Epcylon Technologies, Inc. - FORM 10-K

Attached files

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EX-31.1 - EXHIBIT 31.1 - Epcylon Technologies, Inc.	exhibit31-1.htm
EX-32.1 - EXHIBIT 32.1 - Epcylon Technologies, Inc.	exhibit32-1.htm
EX-32.2 - EXHIBIT 32.2 - Epcylon Technologies, Inc.	exhibit32-2.htm
EX-31.2 - EXHIBIT 31.2 - Epcylon Technologies, Inc.	exhibit31-2.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-K

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: May 31, 2015

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

For the transition period from _________ to _________

Commission File Number: 000-53770

EPCYLON TECHNOLOGIES INC.
(Exact Name of Registrant as Specified in its Charter)

Nevada	27-0156048
(State of other jurisdiction of	(IRS Employer Identification
incorporation or organization)	Number)

34 King Street East, Suite 1010
Toronto, Ontario, Canada M5C 2L9
(Address of principal executive offices)

(416) 479-0880
(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, par value $.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.

Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K: [ ]

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 definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer [ ]	Accelerated Filer [ ]
Non-Accelerated Filer [ ]	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]

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $11,429,795 at November 30, 2014.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: The Issuer had 168,476,221 shares issued at September, 10 2015.

TABLE OF CONTENTS

ITEM 1: BUSINESS

ITEM 1A: RISK FACTORS

ITEM 1B: UNRESOLVED STAFF COMMENTS

ITEM 2: PROPERTIES

ITEM 3: LEGAL PROCEEDINGS

ITEM 4: MINE SAFETY DISCLOSURES

ITEM 5: MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 6: SELECTED FINANCIAL DATA

ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A: CONTROLS AND PROCEDURES

ITEM 9B: OTHER INFORMATION

ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11: EXECUTIVE COMPENSATION

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

ITEM 14: PRINCIPAL ACCOUNTING FEES AND SERVICES

ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

SIGNATURES

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in this Report may be “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. However, as the Company intends to issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on these safe harbor provisions. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in this Report, including the risks described under “Risk Factors,” “Management’s Discussion and Analysis” and “Our Business.”

There are important factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors, include, without limitation, the following: our ability to develop our technology platform and our products; our ability to protect our intellectual property; the risk that we will not be able to develop our technology platform and products in the current projected timeframe; the risk that our products will not achieve performance standards in tests; the risk that the testing process will take longer than projected; the risk that our products will not receive regulatory approval; the risk that the regulatory review process will take longer than projected; the risk that we will not be unsuccessful in implementing our strategic, operating and personnel initiatives; the risk that we will not be able to commercialize our products; any of which could impact sales, costs and expenses and/or planned strategies. Additional information regarding factors that could cause results to differ can be found in this Report and in our other filings with the Securities and Exchange Commission.

The Company disclaims any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments, except as required by the Exchange Act. Unless otherwise provided in this Report, references to the “Company,” “Epcylon,” the “Registrant,” the “Issuer,” “we,” “us,” and “our” refer to Epcylon Technologies Inc.

PART I

ITEM 1: DESCRIPTION OF BUSINESS

Introduction

Epcylon is a financial technology company, based in Toronto, Ontario that develops proprietary software platforms for the financial industry, specializing in the capital markets vertical. Epcylon’s vision is to enable profitable trading for everyone. It will achieve this vision through its mission statement of providing financial freedom and a higher standard of living by developing empowering tools that make trading easier.

We are marketing the acquired Stealth Trader software through various distribution channels. The software is an intelligence-based system that predicts future behavior of securities among various asset classes, including equities, options, futures, currencies, and exchange-traded funds (ETFs). We will be licensing our financial software to financial institutions and individuals as a source of revenue. Our financial software will also be distributed through online resellers and affiliates.

The Stealth Trader software platform has been commercialized for both institutional traders and retail traders. Stealth Trader is an approved Bloomberg App Portal available on Bloomberg terminals worldwide. We are currently in negotiations to distribute the Stealth Trader platform to various institutions through integration of their internal technologies.

Stealth Trader is a mathematical and cognitive psychology based market visualization instrument that filters complex market information to explicitly depict the sentiment and perception of market participants through the electronic order book.

In addition to Stealth Trader, is the completion of the Colony Auto-Trader (“Colony”). The Colony is a fully automated trading system that does not involve human interaction other than for system risk management.

Corporate Development and Business Summary

We were incorporated in the State of Nevada on April 22, 2009, our subsidiary Mobilotto was incorporated in the province of Ontario in September 2008, our subsidiary Delite Americas Inc. was incorporated in Ontario, Canada on July 8, 2013, and our subsidiary Omega Smartbuild Americas Inc. was incorporated in Ontario, Canada on July 8, 2013. On May 13, 2009 we acquired all of the issued and outstanding shares of Mobilotto (including all of the intellectual property of the mobile lottery software application).

Amendment to Articles of Incorporation

Effective as of August 5, 2013, our Articles of Incorporation were amended as follows:

1.	Article 1 of our Articles of Incorporation was amended to read: “Name of Corporation: Epcylon Technologies Inc.” We changed our name as part of an effort to re-brand ourselves.

Effective as of April 3, 2014, our Articles of Incorporation were amended as follows:

1.	Article 3 of the Articles of Incorporation was amended by to creating and authorizing 15,000,000 shares of blank check preferred stock, par value $0.001, in connection with our proposed restructure.

