10-K 1 v424389_10k.htm FORM 10-K

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED JULY 31, 2015

Commission File Number 000-54608

AMBICOM HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Nevada	333-153402	26-2964607
(State or jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employee Identification No.)

500 Alder Drive, Milpitas, CA 95035	408-321-0822
(Address of principal executive offices)	(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to section 12(g) of the Act:

Common Stock, $0.008 par value

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

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

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 x No ¨

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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

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 definitions of “large accelerated filer”, “accelerated filer”, or “smaller reporting company in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	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

Aggregate market value of common stock held by non-affiliates of the Registrant as of January 31, 2015 was $1,925,878. As of October 31, 2015, the Registrant had 101,000,494 shares of common stock, par value $0.008 per share, issued and outstanding.

Documents Incorporated by Reference: None.

AMBICOM HOLDINGS, INC.

TABLE OF CONTENTS

		Page No.

PART I

Item 1.	Business	4
Item 1A	Risk Factors	7
Item 1B	Unresolved Staff Comments	13
Item 2.	Properties	13
Item 3.	Legal Proceedings	13
Item 4.	Mine Safety Disclosures	14

PART II

Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	14
Item 6.	Selected Financial Data	20
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	26
Item 8.	Financial Statements and Supplementary Data	27
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	57
Item9A(T)	Controls and Procedures	57
Item 9B.	Other Information	58

PART III

Item 10.	Directors, Executive Officers, and Corporate Governance	59
Item 11.	Executive Compensation	62
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	64
Item 13.	Certain Relationships and Related Transactions and Director Independence	65
Item 14.	Principal Accountant Fees and Services	65
Item 15.	Exhibits and Financial Statement Schedules	66
	SIGNATURES	67

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains various forward-looking statements regarding our business, financial condition, results of operations and future plans and projects. Forward-looking statements discuss matters that are not historical facts and can be identified by the use of words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “projects,” “can,” “could,” “may,” “will,” “would” or similar expressions. In this report, for example, we make forward-looking statements regarding, among other things, our expectations about the rate of revenue growth in specific business segments and the reasons for that growth and our profitability, our expectations regarding an increase in sales, strategic traction and sales and marketing spending, uncertainties relating to our ability to compete, uncertainties relating to our ability to increase our market share, changes in coverage and reimbursement policies of third-party payers and the effect on our ability to sell our products and services, the existence and likelihood of strategic acquisitions and our ability to timely develop new products or services that will be accepted by the market.

Although these forward-looking statements reflect the good faith judgment of our management, such statements can only be based upon facts and factors currently known to us. Forward-looking statements are inherently subject to risks and uncertainties, many of which are beyond our control. As a result, our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below under the caption “Risk Factors.” For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You should not unduly rely on these forward-looking statements, which speak only as of the date on which they were made. They give our expectations regarding the future but are not guarantees. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by law.

PART I

As used in this report, the terms “AmbiCom”, the “Company”, "we", "us", "our" and "our company" refer to AmbiCom Holdings, Inc.

Background

AmbiCom was organized under the laws of the State of Nevada on July 29, 2008. Prior to the Company’s acquisition of certain assets of Veloxum Corp. (“Veloxum”) AmbiCom was a holding company whose operating company, AmbiCom, Inc., is a designer and developer of wireless products focusing on the wireless medical industry. AmbiCom’s wireless modules and devices are based on the Company’s innovative application software and Wi-Fi or Bluetooth^â technologies. Following the Company’s acquisition of certain assets of Veloxum in May 2014, the Company has focused its operations on developing its application to optimize server configuration settings based upon our patented Active Continuous Optimization (“ACO”) Software, which helps realize the full potential of both virtualized and physical servers and workstations in an IT infrastructure and can assist organizations solve a number of performance related challenges.

On January 15, 2010, Med Control, Inc. (the “Registrant”) amended its Articles of Incorporation (the “Amendment”) to change its name to AmbiCom Holdings, Inc., to increase the number of its authorized shares of capital stock from 75,000,000 to 1,050,000,000 shares of which 1,000,000,000 were designated common stock, par value $0.001 per share (the “Common Stock”) and 50,000,000 were designated preferred stock, par value $0.001 per share (the “Preferred Stock”), and to effect a forward-split such that 131.2335958 shares of Common Stock were issued for every 1 share of Common Stock issued and outstanding immediately prior to filing of the amendment (the “Forward Split”). The Registrant also amended its Bylaws on January 15, 2010. On January 15, 2010, the Registrant entered into an Agreement and Plan of Share Exchange (the “Exchange Agreement”) with AmbiCom Acquisition Corp., a Nevada corporation (“AmbiCom Corp.”), whereby the Registrant acquired all of the issued and outstanding capital stock of AmbiCom Corp. in exchange (the “Exchange”) for 20,000,000 newly issued shares of Common Stock (the “Common Exchange Shares”), 2,600,000 shares of Series B Preferred Stock, options to purchase 5,500,000 common shares and 2,350,000 shares of Series A Preferred Stock at the purchase price of $.01 per share, and 500,000 warrants to purchase 500,000 shares of Common Stock at $0.50 per share. As a result of the Exchange, the AmbiCom Corp equity holders surrendered all of their issued and outstanding capital stock of AmbiCom Corp in consideration for the Exchange Shares, and AmbiCom Corp. became a wholly-owned subsidiary of AmbiCom Holdings, Inc.

ITEM1. BUSINESS

Company Overview

AmbiCom Holdings, Inc. was incorporated as Med Control, Inc. in the State of Nevada as a for-profit company on July 1, 2008 and established a fiscal year end of July 31. Prior to the Exchange, the Company was a development-stage company organized to sell a product called “Med Time”, an electronic and portable device aimed to control the doses and schedules of medications taken by elderly individuals. Following the Exchange with AmbiCom Corp., we adopted the business plan of AmbiCom Corp’s wholly-owned subsidiary, AmbiCom, Inc., a California corporation as a designer and developer wireless products focusing on the wireless medical industry.

In May 2014, following the Company’s acquisition of certain assets of Veloxum, the Company has shifted the primary focus of its operations to developing and marketing its software application to optimize server infrastructure configuration settings using our patented Active Continuous Optimization (“ACO”) tool, which helps realize the full potential of both visualized and physical IT infrastructure and can assist organizations solve a number of challenges.

Veloxum Business Line

In 2015 AmbiCom finished developing and integrating its automated optimization software applications into the current offerings of a development and sales partner which adds the capability of automated performance tuning to the customer’s current offerings.

AmbiCom is working to address a number of markets. The first targeted market is the personal computer consumer market for which the Company launched its first consumer application in April 2015. We anticipate introducing the Veloxum application to small and middle-market businesses serviced by Managed Service Providers (MSP’s). Thereafter, we hope to enter the enterprise, large-scale market place. The Veloxum optimization application is based on Veloxum’s Active Continuous Optimization (ACO) Software which provides a common code base capable of addressing these disparate markets with minimal code modification.

AmbiCom Business Line

AmbiCom is also a designer and developer of innovative wireless products focusing on the wireless medical industry. AmbiCom’s wireless modules and devices are based on the Company’s innovative application software and Wi-Fi or Bluetooth^â technologies. While AmbiCom’s focus has shifted to its Veloxum business line in 2015, the Company continued to sell wireless modules and devices and explore other solutions as opportunities arise.

AmbiCom’s business strategy targets and prioritizes areas of need and problems that could be improved or solved via the application of wireless capabilities. AmbiCom’s wireless device solutions and applications include infusion pumps, heart monitoring machines, and glucose meters.

AmbiCom sells its products through multi-channel distribution and original equipment manufacturer (“OEM”) channels. The Company delivers its medical device modules to OEM companies such as Roche and Zoll Medical.

Business Strategy

AmbiCom is committed to design a better optimization solution to unlock existing capacity in the servers, workstations and personal computers found in the enterprise, small, middle-market and consumer marketplaces.

AmbiCom believes enterprise data centers are complex and heterogeneous mix of client, servers, networks, devices and applications, which require optimization of the environment to reduce troubleshooting and increase capacity. AmbiCom’s internal objective is to position the Company as a leading designer of optimization solutions using the following approach:

Develop and maintain an application that can automatically evaluate and adjust the manufacturers’ supported settings to improve performance and capacity in all leading operating systems.

Develop application specific modules that can automatically evaluate and adjust the manufacturers’ supported settings for leading applications, including VMware; Microsoft’s SharePoint, Outlook, Exchange and SQL server; and Citrix’ XenApp and XenDesktop.

Maintain technical alliances and certifications with Microsoft, IBM, VMware and Citrix.

Maintain technical, marketing and reseller relationships with leading vendors selling complimentary products in our target markets.

Expand sales worldwide via distributor in North America, South Korean and India.

AmbiCom's secondary goal is to continue to provide consumers high quality mobile wireless products and better IT optimization solutions. The Company believes many medical devices lack the technological and operational effectiveness for success in today’s quickly advancing technological environment. The Company’s objective is to continue selling its hardware solutions, via the following approaches and others:

Leverage its current customer base.

Capitalize on its competitive advantage of proprietary technology and software.

Exploit the growing need for cost reduction.

Our Competitive Advantages

The Company believes its strengths include the following:

Advantage Optimized Technology: AmbiCom’s software actively and continuously optimizes existing server and workstation operating system and application settings to maximize workload density and reduce total cost of ownership by up to 30%. The optimization solution helps realize the full potential of both virtualized and physical servers and workstations and ensures that infrastructures run at peak performance and utilization.

Low Cost Operating Structure: AmbiCom maintains a low cost operating structure, focusing resource allocation on its core corporate functions including sales, marketing, research and development, administration, and outsourcing manufacturing to several companies in Asia. This operating structure has allowed the Company to control its operating costs.

Proven Results: Deep domain expertise in wireless technologies and developing new product applications that innovatively leverage wireless technology to create innovative products with breakthrough functionalities. Since the year 2000, AmbiCom has sold over one million devices to customers worldwide.

Products

Optimization Solutions

Veloxum, the Company’s newly developed and launched automated optimization software application, automatically tunes individual personal computers, servers and workstations to better utilize their existing assets, network, memory, and CPU and disc input/output (I/O).

Wireless products

We expect our markets to remain competitive and to reflect rapid technological evolution and continuously evolving customer and regulatory requirements. Our ability to remain competitive depends in part upon our success in maintaining our intellectual knowledge base and selling these systems at competitive prices on a timely basis.

Sales and Marketing

We believe our intellectual capability, technology, sales, and marketing efforts have established our reputation for providing innovative solutions that meet our customers’ needs in a timely, cost-efficient manner. Our ability to leverage our distribution network will be an important factor in our success. The sales and marketing of our products largely depends upon the type of product, location and target customer.

Manufacturing and Suppliers

We currently outsource production of our wireless hardware products primarily to manufacturers in Asia. Many of the key components and sub-components are purchased from third party suppliers. We have selected such suppliers based on their ability to consistently produce these components per our specifications, striving for the best quality product at the most cost effective price.

Research and Product Development

In 2015, the general focus of our research and development team has centered on the design and integration our optimization software tools. Through these efforts, we constantly seek to enhance our existing products, design new tools and develop solutions for customer applications. We believe that our responsiveness to current and perceived future customer demands differentiates us from many of our competitors, as we rapidly introduce new products to address market needs. As more resources become available to the Company, we intend to expand our research and development team as we believe that increased levels of spending on research and development will be necessary to successfully develop products that will have a niche value.

Employees

As of July 31, 2015, we had 6 employees. We believe we have good employee relations. None of our employees are members of any labor union, and we are not a party to any collective bargaining agreement.

Corporate Information

The Company's corporate headquarters are located at 500 Alder Drive, Milpitas, California.

Reports to Securities Holders

We will make available free of charge any of our filings as soon as reasonably practicable after we electronically file these materials with, or otherwise furnish them to, the Securities and Exchange Commission (“SEC”). We are not including the information contained in our website as part of, or incorporating it by reference into, this report on Form 10-K.

The public may read and copy any materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20002. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at (http://www.sec.gov).

ITEM 1A. RISK FACTORS

Investing in the Company's common stock involves a high degree of risk. Prospective investors should carefully consider the risks described below, together with all of the other information included or referred to in this Current Report on Form 10-K, before purchasing shares of the Company's common stock. There are numerous and varied risks, known and unknown, that may prevent the Company from achieving its goals. The risks described below are not the only ones the Company will face. If any of these risks actually occur, the Company's business, financial condition or results of operation may be materially adversely affected. In such case, the trading price of the Company's common stock could decline and investors in the Company's common stock could lose all or part of their investment.

Risks Specific to Us and to Our Business

We have inadequate capital and need additional financing to accomplish our business and strategic plans.

We have very limited funds, and such funds are not adequate to develop our current business plan. We believe that for our company to be successful, we will be required to spend significant sums to develop and market our products. If the sales of our products do not enable us to meet this need, our ultimate success may depend on our ability to raise additional capital. In the absence of additional financing or significant revenues and profits, the we will have to approach our business plan from a much different and much more restricted direction, attempting to secure additional funding sources to fund our growth, borrowing money from lenders or elsewhere or to take other actions to attempt to provide funding. We cannot guarantee that we will be able to obtain sufficient additional funds when needed, or that such funds, if available, will be obtainable on terms satisfactory to us.

Our limited operating history does not afford investors a sufficient history on which to base an investment decision.

We are currently in the early stages of developing our business. There can be no assurance that at this time that we will operate profitably or will have adequate working capital to meet our obligations as they become due.

Investors must consider the risks and difficulties frequently encountered by early stage companies, particularly in rapidly evolving and changing markets. Such risks include the following:

●	the nature of our competition and our ability to effectively market our products;
●	ability to anticipate and adapt to the highly competitive software industry;
●	ability to effectively manage expanding operations, amount and timing of operating costs and capital expenditures relating to expansion of our business, operations, and infrastructure; and
●	dependence upon key personnel to develop our products and to market and sell our services and the loss of one of our key managers may adversely affect the marketing of our services.

We cannot be certain that our business strategy will be successful or that we will successfully address these risks. In the event that we do not successfully address these risks, our business, prospects, financial condition, and results of operations could be materially and adversely affected and we may not have the resources to continue or expand our business operations.

If our products do not gain expected market acceptance, prospects for our sales revenue and profit may be affected.

The ability to automatically tune a computer for higher performance is new and, as such, the market unfamiliarity with this concept may slow the market acceptance. Potential customers for our application may be reluctant to adopt this as alternative to buying a new computer in hopes of achieving better performance results.

Potential customers for our devices and systems may be reluctant to adopt these as alternatives to traditional technologies because of regulatory and other factors beyond the Company’s control. Obstacles to widespread adoption of our devices include inability to achieve market penetration before they are rendered obsolete.

If we are not able to compete effectively with other competitors, our prospects for future growth will be jeopardized.

There are multiple ways to optimize a computer and many competitors representing themselves as offering the ability to provide this service. Many of these competitors have substantial marketing budgets and are able to garner significant visibility in the marketplace.

There is significant competition in the healthcare industry with more established companies. We are not only competing with other wireless device providers but also with companies offering traditional medical products, which are usually more established and have greater resources to devote to research and development, manufacturing and marketing. In addition, we compete with large companies such as Cisco which have advantages of global marketing capabilities and substantially greater resources to devote to research and development and marketing.

Our competitors may promote devices which are more readily accepted by customers and we may be required to reduce the prices of our products in order to remain competitive.

We sell our products in conjunction with partners

A significant amount of our revenue is generated as a result of the combined efforts of the Company and our partners. As such we are reliant on their capabilities to effectively sell and service the purchaser of our software.

Risks Specific to Active Optimization

We make changes to how a computer operates

A fundamental aspect of our optimization software application is its ability to remediate performance issues. To do so our application makes changes to how the computer processes its application requests. There is virtually an unlimited amount of configuration settings available for each computer we tune. If our application chooses the wrong settings the performance can be worsened or the computer can cease to function.

Our optimization application knowledge is limited to a very small group of people.

The way our application functions is highly complex. There are a very small number of key individuals that understand how the application functions and how it achieves its results. If any of these key individuals became unavailable to Ambicom it would severely impact our ability to operate and maintain our offering.

We intend to invest in engineering, sales, service and marketing which could harm our operating results

While we intend to manage our costs and expenses, we also intend to invest in personnel and other resources related to our engineering, sales, service and marketing. These investments and expenses may adversely affect our operating results.

Our business substantially depend upon the continued growth of the internet and internet based systems

A substantial portion of our business and revenue depends on the continued growth and evolution of the Internet, including the continued development of the Internet, and on the deployment of our products by customers who depend on such continued growth and evolution. To the extent that an economic slowdown or uncertainty and related reduction in capital spending led to reduced spending on infrastructure, our business, operating results, and financial condition may be adversely affected.

We compete in intensely competitive markets

The markets in which we compete are characterized by rapid change, converging technologies, and a migration to networking and communications solutions that offer relative advantages. These market factors represent a competitive threat to us. We compete with numerous vendors in each product category, most of which are larger, more established and better funded than us. We expect the overall number of our competitors to increase. Also, the identity and composition of competitors may change as we increase our activity in newer product categories such as data center and collaboration and in our priorities. In addition, the growth in demand for technology delivered as a service enables new competitors to enter the market.

We face intense competition across all markets for our products and services, which may lead to lower revenue or operating margins

Our competitors range in size from diversified global companies with household names significant research and development resources to small, specialized firms whose narrower product lines may let them be more effective in deploying technical, marketing, and financial resources. Barriers to entry in our businesses are low and software products can be distributed broadly and quickly at relatively low cost. Many of the areas in which we compete evolve rapidly with changing and disruptive technologies, shifting user needs, and frequent introductions of new products and services. Our ability to remain competitive depends on our success in making innovative products, devices, and services that appeal to businesses and consumers.

We may face risks to our intellectual property rights.

