UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended ~~June~~ September 30, 2014

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

Commission File number: 001-34212

ORYON TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Nevada	26-2626737
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

4251 Kellway Circle, Addison, Texas 75001

(Address of principal executive offices)

(214) 267-1321

(Registrant’s telephone number, including area code)

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

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

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

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

Large accelerated filer ¨	Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of ~~August~~December 148, 2014, there were 252,333,438 shares of common stock, par value $0.001 per share, outstanding.

INDEX

		Page Number
PART I.	FINANCIAL INFORMATION
ITEM 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets at June 30, 2014 (Unaudited) and December 31, 2013	6
	Consolidated Balance Sheets at September 30, 2014 (Unaudited) and December 31, 2013	5
	Consolidated Statements of Operations - for the quarters and six month periods ended June 30, 2014 and 2013 (Unaudited)	7
	Consolidated Statements of Operations - for the quarters and nine month periods ended September 30, 2014 and 2013 (Unaudited)	6
	Consolidated Statement of Changes in Shareholders’ Equity (Deficit) - for the six month periods ended June 30, 2014 and 2013 (Unaudited)	8
	Consolidated Statement of Changes in Shareholders’ Equity (Deficit) - for the nine month periods ended September 30, 2014 and 2013 (Unaudited)	7
	Consolidated Statements of Cash Flows - for the six month periods ended June 30, 2014 and 2013 (Unaudited)	9
	Consolidated Statements of Cash Flows - for the nine month periods ended September 30, 2014 and 2013 (Unaudited)	8
	Notes to the Consolidated Financial Statements	109
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
ITEM 3.	Quantitative and Qualitative Disclosure about Market Risk	3536
ITEM 4.	Controls and Procedures	3536
PART II.	OTHER INFORMATION
ITEM 1A	Risk Factors	36
ITEM 1.	Legal Proceedings	38
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
ITEM 1A.	Risk Factors	38
ITEM 6.	Exhibits	39
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
	SIGNATURES.	40
ITEM 5.	Other Matters	40
ITEM 6.	Exhibits	42
	SIGNATURES.	43

PART 1 – FINANCIAL INFORMATION

ITEM I.

FINANCIAL STATEMENTS

Filing for Protection Under Chapter 11 of the U.S. Bankruptcy Code

Oryon Technologies, Inc. (“Oryon” or the “Company”) filed a petition for protection under Chapter 11 of the U.S. Bankruptcy Code on May 6, 2014. The following is information relating to such filing.

The name of the proceeding is In Re: Oryon Technologies, Inc., F/D/B/A Oryon Holdings, Inc., F/D/B/A Eaglecrest Resources, Debtor - EIN: 26-2623767 - 4251 Kellway Circle, Addison, Texas 75001.

The identity of the court is The United States Bankruptcy Court for the Northern District of Texas, Dallas Division.

The above Court assumed jurisdiction of the above proceeding on May 6, 2014.

No receiver, fiscal agent or similar officer has been appointed in the proceeding. No order confirming a plan of reorganization, arrangement or liquidation has been entered.

The filing was driven by a number of factors external to the Company’s on-going business, including the following:

	a)	EFL Tech B.V., a Holland corporation (“EFL Holland”), which purchased a majority of Oryon's outstanding common stock under a Subscription Agreement that had its initial closing on January 21, 2014 (the “EFL Holland Transaction”), breached that agreement by failing to make a payment of $250,000 to Oryon on March 31, 2014 as required by such agreement.
	b)	The composition of the Board of EFL Holland legally authorized to make decisions on behalf of, and the identity of the person(s) or entities legally authorized to vote the outstanding shares of, EFL Holland were misrepresented to Oryon, with different factions, advancing different agendas, vying for control of that company.

EFL Tech B.V., a Holland corporation (“EFL Holland”), which purchased a majority of Oryon's outstanding common stock under a Subscription Agreement that had its initial closing on January 21, 2014 (the “EFL Holland Transaction”), breached that agreement by failing to make a payment of $250,000 to Oryon on March 31, 2014 as required by such agreement.

cb) ~~Certain~~The ~~persons~~composition ~~interested~~of inthe ~~EFL~~Board ~~Holland, including George Hatzimihail, a director~~ of EFL Holland, ~~and~~legally ~~his~~authorized ~~son,~~to ~~Alex~~make ~~Hatzimihail,~~decisions ~~Chief~~on ~~Executive~~behalf ~~Office~~ of ~~EFL Tech Pty. Ltd. (an Australian corporation) but upon information and belief with no formal legal position with or connection to EFL Holland (collectively~~, ~~the “Interested Parties”), conspired with Tony Chahine (upon information~~ and ~~belief a/k/a Antoine Chahine-Badr)~~ the ~~Chief~~identity ~~Executive Officer~~ of ~~Myant Capital Partners, Inc., an Ontario, Canada garment manufacturer (“Myant”), subsequent to~~ the closing of the EFL Holland Transaction, to provide Myant with a significant equity interest in, and to enable it to obtain substantial influence over or control of the operations and business of, Oryon. The Board of Directors of Oryon person(~~after prolonged negotiations, and after careful and deliberate consideration of Myant’~~s ~~offers, its history of putting companies which it acquired into bankruptcy, and Tony Chahine’s history of involvement in numerous court cases~~) ~~had~~or ~~previously~~entities ~~rejected~~legally ~~bids~~authorized ~~by Myant~~ to ~~purchase~~vote ~~a controlling equity interest in Oryon as insufficient and not in~~ the ~~best~~outstanding ~~interests~~shares of ~~the creditors and stockholders. d) M. Richard Marcus~~, ~~the~~EFL ~~former~~Holland ~~Chief~~were ~~Executive~~misrepresented ~~Officer~~to ~~and a current affiliate and significant stockholder of~~ Oryon, ~~brought a lawsuit against Oryon and certain of its directors~~ with ~~respect~~different ~~to the EFL transaction seeking~~factions, ~~inter~~advancing ~~alia,~~different ~~to unwind the EFL Holland transaction so that he~~agendas, ~~together~~vying ~~with certain other Oryon stockholders, could sell a majority interest in Oryon to a third party~~ for acontrol ~~price~~of that ~~reflects a control premium~~company. ~~Such lawsuit has consumed appreciable operating funds and management time, negatively impacting Oryon’s business activities.~~

ec) ~~The~~Certain ~~Interested~~persons ~~Parties~~interested in EFL Holland, including George Hatzimihail, a director of EFL Holland, and ~~Tony~~his ~~Chahine~~son, ~~have~~Alex ~~also~~Hatzimihail, ~~conspired~~Chief ~~with~~Executive MOfficer of EFL Tech Pty. ~~Richard~~Ltd. ~~Marcus~~(an Australian corporation) but upon information and belief with no formal legal position with or connection to ~~gain~~EFL ~~his~~Holland ~~support~~(collectively, ~~for~~the ~~their~~“Interested ~~efforts~~Parties”), asconspired ~~described~~with inTony ~~paragraph~~Chahine (cupon information and belief a/k/a Antoine Chahine-Badr) ~~above~~the Chief Executive Officer of Myant Capital Partners, Inc., fan Ontario, Canada garment manufacturer (“Myant”), ~~The~~subsequent ~~Marcus~~to ~~lawsuit~~the closing of the EFL Holland Transaction, asto ~~well~~provide asMyant with a ~~lawsuit~~significant ~~brought~~equity byinterest ~~Myant~~in, ~~created~~and ato enable it to obtain substantial influence over or control of the operations and business ~~environment~~of, inOryon. The Board of Directors of Oryon (after prolonged negotiations, and after careful and deliberate consideration of Myant’s offers, its history of putting companies which it ~~was~~acquired ~~not~~into ~~possible~~bankruptcy, ~~for~~and ~~Oryon~~Tony Chahine’s history of involvement in numerous court cases) had previously rejected bids by Myant to ~~attract~~purchase ~~additional~~a ~~investment~~controlling ~~funds~~equity ~~outside~~interest ofin Oryon as insufficient and not in the ~~protection~~best interests of the ~~Bankruptcy~~creditors ~~Court~~and stockholders.

M. Richard Marcus, the former Chief Executive Officer and a current affiliate and significant stockholder of Oryon, brought a lawsuit against Oryon and certain of its directors with respect to the EFL transaction seeking, inter alia, to unwind the EFL Holland transaction so that he, together with certain other Oryon stockholders, could sell a majority interest in Oryon to a third party for a price that reflects a control premium. Such lawsuit has consumed appreciable operating funds and management time, negatively impacting Oryon’s business activities.

The Interested Parties and Tony Chahine have also conspired with M. Richard Marcus to gain his support for their efforts as described in paragraph (c) above.

The Marcus lawsuit, as well as a lawsuit brought by Myant, created a business environment in which it was not possible for Oryon to attract additional investment funds outside of the protection of the Bankruptcy Court.

Oryon believes that its extensive electroluminescent (EL) patent portfolio, production-ready Elastolite® flexible lighting products and technology, wearable electronics market interest and customer support can create a healthy business under the reorganization protection of the Bankruptcy Court.

~~Previously~~Confirmation ~~Filed~~of ~~Unauthorized~~Plan ~~Form~~of ~~8-K~~Reorganization under Chapter 11 Bankruptcy

On ~~May~~November 7, 2014, a(the ~~Form~~“Confirmation ~~8-K~~Date”) ~~with~~the Court aentered ~~Date~~an oforder ~~Report~~(the of“Confirmation ~~May~~Order”) 2(Exhibit10.1), ~~2014 (~~confirming the ~~“May~~Modified 2First ~~Form~~Amended ~~8-K”)~~Chapter ~~was~~11 ~~filed~~Plan under ~~with~~Chapter ~~the~~11 ~~Securities~~of ~~and~~the ~~Exchange~~Bankruptcy ~~Commission~~Code (the “~~Commission~~Plan”), ~~purportedly on behalf of Oryon~~(Exhibit10. ~~However~~2), proposed by the ~~current~~Company and ~~legally~~EFL ~~designated~~Tech ~~management~~B.V., ofa ~~Oryon~~Netherlands corporation (and the ~~“Management”)~~majority ~~had~~shareholder ~~no knowledge~~ of ~~such~~the ~~Form~~Company ~~8-K,~~(“EFL ~~and~~Tech”). ~~was~~The ~~unaware~~Plan ofis ~~its~~subject ~~existence~~to ~~until~~certain ~~reviewing~~conditions ~~the~~(described in ~~same~~Note ~~upon~~17 ~~its~~to ~~filing with~~ the ~~Commission.~~Consolidated ~~Management~~Financial ~~disavows the~~Statements) ~~May~~that 2must ~~Form~~be ~~8-K,~~satisfied ~~including~~prior to the ~~substance~~effective ~~and~~date ~~legal efficacy~~ of ~~all~~the ~~assertions~~Plan ~~made~~(the ~~therein~~“Effective Date”).

Upon information and belief, the May 2 Form 8-K was filed by, on behalf or at the behest of, or with the involvement of, the group contesting control of Oryon’s Board, as follows:

1. EFL Tech B.V. (by the actions of certain of its officers or directors), which breached its agreement to make a payment to Oryon of $250,000 under the Subscription Agreement between the parties dated as of January 21, 2014, and has otherwise failed to work in good faith with Oryon after purchasing a majority of Oryon’s stock on such date; 2. M. Richard Marcus, the former Chief Executive Officer and current affiliate of Oryon, who has brought a lawsuit against Oryon and certain of its directors, seeking, inter alia, to unwind the EFL transaction and, acting together with certain other Oryon stockholders, to sell a controlling equity interest in Oryon to a third party; and 3. Myant Capital Partners, Inc. (by the actions of its Chief Executive Officer, Tony Chahine, or certain other officers), which had offered in the Fall of 2013 to purchase a majority of Oryon’s stock; Oryon’s board of directors, after extensive negotiation and consideration, rejected Myant’s offer as insufficient.

Management believes that the purported actions or events described in the May 2 Form 8-K are not legally valid, and that the person or persons who filed, or who participated in or directed the filing of, such Form 8-K were not legally entitled to do so under the federal securities laws.

Upon information and belief, one or more of the Interested Parties, Tony Chahine and/or M. Richard Marcus contacted the vendor that Oryon uses to Edgarize and file periodic, current and other reports under the Securities Exchange Act of 1934 pursuant to the Securities and Exchange Commission’s (the “Commission”) EDGAR electronic filing system, purporting to be management of Oryon. Based on such misrepresentation, such persons prevailed upon such vendor to utilize the unique identifying codes and passwords supplied to Oryon by the Commission to file, on May 7, 2014, the May 2 Form 8-K.

Financial Statements – General

The accompanying consolidated balance sheets of Oryon Technologies, Inc. (the “Company”, “Oryon” or the “Registrant”) at ~~June~~September 30, 2014 (with comparative figures at December 31, 2013), the consolidated statements of operations for the quarters and ~~six~~nine month periods ended ~~June~~September 30, 2014 ~~and~~ and 2013, the consolidated statements of cash flows for the ~~six~~nine month periods ended ~~June~~September 30, 2014 and 2013, and the consolidated ~~statement~~ statement of changes in shareholders’ equity (deficit) for the ~~six~~nine month periods ended ~~June~~September 30, 2014 and 2013, have been prepared by the Company’s management in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations, financial position and cash flows have been included and all such adjustments are of a normal recurring nature. These unaudited financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, as amended, filed with the Securities and Exchange Commission (the “SEC”) on March 7, 2014, and in the Company’s other filings with the SEC since that date.

On October 24, 2011, the Company entered into a binding letter of intent (“LOI”) with OryonTechnologies, LLC (“OTLLC”) in connection with a proposed reverse acquisition transaction (the “Merger”) between the Company and OTLLC whereby OTLLC agreed to merge with Oryon Merger Sub, LLC, a Texas limited liability company and wholly-owned subsidiary of the Company (“Merger Sub”) in exchange for the issuance to the members of OTLLC of eight (8) shares of the Company’s common stock for each outstanding membership unit of OTLLC. In accordance with the terms of the LOI, the terms and conditions of the Merger were to be set forth in a formal definitive agreement. To that end, on March 9, 2012, the Company entered into an agreement and plan of merger by and between the Company, OTLLC and Merger Sub (the “Merger Agreement”). Upon the closing of the Merger (the “Closing”) on May 4, 2012 (the “Closing Date”), OTLLC became a wholly-owned subsidiary of the Company pursuant to the Merger Agreement, and the Company issued 16,502,121 shares of common stock to the members of OTLLC in exchange for the then outstanding 2,062,765.12 membership units of OTLLC. In addition, OTLLC had outstanding equity equivalents, consisting of convertible notes payable, accrued interest on the notes payable, warrants and unit options, that by their terms required the Company to be prepared to issue common stock in an amount equal to the number of shares (at the 8 to 1 ratio) that would have been issuable at the Closing Date to holders of all of the equity equivalents if they had been converted to membership units before the Closing.

The Merger was accounted for as a reverse-merger and recapitalization in accordance with GAAP. In conjunction with the Merger, OTLLC assumed no liabilities from the Company and all members of the Company’s executive management are from OTLLC. OTLLC is deemed to be the acquirer for financial reporting purposes and the Company is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger are those of OTLLC and are recorded at the historical cost basis of OTLLC, and the consolidated financial statements after completion of the Merger include the assets and liabilities of the Company and OTLLC, historical operations of OTLLC and operations of the Company from the Closing Date. Membership units and the corresponding capital amounts of OTLLC pre-Merger have been retroactively restated as shares of common stock reflecting the eight (8) to one exchange ratio in the Merger. All references in this document to equity securities and all equity related historical financial measurements, including weighted average shares outstanding, earnings per share, par value of common stock, additional paid in capital, option exercise prices and warrant exercise prices, have been retroactively restated to reflect the Merger exchange ratio.

Operating results for the interim periods presented herein are not necessarily indicative of the results that can be expected for the entire fiscal year.

ORYON TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

~~June~~September 30, 2014 and December 31, 2013

	June 30,			December 31,
	September 30,			December 31,
	2014			2013
ASSETS
CURRENT ASSETS
Cash	$	1123,~~347~~590		$	44,741
Accounts Receivable, net of allowance for doubtful accounts of $0 and $0, respectively		23,971			21,182
Accounts Receivable, net of allowance for
Inventory (see note 2)		142,970			100,931
doubtful accounts of $0 and $0, respectivelyt		30,049			21,182
Other current assets		8,970			8,716
Inventory (see note 2)		133,860			100,931
Total current assets		187,258			175,570
Other current assets		-			8,716
PROPERTY AND EQUIPMENT, NET (see note 3)		10,836			13,736
Total current assets		187,499			175,570
INTANGIBLE ASSETS, NET (see note 4)		103,111			114,652
PROPERTY AND EQUIPMENT, NET (see note 3)		9,481			13,736
OTHER LONG-TERM ASSETS (see note 5)		16,697			16,697
INTANGIBLE ASSETS, NET (see note 4)		97,340			114,652
TOTAL ASSETS	$	317,902		$	320,655
OTHER LONG-TERM ASSETS (see note 5)		17,132			16,697
TOTAL ASSETS	$	311,452		$	320,655
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	~~595~~731,~~866~~839		$	378,184
Deferred compensation (see note 6)		761,~~245~~541			386,973
Current portion of promissory notes and other short-term debt (see note 7)		~~392~~429,~~103~~703			1,149,521
Other current liabilities (see note 8)		95107,~~401~~408			29,748
Total current liabilities		1,~~159~~270,~~615~~491			1,944,426
NOTES PAYABLE, NET (see note 9)		-			114,156
Total liabilities		1,~~159~~270,~~615~~491			2,058,582
SHAREHOLDERS' EQUITY
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding (see note 13)		-			-
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none
Common stock, $0.001 par value, 600,000,000 shares authorized, 252,333,438 and 62,660,778 shares issued and outstanding (see note 13)		252,334			62,661
issued and outstanding (see note 13)		-			-
Paid in capital		12,054,774			10,277,865
Common stock, $0.001 par value, 600,000,000 shares authorized, 252,333,438
Accumulated deficit		(13,148,821	)		(12,078,453	)
and 62,660,778 shares issued and outstanding (see note 13)		252,334			62,661
Total equity (deficit)		(841,713	)		(1,737,927	)
Paid in capital		12,058,271			10,277,865
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	317,902		$	320,655
Accumulated deficit		(13,269,644	)		(12,078,453	)
Total equity (deficit)		(959,039	)		(1,737,927	)
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	311,452		$	320,655

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

ORYON TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

For the Quarters and ~~Six~~Nine Month Periods Ended ~~June~~ September 30, 2014 and 2013

(Unaudited)

	For the Quarter Ended June 30,						For the Six Months Ended June 30,
	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
REVENUES
Product sales	$	2737,~~262~~290		$	3646,~~229~~576		$	5188,~~706~~996		$	5299,~~983~~559
Cost of goods sold		(216,~~385~~257	)		(438,~~849~~882	)		(1026,~~212~~469	)		(948,~~602~~484	)
Gross profit		2421,~~877~~033			317,~~380~~694			4162,~~494~~527			4351,~~381~~075
Other		-			-			-			-
Total revenues		2421,~~877~~033			317,~~380~~694			4162,~~494~~527			4351,~~381~~075
OPERATING EXPENSES
Applications development
Wages		147,~~928~~128			31,~~846~~566			2734,~~178~~306			68100,~~712~~278
Payroll taxes and benefits		2,~~757~~424			25,~~384~~170			911,~~005~~429			1217,~~109~~279
Materials, equipment, services		459,~~702~~345			3025,~~177~~017			~~141~~150,~~424~~769			78103,~~937~~954
Office and overhead		21,~~239~~176			42,~~487~~025			89,~~337~~513			1113,~~635~~660
Total applications development expense		6520,~~626~~073			6863,~~894~~778			~~185~~206,~~944~~017			~~171~~235,~~393~~171
Sales and Marketing
Wages		-			18,000			-			3654,000
Payroll taxes and benefits		-			1,389			-			24,~~796~~185
Overhead		~~9,626~~-			5,~~912~~640			14,829			713,~~921~~561
Outside services		~~2,000~~-			16,000			6,000			17,000
Travel and entertainment		~~3,359~~-			~~3,497~~-			8,076			8,070
Total sales and marketing expense		~~14,985~~-			2931,~~798~~029			28,905			5586,~~787~~816
General and Administrative
Wages		422,~~417~~000			6939,~~999~~540			8183,435			~~139~~179,~~998~~538
Payroll taxes and benefits		135,~~953~~234			22,~~250~~033			2631,~~359~~593			~~106~~128,~~852~~885
Overhead		3223,~~361~~743			35,~~910~~993			7094,~~870~~613			68104,~~484~~477
Outside services		~~263~~75,~~532~~566			~~118~~106,~~176~~208			~~668~~744,~~678~~244			~~221~~327,~~179~~387
Travel and entertainment		~~411~~231			558,309			19,~~594~~825			19,~~687~~996
Total general and administrative expense		~~352~~106,~~674~~774			~~246~~212,~~390~~083			~~866~~973,~~936~~710			~~538~~750,~~200~~283
Depreciation and Amortization		67,~~746~~125			7,695			1421,~~441~~566			1523,~~667~~362
Total loss from operations		(~~415~~112,~~154~~939	)		(~~321~~306,~~397~~891	)		(1,~~054~~167,~~732~~671	)		(~~737~~1,~~666~~044,557	)
OTHER INCOME (EXPENSE)
Interest income		-			-			17			-
Interest expense		(7,~~159~~884	)		(9,~~348~~904	)		(1523,~~653~~537	)		(1828,~~557~~461	)
Total other income (expense)		(7,~~159~~884	)		(9,~~348~~904	)		(1523,~~636~~520	)		(1828,~~557~~461	)
NET LOSS BEFORE TAX		(~~422~~120,~~313~~823	)		(~~330~~316,~~745~~795	)		(1,~~070~~191,~~368~~191	)		(~~756~~1,~~223~~073,018	)
INCOME TAXES (see note 12)		-			-			-			-
NET LOSS AFTER TAX	$	(~~422~~120,~~313~~823	)	$	(~~330~~316,~~745~~795	)	$	(1,~~070~~191,~~368~~191	)	$	(~~756~~1,~~223~~073,018	)
NET LOSS AFTER TAX	$	(422,313	)	$	(330,745	)	$	(1,070,368	)	$	(756,223	)
Loss per share: basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Loss per share: basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.01	)
Weighted average shares outstanding		252,333,438			62,660,778			225,893,097			62,660,778
Weighted average shares outstanding		252,333,438			62,660,778			212,453,808			62,660,778

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

ORYON TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders' Equity

For the Quarters Ended ~~June~~September 30, 2014 and 2013

	Shares		Common Stock, $0.001 par value		Paid in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit			Total
Balances at December 31, 2012		62,660,778	$	62,661	$	10,126,184	$	-	$	(10,686,133	)	$	(497,288	)
Operating Results for the quarter ended March 31, 2013										(425,478	)		(425,478	)
Stock-based compensation expense						77,418							77,418
Balances at March 31, 2013		62,660,778	$	62,661	$	10,203,602	$	-	$	(11,111,611	)	$	(845,348	)
Operating Results for the quarter ended June 30, 2013										(330,745	)		(330,745	)
Stock-based compensation expense						36,120							36,120
Balances at June 30, 2013		62,660,778	$	62,661	$	10,239,722	$	-	$	(11,442,356	)	$	(1,139,973	)
Operating Results for the quarter ended September 30, 2013										(316,795	)		(316,795	)
Stock-based compensation expense						17,157							17,157
Balances at September 30, 2013		62,660,778	$	62,661	$	10,256,879	$	-	$	(11,759,151	)	$	(1,439,611	)
Balances at December 31, 2013		62,660,778	$	62,661	$	10,277,865	$	-	$	(12,078,453	)	$	(1,737,927	)
Operating Results for the quarter ended March 31, 2014										(648,055	)		(648,055	)
Issuance of common stock, financing transactions		170,405,650		170,406		1,079,594							1,250,000
Issuance of common stock in settlement of liabilities		19,267,010		19,267		675,983							695,250
Stock-based compensation expense						12,949							12,949
Balances at March 31, 2014		252,333,438	$	252,334	$	12,046,391	$	-	$	(12,726,508	)	$	(427,783	)
Operating Results for the quarter ended June 30, 2014										(422,313	)		(422,313	)
Stock-based compensation expense						8,383							8,383
Balances at June 30, 2014		252,333,438	$	252,334	$	12,054,774	$	-	$	(13,148,821	)	$	(841,713	)
Operating Results for the quarter ended September 30, 2014										(120,823	)		(120,823	)
Stock-based compensation expense						3,497							3,497
Balances at September 30, 2014		252,333,438	$	252,334	$	12,058,271	$	-	$	(13,269,644	)	$	(959,039	)

