UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

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

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ~~__________~~_______ to ~~__________~~_______

Commission file number: 000-55294

GYROTRON TECHNOLOGY, INC. ~~(Exact name of registrant as specified in its charter)~~

(Exact name of registrant as specified in its charter)

Delaware		51-0382375
(State of incorporation)		(I.R.S. Employer Identification No.)

3412 Progress ~~DriveBensalem, Pennsylvania 19020~~Drive

Bensalem, Pennsylvania 19020

(Address of Principal Executive Offices, Zip Code)

(215)-244-4740

(Registrant's Telephone Number, Including Area Code)

~~_____________________________________________________________~~________________________________________________________

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

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

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

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

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

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

As of ~~November~~July 2325, ~~2015~~2016, 14,414,058 shares of common stock, par value $0.001 per share, were issued and outstanding.

TABLE OF CONTENTS

		PAGE
PART I - FINANCIAL INFORMATION
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements		3
	Balance Sheets		3
	Statements of Operations		4
	Statements of Cash Flow		65
	Notes to the Financial Statements		76
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		2317
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		2620
Item 4.	Controls and Procedures		2620
PART II - OTHER INFORMATION
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		2721
Item IA.	Risk Factors		2721
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		2721
Item 3.	Defaults Upon Senior Securities		2722
Item 4.	Mine Safety Disclosures		2722
Item 5.	Other Information		2722
Item 6.	Exhibits		2822
SIGNATURES			2923

2 Table of Contents

PART I -– FINANCIAL INFORMATION

Item 1. Financial Statements.

GYROTRON TECHNOLOGY, INC.

BALANCE SHEETS

As of

	September 30,			December 31,
	March 31,			December 31,
	2015			2014
	2016			2015
	(Unaudited)
ASSETS
Current assets:
Cash	$	21,~~340~~528		$	~~29,316~~-
Accounts receivable-net		225,~~407~~000			~~520~~17,867
Prepaid expenses and other current assets		-			1,580
Customer contract in progress		-			21,560
Contract Receivable		15,504			-
Total current assets		26,528			39,427
Total current assets		20,251			31,416
Machinery and equipment-net		176,331			176,768
Machinery and equipment-net		81,722			47,362
Patents-net		50,980			53,356
Patents-net		44,509			51,353
Other assets		12,253			12,253
Total assets	$	~~158~~266,~~735~~092		$	~~142~~281,~~384~~804
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Loans payable stockholders	$	182,400		$	85,000
Loan - stockholders	$	145,000		$	145,000
Advances from stockholders		~~125~~229,~~200~~515			-193,325
Accounts payable		~~123~~259,~~830~~997			70241,~~145~~874
Accrued expenses and other liabilities		8189,~~307~~965			1472,~~810~~347
Accrued employee compensation		~~450~~517,~~397~~810			~~364~~481,~~105~~872
Registration rights obligation		~~438~~561,~~732~~611			~~404~~558,~~800~~872
Total current liabilities		1,~~401~~803,~~866~~898			~~938~~1,~~860~~693,290
Commitments and contingencies (Note 14)
Non-current liabilities		26,940			26,940
Redeemable preferred stock
Commitments and contingencies (Note 8)
Redeemable preferred stock:
1,000,000 shares authorized, $0.001 par value
Series A: 450,000 shares designated, 436,774 outstanding		~~3,302,099~~			~~2,948,312~~
Series A-1: 125,000 shares designated, 61,910 outstanding		458,753			408,606
as of March 31, 2016 and December 31, 2015		3,537,957			3,420,028
Series A-2: 8,750 shares designated, 1,349 outstanding		47,225			-
Series A-1: 125,000 shares designated, 61,910 outstanding
Series B: 40,000 shares designated, 39,959 outstanding		1,540,385			1,378,552
as of March 31, 2016 and December 31, 2015		492,185			475,469
Series B-1: 80,000 shares designated, 40,650 outstanding		1,624,010			1,512,829
Series A-2: 8,750 shares designated, 1,782 and 1,739 outstanding
Total redeemable preferred stock		6,972,472			6,248,299
as of March 31, 2016 and December 31, 2015, respectively		62,378			60,857
Stockholders' deficiency
Series B: 40,000 shares designated, 39,959 outstanding
Common stock, 25,000,000 shares authorized, $0.001 par value, 15,222,024 shares issued and 14,414,058 shares outstanding		15,222			15,222
as of March 31, 2016 and December 31, 2015		1,648,275			1,594,331
Additional paid-in capital		2,473,207			3,146,932
Series B-1: 80,000 shares designated, 40,650 outstanding
Accumulated deficit		(10,313,329	)		(9,816,226	)
as of March 31, 2016 and December 31, 2015		1,752,057			1,688,034
		(7,824,900	)		(6,654,072	)
Series B-2: 30,000 shares designated, 667 and 500 outstanding
as of March 31, 2016 and December 31, 2015, respectively		23,953			17,578
Total redeemable preferred stock		7,516,805			7,256,297
Stockholders' deficiency:
Common stock, 25,000,000 shares authorized, $0.001 par value,
15,222,024 shares issued and
14,414,058 shares outstanding		15,222			15,222
Additional paid-in capital		1,962,259			2,217,767
Accumulated deficit		(10,668,329	)		(10,537,009	)
		(8,690,848	)		(8,304,020	)
Treasury stock, 807,966 shares, at cost		(390,703	)		(390,703	)
Total stockholders' deficiency		(89,~~215~~081,~~603~~551	)		(78,~~044~~694,~~775~~723	)
Total liabilities, redeemable preferred stock and stockholders' deficiency	$	158,735		$	142,384
Total liabilities, redeemable preferred stock
and stockholders' deficiency	$	266,092		$	281,804

See accompanying notes.

3 Table of Contents

GYROTRON TECHNOLOGY, INC.

STATEMENTS OF OPERATIONS

For the ~~Nine~~Three Months Ended ~~September~~March 3031,

(Unaudited)

	2015			2014
	2016			2015
Revenues	$	6229,~~710~~250		$	~~141~~1,~~395~~043
Cost of revenues		433,~~840~~122			~~40,360~~-
Gross profit		1826,~~870~~128			~~101~~1,~~035~~043
Operating expenses:
Selling, general and administrative		~~430~~122,~~046~~553			~~626~~148,~~970~~933
Research and development		4826,~~549~~514			5319,~~573~~800
Funded research and development		(15,504	)		-
Total operating expenses		149,067			168,733
Total operating expenses		463,091			680,543
Operating loss		(122,939	)		(167,690	)
Operating loss		(444,221	)		(579,508	)
Other expense:
Other income (expense):
Interest and penalties expense		(5,642	)		(200	)
Extinguishment of debt		-			16,835
Registration rights obligation		(2,739	)		-
Interest and penalties expense		(950	)		-
Net loss		(131,320	)		(167,890	)
Loss on fair value of warrant exchange		(18,000	)		-
Redeemable preferred stock accretion and dividends		(255,963	)		(219,603	)
Registration rights obligation		(33,932	)		(105,344	)
Net loss attributable to common stockholders	$	(387,283	)	$	(387,493	)
Net loss		(497,103	)		(668,017	)
Loss per common share-basic and diluted	$	(0.03	)	$	(0.03	)
Redeemable preferred stock accretion and dividends		(693,053	)		(564,922	)
Weighted average common shares outstanding-basic and diluted		14,414,058			14,414,058
Net loss attributable to common stockholders	$	(1,190,156	)	$	(1,232,939	)
Loss per common share-basic and diluted	$	(0.08	)	$	(0.09	)
Weighted average common shares outstanding-basic and diluted		14,414,058			13,655,582

See accompanying notes.

4 Table of Contents

GYROTRON TECHNOLOGY, INC.

STATEMENTS OF OPERATIONS

For the Three Months Ended September 30,

(Unaudited)

	2015			2014
Revenues	$	23,560		$	48,350
Cost of revenues		19,580			12,285
Gross profit		3,980			36,065
Operating expenses:
Selling, general and administrative		124,149			226,238
Research and development		22,149			9,002
Funded research and development		(15,504	)		-
Total operating expenses		130,794			235,240
Operating loss		(126,814	)		(199,175	)
Other (expense) income:
Extinguishment of debt		-			16,835
Interest and penalties expense		(30	)		-
Loss on fair value of warrant exchange		-			-
Registration rights obligation		(20,329	)		(37,760	)
Net loss		(147,173	)		(220,100	)
Redeemable preferred stock accretion and dividends		(225,312	)		(214,691	)
Net loss attributable to common stockholders	$	(372,485	)	$	(434,791	)
Loss per common share-basic and diluted	$	(0.03	)	$	(0.03	)
Weighted average common shares outstanding-basic and diluted		14,414,058			14,414,054

See accompanying notes.

GYROTRON TECHNOLOGY, INC.

STATEMENTS OF CASH FLOWS

For the ~~Nine~~Three Months Ended ~~September~~March 3031,

(Unaudited)

	2015			2014
	2016			2015
Cash flows from operating activities:
Net loss	$	(~~497~~131,~~103~~320	)	$	(~~668~~167,~~017~~890	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		132,~~443~~813			695,~~184~~110
Patent impairment		6,168			-
Stock based compensation					3,390
Gain on extinguishment of note payable		-			(16,835	)
Stock based compensation		7,573			5,993
Loan receivable, officer, forgiven		-			24,155
(Increase) decrease in assets:
Accounts receivable		(17,~~887~~133	)		(~~140~~720	)
Contracts receivable		(15,504	)		-
Customer contract in progress		21,560			(8,800	)
Prepaid expenses and other current assets		1,580			21,482
Increase in liabilities:
Increase (decrease) in liabilities:
Unearned revenue		-			20,000
Accounts payable		5318,~~685~~123			~~(31~~26,~~809~~204	)
Accrued expenses and other liabilities		6617,~~499~~618			1920,~~720~~267
Accrued employee compensation		8635,~~292~~938			~~(17~~26,~~920~~033	)
Registration rights obligation		332,~~932~~739			~~105,344~~-
Net cash used by operating activities		(~~245~~39,~~322~~662	)		(~~488~~76,~~843~~406	)
Cash flows from investing activities:
Deposit on capital lease		(40,410	)		(40,000	)
Payments for patents		(6,719	)		(7,184	)
Cash flows used by investing activities		(47,129	)		(47,184	)
Cash flows from financing activities:
Proceeds from stockholder loans		97,400			40,000
Proceeds from sale of reedemable preferred stock		5,000			-
Repayments of note payable		-			(29,949	)
Proceeds from advances from stockholders		36,190			50,000
Proceeds from sale of preferred stock, net of issuance costs		42,875			632,390
Net cash provided by financing activities		41,190			50,000
Dividends paid on Series B Preferred		-			(59,940	)
Net (decrease) increase in cash		1,528			(26,406	)
Proceeds from advances from stockholders		125,200			-
Cash - beginning of period		-			29,316
Proceeds from repayment of loan receivable - director		-			8,000
Cash - end of period	$	1,528		$	2,910
Net cash provided by financing activities		265,475			590,501
Net (decrease) increase in cash		(26,976	)		54,474
Cash - beginning of period		29,316			60,082
Cash - end of period	$	2,340		$	114,556
Supplemental disclosure of non-cash financing activities:
Common stock issued in payment of accumulated and declared dividends on Series A Preferred	$	-		$	1,913,479
Redeemable preferred dividend accrual	$	254,663		$	219,603
Common stock issued in payment of accumulated and declared dividends on Series A-1 Preferred	$	-		$	243,440
Dividends on redeemable preferred stock paid by issuance of
Series B-1 preferred dividends paid by issuance of Series B-1 shares	$	-		$	21,625
redeemable preferred stock	$	1,521		$	-
Series A-2 preferred dividends paid by issuance of Series A-2 shares	$	2,250		$	-
Allocation of redeemable preferred stock proceeds
Allocation of redeemable preferred stock proceeds to beneficial conversion feature and warrants	$	13,864		$	169,913
to beneficial conversion feature and warrants	$	455		$	-
Accretion of redeemable preferred	$	15,964		$	173,413
Accretion of redeemable preferred stock proceeds
Redeemable preferred dividend accrual	$	676,948		$	373,384
to liquidation preference	$	845		$	-

See accompanying notes.

