Oryon Technologies, Inc. - FORM 10-Q

Attached files

file	filename
EX-32.2 - EXHIBIT 32.2 - Oryon Technologies, Inc.	v396036_ex32-2.htm
EX-10.6 - EXHIBIT 10.6 - Oryon Technologies, Inc.	v396036_ex10-6.htm
EX-31.2 - EXHIBIT 31.2 - Oryon Technologies, Inc.	v396036_ex31-2.htm
EX-32.1 - EXHIBIT 32.1 - Oryon Technologies, Inc.	v396036_ex32-1.htm
EX-31.1 - EXHIBIT 31.1 - Oryon Technologies, Inc.	v396036_ex31-1.htm
EXCEL - IDEA: XBRL DOCUMENT - Oryon Technologies, Inc.	Financial_Report.xls

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the Quarterly Period Ended September 30, 2014

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

Commission File number: 001-34212

ORYON TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

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

4251 Kellway Circle, Addison, Texas 75001

(Address of principal executive offices)

(214) 267-1321

(Registrant’s telephone number, including area code)

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

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

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

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

Large accelerated filer ¨	Accelerated filer ¨

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of December 8, 2014, there were 252,333,438 shares of common stock, par value $0.001 per share, outstanding.

INDEX

		Page Number
PART I.	FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited)	3

	Consolidated Balance Sheets at September 30, 2014 (Unaudited) and December 31, 2013	5

	Consolidated Statements of Operations - for the quarters and nine month periods ended September 30, 2014 and 2013 (Unaudited)	6

	Consolidated Statement of Changes in Shareholders’ Equity (Deficit) - for the nine month periods ended September 30, 2014 and 2013 (Unaudited)	7

	Consolidated Statements of Cash Flows - for the nine month periods ended September 30, 2014 and 2013 (Unaudited)	8

	Notes to the Consolidated Financial Statements	9

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

ITEM 3.	Quantitative and Qualitative Disclosure about Market Risk	36

ITEM 4.	Controls and Procedures	36

PART II.	OTHER INFORMATION

ITEM 1.	Legal Proceedings	38

ITEM 1A.	Risk Factors	38

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

ITEM 5.	Other Matters	40

ITEM 6.	Exhibits	42

	SIGNATURES.	43

PART 1 – FINANCIAL INFORMATION

ITEM I.

FINANCIAL STATEMENTS

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

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

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

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

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

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

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

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

The composition of the Board of EFL Holland legally authorized to make decisions on behalf of, and the identity of the person(s) or entities legally authorized to vote the outstanding shares of, EFL Holland were misrepresented to Oryon, with different factions, advancing different agendas, vying for control of that company.

Certain persons interested in EFL Holland, including George Hatzimihail, a director of EFL Holland, and his son, Alex Hatzimihail, Chief Executive Officer of EFL Tech Pty. Ltd. (an Australian corporation) but upon information and belief with no formal legal position with or connection to EFL Holland (collectively, the “Interested Parties”), conspired with Tony Chahine (upon information and belief a/k/a Antoine Chahine-Badr) the Chief Executive Officer of Myant Capital Partners, Inc., an Ontario, Canada garment manufacturer (“Myant”), subsequent to the closing of the EFL Holland Transaction, to provide Myant with a significant equity interest in, and to enable it to obtain substantial influence over or control of the operations and business of, Oryon. The Board of Directors of Oryon (after prolonged negotiations, and after careful and deliberate consideration of Myant’s offers, its history of putting companies which it acquired into bankruptcy, and Tony Chahine’s history of involvement in numerous court cases) had previously rejected bids by Myant to purchase a controlling equity interest in Oryon as insufficient and not in the best interests of the creditors and stockholders.

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

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

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

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

Confirmation of Plan of Reorganization under Chapter 11 Bankruptcy

On November 7, 2014 (the “Confirmation Date”) the Court entered an order (the “Confirmation Order”) (Exhibit10.1), confirming the Modified First Amended Chapter 11 Plan under Chapter 11 of the Bankruptcy Code (the “Plan”) (Exhibit10.2), proposed by the Company and EFL Tech B.V., a Netherlands corporation and the majority shareholder of the Company (“EFL Tech”). The Plan is subject to certain conditions (described in Note 17 to the Consolidated Financial Statements) that must be satisfied prior to the effective date of the Plan (the “Effective Date”).