We may not be able to protect our intellectual property rights; Piracy may adversely affects revenue, particularly in countries where laws are less protective of intellectual property rights. Reductions in the legal protection for software intellectual property rights may adversely affect revenue.

We may not receive expected fees from our patent licenses

We expend significant resources to patent the intellectual property we create with the expectation that we will generate revenues by incorporating that intellectual property in our products or services or, in some instances, by licensing our patents to others in return for fees. Changes in the law may lessen our ability to collect revenue for licensing our patents. Similarly, licensees of our patents may fail to satisfy their obligations to pay us royalties, or may contest the scope and extent of their obligations. All of these items may adversely affect our revenues.

If we are unable to recruit and retain qualified personnel, our business could be harmed.

Our growth and success highly depend on qualified personnel. Competition in the industry could cause us difficulty in recruiting or retaining a sufficient number of qualified technical personnel, which could harm our ability to develop new products. If we are unable to attract and retain key personnel, it would harm our ability to develop competitive product, retain customers, and could adversely affect our business and operating results.

Risks Related to Our Wireless Product Line

Downturns in general economic and market conditions could materially and adversely affect our business.

A significant amount of medical device purchases are related to the budgets and purchasing of medical facilities generally and hospitals in particular. A reduction in spending and budgets would likely cause a reduction in the demand for our products. If these facilities have less funds budgeted as a result of general economic conditions, sales of our wireless medical products for which they have budgeted would likely be influenced by general economic downturns.

Our products could contain defects or they may be installed or operated incorrectly, which could reduce sales of those products or result in claims against us.

Although we have quality assurance practices to ensure good product quality, defects still may be found in the future in our existing or future products.

End-users could lose their confidence in our products and Company when they unexpectedly use defective products or use our products improperly. This could result in loss of revenue, loss of profit margin, or loss of market share. Moreover, because our products are employed in the healthcare industry, if one of our products is a cause, or perceived to be the cause, of injury or death to a patient, we would likely be subject to a claim. If we were found responsible it could cause us to incur liability which could interrupt or even cause us to terminate some or all of our operations.

Risks Related to the Securities Markets and Investments in Our Common Stock

Because our common stock is quoted on the "OTCBB," your ability to sell shares in the secondary trading market may be limited.

Our common stock is currently quoted on the over-the-counter market on the OTC Bulletin Board. Consequently, the liquidity of our common stock is impaired, not only in the number of shares that are bought and sold, but also through delays in the timing of transactions, and coverage by security analysts and the news media, if any, of our company. As a result, prices for shares of our common stock may be lower than might otherwise prevail if our common stock was quoted and traded on NASDAQ or a national securities exchange.

Because our shares are "penny stocks," you may have difficulty selling them in the secondary trading market.

Federal regulations under the Securities Exchange Act of 1934 regulate the trading of so-called "penny stocks," which are generally defined as any security not listed on a national securities exchange or Nasdaq, priced at less than $5.00 per share and offered by an issuer with limited net tangible assets and revenues. Since our common stock currently is quoted on the "OTCBB" at less than $5.00 per share, our shares are "penny stocks" and may not be traded unless a disclosure schedule explaining the penny stock market and the risks associated therewith is delivered to a potential purchaser prior to any trade.

In addition, the Securities and Exchange Commission has adopted a number of rules to regulate "penny stocks". Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities and Exchange Act of 1934, as amended. Because our securities constitute “penny stocks", within the meaning of the rules, the rules would apply to us and to our securities. The rules will further affect the ability of owners of shares to sell their securities in any market that might develop for them because it imposes additional regulatory burdens on penny stock transactions.

Shareholders should be aware that, according to Securities and Exchange Commission, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) "boiler room" practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, leaving investors with losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to the Company's securities.

By Virtue of Being a Public Company, the Company is Subject to Certain Regulations and Expenses.

The Company is publicly-traded and, accordingly, subject to the information and reporting requirements of the U.S. securities laws. The U.S. securities laws require, among other things, review, audit, and public reporting of the Company’s financial results, business activities, and other matters. Recent SEC regulation, including regulation enacted as a result of the Sarbanes-Oxley Act of 2002, has also substantially increased the accounting, legal, and other costs related to becoming and remaining an SEC reporting company. The public company costs of preparing and filing annual and quarterly reports, and other information with the SEC, and furnishing audited reports to stockholders will cause the Company’s expenses to be higher than if privately-held. In addition, the Company will incur substantial expenses in connection with the preparation of the Registration Statement and related documents with respect to the registration of the shares issued in the Offering. These increased costs may be material and may include the hiring of additional employees and/or the retention of additional advisors and professionals. Failure by the Company to comply with the federal securities laws could result in private or governmental legal action against the Company and/or our officers and directors, which could have a detrimental effect on the Company's business and finances, the value of the Company’s stock, and the ability of stockholders to resell their stock.

Our stock price may be volatile and your investment in our common stock could suffer a decline in value.

Trading activities in the Company’s common stock has been limited and prices volatile. There can be no assurance that a stable market will ever develop for the Company’s common stock in the future. If a stable market does not develop, investors could be unable to sell their shares of the Company’s common stock, possibly resulting in a complete loss of any funds invested. Should a stable market develop, the price may fluctuate significantly in response to a number of factors, many of which are beyond our control. These factors include:

Acceptance of our products in the industry.

Announcements of technological innovations or new products by us or our competitors.

Government regulatory action affecting our products or our competitors' products.

Developments or disputes concerning patent or proprietary rights.

Economic conditions in the United States or abroad.

Actual or anticipated fluctuations in our operating results.

Broad market fluctuations.

Changes in financial estimates by securities analysts.

A registration of a significant amount of our outstanding restricted stock may have a negative effect on the trading price of our stock.

At October 31, 2015, shareholders of the Company had approximately 39,769,630 shares of restricted stock, or 39% of the outstanding common stock. If we were to file a registration statement including all of these shares, and the registration is allowed by the SEC, these shares would be freely tradable upon the effectiveness of the registration statement. If investors holding a significant number of freely tradable shares decide to sell them in a short period of time following the effectiveness of a registration statement, such sales could contribute to significant downward pressure on the price of our stock.

We do not intend to pay any cash dividends to common shareholders in the foreseeable future and, therefore, any return on your investment in our capital stock must come from increases in the fair market value and trading price of the capital stock.

We have not paid any cash dividends on our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future. We intend to retain future earnings, if any, for reinvestment in the development and expansion of our business. Any credit agreements, which we may enter into with institutional lenders, may restrict our ability to pay dividends. Whether we pay cash dividends in the future will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital requirements and any other factors that the board of directors decides is relevant. Therefore, any return on your investment in our capital stock must come from increases in the fair market value and trading price of the capital stock.

We may issue additional equity shares to fund the Company's operational requirements which would dilute your share ownership.

The Company's continued viability may depend on its ability to raise capital. Changes in economic, regulatory or competitive conditions may lead to cost increases. Management may also determine that it is in the best interest of the Company to develop new services or products. In any such case, additional financing will likely be required for the Company to meet its operational requirements. There can be no assurances that the Company will be able to obtain such financing on terms acceptable to the Company and at times required by the Company, if at all. In such event, the Company may be required to materially alter its business plan or curtail all or a part of its operational plans as detailed further in Management's Discussion and Analysis in this Form 10-K.

The sale or the proposed sale of substantial amounts of our common stock in the public markets may adversely affect the market price of our common stock and our stock price may decline substantially. In the event that the Company is unable to raise or borrow additional funds, the Company may be required to curtail significantly its operational plans as further detailed in Requirements for Additional Capital in the Management Discussion and Analysis of this Form 10-K.

Also, any new securities issued may have greater rights, preferences or privileges than our existing common stock which may adversely affect the market price of our common stock and our stock price may decline substantially.

The Company’s Amended Articles of Incorporation authorize the issuance of up to 750,000,000 total shares of capital stock without additional approval by shareholders. As of October 31, 2015, we had 101,000.494 shares of common stock outstanding.

Large amounts of our common stock will be eligible for resale under Rule 144.

As of October 31, 2015, approximately 39,769,630 of the 101,000,494 issued and outstanding shares of the Company's common stock are restricted securities as defined under Rule 144 of the Securities Act of 1933, as amended (the “Act”) and under certain circumstances may be resold without registration pursuant to Rule 144 or otherwise.

In general, under Rule 144, a person (or persons whose shares are aggregated) who has satisfied a six month holding period may, under certain circumstances, sell within any three-month period a number of securities which does not exceed the greater of 1% of the then outstanding shares of common stock or the average weekly trading volume of the class during the four calendar weeks prior to such sale. Rule 144 also permits, under certain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate, as such term is defined in Rule 144(a)(1), of the Company and who has satisfied a one year holding period. Any substantial sale of the Company's common stock pursuant to Rule 144 may have an adverse effect on the market price of the Company's shares. Since the Company has previously indicated in its filings with the Commission that it is a shell company, as that term is defined under the Securities Act, pursuant to Rule 144, shareholders must wait at least one year from the date of the filing of this Form 10-K to avail themselves of Rule 144 unless we file a registration statement for the sale of such shares prior thereto.

Our reporting requirements may utilize a substantial portion of our cash.

We will incur ongoing costs and expenses for SEC reporting and compliance. To be eligible for quotation on the OTCBB, issuers must remain current in their filings with the SEC. Market Makers are not permitted to begin quotation of a security whose issuer does not meet this filing requirement. Securities already quoted on the OTCBB that become delinquent in their required filings will be removed following a 30 or 60 day grace period if they do not make their required filing during that time. In order for us to remain in compliance we will require future revenues to cover the cost of these filings, which could comprise a substantial portion of our available cash resources.

Our shareholders may suffer future dilution due to issuances of shares for various considerations in the future.

There may be substantial dilution to our shareholders purchasing in future offerings as a result of future decisions of the Board to issue shares without shareholder approval for cash, services, or acquisitions.

Our stock will in all likelihood be thinly traded and, as a result, investors may be unable to sell at or near ask prices or at all if they need to liquidate shares.

Our shares of common stock may be thinly-traded on the OTC Market Group’s OTC Bulletin Board, meaning that the number of persons interested in purchasing our common shares at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that the Company is a small, relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and even if the Company came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an early stage company such as ours or purchase or recommend the purchase of any of our securities until such time as it became more seasoned and viable. As a result, there may be periods of several days or more when trading activity in the our securities is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on the securities price. We cannot give investors any assurance that a broader or more active public trading market for the Company's common securities will develop or be sustained, or that any trading levels will be sustained. Due to these conditions, we can give investors no assurance that they will be able to sell their shares at or near ask prices or at all if they need money or otherwise desire to liquidate their securities of the Company.

Certain Nevada Corporation Law provisions could prevent a potential takeover, which could adversely affect the market price of our stock.

We are incorporated in the State of Nevada. Certain provisions of Nevada corporation law could adversely affect the market price of our common stock. Because Nevada corporation law requires board approval of a transaction involving a change in our control, it would be more difficult for someone to acquire control of us. Nevada corporate law also discourages proxy contests making it more difficult for you and other shareholders to elect directors other than the candidate or candidates nominated by our board of directors.

SHOULD ONE OR MORE OF THE FOREGOING RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD THE UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, EXPECTED, INTENDED OR PLANNED

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Our principal executive office address is 500 Alder Drive, Milpitas, CA 95035. We lease approximately 7,313 square feet of office and warehouse space at a monthly rental of $4,473 under the terms of a 63 month lease that expires on May 31, 2016. The rent increases three percent annually.

We currently have no investment policies as they pertain to real estate, real estate interests or real estate mortgages.

ITEM 3. LEGAL PROCEEDINGS

On October 27, 2015, the Company received a Demand for Arbitration from PC Drivers Headquarters, LP, the Company’s partner (“PC Drivers”). PC Drivers requested that an arbitration panel decide whether a release event had occurred under the Joint Development & License Agreement between the Company and PC Drivers (“JDLA”). PC Drivers alleged that the Company failed to pay certain vendors and breached the JDLA, allowing PC Drivers to obtain the source code held in escrow for the development of the JDLA. After a hearing was held on November 5, 2015, the arbitrator determined that a release event occurred, allowing PC Drivers access to the source code. Other aspects of the JDLA, including the payment to the Company of revenues earned under have yet to be determined and the Company intends to exhaust all legal remedies with respect to such claims.

No director, officer, or affiliate of the Company and no owner of record or beneficial owner of more than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER

Market Information

Our Common stock is currently traded on the OTC Bulletin Board (OTCBB) under the symbol "ABHI". We originally received our listing for quotation on the OTC Bulletin Board as “MCNC” on January 28, 2009. The following table sets forth, for the periods indicated, the high and low inter-dealer closing prices per share of our common stock as reported on the OTC Bulletin Board and OTC Markets Group’s OTC Link for our common stock for the last two fiscal years ended July 31, 2015.

Year	Quarter	High		Low

2014	First	$	0.25	$	0.06

2014	Second	$	0.31	$	0.13

2014	Third	$	0.43	$	0.16

2014	Fourth	$	0.40	$	0.19

2015	First	$	0.37	$	0.14

2015	Second	$	0.21	$	0.10

2015	Third	$	0.21	$	0.08

2015	Fourth	$	0.19	$	0.04

As of July 31, 2015, there were 55,999,118 shares of our common stock issued and outstanding with 97 shareholders of record.

Transfer Agent

Shares of Common Stock are registered at the transfer agent and are transferable at such office by the registered holder (or duly authorized attorney) upon surrender of the Common Stock certificate, properly endorsed. No transfer shall be registered unless the Company is satisfied that such transfer will not result in a violation of any applicable federal or state securities laws. The Company changed transfer agents January 10, 2012 from Signature Stock Transfer to VStock Transfer, LLC. The Company's transfer agent for its Common Stock is VStock Transfer, LLC., 18 Lafayette Place Woodmere, New York 11598, Telephone (212) 828-8436.

Dividend Policy

Dividends payable to common shareholders, if any, will be contingent upon our revenues and earnings, capital requirements and financial conditions. The payment of dividends, if any, will be within the discretion of our Board of Directors. We presently intend to retain all earnings, if any, for use in our business operations.

Description of Securities

Common Stock

Number of Authorized and Outstanding Shares:

The Company's Amended and Restated Articles of Incorporation authorizes the issuance of 700,000,000 shares of capital stock, $0.008 par value per share. On October 31, 2015, there were 101,000,494 shares outstanding.

Voting Rights:

Holders of shares of Common Stock are entitled to one vote for each share on all matters to be voted on by the stockholders. Holders of Common Stock have no cumulative voting rights. Accordingly, the holders of in excess of 50% of the aggregate number of shares of Common Stock outstanding will be able to elect all of the directors of the Company and to approve or disapprove any other matter submitted to a vote of all stockholders.

Other:

No shareholder has any preemptive right or other similar right to purchase or subscribe for any additional securities issued by the Company, and no shareholder has any right to convert the common stock into other securities. No shares of common stock are subject to redemption or any sinking fund provisions. All the outstanding shares of the Company's common stock are fully paid and non-assessable. Subject to the rights of the holders of the preferred stock, if any, the Company's shareholders of common stock are entitled to dividends when, as and if declared by the Board from funds legally available therefore and, upon liquidation, to a pro-rata share in any distribution to shareholders. The Company does not anticipate declaring or paying any cash dividends on the common stock in the foreseeable future.

Preferred Stock

The Company's Amended Articles of Incorporation authorize the issuance of 50,000,000 shares of Preferred Stock subject to any limitations prescribed by law, without further vote or action by the stockholders, and to issue, from time to time, shares, of preferred stock in one or more series. Each such series of Preferred Stock shall have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall be determined by the Company's board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive rights.

Series A Convertible Preferred Stock

The Company has authorized a total of 10,000,000 shares of Series A Convertible Preferred Stock, par value $0.001 per share (the “Series A”). The Series A is convertible at any time into shares of the Company’s common stock at the conversion rate of one share of common stock per each share of Series A converted. The Series A is treated on an “as converted” basis for both voting and liquidation rights. There were 10,000,000 shares of Series A issued and outstanding as July 31, 2014. In June 2011, an amendment was filed with the Secretary of State of Nevada whereby the conversion price of Series A would remain unchanged in event of stock split, stock dividend on the common stock, a reclassification of the common stock or distribution to holders of common stock. During the year ended July 31, 2015, all of the 10,000,000 shares of Series A convertible preferred stock outstanding as of July 31, 2014 were converted into 20,000,000 shares of common stock.

Series B Convertible Preferred Stock

The Company has authorized a total of 325,000 shares of Series B Convertible Redeemable Preferred Stock, par value $0.008 per share (the “Series B”). The Series B accrues annual dividends at the rate of 6% per year in shares of Common Stock at the dividend conversion rate of $1.00. The Series B, together with any unpaid dividends, shall be convertible into Common Stock at the conversion price of $1 per share divided by the greater of forty cents ($0.40) or seventy percent (70%) of the daily volume weighted average price of the Common Stock for the twenty trading days immediately prior to the conversion. The Series B is redeemable by the Company, at any time prior to December 31, 2015, in cash at the redemption rate of $1.00 per share of Series B plus any accrued and unpaid dividends. On December 31, 2015, all outstanding shares of Series B shall be redeemed by the Company at a per share redemption price equal to $1.00 per share of Series B plus an amount of Common Stock equal to the amount of the accrued and unpaid dividend thereon. The Series B priority over the Series A Preferred Stock and the Common Stock. The Series B votes on an “as converted” basis. As of July 31, 2015, the 262,475 outstanding shares of Series B had a liquidation preference of $2,600,000.