Designation of Series A Preferred Stock

On April 7, 2014, we filed a Designation of Series A preferred stock with the Nevada Secretary of State (the "Designation"), creating 10,000,000 shares of Series A preferred stock at $0.001 par value. The Designation provides for certain rights and preferences as follows:

(a) The initial price of each share of Series A Preferred Stock shall be $0.20.

(b) Any and all revenue earned on a quarterly basis as a result of investment of the funds in a restricted account shall, upon approval by our Board of Directors, be distributed on a quarterly basis to the holders of the Series A preferred stock in accordance with their proportionate equity holdings of Series A preferred stock within ten days from the end of such quarter (the "Earned Dividend"). The amount of such Earned Dividend shall be determined in accordance with the respective account management agreement entered into between us and the respective holder of the shares of Series A preferred stock. If we are to pay such Earned Dividend, the holder of the Series A preferred stock may elect to take payment of such Earned Dividend in the form of either cash or issuance of shares of common stock rather than a cash dividend. Such price per share shall be the average trading price of our shares on the OTCQB during the preceding five business days prior to payment of the Earned Dividend.

(c) The holder of the Series A Preferred Stock shall at their option convert the shares of Series A Preferred Stock into shares of common stock on a one preferred share for 1.333333 common share basis.

(d) We may by providing a five day notice to the holder of the Series A Preferred Shares redeem such Series A Preferred Shares at a redemption price of $0.20 per share plus all unpaid and accrued Earned Dividends. In the event of receipt of the Notice of Redemption by the holder of the Series A Preferred Shares, the holder shall have five business days from date of receipt to convert into shares of common stock.

(e) Each holder of outstanding shares of Series A Preferred Stock shall be entitled to cast the number of votes equal to the number of Series A Preferred Stock multiplied by 100. No further designations of preferred shares junior to the Series A Preferred Stock shall have voting rights equal to or higher than the Series A Preferred Stock without the 2/3's consent of all shares of Series A Preferred Stock issued and outstanding.

Designation of Series B Preferred Stock

On September 19, 2014, we filed a Designation of Series B preferred stock with the Nevada Secretary of State creating 5,000,000 shares of Series B preferred stock at $0.001 par value. The Designation provides for certain rights and preferences as follows:

(a) The holders of Series B Preferred Stock shall be entitled to receive dividends only when, as and if declared by the Board of Directors, in its sole discretion.

(b) Upon our liquidation, dissolution or winding up, whether voluntary or involuntary, after any distribution or payment shall be made to the holders of any stock ranking senior to the Series B Preferred Stock, the holders of the Series B Preferred Stock shall be entitled to be paid out of our assets an amount equal to the subscription price (the "Series B Liquidation Amount"). After the payment of the full applicable Preference Value of each share of the Series B Preferred Stock as set forth herein, our remaining assets legally available for distribution, if any, shall be distributed ratably to the holders of our Common Stock. If upon any such liquidation, dissolution or winding up, our assets available for distribution to our stockholders shall be insufficient to pay the holders of shares of Series B Preferred Stock the full amount to which they shall be entitled under this subsection (a), the holders of shares of Series B Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full. The amount deemed paid or distributed to the holders of our capital stock upon any such merger, consolidation, sale, transfer or other disposition shall be the cash or the value of the property, rights or securities paid or distributed to such holders by us or the acquiring person, firm or other entity.

(c) The holder of the Series B Preferred Stock shall at their option convert the shares of Series B Preferred Stock into shares of common stock on a one preferred share for one common share basis. Shares of Series B Preferred Stock are anti-dilutive to reverse splits, and therefore in the case of a reverse split, are convertible to the number of common shares after the reverse split as would have been equal to the conversion rate established prior to the reverse split.

(d) We may by providing a five day notice to the holder of the Series B Preferred Shares redeem such Series B Preferred Shares at a redemption price of equal of the subscription price. In the event of receipt of the Notice of Redemption by the holder of the Series B Preferred Shares, the holder shall have five business days from date of receipt to convert into shares of common stock.

(e) Each holder of outstanding shares of Series B Preferred Stock shall be entitled to cast the number of votes equal to the number of Series A Preferred Stock. No further designations of preferred shares junior to the Series B Preferred Stock shall have voting rights equal to or higher than the Series B Preferred Stock without the two-third's consent of all shares of Series B Preferred Stock issued and outstanding.

STEALTH TRADER SOFTWARE

Stealth Trader is the first real-time and revolutionary market sentiment and traders' perception cockpit based on a unique algorithm that analyzes the bid ask flow rate and other trading activities for a given security.

Stealth Trader quantitatively measures tick-by-tick changes throughout the trading day in the electronic order book of any security that trades with an electronic order book.

Stealth Trader uniquely presents current market information using the flow rate of buy/sell orders placed in real time by all traders on the Exchange Electronic Trading Book. These orders are weighted by their proximity to Inside Bid/Ask levels, their size, and the time elapsed since the order origination.

Stealth Trader provides information, in a proprietary format, that a trader requires and provides in a way enabling the trader to draw instant and accurate conclusions than he would otherwise derive based on charting and other indicators.

Stealth Trader is well positioned to execute on this objective.