65 Table of Contents

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

NOTE 1. - BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business Description - Gyrotron Technology, Inc. (the "Company") is incorporated under the business laws of Delaware. The Company develops and seeks to license unique industrial technologies primarily to the glass, semiconductor, food, footwear, adhesives and plastics industries, providing a novel method for heating for industrial processing. It also develops, licenses, and seeks to sell autoclave-free laminating systems. The Company is organized and managed as a single operating segment.

Basis of Presentation – The accompanying unaudited financial statements have been prepared in accordance with United States generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 8.03 of Regulation S-X for smaller reporting companies. Accordingly, these statements do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary to fairly state the financial position, results of operations and cash flows with respect to the interim financial statements have been included. Operating results for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2015~~2016. The financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company's Form 10-K for the fiscal year ended December 31, ~~2014~~2015.

Liquidity and Management Plans - As shown in the accompanying financial statements, the Company incurred a net loss for the three ~~and nine~~ months ended ~~September~~March 3031, 2016 and 2015 of $~~147~~131,~~173~~320 and $~~497~~167,~~103~~890, respectively, ~~and~~ had negative working capital of $1,~~381~~777,~~615~~370 and stockholders' deficiency of $89,~~215~~081,~~603~~551 at ~~September~~March 3031, ~~2015~~2016. Further, cash used in operating activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 amounted to $~~245~~39,~~322~~662. The Company is expected to continue to incur losses throughout the remainder of ~~2015~~2016. These factors raise substantial doubt as to the ability of the Company to continue as a going concern.

The Company's business strategy is to overcome these losses through commercialization and continued development of (i) applications for the gyrotron beam which will be marketed and monetized through licensing, engineering consulting and servicing and (ii) the lamination system.

~~The~~Since March 31, 2016 the Company's management and Board of Directors have obtained additional funding ~~after~~of ~~September~~approximately 30$245,000 ~~2015~~through stockholder advances and loans and the sale of equity securities (see ~~Note~~Notes 154 and 9) and intend to obtain additional funding for general working capital needs and professional fees through private placement of its equity securities. The Company will continually evaluate funding options including additional offerings of its securities to investors. There can be no assurance as to the availability or terms upon which such financing alternatives might be available.

Accounts Receivable - The Company grants credit to substantially all of its customers, and carries its accounts receivable at original invoice amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on history of past write-offs, collections, and current credit conditions. The allowance for doubtful accounts amounted to $3,218 at ~~September~~March 3031, ~~2015~~2016 and December 31, ~~2014~~2015.

Machinery and Equipment - Machinery and equipment are stated at cost net of accumulated depreciation. Depreciation is provided over the estimated useful lives of the assets using straight-line and accelerated methods for both financial statement and income tax reporting purposes. Maintenance and repairs are charged to operations as incurred; significant betterments are capitalized. Depreciation expense amounted to $437 and $202,~~529~~563 for ~~the~~each ~~three~~of ~~months ended September 30, 2015 and 2014, respectively $6,049 and $61,586 for~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively, and is included within operating expenses in the accompanying statements of operations.

76 Table of Contents

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

NOTE 1. - BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Patents - The Company capitalizes costs relative to patent applications. Patents are recorded at acquired cost and amortized over their estimated useful economic life of 15 years, beginning at the date of issuance. Costs incurred to renew or extend the term of recognized patents, including annuities and fees, are expensed as incurred.

Impairment of Long-Lived Assets - Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future cash flows of the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value is determined based on discounted cash flow or appraised values, depending on the nature of the assets. There was ~~an impairment of a patent during the nine months ended September 30, 2015 in the amount of $6,168 included in operating expenses in the accompanying statement of operations. There was~~ no impairment of long-lived assets during the three months ended ~~September~~March 3031, ~~2015~~2016 and ~~the three and nine months ended September 30, 2014~~2015.

Income Taxes - The Company recognizes estimated income taxes payable or refundable on income tax returns for the current year and the estimated future tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected to be realized.

Share-Based Payments - The Company accounts for stock option awards granted in accordance with Share-Based Payments Topic of the FASB Accounting Standards Codification (ASC) 718. Under ASC 718, compensation expense related to stock based payments is recorded over the requisite service period based on the grant date fair value of the awards. The Company uses the Black-Scholes option pricing model for determining the estimated fair value for stock-based awards. The Black-Scholes model requires the use of assumptions which determine the fair value of stock-based awards, including the option's expected term and the price volatility of the underlying stock.

Treasury Stock - The Company accounts for treasury stock under the cost method, which requires the Company to record the shares as a reduction to equity at the purchased amount.

Revenue Recognition - In accordance with Revenue Recognition Topic of the FASB Accounting Standards Codification (ASC) ~~805~~605, the Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company's price to the customer is fixed or determinate, and collectability is reasonably assured.

87 Table of Contents

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

NOTE 1. - BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Research and Development Expenses - Research and development expenses are charged to operations as incurred. ~~Customer funded research and development is included as income within operating expenses in the accompanying statement of operations.~~

Loss Per Common Share - Basic loss per common share is computed using the weighted average number of common shares outstanding. Diluted loss per common share gives effect to dilutive convertible preferred stock, options and warrants outstanding during the period. Shares to be issued upon the exercise of these instruments have not been included in the computation of diluted loss per share as their effect is anti-dilutive based on the net loss incurred.

As of ~~September~~March 3031, ~~2015~~2016, after giving effect to the expiration of the Series B-1 warrants (see Note 6), there were the following common shares underlying securities that could potentially dilute future earnings:

Preferred A stock			1,637,903
Preferred A-1 stock			232,163
Preferred A-2 stock			6789,~~464~~112
Preferred B stock			1,410,315
Preferred B-1 stock			2,~~032~~391,~~497~~173
Preferred B-1 warrants			1,938,950
Preferred B-2 stock			33,350
Series '15-I warrants			32,125
Warrants expiring 12/15/16			74,225
Other warrants			60,000
Warrants expiring 10/1/18			60,000
Stock options			60,000
Options			60,000
			7,471,417
Total			5,988,241

Accounting Estimates - The process of preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results may differ from estimated amounts.

Fair Value of Financial Instruments - The carrying amount of cash, receivables, accounts payable and accrued expenses and other liabilities are reasonable estimates of their fair value due to their short maturity.

98 Table of Contents

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

NOTE 1. - BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Redeemable Convertible Preferred Stock - The Company classifies conditionally redeemable convertible preferred shares, which includes preferred shares subject to redemption upon the occurrence of uncertain events not solely within control of the Company, as temporary equity in the mezzanine section of the consolidated balance sheet, in accordance with the guidance enumerated in FASB ASC No. 480-10 "Distinguishing Liabilities from Equity", FASB ASC No. 210-10 "Balance Sheet" and Rule 5-02.27 of Regulation S-X, when determining the classification and measurement of preferred stock.

The Company evaluated the detachable warrants in accordance with FASB ASC No. 470-20, "Debt with Conversion and Other Options" and FASB ASC 815, "Derivatives and Hedging" and determined they were not considered a liability. As a result, proceeds from the preferred stock are allocated to the detachable stock purchase warrants based on the relative fair value of the preferred stock and warrants at issuance and recorded as additional paid-in capital.

The Company evaluated the conversion feature of the convertible preferred shares in accordance with FASB ASC No. 470-20, "Debt with Conversion and Other Options". A convertible financial instrument includes a Beneficial Conversion Feature ("BCF") when the fair market value of the preferred stock is lower than the value of common stock when the preferred stock converts to common stock at the issuance date. The BCF shall be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in capital.

Redeemable securities initially are recorded at their fair value minus the detachable warrants, BCF and preferred stock issuance costs. The Company recognizes discounts from the redemption value of the preferred stock immediately as they occur and adjusts the carrying amount to equal redemption value at the end of each reporting period. The Company recognizes accumulated dividends as an increase to preferred stock in the mezzanine section of the balance sheet and increase of stockholders' deficiency.

~~NOTE~~Recent 2Accounting Pronouncements - In November 2014, the FASB issued ASU No.2014-16, Derivatives and Hedging (Topic 815): Determining whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or to equity, ("ASU 2014-16"). ~~LOAN~~The ~~RECEIVABLE~~amendments of ASU 2014-16 clarify how U.S. GAAP should be applied in determining whether the nature of a host contract is more akin to debt or equity and in evaluating whether the economic characteristics and risks of an embedded feature are "clearly and closely related" to its host contract. The guidance in ASU 2014-16 is effective for fiscal years, ~~OFFICER~~and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted. The Company adopted the standard effective January 1, 2016 and the adoption of this standard did not impact the Company's results of operations, cash flows or financial position. The adoption of ASU 2014-16 did not impact the Company's existing financial instruments.

~~The~~NOTE ~~Company~~2. ~~had a non~~-~~interest~~ ~~bearing~~MACHINERY ~~loan~~AND toEQUIPMENT ~~an officer that was due on demand. During the nine months ended September 30, 2014, the Company forgave the loan receivable in the amount of $24,155.~~

10The components of machinery and equipment are as follows:

	Estimated	March 31,			December 31,
	Useful Life	2016			2015

Machinery and equipment	5 to 7 years	$	1,018,231		$	1,018,231
Furniture and fixtures	5 to 7 years		25,874			25,874
Deposit on capital lease			40,000			40,000
			1,084,105			1,084,105
Less accumulated depreciation			(907,774	)		(907,337	)

		$	176,331		$	176,768

Table of Contents

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

NOTE 3. - ~~MACHINERY AND EQUIPMENT~~ PATENTS

The components of machinery and equipment are as follows:

	Estimated	September 30,			December 31,
	Useful Life	2015			2014
Machinery and equipment	5 to 7 years	$	882,338		$	882,338
Furniture and fixtures	5 to 7 years		25,874			25,874
Deposit on equipment			40,410			-
Deposit on capital lease			40,000			40,000
			988,622			948,212
Less accumulated depreciation			(906,900	)		(900.850	)
		$	81.722		$	47362

NOTE 4. – PATENTS

The components of patents are as follows:

	September 30,			December 31,
	March 31,			December 31,
	2015			2014
	2016			2015
Patents	$	~~145~~156,~~520~~419		$	~~153~~156,~~607~~419
Less accumulated amortization		(~~101~~105,~~010~~439	)		(~~102~~103,~~254~~063	)
	$	4450,~~510~~980		$	5153,~~353~~356

The Company amortizes patent costs on a straight-line basis over the expected period of benefit of the related capitalized expenditures. Amortization expense amounted to $2,376 and $2,547 for the three months ended March 31, 2016 and 2015, respectively. For patents placed in service, amortization expense during the next five years is expected to be approximately $7,000 for the nine months ending December 31, 2016, approximately $5,700 in 2017, approximately $3,000 in 2018, 2019, and 2020 and approximately $11,000 in aggregate thereafter.