Securities Authorized for Issuance Under Equity Compensation Plans

2010 Equity Incentive Plan

The Company has reserved 2,277,778 shares of common stock for issuance under the terms of the Company’s 2010 Incentive Plan. The 2010 Plan is intended to promote the interests of the Company by attracting and retaining exceptional employees, consultants, directors, officers and independent contractors (collectively referred to as the “Participants”), and enabling such Participants to participate in the long-term growth and financial success of the Company. Under the 2010 Plan, the Company may grant stock options, which are intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Incentive Stock Options”), non-qualified stock options (the “Nonqualified Stock Options”), stock appreciation rights (“SARs”) and restricted stock awards (the “Restricted Stock Awards”), which are restricted shares of Common Stock (the Incentive Stock Options, the Nonqualified Stock Options, the SARs and the Restricted Stock Awards are collectively referred to as “Incentive Awards”). Incentive Awards may be granted pursuant to the 2010 Plan for 10 years from the Effective Date. From time to time, we may issue Incentive Awards pursuant to the 2010 Plan. Each of the awards will be evidenced by and issued under a written agreement.

If an incentive award granted under the 2010 Plan expires, terminates, is unexercised or is forfeited, or if any shares are surrendered to us in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the Plan.

The number of shares subject to the 2010 Plan, and the number of shares and terms of any Incentive Award may be adjusted in the event of any change in our outstanding Common Stock by reason of any stock dividend, spin-off, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares, or similar transaction.

On September 1, 2010, we granted options to employees to purchase 840,000 shares of Common Stock at a purchase price of $0.20 per share under the terms of the AmbiCom 2010 Incentive Stock option Plan.

On May 1, 2012, we granted options to employees to purchase 250,000 shares of Common Stock at a purchase price of $0.09 per share under the terms of the AmbiCom 2010 Incentive Stock option Plan.

On September 1, 2012, we granted options to employees to purchase 75,000 shares of Common Stock at a purchase price of $0.03 per share under the terms of the AmbiCom 2010 Incentive Stock option Plan.

On January 15, 2014, we granted options to employees to purchase 305,000 shares of Common Stock at a purchase price of $0.16 per share under the terms of the AmbiCom 2010 Incentive Stock Option Plan.

On May 15, 2014, we granted options to employees to purchase 1,000,000 shares of Common Stock at a purchase price of $0.24 per share under the terms of the AmbiCom 2010 Incentive Stock Option Plan.

As of July 31, 2015, there were options outstanding under the 2010 Plan to purchase 200,000 shares of common stock at a purchase price of $0.20 per share, 250,000 shares of common stock at a purchase price of $0.09 per share, 75,000 shares of common stock at a purchase price of $0.03 per share, 275,000 shares of common stock at a purchase price of $0.16 per share and 1,000,000 shares of common stock at a purchase price of $0.24 per share. Since the Plan was created no options have been exercised and options to purchase 690,000 shares have been forfeited.

2014 Equity Incentive Plan

The Company has reserved 10,000,000 shares of common stock for issuance under the terms of the AmbiCom Holdings 2014 Incentive Plan. The 2014 Plan is intended to promote the interests of the Company by attracting and retaining exceptional employees, consultants, directors, officers and independent contractors (collectively referred to as the “Participants”), and enabling such Participants to participate in the long-term growth and financial success of the Company. Under the 2014 Plan, the Company may grant stock options, which are intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Incentive Stock Options”), non-qualified stock options (the “Nonqualified Stock Options”), stock appreciation rights (“SARs”) and restricted stock awards (the “Restricted Stock Awards”), which are restricted shares of common stock (the Incentive Stock Options, the Nonqualified Stock Options, the SARs and the Restricted Stock Awards are collectively referred to as “Incentive Awards”). Incentive Awards may be granted pursuant to the 2014 Plan for 10 years from the Effective Date.

On June 2, 2014, our Board and Stockholders approved and adopted the 2014 Equity Incentive Plan (the “2014 Plan”).

On August 11, 2014, we granted options to employees to purchase 1,750,000 shares of Common Stock at a purchase price of $0.24 per share under the terms of the 2014 Plan.

On September 5, 2014, we granted options to employees to purchase 750,000 shares of Common Stock at a purchase price of $0.24 per share under the terms of the 2014 Plan.

As of July 31, 2015, there were 2,500,000 options at a purchase price of $0.24 per share outstanding under the 2014 Plan, and 7,500,000 remaining available for issuance.

Penny Stock Rules

The Securities and Exchange Commission has also adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

Our shares are considered penny stock under the Securities and Exchange Act. The shares will remain penny stocks for the foreseeable future. The classification of penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his/her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares in us will be subject to Rules 15g-1 through 15g-10 of the Securities and Exchange Act. Rather than creating a need to comply with those rules, some broker-dealers will refuse to attempt to sell penny stock.

The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document, which:

Contains a description of the nature and level of risk in the market for penny stock in both public offerings and secondary trading.

Contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the Securities Act of 1934, as amended.

Contains a brief, clear, narrative description of a dealer market, including "bid" and "ask" price for the penny stock and the significance of the spread between the bid and ask price.

Contains a toll-free telephone number for inquiries on disciplinary actions.

Defines significant terms in the disclosure document or in the conduct of trading penny stocks.

Contains such other information and is in such form (including language, type, size and format) as the Securities and Exchange Commission shall require by rule or regulation.

The broker-dealer also must provide, prior to effecting any transaction in a penny stock, to the customer:

The bid and offer quotations for the penny stock.

The compensation of the broker-dealer and its salesperson in the transaction.

The number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock.

Monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules; the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written acknowledgment of the receipt of a risk disclosure statement, a written agreement to transactions involving penny stocks, and a signed and dated copy of a written suitability statement. These disclosure requirements will have the effect of reducing the trading activity in the secondary market for our stock because it will be subject to these penny stock rules. Therefore, stockholders may have difficulty selling their securities.

Shares Available Under Rule 144

There are currently 40,723,224 shares of common stock that are considered restricted securities under Rule 144 of the Securities Act of 1933. 30,812,937 shares are held by affiliates, as that term is defined in Rule 144(a) (1) and other shareholders. Under Rule 144, such shares can be publicly sold, subject to volume restrictions and certain restrictions on the manner of sale, commencing six months after their acquisition for those companies that have been subject to the reporting requirements of section 13 or 15(d) of the Exchange Act for a period of at least 90 days before the sale.

Recent Sales of Unregistered Securities by the Registrant

During the fiscal years ended July 31, 2015, and 2014 the Company issued the following securities exempt from the registration requirements of the Securities Act. No under writing or other compensation was paid in connection with these transactions:

Between March 25, 2014 and April 24, 2015, the Company sold 1,905,285 shares of Common Stock to an investor for total proceeds of approximately $202,500 in accordance with the provisions of investment agreements between the Company and the investor.

On March 25, 2014, the Registrant sold 120,193 shares of Common Stock to the investor for $25,000 in accordance with the provisions of an Investment Agreement between the Company and the investor.

On May 12, 2014, the Registrant sold 208,333 shares of Common Stock to the investor for $25,000 in accordance with the provisions of an Investment Agreement between the Company and the investor.

On May 27, 2014, the Registrant sold 100,806 shares of Common Stock to the investor for $25,000 in accordance with the provisions of an Investment Agreement between the Company and the investor.

On May 29, 2014, the Company issued 13,100,437 shares of Common Stock to Veloxum Corp., a Delaware corporation, in connection with the Registrant’s acquisition of certain of Veloxum’s assets.

On February 20, 2015, the Company effectuated a Convertible Note Agreement with an investor for the purchase and sale of up to $400,000 of the Company’s original issue discount convertible notes. The first note, in the principal amount of $66,667, was issued on February 20, 2015.

On March 4, 2015, the Company effectuated a Convertible Note Agreement with an investor for the purchase and sale of up to $100,000 of the Company’s original issue discount convertible note. The note, in the principal amount of $100,000, was issued on March 4, 2015.

On April 1, 2015, the Company effectuated a Convertible Note Agreement with an investor for the purchase and sale of $64,000 of the Company’s original issue discount convertible note. The note, in the principal amount of $64,000, was issued on April 1, 2015.

On April 24, 2015, the Company entered into a Series of transactions with Kodiak Capital Group, LLC. (“Kodiak”). On that date the Company entered into an Equity Purchase Agreement pursuant to which the Company may “put” to Kodiak up to $1,000,000 of shares of our Common Stock in amounts up to $25,000 per put upon effectiveness of a registration statement that may be filed for such purpose. The Company issued 500,000 shares of Common Stock as a commitment fee and executed a Registration Rights Agreement to register the Shares to be sold under the line. Also on that date, the Company entered into a Securities Purchase Agreement with Kodiak for the purchase and sale of original issue discount debentures in the maximum aggregate amount of $600,000 for a maximum purchase price of $500,000. The first note, a 15% Senior Secured Convertible Debenture, in the principal amount of $115,000 with proceeds of $100,000, is due on the first anniversary thereof. Principal and interest under the note is convertible at any time at the option of Kodiak into shares of the Company’s Common Stock at a conversion price equal to the lesser of $0.10 or 65% of the lowest closing bid price for the 30 trading days immediately prior to conversion. Thereafter, the Company shall sell and Kodiak shall purchase an additional debenture in the principal amount of $460,000 at the purchase price of $400,000, within 30 days following the effectiveness of a registration statement to be filed for the registration of the Shares underlying both debentures. On April 24, 2015, the Company issued Kodiak a 1% Convertible Redeemable Note in the amount of $50,000 whereby a pre-existing obligation to an unrelated third-party in the amount of $50,000 was assigned to Kodiak and exchanged for such note. Principal and interest under the note are convertible at any time at the option of Kodiak, into shares of Common Stock at the conversion price equal to 70% of the lowest closing bid price for the 30 trading days immediately prior to conversion.

On May 21, 2015, the Company effectuated a Convertible Note Agreement with an investor for the purchase and sale of $43,000 of the Company’s original issue discount convertible note. The note, in the principal amount of $43,000, was issued on May 21, 2015.

On August 13, 2015, the Company effectuated two convertible note agreements with two different investors for a principal amount of $25,000 for each note. The notes bear interest at a rate of 12% per annum and are convertible into shares of common stock at a conversion price equal to 60% of the lowest trade price in the 20 trading days prior to the conversion. The principal and accrued interest balances are due on August 13, 2016.

On September 4, 2015, the Company effectuated a convertible note agreement with an investor for a total principal of $69,000. The note bears interest at a rate of 10% per annum and is convertible into shares of common stock at a conversion price equal to 55% of the lowest trade price in the 20 trading days prior to the conversion. The principal and accrued interest balances are due on March 4, 2016.

On September 21, 2015, the Company effectuated a convertible note agreement with an investor for a total principal of $92,000. The note bears interest at a rate of 10% per annum and is convertible into shares of common stock at a conversion price equal to 50% of the lowest 3 trade price in the 20 trading days prior to the conversion. The principal and accrued interest balances are due on June 21, 2016.

Except as noted above, the sales of the securities identified above were made pursuant to privately negotiated transactions that did not involve a public offering of securities and, accordingly, we believe that these transactions were exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof and rules promulgated there under. Each of the above-referenced investors in our stock represented to us in connection with their investment that they were “accredited investors” (as defined by Rule 501 under the Securities Act) and were acquiring the shares for investment and not distribution, that they could bear the risks of the investment and could hold the securities for an indefinite period of time. The investors received written disclosures that the securities had not been registered under the Securities Act and that any resale must be made pursuant to a registration or an available exemption from such registration. All of the foregoing securities are deemed restricted securities for purposes of the Securities Act.

ITEM 6. SELECTED FINANCIAL DATA

We are a smaller reporting company as defined by 17 C.F.R. 229(10)(f)(i) and are not required to provide the information under this heading.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT OF OPERATIONS

The following discussion and analysis should be read in conjunction with our financial statements and related notes thereto included elsewhere in this annual report. Portions of this document that are not statements of historical or current fact are forward-looking statements that involve risk and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this annual report should be read as applying to all related forward-looking statements wherever they appear in this annual report. You can identify forward-looking statements by the use of words such as the words “expect,” “anticipate,” “estimate,” “may,” “will,” “should,” “intend,” “believe,” and similar expressions. From time to time, we may publish forward-looking statements relative to such matters as anticipated financial performance, business prospects, technological developments and similar matters. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. All statements other than statements of historical fact included in this section or elsewhere in this report are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include, but are not limited to, the following: changes in the economy or in specific customer industry sectors; changes in customer procurement policies and practices; changes in product manufacturer sales policies and practices; the availability of product and labor; changes in operating expenses; the effect of price increases or decreases; the variability and timing of business opportunities including acquisitions, alliances, customer agreements and supplier authorizations; our ability to realize the anticipated benefits of acquisitions and other business strategies; the incurrence of debt and contingent liabilities in connection with acquisitions; changes in accounting policies and practices; the effect of organizational changes within the Company; the emergence of new competitors, including firms with greater financial resources than ours;

The following discussion and analysis of our plan of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this report. This discussion and analysis contain forward-looking statements that involve risks, uncertainties and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those presented under the heading of “Risk Factors” and elsewhere in this annual report.

Acquisition and Reorganization

On January 15, 2010, the acquisition of AmbiCom was completed, and the business of AmbiCom was adopted as our business. As such, the following Management Discussion is focused on the current and historical operations of AmbiCom, and excludes the prior operations of the Registrant.

On May 15, 2014, the Company certain intangible assets of Veloxum Corp., a privately held Delaware corporation, in the form of developed technology and trade names in exchange for 13,100,437 shares of the Company’s common stock.

Overview

AmbiCom is a designer and developer of wireless products focusing on Wi-Fi and Bluetoothâ applications for the medical and healthcare industry. AmbiCom purchases standard wireless products and designs and develops features and packaging to customize these products to their target original equipment manufacturer (“OEM”). The Company believes that there are unique opportunities as a result of the sheer size of the wireless healthcare market and the Company’s innovative approach and exemplary customer service.

Following the Company’s acquisition of certain assets of Veloxum, the Company has focused its operations as an optimizer of server infrastructure configuration settings using its patented Active Continuous Optimization (“ACO”) which helps realize the full potential of both visualized and physical IT infrastructure.

Results of Operations

COMPARATIVE RESULTS OF OPERATIONS FOR THE YEARS ENDING JULY 31,

	2015			2014			Change in Dollars			Change in Percent
Revenue:
Product and other	$	154,147		$	1,941,142		$	(1,786,995	)		-92	%
Software licensing and support		146,913		$	-			146,913			100	%
Total revenue		301,060			1,941,142			(1,640,082	)		-84	%
Cost of Revenue:
Product and other		75,641		$	805,631			(729,990	)		-91	%
Software licensing and support		98,698		$	-			98,698			100	%
Total cost of revenue		174,339			805,631			(631,292	)		-78	%
Gross Profit		126,721			1,135,511			(1,008,790	)		-89	%
Gross Profit/Revenue Percentage		42.1	%		58.5	%

Operating Expenses:
General and administrative		3,109,123			1,396,312			1,712,811			123	%
Sales and marketing		142,389			17,832			124,557			699	%
Research and development		456,349			188,328			268,021			142	%
Total operating expenses		3,707,861			1,602,472			2,105,389			131	%

Loss from operations		(3,581,140	)		(466,961	)		(3,114,179	)		-667	%
Other Income (Expense):
Other income		25,317			2,000			23,317			1166	%
Change in fair value of derivative liabilities		(333,618	)		-			(333,618	)		-100	%
Interest expense		(268,394	)		(2,790	)		(265,604	)		-9520	%
Net other income (expense)		(576,695	)		(790	)		(575,905	)		-72899	%

Net loss	$	(4,157,835	)	$	(467,751	)	$	(3,690,084	)		-789	%

Revenue

Revenue is derived from two sources: a) product sales of our wireless device products including non-recurring engineering project fees along with home healthcare products and b) software licensing and support arrangements for our automated optimization software tools for personal computers (“PC”) in the United States.

Product and other

The products consist of routers, Compact flash Adapters/Modules, USB Adapters/Modules, Mini PCI Modules, PCI Express Mini Modules, mobile wireless products, solar ionic toothbrush and optimization services. We provide optimized wireless products to the medical industry which has concentrated on using wireless solutions as a way to reduce healthcare costs as a whole.

Our product and other sales decreased by $1,786,995 or 92% to $154,147 for the year ended July 31, 2015 from $1,941,142 in the year ended July 31, 2014, mainly as a result of a large portion of our products reaching the end of their product life cycle which resulted in a decrease in revenue as well as the Company's focus shifting towards investing in and marketing its software licensing products under its Veloxum business line.

Software licensing and support

Revenue from software licensing and support was $146,913 for the year ended July 31, 2015 compared to none in the year ended July 31, 2014. The Company started generating revenue from its automated optimization software tools for PCs in April 2015 subsequent to the launch of the consumer business line under a joint development and marketing agreement with the Company’s partner, PC Driver Headquarters. We anticipate consumer demand and revenue to increase once the automated optimization software application for servers and virtual machines is introduced into the Business, MSP, and Enterprise markets and launched in the United States under other development and OEM agreements in the United States and internationally.

Cost of Sales

Product and other

Our cost of sales consists primarily of the amounts paid to third-party manufacturers for the products we purchase for resale, related packaging costs, as well as labor and material costs associated with our service and development projects

Our cost of revenue from product and other sales decreased by $729,990 or 91% to $75,641 in the year ended July 31, 2015 from $805,631 in the year ended July 31, 2014. The decrease was largely a result of the decrease in revenue for the period as explained above.

Software licensing and support

Our cost of revenue from software licensing and support was $98,698 in the year ended July 31, 2015 compared to none in the year ended July 31, 2014. The increase was associated with the launch of this business line in 2015 and the payroll and information technology costs incurred to operate the active optimization software tool and provide support services.

Gross Profit & Gross Margin

Our gross profit declined by $1,008,790 or 89% to $126,721 for the year ended July 31, 2015 from $1,135,511 in the year ended July 31, 2014. The decrease is primarily attributed to the Company shifting its focus, efforts, and resources to the Veloxum business line, which provided a lower gross margin than the more mature AmbiCom business line (product sales) in 2015.

