UNITED STATES

SECURITIES AND
EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-K/A





(Mark One)



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



For the fiscal
year ended December 31, 2014



or



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



For the transition
period from ______________ to ______________



Commission file
number: 333-179738



|Ubiquity, Inc.                                         
|-------------------------------------------------------
|( Exact name of registrant as specified in its charter)



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



|9801
                                         Research Drive
        Irvine, CA |  | 92618     
|------------------------------------------------------------------------------- |  | ----------
|(Address of principal executive offices)                                        |  | (Zip Code)



Registrant’s
telephone number, including area code:  (949) 489-7600



|Securities registered under Section 12(b) of the Act:  
|-------------------------------------------------------
|                                                       
|Title of each class: None                              
|                                                       
|Securities registered under Section 12(g) of the Act:  
|(Title of class)
        Common Stock, par value $0.001



Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 the Securities Act.  ̈ Yes    xNo





Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ̈YesxNo





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. x Yes     ̈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). x
Yes     ̈ No



Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (§ 229.405 of this chapter) 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.    x



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



|Large accelerated filer |  ̈ | Accelerated filer         |  ̈
|----------------------- | - | ------------------------- | -
|Non-accelerated filer   |  ̈ | Smaller reporting company | x



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



State the aggregate market value of the
voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last
sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently
completed second fiscal quarter, June 30, 2014: $20,246,400.





Number of the issuer’s common stock
outstanding as of:  April 10, 2015 -  124,503,084.





Documents incorporated by reference: None.













EXPLANATORY NOTE



Ubiquity, Inc. is filing this
Amendment No. 1 to Form 10-K on Form 10-K/A to amend our Annual Report on Form 10-K for the year ended December 31, 2014,
which was filed with the Securities and Exchange Commission, or SEC, on April 15, 2015. The purpose of this Form 10-K/A is
solely to disclose that the financial statements are not audited and the reports of the independent registered public
accounting firms of KLJ & Associates, LLP and Silberstein Ungar, PLLC have been removed from this Amendment No. 1.



Once our new auditor, Hartley Moore Accountancy
Corporation (“HMCPA”) completes its audit of the fiscal year ended December 31, 2014, we will file an amendment to
our Form 10-K/A which will include audited financial statements.







2









TABLE OF CONTENTS



|           |                                                                                                               | Page
|---------- | ------------------------------------------------------------------------------------------------------------- | ----
|Part I     |                                                                                                              
|           |                                                                                                               |     
|Item 1.    | Business.                                                                                                     | 5   
|Item 1A.   | Risk Factors.                                                                                                 | 9   
|Item 1B.   | Unresolved Staff Comments.                                                                                    | 9   
|Item 2.    | Properties.                                                                                                   | 10  
|Item 3.    | Legal Proceedings.                                                                                            | 11  
|Item 4.    | Mine Safety Disclosures.                                                                                      | 11  
|           |                                                                                                               |     
|Part II    |                                                                                                              
|           |                                                                                                              
|Item 5.    | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | 11  
|Item 6.    | Selected Financial Data.                                                                                      | 12  
|Item 7.    | Management’s Discussion and Analysis of Financial Condition and Results of Operation.                         | 12  
|Item 7A.   | Quantitative and Qualitative Disclosures about Market Risk.                                                   | 16  
|Item 8.    | Financial Statements and Supplementary Data.                                                                  | 16  
|Item 9.    | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.                         | 18  
|Item 9A.   | Controls and Procedures.                                                                                      | 19  
|Item 9B.   | Other Information.                                                                                            | 19  
|           |                                                                                                               |     
|Part III   |                                                                                                              
|           |                                                                                                               |     
|Item 10.   | Directors, Executive Officers and Corporate Governance.                                                       | 20  
|Item 11.   | Executive Compensation.                                                                                       | 24  
|Item 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.               | 27  
|Item 13.   | Certain Relationships and Related Transactions, and Director Independence.                                    | 28  
|Item 14.   | Principal Accounting Fees and Services.                                                                       | 29  
|           |                                                                                                               |     
|Part IV    |                                                                                                              
|           |                                                                                                              
|Item 15.   | Exhibits, Financial Statement Schedules.                                                                      | 30  
|Signatures |                                                                                                               | 31  



3







CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS



This Annual Report on Form 10-K (this
“Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities
Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss
future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,”
“estimate,” “intend,” “could,” “should,” “would,” “may,”
“seek,” “plan,” “might,” “will,” “expect,” “predict,”
“project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions.
These forward-looking statements are found at various places throughout this Report and include information concerning possible
or assumed future results of our operations; business strategies; future cash flows; financing plans; plans and objectives of
management; any other statements regarding future operations, future cash needs, business plans and future financial results,
and any other statements that are not historical facts.



From time to time, forward-looking statements
also are included in our other periodic reports on Forms 10-Q and 8-K, in our press releases, in our presentations, on our website
and in other materials released to the public.  Any or all of the forward-looking statements included in this Report
and in any other reports or public statements made by us are not guarantees of future performance and may turn out to be inaccurate.
These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and
are subject to risks, uncertainties and other factors.  Many of those factors are outside of our control and could cause
actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these
risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to
a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning
other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their
entirety by the cautionary statements contained or referred to in this Report.



Except to the extent required by law,
we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future
events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.



CERTAIN TERMS USED IN THIS REPORT



When this report uses the words “we,” “us,”
“our,” and the “Company,” they refer to Ubiquity, Inc. and our wholly-owned subsidiaries.  “SEC”
refers to the Securities and Exchange Commission.



4







PART I



Item 1. Business







Ubiquity, Inc. (“Ubiquity”
or the “Company”) creating IoT (“Internet of Things”) for emerging businesses in social, mobile,
analytics, & cloud, is a leader in Multiscreen as a Service (“MaaS”) creating a comprehensive
“full stack” engagement platform for multiscreen application environments. The Company is the first fully integrated
enterprise platform that enables brands to capture, engage, manage and monetize their “anywhere, anytime” users. Ubiquity’s
intellectual property and unique cloud-based technology combines MaaS with SaaS (Software as a Service) to enable its customers
to structure their content and data in a mobile cloud to deliver innovative user experiences to their multiscreen communities and
audiences worldwide. The Company’s products and services include the Sprocket Platform with a uniform comprehensive warehouse
data analytics format, GiftSender a mobile wallet, Monkey Bars a social mobility distribution platform, and proprietary video intelligence
software. The Company sells to small and mid-size businesses (“SMB”), digital media, education, enterprise, and government
customers. The Company is a Nevada Corporation originally established in 2007.





Business Strategy



The Company is committed to bringing the best user experience
to its customers through its innovative products and services. The Company’s business strategy leverages its unique ability
to design and develop its own proprietary platforms, software applications, and services to provide its customers new products
and solutions with superior ease-of-use, seamless integration, and innovative design. The Company believes continual investment
in research and development, marketing and advertising is critical to the development and sale of innovative products and technologies.
As part of its strategy, the Company continues to expand its platform for the discovery and delivery of third-party digital content
and applications. The Company also supports a community for the development of third-party software and hardware products and digital
content that complement the Company’s offerings. The Company’s strategy also includes expanding its distribution network
to effectively reach more customers and to serve as a gateway for new business opportunities worldwide.





Ubiquity Products and Services



UBIQUITY PRODUCTS



Sprocket





The Sprocket Platform Multiscreen as a Service (“MaaS”)
is a vertical and highly scalable engagement platform which leverages single sign on with data capturing and customized content
aggregation along with integrated global search to create dynamic analytics and business intelligence that is proprietary to its
product offerings. The Sprocket Platform enables seamless navigation, immersive content interaction with a convenient interactive
dashboard automated processes, and point-and-click simplicity. The platform also provides a comprehensive back end database that
intelligently collects opt in application user information. The Company also supports a community for the development of third-party
software and hardware products and digital content that complement the Company’s offerings. The Sprocket Platform is complete
and is currently being offered to enterprise and white-label customers.





GiftSender







GiftSender is a mobile wallet with a dynamic social user engagement
platform “MaaS” leveraging the Sprocket platform that powers mobile distribution of digital gift cards, digital payments
and transfers. Fully integrated with iOS and Android native mapping, GiftSender geo-target’s consumers allowing for targeted
push notifications, giveaways, coupons, rewards and loyalty programs, and discounts customized based on the users profile data
providing a new level of customer brand interaction and engagement. GiftSender delivers rich analytics so the brands have the tools
to better understand their customers’ needs and spending habits and are able to measure the success of their campaign. GiftSender
was successfully beta tested in iOS and Android platforms in the last quarter of 2014. The Company offers this platform to enterprise
and OEM customers.







Monkeybars



Monkeybars is a social mobility distribution platform “MaaS”
utilizing the Sprocket platform that enables artists to upload and sell their content and reward their fans/followers for buying
and sharing the content. The fan becomes the grassroots digital street team for the artists in a very unique way. The artist decides
how much they want to sell their content for and how much of the revenue they want to share with the fans. Never before have artist
and fans been able to work together to distribute content and share in the revenue in a unique partnership. The platform also provides
a comprehensive back end database that intelligently collects opt in application user information. The application was successfully
tested on iOS and Android platforms.





5









Video Search (MOFF)



The Company’s Match Orientation Field Filter (“MOFF”)
SaaS software platform specializes in detecting objects and logos that have few artifacts enabling it to perform at a higher degree
of efficiently and accuracy than its competition in both live transmissions and video environments. The software utilizes a methodology
of detecting geometry over intensity which provides an advantage to our solutions over other products currently in the market.

The company’s object and logo detection software platform
“SaaS” provides a semantic understanding by combining edge detection and object tracking to recognize objects and activity
within a scene. This allows for the detection of logos, locations and consumer products which can then linked to offers and advertisements.
This process can be executed on existing film libraries and/or on new content assets and can be applied to feature films, television
programs, and user generated content.



MOFF for intelligent sports television
is based on an interactive engagement platform providing the viewer the ability to interact with the programming on a real time
basis. Our Video intelligence provides the technology to generate information based on a robust proprietary object and logo detection
platform.



|MOFF Video Intelligence with object recognition technology, combined with our object tracking methodology offers the ability to detect numbers and names on sport jerseys, helmets, cars, etc. in sports broadcasts. By integrating this technology with existing search and voice recognition technologies, our product can highlight and  track a given player in a sports broadcast. As an example, a viewer can instruct the television set to “highlight the running back” in a football game or track the statistics of a certain player.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



MOFF also allows for the detection of objects
such as guns, tattoos, license plates, and other artifacts that may be of interestin a security, military or law enforcement environment.



In our system we employ effective depth map
processing techniques, along with edge detection, components detection and filtering approaches, in order to design a complete
image-processing algorithm for efficient object detection of multiple individual objects in a single scene, even in complex scenes
with many objects or video noise. The Company is currently offering this technology for licensing to enterprise and government
customers.



DIGITAL CONTENT



Ubiquity Studios-Connecting Mobile
and Streaming Media





Designed from the ground up for Digital
Cinema Production and with the digital lifestyle in mind, Ubiquity’s 32,000 square foot digital media production facility
is based in the rapidly growing research center in Irvine, California. Well positioned between LA’s booming film and television
industry and Irvine’s expanding technology center. The company utilizes its studios to build content for its digital media,
educational, enterprise, and government customers. Ubiquity Studios is a complete digital cinema solution and is ready for professional
quality production of feature films, broadcast television properties and digital media.







Current Ubiquity Studio projects include
the untitled major motion picture the Queen Mary project, untitled major motion picture the Soccer Project, Sneaker Pimps, What’s
Chasing You, Yes Girls, and Wave Warriors are all being developed for multi-screen delivery.



Ubiquity Intellectual Property Patents,
Trademarks, Copyrights and Licenses



The Company currently holds rights to patents and copyrights
relating to products and services. The Company has registered or has applied for trademarks and service marks in the U.S. and a
number of foreign countries. Although the Company believes the ownership of such patents, copyrights, trademarks and service marks
is an important factor in its business and that its success does depend in part on the ownership thereof, the Company relies primarily
on the innovative skills, technical competence and marketing abilities of its personnel.



The Company regularly files patent applications to protect inventions
arising from its research and development around the world. No single patent or copyright is solely responsible for protecting
the Company’s products. The Company believes the duration of its patents is adequate relative to the expected lives of its
products.





Patents



Issued Patents:



The following patents have been granted
and issued by USPTO:



| | • | Patent No.US 7,464,344 “Systems and Methods for Immersive Advertising,”                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Patent No.US 8,533,632 “System and Method for Immersive Advertising,”                                                                                              
| | • | Patent No.US 8,527,906 “System and Method for Immersive Advertising,”                                                                                              
| | • | Patent No. US 7,590,556 “System and Method for Providing Lifestyle
Specific Information Services, and Products Over a Global Computer Network Such as the Internet”
| | • | Patent No. US 7,588,180 “Multi-Application Smart Card with Currency
Exchange, Location Tracking, and Personal Identification Capabilities,”                        
| | • | Patent No.US 7,913,919 “Multi Application Smartcard with Currency
Exchange, Location, Tracking and Personal Identification Capabilities,”                          
| | • | Patent No.US 8,479,981 “Multi-Application Smart Card with Currency
Exchange, Location Tracking, and Personal Identification Capabilities,”                         
| | • | Patent No.US 7,953,452 “Cellular Multiscreen System,”                                                                                                              
| | • | Patent No.US 8,265,707 “Cellular Multiscreen System,”                                                                                                              
| | • | Patent No.US 7,996,788 “System and Method for Navigating a Dynamic
Collection of Information,”                                                                     
| | • | Patent No.Taiwan 351,637 “System and Method for Navigating a
Dynamic Collection of Information,”                                                                   
| | • | Patent No.US 8,032,113 “Value Added Transaction Gateway for
Video Clips,”                                                                                          
| | • | Patent No. US 8,040,216 “Virtual Entry Assistant Using Automated
Greeter” (Virtual Security Guard),                                                                
| | • | Patent No.US 8,155,947, “Multi-Lingual Translation System Using
Character Set,”                                                                                    







6









| | • | Patent No.US 8,170,239 “Virtual Recording Studio and Virtual
Visual Experience Systems,”                           
| | - | -------------------------------------------------------------------------------------------------------------------
| | • | Patent No.US 8,311,901 “Method and Systems for Distributing
products via a wide-area network such as the Internet,”
| | • | Patent No.US 8,401,083 “Extreme Video Compression over a Fixed
Bandwidth Channel,” and                             
| | • | Patent No.US 8,467,775 “Digital Data Compression in a Cellular
Phone,” and                                         
| | • | Patent No.US 8,929,434 “Video Enhancement Internet Media Experience.”                                              



Approved Patent Applications:



The following patent applications have been granted and are
in the process of being issued by USPTO:



| | • | Approved Patent Application No. 14/023,137 “System and Method
for Immersive Advertising,” and                                                                  
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Approved Patent Application No. 13/935,520 “A Multi Application
Smartcard with Currency Exchange, Location, Tracking and Personal Identification Capabilities.”





Patent Applications:



The following patent applications have been
filed and are in the process of being reviewed by USPTO:



| | • | Patent Application No. 12/536,358 “System and Method for Providing
Lifestyle Specific Information, Services, and Products Over a Global Computer Network Such as the Internet,”
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Patent Application No. 11/782,448 “Fly Buy Coupon System,”                                                                                                                     
| | • | Patent Application No. 11/866,937 “Internet Media Experience
Compression Scheme,”                                                                                              
| | • | Patent Application No. 11/854,454 “Video Transmitting Over Cellular
Carrier,”                                                                                                  
| | • | Patent Application No. 13/004,592 “WEAV Video Compression System,”                                                                                                             
| | • | Patent Application No. 13/305,304 “WEAV Video Super Compression
System,”                                                                                                       
| | • | Patent Application No. 11/959,076 “Cell Phone with Personalization
of Avatar,”                                                                                                 
| | • | Patent Application No. 11/958,343 “Interactive Puzzle Game over
a Portable Device,”                                                                                            
| | • | Patent Application No. 11/852,135 “Mobile Movie Editing System,”                                                                                                               
| | • | Patent Application No. 13/763,800 “My Faves Section for a Website,”                                                                                                            
| | • | Patent Application No. 13/176,313 “Video over Internet to Multiple
Display Devices” (IP Streaming),                                                                            
| | • | Patent Application No. 12/721,945 “Tagging Video Content,”                                                                                                                     
| | • | Patent Application No. 12/753,895 “Medical Scan Clip on for
a Portable Device,”                                                                                                
| | • | Patent Application No. 12/754,339 “On the Go Karaoke,”                                                                                                                         
| | • | Patent Application No. 12/860,147 “Message Over Cell Phone System,”                                                                                                            
| | • | Patent Application No. 13/184,687 “Movie Book,”                                                                                                                                
| | • | Patent Application No. 13/221,309 “Mobile Gift Card,”                                                                                                                          
| | • | Patent Application No. 13/529,735 “Video Cell Phone Messenger,”                                                                                                                
| | • | Patent Application No. 13/535,081 “Web 3.0 Content Aggregation,
Delivery and Navigation System,”                                                                               
| | • | Patent Application No. 13/890,075 “Intelligent Video System
Using Electronic Filter,”                                                                                          
| | • | Patent Application No. 13/775,462 “Feature Detection Filter
Using Orientation Fields (MOFF),”                                                                                  
| | • | Patent Application No. 13/854,784 “Transmedia Storytelling Tracking
and Mapping System,”                                                                                       
| | • | Patent Application No. 14/061,567 “System and Method for Mobile
Gift Distribution,”                                                                                            
| | • | Patent Application No. 13/920,286 “Digital Data Compression
in a Cellular Phone,”                                                                                              
| | • | Patent Application No. 14/061,567 “System and Method for Mobile
Gift Distribution,”                                                                                            





7









| | • | Patent Application No. 14/215,670 “Sprocket Shaped User Interface
for Navigating a Dynamic Collection of Information ,”                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | • | Patent Application No. 14/316,578 “Sprocket Shaped User Interface
for Navigating a Dynamic Collection of Information Collected by a Gateway Device at User Premises,”
| | • | Patent Application No. 14/320,442 “Sprocket Shaped User Interface
for Navigating a Dynamic Collection of Information on a Mobile Device,” and                        
| | • | Patent Application No. 14/177,492 “System and Method for Displaying
Data Feeds from Multiple Online Social Networks.”                                                





Customers



The Company sells its products directly to businesses, digital
media enterprise, education, and government customers. The Company believes providing direct contact with its customers is an
effective way to demonstrate the advantages of its products over those of its competitors.