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

ORYON TECHNOLOGIES, INC. AND SUBSIDIARIES ~~Consolidated Statements of Cash Flows For the Six Month Periods Ended June 30, 2014 and 2013~~

	For the Six Months Ended June 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,070,368	)	$	(756,223	)
Adjustments to reconcile net loss to net cash used in operating activities:
Noncash interest expense on short-term notes		14,240			14,232
Stock-based compensation expense		21,332			113,538
Depreciation and amortization		14,442			15,667
Changes in operating assets and liabilities:
Accounts receivable -decrease (increase)		(2,789	)		6,205
Inventory - decrease (increase)		(42,039	)		(4,109	)
Other current assets - decrease (increase)		(254	)		(9,556	)
Other long-term assets - decrease (increase)		-			305
Accounts payable - increase (decrease)		217,681			96,887
Deferred revenues - increase (decrease)		-			(6,000	)
Deferred compensation - increase (decrease)		(310,728	)		101,788
Other current liabilities - increase (decrease)		65,653			(16,787	)
Due to affiliates - increase (decrease)		-			-
Net cash used in operating activities		(1,092,830	)		(444,053	)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash flows used in investing activities		-			-
CASH FLOWS FROM FINANCING ACTIVITIES
Short-term advances		-			350,000
Repayment of short-term debt and notes payable		(185,144	)		(17,563	)
Settlement of short-term debt by issuance of equity		(390,000	)		-
Conversion of investor short-term advances into equity		(310,670	)		-
Equity issued in conversion of investor short-term advances		310,670			-
Net cash proceeds from issuance of equity		939,330			-
Issuance of equity in settlement of short-term debt and other liabilities		695,250			-
Issuance of noncash warrants other than convertible notes related
Net cash provided by financing activities		1,059,436			332,437
Net increase (decrease) in cash and cash equivalents		(33,394	)		(111,616	)
Cash and cash equivalents, beginning of period		44,741			169,678
Cash and cash equivalents, end of period	$	11,347		$	58,062
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	1,414		$	4,325
Debt and accrued interest converted to equity	$	1,005,920		$	-

Consolidated Statements of Cash Flows

For the Nine Month Periods Ended September 30, 2014 and 2013

	For the Nine Months Ended September 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(1,191,191	)	$	(1,073,018	)
Adjustments to reconcile net loss to net cash used in operating activities:
Noncash interest expense on short-term notes		22,124			21,470
Stock-based compensation expense		24,829			130,695
Depreciation and amortization		21,568			23,361
Changes in operating assets and liabilities:
Accounts receivable -decrease (increase)		(8,867	)		(21,587	)
Inventory - decrease (increase)		(32,929	)		(6,916	)
Other current assets - decrease (increase)		8,716			1,252
Other long-term assets - decrease (increase)		(435	)		455
Accounts payable - increase (decrease)		353,654			220,130
Deferred revenues - increase (decrease)		-			(6,000	)
Deferred compensation - increase (decrease)		(385,432	)		170,964
Other current liabilities - increase (decrease)		77,660			(17,045	)
Net cash used in operating activities		(1,110,303	)		(556,239	)

CASH FLOWS FROM FINANCING ACTIVITIES
Short-term advances and increase in other short-term debt		49,716			418,168
Repayment of short-term debt and notes payable		(205,144	)		(22,197	)
Settlement of short-term debt by issuance of equity		(390,000	)		-
Conversion of investor short-term advances into equity		(310,670	)		-
Equity issued in conversion of investor short-term advances		310,670			-
Net cash proceeds from issuance of equity		939,330			-
Issuance of equity in settlement of short-term debt and other liabilities		695,250			-
Net cash provided by financing activities		1,089,152			395,971

Net increase (decrease) in cash and cash equivalents		(21,151	)		(160,268	)

Cash and cash equivalents, beginning of period		44,741			169,678

Cash and cash equivalents, end of period	$	23,590		$	9,410

SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	1,414		$	5,692
Debt and accrued interest converted to equity	$	1,005,920		$	-

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

Organization and Basis of Presentation

Oryon Technologies, Inc. (“Oryon” or the “Company”) has only one direct subsidiary, OryonTechnologies, LLC, a Texas limited liability company (“OTLLC”). The Company is a developer of a patented electroluminescent (“EL”) lighting technology, trademarked as Elastolite^® that enables thin, flexible, crushable, water-resistant lighting systems to be incorporated into multiple applications such as safety apparel, sporting goods, consumer goods and membrane switches, among others. OTLLC is the parent of two wholly-owned companies: OryonTechnologies Licensing, LLC (“OTLIC”) and OryonTechnologiesDevelopment, LLC (“OTD”), both of which are also Texas limited liability companies.

The accompanying unaudited financial statements of Oryon have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates, which have been made using careful judgment. Actual results may vary from these estimates.

These financial statements have been prepared in accordance with GAAP applicable to a going concern, which assume that the Company will be able to meet its obligations and continue its operations for its next fiscal year. Realization values may be substantially different from carrying values as shown and these financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.

Oryon filed a petition for protection under Chapter 11 of the U.S. Bankruptcy Code on May 6, 2014. At ~~June~~September 30, 2014, the Company had cash of $1123,~~347~~590 and had not yet achieved profitable operations. The Company has accumulated losses of $13,~~148~~269,~~821~~644 since its inception and expects to incur further losses in the development of of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to reorganize under the protection of the Bankruptcy Court is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

The Company expects to continue to incur substantial losses as it executes its business plan and does not expect to attain profitability in the near future. Since its inception, the Company has funded operations through short-term borrowings and equity investments in order to meet its strategic objectives. The Company's future operations are dependent upon external funding and its ability to execute its business plan, realize sales and control expenses. Management cannot guarantee that sufficient funding will be available from additional borrowings and equity placements to meet its business objectives, including anticipated cash needs for working capital, for a reasonable period of time. There can be no assurance that the Company will be able to obtain sufficient funds to continue the development of its business operation, or if obtained, upon terms acceptable to the Company.

These unaudited financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K, as amended, filed with the Securities and Exchange Commission (the “SEC”) on March 7, 2014, and in the Company’s other filings with the SEC since that date including the Current Report on Form 8-K, filed on November 13, 2014. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year.

Corporate History and the Merger

The Company was incorporated under the laws of the State of Nevada on August 22, 2007 with the name “Eaglecrest Resources, Inc.” and 100,000,000 authorized common shares with a par value of $0.001. On August 6, 2010, the Company amended its Articles of Incorporation to increase its number of authorized shares of common stock to 600,000,000 shares of common stock, par value of $0.006 per share. On November 4, 2011, the Company amended its Articles of Incorporation to decrease the par value of its common stock from $0.006 to $0.001 per share. On November 25, 2011, the Company amended its Articles of Incorporation to change its name from “Eaglecrest Resources, Inc.” to “Oryon Holdings, Inc.” On May 5, 2012, the Company amended its Articles of Incorporation to change its name from “Oryon Holdings, Inc.” to “Oryon Technologies, Inc.”

10The Company was organized for the purpose of acquiring and developing mineral properties. A mineral claim, with unknown reserves, was acquired in August 2007, became impaired in January 2008 and was written off, and the Company had limited operations subsequently. The Company never established the existence of a commercially minable ore deposit and therefore did not reach the exploration stage.

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

The Company was organized for the purpose of acquiring and developing mineral properties. A mineral claim, with unknown reserves, was acquired in August 2007, became impaired in January 2008 and was written off, and the Company had limited operations subsequently. The Company never established the existence of a commercially minable ore deposit and therefore did not reach the exploration stage.

On October 24, 2011, the Company entered into a binding letter of intent (“LOI”) with OTLLC in connection with a proposed reverse acquisition transaction (the “Merger”) between the Company and OTLLC whereby OTLLC agreed to merge with Oryon Merger Sub, LLC, a Texas limited liability company and wholly-owned subsidiary of the Company (“Merger Sub”), in exchange for the issuance to the members of OTLLC of eight (8) shares of the Company’s common stock for each outstanding membership unit of OTLLC, which was equal to a total of 16,502,121 shares (assuming that none of OTLLC’s existing Series C Notes were converted before the closing of the Merger).

In accordance with the terms of the LOI, the terms and conditions of the Merger were thereafter set forth in a formal definitive agreement. To that end, on March 9, 2012, the Company entered into an agreement and plan of merger by and between the Company, OTLLC and Merger Sub (the “Merger Agreement”). Upon the closing of the Merger on May 4, 2012 (the “Closing Date”), OTLLC became a wholly-owned subsidiary of the Company, the Company issued 16,502,121 shares of common stock to the members of OTLLC and the promissory notes receivable from OTLLC became intercompany obligations within the corporate group (and have been cancelled).

As a result of the Merger, the OTLLC members acquired the majority of the Company’s issued and outstanding common stock, OTLLC became a wholly-owned subsidiary, and the Company acquired the business and operations of OTLLC. In conjunction with the Merger, OTLLC assumed no liabilities from the Company and all members of the Company’s executive management are from OTLLC. The Company filed a Current Report on Form 8-K, as amended, dated May 4, 2012, describing the Merger and providing information concerning OTLLC.

The Merger was accounted for as a reverse-merger and recapitalization in accordance with GAAP. OTLLC is deemed to be the acquirer for financial reporting purposes and the Company is the acquired company. Consequently, the assets and liabilities and the operations that are reflected in the historical financial statements prior to the Merger are those of OTLLC and are recorded at the historical cost basis of OTLLC, and the consolidated financial statements after completion of the Merger include the assets and liabilities of the Company and OTLLC, historical operations of OTLLC and operations of the Company from the Closing Date. Membership units and the corresponding capital amounts of OTLLC pre-Merger have been retroactively restated as shares of common stock reflecting the eight (8) to one exchange ratio of the Merger. All references in the financial statements and notes thereto to equity securities and all equity related historical financial measurements including weighted average shares outstanding, earnings per share, par value of common stock, additional paid in capital, option exercise prices and warrant exercise prices have been retroactively restated to reflect the Merger exchange ratio.

The EFL Transaction

On January 21, 2014, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with EFL Tech B.V., a Netherlands corporation (“EFL Tech”). At the closing of the first tranche of issuances of shares of the Company’s common stock, par value $0.001 (the “Common Stock”) pursuant to the Subscription Agreement, on January 21, 2014 (the “First Closing”), the Company issued to EFL Tech an aggregate of 85,271,779 shares of Common Stock, and EFL Tech delivered $1,000,000 (of the net $1.5 million cash portion of the consideration for all share issuances under the Subscription Agreement) to the Company. Subsequent to the First Closing, on January 21, 2014, EFL Tech held 51.0% of the Company’s issued and outstanding Common Stock (46.0% on a fully diluted basis).

Other consideration provided to the Company at the First Closing for the sale of shares of Common Stock to EFL Tech consists of the following agreements, each of which was entered into and delivered by the Company and EFL Holdings Tech B.V., a Netherlands corporation (“EFL Holdings”), and an affiliate of EFL Tech, on January 21, 2014: (a) License Agreement (included herein as Exhibit 10.6) granting the Company an exclusive, worldwide, perpetual, sub-licensable, royalty-free, paid-up license (the “License Agreement”) for all of EFL Holding’s EL-related patents, trademarks and other intellectual property, both U.S. and international (the “EFL Holdings IP”); (b) Equipment Lease Agreement for certain printing equipment used in the production of electroluminescent (“EL”) lamps, the Company’s principal product, which EFL Holdings valued at $1.5 million, at no cost to Oryon (the “Equipment Lease”); and (c) Business Relationship Agreement pursuant to which EFL Holdings covenants that it will not, directly or indirectly, provide services to or otherwise engage in the business of manufacturing, designing, marketing, selling or distributing EL, or any products incorporating the EFL Holdings IP, other than through the ownership, management and control of the Company by EFL Tech. The above-referenced agreements contemplate that the Company will license, and will manufacture and market products incorporating, its EL-related intellectual property and the EFL Holdings IP as a combined intellectual property portfolio. Collectively, the above referenced agreements and the Subscription Agreement are referred to herein as the “EFL Transaction”.

1110

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

At the closing of the second tranche under the Subscription Agreement, on or before February 28, 2014 (the “Second Closing”), EFL Tech delivered to the Company additional funds in the amount of $250,000 and the Company issued to EFL Tech an additional 85,133,871 shares of Common Stock, at which time EFL Tech’s cumulative ownership became 170,405,650 shares of Common Stock, constituting 63.0% of the Common Stock on a fully diluted basis. . EFL Tech also obtained the right to nominate one additional director to the Company’s Board (but has not yet done so), giving it the right to nominate two members of the seven-member Board.

EFL Tech failed to pay the third and final tranche of $250,000 that was required by the Subscription Agreement to be paid to the Company on or before March 31, 2014 (the “Third Closing”). At the Third Closing, EFL Tech was required to deliver to the Company additional funds in the amount of $250,000 (bringing the total amount of the cash component that would have been paid by EFL Tech to the Company in consideration for the issuance by the Company of shares of Common Stock to EFL Tech under the Subscription Agreement to $1,500,000). At the Third Closing, the Company would have been required to issue to EFL Tech an additional 129,832,877 shares of Common Stock, at which time EFL Tech’s cumulative ownership would have been 300,238,527 shares of Common Stock, constituting 75.0% of the Common Stock on a fully diluted basis.

As required by the Subscription Agreement, on January 21, 2014, the Company entered into certain exchange and release agreements (each an “Exchange Agreement” and collectively, the “Exchange Agreements”) by and between the Company and each member of a group of unsecured creditors of the Company (including current directors and executive officers). At the First Closing, pursuant to the Exchange Agreements the Company issued an aggregate of 19,267,010 shares of Common Stock, constituting 10.39% of the Common Stock on a fully diluted basis, in exchange for the settlement and release of $695,250 in unpaid and accrued debt to such creditors. Under the Exchange Agreements, the per-share exchange price for such debt was determined by the average of the closing prices of the Common Stock on the trading days commencing on December 1, 2013, and ending on January 20, 2014 (the day prior to the First Closing), which resulted in an exchange price of $0.036085 per share of Common Stock. The Company also paid the sum of $122,125 in cash to such creditors under the Exchange Agreement for the settlement and release of such amount of debt (for the settlement and release of a total of $817,375 of debt pursuant to the Exchange Agreements).

The proceeds from the foregoing funding of $1,250,000 ($1,000,000 at the First Closing, consisting of $689,330 in cash plus the forgiveness of the obligation to repay the $310,670 in temporary unsecured advances that EFL Tech provided to the Company in periods prior to the First Closing, and the additional $250,000 payment by EFL Tech at the Second Closing)have been used for general corporate purposes and the repayment of debt, including, but not limited to, the required cash payments of $122,125 made under the Exchange Agreements.

The Company’s common stock is quoted on the OTCQB tier of the U.S. OTC Markets under the symbol ORYNQ.

1. Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The Company uses the accrual method of accounting and all amounts are denominated in United States dollars.

All significant intercompany accounts and transactions have been eliminated in the consolidation. “Due to affiliates” represents amounts due to entities that own equity or indebtedness of the Company or a subsidiary but that are not part of the consolidated company presented herein.

1211

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

Revenue Recognition

The Company recognizes revenue from products when the goods are shipped pursuant to a customer’s purchase order. Revenue from royalties is recorded in the period in which the sales of the underlying products are made. Revenue from license fees is recognized in the period in which they are due and payable.

Cost of Goods Sold

The Company recognizes costs of goods sold as including only direct production costs such as direct materials, direct labor and freight and does not include any allocation of production overhead.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates that affect the amounts reported in the consolidated financial statements and the accompanying notes. Accounting estimates and assumptions are those that management considers to be the most critical to an understanding of the consolidated financial statements because they inherently involve significant judgments and uncertainties. All of these estimates reflect management’s judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions persist longer or deteriorate further than expected, it is reasonably possible that the judgments and estimates could change, which may result in future impairments of assets, among other effects.

Significant estimates include the carrying value of intangible assets and the value of equity instruments, including convertible notes, stock options, warrants, and shares issued in lieu of cash.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash held in bank demand deposits. The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are accounted for at fair value, do not bear interest, and are short-term in nature. The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability to collect on accounts receivable. Based on management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to the valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. The Company does not require collateral.

Concentrations of Credit Risk

Certain balance sheet items that potentially subject the Company to concentrations of credit risk are primarily accounts receivable. Concentrations of credit risk with accounts receivable are generally mitigated by the size of the Company’s customers. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts based upon the expected collectability of all accounts receivable.

Inventory

Inventory is carried at the lower of cost or market. A physical inventory count is taken at the end of each calendar quarter and the accounting records are adjusted to match the physical inventory. Inventory cost does not include any allocation of production overhead.

Property and Equipment

Property, equipment, computer hardware and software, and leasehold improvements are carried at historical cost. Expenditures are capitalized only if the cost of the individual asset exceeds $1,200 and the asset is expected to have a business use for greater than 12 months.

Depreciation is calculated on a straight line basis over the estimated useful life of the property acquired. Equipment and furniture is depreciated over 60 months. Computer software and hardware is depreciated over 36 months. Leasehold improvements are amortized over the life of the lease or the life of the improvement, whichever is shorter.

Inter-company transfers of assets are recorded at depreciated cost, with no change in estimated life or monthly depreciation.

1312

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

Research and Development

The Company expenses all costs associated with the development of applications for the Company’s technology as the costs are incurred.

Intangible Assets

Amortization is computed based on the straight line method over the life of the patent, which is 180 months beginning with the month when the patent is granted. The amortization is based on the historical cost of each individual patent. Costs incurred to renew or extend the terms of patents are expensed as incurred.

The Company annually assesses whether the carrying value of its intangible assets exceeds their fair value and records an impairment loss equal to any excess.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities for a change in tax rate is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized.

The Company accounts for uncertain tax positions in accordance with ASC 740-10. ASC 740-10 provides several clarifications related to uncertain tax positions. Most notably, a “more likely-than-not” standard for initial recognition of tax positions, a presumption of audit detection and a measurement of recognized tax benefits based on the largest amount that has a greater than 50 percent likelihood of realization. ASC 740-10 applies a two-step process to determine the amount of tax benefit to be recognized in the financial statements. First, the Company must determine whether any amount of the tax benefit may be recognized. Second, the Company determines how much of the tax benefit should be recognized (this would only apply to tax positions that qualify for recognition.) No additional liabilities have been recognized as a result of the implementation. Accordingly, the Company has not recognized any penalty, interest or tax impact related to uncertain tax positions. Federal returns for tax years ended December 31, 2010 and after remain open to examination as of December 31, 2013. The statute of limitations differ from state to state; however, generally tax years ended December 31, 2010 and after remain open to state examination as of December 31, 2013.

Stock-Based Compensation

The Company utilizes equity based awards as a form of compensation for employees, officers and directors. The Company records compensation expense for all awards granted. After assessing alternative valuation models and amortization methods, the Company uses the Black-Scholes valuation model and straight-line amortization of compensation expense over the requisite service period for each grant. The Company will reconsider use of this model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model.

Leases

The Company leases office facilities under a non-cancelable operating lease. The Company recognizes rent on a straight-line basis over the lease term.

1413

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

2. Inventory

Inventory consists of the following:

	June 30,		December 31,
	September 30,		December 31,
	2014		2013
Raw materials	$	8882,~~122~~529	$	88,486
Work in process		4541,~~862~~175		6,028
Finished goods		810,~~986~~156		6,417
Total Inventory	$	~~142~~133,~~970~~860	$	100,931

3. Property and Equipment

Property and equipment consist of the following:

	June 30,			December 31,
	September 30,			December 31,
	2014			2013
Leasehold improvements	$	7,279		$	7,279
Furniture and equipment		195,927			195,927
Property and equipment, gross		203,206			203,206
Accumulated depreciation		(~~192~~193,~~370~~725	)		(189,470	)
Net property and equipment	$	109,~~836~~481		$	13,736

Depreciation expense was $~~976~~1,355 and $21,~~201~~924 for the three month periods ended ~~June~~September 30, 2014 and 2013, respectively, and $24,~~900~~255 and $46,~~125~~050 for the ~~six~~nine month periods ended ~~June~~September 30, 2014 and 2013, respectively.

4. Intangible Assets

As of ~~June~~September 30, 2014 and December 31, 2013, the Company’s only intangible assets consisted of patents with a gross carrying cost of $320,795 and accumulated amortization of $~~217~~223,~~684~~455 and $206,143, respectively. The remaining weighted average amortization period was 6.6 years at December 31, 2013. The estimated aggregate amortization expense in each of the years ending December 31, 2014 through December 31, 2017, is $23,084 per year.

The balances as of ~~June~~September 30, 2014, including intangible ~~assets~~ assets and accumulated amortization, are detailed as follows:

As of June 30, 2014

As of September 30, 2014

Finite-Lived Intangible Assets

Amortization Period (Years)

Gross Carrying Amount

Accumulated Amortization

Net

Patents

320,795

(~~217~~223,~~684~~455

)

~~103~~97,~~111~~340

The balances as of December 31, 2013, including intangible assets and accumulated amortization, are detailed as follows:

As of December 31, 2013
Finite-Lived Intangible Assets	Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization			Net
Patents		15	$	320,795	$	(206,143	)	$	114,652

15Amortization expense was $5,771 for each of the three month periods ended September 30, 2014 and 2013 and $17,312 for each of the nine month periods ended September 30, 2014 and 2013.

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

Amortization expense was $5,771 for each of the three month periods ended June 30, 2014 and 2013 and $11,541 for each of the six month periods ended June 30, 2014 and 2013.

5. Other Long Term Assets

Other long term assets consist of the following:

	June 30,		December 31,
	September 30,		December 31,
	2014		2013
Investment in subsidiaries	$	100	$	100
Security deposits		67,~~597~~032		6,597
Licenses		10,000		10,000
Total other assets	$	1617,~~697~~132	$	16,697

6. Deferred Compensation

Deferred compensation consists of the following:

	June 30,		December 31,
	September 30,		December 31,
	2014		2013
Deferred wages	$	~~48,541~~-	$	231,104
Deferred directors' fees		~~23,750~~-		117,500
Accrued unpaid wages		-		20,227
Accrued unpaid wages (incl. accrued tax)		1,541		20,227
Accrued taxes on deferred wages		~~3,954~~-		18,142
Total deferred compensation	$	761,~~245~~541	$	386,973

Effective September 1, 2011, employment agreements with certain executives were revised to provide for the indefinite deferral of unpaid wages until sufficient external funding was obtained. The aggregate deferred compensation as of December 31, 2013, was $231,104 and an additional $3,125 was deferred during the first quarter of 2014 between January 1, 2014 and January 21, 2014. As required by the Subscription Agreement, on January 21, 2014, the Company entered into Exchange Agreements by and between the Company and all persons who were owed deferred compensation. At the First Closing, pursuant to such Exchange Agreements, the Company issued an aggregate of 5,192,832 shares of Common Stock in exchange for the settlement and release of $187,383 in deferred compensation. Under the Exchange Agreements, the per-share exchange price for such debt was determined by the average of the closing prices of the Common Stock on the trading days commencing on December 1, 2013, and ending on January 20, 2014 (the day prior to the First Closing), which resulted in an exchange price of $0.036085 per share of Common Stock. The Company also paid the sum of $46,846 in cash to such creditors under the Exchange Agreement for the settlement and release of such amount of deferred compensation (for the settlement and release of a total of $234,229 of deferred compensation pursuant to such Exchange Agreements). The cash payment of $46,846 represented 20% of the total deferred compensation of $234,229 and provided the recipients with some liquidity to pay Federal employment taxes on the compensation Subsequent to completion of the Exchange Agreements, there were no deferred wages and the balance as of ~~March~~September 3130, 2014, was $0.