We do not necessarily expect gross margins to remain at this level in 2016 and our gross margin will continue to be affected by a variety of factors that include the cost of outsourcing support for project demands, the speed and extent to which new products (including Automated Optimization Software Application) are adopted by customers, the amount of service and development projects we take on, and the average sales prices realized on sales of our products.

Operating Expenses

Our operating expenses consist primarily of research and development, salaries and associated costs for employees in finance, human resources, sales, information technology and administrative activities. In addition, operating expenses may, from time to time, include charges relating to accounting, legal, insurance or stock-based compensation.

Overall operating expenses increased by $2,105,389 for the year ended July 31, 2015 compared to the year ended July 31, 2014, an increase of 131%. The increase in operating expenses is mainly due to the amortization of developed technology and tradenames (Veloxum intangible assets), research and development expenses for efforts focused on our automated optimization software application, stock based compensation expense and professional fees.

General and administrative expense increased by $1,712,811 or 123% for the year ended July 31, 2015 compared to the year ended July 31, 2014. The increase was primarily due to the amortization of intangibles, which increased by $623,580 for the year ended July 31, 2015 from $157,800 for the year ended July 31, 2014 as FY2015 captured a full year of amortization compared to approximately three months in FY2014. Additionally, the Company incurred higher office and salary expenses (increase of $131,869), stock compensation expenses (increase of $327,013), business consulting and investor relations expenses (increase of approximately $420,000) and travel expenses associated with software development (increase of $68,412).

Sales and marketing expenses increased by $124,557 for the year ended July 31, 2015 from $17,832 for the year ended July 31, 2014. The increase is primarily related to costs incurred to introduce our new Veloxum business line to the market.

Research and development expenses increased by $268,021 for the year ended July 31, 2015 from $188,328 for the year ended July 31, 2014. The increase is primarily attributed to professional fees and payroll expenses incurred to explore other applications for our software optimization technology.

Loss from Operations

Loss from operations increased from a loss of $466,961 for the year ended July 31, 2014 to a loss of $4,157,835 for the year ended July 31, 2015. The loss for the year ended July 31, 2015 was largely a result of the increase in amortization for intangible assets, R&D and consulting expenses related to our newly developed automated optimization software applications and the decrease in demand for our wireless device products from our customers who are upgrading their products with new interface wireless devices.

Other income (expense)

Other income (expense) was ($576,695) for the year ended July 31, 2015 compared to other expense of ($790) for the year ended July 31, 2014. The increase in other expense for the year ended July 31, 2015 is largely attributed to the interest expense charged on notes payable entered into in FY2015, the amortization of the debt discount associated with the notes payable, as well as the change in fair value of the derivative liability (embedded conversion feature in note agreements) of $ 333,618.

Capital Resources and Liquidity

For our fiscal year ended July 31, 2015, we have financed our operations primarily through debt financings and sale of our Common Stock. During the year ended July 31, 2015, the Company issued several convertible notes with an aggregate face value of $865,195 and received net proceeds of approximately $827,523, after discounts and issuance related expenses. At July 31, 2015, we had cash and cash equivalents of $53,452. We believe that, based on our current level of operations, our existing cash resources may not be able to support our ongoing operations, planned capital expenditures and working capital requirements for at least the next 12 months.

We expect to incur substantial expenditures in the foreseeable future for the development and potential commercialization of automated optimization software. We will continue to require additional financing to develop our future products and fund operations for the foreseeable future. We will continue to seek funds through equity or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing.

Cash flows

The following table sets forth the primary sources and uses of cash and cash equivalents for each of the years presented below:

	Year Ended July 31,
	2015			2014
Net cash used in operating activities	$	(1,098,862	)	$	(116,530	)
Net cash used in investing activities		(343,910	)		(106,513	)
Net cash provided by financing activites		972,684			149,712
Net decrease in cash and cash equivalents	$	(470,088	)	$	(73,331	)

Operating Activities

During the fiscal year ended July 31, 2015, net cash used in operating activities was $1,098,862 compared to net cash used in operating activities of $116,530 in the fiscal year ended July 31, 2014. The increase was primarily due to higher payroll and consulting expenses as well as the decrease in revenue compared to the prior year.

Our total current assets declined 64% to $217,034 as of July 31, 2015 from $597,989 as of July 31, 2014 while our current liabilities increased 906% to $1,618,338 as of July 31, 2015 from $160,820 as of July 31, 2014. Our overall working capital declined by 421% to a negative working capital of $1,401,304 as of July 31, 2015 from a positive working capital of $437,169 as of July 31, 2014.

Investing Activities

During the fiscal year ended July 31, 2015, net cash used in investing activities was $343,910, which was primarily for costs incurred in the development of our optimization technology tools, compared to $106,513 used for the purchase of property and equipment for the year ended July 31, 2014.

Financing Activities

Financing cash flows consist primarily of borrowings and payments on long-term debt, payments on capital leases and proceeds from the sales of shares subject to the Company’s investment agreements.

During the fiscal year ended July 31, 2015, cash provided by financing activities was $972,689, consisting primarily of proceeds from the issuance of convertible promissory notes and the sale of Common Stock in the fiscal year ended July 31, 2015. During the year ended July 31, 2014 cash provided by financing activities was $149,712 primarily generated from sales of Common Stock and issuance of a note.

Liquidity

Cash generated from financing activities is currently our primary source of liquidity. Cash and cash equivalents were $53,452 at July 31, 2015 compared to $523,540 at July 31, 2014.

Given our negative cash flow from operations and in order to meet our expected cash needs for the next twelve months, we will need to secure additional liquidity sources. We expect that revenues from our new business for automated optimization software application will increase once we launch our tool in the MSP and gaming markets in both the United States and internationally. There can be no assurances that we will be able to successfully implement a long-term solution, and accordingly, we continue to explore debt and equity financing options.

Management expects to continue to incur additional substantial losses in the foreseeable future as a result of the Company’s research and development activities. For the foreseeable future, we plan to fund all our operations and capital expenditures from the net proceeds of equity or debt offerings and our existing cash balances. Although we plan to pursue additional financing, there can be no assurance that we will be able to secure financing when needed or to obtain such financing on terms satisfactory to us, if at all. If we are unable to secure additional financing in the future on acceptable terms, or at all, we may be unable to complete the development of our new products. In addition, we could be forced to reduce or discontinue product development, reduce or forego sales and marketing efforts and forego attractive business opportunities in order to improve our liquidity to enable us to continue operations. The negative cash flows and lack of financial resources of the Company raise substantial doubt as to the Company’s ability to continue as a going concern.

On September 15, 2015, the Company signed a term sheet for a new loan and security agreement with a lender. Under this agreement, the Company could initially borrow up to $1.0 million to fund working capital. The Company expects this transaction to close in the second half of November 2015.

On October 5, 2015, the Company entered promissory note with an investor for a total principal of $100,000. The principal and accrued interest balances are due in 48 payments of $2,625 each to be paid within 12 months.

On October 9, 2015, the Company entered a business loan with a creditor for a total principal of $150,000. The principal and accrued interest balances are due in 220 payments of $900 each to be paid within 10 months.

The Company believes in the viability of its strategy to increase revenue, cash flows, and profitability and in its ability to raise additional funds, and believes that the actions presently being taken by the Company will provide the Company with sufficient liquidity to continue to finance its operations.

Contractual obligations and commitments

The following table summarizes our contractual obligations as of July 31, 2015:

	Payments due by period
	Less than		1 to 3		4 to 5		After 5
	1 year		years		years		years		Total

Lease obligations	$	50,702	$	-	$	-	$	-	$	50,702
Notes payable	$	650,007	$	150,188	$	-	$	-	$	800,195

Total	$	700,709	$	150,188	$	-	$	-	$	850,897

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Critical Accounting Policies

The process of preparing financial statements requires the use of estimates on the part of our management. The estimates used by management are based on our historical experiences combined with management’s understanding of current facts and circumstances. Certain of our accounting policies are considered critical as they are both important to the portrayal of our financial condition and results and require significant or complex judgment on the part of management. For a description of what we believe to be our most critical accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in this Annual Report on Form 10-K, for the year ended July 31, 2015.

Critical accounting policies affecting us, the critical estimates made when applying them, and the judgments and uncertainties affecting their application have not changed materially since July 31, 2015.

Recent Accounting Pronouncements

See Note 3 “Summary of Significant Accounting Policies” in the Notes to the Audited Consolidated Financial Statements for a full description of relevant recent accounting pronouncements including the respective expected dates of adoption.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by 17 C.F.R. 229 (10)(f)(i) and are not required to provide information under this item.

ITEM 8. FINANCIAL STATEMENTS

AMBICOM HOLDINGS, INC.

FINANCIAL STATEMENTS

WITH REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

For the Years Ended July 31, 2015 and 2014

FINANCIAL STATEMENTS

TABLE OF CONTENTS

		Page

Report of Independent Registered Public Accounting Firm (Marcum LLP)		28

Report of Independent Registered Public Accounting Firm (Kim & Lee Corporation, CPAs)		29

Consolidated Balance Sheets as of July 31, 2015 and 2014		30

Consolidated Statements of Operations for the years ended July 31, 2015 and 2014		31

Consolidated Statements of Changes in Series B Convertible Preferred Stock and Stockholders’ Equity for the years ended July 31, 2015 and 2014		32

Consolidated Statements of Cash Flows for the years ended July 31, 2015 and 2014		33

Notes to Consolidated Financial Statements		34

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Marcum LLP)

To the Audit Committee of the

Board of Directors and Shareholders

of AmbiCom Holdings, Inc.

We have audited the accompanying consolidated balance sheet of AmbiCom Holdings, Inc. (the “Company”) as of July 31, 2015, and the related consolidated statements of operations, changes in convertible Series B preferred stock and stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of AmbiCom Holdings, Inc. as of July 31, 2015, and the consolidated results of its operations and its cash flows for the year ended July 31, 2015 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements – Nature of Business and Management’s Plans Regarding Financing of Future Operations, the Company’s recurring losses from operations and its need for additional capital raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 – Nature of Business and Management’s Plans Regarding Financing of Future Operations. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Marcum LLP

Marcum LLP

San Francisco, CA

November 13, 2015

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Kim & Lee Corporation, CPAs)

To the Board of Directors and

Stockholders of AmbiCom Holdings, Inc.

We have audited the accompanying consolidated balance sheets of AmbiCom Holdings, Inc. and subsidiary as of July 31, 2014 and 2013, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended July, 31, 2014. AmbiCom Holdings, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of AmbiCom Holdings, Inc. and subsidiary as of July 31, 2014 and 2013, and the results of their operations and their cash flows for each of the years in the two-year period ended July 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

/s/ Kim and Lee Corporation, CPAs

Kim and Lee Corporation, CPAs

Los Angeles, California

November 7, 2014

AMBICOM HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

	July 31,
				(Revised - Note 12)
	2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	53,452		$	523,540
Accounts receivable, net of allowance for doubtful accounts of $288 and $26 as of July 31, 2015, and July 31, 2014, respectively		1,851			490
Inventory, net of allowance of $5,271 and $7,352 as of July 31, 2015, and July 31, 2014, respectively		25,529			64,120
Prepaid expenses and other current assets		136,202			9,839
Total current assets		217,034			597,989

Property and equipment, net		154,998			97,563
Deposits		20,695			20,695
Intangible assets, net		4,644,906			5,082,375
Total assets	$	5,037,633		$	5,798,622

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:
Accounts payable and accrued liabilities	$	458,134		$	143,105
Deferred revenue		132,056			1,980
Capital lease obligations - current portion		20,952			-
Notes payable - current portion		65,688			15,735
Convertible debt, net of debt discount - current portion		193,559			-
Derivative liabilities - current portion		567,314			-
Advance from development partner		180,635			-
Total current liabilities		1,618,338			160,820

Capital lease obligations - net of current portion		57,675			-
Notes payable - net of current portion		45,709			58,978
Convertible debt, net of debt discount - net of current portion		36,169			-
Derivative liabilities - net of current portion		314,679			-
Total liabilities		2,072,570			219,798

Commitments and contingencies (Note 6)

Convertible redeemable preferred stock, Series B, $0.008 par value 325,000 shares authorized; 262,475 shares issued and outstanding at July 31, 2015 and July 31, 2014. (Liquidation preference $2,600,000) - (Note 11)		262,475			262,475

Stockholders’ equity:

Preferred stock, Series A, $0.001 par value; 10,000,000 shares authorized; 0 shares and 10,000,000 shares issued and outstanding at July 31, 2015 and July 31, 2014, respectively		-			10,000
Common stock, $0.008 par value; 200,000,000 shares authorized; 55,999,118 and 26,162,093 shares issued and outstanding at July 31, 2015 and July 31, 2014, respectively		447,991			209,294
Additional paid in capital - (Note 12)		17,834,719			16,517,451
Accumulated deficit - (Note 12)		(15,580,122	)		(11,420,396	)
Total stockholders’ equity		2,702,588			5,316,349
	$	5,037,633		$	5,798,622

The accompanying notes are an integral part of these consolidated financial statements.

AMBICOM HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED JULY 31,

	2015			2014

Revenue:
Product and other	$	154,147		$	1,941,142
Software licensing and support	$	146,913		$	-
Total revenue	$	301,060		$	1,941,142

Cost of revenue:
Product and other		75,641			805,631
Software licensing and support		98,698			-
Total cost of revenue	$	174,339		$	805,631

Gross profit		126,721			1,135,511

Operating Expenses
General and administrative		3,109,123			1,396,312
Sales and marketing		142,389			17,832
Research and development		456,349			188,328
Total operating expenses		3,707,861			1,602,472

Loss from operations		(3,581,140	)		(466,961	)

Other income (expense)
Other income		25,317			2,000
Change in fair value of derivative liabilities		(333,618	)		-
Interest expense		(268,394	)		(2,790	)
Net other income (expense)		(576,695	)		(790	)

Net loss	$	(4,157,835	)	$	(467,751	)

Net loss per share, basic and diluted	$	(0.096	)	$	(0.018	)

Weighted-average shares used to compute net loss per share, basic and diluted		43,180,618			26,162,093

The accompanying notes are an integral part of these consolidated financial statements.

AMBICOM HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SERIES B CNVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY

			Preferred					Preferred
	Preferred Stock		Stock Series B		Preferred Stock			Stock Series A			Common		Common Stock		Additional Paid-in			Accumulated			(Revised - Note 12)
	Series B #		Amount		Series A #			Amount			Stock #		Amount		Capital			Deficit			Total

Balance at July 31, 2013		262,475	$	262,475		7,050,000		$	7,050			10,806,520	$	86,449	$	11,229,864		$	(10,949,020	)	$	374,343
Stock-based compensation																39,382			-			39,382
Common shares issued to consultants												250,000		2,000		48,000			-			50,000
Common shares issued to advisory board												250,000		2,000		45,000			-			47,000
Series A convertible preferred stock issued						2,950,000			2,950							(2,950	)		-			-
Annual 6% common stock dividend for preferred shareholders per Series B agreement												15,760		126		3,499			(3,625	)		-
Common shares issued in connection with equity financing												429,332		3,435		71,565			-			75,000
Common shares issued in connection with asset acquisition												14,410,481		115,284		5,083,091			-			5,198,375

Net loss for the year ended July 31, 2014																			(467,751	)		(467,751	)
Balance at July 31, 2014		262,475	$	262,475		10,000,000		$	10,000			26,162,093	$	209,294	$	16,517,451		$	(11,420,396	)	$	5,316,349

Stock-based compensation																366,395			-			366,395
Issuance of common stock to advisory board												2,000,000		16,000		264,000			-			280,000
Common shares issued to consultants												3,300,975		26,408		441,992						468,400
Issuance of common stock to an investor as a commitment fee												500,000		4,000		91,000						95,000
Issuance of common stock in connection with convertible debt												700,000		5,600		131,400						137,000
Common shares issued in connection with equity financing												1,475,953		11,808		115,691			-			127,499
Conversion of note payable to common stock												1,807,579		14,461		50,539			-			65,000
Conversion of Series A convertible preferred stock into common stock						(10,000,000	)		(10,000	)		20,000,000		160,000		(150,000	)		-			-
Annual 6% common stock dividend for preferred shareholders per Preferred B agreement												15,760		126		1,765			(1,891	)		-
Common stock issued to employees												36,758		294		4,486			-			4,780

Net loss for the year ended July 31, 2015																			(4,157,835	)		(4,157,835	)

Balance at July 31, 2015		262,475	$	262,475		-		$	-			55,999,118	$	447,991	$	17,834,719		$	(15,580,122	)	$	2,702,589

The accompanying notes are an integral part of these consolidated financial statements.