Competition





The Company is focused on expanding its market opportunities
related to mobile communication and media devices. These industries are highly competitive and include several large, well-funded
and experienced participants. The Company expects competition in these industries to intensify significantly as competitors attempt
to imitate some of the features of the Company’s products and applications within their own products or, alternatively, collaborate
with each other to offer solutions that are more competitive than those they currently offer. These industries are characterized
by aggressive pricing practices, frequent product introductions, evolving design approaches and technologies, rapid adoption of
technological and product advancements by competitors, and price sensitivity on the part of consumers and businesses.







The markets for the Company’s products and services are
highly competitive and the Company is confronted by aggressive competition in all areas of its business. These markets are characterized
by frequent product introductions and rapid technological advances. Competitors may include media and social aggregation products
from startups and companies in existence today such as, Instagram, Vine Flipboard, Pulse etc., as well as traditional program and
grid-guide providers such as Rovi, TV Guide, and Zap2it etc. We may face competition from a number of large companies that have
expertise in developing online commerce, content distribution, social networking, online readers, and mobile cross platform products
and in facilitating online interaction such as Google, FaceBook, You Tube, Apple, Microsoft, Samsung, Yahoo, Snapchat,American
Express and others. The Company expects competition in these industries to intensify significantly as competitors attempt to imitate
some of the features of the Company’s products and applications within their own products or, alternatively, collaborate
with each other to offer solutions that are more competitive than those they currently offer. These industries are characterized
by aggressive pricing practices, frequent product introductions, evolving design approaches and technologies, rapid adoption of
technological and product advancements by competitors, and price sensitivity on the part of consumers and businesses.





The Company’s future financial condition and operating
results depend on the Company’s ability to continue to develop and offer new innovative products and services in each of
the markets it competes in.



Marketing and Sales



The Company uses a variety of direct and indirect distribution
channels, such as enterprise, white label, OEM customers, direct sales force, and third-party cellular network carriers, licensees,
and value-added resellers. The Company believes that sales of its innovative and differentiated products and services are enhanced
by knowledgeable salespersons who can convey the value of the platform and software integration, and demonstrate the unique solutions
that are available on its products. The Company further believes providing direct contact with its targeted customers is an effective
way to demonstrate the advantages of its products over those of its competitors and providing a high-quality sales and after-sales
support experience is critical to attracting new and retaining existing customers.



Research and Development



Because the industries in which the Company competes are characterized
by rapid technological advances, the Company’s ability to compete successfully depends heavily upon its ability to ensure
a continual and timely flow of competitive products, services and technologies to the marketplace. The Company continues to develop
new technologies to enhance existing products and to expand the range of its product offerings through research and development,
licensing of intellectual property and acquisition of third-party businesses and technology. Total research and development expense
was $916,320 and $299,434 in 2014 and 2013, respectively.



Employees



As of December 31, 2014, the Company has 15 full-time employees.



Governmental Regulations



We are affected by laws and regulations that apply to businesses
in general, as well as to businesses operating on the Internet. This includes a continually expanding and evolving range of laws,
regulations and standards that address information security, data protection, privacy, consent and advertising, among other things.
By providing a medium through which users can post content and communicate with one another, we may also be subject to laws governing
intellectual property ownership, obscenity, libel, and privacy, among other issues.





8









Recent Developments



On March 13, 2015 (the “Effective Date”)
Ubiquity, Inc. has entered into a Non-Exclusive Commercial Technology License Agreement (the “License Agreement”)
with Sprocket HK Limited (“Sprocket”), a Hong Kong limited liability company. Pursuant to the terms of the
Agreement, the Company agreed to grant to Sprocket a domestic and international non-exclusive license to make, use, copy and distribute
products and services based upon the technology owned by the Company. Sprocket will also negotiate licenses with third parties,
subject to the terms and conditions set forth in the License Agreement. The license grant is conditioned on the parties’
mutual approval of a “Corporate Memo of Understanding” within 30 calendar days from the Effective Date of the License
Agreement.



Acquisition of Coversant, Inc.



On January 27, 2015 (“Effective Date”), Ubiquity,
Inc. (the “Company”), by and through its wholly owned subsidiary, Ubiquity Merger Sub, Inc. (“Merger Sub”)
entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Coversant, Inc. (“Coversant”),
a California corporation. Pursuant to the Merger Agreement, Coversant will be merged with Merger Sub, which will be the surviving
entity (the “Merger”). On March 19, 2015, the Company, Merger Sub and Coversant consummated and closed the Merger
and an Agreement of Merger was submitted to the State of California. Pursuant to the terms of the Merger Agreement, upon the closing
of the Merger, the Coversant shares issued and outstanding immediately prior to the Effective Date shall be converted automatically
into the right to receive an aggregate of 13,242,334 restricted shares of the Company’s common stock, distributed to the
shareholders of Coversant on a pro rata basis.



Coversant is a developer of an "Internet of Things Service
Bus" (IoT-SB) which can securely and efficiently connect devices, sensors, and actuators to users, applications and databases
for data analysis and process control. Coversant is one of two software platforms in the world that has passed rigorous Defense
Information Systems Agency, and placed on the Unified Capabilities Approved Product List (UCAPL). Coversant’s protocol,
based on XMPP, is mandated by the Department of Defense for real time communication for voice, video, chat, messaging and presence.



On March 20, 2015, the Company issued a press release announcing
that the Company had closed the Merger. A copy of the Company’s press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.



Acquisition of Sponsor Me, Inc.



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





Sponsor Me is a new kind of digital publishing company that
combines expert editorial with ecommerce for distribution on mobile and social platforms.



Sponsor Me, Inc. is a related party. Brenden Garrison is the
CEO of Sponsor Me and is also the CFO of the Company. On the Closing Date, Christopher Carmichael, Connie Jordan and Brenden Garrison,
owning an aggregate of 39,625,000 shall cancel their shares in Sponsor Me, Inc. and shall not receive any shares of Ubiquity, Inc.,
and all accrued salaries.





As a result of the Agreement, the Sponsor Me shareholders transferred
all their interest in Sponsor Me to the Company and, as a result, Sponsor Me became a wholly-owned subsidiary of the Company.



On February 12, 2015, the Board of Directors of Ubiquity, Inc.
(the “Company”) approved the execution of an option agreement whereby, Christopher Carmichael agreed to exchange $1,000,000
of his accrued and unpaid salary and directors compensation for 2,561,856 options, at a share price of $0.485 (the “Options”).
The options will carry a five (5) year term and vest upon issuance.



The issuance of the Options was completed in accordance with
the exemption provided by Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), and/or Section
4(2) of the Securities Act, in that such sale and issuance was made without any public offering to “accredited investors,”
as that term is defined under Rule 50



Item 1A.   Risk Factors.



This information is not required for smaller reporting companies.



Item 1B.   Unresolved
Staff Comments.



This information is not required for smaller
reporting companies.



9







Item 2.      Properties.



The company is located at 9801 Research
Drive, Irvine, CA.



On October 7, 2010, Ubiquity entered into
a 5 year lease for a new building in the city of Irvine, CA. In July 2014, the Company revised their lease agreement for additional
square footage. Under the terms of the revised lease agreement, commencing on September 1, 2014, the minimum monthly rent will
be $40,953. In addition, the revised lease agreement includes annual rent increases through expiration of January 20, 2020 and
other incentives.



10







Item 3.      Legal
Proceedings.





Think Design Media, Inc. and Related
Entities



As previously disclosed in the Company’s Quarterly Report
on Form 10-Q for the quarter ended September 30, 2014, on May 27, 2014, Think Design Media, Inc. ("TDM"), filed a lawsuit
against the Company claiming breach of a December 2013 consulting contract. TDM disputes the Company's cancellation of the consulting
agreement for non-performance.



On July 28, 2014, a complaint was filed by the Company as the
Plaintiff against Think Mobile, Inc., Carlos E. Orellana and Ivano Stamegna (together, the “TGS Defendants”), in the
Superior Court of California. The Company alleged in its complaint causes for breach of contract, breach of implied covenant of
good faith and fair dealing, fraudulent inducement, intentional interference with contractual relations, intentional interference
with prospective economic advantage and conversion. The Company alleged that the terms of the TGS Agreement were violated by the
TGS Defendants and the TGS Defendants failed to enter into the Agreement in good faith.



On September 25, 2014, a complaint was filed by the Company
as the Plaintiff against Think Design Media, Inc., Biznexion, Inc., Acosta Investments, LLC, Carlos Orellana, Ivano Stamegna, Anthony
Cesare and other defendants in the Superior Court of California, County of Orange. The Company alleged that the TDM Defendants
never had any intention to fulfill the terms of the Agreements and instead improperly acquired and disclosed the Company’s
trade secrets. The Company alleged in its complaint that the TDM Defendants’ actions constitute fraud, conversion, misappropriation
of trade secrets, trademark infringement, breach of contract, fraudulent transfer, unfair competition, and violation of the Racketeer
Influenced and Corrupt Organizations Act.



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



Other



On October 10, 2014, the Company was served with a complaint
filed on June 13, 2014 by a former consultant against the Company, in the Superior Court of Arizona, Maricopa County. The complaint
alleges that the consultant was to receive warrants to purchase 1,142,857 shares of common stock as a commencement fees for services
in which commenced on December 15, 2006. The Company believes the claim is without merit; in addition, the statute of limitations
has passed. The Company does not believe that a loss is probable and no accrual for loss contingency has been made.





Item 4.      Mine
Safety Disclosures.



Not Applicable.



PART II



Item 5.      Market for Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities



Market Information



Our common stock is quoted on the OTCQB and OTCBB under the
symbol “UBIQ”.



Price Range of Common Stock



The following table sets forth the high and low bid price per
share of common stock as reported by the OTCQB and OTCBB for the years ended December 31, 2014 and 2013:



|                                       |  | High |       |  | Low |  
|-------------------------------------- |  | ---- | ----- |  | --- | -
|Fiscal Year 2013                       |  |      |       |  |     |  
|First quarter ended March 31, 2013*    |  | $    | 2.20  |  |     | $
|Second quarter ended June 30, 2013     |  | $    | 2.29  |  |     | $
|Third quarter ended September 30, 2013 |  | $    | 3.19  |  |     | $
|Fourth quarter ended December 31, 2013 |  | $    | 3.31  |  |     | $
|                                       |  |      |       |  |     |  
|Fiscal Year 2014                       |  |      |       |  |     |  
|First quarter ended March 31, 2014     |  | $    | 9.24  |  |     | $
|Second quarter ended June 30, 2014     |  | $    | 10.00 |  |     | $
|Third quarter ended September 30, 2014 |  | $    | 6.50  |  |     | $
|Fourth quarter ended December 31, 2014 |  | $    | 5.53  |  |     | $



* The stock began trading on February 26, 2013



The tables above reflect the following stock splits:

On December 6, 2013, there was a 4:1 stock split.

On April 21, 2014 there was a 1:3.5 stock split.



Approximate Number of Equity Security Holders



As of December 31, 2014, there were approximately 957 stockholders
of record. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders
of our shares is substantially larger than the number of stockholders of record.



Dividends



We have not declared or paid any cash dividends on our common
stock, and we do not anticipate declaring or paying cash dividends for the foreseeable future. We are not subject to any legal
restrictions respecting the payment of dividends, except that we may not pay dividends if the payment would render us insolvent.
Any future determination as to the payment of cash dividends on our common stock will be at our board of directors’ discretion
and will depend on our financial condition, operating results, capital requirements and other factors that our board of directors
considers to be relevant.



11







Purchases of Equity Securities by the Issuer and Affiliated
Purchasers



From January 1, 2014 through and including December 31, 2014,
there were no purchases of equity securities by the issuer and affiliated purchasers.



Recent Sales of Unregistered Securities





Common Stock for Cash Proceeds



For the year ended December 31, 2014, the Company sold 10,501,572
shares for $8,060,178 in proceeds. The shares were sold to accredited investors, as that term is defined in Regulation D of the
Securities Act of 1933. The proceeds of the private placement were used for working capital, operating expenses and business development.



Common Stock for Services



During years ended December 31, 2014 and
2013, the Company issued 1,731,965 and 6,512,914 shares of common stock for services. The Company determined the value of such
shares to be $11,139,336 and $10,945,910 for the years ended December 31, 2014 and 2013, respectively, with $312,500 of deferred
stock-based compensation at December 31, 2013 (see below). The values were based upon the fair market value of the Company's common
stock on the date of performance, which in most cases is the agreement date. Services performed in connection with these issuances
relate to assignment to the board of directors, advisory services related to listing on a national exchange, marketing, broadcasting
and production related services.



Debt Financing



On November 17, 2014, Ubiquity, Inc. closed
a financing transaction by entering into a Purchase Agreement dated November 12, 2014 (the “Purchase Agreement”) with
KBM Worldwide, Inc. (the “Purchaser”) for an aggregate principal amount of $204,000 (the “Purchase Price”).
Pursuant to the Purchase Agreement, the Company issued an 8% Convertible Promissory Note (the “Note”).



The Note earns an interest rate per annum
equal to 8% and has a maturity date of August 14, 2015 (the “Maturity Date”). The Note is convertible any time during
the period beginning on the date which is one hundred eighty (180) days following the date of the issuance on this Note and ending
on the later of (i) the Maturity Date and (ii) the date of payment of the Default Amount at a conversion price equal to 50% discount
to the average of the lowest three (3) trading prices for the Common Stock during the twenty (20) Trading Day period immediately
prior the conversion date. The Note Conversion Price is subject to adjustment in the case of stock splits, stock dividends, combinations
of shares and similar recapitalization transactions and any issuances of securities below the conversion price of the Note.  Since
the conversion feature is only convertible after six months, there is no derivative liability as of December 31, 2014. However,
the Company will account for the derivative liability upon the passage of time and the note becoming convertible if not extinguished,
as defined above. Derivative accounting applies upon the conversion feature being available to the holder, as it is variable and
does not have a floor as to the number of common shares in which could be converted. Thus, if the note is not repaid prior to the
note being convertible significant pressure maybe put on the Company's stock price and additional dilution of current shareholders
may take place.



In the event of default, (“Event
of Default”) the Purchaser has the right to require the Company to repay in cash all or a portion of the Note at a price
equal to 150% of the aggregate principal amount of the Note plus all accrued and unpaid interest on the principal amount of this
Note. In addition, in the event of a merger, consolidation, exchange of shares, recapitalization, reorganization or other similar
event, (“Major Event”) the Purchaser has the option to treat the event as an Event of Default or may immediately convert
the remaining balance on the Note and shall be entitled to receive as many shares as the Purchaser would have been entitled to
immediately prior to the Major Event.





These securities were issued in transactions not registered
under the Securities Act in reliance upon the exemption provided under Section 4(2) of the Securities Act and/or Regulation D
promulgated by the Securities and Exchange Commission. We believed that the exemption was available because the offer and sale
of the securities did not involve a public offering and because of the limited number of recipients, each purchaser’s representation
of sophistication in financial matters, and their access to information concerning our business.



Item 6.      Selected Financial
Data



We are not required to provide the information required by
this Item because we are a smaller reporting company.



Item 7.      Management’s
Discussion and Analysis of Financial Condition and Results of Operations.



The following discussion and analysis of the results of
operations and financial condition for the fiscal years ended December 31, 2014 and 2013 should be read in conjunction with our
financial statements, and the notes to those financial statements that are included elsewhere in this Report.



12









Overview





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



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



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



Business







Ubiquity,
Inc. creating IoT (“Internet of Things”) for emerging businesses in social, mobile, analytics, & cloudis a leader in Multiscreen as a Service (“MaaS”) creating a comprehensive “full stack” engagement platform
for multiscreen application environments. The company is the first fully integrated enterprise platform that enables brands to
capture, engage, manage and monetize their anywhere anytime users. Ubiquity’s intellectual property and unique cloud-based
technology combines MaaS with SaaS to enable its customers to structure their content and data in a mobile cloud to deliver innovative
user experiences to their multiscreen communities and audiences worldwide. The company’s products and services include the
Sprocket Platform with a uniform comprehensive warehouse data analytics format, GiftSender a mobile wallet, Monkey Bars a social
mobility distribution platform, and proprietary video intelligence software. The company sells to small and mid-size business (“SMB”),
digital media, education, enterprise, and government customers. The company is a Nevada Corporation originally established in 2007.







13







Plan of Operations





The Company manages its business primarily on operating segments
which are generally based on its products and services offered. The Company has determined that is operating segments include Sprocket,
GiftSender, Monkeybars, and Video Intelligence. The company expects the nature and location of its customers in the America’s,
Canada, Europe, Japan and Asia Pacific including Australia will be managed through its licensees, OEM’s, white-label and
partner relationships. The Company is committed to bringing the best user experience to its customers through its innovative products
and services. The Company’s business strategy leverages its unique ability to design and develop its own platform, software
application, and services to provide its customers new products and solutions with superior ease-of-use, seamless integration,
and innovative design.