Financial Statements – General

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

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

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

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

ORYON TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2014 and December 31, 2013

	September 30,			December 31,
	2014			2013

ASSETS
CURRENT ASSETS
Cash	$	23,590		$	44,741
Accounts Receivable, net of allowance for
doubtful accounts of $0 and $0, respectivelyt		30,049			21,182
Inventory (see note 2)		133,860			100,931
Other current assets		-			8,716
Total current assets		187,499			175,570

PROPERTY AND EQUIPMENT, NET (see note 3)		9,481			13,736

INTANGIBLE ASSETS, NET (see note 4)		97,340			114,652

OTHER LONG-TERM ASSETS (see note 5)		17,132			16,697

TOTAL ASSETS	$	311,452		$	320,655

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	731,839		$	378,184
Deferred compensation (see note 6)		1,541			386,973
Current portion of promissory notes and other short-term debt (see note 7)		429,703			1,149,521
Other current liabilities (see note 8)		107,408			29,748
Total current liabilities		1,270,491			1,944,426

NOTES PAYABLE, NET (see note 9)		-			114,156

Total liabilities		1,270,491			2,058,582

SHAREHOLDERS' EQUITY
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none
issued and outstanding (see note 13)		-			-
Common stock, $0.001 par value, 600,000,000 shares authorized, 252,333,438
and 62,660,778 shares issued and outstanding (see note 13)		252,334			62,661
Paid in capital		12,058,271			10,277,865
Accumulated deficit		(13,269,644	)		(12,078,453	)
Total equity (deficit)		(959,039	)		(1,737,927	)

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	311,452		$	320,655

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

ORYON TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

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

(Unaudited)

	For the Quarter Ended September 30,						For the Nine Months Ended September 30,
	2014			2013			2014			2013
REVENUES
Product sales	$	37,290		$	46,576		$	88,996		$	99,559
Cost of goods sold		(16,257	)		(38,882	)		(26,469	)		(48,484	)
Gross profit		21,033			7,694			62,527			51,075
Other		-			-			-			-
Total revenues		21,033			7,694			62,527			51,075
OPERATING EXPENSES
Applications development
Wages		7,128			31,566			34,306			100,278
Payroll taxes and benefits		2,424			5,170			11,429			17,279
Materials, equipment, services		9,345			25,017			150,769			103,954
Office and overhead		1,176			2,025			9,513			13,660
Total applications development expense		20,073			63,778			206,017			235,171
Sales and Marketing
Wages		-			18,000			-			54,000
Payroll taxes and benefits		-			1,389			-			4,185
Overhead		-			5,640			14,829			13,561
Outside services		-			6,000			6,000			7,000
Travel and entertainment		-			-			8,076			8,070
Total sales and marketing expense		-			31,029			28,905			86,816
General and Administrative
Wages		2,000			39,540			83,435			179,538
Payroll taxes and benefits		5,234			22,033			31,593			128,885
Overhead		23,743			35,993			94,613			104,477
Outside services		75,566			106,208			744,244			327,387
Travel and entertainment		231			8,309			19,825			9,996
Total general and administrative expense		106,774			212,083			973,710			750,283
Depreciation and Amortization		7,125			7,695			21,566			23,362

Total loss from operations		(112,939	)		(306,891	)		(1,167,671	)		(1,044,557	)

OTHER INCOME (EXPENSE)
Interest income		-			-			17			-
Interest expense		(7,884	)		(9,904	)		(23,537	)		(28,461	)
Total other income (expense)		(7,884	)		(9,904	)		(23,520	)		(28,461	)

NET LOSS BEFORE TAX		(120,823	)		(316,795	)		(1,191,191	)		(1,073,018	)

INCOME TAXES (see note 12)		-			-			-			-

NET LOSS AFTER TAX	$	(120,823	)	$	(316,795	)	$	(1,191,191	)	$	(1,073,018	)

Loss per share: basic and diluted	$	(0.00	)	$	(0.01	)	$	(0.01	)	$	(0.02	)
Weighted average shares outstanding		252,333,438			62,660,778			225,893,097			62,660,778

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

ORYON TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Shareholders' Equity

For the Quarters Ended September 30, 2014 and 2013

	Shares		Common Stock, $0.001 par value		Paid in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit			Total
Balances at December 31, 2012		62,660,778	$	62,661	$	10,126,184	$	-	$	(10,686,133	)	$	(497,288	)

Operating Results for the quarter ended March 31, 2013										(425,478	)		(425,478	)
Stock-based compensation expense						77,418							77,418

Balances at March 31, 2013		62,660,778	$	62,661	$	10,203,602	$	-	$	(11,111,611	)	$	(845,348	)

Operating Results for the quarter ended June 30, 2013										(330,745	)		(330,745	)
Stock-based compensation expense						36,120							36,120

Balances at June 30, 2013		62,660,778	$	62,661	$	10,239,722	$	-	$	(11,442,356	)	$	(1,139,973	)

Operating Results for the quarter ended September 30, 2013										(316,795	)		(316,795	)
Stock-based compensation expense						17,157							17,157

Balances at September 30, 2013		62,660,778	$	62,661	$	10,256,879	$	-	$	(11,759,151	)	$	(1,439,611	)

Balances at December 31, 2013		62,660,778	$	62,661	$	10,277,865	$	-	$	(12,078,453	)	$	(1,737,927	)

Operating Results for the quarter ended March 31, 2014										(648,055	)		(648,055	)
Issuance of common stock, financing transactions		170,405,650		170,406		1,079,594							1,250,000
Issuance of common stock in settlement of liabilities		19,267,010		19,267		675,983							695,250
Stock-based compensation expense						12,949							12,949