Competitive Advantages of Stealth Trader:

•	First real-time market sentiment and perception indicator for financial markets.
•	Game-changing tool that empowers traders, giving them a competitive advantage.
•	Interface designed to quickly process complex data to enable faster trading decisions.
•	Identifies optimum entry and exit points for securities across multiple asset classes.
•	Chart-free trading tool that eliminates the noise and indecisions from lagging indicators.
•	Applicable for all securities in any financial market.

Our three (3) core packages as part of offering the Stealth Trader platform include - Stealth Trader – Basic Stealth Trader - Professional, and Stealth Trader - Ultimate. These core products will be augmented with additional products and services that will include but not be limited to the following:

•	Monthly subscription to a market newsletter including a daily trade sheet.
•	A comprehensive education program for new, intermediate, and experienced traders based on auction logic and our proprietary methodologies.
•	A live trade room with real time market analysis and trading ideas.
•	An alert service for trades via the mobile application, email, and text.
•	Trading workshops.
•	Shadow Trading Accounts.
•	Creation of an affiliate and reseller channel consisting of ambassadors and champions using our trading methodology and education curriculum.

Stealth Trader was recently launched in early March, 2015 with customers previously licensing our software through the monthly subscription model.

THE COLONY AUTO-TRADER

The Colony Auto-Trader (“Colony”) is an intelligence-based proprietary and automated trading algorithm that trades securities intraday by exploiting market inefficiencies through the use of complex mathematics/statistics. The Colony can be used to successfully trade securities across various asset classes including equities, options, futures, currencies, fixed income, and exchange-traded funds. It is a perfectly scalable trading platform that can trade securities on multiple markets globally.

The Colony platform can be used for any capital market around the world provided securities traded satisfy minimum scanning/filtering requirements (i.e., volatility, narrow bid-offer spreads, daily volume thresholds, liquidity). The Colony maximizes profits through speed of execution and automation.

The Colony does not involve human interaction to generate trades; instead, it automatically executes trades based on previously established filters. It has capacity of trading up to two-thousand (2,000) securities, while operational optimization and effectiveness is limited to 40-60 securities for a given capital market, on any given trading day. Although the Colony eliminates the need for human decision-making, it does require a human to manage various risks throughout the day. A risk manager will be overseeing the Colony on a daily basis to ensure its performance is continually optimized.

Epcylon will establish a discretionary trading fund either within Epcylon or as a separate and independent entity. The goal is to use the fund to trade multiple capital markets, across multiple asset classes, in multiple time zones, while exploiting intraday inefficiencies in securities prices.

The Colony is not available to the public and is strictly used for internal purposes to generate revenue for the Company.

MOBILE LOTTERY SOFTWARE

Our MOBI branded products are currently being customized for various charitable organizations to integrate the product suite with in-house technologies. Our MOBI branded products aim to become a leading developer of global mobile engagement services - mobile marketing, mobile commerce and mobile gaming. Through the MOBI branded products, we focus on social good and our contribution towards charity. The product suite utilizes efficient and highly interactive broad-based participation games (such as draw based lotteries) to promote responsible play and support charitable causes. The brand continues to have exploratory discussions with various charities to seek partnerships.

We will provide lottery operators worldwide with a complete solution to enable consumers to play lottery and other games of chance and skill via mobile devices. For the players, the solution makes mobile-play much more exciting and convenient compared to paper ticket play. For the operator, MOBI can deploy in 60 days, without capital costs, and expand revenues by reaching mobile savvy players and analytically-enriched in-game marketing.

Competitive Advantages - MOBI

1.	Our mobile technologies function as an application which facilitates the following:

	•	Controlled end-user experience interactive graphical user interface (GUI), matched to phone capabilities;

	•	Includes secure interface standards;

	•	Enhanced eCommerce capabilities; and

	•	Low cost per message.

2.	Our product has the ability to identify the geographical location of players. This patent-pending process limits out of region play for purposes of controlling compliance with jurisdictional legal requirements.

3.	Our application has been tested on a number of different phone types:

	•	A development plan is underway to cover most of the popular smart model cellular telephones;

	•	Current development is underway to enable Windows Mobile platforms; and

	•	Non-smart phones using conventional technologies have development potential.

4.	Our application has been built to integrate with existing on-line offerings without duplicating processes or databases to create an efficient, seamless mobile and on-line gaming experience.

5.	We believe that Phase 2 gaming (including pro-line, sports select, and multiplayer games) could be developed and accommodated on our system.

6.	Our product provides the lottery operator with a non-intrusive, 2-way communication capability which includes screen pop-ups, device start-up screen, and survey capability, as well as enhanced personalized marketing opportunities.

7.	We provide full screen notification of lottery results.

8.	Our application icon resides on the mobile device and application upgrades are automatic.

9.	Our working demonstration models are developed and are currently operable for assessment by lottery operators.

Marketing Plan

The Competitive Risks Associated with Our Technology And Business

	•	We are a development stage company, with limited resources to continue to develop our business;

	•	Our lotto system still requires the software development of the player registration, financial settlement and player messaging components;

	•	We will be dependent on third-party software development companies to develop the remaining components for our full feature system;

	•	There is no assurance that our products will operate in the manner for which it is intended;

	•	The cost of development and realization of the additional components to our software applications may be greater than we anticipate;

	•	There is no assurance that our mobile lottery software will be certified for use by the Gaming Standards Association or lottery operators;

	•	There is no assurance that we will be able to market and sell our software applications;

	•	There is no assurance that our mobile lottery software will be acceptable to lottery operators; and

	•	Larger suppliers in the industries that we operate who have more resources than we do could decide to enter the businesses and compete more effectively for market share.

