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 ~~June~~September 30, 2016

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

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

Commission file number: 000-55294

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

(Exact name of registrant as specified in its charter)

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

3412 Progress Drive

Bensalem, Pennsylvania 19020

(Address of Principal Executive Offices, Zip Code)

(215)-244-4740

(Registrant's Telephone Number, Including Area Code)

~~_____________________________________________________________~~____________________________________________________________

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes 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 ~~August~~November 1921, 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
Item 1.	Financial Statements		3
	Balance Sheets		3
	Statements of Operations		4
	Statements of Cash Flow		6
	Notes to the Financial Statements		7
Item 2.	Management'’s Discussion and Analysis of Financial Condition and Results of Operations		1716
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		2019
Item 4.	Controls and Procedures		2019
PART II - OTHER INFORMATION
			21
Item 1.	Legal Proceedings		20
Item 1.	Legal Proceedings		21
Item IA.	Risk Factors		20
Item IA.	Risk Factors		21
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		21
Item 3.	Defaults Upon Senior Securities		20
Item 3.	Defaults Upon Senior Securities		21
Item 4.	Mine Safety Disclosures		20
Item 4.	Mine Safety Disclosures		21
Item 5.	Other Information		20
Item 5.	Other Information		21
Item 6.	Exhibits		21
Item 6.	Exhibits		22
SIGNATURES			22
SIGNATURES			23

2 ~~Table of Contents~~

PART I - FINANCIAL INFORMATION

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

GYROTRON TECHNOLOGY, INC.

BALANCE SHEETS

	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

As of

See accompanying notes.

	September 30,			December 31,
	2016			2015
	(Unaudited)
ASSETS
Current assets:
Cash	$	-		$	-
Accounts receivable-net		25,000			17,867
Customer contracts in progress		-			21,560
Total current assets		25,000			39,427

Machinery and equipment-net		357,256			176,768
Patents-net		48,991			53,356
Other assets		12,253			12,253
Total assets	$	443,500		$	281,804

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Loan - stockholders	$	170,000		$	145,000
Advances from stockholders		486,988			193,325
Accounts payable		177,296			193,963
Current portion of capital lease		75,000			-
Accrued expenses and other liabilities		188,810			120,258
Accrued employee compensation		564,880			481,872
Registration rights obligation		566,044			558,872
Total current liabilities		2,229,018			1,693,290

Non-current liabilities		60,000			26,940

Commitments and contingencies (Note 8)

Redeemable convertible preferred stock:
1,000,000 shares authorized, $0.001 par value Series A: 450,000 shares designated, 436,774 outstanding as of September 30, 2016 and December 31, 2015		3,773,815			3,420,028
Series A-1: 125,000 shares designated, 61,910 outstanding as of September 30, 2016 and December 31, 2015		525,616			475,469
Series A-2: 8,750 shares designated, 1,872 and 1,739 outstanding as of September 30, 2016 and December 31, 2015		65,528			60,857
Series B: 40,000 shares designated, 39,959 outstanding as of September 30, 2016 and December 31, 2015		1,756,164			1,594,331
Series B-1: 80,000 shares designated, 40,650 outstanding as of September 30, 2016 and December 31, 2015		1,880,105			1,688,034
Series B-2: 30,000 shares designated, 1,007 and 500 outstanding as of September 30, 2016 and December 31, 2015		36,104			17,578
Total redeemable convertible preferred stock		8,037,332			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		1,450,621			2,217,767
Accumulated deficit		(10,957,990	)		(10,537,009	)
		(9,492,147	)		(8,304,020	)
Treasury stock, 807,966 shares, at cost		(390,703	)		(390,703	)
Total stockholders' deficiency		(9,882,850	)		(8,694,723	)

Total liabilities, redeemable convertible preferred stock and stockholders' deficiency	$	443,500		$	281,804

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

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

~~STATEMENTS~~GYROTRON OFTECHNOLOGY, ~~OPERATIONS~~ INC.

~~For~~STATEMENTS ~~the~~OF ~~Three Months Ended June 30,~~OPERATIONS

~~(Unaudited)~~For the Three Months Ended September 30,

	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

(Unaudited)

See accompanying notes.

	2016			2015

Revenues	$	33,500		$	23,560

Cost of revenues		9,895			19,580

Gross profit		23,605			3,980

Operating expenses:
Selling, general and administrative		147,018			124,149
Research and development		7,693			22,149
Funded research and development		-			(15,504	)
Total operating expenses		154,711			130,794

Operating loss		(131,106	)		(126,814	)

Other expense:
Interest and penalties expense		-			(30	)
Registration rights obligation		-			(20,329	)

Net loss		(131,106	)		(147,173	)

Redeemable convertible preferred stock accretion and dividends		(258,213	)		(225,312	)

Net loss attributable to common stockholders	$	(389,319	)	$	(372,485	)

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

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

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

~~STATEMENTS~~GYROTRON OFTECHNOLOGY, ~~OPERATIONS~~ INC.

~~For~~STATEMENTS ~~the Six~~OF ~~Months Ended June 30,~~OPERATIONS

~~(Unaudited)~~For the Nine Months Ended September 30,

	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

(Unaudited)

See accompanying notes.

	2016			2015

Revenues	$	87,750		$	62,710

Cost of revenues		13,017			43,840

Gross profit		74,733			18,870

Operating expenses:
Selling, general and administrative		433,129			430,046
Research and development		49,771			48,549
Funded research and development		-			(15,504	)
Total operating expenses		482,900			463,091

Operating loss		(408,167	)		(444,221	)

Other expense:
Interest and penalties expense		(5,642	)		(950	)
Loss on fair value of warrant exchange		-			(18,000	)
Registration rights obligation		(7,172	)		(33,932	)

Net loss		(420,981	)		(497,103	)

Redeemable convertible preferred stock accretion and dividends		(771,334	)		(693,053	)

Net loss attributable to common stockholders	$	(1,192,315	)	$	(1,190,156	)

Loss per common share-basic and diluted	$	(0.08	)	$	(0.08	)

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

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

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

~~STATEMENTS~~GYROTRON OFTECHNOLOGY, ~~CASH FLOWS~~INC.

~~For~~STATEMENTS ~~the~~OF ~~Six~~CASH ~~Months Ended June 30,~~ FLOWS

~~(Unaudited)~~For the Nine Months Ended September 30,

	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

(Unaudited)

See accompanying notes.

	2016			2015

Cash flows from operating activities:
Net loss	$	(420,981	)	$	(497,103	)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		8,040			13,443
Patent impairment		-			6,168
Stock based compensation		-			7,573
(Increase) decrease in assets:
Accounts receivable		(7,133	)		(1,887	)
Contracts receivable		-			(15,504	)
Customer contract in progress		21,560			-
Prepaid expenses and other current assets		-			1,580
Increase (decrease) in liabilities:
Accounts payable		(43,607	)		53,685
Accrued expenses and other liabilities		69,253			66,499
Accrued employee compensation		83,008			86,292
Registration rights obligation		7,172			33,932
Net cash used by operating activities		(282,688	)		(245,322	)

Cash flows from investing activities:
Purchases of equipment		(46,435	)		-
Deposits on equipment		-			(40,410	)
Payments for patents		(2,729	)		(6,719	)
Cash flows used by investing activities		(49,164	)		(47,129	)

Cash flows from financing activities:
Proceeds from stockholder loans		25,000			97,400
Net proceeds from sale of reedemable convertible preferred stock		14,588			42,875
Dividends paid on redeemable preferred stock		(1,399	)		-
Proceeds from advances from stockholders		293,663			125,200
Net cash provided by financing activities		331,852			265,475

Net decrease in cash		-			(26,976	)

Cash - beginning of period		-			29,316

Cash - end of period	$	-		$	2,340

Supplemental disclosure of non-cash investing and financing activities:
Purchase of equipment in capital lease and long term liability	$	135,000		$	-
Redeemable convertible preferred dividend accrual	$	764,691		$	676,948
Dividends on redeemable convertible preferred stock paid by issuance of redeemable preferred stock	$	4,671		$	2,250
Allocation of redeemable convertible preferred stock net proceeds to beneficial conversion feature and warrants	$	3,479		$	13,864
Accretion of redeemable convertible preferred stock net proceeds to liquidation preference	$	3,164		$	2,100

6See ~~Table~~accompanying ~~of Contents~~notes.

~~GYROTRON~~6 ~~TECHNOLOGY,~~Table ~~INC.~~ of Contents

~~NOTES~~GYROTRON TOTECHNOLOGY, ~~THE FINANCIAL STATEMENTS~~ INC.