NOTE 4. - STOCKHOLDER LOANS AND ADVANCES FROM STOCKHOLDERS

Gabriel Capital LP ("Gabriel"), a major stockholder of the Company, made two loans to the Company in 2014 in the amounts of $40,000 and $45,000, to purchase machinery and equipment. There is no interest on these informal loans. The $40,000 loan was to be repaid on July 1, 2015, or earlier to the extent the Company has cash in excess of $250,000. As of the date hereof, this loan has not been repaid. The $45,000 loan was to be repaid on October 1, 2015, or earlier to the extent the Company has cash in excess of $250,000. As of the date hereof, this loan has not been repaid. In May 2015, Gabriel loaned the Company an additional $60,000 interest free to be repaid from 50% of the net proceeds of any equity financing obtained by the Company, and, in any event, to be repaid by September 30, 2015. In October 2015, Gabriel agreed to extend the maturity of all of the above loans to January 4, 2016 and to waive the obligation to repay the May 2015 loan from equity proceeds. In April 2016 Gabriel loaned the Company an additional $25,000 interest free to be repaid by December 31, 2016, and extended the maturity date of all its loans to the Company to December 31, 2016.

As of March 31, 2016 and December 31, 2015, stockholders had advanced the Company approximately $45,000 and $30,500, respectively for future accounts receivable to be repaid at premiums upon collection of the accounts receivable. As of the date hereof the premiums range from 9.4% to 13.2%.

During the three months ended March 31, 2016, a director and his affiliates advanced $12,500 to the Company that bears no interest. Subsequent to March 31, 2016, the director and his affiliates advanced $210,000 to the Company that bears no interest. The Company expects that a substantial portion of such advances will be converted into preferred stock units (see Note 5).

Table of Contents

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

NOTE 45. –- ~~PATENTS~~REDEEMABLE ~~(CONTINUED)~~PREFERRED STOCK

The ~~Company~~Board ~~amortizes~~of ~~patent~~Directors ~~costs~~has ondesignated asix ~~straight-line~~series ~~basis~~of ~~over~~redeemable ~~the~~convertible ~~expected~~par ~~period~~value of$.001 ~~benefit~~preferred ofstock: ~~the~~Series ~~related~~A, ~~capitalized~~Series ~~expenditures.~~A-1, ~~Amortization~~Series ~~expense amounted to $~~A-2,~~299~~ ~~and~~Series $2B,~~602~~ ~~for~~Series ~~the~~B-1, ~~three~~and ~~months~~Series ~~ended~~B-2. ~~September~~Series 30A, ~~2015~~Series ~~and 2014~~A-1, ~~respectively,~~ and ~~$7,394~~Series ~~and~~A-2 ~~$7,598~~rank equal for ~~the~~all ~~nine~~purposes. ~~months~~Series ~~ended~~B, ~~September~~Series 30B-1, ~~2015~~ and ~~2014,~~Series ~~respectively.~~B-2 ~~Amortization~~rank ~~expense~~equal for ~~the~~all ~~next~~purposes. ~~five~~Series ~~years~~A, isA-1 ~~expected~~and toA-2 beeach ~~approximately~~rank ~~$3,000~~senior ~~for~~to ~~the~~each ~~remainder~~ of ~~2015,~~Series ~~approximately $10~~B,~~000~~ ~~in 2016~~B-1, ~~approximately $6,000 in 2017, approximately $4,000 in 2018~~ and ~~approximately $21,000 thereafter~~B-2.

~~NOTE~~As 5further detailed below, holders of Series A, A-1, A-2, B, B-1, and B-2 redeemable convertible preferred stock can take control of the board of directors in the event the Company does not accept a redemption request or the Company fails to pay dividends. –In ~~STOCKHOLDER~~addition, ~~LOANS~~a ~~AND~~majority ~~ADVANCES~~of ~~FROM~~the ~~STOCKHOLDERS~~current members of the board of directors own various classes of preferred stock. As a result, these instruments have conditions for their redemption that are not within the control of the Company. Accordingly, the fair value of the Series A, A-1, A-2, B, B-1, and B-2 redeemable convertible preferred stock are recorded outside of stockholders' deficiency as temporary equity in the mezzanine section of the balance sheet. The Company recognizes changes in the redemption value of the convertible preferred stock immediately as they occur, and the carrying amount of the instrument is adjusted to equal the redemption value at the end of each reporting period. The adjustment to record preferred stock at its redemption value was charged to the redeemable convertible preferred stock carrying value and additional paid in capital for the three months ended March 31, 2016 and is further detailed in the following schedule:

Gabriel Capital LP, a major stockholder of the Company, made two loans to the Company in 2014 in the amounts of $40,000 and $45,000, to purchase machinery and equipment. There is no interest on these informal loans. The $40,000 loan was to be repaid on July 1, 2015, or earlier to the extent the Company has cash in excess of $250,000. As of the date hereof, this loan has not been repaid. The $45,000 loan was to be repaid on October 1, 2015, or earlier to the extent the Company has cash in excess of $250,000. As of the date hereof, this loan has not been repaid. In May 2015, Gabriel Capital LP loaned the Company an additional $60,000 interest free to be repaid from 50% of the net proceeds of any equity financing obtained by the Company, and, in any event, to be repaid by September 30, 2015. In October 2015, Gabriel Capital LP agreed to extend the maturity of all of the above loans to January 4, 2016 and to waive the obligation to repay the May 2015 loan from equity proceeds.

	Series A		Series A-1		Series A-2		Series B		Series B-1		Series B-2		Total

Fair Value of Redeemable Preferred Stock as of December 31, 2015	$	3,420,028	$	475,469	$	60,857	$	1,594,331	$	1,688,034	$	17,578	$	7,256,297
New issuances including dividends paid in kind		-		-	$	1,521		-		-	$	5,845	$	7,366
Dividends accumulated	$	117,929	$	16,716		-	$	53,944	$	64,024	$	530	$	253,142
Fair Value of Redeemable Preferred Stock as of March 31, 2016	$	3,537,957	$	492,185	$	62,378	$	1,648,275	$	1,752,058	$	23,953	$	7,516,805

~~During~~11 ~~the~~Table ~~nine months ended September 30, 2015, stockholders loaned the Company $38,000 for accounts receivable to be repaid at a premium upon collection~~ of the accounts receivable. As of September 30, 2015, a portion of the accounts receivable has been collected and accordingly, $20,000 was due and the remaining $18,000 will be repaid upon collection of future accounts receivable.Contents

During the nine months ended September 30, 2015, a director and his affiliates advanced $125,200 to the Company that bear no interest. The Company expects that a substantial portion of such advances will be converted into A-2 Units (see Note 8).

NOTE 6. - REDEEMABLE CONVERTIBLE PREFERRED STOCK

As further detailed below, holders of Series A, A-1, A-2, B and B-1 redeemable convertible preferred stock can take control of the board of directors in the event the Company does not accept a redemption request or the Company fails to pay dividends. In addition, a majority of the current members of the board of directors own various classes of preferred shares. As a result, these instruments have conditions for their redemption that are not within the control of the Company. Accordingly, the fair value of the Series A, A-1, A-2, B and B-1 redeemable convertible preferred stock are recorded outside of stockholders' deficiency as temporary equity in the mezzanine section of the balance sheet. The Company recognizes changes in the redemption value of the convertible preferred stock immediately as they occur, and the carrying amount of the instrument is adjusted to equal the redemption value at the end of each reporting period. The adjustment to record preferred stock at its redemption value was charged to the redeemable convertible preferred stock carrying value and additional paid in capital for the nine months ended September 30, 2015 and is further detailed in the following schedule:

	Series A		Series A-1		Series A-2		Series B		Series B-1		Total
Fair Value of Redeemable Preferred Stock as of December 31, 2014	$	2,948,312	$	408,606	$	-	$	1,378,552	$	1,512,829	$	6,248,299
New Issuances		-		-		44,975		-		-		44,975
Dividends accumulated		353,787		50,147		2,250		161,833		111,181		679,198
Fair Value of Redeemable Preferred Stock as of September 30, 2015	$	3,302,099	$	458,753	$	47,225	$	1,540,386	$	1,624,010	$	6,972,472

With respect to the new issuances of Series A-2 preferred, $15,964 of the proceeds were allocated to transaction costs, fair value of related warrants and beneficial conversion feature, and then immediately accreted to Fair Value of Redeemable Preferred Stock. Accumulated dividends on the Series A-2 Preferred of $2,250 were paid in additional shares of Series A-2 Preferred.

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

~~NOTE~~The 7terms of these preferred stock are summarized in the table below. -All ~~SERIES~~series Acarry &an ~~A-1~~initial ~~REDEEMABLE~~dividend ~~CONVERTIBLE~~rate ~~PREFERRED~~of ~~STOCK~~10% payable quarterly and are convertible in the common stock of the Company. The holders of preferred stock have the right to one vote for each share of common stock into which such share of preferred stock could then be converted. The conversion ratio and price are subject to adjustment when the Company declares or pays dividends, makes a distribution on common stock payable in common shares, or affects a subdivision, split, consolidation, combination, or reverse split of outstanding common shares into a greater or lesser number of common shares.

The Board of Directors has designated 450,000 shares of redeemable convertible Series A par value $.001 preferred stock and 125,000 shares of redeemable convertible Series A-1 par value $.001 preferred stock. Each share of Series A and A-1 preferred stock shall has a liquidation preference equal to $6 per share plus any accrued or declared and unpaid dividends owed to holders of shares. In the event of a liquidation, winding up, or dissolution of the Company, no distribution shall be made to holders of shares of common stock ranking junior to Series A and A-1 preferred stock until holders of the Series A and A-1 preferred stock have received their liquidation preference. Series A and A-1 preferred stock rank equal with each other and the Series A-2 preferred stock (see Note 8) for all purposes and senior to Series B and B-1 preferred stock.

	Series A			Series A-1			Series A-2			Series B			Series B-1			Series B-2			Totals

Shares designated		450,000			125,000			8,750			40,000			80,000			30,000			733,750
Liquidation preference	$	6		$	6		$	35		$	30		$	35		$	35			-
Conversion price	$	1.600		$	1.600		$	0.700		$	1.000		$	0.700		$	0.700			-
Default conversion price	$	1.600		$	1.600		$	0.595		$	0.850		$	0.595		$	0.595			-
In default at March 31, 2016	YES			YES			NO			YES			YES			NO				-
Number of shares of common issued upon conversion		3.75			3.75			50.00			35.29			58.82			50.00			-
Number of quarters in arrears that triggers default rate		4			4			4			6			6			6			-
Number of quarters in arrears		10			9			-			11			8			-			-
Repurchase date	6/30/2015			6/30/2015			6/30/2020			6/30/2016			9/30/2017			12/31/2019				-
May be paid in kind through and including		-			-		9/30/2016				-			-			-			-
Mandatory conversion percentage		150	%		150	%		150	%		196.1	%		184.9	%		150	%		-
Dividends accrued during the three months ended March 31, 2015	$	117,929		$	16,716		$	-		$	53,944		$	31,014		$	-		$	219,603
Dividends accrued during the three months ended March 31, 2016	$	117,929		$	16,716		$	1,521		$	53,944		$	64,024		$	530		$	254,663
Dividends paid in kind during the three months ended March 31, 2016	$	-		$	-		$	1,521		$	-		$	-		$	-		$	1,521
Cumulative unpaid dividends at December 31, 2015	$	799,384		$	104,009		$	-		$	395,560		$	265,286		$	78		$	1,564,317
Cumulative unpaid dividends at March 31, 2016	$	917,313		$	120,725		$	-		$	449,504		$	329,310		$	608		$	1,817,460
Dividend Rate		18	%		18	%		10	%		18	%		18	%		10	%		-

~~The~~12 ~~holders~~Table of ~~preferred stock have the right to one vote for each share of common stock into which such share of preferred stock could then be converted.~~ Contents

In accordance with Series A and A-1 certificates of designation above, cumulative dividends on each share of Series A and A-1 preferred stock accrue at a rate of 10% of the $6 liquidation amount. After May 31, 2011, the dividend rate increased from 10% to 18%. Dividends are payable quarterly in cash when and if declared by the Board of Directors. The dividends accrue and accumulate whether or not they have been declared by the board of directors and whether or not there are profits or other funds legally available.