As of December 31, 2014, we have taken
the following steps to implement our business plan:







| | · | Completed the Acquisition of Monkeybars
| | - | ---------------------------------------







| | · | Completed MVP beta testing of the GiftSender product
| | - | ----------------------------------------------------



| | · | Completed pilot programs of the Sprocket Platform
| | - | -------------------------------------------------



| | · | Continued to develop Intellectual Property around the company’s products and services
| | - | -------------------------------------------------------------------------------------



Results of Operations





Comparison for the year ended December
31, 2014 and December 31, 2013





Net Revenue



Net revenue was $301,585 and $201,207 for the years ended December
31, 2014 and 2013, respectively. This increase is primarily attributable to the inclusion of $250,000 in related party revenue
related to licensing of intellectual products “Internet Protocol Television” to Sponsor Me, Inc. The Company determined
the price to be charged to the related party based upon a previous licensing agreement with a third party for similar stage technology.
Excluding related party revenue, there was a decrease in net revenue of $149,622. The decrease primarily relates to a decrease
in production related revenue of approximately $89,000 and equipment rentals of $28,000. The inconsistency in our revenues is
related to event driven nature of our revenue. Going forward management anticipates earning revenue from a variety of new sources
developed through its Ubiquity Labs products and services; however, until a consistent revenue stream can be generated, management
expects inconsistency in its revenue on a go forward basis.



Total Cost of Sales



Cost of sales was $165,047 and $153,884 for the years ended
December 31, 2014 and 2013, respectively.  The increase is primarily attributable to a base level of fixed costs regardless
of the amount of revenues generated. These fixed costs increased during 2014 due to the increase in personnel.



Gross profit



Gross profit was $136,538 and $47,323 for the years ended December
31, 2014 and 2013, respectively. This increase is primarily attributable to the related party revenue generated during 2014 which
had minimal associated direct costs. Absent said revenue of $250,000, the Company would have incurred as gross loss during 2014
due to the fixed costs described above being higher than third-party revenue generated.



14







Net Loss









Net Loss was ($27,899,238) and ($51,594,144)
for the years ended December 31, 2014 and 2013, respectively. This decrease in the loss is primarily attributable to continuing
operations and the reduction in non-cash loss of ($43,921,242) in 2013 to $10,674,401 in 2014, a decrease of $33,246,841 or 75.7%.
These charges are a result of the issuance of stock for services, stock compensation, and other equity awards. The Company tries
to utilize its stock to pay for services and as an incentive to employees, engineers, and contractors. There were also decreases
in outside services and payroll expense of approximately $213,000 and $421,000, respectively. The decrease in these line items
primarily relate to decreased market price of the company’s common shares. The reductions in stock-based compensation and
other expenses noted were offset by increases to depreciation and amortization of approximately $720,000, professional fees of
approximately $607,000, office and computer expenses of approximately $206,000, travel of approximately $167,000 and marketing
of approximately $89,000, among other smaller increases. Stock based compensation decreased.



Liquidity and Capital Resources



At December 31, 2014, we had cash and cash
equivalents of $100,249 as compared to $74,300 as of December 31, 2013, representing an increase of $25,949.





Cash used in operating activities decreased
to ($5,715,521) for the year ended December 31, 2014 compared to ($6,708,896) for the year ended December 31, 2013. The primary
difference from 2013 to 2014 is a decrease in expenditures between the years. Excluding changes in operating assets and liabilities
our net loss plus our adjustments to reconcile net loss to net cash used in operating activities (non-cash items) was ($6,158,124)
in 2014 compared to ($6,680,971).







Cash used in investing activities increased
to ($2,024,005) for the year ended December 31, 2014 compared to ($391,488) for the year ended December 31, 2013. The primary difference
from 2013 relates to significant expenditures related to the development of our product lines, patent and trademark costs, and
loans made to related parties. Loans to related parties during 2014 were $963,143. The purpose of these loans were to provide additional
financing to Sponsor Me, Inc. who is in the process of developing various products in which we hold licensing agreements with.
The loans were expected to be repaid through future licensing and royalty revenues generated by Sponsor Me, Inc.'s products. Effective
March 31, 2015, we merged with Sponsor Me, Inc., see the notes to the financial statement for additional information.





Cash provided by financing activities increased to $7,765,475
for the year ended December 31, 2014, as compared to net cash provided of $7,056,021 for the year ended December 31, 2013. Cash
from financing activities increased due to an increase in the sale of common stock of approximately $504,000 during 2014 compared
to 2013 and due to proceeds from convertible notes payable of $200,000 in 2014. The Company is still dependent upon financing
to fund operations. In addition, we have become dependent upon the issuance of convertible notes payable as our stock price has
decreased significantly during the year which has limited our ability to sell large cash subscriptions of stock at prices significantly
lower than market.



Current cash and cash equivalents will not be sufficient to
meet working capital needs over the next 12 months. Management’s plans regarding this expected deficiency are noted below.



15







Managements' Plans / Going Concern



The accompanying financial statements have been prepared assuming
that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has negative
working capital, has incurred operating losses each of the past two years, and has not yet produced sufficient revenues to cover
the cost of operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The
financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the
amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.





The Company is currently in various negotiations for the licensing
of their Sprocket platform, however, no formal terms have been agreed upon. To date, revenues from licensing agreements have not
been sufficient to fund operations. The Company estimates that approximately $8.5 million in capital will be needed to fund operations
for the next 12 months. Thus, until the Company can generate sufficient cash flows to fund operations, the Company is dependent
on raising additional capital through debt and/or equity transactions. In addition, the Company may have to renegotiate current
convertible debt obligations, reduce certain overhead costs through the deferral of salaries and other means, defer costs related
to the development of their technologies, and settle liabilities through negotiation.  Currently, the Company does not
have any commitments or assurances for additional capital, other than disclosed below, nor can the Company provide assurance
that such financing will be available to it on favorable terms, or at all. If, after utilizing the existing sources of capital
available to the Company, further capital needs are identified and the Company is not successful in obtaining the financing, it
may be forced to curtail its existing or planned future operations as discussed above. Subsequent to year end, the Company raised
$2,000,000 in convertible notes payable, and $517,500 in common stock sales





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



Item 7A.   Quantitative and Qualitative Disclosures
About Market Risk.



We do not hold any derivative instruments and do not engage
in any hedging activities.



Item 8.      Financial Statements
and Supplementary Data.



16









UBIQUITY INC.



FINANCIAL
STATEMENTS (UNAUDITED)



DECEMBER 31,
2014



CONTENTS



|                                                                           | PAGE      
|-------------------------------------------------------------------------- | ----------
|                                                                           |           
|Balance Sheets as of December 31, 2014 and 2013                            | F-1       
|                                                                           |           
|Statements of Operations for the Years Ended December 31, 2014 and 2013    | F-2       
|                                                                           |           
|Statement of Stockholders’ Equity for the Years December 31, 2014 and 2013 | F-3       
|                                                                           |           
|Statements of Cash Flows for the Years Ended December 31, 2014 and 2013    | F-4       
|                                                                           |           
|Notes to the  Financial Statements                                         | F-5 - F-17



17











UBIQUITY, INC.

(FORMERLY UBIQUITY
BROADCASTING CORPORATION)

BALANCE
SHEETS (UNAUDITED)

AS OF DECEMBER
31, 2014 AND 2013





|                                                                                                                                                                       |  | December 31,  2014 |              |   | December 31,  2013 |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ------------ | - | ------------------ | -
|Assets:                                                                                                                                                                |  |                    |              |   |                    |  
|Cash and cash equivalents                                                                                                                                              |  | $                  | 100,249      |   |                    | $
|Accounts receivable, net                                                                                                                                               |  |                    | 27,000       |   |                    |  
|Prepaid expenses                                                                                                                                                       |  |                    | 39,433       |   |                    |  
|Loans receivable - related parties                                                                                                                                     |  |                    | 247,461      |   |                    |  
|Other current assets                                                                                                                                                   |  |                    | -            |   |                    |  
|Total current assets                                                                                                                                                   |  |                    | 414,143      |   |                    |  
|                                                                                                                                                                       |  |                    |              |   |                    |  
|Property and equipment, net                                                                                                                                            |  |                    | 748,438      |   |                    |  
|Other assets:                                                                                                                                                          |  |                    |              |   |                    |  
|Other assets                                                                                                                                                           |  |                    | 53,493       |   |                    |  
|Accounts receivable - related party                                                                                                                                    |  |                    | 100,000      |   |                    |  
|Receivable - related parties                                                                                                                                           |  |                    | 1,470,596    |   |                    |  
|Intangible assets, net                                                                                                                                                 |  |                    | 8,475,898    |   |                    |  
|Total assets                                                                                                                                                           |  | $                  | 11,262,568   |   |                    | $
|                                                                                                                                                                       |  |                    |              |   |                    |  
|Liabilities and Stockholders' Equity:                                                                                                                                  |  |                    |              |   |                    |  
|Current liabilities                                                                                                                                                    |  |                    |              |   |                    |  
|Accounts payable                                                                                                                                                       |  | $                  | 423,356      |   |                    | $
|Accrued expenses                                                                                                                                                       |  |                    | 1,909,353    |   |                    |  
|Credit cards payable                                                                                                                                                   |  |                    | 825,854      |   |                    |  
|Loans payable - related parties                                                                                                                                        |  |                    | 36,250       |   |                    |  
|Convertible note                                                                                                                                                       |  |                    | 200,881      |   |                    |  
|Total current liabilities                                                                                                                                              |  |                    | 3,395,694    |   |                    |  
|                                                                                                                                                                       |  |                    |              |   |                    |  
|Accrued expenses, long-term                                                                                                                                            |  |                    | 1,000,000    |   |                    |  
|Total liabilities                                                                                                                                                      |  |                    | 4,395,694    |   |                    |  
|                                                                                                                                                                       |  |                    |              |   |                    |  
|Commitments and contingencies                                                                                                                                          |  |                    |              |   |                    |  
|                                                                                                                                                                       |  |                    |              |   |                    |  
|Stockholders' Equity:                                                                                                                                                  |  |                    |              |   |                    |  
|Preferred stock, par value $0.001, 10,000,000 shares authorized, no shares issued and outstanding                                                                      |  |                    | -            |   |                    |  
|Common stock, par value $0.001, 800,000,000 shares authorized, 105,438,968 and 92,069,199 shares issued and outstanding as of December 31, 2014 and 2013, respectively |  |                    | 105,395      |   |                    |  
|Additional paid-in capital                                                                                                                                             |  |                    | 148,135,335  |   |                    |  
|Common stock to be issued                                                                                                                                              |  |                    | -            |   |                    |  
|Deferred stock-based compensation                                                                                                                                      |  |                    | -            |   |                    |  
|Accumulated deficit                                                                                                                                                    |  |                    | (141,373,856 | ) |                    |  
|Total stockholders' equity                                                                                                                                             |  |                    | 6,866,874    |   |                    |  
|Total liabilities and stockholders' equity                                                                                                                             |  | $                  | 11,262,568   |   |                    | $





See accompanying
notes to financial statements.



F-1







UBIQUITY, INC.

(FORMERLY UBIQUITY
BROADCASTING CORPORATION)

STATEMENTS OF
OPERATIONS (UNAUDITED)

FOR THE YEARS
ENDED DECEMBER 31, 2014 AND 2013





|                                                                 |  | Year Ended  December 31,  2014 |             |   | Year Ended  December 31,  2013 |  
|---------------------------------------------------------------- |  | ------------------------------ | ----------- | - | ------------------------------ | -
|                                                                 |  |                                |             |   |                                |  
|Revenues                                                         |  | $                              | 51,585      |   |                                | $
|Revenues - related party                                         |  |                                | 250,000     |   |                                |  
|                                                                 |  |                                | 301,585     |   |                                |  
|                                                                 |  |                                |             |   |                                |  
|Costs of sales                                                   |  |                                | 165,047     |   |                                |  
|Gross profit                                                     |  |                                | 136,538     |   |                                |  
|                                                                 |  |                                |             |   |                                |  
|Operating expenses:                                              |  |                                |             |   |                                |  
|Meals and entertainment                                          |  |                                | 72,781      |   |                                |  
|Marketing                                                        |  |                                | 180,882     |   |                                |  
|Outside services                                                 |  |                                | 149,162     |   |                                |  
|Payroll expense                                                  |  |                                | 1,961,291   |   |                                |  
|Stock-based compensation                                         |  |                                | 12,514,401  |   |                                |  
|Office and computer                                              |  |                                | 386,257     |   |                                |  
|Professional fees                                                |  |                                | 2,290,823   |   |                                |  
|Rent                                                             |  |                                | 575,832     |   |                                |  
|Travel                                                           |  |                                | 293,912     |   |                                |  
|Taxes                                                            |  |                                | 11,539      |   |                                |  
|Charitable contributions                                         |  |                                | 74,343      |   |                                |  
|Bad debt expense                                                 |  |                                | 19,355      |   |                                |  
|Depreciation and amortization                                    |  |                                | 2,002,086   |   |                                |  
|Other operating expenses                                         |  |                                | 346,302     |   |                                |  
|Total operating expenses                                         |  |                                | 20,878,966  |   |                                |  
|                                                                 |  |                                |             |   |                                |  
|Operating loss                                                   |  |                                | (20,742,428 | ) |                                |  
|                                                                 |  |                                |             |   |                                |  
|Other income and (expense)                                       |  |                                |             |   |                                |  
|Impairment loss                                                  |  |                                | -           |   |                                |  
|Interest expense                                                 |  |                                | (14,880     | ) |                                |  
|Loss on impairment of intangible assets                          |  |                                | (7,185,933  | ) |                                |  
|Other income (expense)                                           |  |                                | 44,003      |   |                                |  
|Total other income (expense)                                     |  |                                | (7,156,810  | ) |                                |  
|                                                                 |  |                                |             |   |                                |  
|Loss before provision for income taxes                           |  |                                | (27,899,238 | ) |                                |  
|                                                                 |  |                                |             |   |                                |  
|Provision for income taxes                                       |  |                                | -           |   |                                |  
|                                                                 |  |                                |             |   |                                |  
|Net loss                                                         |  | $                              | (27,899,238 | ) |                                | $
|                                                                 |  |                                |             |   |                                |  
|Net loss per share: basic and diluted                            |  | $                              | (0.29       | ) |                                | $
|Weighted average number of shares outstanding: basic and diluted |  |                                | 97,790,696  |   |                                |  





See accompanying
notes to financial statements.



F-2







UBIQUITY, INC.

(FORMERLY UBIQUITY
BROADCASTING CORPORATION)

STATEMENT OF STOCKHOLDERS’
EQUITY (UNAUDITED)

FOR THE YEARS
ENDED DECEMBER 31, 2014 AND 2013





|                                           |  | Common Stock |             |   | Preferred Stock |   |         |        |  |   |          |   |  |                                      |      |   |                                                  |  
|------------------------------------------ |  | ------------ | ----------- | - | --------------- | - | ------- | ------ |  | - | -------- | - |  | ------------------------------------ | ---- | - | ------------------------------------------------ | -
|                                           |  | Shares       |             |   | Amount          |   |         | Shares |  |   | Amount   |   |  | Additional
    Paid- 
    in Capital |      |   | Deferred Stock-
    
    Based 
    Compensation |  
|                                           |  |              |             |   |                 |   |         |        |  |   |          |   |  |                                      |      |   |                                                  |  
|December 31, 2012                          |  |              | 55,599,799  |   |                 | $ | 55,600  |        |  | $ | 600,000  |   |  | $                                    | 600  |   |                                                  | $
|                                           |  |              |             |   |                 |   |         |        |  |   |          |   |  |                                      |      |   |                                                  |  
|Merger/recapitalization                    |  |              | 12,822,857  |   |                 |   | 12,823  |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Cancellation of shares                     |  |              | (4,571,429  | ) |                 |   | (4,571  | )      |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Conversion of preferred stock              |  |              | 685,714     |   |                 |   | 685     |        |  |   | (600,000 | ) |  |                                      | (600 | ) |                                                  |  
|Shares issued for cash                     |  |              | 6,210,057   |   |                 |   | 6,210   |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Equity issuance costs to officers          |  |              | -           |   |                 |   | -       |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Stock options exercised                    |  |              | 13,200,000  |   |                 |   | 13,200  |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Shares issued for services                 |  |              | 6,512,914   |   |                 |   | 6,513   |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Shares issued to acquire intangible assets |  |              | 1,609,286   |   |                 |   | 1,609   |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Stock options issued for services rendered |  |              | -           |   |                 |   | -       |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Net loss                                   |  |              | -           |   |                 |   | -       |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|                                           |  |              |             |   |                 |   |         |        |  |   |          |   |  |                                      |      |   |                                                  |  
|December 31, 2013                          |  |              | 92,069,199  |   |                 |   | 92,069  |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|                                           |  |              |             |   |                 |   |         |        |  |   |          |   |  |                                      |      |   |                                                  |  
|Shares issued for cash                     |  |              | 10,501,572  |   |                 |   | 10,502  |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Shares issued for services                 |  |              | 1,731,965   |   |                 |   | 1,732   |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Shares issued for purchase of assets       |  |              | 1,092,233   |   |                 |   | 1,092   |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Equity issuance costs to officers          |  |              | -           |   |                 |   | -       |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Stock-based compensation                   |  |              | -           |   |                 |   | -       |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|Net loss                                   |  |              | -           |   |                 |   | -       |        |  |   | -        |   |  |                                      | -    |   |                                                  |  
|                                           |  |              |             |   |                 |   |         |        |  |   |          |   |  |                                      |      |   |                                                  |  
|December 31, 2014                          |  |              | 105,394,969 |   |                 | $ | 105,395 |        |  | $ | -        |   |  | $                                    | -    |   |                                                  | $





See accompanying
notes to financial statements.



F-3







UBIQUITY, INC.