~~JUNE~~NOTES ~~30,~~TO ~~2016~~ THE FINANCIAL STATEMENTS

~~(Unaudited)~~September 30, 2016

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

~~Business~~NOTE ~~Description - Gyrotron Technology, Inc~~1. (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~~BUSINESS ~~systems.~~DESCRIPTION ~~The~~AND ~~Company~~SUMMARY isOF ~~organized~~SIGNIFICANT ~~and~~ACCOUNTING ~~managed~~POLICIES ~~as a single operating segment.~~

~~Basis~~Business ofDescription ~~Presentation~~- –Gyrotron ~~The~~Technology, ~~accompanying~~Inc. ~~unaudited~~(the ~~financial~~"Company") ~~statements~~is ~~have~~incorporated ~~been~~under ~~prepared in accordance with United States generally accepted accounting principles for interim financial information and with~~ the ~~instructions~~business tolaws ~~Form 10-Q and Rule 8.03~~ of ~~Regulation S-X for smaller reporting companies~~Delaware. ~~Accordingly,~~The ~~these~~Company ~~statements~~develops ~~do not include all of the information~~ and ~~footnotes~~seeks ~~required~~to bylicense ~~United~~unique ~~States~~industrial ~~generally~~technologies ~~accepted~~primarily ~~accounting~~to ~~principles for complete financial statements. In~~ the ~~opinion~~glass, ~~of management~~semiconductor, ~~all adjustments~~food, ~~consisting only of normal recurring adjustments necessary to fairly state the financial position~~footwear, ~~results~~adhesives ~~of operations~~ and ~~cash~~plastics ~~flows~~industries, ~~with~~providing ~~respect~~a tonovel ~~the~~method ~~interim~~for ~~financial~~heating ~~statements~~for ~~have~~industrial ~~been included~~processing. ~~Operating~~It ~~results~~also ~~for~~develops, ~~the~~licenses, ~~three~~ and ~~six~~seeks ~~months~~to ~~ended~~sell ~~June~~autoclave-free ~~30,~~laminating ~~2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016~~systems. The ~~financial~~Company ~~statements~~is ~~should~~organized ~~be read in conjunction with the audited financial statements~~ and ~~footnotes~~managed ~~included~~as ina ~~the~~single ~~Company's~~operating ~~Form 10-K for the fiscal year ended December 31, 2015~~segment.

~~Liquidity~~Basis ~~and~~of ~~Management~~Presentation - ~~Plans~~The -accompanying Asunaudited ~~shown~~financial instatements ~~the~~have ~~accompanying~~been ~~financial~~prepared ~~statements,~~in ~~the~~accordance ~~Company~~with ~~incurred~~United aStates ~~net~~generally ~~loss~~accepted accounting principles for ~~the~~interim ~~three~~financial information and ~~six~~with ~~months~~the ~~ended~~instructions ~~June~~to ~~30,~~Form ~~2016~~10-Q and Rule 8.03 of ~~$158,555~~Regulation ~~and~~S-X ~~$289,875,~~for ~~respectively~~smaller reporting companies. Accordingly, ~~and~~these ~~had~~statements ~~negative~~do ~~working~~not ~~capital~~include all of ~~$2,044,160~~the information and ~~stockholders'~~footnotes ~~deficiency~~required by United States generally accepted accounting principles for complete financial statements. In the opinion of $9management,~~497~~ all adjustments,~~407~~ atconsisting ~~June~~only ~~30,~~of ~~2016.~~normal ~~Further~~recurring adjustments necessary to fairly state the financial position, results of operations and cash ~~used~~flows inwith ~~operating~~respect ~~activities~~to ~~during~~the interim financial statements have been included. Operating results for the ~~six~~three and nine months ended ~~June~~September 30, 2016 ~~amounted~~are tonot ~~$164,997.~~necessarily ~~The~~indicative ~~Company~~of isthe ~~expected~~results tothat ~~continue~~may tobe ~~incur~~expected ~~losses~~for ~~throughout~~ the ~~remainder~~year ofending December 31, 2016. ~~These~~The ~~factors~~financial ~~raise~~statements ~~substantial~~should ~~doubt~~be asread toin conjunction with the ~~ability~~audited offinancial statements and footnotes included in the Company’s toForm ~~continue~~10-K asfor athe ~~going~~fiscal ~~concern~~year ended December 31, 2015.

~~The~~Liquidity ~~Company's~~and ~~business~~Management ~~strategy~~Plans is- toAs ~~overcome~~shown ~~these~~in ~~losses~~the ~~through~~accompanying ~~commercialization~~financial ~~and~~statements, ~~continued~~the ~~development~~Company ofincurred ~~(i)~~a ~~applications~~net loss for the ~~gyrotron~~three ~~beam~~and ~~which~~nine ~~will~~months beended ~~marketed~~September ~~and~~30, ~~monetized~~2016 ~~through~~of ~~licensing~~$131,106 ~~engineering~~and ~~consulting~~$420,981, respectively, and ~~servicing~~had negative working capital of $2,204,018 and ~~(ii)~~stockholders' deficiency of $9,882,850 at September 30, 2016. Further, cash used in operating activities during the ~~lamination~~nine ~~system~~months ended September 30, 2016 amounted to $282,688. 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.

The Company's ~~management~~business ~~and~~strategy ~~Board~~is ofto ~~Directors~~overcome ~~have~~these ~~obtained~~losses ~~additional~~through ~~funding~~commercialization and ~~after~~continued ~~June~~development ~~30,~~of ~~2016~~ (~~see Note 4~~i) ~~and~~applications ~~intend~~for tothe ~~obtain~~gyrotron ~~additional~~beam ~~funding~~which ~~for~~will ~~general~~be ~~working~~marketed ~~capital needs~~ and ~~professional~~monetized ~~fees~~ through ~~private~~licensing, ~~placement~~engineering ofconsulting ~~its~~and ~~equity~~servicing ~~securities.~~and ~~The~~(ii) ~~Company will continually evaluate funding options including additional offerings of its securities to investors. There can be no assurance as to~~ the ~~availability~~lamination ~~or terms upon which such financing alternatives might be available~~system.

~~Accounts Receivable -~~ The Company's ~~grants~~management ~~credit~~and toBoard ~~substantially~~of ~~all~~Directors ofhave ~~its~~obtained ~~customers,~~additional ~~and~~funding ~~carries~~after ~~its~~September ~~accounts~~30, ~~receivable~~2016 at(see ~~original~~Note ~~invoice~~4) ~~amount~~and ~~less~~intend anto ~~allowance~~obtain additional funding for general ~~doubtful~~working ~~accounts.~~capital Onneeds aand ~~periodic~~professional ~~basis,~~fees ~~the~~through ~~Company~~private ~~evaluates~~placement of its ~~accounts~~equity ~~receivable~~securities. ~~and~~The ~~establishes~~Company anwill ~~allowance~~continually ~~for~~evaluate ~~doubtful~~funding ~~accounts~~options ~~based~~including onadditional ~~history~~offerings of ~~past~~its ~~write-offs,~~securities ~~collections,~~to ~~and~~investors. ~~current~~There ~~credit~~can ~~conditions.~~be ~~The~~no ~~allowance~~assurance ~~for~~as ~~doubtful~~to ~~accounts~~the ~~amounted~~availability toor ~~$3,218~~terms atupon ~~June~~which ~~30,~~such ~~2016~~financing ~~and~~alternatives ~~December~~might ~~31,~~be ~~2015~~available.

~~Machinery~~Accounts ~~and~~Receivable ~~Equipment~~ - ~~Machinery~~The ~~and~~Company ~~equipment~~grants ~~are~~credit ~~stated~~to atsubstantially ~~cost~~all ~~net~~ of ~~accumulated~~its ~~depreciation.~~customers, ~~Depreciation~~and iscarries ~~provided~~its ~~over~~accounts ~~the~~receivable ~~estimated~~at ~~useful~~original ~~lives~~invoice ofamount ~~the~~less ~~assets~~an ~~using~~allowance ~~straight-line~~for ~~and~~doubtful ~~accelerated~~accounts. ~~methods~~On ~~for~~a ~~both~~periodic ~~financial~~basis, ~~statement~~the ~~and~~Company ~~income~~evaluates ~~tax~~its ~~reporting~~accounts ~~purposes.~~receivable ~~Maintenance~~ and ~~repairs~~establishes ~~are~~an ~~charged~~allowance tofor ~~operations~~doubtful asaccounts ~~incurred;~~based ~~significant~~on ~~betterments~~history ~~are~~of ~~capitalized.~~past ~~Depreciation~~write-offs, ~~expense~~collections, ~~amounted to $437~~ and ~~$3,049~~current ~~for~~credit ~~the~~conditions. ~~three~~The ~~months~~allowance ~~ended~~for ~~June~~doubtful ~~30,~~accounts ~~2016~~amounted ~~and~~to ~~2015, respectively, and~~ $~~874 and $5~~3,~~612~~218 ~~for~~at ~~the~~September ~~six months ended June~~ 30, 2016 and ~~2015,~~December ~~respectively~~31, ~~and is included within operating expenses in the accompanying statements of operations~~2015.

7Machinery ~~Table~~and Equipment - Machinery and equipment are stated at cost net of ~~Contents~~accumulated depreciation. Depreciation is provided over the estimated useful lives of the assets using straight-line and accelerated methods for both financial statement and income tax reporting purposes. Maintenance and repairs are charged to operations as incurred; significant betterments are capitalized.

~~GYROTRON~~7 ~~TECHNOLOGY,~~Table ~~INC.~~ of Contents

~~NOTES~~GYROTRON TOTECHNOLOGY, ~~THE FINANCIAL STATEMENTS~~ INC.

