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 ~~March~~June 3130, 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)

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

3412 Progress 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 xo

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 No o

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 ~~July~~August 2519, 2016, there were 14,414,058 shares of common stock outstanding, 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		56
	Notes to the Financial Statements		67
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		20
Item 4.	Controls and Procedures		20
PART II – OTHER INFORMATION
PART II - OTHER INFORMATION
			21
Item 1.	Legal Proceedings		21
Item IA.	Risk Factors		21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		21
Item 3.	Defaults Upon Senior Securities		2221
Item 4.	Mine Safety Disclosures		2221
Item 5.	Other Information		2221
Item 6.	Exhibits		22
SIGNATURES			23

Table of Contents

PART I – - FINANCIAL INFORMATION

~~Item~~ITEM 1. ~~Financial~~FINANCIAL ~~Statements~~STATEMENTS.

GYROTRON TECHNOLOGY, INC.

BALANCE SHEETS

As of

	June 30,			December 31,
	2016			2015
	(Unaudited)
ASSETS
Current assets:
Cash	$	5,163		$	-
Accounts receivable-net		50,000			17,867
Prepaid expenses and other		6,248			-
Customer contracts in progress		-			21,560
Total current assets		61,411			39,427

Machinery and equipment-net		355,895			176,768
Patents-net		48,621			53,356
Other assets		12,253			12,253
Total assets	$	478,180		$	281,804

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Loan - stockholders		170,000			145,000
Advances from stockholders		324,515			193,325
Accounts payable		285,402			241,874
Current portion of capital lease		120,000			-
Accrued expenses and other liabilities		98,168			72,347
Accrued employee compensation		541,442			481,872
Registration rights obligation		566,044			558,872
Total current liabilities		2,105,571			1,693,290

Non-current liabilities		86,940			26,940

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
as of June 30, 2016 and December 31, 2015		3,655,886			3,420,028
Series A-1: 125,000 shares designated, 61,910 outstanding
as of June 30, 2016 and December 31, 2015		508,900			475,469
Series A-2: 8,750 shares designated, 1,827 and 1,739 outstanding
as of June 30, 2016 and December 31, 2015		63,953			60,857
Series B: 40,000 shares designated, 39,959 outstanding
as of June 30, 2016 and December 31, 2015		1,702,220			1,594,331
Series B-1: 80,000 shares designated, 40,650 outstanding
as of June 30, 2016 and December 31, 2015		1,816,081			1,688,034
Series B-2: 30,000 shares designated, 1,007 and 500 outstanding
as of June 30, 2016 and December 31, 2015		36,036			17,578
Total redeemable preferred stock		7,783,076			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		1,704,958			2,217,767
Accumulated deficit		(10,826,884	)		(10,537,009	)
		(9,106,704	)		(8,304,020	)
Treasury stock, 807,966 shares, at cost		(390,703	)		(390,703	)
Total stockholders' deficiency		(9,497,407	)		(8,694,723	)

Total liabilities, redeemable preferred stock
and stockholders' deficiency	$	478,180		$	281,804

	March 31,			December 31,
	2016			2015
	(Unaudited)
ASSETS
Current assets:
Cash	$	1,528		$	-
Accounts receivable-net		25,000			17,867
Customer contract in progress		-			21,560
Total current assets		26,528			39,427
Machinery and equipment-net		176,331			176,768
Patents-net		50,980			53,356
Other assets		12,253			12,253
Total assets	$	266,092		$	281,804
LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Loan - stockholders	$	145,000		$	145,000
Advances from stockholders		229,515			193,325
Accounts payable		259,997			241,874
Accrued expenses and other liabilities		89,965			72,347
Accrued employee compensation		517,810			481,872
Registration rights obligation		561,611			558,872
Total current liabilities		1,803,898			1,693,290
Non-current liabilities		26,940			26,940
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
as of March 31, 2016 and December 31, 2015		3,537,957			3,420,028
Series A-1: 125,000 shares designated, 61,910 outstanding
as of March 31, 2016 and December 31, 2015		492,185			475,469
Series A-2: 8,750 shares designated, 1,782 and 1,739 outstanding
as of March 31, 2016 and December 31, 2015, respectively		62,378			60,857
Series B: 40,000 shares designated, 39,959 outstanding
as of March 31, 2016 and December 31, 2015		1,648,275			1,594,331
Series B-1: 80,000 shares designated, 40,650 outstanding
as of March 31, 2016 and December 31, 2015		1,752,057			1,688,034
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		(9,081,551	)		(8,694,723	)
Total liabilities, redeemable preferred stock
and stockholders' deficiency	$	266,092		$	281,804

See accompanying notes.

~~See~~3 ~~accompanying~~Table ~~notes.~~of Contents

3GYROTRON ~~Table~~TECHNOLOGY, ~~of Contents~~INC.

~~GYROTRON~~STATEMENTS ~~TECHNOLOGY,~~OF ~~INC.~~OPERATIONS

~~STATEMENTS~~For OFthe ~~OPERATIONS~~Three Months Ended June 30,

~~For the Three Months Ended March 31,~~(Unaudited)

(Unaudited)

	2016			2015

Revenues	$	25,000		$	38,107

Cost of revenues		-			24,260

Gross profit		25,000			13,847

Operating expenses:
Selling, general and administrative		163,558			156,964
Research and development		15,564			6,600
Total operating expenses		179,122			163,564

Operating loss		(154,122	)		(149,717	)

Other expense:
Interest and penalties expense		-			(720	)
Loss on fair value of warrant exchange		-			(18,000	)
Registration rights obligation		(4,433	)		(13,603	)

Net loss		(158,555	)		(182,040	)

Redeemable preferred stock accretion and dividends		(258,001	)		(248,129	)

Net loss attributable to common stockholders	$	(416,556	)	$	(430,169	)

Loss per common share-basic and diluted	$	(0.03	)	$	(0.03	)

Weighted average common shares
outstanding-basic and diluted		14,414,058			14,414,058

	2016			2015
Revenues	$	29,250		$	1,043
Cost of revenues		3,122			-
Gross profit		26,128			1,043
Operating expenses:
Selling, general and administrative		122,553			148,933
Research and development		26,514			19,800
Total operating expenses		149,067			168,733
Operating loss		(122,939	)		(167,690	)
Other expense:
Interest and penalties expense		(5,642	)		(200	)
Registration rights obligation		(2,739	)		-
Net loss		(131,320	)		(167,890	)
Redeemable preferred stock accretion and dividends		(255,963	)		(219,603	)
Net loss attributable to common stockholders	$	(387,283	)	$	(387,493	)
Loss per common share-basic and diluted	$	(0.03	)	$	(0.03	)
Weighted average common shares outstanding-basic and diluted		14,414,058			14,414,058

See accompanying notes.

~~See~~4 ~~accompanying~~Table ~~notes.~~of Contents

4GYROTRON ~~Table~~TECHNOLOGY, ~~of Contents~~INC.

~~GYROTRON~~STATEMENTS ~~TECHNOLOGY,~~OF ~~INC.~~OPERATIONS

~~STATEMENTS~~For OFthe Six ~~CASH~~Months ~~FLOWS~~Ended June 30,

~~For the Three Months Ended March 31,~~(Unaudited)

(Unaudited)

	2016			2015

Revenues	$	54,250		$	39,150

Cost of revenues		3,122			24,260

Gross profit		51,128			14,890

Operating expenses:
Selling, general and administrative		286,111			305,897
Research and development		42,078			26,400
Total operating expenses		328,189			332,297

Operating loss		(277,061	)		(317,407	)

Other expense:
Interest and penalties expense		(5,642	)		(920	)
Loss on fair value of warrant exchange		-			(18,000	)
Registration rights obligation		(7,172	)		(13,603	)

Net loss		(289,875	)		(349,930	)

Redeemable preferred stock accretion and dividends		(513,121	)		(467,732	)

Net loss attributable to common stockholders	$	(802,996	)	$	(817,662	)

Loss per common share-basic and diluted	$	(0.06	)	$	(0.06	)

Weighted average common shares
outstanding-basic and diluted		14,414,058			14,414,058

	2016			2015
Cash flows from operating activities:
Net loss	$	(131,320	)	$	(167,890	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		2,813			5,110
Stock based compensation					3,390
(Increase) decrease in assets:
Accounts receivable		(7,133	)		(720	)
Customer contract in progress		21,560			(8,800	)
Increase in liabilities:
Unearned revenue		-			20,000
Accounts payable		18,123			26,204
Accrued expenses and other liabilities		17,618			20,267
Accrued employee compensation		35,938			26,033
Registration rights obligation		2,739			-
Net cash used by operating activities		(39,662	)		(76,406	)
Cash flows from financing activities:
Proceeds from sale of reedemable preferred stock		5,000			-
Proceeds from advances from stockholders		36,190			50,000
Net cash provided by financing activities		41,190			50,000
Net (decrease) increase in cash		1,528			(26,406	)
Cash - beginning of period		-			29,316
Cash - end of period	$	1,528		$	2,910
Supplemental disclosure of non-cash financing activities:
Redeemable preferred dividend accrual	$	254,663		$	219,603
Dividends on redeemable preferred stock paid by issuance of
redeemable preferred stock	$	1,521		$	-
Allocation of redeemable preferred stock proceeds
to beneficial conversion feature and warrants	$	455		$	-
Accretion of redeemable preferred stock proceeds
to liquidation preference	$	845		$	-

See accompanying notes.

