limited to, $104,841.55 of salary amounts including statutory penalties plus possible court costs. He also sued for workers’ compensation benefits but was denied by the insurance carrier as being a false claim on July 25, 2016. Following rounds of demurrers, Bryan Harpole filed a Second Amended Complaint on March 13, 2017, removing the claims asserted against the officers and directors of the Company. This Complaint asserts a single cause of action for Breach of Contract against Ubiquity, Inc. This complaint claims the same damages as previously filed.

Iconic Holdings, LLC

On June 3, 2016, Iconic Holdings, LLC sued the Company, claiming that Ubiquity owes Iconic $400,000 under the provisions of the Convertible Promissory Note due to default of filing requirements of Section 2.00(e)(vi) of the Note. Ubiquity originally received $97,500 on the disputed note. The Company is currently in settlement discussions, and has accrued all amounts due under the convertible note agreement.

American States Insurance Company

One June 9, 2016 America States Insurance Company filed a breach of contract against Ubiquity for a total potential amount owed of $44,904.73. The company contends it cancelled the agreements and is unable to determine the outcome of the breach of contract claim.

De Lage Landen Financial Services, Inc.

On January 29, 2016, De Lage Landen claimed the Company breached its leasing agreement dated on or about May 17, 2011 and claim breached damages of $29,396.37. The Company has not accounted for an accrual for this claim as it us unable to determine the outcome at this time. The Company contends it does not owe the balance as the lease was terminated.

William Alessi

Item 1A. Risk Factors.

We are a Smaller Reporting Company and are not required to provide the information under this item.

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

1325,~~029~~422,~~312~~ 658 shares were issued in the quarter ended ~~September~~March 3031, ~~2015~~2016 to approximately 2115 accredited investors as defined in Rule 506 of Regulation D promulgated under the Securities Act for a total of $~~725~~907,~~000~~955.

The above securities were offered and sold to the investors in a private placement transaction made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506 promulgated under the Securities Act. The investors are accredited investors as defined in Rule 501 of Regulation D promulgated under the Securities Act.

The Company issued ~~500~~4,~~000~~636,439 shares of common stock ~~to three people~~ for services and settlement during the quarter ended ~~September~~March 3031, ~~2015~~2016. The shares were valued at a total value of $871,~~500~~018,231.

The Company issued 11,249,140 shares of common stock during the quarter ended March 31, 2016 for the retirement of a convertible note in the amount of $11,249.14.

The above securities were issued to the individuals identified in connection with a transaction made in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506 promulgated under the Securities Act. The investors are accredited investors as defined in Rule 501 of Regulation D promulgated under the Securities Act.

The Company received approximately $0 in proceeds from convertible notes payable during the quarter ended ~~September~~March 3031, ~~2015~~2016. The ~~convertible~~ convertible notes payable are either convertible upon issuance or ~~nine~~six months from such date, incur interest rates ranging from 8-12%, have conversion rates with discounts to market ranging from 35-45% and mature within ~~nine~~six to 24 months. The terms of the notes are substantially similar to those disclosed in Note 7. Each financing was an exempt private placement with offers and sales made only to “accredited investors” without the use of public advertising and without registration under the Securities Act in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws.

Item 3. Defaults Upon Senior Securities.

~~None~~See Item 1 Legal for default information.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

~~The~~Sale ~~officers and directors~~ of ~~Ubiquity,~~Company ~~Inc. have not sold any shares since the company went public in 2013.~~Shares

Beginning on the date of the reverse merger transaction under which the Company became a public company (September 20, 2013 and through the date of this filing), there have no sales of any shares of Company stock owned by or the benefit of any current Officer or Director of the Company.

Item 6. Exhibits.

Exhibit Number		Exhibit Title

31.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS *		XBRL Instance Document

101.SCH *		XBRL Taxonomy Schema

101.CAL *		XBRL Taxonomy Calculation Linkbase

101.DEF *		XBRL Taxonomy Definition Linkbase

101.LAB *		XBRL Taxonomy Label Linkbase

101.PRE *		XBRL Taxonomy Presentation Linkbase

In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.

* Furnished herewith. XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

1221

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Ubiquity Broadcasting Corporation
	By:	/s/ Christopher Carmichael
		Christopher Carmichael
		Chief Executive Officer
		Interim Chief Executive Officer
		(Duly Authorized Officer and Principal Executive Officer)
		(Duly Authorized Officer and Principal
	Dated: May 4, 2016
		Executive Officer)
	Dated: July 12, 2017
	By:	/s/ Brenden Garrison
		Brenden Garrison
		Chief Financial Officer
		(Duly Authorized Officer and Principal
		Financial and Accounting Officer)
	Dated: May 4, 2016
	Dated: July 12, 2017

1322

Filing Compare · UBIQUITY, INC.