AMBICOM HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED JULY 31,

	2015			2014

Cash flows from operating activities:
Net loss	$	(4,157,835	)	$	(467,751	)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation		40,215			24,151
Amortization of intangible assets		781,380			157,800
Stock-based compensation expense		366,395			39,382
Change in fair value of derivative liabilities		333,618			-
Gain on conversion of convertible debt to common stock		(25,317	)		-
Non-cash interest expense relating to convertible debt and amortization of debt discount		261,871			-
Issuance of common stock in exchange for consulting services		468,400			47,000
Issuance of common stock to advisory board		280,000			50,000
Common stock issued to employees		4,780			-
Issuance of common stock to investors as a commitment fee		95,000			-
Provision for bad debt		262			-
Provision for inventory		(2,081	)		2,128
Changes in operating assets and liabilities:
Accounts receivable		(1,623	)		191,345
Inventory		40,672			23,485
Prepaid expenses and other assets		(134,879	)		115,634
Accounts payable and accrued liabilities		239,566			80,296
Deferred revenue		130,079			(380,000	)
Advance from development partner		180,635			-
Net cash used in operating activities		(1,098,862	)		(116,530	)

Cash flows from investing activities:
Purchases of property and equipment		-			(106,513	)
Developed Intangibles		(343,910	)
Net cash used in investing activities		(343,910	)		(106,513	)

Cash flows from financing activities:
Proceeds from issuance of convertible debt		827,475			-
Proceeds from sale of common stock		127,500			75,000
Payments on capital Leases		(19,022	)		-
Proceeds from note payable (Auto Loan)		-			74,712
Payments on note payable (Auto Loan)		(13,269	)		-
Proceeds from issuance of note payable to employee		50,000			-
Net cash provided by financing activities		972,684			149,712

Net decrease in cash and cash equivalents		(470,088	)		(73,331	)

Cash and cash equivalents, beginning of period		523,540			596,871

Cash and cash equivalents, end of period	$	53,452		$	523,540

Supplemental information:
Income taxes paid	$	-		$	-
Interest paid	$	6,523		$	2,790

Noncash investing and financing activities:
Fixed assets acquired pursuant to capital leases	$	97,649		$	-
Embedded derivative liabilities issued in connection with convertible debt	$	626,018		$	-
Issuance of common stock in connection with convertible debt	$	137,000		$	-
Conversion of preferred stock, Series A, to common stock	$	10,000		$	-
6% dividend for preferred stock Series B holders issued in common stock	$	1,891		$	3,625
Conversion of debt into common stock	$	65,000		$	-

The accompanying notes are an integral part of these consolidated financial statements.

AMBICOM HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JULY 31, 2015 AND 2014

1. Nature of Business and Management’s Plans Regarding Financing of Future Operations

Formation and Business of the Company

AmbiCom Holdings, Inc., a Nevada corporation (“AmbiCom”, “we”, “our”, “us”, or the “Company”), focuses its operations as an optimizer of server infrastructure configuration settings using its patented Active Continuous Optimization tool (“ACO”) which helps realize the full potential of both visualized and physical IT infrastructure. AmbiCom is also a designer and developer of wireless products focusing on Wi-Fi and Bluetoothâ applications for the medical and healthcare industry. AmbiCom purchases standard wireless products and designs and develops features and packaging to customize these products to their target original equipment manufacturer (“OEM”) markets. AmbiCom also sells home healthcare products in the retail market which include solar toothbrushes in that convert light into negatively-charged ions.

On May 29, 2014, the Company acquired certain assets of Veloxum Corp., a Delaware corporation (“Veloxum”) in consideration for the issuance of 13,100,437 shares of the Company’s Common Stock. Following the Company’s acquisition of the Veloxum assets, the Company has focused its operations as an optimizer of server infrastructure configuration settings.

In March 2011, the Company established a wholly owned subsidiary, E-Care USA, Inc., a Nevada designer and developer of wireless home medical devices. In April 2015, the Company dissolved E-Care USA, Inc.

In April 2015, the Company established a wholly owned subsidiary, Lagranger, Inc., a Nevada designer and developer of the active optimization tool for the gaming market.

Details of the Company’s subsidiaries as of July 31, 2015 are as follows:

Name

Place and Date of
Establishment/
Incorporation

Relationships

Principal Activities

Lagranger, Inc.

Nevada

April 21, 2015

Wholly-owned subsidiary of AmbiCom Holdings, Inc.

Designer and developer of optimizer of gaming infrastructure configuration settings.

All intercompany transactions and balances are eliminated in consolidation.

Management’s Plans Regarding Financing of Future Operations

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern.

The Company has incurred losses and negative cash flows from operations for the past two fiscal years. As of July 31, 2015, the Company had cash and cash equivalents of approximately $53,452, a working capital deficit of approximately $1,401,304, and an accumulated deficit of $ 15,580,122. The Company also incurred a net loss of $4,157,835 and had net cash used in operating activities of $1,098,862 for the year ended July 31, 2015.

The Company has financed its operations primarily with the proceeds from the sale of stock and issuance of convertible notes. The Company’s long-term success is dependent upon its ability to successfully develop, commercialize and market its products and services, earn revenue, obtain additional capital when needed, and, ultimately, to achieve profitable operations.

Management expects to continue to incur additional substantial losses in the foreseeable future as a result of the Company’s research and development activities. For the foreseeable future, we plan to fund all our operations and capital expenditures from the net proceeds of equity or debt offerings and existing cash balances. Although the Company plans to pursue additional financing, there can be no assurance that it will be able to secure financing when needed or to obtain such financing on terms satisfactory to the Company, if at all. If unable to secure additional financing in the future on acceptable terms, or at all, the Company may be unable to complete the development of its new products. In addition, the Company could be forced to reduce or discontinue product development, reduce or forego sales and marketing efforts and forego attractive business opportunities in order to improve liquidity to enable the Company to continue its operations. The negative cash flows and lack of financial resources of the Company raise substantial doubt as to the Company’s ability to continue as a going concern.

On September 21, 2015, the Company effectuated a convertible note agreement with an investor for a total principal of $92,000. The note bears interest at a rate of 10% per annum and is convertible into shares of common stock at a conversion price equal to 50% of the lowest trade price in the 20 trading days prior to the conversion. The principal and accrued interest balances are due on June 21, 2016.

Note 2. Summary of Significant Accounting Policies

The summary of significant accounting policies is presented to assist in understanding the Company’s financial statements. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Basis of Presentation - The accompanying financial statements have been prepared in accordance with account principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”).

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates, and the differences may be material to the financial statements. Estimates are used primarily in determining the valuation of stock based compensation, valuation of convertible instruments and derivative liability, the reserves for sales allowances, accounts receivable and inventory. Various assumptions go into the determination of these estimates. The process of determining significant estimates requires consideration of factors such as historical experience and current and expected economic conditions.

Cash and Cash Equivalents - The Company considers all highly liquid investments and deposits with original maturities of three months or less when purchased to be cash equivalents. All cash and cash equivalents are maintained with nationally recognized financial institutions.

Accounts receivable and Allowance for Doubtful Accounts - Accounts receivable consist primarily of amounts due from customers under normal trade terms. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The allowance for doubtful accounts is computed based on the Company’s historical experience and management’s analysis of possible bad debts. Accounts receivable are shown net of an allowance for doubtful accounts of $288 as of July 31, 2015 and $26 as of July 31, 2014, respectively.

Inventory - Inventory is stated at the lower of cost or market on an average cost basis. Inventory allowances are recorded for damaged, obsolete, excess and slow-moving inventory. The market value of inventory is estimated based on the impact of market trends, an evaluation of economic conditions and the value of current orders relating to the future sales of this type of inventory. As of July 31, 2015 and July 31, 2014, the Company recorded an inventory allowance of $5,271 and $7,352 respectively, and all of the inventory was comprised of finished goods.

Property and Equipment - Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the following estimated useful lives of the assets: furniture and fixtures –seven years; machinery and equipment –five years; software – five years; leasehold improvements –the life of the current facility lease. Major additions and betterments are capitalized and repairs and maintenance are charged to operations in the period incurred.

Intangible Assets - Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives. The useful life of the intangible asset is evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining useful life.

Long-Lived Assets – The Company evaluates the carrying amount of its long-lived assets whenever events or changes in circumstances indicate that the assets may not be recoverable. An impairment loss is recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than the carrying amount of the asset. To date, there have been no such impairment losses.

Accounts Payable and Accrued Liabilities - Accounts payable and accrued liabilities consisted of the following as of July 31, 2015 and 2014:

	2015		2014
Accounts payable	$	319,837	$	116,240
Accrued interest		75,463		-
Accrued operating expenses		33,222		9,257
Employee payroll compensation expense		29,600		17,596
Accrued other		12		12
Total accounts payable and accrued liabilities	$	458,134	$	143,105

Income Taxes - The Company accounts for income taxes pursuant to the FASB ASC Topic 740. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment

Topic 740-10 clarifies the accounting for uncertainty in income taxes recognized in the Company’s financial statements in accordance with generally accepted accounting principles. The calculation of the Company's tax provision involves the application of complex tax rules and regulations within multiple jurisdictions. The Company's tax liabilities include estimates for all income-related taxes that the Company believes are probable and that can be reasonably estimated. To the extent that the Company’s estimates are understated, additional charges to the provision for income taxes would be recorded in the period in which the Company determines such understatement. If the Company's income tax estimates are overstated, income tax benefits will be recognized when realized. .

The Company utilizes a two-step approach to recognizing and measuring uncertain tax positions by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. As of July 31, 2015, no liabilities were required to be recorded related to tax positions taken

In accordance with FASB guidance, the Company has elected to include interest and penalties related to its tax contingencies as a component of other expense. There were no accruals for interest and penalties related to uncertain tax positions as of July 31, 2015.

Revenue Recognition - The Company generates revenues from the sale of wireless products primarily in the medical field, and from software licensing and support arrangements with third parties.

Product and Other

The Company's product revenues are recognized upon shipment or delivery and acceptance of products by customers, when pervasive evidence of a sales arrangement exists, the price is fixed or determinable, the title has transferred and collection of resulting receivables is reasonably assured.

License and Support

The Company recognized revenue during the year ended July 31, 2015 pursuant to its joint development and license agreement with PC Driver Headquarters, LP, a Texas limited partnership (“PC Drivers”), which was entered into on September 17, 2014. The agreement provides for AmbiCom to license its automated optimization software tool to PC Drivers in order for the technology to be incorporated and integrated into PC Driver’s application offerings (“Jointly Developed Software”), which is marketed to consumers in the United States. The agreement provides for PC Drivers to perform the sales and marketing functions for the Jointly Developed Software and for AmbiCom to perform the hosting, maintenance, and support functions related to the Jointly Developed Software in addition to maintaining servers dedicated for the combined application offerings. AmbiCom is also responsible for performing certain additional professional services related to software development for new features and functionality as agreed to by both parties.

Upon entering into the agreement, AmbiCom received a one-time, non-refundable payment of $150,000 from PC Drivers in consideration for licensing the software to PC Drivers pursuant to the agreement. The Company recorded the payment as deferred revenue upon receipt and will recognize the amount as license revenue over the term of the agreement of approximately 6 years (based on the expiration date of AmbiCom’s patent as stipulated in the agreement).

Additionally, during the year ended July 31, 2015, PC Drivers advanced $180,635 to AmbiCom, which was used to pay for additional development services and to purchase servers and other equipment needed to support the application offerings. This balance is owed to PC Drivers and will be deducted from future cash flows generated from licensing and support revenue and repaid to PC Drivers. As of July 31, 2015 the advance from the development partner was reflected as part of current liabilities on the consolidated balance sheet.

The agreement provides for the two parties to split all revenues and expenses related to the sale of the software tool in the consumer market over the term of the agreement. All net revenues generated are split 50/50 between PC Driver and the Company.

Research and Development Costs -Research and development costs are charged to operations as incurred. Research and development expenses consist primarily of compensation and related costs for personnel responsible for the research and development activities relating to new and existing products.

Stock-Based Compensation - The Company accounts for its stock-based compensation expense based on the fair value of the stock-based awards that are ultimately expected to vest. The fair value of an employee stock option grant is estimated on the date of grant using the Black-Scholes option pricing model, and is recognized as expense on a straight-line basis over the employee’s requisite service period (generally the vesting period), net of estimated forfeitures. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from the prior estimates.

The Company records the expense attributed to non-employee services paid with stock-based awards based on the estimated fair value of the awards determined using the Black-Scholes option pricing model. The measurement of stock-based compensation for non-employees is subject to re-measurement as the options vest, and the expense is recognized over the period during which services are received.

Concentration - Financial instruments which potentially subject the Company to concentrations of credit risk are primarily accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition. If the collection of the receivable becomes doubtful, the Company establishes a reserve in an amount determined appropriate for the perceived risk.

The Company maintains its cash accounts at commercial banks. From time to time, cash balances maintained in such banks may exceed the insured amount by the Federal Deposit Insurance Corporation (FDIC). As of July 31, 2015, management does not believe it was exposed to any significant risk on cash balances.

Four customers accounted for 81% of revenue for the year ended July 31, 2015 and four customers accounted for 84% of revenue for the year ended July 31, 2014.

Two vendors accounted for 100% of purchases for the year ended July 31, 2015 and two vendors accounted for 93% of purchases for the year ended July 31, 2014.

Convertible Instruments – The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with ASC 815 “Derivatives and Hedging.”ASC 815 generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract,(b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not remeasured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument subject to the requirements of ASC 815. ASC 815 also provides an exception to this rule when the host instrument is deemed to be conventional (as that term is described in the implementation guidance to ASC 815).

The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options.

Derivative financial liabilities are initially recorded at fair value, with gains and losses arising from changes in fair value recognized in other income (expense), net in the consolidated statements of operations at each period end while such instruments are outstanding.

The terms of the conversion features associated with the convertible debt do not explicitly limit the potential number of shares issuable upon conversion and accordingly could result in the Company’s obligation to deliver a potentially unlimited number of shares upon settlement. As such, share settlement is not considered to be within the control of the Company.

In accordance with ASC 815 paragraph 40-35, the Company adopted a sequencing policy that reclassifies contracts, with the exception of stock options, from equity to assets or liabilities for those with the latest inception date first. Future issuance of securities will be evaluated as to reclassification as a liability under our sequencing policy of latest inception date.

In accordance with the guidance under ASC 815-40-25, we have evaluated that we have a sufficient number of authorized and unissued shares as of July 31, 2015, to settle all existing commitments.

Net Income (Loss) Per Share of Common Stock – Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net income (loss) per share calculation, convertible preferred stock, convertible promissory notes, and stock are considered to be potentially dilutive securities. Because the Company has reported a net loss for the years ended July 31, 2015 and 2014, diluted net loss per common share is the same as basic net loss per common share for those periods.

Recent Accounting Pronouncements - From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. ASU 2015-03 is effective for annual period, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Company does not expect that the adoption of ASU 2015-03 will have a material effect on its financial statements.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern. The new standard provides guidance around management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted. The Company does not expect that the adoption of ASU 2015-03 will have a material effect on its financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The ASU is effective for public entities for annual periods beginning after December 15, 2017. In June 2015, the FASB deferred for one year the effective date of the new revenue standard, with an option that would permit companies to adopt the standard as early as the original effective date. Early adoption prior to the original effective date is not permitted. The Company is evaluating the impact this standard may have on its revenue recognition, but does not expect that the adoption will have a material impact on the Company’s financial statements.

Note 3. Fair Value of Financial Instruments

The Company records its financial assets and liabilities at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value should maximize the use of observable inputs and minimize the use of unobservable inputs. The accounting guidance for fair value establishes a three-level hierarchy for disclosure of fair value measurements, as follows:

Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted market prices included in Level 1) that are either directly or indirectly observable, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the instrument’s anticipated life.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying values of certain financial assets and liabilities of the Company, such as cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximate fair value due to their relatively short maturities. The carrying values of the Company’s notes payable approximate their fair values as the terms of the borrowing are consistent with current market rates that the Company could obtain for debt with similar terms and maturities.

During the year ended July 31 2015, the Company entered into a series of convertible note agreements which contain embedded conversion features that allowed the debt holder to convert the outstanding principal and accrued interest into common stock at a discount on the date of conversion. The Company has determined that the derivative liabilities associated with the convertible debt are based on significant inputs that are unobservable and thus represent a Level 3 measurement.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy:

	Fair Value Measurements at July 31, 2015
	Total		Level 1		Level 2		Level 3

Derivative liabilities	$	881,993		—		—	$	881,993

The fair value measurement of the derivative liabilities for the conversion features associated with convertible debt are based on significant inputs that are unobservable and thus represent a Level 3 measurement. The Company’s estimated fair value of the derivative liabilities are calculated using a Binomial Lattice valuation model. The valuation model is dependent upon several variables such as the term of the convertible note, conversion price, current stock price, risk-free interest rate estimated over the contractual term, estimated volatility of our stock over the term of the note and the estimated market price of our stock during the conversion period. The risk-free rate is based on U.S. Treasury securities with similar maturities as the expected terms of the warrants. The volatility is estimated based on blending the volatility rates for a number of similar publicly-traded companies (Note 11). The Level 3 estimates are based, in part, on subjective assumptions.

During the periods presented, the Company has not changed the manner in which it values liabilities that are measured at fair value using Level 3 inputs. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the periods presented.

The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments as follows:

	Derivative Liability
Balance at August 1, 2014	$	-
Issuance		626,018
Reduction upon conversion to common stock		(77,643	)
Change in fair value recorded in other income (expense), net		333,618
Balance at July 31, 2015	$	881,993

Note 4. Assets Purchase

Veloxum

On May 15, 2014, the Company acquired certain assets of Veloxum, Inc., (“Veloxum”), a privately-held company, relating to its enterprise software in exchange for 13,100,437 shares of common stock which was accounted as an asset purchase. At the time of the acquisition, the Company determined that the fair value of the common stock issued was approximately $5.2 million based on the trading price of the common stock at issuance.

The following table summarizes the fair value of assets acquired of $5.2 million:

Developed technology	$	4,423,375
Tradenames and other intangible asset	$	816,800
Total	$	5,240,175

Note 5. Intangible Assets

Developed technology and trade names were acquired as part of the Veloxum transaction in May 2014. Acquisition related intangibles are amortized over their estimated useful lives based on expected future benefit.