~~See~~5 ~~accompanying~~Table ~~notes.~~of Contents

5 GYROTRON ~~Table~~TECHNOLOGY, ~~of Contents~~INC.

~~GYROTRON~~STATEMENTS ~~TECHNOLOGY,~~OF ~~INC.~~CASH FLOWS

~~NOTES~~For TOthe ~~THE~~Six ~~FINANCIAL~~Months ~~STATEMENTS~~Ended June 30,

~~MARCH 31, 2016~~(Unaudited)

(Unaudited)

	2016			2015

Cash flows from operating activities:
Net loss	$	(289,875	)	$	(349,930	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		5,608			10,708
Patent impairment		-			6,168
Stock based compensation		-			6,781
(Increase) decrease in assets:
Accounts receivable		(32,133	)		(827	)
Customer contract in progress		21,560			(12,100	)
Prepaid expenses and other current assets		(6,248	)		1,580
Increase in liabilities:
Accounts payable		43,528			46,910
Accrued expenses and other liabilities		25,821			45,147
Accrued employee compensation		59,570			42,129
Registration rights obligation		7,172			13,603
Net cash used by operating activities		(164,997	)		(189,831	)

Cash flows from investing activities:
Deposit on equipment		-			(40,410	)
Payments for patents		-			(6,719	)
Cash flows used by investing activities		-			(47,129	)

Cash flows from financing activities:
Proceeds from stockholder loans		25,000			93,180
Net Proceeds from sale of reedemable preferred stock		14,588			42,875
Dividends paid on reedemable preferred stock		(618	)		-
Proceeds from advances from stockholders		131,190			73,000
Net cash provided by financing activities		170,160			209,055

Net (decrease) increase in cash		5,163			(27,905	)

Cash - beginning of period		-			29,316

Cash - end of period	$	5,163		$	1,411

Supplemental disclosure of non-cash investing and financing activities:
Purchase of equipment in capital lease and long term liability	$	180,000		$	-
Redeemable preferred dividend accrual	$	509,642		$	452,789
Dividends on redeemable preferred stock paid by issuance of redeemable preferred stock	$	3,096		$	1,098
Allocation of redeemable preferred stock net proceeds to beneficial conversion feature and warrants	$	3,479		$	13,864
Accretion of redeemable preferred stock net proceeds to liquidation preference	$	3,157		$	2,100
Accretion of redeemable preferred stock - total	$	6,636		$	15,964

~~NOTE~~See 1accompanying ~~- BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~ notes.

~~Business~~6 ~~Description~~Table ~~- 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. Contents

~~Basis~~GYROTRON 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. AccordinglyTECHNOLOGY, ~~these statements do not include all of the information and footnotes required by United States generally accepted accounting principles for complete financial statements~~INC. 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 months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 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, 2015.

~~Liquidity~~NOTES ~~and~~TO ~~Management~~THE ~~Plans~~FINANCIAL - As shown in the accompanying financial statements, the Company incurred a net loss for the three months ended March 31, 2016 and 2015 of $131,320 and $167,890, respectively, had negative working capital of $1,777,370 and stockholders' deficiency of $9,081,551 at March 31, 2016. Further, cash used in operating activities during the three months ended March 31, 2016 amounted to $39,662. The Company is expected to continue to incur losses throughout the remainder of 2016. These factors raise substantial doubt as to the ability of the Company to continue as a going concern.STATEMENTS

~~The~~JUNE 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 licensing30, ~~engineering consulting and servicing and (ii) the lamination system.~~2016

~~Since March 31, 2016 the Company's management and Board of Directors have obtained additional funding of approximately $245,000 through stockholder advances and loans and the sale of equity securities~~ (~~see Notes 4 and 9~~Unaudited) 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~~NOTE ~~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~~1. ~~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,~~BUSINESS ~~and~~DESCRIPTION ~~current~~AND ~~credit~~SUMMARY ~~conditions.~~OF ~~The~~SIGNIFICANT ~~allowance~~ACCOUNTING ~~for~~POLICIES ~~doubtful accounts amounted to $3,218 at March 31, 2016 and December 31, 2015.~~

~~Machinery~~Business ~~and~~Description ~~Equipment~~ - ~~Machinery~~Gyrotron ~~and~~Technology, ~~equipment are stated at cost net of accumulated depreciation~~Inc. ~~Depreciation~~(the "Company") is ~~provided~~incorporated ~~over~~under the ~~estimated~~business ~~useful~~laws ~~lives~~ of ~~the~~Delaware. ~~assets~~The ~~using~~Company ~~straight-line~~develops and ~~accelerated~~seeks ~~methods~~to ~~for~~license ~~both~~unique ~~financial~~industrial ~~statement~~technologies ~~and~~primarily ~~income~~to ~~tax~~the ~~reporting~~glass, ~~purposes.~~semiconductor, ~~Maintenance~~food, footwear, adhesives and ~~repairs~~plastics ~~are~~industries, ~~charged~~providing toa ~~operations~~novel asmethod ~~incurred;~~for ~~significant~~heating ~~betterments~~for ~~are~~industrial ~~capitalized~~processing. ~~Depreciation~~It ~~expense~~also ~~amounted~~develops, tolicenses, ~~$437~~ and ~~$2,563~~seeks ~~for~~to ~~each~~sell ofautoclave-free ~~the~~laminating ~~three~~systems. ~~months~~The ~~ended~~Company ~~March~~is ~~31,~~organized ~~2016~~ and ~~2015,~~managed ~~respectively~~as ~~and~~a issingle ~~included within~~ operating ~~expenses in the accompanying statements of operations~~segment.

6Basis ~~Table~~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 ~~Contents~~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 six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 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, 2015.

~~GYROTRON~~Liquidity ~~TECHNOLOGY~~and Management Plans - As shown in the accompanying financial statements, ~~INC~~the Company incurred a net loss for the three and six months ended June 30, 2016 of $158,555 and $289,875, respectively, and had negative working capital of $2,044,160 and stockholders' deficiency of $9,497,407 at June 30, 2016. Further, cash used in operating activities during the six months ended June 30, 2016 amounted to $164,997. The Company is expected to continue to incur losses throughout the remainder of 2016. These factors raise substantial doubt as to the ability of the Company to continue as a going concern.

~~NOTES~~The TOCompany's ~~THE~~business ~~FINANCIAL~~strategy ~~STATEMENTS~~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.

~~MARCH~~The 31Company's management and Board of Directors have obtained additional funding after June 30, 2016 (see Note 4) 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.

~~(Unaudited)~~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 June 30, 2016 and December 31, 2015.

~~NOTE~~Machinery 1and 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 ~~BUSINESS~~and ~~DESCRIPTION~~accelerated ~~AND~~methods ~~SUMMARY~~for OFboth ~~SIGNIFICANT~~financial ~~ACCOUNTING~~statement ~~POLICIES~~and ~~(CONTINUED)~~income tax reporting purposes. Maintenance and repairs are charged to operations as incurred; significant betterments are capitalized. Depreciation expense amounted to $437 and $3,049 for the three months ended June 30, 2016 and 2015, respectively, and $874 and $5,612 for the six months ended June 30, 2016 and 2015, respectively, and is included within operating expenses in the accompanying statements of operations.

~~Patents~~7 -Table ~~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.~~ Contents

~~Impairment~~GYROTRON 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 impairedTECHNOLOGY, ~~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~~INC. Fair value is determined based on discounted cash flow or appraised values, depending on the nature of the assets. There was no impairment of long-lived assets during the three months ended March 31, 2016 and 2015.

~~Income~~NOTES ~~Taxes~~TO -THE ~~The~~FINANCIAL 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. STATEMENTS

~~Share-Based~~JUNE ~~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~~30, 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. 2016

~~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.~~ (Unaudited)

~~Revenue~~NOTE ~~Recognition~~1. - InBUSINESS ~~accordance~~DESCRIPTION ~~with~~AND ~~Revenue~~SUMMARY ~~Recognition~~OF ~~Topic~~SIGNIFICANT ofACCOUNTING ~~the~~POLICIES ~~FASB Accounting Standards Codification~~ (~~ASC~~CONTINUED) 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.

7Patents ~~Table~~- The Company capitalizes costs relative to patent applications. Patents are recorded at acquired cost and amortized over their estimated useful economic life of ~~Contents~~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.

~~GYROTRON~~Impairment ~~TECHNOLOGY~~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, ~~INC~~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 three and six months ended June 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 and six months ended June 30, 2016.