~~JUNE~~NOTES ~~30,~~TO ~~2016~~THE FINANCIAL STATEMENTS

~~(Unaudited)~~September 30, 2016

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

~~Patents~~NOTE ~~- The Company capitalizes costs relative to patent applications~~1. ~~Patents~~- ~~are~~BUSINESS ~~recorded~~DESCRIPTION atAND ~~acquired~~SUMMARY ~~cost~~OF ~~and~~SIGNIFICANT ~~amortized~~ACCOUNTING ~~over~~POLICIES ~~their~~(CONTINUED) ~~estimated useful economic life of 15 years, beginning at the date of issuance. Costs incurred to renew or extend the term of recognized patents, including annuities and fees, are expensed as incurred.~~

~~Impairment~~Patents ~~of Long~~-~~Lived~~ ~~Assets~~The -Company ~~Long-lived~~capitalizes ~~assets~~costs ~~and~~relative ~~certain~~to ~~identifiable~~patent ~~intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable~~applications. ~~Recoverability~~Patents ofare ~~assets~~recorded toat beacquired ~~held~~cost and ~~used~~amortized isover ~~measured~~their byestimated auseful ~~comparison~~economic oflife ~~the carrying amount~~ of an15 ~~asset to the undiscounted future cash flows of the asset. If such assets are considered to be impaired~~years, ~~the~~beginning ~~impairment~~at ~~to be recognized is measured by~~ the ~~amount~~date ~~by which the carrying amount~~ of ~~the assets exceeds the fair value of the assets~~issuance. ~~Fair~~Costs ~~value~~incurred isto ~~determined~~renew ~~based on discounted cash flow~~ or ~~appraised~~extend ~~values, depending on~~ the ~~nature~~term of ~~the~~recognized ~~assets.~~patents, ~~There~~including ~~was~~annuities ~~an impairment of a patent during the three~~ and ~~six months ended June 30~~fees, ~~2015~~are inexpensed ~~the~~as ~~amount of $6,168 included in operating expenses in the accompanying statement of operations~~incurred. ~~There was no impairment of long-lived assets during the three and six months ended June 30, 2016.~~

~~Income~~Impairment ~~Taxes~~of Long-Lived ~~The~~Assets ~~Company~~- ~~recognizes~~Long-lived ~~estimated~~assets ~~income~~and ~~taxes~~certain ~~payable~~identifiable orintangibles ~~refundable~~are onreviewed ~~income~~for ~~tax~~impairment ~~returns~~whenever ~~for~~events or changes in circumstances indicate that the ~~current~~carrying ~~year~~amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the ~~estimated~~carrying ~~future~~amount ~~tax~~of ~~effect~~an ~~attributable~~asset to ~~temporary~~the ~~differences~~undiscounted ~~and~~future ~~carry-forwards~~cash flows of the asset. ~~Measurement~~If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of ~~deferred~~the ~~income~~assets ~~items~~exceeds the fair value of the assets. Fair value is determined based on ~~enacted~~discounted ~~tax~~cash ~~laws~~flow ~~including~~or ~~tax~~appraised ~~rates~~values, ~~with~~depending on the ~~measurement~~nature of ~~deferred~~the ~~income~~assets. ~~tax~~There ~~assets~~was ~~being~~an ~~reduced~~impairment byof ~~available~~a ~~tax~~patent ~~benefits~~during ~~not~~the ~~expected~~nine tomonths beended ~~realized~~September 30, 2015 in the amount of $6,168 included in operating expenses in the accompanying statement of operations. There was no impairment of long-lived assets during the three and nine months ended September 30, 2016.

~~Share-Based~~Accrued ~~Payments~~Expenses - ~~The~~Related ~~Company~~Parties ~~accounts~~- ~~for~~Included ~~stock option awards granted~~ in ~~accordance~~accrued ~~with~~expenses ~~Share-Based~~is ~~Payments~~approximately ~~Topic of the FASB Accounting Standards Codification (ASC) 718. Under ASC 718~~$143,000 ~~compensation~~in ~~expense~~fees ~~related~~due to ~~stock~~two ~~based~~members ~~payments~~of ~~is recorded over~~ the ~~requisite~~board ~~service~~of ~~period~~directors ~~based~~as ~~on the grant date fair value~~ of ~~the~~September ~~awards.~~30, ~~The Company uses the Black-Scholes option pricing model for determining the estimated fair value for stock-based awards~~2016. ~~The~~As ~~Black-Scholes model requires the use~~ of ~~assumptions~~December ~~which determine the fair value of stock-based awards~~31, ~~including~~2015 ~~the~~this ~~option's~~amount ~~expected~~was ~~term~~approximately ~~and the price volatility of the underlying stock~~$79,000.

~~Treasury~~Income ~~Stock~~Taxes - The Company ~~accounts~~recognizes ~~for~~estimated ~~treasury~~income ~~stock~~taxes ~~under~~payable ~~the~~or ~~cost~~refundable ~~method,~~on ~~which~~income ~~requires~~tax returns for the ~~Company~~current toyear ~~record~~and the ~~shares~~estimated asfuture atax ~~reduction~~effect attributable to ~~equity~~temporary atdifferences and carry-forwards. Measurement of deferred income items is based on enacted tax laws including tax rates, with the ~~purchased~~measurement ~~amount~~of deferred income tax assets being reduced by available tax benefits not expected to be realized.

~~Revenue~~Share-Based ~~Recognition~~Payments - InThe Company accounts for stock option awards granted in accordance with ~~Revenue~~Share-Based ~~Recognition~~Payments Topic of the FASB Accounting Standards Codification (ASC) ~~605~~718. Under ASC 718, compensation expense related to stock based payments is recorded over the ~~Company~~requisite ~~recognizes~~service ~~revenue~~period ~~when~~based ~~all~~on the grant date fair value of the ~~following~~awards. ~~criteria~~The ~~are~~Company ~~met:~~uses ~~persuasive~~the ~~evidence~~Black-Scholes ofoption anpricing ~~arrangement~~model ~~exists,~~for ~~delivery~~determining ~~has~~the ~~occurred~~estimated orfair ~~services~~value ~~have~~for ~~been~~stock-based ~~rendered,~~awards. The Black-Scholes model requires the ~~Company's~~use ~~price~~of toassumptions which determine the ~~customer~~fair isvalue ~~fixed~~of orstock-based ~~determinate~~awards, including the option's expected term and ~~collectability~~the isprice ~~reasonably~~volatility ~~assured~~of the underlying stock.

8Treasury ~~Table~~Stock of- ~~Contents~~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.

~~GYROTRON~~Revenue ~~TECHNOLOGY~~Recognition - In accordance with Revenue Recognition Topic of the FASB Accounting Standards Codification (ASC) 605, ~~INC~~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.

~~NOTES~~Research TOand ~~THE~~Development ~~FINANCIAL~~Expenses ~~STATEMENTS~~ - Research and development expenses are charged to operations as incurred. Customer funded research and development is included within operating expenses in the accompanying statements of operations as a reduction of research and development expense.

~~JUNE~~8 ~~30,~~Table ~~2016~~ of Contents

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

~~NOTE~~NOTES 1.TO -THE ~~BUSINESS~~FINANCIAL ~~DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)~~ STATEMENTS

~~Research~~September ~~and~~30, ~~Development Expenses - Research and development expenses are charged to operations as incurred.~~ 2016

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

AsLoss ofPer ~~June~~Common ~~30,~~Share ~~2016,~~- ~~there~~Basic ~~were~~loss per common share is computed using the ~~following~~weighted average number of common shares ~~underlying~~outstanding. ~~securities~~Diluted ~~that~~loss ~~could~~per ~~potentially~~common ~~dilute~~share ~~future~~gives ~~earnings:~~effect to dilutive convertible preferred stock, options and warrants outstanding during the period. Shares to be issued upon the exercise of these instruments have not been included in the computation of diluted loss per share as their effect is anti-dilutive based on the net loss incurred.

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

As of September 30, 2016, there were the following common shares underlying securities that could potentially dilute future earnings:

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.

Preferred A stock			1,637,903
Preferred A-1 stock			232,163
Preferred A-2 stock			93,612
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			6,026,741

~~Fair~~Accounting ~~Value~~Estimates - The process of ~~Financial~~preparing ~~Instruments~~financial -statements ~~The~~in ~~carrying~~conformity ~~amount~~with accounting principles generally accepted in the United States of ~~cash,~~America ~~receivables,~~requires ~~accounts~~the ~~payable~~use of estimates and ~~accrued~~assumptions ~~expenses~~that affect the reported amounts of assets and ~~other~~liabilities and disclosure of contingent assets and liabilities ~~are~~at ~~reasonable~~the ~~estimates~~date of ~~their~~the ~~fair~~financial ~~value~~statements ~~due~~and tothe ~~their~~reported ~~short~~amounts ~~maturity~~of revenues and expenses during the reporting period. Accordingly, actual results may differ from estimated amounts.