In January 2014, the Company amended the certificate of designation of the Series A Preferred with the effect of satisfying cumulative unpaid dividends through September 30, 2013 with common stock at the rate of one common share per $0.65 of dividends, and reducing the dividend rate to 10% from 18% beginning October 1, 2013. As a result of the board of directors' declaration of dividends in February 2014, $1,913,479 of cumulative dividends were satisfied by the issuance of 2,943,837 shares of common stock. These shares were issuable at September 30, 2015 and December 31, 2014, and a portion of these shares have not been issued for administrative reasons. Accordingly, the presentation in these financial statements considers these shares as effectively issued.

In May 2014, the Company amended the certificate of designation of the Series A-1 Preferred with the effect of satisfying cumulative unpaid dividends through December 31, 2013 with common stock at the rate of one common share per $0.65 of dividends, and reducing the dividend rate to 10% from 18% beginning January 1, 2014. As a result of the board of directors' declaration of dividends in June 2014, $243,440 of cumulative dividends were satisfied with 374,523 shares of common stock. These shares were issuable at September 30, 2015 and December 31, 2014, and a portion of them had not been issued for administrative reasons. Accordingly, the presentation in these financial statements considers these shares as effectively issued.

During the three months ended September 30, 2015 and 2014, there were $117,929 and $65,516, respectively, of preferred stock dividends accumulated for Series A preferred stock. During the nine months ended September 30, 2015 and 2014, there were $353,787 and $196,548, respectively, of preferred stock dividends accumulated for Series A preferred stock. At September 30, 2015 and December 31, 2014, there were cumulative unpaid dividends of $681,455 and $327,668, respectively, for Series A preferred stock.

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

~~NOTE~~The 7dividends accrue and accumulate whether or not they have been declared by the board of directors and whether or not there are profits or other funds legally available. -As ~~SERIES~~specified Ain &the ~~A-1~~certificate ~~REDEEMABLE~~of ~~CONVERTIBLE~~designation ~~PREFERRED~~for ~~STOCK~~each ~~(CONTINUED)~~series, the Company may have the option to pay dividends in kind for a specified period of time.

~~During~~For each series any holder can request on the ~~three~~date ~~months~~specified ~~ended~~for ~~September~~that series that the Company repurchase 30, ~~2015~~calendar ~~and~~days ~~2014,~~thereafter ~~there~~(the ~~were~~"Repurchase ~~$16~~Date"),~~716~~ ~~and~~all ~~$9,287~~shares of ~~preferred~~that ~~stock~~series ~~dividends~~held ~~accumulated~~by the holder for ~~Series~~cash ~~A-1~~equal ~~preferred~~to ~~stock~~the ~~respectively~~liquidation preference per share plus accrued and unpaid dividends as of the Repurchase Date. ~~During~~The Company has the ~~nine~~option ~~months~~whether ~~ended~~or ~~September~~not 30to agree to the repurchase. In the event the Company fails to repurchase, ~~2015~~or ~~and~~payment ~~2014~~of dividends of a series is a number of quarters in arrears specified for that series (either being a Default), ~~there~~the ~~were~~dividend ~~$50~~rate on that series increases to 18%,~~147~~ and ~~$27,860~~the majority holders of ~~preferred~~that ~~stock~~series, ~~dividends~~voting ~~accumulated~~together ~~for~~with ~~Series~~the ~~A-1~~holders ~~preferred~~of ~~stock.~~any Atpari ~~September~~– 30passu series, ~~2015~~have ~~and~~the ~~December~~right ~~31,~~to ~~2014~~elect the majority of the board of directors, ~~there~~so ~~were~~long ~~cumulative~~as ~~unpaid~~the dividends continue to be the specified number of ~~$87,293~~quarters ~~and~~in ~~$37~~arrears. For Series A-2,~~146~~ B, ~~respectively~~B-1, and B-2, in the event of a Default the conversion price ("Default Conversion Price") for ~~Series~~that ~~A-1~~series ~~preferred~~permanently ~~stock.~~decreases 15%.

~~Prior~~The toCompany, ~~the~~at ~~January~~its ~~2014~~option, ~~amendment~~may ~~for~~require ~~Series~~conversion Aof ~~preferred~~all ~~stock~~or ~~and~~any ~~May~~pro-rata ~~2014~~portion ~~amendment~~of ~~for~~shares ~~Series~~of ~~A-1~~a ~~preferred~~series ~~stock~~into ~~described~~common ~~above,~~stock onat orthe ~~after~~conversion ~~April~~price ~~30,~~if ~~2012,~~at aany ~~holder~~time ~~could~~i) ~~have~~the ~~requested~~common ~~the~~stock ~~Company~~is tolisted ~~repurchase~~for trading on ~~the~~a ~~date~~national ~~which~~securities isexchange, 31an ~~calendar~~inter-dealer ~~days~~automated ~~thereafter~~quotation system, ~~all~~or ~~shares~~over ofthe ~~Series~~counter Abulletin board (or for the series A-12 ~~preferred~~and ~~stock~~B-2 ~~held~~the by"OTC ~~the~~Pinks"), ~~holder~~ii) ~~for~~the ~~cash~~Company ~~equal~~shall tohave $6prepared ~~per~~and ~~share~~filed ~~plus~~with ~~accrued~~the Securities and ~~declared~~Exchange ~~but~~Commission ~~unpaid~~a ~~dividends~~registration asstatement ofcovering the ~~repurchase~~shares ~~date.~~of ~~The~~common ~~Company~~stock ~~had~~to ~~the~~be ~~option~~issued ~~whether~~upon ordue ~~not~~conversion toof ~~agree~~preferred tostock, ~~the~~and ~~repurchase.~~such Ifregistration ~~the~~statement ~~Company~~shall ~~had~~have ~~failed~~been todeclared ~~repurchase~~effective ~~the~~under ~~shares,~~ the ~~majority~~Securities ~~holders~~Act of ~~Series~~1933, Aas amended, and ~~A-1~~continues ~~stock~~to ~~would~~be ~~have~~effective, ~~had~~iii) ~~the~~during ~~right~~any topreceding ~~elect~~period ~~the majority~~ of ~~the~~twenty ~~board~~consecutive oftrading ~~directors.~~days No(while ~~such~~i) ~~holder~~and atii) ~~any~~are ~~time~~fulfilled) ~~requested~~ the ~~Company~~closing ~~repurchase~~price ~~all~~equals ~~shares~~or ofexceeds ~~Series~~a Aspecified orpercentage ~~A-1~~("Mandatory ~~preferred.~~conversion ~~Majority~~percentage") ~~holders~~of ~~did~~the ~~not~~conversion ~~exercise~~price, ~~the~~and ~~right~~iv) tothe ~~elect~~Company ~~the~~is ~~majority~~current ofon ~~the~~its ~~board~~dividends offor ~~directors~~that Series.

~~After~~Registration ~~giving~~Rights ~~effect~~- toIn connection with its stock subscription agreements, the ~~aforementioned~~Company ~~amendments~~has agreed, on orvarious ~~after~~dates ~~May~~since ~~31,~~December ~~2015~~2009, ato ~~holder~~pay of the ~~Series~~various Asubscribers ~~or A-~~1/2% ~~preferred~~of ~~stock~~the ~~can~~aggregate ~~request~~purchase ~~the~~price ~~Company~~of ~~repurchase~~shares onacquired ~~the~~monthly ~~date~~until ~~which~~(i) iswith 30respect ~~calendar~~to ~~days~~the ~~thereafter,~~common ~~all~~ shares ofunderlying ~~Series~~the Arelated ~~or A-1~~ preferred stock, ~~held~~either by(x) the ~~holder~~Company ~~for~~has ~~cash~~prepared ~~equal~~and tofiled $6a ~~per~~registration ~~share~~statement ~~plus~~with ~~accrued~~the Securities and ~~unpaid~~Exchange ~~dividends~~Commission aswhich ofhas ~~the~~been ~~repurchase~~declared ~~date.~~effective ~~The~~under ~~Company has~~ the ~~option~~Securities ~~whether~~Act or ~~not~~(y) tothe ~~agree~~holder is then able to ~~the~~sell ~~repurchase.~~such Inshares ~~the~~under ~~event~~Rule ~~the~~144 ~~Company~~promulgated ~~fails~~pursuant to ~~repurchase,~~the ~~or,~~Securities ~~after~~Act ~~December~~(in ~~31,~~certain ~~2014,~~agreements ~~payment~~also ofwith ~~dividends~~the oncondition athat ~~series~~said ofsale ~~preferred~~can ~~stock~~be ismade ~~four~~without ~~quarters~~volume ~~in arrears~~restriction), ~~the~~and ~~dividend~~(ii) ~~rate~~the onCompany ~~that~~has ~~series~~obtained ~~will~~a ~~increase~~ticker tosymbol ~~18%~~ and ~~the~~common ~~majority~~shares ~~holders~~are ofeligible ~~said~~to ~~series~~trade, ~~together~~as ~~with~~specified ~~holders~~in ofthe ~~any~~particular ~~series~~subscription ~~of equal seniority~~agreement, ~~will~~on ~~have~~ the ~~right~~OTCBB toor ~~elect~~OTC ~~the~~PINKS. ~~majority~~At ofMarch ~~the~~31, ~~board~~2016 ofand ~~directors~~December ~~until~~31, ~~such~~2015, ~~failure~~the orestimated ~~arrearage~~liability isunder ~~cured.~~these Asagreements ofamounted ~~December~~to 31$561,611 ~~2014~~and ~~dividends~~$558,872, onrespectively, and the ~~Series~~change Ain ~~and~~such ~~A-1~~estimated ~~were~~liability ~~five~~for ~~and~~the ~~four~~three ~~quarters~~months inending ~~arrears~~March ~~respectively~~31, ~~and~~2016 atamounting ~~September~~to 30$2,739 ~~2015,~~are ~~they~~included ~~were~~as ~~eight~~other ~~and~~expense ~~seven quarters~~ in ~~arrears,~~the ~~respectively.~~accompanying ~~Further,~~statements atof ~~September~~operations. ~~30,~~The ~~2015~~agreements ~~the~~provide ~~Company~~for ~~had~~no ~~not~~limitation ~~agreed~~as to ~~repurchase~~ the ~~Series~~maximum Apotential orconsideration ~~A-1~~to ~~preferred~~be ~~stock~~transferred. ~~Accordingly~~At March 31, 2016 the ~~dividend~~aggregate ~~rate~~investment onfor which the ~~Series~~right Ato ~~and~~registration ~~A-1~~rights ~~preferred~~payments ~~stock~~had ~~has~~not ~~increased~~terminated towas ~~18%~~$2,110,886.