~~NOTES~~Income TOTaxes ~~THE~~- ~~FINANCIAL~~The ~~STATEMENTS~~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.

~~MARCH~~Share-Based 31Payments - 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, ~~2016~~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.

~~(Unaudited)~~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.

~~NOTE~~Revenue 1.Recognition - ~~BUSINESS~~In ~~DESCRIPTION~~accordance ~~AND~~with ~~SUMMARY~~Revenue OFRecognition ~~SIGNIFICANT~~Topic ~~ACCOUNTING~~of ~~POLICIES~~the FASB Accounting Standards Codification (~~CONTINUED~~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.

~~Research~~8 ~~and~~Table ~~Development~~of ~~Expenses - Research and development expenses are charged to operations as incurred.~~ Contents

~~Loss~~GYROTRON 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 stockTECHNOLOGY, ~~options and warrants outstanding during the period~~INC. ~~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.~~

AsNOTES ofTO ~~March~~THE ~~31,~~FINANCIAL ~~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:~~STATEMENTS

Preferred A stock			1,637,903
Preferred A-1 stock			232,163
Preferred A-2 stock			89,112
Preferred B stock			1,410,315
Preferred B-1 stock			2,391,173
Preferred B-2 stock			33,350
Warrants expiring 12/15/16			74,225
Warrants expiring 10/1/18			60,000
Options			60,000
Total			5,988,241

JUNE 30, 2016

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.(Unaudited)

~~Fair~~NOTE ~~Value~~1. ~~of Financial Instruments~~ - ~~The~~BUSINESS ~~carrying~~DESCRIPTION ~~amount~~AND ofSUMMARY ~~cash,~~OF ~~receivables,~~SIGNIFICANT ~~accounts~~ACCOUNTING ~~payable~~POLICIES ~~and~~(CONTINUED) ~~accrued expenses and other liabilities are reasonable estimates of their fair value due to their short maturity.~~

8Research ~~Table~~and ofDevelopment ~~Contents~~Expenses - Research and development expenses are charged to operations as incurred.

~~GYROTRON~~Loss ~~TECHNOLOGY~~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, ~~INC~~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.

~~NOTES~~As TOof ~~THE~~June ~~FINANCIAL~~30, ~~STATEMENTS~~2016, there were the following common shares underlying securities that could potentially dilute future earnings:

MARCH 31, 2016

Preferred A stock			1,637,903
Preferred A-1 stock			232,163
Preferred A-2 stock			91,362
Preferred B stock			1,410,315
Preferred B-1 stock			2,391,173
Preferred B-2 stock			50,350
Warrants expiring 12/15/16			91,225
Warrants expiring 10/1/18			60,000
Options			60,000
Total			6,024,491

~~(Unaudited)~~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.

~~NOTE~~Fair 1.Value of Financial Instruments - ~~BUSINESS~~The ~~DESCRIPTION~~carrying ~~AND~~amount ~~SUMMARY~~of OFcash, ~~SIGNIFICANT~~receivables, ~~ACCOUNTING~~accounts ~~POLICIES~~payable ~~(CONTINUED)~~and accrued expenses and other liabilities are reasonable estimates of their fair value due to their short maturity.

~~Redeemable~~9 ~~Convertible~~Table ~~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.Contents

~~The~~GYROTRON ~~Company evaluated the detachable warrants in accordance with FASB ASC No. 470-20~~TECHNOLOGY, ~~"Debt with Conversion and Other Options" and FASB ASC 815, "Derivatives and Hedging" and determined they were not considered a liability~~INC. 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~~NOTES ~~Company~~TO ~~evaluated~~THE ~~the~~FINANCIAL 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.STATEMENTS

~~Redeemable~~JUNE ~~securities initially are recorded at their fair value minus the detachable warrants~~30, 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. 2016

~~Recent Accounting Pronouncements - In November 2014, the FASB issued ASU No.2014-16, Derivatives and Hedging~~ (~~Topic 815~~Unaudited): 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"). The 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, 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.

NOTE 21. - ~~MACHINERY~~BUSINESS DESCRIPTION AND ~~EQUIPMENT~~SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Redeemable Convertible Preferred Stock - The ~~components~~Company classifies conditionally redeemable convertible preferred shares, which includes preferred shares subject to redemption upon the occurrence of ~~machinery~~uncertain ~~and~~events ~~equipment~~not ~~are~~solely within control of the Company, as ~~follows:~~temporary equity in the mezzanine section of the 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.

	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

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.

9The ~~Table~~Company evaluated the conversion feature of ~~Contents~~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.

~~GYROTRON~~Redeemable ~~TECHNOLOGY~~securities initially are recorded at their fair value minus the detachable warrants, ~~INC~~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.

~~NOTES~~Recent TOAccounting ~~THE~~Pronouncements - ~~FINANCIAL~~In ~~STATEMENTS~~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"). The 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, 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.

~~MARCH~~In 31February 2016, the FASB issued an accounting standard update ASU 2016-02, "Leases", which requires that lease arrangements longer than 12 months result in an entity recognizing an asset and liability. ASU 2016-02 is effective for interim and annual periods beginning after December 15, 2018, and early adoption is permitted. The Company has not yet evaluated nor has it determined the effect of the standard will have on its consolidated financial statements and related disclosures.

~~(Unaudited)~~10 Table of Contents

~~NOTE~~GYROTRON 3.TECHNOLOGY, -INC. ~~PATENTS~~

~~The~~NOTES ~~components~~TO ofTHE ~~patents~~FINANCIAL ~~are as follows:~~STATEMENTS

	March 31,			December 31,
	2016			2015
Patents	$	156,419		$	156,419
Less accumulated amortization		(105,439	)		(103,063	)
	$	50,980		$	53,356

JUNE 30, 2016

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.(Unaudited)

NOTE 42. - ~~STOCKHOLDER~~MACHINERY ~~LOANS~~ AND ~~ADVANCES~~EQUIPMENT ~~FROM STOCKHOLDERS~~

~~Gabriel~~The ~~Capital~~components ~~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~~are isas 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. follows:

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%.

	Estimated	June 30,			December 31,
	Useful Life	2016			2015

Machinery and equipment	5 to 7 years	$	1,238,232		$	1,018,231
Furniture and fixtures	5 to 7 years		25,874			25,874
Deposit on capital lease			-			40,000
			1,264,106			1,084,105
Less accumulated depreciation			(908,211	)		(907,337	)
		$	355,895		$	176,768

~~During~~NOTE ~~the three months ended March 31, 2016, a director and his affiliates advanced $12,500 to the Company that bears no interest~~3. ~~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).PATENTS

10The ~~Table~~components of ~~Contents~~patents are as follows:

GYROTRON TECHNOLOGY, INC.

	June 30,			December 31,
	2016			2015

Patents	$	156,419		$	156,419
Less accumulated amortization		(107,798	)		(103,063	)
	$	48,621		$	53,356

~~NOTES~~The TOCompany ~~THE~~amortizes ~~FINANCIAL~~patent ~~STATEMENTS~~costs on a straight-line basis over the expected period of benefit of the related capitalized expenditures. Amortization expense amounted to $2,359 and $2,548 for the three months ended June 30, 2016 and 2015, respectively, and $4,735 and $5,095 for the six months ended June 30, 2016 and 2015, respectively. For patents placed in service, amortization expense during the next five years is expected to be approximately $4,700 for the six 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.

~~MARCH~~11 ~~31,~~Table ~~2016~~of Contents

~~(Unaudited)~~GYROTRON TECHNOLOGY, INC.

~~NOTE~~NOTES 5.TO -THE ~~REDEEMABLE~~FINANCIAL ~~PREFERRED STOCK~~STATEMENTS

~~The~~JUNE ~~Board of Directors has designated six series of redeemable convertible par value $.001 preferred stock: Series A~~30, Series A-1, Series A-2, Series B, Series B-1, and Series B-2. Series A, Series A-1, and Series A-2 rank equal for all purposes. Series B, Series B-1, and Series B-2 rank equal for all purposes. Series A, A-1 and A-2 each rank senior to each of Series B, B-1, and B-2.2016

As further 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 addition, a majority of the 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:(Unaudited)

	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

NOTE 4. – STOCKHOLDER LOANS AND ADVANCES FROM STOCKHOLDERS

11Gabriel ~~Table~~Capital LP ("Gabriel"), a major stockholder of ~~Contents~~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.

~~GYROTRON~~As ~~TECHNOLOGY~~of June 30, ~~INC~~2016 and December 31, 2015, stockholders had advanced the Company approximately $45,000 and $30,500 for future accounts receivable to be repaid at premiums upon collection of the accounts receivable, of which as of December 31, 2015 $9,728 had been collected and had not been repaid. As of June 30, 2016 the premiums range from 9.4% to 13.2%.