(FORMERLY UBIQUITY
BROADCASTING CORPORATION)

STATEMENTS OF
CASH FLOWS (UNAUDITED)

FOR THE YEARS
ENDED DECEMBER 31, 2014 AND 2013





|                                                                            |  | For the Year  Ended  December 31,  2014 |             |   | For the Year  Ended  December 31,  2013 |  
|--------------------------------------------------------------------------- |  | --------------------------------------- | ----------- | - | --------------------------------------- | -
|CASH FLOWS FROM OPERATING ACTIVITIES:                                       |  |                                         |             |   |                                         |  
|Net loss                                                                    |  | $                                       | (27,899,238 | ) |                                         | $
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                                         |             |   |                                         |  
|Depreciation and amortization                                               |  |                                         | 2,002,086   |   |                                         |  
|Stock-based compensation and stock for services                             |  |                                         | 12,514,401  |   |                                         |  
|Contributed interest on related party notes                                 |  |                                         | 18,418      |   |                                         |  
|Bad debt expense                                                            |  |                                         | 19,355      |   |                                         |  
|Impairment expense                                                          |  |                                         | 7,185,933   |   |                                         |  
|Amortization of debt discount                                               |  |                                         | 881         |   |                                         |  
|Changes in operating assets and liabilities:                                |  |                                         |             |   |                                         |  
|Accounts receivable                                                         |  |                                         | (8,250      | ) |                                         |  
|Accounts receivable - related party                                         |  |                                         | (100,000    | ) |                                         |  
|Prepaid expenses                                                            |  |                                         | 81,842      |   |                                         |  
|Other current assets                                                        |  |                                         | -           |   |                                         |  
|Accounts payable                                                            |  |                                         | (332,920    | ) |                                         |  
|Accrued expenses                                                            |  |                                         | 458,752     |   |                                         |  
|Credit cards payable                                                        |  |                                         | 343,219     |   |                                         |  
|Loans to related parties                                                    |  |                                         | -           |   |                                         |  
|Net cash used in operating activities                                       |  |                                         | (5,715,521  | ) |                                         |  
|                                                                            |  |                                         |             |   |                                         |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                       |  |                                         |             |   |                                         |  
|Loans to related parties                                                    |  |                                         | (963,143    | ) |                                         |  
|Purchase of property and equipment                                          |  |                                         | (49,050     | ) |                                         |  
|Other assets                                                                |  |                                         | (53,493     | ) |                                         |  
|Acquisition of intangible assets                                            |  |                                         | (958,319    | ) |                                         |  
|Net cash used in investing activities                                       |  |                                         | (2,024,005  | ) |                                         |  
|                                                                            |  |                                         |             |   |                                         |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                       |  |                                         |             |   |                                         |  
|Proceeds from convertible notes payable                                     |  |                                         | 200,000     |   |                                         |  
|Net proceeds from loan payable - related party                              |  |                                         | 29,250      |   |                                         |  
|Equity issuance costs                                                       |  |                                         | (523,953    | ) |                                         |  
|Proceeds from sale of common stock                                          |  |                                         | 8,060,178   |   |                                         |  
|Net cash provided by financing activities                                   |  |                                         | 7,765,475   |   |                                         |  
|                                                                            |  |                                         |             |   |                                         |  
|Change in cash and cash equivalents                                         |  |                                         | 25,949      |   |                                         |  
|Cash and cash equivalents, beginning of year                                |  |                                         | 74,300      |   |                                         |  
|Cash and cash equivalents, end of year                                      |  | $                                       | 100,249     |   |                                         | $
|                                                                            |  |                                         |             |   |                                         |  
|Supplemental disclosures of cash flow information:                          |  |                                         |             |   |                                         |  
|Cash paid for interest                                                      |  | $                                       | -           |   |                                         | $
|Cash paid for income taxes                                                  |  | $                                       | -           |   |                                         | $
|                                                                            |  |                                         |             |   |                                         |  
|Non-cash investing and financing activities:                                |  |                                         |             |   |                                         |  
|Value of common shares issued for assets                                    |  | $                                       | 2,250,000   |   |                                         | $







See accompanying
notes to financial statements.



F-4







UBIQUITY, INC.

(FORMERLY UBIQUITY
BROADCASTING CORPORATION)

NOTES TO THE FINANCIAL
STATEMENTS (UNAUDITED)

DECEMBER 31,
2014



NOTE 1 - NATURE OF BUSINESS



Ubiquity, Inc., formerly Ubiquity Broadcasting
Corporation, (“Ubiquity” or “the Company”) was formed in the State of Delaware in February 2007. It then
became a corporation in the State of Nevada on February 12, 2007.







Ubiquity, Inc. (Collectively “Ubiquity”
or the “Company”)creating IOT (“Internet of Things”) for emerging businesses in social, mobile,
analytics, & cloud,is a leader in Multiscreen as a Service (“MaaS”) creating a comprehensive
“full stack” engagement platform for multiscreen application environments. The company is the first fully integrated
enterprise platform that enables brands to capture, engage, manage and monetize their anywhere anytime users. Ubiquity’s
intellectual property and unique cloud-based technology combines MaaS with SaaS to enable its customers to structure their content
and data in a mobile cloud to deliver innovative user experiences to their multiscreen communities and audiences worldwide. The
company’s products and services include the Sprocket Platform with a uniform comprehensive warehouse data analytics format,
GiftSender a mobile wallet, Monkey Bars a social mobility distribution platform, and proprietary video intelligence software.







Reverse Merger



As previously reported in the Current Report
on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on March 6, 2013. On March 5, 2013, the Company
entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ubiquity Broadcasting Corporation, a privately
held Delaware corporation (“Ubiquity-DE”), and Ubiquity Acquisition Corp., a newly formed, wholly-owned Nevada subsidiary
of ours (“Acquisition Sub”), pursuant to which Acquisition Sub was merged with and into Ubiquity-DE, and Ubiquity-DE,
as the surviving corporation, became our wholly-owned subsidiary (the “Merger”). A condition to the closing of the
merger was that the Company shall have received an audit report of Ubiquity-DE with respect to its two most recently completed
fiscal years from an independent accounting firm that is registered with the Public Company Accounting Oversight Board. Ubiquity-DE
received an audit report by Silberstein Ungar; PLLC dated September 20, 2013. Accordingly, the merger closed on September 20, 2013.
As a result of the Merger, the Company ceased its prior operations, which were insignificant and became a multimedia company focused
on the intersection of cloud-based cross platform applications synchronized across all screens for enhancing the digital lifestyle.







The transaction was regarded as a reverse
merger whereby Ubiquity-DE was considered to be the accounting acquirer as its management retained control of the Company after
the Share Exchange. As a result of this accounting treatment the historical financial statements of Ubiquity-DE, the accounting
acquirer, are presented for all periods presented. The financial statements of the Company, which are insignificant, have been
presented from the date of acquisition, deemed to September 20, 2013, forward. Pro-forma financial information has not been provided
as the amounts are insignificant.





Pursuant to the terms and conditions of
the Merger Agreement:



| | · | Each
                                         share of Ubiquity-DE’s common stock issued and outstanding immediately prior to
                                         the closing of the Merger was converted into the right to receive 19,838,746 shares of
                                         our common stock.  An aggregate of 19,838,746sharesof the Company’s common stock were issued to the holders of Ubiquity-DE’s
                                         common stock.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Pursuant
                                         to the terms of the Merger Agreement, new members of our board of directors were appointed.   Our
                                         new board of directors consists of previously the directors and officer of Ubiquity-DE
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The purposes of the transactions described
in the Form 8-K were to complete a reverse merger and complete a recapitalization of the Company with the result being that Ubiquity-DE
became a wholly-owned subsidiary.  Our business operations will now focus on the business of Ubiquity-DE in the future
and our management will be the management of Ubiquity-DE.



NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Basis of Presentation

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



Principles of Consolidation

The accompanying consolidated financial
statements include the accounts of the Company and its wholly-owned subsidiary Ubiquity Broadcasting Corp., a Delaware corporation.
All material inter-company accounts and transactions have been eliminated in consolidation.



F-5







Cash and Cash Equivalents

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



Accounts Receivable and Allowance for
Doubtful Accounts

Accounts receivable are reported at realizable
value, net of allowances for doubtful accounts, which is estimated and recorded in the period the related revenue is recorded.
The Company has a standardized approach to estimate and review the collectability of its receivables based on a number of factors,
including the period they have been outstanding. Historical collection and payer reimbursement experience is an integral part
of the estimation process related to allowances for doubtful accounts. In addition, the Company regularly assesses the state of
its billing operations in order to identify issues, which may impact the collectability of these receivables or reserve estimates.
Bad debt expense was $19,355 and $25,000 for the years ended December 31, 2014 and 2013, respectively. The allowance for doubtful
accounts was $40,000 and $25,000 at December 31, 2014 and 2013, respectively.



Property and Equipment

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



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



Intangible Assets

Intangible assets are amortized using
the straight-line method over fifteen years. The Company periodically evaluates the recoverability of intangible assets and takes
into account events or circumstances that warrant revised estimates of useful lives or that indicate impairment exists. All of
Ubiquity’s intangible assets are subject to amortization. See Note 5 for additional information related to an impairment
recorded during the year ended December 31, 2014.



Fair Value of Financial Instruments

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



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

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

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



As of December 31, 2014 and 2013, we did
not have any level 1, 2, or 3 assets or liabilities.



Revenue Recognition

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



Cost of Revenue

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



Advertising Costs

Advertising costs are expensed as incurred.
Advertising costs were $180,882 and $85,744 for the years ended December 31, 2014 and 2013, respectively.



Stock-Based Compensation

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



F-6







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



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



Income Taxes

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



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



Concentration of Credit Risks

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



Use of Estimates

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



Earnings per Common and Common Equivalent
Share

The computation of basic earnings per
common share is computed using the weighted average number of common shares outstanding during the year. The computation of diluted
earnings per common share is based on the weighted average number of shares outstanding during the year plus common stock equivalents
which would arise from the exercise of warrants outstanding using the treasury stock method and the average market price per share
during the year. Options, warrants and convertible preferred stock which are common stock equivalents are not included in the
diluted earnings per share calculation for December 31, 2014 and 2013, respectively, since their effect is anti-dilutive.



Impairment of Long-Lived Assets

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



Recently Issued Accounting Guidance

In May 2014, the Financial Accounting
Standards Board (FASB) issued Accounting Standards Update No. 2014-9, Revenue from Contracts with Customers (Topic 606) (“ASU
2014-9”). ASU 2014-9 outlines a single comprehensive model for entities to use in accounting for revenue. Under the
guidance, revenue is recognized when a company transfers promised goods or services to customers in an amount that reflects the
consideration to which the company expects to be entitled in exchange for those goods or services. The standard is effective for
public entities with annual and interim reporting periods beginning after December 15, 2016. Entities have the option of
using either a full retrospective or a modified retrospective approach to adopt the guidance. We are currently evaluating
implementation methods and the effect that implementation of this standard will have on our financial statements upon adoption.



F-7







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



NOTE 3 - PREPAID EXPENSES



Prepaid expenses consisted of the following
as of December 31:



|                       |  | December 31, 2014 |        |  | December 31, 2013 |  
|---------------------- |  | ----------------- | ------ |  | ----------------- | -
|Commissions            |  | $                 | -      |  |                   | $
|Short term deposits    |  |                   | 39,433 |  |                   |  
|Legal                  |  |                   | -      |  |                   |  
|Miscellaneous          |  |                   | -      |  |                   |  
|Total prepaid expenses |  | $                 | 39,433 |  |                   | $



NOTE 4 - PROPERTY AND EQUIPMENT



Property and equipment recorded at cost
consisted of the following as of December 31:



|                            |  | December 31, 2014 |            |   | December 31, 2013 |  
|--------------------------- |  | ----------------- | ---------- | - | ----------------- | -
|Machinery and equipment     |  | $                 | 477,104    |   |                   | $
|Office equipment            |  |                   | 881,100    |   |                   |  
|Leasehold improvements      |  |                   | 641,599    |   |                   |  
|Subtotal                    |  |                   | 1,999,803  |   |                   |  
|Accumulated depreciation    |  |                   | (1,251,365 | ) |                   |  
|Property and equipment, net |  | $                 | 748,438    |   |                   | $



Depreciation expense was $304,158 and
$257,272 for the years ended December 31, 2014 and 2013, respectively.



NOTE 5 - INTANGIBLE ASSETS



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





|                            |  | December 31, 2014 |             |   | December 31, 2013 |  
|--------------------------- |  | ----------------- | ----------- | - | ----------------- | -
|Patents and trademarks      |  | $                 | 8,143,282   |   |                   | $
|Data compression            |  |                   | 623,628     |   |                   |  
|Website                     |  |                   | 2,572,607   |   |                   |  
|Invicta immersive property  |  |                   | 2,392,505   |   |                   |  
|GiftSender                  |  |                   | 2,599,694   |   |                   |  
|Think Media                 |  |                   | 400,000     |   |                   |  
|Biznexion                   |  |                   | 216,400     |   |                   |  
|Digital Magazine            |  |                   | 2,028,000   |   |                   |  
|Monkeybars                  |  |                   | 2,250,000   |   |                   |  
|Goodwill                    |  |                   | 972,000     |   |                   |  
|Subtotal, intangible assets |  |                   | 22,198,116  |   |                   |  
|Accumulated amortization    |  |                   | (13,722,218 | ) |                   |  
|Intangible assets, net      |  | $                 | 8,475,898   |   |                   | $





F-8







Additions to Intangible Assets





Additions to the intangible assets primarily
relate to the Company’s development of patents and trademarks, , the Sprocket platform, GiftSender, Monkeybars, MOFF, and
studio projects. The Company has incurred heavy costs for intangible assets in the past and does not expect to see intangible costs
level out or drop in the future as the Company continues to invest and develop its intellectual property. The Company analyzes
these assets typically on an annual basis, during the fourth quarter, and when there are other indicating factors, see below for
discuss regarding impairments recorded. Amortization expense is recorded using the straight-line method over fifteen years.





On April 23, 2014, the Company entered
into an asset purchase agreement (the “Monkeybars Agreement”) with Monkeybars Inc. (“Monkeybars”) whereby
the Company acquired all of the assets of Monkeybars. In exchange, the Company issued to Monkeybars 1,092,233 shares of restricted
common stock, which has an aggregate value of $2,250,000, based upon a market price per share of $2.06 on the date the parties
entered into the Monkeybars Agreement. Monkeybars has a music platform that combines a cloud content storage, a sharing application,
and social networking search technology. The Company accounted for the transaction as an asset acquisition as Monkeybars' products
acquired had yet to generate any revenues and did not constitute a business. The Company is currently evaluating the estimated
life of the assets acquired but has recorded amortization expense from the date of acquisition using a fifteen year period.



On July 12, 2013, the Company acquired
intangible assets, including the Social Mashup and IPTV, from Think Design Media Inc., a California corporation, for 683,371 shares
of common stock for a total purchase price of $2,391,800.



Additionally on July 12, 2013, the Company
acquired intangible assets, including Gift Sender, from Think Mobile, Inc., d/b/a GiftSender, a Delaware corporation, for 683,371
shares of common stock and $151,000 in cash for a total purchase price of $2,542,800.



Also on July 12, 2013, the Company acquired
intangible assets, including ZoneBox, from Biznexion, Inc., a Delaware corporation, for 61,829 shares of common stock for a total
purchase price of $216,400.





On September 30, 2013, the Company acquired
intangible assets of Acosta Investments relating to the digital magazine a California Limited Liability Corporation, for 114,286
shares of common stock for a total purchase price of $400,000. The shares were valued at $1,250,000 on the date of the agreement.
As such the digital magazine asset was booked at $400,000 and a loss on the purchase of the digital magazine was recorded for $850,000.
The digital magazine application (“Magazine”) is designed to give users a new interactive magazine viewing experience
using videos and interactive advertising related to various products within the article. The platform has the ability to create
a magazine from scratch by uploading text for articles, images, video and audio files.





In 2013, Ubiquity acquired TaC Friends
and associated IP for 57,143 shares of common stock valued at $200,000. TaC Friends promotes the use of SMS and MMF messaging
so people interested in social networking do not have to sit in front of a web site. Ubiquity anticipates that the integration
of TaC friends into its Sprocket will enable users to enjoy a mobile lifestyle and the need to always be in touch and using the
platform.



Amortization expense for all intangible
assets was $1,697,928 and $1,024,659 for the years ended December 31, 2014 and 2013, respectively.



Impairment of Intangible Assets





At December 31, 2014, as part of their
annual assessment, the Company estimated the expected life on intangibles should be revised from fifteen to five years, the estimated
remaining life of Sprocket. Although, the Company has various projects in development, the focus in 2014 has been on finalizing
and bringing to market Sprocket. In addition, the majority of the Company's products are currently or are planned to be integrated
with Sprocket. Thus, the Company has determined that Sprocket represents the primary asset as it represents the most significant
component asset from which the asset group derives its cash-flow-generating capacity. Thus, it is reasonable that all intangible
assets within the Sprocket Asset Group their lives be revised to five years. In connection, with the change in estimated life the
Company recorded an impairment of $6.1 million during the year ended December 31, 2014. In addition, at December 31, 2014, the
Company reviewed whether or not there were any indicating factors that the carry value of the Company's intangible assets had been
impaired. There were various factors in which indicated that impairment was necessary, including the lack of revenues generated
from the intangibles. However, as part of this analysis, the Company reviewed the status of each project, including those considered
to be within the Sprocket Asset Group, in which the intangible assets related to and the future estimated cash flows from those
projects. In determining future estimated cash flows, the Company used the best current information available to them which consisted
primarily of license contracts currently being negotiate, estimated costs to maintain, etc. Based upon the Company's analysis,
it was determined that an impairment of $7,185,933 would be recorded. A significant factor leading some of the intangibles to impairment
was the lack of capital and physical resource to turn all of the Company's technology into viable cash flow generating products.
Currently, the Company is focusing its attention on technologies and functionality related to the Sprocket platform and other items,
such as GiftSender, Monkeybars, MOFF, in which are expected to either be integrated with Sprocket or have a direct benefit from.



F-9









NOTE 6 - ACCRUED EXPENSES



Accrued expenses consisted of the following
as of December 31, 2014 and 2013:





|                               |  | December 31, 2014 |           |  | December 31, 2013 |  
|------------------------------ |  | ----------------- | --------- |  | ----------------- | -
|Salaries and wages             |  | $                 | 709,703   |  |                   | $
|Payroll and other taxes        |  |                   | 1,145,125 |  |                   |  
|Other                          |  |                   | 54,525    |  |                   |  
|Total current accrued expenses |  |                   | 1,909,353 |  |                   |  
|                               |  |                   |           |  |                   |  
|Salaries and wages, long-term  |  |                   | 1,000,000 |  |                   |  
|Total accrued expenses         |  | $                 | 2,909,353 |  |                   | $



Subsequent to year-end, the Company's Chief Executive Officer forgave accrued salary and bonuses of $1
million dollars in exchange for options to purchase 2,561,856 shares of common stock with an exercise price of $0.485 per share.
The options vest immediately and have a five year life. As a result, the amount of the accrued salaries subsequently exchanged
for equity has been reflected as long-term as of December 31, 2014 in the accompanying financial statements. The Company is currently
determining the impact on their financial statements.