An accrual equal to 7.85% of the deferred wages had been established for the employer’s Social Security and Medicare tax obligations that would be required to be paid at the time the deferred wages are paid. Such taxes were paid in full due to the settlement of the deferred wages as described above.

16In November 2012, the Compensation Committee of the Board of Directors and the Board of Directors both approved a program of compensation for independent directors to compensate non-management directors for their services. Management directors receive no compensation for board service. Compensation for independent director services was established as $5,000 per calendar quarter, due at the end of each calendar quarter for services rendered during such period. In addition, the chairman of the Audit Committee receives extra compensation of $1,875 per calendar quarter and the chairman of the Compensation Committee receives extra compensation of $1,250 per calendar quarter. However, payment of cash compensation for director services has been deferred by the Board of Directors indefinitely. Directors are not paid for meetings attended. No directors’ fees were accrued in the third quarter of 2014 due to the bankruptcy proceedings.

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

In November 2012, the Compensation Committee of the Board of Directors and the Board of Directors both approved a program of compensation for independent directors to compensate non-management directors for their services. Management directors receive no compensation for board service. Compensation for independent director services was established as $5,000 per calendar quarter, due at the end of each calendar quarter for services rendered during such period. In addition, the chairman of the Audit Committee receives extra compensation of $1,875 per calendar quarter and the chairman of the Compensation Committee receives extra compensation of $1,250 per calendar quarter. However, payment of cash compensation for director services has been deferred by the Board of Directors indefinitely. Directors are not paid for meetings attended.

The aggregate deferred directors’ fees as of December 31, 2013, were $117,500. As required by the Subscription Agreement, on January 21, 2014, the Company entered into Exchange Agreements by and between the Company and certain members of the board of directors who were owed deferred compensation for past board service. At the First Closing, pursuant to such Exchange Agreements, the Company issued an aggregate of 1,681,217 shares of Common Stock in exchange for the settlement and release of $60,667 in deferred directors’ fees. Under the Exchange Agreements, the per-share exchange price for such debt was determined by the average of the closing prices of the Common Stock on the trading days commencing on December 1, 2013, and ending on January 20, 2014 (the day prior to the First Closing), which resulted in an exchange price of $0.036085 per share of Common Stock. The Company also paid the sum of $15,167 in cash to such directors under the Exchange Agreement for the settlement and release of such amount of deferred directors’ fees (for the settlement and release of a total of $75,833 of deferred directors’ fees pursuant to such Exchange Agreements). The cash payment of $15,167 represented 20% of the settled deferred directors’ compensation of $75,833 and provided the recipients with some liquidity to pay Federal employment taxes on the compensation. One former director agreed to waive payment of deferred directors’ compensation in the aggregate amount of $41,667, which amount was applied to reduce directors’ expense in the first quarter of 2014.

As a result of the Company’s filing for bankruptcy protection on May 6, 2014, the Company terminated all employees. However, certain individuals continued to work on behalf of the Company on a volunteer basis with the understanding that they might possibly receive compensation in the event the Company was able to obtain additional financing and exit the bankruptcy process. Such individuals are aware that their services may not be compensated if those conditions are not achieved. The deferred wages of $48,542 represents the potential compensation incurred through June 30, 2014, that might be paid to those individuals in the event the conditions are met and the accrued taxes on deferred wages of $3,954 represent the potential employment taxes that would be payable by the Company in the event those individuals are so compensated.

The deferred directors’ compensation of $23,750 as of June 30, 2014, represents the accrual for director services in the first six months of 2014.

7. Current Portion of Promissory Notes and Other Short-Term Debt

Other short-term debt consists of the following:

	June 30,		December 31,
	September 30,		December 31,
	2014		2013
Current portion, promissory notes payable	$	-	$	53,738
Other short-term debt		307,145		318,395
Short-term advances		-29,716		706,670
Accrued interest		8492,~~958~~842		70,718
Total	$	~~392~~429,~~103~~703	$	1,149,521

“Current portion, promissory notes payable”

In December 2012, the Company executed a promissory note (the “Note”) payable to a former executive and current shareholder in order to consolidate its various obligations to such individual into a single instrument. The Note had an original balance of $211,418 and would have matured on September 16, 2016. Interest on the Note is incurred at ~~WSJPrime~~WSJ Prime plus one percent per annum, which has resulted in a constant interest rate of 4.25% through March 31, 2014. The Note required monthly principal and interest payments of (a) $3,000 through March 31, 2014, (b) $4,500 from October 1, 2013 through September 30, 2014, (c) $6,000 from October 1, 2014 through September 30, 2015, (d) $7,500 from October 1, 2015 through September 30, 2016 and (e) all remaining principal on September 30, 2016. The remaining Note principal balance at December 31, 2013 of $167,894 was repaid in full during the first quarter of 2014 from a portion of the proceeds from the EFL Transaction.

17“Other short-term debt” and “Accrued interest”

During the year ended December 31, 2011, OTLLC was unable to complete a financing deal with a private equity firm that had been expected to provide OTLLC with adequate capital. To fund continuing operations at a reduced level of expenditures, OTLLC received temporary funding from several sources. The Company’s remaining obligation as of December 31, 2013, was $31,250, included in the table above as other short-term debt. Such obligation was repaid in full during the first quarter of 2014.

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

~~“Other~~In ~~short-term~~addition, ~~debt”~~a ~~and~~vendor ~~“Accrued~~previously required that the outstanding accounts payable balance of $287,145 be converted to a promissory note. Such note accrues interest” at 10% annually ($92,195 and $70,718 accrued through September 30, 2014, and December 31, 2013, respectively) and is payable upon demand. This note matured on December 15, 2011 and management has engaged in negotiations with the vendor to extend the note or replace it with a new promissory note.

During the ~~year~~second ~~ended~~quarter ~~December~~of 312014, ~~2011,~~a ~~OTLLC~~customer ~~was~~advanced ~~unable~~the toCompany ~~complete~~$20,000, acollateralized ~~financing~~by ~~deal~~certain ~~with~~of athe ~~private~~Company’s ~~equity~~equipment. ~~firm~~It ~~that~~is ~~had~~anticipated ~~been~~that ~~expected~~the toCompany ~~provide~~will ~~OTLLC~~produce ~~with~~goods ~~adequate~~for the ~~capital.~~customer Tothat ~~fund~~will ~~continuing operations~~be atdelivered ain ~~reduced~~lieu ~~level~~ of ~~expenditures, OTLLC received temporary funding from several sources~~repayment. The ~~Company’s~~advance ~~remaining obligation as of December 31, 2013,~~ was ~~$31,250,~~documented ~~included~~with ina ~~the~~promissory ~~table~~note ~~above~~and assuch ~~other~~note ~~short-term~~accrues interest ~~debt.~~at ~~Such~~10% ~~obligation~~annually ~~was~~($647 ~~repaid in~~accrued ~~full~~through ~~during~~September ~~the~~30, ~~first quarter of~~ 2014.

In addition, a vendor previously required that the outstanding accounts payable balance of $287,145 be converted to a promissory note. Such note accrues interest at 10% annually ($84,957 and $70,718 accrued through June 30, 2014, and December 31, 2013, respectively) and is payable upon demand. This note matured on December 15, 2011 and management has engaged in negotiations with the vendor to extend the note or replace it with a new promissory note.

“Short-term advances”

In connection with the Merger, the Company received $2.0 million in proceeds from the private equity offering, issuing 4.0 million shares of common stock, par value $0.001 (along with warrants for the purchase an additional 4.0 million shares of common stock at the current exercise price of $0.50 per share and having a term of five (5) years). In the first nine months of 2013, investors holding certain of the warrants provided the Company with $390,000 in financial support by providing short-term advances to the Company against the exercise of their warrants at a future time of the investors’ choice. The balance of the short-term advances was $390,000 as of December 31, 2013. Since the Company’s stock price in January 2014 was far below the exercise price of the warrants, EFL Tech required that the Company enter into an Exchange Agreement with the investors who had provided the short-term advances in order to eliminate this obligation. At the First Closing, pursuant to such Exchange Agreement the Company issued an aggregate of 10,807,815 shares of Common Stock, in exchange for the settlement and release of $390,000 in short-term advances from such creditors. Under the Exchange Agreement, the per-share exchange price for such debt was determined by the average of the closing prices of the Common Stock on the trading days commencing on December 1, 2013, and ending on January 20, 2014 (the day prior to the First Closing), which resulted in an exchange price of $0.036085 per share of Common Stock.

At December 31, 2013, short-term advances consisted of (a) the $390,000 from investors as described above, (b) $310,670 in short term advances from EFL Tech to be credited against the equity investment to be made at the First Closing, and (c) a loan to the Company of $6,000 from the Company’s Chief Executive Officer, which was repaid in cash after the First Closing.

At September 30, 2014, short-term advances consisted of $29,716 provided to the Company by EFL during the third quarter of 2014 to assist the Company in funding its continuing operations. Such advance does not bear interest. It is anticipated that the advance will be repaid from investment capital to be made available to the Company at the time it is able to exit bankruptcy.

8. Other Current Liabilities

Other liabilities at ~~June~~September 30, 2014, and December 31, 2013, ~~consist~~ consist of accrued corporate operating expenses as estimated by management, including accruals for legal, tax preparation and accounting expenses.

9. Notes Payable, Net

At December 31, 2013, notes payable consisted entirely of the non-current portion of the promissory note (the “Note”) discussed above in Note 7, “Current Portion of Promissory Notes and Other Short-Term Debt”. The Note was repaid in full during the first quarter of 2014.

The Company, through its wholly-owned subsidiary OTLLC, had three outstanding series of convertible notes (the Series C-1 notes, the Series C-2 notes, and the Series C-3 notes, collectively the “Notes”). Each series of Notes was convertible under certain circumstances into the Company’s common stock at different conversion rates. On August 31, 2012, as a result of the completion of a “Qualified Financing” as defined in the Notes and as modified by the Group Modification Agreement approved by the holders of the Notes in March 2012, the Notes and accumulated accrued interest through August 31, 2012, were converted into 27,158,657 shares of the Company’s common stock (the “Conversion”).

Following the Conversion on August 31, 2012, none of the principal and interest of the Notes remained outstanding, but the holders of the Notes retained the detachable warrants to purchase common stock at $0.3125 per share that they had received in connection with their investment in the Notes. The following table shows the number of shares of common stock that would have been issued if all the warrants related to the Notes were exercised as of June 30, 2014 and as of December 31, 2013:17

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

As of June 30, 2014 and December 31, 2013
Convertible Debt	Conversion Price	Principal and Interest Amounts		Potential Shares Issued if Notes Converted		Shares Issued if Series C Warrants Exercised @ $0.3125
Series C-1 Notes	N/A	$	-		-		2,841,440
Series C-2 Notes	N/A		-		-		3,200,000
Series C-3 Notes	N/A		-		-		1,972,000
		$	-		-		8,013,440

As of September 30, 2014 and December 31, 2013
Convertible Debt	Conversion Price		Principal and Interest Amounts		Potential Shares Issued if Notes Converted		Shares Issued if Series C Warrants Exercised @ $0.3125
Series C-1 Notes		N/A	$	-		-		2,841,440
Series C-2 Notes		N/A		-		-		3,200,000
Series C-3 Notes		N/A		-		-		1,972,000
			$	-		-		8,013,440

The Company has not included these share equivalents in earnings per share calculations as they are anti-dilutive due to the Company’s net losses incurred for the periods presented.

10. Leases

The Company’s only lease is for its office and production facility, consisting of approximately 9,957 square feet in a building located at 4251 Kellway Circle in Addison Texas. The Company is obligated to pay $6,597 per month through March 31, 2016. The Company began leasing its current facilities in April 2010 under an operating lease that extends through March 2016.

Rent expense relating to the operating lease agreement was $19,791 for each of the three month periods ended ~~June~~September 30, 2014 and 2013 and $3959,~~582~~373 for each of the ~~six~~nine month periods ended ~~June~~ September 30, 2014 and 2013.

As of ~~December~~September 3130, ~~2013~~2014, the future minimum payments required under all operating leases with terms in excess of one year were as follows:

For the year ending December 31,	Amount
	Payments Due by Period
2014		79,164
Contractual Obligations at September 30, 2014	Less than One Year		One to Three years		Three to Five Years		More Than Five Years		Total
2015		79,164
		($)		($)		($)		($)		($)
2016		19,791
Operating lease obligations		79,164		39,582		-		-		118,746
2017		-
Long-term debt obligations		-		-		-		-		-
	$	178,119
Capital expenditure obligations		-		-		-		-		-
Purchase obligations		-		-		-		-		-
Other long-term obligations		-		-		-		-		-

11. Commitments and Contingencies

Marcus v. Oryon, et. al.

On February 6, 2014, M. Richard Marcus (the “Plaintiff”) filed a lawsuit against Oryon Technologies, Inc. (“Oryon”) and certain of its subsidiaries and directors, and EFL Tech B.V. (“EFL”) and an affiliate (collectively, the “Defendants”), in the District Court for Dallas County, Texas (the “Court”), alleging a breach of fiduciary duty, inducement of breach of fiduciary duty, minority shareholder oppression, breach of promissory note, and tortious interference with contract, in connection with the transaction between Oryon and EFL that is described in Oryon’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 27, 2014 (the “EFL Transaction”). The Plaintiff is the former Chief Executive Officer, President and Chairman of the Board of OryonTechnologies, LLC, having relinquished those positions upon the closing of the Merger (as that term is defined in Part II, Item 5, Initial Public Offering) on May 4, 2012.

1918

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

In the lawsuit, the Plaintiff seeks monetary damages, and a temporary restraining order, temporary injunction and permanent injunction that would, inter alia, restrain the Defendants from: (i) closing the second and third tranches (as required by the Subscription Agreement between the parties) pursuant to which EFL would contribute $500,000 to Oryon in exchange for shares of common stock that would increase EFL’s ownership stake in Oryon to 75% of Oryon’s fully diluted common stock, and allow EFL to nominate three additional directors to Oryon’s Board of Directors; (ii) acting under the Subscription Agreement, License Agreement, Equipment Lease Agreement, or the Business Relationship Agreement that are part of the EFL Transaction; and (iii) dissipating the assets of Oryon.

The Plaintiff also alleges that Oryon breached a promissory note held by Plaintiff which accelerates the full amount of principal and interest of due thereunder, in the amount of approximately $68,000.

At a hearing held on February 6, 2014, the Court denied the Plaintiff’s motion for a temporary restraining order.

After a hearing before the Court held on February 14 and 19, 2014, the Court entered an Order on February 20, 2014:

1. Denying Plaintiff’s request for a Temporary Injunction; and

2. Ordering that Plaintiff shall not obstruct or interfere with the Defendants’ continuing operations and transactions.

Oryon intends to vigorously defend against the foregoing action.

Myant v. Oryon, et. al.

On January 3, 2014, Myant Capital Partners filed a lawsuit against Oryon Technologies, Inc. in the United States District Court for the Northern District of Texas, Dallas Division, alleging that Oryon breached an exclusivity agreement and a non-disclosure/confidentiality agreement, and seeking $1.25 million in damages. On January 28, 2014, Oryon filed its Answer to the Complaint denying the allegations and asserting affirmative defenses.

Oryon intends to vigorously defend against the foregoing action.

Other Commitments and Contingencies

As of ~~June~~September 30, 2014, ~~only~~none ~~one~~ of the Company’s employees was covered by an employment agreement. ~~In general, the employment agreement contains non-compete provisions ranging from three months to one year following the termination of employment.~~

12. Income Taxes

The tax effects of significant items comprising the Company’s net deferred tax assets and liabilities at ~~June~~September 30, 2014 are as follows:

	June 30, 2014
	September 30, 2014
Net operating loss carryforwards	$	1,~~216~~249,~~431~~026
Depreciation		(2,~~645~~184	)
Amortization		1416,~~816~~778
Accrued miscellaneous		(2419,~~648~~772	)
FMV warrants adjustment		182,025
Stock option compensation expense		~~122~~123,~~293~~482
Interest amortization		33,178
Total current deferred tax asset		1,~~541~~582,~~450~~533
Less: Valuation alllowance		(1,541,450	)
Less: Valuation allowance		(1,582,533	)
Net current deferred tax asset	$	-

The Company has net operating loss carry forwards of approximately $3,577,740 at June 30, 2014, which begin expiring in 2030. In assessing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management has recorded a valuation allowance for all deferred tax assets at June 30, 2014.19

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

The Company has net operating loss carry forwards of approximately $3,673,607 at September 30, 2014, which begin expiring in 2030. In assessing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Management has recorded a valuation allowance for all deferred tax assets at September 30, 2014.

The Company is currently evaluating the tax impacts, if any, of the ownership change. The federal and state net operating loss carryovers of the Company may be limited in the amount that can be recognized in any one year. The full impact of this evaluation has not been determined as of the date of these financial statements.

13. Capital

The Company was incorporated under the laws of the State of Nevada on August 22, 2007 with 100,000,000 authorized common shares with a par value of $0.001. On August 6, 2010, the Company effected a forward split of its shares of common stock on the basis of six new shares for one existing share, and amended its Articles of Incorporation to increase its number of authorized shares of common stock to 600,000,000 shares of common stock, with a par value of $0.006 per share. On October 31, 2011, certain shareholders, including two executive officers, surrendered, in aggregate, 30,000,000 shares of the Company’s common stock for cancellation. On November 17, 2011, an additional 1,000,000 shares were surrendered for cancellation. On November 4, 2011, the Board of Directors reduced the par value of the common shares from $0.006 to $0.001 per share. As of ~~June~~September 30, 2014 and December 31, 2013, 29respectively,~~000~~ there were 252,~~000~~333,438 ~~post-split~~and ~~common~~62,660,778 shares of ~~were~~common stock issued and outstanding. The post-split common shares are shown as split from the date of inception.

14. Equity Options and Warrants

OTLLC adopted the 2004 Unit Option Plan under which officers, employees, advisors and managers could be awarded membership unit option grants. Under the 2004 Unit Option Plan, OTLLC’s board could fix the term and vesting schedule of each option. Vested options generally could remain exercisable for up to three months after a participant's termination of service or up to 12 months after a participant's death or disability. Typically, the exercise price of a nonqualified option must not be less than the fair market value of the units on the grant date. The exercise price of each unit option granted under the 2004 Plan must be paid in cash when the option is exercised. Generally, options are not transferable except by will or the laws of descent and distribution.

In connection with the Merger, the Company’s Board of Directors adopted the 2012 Equity Incentive Plan, previously filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on March 21, 2012. In connection with the Merger, each currently outstanding option to purchase an OTLLC unit was converted into an option to purchase eight (8) shares of the Company’s common stock under the Company’s 2012 Equity Incentive Plan. Immediately prior to Closing, there were 345,388 options to purchase OTLLC units outstanding, which, if exercised could result in the issuance of 2,763,104 shares of the Company’s common stock at prices ranging from $0.13 per share to $0.63 per share.

On January 16, 2013, options for 423,796 shares were granted to employees and consultants for past services rendered, exercisable at $0.3425 per share and 100% vested on the grant date. The expense related to these option grants was $44,320 in 2013.

On May 2, 2013, non-executive directors were issued options for 300,000 shares, exercisable at $0.21 per share, 100% vested on the grant date, as compensation for such independent directors’ past service. The $19,590 grant date fair market value of these option grants was expensed in 2013.

On May 6, 2013, a consultant was issued an option for 81,081 shares, exercisable at $0.185 per share, 100% vested on the grant date, as compensation for such consultant’s past service. The $8,205 grant date fair market value of these option grants was expensed in 2013. Also, on June 28, 2013, the consultant was issued an option for 53,922 shares, exercisable at $0.153 per share, 100% vested on the grant date, as compensation for such consultant’s service in the second quarter. The $6,334 grant date fair market value of these option grants was expensed in 2013. Also, on March 31, 2014, the consultant was issued an option for 181,500 shares, exercisable at $0.10 per share, 100% vested on the grant date, as compensation for such consultant’s service in the first quarter of 2014. The $8,321 grant date fair market value of these option grants was expensed in the first quarter of 2014.

In September 2013, an option for 500,000 shares, exercisable at $0.1096 per share, with 100% vested on the first anniversary of the grant date, was granted to the Company’s chief executive officer under the 2012 Equity Incentive Plan. The grant date fair market value of this option grant was $18,820 of which $6,016 was expensed in 2013.20

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

In November 2013, non-executive directors were issued options for 300,000 shares, exercisable at $0.0418 per share, 100% vested on the grant date, as compensation for such independent directors’ prior service. The grant date fair market value of these option grants was $3,687, all of which was expensed in 2013.

At ~~June~~September 30, 2014, there were options ~~exercisable~~ exercisable for 6,358,774 shares outstanding at an average exercise price of $0.183 per share, consisting of fully vested options for 56,~~858~~358,774 shares at an average exercise price of $0.~~190~~183 per share ~~and an unvested option for 500,000 shares at an exercise price of $0~~.~~1096 per share.~~

Stock Options

The Company uses the modified Black-Scholes model to estimate the fair value of employee options on the date of grant utilizing the assumptions noted below. The risk-free rate is based on the U.S. Treasury bill yield curve in effect at the time of grant for the expected term of the option. The expected term of options granted represents the period of time that the options are expected to be outstanding. Expected volatilities are based on historical volatilities of selected technology stock mutual funds. The dividend yield was zero since the Company will not be paying dividends for the foreseeable future. For stock option grants in 2012, the following assumptions were used:

Range of risk-free interest rates	0.669% - 2.812%
Expected term of options in years	5.003 – 6.256
Range of expected volatility	34.70% – 38.42%

A summary of option activity for the years ended December 31, 2013 and 2012 follows:

	For the year ended December 31,
	2013					2012
	Shares			Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding at the beginning of the year		3,529,771		$	0.275		2,363,104	$	0.188
Granted		2,607,503		$	0.125		1,166,667	$	0.452
Exercised		-		$	-		-	$	-
Forfeited and expired		(240,000	)	$	0.311		-	$	-
Outstanding at the end of the year		5,897,274		$	0.183		3,529,771	$	0.275
Exercisable at the end of the year		5,397,274		$	0.~~190~~183		2,879,771	$	0.255

The Company recognized total compensation expense related to the stock options of $123,~~949~~497 and $7717,~~418~~157 during the three month periods ended ~~June~~September 30, 2014, and 2013, respectively, and $24,829 and $130,695 during the nine month periods ended September 30, 2014 and 2013, respectively. Compensation expense related to stock options is included in selling, general and administrative expenses in the consolidated statement of operations. Total unrecognized compensation expense related to unvested unit options was $~~8,176~~-0- and $12,804 at ~~June~~September 30, 2014, and December 31, 2013, respectively.

~~The weighted average grant date fair value of share options granted during the three month period ended June 30, 2014 was $0.100 per share.~~21

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

Common stock options outstanding and exercisable at ~~June~~ September 30, 2014 were as follows:

As of June 30, 2014
As of September 30, 2014
		Options Outstanding				Options Exercisable
Exercise Prices		Number Outstanding		Weighted Average Years of Remaining Contractual Life		Number Outstanding
$	0.020		540,000		9.9469		540,000
$	0.030		765,000		9.5126		765,000
$	0.042		300,000		9.3510		300,000
$	0.080		227,500		9.2601		227,500
$	0.100		181,500		9.7651		181,500
$	0.110		500,000		98.1994		-500,000
$	0.125		1,943,104		6.3914		1,943,104
$	0.153		53,922		98.0075		53,922
$	0.185		81,081		8.8560		81,081
$	0.210		300,000		8.8459		300,000
$	0.250		240,000		4.5126		240,000
$	0.343		340,000		8.5530		340,000
$	0.375		120,000		65.1186		120,000
$	0.395		266,667		8.3611		266,667
$	0.745		500,000		87.1994		500,000
~~Total~~	Total		6,358,774		87.0681		56,~~858~~358,774

The stock options exercisable at December 31, 2013, had an aggregate intrinsic value of $354,314. No options were exercised during 2014 or 2013.

The Company has not included these common stock equivalents in earnings per share calculations as they are anti-dilutive due to the Company’s net losses incurred for the periods presented.