~~Under~~13 ~~both~~Table ~~the Series A and Series A-1 certificates~~ of designation, the holder has the right, at any time, to convert each share of preferred stock into 3.75 (the conversion ratio) shares of common stock, or a conversion price of $1.60. The conversion ratio and price are subject to adjustment when the Company declares or pays dividends, makes a distribution on common stock payable in common shares, or affects a subdivision, split, consolidation, combination, or reverse split of outstanding common shares into a greater or lesser number of common shares.Contents

The Company, at its option, may require conversion of all or any pro-rata portion of shares of Series A or A-1 preferred stock outstanding into common stock at the conversion price if at any time i) the common stock is listed for trading on a national securities exchange, an inter-dealer automated quotation system, or over the counter bulletin board, ii) the Company shall have prepared and filed with the Securities and Exchange Commission a registration statement covering the shares of common stock to be issued upon due conversion of preferred stock, and such registration statement shall have been declared effective under the Securities Act of 1933, as amended, and continues to be effective, iii) during any preceding period of twenty consecutive trading days (while i) and ii) are fulfilled) the closing price equals or exceeds 150% of the conversion price, and iv) the Company is current on its dividends for that Series.

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

~~NOTE~~Sale 7.of Equity Securities – During the three months ending March 31, 2016, the Company sold units consisting of 1 share of Series B-2 ~~SERIES~~preferred Aand &warrants Ato purchase one share of common stock, referred to as B-12 ~~REDEEMABLE~~units. ~~CONVERTIBLE~~This ~~PREFERRED~~sale ~~STOCK~~is ~~(CONTINUED)~~summarized in the table below. Proceeds are shown net of offering expenses.

Registration Rights - In connection with the Series A-1 preferred stock subscription agreements, the Company agreed to pay the various subscribers 1/2% of the aggregate purchase price of shares acquired each month beginning on various dates between December 1, 2009 and July 1, 2010 until i) the Company has prepared and filed a registration statement with the Securities and Exchange Commission which has been declared effective under the Securities Act or the holder is then able to sell the underlying common shares under Rule 144 promulgated pursuant to the Securities Act and ii) the Company has obtained a ticker symbol and common shares are eligible to trade on the Over the Counter Bulletin Board (OTCBB). In May 2015 the Company's common shares became eligible to trade on the OTCBB. At September 30, 2015 and December 31, 2014, the estimated liability amounted to $131,782 and $122,549, respectively, and the resulting change for the three and nine months ended September 30, 2015 amounting to $4,541 and $9,233, respectively, is included as other expense in the accompanying statements of operations. The arrangement provides for no limitation as to the maximum potential consideration to be transferred.

	B-2 units
Warrants per unit		50
Warrant exercise price	$	1.00
Warrant expiration date	12/15/2016
Price/unit	$	30
Units sold during the three months ended March 31, 2016		167
Proceeds net of offering expenses received during the three months ended March 31, 2016	$	5,000

~~NOTE~~Warrants 8. - ~~SERIES~~ ~~A-2~~The ~~REDEEMABLE~~warrants ~~CONVERTIBLE~~contain ~~PREFERRED~~customary ~~STOCK~~terms for the adjustment of their exercise price and/or the consideration issued upon exercise upon the occurrence of certain corporate events such as mergers, splits and dividends.

On The ~~March~~proceeds ~~31,~~of ~~2015,~~the preferred stock unit offerings are allocated between the ~~Board~~preferred stock and the warrants based on the relative fair value of ~~Directors~~each ~~designated~~instrument. ~~8,750~~The assumed value of the preferred stock is determined based on the fair value of the underlying common shares and the fair value of ~~10%~~the ~~Convertible~~warrants ~~Series~~was Avalued using a management estimate verified using the Black-2Scholes ~~par~~option ~~value~~pricing $model.~~001~~ ~~preferred~~For ~~stock.~~the three months ending March 31, 2016, $455 respectively was recognized as additional paid-in capital allocable to such warrants and immediately accreted to Fair Value of Redeemable Preferred Stock.

~~Each~~NOTE ~~share of Series A-2 preferred stock has a liquidation preference of $35 per share and is convertible into 50 shares of common stock at a conversion price of $0~~6.70 ~~per common share. In the event of a liquidation, winding up, or dissolution of the Company, the Series A~~-2 COMMON ranks senior to Series B and B-1 and equal to the Series A and A-1 preferred stock. Holders of Series A-2 preferred stock have the right to one vote for each share of common stock into which such share of preferred stock could then be converted.STOCK

~~Cumulative~~At ~~dividends~~March ~~accrue~~31, on2016 ~~the~~and ~~Series~~December ~~A-2~~31, ~~preferred~~2015, ~~stock~~there atwere a15,222,024 ~~rate~~shares ofissued ~~10% of the $35 liquidation amount~~ and 14,414,058 ~~are~~shares ~~payable~~outstanding ~~quarterly~~of ~~when and if declared by~~ the ~~Board~~issuer's ofcommon ~~Directors~~stock. ~~Through~~A ~~September~~portion ~~30,~~of ~~2016,~~these ~~dividends~~shares ~~are~~were ~~paid~~issuable inbut ~~kind,~~had ~~if they are~~ not ~~declared~~been orissued ~~previously~~for ~~paid~~administrative ~~in cash~~reasons. ~~During~~Accordingly, the ~~three~~presentation ~~and~~in ~~nine~~these ~~months~~financial ~~ended~~statements ~~September~~considers ~~30,~~these ~~2015, there were $1,152 and $2,250 of preferred stock dividends accumulated, which were paid by issuance of 33 and 64~~ shares ofas ~~Series~~effectively ~~A-2 preferred stock, respectively~~issued.

~~Under~~14 ~~certain~~Table ~~conditions, the Company, at its option, may require conversion~~ of all or any prorata portion of the Series A-2 preferred stock outstanding into common stock if such stock is registered and for twenty consecutive trading days the closing price equals or exceeds 150% of the conversion price then in effect, and the Company is current on its dividends on the Series A-2 preferred stock.Contents

On or after May 31, 2020, a holder can request the Company repurchase, on the date which is 30 calendar days thereafter, all shares of Series A-2 preferred stock held by the holder for cash equal to $35 per share plus accrued and unpaid dividends as of the repurchase date. The Company has the option whether or not to agree to the repurchase. In the event the Company fails to repurchase or payment of Series A-2 dividends is four quarters in arrears, the dividend rate will increase to 18% and the majority holders of Series A-2 preferred stock, voting together with holders of other equally ranking preferred stock, have the right to elect the majority of the board of directors.

For each $35 of consideration, the Company is offering units ("A-2 Units") consisting of (i) one share of A-2 preferred stock and (ii) 25 warrants to purchase one share of common stock through December 15, 2016 at $1.00 ("Series '15-I" warrants"). In the nine months ended September 30, 2015, the Company sold 1,285 units for proceeds of $42,875, net of issuance costs of $2,100. Additionally, a director and his affiliates advanced $125,200 during the nine months ended September 30, 2015 to the Company and the Company expects that a substantial portion of such advances will be converted into A-2 Units.

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

~~NOTE~~The 8.following ~~- SERIES~~is ~~A-2~~a ~~REDEEMABLE~~summary ~~CONVERTIBLE~~of ~~PREFERRED~~warrants ~~STOCK~~outstanding ~~(CONTINUED)~~and exercisable at March 31, 2016 and 2015 and activity during the three months then ended:

Because the warrants were issued in conjunction with the Series A-2 preferred stock, the proceeds of the offering were allocated between the Series A-2 preferred and the warrants based on the relative fair value of each instrument. The assumed value of the Series A-2 preferred was determined based on the fair value of the underlying common shares and the fair value of the warrants was estimated by management and approximates the value using the Black-Scholes option pricing model. During the nine months ended September 30, 2015, $4,372 was recognized as additional paid-in capital as a result of these warrants and immediately accreted to Fair Value of Redeemable Preferred Stock.

	2016					2015
				Weighted					Weighted
				Average					Average
				Exercise					Exercise
	Warrants			Price		Warrants			Price

Outstanding January 1		2,064,825		$	1.00		3,043,814		$	1.00
Issued during 3 months ended March 31,		8,350			1.00		-			-
Exercised		-			-		-			-
Lapsed		(1,938,950	)		1.00		(1,044,864	)		1.00

Outstanding at March 31,		134,225			0.89		1,998,950		$	0.99

Exercisable at March 31,		134,225		$	0.89		1,998,950		$	0.99

Weighted average months remaining					18.11					12.90

~~The~~NOTE effective conversion price of the Series A-2 was at a price lower than the market price of the common stock at the date of the issuance, resulting in a non-cash beneficial conversion feature for the nine months ended September 30, 2015 of $9,5127. ~~As there is an accumulated deficit, this beneficial conversion feature was recognized as additional paid~~-in ~~capital~~STOCK ~~and~~BASED ~~immediately~~COMPENSATION ~~accreted to Fair Value of Redeemable Preferred Stock.~~

NOTE 9. - SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK

The Board of Directors has designated 40,000 shares of 10% redeemable convertible Series B par value $.001 preferred stock.

Commencing on July 1, 2011, cumulative dividends on each share accrue at a rate of 10% of the $30 liquidation amount. Dividends are payable quarterly in cash when and if declared by the Board of Directors. The dividends accrue whether or not they have been declared by the board of directors and whether or not there are profits or other funds legally available. During the three and nine months ended September 30, 2014, there were $29,969 and $89,908, respectively, of preferred stock dividends accumulated for Series B preferred stock, and of those, during the three and nine months ended September 30, 2014, $29,969 and $59,938 were declared and paid, respectively. During the three and nine months ended September 30, 2015, there were $53,945 and $161,833 of preferred stock dividends accumulated for the Series B preferred, respectively. At September 30, 2015 and December 31, 2014, there were cumulative unpaid dividends of $341,616 and $179,782, respectively, for the Series B preferred stock.

Each share of Series B preferred stock has a liquidation preference equal to $30 per share plus any accrued or declared and unpaid dividends owed to holders of shares. In the event of a liquidation, winding up, or dissolution of the Company, the Series B ranks senior to the common stock, junior to the Series A, A-1 and A-2 preferred stock, and equal to Series B-1 preferred stock.

The holder of Series B preferred stock has the right, at any time, to convert each share into common stock at a conversion ratio of one share of Series B preferred stock to 30 shares of common stock conversion price of $1 per common share. The conversion ratio is subject to adjustment when the Company declares or pays dividends, makes a distribution on common stock payable in common shares, or affects a subdivision, split, consolidation, combination, or reverse split of outstanding common shares into a greater or lesser number of common shares. The Series B holder would be entitled to receive the number of common stock or securities or property that such holder would have owned or been entitled to receive upon the happening of such event had the Series B preferred been converted immediately prior to the record or effective date of such event.