We expect to compete in the global market on the basis of being able to provide a full feature mobile lottery application that we have designed to include the following components: secure player registration and authorization, number selection, settlement, winning number notification and direct-to-customer messaging capability for enhanced marketing opportunities. There are some competitors who are currently offering and developing mobile lottery applications, however, we are not aware of any who are offering solutions with the same full feature characteristics as our product. We are not yet in a competitive position in the global market because we have not completed the development of all components of our full featured mobile lottery software application. We expect to complete our full featured mobile lottery software application within approximately nine months from instructing our software development partner to commence work. We anticipate that lottery operators will make their selection of vendors and service providers on the basis of considerations involving security, product performance, ease of use by the lottery operator and by end-users, as well as ongoing service support for the lottery operator and end-users. Upon completion of our full feature mobile lottery application, we believe that we will be able to compete globally in a manner which will be competitively attractive to lottery operators, however, the need for continuing development of our software application and the plans for commercial sale of our product are subject to many uncertainties that present material risks to investors.

Industry Overview

Stealth - Trading Industry Overview

The online trading market comprises of investors with a wide range of trading activities, demographic profiles, and risk tolerances. We can define investors in the following three categories:

Traditional investors. Long-term investors with sporadic trading activity (<3 trades per month). This defines the largest proportion of self-directed investors.
Active investors. Investors trading between 3 and 10 trades per month. Active investors tend to use a wider range of tools as compared to traditional investors.
Active traders. Investors trading over 10 trades per month. This group of investors tends to be more self- directed and is less interested in advice. Occasionally, firms will define a fourth segment for those who trade hundreds of times per month. These “hyperactive traders” tend to consist of individuals who trade for a living or may trade on family accounts.

Over the past several years, the number of trading platforms has expanded, leading to a fragmented market. Since 2010, a number of firms targeting the active investors and active traders have emerged. There are now a number of firms focused specifically on options, futures, and equities trading, including eOption, OptionsHouse, OptionsXpress (now owned by Schwab), and TradeMonster. Additionally, a number of bank brokers, insurance groups, mutual fund providers, and private wealth managers have enhanced their online trading capabilities to supplement their other wealth management services. These firms use their online trading capabilities to target their existing customer base and try to capture assets previously held at stand-alone discount brokers via cross-selling into different accounts. These online services are also aimed at banking customers with too \few assets to hold advisory-based accounts. The goal is to capture these customers early, allow their wealth to grow, and then cross-sell into fee-based accounts once they have more wealth.

The online trading industry can be further broken down into to 2 main categories.

	1.	Online Brokerage companies with execution capabilities.
	2.	Online trading education companies with charting/indicator based software without execution capabilities.

The first category of online brokerage companies with trade execution capabilities main revenue is derived from commissions and fees from trade execution. The second category of trading education companies with charting/indicator software derive their revenue from trading courses/service and/or monthly software as a service subscription models.

Relevant Market Size

The industry estimates that the US self-directed investment market reached just over 40 million investors in 2012. The number of self-directed accounts continues to increase, despite challenging market conditions for retail investors. Over the past year, the market has grown at a moderate pace of 5%. Traditional investors make up the bulk of the self-directed population (52%), although this population continues to rebalance towards active investors and active traders.

Traditional investor growth of 3% in 2012 represents a modest rate as compared to active investors and active traders. The active trader segment continues to witness the most aggressive growth rates of 14% and 12% over the last two years. However, this market remains a small segment of the total self-directed population, comprising only 6%. The active investor market has demonstrated growth rates of 7% and 6%, respectively, over the past two years. By end 2012, the active investor market reached nearly 17 million investors, making up 42% of the self-directed market. Both active investors and active traders present a significant opportunity for firms, with aggressive growth rates as compared to the traditional investors.

Overall the US self-directed market represents a fraction of the global market share of investors with retail investment holdings in the trillions. The fact that the industry worldwide is so fragmented is that the industry itself is so large with continued annual exponential growth.

The research is clear. The number of self-directed accounts continues to increase, despite challenging market conditions for retail investors. Investors want greater control over their investments and as a result, a self-directed channel is no longer an option for firms hoping to attract new clients or retain existing ones.

The convergence of services and products within the online trading market have changed the way investors view banking and investments. Investors have become much more active with their investment portfolio. This has implications for the industry as a whole; there is a predominant shift from traditional advisor-based firms, to online brokerages and banking institutions. How do you differentiate an online trading firm? Our research indicates a core driver within the convergence remains a focus on client retention and customer experience.

A few key statistics for reference:

The US self-directed market reached over 40 million investors in 2012 and the active investor market alone is now made up of nearly 17 million individuals (42%), growing at a rate of 7% and 6% over the last two years, respectively. Active traders witnessed the most significant progress with 15% and 12% growth.
Among online brokers, mobile trades via mobile apps have more than doubled since the beginning of 2011, and have grown 50-70% from year-end 2011 to year-end 2012.
The online brokerage channel became an important business segment for full service brokers and bank- brokers who are integrating online brokerage platform to match business’ strategy and enhance their offering by providing unique branding and trading experience that differentiate themselves from the competition

Competitive analysis

Over the past several years, retail investors have demanded an increasingly diverse set of products to trade with. Equities, mutual funds, ETFs, and fixed income products are common, trading options products has also become increasingly common.