Balances at March 31, 2014		252,333,438	$	252,334	$	12,046,391	$	-	$	(12,726,508	)	$	(427,783	)

Operating Results for the quarter ended June 30, 2014										(422,313	)		(422,313	)
Stock-based compensation expense						8,383							8,383

Balances at June 30, 2014		252,333,438	$	252,334	$	12,054,774	$	-	$	(13,148,821	)	$	(841,713	)

Operating Results for the quarter ended September 30, 2014										(120,823	)		(120,823	)
Stock-based compensation expense						3,497							3,497

Balances at September 30, 2014		252,333,438	$	252,334	$	12,058,271	$	-	$	(13,269,644	)	$	(959,039	)

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

ORYON TECHNOLOGIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

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

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

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

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

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

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

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

Organization and Basis of Presentation

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

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

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

Oryon filed a petition for protection under Chapter 11 of the U.S. Bankruptcy Code on May 6, 2014. At September 30, 2014, the Company had cash of $23,590 and had not yet achieved profitable operations. The Company has accumulated losses of $13,269,644 since its inception and expects to incur further losses in the development of its business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. The Company’s ability to reorganize under the protection of the Bankruptcy Court is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

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

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

Corporate History and the Merger

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

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

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

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

The EFL Transaction

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

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

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

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

1. Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

Revenue Recognition

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

Cost of Goods Sold

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

Use of Estimates

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

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

Cash and Cash Equivalents

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

Accounts Receivable and Allowance for Doubtful Accounts

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

Concentrations of Credit Risk

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

Inventory

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

Property and Equipment

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

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

Research and Development

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

Intangible Assets

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

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

Income Taxes

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

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

Stock-Based Compensation

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

Leases

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

2. Inventory

Inventory consists of the following:

	September 30,		December 31,
	2014		2013
Raw materials	$	82,529	$	88,486
Work in process		41,175		6,028
Finished goods		10,156		6,417
Total Inventory	$	133,860	$	100,931

3. Property and Equipment

Property and equipment consist of the following:

	September 30,			December 31,
	2014			2013

Leasehold improvements	$	7,279		$	7,279
Furniture and equipment		195,927			195,927
Property and equipment, gross		203,206			203,206
Accumulated depreciation		(193,725	)		(189,470	)
Net property and equipment	$	9,481		$	13,736

Depreciation expense was $1,355 and $1,924 for the three month periods ended September 30, 2014 and 2013, respectively, and $4,255 and $6,050 for the nine month periods ended September 30, 2014 and 2013, respectively.

4. Intangible Assets

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

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

As of September 30, 2014
Finite-Lived Intangible Assets	Amortization Period (Years)		Gross Carrying Amount		Accumulated Amortization			Net
Patents		15	$	320,795	$	(223,455	)	$	97,340

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

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

5. Other Long Term Assets

Other long term assets consist of the following:

	September 30,		December 31,
	2014		2013
Investment in subsidiaries	$	100	$	100
Security deposits		7,032		6,597
Licenses		10,000		10,000
Total other assets	$	17,132	$	16,697

6. Deferred Compensation

Deferred compensation consists of the following:

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

Effective September 1, 2011, employment agreements with certain executives were revised to provide for the indefinite deferral of unpaid wages until sufficient external funding was obtained. The aggregate deferred compensation as of December 31, 2013, was $231,104 and an additional $3,125 was deferred during the first quarter of 2014 between January 1, 2014 and January 21, 2014. As required by the Subscription Agreement, on January 21, 2014, the Company entered into Exchange Agreements by and between the Company and all persons who were owed deferred compensation. At the First Closing, pursuant to such Exchange Agreements, the Company issued an aggregate of 5,192,832 shares of Common Stock in exchange for the settlement and release of $187,383 in deferred compensation. Under the Exchange Agreements, the per-share exchange price for such debt was determined by the average of the closing prices of the Common Stock on the trading days commencing on December 1, 2013, and ending on January 20, 2014 (the day prior to the First Closing), which resulted in an exchange price of $0.036085 per share of Common Stock. The Company also paid the sum of $46,846 in cash to such creditors under the Exchange Agreement for the settlement and release of such amount of deferred compensation (for the settlement and release of a total of $234,229 of deferred compensation pursuant to such Exchange Agreements). The cash payment of $46,846 represented 20% of the total deferred compensation of $234,229 and provided the recipients with some liquidity to pay Federal employment taxes on the compensation Subsequent to completion of the Exchange Agreements, there were no deferred wages and the balance as of September 30, 2014, was $0.

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

As a result of the Company’s filing for bankruptcy protection on May 6, 2014, the Company terminated all employees. However, certain individuals continued to work on behalf of the Company on a volunteer basis with the understanding that they might possibly receive compensation in the event the Company was able to obtain additional financing and exit the bankruptcy process. Such individuals are aware that their services may not be compensated if those conditions are not achieved.