9Fair ~~Table~~Value of ~~Contents~~Financial Instruments - The carrying amount of cash, receivables, accounts payable and accrued expenses and other liabilities are reasonable estimates of their fair value due to their short maturity.

~~GYROTRON~~Redeemable ~~TECHNOLOGY~~Convertible Preferred Stock - The Company classifies conditionally redeemable convertible preferred shares, ~~INC~~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 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.

~~NOTES~~The TOCompany ~~THE~~evaluated ~~FINANCIAL~~the ~~STATEMENTS~~ 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.

~~JUNE~~9 ~~30,~~Table ~~2016~~ of Contents

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

~~NOTE~~NOTES 1.TO -THE ~~BUSINESS~~FINANCIAL ~~DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)~~ STATEMENTS

~~Redeemable~~September ~~Convertible Preferred Stock - The Company classifies conditionally redeemable convertible preferred shares~~30, 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 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.2016

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.(Unaudited)

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

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

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

In February 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.

10NOTE ~~Table~~2. of- ~~Contents~~MACHINERY AND EQUIPMENT

~~GYROTRON~~The ~~TECHNOLOGY,~~components ~~INC.~~ of machinery and equipment are as follows:

NOTES TO THE FINANCIAL STATEMENTS

	Estimated	September 30,			December 31,
	Useful Life	2016			2015

Machinery and equipment	5 to 7 years	$	1,239,665		$	1,018,231
Furniture and fixtures	5 to 7 years		25,874			25,874
Deposit on capital lease			-			40,000
			1,265,539			1,084,105
Less accumulated depreciation			(908,283	)		(907,337	)

		$	357,256		$	176,768

~~JUNE~~Depreciation expense amounted to $510 and $437 for the three months ended September 30, 2016 and 2015, respectively, and $946 and $6,049 for the nine months ended September 30, 2016 and 2015, respectively, and is included within operating expenses in the accompanying statements of operations.

~~(Unaudited)~~10 Table of Contents

~~NOTE~~GYROTRON 2.TECHNOLOGY, ~~- MACHINERY AND EQUIPMENT~~ INC.

~~The~~NOTES ~~components~~TO ofTHE ~~machinery~~FINANCIAL ~~and equipment are as follows:~~STATEMENTS

	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

September 30, 2016

~~NOTE 3. – PATENTS~~(Unaudited)

~~The~~NOTE ~~components~~3. of– ~~patents are as follows:~~PATENT

	June 30,			December 31,
	2016			2015
Patents	$	156,419		$	156,419
Less accumulated amortization		(107,798	)		(103,063	)
	$	48,621		$	53,356

The components of patents are as follows:

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 $2,359 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.

	September 30,			December 31,
	2016			2015

Patents	$	159,148		$	156,419
Less accumulated amortization		(110,157	)		(103,063	)

	$	48,991		$	53,356

Amortization expense amounted to $2,359 and $2,299 for the three months ended September 30, 2016 and 2015, respectively, and $7,094 and $7,394 for the nine months ended September 30, 2016 and 2015, respectively. For patents placed in service, amortization expense during the next five years is expected to be approximately $2,400 for the three months ending December 31, 2016, approximately $5,700 in 2017, approximately $3,000 in 2018, 2019, and 2020 and approximately $11,000 ~~Table~~in ofaggregate ~~Contents~~thereafter.

~~GYROTRON~~NOTE ~~TECHNOLOGY, INC~~4. – STOCKHOLDER LOANS AND ADVANCES FROM STOCKHOLDERS

~~NOTES~~Gabriel TOCapital ~~THE~~LP ~~FINANCIAL~~(“Gabriel”), ~~STATEMENTS~~ 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 a gyrotron and a cryomagnet (see Note 8). 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. 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. 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. As of October 2015, these loans had not been repaid and at that time 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. Subsequent to September 30, 2016 Gabriel loaned the Company an additional $40,000 for payments related to the cryomagnet and gyrotron and to pay expenses needed to put them into service, and the Company agreed (a) to provide Gabriel a security interest in the gyrotron and cryomagnet for the related $125,000 in loans, (b) to use its best efforts to arrange for a sale-leaseback of the gyrotron and cryomagnet within 90 days of their being put into service (which the Company estimates will take place by January 1, 2017), and (c) to pay 20% of any testing revenue they generate to Gabriel to reduce the amount outstanding on the related $125,000 loans. Gabriel also agreed to extend the maturity date of all its loans to the Company to April 1, 2017.

~~JUNE~~During the nine months ended September 30, 2016 , a director and his affiliates advanced $293,663 to the Company that bears no interest. Subsequent to September 30, 2016, he advanced $23,500 to the Company that bears no interest. The Company expects that a substantial portion of such advances will be converted into redeemable convertible preferred stock units (see Note 5). Additionally an unrelated party advanced $24,750 for the purchase of equity securities, with terms yet to be finalized.

~~(Unaudited)~~11 Table of Contents

~~NOTE~~GYROTRON 4.TECHNOLOGY, ~~– STOCKHOLDER LOANS AND ADVANCES FROM STOCKHOLDERS~~INC.

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

AsSeptember ~~of June~~ 30, 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%.

During the six months 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~~Unaudited).

NOTE 5. - REDEEMABLE CONVERTIBLE PREFERRED STOCK

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.

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 shares. As a result, these instruments have conditions for their redemption that are not within the control of the Company. Accordingly, the fair value of the Series A, A-1, A-2, B, 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~~sheets. The Company recognizes changes in the redemption value of the redeemable 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 ~~six~~nine months ended ~~June~~September 30, 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		Total
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
New issuances including dividends paid in kind		-		-	$	34,~~096~~671		-		-	$	17,745	$	2022,~~841~~416
Dividends accumulated	$	~~235~~353,~~858~~787	$	3350,~~431~~147		-	$	~~107~~161,~~889~~833	$	~~128~~192,~~047~~071	$	~~713~~781	$	~~505~~758,~~938~~619
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
Liquidation Preference of Redeemable Preferred Stock as of September 30, 2016	$	3,773,815	$	525,616	$	65,528	$	1,756,164	$	1,880,105	$	36,104	$	8,037,332

12The ~~Table~~terms of ~~Contents~~these preferred shares are summarized in the table below. All series carry an initial dividend rate of 10% payable quarterly and are convertible in the common stock of the Company. The holders of preferred stock have the right to one vote for each share of common stock into which such share of preferred stock could then be converted. The conversion ratio and price are subject to adjustment when the Company declares or pays dividends, makes a distribution on common stock payable in common shares, or affects a subdivision, split, consolidation, combination, or reverse split of outstanding common shares into a greater or lesser number of common shares.

GYROTRON TECHNOLOGY, INC.

	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 September 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 September 30, 2016		12			11			-			13			10			1
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	%		196.10	%		184.90	%		150	%
Dividends:
Rate		18	%		18	%		10	%		18	%		18	%		10	%
Accrued during the three months ended September 30, 2015	$	117,929		$	16,716		$	1,152		$	53,945		$	35,569		$	-		$	225,311
Accrued during the three months ended September 30, 2016	$	117,929		$	16,716		$	1,575		$	53,944		$	64,024		$	860		$	255,048
Accrued during the nine months ended September 30, 2015	$	353,787		$	50,147		$	2,250		$	161,833		$	111,181		$	-		$	679,198
Accrued during the nine months ended September 30, 2016	$	353,787		$	50,147		$	4,671		$	161,833		$	192,071		$	2,181		$	764,690
Paid in kind during the three months ended September 30, 2015	$	-		$	-		$	1,155		$	-		$	-		$	-		$	1,155
Paid in kind during the three months ended September 30, 2016	$	-		$	-		$	1,575		$	-		$	-		$	-		$	1,575
Paid in kind during the nine months ended September 30, 2015	$	-		$	-		$	2,250		$	-		$	-		$	-		$	2,250
Paid in kind during the nine months ended September 30, 2016	$	-		$	-		$	4,671		$	-		$	-		$	-		$	4,671
Paid in cash during the three months ended September 30, 2016	$	-		$	-		$	-		$	-		$	-		$	791		$	791
Paid in cash during the nine months ended September 30, 2016	$	-		$	-		$	-		$	-		$	-		$	1,399		$	1,399
Cumulative unpaid dividends at December 31, 2015	$	799,384		$	104,009		$	-		$	395,560		$	265,286		$	78		$	1,564,317
Cumulative unpaid dividends at September 30, 2016	$	1,153,171		$	154,156		$	-		$	557,393		$	457,357		$	860		$	2,322,937

~~NOTES~~12 TOTable ~~THE~~of ~~FINANCIAL STATEMENTS~~ Contents

~~JUNE~~GYROTRON 30TECHNOLOGY, ~~2016~~ INC.

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

~~The~~September terms of these preferred shares are summarized in the table below. All series carry an initial dividend rate of 10% payable quarterly and are convertible in the common stock of the Company. The holders of preferred stock have the right to one vote for each share of common stock into which such share of preferred stock could then be converted. The conversion ratio and price are subject to adjustment when the Company declares or pays dividends30, makes a distribution on common stock payable in common shares, or affects a subdivision, split, consolidation, combination, or reverse split of outstanding common shares into a greater or lesser number of common shares. 2016

	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

(Unaudited)

The dividends accrue and accumulate whether or not they have been declared by the board of directors and whether or not there are profits or other funds legally available. As specified in the certificate of designation for each series, the Company may have the option to pay dividends in kind for a specified period of time.