For example, a number of online brokerage firms have entered the FX market so as to compete with the traditional FX online brokers. Active trader firms such as TradeStation, Lightspeed, and Interactive Brokers have allowed customers to trade currencies alongside other products from a single account. In order to gain traction in the FX market, TradeStation purchased IBFX in November 2011. Increasingly, firms with predominantly traditional and active investor clients, but who are looking to gain greater traction in the active trader market, are offering FX as well. For example, Fidelity, E*Trade, and TradeKing now offer currency trades to their customers. In addition, Schwab has introduced its Global Trading Account where investors can trade stocks on foreign markets in their local currencies. The account also provides real-time quotes during foreign market hours.

As has been noted, many of the larger brokers with considerable size, scale, and a branch presence are expanding their product selection to offer fee-based products such as model portfolios and managed accounts. Firms offering these products are taking advantage of technology to offer a “hybrid” version of service and advice. To complement these products, firms are offering a greater number of tools around portfolio analysis and retirement planning, among others.

The following is an overview of Stealth Analytics competitors. There is a vast array of companies that service this industry with new companies entering the space continually. They are essentially broken down into two main categories, although both generally will offer a cross section of products and services. Basically they can be separated by those with executions platforms and those with software/services/education without execution platforms.

Below is a comparison chart of products and services of the top competitors within the industry as rated by users at www.TopTenReviews.com . Due to the vast number of competitors within the industry, we feel that this list constitutes the largest competitors.

Competitors:

Intellectual Property

We have Intellectual Property that gives us an advantage over our competitors. Our IP includes real time psychological mathematical algorithms that measure market participant’s sentiment, perception, and commitment on the electronic order book.

Research and product development

Stealth Analytics© is the first real-time market sentiment and traders' perception cockpit. Based on a unique algorithm that analyzes the bid ask flow rate and other trading activities for a given security.

Over a period of 13 years, under the guidance of Dr. Alex Bogdan, a team of up to 60 developers created a number of unique mobile solutions. Stealth Analytics© was developed as a unique platform for professional traders and investment houses.

The Stealth^© system quantitatively measures tick by tick changes throughout the trading day in the electronic order book of any security that trades with an electronic order book.

The Stealth^©platform is a unique way of presenting current market information using the flow rate of buy/sell orders placed in real time by all traders on the Exchange Electronic Trading Book. These orders are weighted by their proximity to Inside Bid/Ask levels, their size, and the time elapsed since the order origination.

Mindful of the pace of modern electronic markets, our software programmers sought to develop a system that would enable a trader to anticipate changes in market sentiment instantly and profit by reacting immediately.

Stealth^©provides information, in a proprietary format, that a trader requires and provides that information in a context that allows that trader to quickly draw better conclusions than he would ordinarily using traditional numbers and charts and indicators.

Stealth Development and History:

1992 - 1993 Concept of the sentiment tracking has been developed. This ground-breaking discovery has forever changed the way the markets are analyzed. In addition to Technical and Fundamental analysis the third, equally important type of market analysis has been established - Sentiment Analysis.
1993-1994 The 3-D graph of the trader’s sentiment was designed and tested in real market conditions. This analysis tool has been tested on the currency trading floor of the Royal Bank and exhibited high level of accuracy. The floor traders called it the “night goggle” as the Sentiment Indicator allowed them to see the market moves that the traders have not been able to see before.
1994 - 1995 Formulas for Bid/Ask, Thrust and Head-Room gauges was developed. These three essential indicators allowed looking at dynamic characteristics of the sentiment development from a totally different angle enhancing the dynamic picture of the Sentiment Analysis.
1995-1996 The first real-time market navigator was built and implemented for trading. It could only analyze one stock at the time; however, it was the first complete system for the real time sentiment analysis combined with the ability of on-line execution and position tracking
1996 - 1999 The system for simultaneous trading of up to 10 stocks was designed and tested in trading of NASDAQ stocks. This milestone development paved the way for all the systems that Market Guidance Systems, Inc. develops today. Its innovative design, cockpit like interface and all its real time gauges were extremely accurate and reliable. This system has been tested by over 100 professional traders and earned the reputation of a 'spitfire' due to its active style of trading
1999-2000 The software for connecting the RTN system to a direct access trading platform has was conceded, designed and built. The first application interface has enabled traders to place their order directly to the markets via variety of brokers. This feature has dramatically enhanced the efficiency of RTN and opened the door for the very high order execution reliability.
2000 - 2001 Trading Zone, Commitment Gauge, Wizard, Scanner, Multiple Time Frame Sentiment Gauges was developed. This product has market a completely new class of RTN products equipped with all necessary support systems pulling together all the information needed for a comprehensive market analysis including Technical, Fundamental and Sentiment gauges. The visual interface theme has been changed to better much the style suitable for institutional trading.
2001 - 2002 A proprietary Direct Access execution platform was developed and connected to RTN via one integrated screen. The partnership with Interactive Brokers - one of the pioneers of universal high-speed electronic trading platforms enabled the development of a high level order management system that became a standard for all latest versions of RTN.
2002-2003 RTN with Autopilot and Variance Gauge was designed and deployed in real trading. Market Guidance Systems, Inc. has been formed. With more developers on staff and significantly increase amount of research equipment it became possible to design and build an artificial intelligence driven robotic system that took away 90% of routine operation performed by traders. The efficiency of the system has been significantly increased and trading of company's funds has begun. The returns produced by the new system led the way to further development and established the basis for undisputable credibility of the RTN system