Warrants

On March 12, 2012, as discussed in Note 13 above, the Company fulfilled subscriptions for the issuance of 800,000 shares along with warrants having the right to purchase 800,000 shares of common stock at the current exercise price of $0.50 per share, expiring in 5 years from the date of issuance. In June 2012, the Company fulfilled subscriptions for the issuance of 2,200,000 shares along with warrants having the right to purchase 2,200,000 shares of common stock at the current exercise price of $0.50 per share, expiring in 5 years from the date of issuance. In September 2012, the Company fulfilled subscriptions for the issuance of 1,000,000 shares along with warrants having the right to purchase 1,000,000 shares of common stock at the current exercise price of $0.50 per share, expiring in 5 years from the date of issuance. Also in September 2012, the Company issued to a consultant warrants having the right to purchase 133,335 shares of common stock at the current exercise price of $0.50 per share, expiring in 5 years from the date of issuance. Therefore, shares that may potentially be issued upon the exercise of warrants as a result of subscriptions received by the Company and issued to consultants as of ~~June~~September 30, 2014 are as follows:

	Number of shares potentially issuable		Weighted average exercise price
Issued in fulfillment of subscriptions		4,000,000		0.50
Issued to consultant		133,335		0.50
Exercised		-		-
Total shares potentially issuable as of June 30, 2014		4,133,335		0.50
Total shares potentially issuable as of September 30, 2014		4,133,335		0.50

When subscriptions are fulfilled by the Company, the warrants related to each individual subscription are dated as of the date the subscription funds were received by the Company, regardless of the date on which the obligation is ultimately fulfilled. Therefore, all warrants have a term of five years from date the subscription funds were received.22

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

AtWhen ~~June~~subscriptions ~~30,~~are ~~2014~~fulfilled by the Company, the ~~remaining~~warrants related ~~number~~to ofeach ~~years~~individual tosubscription ~~expiration and~~are dated as of the ~~weighted~~date ~~average~~the ~~term~~subscription tofunds ~~expiration~~were ~~for~~received by the 4Company,~~133,335~~ ~~outstanding~~regardless of ~~warrants~~the ~~related~~date toon ~~subscriptions~~which ~~that~~the ~~had~~obligation ~~been~~is ultimately fulfilled ~~through~~. ~~that~~Therefore, all warrants have a term of five years from date ~~were~~the assubscription funds ~~follows:~~were received.

At September 30, 2014, the remaining number of years to expiration and the weighted average term to expiration for the 4,133,335 outstanding warrants related to subscriptions that had been fulfilled through that date were as follows:

Expiration Date	Number of shares potentially issuable		Remaining years to expiration and weighted average		Fair Value of Warrants (at $0.50 exercise price)

October 26, 2016		200,000		2.82	$	107,446
November 1, 2016		50,000		2.84		26,862
December 4, 2016		200,000		2.93		107,446
December 27, 2016		200,000		2.99		107,446
February 13, 2017		50,000		3.12		26,862
February 27, 2017		100,000		3.16		53,723
March 12, 2017		250,000		3.20		134,308
April 4, 2017		150,000		3.26		80,585
April 22, 2017		250,000		3.31		134,308
May 9, 2017		500,000		3.36		268,616
May 14, 2017		1,050,000		3.37		564,094
July 22, 2017		500,000		3.56		268,616
August 30, 2017		500,000		3.67		268,616
August 30, 2017		133,335		3.67		71,632
		4,133,335		3.34	$	2,220,560

The following assumptions were used for the Black-Scholes valuation of the warrants issued:

	Assumption
Dividend rate		0	%
Annualized volatility		39.00	%
Risk free interest rate		0.59%- 1.20%	%
Expected life of warrants (years)		5.00

At both ~~June~~September 30, 2014 and December 31, 2013, the Company ~~had~~ had issued warrants for 8,013,440 shares of common stock to the holders of the Notes (see note 9) and additional warrants for 107,672 shares of common stock to other individuals for a total of 8,121,112 warrants outstanding. Of the warrants outstanding, 42,672 were issued in 2009, exercisable at $0.375 per share and had a weighted average grant date fair value of $0.009. In 2010, 7,768,440 warrants were issued, exercisable at $0.3125 per share, having a weighted average grant date fair value of $0.01. The remaining 310,000 warrants were issued in 2011, also exercisable at $0.3125 per share, having a weighted average grant date fair value of $0.008. The Company uses the modified Black-Scholes model to estimate the fair value of warrants on the date of issuance.

The Company has not included these common stock equivalents in earnings per share calculations as they are anti-dilutive due to the Company’s net losses incurred for the periods presented.

2423

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

~~June~~September 30, 2014

(Unaudited)

15. Benefit Plans

The Company established a 401(k) Plan (the “Plan”) for eligible employees of the Company, but in December 2012, the Company announced the termination of the Plan, primarily due to the high cost relative to the inadequate employee participation. Generally, all employees of the Company who are at least twenty-one years of age and who have completed one-half year of service were eligible to participate in the Plan. The Plan was a defined contribution plan that provides that participants may make voluntary salary deferral contributions, on a pretax basis, between 1% and 15% of their compensation in the form of voluntary payroll deductions, up to a maximum amount as indexed for cost of living adjustments. The Company was permitted to make discretionary contributions but no Company contributions had been made in 2014 or 2013.

16. Going Concern

The Company has accumulated losses from inception through ~~June~~September 30, 2014 of $13,~~148~~269,~~821~~644, has minimal assets, and has negative working capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These factors may have potential adverse effects on the Company including the ceasing of operations.

The Company is currently seeking additional capital to fund its operations through the foreseeable future. If capital raising efforts are unsuccessful, discontinuance of operations is likely. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

17. Subsequent Events

The Company has evaluated subsequent events that occurred after ~~June~~September 30, 2014 through ~~August~~December 148, 2014, the date this report was available to be issued. Any material subsequent events that ~~occurred~~ occurred during that time period have been properly recognized or disclosed in the Company’s financial statements.

Confirmation of Plan of Reorganization under Chapter 11 Bankruptcy

As previously reported, on May 6, 2014, the Company filed a voluntary petition for relief (the “Bankruptcy Filing”) under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division (the “Court”), Case No. 14-32293.

On November 7, 2014 (the “Confirmation Date”) the Court entered an order (the “Confirmation Order”) (Exhibit10.1), confirming the Modified First Amended Chapter 11 Plan under Chapter 11 of the Bankruptcy Code (the “Plan”) (Exhibit10.2), proposed by the Company and EFL Tech B.V., a Netherlands corporation and the majority shareholder of the Company (“EFL Tech”). The Plan is subject to certain conditions, including the execution and delivery of the license agreement described below under “Material Features of the Plan,” that must be satisfied prior to the effective date of the Plan (the “Effective Date”).

The following is a summary of certain material features of the Plan as confirmed by the Bankruptcy Court pursuant to the Confirmation Order. This summary is not intended to be a complete description of the Plan, and is qualified in its entirety by reference to the full text of the Plan. Capitalized terms used but not defined herein shall have the meanings given to them in the Plan.

Material Features of the Plan

In General. The Plan provides for payment of the undisputed pre-petition claims listed in the Company’s Plan and all post-petition payables from (A) the proceeds of a $1.37 million cash infusion made by EL Flexible Signs or its affiliates, in exchange for 80 million newly-issued shares of common stock, $0.001 par value (the “Common Stock”), of the Company and a $250,000 payment by EFL Tech, constituting the final payment under the subscription agreement dated January 21, 2014 (the “Subscription Agreement”) pursuant to which EFL Tech was issued 129,832,877 newly-issued shares of Common Stock as specified therein and (B) cash on hand. The Subscription Agreement is incorporated herein by reference to Exhibit 2 to the Schedule 13D dated January 21, 2014 as filed with the Securities and Exchange Commission by EFL Tech and its affiliates on January 31, 2014.

The Plan further provides for the waiver of claims held by insiders and the establishment of a disputed claims reserve in the approximate amount of $106,000 for a single claim in dispute. EFL Tech will continue to be the majority shareholder of the Company and the Company will be operated by a new board of directors. The Plan also provides for dismissal of all claims in the litigation pending before the Bankruptcy Court and incorporates a settlement agreement dated September 24, 2014 between the Company, a former officer of the Company, and certain shareholders and their respective affiliates settling various disputes and controversies between the parties, as amended by the Plan (the “Settlement Agreement”) (Exhibit 10.3).

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

Settlement Agreement. Pursuant to the Settlement Agreement the following actions will be effective as of the Effective Date:

1. The Company will pay M. Richard Marcus, the former Chief Executive Officer of the Company and certain of his affiliates, MRM Acquisitions, LLC and Oryon Capital LLC (collectively, “Marcus”), and Myant Capital Partners, Inc., an Ontario, Canada garment manufacturer, and Tony Chahine, the Chief Executive Officer of Myant (collectively, “Myant”) a combined total of $1.7 million, in the form of $600,000 in cash and execute and deliver to Marcus and Myant a promissory note dated November 7, 2014 in the original principal amount of $1.1 million (the “Promissory Note”). The Promissory Note will bear interest at six percent (6%) per annum, mature two (2) years from the date of the Promissory Note, and be secured by the Company’s patents and other intellectual property rights pursuant to a security agreement of even date (the “Security Agreement”). The Promissory Note will provide for principal payments as follows: $500,000 on or before ninety (90) days following the date of the Promissory Note, followed by fifteen (15) equal monthly payments each in the amount of $40,000 beginning ten (10) months after the date of the Promissory Note until maturity. The Promissory Note and Security Agreement are attached as Exhibits 10.4 and 10.5.

2. The Company will execute and deliver to Myant an exclusive license agreement with respect to the Company’s patents covering the geographic region of Canada (the “License Agreement”). The License Agreement is filed with the Commission as part of this Quarterly Report on Form 10-Q as Exhibit 10.2.

3. Marcus will surrender for cancellation all of their shares of Common Stock in the Company, consisting of 6,205,227 shares of Common Stock owned by Oryon Capital, LLC, 18,289,700 shares of Common Stock owned by MRM Acquisitions, LLC, and 1,300,310 shares of Common Stock owned by M. Richard Marcus, for a combined total of 25,795,237 shares of Common Stock.

4. All parties to the Settlement Agreement will fully release each other and dismiss all legal actions involving the Company.

Additional Agreements. Thomas P. Schaeffer, Larry L. Sears, Richard K. Hoesterey, and Clifton Shen (the members of the board of directors of the Company), and Donald M. Crook (collectively, the “Surrendering Parties”), and the Company, the members of the new board of directors of the Company, and EFL Tech and its affiliates will fully release each other from all legal actions involving the Company. In addition, the Surrendering Parties will surrender all shares of Common Stock and related warrants and options held in their names and in the names of their affiliates and family members. The total outstanding shares of Common Stock surrendered for cancellation by the Surrendering Parties was 8,025,127 shares of Common Stock.

Executory Contracts and Unexpired Leases. All pre-petition executory contracts and unexpired leases will be assumed by the Company, except for those executory contracts and/or unexpired leases rejected by the Company on or before the Confirmation Date or otherwise rejected under the Plan.

Equity Securities of the Company as of the Effective Date. As of the Effective Date the total issued and outstanding shares of Common Stock of the Company will be 428,345,951, after giving effect to the issuance of 209,832,877 shares of Common Stock to EFL Tech and EL Flexible Signs or its assigns and the surrender of 33,820,364 shares of Common Stock by Marcus and the Surrendering Parties. The issuance of such shares of Common Stock described above will be exempt from registration under the Securities Act pursuant to (i) Section 1145 of the Bankruptcy Code, which generally exempts from such registration requirements the issuance of securities under a plan of reorganization, and/or (ii) Section 4(a)(2) of the Securities Act because the issuance does not involve any public offering.

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the results of operations of Oryon Technologies, Inc. and its subsidiaries for the three and ~~six~~nine month periods ended ~~June~~September 30, 2014 and 2013 and its ~~financial~~ financial condition as of ~~June~~September 30, 2014 and December 31, 2013, should be read in conjunction with the consolidated financial statements and the notes to those financial statements that are included elsewhere in this Quarterly Report on Form 10-Q. Our discussion ~~includes~~ includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K, as amended, filed with the Securities and Exchange Commission (the “SEC”) on March 7, 2013. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

Oryon Technologies, Inc. (“Oryon”, the “Registrant” or the “Company” and “we,” “us”, “our” or similar terms) was organized under the laws of the State of Nevada on August 22, 2007 to explore mineral properties. On May 4, 2012 (the “Closing Date”), Oryon closed a merger transaction (the “Merger”) with Oryon Merger Sub, LLC, a Texas limited liability company and wholly-owned subsidiary of the Company (“Merger Sub”), and OryonTechnologies, LLC (“OTLLC”), a Texas limited liability company, pursuant to an Agreement and Plan of Merger dated March 9, 2012 (the “Merger Agreement”). As a result of the Merger, the Company ceased to explore mineral properties and became a technology company with certain valuable products and intellectual property rights related to a three-dimensional, elastomeric, membranous, flexible electroluminescent lamp. The Company’s principal executive offices are located at 4251 Kellway Circle, Addison, Texas 75001, and its phone number is (214) 267-1321.

The following discussion should be read in conjunction with our most recent financial statements and notes appearing elsewhere in this quarterly report. In addition to the historical financial information, the following discussion contains forward-looking statements that involve risks and uncertainties. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors.

Management’s discussion and analysis of the Company’s financial condition and results of operations are only based on the current business and operations of OTLLC and its subsidiaries, on a consolidated basis. Key factors affecting the Company’s results of operations include revenues, cost of revenues, operating expenses and interest expense.

Operating results for the interim periods presented herein are not necessarily indicative of the results that can be expected for the entire fiscal year.

Comparison of the Three months ended ~~June~~ September 30, 2014 to the Three months ended ~~June~~September 30, 2013

Gross Profit and Other Revenues

	For the Quarter Ended June 30,
	For the Quarter Ended September 30,
	2014			2013			Change from 2013 to 2014
Revenues	$	$		$	$		$	$		%	%
Product sales		2737,~~262~~290			3646,~~229~~576			(89,~~967~~286	)		-2419.89	%
Cost of goods sold		(216,~~385~~257	)		(438,~~849~~882	)		222,~~464~~625			-5058.82	%
Gross profit		2421,~~877~~033			317,~~380~~694			(613,~~503~~339	)		~~-20~~173.74	%
Royalty and license fees		-			-			-
Other		-			-			-
Total revenues		2421,~~877~~033			317,~~380~~694			(613,~~503~~339	)		~~-20~~173.74	%
Gross profit margin		9156.34	%		8616.65	%

Product sales decreased $9.03 thousand, or 2419.89%, to $2737.3 thousand for the three months ended ~~June~~September 30, 2014 from $3646.26 thousand for the three months ended ~~June~~ September 30, 2013. Gross profit and total revenues ~~decreased~~increased $613.53 thousand to $2421.90 thousand, or 20173.74%, from $317.47 thousand in the three months ended ~~June~~ September 30, 2013, due to the ~~decrease in product sales but offset by the~~ increase in gross profit on product sales resulting from a decrease in the cost of goods sold as a percentage of product sales.

Cost of goods sold represented 3243.06% of product sales revenues in the first three months of 2014 as compared to 2883.45% in the first three months of 2013. Each of the Company’s sales is separately negotiated with the specific customer. The Company endeavors to obtain the highest sales price for its products that can be negotiated with the customer and does not establish sales prices based on a “cost plus” analysis. Therefore, the cost of goods sold as a percentage of product sales revenue can be expected to vary significantly from period to period depending on the specific customers’ product orders. In addition, product sales ~~included~~may include the cost of design and engineering services that have little or no cost of goods sold.

Operating Expenses-Overview

Total operating expenses for the three months ended ~~June~~September 30, 2014, ~~increased~~decreased $87180.36 thousand, or 2457.74%, to $~~440~~134.0 thousand, from $~~352~~314.86 thousand in the three months ended September ~~June~~ 30, 2013, as shown in the table below:

	For the quarter ended					For the quarter ended
	June 30, 2014					June 30, 2013					Change
	September 30, 2014					September 30, 2013					Change
	$	$	%	%		$	$	%	%		$	$		%	%
Total applications development exp.		6520,~~626~~073		1415.90	%		6863,~~894~~778		1920.53	%		(343,~~268~~705	)		-468.75	%
Total sales and marketing exp.		~~14,985~~-		30.40	%		2931,~~798~~029		89.59	%		(1431,~~813~~029	)		-49100.70	%
Total general and administrative exp.		~~352~~106,~~674~~774		8079.27	%		~~246~~212,~~390~~083		6967.84	%		~~106~~(105,~~284~~309	)		43-49.17	%
Depreciation and amortization		67,~~746~~125		1.5.3	%		7,695		2.25	%		(~~949~~570	)		-127.34	%
Total operating expenses		~~440~~133,~~031~~972		100.0	%		~~352~~314,~~777~~585		100.0	%		87(180,~~254~~613	)		24-57.74	%

The primary reason for the ~~increase~~decrease in total operating expenses is the 4349.17% ~~increase~~decrease in general and administrative expense, as discussed below. In general, operating expenses declined in all sectors due to the reduced level of corporate activity in the 2014 period as a consequence of the bankruptcy status of the Company.

~~Applications Development Expense~~27

	For the Quarter Ended June 30,
	2014		2013		Change from 2013 to 2014
Applications Development Expense	$		$		$			%
Wages		14,928		31,846		(16,918	)		-53.1	%
Payroll taxes and benefits		2,757		2,384		373			15.6	%
Materials, equipment, services		45,702		30,177		15,525			51.4	%
Office and overhead		2,239		4,487		(2,248	)		-50.1	%
Travel and entertainment		-		-		-
Total applications development exp.		65,626		68,894		(3,268	)		-4.7	%

Applications Development Expense

NM = Not Meaningful

	For the Quarter Ended September 30,
	2014		2013		Change from 2013 to 2014
Applications Development Expense		$		$		$		%
Wages		7,128		31,566		(24,438	)	-77.4	%
Payroll taxes and benefits		2,424		5,170		(2,746	)	-53.1	%
Materials, equipment, services		9,345		25,017		(15,672	)	-62.6	%
Office and overhead		1,176		2,025		(849	)	-41.9	%
Total applications development exp.		20,073		63,778		(43,705	)	-68.5	%

27Total applications development expense decreased by $43.7 thousand or 68.5% for the three months ended September 30, 2014 as compared to the three months ended September 30, 2013, largely due to the $24.4 thousand, or 77.4%, decrease in wages and the related $2.7 thousand or 53.1% decrease in payroll taxes and benefits, both resulting from the reduced number of development personnel in 2014 as compared to the same period in 2013. Materials, equipment and services expense also decreased due to the reduced level of overall operational activity resulting from the bankruptcy filing.

~~Total~~Sales ~~applications~~and ~~development~~Marketing expense decreased by $3.3 thousand or 4.7% for the three months ended June 30, 2014 as compared to the three months ended June 30, 2013, due to the $15.5 thousand, or 51.4%, increase in materials, offset by the $16.9 thousand decrease in wages resulting from the lower number of development personnel in 2014.Expense

Sales and Marketing Expense

	For the Quarter Ended September 30,
	2014		2013		Change from 2013 to 2014
Sales and Marketing Expense		$		$		$		%
Wages		-		18,000		(18,000	)	-100.0	%
Payroll taxes and benefits		-		1,389		(1,389	)	-100.0	%
Overhead		-		5,640		(5,640	)	-100.0	%
Outside services		-		6,000		(6,000	)	-100.0	%
Travel and entertainment		-		-		-		NM
Total sales and marketing exp.		-		31,029		(31,029	)	-100.0	%

NM = Not Meaningful

	For the Quarter Ended June 30,
	2014		2013		Change from 2013 to 2014
Sales and Marketing Expense	$		$		$			%
Wages		-		18,000		(18,000	)		NM
Payroll taxes and benefits		-		1,389		(1,389	)		-100.0	%
Overhead		9,626		5,912		3,714			62.8	%
Outside services		2,000		1,000		1,000			100.0	%
Travel and entertainment		3,359		3,497		(138	)		-3.9	%
Total sales and marketing exp.		14,985		29,798		(14,813	)		-49.7	%

Total sales and marketing expense decreased to $-0- thousand in the first three months of 2014 from $31.0 thousand in the comparable quarter of 2013. The decrease of $31.0 thousand was due to the absence of sales personnel in the 2014 period.

NMGeneral =and ~~Not~~Administrative ~~Meaningful~~Expense

Total sales and marketing expense decreased to $15.0 thousand in the first three months of 2014 from $29.8 thousand in the first three months of 2013. The decrease of $14.8 thousand or 49.7% is largely due to the to the $18.0 thousand decrease in wages along with the related $1.4 thousand decrease in payroll taxes and benefits resulting from the absence of sales personnel in 2014.

	For the Quarter Ended September 30,
	2014		2013		Change from 2013 to 2014
General and Administrative Expense		$		$		$		%
Wages		2,000		39,540		(37,540	)	-94.9	%
Payroll taxes and benefits		5,234		22,033		(16,799	)	-76.2	%
Overhead		23,743		35,993		(12,250	)	-34.0	%
Outside services		75,566		106,208		(30,642	)	-28.9	%
Travel and entertainment		231		8,309		(8,078	)	-97.2	%
Total general and administrative exp.		106,774		212,083		(105,309	)	-49.7	%

General and ~~Administrative~~administrative expense ~~Expense~~for the third quarter of the year decreased by $105.3 thousand, or 49.7%, to $106.8 thousand from $212.1 thousand in the prior year comparable period largely due to (a) the $30.6 thousand decrease in outside services expenses, as discussed below, and (b) the $37.5 thousand decrease in wages along with the related $16.8 thousand decrease in payroll taxes and benefits. Payroll taxes and benefits included stock option compensation expense for employees and consultants of $3.5 thousand in the quarter ended September 30, 2014, as compared to $17.2 thousand in the comparable quarter of 2013. Stock option compensation expense for directors is included in outside services expense, discussed below.

	For the Quarter Ended June 30,
	2014		2013		Change from 2013 to 2014
General and Administrative Expense	$		$		$			%
Wages		42,417		69,999		(27,582	)		-39.4	%
Payroll taxes and benefits		13,953		22,250		(8,297	)		-37.3	%
Overhead		32,361		35,910		(3,549	)		-9.9	%
Outside services		263,532		118,176		145,356			123.0	%
Travel and entertainment		411		55		356			647.3	%
Total general and administrative exp.		352,674		246,390		106,284			43.1	%

NMOutside =services ~~Not~~expenses ~~Meaningful~~ decreased $30.6 thousand, or 28.9%, to $75.6 thousand in the three months ended September 30, 2014 from $106.2 thousand in the three months ended September 30, 2013, as shown in the table below.

General and administrative expense for the second quarter of the year increased by $106.3 thousand, or 43.1%, to $352.7 thousand from $246.4 thousand in the prior year comparable period largely due to (a) the $145.4 thousand increase in outside services expenses, as discussed below, offset by (b) the $27.6 decrease in wages along with the related $8.3 decrease in payroll taxes and benefits. Payroll taxes and benefits included stock option compensation expense for employees and consultants of $8.4 thousand in the quarter ended June 30, 2014, as compared to $16.5 thousand in the comparable quarter of 2013. Stock option compensation expense for directors is included in outside services expense, discussed below.