~~NOTES~~During TOthe ~~THE~~six ~~FINANCIAL~~months ~~STATEMENTS~~ended June 30, 2016, a director and his affiliates advanced $131,190 to the Company that bears no interest. Subsequent to June 30, 2016, the director and his affiliates advanced $140,000 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).

~~MARCH~~NOTE ~~31,~~5. ~~2016~~- REDEEMABLE PREFERRED STOCK

~~(Unaudited)~~The Board of Directors has designated six series of redeemable convertible par value $.001 preferred stock: Series A, Series A-1, Series A-2, Series B, Series B-1, and Series B-2. Series A, Series A-1, and Series A-2 rank equal for all purposes. Series B, Series B-1, and Series B-2 rank equal for all purposes. Series A, A-1 and A-2 each rank senior to each of Series B, B-1, and B-2.

~~The~~As ~~terms~~further detailed below, holders of ~~these~~Series A, A-1, A-2, B, B-1, and B-2 redeemable convertible preferred stock ~~are~~can ~~summarized~~take control of the board of directors in the ~~table~~event ~~below~~the Company does not accept a redemption request or the Company fails to pay dividends. In ~~All~~addition, ~~series~~a ~~carry~~majority anof ~~initial~~the ~~dividend~~current ~~rate~~members of ~~10%~~the ~~payable~~board ~~quarterly~~of ~~and~~directors own various classes of preferred shares. As a result, these instruments have conditions for their redemption that are ~~convertible~~not inwithin the ~~common~~control ~~stock~~ of the Company. Accordingly, ~~The~~the ~~holders~~fair value of the Series A, A-1, A-2, B, B-1, and B-2 redeemable convertible preferred stock ~~have~~are ~~the~~recorded ~~right~~outside toof ~~one~~stockholders' ~~vote~~deficiency ~~for~~as ~~each~~temporary ~~share~~equity in the mezzanine section of ~~common~~the ~~stock~~balance ~~into~~sheet. ~~which~~The ~~such~~Company ~~share~~recognizes changes in the redemption value of the convertible preferred stock ~~could~~immediately ~~then~~as bethey ~~converted.~~occur, ~~The~~and ~~conversion~~the ~~ratio~~carrying ~~and~~amount ~~price~~of ~~are~~the ~~subject~~instrument tois ~~adjustment~~adjusted ~~when~~to equal the ~~Company~~redemption ~~declares~~value orat ~~pays~~the ~~dividends,~~end ~~makes~~of aeach ~~distribution~~reporting onperiod. The ~~common~~adjustment to record preferred stock ~~payable~~at inits ~~common~~redemption ~~shares,~~value orwas ~~affects~~charged ato ~~subdivision,~~the ~~split,~~redeemable ~~consolidation,~~convertible ~~combination,~~preferred orstock ~~reverse~~carrying ~~split~~value ofand ~~outstanding~~additional ~~common~~paid ~~shares~~in ~~into~~capital afor ~~greater~~the orsix ~~lesser~~months ~~number~~ended ofJune ~~common~~30, ~~shares.~~2016 and is further detailed in the following schedule:

	Series A			Series A-1			Series A-2			Series B			Series B-1			Series B-2			~~Totals~~Total
Shares designated		450,000			125,000			8,750			40,000			80,000			30,000			733,750
Liquidation Preference 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
Liquidation preference	$	6		$	6		$	35		$	30		$	35		$	35			-
New issuances including dividends paid in kind		-			-		$	3,096			-			-		$	17,745		$	20,841
Conversion price	$	1.600		$	1.600		$	0.700		$	1.000		$	0.700		$	0.700			-
Dividends accumulated	$	235,858		$	33,431			-		$	107,889		$	128,047		$	713		$	505,938
Default conversion price	$	1.600		$	1.600		$	0.595		$	0.850		$	0.595		$	0.595			-
Liquidation Preference of Redeemable Preferred Stock as of June 30, 2016	$	3,655,886		$	508,900		$	63,953		$	1,702,220		$	1,816,081		$	36,036		$	7,783,076
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	%		-

Table of Contents

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(Unaudited)

The ~~dividends~~terms ~~accrue~~of ~~and~~these ~~accumulate~~preferred ~~whether~~shares orare ~~not~~summarized ~~they~~in ~~have~~the ~~been~~table ~~declared~~below. byAll ~~the~~series ~~board~~carry ofan ~~directors~~initial ~~and~~dividend ~~whether~~rate orof ~~not~~10% ~~there~~payable quarterly and are ~~profits~~convertible orin ~~other~~the ~~funds~~common ~~legally~~stock ~~available~~of the Company. AsThe ~~specified~~holders inof preferred stock have the ~~certificate~~right ofto ~~designation~~one vote for each ~~series,~~share ~~the~~of ~~Company~~common ~~may~~stock ~~have~~into ~~the~~which ~~option~~such share of preferred stock could then be converted. The conversion ratio and price are subject to ~~pay~~adjustment when the Company declares or pays dividends, makes a distribution on common stock payable in ~~kind~~common ~~for~~shares, or affects a ~~specified~~subdivision, ~~period~~split, consolidation, combination, or reverse split of ~~time~~outstanding common shares into a greater or lesser number of common shares.

For each series any holder can request on the date specified for that series that the Company repurchase 30 calendar days thereafter (the "Repurchase Date"), all shares of that series held by the holder for cash equal to the liquidation preference 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 dividends of a series is a number of quarters in arrears specified for that series (either being a Default), the dividend rate on that series increases to 18%, and the majority holders of that series, voting together with the holders of any pari – passu series, have the right to elect the majority of the board of directors, so long as the dividends continue to be the specified number of quarters in arrears. For Series A-2, B, B-1, and B-2, in the event of a Default the conversion price ("Default Conversion Price") for that series permanently decreases 15%.

	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 June 30, 2016	YES			YES			NO			YES			YES			NO
Number of shares of common issuable 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 at June 30, 2016		11			10			-			12			9			-
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 thru and including							9/30/2016
Mandatory conversion percentage		150	%		150	%		150	%		196.10	%		184.90	%		150	%
Dividends:
Rate		18	%		18	%		10	%		18	%		18	%		10	%
Accrued during the three months ended June 30, 2015	$	117,929		$	16,716		$	1,098		$	53,945		$	35,569		$	-		$	225,257
Accrued during the three months ended June 30, 2016	$	117,929		$	16,715		$	1,575		$	53,944		$	64,024		$	791		$	254,978
Accrued during the six months ended June 30, 2015	$	235,858		$	33,431		$	1,098		$	107,889		$	75,612		$	-		$	453,888
Accrued during the six months ended June 30, 2016	$	235,858		$	33,431		$	3,096		$	107,889		$	128,047		$	1,321		$	509,642
Paid in kind during the three months ended June 30, 2016	$	-		$	-		$	1,575		$	-		$	-		$	-		$	1,575
Paid in kind during the six months ended June 30, 2016	$	-		$	-		$	3,096		$	-		$	-		$	-		$	3,096
Paid in cash during the three months ended June 30, 2016	$	-		$	-		$	-		$	-		$	-		$	608		$	608
Paid in cash during the six months ended June 30, 2016	$	-		$	-		$	-		$	-		$	-		$	608		$	608
Cumulative unpaid dividends at December 31, 2015	$	799,384		$	104,009		$	-		$	395,560		$	265,286		$	78		$	1,564,317
Cumulative unpaid dividends at June 30, 2016	$	1,035,242		$	137,440		$	-		$	503,449		$	393,333		$	791		$	2,070,255

The ~~Company,~~dividends ataccrue ~~its~~and ~~option,~~accumulate ~~may~~whether ~~require conversion of all~~ or ~~any~~not ~~pro-rata~~they ~~portion~~have ofbeen ~~shares~~declared ofby ~~a series into common stock at~~ the ~~conversion~~board ~~price~~of ifdirectors atand ~~any~~whether ~~time~~or i)not ~~the~~there ~~common~~are ~~stock~~profits isor ~~listed~~other ~~for~~funds ~~trading~~legally onavailable. aAs ~~national~~specified ~~securities~~in ~~exchange, an inter-dealer automated quotation system, or over~~ the ~~counter~~certificate ~~bulletin~~of ~~board~~designation ~~(or~~ for ~~the~~each series ~~A-2 and B-2 the "OTC Pinks")~~, ~~ii)~~ the Company ~~shall~~may have ~~prepared and filed with~~ the ~~Securities~~option ~~and Exchange Commission a registration statement covering the shares of common stock~~ to bepay ~~issued~~dividends ~~upon~~in ~~due~~kind ~~conversion~~for 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 a specified ~~percentage~~period ~~("Mandatory conversion percentage")~~ of ~~the conversion price, and iv) the Company is current on its dividends for that Series~~time.