2003-2004 The version of RTN utilizing combined stocks and option trading facility has been developed and implemented. This next milestone in our history came as a result of our unprecedented discovery of the revolutionary trading strategy never explored by anybody else. This strategy implements elaborated multi- option constructions in combination with the underlying security to achieve a very high level of immunity to ever changing market conditions.
2004-2005 The first multi-screen (24 screens) RTN trading platform was built and deployed for trading.
2005-2007 A in-house trading floor with over 150 screens and 6 servers has been built and deployed for trading. This system has a capacity of up to $2 billion. Master controller with remote access and redundant trading systems located in New Jersey and Toronto have been built and released for trading. Seven different robotic systems enhancing the RTN performance have been designed and implemented. Automatic alert and accounting systems were implemented as well.
2007 - 2008 RTN Stealth was built. This product featured an optimized interface and did not include a robotic trading algorithm. An improved historical market simulator was included that featured an improved trade simulation algorithm and significantly smaller data files (via a proprietary market data compression algorithm). Historical data files could be downloaded from remote servers and installed directly from within the program.
2008 - 2009 SPYder was launched. SPYder was the second internal automated trading system developed, employing innovations coming from the RTN Stealth system. It is the first system designed by the company that uses a full risk regulator, allowing for entry of long or short positions, or of both sides at a time. Several unique automated trading algorithms were employed by the system. Supporting this program was a distributed system of automated back-testers that ran simulations with a variety of different algorithmic variables. This system allowed for the optimization of the automated trading algorithms included in SPYder by using a broad spectrum of Monte-Carlo runs. Back-testing simulation included the simulation of individual fills according to bid/ask and last data as well as slippage for market orders and trading commissions paid. The primary indicator calculations were highly optimized for this system to allow for the maximum number of simulations to run with the computing resources available. A master system controlled the parameters of each run and analyzed the results for current use by SPYder and future optimization runs.
2012 - Market Sentiment Navigator was released. MSNav is a mobile application designed to display proprietary stock and securities analysis to help investors choose the best time at which to make a trade. This system allows registered users to save and maintain a portfolio of up to 15 securities from a list of the top 200+ most liquid securities on the NASDAQ, New York Stock Exchange, ETFs, and currency pairs.

Lottery Industry Overview

Lotteries are generally regulated and licensed by governmental authorities in over 200 jurisdictions globally. Currently, most U.S. states and four Canadian regions operate lotteries. In 2009, lottery and instant game revenues approximated $60 Billion in North America. According to LaFleurs 2010 World Lottery Almanac, global lottery, instant and other game revenues approximated $240 billion.

Although many different types of lottery games exist worldwide, they may generally be categorized into two main groups: instant ticket and traditional draw type lotteries. An instant ticket game is usually played by removing a coating from a pre-printed ticket to determine whether the ticket is a winner. With draw type lottery games, such as the Canadian Lotto6/49, winning is based on a purchaser matching numbers with those randomly selected by the lottery operator. Outside of North America, various types of sports betting are also popular. All of these game types can be simulated on mobile devices.

Lottery Operational Overview

Our technology can provide location-aware gaming solutions for government-sponsored lotteries and privately operated lotteries. Our solutions include mobile integration with existing online lottery systems, turnkey mobile gaming systems, custom developed traditional and interactive games, as well as ongoing support, maintenance, and management for each of our solutions.

Our lottery application utilizes proprietary technology to locate, authorize, or restrict game play based on the lottery license holder’s authorized jurisdiction. When an authorized player leaves the authorized jurisdiction for a game, new game play and additional game features may be disabled.

Lottery Contract Procurement

Government authorized lotteries in the U.S. and Canada typically operates under local government mandated public procurement regulations. Lotteries generally select suppliers by issuing a request for proposal, or RFP, which outlines contractual obligations as well as products and services to be delivered. An evaluation committee frequently comprised of key lottery staff evaluates responses based on various criteria. These criteria usually include quality of product and/or technical solutions, security plan and features, experience in the industry, quality of personnel and services to be delivered, and price. We believe that our product functionality, game content, the quality of our personnel, our technical expertise and our demonstrated ability to help the lotteries increase their revenues may provide us with advantages relative to the competition when responding to government lottery RFP's. However, some lotteries still award the contract to the qualified vendor offering the lowest price, regardless of factors other than price. Contract awards by lottery authorities are sometimes challenged by unsuccessful competitors, which can result in protracted legal proceedings. Internationally, lottery authorities do not always utilize such a formal bidding process, but rather negotiate with one or more potential vendors.

Most lottery contracts typically have an initial term of three to five years and frequently include multiple renewal options, which may be exercised for additional periods ranging from one to five years. The length of these lottery contracts, together with their renewal options, limits the number of lottery contracts available for bidding in any given year.

Research and Product Development

Our wholly-owned subsidiary, Mobilotto, has developed a ready to deploy SMS system. Working models of our application version are ready to demonstrate operation of various lottery games through commercially available mobile phones currently including IOS and RIM.

We believe our ability to attract new lottery customers and retain existing customers will depend in part on our ability to continue to incorporate technological advances into, and to improve our products, systems and communication abilities with lottery purchaser end-users of our systems. We intend to maintain a development program focusing on systems development as well as improvement and refinement of our present products as well as the expansion of uses and applications.