	For the quarter ended				For the quarter ended
	September 30, 2014				September 30, 2013				Change
		$	%			$	%			$		%

Legal expenses		18,820	24.9	%		30,159	28.4	%		(11,339	)	-37.6	%
Accounting and audit expenses		12,650	16.7	%		21,048	19.8	%		(8,398	)	-39.9	%
Directors' fees and expenses		11,875	15.7	%		18,125	17.1	%		(6,250	)	-34.5	%
Public relations expenses		5,894	7.8	%		3,115	2.9	%		2,779		89.2	%
Consulting		17,567	23.3	%		25,433	24.0	%		(7,866	)	-30.9	%
Payroll processing expenses		254	0.3	%		595	0.6	%		(341	)	-57.3	%
Banking Fees		-	0.0	%		118	0.1	%		(118	)	-100.0	%
Stock transfer agent and filing fees		8,506	11.3	%		7,615	7.2	%		891		11.7	%
Total G&A outside services		75,566	100.0	%		106,208	100.0	%		(30,642	)	-28.9	%

~~Outside~~The ~~services~~primary ~~expenses~~reason for the decrease in outside ~~increased~~services expense is the $~~145~~11.43 thousand, or ~~123~~37.36%, todecrease ~~$263.5~~in ~~thousand~~legal expenses in the ~~three~~third ~~months~~quarter ~~ended~~of ~~June~~2014 ~~30,~~as ~~2014~~compared ~~from~~to ~~$118~~the third quarter of 2013.2 ~~thousand~~As discussed in Note 11 to the ~~three~~financial statements, the Company has been conducting vigorous legal defenses against ~~months~~two ~~ended~~lawsuits. ~~June~~Although ~~30,~~some ~~2013,~~of asdefense ~~shown~~costs inhave been covered by insurance, the ~~table~~Company’s ~~below~~directors’ and officers’ insurance policy carries substantial deductible requirements.

28In connection with the EFL Transaction, one director voluntarily resigned from the Board of Directors effective January 21, 2014, thereby eliminating the requirement for the quarterly accrual of fees for his service for the third quarter of 2014. Largely as a result of this director’s resignation, directors’ fees and expenses for the three months ended September 30, 2014, decreased by $6.3 thousand as compared to the three month period ended September 30, 2013. No stock option compensation expense for directors was incurred in the third quarters of 2014 and 2013.

	For the quarter ended					For the quarter ended
	June 30, 2014					June 30, 2013					Change
	$		%			$		%			$			%
Legal expenses		189,208		71.8	%		38,993		33.0	%		150,215			385.2	%
Accounting and audit expenses		18,536		7.0	%		11,694		9.9	%		6,842			58.5	%
Directors' fees and expenses		11,875		4.5	%		37,826		32.0	%		(25,951	)		NM
Public relations expenses		3,794		1.4	%		-		0.0	%		3,794			NM
Consulting		31,419		11.9	%		28,044		23.7	%		3,375			12.0	%
Payroll processing expenses		272		0.1	%		564		0.5	%		(292	)		-51.8	%
Banking Fees		35		0.0	%		170		0.1	%		(135	)		-79.4	%
Stock transfer agent and filing fees		8,393		3.2	%		885		0.8	%		7,508			848.4	%
Total G&A outside services		263,532		100.0	%		118,176		100.0	%		145,356			123.0	%

Public relations expense increased by $2.8 thousand to $5.9 thousand in the three months ended September 30, 2014 as compared to $3.1 thousand in the three months ended September 30, 2013. The expense in 2014 is for press releases and the cost of public relations consultants in connection with the communications to the public about the status of the bankruptcy process.

NMOther =expense ~~Not~~categories ~~Meaningful~~such as consulting, payroll processing expenses and banking fees decreased from the comparable year period due to the reduced level of corporate activity resulting from the Company’s bankruptcy.

~~The~~Other ~~primary reason for the increase in outside~~Income services expense is the $150.2 thousand, or 385.2%, increase in legal expenses in the second quarter of 2014 as compared to the second quarter of 2013. As discussed in Note 11, the Company has been conducting vigorous legal defenses against two lawsuits. Although some of the legal defense costs will be covered by insurance, the Company’s directors’ and officers’ insurance policy carries substantial deductible requirements.(Expense)

InInterest ~~connection~~expense ~~with~~decreased ~~the~~$2.0 ~~EFL Transaction~~thousand, ~~the~~or ~~Company was required to eliminate much of its corporate debt obligations~~20.4%, ~~including the deferred directors’ fees that had been accrued. Two directors agreed~~ to settle their balances through the Exchange Agreements whereby they received a combination of cash and common stock in settlement. A third director voluntarily agreed to waive his deferred director’s fees in the amount of $~~41.~~7.9 thousand, ~~which~~for ~~amount~~the ~~was~~three ~~applied~~months inended ~~the~~September ~~first~~30, ~~quarter of~~ 2014, ~~offsetting~~from ~~the quarterly accrual for directors’ fees expense and creating a negative balance for the quarter~~$9.9 ~~The~~thousand ~~director~~in ~~also resigned from~~ the ~~Board~~three ofmonths ~~Directors~~ended ~~effective~~September ~~January 21~~30, ~~2014~~2013, ~~thereby~~due ~~eliminating~~to the ~~requirement~~lower ~~for~~principal ~~the~~amount ~~quarterly accrual~~ of ~~fees~~debt ~~for~~outstanding ~~his~~as ~~service for the second quarter of 2014. As~~ a result of ~~this~~the ~~director’s~~full ~~resignation,~~payment ~~directors’~~of ~~fees and expenses for~~ the ~~three~~notes ~~months~~payable ~~ended~~earlier ~~June 30,~~in 2014, ~~decreased~~as byreported ~~$26.0~~in ~~thousand~~notes as7 ~~compared~~and 9 to the ~~three~~financial ~~month period ended June 30, 2013~~statements. ~~Also,~~Interest ~~directors’ fees and expenses included stock option compensation~~ expense offor ~~$-0- in~~ the ~~quarter~~reported ~~ended~~periods ~~June~~consisted ~~30,~~only ~~2014,~~of asinterest on ~~compared~~promissory tonotes ~~$19.6~~payable ~~thousand~~and inother ~~the~~short-term ~~comparable period in 2013~~debt.

Public relations expense increased by $3.8 thousand to $3.8 thousand in the three months ended June 30, 2014 as compared to no expense in the three months ended June 30, 2013. The expense in 2014 is for press releases and the cost of public relations consultants in connection with the communications to the public about the EFL Transaction.Taxes

~~Other~~For ~~Income~~the three months ended September 30, ~~(Expense)~~2014, the Company incurred substantial losses and subsequently has no tax obligation. Although the incurred losses may be carried forward to offset future taxable income, within certain limitations, the Company cannot reliably forecast when profitable operations will occur. Accordingly, the Company has not recorded any deferred tax assets related to the losses incurred.

Interest Expense: Interest expense decreased $2.2 thousand, or 23.4%, to $7.2 thousand for the three months ended June 30, 2014, from $9.3 thousand in the three months ended June 30, 2013, due to the lower principal amount of debt outstanding. Interest expense for the reported periods consisted only of interest on promissory notes payable and other short-term debt.29

~~Taxes~~Comparison of the Nine months ended September 30, 2014 to the Nine months ended September 30, 2013

~~For~~Gross ~~the~~Profit ~~three months ended June 30, 2014, the Company incurred substantial losses~~ and ~~subsequently~~Other has no tax obligation. Although the incurred losses can be carried forward to offset future taxable income, within certain limitations, the Company cannot reliably forecast when profitable operations will occur. Accordingly, the Company has not recorded any deferred tax assets related to the losses incurred.Revenues

Comparison of the Six months ended June 30, 2014 to the Six months ended June 30, 2013


	For the Nine Months Ended September 30,
	2014			2013			Change from 2013 to 2014
Revenues		$			$			$		%
Product sales		88,996			99,559			(10,563	)	-10.6	%
Cost of goods sold		(26,469	)		(48,484	)		22,015		-45.4	%
Gross profit		62,527			51,075			11,452		22.4	%
Royalty and license fees		-			-			-
Other		-			-			-
Total revenues		62,527			51,075			11,452		22.4	%


Gross profit margin		70.3	%		51.3	%

Product sales decreased $10.6 thousand, or 10.6%, to $89.0 thousand for the nine months ended September 30, 2014 from $99.6 thousand for the nine months ended September 30, 2013. Gross ~~Profit~~profit and ~~Other~~total ~~Revenues~~revenues increased $11.5 thousand to $62.5 thousand, or 22.4%, from $51.1 thousand in the nine months ended September 30, 2013, due to the increase in gross profit on product sales resulting from a decrease in the cost of goods sold as a percentage of product sales that more than offset the decrease in product sales revenues.

	For the Six Months Ended June 30,
	2014			2013			Change from 2013 to 2014
Revenues	$			$			$			%
Product sales		51,706			52,983			(1,277	)		-2.4	%
Cost of goods sold		(10,212	)		(9,602	)		(610	)		6.4	%
Gross profit		41,494			43,381			(1,887	)		-4.3	%
Royalty and license fees		-			-			-
Other		-			-			-
Total revenues		41,494			43,381			(1,887	)		-4.3	%
Gross profit margin		80.2	%		81.9	%

Cost of goods sold represented 29.7% of product sales revenues in the first nine months of 2014 as compared to 48.7% in the first nine months of 2013. Each of the Company’s sales is separately negotiated with the specific customer. The Company endeavors to obtain the highest sales price for its products that can be negotiated with the customer and does not establish sales prices based on a “cost plus” analysis. Therefore, the cost of goods sold as a percentage of product sales revenue can be expected to vary significantly from period to period depending on the specific customers’ product orders. In addition, product sales may include the cost of design and engineering services that have little or no cost of goods sold.

29Operating Expenses-Overview

~~Product~~Total ~~sales~~operating ~~decreased~~expenses ~~$1.3 thousand, or 2.4%, to $51.7 thousand~~ for the ~~six~~nine months ended ~~June~~September 30, 2014, ~~from~~increased $53134.06 thousand ~~for the six months ended June 30~~, ~~2013.~~or ~~Gross profit and total revenues decreased $1~~12.93%, ~~thousand~~ to $411,230.52 thousand, ~~or 4.3%,~~ from $431,095.46 thousand in the ~~six~~nine months ended ~~June~~ September 30, 2013, ~~due~~as toshown ~~both the decrease~~ in ~~product sales and~~ the ~~decrease~~table ~~in gross profit on product sales resulting from an increase in the cost of goods sold as a percentage of product sales.~~below:

Cost of goods sold represented 19.8% of product sales revenues in the first six months of 2014 as compared to 18.1% in the first six months of 2013. Each of the Company’s sales is separately negotiated with the specific customer. The Company endeavors to obtain the highest sales price for its products that can be negotiated with the customer and does not establish sales prices based on a “cost plus” analysis. Therefore, the cost of goods sold as a percentage of product sales revenue can be expected to vary significantly from period to period depending on the specific customers’ product orders. In addition, product sales included the cost of design and engineering services that have little or no cost of goods sold.

	For the nine months ended				For the nine months ended
	September 30, 2014				September 30, 2013				Change
		$	%			$	%			$		%
Total applications development exp.		206,017	16.8	%		235,171	21.5	%		(29,154	)	-12.4	%
Total sales and marketing exp.		28,905	2.4	%		86,816	7.9	%		(57,911	)	-66.7	%
Total general and administrative exp.		973,710	79.2	%		750,283	68.5	%		223,427		29.8	%
Depreciation and amortization		21,566	1.8	%		23,362	2.1	%		(1,796	)	-7.7	%
Total operating expenses		1,230,198	100.0	%		1,095,632	100.0	%		134,566		12.3	%

~~Operating~~The ~~Expenses-Overview~~primary reason for the increase in total operating expenses is the 29.8% increase in general and administrative expense, as discussed below.

~~Total operating expenses for the six months ended June~~ 30~~, 2014, increased $315.2 thousand, or 40.4%, to $1,096.2 thousand, from $781.0 thousand in the six months ended June 30, 2013, as shown in the table below:~~

	For the six months ended					For the six months ended
	June 30, 2014					June 30, 2013					Change
	$		%			$		%			$			%
Total applications development exp.		185,944		17.0	%		171,393		21.9	%		14,551			8.5	%
Total sales and marketing exp.		28,905		2.6	%		55,787		7.1	%		(26,882	)		-48.2	%
Total general and administrative exp.		866,936		79.1	%		538,200		68.9	%		328,736			61.1	%
Depreciation and amortization		14,441		1.3	%		15,667		2.0	%		(1,226	)		-7.8	%
Total operating expenses		1,096,226		100.0	%		781,047		100.0	%		315,179			40.4	%

Applications Development Expense

The primary reason for the increase in total operating expenses is the 61.1% increase in general and administrative expense, as discussed below.

	For the Nine Months Ended September 30,
	2014		2013		Change from 2013 to 2014
Applications Development Expense		$		$		$		%
Wages		34,306		100,278		(65,972	)	-65.8	%
Payroll taxes and benefits		11,429		17,279		(5,850	)	-33.9	%
Materials, equipment, services		150,769		103,954		46,815		45.0	%
Office and overhead		9,513		13,660		(4,147	)	-30.4	%
Total applications development exp.		206,017		235,171		(29,154	)	-12.4	%

~~Applications~~Total ~~Development~~applications ~~Expense~~development expense decreased by $29.2 thousand or 12.4% for the nine months ended September 30, 2014 as compared to the nine months ended September 30, 2013, due to the $66.0 thousand, or 65.8%, decrease in wages and the related $5.9 thousand, or 33.9%, decrease in payroll taxes and benefits as a result of the decrease in personnel associated with the bankruptcy process. This decrease was substantially offset by the $46.8 thousand increase in the cost of materials that was largely due to $45.6 thousand in costs associated with the production of products ordered by EFL Tech, for which no net revenue has been reported. The sales price for the materials that could have been invoiced to EFL Tech was $54.1 thousand, but management has not invoiced for the product due to the possibility that EFL Tech will not make payment as a consequence of the Company’s legal matters.

	For the Six Months Ended June 30,
	2014		2013		Change from 2013 to 2014
Applications Development Expense	$		$		$			%
Wages		27,178		68,712		(41,534	)		-60.4	%
Payroll taxes and benefits		9,005		12,109		(3,104	)		-25.6	%
Materials, equipment, services		141,424		78,937		62,487			79.2	%
Office and overhead		8,337		11,635		(3,298	)		-28.3	%
Travel and entertainment		-		-		-
Total applications development exp.		185,944		171,393		14,551			8.5	%

Sales and Marketing Expense

Total applications development expense increased by $14.6 thousand or 8.5% for the six months ended June 30, 2014 as compared to the six months ended June 30, 2013, due to the $62.5 thousand, or 79.2%, increase in materials, offset by the $41.5 thousand decrease in wages along with the related $3.1 thousand decrease in payroll taxes and benefits resulting from the lower number of development personnel in 2014. The increase in the cost of materials is largely due to $45.6 thousand in costs associated with the production of products ordered by EFL Tech, for which no net revenue has been reported. The price for the materials as invoiced to EFL Tech was $54.1 thousand, but management has fully reserved that receivable due to the possibility that EFL Tech will not make payment as a consequence of the Company’s legal matters.

	For the Nine Months Ended September 30,
	2014		2013		Change from 2013 to 2014
Sales and Marketing Expense		$		$		$		%
Wages		-		54,000		(54,000	)	NM
Payroll taxes and benefits		-		4,185		(4,185	)	NM
Overhead		14,829		13,561		1,268		9.4	%
Outside services		6,000		7,000		(1,000	)	-14.3	%
Travel and entertainment		8,076		8,070		6		0.1	%
Total sales and marketing exp.		28,905		86,816		(57,911	)	-66.7	%

30Total sales and marketing expense decreased to $28.9 thousand in the first nine months of 2014 from $86.8 thousand in the first nine months of 2013. The decrease of $57.9 thousand or 66.7% is largely due to the to the $54.0 thousand decrease in wages along with the related $4.2 thousand decrease in payroll taxes and benefits resulting from the absence of sales personnel in 2014.

~~Sales~~General and ~~Marketing~~Administrative Expense

	For the Six Months Ended June 30,
	For the Nine Months Ended September 30,
	2014		2013		Change from 2013 to 2014
Sales and Marketing Expense	$		$		$			%
General and Administrative Expense		$		$		$			%
Wages		-83,435		36179,~~000~~538		(3696,~~000~~103	)		NM-53.5	%
Payroll taxes and benefits		-31,593		2128,~~796~~885		(297,~~796~~292	)		NM-75.5	%
Overhead		1494,~~829~~613		7104,~~921~~477		6(9,~~908~~864	)		87-9.24	%
Outside services		6744,~~000~~244		1327,~~000~~387		5416,~~000~~857			NM127.3	%
Travel and entertainment		819,~~076~~825		89,~~070~~996		69,829			098.13	%
Total sales and marketing exp.		28,905		55,787		(26,882	)		-48.2	%
Total general and administrative exp.		973,710		750,283		223,427			29.8	%

~~Total~~General ~~sales~~ and ~~marketing~~ administrative expense ~~decreased to~~for ~~$28.9 thousand in~~ the first ~~six~~nine months of ~~2014~~the ~~from~~year increased by $55223.4 thousand, or 29.8%, to $973.7 thousand infrom $750.3 thousand in the ~~first~~prior ~~six~~year ~~months~~comparable ofperiod ~~2013.~~largely ~~The~~due ~~decrease~~to of(a) the $26416.9 thousand or ~~48.2%~~increase isin ~~largely~~outside ~~due~~services toexpenses, ~~the~~as todiscussed below, offset by (b) the $3696.01 ~~thousand~~ decrease in wages along with the related $297.83 ~~thousand~~ decrease in payroll taxes and benefits. The decrease in payroll taxes and benefits ~~resulting~~is largely due to a decrease in stock option compensation expense for employees and consultants to $24.9 thousand in the nine months ended September 30, 2014, from $111.1 thousand in the ~~absence~~comparable period of ~~sales~~2013, ~~personnel~~a decrease of $86.2 thousand. Stock option compensation expense for directors is included in ~~2014~~outside services expense, discussed below.

~~General and Administrative Expense~~31

	For the Six Months Ended June 30,
	2014		2013		Change from 2013 to 2014
General and Administrative Expense	$		$		$			%
Wages		81,435		139,998		(58,563	)		-41.8	%
Payroll taxes and benefits		26,359		106,852		(80,493	)		-75.3	%
Overhead		70,870		68,484		2,386			3.5	%
Outside services		668,678		221,179		447,499			202.3	%
Travel and entertainment		19,594		1,687		17,907			NM
Total general and administrative exp.		866,936		538,200		328,736			61.1	%

Outside services expenses increased $416.9 thousand, or 127.3%, to $744.2 thousand in the nine months ended September 30, 2014 from $327.4 thousand in the nine months ended September 30, 2013, as shown in the table below.

General and administrative expense for the first six months of the year increased by $328.7 thousand, or 61.1%, to $866.9 thousand from $538.2 thousand in the prior year comparable period largely due to (a) the $447.5 thousand increase in outside services expenses, as discussed below, offset by (b) the $58.6 decrease in wages along with the related $80.5 decrease in payroll taxes and benefits. The decrease in payroll taxes and benefits is primarily due to the decrease in stock option compensation expense for employees and consultants to $21.3 thousand in the six months ended June 30, 2014, from $93.9 thousand in the comparable period of 2013, a decrease of $72.6 thousand. Stock option compensation expense for directors is included in outside services expense, discussed below.

	For the nine months ended					For the nine months ended
	September 30, 2014					September 30, 2013				Change
		$		%			$	%			$		%

Legal expenses		566,925		76.2	%		72,999	22.3	%		493,926		676.6	%
Accounting and audit expenses		48,442		6.5	%		45,432	13.9	%		3,010		6.6	%
Directors' fees and expenses		(6,042	)	-0.8	%		74,176	22.7	%		(80,218	)	-108.2	%
Public relations expenses		27,924		3.8	%		3,115	1.0	%		24,809		796.4	%
Consulting		88,792		11.9	%		82,758	25.3	%		6,034		7.3	%
Payroll processing expenses		1,002		0.1	%		1,813	0.6	%		(811	)	-44.7	%
Banking Fees		470		0.1	%		632	0.2	%		(162	)	-25.6	%
Stock transfer agent and filing fees		16,731		2.3	%		46,462	14.2	%		(29,731	)	-64.0	%
Total G&A outside services		744,244		100.0	%		327,387	100.0	%		416,857		127.3	%

~~Outside~~The ~~services~~primary ~~expenses~~reason for the increase in outside ~~increased~~services expense is the $~~447~~493.59 thousand, or ~~202~~676.36%, toincrease ~~$668.7~~in ~~thousand~~legal expenses in the ~~six~~first nine months ~~ended~~of ~~June~~2014 ~~30,~~as ~~2014~~compared ~~from~~to the ~~$221~~first nine months of 2013.2 ~~thousand~~As discussed in Note 11, the ~~six months~~Company ~~ended~~has ~~June~~been ~~30,~~conducting ~~2013~~vigorous legal defenses against two lawsuits, while asalso ~~shown~~incurring inlegal costs associated with the ~~table~~bankruptcy ~~below~~process. Although some of the legal defense costs have been covered by insurance, the Company’s directors’ and officers’ insurance policy carries substantial deductible requirements.

	For the six months ended						For the six months ended
	June 30, 2014						June 30, 2013					Change
	$			%			$		%			$			%
Legal expenses		548,105			82.0	%		79,635		36.0	%		468,470			588.3	%
Accounting and audit expenses		35,792			5.4	%		24,384		11.0	%		11,408			46.8	%
Directors' fees and expenses		(17,917	)		-2.7	%		56,051		25.3	%		(73,968	)		-132.0	%
Public relations expenses		22,030			3.3	%		-		0.0	%		22,030			NM
Consulting		71,225			10.7	%		57,325		25.9	%		13,900			24.3	%
Payroll processing expenses		748			0.1	%		1,218		0.6	%		(470	)		-38.6	%
Banking Fees		470			0.1	%		514		0.2	%		(44	)		-8.6	%
Stock transfer agent and filing fees		8,225			1.2	%		2,052		0.9	%		6,173			300.8	%
Total G&A outside services		668,678			100.0	%		221,179		100.0	%		447,499			202.3	%

In connection with the EFL Transaction, the Company was required to eliminate much of its corporate debt obligations, including the deferred directors’ fees that had been accrued. Two directors agreed to settle their balances through the Exchange Agreements whereby they received a combination of cash and common stock in settlement. A third director voluntarily agreed to waive his deferred director’s fees in the amount of $41.7 thousand, which amount was applied in the first quarter of 2014, offsetting the quarterly accrual for directors’ fees expense and creating a negative balance for the first quarter that also resulted in a negative balance for the first nine months of 2014. The director also resigned from the Board of Directors effective January 21, 2014, thereby eliminating the requirement for the accrual of fees for service for 2014. As a result of this director’s fee waiver and resignation, directors’ fees and expenses for the nine months ended September 30, 2014, decreased by $80.2 thousand as compared to the nine month period ended September 30, 2013. Also, directors’ fees and expenses included stock option compensation expense of $-0- in the nine months ended September 30, 2014, as compared to $19.6 thousand in the comparable period in 2013.

31Public relations expense increased by $24.8 thousand to $27.9 thousand in the nine months ended September 30, 2014, as compared to $3.1 thousand in the nine months ended September 30, 2013. The expense in 2014 is for press releases and the cost of public relations consultants in connection with the communications to the public about the EFL Transaction and the status of the bankruptcy process.

~~The~~Other ~~primary reason for the increase in outside~~Income services expense is the $468.5 thousand, or 588.3%, increase in legal expenses in the first six months of 2014 as compared to the first six months of 2013. As discussed in Note 11, the Company has been conducting vigorous legal defenses against two lawsuits. Although some of the legal defense costs will be covered by insurance, the Company’s directors’ and officers’ insurance policy carries substantial deductible requirements.(Expense)

InInterest ~~connection~~expense ~~with~~decreased ~~the~~$4.9 ~~EFL Transaction~~thousand, ~~the~~or ~~Company was required to eliminate much of its corporate debt obligations~~17.3%, ~~including the deferred directors’ fees that had been accrued. Two directors agreed~~ to settle their balances through the Exchange Agreements whereby they received a combination of cash and common stock in settlement. A third director voluntarily agreed to waive his deferred director’s fees in the amount of $4123.75 thousand, ~~which~~for ~~amount~~the ~~was~~nine ~~applied~~months inended ~~the~~September ~~first~~30, ~~quarter of~~ 2014, ~~offsetting~~from ~~the quarterly accrual for directors’ fees expense and creating a negative balance for the first quarter~~$28.5 ~~The~~thousand ~~director~~in ~~also resigned from~~ the ~~Board~~nine ofmonths ~~Directors~~ended ~~effective~~September ~~January 21~~30, ~~2014~~2013, ~~thereby~~due ~~eliminating~~to the ~~requirement~~lower ~~for~~principal ~~the~~amount ~~accrual~~ of ~~fees~~debt ~~for~~outstanding ~~service~~as ~~for~~a ~~the~~result ~~first half~~ of ~~2014.~~the Asfull apayment ~~result~~ of ~~this director’s fee waiver and resignation, directors’ fees and expenses for~~ the ~~six~~notes ~~months~~payable ~~ended~~earlier ~~June 30,~~ in 2014, ~~decreased~~ ~~by $74.0 thousand~~ as ~~compared~~reported toin ~~the~~notes ~~six~~7 ~~month~~and ~~period~~9 ~~ended~~to ~~June~~the ~~30,~~financial ~~2013~~statements. ~~Also,~~Interest ~~directors’ fees and expenses included stock option compensation~~ expense offor ~~$-0- in~~ the ~~six~~reported ~~months~~periods ~~ended~~consisted ~~June~~only ~~30,~~of ~~2014,~~interest on aspromissory ~~compared~~notes topayable ~~$19.6~~and ~~thousand~~other inshort-term ~~the comparable period in 2013~~debt.