13For ~~Table~~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 ~~Contents~~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%.

~~GYROTRON~~The ~~TECHNOLOGY~~Company, ~~INC~~at its option, may require conversion of all or any pro-rata portion of shares of a series into common stock at the conversion price if at any time i) the common stock is listed for trading on a national securities exchange, an inter-dealer automated quotation system, or over the counter bulletin board (or for the series A-2 and B-2 the “OTC Pinks”), ii) the Company shall have prepared and filed with the Securities and Exchange Commission a registration statement covering the shares of common stock to be issued upon due conversion of preferred stock, and such registration statement shall have been declared effective under the Securities Act of 1933, as amended, and continues to be effective, iii) during any preceding period of twenty consecutive trading days (while i) and ii) are fulfilled) the closing price equals or exceeds a specified percentage (“Mandatory conversion percentage”) of the conversion price, and iv) the Company is current on its dividends for that Series.

~~NOTES~~Registration TORights ~~THE~~- ~~FINANCIAL~~In ~~STATEMENTS~~connection with its stock subscription agreements, the Company has agreed, on various dates since December 2009, to pay the various subscribers, commencing a specified time after the subscription date, 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 September 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 $20,329 for the three months ended September 30, 2015, and $7,172 and $33,932 for the nine months ended September 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 September 30, 2016 the aggregate investment for which the right to registration rights payments had commenced and not terminated was $1,016,435.

~~JUNE~~Warrants 30- 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, ~~2016~~ splits and dividends.

~~(Unaudited)~~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 nine months ending September 30, 2016, $1,236 was recognized as additional paid-in capital allocable to such warrants and immediately accreted to Fair Value of Redeemable Convertible Preferred Stock.

~~For~~Sale ~~each~~of ~~series~~Equity ~~any~~Securities - ~~holder~~During ~~can request on~~ the ~~date~~nine ~~specified~~months ~~for~~ending ~~that~~September ~~series that the Company repurchase~~ 30, ~~calendar days thereafter (the "Repurchase Date")~~2016, ~~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~~sold ~~the~~507 ~~option~~units ~~whether~~consisting ~~or not to agree to the repurchase. In the event the Company fails to repurchase, or payment~~ of ~~dividends~~1 ofshare ~~a series is a number~~ of ~~quarters~~Series inB-2 ~~arrears~~preferred ~~specified for that series (either being a Default), the dividend rate on that series increases to 18%,~~ and ~~the~~50 ~~majority~~warrants ~~holders of that series, voting together with the holders of any pari – passu series, have the right~~ to ~~elect~~purchase ~~the~~one ~~majority~~share of ~~the~~common ~~board~~stock ofat ~~directors, so long as the dividends continue to be the specified number of quarters in arrears~~$1.00 ~~For~~expiring ~~Series~~December ~~A-2~~15, B,2016 ~~B-1,~~at ~~and B-2, in the event of a Default the conversion price ("Default Conversion Price") for that series permanently decreases 15%~~$30/unit.

~~The~~NOTE Company, at its option, may require conversion of all or any pro-rata portion of shares of a series into common stock at the conversion price if at any time i) the common stock is listed for trading on a national securities exchange, an inter-dealer automated quotation system, or over the counter bulletin board (or for the series A-2 and B-2 the "OTC Pinks"), ii) the Company shall have prepared and filed with the Securities and Exchange Commission a registration statement covering the shares of common stock to be issued upon due conversion of preferred stock, and such registration statement shall have been declared effective under the Securities Act of 1933, as amended, and continues to be effective, iii) during any preceding period of twenty consecutive trading days (while i) and ii) are fulfilled) the closing price equals or exceeds a specified percentage ("Mandatory conversion percentage") of the conversion price, and iv) the Company is current on its dividends for that Series6. COMMON STOCK

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~~September 30, 2016 and December 31, 2015, ~~the~~there ~~estimated~~were ~~liability under these agreements amounted to $566~~14,~~044 and $558~~414,~~872,~~058 ~~respectively,~~shares ~~and~~of the ~~change~~issuer's incommon ~~such~~stock ~~estimated~~issued ~~liability of $4,433~~ and ~~$13,603~~outstanding. ~~for~~A ~~the~~portion ~~three~~of ~~months~~these ~~ended~~shares ~~June~~were ~~30,~~issuable ~~2016~~but ~~and~~had ~~2015,~~not ~~respectively,~~been ~~and~~issued ~~$7,172 and $13,603~~ for ~~the~~administrative ~~six~~reasons. ~~months ended June 30~~Accordingly, ~~2016~~the ~~and~~presentation ~~2015, respectively are included as other expense~~ in ~~the~~these ~~accompanying~~financial statements ofconsiders ~~operations.~~these ~~The~~shares ~~agreements provide for no limitation~~ as toeffectively ~~the maximum potential consideration to be transferred~~issued. ~~At June 30, 2016 the aggregate investment for which the right to registration rights payments had not terminated was $2,110,886.~~

~~Sale~~13 ofTable ~~Equity Securities – During the three months ending June 30, 2016, the Company sold units consisting~~ of ~~1 share of Series B-2 preferred and warrants to purchase one share of common stock, referred to as B-2 units. This sale is summarized in the table below. Proceeds are shown net of offering expenses.~~Contents

	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

GYROTRON TECHNOLOGY, INC.

~~Warrants~~NOTES -TO ~~The~~THE ~~warrants~~FINANCIAL ~~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.~~ STATEMENTS

~~The~~September 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 and six months ending June 30, 2016~~, $781 and $1,236 respectively was recognized as additional paid-in capital allocable to such warrants and immediately accreted to Fair Value of Redeemable Preferred Stock.~~

~~14 Table of Contents~~(Unaudited)

~~GYROTRON~~The ~~TECHNOLOGY~~following is a summary of warrants outstanding and exercisable at September 30, ~~INC.~~2016 and 2015 and activity during the nine months then ended:

NOTES TO THE FINANCIAL STATEMENTS

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

Outstanding January 1		2,064,825		$	.99		3,043,814		$	1.00
Issued during nine months ended September 30,		25,350			1.00		32,125			1.00
Exercised		-			-		-			-
Lapsed		(1,938,950	)		1.00		(1,044,864	)		1.00

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

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

Weighted average months remaining					11.03					7.02

~~JUNE~~NOTE ~~30,~~7. ~~2016~~ - STOCK BASED COMPENSATION

~~(Unaudited)~~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.

~~NOTE~~In 6July 2014, the Company granted a director 60,000 five year options to purchase common stock at an exercise price of $0.725 ~~- COMMON~~per ~~STOCK~~share, of which 12,000 options vested on the grant date, and 12,000 vested in each of October 2014, January 2015, April 2015 and July 2015. The value of the options was determined to be $16,962 using the Black Scholes pricing model. During the three and nine months ended September 30, 2015, $792 and $7,573, respectively, of that amount was recognized.

~~At June 30, 2016 and December 31, 2015, there were 15,222,024 shares issued and~~ 14~~,414,058~~ ~~shares~~Table ~~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.~~ Contents

~~The~~GYROTRON ~~following is a summary of warrants outstanding and exercisable at June 30~~TECHNOLOGY, ~~2016 and 2015 and activity during the six months then ended:~~INC.

	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

NOTES TO THE FINANCIAL STATEMENTS

~~NOTE~~September 7.30, ~~- STOCK BASED COMPENSATION~~ 2016

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.(Unaudited)

InNOTE ~~July 2014, the Company granted a director 60,000 five year options to purchase common stock at an exercise price of $0~~8.~~725~~ ~~per~~- ~~share,~~COMMITMENTS ofAND ~~which~~CONTINGENCIES 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.

15Leases ~~Table~~- The Company leased office and warehouse space under an operating lease which expired on July 31, 2016. In July 2016, the Company entered into a five year lease for the same space at a rate of ~~Contents~~$68,000 per year in rent and $31,600 per year in common area charges, included in rent expense

~~GYROTRON~~Rent ~~TECHNOLOGY~~expense for the three and nine months ended September 30, ~~INC~~2016 and the three and nine months ended September 30, 2015 amounted to $15,412 and $78,583, $31,392 and $90,584 respectively. At September 30, 2016 the aggregate future minimum lease payment under the non-cancelable operating lease was $481,400 with approximately $23,000 for the rest of 2016, $91,600 for the years ending December 31, 2017 through 2020 and $68,700 for the year ended December 31, 2021. The Company has made a $12,253 security deposit included within other assets in the accompanying balance sheets as of September 30, 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, which is accounted for in the accompanying financial statements as a reduction in rent expense.

~~NOTES~~In TOJuly ~~THE~~2014, ~~FINANCIAL~~the ~~STATEMENTS~~ 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, 2015. An additional $45,000 was paid in July 2016, and $75,000 and $60,000, are due on 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. As of September 30, 2016, on the accompanying balance sheet the gyrotron is included in machinery and equipment, and the remaining payment obligation is recorded as $75,000 in current portion of capital lease and $60,000 in other non-current liability.