NOTE 7 - CONVERTIBLE NOTES PAYABLE



On November 17, 2014, Ubiquity, Inc. (the
“Company”) closed a financing transaction by entering into a Purchase Agreement dated November 12, 2014 (the “Purchase
Agreement”) with Worldwide, Inc. (the “Purchaser”) for an aggregate principal amount of $204,000 (the “Purchase
Price”). Pursuant to the Purchase Agreement, the Company issued an 8% Convertible Promissory Note (the “Note”).



The Note earns an interest rate per annum
equal to 8% and has a maturity date of August 14, 2015 (the “Maturity Date”). The Note is convertible any time during
the period beginning on the date which is one hundred eighty (180) days following the date of the issuance on this Note and ending
on the later of (i) the Maturity Date and (ii) the date of payment of the Default Amount at a conversion price equal to 50% discount
to the average of the lowest three (3) trading prices for the Common Stock during the twenty (20) Trading Day period immediately
prior the conversion date. The Note Conversion Price is subject to adjustment in the case of stock splits, stock dividends, combinations
of shares and similar recapitalization transactions and any issuances of securities below the conversion price of the Note.  Since
the conversion feature is only convertible after six months, there is no derivative liability as of December 31, 2014. However,
the Company will account for the derivative liability upon the passage of time and the note becoming convertible if not extinguished,
as defined above. Derivative accounting applies upon the conversion feature being available to the holder, as it is variable and
does not have a floor as to the number of common shares in which could be converted. Thus, if the note is not repaid prior to
the note being convertible significant pressure maybe put on the Company's stock price and additional dilution of current shareholders
may take place.



In the event of default, (“Event
of Default”) the Purchaser has the right to require the Company to repay in cash all or a portion of the Note at a price
equal to 150% of the aggregate principal amount of the Note plus all accrued and unpaid interest on the principal amount of this
Note. In addition, in the event of a merger, consolidation, exchange of shares, recapitalization, reorganization or other similar
event, (“Major Event”) the Purchaser has the option to treat the event as an Event of Default or may immediately convert
the remaining balance on the Note and shall be entitled to receive as many shares as the Purchaser would have been entitled to
immediately prior to the Major Event.



See Note 13, for additional convertible
notes issued subsequent to year end.



F-10







NOTE 8 - RELATED PARTY TRANSACTIONS



Compensation Related



The following is a summary of compensation
paid and amounts payable to Christopher Carmichael and Connie Jordan for the year ended December 31, 2014:



|                            |  | Christopher
    Carmichael |           |   | Connie Jordan |  
|--------------------------- |  | -------------------------- | --------- | - | ------------- | -
|Accrual - December 31, 2013 |  | $                          | 1,053,398 |   |               | $
|Annual Salary               |  |                            | 539,400   |   |               |  
|Annual Director Fees        |  |                            | -         |   |               |  
|Bonus - Capital Raises      |  |                            | 403,010   |   |               |  
|Other                       |  |                            | 5,344     |   |               |  
|Subtotal                    |  |                            | 2,001,152 |   |               |  
|Payments                    |  |                            | (726,300  | ) |               |  
|Accrual - December 31, 2014 |  | $                          | 1,274,852 |   |               | $



Annual Salary



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



The Company’s CFO receives an annual
salary of $225,000 and an annual option grant of 75,000 shares.



The Company's Senior Executive Vice President,
Connie Jordan, received an annual salary of $250,000 during the years ended December 31, 2014 and 2013. Additionally, the Senior
Executive Vice President receives a medical allowance of $1,200 per month and an annual option grant of 200,000.



No Company Officer or Director have sold any shares in the UBIQ since going public in 2013.



Bonus - Capital Raises



The Company's CEO and Senior Executive
Vice President receive percentages of 5% and 1.5% for all monies obtained through capital raises, respectively. During the years
ended December 31, 2014 and 2013, the CEO earned bonuses from capital raises of $403,010 and $230,563, respectively. During the
years ended December 31, 2014 and 2013, the Senior Executive Vice President earned bonuses from capital raises of $120,943 and
$39,168, respectively. The Company accounts for the bonuses as offsets to the proceeds raised due to the individuals involvement
in obtaining the investments.



Accrued Amounts Payable to CEO and Senior
Executive Vice President



As of December 31, 2014 and 2013, amounts
payable to the CEO related to the items discussed above were $1,274,852 and $1,053,398, respectively. See Note 6 for discussion
related to $1,000,000 of salary and bonus payable to the CEO exchanged for options to purchase shares of the Company's common
stock. As of December 31, 2014 and 2013, amounts payable to the Senior Executive Vice President related to the items discussed
above were $48,458 and $181,241, respectively.



Board of Director Fees



Effective July 1, 2014, the Company revised
its policy for providing compensation to members of the board of directors. Each independent board member receives an annual fee
off $25,000 payable annually and additional compensation annually ranging from $5,000 - $10,000 depending on the board members
participation in the Company's various committees. In addition, effective July 1, 2014, the Company officers who also reside on
the board of directors do not receive compensation. As of December 31, 2013, of the board of director fees accrued, $25,000 was
due to the CEO and $25,000 and $25,000 was due to the Senior Executive Vice President. During the years ended December 31, 2014
and 2013, the Company accrued $32,500 and $75,000 in such compensation which is included within accrued expenses on the accompanying
balance sheet.



Options and Common Stock Issued to
Related Parties



See Note 9 for discussion of options and
common stock granted to management and the board of directors during the years ended December 31, 2014 and 2013.



F-11







Loans Payable - Related Parties



The Carmichael Family
has personally guaranteed two Company credit cards and has allowed the Company use of their personal credit cards as needed. Total
lines of credit personally guaranteed by the Carmichael family are up to $800,000 per month.



The Company had certain notes payable
outstanding to related parties as of December 31, 2014 and 2013. During the years ended December 31, 2014 and 2013, the Company
borrowed $225,000 and $7,000 from Chris Carmichael for which payment were made of $232,000 and $0, respectively. As of December
31, 2014 and 2013, Christopher Carmichael was owed $0 and $7,000, respectively. The amounts were unsecured, incurred interest
at 8% per annum and due on demand. During the year ended December 31, 2014, the Company recorded accrued interest of $18,418 as
contributed capital as the interest on the notes payable was forgiven. The proceeds were used for operations.



Albert Carmichael, a family member of
the Company's CEO, was owed $10,000 and $0 as of December 31, 2014 and 2013, respectively. The amounts are unsecured, non-interest
bearing and due on demand. The proceeds were used for operations.



An employee of the Company was owed $10,000
and $0 as of December 31, 2014 and 2013, respectively. The amounts are unsecured, non-interest bearing and due on demand. The
proceeds were used for operations.



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



Licensing and Revenues





On August 30, 2010, Ubiquity entered into
three separate Patent Licensing Agreements with Sponsor Me Inc., ("SME") for the License of the “Immersive Advertising
Patent” in the amount of $250,000, another agreement for the license of the “Lifestyle Portal” Patent in the
amount of $250,000, and also a Lifestyle Portal Web and Mobile Development reimbursement agreement for the production of the SME
web and mobile site. The balance due on these agreements was $190,915 and $190,915 for the years ended December 31, 2014 and 2013,
respectively, and included with long term receivable - related parties on the accompanying balance sheets. The Companies are considered
related due to common shareholders including officers and directors of the Company. Subsequent to the year ended December 31, 2014,
the receivable was relieved as part of the acquisition of SME, see Note 13 for additional information. Due to this relief, the
loan receivable has been presented as a long term asset on the accompanying financial statements.





On February 19, 2014, the Company entered
into a Patent Licensing Agreements with SME, for the non-exclusive license of the intellectual products “Internet Protocol
Television” in the amount of $250,000. The balance due on this agreement was $100,000 as of December 31, 2014. The Companies
are considered related due to common shareholders including officers and directors of the Company. Subsequent to the year ended
December 31, 2014, the receivable was relieved as part of the acquisition of SME, see Note 13 for additional information. Due to
this relief, the accounts receivable has been presented as a long term asset on the accompanying financial statements.



Loans Receivable - Related Parties





As of December 31, 2014 and 2013, amounts
due from a company controlled by an officer, owed the Company $1,279,681 and $437,812, respectively. The amount is unsecured, does
not incur interest and is due on demand.  The increase in the loan during the year ended December 31, 2014 related to providing
capital to the related entity in which the proceeds were used for further development on Ubiquity licensed patents and products
in which the entity has licensed. Subsequent to the year ended December 31, 2014, the receivable was relieved as part of the acquisition
of SME, see Note 13 for additional information. Due to this relief, the loan receivable has been presented as a long term asset
on the accompanying financial statements.





As of December 31, 2014 and 2013, amounts
due from an employee, owed the Company $247,461 and $125,920, respectively. The amount is unsecured, does not incur interest and
is due on demand. Subsequent to December 31, 2014, the employee has repaid $239,921, reducing the balance due to $7,840. The Company
expects to collect on the remaining receivable during the year ended December 31, 2015.



NOTE 9 - STOCKHOLDERS’ EQUITY



Reverse Stock Split

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



Preferred Stock

During the year ended December 31, 2013,
600,000 shares of Preferred Stock were converted into 685,714 shares of common stock. There were no shares of preferred stock
issued and outstanding as of December 31, 2014 and 2013.



F-12







Proceeds from Sales of Common Stock

During the years ended December 31, 2014
and 2013, the Company issued 10,501,572 and 6,210,057 shares of common stock for cash proceeds of $8,060,178 and $7,556,250, respectively.
Equity issuance costs related to the stock issuances, as discussed above, were $557,702 and $494,729 for the years ended December
31, 2014 and 2013, respectively.



Common Stock issued for Services





During years ended December 31, 2014 and
2013, the Company issued 1,731,965 and 6,512,914 shares of common stock for services. The Company determined the value of such
shares to be $11,139,336 and $10,645,910 for the years ended December 31, 2014 and 2013, respectively, with $312,500 of deferred
stock-based compensation at December 31, 2013 (see below). The values were based upon the fair market value of the Company's common
stock on the date of performance, which in most cases is the agreement date. Services performed in connection with these issuances
relate to assignment to the board of directors, advisory services related to listing on a national exchange, marketing, broadcasting
and production related services.



On March 22, 2013, the Company entered
into an agreement to retain a new co-chairman of the board. The agreement granted 71,429 shares of common stock valued at $8.75
per share for services to be rendered over a twelve month period. In July 2013, the agreement was amended to grant an additional
71,429 shares for services through February 2014. The value of the shares was being amortized over the period of service and accounted
for as deferred stock-based compensation. Amortization of deferred stock-based compensation during the years ended December 31,
2014 and 2013 was $312,500 and $0, respectively. As of December 31, 2014, all deferred stock-based compensation had been fully
amortized.



During the year ended December 31, 2014,
the Company granted a new member of the board of directors 331,900 shares of common stock. The shares were valued at $2,369,766
based upon the closing market price of the Company's common stock on the date of performance, which was the date assigned to the
board of directors.



Options

On February 1, 2013, the Company granted
71,429 stock options valued at $726,710 with exercise prices of $14.00. The options were valued on the grant dates using the Black-Scholes
option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 97%, risk-free interest rates
of 0.88% and expected lives of 60 months. The options were fully expensed as of December 31, 2013. All outstanding options as
of September 9, 2013 were modified to an exercise price of $0. The options were revalued in accordance with ASC 718-20-35. The
revaluation resulted in the recording of stock-based compensation totaling $24,242,707 recorded during the year ended December
31, 2014.



During the year ended December 31, 2013,
the Company granted 1,921,663 stock options valued at $9,032,624 with exercise prices of $8.19 - $14.00. The options were valued
on the grant dates using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected
volatility of 97% - 111%, risk-free interest rates of 0.37 - 0.88% and expected lives of 24 - 60 months. The options were fully
expensed as of December 31, 2013.



On May 22, 2014, the Company granted 51,147
stock options to its CEO valued at $417,000 with an exercise price of $4.07. The options were valued on the grant date using the
Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, expected volatility of 172%, risk-free
interest rates of 0.12% and expected life of 60 months. The options were fully vested and expensed as of December 31, 2014.



On December 18 and 31, 2014, the Company
granted options to purchase 1,873,760 shares of common stock to the Board of Directors and employees, including 550,000 to the
CEO and 450,000 to EVP for board of director and employment services; 223,760 to the CEO in connection with guarantees made on
Company loans/credit cards; and 650,000 to employees. The options were valued at $1,416,932 on the grant date using the Black-Scholes
option-pricing model with the following assumptions: exercise prices ranging from $0.68 to $0.87; dividend yield of 0%; expected
volatility of 163%; risk-free interest rates of 0.12% and expected life of 60 to 66 months. 873,760 options were fully vested
and expensed as of December 31, 2014. During the year ended December 31, 2014, the Company recorded $664,023 in compensation expense
in connection with the options. The Company expects to record the remaining unamortized portion of $752,909 during the year
ended December 31, 2015.



F-13







The Company had the following options
outstanding for the years ended December 31, 2014 and 2013:



|                                    |  | Number of Options |            |   | Weighted Average Exercise Price |  
|----------------------------------- |  | ----------------- | ---------- | - | ------------------------------- | -
|Balance, January 1, 2013            |  |                   | 3,228,571  |   |                                 | $
|Granted - 2013                      |  |                   | 1,921,663  |   |                                 |  
|Exercised - 2013                    |  |                   | (3,300,000 | ) |                                 |  
|Expired - 2013                      |  |                   | -          |   |                                 |  
|Balance, December 31, 2013          |  |                   | 1,850,234  |   |                                 | $
|Granted                             |  |                   | 1,924,907  |   |                                 |  
|Exercised                           |  |                   | -          |   |                                 |  
|Expired                             |  |                   | -          |   |                                 |  
|Balance, December 31, 2014          |  |                   | 3,775,141  |   |                                 | $
|Balance, December 31, 2014 - Vested |  |                   | 2,775,141  |   |                                 | $



NOTE 10 - COMMITMENTS AND CONTINGENCIES



Operating Lease



On October 7, 2010, Ubiquity entered into
a 5 year lease for a new building in the city of Irvine, CA. In July 2014, the Company revised their lease agreement for additional
square footage. Under the terms of the revised lease agreement, commencing on September 1, 2014, the minimum monthly rent will
be $40,953. In addition, the revised lease agreement includes annual rent increases through expiration of January 20, 2020 and
other incentives. As of December 31, 2014, the Company recorded accrued rent of $52,558 in connection with straight-lining the
rent expense.



The following is summary of payments under
non-cancellable rent agreements as of December 31, 2014:



|Year ended December 31, 2015 |  | $ | 478,269   | 
|---------------------------- |  | - | --------- | 
|2016                         |  |   | 517,758   | 
|2017                         |  |   | 535,314   | 
|2018                         |  |   | 552,864   | 
|2019                         |  |   | 570,414   | 
|Thereafter                   |  |   | 28,960    | 
|Total lease commitment       |  | $ | 2,683,579 | 



Other Contingencies



At the time of death of the former President
of Ubiquity, Gregory Crotty had accrued $93,743 in salary, 22,857 Common Shares of Ubiquity Broadcasting Corporation, and had
200,929 options to purchase Ubiquity Broadcasting Corporation Common Shares at $5.25 per share. He also had 42,857 shares of common
stock issued in his name. Ubiquity will have to issue these shares and pay the balance of his accrued salary to the proper beneficiary
once established. As of December 31, 2014, an established beneficiary has yet to be named. All 200,929 options expired as of December
31, 2011 and are not included in total options outstanding.



During the first quarter of 2013, the
EDD California Employment department notified the Company with an assessment of our independent contractors that the Company may
have to pay additional taxes based on our independent contractor payments for a total contingent liability of $305,885. The Company
filed a formal petition as of April 22, 2013 and has not heard back on any formal final ruling. As of and December 31, 2014 and
2013, the Company has not recorded a provision for the assessment as they do not believe the independent contractors meet the
definition of an employee.



F-14







Litigation



Think Design Media, Inc. and Related Entities



As previously disclosed in the Company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2014, on May 27, 2014, Think Design Media, Inc. ("TDM"),
filed a lawsuit against the Company claiming breach of a December 2013 consulting contract. TDM disputes the Company's cancellation
of the consulting agreement for non-performance.



On July 28, 2014, a complaint was filed
by the Company as the Plaintiff against Think Mobile, Inc., Carlos E. Orellana and Ivano Stamegna (together, the “TGS Defendants”),
in the Superior Court of California. The Company alleged in its complaint causes for breach of contract, breach of implied covenant
of good faith and fair dealing, fraudulent inducement, intentional interference with contractual relations, intentional interference
with prospective economic advantage and conversion. The Company alleged that the terms of the TGS Agreement were violated by the
TGS Defendants and the TGS Defendants failed to enter into the Agreement in good faith.



On September 25, 2014, a complaint was
filed by the Company as the Plaintiff against Think Design Media, Inc., Biznexion, Inc., Acosta Investments, LLC, Carlos Orellana,
Ivano Stamegna, Anthony Cesare and other defendants in the Superior Court of California, County of Orange. The Company alleged
that the TDM Defendants never had any intention to fulfill the terms of the Agreements and instead improperly acquired and disclosed
the Company’s trade secrets. The Company alleged in its complaint that the TDM Defendants’ actions constitute fraud,
conversion, misappropriation of trade secrets, trademark infringement, breach of contract, fraudulent transfer, unfair competition,
and violation of the Racketeer Influenced and Corrupt Organizations Act.