Public relations expense increased by $22.0 thousand to $22.0 thousand in the six months ended June 30, 2014 as compared to no expense in the six months ended June 30, 2013. The expense in 2014 is for press releases and the cost of public relations consultants in connection with the communications to the public about the EFL Transaction.32

~~Other Income (Expense)~~Taxes

~~Interest~~For ~~Expense:~~the ~~Interest expense~~nine ~~decreased~~months ~~$2.9~~ended ~~thousand~~September 30, 2014, orthe ~~15.6%,~~Company toincurred ~~$15.7~~substantial ~~thousand~~losses ~~for~~and ~~the~~subsequently ~~six~~has ~~months~~no ~~ended~~tax ~~June~~obligation. ~~30,~~Although ~~2014,~~the ~~from~~incurred ~~$18.6~~losses ~~thousand~~can inbe ~~the~~carried ~~six~~forward ~~months~~to ~~ended~~offset ~~June~~future ~~30,~~taxable ~~2013~~income, ~~due~~within tocertain limitations, the ~~lower~~Company ~~principal~~cannot ~~amount~~reliably offorecast ~~debt~~when ~~outstanding.~~profitable ~~Interest~~operations will ~~expense~~occur. ~~for~~Accordingly, the ~~reported~~Company ~~periods consisted~~has ~~only~~not ofrecorded ~~interest~~any ondeferred ~~promissory~~tax ~~notes~~assets ~~payable~~related ~~and~~to ~~other~~the ~~short-term~~losses ~~debt~~incurred.

~~Taxes~~Liquidity and Capital Resources

~~For~~Oryon filed a petition for protection under Chapter 11 of the ~~six~~U.S. ~~months~~Bankruptcy ~~ended~~Code ~~June~~on 30May 6, 2014~~, the~~. The Company ~~incurred~~does ~~substantial~~not ~~losses~~have ~~and~~sufficient ~~subsequently~~cash ~~has~~on nohand ~~tax~~to ~~obligation~~meet its current obligations and anticipated cash requirements. ~~Although~~See Notes 13, 16 and 17 of the ~~incurred~~Notes ~~losses~~to ~~can~~the beConsolidated ~~carried~~Financial ~~forward~~Statements. Not including tocapital ~~offset~~expenditures ~~future~~and ~~taxable~~costs ~~income~~directly related to revenue generating projects, ~~within~~operating ~~certain~~expenditures ~~limitations~~are expected to range between $100,000.00 ~~the~~and ~~Company~~$150,000.00 ~~cannot~~per ~~reliably~~month. ~~forecast~~Management ~~when~~anticipates ~~profitable~~that ~~operations~~an additional $1,500,000 to $3,000,000 will be necessary to ~~occur.~~fund ~~Accordingly,~~operations and provide adequate working capital for the next twelve to twenty-four month period subsequent to the date of this report. The Company ~~has~~does not ~~recorded~~currently have any ~~deferred~~material ~~tax~~commitments ~~assets~~for ~~related~~capital toexpenditures as of the ~~losses~~end ~~incurred~~of the current period.

~~Liquidity~~To meet management’s future objectives, the Company will need to sell additional equity and/or ~~Capital~~debt ~~Resources~~securities, which could result in dilution to current shareholders, or seek additional loans. The incurrence of indebtedness would result in increased debt service obligations and could require the Company to agree to operating and financial covenants that would restrict its operations. The Company does not have any lending arrangements in place with banking or financial institutions and management does not anticipate that it will be able to secure these funding arrangements in the near future. Financing may not be available in amounts or on terms acceptable to the Company, if at all. Any failure by the Company to raise additional funds on terms acceptable to it, or at all, could limit its ability to continue operations and terminate its overall business prospects.

~~Oryon~~Our ~~filed~~current acash ~~petition~~requirements ~~for~~are ~~protection under~~significant ~~Chapter~~due 11to ofplanned ~~the~~applications ~~U.S.~~development ~~Bankruptcy~~and ~~Code~~marketing onof ~~May~~our 6current technology, ~~2014.~~and ~~The~~we ~~Company~~anticipate ~~does~~generating ~~not~~additional ~~have~~operating monthly ~~sufficient~~losses ~~cash~~at onleast ~~hand~~through the middle of 2015. In order to ~~meet~~execute ~~its~~on ~~current~~our ~~obligations and~~business ~~anticipated~~strategy, ~~cash~~we ~~requirements.~~will ~~See~~require ~~Notes~~additional 13working capital, 16commensurate ~~and~~with 17the operational needs of ~~the~~our ~~Notes~~planned tomarketing, ~~the~~development ~~Consolidated~~and ~~Financial~~production ~~Statements~~efforts. ~~Not~~Our ~~including~~management cannot ~~capital~~guarantee ~~expenditures~~that ~~and~~we ~~costs~~will ~~directly~~be ~~related~~able to ~~revenue~~raise ~~generating~~sufficient ~~projects,~~amounts ~~operating~~of ~~expenditures~~working ~~are~~capital ~~expected~~through todebt ~~range~~or ~~between $100~~equity offerings,~~000.00~~ ~~and~~as ~~$150,000.00~~may ~~per~~be ~~month~~required to meet our short-term obligations. ~~Management~~Moreover, ~~anticipates~~changes ~~that~~in anour ~~additional~~operating $1plans,~~500,000~~ toincreased $3expenses,~~000~~ acquisitions,~~000~~ ~~will~~or beother ~~necessary~~events, may cause us to ~~fund~~ ~~operations~~seek ~~and~~additional ~~provide~~equity ~~adequate~~or ~~working~~debt ~~capital~~financing ~~for~~in the ~~next~~future. ~~twelve~~We anticipate continued and additional marketing, development and production expenses. Accordingly, we expect to ~~twenty-four~~continue ~~month~~to ~~period~~use ~~subsequent~~debt and equity financing to fund operations for the ~~date~~next oftwelve ~~this~~to ~~report.~~twenty-four ~~The~~months, ~~Company~~as ~~does~~we ~~not~~look ~~currently~~to ~~have~~expand ~~any~~our ~~material~~asset ~~commitments~~base ~~for~~and ~~capital~~fund ~~expenditures~~marketing, asdevelopment ofand ~~the~~production ~~end~~ of ~~the~~our ~~current period~~technology.

ToThere ~~meet~~are ~~management’s future~~no ~~objectives,~~assurances ~~the~~that ~~Company~~we will ~~need~~be able to ~~sell~~raise ~~additional~~the ~~equity~~required ~~and/or~~working ~~debt~~capital ~~securities,~~on ~~which~~terms ~~could~~favorable ~~result in dilution~~ to ~~current shareholders~~us, or ~~seek~~that ~~additional~~such ~~loans.~~working ~~The~~capital ~~incurrence~~will ofbe ~~indebtedness~~available ~~would~~on ~~result~~any ~~in increased debt service obligations and could~~terms ~~require~~when ~~the~~needed. ~~Company~~Any tofailure ~~agree~~ to ~~operating~~secure ~~and~~additional ~~financial~~financing ~~covenants that~~ would ~~restrict~~limit ~~its~~our ~~operations.~~ability ~~The~~to ~~Company~~continue ~~does~~as ~~not~~a ~~have any~~going ~~lending~~concern ~~arrangements in place with banking or financial institutions~~ and ~~management~~force ~~does~~us ~~not anticipate that it will be able~~ to ~~secure these funding arrangements in the near future. Financing may not be available in amounts or on terms acceptable to the~~ ~~Company,~~modify ifour atbusiness ~~all~~strategy. ~~Any~~In ~~failure by the Company to raise additional funds on terms acceptable to it~~addition, orwe atcannot ~~all,~~be ~~could~~assured ~~limit~~of ~~its ability~~profitability toin ~~continue~~the ~~operations and terminate its overall business prospects~~future.

~~Our~~We ~~current cash requirements~~ are ~~significant due~~not toaware ~~planned applications development and marketing~~ of ~~our~~any ~~current~~unusual ~~technology,~~or ~~and we anticipate generating additional operating~~infrequent ~~monthly~~events ~~losses~~or attransactions least through the end of 2014. In order to execute on our business strategy, we will require additional working capital, commensurate with the operational needs of our planned marketing, development and production efforts. Our management cannot guarantee that we will be able to raise sufficient amounts of working capital through debt or ~~equity~~any ~~offerings,~~significant aseconomic ~~may be required to meet our short-term obligations. Moreover,~~ changes inthat ~~our~~materially ~~operating~~affected ~~plans, increased expenses, acquisitions,~~ or ~~other~~could ~~events, may~~materially ~~cause~~affect ~~us to seek additional equity or debt financing in~~ the ~~future.~~amount Weof ~~anticipate continued and additional marketing, development~~our ~~and~~reported ~~production~~income ~~expenses.~~from ~~Accordingly, we expect to continue to use debt and equity financing to fund~~ operations ~~for the next twelve to twenty-four months, as we look to expand our asset base and fund marketing, development and production of our technology~~.

32Sources and uses of funds

~~There~~As ~~are~~of noSeptember ~~assurances~~30, 2014, ~~that~~Oryon wehad ~~will~~cash ~~be able~~and toequivalents ~~raise~~on ~~the~~hand ~~required~~of $23.6 thousand, and negative working capital onof ~~terms~~$1,083.0 ~~favorable~~thousand. toManagement ~~us,~~of the orCompany recognizes that ~~such~~its cash on hand and working capital will not be ~~available~~sufficient onto ~~any~~meet ~~terms~~its anticipated cash requirements ~~when~~in ~~needed~~the near term and is actively seeking additional capital funding. Any failure to secure additional financing would limit ~~our~~the Company’s ability to continue as a going concern and force usmanagement to modify ~~our~~the business strategy. ~~In addition, we cannot be assured of profitability in the future.~~

WeOryon’s ~~are~~sales ~~not~~cycle ~~aware~~timing varies depending on the type of ~~any~~customer ~~unusual~~being orserved. ~~infrequent~~It ~~events~~can orrange ~~transactions~~from three months for certain specialty promotions to 12-18 months orfor ~~any~~certain ~~significant~~branded ~~economic~~products ~~changes~~from first contact with a prospective customer until product sales revenues can be reported. During that ~~materially~~period, ~~affected~~Oryon orworks ~~could~~with ~~materially~~the ~~affect~~customer’s designers to cooperatively engineer an application of its patented technology into the ~~amount~~customer’s final product. This requires substantial co-development with the customer’s personnel to meet the needs of ~~our~~the ~~reported~~customer. ~~income~~Accordingly, ~~from~~Oryon must have sufficient capital to fund administrative overhead, sales and marketing efforts ~~operations~~and staffing expenses for an extended period of time before cash is received from customers.

~~Sources and uses of funds~~33

AsNet ~~of June 30, 2014, Oryon had~~ cash ~~and~~provided ~~equivalents~~by on(used hand of $11.3 thousand, and negative working capital of $972.4 thousand. Management of the Company recognizes that its cash on hand and working capital will not be sufficient to meet its anticipated cash requirements in) ~~the~~operating near term and is actively seeking additional capital funding. Any failure to secure additional financing would limit the Company’s ability to continue as a going concern and force management to modify the business strategy.activities

~~Oryon’s~~Net ~~sales~~cash ~~cycle~~used ~~timing~~in ~~varies depending~~operating onactivities for the ~~type~~nine ofmonths ~~customer~~ended ~~being~~September ~~served.~~30, It2014 ~~can~~increased ~~range~~by ~~from~~$554.1 ~~three~~thousand ~~months~~to ~~for~~a ~~certain~~use ~~specialty~~of ~~promotions~~$1,110.3 thousand, as compared to ~~12-18~~a ~~months~~use of $556.2 thousand for ~~certain~~the ~~branded~~nine ~~products~~months ~~from~~ended ~~first~~September ~~contact~~30, ~~with~~2013. aThe ~~prospective~~primary ~~customer~~reason, ~~until~~aside ~~product~~from ~~sales~~the ~~revenues~~significantly ~~can~~increased beoperating ~~reported. During~~loss ~~that~~(see ~~period~~below), ~~Oryon~~was ~~works~~the ~~with~~decreased aggregate change in the ~~customer’s~~operating ~~designers~~assets toand ~~cooperatively~~liabilities ~~engineer~~that anoccurred ~~application~~in ofthe ~~its~~first ~~patented~~nine ~~technology~~months ~~into~~of ~~the~~2014, ~~customer’s~~largely ~~final~~as ~~product.~~a ~~This~~result ~~requires~~of ~~substantial~~the ~~co-development~~EFL ~~with~~Transaction. In the ~~customer’s~~nine ~~personnel~~months toended ~~meet~~September 30, 2014, the aggregate changes in operating ~~needs~~assets and liabilities resulted in a total source of ~~the~~cash ~~customer~~of $12.4 ~~Accordingly~~thousand, ~~Oryon~~as ~~must~~compared ~~have~~to ~~sufficient~~cash ~~capital~~provided toof ~~fund~~$362.8 ~~administrative~~thousand ~~overhead~~in the comparable period in 2013, ~~sales~~a ~~and~~net ~~marketing~~reduced ~~efforts~~source of cash of $350.5 thousand. Under the terms of the Subscription Agreement, the Company was required to eliminate many of its obligations through settlement and ~~staffing~~release ~~expenses~~agreements ~~for~~(the an“Exchange ~~extended~~Agreements”). A ~~period~~significant portion of ~~time~~the ~~before~~change ~~cash~~to operating liabilities is ~~received~~offset ~~from~~by ~~customers~~the issuance of equity as described below under “Net Cash Provided by Financing Activities”.

~~Net~~In addition, the deterioration in operating results, with a net loss of $1,191.2 thousand in the first nine months of 2014 as compared to a net loss of $1,073.0 thousand in the first nine months of 2013, resulted in an increased cash ~~provided~~use byof $118.3 thousand, or 11.0%. In addition, stock-based compensation expense represented a smaller portion of the net loss in the first half of 2014 (~~used~~an adjustment of $24.8 thousand) than it did in the first half of 2013 (an adjustment of $130.7 thousand). In aggregate, the net cash used in operating activities before the changes in operating assets and liabilities was $1,122.7 thousand in the nine months ended September 30, 2014, as compared to $897.5 thousand in the 2013 comparable period, an increased use of $225.2 thousand).

Net cash ~~used~~provided ~~in operating activities for the six months ended June 30, 2014 increased~~ by ~~$648.8 thousand to a use of $1,092.8 thousand, as compared to a use of $444.1 thousand for the six months ended June 30, 2013. The primary reason, aside from the significantly increased operating loss~~ (~~see~~used ~~below), was the increased aggregate change~~ in the operating assets and liabilities that occurred in the first six months of 2014, largely as a result of the EFL Transaction. In the six months ended June 30, 2014, the aggregate changes in operating assets and liabilities resulted in a total use of cash of $72.5 thousand, as compared to cash provided of $168.7 thousand in the comparable period in 2013, a net increased use of cash of $241.2 thousand. Under the terms of the Subscription Agreement, the Company was required to eliminate many of its obligations through settlement and release agreements (the “Exchange Agreements”). Ainvesting ~~significant portion of the change to operating liabilities is offset by the issuance of equity as described below under “Net Cash Provided by Financing Activities”.~~activities

InNo ~~addition, the deterioration in operating results, with a~~ net ~~loss of $1,070.4 thousand in the first six months of 2014 as compared to a net loss of $756.2 thousand in the first six months of 2013, resulted in an increased~~ cash ~~use~~was ofprovided ~~$314.1~~by ~~thousand, or 41.5%. In addition, stock-based compensation expense represented a smaller portion of the net loss in the first half of 2014~~ (anused ~~adjustment of $21.3 thousand) than it did~~ in ~~the first half of 2013 (an adjustment of $113.5 thousand~~). ~~In aggregate, the net cash used in operating~~ investing activities ~~before the changes~~ in ~~operating assets and liabilities was $1,020.4 thousand in~~ the ~~six~~nine ~~months~~month periods ended ~~June~~September 30, 2014, asand ~~compared to $612.8 thousand in the~~ 2013 ~~comparable period, an increased use of $407~~.~~6 thousand).~~

~~Net cash provided by (used in) investing activities~~ 34

NoNet ~~net~~ cash ~~was~~ provided by ~~(used~~ ~~in)~~financing ~~investing~~ activities ~~in the six month periods ended June 30, 2014 and 2013.~~

Net cash provided by financing activities in the first nine months of 2014 was $1,089.2 thousand as compared to $396.0 thousand in the first nine months of 2013. In connection with the EFL Transaction, the Company issued an aggregate of 170,405,650 shares of common stock, par value $0.001, to EFL Tech for the First Closing and the Second Closing. Prior to December 31, 2013, EFL Tech had advanced the Company a total of $310.7 thousand in investor short-term advances to fund the Company’s operations up to the date of the First Closing. Such funds were recorded as short-term advances when they were received by the Company. As provided by the Subscription Agreement, the $310.7 thousand of short-term advances was settled by conversion into the Company’s common stock, par value $0.001, at the First Closing. In addition, the Company received cash proceeds of $939.3 thousand ($689.3 at the First Closing and $250.0 at the Second Closing) from EFL tech so that, in total, EFL Tech provided to the Company an aggregate of $1,250.0 thousand in cash, including $310.7 thousand that had been advanced to the Company in 2013 and was settled by conversion to equity at the First Closing.

~~Net~~As ~~cash~~required ~~provided~~ by ~~financing activities in~~ the ~~first~~Subscription ~~six~~Agreement, on ~~months~~January of21, 2014 ~~was $1~~,~~059.4~~ ~~thousand~~the asCompany ~~compared~~entered tointo ~~$332.4~~certain ~~thousand~~exchange inand ~~the~~release ~~first~~agreements ~~six~~(each ~~months~~an of“Exchange ~~2013. In connection~~Agreement” ~~with~~and ~~the EFL Transaction~~collectively, the ~~Company~~“Exchange ~~issued~~Agreements”) anby ~~aggregate~~and ofbetween ~~170,405,650 shares of common stock, par value $0.001, to EFL Tech for~~ the ~~First~~Company ~~Closing~~ and ~~the~~each ~~Second~~member ~~Closing.~~of ~~Prior to December 31, 2013, EFL Tech had advanced the Company~~ a ~~total~~group of ~~$310.7~~unsecured ~~thousand~~creditors inof ~~investor short-term advances to fund~~ the Company’s ~~operations~~(including upcurrent todirectors ~~the~~and ~~date~~executive ofofficers). At the First Closing., ~~Such~~pursuant ~~funds~~to ~~were~~the ~~recorded as~~Exchange ~~short-term advances when they were received by~~ Agreements the Company. Asissued ~~provided~~an byaggregate ~~the~~of ~~Subscription Agreement~~19,267,010 ~~the~~shares ~~$310.7 thousand~~ of ~~short-term~~ ~~advances~~Common ~~was~~Stock ~~settled~~in byexchange ~~conversion~~for ~~into~~ the ~~Company’s~~settlement ~~common~~and ~~stock,~~release ~~par~~of ~~value~~ $0695.~~001,~~3 atthousand in ~~the~~unpaid ~~First~~and ~~Closing.~~accrued ~~In addition,~~debt ~~the~~to ~~Company~~such ~~received~~creditors. ~~cash~~Of ~~proceeds~~the of $~~939~~695.3 thousand, ($~~689~~390.30 atthousand ~~the~~was ~~First~~for ~~Closing~~the ~~and~~settlement ~~$250.0~~of atshort-term ~~the Second Closing)~~advances ~~from~~and ~~EFL~~the ~~tech~~remaining so$305.3 ~~that,~~thousand inwas ~~total,~~for ~~EFL Tech provided to~~ the ~~Company~~settlement anof ~~aggregate~~operating ofliabilities including $~~1,250~~187.04 thousand inof ~~cash,~~deferred ~~including~~ compensation, $~~310~~60.7 thousand ~~that~~ ~~had~~of ~~been~~deferred ~~advanced~~directors’ tofees ~~the Company in 2013~~ and ~~was~~$57.2 ~~settled~~thousand byof ~~conversion~~accounts ~~to equity at the First Closing~~payable.

33The Company also paid the sum of $167.9 thousand in full payment of the promissory note payable to a former executive and current shareholder. In addition, the Company paid $31.3 to an unsecured holder of short-term debt and $6.0 thousand to the Company’s chief executive officer who had advanced such amount during the third quarter of 2013 to fund operations at a time when the Company’s cash was inadequate. In the second quarter of 2014, the Company received short-term debt of $20.0 thousand from a vendor to finance the Company’s operations during the bankruptcy filing, such debt secured by first liens on certain of the Company’s fixed assets.

AsShort-term ~~required~~advances byin the ~~Subscription~~nine ~~Agreement,~~months onended ~~January~~September 2130, 2014, ~~the~~consisted ~~Company~~of ~~entered~~$20.0 ~~into~~thousand ~~certain~~advanced ~~exchange~~to ~~and~~the ~~release~~Company ~~agreements~~by ~~(each~~a ancustomer ~~“Exchange~~in ~~Agreement” and~~return ~~collectively,~~for ~~the~~a ~~“Exchange~~promissory ~~Agreements”)~~note bybearing interest ~~and~~at ~~between~~10% ~~the~~per ~~Company~~annum and ~~each~~collateralized ~~member~~by ofcertain ~~a group~~ of ~~unsecured creditors of~~ the Company’s ~~(including~~fixed ~~current~~assets. ~~directors~~The customer and ~~executive~~the ~~officers).~~Company At expect the ~~First~~advance ~~Closing, pursuant~~ to ~~the~~be ~~Exchange~~repaid ~~Agreements the~~in ~~Company~~whole ~~issued~~or anin ~~aggregate~~part ofby ~~19,267,010~~the ~~shares~~delivery of ~~Common~~products ~~Stock~~to inthe ~~exchange~~customer ~~for~~from the ~~settlement~~Company ~~and~~related ~~release~~to ofpurchase ~~$695.3 thousand~~orders inthe ~~unpaid~~customer ~~and~~previously ~~accrued~~delivered ~~debt~~ to ~~such~~the ~~creditors~~Company. OfIn addition, during the ~~$695.3~~quarter ~~thousand~~ended September 30, 2014, EFL advanced a total of $~~390~~29.07 thousand ~~was~~to ~~for~~assist the ~~settlement~~Company ofin ~~short-term~~maintaining ~~advances and~~operational capabilities throughout the ~~remaining~~bankruptcy ~~$305~~process.3 ~~thousand~~It ~~was~~is ~~for~~anticipated that ~~the~~these ~~settlement~~advances ofwill ~~operating~~be ~~liabilities~~repaid ~~including~~at ~~$187.4~~the ~~thousand~~time ofthe ~~deferred~~Company ~~compensation, $60.7~~exits ~~thousand~~bankruptcy offrom ~~deferred~~additional ~~directors’~~equity ~~fees~~proceeds ~~and~~provided ~~$57.2~~by ~~thousand~~EFL ofor other ~~accounts payable~~investors.