~~JUNE~~In February 2015, the Company entered into an agreement to purchase a cryomagnet for a series of payments totaling $134,700 of which $40,410 was paid up front, $40,410 was paid in July 2016, $26,940 was paid in November 2016, and $26,940 will be due in May 2017. The two remaining payments are recorded in accounts payable as of September 30, 2016 .

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

NOTE 89. -– ~~COMMITMENTS~~SUBSEQUENT ~~AND CONTINGENCIES~~ EVENTS

~~Leases~~See -Note ~~The~~4 ~~Company~~regarding ~~leased~~stockholder ~~office~~loans and ~~warehouse~~advances ~~space~~subsequent ~~under~~to anSeptember ~~operating lease which expire on July 31, 2016. Rent expense for the three and six months ended June~~ 30, 2016 ~~and the three and six months ended June 30~~, ~~2015 amounted to $31,585~~ and ~~$63,171,~~Note ~~$29,538~~8 ~~and~~regarding ~~$59,192 respectively. At June 30, 2016~~ the ~~aggregate~~Company’s ~~future~~new ~~minimum~~office lease ~~payment under the non-cancelable operating lease was $9,846. The Company has made a $12,253 security deposit included within other assets in the accompanying balance sheets as of June 30, 2016~~ and ~~December~~payment ~~31,~~on ~~2015. An affiliate of~~ a ~~director~~purchase ~~is using a portion~~ of ~~the space on~~ a ~~temporary informal basis and reimbursing the Company $1,000 per month for such use~~cryomagnet.

In15 ~~July~~Table ~~2016, the Company entered into a five year lease for the same space at a rate~~ of ~~$68,000 per year.~~Contents

InItem ~~July 2014, the Company entered into an agreement to lease a new gyrotron and associated equipment from a vendor pursuant to a capital lease~~2. AsManagement’s ~~amended~~Discussion ~~in May 2016, the lease requires four payments aggregating $220,000, $40,000 of which was paid up-front~~ and isAnalysis ~~included~~or inPlan ~~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~~Operations. 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 liability on the accompanying balance sheet as of June 30, 2016.

InAs ~~February~~used ~~2015,~~in ~~the~~this ~~Company~~Report ~~entered~~on ~~into~~Form an10-Q ~~agreement~~(this ~~to purchase a cryomagnet for $134~~“Report”),~~700~~ ofunless ~~which~~the ~~$40,410~~context ~~was~~otherwise ~~paid~~indicates, ~~$40,410~~references ~~was~~to ~~due 30 days after delivery (which took place in~~ the ~~fourth quarter of 2015) and was paid in July 2016~~“Company,” ~~$26,940~~the ~~will be due 6 months after successful provisional acceptance testing (which has not taken place)~~“Registrant,” ~~and $26~~“we,~~940~~” ~~will be due 18 months after successful provisional acceptance testing. The Company recorded $67~~“our,~~350~~” inor ~~accounts~~“us” ~~payable~~refers ~~and~~to ~~$26,940~~Gyrotron ~~in other non-current liability on the accompanying balance sheet as of June 30~~Technology, ~~2016 and December 31, 2015~~Inc.

~~Claims~~ Forward-Looking 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.Statements

~~NOTE~~Certain 9statements contained in this report, including statements regarding our business, financial condition, our intent, belief or current expectations, primarily with respect to the future operating performance of the Company and other statements contained herein regarding matters that are not historical facts, are "forward-looking" statements. –You ~~SUBSEQUENT~~can ~~EVENTS~~identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “continue” or the negative of these similar terms. Future filings with the Securities and Exchange Commission, future press releases and future oral or written statements made by us or with our approval, which are not statements of historical fact, may contain forward-looking statements. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

~~See~~All ~~Note~~forward-looking 4statements ~~regarding~~speak ~~stockholder~~only ~~loans~~as ~~and~~of ~~advances~~the ~~subsequent~~date on which they are made. We undertake no obligation to ~~June~~update ~~30,~~such ~~2016,~~statements ~~and~~to ~~Note~~reflect 8events ~~regarding~~that ~~the~~occur ~~Company's~~or ~~new~~circumstances ~~office~~that ~~lease~~exist ~~and~~after the ~~lease~~date ofon awhich ~~gyrotron~~they are made, except as required by federal securities and ~~purchase~~any ofother aapplicable ~~cryomagnet~~law.

~~16 Table of Contents~~Overview

~~ITEM~~We 2were incorporated in State of Delaware on April 13, 1998 to capitalize on the industrial potential of the gyrotron beam. ~~MANAGEMENT'S~~The ~~DISCUSSION~~Company’s ~~AND~~current ~~ANALYSIS~~product ORofferings ~~PLAN~~fall OFinto ~~OPERATIONS~~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.

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

~~Forward-Looking~~For ~~Statements~~the three months ended September 30, 2016 and September 30, 2015

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

~~All~~The ~~forward-looking~~Company ~~statements~~generated ~~speak~~$33,500 ~~only~~in asrevenues ofduring the ~~date~~quarter onended ~~which~~September ~~they~~30, ~~are~~2016, ~~made.~~as Wecompared ~~undertake~~to no$23,560 ~~obligation~~in torevenues ~~update~~for ~~such~~the ~~statements~~quarter toended ~~reflect~~September ~~events~~30, ~~that~~2015. ~~occur~~In orthe ~~circumstances~~quarter ~~that~~ended ~~exist~~September ~~after~~30, ~~the~~2016 ~~date~~revenue oncame ~~which~~for ~~they~~royalties ~~are~~and ~~made~~testing revenue and in the quarter ended September 30, ~~except~~2015 asalmost ~~required~~all byof ~~federal~~the ~~securities~~revenue ~~and~~came ~~any~~from ~~other~~a ~~applicable~~one-time ~~law~~feasibility study.

~~Overview~~Total operating expenses

WeDuring the quarter ended September 30, 2016, total operating expenses were ~~incorporated~~$154,711, inwhich ~~State~~consisted of ~~Delaware~~selling, ongeneral ~~April~~and ~~13,~~administrative ~~1998~~expenses toof ~~capitalize~~$147,018 onand ~~the~~research ~~industrial~~and ~~potential~~development expenses of $7,693. During the ~~gyrotron~~quarter ~~beam.~~ended ~~The~~September ~~Company's~~30, ~~current~~2015, ~~product~~total ~~offerings~~operating ~~fall~~expenses ~~into~~were ~~two~~$130,794 ~~broad~~which ~~categories~~consisted -of aselling, ~~suite~~general and administrative expenses of ~~material~~$124,149 ~~processing~~and ~~applications~~research ~~based~~and ondevelopment ~~the~~expenses, ~~unique~~net ~~heating~~of ~~characteristics~~funded research and development expenses of ~~the~~$6,645. ~~gyrotron~~Total ~~beam~~operating expenses increased $23,917, or 18.3%. The increase in selling, general and ~~its~~administrative ~~GLS~~expenses ~~market-ready~~was ~~autoclave-free~~due ~~system~~primarily ~~for~~to ~~glass~~increased ~~lamination~~expenditure on travel and ~~encapsulation~~investor relations.

~~Results~~16 Table of ~~Operations~~Contents

~~For~~Net ~~the three months ended June 30, 2016 and June 30, 2015~~Loss

~~Revenues~~During the quarter ended September 30, 2016, we had a net loss of $131,106, as compared with a net loss of $147,143 for the quarter ended September 30, 2015. The decreased loss was primarily due to the increase in revenue noted above and absence of a charge for registration rights obligations in the quarter ending September 30, 2016 as compared to a charge of $20,329 in the quarter ended September 30, 2015, offset in part by the increase in selling, general and administrative expenses noted above.

~~The~~For ~~Company generated $25,000 in revenues during~~ the ~~quarter~~nine ~~ended~~months ~~June 30, 2016, as compared to $38,107 in revenues for the quarter~~ ended ~~June~~September 30, ~~2015. In the quarter ended June 30,~~ 2016 ~~revenue came for royalties~~ and inSeptember ~~the quarter ended June~~ 30, 2015 ~~almost all of the revenue came from a one-time feasibility study.~~

~~Total operating expenses~~Revenues

~~During~~The ~~the~~Company ~~quarter~~generated ~~ended June 30, 2016, total operating expenses were~~ $~~179~~87,~~122,~~750 ~~which~~in ~~consisted~~revenues ofduring ~~selling, general and administrative expenses of $163,558 and research and development expenses of $15,564. During~~ the ~~quarter~~nine months ended ~~June~~September 30, ~~2015~~2016, ~~total~~as ~~operating~~compared ~~expenses~~to ~~were~~ $~~163~~62,~~564,~~710 ~~which~~in ~~consisted~~revenues offor ~~selling,~~the ~~general~~nine ~~and~~months ~~administrative~~ended ~~expenses~~September ~~of $156~~30,~~964~~ ~~and~~2015. ~~research~~In ~~and~~2016 ~~development~~over ~~expenses~~80% of ~~$6,600.~~the ~~Total~~revenue ~~operating~~came ~~expenses~~from ~~increased $15,558, or 9~~royalties.~~5%. The~~ ~~increase~~In in2015 ~~selling,~~most ~~general~~of ~~and administrative expenses was due primarily to increased travel expense, and~~ the ~~increase~~revenue incame ~~research~~from ~~and~~a ~~development~~one-time ~~expense~~feasibility ~~was due to increased scientific activity~~study.