We intend to invest in new gaming technologies and new game delivery methods. We will endeavor to continually improve our existing application as well as research, innovate, and implement new solutions. Through continual development, we believe that we can attract new players for our customers and grow our company by attracting new lottery operators and potential partners to our company and our technologies.

Intellectual Property

We hold U.S. Provisional Patent 61/106,988 which has established our international priority date as of October 21, 2008. We are proceeding with the filing of the patent. Certain technology material to our lottery application products, processes and systems are the subject of patent applications currently pending, in the U.S. and certain other countries. In our business for instance, we intend to utilize our patent-pending technology for the jurisdictional validation and distribution of lottery tickets.

In July 2010, we received confirmation that our wave design logo as well as the phrase “THE FUTURE OF LOTTERY IS IN YOUR HAND” has been allowed by the Canadian Trade-marks Office. We previously applied for a U.S. Trademark from the United States Patent and Trademark Office (the “USPTO”). This application was not granted. We intend to re-apply for such U.S. Trademark as soon as reasonably possible. Trademark protection continues in some countries, including the U.S., for as long as the mark is used and in other countries for as long as it is registered. Registrations generally are for fixed, but renewable, terms.

Should we become aware of any potential infringement of our intellectual property or trade names by competitors and other third parties, we will consider what action, if any, to take in that regard, including, where appropriate, litigation.

Production Processes, Sources and Availability of Components

Our mobile application process is specifically designed to produce secure lottery game tickets for government sanctioned lotteries and promotional games, and to specifically ensure the jurisdiction of play and rules regarding play are complied with, along with meeting social responsibility mandates. Our application is designed for efficient, timely, mobile and secure production of game tickets and storage of game tickets and notification of winning ticket results. Games are delivered consistent with and ready for play with the lottery authority within the jurisdiction of play.

Competition: Mobile Lottery Products

Our lottery gaming business competes with a variety of suppliers from various international markets. There are numerous short message service (SMS) mobile lottery companies that have emerged globally over the past few years. Due to heavy regulation in Europe and North America the majority of these companies have set their sights on less regulated emerging markets. These markets are of significant interest to mobile lottery and gaming vendors due to their high population density and the relatively low access to online internet services and traditional convenience store lottery retailers.

Principal direct competitors exist in such emerging markets as India, Mexico, China and Europe where lottery vendors provide access to national lotteries and sports betting through mobile SMS messaging capabilities. To date the percentage of individuals who use the mobile device sales channel for lottery has remained low. The need to purchase prepaid cards from retailers and incompatible handsets still remain a challenge for these vendors. Furthermore, these have an apparent inherent weakness as they lack security and do not identify the user’s location.

Additional competition exists within European markets as lottery regulation continues to evolve. The market for mobile lottery is in its infancy as vendors address both security and regulatory restrictions; however sports betting over mobile devices is common in many European countries.

We have engineered our mobile lottery application with both location-based technology and superior cryptology which allows us to meet stringent government regulations.

The existing lottery terminal manufacturers, with GTech, Scientific Games, Intralot, Wincor, and Sagam Securite being the largest, have not publicly announced plans to develop mobile gaming solutions, but could develop a mobile offering. In addition, lottery operators could contract with software development and / or mobile software development firms to satisfy their mobile needs.

Consultant Agreements

Effective on January 30, 2015, our Board of Directors authorized and approved the execution of that certain statement of work (the "SOW") with Black Swan Diagnostics, Inc. ("Black Swan"), pursuant to which we engaged Black Swan to provide certain project consulting and implementation services (the "Consulting Services"). The Consulting Services to be provided by Black Swan shall include, but are not limited to, the following: (i) completion of custom-tailor products and services for our Stealth Trader Analytics division; (ii) implementation of risk management policies and procedures and a manual to mitigate trading risks and securities regulatory risk exposure for proprietary traders using the Stealth Trader Analytics; (iii) assistance with the Stealth Trader Analytics reseller program concerning pricing, distribution channels, partnerships, commissions or payouts and oversight of proper training and development of the Stealth Analytics platform; (iv) initiation of a public relations campaign to create brand awareness and positioning of the Stealth Trader Analytics; (v) assistance with our website including analysis concerning image, rebranding and video overhaul; and (vi) assistance with corporate presentations regarding capital raising, marketing and branding via private placements, trader recruitment, press releases, capital restructuring and investor related information. The Consulting Services shall be provided by Black Swan to us in three separate phases. Phase I shall basically focus on the initiation and implementation of the Stealth Trader Analytics reseller program. Phase II shall focus on the recruitment and training of qualified and competent traders who will learn the Stealth Trader Analytics systems from internal training and development resources provided by us. Phase III shall focus on preparation and completion of the risk management policies and procedures manual designed to mitigate trading risk for proprietary traders retained by us using the Stealth Trader Analytics system. Black Swan shall generally provide us with a weekly report summarizing the work completed during such phases, the status of work then in process, the status of any known problems or outstanding issues and the status of open change requests, in any.

The further terms and provisions of the SOW provide that we shall pay an approximate aggregate fee of $30,000 to Black Swan as consideration for the Consulting Services as follows: (i) $10,000 upon execution of the SOW; (ii) $10,000 in the second tranche due on March 6, 2015; and (iii) $10,000 in the third tranche due on May 1, 2015. As of the date of this Annual Report, we have paid $70,000 to Black Swan.