~~The~~Contractual ~~Company~~Obligations ~~also paid the sum of $167.9 thousand in full payment of the promissory note payable to a former executive~~ and ~~current shareholder. In addition, the Company paid $31.3 to an unsecured holder of short~~Off-~~term~~Balance ~~debt~~Sheet and $6.0 thousand to the Company’s chief executive officer who had advanced such amount during the third quarter of 2013 to fund operations at a time when the Company’s cash was inadequate. In the second quarter of 2014, the Company received short-term debt of $20.0 thousand from a vendor to finance the Company’s operations during the bankruptcy filing, such debt secured by first liens on certain of the Company’s fixed assets.Arrangements

Contractual Obligations ~~and Off-Balance Sheet Arrangements~~

~~Contractual~~The ~~Obligations~~ following table outlines payments due under the Company’s significant contractual obligations over the periods shown, exclusive of interest, as of September 30, 2014:

The following table outlines payments due under the Company’s significant contractual obligations over the periods shown, exclusive of interest, as of June 30, 2014:

	Payments Due by Period
Contractual Obligations at September 30, 2014	Less than One Year		One to Three years		Three to Five Years		More Than Five Years		Total
		($)		($)		($)		($)		($)
Operating lease obligations		79,164		39,582		-		-		118,746
Long-term debt obligations		-		-		-		-		-
Capital expenditure obligations		-		-		-		-		-
Purchase obligations		-		-		-		-		-
Other long-term obligations		-		-		-		-		-

	Payments Due by Period
Contractual Obligations at June 30, 2014	Less than One Year		One to Three years		Three to Five Years		More Than Five Years		Total
	($)		($)		($)		($)		($)
Operating lease obligations		79,164		59,373		-		-		138,537
Long-term debt obligations		-		-		-		-		-
Capital expenditure obligations		-		-		-		-		-
Purchase obligations		-		-		-		-		-
Other long-term obligations		-		-		-		-		-

The above table outlines our obligations as of the date noted above and does not reflect any changes in obligations that have occurred after that date.

~~The above table outlines our obligations as of the date noted above and does not reflect any changes in obligations that have occurred after that date.~~35

Off-Balance Sheet Arrangements

The Company has not entered into any other financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to it or engages in leasing, hedging or research and development services with it.

Critical Accounting Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the consolidated financial statements and the accompanying notes. Accounting estimates and assumptions are those that management considers to be the most critical to an understanding of the consolidated financial statements because they inherently involve significant judgments and uncertainties. All of these estimates reflect management’s judgment about current economic and market conditions and their effects based on information available as of the date of these consolidated financial statements. If such conditions persist longer or deteriorate further than expected, it is reasonably possible that the judgments and estimates could change, which may result in future impairments of assets, among other effects.

34Significant estimates for Oryon include the carrying value of intangible assets and the value of equity instruments, including convertible notes, stock options, warrants, and shares of equity issued in lieu of cash.

~~Significant~~Recently ~~estimates~~Issued ~~for~~Accounting ~~Oryon include the carrying value of intangible assets and the value of equity instruments, including convertible notes, stock options, warrants, and shares of equity issued in lieu of cash.~~Pronouncements

~~Recently~~There have ~~Issued~~been ~~Accounting~~no ~~Pronouncements~~new accounting rules or pronouncements introduced in 2014 or 2013 that have had an effect on our financial condition or results of operations.

~~There have~~ITEM ~~been~~3. noQUANTITATIVE ~~new~~AND ~~accounting~~QUALITATIVE ~~rules~~DISCLOSURE orOF ~~pronouncements~~MARKET ~~introduced in 2014 or 2013 that have had an effect on our financial condition or results of operations.~~RISK

~~ITEM~~The 3.Company ~~QUANTITATIVE~~does ~~AND~~not ~~QUALITATIVE~~have ~~DISCLOSURE~~any OFmarket ~~MARKET~~risk ~~RISK~~sensitive instruments.

~~The~~ITEM ~~Company~~4. ~~does~~CONTROLS ~~not~~AND ~~have any market risk sensitive instruments.~~PROCEDURES

~~ITEM~~Our 4management, under the supervision and with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined under the Exchange Act and the Sarbanes-Oxley Act of 2002 (“SOX”) Section 404(a). ~~CONTROLS~~Based ~~AND~~on ~~PROCEDURES~~this evaluation, we concluded that, as of September 30, 2014, our disclosure controls and procedures were not effective. This conclusion was based on the existence of material weakness as discussed below. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

~~Our~~As ~~management,~~of ~~under~~December ~~the~~31, ~~supervision~~2013, ~~and with~~ the ~~participation of~~Company’s ~~our~~management ~~CEO and CFO, evaluated~~ assessed the effectiveness of ~~our disclosure controls and procedures (as defined under~~ the ~~Exchange~~Company’s ~~Act~~internal ~~and the~~control ~~Sarbanes-Oxley~~over ~~Act~~financial ofreporting ~~2002~~based ~~(“SOX”) Section 404(a). Based~~ on ~~this~~the ~~evaluation,~~criteria wefor ~~concluded~~effective ~~that, as of June 30,~~internal ~~2014,~~control ~~our~~over ~~disclosure~~financial ~~controls~~reporting ~~and~~established ~~procedures~~in ~~were~~Internal ~~not~~Control—Integrated ~~effective.~~Framework ~~This~~issued ~~conclusion~~by ~~was based on~~ the ~~existence~~Committee of ~~material weakness~~Sponsoring asOrganizations ~~discussed~~of ~~below.~~the ~~Our~~Treadway ~~management~~Commission is(“COSO”) ~~responsible~~and ~~for~~SEC ~~establishing~~guidance ~~and~~on ~~maintaining~~conducting ~~adequate~~such ~~internal~~assessments ~~control~~and ~~over~~concluded ~~financial reporting.~~in ~~Our~~our ~~internal~~Annual ~~control~~Report ~~system~~on ~~was~~Form ~~designed~~10-K tofor ~~provide reasonable assurance regarding~~ the ~~reliability~~year ofended ~~financial~~December ~~reporting~~31, ~~and~~2013 ~~the preparation~~that ofthere ~~financial~~is ~~statements~~a ~~for~~material ~~external~~weakness ~~purposes,~~ in ~~accordance~~our ~~with generally accepted accounting principles. Because of inherent limitations, a system of~~ internal control over financial reporting ~~may not prevent or detect misstatements~~. Management ~~Also,~~determined ~~projections of~~that ~~any~~there ~~evaluation of effectiveness to future periods~~ are ~~subject~~deficiencies toin the ~~risk~~design ~~that~~or ~~controls~~operation ~~may~~of ~~become~~the ~~inadequate due to change~~Company’s ininternal ~~conditions,~~control or that ~~the~~adversely ~~degree~~affected ofthe ~~compliance~~Company’s ~~with~~internal ~~the~~controls ~~policies~~that ormanagement ~~procedures~~considers ~~may~~being ~~deteriorate~~material weaknesses.

AsIn ofthe ~~December~~light ~~31,~~of ~~2013, the Company~~management’s ~~management assessed~~review ~~the effectiveness~~ of ~~the Company’s~~ internal control ~~over~~procedures ~~financial~~as ~~reporting~~they ~~based~~relate onto the criteria for effective internal control over financial reporting established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and ~~SEC guidance on conducting such assessments and concluded in our Annual Report on Form 10-K for~~ the ~~year~~SEC ~~ended December 31, 2013 that there is a material weakness in our internal control over financial reporting. Management determined that there are deficiencies in~~ the ~~design~~following orwere ~~operation of the Company’s internal control that adversely affected the Company’s internal controls that management considers being material weaknesses.~~identified:

In● ~~the~~The ~~light~~Company ofhas ~~management’s~~limited ~~review~~ segregation of ~~internal~~duties, ~~control~~which ~~procedures~~is asnot ~~they~~consistent ~~relate~~with togood ~~COSO~~internal ~~and~~control ~~the SEC the following were identified:~~procedures.

·● The Company ~~has~~does ~~limited~~not ~~segregation~~have ofa written internal control procedures manual that outlines the duties, ~~which~~and isreporting ~~not~~requirements ~~consistent~~of ~~with~~the ~~good~~Directors and any staff to be hired in the future. This lack of a written internal control procedures manual does not meet the requirements of the SEC or for good internal control.

·● ~~The~~There ~~Company~~are ~~does~~no ~~not~~effective ~~have~~controls ainstituted ~~written~~over ~~internal~~financial ~~control~~disclosure ~~procedures~~and ~~manual that outlines~~ the ~~duties and~~ reporting ~~requirements of the Directors and any staff to be hired in the future~~processes. ~~This lack of a written internal control procedures manual does not meet the requirements of the SEC or for good internal control.~~

~~· There are no effective controls instituted over financial disclosure and the reporting processes.~~36

Management determined that the weaknesses identified above have not affected the financial results of the Company due to management’s additional review and analysis.

The Company will endeavor to correct the above noted weaknesses in internal control once it has adequate funds to do so. With an increase in administrative staff, the segregation of duties issue will be addressed in part and internal control will be significantly improved. The Audit Committee has directed management to develop a written policy manual outlining the duties of each of the officers and staff of the Company to facilitate better internal control procedures.

Management will continue to monitor and evaluate the effectiveness of the Company’s internal controls and procedures and its internal controls over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Changes in Internal Control over Financial Reporting

No changes occurred during the quarter ended ~~June~~September 30, 2014 ~~that~~ that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3537

PART II – OTHER INFORMATION

ITEM ~~1A RISK~~1 ~~FACTORS~~LEGAL PROCEEDINGS

AnThe ~~investment~~information inregarding ~~our securities involves a high degree of risk. In evaluating our business and its future expectations, one should consider carefully~~ the ~~risk factors included the~~ Company’s ~~Annual~~ ~~Report~~legal ~~on Form 10-K, as amended, filed with the Securities and Exchange Commission (the “SEC”) on March 7, 2014. Any~~proceedings ofis ~~such~~provided ~~risk~~in ~~factors,~~Notes if11 ~~they occur, could seriously harm our business~~ and ~~our~~17 ~~operations. There may be risk factors we do not know exist, or that we have deemed~~ to bethe ~~immaterial,~~Consolidated atFinancial ~~this~~Statements ~~time.~~provided ~~Even~~in ifPart ~~they~~I ~~are~~of ~~deemed immaterial at~~ this ~~time~~filing, ~~they~~which ~~could develop~~Notes ~~whereby they could adversely affect our business. Our shares~~ are ~~speculative by nature and therefore the risk of purchasing~~specifically orincorporated ~~holding~~into ~~our~~this ~~shares~~Part isII ~~high.~~by ~~Investors should consider whether they can assume a loss of their entire investment~~reference.

ITEM ~~2 UNREGISTERED~~1A ~~SALES~~RISK ~~OF EQUITY SECURITIES AND USE OF PROCEEDS~~FACTORS

~~Investment~~An investment in our securities involves a high degree of risk. In evaluating our business and its future expectations, one should consider carefully the risk factors included the Company’s Annual Report on Form 10-K, as amended, filed with the Securities and Exchange Commission (the “SEC”) on March 7, 2014. Any of such risk factors, if they occur, could seriously harm our business and our operations. There may be risk factors we do not know exist, or that we have deemed to be immaterial, at this time. Even if they are deemed immaterial at this time, they could develop whereby they could adversely affect our business. Our shares are speculative by ~~EFL~~nature ~~Tech~~and Btherefore the risk of purchasing or holding our shares is high.V Investors should consider whether they can assume a loss of their entire investment.

~~Issuance~~ITEM ~~under~~2 ~~Subscription~~UNREGISTERED ~~Agreement. On~~SALES ~~January~~OF ~~21,~~EQUITY ~~2014,~~SECURITIES ~~Oryon~~AND ~~Technologies,~~USE ~~Inc.,~~OF a Nevada corporation (the “Registrant,” “ORYN” or the “Company”) entered into a Subscription Agreement (the “Subscription Agreement”) with EFL Tech B.V., a Netherlands corporation (“EFL Tech”). At the closing of the first tranche of issuances of shares of the Company’s common stock, par value $0.001 (the “Common Stock”) pursuant to the Subscription Agreement, on January 21, 2014 (the “First Closing”), the Registrant issued to EFL Tech an aggregate of 85,271,779 shares of Common Stock, and EFL Tech delivered $1,000,000 (of the net $1.5 million cash portion of the consideration for all share issuances under the Subscription Agreement) to the Company. Subsequent to the First Closing, on January 21, 2014, EFL Tech held 51.0% of the Company’s issued and outstanding Common Stock (46.0% on a fully diluted basis). Based upon information from EFL Tech, the source of such funds was the working capital of EFL Tech.PROCEEDS

~~Other~~Investment ~~consideration provided to the Company at the First Closing for the sale of shares of Common Stock to EFL Tech consisted of the following agreements, each of which was entered into and delivered~~ by ~~the Company and~~ EFL ~~Holdings~~ Tech B.V., a Netherlands corporation (“EFL Holdings”), and an affiliate of EFL Tech, on January 21, 2014: (a) License Agreement granting the Company an exclusive, worldwide, perpetual, sub-licensable, royalty-free, paid-up license (the “License Agreement”) for all of EFL Holding’s EL-related patents, trademarks and other intellectual property, both U.S. and international (the “EFL Holdings IP”); (b) Equipment Lease Agreement for certain printing equipment used in the production of electroluminescent (“EL”) lamps, the Company’s principal product, which EFL Holdings valued at $1.5 million, at no cost to the Company (the “Equipment Lease”); and (c) Business Relationship Agreement pursuant to which EFL Holdings covenants that it will not, directly or indirectly, provide services to or otherwise engage in the business of manufacturing, designing, marketing, selling or distributing EL, or any products incorporating the EFL Holdings IP, other than through the ownership, management and control of the Company by EFL Tech. The License Agreement has a term that continues until the expiration of the last of the patents licensed thereunder, unless sooner terminated by EFL Holdings due to the Company’s bankruptcy or other specified, similar financial difficulties. The Business Relationship Agreement has a term that continues until, and the Equipment Lease has a term of the earlier of 21 years or until, the License Agreement expires or is terminated. The above-referenced agreements contemplate that the Company will license, and will manufacture and market products incorporating, its own EL-related intellectual property, as well as the EFL Holdings IP, as a combined intellectual property portfolio. The descriptions of the Subscription Agreement, the License Agreement, the Equipment Lease, and the Business Relationship Agreement herein are qualified in their entirety by reference to the full text of such agreements, which are attached to the Company’s Annual Report on Form 10-K, filed with the Commission on March 7, 2014, as Exhibits 10.1, 10.3, 10.4, and 10.5, respectively.

AtIssuance ~~the~~under ~~closing~~Subscription ofAgreement. On ~~the~~January ~~second~~21, ~~tranche~~2014, ~~under the~~Oryon ~~Subscription~~Technologies, ~~Agreement~~Inc., ona orNevada ~~before~~corporation ~~February~~(the 28“Registrant,” ~~2014~~“ORYN” or the “Company”) entered into a Subscription Agreement (the “~~Second~~Subscription ~~Closing~~Agreement”), with EFL Tech ~~was~~B.V., ~~required~~a toNetherlands ~~deliver~~corporation to(“EFL ~~the~~Tech”). ~~Company~~At ~~additional~~the ~~funds~~closing inof the ~~amount~~first tranche of ~~$250,000~~issuances onof orshares ~~before~~of ~~February~~the 28Company’s common stock, ~~2014~~par value $0.001 At(the “Common Stock”) pursuant to the ~~Second~~Subscription ~~Closing~~Agreement, on January 21, 2014 (the ~~Company~~“First ~~issued~~Closing”), the Registrant issued to EFL Tech an ~~additional~~aggregate of 85,~~133~~271,~~871~~779 shares of Common Stock, atand ~~which time~~ EFL Tech’s ~~cumulative~~delivered ~~ownership became 170~~$1,~~405~~000,~~650~~000 (of the ~~shares~~net $1.5 million cash portion of ~~Common~~the ~~Stock~~consideration for all share issuances under the Subscription Agreement) to the Company. Subsequent to the First Closing, ~~constituting~~on 63January 21, 2014, EFL Tech held 51.0% of the Company’s issued and outstanding Common Stock (46.0% on a fully diluted basis). Based upon information from EFL Tech, the source of such funds was the working capital of EFL Tech.

~~EFL~~Other ~~Tech~~consideration ~~failed~~provided to ~~pay~~the Company at the ~~third~~First ~~and~~Closing ~~final tranche~~for the sale of ~~$250~~shares of Common Stock to EFL Tech consisted of the following agreements,~~000~~ ~~that~~each of which was entered ~~required~~into and delivered by the ~~Subscription~~Company ~~Agreement~~and toEFL beHoldings ~~paid~~Tech toB.V., ~~the~~a ~~Company~~Netherlands oncorporation or(“EFL ~~before~~Holdings”), ~~March~~and an 31affiliate of EFL Tech, on January 21, 2014: (a) License Agreement granting the Company an exclusive, worldwide, perpetual, sub-licensable, royalty-free, paid-up license (the “~~Third~~License ~~Closing~~Agreement”) for all of EFL Holding’s EL-related patents, trademarks and other intellectual property, both U.S. Atand international (the ~~Third~~“EFL ~~Closing~~Holdings IP”); (b) Equipment Lease Agreement for certain printing equipment used in the production of electroluminescent (“EL”) lamps, the Company’s principal product, which EFL ~~Tech~~Holdings ~~was~~valued ~~required~~at to$1.5 ~~deliver~~million, at no cost to the Company ~~additional~~(the ~~funds~~“Equipment Lease”); and (c) Business Relationship Agreement pursuant to which EFL Holdings covenants that it will not, directly or indirectly, provide services to or otherwise engage in the ~~amount~~ business of ~~$250~~manufacturing,~~000~~ ~~(bringing~~designing, marketing, selling or distributing EL, or any products incorporating the ~~total~~EFL ~~amount~~Holdings IP, other than through the ownership, management and control of the ~~cash~~Company ~~component~~by EFL Tech. The License Agreement has a term that ~~would~~continues ~~have~~until ~~been~~the ~~paid~~expiration of the last of the patents licensed thereunder, unless sooner terminated by EFL Holdings ~~Tech~~due to the Company’s inbankruptcy ~~consideration~~or other specified, similar financial difficulties. The Business Relationship Agreement ~~for~~has ~~the~~a ~~issuance~~term bythat continues until, and the ~~Company~~Equipment ofLease ~~shares~~has a term of ~~Common~~the ~~Stock~~earlier toof ~~EFL~~21 ~~Tech~~years ~~under~~or until, the ~~Subscription~~License Agreement expires toor ~~$1,500,000)~~is terminated. AtThe ~~the~~above-referenced ~~Third Closing,~~agreements contemplate that the Company ~~would~~will ~~have~~license, ~~been~~and ~~required~~will tomanufacture ~~issue~~and tomarket products ~~EFL~~incorporating, ~~Tech~~its anown ~~additional~~EL-related ~~129~~intellectual property,~~832,877~~ ~~shares~~as ofwell ~~Common~~as ~~Stock~~the EFL Holdings IP, atas ~~which~~a ~~time~~combined intellectual property ~~EFL~~portfolio. ~~Tech’s~~The ~~cumulative~~descriptions ~~ownership~~of ~~would~~the ~~have~~Subscription ~~been~~Agreement, ~~300~~the License Agreement,~~238~~ the Equipment Lease,~~527~~ ~~shares~~and the Business Relationship Agreement herein are qualified in their entirety by reference to the full text of ~~Common~~such ~~Stock~~agreements, ~~constituting~~which ~~75.0%~~are ofattached to the ~~Common Stock~~Company’s Annual Report on aForm ~~fully~~10-K, ~~diluted~~filed ~~basis~~with the Commission on March 7, 2014, as Exhibits 10.1, 10.3, 10.4, and 10.5, respectively.

36At the closing of the second tranche under the Subscription Agreement, on or before February 28, 2014 (the “Second Closing”), EFL Tech was required to deliver to the Company additional funds in the amount of $250,000 on or before February 28, 2014. At the Second Closing, the Company issued to EFL Tech an additional 85,133,871 shares of Common Stock, at which time EFL Tech’s cumulative ownership became 170,405,650 shares of Common Stock, constituting 63.0% of the Common Stock on a fully diluted basis.

~~The~~EFL ~~proceeds~~Tech ~~from~~failed to pay the ~~foregoing~~third ~~funding~~and final tranche of $1,250,000 ~~($1,000,000~~that atwas ~~the~~required ~~First~~by ~~Closing,~~the ~~consisting~~Subscription ofAgreement ~~$689,330~~to inbe ~~cash~~paid ~~plus~~to the ~~forgiveness~~Company ofon ~~the~~or ~~obligation~~before toMarch ~~repay the $310~~31,~~670~~ in2014 ~~temporary~~(the “Third ~~unsecured~~Closing”). ~~advances~~At ~~that~~the Third Closing, EFL Tech ~~provided~~was required to ~~the~~deliver ~~Company in periods prior~~ to the ~~First~~Company ~~Closing,~~additional ~~and~~funds in the amount ~~additional~~of $250,000 ~~payment~~(bringing bythe ~~EFL~~total ~~Tech~~amount atof the ~~Second~~cash ~~Closing)~~component that would have been ~~used~~paid ~~for~~by ~~general~~EFL ~~corporate~~Tech ~~purposes~~to ~~and~~ the Company in consideration ~~repayment~~for ofthe ~~debt,~~issuance ~~including,~~by ~~but~~the ~~not~~Company ~~limited~~of ~~to,~~shares ~~the~~of ~~payments~~Common ~~required~~Stock to beEFL ~~made~~Tech under the ~~Exchange~~Subscription ~~Agreements~~Agreement ~~(as~~to ~~defined and described below~~$1,500,000). At the ~~First~~ Third Closing, the Company ~~paid~~ ~~the~~would ~~sum~~have ofbeen ~~$122,125~~required into ~~cash,~~issue ~~and~~to ~~issued~~EFL Tech an ~~aggregate~~additional ~~of 19~~129,~~267~~832,~~010~~ 877 shares of Common Stock, to ~~certain~~at ~~creditors,~~which ~~including~~time EFL ~~directors~~Tech’s ~~and~~cumulative ~~executive~~ownership ~~officers,~~would ~~for~~have ~~the~~been ~~settlement~~300,238,527 ~~and~~shares ~~release~~ of a ~~total~~Common ~~of $817~~Stock,~~375~~ constituting 75.0% of the ~~Company's~~Common ~~debt,~~Stock on ~~pursuant~~a tofully ~~the~~diluted ~~Exchange Agreements~~basis.

In connection with the foregoing issuance of shares of Common Stock (and the Additional Shares (as defined below), if any) to EFL Tech under the Subscription Agreement, the Company and EFL Tech entered into a Registration Rights Agreement - Subscription Securities, effective on the First Closing, pursuant to which the Company agreed to provide EFL Tech with rights to request registration of such shares under the Securities Act of 1933, as amended. The foregoing description of such Registration Rights Agreement is qualified in its entirety by reference to the full text of such agreement, which is attached to the Company’s Annual Report on Form 10-K, filed with the Commission on March 7, 2014, as Exhibit 10.2.38

NoThe ~~underwriter~~proceeds ~~was~~from ~~involved~~the foregoing funding of $1,250,000 ($1,000,000 at the First Closing, consisting of $689,330 in cash plus the ~~above~~forgiveness of the obligation to repay ~~sale~~the $310,670 in temporary unsecured advances that EFL Tech provided to the Company in periods prior to the First Closing, and the additional $250,000 payment by EFL Tech at the Second Closing) have been used for general corporate purposes and the repayment of debt, including, but not limited to, the payments required to be made under the Exchange Agreements (as defined and described below). At the First Closing, the Company paid the sum of $122,125 in cash, and issued an aggregate of 19,267,010 shares of Common Stock, to certain creditors, including directors and executive officers, for the settlement and release of a total of $817,375 of the Company's debt, pursuant to the Exchange Agreements.