~~Registration~~13 ~~Rights~~Table ~~- In connection with its stock subscription agreements, the Company has agreed, on various dates since December 2009, to pay the various subscribers 1/2%~~ of the aggregate purchase price of shares acquired monthly until (i) with respect to the common shares underlying the related preferred stock, either (x) 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 (y) the holder is then able to sell such shares under Rule 144 promulgated pursuant to the Securities Act (in certain agreements also with the condition that said sale can be made without volume restriction), and (ii) the Company has obtained a ticker symbol and common shares are eligible to trade, as specified in the particular subscription agreement, on the OTCBB or OTC PINKS. At March 31, 2016 and December 31, 2015, the estimated liability under these agreements amounted to $561,611 and $558,872, respectively, and the change in such estimated liability for the three months ending March 31, 2016 amounting to $2,739 are included as other expense in the accompanying statements of operations. The agreements provide for no limitation as to the maximum potential consideration to be transferred. At March 31, 2016 the aggregate investment for which the right to registration rights payments had not terminated was $2,110,886.Contents

13GYROTRON ~~Table~~TECHNOLOGY, ~~of Contents~~INC.

~~GYROTRON~~NOTES ~~TECHNOLOGY,~~TO ~~INC.~~THE FINANCIAL STATEMENTS

~~NOTES~~JUNE TO30, ~~THE FINANCIAL STATEMENTS~~2016

~~MARCH 31, 2016~~(Unaudited)

For each series any holder can request on the date specified for that series that the Company repurchase 30 calendar days thereafter (~~Unaudited~~the "Repurchase Date"), all shares of that series held by the holder for cash equal to the liquidation preference 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 dividends of a series is a number of quarters in arrears specified for that series (either being a Default), the dividend rate on that series increases to 18%, and the majority holders of that series, voting together with the holders of any pari – passu series, have the right to elect the majority of the board of directors, so long as the dividends continue to be the specified number of quarters in arrears. For Series A-2, B, B-1, and B-2, in the event of a Default the conversion price ("Default Conversion Price") for that series permanently decreases 15%.

~~Sale~~The Company, at its option, may require conversion of ~~Equity~~all ~~Securities~~or –any ~~During~~pro-rata portion of shares of a series into common stock at the ~~three~~conversion ~~months~~price ~~ending~~if ~~March~~at 31any time i) the common stock is listed for trading on a national securities exchange, ~~2016~~an inter-dealer automated quotation system, ~~the~~or ~~Company~~over ~~sold~~the ~~units~~counter ~~consisting~~bulletin ofboard 1(or ~~share~~for ofthe series ~~Series~~A-2 and B-2 the ~~preferred~~"OTC Pinks"), ii) the Company shall have prepared and ~~warrants~~filed towith ~~purchase~~the ~~one~~Securities ~~share~~and Exchange Commission a registration statement covering the shares of common stock to be issued upon due conversion of preferred stock, ~~referred~~and tosuch asregistration ~~B-2~~statement ~~units.~~shall ~~This~~have ~~sale~~been isdeclared ~~summarized~~effective inunder the ~~table~~Securities ~~below.~~Act ~~Proceeds~~of 1933, as amended, and continues to be effective, iii) during any preceding period of twenty consecutive trading days (while i) and ii) are ~~shown~~fulfilled) ~~net~~the closing price equals or exceeds a specified percentage ("Mandatory conversion percentage") of ~~offering~~the ~~expenses~~conversion price, and iv) the Company is current on its dividends for that Series.

	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

Registration Rights - In connection with its stock subscription agreements, the Company has agreed, on various dates since December 2009, to pay the various subscribers 1/2% of the aggregate purchase price of shares acquired monthly until (i) with respect to the common shares underlying the related preferred stock, either (x) 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 (y) the holder is then able to sell such shares under Rule 144 promulgated pursuant to the Securities Act (in certain agreements also with the condition that said sale can be made without volume restriction), and (ii) the Company has obtained a ticker symbol and common shares are eligible to trade, as specified in the particular subscription agreement, on the OTCBB or OTC PINKS. At June 30, 2016 and December 31, 2015, the estimated liability under these agreements amounted to $566,044 and $558,872, respectively, and the change in such estimated liability of $4,433 and $13,603 for the three months ended June 30, 2016 and 2015, respectively, and $7,172 and $13,603 for the six months ended June 30, 2016 and 2015, respectively are included as other expense in the accompanying statements of operations. The agreements provide for no limitation as to the maximum potential consideration to be transferred. At June 30, 2016 the aggregate investment for which the right to registration rights payments had not terminated was $2,110,886.

~~Warrants~~Sale -of ~~The~~Equity ~~warrants~~Securities ~~contain~~– ~~customary~~During ~~terms~~the ~~for~~three months ending June 30, 2016, the ~~adjustment~~Company sold units consisting of ~~their~~1 ~~exercise~~share ~~price~~of ~~and/or~~Series ~~the~~B-2 ~~consideration~~preferred ~~issued~~and ~~upon~~warrants ~~exercise~~to ~~upon~~purchase ~~the~~one ~~occurrence~~share of ~~certain~~common ~~corporate~~stock, ~~events~~referred ~~such~~to as ~~mergers,~~B-2 ~~splits~~units. ~~and~~This ~~dividends~~sale is summarized in the table below. Proceeds are shown net of offering expenses.

The proceeds of the preferred stock unit offerings are allocated between the preferred stock and the warrants based on the relative fair value of each instrument. The assumed value of the preferred stock is determined based on the fair value of the underlying common shares and the fair value of the warrants was valued using a management estimate verified using the Black-Scholes option pricing model. For 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.

	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 June 30, 2016		340
Proceeds net of offering expenses received during the three months ended June 30, 2016	$	9,588

~~NOTE~~Warrants 6. - ~~COMMON~~ ~~STOCK~~The warrants contain customary 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.

AtThe ~~March~~proceeds ~~31,~~of ~~2016~~the ~~and~~preferred ~~December~~stock ~~31,~~unit ~~2015,~~offerings ~~there~~are ~~were~~allocated ~~15,222,024~~between ~~shares~~the ~~issued~~preferred stock and ~~14,414,058~~ ~~shares~~the ~~outstanding~~warrants ofbased on the ~~issuer's~~relative ~~common~~fair ~~stock~~value of each instrument. AThe ~~portion~~assumed value of ~~these~~the preferred stock is determined based on the fair value of the underlying common shares ~~were~~and ~~issuable~~the ~~but~~fair ~~had~~value ~~not~~of ~~been~~the ~~issued~~warrants ~~for~~was ~~administrative~~valued ~~reasons~~using a management estimate verified using the Black-Scholes option pricing model. ~~Accordingly,~~For the ~~presentation~~three inand ~~these~~six ~~financial~~months ~~statements~~ending ~~considers~~June ~~these~~30, ~~shares~~2016, $781 and $1,236 respectively was recognized as ~~effectively~~additional ~~issued.~~paid-in capital allocable to such warrants and immediately accreted to Fair Value of Redeemable Preferred Stock.

Table of Contents

GYROTRON TECHNOLOGY, INC.

NOTES TO THE FINANCIAL STATEMENTS

~~MARCH~~JUNE 3130, 2016

(Unaudited)

~~The~~NOTE ~~following~~6. is- COMMON ~~a summary of warrants outstanding and exercisable at March 31, 2016 and 2015 and activity during the three months then ended:~~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

At June 30, 2016 and December 31, 2015, there were 15,222,024 shares issued and 14,414,058 shares outstanding. A portion of these shares were issuable but had not been issued for administrative reasons. Accordingly, the presentation in these financial statements considers these shares as effectively issued.

~~NOTE~~The 7.following -is ~~STOCK~~a ~~BASED~~summary ~~COMPENSATION~~of warrants outstanding and exercisable at June 30, 2016 and 2015 and activity during the six months then ended:

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.

	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 six months ended June 30,		25,350			1.00		32,125			-
Exercised		-			-		-			-
Lapsed		(1,938,950	)		1.00		(1,044,864	)		1.00

Outstanding at June 30,		151,225			0.90		2,031,075		$	0.99

Exercisable at June 30,		151,225		$	0.90		2,031,075		$	0.99

Weighted average months remaining					14.03					10.02

InNOTE ~~July 2014, the Company granted a director 60,000 five year options to purchase common stock at an exercise price of $0~~7.~~725~~ ~~per~~- ~~share,~~STOCK ofBASED ~~which~~COMPENSATION 12,000 options vested on the grant date, and 12,000 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 months ended March 31, 2015, $3,392 of that amount was recognized.

15During ~~Table~~2006, the Board of ~~Contents~~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.

~~GYROTRON~~In ~~TECHNOLOGY~~July 2014, ~~INC~~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 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 six months ended June 30, 2015, $3,392 and $6,785, respectively, of that amount was recognized.

~~NOTES~~15 TOTable ~~THE~~of ~~FINANCIAL STATEMENTS~~Contents

~~MARCH~~GYROTRON 31TECHNOLOGY, ~~2016~~INC.