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

Other short-term debt consists of the following:

	September 30,		December 31,
	2014		2013
Current portion, promissory notes payable	$	-	$	53,738
Other short-term debt		307,145		318,395
Short-term advances		29,716		706,670
Accrued interest		92,842		70,718
Total	$	429,703	$	1,149,521

“Current portion, promissory notes payable”

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

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

During the second quarter of 2014, a customer advanced the Company $20,000, collateralized by certain of the Company’s equipment. It is anticipated that the Company will produce goods for the customer that will be delivered in lieu of repayment. The advance was documented with a promissory note and such note accrues interest at 10% annually ($647 accrued through September 30, 2014.

“Short-term advances”

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

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

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

8. Other Current Liabilities

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

9. Notes Payable, Net

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

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

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

10. Leases

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

Rent expense relating to the operating lease agreement was $19,791 for each of the three month periods ended September 30, 2014 and 2013 and $59,373 for each of the nine month periods ended September 30, 2014 and 2013.

As of September 30, 2014, the future minimum payments required under all operating leases with terms in excess of one year were as follows:

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

11. Commitments and Contingencies

Marcus v. Oryon, et. al.

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

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

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

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

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

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

Oryon intends to vigorously defend against the foregoing action.

Myant v. Oryon, et. al.

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

Oryon intends to vigorously defend against the foregoing action.

Other Commitments and Contingencies

As of September 30, 2014, none of the Company’s employees was covered by an employment agreement.

12. Income Taxes

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

	September 30, 2014

Net operating loss carryforwards	$	1,249,026

Depreciation		(2,184	)

Amortization		16,778

Accrued miscellaneous		(19,772	)

FMV warrants adjustment		182,025

Stock option compensation expense		123,482

Interest amortization		33,178

Total current deferred tax asset		1,582,533

Less: Valuation allowance		(1,582,533	)

Net current deferred tax asset	$	-

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

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

13. Capital

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

14. Equity Options and Warrants

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

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

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

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

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

At September 30, 2014, there were options exercisable for 6,358,774 shares outstanding at an average exercise price of $0.183 per share, consisting of fully vested options for 6,358,774 shares at an average exercise price of $0.183 per share.

Stock Options

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

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

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

	For the year ended December 31,
	2013					2012

	Shares			Weighted Average Exercise Price		Shares		Weighted Average Exercise Price

Outstanding at the beginning of the year		3,529,771		$	0.275		2,363,104	$	0.188
Granted		2,607,503		$	0.125		1,166,667	$	0.452
Exercised		-		$	-		-	$	-
Forfeited and expired		(240,000	)	$	0.311		-	$	-
Outstanding at the end of the year		5,897,274		$	0.183		3,529,771	$	0.275
Exercisable at the end of the year		5,397,274		$	0.183		2,879,771	$	0.255

The Company recognized total compensation expense related to the stock options of $3,497 and $17,157 during the three month periods ended September 30, 2014, and 2013, respectively, and $24,829 and $130,695 during the nine month periods ended September 30, 2014 and 2013, respectively. Compensation expense related to stock options is included in selling, general and administrative expenses in the consolidated statement of operations. Total unrecognized compensation expense related to unvested unit options was $-0- and $12,804 at September 30, 2014, and December 31, 2013, respectively.

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

As of September 30, 2014
		Options Outstanding				Options Exercisable

Exercise Prices		Number Outstanding		Weighted Average Years of Remaining Contractual Life		Number Outstanding
$	0.020		540,000		9.69		540,000
$	0.030		765,000		9.26		765,000
$	0.042		300,000		9.10		300,000
$	0.080		227,500		9.01		227,500
$	0.100		181,500		9.51		181,500
$	0.110		500,000		8.94		500,000
$	0.125		1,943,104		6.14		1,943,104
$	0.153		53,922		8.75		53,922
$	0.185		81,081		8.60		81,081
$	0.210		300,000		8.59		300,000
$	0.250		240,000		4.26		240,000
$	0.343		340,000		8.30		340,000
$	0.375		120,000		5.86		120,000
$	0.395		266,667		8.11		266,667
$	0.745		500,000		7.94		500,000
	Total		6,358,774		7.81		6,358,774

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

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

Warrants

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

	Number of shares potentially issuable		Weighted average exercise price

Issued in fulfillment of subscriptions		4,000,000		0.50
Issued to consultant		133,335		0.50
Exercised		-		-

Total shares potentially issuable as of September 30, 2014		4,133,335		0.50

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

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

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

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

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

	Assumption

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

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

15. Benefit Plans

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

16. Going Concern

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

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

17. Subsequent Events

The Company has evaluated subsequent events that occurred after September 30, 2014 through December 8, 2014, the date this report was available to be issued. Any material subsequent events that occurred during that time period have been properly recognized or disclosed in the Company’s financial statements.