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(Unaudited)

NOTE 9. - SERIES B REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)

The Company, at its option, may require conversion of all or any pro-rata portion of shares of Series B preferred stock outstanding into common stock if at any time i) the common stock is listed for trading on a national securities exchange, an inter-dealer automated quotation system, or over the counter bulletin board, ii) the Company shall have prepared and filed with the Securities and Exchange Commission a registration statement covering the shares of common stock to be issued upon due conversion of preferred stock, and such registration statement shall have been declared effective under the Securities Act of 1933, iii) during any preceding period of twenty consecutive trading days (while i) and ii) are fulfilled) the closing price equals or exceeds 166 2/3% of the conversion price then in effect, and iv) the Company is current on its dividends on the Series B preferred stock. The holders of Series B preferred stock have the right to one vote for each share of common stock into which such share of preferred stock could then be converted.

On or after May 31, 2016, a holder can request the Company repurchase on the date which is 30 calendar days thereafter, all shares of Series B preferred stock held by the holder for cash equal to $30 per share plus accrued and unpaid dividends as of the repurchase date. The Company has the option whether or not to agree to the repurchase. In the event the Company fails to repurchase, or payment of Series B dividends is six quarters in arrears, the conversion price shall decrease to $0.85, and in addition, until such failure or arrearage is cured, the dividend rate will increase to 18% and the majority holders of Series B preferred stock have the right to elect the majority of the board of directors. At December 31, 2014, the Company became six quarters in arrears and, as a result, the conversion price decreased to $0.85. In addition, the dividend rate has increased to 18% for periods subsequent to December 31, 2014 until such time as the Company reduces the arrearages to less than six quarters.

Warrants - In connection with the Series B preferred stock subscription agreements, purchasers' acquired ten detachable warrants for each share of purchased Series B preferred. Each warrant entitles the holder to acquire three shares of $.001 par value common stock at an exercise price of $1 per common share, and expires on the earlier of March 31, 2015 or such date after June 30, 2012 at which i) the common stock is listed on the OTCBB and ii) the shares to be acquired by exercise of the warrants have been registered under the Securities Act of 1933, for 60 consecutive days. All of these warrants expired unexercised on March 31, 2015.

Registration rights - In connection with the Series B preferred stock subscription agreement, the Company agreed to pay subscribers 1/2% of the liquidation preference of shares held by subscribers each month beginning on dates varying from January 1, 2012 to September 1, 2012 until i) the common shares are eligible for trading on the OTCBB and ii) the common shares issuable upon conversion of the shares shall be registered under the Securities Act of 1933 or the subscriber is able to sell such common shares under Rule 144. In May 2015 the Company's common shares became eligible to trade on the OTCBB. Because the transfer of consideration is probable and reasonably estimable at inception of the arrangement, the contingent liability related to registration rights was included in the allocation of proceeds in accordance with GAAP.

As of September 30, 2015 and December 31, 2014, the estimated liability amounted to $221,932 and $212,401, respectively, and the change in the estimated liability for the three and nine months ended September 30, 2015 amounting to $6,443 and $9,531 is included in other expense of the accompanying statements of operations. The arrangement provides for no limitation as to the maximum potential consideration to be transferred.

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(Unaudited)

NOTE 10. - SERIES B-1 REDEEMABLE CONVERTIBLE PREFERRED STOCK

In November 2012, the Board of Directors designated 20,000 shares of 10% redeemable convertible Series B-1 par value $.001 preferred stock. In connection therewith, for each $35 of consideration, the Company offered one unit consisting of one share of Series B-1 convertible preferred stock and 50 common stock warrants exercisable at $1.00 per share. In March 2014, the certificate of designation was amended to increase in the shares designated to 80,000. During the three and nine months ended September 30, 2014, the Company issued 7,393 and 18,169 shares of Series B-1 preferred and 369,650 and 908,450 warrants for proceeds of $258,755 and $635,890, respectively.

The holder of Series B-1 preferred stock has the right, at any time, to convert each share into common stock at a conversion ratio of one share of Series B-1 preferred stock to 50 shares of common stock at a conversion price of $.70 per common share. Each share of Series B-1 preferred stock has a liquidation preference equal to $35 per share plus any accrued or declared and unpaid dividends owed to holders of shares. In the event of a liquidation, winding up, or dissolution of the Company, the Series B-1 ranks senior to the common stock, junior to the Series A, A-1 and A-2 preferred stock, and equal to the Series B preferred stock.

Commencing December 31, 2012, cumulative dividends on each share accrue at a rate of 10% of the $35 liquidation amount. Dividends are payable quarterly in cash when and if declared by the Board of Directors. The dividends accrue whether or not they have been declared by the board of directors and whether or not there are profits or other funds legally available. Through March 31, 2014, in the event that dividends have not been declared by the board of directors prior to the relevant dividend payment date, such dividends shall be payable in shares of Series B-1 preferred stock. During the three and nine months ended September 30, 2015 and the three and nine months ended September 30, 2014, $35,569, $111,181, $30,640, and $80,693 of dividends accumulated for Series B-1 preferred stock, respectively. Of these, during the nine months ended September 30, 2014, dividends of $21,625, were paid by the issuance of 618 shares of Series B-1 preferred.

The conversion ratio is subject to adjustment when the Company declares or pays dividends, makes a distribution on common stock payable in common shares, or affects a subdivision, split, consolidation, combination, or reverse split of outstanding common shares into a greater or lesser number of common shares. The conversion price of $0.70 is adjusted based on changes in the conversion ratio. The Series B-1 holder is entitled to receive the number of common stock or securities or property that such holder would have owned or been entitled to receive upon the happening of such event had the Series B-1 preferred been converted immediately prior to the record or effective date of such event.

The Company, at its option, may require conversion of all or any prorata portion of shares of Series B-1 preferred stock outstanding into common stock if at any time i) the common stock is listed for trading on a national securities exchange, an inter-dealer automated quotation system, or over the counter bulletin board, ii) the Company shall have prepared and filed with the Securities and Exchange Commission a registration statement covering the shares of common stock to be issued upon due conversion of preferred stock, and such registration statement shall have been declared effective under the Securities Act of 1933, iii) during any preceding period of twenty consecutive trading days (while i) and ii) are fulfilled) the closing price equals or exceeds 157% of the conversion price then in effect, and iv) the Company is current on its dividends on the Series B-1 preferred stock. The holders of Series B-1 preferred stock have the right to one vote for each share of common stock into which such share of preferred stock could then be converted.

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(Unaudited)

NOTE 10. - SERIES B-1 REDEEMABLE CONVERTIBLE PREFERRED STOCK (CONTINUED)

On or after August 31, 2017, a holder can request the Company repurchase on the date which is 30 calendar days thereafter, all shares of Series B-1 preferred stock held by the holder for cash equal to $35 per share plus accrued and unpaid dividends as of the repurchase date. The Company has the option whether or not to agree to the repurchase. In the event the Company fails to repurchase or payment of Series B-1 dividends is six quarters in arrears, then the following default provisions will apply: (i) the conversion price shall decrease to $0.595, (ii) until such failure or arrearage is cured, the dividend rate will increase to 18% and (iii) the majority holders of Series B-1 preferred stock have the right to elect the majority of the board of directors. As of September 30, 2015, dividends on the Series B-1 became six quarters in arrears, thus triggering the above default provisions. Subsequent to September 30, 2015, the Company has come to a verbal understanding with all holders of the Series B-1 preferred stock to exchange the Series B-1 preferred stock for a new series of convertible preferred stock with the intended economic effect that dividends accrued and unpaid to-date and future dividends through September 30, 2016 will be paid in-kind, the dividend rate will remain at 10%, and the above default provisions shall apply if dividends subsequent to September 30, 2016 are two quarters in arrears.

Warrants - Each warrant issued together with the Series B-1 preferred entitles the holder to acquire one share of $.001 par value common stock at an exercise price of $1 per common share, and expires on the earlier of March 31, 2016 or such date at which i) the common stock is listed on the OTCBB and ii) the shares to be acquired by exercise of the warrants have been registered under the Securities Act of 1933, for 60 consecutive days. If the Company subdivides or combines its common stock, issues or pays the holders of common stock, or take a record of the holders of common stock for the purpose of entitling them to receive a dividend payable in or distribution of common stock, the number of shares of common stock purchasable upon exercise of the warrant and the warrant price shall be proportionally adjusted.

Because the warrants were issued in conjunction with the Series B-1 preferred stock, the proceeds of the offering are allocated between the Series B-1 preferred and the warrants based on the relative fair value of each instrument. The assumed value of the Series B-1 preferred was determined based on the fair value of the underlying common shares and the fair value of the warrants was valued using the Black-Scholes option pricing model. During the three and nine months ended September 30, 2014, $26,539 and $71,856, respectively, were recognized as additional paid-in capital as a result of these warrants and immediately accreted to Fair Value of Redeemable Preferred Stock.

Registration rights - In connection with the Series B-1 preferred stock subscription agreement, the Company agreed to pay subscribers 1/2% of the liquidation preference of shares held by subscribers each month on beginning on dates varying between July 1, 2013 and September 8, 2015 until i) the common shares are eligible for trading on the OTCBB or OTC Pinks as noted in the respective subscription agreement and ii) the common shares issuable upon conversion of the shares shall be registered under the Securities Act of 1933 or the subscriber is able to sell such common shares under Rule 144. Because the transfer of consideration is probable and reasonably estimable at inception of the arrangement, the contingent liability related to registration rights will be included in the allocation of proceeds in accordance with GAAP.

As of September 30, 2015 and December 31, 2014, the estimated liability amounted to $85,018 and $69,850, respectively, and the change in the estimated liability for the three months and nine months ended September 30, amounting to $9,346 and $15,168 is included in other expense on the accompanying statement of operations. The arrangement provides for no limitation as to the maximum potential consideration to be transferred.

Beneficial Conversion Feature- The effective conversion price of the Series B-1 was at a price lower than the market price of the common stock at the date of the issuance, resulting in a non-cash beneficial conversion feature for the three and nine months ended September 30, 2014 of $52,740 and $98,057, respectively. As there is an accumulated deficit, this beneficial conversion feature was recognized as additional paid-in capital and immediately accreted to Fair Value of Redeemable Preferred Stock.

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(Unaudited)

NOTE 11. - MOST FAVORED NATION RIGHTS

If, prior to December 31, 2016 for Series A-2 units and prior to December 31, 2015 for certain Series B-1 units, the Company closes a financing or series of financing with gross proceeds in excess of $50,000 and terms and conditions more favorable than the terms and conditions provided for in the respective Series A-2 or B-1 subscription agreement, the holders of a Series A-2 and/or B-1 unit may exchange all or any part of the unit at $35 per unit plus accrued dividends for the securities issued in the subsequent financing on the same terms of such subsequent financing ("Most Favored Nation (or "MFN") right"). Purchasers of 7,913 of the Series B-1 units have MFN rights.

Because purchasers the Series A-2 and B-1 units have MFN rights that could affect ultimate settlement of the units, the Company analyzed those instruments for embedded derivatives that require bifurcation. In connection with this analysis, the Company's determined that the Series A-2 and B-1 units are more akin to equity than debt and that the embedded features were clearly and closely related to the economic characteristics and risks of the unit. As a result, the Company concluded that the embedded features would not need to be bifurcated from the unit. Any benefit received by the holder related to the exercise of the MFN right would be recognized upon the occurrence of the contingent events based on its intrinsic value at the commitment date.