17Total ~~Table~~operating ~~of Contents~~expenses

~~Net~~During ~~Loss~~the nine months ended September 30, 2016, total operating expenses were $482,900, which consisted of selling, general and administrative expenses of $433,129 and research and development expenses of $49,771. During the nine months ended September 30, 2015, total operating expenses were $463,091, which consisted of selling, general and administrative expenses of $430,046 and research and development expenses, net of funded research and development expenses, of $33,045. Total operating expenses increased by $19,809, or approximately 4.3%. The increase was primarily due to the increase in research and development expense, which in turn was primarily due to the absence of customer funding for research and development.

~~During~~Net the quarter ended June 30, 2016, we had a net loss of $158,555, as compared with a net loss of $182,040 for the quarter ended June 30, 2015. The decreased loss was primarily due to the absence of a charge for loss on fair value of warrant exchange and decreased expense for registration rights obligations of $4,433 in the quarter ending June 30, 2016 as compared to $13,603 in the quarter ended June 30, 2015.Loss

~~For~~During the ~~six~~nine months ended ~~June~~September 30, 2016, ~~and~~we ~~June~~had a net loss of $420,981, as compared with a net loss of $497,103 for the nine months ended September 30, 2015. The decreased loss was primarily due to increased revenue, as detailed above, the absence of a charge for loss on fair value of warrant exchange and decreased expense for registration rights obligations.

~~Revenues~~Liquidity and Capital Resources

~~The~~As ~~Company~~of ~~generated~~September ~~$54,250 in revenues during the six months ended June~~ 30, 2016, aswe ~~compared~~had tono ~~$39,150 in revenues for the six months ended June 30, 2015~~cash. In ~~2016 over 90% of the revenue came from royalties. In 2015 most of the revenue came from a one-time feasibility study.~~

~~Total~~Subsequent ~~operating~~to September 30, 2016, a director has advanced $23,500 to the Company that bears no interest. Additionally an unrelated party advanced $24,750 for the purchase of preferred equity securities, with terms yet to be finalized. The Company estimates that it will need approximately $300,000 for the next 12 months of operations. The Company does not have sufficient cash to fund its expenses over the next twelve months. There can be no assurance that additional capital will be available to the Company. If the Company fails to raise adequate capital, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.

~~During~~Going the six months ended June 30, 2016, total operating expenses were $328,189, which consisted of 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%. Concern

~~Net~~As ~~Loss~~shown in the accompanying financial statements, the Company incurred a net loss for the three and nine months ended September 30, 2016 of $131,106 and $420,981, respectively, and had negative working capital of $2,204,018 and stockholders' deficiency of $9,882,850 at September 30, 2016. Further, cash used in operating activities during the nine months ended September 30, 2016 amounted to $282,688. 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. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

~~During~~17 ~~the~~Table ~~six months ended June 30, 2016, we had a net loss~~ of $289,875, as compared with a net loss of $349,930 for the six months ended June 30, 2015. The decreased loss was primarily due to lower selling, general and administrative expense as detailed above, the absence of a charge for loss on fair value of warrant exchange and decreased expense for registration rights obligations.Contents

~~Liquidity~~Off-Balance ~~and~~Sheet ~~Capital Resources~~Arrangements

AsWe ofhave ~~June~~no ~~30,~~off-balance ~~2016,~~sheet ~~we had $5,163 of cash~~arrangements.

~~Since~~Critical ~~June~~Accounting 30, 2016 major stockholders and affiliates have advanced $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. The Company does not have sufficient cash to fund its expenses over the next twelve months. There can be no assurance that additional capital will be available to the Company. If the Company fails to raise adequate capital, its inability to raise funds for the above purposes will have a severe negative impact on its ability to remain a viable company.Policies

18The ~~Table~~accompanying financial statements have been prepared on the accrual basis of ~~Contents~~accounting in accordance with generally accepted accounting principles. In the opinion of management, these financial statements include all adjustments necessary in order to make them not misleading.

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

AsImpairment ~~shown~~of inLong-Lived ~~the~~Assets ~~accompanying~~-Long-lived ~~financial~~assets ~~statements,~~and ~~the~~certain ~~Company~~identifiable ~~incurred~~intangibles aare ~~net~~reviewed ~~loss~~ for ~~the~~impairment ~~three~~whenever ~~and~~events ~~six~~or ~~months~~changes ~~ended~~in ~~June~~circumstances ~~30,~~indicate ~~2016~~that ofthe ~~$158,555~~carrying ~~and~~amount ~~$289,875, respectively, and had negative working capital~~ of ~~$2,044,160~~an ~~and~~asset ~~stockholders'~~may ~~deficiency~~not ofbe ~~$9,497,407 at June 30, 2016~~recoverable. ~~Further,~~There ~~cash~~was ~~used~~an inimpairment ~~operating~~of ~~activities~~a patent during the ~~six~~nine months ended ~~June~~September 30, ~~2016~~2015 ~~amounted~~in ~~to $164,997. The Company is expected to continue to incur losses throughout~~ the ~~remainder~~amount of ~~2016.~~$6,168 ~~These~~included ~~factors~~in ~~raise~~operating ~~substantial~~expenses ~~doubt~~in ~~regarding~~ the ~~Company's~~accompanying ~~ability~~statement toof ~~continue as a going concern~~operations. ~~These~~ ~~financial~~There ~~statements~~was dono ~~not~~impairment ~~include~~of ~~any~~long-lived ~~adjustments~~assets toduring the ~~recoverability~~three and ~~classification~~nine ofmonths ~~recorded~~ended ~~asset~~September ~~amounts~~30, ~~and classification of liabilities that might be necessary should the Company be unable to continue as a going concern~~2016.

~~Off~~Research and Development Expenses -~~Balance~~ ~~Sheet~~Research ~~Arrangements~~and development expenses are charged to operations as incurred. Customer funded research and development is included within operating expenses in the accompanying statements of operations as a reduction of research and development expense.

WeAllocation ~~have~~of noProceeds ~~off~~from Financing Transactions -~~balance~~ ~~sheet~~The ~~arrangements~~Company has raised, and continues to raise capital, by selling units consisting of redeemable 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.

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

The ~~accompanying~~Company ~~financial~~evaluated ~~statements~~the ~~have~~detachable ~~been~~warrants ~~prepared~~in onaccordance ~~the~~with ~~accrual~~FASB ~~basis~~ASC ofNo. ~~accounting~~470-20, in“Debt ~~accordance~~ with ~~generally~~Conversion ~~accepted~~and ~~accounting~~Other ~~principles~~Options” and FASB ASC 815, “Derivatives and Hedging” and determined they were not considered a liability. InAs a result, proceeds from the ~~opinion~~preferred ofstock ~~management,~~are ~~these~~allocated ~~financial~~to ~~statements~~the ~~include~~detachable ~~all~~stock ~~adjustments~~purchase ~~necessary~~warrants inbased ~~order~~on tothe ~~make~~relative ~~them~~fair ~~not~~value ~~misleading~~of the preferred stock and warrants.

~~Revenue~~18 ~~Recognition~~Table ~~- In accordance with Revenue Recognition Topic~~ of the FASB Accounting Standards Codification (ASC) 605, the Company recognizes revenue when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company's price to the customer is fixed or determinate, and collectability is reasonably assured. Contents

~~Impairment~~The ofCompany ~~Long-Lived~~evaluated ~~Assets~~the ~~-Long-lived~~conversion ~~assets~~feature ~~and~~of ~~certain~~the ~~identifiable~~convertible ~~intangibles~~preferred ~~are~~shares ~~reviewed~~in ~~for~~accordance ~~impairment~~with ~~whenever~~FASB ~~events~~ASC orNo. ~~changes~~470-20, in“Debt ~~circumstances~~with ~~indicate~~Conversion ~~that~~and ~~the~~Other ~~carrying~~Options”. ~~amount~~A ofconvertible anfinancial ~~asset~~instrument ~~may~~includes ~~not~~a beBeneficial ~~recoverable.~~Conversion ~~There~~Feature ~~was~~(“BCF”) anwhen ~~impairment~~the offair amarket ~~patent~~value ~~during~~of the ~~three~~preferred ~~and~~stock ~~six~~is ~~months~~lower ~~ended~~than ~~June~~the ~~30,~~value ~~2015~~of incommon ~~the~~stock ~~amount~~when ofthe ~~$6,168~~preferred ~~included~~stock inconverts ~~operating~~to ~~expenses~~common instock at the ~~accompanying~~issuance ~~statement~~date. ofThe ~~operations. There~~BCF ~~was~~shall nobe ~~impairment~~recognized separately at issuance by allocating a portion of ~~long-lived~~the ~~assets~~proceeds ~~during~~equal to the ~~three~~intrinsic ~~and~~value ~~six~~of ~~months~~the ~~ended~~feature ~~June~~to ~~30,~~additional ~~2016.~~paid-in capital.