Confirmation of Plan of Reorganization under Chapter 11 Bankruptcy

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

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

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

Material Features of the Plan

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

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

ORYON TECHNOLOGIES, INC.

Notes to the Consolidated Financial Statements (Continued)

September 30, 2014

(Unaudited)

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

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

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

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

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

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

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

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

ITEM 2.

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

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

Overview

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

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

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

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

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

Gross Profit and Other Revenues

	For the Quarter Ended September 30,
	2014			2013			Change from 2013 to 2014
Revenues		$			$			$		%
Product sales		37,290			46,576			(9,286	)	-19.9	%
Cost of goods sold		(16,257	)		(38,882	)		22,625		-58.2	%
Gross profit		21,033			7,694			13,339		173.4	%
Royalty and license fees		-			-			-
Other		-			-			-
Total revenues		21,033			7,694			13,339		173.4	%

Gross profit margin		56.4	%		16.5	%

Product sales decreased $9.3 thousand, or 19.9%, to $37.3 thousand for the three months ended September 30, 2014 from $46.6 thousand for the three months ended September 30, 2013. Gross profit and total revenues increased $13.3 thousand to $21.0 thousand, or 173.4%, from $7.7 thousand in the three months ended September 30, 2013, due to the increase in gross profit on product sales resulting from a decrease in the cost of goods sold as a percentage of product sales.

Cost of goods sold represented 43.6% of product sales revenues in the first three months of 2014 as compared to 83.5% in the first three months of 2013. Each of the Company’s sales is separately negotiated with the specific customer. The Company endeavors to obtain the highest sales price for its products that can be negotiated with the customer and does not establish sales prices based on a “cost plus” analysis. Therefore, the cost of goods sold as a percentage of product sales revenue can be expected to vary significantly from period to period depending on the specific customers’ product orders. In addition, product sales may include the cost of design and engineering services that have little or no cost of goods sold.

Operating Expenses-Overview

Total operating expenses for the three months ended September 30, 2014, decreased $180.6 thousand, or 57.4%, to $134.0 thousand, from $314.6 thousand in the three months ended September 30, 2013, as shown in the table below:

	For the quarter ended				For the quarter ended
	September 30, 2014				September 30, 2013				Change
		$	%			$	%			$		%
Total applications development exp.		20,073	15.0	%		63,778	20.3	%		(43,705	)	-68.5	%
Total sales and marketing exp.		-	0.0	%		31,029	9.9	%		(31,029	)	-100.0	%
Total general and administrative exp.		106,774	79.7	%		212,083	67.4	%		(105,309	)	-49.7	%
Depreciation and amortization		7,125	5.3	%		7,695	2.5	%		(570	)	-7.4	%
Total operating expenses		133,972	100.0	%		314,585	100.0	%		(180,613	)	-57.4	%

The primary reason for the decrease in total operating expenses is the 49.7% decrease in general and administrative expense, as discussed below. In general, operating expenses declined in all sectors due to the reduced level of corporate activity in the 2014 period as a consequence of the bankruptcy status of the Company.

Applications Development Expense

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

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

Sales and Marketing Expense

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

NM = Not Meaningful

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

General and Administrative Expense

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

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

Outside services expenses decreased $30.6 thousand, or 28.9%, to $75.6 thousand in the three months ended September 30, 2014 from $106.2 thousand in the three months ended September 30, 2013, as shown in the table below.

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

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

The primary reason for the decrease in outside services expense is the $11.3 thousand, or 37.6%, decrease in legal expenses in the third quarter of 2014 as compared to the third quarter of 2013. As discussed in Note 11 to the financial statements, the Company has been conducting vigorous legal defenses against two lawsuits. Although some of defense costs have been covered by insurance, the Company’s directors’ and officers’ insurance policy carries substantial deductible requirements.

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

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

Other expense categories such as consulting, payroll processing expenses and banking fees decreased from the comparable year period due to the reduced level of corporate activity resulting from the Company’s bankruptcy.

Other Income (Expense)

Interest expense decreased $2.0 thousand, or 20.4%, to $7.9 thousand for the three months ended September 30, 2014, from $9.9 thousand in the three months ended September 30, 2013, due to the lower principal amount of debt outstanding as a result of the full payment of the notes payable earlier in 2014, as reported in notes 7 and 9 to the financial statements. Interest expense for the reported periods consisted only of interest on promissory notes payable and other short-term debt.