The carrying amounts of the intangible assets as of July 31, 2015 and 2014 are as follows:

	Intangible Assets, Gross						Accumulated Amortization								Intangible Assets, Net				Weighted
																			Average
	July 31, 2013		Additions		July 31, 2014		July 31, 2013		Expense			July 31, 2014			July 31, 2013		July 31, 2014		Useful Life (Years)
Developed technology	$	-	$	4,423,375	$	4,423,375	$	-	$	(133,203	)	$	(133,203	)	$	-	$	4,290,172		7
Trade names		-		816,800		816,800		-		(24,597	)		(24,597	)		-		792,203		7
Total intangible assets, net	$	-	$	5,240,175	$	5,240,175	$	-	$	(157,800	)	$	(157,800	)	$	-	$	5,082,375

	July 31, 2014		Additions		July 31, 2015		July 31, 2014			Expense			July 31, 2015			July 31, 2014		July 31, 2015		Useful Life (Years)
Developed technology	$	4,423,375	$	343,911	$	4,767,286	$	(133,203	)	$	(664,694	)	$	(797,897	)	$	4,290,172	$	3,969,389		7
Trade names		816,800				816,800		(24,597	)		(116,686	)		(141,283	)		792,203		675,517		7
Total intangible assets, net	$	5,240,175	$	343,911	$	5,584,086	$	(157,800	)	$	(781,380	)	$	(939,180	)	$	5,082,375	$	4,644,906

During the fiscal year ended July 31, 2015, the Company developed new features and added functionality to its software as requested by its partner, PC Driver, under the joint development and license agreement (Note 2). During the year ended July 31, 2015, the Company incurred $343,911 of additional development cost that was capitalized as intangible asset.

The amortization expense associated with intangible assets was $781,380 and $157,800 for the years ended July 31, 2015 and 2014, all of which was recorded in general and administrative expenses. As of July 31, 2015, the amortization expense related to identifiable intangible assets in future periods is expected to be as follows:

					Total
	Developed		Trade		intangible
Year ending July 31,	technology		names		assets
2016		681,041		116,686		797,727
2017		681,041		116,686		797,727
2018		681,041		116,686		797,727
2019		681,041		116,686		797,727
Thereafter		1,245,225		208,773		1,453,998
Total intangible assets subject to amortization		3,969,389	$	675,517	$	4,644,906

A long-lived asset or asset group that is held and used should be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount for the long-live asset or asset group might not be recoverable. As a result, a company is not required to perform an impairment analysis if indicators of impairment are not present. Instead, a company would assess the need for an impairment write-down only if an indicator of impairment (also referred to as a triggering event) is present. As of July 31, 2015, no triggering events have occurred which would indicate that the acquired Veloxum developed technology and trade name values may not be recoverable. The strategy and plans that had been put in place at the original acquisition date were still effective and progressing as planned.

Note 6. Commitments and Contingencies

Office Lease

The company leases approximately 7,313 square feet of office and warehouse space at a monthly rental of $4,473 under the terms of a 63 month lease that expires on May 31, 2016. Total future minimum lease payments under this agreement are $50,702 all due in FY2016.

Total rent expense for the years ended July 31, 2015 and 2014 was $66,949, and $53,675, respectively.

Capital Leases

On October 31, 2014, the Company leased $93,294 of servers and network switches to increase production capacity for the OEM project with PC Driver Headquarters LP. The leases are payable in 60 monthly installments through fiscal year 2019. On March 31, 2015, the Company leased $4,356 of drivers to increase production capacity for the OEM project with PC Driver Headquarters LP. The lease is payable in 36 monthly installments through fiscal year 2018. The Company determined that the leases qualified as capital leases because the company will own the equipment at the end of the leasing term subject to a bargain purchase option.

The future minimum lease payments under capital lease as of July 31, 2015 are as follows:

Year Ending July 31:
2016		21,682
2017		21,682
2018		21,037
2019		20,133
2020		5,033
		89,566
Less: amount representing interest		(10,939	)
		78,627
Less: current portion of capital lease obligation		(20,952	)
Long-term capital lease obligation	$	57,675

Note 7. Series B Convertible Redeemable Preferred Stock

In September 2011, the Company amended and restated its Articles of Incorporation. Before the amendment, there were 2,600,000 shares of Series B Convertible Preferred Stock authorized at $0.001 par value per share. After the amendment, the authorized number of shares of Series B Convertible Preferred Stock was changed to 325,000 at $0.008 par value per share.

As of July 31, 2015 and July 31, 2014, there were 262,475 shares of Series B Convertible Preferred Stock outstanding.

The Series B accrues annual dividends at the rate of 6% per year in shares of common stock at the conversion rate of $1.00 per share. The Series B, together with any unpaid dividends, is convertible at any time into shares of the Company’s common stock at the conversion price divided by the greater of forty cents ($0.40) or seventy percent (70%) of the daily volume weighted average price of the common stock for the twenty trading days immediately prior to the conversion. The Series B is redeemable by the Company, at any time prior to December 31, 2015, in cash at the redemption rate of $1.00 per share of Series B plus any accrued and unpaid dividends. On December 31, 2015, all outstanding shares of Series B shall be redeemed by the Company at a per share redemption price equal to $1.00 per share of Series B plus an amount of common stock equal to the amount of the accrued and unpaid dividend thereon. The Series B has a liquidation preference of $2,600,000 and has priority over the Series A Preferred Stock and the common stock. The Series B votes on an “as converted” basis.

Management determined that the Series B Preferred Stock meets the definition of a temporary equity instrument in accordance with ASC Topic 480-10-S99 “Accounting for Redeemable Equity Instruments”. Accordingly, the Company determined that the Series B should be classified as temporary equity and recorded at its redemption value (Note 12).

Note 8. Shareholders’ Equity

Preferred Stock

The Company's Amended Articles of Incorporation authorizes the issuance of 50,000,000 shares of Preferred Stock, subject to any limitations prescribed by law, without further vote or action by the stockholders, to issue from time to time shares of preferred stock in one or more series. Each such series of Preferred Stock shall have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall be determined by the Company's board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive rights.

Series A Convertible Preferred Stock

The Company has authorized a total of 10,000,000 shares of Series A Convertible Preferred Stock (the “Series A”). The Series A is convertible at any time into shares of the Company’s common stock at the conversion rate of two shares of common stock per each share of Series A converted. The Series A is treated on an “as converted” basis for both voting and liquidation rights. On November 20, 2014, the CEO of the Company converted 10,000,000 shares of preferred Series A to 20,000,000 shares of common stock. There are no shares of Series A preferred stock outstanding as of July 31, 2015.

Options

2010 Equity Incentive Plan

On January 15, 2010, the Board and Stockholders approved and adopted the 2010 Equity Incentive Plan (the “2010 Plan”). The 2010 Plan is intended to promote the interests of the Company by attracting and retaining exceptional employees, consultants, directors, officers and independent contractors (collectively referred to as the “Participants”), and enabling such Participants to participate in the long-term growth and financial success of the Company. Under the 2010 Plan, the Company may grant stock options, which are intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Incentive Stock Options”), non-qualified stock options (the “Nonqualified Stock Options”), stock appreciation rights (“SARs”) and restricted stock awards (the “Restricted Stock Awards”), which are restricted shares of common stock (the Incentive Stock Options, the Nonqualified Stock Options, the SARs and the Restricted Stock Awards are collectively referred to as “Incentive Awards”). Incentive Awards may be granted pursuant to the 2010 Plan for 10 years from the Effective Date.

From time to time, the Company may issue Incentive Awards pursuant to the 2010 Plan. Each of the awards will be evidenced by and issued under a written agreement. In accordance with the rules of the plan, the exercise price of options granted shall be not less than 110% of the average of the closing price for the 30 days preceding the grant date.

At July 31, 2015, 477,778 options remain available for future grant under the 2010 Plan

As of July 31, 2015, there were options outstanding under the 2010 Plan to purchase 200,000 shares of common stock at a purchase price of $0.20 per share, 250,000 shares of common stock at a purchase price of $0.09 per share, 75,000 shares of common stock at a purchase price of $0.03 per share, 275,000 shares of common stock at a purchase price of $0.16 per share and 1,000,000 shares of common stock at a purchase price of $0.24 per share. No options have been exercised since the Plan was created.

The Company recognized a non-cash stock compensation expense of $121,769 and $39,382 for the years ended July 31, 2015 and 2014, respectively in connection with options issued under the 2010 Plan.

No options were granted under the 2010 Plan during the fiscal year ending July 31, 2015.

2014 Equity Incentive Plan

On June 2, 2014, the Board and Stockholders approved and adopted the 2014 Equity Incentive Plan (the “2014 Plan”).

The 2014 Plan is intended to promote the interests of the Company by attracting and retaining exceptional employees, consultants, directors, officers and independent contractors (collectively referred to as the “Participants”), and enabling such Participants to participate in the long-term growth and financial success of the Company. Under the 2014 Plan, the Company may grant stock options, which are intended to qualify as “incentive stock options” under Section 422 of the Internal Revenue Code of 1986, as amended (the “Incentive Stock Options”), non-qualified stock options (the “Nonqualified Stock Options”), stock appreciation rights (“SARs”) and restricted stock awards (the “Restricted Stock Awards”), which are restricted shares of common stock (the Incentive Stock Options, the Nonqualified Stock Options, the SARs and the Restricted Stock Awards are collectively referred to as “Incentive Awards”). Incentive Awards may be granted pursuant to the 2014 Plan for 10 years from the Effective Date.

From time to time, the Company may issue Incentive Awards pursuant to the 2014 Plan. Each of the awards will be evidenced by and issued under a written agreement. In accordance with the rules of the plan, the exercise price of options granted shall be not less than 110% of the average of the closing price for the 30 days preceding the grant date.

The Board reserved a total of 10,000,000 shares of Common Stock for issuance under the 2014 Plan. If an incentive award granted under the 2014 Plan expires, terminates, is unexercised, or is forfeited, or if any shares are surrendered in connection with an incentive award, the shares subject to such award and the surrendered shares will become available for further awards under the Plan.

The number of shares subject to the 2014 Plan, any number of shares subject to any numerical limit in the 2014 Plan, and the number of shares and terms of any Incentive Award may be adjusted in the event of any change in the Company outstanding Common Stock by reason of any stock dividend, spin-off, stock split, reverse stock split, recapitalization, reclassification, merger, consolidation, liquidation, business combination or exchange of shares, or similar transaction.

The Company uses the Black-Scholes valuation model as the method for determining the estimated fair value of certain financial instruments.

Expected Term—Expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is determined using the contractual term of the option grant.

Expected Volatility—Expected volatility is estimated by studying the volatility of our stock for similar terms.

Expected Dividend—The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company has never paid dividends and has no plans to pay dividends.

Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury zero-coupon issues in effect at the time of grant for periods corresponding with the expected term of the option.

On August 11, 2014, 1,750,000 options were granted to two employees at an exercise price of $0.24 per share. By using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 1.86%; volatility of 200%; expected life of 6.5 years; and zero dividend yield; the Company recognized a non-cash stock compensation charge of $167,332 for the year ended July 31, 2015 in connection with the issuance and vesting of these options.

On September 5, 2014, 750,000 options were granted to one employee at an exercise price of $0.24 per share. By using the Black-Scholes option pricing model with the following assumptions: risk-free interest rate of 1.92%; volatility of 200%; expected life of 6.5 years; and zero dividend yield, the Company recognized a non-cash stock compensation charge of $53,432 for the year ended July 31, 2015 in connection with the issuance and vesting of these options.

A summary of stock option activity under the 2010 and 2014 Plans is as follows:

	Options available for grant			Options outstanding			Weighted average exercise price
Balance at July 31, 2013		1,732,778			545,000		$	0.13
Granted		(1,305,000	)		1,305,000		$	0.22
Balance at July 31, 2014		427,778			1,850,000		$	0.19
Authorized		10,000,000			-		$	-
Granted		(2,500,000	)		2,500,000		$	0.24
Canceled, forfeited, or expired		50,000			(50,000	)	$	0.18
Balance at July 31, 2015		7,977,778			4,300,000		$	0.22

Options exercisable as of July 31, 2014 were:

		Options outstanding		Weighted average
Exercise price		at July 31, 2014		remaining life
$	0.03		45,000		8.09
$	0.09		175,000		7.75
$	0.16		45,750		9.46
$	0.20		220,000		6.08
$	0.24		75,000		9.79
			560,750

Options exercisable as of July 31, 2015 were:

		Options outstanding		Weighted average
Exercise price		at July 31, 2015		remaining life
$	0.03		75,000		7.09
$	0.09		250,000		6.75
$	0.16		137,250		8.46
$	0.20		220,000		5.08
$	0.24		1,125,000		8.98
			1,807,250

As of July 31, 2015, unrecognized compensation cost related to unvested stock options amounted to $769,800, which will be recognized over the remaining weighted-average requisite service period of 1.49 years. The intrinsic value of the Company’s outstanding common stock options as of July 31, 2015 was zero.

For the year ended July 31, 2015 non-cash stock compensation expenses of $143,881 were allocated to research and development expenses and $222,514 to general and administrative expenses. All non-cash stock compensation expenses for the year ended July 31, 2014 were allocated to general and administrative expenses.

Common Stock

In September 2011, the Company amended and restated its Articles of Incorporation to effectuate a 1 for 8 reverse stock split by decreasing the authorized shares for issuance from 1,000,000,000 shares of common stock, $0.001 par value per share to 125,000,000 shares of common stock, $0.008 par value per share. On June 8, 2015, the Company increased the authorized shares of common stock to 200,000,000. On August 4, 2015, the Board and holders of a majority of the outstanding capital stock authorized and approved an amendment to increase the authorized shares of common stock to 700,000,000. There were 55,999,118 and 26,162,093 shares of common stock outstanding as of July 31, 2015 and July 31, 2014, respectively.

Kodiak Capital Group LLC Investment Agreement

On October 31, 2011, we entered into an Investment Agreement and a Registration Rights Agreement with Kodiak Capital Group, LLC (the “Investor”) to purchase up to $1,000,000 of the Company’s Common Stock. In accordance with these Equity Line Transaction agreements, the Company filed a registration statement on Form S-1, which was declared effective on January 25, 2013. The Investment Agreement allows the Company to sell Common Stock in increments of $25,000 at a per share purchase price equal to 80% of the volume weighted average price of the Common Stock over five consecutive trading days. The agreements provide for the Company to exercise put options that obligate the Investor to purchase common stock shares valued at $25,000 per each put option.

Pursuant to the agreement, the Company issued the following common stock to the Investor, each in exchange for a $25,000 investment: 120,193 shares on March 25, 2014; 208,333 shares on May 12, 2014; 100,806 shares on May 27, 2014; 148,810 shares on September 23, 2014; 168,919 shares on October 3, 2014; 219,491 shares on October 13, 2014; 223,215 shares on October 22, 2014; and 215,518 shares on November 4, 2014.

On April 20, 2015, we entered into a new Investment Agreement and a Registration Rights Agreement with the same investor to purchase up to $1,000,000 of the Company’s Common Stock. The Investment Agreement allows the Company to sell Common Stock in increments of $25,000 at a per share purchase price equal to 80% of the volume weighted average price of the Common Stock over five consecutive trading days. The agreement provides for the Company to exercise put options that obligate the Investor to purchase common stock shares valued at $25,000 per each put option as long as the Company has an effective registration statement in order to register the purchased shares. The Company issued 500,000 shares of common stock to Kodiak as a commitment fee on the date of the transaction and recorded $95,000 as other expense on the statement of operations to account for the value of the issued shares based on the trading price of the Company's stock on the issuance date.

Pursuant to the 2015 agreement with the investor, the Company issued 500,000 shares on April 24, 2015 in exchange for a $25,000 investment.

Note 9. Property and Equipment, Net

As of July 31, 2015 and 2014, property and equipment consisted of the following:

	July 31, 2015			July 31, 2014
Furniture and fixture	$	27,634		$	27,634
Machinery and equipment		125,189			27,540
Software		359,417			359,417
Leasehold Improvements		5,985			5,985
Vehicle		105,278			105,278
		623,503			525,854
Accumulated depreciation		(468,505	)		(428,291	)
Property and equipment, net	$	154,998		$	97,563

Depreciation expense for the years ended July 31, 2015 and 2014 was $40,214 and $24,151, respectively. The assets under capital leases as of July 31, 2015 and July 31, 2014 were $97,649 and $0, respectively. Accumulated depreciation related to assets under capital leases as of these dates was $12,730 and $0, respectively.

Note 10. Notes Payable

The notes payable consisted of the following as of July 31, 2015 and July 31, 2014:

	July 31, 2015			July 31, 2014
Note payable (Auto)	$	61,397		$	74,713
Note payable (Primary note)		50,000			-
		111,397			74,713
Less current portion		(65,688	)		(15,735	)
Long-term note payable	$	45,709		$	58,978

The automobile note payable is secured by the Company’s automobile and bears interest at 3.99% per annum with a maturity date of October 9, 2019. The Company’s monthly payment under the automobile note is $1,336 until maturity.

The primary note payable to an employee, which was entered into on May 12, 2015, bears interest at 5% interest per 30 days. The entire principal balance together with accrued interest are due on the maturity date of January 7, 2016.

The future minimum payments under notes payable as July 31, 2015 are as follows:

Year Ending July 31:
2016	$	65,688
2017		16,032
2018		16,032
2019		13,646
Total		111,397

Note 11. Convertible Debt and Derivative Liability

On December 18, 2014, the Company entered into a convertible note agreement with an investor for the purchase and sale of up to $285,000 of the Company’s original issue discount convertible debentures with a term of 3 years. The first debenture, in the principal amount of $160,000, was issued on December 18, 2014.

In connection with the agreement, the Company provided the lender with 200,000 shares of common stock. The Company used the trading price of its common stock on December 18, 2014 as the fair value of the common stock. The Company recorded a debt discount of $42,000 attributed to the issuance of the common stock.

The agreement provides that the holder may convert the notes into common stock at 70% of the lowest trading price in a 20 day trading window prior to the conversion. The note does not bear interest if repaid within 90 day of the borrowing date while a 30% one-time interest fee will be charged on the 181^st day if the note is still outstanding. The Company has determined that the right to convert the notes at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on December 18, 2014 and remeasured at each reporting period. The Company recorded a debt discount for the fair value of the derivative liability of $80,008 on the issuance date. The debt discount attributed to the convertible note, the issuance of the common stock, and the derivative liability is being amortized over the term of the note of 3 years and recorded as interest expense in the statements of operations.