~~(Unaudited)~~NOTES TO THE FINANCIAL STATEMENTS

~~NOTE~~JUNE 8.30, ~~- COMMITMENTS AND CONTINGENCIES~~ 2016

Leases - The Company leases office and warehouse space under an operating lease which expires on July 31, 2016. Rent expense for the three months ended March 31, 2016 and 2015 and amounted to $31,585 and $29,654 respectively. Aggregate future minimum lease payments under the non-cancelable operating lease are $39,384 for the year ended December 31, 2016. The Company has made a $12,253 security deposit included within other assets in the accompanying balance sheets as of March 31, 2016 and December 31, 2015.(Unaudited)

InNOTE ~~July 2014, the Company entered into an agreement to lease a new gyrotron and associated equipment from a vendor pursuant to a capital lease~~8. ~~As amended in May 2016, the lease requires four payments aggregating $220,000, $40,000 of which was paid up~~-~~front~~ ~~and~~COMMITMENTS isAND ~~included~~CONTINGENCIES in machinery and equipment in the accompanying balance sheets as of March 31, 2016 and December 31, 2015, and $45,000, $75,000 and $60,000, are due on August 1, 2016, January 31, 2017, and January 31, 2018, respectively. Should the Company fail to timely make the $45,000 payment, it is required to return the gyrotron to the manufacturer by September 30, 2016. The lease contains a $1 bargain purchase option following the completion of payments made by the Company.

InLeases ~~February~~- ~~2015,~~The ~~the~~ Company ~~entered~~leased ~~into~~office anand ~~agreement~~warehouse tospace ~~purchase~~under ~~a cryomagnet~~an ~~for $134,700~~operating oflease which ~~$40,410~~expire ~~was~~on ~~paid,~~July ~~$40~~31,~~410~~ ~~was~~2016. ~~due~~Rent 30expense ~~days~~for ~~after~~the ~~delivery~~three ~~(which~~and ~~took~~six ~~place~~months inended ~~the~~June ~~fourth~~30, ~~quarter~~2016 ofand ~~2015)~~the three and ~~has~~six ~~not~~months ~~yet~~ended ~~been~~June ~~paid~~30, ~~$26,940~~2015 ~~will~~amounted beto ~~due~~$31,585 6and ~~months~~$63,171, ~~after~~$29,538 ~~successful~~and ~~provisional~~$59,192 ~~acceptance~~respectively. ~~testing~~At ~~(which~~June ~~has~~30, ~~not~~2016 ~~taken~~the ~~place),~~aggregate ~~and~~future ~~$26,940~~minimum ~~will~~lease bepayment ~~due~~under 18the ~~months~~non-cancelable ~~after~~operating ~~successful~~lease ~~provisional~~was ~~acceptance testing~~$9,846. The Company ~~recorded~~has made a $6712,~~350~~253 insecurity ~~accounts~~deposit ~~payable~~included ~~and~~within ~~$26,940 in~~ other ~~non-current~~assets ~~liability~~in on the accompanying balance sheets as of ~~March~~June 3130, 2016 and December 31, 2015. An affiliate of a director is using a portion of the space on a temporary informal basis and reimbursing the Company $1,000 per month for such use.

~~Claims - The Company is subject to a claim arising in the normal course of business.~~ In ~~the~~July ~~opinion of management~~2016, the ~~amount~~Company ofentered ~~the~~into ~~ultimate liability, if any, with respect this action will not have~~ a ~~material~~five ~~adverse~~year ~~effect~~lease onfor the ~~financial~~same ~~position,~~space ~~results~~at ofa ~~operation~~rate ~~or cash flow~~ of ~~the~~$68,000 ~~Company~~per year.

~~NOTE~~In 9July 2014, the Company entered into an agreement to lease a new gyrotron and associated equipment from a vendor pursuant to a capital lease. As amended in May 2016, the lease requires four payments aggregating $220,000, $40,000 of which was paid up-front and is included in machinery and equipment in the accompanying balance sheet as of December 31, 2014, and $45,000, $75,000 and $60,000, are due on August 1, 2016 (which payment was made in July 2016), January 31, 2017, and January 31, 2018, respectively. The lease contains a $1 bargain purchase option following the completion of payments made by the Company. The Company recorded the capital lease during the three months ended June 30, 2016 by recording $120,000 in current portion of capital lease and $60,000 in other non-current ~~SUBSEQUENT~~liability ~~EVENTS~~on the accompanying balance sheet as of June 30, 2016.

~~Subsequent~~In toFebruary ~~March 31~~2015, ~~2016,~~ the Company ~~has~~entered ~~sold~~into ~~340~~an ~~B-2~~agreement ~~units~~to atpurchase a ~~price~~cryomagnet for $134,700 of which $40,410 was paid, $40,410 was due 30 ~~per~~days ~~unit~~after ~~for~~delivery ~~gross~~(which ~~proceeds~~took place in the fourth quarter of 2015) and was paid in July 2016, $1026,~~200.~~940 ~~See~~will ~~also~~be ~~Note~~due 46 ~~regarding~~months ~~stockholder~~after ~~loans~~successful ~~and~~provisional ~~advances~~acceptance ~~subsequent~~testing to(which ~~March~~has 31not taken place), ~~2016~~and $26,940 will be due 18 months after successful provisional acceptance testing. The Company recorded $67,350 in accounts payable and ~~Note~~$26,940 8in ~~regarding~~other non-current liability on the ~~Company's~~accompanying ~~lease~~balance sheet as of aJune ~~gyrotron~~30, 2016 and December 31, 2015.

16Claims ~~Table~~- The Company is subject to a claim arising in the normal course of ~~Contents~~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.

~~Item~~NOTE 29. ~~Management's~~– ~~Discussion~~SUBSEQUENT ~~and Analysis or Plan of Operations.~~EVENTS

AsSee ~~used~~Note in4 ~~this~~regarding ~~Report~~stockholder onloans ~~Form~~and ~~10-Q~~advances ~~(this~~subsequent ~~"Report"),~~to ~~unless~~June ~~the~~30, ~~context~~2016, ~~otherwise~~and ~~indicates,~~Note ~~references~~8 toregarding the "Company,"'s ~~the~~new ~~"Registrant,"~~office ~~"we,"~~lease ~~"our,"~~and orthe ~~"us"~~lease ~~refers~~of toa ~~Gyrotron~~gyrotron ~~Technology,~~and ~~Inc~~purchase of a cryomagnet.

~~Forward-Looking~~16 ~~Statements~~Table of Contents

~~Certain~~ITEM 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" statements2. ~~You~~MANAGEMENT'S ~~can~~DISCUSSION ~~identify~~AND ~~forward-looking~~ANALYSIS ~~statements~~OR byPLAN ~~those~~OF 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 termsOPERATIONS. 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~~As ~~forward-looking~~used ~~statements~~in ~~speak~~this ~~only~~Report ~~as of the date~~ on ~~which~~Form ~~they~~10-Q ~~are~~(this ~~made.~~"Report"), Weunless ~~undertake~~the nocontext ~~obligation~~otherwise toindicates, ~~update~~references ~~such statements~~ to ~~reflect~~the ~~events~~"Company," ~~that occur or circumstances that exist after~~ the ~~date~~"Registrant," on"we," ~~which they are made~~"our," ~~except~~or as"us" ~~required~~refers byto ~~federal~~Gyrotron ~~securities~~Technology, ~~and any other applicable law~~Inc.

~~Overview~~Forward-Looking Statements

WeCertain ~~were~~statements ~~incorporated~~contained in ~~State~~this ofreport, ~~Delaware~~including onstatements ~~April~~regarding 13our business, ~~1998~~financial tocondition, ~~capitalize~~our onintent, belief or current expectations, primarily with respect to the ~~industrial~~future ~~potential~~operating performance of the ~~gyrotron~~Company ~~beam~~and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. ~~The~~You ~~Company's~~can ~~current~~identify ~~product~~forward-looking ~~offerings~~statements ~~fall~~by ~~into~~those ~~two~~that ~~broad~~are ~~categories~~not –historical ain ~~suite~~nature, ofparticularly ~~material~~those ~~processing~~that ~~applications~~use ~~based~~terminology onsuch ~~the~~as ~~unique~~"may," ~~heating~~"will," ~~characteristics~~"should," "expects," "anticipates," "contemplates," "estimates," "believes," "plans," "projected," "predicts," "potential," or "continue" or the negative of these similar terms. Future filings with the ~~gyrotron~~Securities ~~beam~~and Exchange Commission, future press releases and ~~its~~future ~~GLS~~oral ~~market-ready~~or ~~autoclave~~written statements made by us or with our approval, which are not statements of historical fact, may contain forward-~~free~~looking ~~system~~statements. ~~for~~Because ~~glass~~such ~~lamination~~statements include risks and ~~encapsulation~~uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

~~Results~~All forward-looking statements speak only as of ~~Operations~~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.

~~For the three months ended March 31, 2016 and March 31, 2015~~Overview

~~Revenues~~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.