Taxes

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

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

Gross Profit and Other Revenues


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


Gross profit margin		70.3	%		51.3	%

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

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

Operating Expenses-Overview

Total operating expenses for the nine months ended September 30, 2014, increased $134.6 thousand, or 12.3%, to $1,230.2 thousand, from $1,095.6 thousand in the nine months ended September 30, 2013, as shown in the table below:

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

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

Applications Development Expense

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

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

Sales and Marketing Expense

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

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

General and Administrative Expense

	For the Nine Months Ended September 30,
	2014		2013		Change from 2013 to 2014
General and Administrative Expense		$		$		$		%
Wages		83,435		179,538		(96,103	)	-53.5	%
Payroll taxes and benefits		31,593		128,885		(97,292	)	-75.5	%
Overhead		94,613		104,477		(9,864	)	-9.4	%
Outside services		744,244		327,387		416,857		127.3	%
Travel and entertainment		19,825		9,996		9,829		98.3	%
Total general and administrative exp.		973,710		750,283		223,427		29.8	%

General and administrative expense for the first nine months of the year increased by $223.4 thousand, or 29.8%, to $973.7 thousand from $750.3 thousand in the prior year comparable period largely due to (a) the $416.9 thousand increase in outside services expenses, as discussed below, offset by (b) the $96.1 decrease in wages along with the related $97.3 decrease in payroll taxes and benefits. The decrease in payroll taxes and benefits is largely due to a decrease in stock option compensation expense for employees and consultants to $24.9 thousand in the nine months ended September 30, 2014, from $111.1 thousand in the comparable period of 2013, a decrease of $86.2 thousand. Stock option compensation expense for directors is included in outside services expense, discussed below.

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

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

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

The primary reason for the increase in outside services expense is the $493.9 thousand, or 676.6%, increase in legal expenses in the first nine months of 2014 as compared to the first nine months of 2013. As discussed in Note 11, the Company has been conducting vigorous legal defenses against two lawsuits, while also incurring legal costs associated with the bankruptcy process. Although some of the legal defense costs have been covered by insurance, the Company’s directors’ and officers’ insurance policy carries substantial deductible requirements.

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

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

Other Income (Expense)

Interest expense decreased $4.9 thousand, or 17.3%, to $23.5 thousand for the nine months ended September 30, 2014, from $28.5 thousand in the nine months ended September 30, 2013, due to the lower principal amount of debt outstanding as a result of the full payment of the notes payable earlier in 2014, as reported in notes 7 and 9 to the financial statements. Interest expense for the reported periods consisted only of interest on promissory notes payable and other short-term debt.

Taxes

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

Liquidity and Capital Resources

Oryon filed a petition for protection under Chapter 11 of the U.S. Bankruptcy Code on May 6, 2014. The Company does not have sufficient cash on hand to meet its current obligations and anticipated cash requirements. See Notes 13, 16 and 17 of the Notes to the Consolidated Financial Statements. Not including capital expenditures and costs directly related to revenue generating projects, operating expenditures are expected to range between $100,000.00 and $150,000.00 per month. Management anticipates that an additional $1,500,000 to $3,000,000 will be necessary to fund operations and provide adequate working capital for the next twelve to twenty-four month period subsequent to the date of this report. The Company does not currently have any material commitments for capital expenditures as of the end of the current period.

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

Our current cash requirements are significant due to planned applications development and marketing of our current technology, and we anticipate generating additional operating monthly losses at least through the middle of 2015. In order to execute on our business strategy, we will require additional working capital, commensurate with the operational needs of our planned marketing, development and production efforts. Our management cannot guarantee that we will be able to raise sufficient amounts of working capital through debt or equity offerings, as may be required to meet our short-term obligations. Moreover, changes in our operating plans, increased expenses, acquisitions, or other events, may cause us to seek additional equity or debt financing in the future. We anticipate continued and additional marketing, development and production expenses. Accordingly, we expect to continue to use debt and equity financing to fund operations for the next twelve to twenty-four months, as we look to expand our asset base and fund marketing, development and production of our technology.

There are no assurances that we will be able to raise the required working capital on terms favorable to us, or that such working capital will be available on any terms when needed. Any failure to secure additional financing would limit our ability to continue as a going concern and force us to modify our business strategy. In addition, we cannot be assured of profitability in the future.

We are not aware of any unusual or infrequent events or transactions or any significant economic changes that materially affected or could materially affect the amount of our reported income from operations.

Sources and uses of funds

As of September 30, 2014, Oryon had cash and equivalents on hand of $23.6 thousand, and negative working capital of $1,083.0 thousand. Management of the Company recognizes that its cash on hand and working capital will not be sufficient to meet its anticipated cash requirements in the near term and is actively seeking additional capital funding. Any failure to secure additional financing would limit the Company’s ability to continue as a going concern and force management to modify the business strategy.

Oryon’s sales cycle timing varies depending on the type of customer being served. It can range from three months for certain specialty promotions to 12-18 months for certain branded products from first contact with a prospective customer until product sales revenues can be reported. During that period, Oryon works with the customer’s designers to cooperatively engineer an application of its patented technology into the customer’s final product. This requires substantial co-development with the customer’s personnel to meet the needs of the customer. Accordingly, Oryon must have sufficient capital to fund administrative overhead, sales and marketing efforts and staffing expenses for an extended period of time before cash is received from customers.