~~The~~In connection with the foregoing issuance of shares ~~were~~of ~~issued~~Common Stock (and in the ~~case of any~~ Additional Shares (as defined below), ~~will~~if ~~be issued~~any) into ~~reliance~~EFL ~~upon~~Tech anunder ~~exemption~~the ~~from~~Subscription ~~registration~~Agreement, the ~~set~~Company ~~forth~~and EFL Tech entered into a Registration Rights Agreement - Subscription Securities, effective on the First Closing, inpursuant ~~Regulation~~to Dwhich ~~and/or~~the ~~Section~~Company ~~4(2)~~agreed to provide EFL Tech with rights to request registration of such shares under the Securities Act of 1933, ~~which~~as ~~exempts~~amended. ~~transactions~~The foregoing description of such Registration Rights Agreement is qualified in its entirety by anreference to ~~issuer~~the ~~not~~full ~~involving~~text aof ~~public~~such ~~offering~~agreement, which is attached to the Company’s Annual Report on Form 10-K, filed with the Commission on March 7, 2014, as Exhibit 10.2.

~~Issuance~~No ~~under~~underwriter ~~Exchange~~was ~~and~~involved ~~Release~~in ~~Agreements. As required by~~ the ~~Subscription Agreement, on January 21, 2014, the Company entered into exchange and release agreements (each an~~above ~~“Exchange~~sale ~~Agreement” and collectively, the “Exchange Agreements”) by and between the Company and each member~~ of a group of unsecured creditors of the Company (including current directors and Executive Officers). At the First Closing, pursuant to the Exchange Agreements the Company issued an aggregate of 19,267,010 shares of Common Stock~~, constituting 10~~.39% of the Common Stock on a fully diluted basis, in exchange for the settlement and release of $695,250 in unpaid and accrued debt to such creditors. Under the Exchange Agreements, the per-share exchange price for such debt was determined by the average of the closing prices of the Common Stock on the trading days commencing on December 1, 2013, and ending on January 20, 2014 (the day prior to the First Closing), which resulted in an exchange price of $0.036085 per share of Common Stock. The Company also paid the sum of $122,125 in cash to such creditors under the Exchange Agreement for the settlement and release of such amount of debt (for the settlement and release of a total of $817,375 of debt pursuant to the Exchange and Release Agreements).

~~Under~~The ~~the~~foregoing ~~Subscription Agreement, the Company has the option of entering into additional Exchange Agreements with other holders of outstanding debt of the Company for the purpose of exchanging~~ shares ofwere ~~Common~~issued ~~Stock for the settlement~~ (and release of additional amounts of unpaid and accrued debt of the Company. The Company has not made a decision regarding whether to enter into any such additional Exchange Agreements. If the Company were to enter into one or more Exchange Agreements in ~~the future, the Company would issue to EFL Tech that number of additional shares~~ ~~of Common Stock such that, after issuing shares of Common Stock in exchange for Company debt under such Exchange Agreements, EFL Tech would continue to hold 75% of~~ the ~~fully~~case ~~diluted shares~~ of ~~Common~~any ~~Stock (the “~~Additional Shares~~”).~~ ~~Under~~(as ~~the~~defined ~~Subscription Agreement~~below), ~~the cash and non-cash consideration described above for the issuance to EFL Tech of shares of Common Stock at the First Closing, the Second Closing and the Third Closing~~ will ~~apply~~be toissued) ~~and suffice~~ in ~~all~~reliance ~~respects~~upon ~~for~~an ~~the~~exemption ~~issuance~~from byregistration ~~the~~set ~~Company of~~forth ~~all~~in ~~Additional~~Regulation ~~Shares,~~D and/or ~~EFL~~Section ~~Tech~~4(2) ~~will~~of ~~not provide~~ the ~~Company~~Securities ~~with~~Act, ~~any~~which ~~additional~~exempts ~~consideration~~transactions ~~in connection with the issuance~~ by ~~the~~an ~~Company~~issuer ofnot ~~any~~involving ~~such~~a ~~Additional~~public ~~Shares to EFL Tech~~offering.

InIssuance ~~connection~~under ~~with~~Exchange ~~the~~and ~~foregoing~~Release ~~issuance~~Agreements. As ofrequired ~~shares~~by ofthe ~~Common~~Subscription ~~Stock~~Agreement, toon ~~such~~January ~~creditors~~21, ~~under~~2014, the Company entered into exchange and release agreements (each an “Exchange ~~Agreements~~Agreement” and collectively, the “Exchange Agreements”) by and between the Company and ~~such~~each member of a group of unsecured creditors ~~entered~~of ~~into~~the aCompany ~~Registration Rights~~(including ~~Agreement~~current –directors ~~Exchange~~and ~~Shares,~~Executive ~~effective~~Officers). onAt the First Closing, pursuant to ~~which~~the Exchange Agreements the Company ~~agreed~~issued toan ~~provide~~aggregate ~~such creditors~~of ~~with~~19,267,010 ~~rights~~shares toof ~~request~~Common ~~registration~~Stock, constituting 10.39% of ~~such~~the ~~shares~~Common Stock ~~under~~on a fully diluted basis, in exchange for the ~~Securities~~settlement ~~Act~~and release of ~~1933~~$695,250 asin ~~amended.~~unpaid ~~The~~and ~~foregoing~~accrued ~~description of~~debt to such ~~Registration~~creditors. Under ~~Rights~~the ~~Agreement~~Exchange isAgreements, ~~qualified~~the inper-share ~~its~~exchange ~~entirety~~price for such debt was determined by ~~reference~~the toaverage of the ~~full~~closing ~~text~~prices of the Common Stock on the ~~form~~trading ofdays ~~such~~commencing ~~agreement~~on December 1, ~~which~~ is2013, ~~attached~~and ending on January 20, 2014 (the day prior to the First Closing), which resulted in an exchange price of $0.036085 per share of Common Stock. The Company’s ~~Annual~~also ~~Report~~paid onthe ~~Form~~sum ~~10-K~~of $122,125 in ~~filed~~cash ~~with~~to such creditors under the ~~Commission~~Exchange onAgreement ~~March~~for 7,the ~~2014~~settlement and release of such amount of debt (for the settlement and release of a total of $817,375 asof ~~Exhibit~~debt 10pursuant to the Exchange and Release Agreements).7.

~~The~~Under ~~foregoing~~the ~~shares~~Subscription ~~were~~Agreement, ~~issued~~the ~~(and in~~Company has the ~~case~~option of ~~any~~entering into additional Exchange Agreements with other holders of outstanding debt of the Company for the purpose of exchanging shares ~~issued~~of Common Stock for the settlement and release of additional amounts of unpaid and accrued debt of the Company. The Company has not made a decision regarding whether to ~~Oryon~~enter ~~creditors~~into ~~subsequent~~any such additional Exchange Agreements. If the Company were to enter into one or more Exchange Agreements in the ~~First~~future, ~~Closing~~the Company would issue to EFL Tech that number of additional shares of Common Stock such that, ~~will~~after beissuing ~~issued)~~shares of Common Stock in ~~reliance~~exchange ~~upon~~for anCompany ~~exemption~~debt under such Exchange Agreements, EFL ~~from~~Tech ~~registration~~would ~~set~~continue ~~forth~~to inhold ~~Regulation~~75% Dof ~~and/or~~the ~~Section~~fully 4diluted shares of Common Stock (2the “Additional Shares”). ofUnder the ~~Securities~~Subscription Agreement, ~~Act~~the cash and non-cash consideration described above for the issuance to EFL Tech of shares of Common Stock at the First Closing, ~~which~~the ~~exempts~~Second ~~transactions~~Closing and the Third Closing will apply to and suffice in all respects for the issuance by anthe ~~issuer~~Company of all Additional Shares, and EFL Tech will not ~~involving~~provide athe ~~public~~Company ~~offering~~with any additional consideration in connection with the issuance by the Company of any such Additional Shares to EFL Tech.

NoIn ~~underwriter~~connection ~~was~~with ~~involved~~the inforegoing issuance of shares of Common Stock to such creditors under the ~~sale~~Exchange Agreements, the Company and such creditors entered into a Registration ofRights Agreement – Exchange Shares, effective on the ~~above~~First Closing, pursuant to which the Company agreed to provide such creditors with rights to request registration of such shares under the Securities Act of ~~Common~~1933, ~~Stock~~as amended. The foregoing description of such Registration Rights Agreement is qualified in its entirety by reference to the full text of the form of such agreement, which is attached to the Company’s Annual Report on Form 10-K, filed with the Commission on March 7, 2014, as Exhibit 10.7.

37The foregoing shares were issued (and in the case of any shares issued to Oryon creditors subsequent to the First Closing, will be issued) in reliance upon an exemption from registration set forth in Regulation D and/or Section 4(2) of the Securities Act, which exempts transactions by an issuer not involving a public offering.

~~Change~~No inunderwriter ~~Control.~~was ~~Effective~~involved atin the ~~First Closing,~~sale ~~on January 21, 2014, EFL Tech became the holder~~ of ~~51.0% of~~ the ~~Company’s~~above ~~issued and outstanding~~ shares ~~Common Stock under the terms~~ of ~~the Subscription Agreement, and on February 28, 2014, became the holder of 63.0% of the Company’s shares of~~ Common Stock ~~on a fully diluted basis (upon the occurrence of the Second Closing)~~.

~~Departure and Election of Directors. On January 21, 2014, effective at the First Closing, the following events occurred:~~39

1.Cancellation ~~Jon~~of S.Shares ~~Ross,~~in anConnection with ~~independent~~the ~~director~~Confirmation ~~and~~of ~~Chairman~~ Plan of ~~the~~Reorganization ~~Compensation~~under ~~Committee~~Chapter of11 Bankruptcy. Information regarding the ~~Board,~~surrender and ~~Mark~~cancellation of E.shares ~~Pape,~~in aconnection ~~director~~with ~~and~~the Confirmation of the Company’s ~~Chief~~Plan ~~Financial~~of ~~Officer~~Reorganization ~~and~~is ~~Secretary, resigned~~provided ~~from~~in Note 17 to the ~~Board,~~Consolidated Financial asStatements provided in ~~the~~Part ~~Subscription~~I ~~Agreement~~of this filing, which Note 17 is specifically incorporated into this Part II by reference.

2Thomas P. ~~Richard~~Schaeffer, Larry L. Sears, Richard K. Hoesterey, anand ~~existing independent~~Clifton ~~director,~~Shen a(the ~~Member~~members of the ~~Compensation~~board ~~Committee~~of directors of the ~~Board~~Company), and Donald M. Crook (collectively, the ~~Chairman~~“Surrendering Parties”), and the Company, the members of the ~~Nominating~~new ~~and~~board ~~Governance~~of ~~Committee~~ directors of the ~~Board~~Company, ~~was~~and ~~appointed~~EFL ~~Chairman~~Tech ofand its affiliates will fully release each other from all legal actions involving the ~~Compensation~~Company. ~~Committee~~In addition, the Surrendering Parties will surrender all shares of Common Stock and related warrants and options held in their names and in the ~~Board,~~names ~~replacing~~of Mrtheir affiliates and family members. The ~~Ross~~total asoutstanding ~~Chairman~~shares of ~~such~~Common ~~committee~~Stock surrendered for cancellation by the Surrendering Parties was 8,025,127 shares of Common Stock.

3M. ~~The~~Richard ~~Board~~Marcus, ~~appointed~~the ~~Larry~~former Chief Executive L.Officer ~~Sears,~~of anthe ~~existing~~Company ~~independent~~and ~~director~~certain of his affiliates, MRM Acquisitions, LLC and ~~the~~Oryon ~~Chairman~~Capital LLC (collectively, “Marcus”), will surrender for cancellation all of their shares of Common Stock in the ~~Audit~~Company, ~~Committee~~consisting of ~~the~~6,205,227 ~~Board~~shares of Common Stock owned by Oryon Capital, asLLC, a18,289,700 ~~member~~shares of ~~the~~Common ~~Compensation~~Stock owned by MRM Acquisitions, LLC, and 1,300,310 shares of Common Stock ~~Committee~~owned by M. Richard Marcus, for a combined total of ~~the~~25,795,237 ~~Board~~shares of Common Stock.

4.Issuance ~~The~~of ~~Board~~Shares ~~appointed~~in DrConnection with the Confirmation of Plan of Reorganization under Chapter 11 Bankruptcy. ~~Clifton~~Information ~~Kwang-Fu~~regarding ~~Shen,~~the issuance of shares in connection with the ~~Chief~~Confirmation ~~Scientific~~of ~~Officer~~the Company’s Plan of ~~EFL~~Reorganization ~~Tech~~is ~~International~~provided ~~Group~~in ~~N.V,~~Note a17 ~~Netherlands~~to ~~corporation~~the ~~and~~Consolidated anFinancial ~~affiliate~~Statements provided in Part I of ~~EFL~~this ~~Tech~~filing, towhich ~~fill~~Note 17 is specifically incorporated into this Part II by reference. The Plan provides ~~one~~for payment of the ~~foregoing~~undisputed ~~vacancies~~pre-petition claims listed in the Company’s Plan and all post-petition payables from (A) the proceeds of a $1.37 million cash infusion made by EL Flexible Signs or its affiliates, in ~~accordance~~exchange ~~with~~for 80 million newly-issued shares of common stock, $0.001 par value (the ~~provisions~~“Common Stock”), of the Company’s ~~Bylaws.~~and ~~Dr.~~a ~~Shen~~$250,000 ~~was~~payment ~~appointed~~by toEFL ~~serve~~Tech, constituting ~~until~~the final payment under the ~~Company’s~~subscription ~~next~~agreement ~~annual~~dated ~~meeting~~January 21, 2014 pursuant to which EFL Tech will be issued 129,832,877 newly-issued shares of ~~shareholders~~Common Stock as specified therein and (B) cash on hand.

5.As ~~The~~of ~~Board increased~~ the ~~number~~Effective ofDate, ~~directors~~the ~~that~~total issued ~~may~~and ~~serve~~outstanding onshares ~~the~~of ~~Board~~Common ~~from~~Stock ~~five~~of ~~(5)~~the toCompany ~~seven~~will ~~(7)~~be 428,345,951, ~~pursuant~~after togiving ~~the~~effect ~~authority granted~~ to the ~~Board~~issuance inof ~~the~~209,832,877 ~~Company’s Bylaws.~~shares ~~With the resignations~~ of ~~Messrs.~~Common ~~Pape~~Stock ~~and~~to ~~Ross~~EFL asTech ~~directors,~~ and ~~the~~EL ~~appointment~~Flexible ofSigns ~~Dr.~~or ~~Shen~~its asassigns aand ~~director,~~the ~~effective~~surrender atof ~~the Closing~~33, ~~there~~820,364 ~~were~~shares ~~four~~of ~~(4)~~Common ~~directors~~Stock onby Marcus and the ~~Board,~~Surrendering ~~leaving three (3) directorships unfilled~~Parties.

~~Under~~The ~~the~~issuance ~~Subscription Agreement, EFL Tech had the right to nominate a total~~ of ~~four~~such ~~(4)~~shares ~~directors to the Company’s Board, one (1)~~ of ~~whom~~Common isStock will ~~Dr.~~be ~~Shen,~~exempt ~~who~~from ~~was~~registration ~~appointed~~under ~~a director effective at~~ the ~~Closing,~~Securities asAct ~~described~~pursuant ~~above. EFL Tech has the right~~ to ~~nominate one~~ (1i) ~~additional~~Section ~~director~~1145 ~~at the Second Closing; however, EFL Tech has made no decision regarding whom it will nominate with respect to such right to nominate. Accordingly, as~~ of the ~~date~~Bankruptcy ~~hereof~~Code, ~~since~~which ~~the Second Closing occurred as scheduled on February 28, 2014, but the Third Closing has not occurred,~~generally asexempts ~~reported~~from insuch ~~the~~registration ~~Current~~requirements ~~Report on Form 8-K/A filed with~~ the ~~Commission~~issuance onof ~~April~~securities ~~11,~~under ~~2014, after the second EFL Tech-nominated director has been appointed as~~ a ~~director~~plan byof ~~the Board~~reorganization, ~~EFL~~and/or ~~Tech~~(ii) ~~will~~Section ~~have two~~ 4(a)(2) of ~~its director-nominees on~~ the ~~Company’s five~~Securities ~~(5)~~Act ~~member~~because ~~Board. The description of~~ the ~~Subscription~~issuance ~~Agreement~~does ~~herein~~not isinvolve ~~qualified~~any inpublic ~~its entirety by reference to the full text of such agreement~~offering.

Change in Control. Effective at the First Closing, on ~~Thomas~~January P.21, ~~Schaeffer~~2014, ~~retained his~~EFL ~~position~~Tech asbecame ~~Chief~~the ~~Executive~~holder ~~Officer~~of 51.0% of the Company,’s ~~but~~issued heand ~~resigned~~outstanding shares Common Stock under the ~~office~~terms of ~~President.~~the ~~That~~Subscription ~~office~~Agreement, ~~has~~and, ~~not~~on ~~been~~February ~~filled. The~~28, ~~Board~~2014, ~~may~~became ~~appoint~~the aholder ~~replacement~~of to63.0% of the ~~office~~Company’s shares of Common ~~President,~~Stock ~~which~~on ~~may be~~ a ~~member~~fully ofdiluted ~~EFL~~basis ~~Tech’s~~(reflecting ~~management~~the ~~team,~~occurrence ~~but no~~of ~~decision~~the ~~has~~Second ~~been~~Closing). ~~made,~~After asthe Plan of ~~the~~Reorganization ~~date~~is ~~hereof~~effective, EFL ifTech orwill ~~when~~hold ~~such~~70.1% ~~appointment~~and EL Flexible Signs will behold ~~made,~~18.7% orof ~~who~~the ~~will~~shares beof ~~appointed~~Common Stock issued and outstanding.

~~Amendments~~ITEM to5 ~~Bylaws.~~OTHER Prior to the First Closing, Section 3.3 of the Company’s Bylaws provided that the Board may not fill more than two (2) newly created directorships during the period between any two successive annual meetings of stockholders. On January 21, 2014, effective at the First Closing, the Board amended Section 3.3 of the Bylaws to delete the foregoing restriction on the Board’s authority to fill newly created directorships.MATTERS

38Departure and Election of Directors in Connection with the Subscription Agreement. On January 21, 2014, effective at the First Closing, the following events occurred:

~~ITEM~~1. ~~6 EXHIBITS~~Jon S. Ross, an independent director and Chairman of the Compensation Committee of the Board, and Mark E. Pape, a director and the Company’s Chief Financial Officer and Secretary, resigned from the Board, as provided in the Subscription Agreement.

~~The~~2. ~~following~~Richard ~~exhibits~~K. ~~are~~Hoesterey, ~~included~~an asexisting independent ~~part~~director, a Member of ~~this~~the ~~report~~Compensation Committee of the Board, and the Chairman of the Nominating and Governance Committee ~~are~~of ~~filed~~the ~~herewith:~~Board, was appointed Chairman of the Compensation Committee of the Board, replacing Mr. Ross as Chairman of such committee.

Exhibit No.		Description
31.1		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Principal Financial Officer and Principal Accounting Officer 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 and Principal Accounting 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 Extension Schema*
101.CAL		XBRL Taxonomy Extension Calculation Linkbase*
101.DEF		XBRL Taxonomy Extension Definition Linkbase*
101.LAB		XBRL Taxonomy Extension Label Linkbase*
101.PRE		XBRL Taxonomy Extension Presentation Linkbase*

3. The Board appointed Larry L. Sears, an existing independent director and the Chairman of the Audit Committee of the Board, as a member of the Compensation Committee of the Board.

· Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement of prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.40

394. The Board appointed Dr. Clifton Kwang-Fu Shen, the Chief Scientific Officer of EFL Tech International Group N.V, a Netherlands corporation and an affiliate of EFL Tech, to fill one of the foregoing vacancies, in accordance with the provisions of the Company’s Bylaws. Dr. Shen was appointed to serve until the Company’s next annual meeting of shareholders.

~~SIGNATURES~~5. The Board increased the number of directors that may serve on the Board from five (5) to seven (7), pursuant to the authority granted to the Board in the Company’s Bylaws. With the resignations of Messrs. Pape and Ross as directors, and the appointment of Dr. Shen as a director, effective at the Closing, there were four (4) directors on the Board, leaving three (3) directorships unfilled.

~~Pursuant~~Under the Subscription Agreement, EFL Tech had the right to nominate a total of four (4) directors to the ~~requirements~~Company’s Board, one (1) of whom is Dr. Shen, who was appointed a director effective at the ~~Securities~~Closing, ~~Exchange~~as ~~Act~~described above. EFL Tech has the right to nominate one (1) additional director at the Second Closing; however, EFL Tech has made no decision regarding whom it will nominate with respect to such right to nominate. Accordingly, as of ~~1934~~the date hereof, since the ~~registrant~~Second Closing occurred as scheduled on February 28, 2014, but the Third Closing has ~~duly~~not ~~caused~~occurred, as ~~this~~reported ~~report~~in tothe beCurrent ~~signed~~Report on ~~its~~Form ~~behalf~~8-K/A filed with the Commission on April 11, 2014, after the second EFL Tech-nominated director has been appointed as a director by the ~~undersigned~~Board, ~~thereunto~~EFL ~~duly~~Tech ~~authorized~~will have two (2) of its director-nominees on the Company’s five (5) member Board. The description of the Subscription Agreement herein is qualified in its entirety by reference to the full text of such agreement.

	ORYON TECHNOLOGIES, INC.
	(Registrant)
Date: August 14, 2014	By: /s/ Thomas P. Schaeffer
	Thomas P. Schaeffer Chief Executive Officer and Director
Date: August 14, 2014	By: /s/ Mark E. Pape
	Mark E. Pape Chief Accounting Officer and Chief Financial Officer

Effective at the First Closing, Thomas P. Schaeffer, retained his position as Chief Executive Officer of the Company, but he resigned the office of President. That office has not been filled. The Board may appoint a replacement to the office of President, which may be a member of EFL Tech’s management team, but no decision has been made, as of the date hereof, if or when such appointment will be made, or who will be appointed.

40Departure and Election of Directors in Connection with the Confirmation of the Plan of Reorganization under Chapter 11 Bankruptcy. As reported in Item 5.02 of the Company’s Current Report on Form 8-K filed with the Commission on November 13, 2014, which is incorporated herein by reference, pursuant to the Plan, the following directors will cease to be members of the board of directors of the Company as of the Effective Date: Thomas P. Schaeffer, Larry L. Sears, Richard K. Hoesterey and Clifton Shen. In addition, Thomas P. Schaeffer will cease to serve as Chief Executive Officer of the Company and Mark E. Pape will cease to serve as Chief Financial Officer. Pursuant to the Plan, as of the Effective Date, three individuals associated with EFL Tech will be appointed members of the board of directors of the Company and the new board of directors will appoint a Chief Executive Officer and a Chief Financial Officer.

Amendments to Bylaws. Prior to the First Closing, Section 3.3 of the Company’s Bylaws provided that the Board may not fill more than two (2) newly created directorships during the period between any two successive annual meetings of stockholders. On January 21, 2014, effective at the First Closing, the Board amended Section 3.3 of the Bylaws to delete the foregoing restriction on the Board’s authority to fill newly created directorships.

ITEM 6

EXHIBITS

The following exhibits are included as part of this report and are filed herewith:

Exhibit No.		Description

10.1		Order Confirming Debtors’ Chapter 11 Plan of Reorganization (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.2		Plan Proponents’ Modified First Amended Chapter 11 Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.3		Settlement Agreement dated September 14, 2014 (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.4		Secured Promissory Note dated November 7, 2014 (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.5		Intellectual Property Security Agreement dated November 7, 2014 (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.6		License Agreement*
31.1		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2		Certification of Principal Financial Officer and Principal Accounting Officer 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 and Principal Accounting 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 Extension Schema*
101.CAL		XBRL Taxonomy Extension Calculation Linkbase*
101.DEF		XBRL Taxonomy Extension Definition Linkbase*
101.LAB		XBRL Taxonomy Extension Label Linkbase*
101.PRE		XBRL Taxonomy Extension Presentation Linkbase*

___________

Filed herewith.

SIGNATURES

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

	ORYON TECHNOLOGIES, INC.
	(Registrant)

Date: December 8, 2014	By: /s/ Thomas P. Schaeffer
	Thomas P. Schaeffer Chief Executive Officer and Director

Date: December 8, 2014	By: /s/ Mark E. Pape
	Mark E. Pape Chief Financial Officer, Chief Accounting Officer, Secretary and Director

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