~~The~~Results ~~Company~~of generated $29,250 in revenues during the quarter ended March 31, 2016, as compared to $1,043 in revenues for the quarter ended March 31, 2015. This was due primarily to a substantial increase in royalties received.Operations

17For ~~Table~~the ofthree ~~Contents~~months ended June 30, 2016 and June 30, 2015

~~Total operating expenses~~Revenues

~~During~~The ~~the~~Company ~~quarter~~generated ~~ended March 31, 2016, total operating expenses were~~ $~~149~~25,~~067,~~000 ~~which~~in ~~consisted~~revenues ofduring ~~selling, general and administrative expenses of $122,553 and research and development expenses of $26,514. During~~ the quarter ended ~~March~~June 3130, ~~2015~~2016, ~~total~~as ~~operating~~compared ~~expenses~~to ~~were~~ $~~168~~38,~~733,~~107 ~~which~~in ~~consisted~~revenues offor ~~selling,~~the ~~general~~quarter ~~and~~ended ~~administrative~~June ~~expenses of $148~~30,~~933~~ ~~and~~2015. ~~research~~In ~~and~~the ~~development~~quarter ~~expenses~~ended ofJune ~~$19~~30,~~800.~~ ~~Total~~2016 ~~operating~~revenue ~~expenses~~came ~~decreased~~for ~~$19,666,~~royalties ~~or 11.7%. The decrease in operating expenses was due primarily to lower selling, general~~ and ~~administrative expenses ($122,553~~ in the quarter ended ~~March~~June 3130, ~~2016~~2015 ~~compared~~almost toall ~~$148,933~~of in the ~~quarter~~revenue ~~ended~~came ~~March~~from ~~31,~~a ~~2015)~~one-time feasibility study.

~~Net~~Total ~~Loss~~operating expenses

During the quarter ended ~~March~~June 3130, 2016, wetotal ~~had~~operating aexpenses ~~net~~were ~~loss~~$179,122, which consisted of ~~$131~~selling,~~320,~~ asgeneral ~~compared~~and ~~with~~administrative aexpenses ~~net~~of ~~loss~~$163,558 and research and development expenses of $~~167~~15,~~890~~564. ~~for~~During the quarter ended ~~March~~June 3130, 2015, total operating expenses were $163,564, which consisted of selling, general and administrative expenses of $156,964 and research and development expenses of $6,600. Total operating expenses increased $15,558, or 9.5%. The ~~decreased~~increase ~~loss~~in ~~was~~selling, ~~primarily~~general and administrative expenses was due primarily to increased travel expense, and the increase in ~~revenue~~research asand ~~well~~development asexpense ~~the~~was ~~decrease~~due into ~~operating~~increased ~~expenses~~scientific ~~as detailed above~~activity.

~~Liquidity~~17 ~~and~~Table ~~Capital~~of ~~Resources~~Contents

AsNet ~~of March 31, 2016, we had $1,528 of cash. As of July 25, 2016, we had approximately $15,000 of cash.~~ Loss

~~Since~~During ~~March~~the ~~31,~~quarter ~~2016~~ended ~~major~~June ~~stockholders~~30, ~~and affiliates have advanced $235~~2016,~~000~~ towe ~~the~~had ~~Company interest free,~~ a ~~significant~~net ~~portion~~loss of ~~which the Company expects will be converted into equity securities, and the Company has raised~~ $10158,~~200~~555, ~~from~~as ~~the~~compared ~~sale~~with ofa ~~equity~~net ~~securities.~~loss ~~Management~~ of ~~Gyrotron estimates that we will need approximately~~ $~~400~~182,~~000~~040 for the ~~next~~quarter 12ended ~~months~~June of30, ~~operations~~2015. The ~~Company~~decreased ~~does~~loss ~~not~~was ~~have~~primarily ~~sufficient~~due ~~cash~~ to ~~fund~~the ~~its~~absence ~~expenses~~of ~~over~~a ~~the~~charge ~~next~~for ~~twelve~~loss ~~months.~~on ~~There~~fair ~~can~~value beof nowarrant ~~assurance~~exchange ~~that~~and ~~additional~~decreased ~~capital~~expense ~~will~~for beregistration ~~available~~rights toobligations ~~the~~of ~~Company.~~$4,433 Ifin the ~~Company~~quarter ~~fails~~ending toJune ~~raise adequate capital~~30, ~~its~~2016 ~~inability~~as compared to ~~raise~~$13,603 ~~funds~~in ~~for~~ the ~~above~~quarter ~~purposes~~ended ~~will~~June ~~have~~30, ~~a severe negative impact on its ability to remain a viable company~~2015.

~~Going~~For ~~Concern~~the six months ended June 30, 2016 and June 30, 2015

As shown in the accompanying financial statements, the Company incurred a net loss for the three months ended March 31, 2016 and 2015 of $131,320 and $167,890, respectively, had negative working capital of $1,777,370 and stockholders' deficiency of $9,081,551 at March 31, 2016. Further, cash used in operating activities during the three months ended March 31, 2016 amounted to $39,662. The Company is expected to continue to incur losses throughout the remainder of 2016. Revenues

~~These~~The ~~factors~~Company ~~raise~~generated ~~substantial~~$54,250 ~~doubt~~in ~~regarding~~revenues during the ~~Company's~~six ~~ability~~months toended ~~continue~~June as30, a2016, ~~going~~as ~~concern. These~~compared ~~financial~~to ~~statements~~$39,150 doin ~~not~~revenues ~~include~~for ~~any adjustments to~~ the ~~recoverability~~six ~~and~~months ~~classification~~ended ofJune ~~recorded~~30, ~~asset~~2015. In ~~amounts~~2016 ~~and~~over ~~classification~~90% of ~~liabilities~~the ~~that~~revenue ~~might~~came befrom ~~necessary~~royalties. ~~should~~In ~~the~~2015 ~~Company~~most beof ~~unable~~the torevenue ~~continue~~came asfrom a ~~going~~one-time ~~concern~~feasibility study.

~~Off-Balance~~Total ~~Sheet~~operating ~~Arrangements~~expenses

18During ~~Table~~the six months ended June 30, 2016, total operating expenses were $328,189, which consisted of ~~Contents~~selling, general and administrative expenses of $286,111 and research and development expenses of $42,078. During the six months ended June 30, 2015, total operating expenses were $332,297, which consisted of selling, general and administrative expenses of $305,897 and research and development expenses of $26,400. Total operating expenses decreased $4,108, or approximately 1.2%.

~~Critical~~Net ~~Accounting Policies~~Loss

~~The~~During ~~accompanying~~the ~~financial~~six ~~statements~~months ~~have~~ended ~~been~~June ~~prepared~~30, on2016, ~~the~~we ~~accrual~~had ~~basis~~a net loss of ~~accounting~~$289,875, inas ~~accordance~~compared with ~~generally~~a ~~accepted~~net ~~accounting~~loss ~~principles~~of $349,930 for the six months ended June 30, 2015. The Indecreased loss was primarily due to lower selling, general and administrative expense as detailed above, the ~~opinion~~absence of ~~management,~~a ~~these~~charge ~~financial~~for ~~statements~~loss ~~include~~on ~~all~~fair ~~adjustments~~value ~~necessary~~of inwarrant ~~order~~exchange toand ~~make~~decreased ~~them~~expense ~~not~~for ~~misleading~~registration rights obligations.

~~Revenue~~Liquidity 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~~Capital ~~is reasonably assured.~~Resources

~~Impairment~~As of ~~Long-Lived~~June ~~Assets~~30, ~~-Long-lived~~2016, ~~assets~~we ~~and~~had ~~certain~~$5,163 ~~identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount~~ of ~~an asset may not be recoverable~~cash. ~~There was no impairment of long-lived assets during the three months ended March 31, 2016 and 2015.~~

~~Research~~Since ~~and~~June ~~Development~~30, ~~Expenses~~2016 -major ~~Research~~stockholders and ~~development~~affiliates ~~expenses~~have ~~are~~advanced ~~charged~~$140,000 to the Company interest free, a significant portion of which the Company expects will be converted into equity securities. Management of Gyrotron estimates that we will need approximately $400,000 for the next 12 months of operations. asThe ~~incurred~~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.