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



Other



On October 10,
2014, the Company was served with a complaint filed on June 13, 2014 by a former consultant against the Company, in the Superior
Court of Arizona, Maricopa County. The complaint alleges that the consultant was to receive warrants to purchase 1,142,857 shares
of common stock as a commencement fees for services in which commenced on December 15, 2006. The Company believes the claim is
without merit; in addition, the statute of limitations has passed. The Company does not believe that a loss is probable and no
accrual for loss contingency has been made.



Financing



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



NOTE 11 - INCOME TAXES



For the years ended December 31,
2014 and 2013, the Company incurred net losses and therefore has no tax liability. The Company began operations in 2007 and had
net operating loss carry-forwards of approximately $122,381,000 that will be carried forward and can be used through the year
2034 to offset future taxable income. In the future, the cumulative net operating loss carry-forward for income tax purposes may
differ from the cumulative financial statement loss due to timing differences between book and tax reporting.



The provision for Federal income tax consists
of the following for the years ended December 31, 2014 and 2013:



|                                    |  | 2014 |            |   | 2013 |  
|----------------------------------- |  | ---- | ---------- | - | ---- | -
|Income tax benefit attributable to: |  |      |            |   |      |  
|Net loss                            |  | $    | (7,411,741 | ) |      | $
|Permanent differences               |  |      | 4,261,172  |   |      |  
|Valuation allowance                 |  |      | 3,150,569  |   |      |  
|Net provision for income tax        |  | $    | -          |   |      | $



F-15







The cumulative tax effect at the expected
rate of 34% of significant items comprising our net deferred tax amount is as follows as of December 31, 2014 and 2013:



|                                    |  | 2014 |             |   | 2013 |  
|----------------------------------- |  | ---- | ----------- | - | ---- | -
|Deferred tax asset attributable to: |  |      |             |   |      |  
|Net operating loss carryover        |  | $    | 41,609,540  |   |      | $
|Valuation allowance                 |  |      | (41,609,540 | ) |      |  
|Net deferred tax asset              |  | $    | -           |   |      | $



Due to the change in ownership provisions
of the Tax Reform Act of 1986, net operating loss carry forwards of approximately $122,381,000 for Federal income tax reporting
purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carry forwards may be limited
as to use in future years.



The Company has identified the United
States Federal tax returns as its “major” tax jurisdiction. The United States Federal return years 2010 through 2014
are still subject to tax examination by the United States Internal Revenue Service; however, we do not currently have any ongoing
tax examinations. The Company is subject to examination by the California Franchise Tax Board for the years ended 2010 through
2014 and currently does not have any ongoing tax examinations.



NOTE 12 - GOING CONCERN



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





The financial statements do not include
any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities
that might be necessary in the event that the Company cannot continue as a going concern. The Company is currently in various negotiations
for the licensing of their Sprocket product line, however, no formal terms have been agreed upon. To date revenues from licensing
agreements have not been sufficient to fund operations. Thus, until the Company can generate sufficient cash flows to fund operations,
the Company is dependent on raising additional capital through debt and/or equity transactions. In addition, the Company may have
to renegotiate current convertible debt obligations, reduce certain overhead costs through the deferral of salaries and other means,
and settle liabilities through negotiation.  Currently, the Company does not have any commitments or assurances for additional
capital, other than disclosed above, nor can the Company provide assurance that such financing will be available to it on
favorable terms, or at all. If, after utilizing the existing sources of capital available to the Company, further capital needs
are identified and the Company is not successful in obtaining the financing, it may be forced to curtail its existing or planned
future operations. Subsequent to year end, the Company raised $2,000,000 in convertible notes payable.





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



NOTE 13 - SUBSEQUENT EVENTS



Cancelation of Underwriting Agreement



On January 26, 2015, we determined that
we would no longer actively pursue a firm commitment underwritten offering under the terms of the Registration Rights Agreement
(the “Agreement”) that became effective on September 25, 2014 by and among the Company and holders of the Company’s
Restricted Common Stock parties to the Agreement. Accordingly, we did not enter into an agreement with a lead underwriter as required
under the terms of the Agreement to continue the Agreement. There are no termination penalties or similar amounts. We have concluded
that pursuing a registered offering at this time under current market conditions would cause a dilution to our shareholders, which
would not be in the best interests of the shareholders.



Conversant, Inc. Acquisition



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



F-16







The shares of the Company Common Stock
issued and outstanding immediately prior to the Effective Time (individually a “Share” and collectively the “Shares”)
shall be converted automatically into the right to receive an aggregate of 13,242,334 shares of the Parent’s Common Stock
(the “Merger Consideration”). The Merger Consideration shall be distributed among the shareholders of the Company
on a pro rata basis. On the terms and subject to the conditions set forth in this Agreement, at the Effective Time, each Company
Option (or portion thereof), whether vested or unvested, that is outstanding and unexercised as of immediately prior to the Effective
Time shall terminate. At least 15 days prior to the Effective Time, the Company shall provide each holder of a Company Option
with written or electronic notice that the Company Option will be fully exercisable for 15 days from the date of the notice and
that the Company Option will terminate on the expiration of the 15-day period. Capitalized terms used herein but not otherwise
defined have the meaning set forth in the Merger Agreement.



The Merger will not be finalized unless
the Parties are satisfied with the results of their respective due diligence. Consummation of the Merger is also subject to certain
customary conditions. The Merger Agreement contains representations and warranties by each of Parent, Merger Sub and the Company.
These representations and warranties were made solely for the benefit of the parties to the Merger Agreement.



Sponsor Me, Inc. Acquisition



On December 31, 2014, effective March
31, 2015, the “Company” entered into a Share Exchange Agreement (the “Agreement”) with Sponsor Me, Inc.
(“Sponsor Me”), a Nevada corporation, and a related party, which resulted in the acquisition of 100% of the issued
and outstanding equity securities of Sponsor Me. Pursuant to the terms of the Agreement, The Company acquired all of the outstanding
capital stock of Sponsor Me from the Sponsor Me shareholders for an aggregate of 3,878,467 shares, of 3.59% of the Company’s
common stock. In addition, in connection with the transaction, the Company forgave notes accounts/receivables due from Sponsor
Me and SC Business, Inc.





Sponsor Me is a new kind of digital publishing
company that combines expert editorial with ecommerce for distribution on mobile and social platforms. Sponsor Me, Inc. is considered
a related party. The Company's CFO, Brenden Garrison, is the CEO of Sponsor Me. In addition, Sponsor Me has a similar shareholder
group including the Company's CEO and EVP. Thus, the Company expects to account for the acquisition of Sponsor Me as an entity
under common control using the carry over basis related to Sponsor Me's assets and liabilities.



Significant Agreements



On January 5, 2015, the Company entered
into a one year agreement to provide assistance with developing, updating, and identifying potential sources of capital and prospective
businesses for acquisition or combination. Under the terms of the agreement, the Company is to pay the consultants a non-refundable
$25,000 commitment fee; a monthly fee of $25,000; issue 1,000,000 shares of common stock which vest in two equal installments
on January 15, 2015 and March 31, 2015. The agreement contains compensation provisions based upon the successfulness of the consultants
in connection with capital raises and business combinations. The agreement contains renewal provisions in which include the issuance
of additional shares of common stock.



Convertible Notes Payable



Subsequent to December 31, 2014 through
the date of this filing, the Company received $2,000,000 in proceeds from convertible notes payable. The terms of the notes are
similar to those disclosed in Note 7.



Sales of Common Stock



Subsequent to December 31, 2014, the Company
issued approximately 2,183,333 shares of common stock for cash proceeds of $517,500.



Accrued Salary and Bonus to CEO



See Note 6, for discussion related to
exchange of stock options for accrued salary and bonus due to the CEO.



In accordance with ASC 855-10, the Company
has analyzed its operations subsequent to December 31, 2014 through the date these financial statements were issued and has determined
that it does not have any material subsequent events to disclose other than the events described above.



Series A Preferred Stock



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





On March 6, 2015, the Company issued the
CEO and the SEVP 250 shares each of Series A Preferred Stock.





F-17







Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.



On July 24, 2014, the Board of Directors
of Ubiquity, Inc. accepted the resignation of Silberstein Ungar, PLLC (“Silberstein”) as its independent registered
public accountant, effectively immediately.



Silberstein’s reports on our financial
statements as of and for the fiscal years ended December 31, 2012 and 2013 did not contain an adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.



During the fiscal years ended December
31, 2012 and 2013 and through Silberstein’s resignation on July 24, 2014, there were (1) no disagreements with Silberstein
on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures, which disagreements,
if not resolved to the satisfaction of Silberstein, would have caused Silberstein to make reference to the subject matter of the
disagreements in connection with its reports, and (2) no events of the type listed in paragraphs (A) through (D) of Item 304(a)(1)(v)
of Regulation S-K.



Concurrent with the acceptance of Silberstein’s
Resignation as our independent registered public accounting firm, the Board of Directors of the Company appointed KLJ & Associates,
LLC (“KLJ”) as our independent registered public accounting firm.



Prior to retaining the new accountant,
neither the Company nor anyone acting on its behalf consulted KLJ with respect to (i) the application of accounting principles
to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s
financial statements, and neither a written report was provided to the Company or oral advice was provided that KLJ concluded
was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting
issues; or (ii) any matter that was the subject of a disagreement or reportable events set forth in Item 304(a)(1)(iv) and (v),
respectively, of Regulation S-K.





On April 15, 2015, Ubiquity, Inc. accepted
the resignation of KLJ from their engagement to be the independent certifying accountant for the Company.



KLJ did not issue an
Auditors’ Report for the fiscal year ended December 31, 2013 and did not issue an Auditors’ Report to be relied upon
for the fiscal year ended December 31, 2014.



During KLJ’s
audit of the Company’s 2014 fiscal year and through April 23, 2015, there were the following disagreements with KLJ: (1)
the valuation of certain intangible assets from the beginning of the fiscal 2014 through the year then ended; and (2) the filing
of the Form 10-K for the fiscal year ended December 31, 2014 prior to receiving KLJ’s consent. Except as discussed above
in terms of the valuation of intangible assets and such effects on the 2013 and 2014 fiscal years, and the inappropriate filing
of the 2014 Form 10-K, there were no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation
S-K



On April 28, 2015, the Company’s
Board of Directors approved the engagement of Hartley Moore Accountancy Corporation (“HMCPA”) as its independent registered
public accounting firm for the Company’s fiscal year ended December 31, 2014.





During the fiscal years ended December
31, 2014 and December 31, 2013 and the subsequent interim period through April 28, 2015, the date of engagement of HMCPA, the Company
did not consult with HMPCA regarding either (i) the application of accounting principles to a specified transaction, either completed
or proposed, or the type of audit opinion that might be rendered on the Company’s financial statements; or (ii) any matter
that was either the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K and the related
instructions thereto) or a reportable event (as described in paragraph (a)(1)(v) of Item 304 of Regulation S-K). Ubiquity, Inc
has chosen HMCPA as they are closer to the corporate headquarters and will increase the efficiency in both cost and communication.





18







Item 9A.  Controls and Procedures.



Evaluation of Disclosure Controls and Procedures



Pursuant to Rule 13a-15(b) under the Securities
Exchange Act of 1934, as amended (“Exchange Act”), the Company carried out an evaluation, with the participation of
the Company’s management, including the Company’s Chief Executive Officer (“CEO”) Christopher Carmichael
(the Company’s principal executive officer) and Chief Financial Officer (“CFO”) (Brenden Garrison), of the effectiveness
of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end
of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s
disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the
reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the
time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s
management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.



Management's Annual Report on Internal
Control Over Financial Reporting.



As required by Rule 13a-15 or Rule 15d-15(b) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, including our principal executive
officer and principal accounting officer carried out an evaluation of the effectiveness of the design and operation of our disclosure
controls and procedures as of the end of the period covered by this report. Based on the foregoing evaluation, we have concluded
that our disclosure controls and procedures were not effective as of December 31, 2014 and that they do not allow for
information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission (“SEC”)
rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the us in the reports that we file or submit under the Exchange Act is accumulated and
communicated to the Company’s management, including its Chief Executive and Principal Accounting & Financial Officers
as appropriate to allow timely decisions regarding required disclosure.



The material weaknesses were first identified by us in our
audited financial statements filed in Form 8-K on September 27, 2013 for the years ended December 31, 2012 and 2011 in which related
to the following:



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



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



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



This annual report does not include an
attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's registered public accounting firm as we are a smaller reporting
company and not required to provide the report.



Changes in Internal Controls over Financial
Reporting



There were no changes in our internal
controls over financial reporting that occurred during the  fourth quarter of the fiscal year ended December 31, 2014
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



Item 9B. Other Information.





Cancelation of Underwriting Agreement



On January 26, 2015, we determined that
we would no longer actively pursue a firm commitment underwritten offering under the terms of the Registration Rights Agreement
(the “Agreement”) that became effective on September 25, 2014 by and among the Company and holders of the Company’s
Restricted Common Stock parties to the Agreement. Accordingly, we did not enter into an agreement with a lead underwriter as required
under the terms of the Agreement to continue the Agreement. There are no termination penalties or similar amounts. We have concluded
that pursuing a registered offering at this time under current market conditions would cause a dilution to our shareholders, which
would not be in the best interests of the shareholders.





19







PART III



Item 10. Directors, Executive Officers and Corporate
Governance



Our directors, executive officers and key employees are listed
below. The number of directors is determined by our board of directors. All directors hold office until the next annual meeting
of the board or until their successors have been duly elected and qualified. Officers are elected by the board of directors and
their terms of office are, except to the extent governed by employment contract, at the discretion of the board of directors.



|Name                   |  | Age |  | Position                                                                            
|---------------------- |  | --- |  | ------------------------------------------------------------------------------------
|Christopher Carmichael |  | 61  |  | Chief Executive Officer, and Co-Chairman                                            
|Brenden Garrison       |  | 32  |  | Chief Financial Officer                                                             
|Nicholas Mitsakos      |  | 55  |  | Co-Chairman                                                                         
|Connie Jordan          |  | 61  |  | Senior Executive Vice President of Intellectual Property and Transmedia and Director
|Webb Blessley          |  | 67  |  | Treasurer, Secretary, and Director                                                  
|Bryan Harpole          |  | 42  |  | General Studio Manager                                                              



20







Set forth below is a brief description of the background and
business experience of our executive officers and directors for the past five years.





Christopher Carmichael has
been the President and Chief Executive Officer of the Company since May 20, 2009. On September 30, 2006, Mr. Carmichael was employed
by Ubiquity Holdings to be the Creative Director, and when Ubiquity Holdings became Ubiquity Broadcasting Corporation in February
of 2007 he remained as the Creative director until taking the position of President and CEO. Mr. Carmichael was the United States
Surfing Champion from 1969 through 1971 and became a premier apparel designer in the United States, while working in marketing
and film production. Mr. Carmichael is frequently described as a visionary. He was voted one of the Top Ten designers of Men's
Apparel in the United States, in Sports Style Magazine published by Fairchild Publications in 1983, and is an expert in design,
marketing, and distribution. Mr. Carmichael has extensive experience in the film industry, working for numerous television shows
while working with Grammy and Emmy Award winning artists and producers such as Steve Sabol at NFL Films. He has produced several
television commercials and in 1978, he won a "Clio” award for an RC Cola Commercial.   Mr. Carmichael turned his
attention to the internet industry in early 1997. Early on he realized the need for design and technology innovation, he invented
the “Sprocket” and coauthored the company’s other patents such as “Compression,” “Lifestyle
Portal,” “Immersive Advertising,” and “B2B,” to name a few.



Brenden Garrison is the Chief
Financial Officer for the Company. Prior to starting work at Ubiquity, Inc., Brenden graduated with a Bachelor’s degree in
Accounting from the School of Business and Economics at California State University Fullerton in 2005. While at California State
University Fullerton he acted as the Treasurer of the Accounting Society in charge of the campus budget. He started his career
with Scottel Voice and Data Inc. in 2003 where he became the Jr. Controller in under a year’s time. He then went on to manage
and provide accounting, tax, audit, and financial services for several corporate clients in various fields with Semmens & Semmens
CPA firm from 2005-2007. After three years of employment with Semmens & Semmens, he decided to create his own accounting, tax
and business consulting firm. While developing his own company, Brenden started the process to become a Certified Public Accountant
and is in the final stages of obtaining his CPA license.



Nicholas Mitsakos, has been the
Chairman and Chief Executive Officer of Arcadia Holdings, Inc. since 1989. At Arcadia, Mr. Mitsakos managed the investment firm’s
operations in the private and public equity markets. Arcadia is aglobal diversified holding company
that owns public securities, majority-owned subsidiaries, and minority interests in various businesses. Arcadia’s
capital partners include large international institutions. Through Arcadia Holdings, Mr. Mitsakos has acquired, or invested in,
over 40 companies in the U.S., Asia and Europe. He has served as either a director or advisor to each company, working closely
with management, the board of directors and other investors. Additionally, Mr. Mitsakos has served on the board of over twenty
five companies. From 2002 to present, he has been an advisor and Managing Director to London-based Sardis Capital, a merchant bank,
focused on technology and middle market merchant banking. From 1995 to present, Mr. Mitsakos has advised Templeton International
on investments in private and public companies based in emerging markets, including China. He now advises Franklin Templeton and
Janus on public and private investment throughout Asia. In 1985, Mr. Mitsakos started his career as an investment banker at Goldman
Sachs. From 1986 to 1989, he was a member of the corporate finance department at Drexel Burnham Lambert. He holds an MBA from Harvard
University (1986) and B.S. degrees in Computer Science and Microbiology from the University of Southern California (Valedictorian,
1981). He taught at UCLA’s Anderson School of Business from 1992 to 1998, and is also on the board to UCLA’s Center
for Cerebral Palsy within the UCLA Medical School. He is also on the board to the Rehabilitation Hospital in Honolulu, HI.