During the year ended July 31, 2015, the lender converted $65,000 of the principal balance of the note in exchange for 1,807,579 shares of Common Stock, which also resulted in the de-recognition of $77,643 of the balance of the derivative liability. As of July 31, 2015, the Company determined the fair value of the derivative liability was $113,151 and accordingly recorded the change in fair value of $110,786 as other expense in the statements of operations.

On February 20, 2015, the Company entered into a convertible note agreement with an investor for the purchase and sale of up to $66,667 of the Company’s original issue discount convertible notes with a term of 2 years.

The agreement provides that the holder may convert the notes into common stock at the lesser of $0.15 per share or 60% of the lowest trading price in a 25 day trading window prior to the conversion. The note does not bear interest if repaid within 90 day of the borrowing date while a 12% one-time interest fee will be charged on the 91^st day if the note is still outstanding. The Company has determined that the right to convert the notes at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on February 20, 2015 and remeasured at each reporting period. The Company recorded a debt discount for the fair value of the derivative liability of $50,000 on the issuance date. The debt discount attributed to the convertible note and the derivative liability is being amortized over the term of the note of 2 years and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value of the derivative liability has increased to $102,259 and accordingly recorded the change in fair value of $52,259 as other expense in the statements of operations.

On March 4, 2015, the Company entered into a convertible note agreement with an investor for a principal balance of $100,000 with a term of 1 year.

The agreement provides that the holder may convert the notes into common stock at 60% of the lowest trading price in a 15 day trading window prior to the conversion. The debt accrues interest at a rate of 8% per annum, payable in common stock at the conversion rate. The Company has determined that the right to convert the notes at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on March 4, 2015 and remeasured at each reporting period. The Company recorded a debt discount for the fair value of the derivative liability of $89,672 on the issuance date. The debt discount attributed to the derivative liability is being amortized over the term of the note of 1 year and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value of the derivative liability has increased to $115,747 and accordingly recorded the change in fair value of $26,075 as other expense in the statements of operations.

On April 1, 2015, the Company entered into a convertible promissory note with an investor for a total principal balance of $64,000 of with a term of 1 year.

The agreement provides that the holder may convert the note into common stock at 61% of the lowest 3 trading prices in a 10 day trading window prior to the conversion. The note accrues interest at a rate of 8% per annum. The Company has determined that the right to convert the note at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on April 1, 2015 and remeasured at each reporting period. The Company recorded a debt discount for the fair value of the derivative liability of $55,958 on the issuance date. The debt discount attributed to the derivative liability is being amortized over the term of the note of 1 year and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value has increased to $61,376 and accordingly recorded the change in fair value of $5,418 as other expense in the statements of operations.

On April 24, 2015, the Company entered into a convertible note agreement with an investor for a total principal of up to $115,000 with a term of 1 year. The debenture, in the principal amount of $115,000, was issued on April 24, 2015.

The agreement provides that the holder may convert the note into common stock at the lesser of $0.10 or 65% of the lowest trading price in a 30 day trading window preceding the date of conversion. The note accrues interest at a rate of 15% per annum. The Company has determined that the right to convert the note at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on April 24, 2015 and remeasured at each reporting period. The Company recorded a debt discount for the fair value of the derivative liability of $80,000 on the issuance date. The debt discount attributed to the convertible note and the derivative liability is being amortized over the term of the note of 1 year and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value has increased to $115,837 and accordingly recorded the change in fair value of $35,837 as other expense in the statements of operations.

On April 24, 2015, the Company entered into a convertible note agreement with an investor for the purchase and sale of $50,000 of the Company’s original issue discount convertible note with a term of 8 months.

The agreement provides that the holder may convert the notes into common stock at 70% of the lowest trading price in a 30 day trading window prior to the conversion. The note accrues an interest of 1% per annum. The Company has determined that the right to convert the notes at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on April 24, 2015 and remeasured at each reporting period. The Company recorded a debt discount for the fair value of the derivative liability of $31,572 on the issuance date. The debt discount attributed to the convertible note and the derivative liability is being amortized over the term of the note of 8 months and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value of the derivative liability has increased to $47,217 and accordingly recorded the change in fair value of $15,645 as other expense in the statements of operations.

On May 21, 2015, the Company entered into a convertible promissory note with an investor for a total principal balance of $43,000 of with a term of nine months.

The agreement provides that the holder may convert the note into common stock at 61% of the lowest 3 trading prices in a 10 day trading window prior to the conversion after 180 days. The note accrues interest at a rate of 8% per annum. The Company has determined that the right to convert the note at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on May 21, 2015 and remeasured at July 31, 2015. The Company recorded a debt discount for the fair value of the derivative liability of $29,204 on the issuance date. The debt discount attributed to the derivative liability is being amortized over the term of the note of nine months and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value has increased to $40,674 and accordingly recorded the change in fair value of $11,470 as other expense in the statements of operations.

On June 11, 2015, the Company entered into a convertible promissory note with an investor for a total principal balance of $27,778 of with a term of 2 years.

The agreement provides that the holder may convert the note into common stock at the lesser of 0.125 or 65% of the lowest trading prices in a 25 day trading window proceeding to the conversion. The note accrues interest at a rate of 10% per annum. The Company has determined that the right to convert the note at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on June 11, 2015 and remeasured at July 31, 2015. The Company recorded a debt discount for the fair value of the derivative liability of $25,000 on the issuance date. The debt discount attributed to the derivative liability is being amortized over the term of the note of 2 years and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value has increased to $43,278 and accordingly recorded the change in fair value of $18,278 as other expense in the statements of operations.

On June 15, 2015, the Company entered into a convertible promissory note with an investor for a total principal balance of $55,000 of with a term of 1 year.

The agreement provides that the holder may convert the note into common stock at 60% of the lowest trading prices in a 25 day trading window prior to the conversion or the effective date of the Note. The note accrues interest at a rate of 10% per annum. The Company has determined that the right to convert the note at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on June 15, 2015 and remeasured at July 31, 2015. The Company recorded a debt discount for the fair value of the derivative liability of $24,270,000 on the issuance date. The debt discount attributed to the derivative liability is being amortized over the term of the note of 1 year and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value has increased to $28,308 and accordingly recorded the change in fair value of $4,038 as other expense in the statements of operations.

On July 9, 2015, the Company entered into a convertible promissory note with an investor for a total principal balance of $65,750 of with a term of 9 months.

The agreement provides that the holder may convert the note into common stock at 63% of the lowest trading prices in a 25 day trading window prior to the conversion or the effective date of the Note after 180 days. The note accrues interest at a rate of 8% per annum. The Company has determined that the right to convert the note at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on July 9, 2015 and remeasured at July 31, 2015. The Company recorded a debt discount for the fair value of the derivative liability of $60,000 on the issuance date. The debt discount attributed to the derivative liability is being amortized over the term of the note of 9 months and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value has increased to $73,427 and accordingly recorded the change in fair value of $13,427 as other expense in the statements of operations.

On July 10, 2015, the Company entered into a convertible promissory note with an investor for a total principal balance of $75,000 of with a term of 1 year.

The agreement provides that the holder may convert the note into common stock at 35% of the lowest trading prices in a 10 day trading window prior to the conversion or the effective date of the Note after 180 days. The note accrues interest at a rate of 10% per annum. The Company has determined that the right to convert the note at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on July 10, 2015 and remeasured at July 31, 2015. The Company recorded a debt discount for the fair value of the derivative liability of $71,250 on the issuance date. The debt discount attributed to the derivative liability is being amortized over the term of the note of 1 year and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value has increased to $100,591 and accordingly recorded the change in fair value of $29,341 as other expense in the statements of operations.

On July 27, 2015, the Company entered into a convertible promissory note with an investor for a total principal balance of $43,000 of with a term of nine months.

The agreement provides that the holder may convert the note into common stock at 61% of the lowest 3 trading prices in a 10 day trading window prior to the conversion after 180 days. The note accrues interest at a rate of 8% per annum. The Company has determined that the right to convert the note at a discount represents an embedded derivative liability that met the criteria for bifurcation under ASC 815 “Derivative and Hedging” which generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. The fair value of the derivative liability was calculated using a Binomial Lattice model on July 27, 2015 and remeasured at July 31, 2015. The Company recorded a debt discount for the fair value of the derivative liability of $29,084 on the issuance date. The debt discount attributed to the derivative liability is being amortized over the term of the note of nine month and recorded as interest expense in the statements of operations. As of July 31, 2015, the Company determined the fair value has increased to $40,128 and accordingly recorded the change in fair value of $11,044 as other expense in the statements of operations.

The Company used a Binomial Lattice model to calculate the fair value of its derivative liabilities using the following inputs:

	Issuance date			July 31, 2015
Volatility		96% - 196	%		174% - 207	%
Expected Term (years)		0.69 - 3.00			0.42 - 2.38
Expected dividend yield		0	%		0	%
Risk-free rate		0.15% - 1.10	%		0.13% - 0.80	%

As of July 31, 2015, amounts outstanding under the Company’s convertible debt payable were as follows:

Principal balance	$	800,195
Debt discount		(570,467	)
Net carrying value of debt		229,728
Less current portion		193,559
Long term net carrying value of debt		36,169

The future minimum payments under convertible debt agreements as of July 31, 2015 are as follows:

Year Ending July 31:
2016	$	650,007
2017		150,188

	$	800,195

Note 12. Revision of Prior Period Amounts

It was determined during the preparation of the interim financial statements for the nine months ended April 30, 2015, that adjustments were required relating to periods preceding August 1, 2014. These adjustments resulted from the Company’s re-evaluation of the accounting treatment of the Series B Convertible Redeemable Preferred Stock (the “Series B”), which was originally recorded in stockholders’ equity upon issuance. Management determined that the Series B meets the definition of a temporary equity instrument in accordance with ASC Topic 480-10-S99“Accounting for Redeemable Equity Instruments”. Accordingly, the Company determined that the Series B should be classified as temporary equity and recorded at its redemption value.

Management has evaluated the effect of this prior period adjustment and determined that it was immaterial to each of the reporting periods affected and, therefore, amendment of previously filed reports was not required. In accordance with guidelines issued in SEC Staff Accounting Bulletin, we have recorded adjustments to correct and reclassify the current year’s beginning Convertible Redeemable Preferred Stock Series B and Additional paid in capital amounts to correct these immaterial prior period errors. We also plan to revise in future filings of our 10-Q and 10-K, the previously reported quarterly and annual financial statements during the year ended July 31, 2014 for these immaterial amounts.

The following table sets forth the revised prior period balances reported in our comparative financial statements:

	Previously reported		Adjustment			Revised
Balance sheet items at July 31, 2014:
Preferred Stock, Series B		2,100		260,375			262,475
Additional paid in capital		16,777,826		(260,375	)		16,517,451
Total stockholders’ equity		5,578,824		(262,475	)		5,316,349

Note 13. Income Taxes

Income tax expense (benefit) was comprised of the following:

	Years Ended July 31,
	2015			2014
Current
Federal	$	-		$	-
State		-			-
Total current		-			-
Deferred
Federal		(1,181,162	)		(148,161	)
State		(205,397	)		(20,260	)
Total deferred		(1,386,559	)		(168,421	)
Change in valuation allowance		1,386,559			168,421
	$	-		$	-

The following is a reconciliation of the differences between the actual provision for income taxes and the provision computed by applying the federal statutory rate on income before income taxes for the years ended July 31:

	2015			2014
Tax (benefit) at federal statutory rate	$	(1,413,664	)	$	(159,070	)
State tax (benefit), net of federal benefit		(197,769	)		(23,445	)
Change in FV of derivative liability		132,880			-
Incentive Stock Options		145,935			15,686
Other		(53,941	)		(1,592	)
Change in valuation allowance		1,386,559			168,421
Total provision for income taxes	$	-		$	-

The significant components of the deferred income tax assets and liabilities as of July 31, 2015 and July 31, 2014 are as follows:

	Years Ended July 31,
	2015			2014
Current Deferred Tax Assets:
Accruals	$	117,214		$	17,938
Non-Current Deferred Tax Assets:

Net Operating Loss Carryforwards		1,860,375			754,782
Research and development credits		188,949			145,162
Other Credits		3,635			3,635
Intangible Assets		200,725			28,181
Fixed Assets		(32,166	)		2475

Total Non-Current Deferred Tax Assets		2,221,518			934,235

Total Deferred Tax Assets		2,338,732			952,173

Valuation Allowance		(2,338,732	)		(952,173	)

Net Deferred Tax Assets	$	—		$	—

Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, and have been offset by a valuation allowance since there is no assurance that we will be able to utilize these NOLs.

The valuation allowance increased by $1,386,559 from July 31, 2014 to July 31, 2015 primarily due to the generation of current year net operating losses and research and development credits claimed.

As of July 31, 2015, the Company had $4,833,000 of federal and $2,992,000 of state net operating loss, respectively, available to offset future taxable income. The federal net operating loss carryforwards begins to expire in 2018 and the state net operating loss carryforwards will begin to expire in 2029, if not utilized. As of July 31, 2015, the Company also had $115,889 of federal and $72,892 of state research and development credit carryforwards, respectively. The federal research and development credit carryforward begins to expire in 2027 and the state research and development credit begins to expire in 2027, if not utilized.

In addition, the use of net operating loss and tax credit carryforwards may be limited under Section 382 of the Internal Revenue Code in certain situations where changes occur in the stock ownership of a company. In the event that the Company has had a change in ownership, utilization of the carryforwards could be restricted.

The Company files income tax returns in the U.S. federal jurisdiction and certain state jurisdictions. In the normal course of business, the Company is subject to examination by federal and state jurisdictions, where applicable. The federal and California statute of limitations remains open for the years ended July 31, 2009 through 2015.

Note 14. Subsequent Events

Management of the Company performed an evaluation of all subsequent events that occurred as of the date these financial statements were issued to determine if they must be reported. Management of the Company has determined that the following subsequent events are required to be disclosed:

On August 13, 2015, the Company effectuated two convertible note agreements with two different investors with a principal amount of $25,000 for each note. The notes bear interest at a rate of 12% per annum and are convertible into shares of common stock at a conversion price equal to 60% of the lowest trade price in the 20 trading days prior to the conversion. The principal and accrued interest balances are due on August 13, 2016.

On September 15, 2015, the Company executed a term sheet for a new loan and security agreement with an investor. Under this agreement, the Company could initially borrow up to $1.0 million to fund working capital. The Company is under processing for due diligence and expect to receive the fund by middle of November 2015.

On October 5, 2015, the Company entered into a promissory note with an investor for a total principal of $100,000 with interest at the rate of 26% per annum. The principal and accrued interest balances are due in 48 payments of $2,625 each to be paid within 12 months.

On October 9, 2015, the Company entered into a business loan with a creditor for a total principal of $150,000 with interest at the rate of 38% per annum. The principal and accrued interest balances are due in 220 payments of $900 each to be paid within 10 months.

On October 7, 2015, the Company retired a convertible note issued on April 1, 2015, by paying the principal amount of $64,000 and the accumulated interest of $24,925 on the note.

During the three months ended October 31, 2015, three lenders converted an aggregate of $216,580 of principal and accrued interest owed under certain convertible note agreements into 44,854,970 shares of the Company's common stock. The notes were converted at a discount to the trading price of the common stock in accordance with the conversion terms under the different notes disclosed in Note 12.

During the three months ended October 31, 2015, the Company issued a total of 146,406 shares to consultants in exchange for services provided.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL DISCLOSURE

On December 2, 2014, Kim and Lee Corporation, CPA (“K and L”) resigned as the Company’s independent registered public accounting firm. The Company’s Board of Directors accepted the resignation of K and L. K and L’s reports on the Company’s financial statements for the years ended July 31, 2014 and 2013, respectively, did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles other than going concern.

During the years ended July 31, 2014 and 2013, and through December 2, 2014, there were no disagreements with K and L on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of K and L, would have caused it to make reference thereto in connection with its reports on the financial statements for such years. During the years ended July 31, 2014 and 2013, and through December 2, 2014, there were no matters that were either the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K.

On December 3, 2014, the Company’s Board of Directors, acting in the capacity of an audit committee, engaged Marcum LLP (“Marcum”) as the Company’s new independent registered public accounting firm to act as the principal accountant to audit the Company’s financial statements. During the Company’s fiscal years ended July 31, 2015 and 2014, neither the Company, nor anyone acting on its behalf, consulted with Marcum regarding the application of accounting principles to a specific completed or proposed transaction or the type of audit opinion that might be rendered on the Company’s financial statements, and no written report or oral advice was provided that Marcum concluded was an important factor considered by the Company in reaching a decision as to any such accounting, auditing or financial reporting issue.

ITEM 9A. CONROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and the principal financial officer, we have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were effective such that the material information required to be included in our Securities and Exchange Commission reports is accumulated and communicated to our management, including our principal executive and financial officers, recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms relating to our company, particularly during the period when this report was being prepared.

Management's Annual Report on Internal Control Over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of its management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Management recognizes that there are inherent limitations in the effectiveness of any system of internal control, and accordingly, even effective internal control can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect material misstatements. In addition, effective internal control at a point in time may become ineffective in future periods because of changes in conditions or due to deterioration in the degree of compliance with our established policies and procedures.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in there being a more than remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

Under the supervision and with the participation of our president, we conducted an evaluation of the effectiveness of our internal control over financial reporting, as of July 31, 2015, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Tread way Commission (COSO) in 2013. Based on our evaluation under this framework, we concluded that our internal control over financial reporting was not effective as of the evaluation date due to the factors stated below.

We assessed the effectiveness of the Company’s internal control over financial reporting as of evaluation date and identified the following material weaknesses:

Insufficient Resources: We have an inadequate number of personnel with requisite expertise in the key functional areas of finance and accounting.

Inadequate Segregation of Duties: We have an inadequate number of personnel to properly implement control procedures.