Net cash provided by (used in) operating activities

Net cash used in operating activities for the nine months ended September 30, 2014 increased by $554.1 thousand to a use of $1,110.3 thousand, as compared to a use of $556.2 thousand for the nine months ended September 30, 2013. The primary reason, aside from the significantly increased operating loss (see below), was the decreased aggregate change in the operating assets and liabilities that occurred in the first nine months of 2014, largely as a result of the EFL Transaction. In the nine months ended September 30, 2014, the aggregate changes in operating assets and liabilities resulted in a total source of cash of $12.4 thousand, as compared to cash provided of $362.8 thousand in the comparable period in 2013, a net reduced source of cash of $350.5 thousand. Under the terms of the Subscription Agreement, the Company was required to eliminate many of its obligations through settlement and release agreements (the “Exchange Agreements”). A significant portion of the change to operating liabilities is offset by the issuance of equity as described below under “Net Cash Provided by Financing Activities”.

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

Net cash provided by (used in) investing activities

No net cash was provided by (used in) investing activities in the nine month periods ended September 30, 2014 and 2013.

Net cash provided by financing activities

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

As required by the Subscription Agreement, on January 21, 2014, the Company entered into certain exchange and release agreements (each an “Exchange Agreement” and collectively, the “Exchange Agreements”) by and between the Company and each member of a group of unsecured creditors of the Company (including current directors and executive officers). At the First Closing, pursuant to the Exchange Agreements the Company issued an aggregate of 19,267,010 shares of Common Stock in exchange for the settlement and release of $695.3 thousand in unpaid and accrued debt to such creditors. Of the $695.3 thousand, $390.0 thousand was for the settlement of short-term advances and the remaining $305.3 thousand was for the settlement of operating liabilities including $187.4 thousand of deferred compensation, $60.7 thousand of deferred directors’ fees and $57.2 thousand of accounts payable.

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

Short-term advances in the nine months ended September 30, 2014, consisted of $20.0 thousand advanced to the Company by a customer in return for a promissory note bearing interest at 10% per annum and collateralized by certain of the Company’s fixed assets. The customer and the Company expect the advance to be repaid in whole or in part by the delivery of products to the customer from the Company related to purchase orders the customer previously delivered to the Company. In addition, during the quarter ended September 30, 2014, EFL advanced a total of $29.7 thousand to assist the Company in maintaining operational capabilities throughout the bankruptcy process. It is anticipated that these advances will be repaid at the time the Company exits bankruptcy from additional equity proceeds provided by EFL or other investors.

Contractual Obligations and Off-Balance Sheet Arrangements

Contractual Obligations

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

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

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

Off-Balance Sheet Arrangements

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

Critical Accounting Estimates

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

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

Recently Issued Accounting Pronouncements

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

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK

The Company does not have any market risk sensitive instruments.

ITEM 4.

CONTROLS AND PROCEDURES

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

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

In the light of management’s review of internal control procedures as they relate to COSO and the SEC the following were identified:

●

The Company has limited segregation of duties, which is not consistent with good internal control procedures.

●

The Company does not have a written internal control procedures manual that outlines the duties and reporting requirements of the Directors and any staff to be hired in the future. This lack of a written internal control procedures manual does not meet the requirements of the SEC or for good internal control.

●

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

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

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

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

Changes in Internal Control over Financial Reporting

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

PART II – OTHER INFORMATION

ITEM 1

LEGAL PROCEEDINGS

The information regarding the Company’s legal proceedings is provided in Notes 11 and 17 to the Consolidated Financial Statements provided in Part I of this filing, which Notes are specifically incorporated into this Part II by reference.

ITEM 1A

RISK FACTORS

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

ITEM 2

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Investment by EFL Tech B.V.

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

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

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

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

In connection with the foregoing issuance of shares of Common Stock (and the Additional Shares (as defined below), if any) to EFL Tech under the Subscription Agreement, the Company and EFL Tech entered into a Registration Rights Agreement - Subscription Securities, effective on the First Closing, pursuant to which the Company agreed to provide EFL Tech with rights to request registration of such shares under the Securities Act of 1933, as amended. The foregoing description of such Registration Rights Agreement is qualified in its entirety by reference to the full text of such agreement, which is attached to the Company’s Annual Report on Form 10-K, filed with the Commission on March 7, 2014, as Exhibit 10.2.

No underwriter was involved in the above sale of shares of Common Stock.

The foregoing shares were issued (and in the case of any Additional Shares (as defined below), will be issued) in reliance upon an exemption from registration set forth in Regulation D and/or Section 4(2) of the Securities Act, which exempts transactions by an issuer not involving a public offering.

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

Under the Subscription Agreement, the Company has the option of entering into additional Exchange Agreements with other holders of outstanding debt of the Company for the purpose of exchanging shares of Common Stock for the settlement and release of additional amounts of unpaid and accrued debt of the Company. The Company has not made a decision regarding whether to enter into any such additional Exchange Agreements. If the Company were to enter into one or more Exchange Agreements in the future, the Company would issue to EFL Tech that number of additional shares of Common Stock such that, after issuing shares of Common Stock in exchange for Company debt under such Exchange Agreements, EFL Tech would continue to hold 75% of the fully diluted shares of Common Stock (the “Additional Shares”). Under the Subscription Agreement, the cash and non-cash consideration described above for the issuance to EFL Tech of shares of Common Stock at the First Closing, the Second Closing and the Third Closing will apply to and suffice in all respects for the issuance by the Company of all Additional Shares, and EFL Tech will not provide the Company with any additional consideration in connection with the issuance by the Company of any such Additional Shares to EFL Tech.