21







Connie Jordan began her professional
career in banking at Security Pacific Bank in 1974. Ms. Jordan worked at U.S. West in the Major Accounts Division, where Ms. Jordan
designed and implemented technology for Fortune 500 clients, traveled extensively as a lecturer on college campuses and at leading
telecommunications seminars. Jordan turned her attention to the design of intricate telecommunications solutions for her clients
and founded Signal Management Group in 1989. Shifting gears she began a career in Television writing, producing, and co- hosting
successful shows such as California Lifestyles, Premier Real Estate Show, and Yachting Lifestyles for Cable, ABC, ESPN, and the
Discovery Network. As a consultant in 1997, Jordan began shifting her focus to the Internet. Jordan co-founded Ubiquity and is
among the inventors and co-author of several of the company’s patents the "World Smart Card" patent, and has co-authored
several more including “Sprocket,” "Lifestyle," "Immersive Advertising," and "B2B".Ms.
Jordan was Ubiquity Holdings Intellectual Property Development Manager from 2006 until 2008. In 2008, Ms. Jordan became the Company’s
Vice President of Creative Development and Intellectual Property until her appointment as Senior Executive Vice President of Intellectual
Property and Transmedia.



Webb Blessley has over 30
years of experience in corporate, venture capital and real estate acquisitions. An architectural engineer by education, Webb worked
at McDonald's Corporation as Vice President of Real Estate and Construction Worldwide from 1974 until his retirement in 1995.
Blessley was founder of the Ronald McDonald Camp for Children at Eagle Lake and has served on numerous scholarship boards. Most
recently, Webb help found the Cougar Fund with his daughter Cara Blessley Lowe and board members Howard Buffett, Tom Mangelsen
and Dr. Jane Goodall to explore and promote the preservation of the North American Cougar. After his retirement, Blessley returned
to his architectural roots and now works as a contact source in alternative building and solar powered technology, consulting
on projects using ecologically sound materials.



Certain Significant Employee



Bryan Harpole has worked in
the television production/operations industry for over 20 years. From the creation of studio and documentary-style productions
to the management and technical maintenance of production facilities, Bryan brings a uniquely broad set of skills to the Ubiquity
Studios Team. Bryan graduated with a BS degree from East Carolina University in 1994. After a career of playing professional soccer,
he immediately went to work in freelance television production. From January 1995 to August 2006, Harpole worked with numerous
networks such as ESPN, NBC Sports, Fox Sports, Turner Sports, Comcast Sports net, etc. working on Live Television Production trucks
all over the country. His talents included Camera Operator, EVS Operator, Graphics, Producer, Director and Technical Manager for
numerous Sporting Events and Concerts while also maintaining events and technical maintenance at the Verizon Center from January
1996 to August 2006 as Technical Production Manager in Washington, DC. Bryan was able to take part in major events such as the
Summer Olympics, FIFA World Cup, NHL Stanley Cup Finals, WNBA Finals and NBA Finals. From August 2006 to April 2009, Bryan accepted
a position with Discovery Communications located in Silver Spring, Maryland where he was named Technical Manager, Live Events
and Studio Production for all of Discovery Communications 11 major networks. While at Discovery, Bryan was able to oversee 50-60
Live Events a year, which took him not only all over the country but all over the world. From May 2009 to February 2011, Bryan
was asked to oversee the new build out of the ESPN Los Angeles Production Center located at L.A. Live. As Manager of Production
Operations, Bryan was able to oversee operations and support for Sports Center, Studio Operations, Live Remotes and Special Events
as related to ESPN.



Involvement in Certain Legal Proceedings



To the best of our knowledge, none of
our directors or executive officers has, during the past ten years:



|· | been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding
    traffic violations and other minor offenses);
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------



|· | had any bankruptcy petition filed by or against the business or property of the person, or
    of any partnership, corporation or business association of which he was a general partner or executive officer, either at
    the time of the bankruptcy filing or within two years prior to that time;
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|· | been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated,
    of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending
    or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings
    and loan, or insurance activities, or to be associated with persons engaged in any such activity;
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|· | been found by a court of competent jurisdiction in a civil action or by the Securities and
    Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities
    law, and the judgment has not been reversed, suspended, or vacated;
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



22







|· | been the subject of, or a party to, any federal or state judicial or administrative order,
    judgment, decree, or finding, not subsequently reversed, suspended or vacated (not including any settlement of a civil proceeding
    among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation,
    any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary
    or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist
    order, or removal or prohibition order, or any law or regulation prohibiting mail or wire fraud or fraud in connection with
    any business entity; or
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|· | been the subject of, or a party to, any sanction or order, not subsequently reversed, suspended
    or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act), any registered entity
    (as defined in Section 1(a)(29) of the Commodity Exchange Act), or any equivalent exchange, association, entity or organization
    that has disciplinary authority over its members or persons associated with a member.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Except as set forth in our discussion
below in “Certain Relationships and Related Transactions,” none of our directors or executive officers has been involved
in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed
pursuant to the rules and regulations of the Commission.



Term of Office



Our directors are appointed for a one-year
term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with
our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.



Code of Ethics



We have adopted a code of ethics as of
April 4, 2008 that applies to our principal executive officer, principal financial officer, and principal accounting officer as
well as our employees.  Our standards are in writing and are to be posted on our website at a future time.   The following
is a summation of the key points of the Code of Ethics we adopted:



|· | Honest and ethical conduct, including ethical handling of actual or apparent conflicts of
    interest between personal and professional relationships;                                                             
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|· | Full, fair, accurate, timely, and understandable disclosure reports and documents that a small
    business issuer files with, or submits to, the Commission and in other public communications made by our Company;
|· | Full compliance with applicable government laws, rules and regulations;                                                                                                                                             
|· | The prompt internal reporting of violations of the code to an appropriate person or persons
    identified in the code; and                                                                                         
|· | Accountability for adherence to the code.                                                                                                                                                                           



Corporate Governance



The business and affairs of the Company
are managed under the direction of the Board of Directors (the “Board”). Chris Carmichael, Connie Jordan, Nicholas
Mitsakos, Webb Blessley, are the current members of the Board.



Family Relationships



Except as disclosed below, there are no
family relationships among any of our officers or directors.





23







Our Chief Executive Officer and Co-Chairman,
Christopher Carmichael, is married to our Senior Executive Vice President of Intellectual Property and Transmedia Connie Jordan.





Section 16(a) Beneficial Ownership Reporting Compliance



Under Section 16(a) of the Exchange Act,
our directors and certain of our officers, and persons holding more than 10 percent of our common stock are required to file forms
reporting their beneficial ownership of our common stock and subsequent changes in that ownership with the United States Securities
and Exchange Commission. Based solely upon a review of copies of such forms filed on Forms 3, 4, and 5, and amendments thereto
furnished to us, we believe that as of December 31, 2014, our executive officers, directors and greater than 10 percent beneficial
owners have complied on a timely basis with all Section 16(a) filing requirements.





Item 11. Executive Compensation.



Summary Compensation Table



The following sets forth information with
respect to the compensation awarded or paid to Christopher Carmichael, our Chief Executive Officer and Co-Chairman, and Connie
Jordan, our newly appointed Senior Executive Vice President of Intellectual Property and Transmedia, Brenden Garrison, our newly
appointed Chief Financial Officer, and Bryan Harpole, a significant employee, for all services rendered in all capacities to us
and our subsidiaries. The aforementioned executive officers are referred to as the “named executive officers” throughout
this Report.



The discussion below pertains to compensation
awarded or paid by Ubiquity to Mr. Christopher Carmichael, Ms. Connie Jordan, Brenden Garrison, and Bryan Harpole with respect
to Ubiquity's years ended December 31, 2014 and 2013.



|                                   |  |      |  |        |         |  |       |   |         |        |  |   |             |  |  |                    |           |  | Non-Qualified |   |   |               |  |   |       | 
|---------------------------------- |  | ---- |  | ------ | ------- |  | ----- | - | ------- | ------ |  | - | ----------- |  |  | ------------------ | --------- |  | ------------- | - | - | ------------- |  | - | ----- | 
|                                   |  |      |  |        |         |  |       |   |         |        |  |   |             |  |  | Non-Equity         |           |  | Deferred      |   |   |               |  |   |       | 
|Name and Principal                 |  |      |  |        |         |  |       |   |         | Stock  |  |   | Option      |  |  | Incentive
    Plan |           |  | Compensation  |   |   | All
    Other |  |   |       | 
|Position                           |  | Year |  | Salary |         |  | Bonus |   |         | Awards |  |   | Awards      |  |  | Compensation       |           |  | Earnings      |   |   | Compensation  |  |   | Total | 
|                                   |  |      |  | ($)    |         |  | ($)   |   |         | ($)    |  |   | ($)
    (C) |  |  | ($)                |           |  | ($)           |   |   | ($)           |  |   | ($)   | 
|                                   |  |      |  |        |         |  |       |   |         |        |  |   |             |  |  |                    |           |  |               |   |   |               |  |   |       | 
|Christopher Carmichael,(A)         |  | 2014 |  | $      | 539,400 |  |       | $ | 403,009 |        |  | $ | -           |  |  | $                  | 790,844   |  |               | $ | - |               |  | $ | -     | 
|President, Chief Executive Officer |  | 2013 |  |        | 842,196 |  |       |   | -       |        |  |   | -           |  |  |                    | 3,743,521 |  |               |   | - |               |  |   | -     | 
|                                   |  |      |  |        |         |  |       |   |         |        |  |   |             |  |  |                    |           |  |               |   |   |               |  |   |       | 
|Connie Jordan,(B)                  |  | 2014 |  |        | 264,400 |  |       |   | 120,943 |        |  |   | -           |  |  |                    | 143,816   |  |               |   | - |               |  |   | -     | 
|Senior Executive Vice President of |  | 2013 |  |        | 250,774 |  |       |   |         |        |  |   |             |  |  |                    | 1,655,907 |  |               |   | - |               |  |   | -     | 
|Intellectual Property and          |  |      |  |        |         |  |       |   |         |        |  |   |             |  |  |                    |           |  |               |   |   |               |  |   |       | 
|Transmedia                         |  |      |  |        |         |  |       |   |         |        |  |   |             |  |  |                    |           |  |               |   |   |               |  |   |       | 
|                                   |  |      |  |        |         |  |       |   |         |        |  |   |             |  |  |                    |           |  |               |   |   |               |  |   |       | 
|Brenden Garrison                   |  | 2014 |  |        | 225,000 |  |       |   | -       |        |  |   | -           |  |  |                    | 47,514    |  |               |   | - |               |  |   | -     | 
|Chief Financial Officer            |  | 2013 |  |        | 198,375 |  |       |   | -       |        |  |   | -           |  |  |                    | 121,598   |  |               |   | - |               |  |   | -     | 
|                                   |  |      |  |        |         |  |       |   |         |        |  |   |             |  |  |                    |           |  |               |   |   |               |  |   |       | 
|Certain Significant Employee -     |  | 2014 |  |        | 150,000 |  |       |   | -       |        |  |   | -           |  |  |                    | 47,514    |  |               |   | - |               |  |   | -     | 
|Bryan Harpole                      |  | 2013 |  |        | 150,000 |  |       |   | -       |        |  |   | -           |  |  |                    | 121,598   |  |               |   | - |               |  |   | -     | 



(A) As of December 31, 2014, Christopher Carmichael was due
$1,274,852 in compensation related to salaries and bonuses earned during the years ended December 31, 2014 and 2013. Subsequent
to December 31, 2014, Christopher Carmichael received options to purchase 2,561,856 shares of common stock with an exercise price
of $0.485 per share in exchange for $1.0 million of the accrued salaries and bonuses.





(B) As of December 31, 2014, Connie Jordan was due $48,458 in
compensation, related to salaries and bonuses earned during the years ended December 31, 2014 and 2013.





(C) See Note 9 for valuation techniques related to the issuance
of stock options.



24







Outstanding Equity Awards at Fiscal Year-End Table



At December 31, 2014 the Company the following
outstanding equity awards.



2014
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR



|                       |  |                  |  |             |         |  | OPTION AWARDS |  |         |                 |  |  |               |  | STOCK AWARDS |            |       |           | 
|---------------------- |  | ---------------- |  | ----------- | ------- |  | ------------- |  | ------- | --------------- |  |  | ------------- |  | ------------ | ---------- | ----- | --------- | 
|                       |  |                  |  |             |         |  |               |  |         | Equity          |  |  |               |  |              |            |       |           | 
|                       |  |                  |  |             |         |  |               |  |         | Incentive Plan  |  |  |               |  |              |            |       | Number    | 
|                       |  |                  |  |             |         |  |               |  |         | Awards:         |  |  |               |  |              |            |       | of Shares | 
|                       |  |                  |  | Number of   |         |  | Number of     |  |         | Number of       |  |  |               |  |              |            |       | or Units  | 
|                       |  |                  |  | Securities  |         |  | Securities    |  |         | Securities      |  |  |               |  |              |            |       | of Stock  | 
|                       |  |                  |  | Underlying  |         |  | Underlying    |  |         | Underlying      |  |  |               |  |              |            |       | That      | 
|                       |  |                  |  | Unexercised |         |  | Unexercised   |  |         | Unexercised     |  |  | Option        |  |              | Option     |       | Have Not  | 
|                       |  |                  |  | Options (#) |         |  | Options (#)   |  |         | Unearned        |  |  | Exercise      |  |              | Expiration |       | Vested    | 
|Name                   |  | Date
    Granted |  | Exercisable |         |  | Unexercisable |  |         | Options
    (#) |  |  | Price
    ($) |  |              | Date       |       | (#)       | 
|                       |  |                  |  |             |         |  |               |  |         |                 |  |  |               |  |              |            |       |           | 
|Christopher Carmichael |  | 12/31/2014       |  |             | 300,000 |  |               |  | -       |                 |  |  | -             |  |              | $          | 0.68  |           | 
|                       |  | 12/31/2014       |  |             | 223,760 |  |               |  | -       |                 |  |  | -             |  |              | $          | 0.68  |           | 
|                       |  | 12/18/2014       |  |             | -       |  |               |  | 250,000 |                 |  |  | -             |  |              | $          | 0.87  |           | 
|                       |  | 5/8/2014         |  |             | 51,147  |  |               |  | -       |                 |  |  | -             |  |              | $          | 4.07  |           | 
|                       |  | 12/31/2013       |  |             | 85,714  |  |               |  | -       |                 |  |  | -             |  |              | $          | 8.75  |           | 
|                       |  | 12/20/2013       |  |             | 521,663 |  |               |  | -       |                 |  |  | -             |  |              | $          | 14.00 |           | 
|                       |  | 12/20/2013       |  |             | 285,714 |  |               |  | -       |                 |  |  | -             |  |              | $          | 8.19  |           | 
|                       |  |                  |  |             |         |  |               |  |         |                 |  |  |               |  |              |            |       |           | 
|Connie Jordan          |  | 12/31/2014       |  |             | 200,000 |  |               |  | -       |                 |  |  | -             |  |              | $          | 0.68  |           | 
|                       |  | 12/18/2014       |  |             | -       |  |               |  | 250,000 |                 |  |  | -             |  |              | $          | 0.87  |           | 
|                       |  | 12/31/2013       |  |             | 57,143  |  |               |  | -       |                 |  |  | -             |  |              | $          | 8.75  |           | 
|                       |  | 12/20/2013       |  |             | 285,714 |  |               |  | -       |                 |  |  | -             |  |              | $          | 8.19  |           | 
|                       |  |                  |  |             |         |  |               |  |         |                 |  |  |               |  |              |            |       |           | 
|Brenden Garrison       |  | 12/31/2014       |  |             | 75,000  |  |               |  | -       |                 |  |  | -             |  |              | $          | 0.68  |           | 
|                       |  | 12/31/2013       |  |             | 21,429  |  |               |  | -       |                 |  |  | -             |  |              | $          | 8.75  |           | 
|                       |  |                  |  |             |         |  |               |  |         |                 |  |  |               |  |              |            |       |           | 
|Bryan Harpole          |  | 12/31/2014       |  |             | 75,000  |  |               |  | -       |                 |  |  | -             |  |              | $          | 0.68  |           | 
|                       |  | 12/31/2013       |  |             | 21,429  |  |               |  | -       |                 |  |  | -             |  |              | $          | 8.75  |           | 



25







Employment Agreements



On June 4, 2013, the Company entered into
an employment agreement with Christopher Carmichael, the Company’s Chief Executive Officer, to perform the services and
duties that are normally and customarily associated with this position as well as other associated duties as our Board reasonably
determine (the “Carmichael Agreement”). The effective date of the Carmichael Agreement is July 1, 2013 and has a five
(5) year term. The Carmichael Agreement calls for an initial base salary of $420,000 payable in equal semi-monthly installments
in accordance with the Company’s usual practice. The Carmichael Agreement also calls for an annual bonus that is equal to
two and one half percent (2.5%) of the pretax gross revenue, a three percent (3%) override of gross license fees derived from
the company’s products and services and five percent (5%) success fee of the gross private placement capital contributions
received by the company, and a three percent (3%) override of the gross book value derived from all cashless transactions of the
Company. Moreover, the Carmichael Agreement calls for the grant of an option to purchase 300,000 shares of the Company’s
common stock at an exercise price of $2.50 per share. As further compensation, Mr. Carmichael is awarded twenty percent of all
gross revenues associated with the project known as “106 Yards”.





On March 15, 2012, the Company renewed
an employment agreement with Connie Jordan, the Company’s Senior Executive Vice President of Intellectual Property and Transmedia,
to perform the services and duties that are normally and customarily associated with this position as well as other associated
duties as our Board reasonably determine (the “Jordan Agreement”). The effective date of the Jordan Agreement is March
15, 2012 and has a three (3) year term. The Jordan Agreement calls for an initial base salary of $198,000 payable in equal semi-monthly
installments in accordance with the Company’s usual practice. The Jordan Agreement also calls for an annual bonus that is
equal to one percent (1%) of the pretax gross revenue and one and one half percent (1.5%) of the net capital contributions received
by the Company from strategic partners. Moreover, the Jordan Agreement calls for the grant of an option to purchase 200,000 shares
of the Company’s common stock at an exercise price of $2.50 per share.