Lack of Audit Committee: We do not have a functioning audit committee, resulting in lack of independent oversight in the establishment and monitoring of required internal controls and procedures.

We are committed to improving the internal controls and will (1) continue to use third party specialists to address shortfalls in staffing and to assist the Company with accounting and finance responsibilities, (2) increase the frequency of independent reconciliations of significant accounts which will mitigate the lack of segregation of duties until there are sufficient personnel and (3) may consider appointing additional outside directors and audit committee members in the future.

We have discussed the material weakness noted above with our independent registered public accounting firm. Due to the nature of this material weakness, there is a more than remote likelihood that misstatements which could be material to the annual or interim financial statements could occur that would not be prevented or detected.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Our report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only our report in this annual report.

Changes in Internal Controls Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the last fiscal quarter for our fiscal year ended July 31, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding the members of the Company’s board of directors and its executive officers. All directors hold office until the first annual meeting of the stockholders of the Company and until the election and qualification of their successors or their earlier removal or retirement.

Officers are elected annually by the board of directors and serve at the discretion of the board.

*Name*	*Age*	*Title*

John Hwang	53	Chief Executive Officer, Chairman of the Board

Kevin Cornell	63	President and Director

Robert Radoff	47	Director

John Hwang, 53 Chief Executive Officer, Chairman of the Board Director, Mr. Hwang has over 20 years corporate and entrepreneurial leadership experience in semiconductor technology and consumer electronics. From 2002 through 2007, Mr. Hwang was a member of the office of the Chairman of Techno Concepts, Inc., a developer and manufacturer of wireless communication devices. Mr. Hwang was President of Osicom, a fiber optic and network technologies manufacturer from 1994 to 1997. From 1985 to 1992, Mr. Hwang was VP of Samsung America, starting the first Samsung brand for monitors and PCs. He then created then created Samtron, a new brand for Samsung, which became a second tier brand to focus into the VAR channel. Mr. Hwang has a Bachelor of Science Degree in Economics from Rutgers University.

The Company believes that due to Mr. Hwang’s role as a founder of the Company and public company experience, he is ideally suited to serve as the Company’s Chief Executive Officer.

Kevin Cornell, 63 President, Mr. Cornell has held several senior management positions within the computer industry. Prior to joining AmbiCom in May 2014, Mr. Cornell served as the CEO and co-founder of Veloxum Corp. from March, 2008 to May 2014. Prior thereto and from August 2005 to February 2008 Mr. Cornell was the Chief Operating Officer and co-founder of Symphoniq Corporation (n/k/a Coradiant Corp). From January 2003 to July 2005, he served as the Senior Vice-President and General Manager of Finisar Corporation’s Network Tools Division and from January 1999 to January 2003, the Vice President and General Manager of Borland. Mr. Cornell also was employed with Fulltime Software (n/k/a EMC), MIPs, and Oracle. Mr. Cornell graduated from Ryerson University, Toronto, Canada and holds four patents in optics.

Robert Radoff, 47 Director. Mr. Radoff has created and managed a national broker network, monitoring sales, distribution, packaging and setting up logistics of new and existing products, setting objectives and goals for the sales force and creating presentations to major accounts. He has also helped develop and sell national brand and private label and other brands to major accounts in the U.S. and international markets. Mr. Radoff also built partnerships with several multi-national pharmaceutical companies that rank in the Fortune 100. Mr. Radoff majored in Business and Physiology at Pierce College Cal State Northridge.

The Company believes that Mr. Radoff’s education and experiences in sales with biotechnology companies lead him to be well-qualified to serve as a Director.

Compensation of Directors

At this time, directors receive no remuneration for their services as directors of the Company, nor does the Company reimburse directors for expenses incurred in their service to the Board of Directors. The Company does not expect to pay any fees to its directors for the 2015 fiscal year.

Indemnification of Directors and Officers

Nevada Revised Statutes (“NRS”) Sections 78.7502 and 78.751 provide the Company with the power to indemnify any of our directors and officers. The director or officer must have conducted himself/herself in good faith and reasonably believe that his/her conduct was in, or not opposed to our best interests. In a criminal action, the director, officer, employee or agent must not have had reasonable cause to believe his/her conduct was unlawful.

Under NRS Section 78.751, advances for expenses may be made by agreement if the director or officer affirms in writing that he/she believes he/she has met the standards and will personally repay the expenses if it is determined such officer or director did not meet the standards.

Pursuant to the Company’s Articles of Incorporation and bylaws, we may indemnify an officer or director who is made a party to any proceeding, because of his position as such, to the fullest extent authorized by Nevada Revised Statutes, as the same exists or may hereafter be amended. In certain cases, we may advance expenses incurred in defending any such proceeding.

To the extent that indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. If a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of our company in the successful defense of any action, suit or proceeding) is asserted by any of our directors, officers or controlling persons in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of that issue.

Anti-Takeover Effects of Provisions of Nevada State Law

We may be or in the future we may become subject to Nevada's control share law. A corporation is subject to Nevada's control share law if it has more than 200 stockholders, at least 100 of whom are stockholders of record and residents of Nevada, and if the corporation does business in Nevada or through an affiliated corporation.

The law focuses on the acquisition of a “controlling interest” which means the ownership of outstanding voting shares is sufficient, but for the control share law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors: (1) one-fifth or more but less than one-third, (2) one-third or more but less than a majority, or (3) a majority or more. The ability to exercise such voting power may be direct or indirect, as well as individual or in association with others.

The effect of the control share law is that the acquiring person, and those acting in association with that person, obtain only such voting rights in the control shares as are conferred by a resolution of the stockholders of the corporation, approved at a special or annual meeting of stockholders. The control share law contemplates that voting rights will be considered only once by the other stockholders. Thus, there is no authority to take away voting rights from the control shares of an acquiring person once those rights have been approved. If the stockholders do not grant voting rights to the control shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell its shares to others. If the buyers of those shares themselves do not acquire a controlling interest, their shares do not become governed by the control share law.

If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, any stockholder of record, other than an acquiring person, who has not voted in favor of approval of voting rights, is entitled to demand fair value for such stockholder's shares.

Nevada's control share law may have the effect of discouraging corporate takeovers.

In addition to the control share law, Nevada has a business combination law, which prohibits certain business combinations between Nevada corporations and "interested stockholders" for three years after the "interested stockholder" first becomes an "interested stockholder" unless the corporation's board of directors approves the combination in advance. For purposes of Nevada law, an "interested stockholder" is any person who is (1) the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the outstanding voting shares of the corporation, or (2) an affiliate or associate of the corporation and at any time within the three previous years was the beneficial owner, directly or indirectly, of ten percent or more of the voting power of the then outstanding shares of the corporation. The definition of the term "business combination" is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation's assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other stockholders.

The effect of Nevada's business combination law is to potentially discourage parties interested in taking control of the Company from doing so if it cannot obtain the approval of our Board of Directors.

Audit Committee The Company intends to establish an audit committee, which will consist of independent directors. The audit committee's duties would be to recommend to the Company's board of directors the engagement of independent auditors to audit the Company's financial statements and to review its accounting and auditing principles. The audit committee would review the scope, timing and fees for the annual audit and the results of audit examinations performed by the internal auditors and independent public accountants, including their recommendations to improve the system of accounting and internal controls. The audit committee would at all times be composed exclusively of directors who are, in the opinion of the Company's Board of Directors, free from any relationship which would interfere with the exercise of independent judgment as a committee member and who possess an understanding of financial statements and generally accepted accounting principles.

Compensation Committee Our Board of Directors does not have a standing compensation committee responsible for determining executive and director compensation. Instead, the Board of Directors fulfills this function, and each member of the Board participates in the determination. Given the small size of the Company and its Board and the Company's limited resources, locating, obtaining and retaining additional independent directors is extremely difficult. In the absence of independent directors, the Board does not believe that creating a separate compensation committee would result in any improvement in the compensation determination process. Accordingly, the Board of Directors has concluded that the Company and its stockholders would be best served by having the Board of Directors act in place of a compensation committee. When acting in this capacity, the Board does not have a charter.

In considering and determining executive and director compensation, our Board of Directors reviews compensation that is paid by other similar public companies to its officers and takes that into consideration in determining the compensation to be paid to the Company’s officers. The Board of Directors also determines and approves any non-cash compensation to any employee. The Company does not engage consultants in determining or recommending the compensation to the Company’s officers or employees.

Conflicts of Interest

There are no conflicts of interest with any officers, directors or executive staff.

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past five years, none of the following occurred with respect to a present or former director or executive officer of the Company: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission or the commodities futures trading commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Code of Ethics

We do not currently have a code of ethics. Because we currently have only limited business operations and two officers and directors, we believe a code of ethics would have limited utility. We intend to adopt a code of ethics as our business operations expand and we have additional directors, officers and employees.

Item 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information regarding compensation earned by our President and Chief Executive Officer during the years ended July 31, 2015 and 2014. We refer to these individuals as our named executive officers.

Name & Principal Position	Year	Salary			Option Awards			Total
John Hwang, CEO	2015		264,000			-		$	264,000
	2014		264,000			-		$	264,000
Kevin Cornell, President	2015		180,000			460,852	(2)	$	640,852
	2014		37,500	⁽¹⁾		-		$	37,500

(1)	The employment agreement with Kevin Cornell was entered into in May 2014.
(2)	Represents the aggregate grant date fair value of option awards granted in fiscal year 2015 in accordance with ASC 718, Compensation—Stock Compensation.

Narrative Disclosure to Summary Compensation Table

We review compensation annually for all of our employees, including our executives. In setting executive base salaries and bonuses and granting equity incentive awards, we consider compensation for comparable positions in the market, the historical compensation levels of our executives, individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short- and long-term results that are in the best interests of our stockholders, and a long-term commitment to our company. We do not target a specific competitive position or a specific mix of compensation among base salary, bonus or long-term incentives.

We have formal employment agreements with John Hwang, our Chief Executive Officer and Kevin Cornell, our President. Mr. Hwang’s employment agreement provides for an initial annual base salary of $264,000, subject to increase from time to time. Mr. Cornell’s employment agreement provides for an initial annual base salary of $180,000, subject to increase from time to time.

Outstanding Equity Awards at Year-End

The following table sets forth information regarding outstanding stock options held by our named executive officers as of July 31, 2015.

Option Awards

Number of

Securities

Underlying

Unexercised

Option

Options (#)

Exercise Price

Expiration

Option Grant

Name

unexercisable

($)

Date

Kevin Cornell

1,500,000

⁽¹⁾

0.24

8/10/2024

8/11/2014

(1)	This option becomes exercisable for 30% of the underlying shares on the first anniversary of the grant date, accumulated 60% of the underlying shares on the second anniversary of the grant date and accumulated 100% of the underlying shares on the third anniversary of the grant date.

Compensation Policy

Our Company’s executive compensation plan is based on attracting and retaining qualified professionals who possess the skills and leadership necessary to enable our Company to achieve earnings and profitability growth to satisfy our stockholders. Therefore, we must create incentives for these executives to achieve both Company and individual performance objectives through the use of performance-based compensation programs. No one component is considered by itself, but all forms of the compensation package are considered in total. Wherever possible, objective measurements will be utilized to quantify performance, but many subjective factors still come into play when determining performance.

Compensation Components

The main elements of our compensation package consist of base salary, stock options and bonuses.

Base Salary: As we continue to grow and financial conditions improve, these base salaries, stock options, and bonuses will be reviewed for possible adjustments. Base salary adjustments will be based on both individual and Company performance and will include both objective and subjective criteria specific to each executive’s role and responsibility with the Company.

Director Compensation

The following table sets forth information regarding compensation awarded to, earned by or paid to each of our non-employee directors during the years ended July 31, 2015 and July 31, 2014. See “Executive Compensation” above for a discussion of the compensation of Mr. Hwang and Mr. Cornell.

Director Name	Year	Fees Earned or Paid in Cash		Stock Awards ^(1) (2)		Total
Robert Radoff	2015	$	-	$	83,000	$	83,000
	2014	$	-	$	40,000	$	40,000

(1)	Represents the aggregate issuance date fair value of stock awards granted in fiscal year 2015 and 2014. The assumptions we use in calculating are based on the stock closing price on the issuance dates.
(2)	Represents stock awards of 500,000 shares of common stock issued in fiscal 2015 and 200,000 issued in fiscal year 2014.

Employment Agreements, Termination of Employment and Change in Control Arrangements

On May 12, 2014, the Company entered into employment agreements with, Kevin Cornell, President, and Michael Lazar.

Directors, Executive Officers, Promoters and Control Persons, Conflicts of Interest

No retirement, pension, profit sharing, or insurance programs or other similar programs have been adopted by us for the benefit of our employees.

Legal Proceedings

We are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table summarizes certain information regarding the beneficial ownership (as such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934) of outstanding Common Stock as of July 31, 2015 (after giving effect to the Exchange) by (i) each person known by us to be the beneficial owner of more than 5% of the outstanding Common Stock, (ii) each of our directors, (iii) each of our named executive officers (as defined in Item 403(a) of Regulation S-K under the Securities Act), and (iv) all executive officers and directors as a group. Except as indicated in the footnotes below, the security and stockholders listed below possess sole voting and investment power with respect to their shares.

Name of Beneficial Owner (1)	Amount and Nature of Beneficial Owner		Percent of Class (2)
John Hwang (3)		17,000,000		30.4	%
Kevin Cornell and affiliated entities		13,100,437		23.4	%
Robert Radoff		712,500		1.3	%
All Directors and Executive Officers as a Group (3 persons)		30,812,937		55.1	%

(1) "Beneficial Owner" means having or sharing, directly or indirectly (i) voting power, which includes the power to vote or to direct the voting, or (ii) investment power, which includes the power to dispose or to direct the disposition, of shares of the common stock of an issuer. The definition of beneficial ownership includes shares, underlying options or warrants to purchase common stock, or other securities convertible into common stock, that currently are exercisable or convertible or that will become exercisable or convertible within 60 days. Unless otherwise indicated, the beneficial owner has sole voting and investment power.

(2) For each shareholder, the calculation of percentage of beneficial ownership is based upon 55,999,118 shares of Common Stock outstanding as of July 31, 2015, and shares of Common Stock subject to options, warrants and/or conversion rights held by the shareholder that are currently exercisable or exercisable within 60 days, which are deemed to be outstanding and to be beneficially owned by the shareholder holding such options, warrants, or conversion rights. The percentage ownership of any shareholder is determined by assuming that the shareholder has exercised all options, warrants and conversion rights to obtain additional securities and that no other shareholder has exercised such rights.

(3) Does not include 1,007,321 shares of Common stock held beneficially by family members.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Currently, we have one independent director on our Board of Directors, and have no formal procedures in effect for reviewing and pre-approving any transactions between us, our directors, officers and other affiliates. We will use our best efforts to insure that all transactions are on terms at least as favorable to the Company as we would negotiate with unrelated third parties.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth fees related to services performed by Marcum LLP for the year ended July 31, 2015, Kim and Lee for the years ended July 31, 2015 and 2014 and other service providers:

		2015		2014
Audit fees	(1)	$	35,983	$	65,000
Taxation fees	(2)		5,300		4,500
Accounting & other services	(3)		-		-

Total		$	41,283	$	59,500

(1)

Audit fees represent fees for professional services provided in connection with the audit of our financial statements and review of our quarterly financial statements.

(2)

Tax fees principally included tax advice, tax planning and tax return preparation.

(3)

Other fees related to registration statement reviews and comments.

The Board of Directors has reviewed and discussed with the Company's management and independent registered public accounting firm the audited financial statements of the Company contained in the Company's Annual Report on Form 10-K for the Company's 2015 fiscal year. The Board has also discussed with the auditors the matters required to be discussed pursuant to SAS No. 61 (Codification of Statements on Auditing Standards, AU Section 380), which includes, among other items, matters related to the conduct of the audit of the Company's financial statements.

The Board has received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and has discussed with its auditors its independence from the Company. The Board has considered whether the provision of services other than audit services is compatible with maintaining auditor independence.

Based on the review and discussions referred to above, the Board approved the inclusion of the audited financial statements be included in the Company's Annual Report on Form 10-K for its 2015 fiscal year for filing with the SEC.

Pre-Approval Policies

The Board's policy is now to pre-approve all audit services and all permitted non-audit services (including the fees and terms thereof) to be provided by the Company's independent registered public accounting firm; provided, however, pre-approval requirements for non-audit services are not required if all such services (1) do not aggregate to more than five percent of total revenues paid by the Company to its accountant in the fiscal year when services are provided; (2) were not recognized as non-audit services at the time of the engagement; and (3) are promptly brought to the attention of the Board and approved prior to the completion of the audit.

The Board pre-approved all fees described above.

PART IV

ITEM 15. EXHIBITS

The following exhibits are included with this filing:

Exhibit Number		Description

21.1*		List of Subsidiaries

31.1*		Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer

32.1*		Section 1350 Certification of Chief Executive Officer

101.INS*		XBRL Instance Document

101.SCH*		XBRL Taxonomy Extension Schema Document

101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*		XBRL Taxonomy Extension Label Linkbase Document

101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

Filed herein.

Signatures

In accordance with Section 13 or 15(d) of the Securities Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

November 13, 2015	AMBICOM HOLDINGS, INC.

	By	/s/ John Hwang
	John Hwang
	Chief Executive Officer and Director (Principal Executive Officer)

	By	/s/ John Hwang
	John Hwang
	Chief Financial Officer, Chief Accounting Officer (Principal Financial Officer)

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ John Hwang		November 13, 2015
John Hwang		Date
Chief Executive Officer and Director
(Principal Executive Officer)

/s/ John Hwang		November 13, 2015
John Hwang		Date
Chief Financial Officer, Chief Accounting Officer (Principal Financial Officer)

/s/ Robert Radoff		November 13, 2015
Robert Radoff		Date
Director