In April 2015, the Company agreed with a holder of 5,000 Series B-1 units that in the event the MFN right is triggered, he will waive such right and the Company will issue him 250,000 Series '15- I warrants in exchange for 250,000 warrants expiring March 15, 2016 that such holder acquired as part of his purchase of Series B-1 units. During the nine months ended September 30, 2015, it was considered probable that the MFN right would be triggered and the Company recorded other expense in the amount of $18,000 representing the difference in fair value between the warrants to be issued and the warrants to be forfeited. Subsequent to September 30, 2015, the MFN right of the purchasers of 7,913 of the Series B-1 units was triggered by the sale of A-2 units in excess of $50,000 (See Note 15 –Subsequent Events), and hence the foregoing agreement was triggered. The Company may seek to enter into like agreements with the holders of the remaining 2,913 B-1 units having the aforementioned rights.

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(Unaudited)

NOTE 12. - COMMON STOCK

The following is a summary of warrants outstanding and exercisable at September 30, 2015 and 2014 and activity during the nine months then ended:

	2015				2014
			Weighted				Weighted
			Average				Average
			Exercise				Exercise
	Warrants		Price		Warrants		Price
Outstanding January 1		3,043,814	$	1.00		2,109,364	$	0.99
Issued during 9 months ended September 30,		32,125		1.00		908,450		1.00
Exercised		-		-		-		-
Lapsed		1,044,864		1.00		-		-
Outstanding at September 30,		2,031,075		0.99		3,017,814	$	0.99
Exercisable at September 30,		2,031,075	$	0.99		3,017,814	$	0.99
Weighted average months remaining				7.02				14.44

See Note 8 – Series A-2 Redeemable Convertible Preferred Stock and Note 10 – Series B-1 Redeemable Convertible Preferred Stock related to warrants granted during the nine months ended September 30, 2015 and 2014, respectively.

NOTE 13. - STOCK BASED COMPENSATION

During 2006, the Board of Directors authorized the creation of a pool of 1,200,000 stock options to purchase shares of the Company's common stock to officers and salaried employees of the Company, member of the Board of Directors, consultants, and any other key employees as determined by the Board of Directors as an incentive to remain in the service of the Company, enhance the long-term performance of the Company, and to acquire a proprietary interest in the success of the Company. Awards of these options shall be determined by the Board of Directors or an authorized committee thereof. The right to grant options under the plan expires in 2016.

In July 2014, the Company granted a director 60,000 five year options to purchase common stock at an exercise price of $0.725 per share, of which 12,000 options vested on the grant date, and 12,000 ~~vested~~vest in each of October 2014, January 2015, April 2015 and July 2015. The value of the options was determined to be $16,962 using the Black Scholes pricing model. During the three ~~and nine~~ months ended ~~September~~March 3031, 2015, $~~792 and $7~~3,~~576~~392 of that amount was recognized. ~~Unrecognized stock based compensation expense amounted to $0 and $7,576 as of September 30, 2015 and December 31, 2014, respectively.~~

2115 Table of Contents

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~SEPTEMBER~~MARCH 3031, ~~2015~~2016

(Unaudited)

NOTE 148. - COMMITMENTS AND CONTINGENCIES

InLeases ~~July~~- ~~2014,~~The ~~the~~ Company ~~entered~~leases ~~into~~office anand ~~agreement~~warehouse tospace ~~lease~~under aan ~~new~~operating ~~gyrotron~~lease ~~and~~which ~~associated~~expires ~~equipment~~on ~~from~~July a31, ~~vendor~~2016. ~~pursuant~~Rent toexpense afor ~~capital~~the ~~lease.~~three ~~The~~months ~~lease~~ended ~~requires~~March ~~four~~31, ~~payments~~2016 ~~aggregating~~and ~~$220,000,~~2015 ofand ~~which~~amounted to $4031,~~000~~585 ~~was~~and ~~paid,~~ $4529,~~000~~654 isrespectively. ~~due~~Aggregate ~~upon~~future ~~successful~~minimum ~~launch~~lease ~~(expected~~payments byunder the ~~fourth~~non-cancelable ~~quarter~~operating oflease ~~2015),~~are ~~and~~ $7539,~~000~~384 ~~and~~for ~~$60,000 is due at~~ the ~~first~~year ~~and~~ended ~~second~~December ~~anniversary of launch~~31, ~~respectively~~2016. The ~~lease~~Company ~~contains~~has made a $112,253 ~~bargain~~security ~~purchase~~deposit ~~option~~included ~~following~~within ~~the~~other ~~completion~~assets ofin ~~payments made by~~ the ~~Company.~~accompanying ~~The~~balance ~~term~~sheets as of ~~the~~March ~~lease begins when the equipment is commissioned at the Bensalem~~31, ~~Pennsylvania~~2016 ~~facility,~~and ~~which~~December ~~has not occurred as of September 30~~31, 2015.

In ~~February~~July ~~2015~~2014, the Company entered into an agreement to ~~purchase~~lease a ~~cyromagnet~~new ~~for~~gyrotron ~~$134~~and associated equipment from a vendor pursuant to a capital lease. As amended in May 2016,~~700~~ ofthe ~~which~~lease requires four payments aggregating $220,000, $40,~~410~~000 of which was paid up-front and is included in ~~April~~machinery and equipment in the accompanying balance sheets as of March 31, 2016 and December 31, 2015, and $4045,~~410~~000, ~~will~~$75,000 beand $60,000, are due 30on ~~days~~August ~~after~~1, ~~delivery~~2016, ~~(which~~January ~~took~~31, ~~place~~2017, atand January 31, 2018, respectively. Should the ~~end~~Company offail ~~October~~to ~~2015),~~timely make the $2645,~~940~~000 ~~will~~payment, beit ~~due~~is 6required ~~months~~to ~~after~~return ~~successful~~the ~~provisional~~gyrotron ~~acceptance~~to ~~testing~~the ~~and~~manufacturer ~~$26~~by September 30,~~940~~ ~~will~~2016. beThe ~~due~~lease 18contains ~~months~~a ~~after~~$1 ~~successful~~bargain ~~provisional~~purchase ~~acceptance~~option ~~testing~~following the completion of payments made by the Company.

~~Leases~~In -February ~~The~~2015, the Company ~~leases~~entered ~~office~~into ~~and~~an ~~warehouse~~agreement ~~space~~to ~~under~~purchase ana cryomagnet ~~operating~~for $134,700 ~~lease~~of which ~~expired~~$40,410 onwas ~~July 31~~paid, ~~2015~~$40,410 ~~and~~ was ~~automatically~~due ~~renewed~~30 ondays ~~that~~after ~~date~~delivery ~~for~~(which antook ~~additional~~place 12in ~~months~~the atfourth quarter of 2015) and has not yet been paid, $926,~~846/month.~~940 ~~Rent~~will ~~expense~~be ~~for~~due ~~the~~6 ~~three~~months ~~and~~after ~~nine~~successful ~~months~~provisional ~~ended~~acceptance ~~September~~testing ~~30,~~(which ~~2015~~has ~~and~~not ~~the~~taken ~~three~~place), and ~~nine~~$26,940 will be due 18 months ~~ended~~after ~~September~~successful ~~30,~~provisional ~~2014~~acceptance ~~amounted~~testing. toThe ~~$31,392,~~Company recorded $9067,~~584,~~350 in accounts payable and $26,~~276~~940 in other non-current liability on the accompanying balance sheets as of March 31, 2016 and ~~$76~~December 31,~~524,~~ ~~respectively~~2015.

Aggregate future minimum lease payments from September 30, 2015 under the non-cancelable operating lease are $98,460 through July 2016. The Company has made a $12,253 security deposit included within other assets in the accompanying balance sheets as of September 30, 2015 and December 31, 2014.

Claims - The Company is subject to a claim arising in the normal course of business. In the opinion of management, the amount of the ultimate liability, if any, with respect this action will not have a material adverse effect on the financial position, results of operation or cash flow of the Company.

~~Cost~~NOTE ~~Sharing~~ 9. - ~~The~~SUBSEQUENT Company has entered into an agreement to act as a subcontractor to the prime contractor in a research and development project majority funded by the Department of Energy ("DOE") which calls for 70%/30% cost sharing between the DOE and the prime contractor. The Company has a subcontract with the prime contractor that calls for the Company to bear 30% of the cost of its work. If the DOE continues to fund the project and the agreement is not otherwise terminated, the agreement contemplates that the Company's 30% share of the costs over a two and a half year period will be $51,709. The 70% subcontracted payment to the Company for the three and nine months ended September 30, 2015 is shown in the Statements of Operations as funded research and development.EVENTS

~~NOTE~~Subsequent 15to March 31, 2016, the Company has sold 340 B-2 units at a price of $30 per unit for gross proceeds of $10,200. –See ~~SUBSEQUENT~~also ~~EVENTS~~Note 4 regarding stockholder loans and advances subsequent to March 31, 2016, and Note 8 regarding the Company's lease of a gyrotron.

~~Subsequent~~16 toTable ~~September 30, 2015 a director and his affiliates advanced $25,600 to the Company, and the Company sold 350 A-2 Units for proceeds~~ of ~~$11,935, net of issuance costs of $315. As a result, aggregate sales of the A-2 units exceeded $50,000, which triggered certain MFN rights. See Note 11- Most Favored Nation Rights.~~Contents

Item 2. Management's Discussion and Analysis or Plan of Operations.

As used in this Report on Form 10-Q (this "Report"), unless the context otherwise indicates, references to the "Company," the "Registrant," "we," "our," or "us" refers to Gyrotron Technology, Inc.

Forward-Looking Statements

Certain statements contained in this report, including statements regarding our business, financial condition, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as "may," "will," "should," "expects," "anticipates," "contemplates," "estimates," "believes," "plans," "projected," "predicts," "potential," or "continue" or the negative of these similar terms. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

All forward-looking statements speak only as of the date on which they are made. We undertake no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they are made, except as required by federal securities and any other applicable law.

Overview

We were incorporated in State of Delaware on April 13, 1998 to capitalize on the industrial potential of the gyrotron beam. The Company's current product offerings fall into two broad categories -– a suite of material processing applications based on the unique heating characteristics of the gyrotron beam, and its GLS market-ready autoclave-free system for glass lamination and encapsulation.

Results of Operations

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

Revenues

The Company generated $2329,~~560~~250 in revenues during the quarter ended ~~September~~March 3031, ~~2015~~2016, as compared to $481,~~350~~043 in revenues for the quarter ended ~~September~~March 3031, ~~2014~~2015. InThis ~~the~~was ~~quarter~~due ~~ended~~primarily ~~September~~to ~~30, 2015, almost all revenue came from~~ a ~~one-time~~substantial ~~feasibility~~increase ~~study, from one customer, whereas~~ in ~~the~~royalties ~~quarter ended September 30,2014, almost all revenue came from two one-time feasibility studies, one with this same customer and one with a different customer~~received.