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

~~Allocation~~Item 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 period3. ~~Proceeds~~Quantitative ~~are allocated between the preferred stock, the warrants~~ and, inQualitative ~~certain~~Disclosures ~~instances,~~About ~~the~~Market ~~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~~Risk. The fair value of the warrants were determined using the Black-Scholes option pricing model. The Black-Scholes model requires the use of assumptions which determine the fair value of the warrants, including their expected term and the price volatility of the underlying common stock. The estimate of registration rights liability is updated each reporting period based on the expected date of compliance. Changes to the estimated liability are recognized in the statement of operations.

~~Redeemable~~As ~~Convertible~~a ~~Preferred~~“smaller ~~Stock~~reporting ~~- The Company classifies conditionally redeemable convertible preferred shares~~company”, ~~which~~we ~~includes~~are ~~preferred~~not ~~shares~~required ~~subject~~ to ~~redemption~~provide ~~upon~~ the ~~occurrence~~information ofrequired ~~uncertain~~by ~~events~~this ~~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~~Item. ~~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.~~

19Item ~~Table~~4. ofControls ~~Contents~~and Procedures

~~The~~Evaluation 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~~Disclosure ~~preferred~~Controls ~~stock~~ and ~~warrants.~~Procedures

~~The~~Under ~~Company~~the ~~evaluated~~supervision ~~the~~and ~~conversion~~with ~~feature~~the participation of ~~the~~our ~~convertible~~management, ~~preferred~~who ~~shares~~is inalso ~~accordance~~our ~~with~~principal ~~FASB~~executive ~~ASC~~officer ~~No.~~and ~~470-20~~principal financial officer, ~~"Debt~~we ~~with~~conducted ~~Conversion~~an evaluation of our disclosure controls and ~~Other~~procedures, ~~Options". A~~as ~~convertible~~such ~~financial~~term ~~instrument~~is ~~includes~~defined aunder ~~Beneficial~~Rule ~~Conversion~~13a-15(e) ~~Feature~~and Rule 15d-15(~~"BCF"~~e) ~~when~~promulgated under the ~~fair~~Securities ~~market~~Exchange ~~value~~Act of 1934, as amended, as of September 30, 2016. Based upon such evaluation, the ~~preferred~~Company's ~~stock~~Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective, as of September 30, 2016, to provide assurance that information that is ~~lower~~required ~~than~~to be disclosed by the ~~value~~Company ofin ~~common~~the ~~stock~~reports ~~when~~that it files or submits under the ~~preferred~~Exchange ~~stock~~Act ~~converts~~is torecorded, ~~common~~processed, ~~stock~~summarized, atand reported, within the ~~issuance~~time ~~date~~periods specified by the SEC's rules and forms. ~~The~~Disclosure ~~BCF~~controls ~~shall~~and beprocedures ~~recognized~~include, ~~separately~~without atlimitation, ~~issuance~~controls and procedures designed to ensure that information required to be disclosed by ~~allocating~~the aCompany ~~portion~~in ofthe reports that it files or submits under the ~~proceeds~~Exchange ~~equal~~Act is accumulated and communicated to the ~~intrinsic~~Company's ~~value~~management, ofincluding ~~the~~its ~~feature~~Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate, to ~~additional~~allow ~~paid-in~~timely ~~capital~~decisions regarding required disclosure.

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

~~ITEM~~There 3.were ~~QUANTITATIVE~~no ~~AND~~changes ~~QUALITATIVE~~in ~~DISCLOSURES~~our ~~ABOUT~~internal ~~MARKET~~controls ~~RISK~~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.

As19 aTable ~~"smaller~~of ~~reporting company", we are not required to provide the information required by this Item.~~ Contents

~~ITEM~~PART 4.II OTHER ~~CONTROLS AND PROCEDURES~~INFORMATION

~~Evaluation~~Item of1. ~~Disclosure~~Legal ~~Controls and Procedures~~Proceedings.

~~Under~~The ~~the~~Company ~~supervision~~is ~~and~~subject ~~with~~to ~~the~~a ~~participation~~claim ofarising ~~our~~in ~~management,~~the ~~who~~normal iscourse ~~also~~of ~~our~~business. ~~principal~~In ~~executive~~the ~~officer~~opinion ~~and~~of ~~principal financial officer~~management, wethe ~~conducted~~amount ~~an evaluation~~ of ~~our~~the ~~disclosure~~ultimate ~~controls~~liability, ~~and~~if ~~procedures~~any, aswith ~~such~~respect ~~term~~this isaction ~~defined~~will ~~under~~not ~~Rule~~have ~~13a-15(e)~~a ~~and~~material ~~Rule~~adverse ~~15d-15(e)~~effect ~~promulgated~~on ~~under~~ the ~~Securities~~financial ~~Exchange~~position, ~~Act~~results of ~~1934,~~operation asor ~~amended,~~cash asflow of ~~June 30, 2016. Based upon such evaluation,~~ the Company's. ~~Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective~~Otherwise, asthere ofare ~~June~~no ~~30,~~pending ~~2016,~~legal proceedings to ~~provide~~which ~~assurance~~the ~~that~~Company ~~information that~~ is ~~required~~a toparty beor ~~disclosed by the Company~~ in ~~the~~which ~~reports~~any ~~that~~director, itofficer ~~files~~ or ~~submits~~affiliate ~~under~~of the ~~Exchange Act is recorded~~Company, ~~processed,~~any ~~summarized,~~owner ~~and~~of ~~reported,~~record ~~within~~or ~~the~~beneficially ~~time~~of ~~periods~~more ~~specified~~than by5% ~~the~~of ~~SEC's~~any ~~rules~~class ~~and~~of ~~forms.~~voting ~~Disclosure~~securities ~~controls~~of ~~and~~the ~~procedures include~~Company, ~~without~~or ~~limitation,~~security ~~controls~~holder ~~and~~is ~~procedures~~a ~~designed~~party toadverse ~~ensure that information required~~ to ~~be disclosed by~~ the Company ~~in the reports that it files~~ or ~~submits~~has ~~under~~a ~~the~~material ~~Exchange~~interest ~~Act~~adverse ~~is accumulated and communicated~~ to the Company~~'s management~~, ~~including its Chief Executive Officer~~ and ~~Chief~~the ~~Financial~~Company’s ~~Officer,~~property oris ~~persons~~not ~~performing~~the ~~similar~~subject ~~functions,~~of asany ~~appropriate,~~pending tolegal ~~allow timely decisions regarding required disclosure~~proceedings.

~~Changes~~Item in1A. ~~Internal~~Risk ~~Controls over Financial Reporting~~Factors

~~There~~As ~~were~~a no“smaller ~~changes in our internal controls over financial~~ reporting ~~that occurred during our last fiscal quarter that have materially affected~~company”, orwe are ~~reasonably~~not ~~likely~~required to ~~materially~~provide ~~affect,~~the ~~our~~information ~~internal~~required ~~control~~by ~~over~~this ~~financial reporting~~item.

20Item ~~Table~~2. Unregistered Sales of ~~Contents~~Equity Securities and Use of Proceeds.

~~PART~~Recent ~~II.~~sales ~~OTHER~~of ~~INFORMATION~~unregistered securities

~~ITEM~~There 1.were ~~LEGAL~~no ~~PROCEEDINGS.~~sales of unregistered securities in the three months ended September 30, 2016

~~The~~Purchases ~~Company is subject to a claim arising in the normal course~~ of ~~business.~~equity 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 ofby the ~~Company,~~issuer ~~or security holder is a party adverse to the Company or has a material interest adverse to the Company,~~ and ~~the~~affiliated ~~Company's property is not the subject of any pending legal proceedings~~purchasers.

~~ITEM 1A~~None. ~~RISK FACTORS~~

AsItem a3. ~~"smaller~~Defaults ~~reporting~~Upon ~~company",~~Senior ~~we are not required to provide the information required by this item~~Securities.

~~ITEM 2~~None. ~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.~~

~~Recent~~Item ~~sales~~4. ofMine ~~unregistered~~Safety ~~securities~~Disclosures.

InNot 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.Applicable

~~The~~Item ~~certificate of designation for the Series B-2 has been filed as exhibit 3~~5.14 toOther ~~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.~~Information

~~All~~20 ~~certificates~~Table 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.Contents

~~Purchases~~Item of6. ~~equity securities by the issuer and affiliated purchasers~~Exhibits.

None.

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

~~ITEM~~21 3.Table ~~DEFAULTS~~of ~~UPON SENIOR SECURITIES.~~Contents

~~None.~~SIGNATURES

~~ITEM~~Pursuant 4.to ~~MINE~~the ~~SAFETY~~requirements ~~DISCLOSURES~~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.

Not Applicable

	GYROTRON TECHNOLOGY, INC.

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

~~ITEM 5. OTHER INFORMATION~~22

21 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

22 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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