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

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

No underwriter was involved in the sale of the above shares of Common Stock.

Cancellation of Shares in Connection with the Confirmation of Plan of Reorganization under Chapter 11 Bankruptcy. Information regarding the surrender and cancellation of shares in connection with the Confirmation of the Company’s Plan of Reorganization is provided in Note 17 to the Consolidated Financial Statements provided in Part I of this filing, which Note 17 is specifically incorporated into this Part II by reference.

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

M. Richard Marcus, the former Chief Executive Officer of the Company and certain of his affiliates, MRM Acquisitions, LLC and Oryon Capital LLC (collectively, “Marcus”), will surrender for cancellation all of their shares of Common Stock in the Company, consisting of 6,205,227 shares of Common Stock owned by Oryon Capital, LLC, 18,289,700 shares of Common Stock owned by MRM Acquisitions, LLC, and 1,300,310 shares of Common Stock owned by M. Richard Marcus, for a combined total of 25,795,237 shares of Common Stock.

Issuance of Shares in Connection with the Confirmation of Plan of Reorganization under Chapter 11 Bankruptcy. Information regarding the issuance of shares in connection with the Confirmation of the Company’s Plan of Reorganization is provided in Note 17 to the Consolidated Financial Statements provided in Part I of this filing, which Note 17 is specifically incorporated into this Part II by reference. The Plan provides for payment of the undisputed pre-petition claims listed in the Company’s Plan and all post-petition payables from (A) the proceeds of a $1.37 million cash infusion made by EL Flexible Signs or its affiliates, in exchange for 80 million newly-issued shares of common stock, $0.001 par value (the “Common Stock”), of the Company and a $250,000 payment by EFL Tech, constituting the final payment under the subscription agreement dated January 21, 2014 pursuant to which EFL Tech will be issued 129,832,877 newly-issued shares of Common Stock as specified therein and (B) cash on hand.

As of the Effective Date, the total issued and outstanding shares of Common Stock of the Company will be 428,345,951, after giving effect to the issuance of 209,832,877 shares of Common Stock to EFL Tech and EL Flexible Signs or its assigns and the surrender of 33,820,364 shares of Common Stock by Marcus and the Surrendering Parties.

The issuance of such shares of Common Stock will be exempt from registration under the Securities Act pursuant to (i) Section 1145 of the Bankruptcy Code, which generally exempts from such registration requirements the issuance of securities under a plan of reorganization, and/or (ii) Section 4(a)(2) of the Securities Act because the issuance does not involve any public offering.

Change in Control. Effective at the First Closing, on January 21, 2014, EFL Tech became the holder of 51.0% of the Company’s issued and outstanding shares Common Stock under the terms of the Subscription Agreement, and, on February 28, 2014, became the holder of 63.0% of the Company’s shares of Common Stock on a fully diluted basis (reflecting the occurrence of the Second Closing). After the Plan of Reorganization is effective, EFL Tech will hold 70.1% and EL Flexible Signs will hold 18.7% of the shares of Common Stock issued and outstanding.

ITEM 5

OTHER MATTERS

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

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

2. Richard K. Hoesterey, an existing independent director, a Member of the Compensation Committee of the Board, and the Chairman of the Nominating and Governance Committee of the Board, was appointed Chairman of the Compensation Committee of the Board, replacing Mr. Ross as Chairman of such committee.

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

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

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

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

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

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

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

ITEM 6

EXHIBITS

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

Exhibit No.		Description

10.1		Order Confirming Debtors’ Chapter 11 Plan of Reorganization (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.2		Plan Proponents’ Modified First Amended Chapter 11 Plan (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.3		Settlement Agreement dated September 14, 2014 (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.4		Secured Promissory Note dated November 7, 2014 (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.5		Intellectual Property Security Agreement dated November 7, 2014 (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on November 13, 2014)
10.6		License Agreement*
31.1		Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2		Certification of Principal Financial Officer and Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2		Certification of Principal Financial and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS		XBRL Instance Document*
101.SCH		XBRL Taxonomy Extension Schema*
101.CAL		XBRL Taxonomy Extension Calculation Linkbase*
101.DEF		XBRL Taxonomy Extension Definition Linkbase*
101.LAB		XBRL Taxonomy Extension Label Linkbase*
101.PRE		XBRL Taxonomy Extension Presentation Linkbase*

___________

Filed herewith.

SIGNATURES

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

	ORYON TECHNOLOGIES, INC.
	(Registrant)

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

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

Attached files

Oryon Technologies, Inc. Reports

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