On August 15, 2013, the Company entered
into an employment agreement with Brenden Garrison, the Company’s Chief Financial Officer, to perform the services and duties
that are normally and customarily associated with this position as well as other associated duties as our Board reasonably determine
(the “Garrison Agreement”). The Garrison Agreement calls for an initial base salary of $150,000 payable in equal semi-monthly
installments in accordance with the Company’s usual practice. The Garrison Agreement also calls for an annual bonus in the
form of stock options to purchase 75,000 shares at an exercise price of $4.00.



On January 1, 2012, as amended on August
1, 2013, the Company entered into an employment agreement with Bryan Harpole (the “Harpole Agreement”) to be employed
as the Company’s general studio manager on an at will basis. Mr. Harpole will receive an annual salary of $150,000 and eligible
for certain bonuses including an annual bonus in the form of stock options to purchase 75,000 shares at an exercise price of $4.00.



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



26







Directors Retention Agreement



Effective July 1, 2014,  we revised
our policy for providing compensation to members of the board of directors. Each independent board member receives an annual fee
off $25,000 payable annually and additional compensation annually ranging from $5,000 - $10,000 depending on the board members
participation in the Company's various committees. In addition, effective July 1, 2014, the Company officers who also reside on
the board of directors do not receive compensation.



2014
DIRECTOR COMPENSATION TABLE



|                       |  |      |  |                |        |  |        |   |   |             |  |   |                |  |  | Non-Qualified |   |  |              |   |   |        | 
|---------------------- |  | ---- |  | -------------- | ------ |  | ------ | - | - | ----------- |  | - | -------------- |  |  | ------------- | - |  | ------------ | - | - | ------ | 
|                       |  |      |  |                |        |  |        |   |   |             |  |   | Non-Equity     |  |  | Deferred      |   |  |              |   |   |        | 
|                       |  |      |  | Fees Earned or |        |  | Stock  |   |   | Option      |  |   | Incentive Plan |  |  | Compensation  |   |  | All Other    |   |   |        | 
|Name                   |  | Year |  | Paid in Cash   |        |  | Awards |   |   | Awards      |  |   | Compensation   |  |  | Earnings      |   |  | Compensation |   |   | Totals | 
|                       |  |      |  | ($)            |        |  | ($)    |   |   | ($)
    (C) |  |   | ($)            |  |  | ($)           |   |  | ($)          |   |   | ($)    | 
|                       |  |      |  |                |        |  |        |   |   |             |  |   |                |  |  |               |   |  |              |   |   |        | 
|Christopher Carmichael |  | 2014 |  | $              | -      |  |        | $ | - |             |  | $ | 17,112         |  |  | $             | - |  |              | $ | - |        | 
|Co-Chairman            |  |      |  |                |        |  |        |   |   |             |  |   |                |  |  |               |   |  |              |   |   |        | 
|                       |  |      |  |                |        |  |        |   |   |             |  |   |                |  |  |               |   |  |              |   |   |        | 
|Connie Jordan          |  | 2014 |  |                | -      |  |        |   | - |             |  |   | 17,112         |  |  |               | - |  |              |   | - |        | 
|                       |  |      |  |                |        |  |        |   |   |             |  |   |                |  |  |               |   |  |              |   |   |        | 
|Nick Mitsakos(A)       |  | 2014 |  |                | 17,500 |  |        |   | - |             |  |   | 17,112         |  |  |               | - |  |              |   | - |        | 
|Co-Chairman            |  |      |  |                |        |  |        |   |   |             |  |   |                |  |  |               |   |  |              |   |   |        | 
|                       |  |      |  |                |        |  |        |   |   |             |  |   |                |  |  |               |   |  |              |   |   |        | 
|Webb Blessley          |  | 2014 |  |                | 15,000 |  |        |   | - |             |  |   | 17,112         |  |  |               | - |  |              |   | - |        | 
|                       |  |      |  |                |        |  |        |   |   |             |  |   |                |  |  |               |   |  |              |   |   |        | 
|James Nelson(B)        |  | 2014 |  |                | -      |  |        |   | - |             |  |   | 2,369,766      |  |  |               | - |  |              |   | - |        | 





(A) On March 22, 2013, the Company entered
into a Co-Chairman of the Board of Directors Retention Agreement with, Nick Mitsakos to perform the services and duties that are
normally and customarily associated with this position as well as other associated duties as our Board reasonably determine in
exchange for 250,000 shares of Company stock that were awarded upon execution of the agreement. The agreement was amended on December
31, 2013 whereby Mr. Mitsakos would receive a flat monthly rate of $25,000 per month in addition to his stock award. As of December
31, 2014, amounts due to Mr. Mitsakos included within the table above were $167,500.





(B) James Nelson resigned from the Board
of Directors in June 2014.



(C) See Note 9 for valuation techniques related to the issuance
of stock options.



Item 12. Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters.



The following table sets forth certain
information regarding our shares of common stock beneficially owned as of April 10, 2015 for (i) each stockholder known to be
the beneficial owner of 5% or more of our outstanding shares of common stock, (ii) each named executive officer and director,
and (iii) all executive officers and directors as a group.  A person is considered to beneficially own any shares: (i)
over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person
has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants or otherwise.
Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive
officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children.



27







For purposes of this table, a person or
group of persons is deemed to have “beneficial ownership” of any shares of common stock that such person has the right
to acquire within 60 days as of April 10, 2015.  For purposes of computing the percentage of outstanding shares of our
common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire
within 60 days of the Closing Date is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person.  The inclusion herein of any shares listed as beneficially owned does
not constitute an admission of beneficial ownership.



Unless otherwise specified, the address of each of the persons
set forth below is in care of Ubiquity, Inc., 9801 Research Drive, Irvine CA 92618.





|                                                        |  |                |  | Amount and Nature of |            |  | Percentage  | 
|------------------------------------------------------- |  | -------------- |  | -------------------- | ---------- |  | ----------- | 
|Name and Address of Beneficial Owner                    |  | Title of Class |  | Beneficial Ownership |            |  | of Class(3) | 
|Executive Officers and Directors                        |  |                |  |                      |            |  |             | 
|Christopher Carmichael(1)(4)                            |  | Common Stock   |  |                      | 23,278,744 |  |             | 
|Brenden Garrison(5)                                     |  | Common Stock   |  |                      | 1,001,826  |  |             | 
|Nicholas Mitsakos                                       |  | Common Stock   |  |                      | 1,142,868  |  |             | 
|Connie Jordan(1)(2)(6)                                  |  | Common Stock   |  |                      | 9,406,105  |  |             | 
|Webb Blessley                                           |  | Common Stock   |  |                      | 1,224,484  |  |             | 
|Directors and executive officers as a group (5 persons) |  | Common Stock   |  |                      | 36,054,027 |  |             | 
|Other 5% Holders:                                       |  |                |  |                      |            |  |             | 
|Silent Light LLC                                        |  | Common Stock   |  |                      | 5,371,429  |  |             | 
|Harold A. Havekotte                                     |  | Common Stock   |  |                      | 6,628,338  |  |             | 







|(1) | Christopher Carmichael and Connie Jordan are the beneficial owners of 2,371,429 shares and 2,371,429 shares, respectively, which are owned by Silent Light LLC, making Christopher Carmichael and Connie Jordan individual owners of 44.15% of the Silent Light Stock or 88.30% in aggregate giving them the voting power over said shares.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | 6,720,000 shares are held by an irrevocable trust.
|--- | --------------------------------------------------



|(3) | Based on 129,172,224 shares issued and outstanding as of April 10, 2015.
|--- | ------------------------------------------------------------------------



| | (4) | Chris Carmichael has 13,517,461 in common shares in his
name, 2,371,429 shares as a beneficial ownership in Silent Light, LLC, 3,360,000 shares as beneficial ownership in a trust, and
4,029,854 in options to purchase common stock consisting of 2,561,856 in a subsequent event with an exercise price of $0.485 per
share in exchange for $1.0 million of the accrued salaries and bonuses
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | Brenden Garrison has 848,254 in common shares in his
name, 57,143 shares as beneficial ownership in an LLC, and 96,429 options to purchase to common shares.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | Connie Jordan has 3,051,429 common shares in her name,
2,371,429 shares as a beneficial ownership in Silent Light, LLC, 3,360,000 shares as beneficial ownership in a trust, 80,390 shares
as beneficial ownership in an LLC and 542,857 in options to purchase common stock.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







Item 13.    Certain Relationships and
Related Transactions, and Director Independence.



Transactions with Related Persons







Loans Payable - Related Parties



The Carmichael Family has personally guaranteed
two Company credit cards and has allowed the Company use of their personal credit cards as needed. Total lines of credit personally
guaranteed by the Carmichael family are up to $800,000 per month.



The Company had certain notes payable outstanding
to related parties as of December 31, 2014 and 2013. During the years ended December 31, 2014 and 2013, the Company borrowed $225,000
and $7,000 from Chris Carmichael for which payment were made of $232,000 and $0, respectively. As of December 31, 2014 and 2013,
Christopher Carmichael was owed $0 and $7,000, respectively. The amounts were unsecured, incurred interest at 8% per annum and
due on demand. During the year ended December 31, 2014, the Company recorded accrued interest of $18,418 as contributed capital
as the interest on the notes payable was forgiven. The proceeds were used for operations.



Albert Carmichael, a family member of the
Company's CEO, was owed $10,000 and $0 as of December 31, 2014 and 2013, respectively. The amounts are unsecured, non-interest
bearing and due on demand. The proceeds were used for operations.



An employee of the Company was owed $10,000
and $0 as of December 31, 2014 and 2013, respectively. The amounts are unsecured, non-interest bearing and due on demand. The proceeds
were used for operations.



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



Loans Receivable - Related Parties



As of December 31, 2014 and 2013, amounts
due from a company controlled by an officer, owed the Company $1,279,681 and $437,812, respectively. The amount is unsecured, does
not incur interest and is due on demand.  The increase in the loan during the year ended December 31, 2014 related to providing
capital to the related entity in which the proceeds were used for further development on Ubiquity licensed patents and products
in which the entity has licensed. Subsequent to the year ended December 31, 2014, the receivable was relieved as part of the acquisition
of SME, see Note 13 for additional information. Due to this relief, the loan receivable has been presented as a long term asset
on the accompanying financial statements.



As of December 31, 2014 and 2013, amounts
due from an employee, owed the Company $247,461 and $125,920, respectively. The amount is unsecured, does not incur interest and
is due on demand. Subsequent to December 31, 2014, the employee has repaid $239,921, reducing the balance due to $7,840. The Company
expects to collect on the remaining receivable during the year ended December 31, 2015.









28







Director Independence



We use the definition of “independence”
of The NASDAQ Stock Market to make this determination.  NASDAQ Listing Rule 5605(a)(2) provides that an “independent
director” is a person other than an officer or employee of the company or any other individual having a relationship that,
in the opinion of the Company’s Board, would interfere with the exercise of independent judgment in carrying out the responsibilities
of a director.  The NASDAQ listing rules provide that a director cannot be considered independent if:



|· | the director is, or at any time during the past three years was, an employee of the company;
|- | --------------------------------------------------------------------------------------------



|· | the director or a family member of the director accepted any compensation from the company
    in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination
    (subject to certain exclusions, including, among other things, compensation for board or board committee service);
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|· | a family member of the director is, or at any time during the past three years was, an executive
    officer of the company;
|- | ----------------------------------------------------------------------------------------------------------------------------





|· | the director or a family member of the director is a partner in, controlling stockholder of,
    or an executive officer of an entity to which the company made, or from which the company received, payments in the current
    or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or
    $200,000, whichever is greater (subject to certain exclusions);
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|· | the director or a family member of the director is employed as an executive officer of an
    entity where, at any time during the past three years, any of the executive officers of the company served on the compensation
    committee of such other entity; or
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|· | the director or a family member of the director is a current partner of the company’s
    outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor,
    and who worked on the company’s audit.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





We have determined that Mr. Nicholas Mitsakos and Webb Blessley
are considered independent directors.





Item 14.     Principal Accounting
Fees and Services.



Audit Fees



The aggregate fees billed by KLJ
and Associates, LLP for professional services rendered for the audit of the Company’s financial statements for the year
ended December 31, 2014 were $56,000.



The aggregate fees billed by Silberstein
Ungar, PLLC for professional services rendered for the audit of the Company’s financial statements for the years ended December
31, 2014 and 2013 were $28,000and $59,500, respectively.



Audit Related Fees



We paid Silberstein Ungar, PLLC $2,500 in 2013 for audit related
fees.



Tax Fees



For the Company’s fiscal years ended December 31, 2014
and 2013, we were t billed $8,000 and $0 for professional services rendered for tax compliance, tax advice, and tax planning.



All Other Fees



Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before our auditor is engaged by us to render any auditing or permitted non-audit related service,
the engagement be:



-approved by our audit committee; or



-entered into pursuant to pre-approval policies and procedures
established by the audit committee, provided the policies and procedures are detailed as to the particular  service,  the  audit
committee is informed of each service, and such policies and procedures do not include delegation of the audit committee's responsibilities
to management.



The pre-approval process has just been implemented in response
to the new rules. Therefore, our board of directors does not have records of what percentage of the above fees
were pre-approved.  However, all of the above services and fees were reviewed and approved by the entire board of directors
either before or after the respective services were rendered.



29







PART IV



Item 15.     Exhibits, Financial
Statement Schedules.



|Exhibit
        No. |  | Description                                                                                                                                                                 
|------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                    |  |                                                                                                                                                                             
|2.1                 |  | Agreement and Plan of Merger, dated March 5, 2013, by and among Ubiquity Broadcasting Corporation., Ubiquity Acquisition
    Corp. and Ubiquity Broadcasting Corporation.(1)
|                    |  |                                                                                                                                                                             
|2.2                 |  | Certificate of Merger for State of Delaware.(1)                                                                                                                             
|                    |  |                                                                                                                                                                             
|2.3                 |  | Articles of Merger for State of Nevada.(1)                                                                                                                                  
|                    |  |                                                                                                                                                                             
|3.1(i)              |  | Articles of Incorporation dated December 2, 2011.(2)                                                                                                                        
|                    |  |                                                                                                                                                                             
|3.1(ii)             |  | Amended Articles of Incorporation dated March 4, 2013.(3)                                                                                                                   
|                    |  |                                                                                                                                                                             
|3.2                 |  | Bylaws.(2)                                                                                                                                                                  
|                    |  |                                                                                                                                                                             
|10.1                |  | Carmichael Employment Agreement.(1)                                                                                                                                         
|                    |  |                                                                                                                                                                             
|10.2                |  | Jordan Employment Agreement.(1)                                                                                                                                             
|                    |  |                                                                                                                                                                             
|10.3                |  | Garrison Employment Agreement.(1)                                                                                                                                           
|                    |  |                                                                                                                                                                             
|10.4                |  | Harpole Employment Agreement.(1)                                                                                                                                            
|                    |  |                                                                                                                                                                             
|31.1                |  | Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of
    the Sarbanes-Oxley Act of 2002                   
|                    |  |                                                                                                                                                                             
|31.2                |  | Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of
    the Sarbanes-Oxley Act of 2002                   
|                    |  |                                                                                                                                                                             
|32.1                |  | Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002                   
|                    |  |                                                                                                                                                                             
|32.2                |  | Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002                   
|                    |  |                                                                                                                                                                             
|101.INS**           |  | XBRL Instance Document                                                                                                                                                      
|                    |  |                                                                                                                                                                             
|101.SCH**           |  | XBRL Taxonomy Schema                                                                                                                                                        



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|101.CAL** |  | XBRL Taxonomy Calculation Linkbase 
|--------- |  | -----------------------------------
|          |  |                                    
|101.DEF** |  | XBRL Taxonomy Definition Linkbase  
|          |  |                                    
|101.LAB** |  | XBRL Taxonomy Label Linkbase       
|          |  |                                    
|101.PRE** |  | XBRL Taxonomy Presentation Linkbase



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



(1) Incorporated by reference to the Company’s
Current Report on Form 8-K filed on September 27, 2013.

(2) Incorporated by reference to the Company’s
S-1 filed on February 27, 2012.

(3) Incorporated by reference to the Company’s
Current Report on Form 8-K filed on March 6, 2013.



* Exhibit identified as a management contract
or compensatory plan.



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



SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.



| |        | Ubiquity, Inc.                        
| | ------ | --------------------------------------
| |        |                                       
| | By:    | /s/ Christopher Carmichael            
| |        | Christopher Carmichael                
| |        | Chief Executive Officer               
| |        | (Duly Authorized Officer and Principal
| |        | Executive Officer)                    
| |        |                                       
| | Dated: | April 30, 2015                        
| |        |                                       
| | By:    | /s/ Brenden Garrison                  
| |        | Brenden Garrison                      
| |        | Chief Financial Officer               
| |        | (Duly Authorized Officer and Principal
| |        | Financial and Accounting Officer)     
| |        |                                       
| | Dated: | April 30, 2015                        



Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the
dates indicated.



|Signature                  |  | Title                                        |  | Date          
|-------------------------- |  | -------------------------------------------- |  | --------------
|                           |  |                                              |  |               
|                           |  | Chief Executive Officer and Co-Chairman of   |  | April 30, 2015
|                           |  | the Board                                    |  |               
|/s/ Christopher Carmichael |  | (principal executive officer)                |  |               
|Christopher Carmichael     |  |                                              |  |               
|                           |  |                                              |  |               
|/s/ Brenden Garrison       |  | Chief Financial Officer                      |  | April 30, 2015
|Brenden Garrison           |  | (principal financial and accounting officer) |  |               
|                           |  |                                              |  |               
|/s/ Nicholas Mitsakos      |  | Co-Chairman of the Board                     |  | April 30, 2015
|Nicholas Mitsakos          |  |                                              |  |               
|                           |  |                                              |  |               
|                           |  | Senior Executive Vice President of           |  | April 30, 2015
|                           |  | Intellectual Property and                    |  |               
|/s/ Connie Jordan          |  | Transmedia and Director                      |  |               
|Connie Jordan              |  |                                              |  |               
|                           |  |                                              |  |               
|/s/ Webb Blessley          |  | Treasurer, Secretary, and Director           |  | April 30, 2015
|Webb Blessley              |  |                                              |  |               



31