Table of Contents

Total operating expenses

During the quarter ended ~~September~~March 3031, ~~2015~~2016, total operating expenses were $~~130~~149,~~794~~067, which consisted of selling, general and administrative expenses of $~~124~~122,~~149~~553 and research and development expenses, ~~net~~ of ~~funded research and development expenses of~~ $626,~~645~~514. During the quarter ended ~~September~~March 3031, ~~2014~~2015, total operating expenses were $~~235~~168,~~240~~733, which consisted of selling, general and administrative expenses of $~~226~~148,~~238~~933 and research and development expenses of $919,~~002~~800. Total operating expenses decreased $~~104~~19,~~446~~666, or ~~approximately 44~~11.7%. The decrease in ~~selling,~~operating ~~general and administrative~~ expenses was ~~primarily~~ due primarily to ~~the~~lower ~~absence~~selling, ofgeneral ~~consulting~~and ~~fees~~administrative ~~and~~expenses ~~lower~~($122,553 ~~depreciation~~in ~~expense~~the asquarter aended ~~result~~March of31, ~~equipment~~2016 ~~becoming~~compared ~~fully~~to ~~depreciated~~$148,933 in the ~~fourth~~ quarter ofended ~~2014~~March 31, 2015).

Net Loss

During the quarter ended ~~September~~March 3031, ~~2015~~2016, ~~the~~we ~~Company~~ had a net loss of $~~147~~131,~~173~~320, as compared with a net loss of $~~220~~167,~~100~~890 for the quarter ended ~~September~~March 3031, ~~2014~~2015. The decreased loss was primarily due to the ~~decrease~~increase in ~~operating~~revenue ~~expenses~~as ~~detailed~~well ~~above,~~as ~~offset in part by~~ the decrease in ~~gross~~operating ~~profit~~expenses ~~from~~as ~~$36,065~~detailed ~~to $3,980~~above.

For the nine months ended September 30, 2015 and September 30, 2014

Revenues

The Company generated $141,395 in revenues during the nine months ended September 30, 2015, as compared to $62,710 in revenues for the nine months ended September 30, 2014. In each nine month period, almost all revenue came from a one-time feasibility study, each from a different customer.

Total operating expenses

During the nine months ended September 30, 2015, total operating expenses were $463,091, which consisted of selling, general and administrative expenses of $430,046 and research and development expenses, net of funded research and development expenses, of $33,045. During the nine months ended September 30, 2014, total operating expenses were $680,543, which consisted of selling, general and administrative expenses of $626,970 and research and development expenses of $53,573. Total operating expenses decreased $217,452, or approximately 32%. The decrease in selling, general and administrative expenses was due primarily due to decreased consulting fees, lower depreciation expense as a result of equipment becoming fully depreciated in the fourth quarter of 2014, and the decrease in research and development expense was due primarily to partial funding by a third party.

Net Loss

During the nine months ended September 30, 2015, we had a net loss of $497,103, as compared with a net loss of $668,017 for the nine months ended September 30, 2014. The decreased loss was primarily due to the decrease in operating expenses detailed above as well as a decrease in accrual for registration rights obligation from $105,344 to $33,932, offset in part by the decrease in gross profit from $101,035 to $18,870 and a one-time loss on a warrant exchange of $18,000.

Liquidity and Capital Resources

As of ~~September~~March 3031, ~~2015~~2016, we had $21,~~340~~528 of cash. As of July 25, 2016, we had approximately $15,000 of cash.

~~Management~~Since ~~estimates~~March ~~that~~31, 2016 major stockholders and affiliates have advanced $235,000 to the Company interest free, a significant portion of which the Company expects will be converted into equity securities, and the Company has raised $10,200 from the sale of equity securities. Management of Gyrotron estimates that we will need approximately $400,000 for the next 12 months of operations. The Company does not have sufficient cash to fund its expenses over the next twelve months. There can be no assurance that additional capital will be available to the Company. If the Company fails to raise adequate capital, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.

Going Concern

As shown in the accompanying financial statements, the Company incurred a net loss for the three ~~and nine~~ months ended ~~September~~March 3031, 2016 and 2015 of $~~147~~131,~~173~~320 and $~~497~~167,~~103~~890, respectively, ~~and~~ had negative working capital of $1,~~381~~777,~~615~~370 and stockholders' deficiency of $89,~~215~~081,~~603~~551 at ~~September~~March 3031, ~~2015~~2016. ~~Cash~~Further, cash used in operating activities during the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 amounted to $~~245~~39,~~322~~662. The Company is expected to continue to incur losses throughout the remainder of ~~2015~~2016.

These factors raise substantial doubt regarding the Company's ability to continue as a going concern. These ~~The accompanying~~ financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that ~~may~~might be necessary ifshould the Company isbe unable to continue as a going concern.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

We18 ~~have~~Table noof ~~off-balance sheet arrangements.~~ Contents

Critical Accounting Policies

The accompanying financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. In the opinion of management, these financial statements include all adjustments necessary in order to make them not misleading.

Revenue Recognition - In accordance with Revenue Recognition Topic of the FASB Accounting Standards Codification (ASC) 605, the Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company's price to the customer is fixed or determinate, and collectability is reasonably assured.

Impairment of Long-Lived Assets - Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There was ~~an impairment of a patent during the nine months ended September 30, 2015 in the amount of $6,168 included in operating expenses in the accompanying statement of operations. There was~~ no impairment of long-lived assets during the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2016 and 2015.

Research and Development Expenses - Research and development expenses are charged to operations as incurred.

Allocation of Proceeds from Financing Transactions - The Company has raised, and continues to raise capital, by selling units consisting of convertible preferred stock and warrants, and offering the purchasers registration rights payments if the common stock that underlies the preferred stock is not registered by a certain time period. Proceeds are allocated between the preferred stock, the warrants and, in certain instances, the right to registration related payments based on an estimate of when the underlying common stock will be registered using the relative fair value of the preferred stock and the warrants. The fair value of the warrants were determined using the Black-Scholes option pricing model. The Black-Scholes model requires the use of assumptions which determine the fair value of the warrants, including their expected term and the price volatility of the underlying common stock. The estimate of registration rights liability is updated each reporting period based on the expected date of compliance. Changes to the estimated liability are recognized in the statement of operations.

Redeemable Convertible Preferred Stock - The Company classifies conditionally redeemable convertible preferred shares, which includes preferred shares subject to redemption upon the occurrence of uncertain events not solely within control of the Company, as temporary equity in the mezzanine section of the consolidated balance sheet, in accordance with the guidance enumerated in FASB ASC No. 480-10 "Distinguishing Liabilities from Equity", FASB ASC No. 210-10 "Balance Sheet" and Rule 5-02.27 of Regulation S-X, when determining the classification and measurement of preferred stock.

~~Redeemable~~19 ~~securities~~Table ~~initially are recorded at their fair value minus the detachable warrants, BCF and preferred stock issuance costs. The Company recognizes discounts from the redemption value~~ of the preferred stock immediately as they occur and adjusts the carrying amount to equal redemption value at the end of each reporting period. The Company recognizes accumulated dividends as an increase to preferred stock in the mezzanine section of the balance sheet and increase of stockholders' deficiency. Contents

25Item 3. Quantitative and Qualitative Disclosures About Market Risk.

~~Item~~As 3.a ~~Quantitative~~"smaller ~~and~~reporting ~~Qualitative~~company", ~~Disclosures~~we ~~About~~are ~~Market~~not ~~Risk~~required to provide the information required by this Item.

~~As a "smaller reporting company", we are not required to provide the information required by this~~ Item 4. Controls and Procedures

~~Item~~Evaluation 4.of Disclosure Controls and Procedures

~~Evaluation~~Under the supervision and with the participation of our management, who is also our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of March 31, 2016. Based upon such evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective, as of March 31, 2016, to provide assurance that information that is required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified by the SEC's rules and forms. Disclosure ~~Controls~~controls and ~~Procedures~~procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

~~Under~~Changes the supervision and with the participation of our management, who is also our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of September 30, 2015. Based upon such evaluation, the Company's Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective, as of September 30, 2015, to provide assurance that information that is required to be disclosed by the Company in ~~the~~Internal ~~reports~~Controls ~~that~~over it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified by the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial ~~Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.~~Reporting

There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Given~~20 ~~the~~Table ~~limited number~~ of personnel responsible for accounting for and managing transaction and funds in the company, there is an inherent limitation to the Company's ability to establish segregation of duties. Moreover, the Company has a limited number of qualified accounting personnel involved in the maintenance of accounting records and the Company has been unable to maintain adequate control activities or monitoring processes.Contents

~~Changes~~PART inII ~~Internal~~- OTHER ~~Controls over Financial Reporting~~INFORMATION

~~There~~Item ~~were~~1. noLegal changes in our internal controls over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reportingProceedings.

26The Company is subject to a claim arising in the normal course of business. In the opinion of management, the amount of the ultimate liability, if any, with respect this action will not have a material adverse effect on the financial position, results of operation or cash flow of the Company. Otherwise, there are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company, and the Company's property is not the subject of any pending legal proceedings.

~~PART~~Item ~~II OTHER~~1A. ~~INFORMATION~~Risk Factors

~~Item~~As 1.a ~~Legal~~"smaller ~~Proceedings~~reporting company", we are not required to provide the information required by this item.

~~The~~Item ~~Company is subject to a claim arising in the normal course of business~~2. InUnregistered ~~the~~Sales ~~opinion~~ of ~~management,~~Equity ~~the~~Securities amount of the ultimate liability, if any, with respect this action will not have a material adverse effect on the financial position, results of operation or cash flow of the Company. Otherwise, there are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company, and ~~the~~Use ~~Company's property is not the subject~~ of ~~any pending legal proceedings~~Proceeds.

~~Item~~Recent ~~1A.~~sales ~~Risk~~of ~~Factors.~~unregistered securities

AsIn aJanuary, ~~"smaller~~2016, ~~reporting~~the ~~company"~~Company offered and sold to one unaffiliated purchaser 167 units, weeach ~~are~~consisting ~~not~~of ~~required~~(i) toone ~~provide~~share of 10% Convertible Redeemable Series B-2 preferred stock, par value $.001 per share (the ~~information~~"Series ~~required~~B-2") byand ~~this~~(ii) ~~item~~50 warrants to purchase one share of common stock through December 15, 2016 at an exercise price of $1.00 per share ("B-2 Unit") at a price of $30 per unit.

~~Item~~The certificate of designation for the Series B-2 has been filed as exhibit 3.14 ~~Unregistered~~to ~~Sales~~the ofCurrent ~~Equity~~Report ~~Securities~~on ~~and~~Form ~~Use~~8-K offiled ~~Proceeds~~with the SEC on December 23, 2015. See also note 5 to the financial statements included in this form 10-Q.

~~Recent~~All ~~sales~~certificates evidencing the equity securities issued and described above contain a legend (1) stating that the shares have not been registered under the Securities Act and (2) setting forth or referring to the restrictions on transferability and sale of ~~unregistered~~the shares under the Securities Act. All of the above securities were offered and issued pursuant to an exemption from registration requirements under the Securities Act of 1933 as amended, pursuant to Section 4 (2) of such Act.

~~There~~21 ~~were~~Table ~~no sales~~ of ~~unregistered securities during the Company's fiscal quarter ended September 30, 2015.~~Contents

Purchases of equity securities by the issuer and affiliated purchasers.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable

Item 5. Other Information.

Item 6. Exhibits.

Exhibit No.		Description
31		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
32		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

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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.

	GYROTRON TECHNOLOGY, INC.
Date: November 23, 2015	By:	/s/ Vlad Sklyarevich
Date: July 27, 2016	By:	/s/ Vlad Sklyarevich
		Vlad Sklyarevich
		President, Treasurer and Director(Principal Executive Officer andPrincipal Financial and Accounting Officer)
		President, Treasurer and Director(principal executive officer and principal financial and accounting officer)

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