~~Allocation~~18 ofTable ~~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.Contents

~~Redeemable~~Going 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.Concern

~~The~~As ~~Company~~shown ~~evaluated~~in the ~~detachable~~accompanying ~~warrants~~financial instatements, ~~accordance~~the ~~with~~Company ~~FASB~~incurred ~~ASC~~a ~~No.~~net ~~470-20,~~loss ~~"Debt~~for ~~with~~the ~~Conversion~~three and ~~Other~~six ~~Options"~~months ~~and~~ended ~~FASB~~June ~~ASC~~30, ~~815~~2016 of $158,555 ~~"Derivatives~~and $289,875, respectively, and ~~Hedging"~~had negative working capital of $2,044,160 and ~~determined~~stockholders' ~~they~~deficiency ~~were~~of ~~not~~$9,497,407 ~~considered~~at aJune ~~liability~~30, 2016. AsFurther, acash ~~result,~~used ~~proceeds~~in ~~from~~operating activities during the ~~preferred~~six ~~stock~~months ~~are~~ended ~~allocated~~June 30, 2016 amounted to $164,997. The Company is expected to continue to incur losses throughout the ~~detachable~~remainder ~~stock~~of ~~purchase~~2016. ~~warrants~~These ~~based~~factors onraise substantial doubt regarding the ~~relative~~Company's ~~fair~~ability ~~value~~to ofcontinue as a going concern. These financial statements do not include any adjustments to the ~~preferred~~recoverability ~~stock~~and classification of recorded asset amounts and ~~warrants.~~classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

~~The Company evaluated the conversion feature of the convertible preferred shares in accordance with FASB ASC No. 470~~Off-~~20,~~Balance ~~"Debt~~Sheet 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. Arrangements

19We ~~Table~~have ofno ~~Contents~~off-balance sheet arrangements.

~~Item~~Critical ~~3. Quantitative~~Accounting ~~and Qualitative Disclosures About Market Risk.~~Policies

AsThe aaccompanying ~~"smaller~~financial ~~reporting~~statements ~~company",~~have webeen ~~are~~prepared ~~not~~on ~~required~~the toaccrual ~~provide~~basis ~~the~~of ~~information~~accounting ~~required~~in byaccordance ~~this~~with ~~Item~~generally accepted accounting principles. In the opinion of management, these financial statements include all adjustments necessary in order to make them not misleading.

~~Item~~Revenue ~~4. Controls~~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 ~~Procedures~~collectability is reasonably assured.

~~Evaluation~~Impairment of ~~Disclosure~~Long-Lived ~~Controls~~Assets -Long-lived assets and ~~Procedures~~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 three and six months ended June 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 and six months ended June 30, 2016.

~~Under~~Research ~~the supervision~~ and ~~with~~Development ~~the~~Expenses 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~~Research ~~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~~development ~~Financial~~expenses ~~Officer~~are ~~concluded~~charged ~~that our disclosure controls and procedures were not effective, as of March 31, 2016,~~ to ~~provide~~operations 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 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~~incurred.

~~Changes~~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 ~~Internal~~certain ~~Controls~~instances, ~~over~~the ~~Financial~~right ~~Reporting~~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.

20Redeemable ~~Table~~Convertible Preferred Stock - The Company classifies conditionally redeemable convertible preferred shares, which includes preferred shares subject to redemption upon the occurrence of ~~Contents~~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.

~~PART~~19 IITable ~~- OTHER~~of ~~INFORMATION~~Contents

~~Item~~The 1Company evaluated the detachable warrants in accordance with FASB ASC No. ~~Legal~~470-20, ~~Proceedings~~"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.

The Company isevaluated ~~subject to a claim arising in~~ the ~~normal~~conversion ~~course~~feature of ~~business. In~~ the ~~opinion~~convertible ofpreferred ~~management,~~shares ~~the~~in ~~amount~~accordance ofwith ~~the~~FASB ~~ultimate~~ASC ~~liability,~~No. ~~if any~~470-20, "Debt with ~~respect~~Conversion ~~this~~and ~~action~~Other ~~will~~Options". A ~~not~~convertible ~~have~~financial ainstrument ~~material~~includes ~~adverse~~a ~~effect~~Beneficial onConversion ~~the~~Feature ~~financial~~("BCF") ~~position,~~when ~~results~~the offair ~~operation~~market orvalue ~~cash flow~~ of the ~~Company.~~preferred ~~Otherwise,~~stock ~~there~~is ~~are~~lower nothan ~~pending legal proceedings to which~~ the ~~Company~~value isof acommon ~~party~~stock orwhen inthe ~~which~~preferred ~~any~~stock ~~director,~~converts ~~officer~~to orcommon ~~affiliate~~stock ofat the ~~Company,~~issuance ~~any~~date. ~~owner~~The ofBCF ~~record~~shall orbe ~~beneficially~~recognized ofseparately ~~more~~at ~~than~~issuance 5%by ofallocating ~~any~~a ~~class~~portion of ~~voting securities of~~ the ~~Company,~~proceeds orequal ~~security holder is a party adverse~~ to the ~~Company~~intrinsic orvalue ~~has~~of athe ~~material~~feature ~~interest adverse~~ to ~~the~~additional ~~Company,~~paid-in ~~and the Company's property is not the subject of any pending legal proceedings~~capital.

~~Item~~Redeemable 1Asecurities initially are recorded at their fair value minus the detachable warrants, BCF and preferred stock issuance costs. The ~~Risk~~Company ~~Factors~~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.

AsITEM a3. ~~"smaller~~QUANTITATIVE ~~reporting~~AND ~~company",~~QUALITATIVE weDISCLOSURES ~~are~~ABOUT ~~not~~MARKET ~~required to provide the information required by this item~~RISK.

~~Item~~As 2.a ~~Unregistered~~"smaller ~~Sales~~reporting ofcompany", ~~Equity~~we ~~Securities~~are ~~and~~not ~~Use~~required ofto ~~Proceeds~~provide the information required by this Item.

~~Recent~~ITEM ~~sales~~4. ofCONTROLS ~~unregistered~~AND ~~securities~~PROCEDURES

InEvaluation ~~January, 2016, the Company offered and sold to one unaffiliated purchaser 167 units, each consisting~~ of ~~(i)~~Disclosure ~~one~~Controls ~~share of 10% Convertible Redeemable Series B-2 preferred stock, par value $.001 per share (the "Series B-2")~~ and ~~(ii) 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.~~Procedures

~~The~~Under ~~certificate~~the ofsupervision ~~designation~~and ~~for~~with the ~~Series~~ Bparticipation 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-215(e) ~~has~~and ~~been~~Rule ~~filed~~15d-15(e) promulgated under the Securities Exchange Act of 1934, as ~~exhibit~~amended, 3as of June 30, 2016.14 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 June 30, 2016, to provide assurance that information that is required to be disclosed by the ~~Current~~Company ~~Report~~in onthe ~~Form~~reports ~~8-K~~that ~~filed~~it ~~with~~files or submits under the ~~SEC~~Exchange onAct ~~December~~is 23recorded, ~~2015~~processed, summarized, and reported, within the time periods specified by the SEC's rules and forms. ~~See~~Disclosure ~~also~~controls ~~note~~and 5procedures include, without limitation, controls and procedures designed to ~~the~~ensure ~~financial~~that ~~statements~~information ~~included~~required to be disclosed by the Company in ~~this~~the ~~form~~reports ~~10-Q.~~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.

~~All~~Changes ~~certificates~~in ~~evidencing~~Internal ~~the~~Controls ~~equity~~over ~~securities~~Financial 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 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. Reporting

21There ~~Table~~were ofno ~~Contents~~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.

~~Purchases~~20 Table of ~~equity securities by the issuer and affiliated purchasers.~~Contents

~~None~~PART II. OTHER INFORMATION

~~Item~~ITEM 31. ~~Defaults~~ ~~Upon~~LEGAL ~~Senior Securities~~PROCEEDINGS.

~~None~~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. 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.

~~Item~~ITEM 41A. ~~Mine~~RISK ~~Safety Disclosures.~~FACTORS

~~Not~~As ~~Applicable~~a "smaller reporting company", we are not required to provide the information required by this item.

~~Item~~ITEM 52. ~~Other~~UNREGISTERED ~~Information~~SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

~~Item~~Recent 6.sales ~~Exhibits.~~of unregistered securities

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

In April 2016, the Company offered and sold to one unaffiliated purchaser 340 units, each consisting of (i) one share of 10% Convertible Redeemable Series B-2 preferred stock, par value $.001 per share (the "Series B-2") and (ii) 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.

22The ~~Table~~certificate of ~~Contents~~designation for the Series B-2 has been filed as exhibit 3.14 to the Current Report on Form 8-K filed with the SEC on December 23, 2015. See also Note 5 to the financial statements included in this form 10-Q.

~~SIGNATURES~~All 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 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.

~~Pursuant~~Purchases ~~to the requirements~~ of ~~the~~equity ~~Securities~~securities ~~Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf~~ by the ~~undersigned~~issuer ~~thereunto~~and ~~duly~~affiliated ~~authorized~~purchasers.

	GYROTRON TECHNOLOGY, INC.
Date: July 27, 2016	By:	/s/ Vlad Sklyarevich
		Vlad Sklyarevich
		President, Treasurer and Director(principal executive officer and principal financial and accounting officer)

None.

23ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable

ITEM 5. OTHER INFORMATION

Table of Contents

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

Table of Contents

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: August 23, 2016	By:	/s/ Vlad Sklyarevich
		Vlad Sklyarevich
		President, Treasurer and Director (principal executive officer and principal financial and accounting officer)

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