In the event of an alleged breach by either party, each party shall notify the other in writing of the other's alleged violation of a material provisions and each party shall have thirty calendar days from the date of receipt of such notice to affect a cure (the "Cure Period"). If the recipient of such notice fails to affect such cure with the Cure Period, then the other party shall have the option of sending a written notice of termination, which notice shall take effect upon receipt.

Employees

We currently have two full-time employees, two full-time contractors and one part-time contractor. We expect to hire additional full time employees as market conditions and resource needs dictate. We have engaged additional consultants for accounting, legal, and other part-time and occasional services.

ITEM 1A. RISK FACTORS

Our business is subject to numerous risks. We caution you that the following important factors, among others, could cause our actual results to differ materially from those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors and oral statements. Any or all of our forward-looking statements in this and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in the discussion below will be important in determining future results. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially from those anticipated in forward-looking statements. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosure we make in our reports filed with the SEC.

Risks Related To Our Operations And Financial Condition

We are a development stage company and we may never generate revenues which could cause our business to fail.

We are a development stage company and we have not generated any material revenues as of the date of this Report. From the inception of our activities on September 16, 2008 through the fiscal year ended May 31, 2014, the Company has incurred losses of $6,419,061. We expect to operate with net losses within the current fiscal year-ending May 31, 2014 or longer. We cannot predict the extent of these future net losses, or when we may attain profitability, if at all. If we are unable to generate significant revenue or attain profitability, we will not be able to sustain operations and will have to curtail significantly or cease operations.

We are a development stage company with significant capital resources deficiencies and we may not be able to raise adequate capital which could materially and adversely affect our ability to conduct business.

As a development stage company, we have a capital deficiency and limited operating resources. From inception through May 31, 2015, the Company raised $5,107,478 in initial funding and private placements of restricted common stock. The money raised in the initial funding and our private placements will not be sufficient to meet our projected cash flow deficits from operations and will not be sufficient to fund the continuation of the development of our technology and products. The Company will need to raise additional capital as needed to operate as planned. Even if we are able to obtain third party financing, the terms and condition of financing could have a material adverse affect on our business, results of operations, liquidity and financial condition. Any investment in our shares is subject to the significant risk that we will not be able to adequately capitalize our Company to enable us to continue to develop and implement our business model. Even if we are able to raise adequate capital, the cost of such capital may be burdensome and may materially impair our ability to fully implement our business plan.

The administrative costs of public company regulatory compliance could become burdensome and consume a significant amount of our cash resources which could materially and adversely affect our business.

We will incur significant costs and expenses in connection with assuring compliance with all laws, rules and regulations applicable to us as a public company. We anticipate that our ongoing costs and expenses of complying with our public reporting company obligations will be approximately $75,000 annually. Our reporting and compliance costs and expenses may increase substantially if we are able to deploy our business model on an international basis, which will add significant cross-border jurisdictional complexity to our regulatory compliance and our accounting controls and procedures. Our compliance costs and expenses could also increase substantially if we apply for trading of our securities on a national stock exchange which may have listing requirements that engender additional administration and compliance costs. We have assigned a high priority to establishing and maintaining controls, procedures, corporate compliance and public company reporting; however, there can be no assurance that we will have sufficient cash resources available to satisfy our public company reporting and compliance obligations. If we are unable to cover the cost of proper administration of our public company compliance and reporting obligations, we could become subject to sanctions, fines and penalties, our stock could be barred from trading in public capital markets and we may have to cease doing business.

We operate in highly competitive industries and our success depends on our ability to effectively compete with numerous domestic and foreign businesses. If we are unable to compete effectively our business could fail.

We face competition from a number of domestic and foreign businesses, some of which have substantially greater financial resources than we do, which could adversely affect our ability to enter into contracts with lottery operators. We operate in a period of intense price-based competition which could adversely affect the number and the profitability of contracts we may be able to obtain. We currently do not have any contracts and due to competition and the nature of the lottery industry, we do not know when or if we will be able to enter into any contracts. Intense competition could result in pricing pressures, lower sales, reduced margins, and lower market share. Our ability to compete successfully will depend on a number of factors, both within and outside our control.

We expect these factors to include the following:

our success in designing, testing and delivering new features, including incorporating new technologies on a timely basis;
our ability to address the needs of end-users and the quality of services for customers of the lottery operators;
the quality, performance, reliability, features, ease of use and pricing of our application;
successful implementation and expansion of our application’s capabilities;
our efficiency of production, and ability to deliver the application to the lottery operators and to end-users;
the rate at which commercially available smart phone equipment manufactures provide a technologically accessible format for incorporation of our solutions into their devices;
the market acceptance of our application; and
product or technology introductions by our competitors.

Our competitive position could be damaged if one or more potential lottery operators decide to develop their own solution or utilize a third party solution using alternative software and hardware technologies. Our prospective lottery operator customers may be reluctant to rely on a relatively small company such as our company. In addition, contract awards by lottery operators are sometimes challenged by unsuccessful bidders which can result in costly and protracted legal proceedings that can result in delayed implementation or cancellation of the contract. We cannot assure you that we will be able to compete successfully against current and future competition, and the failure to do so would have a materially adverse effect upon our business, operating results and financial condition and our business. If we do not compete effectively, our business could fail and investors could lose their entire investment.

The market for mobile lottery services is in the early stages of development, and if the market for our services does not develop as we anticipate, it will have a material adverse effect on our business, prospects, financial condition and results of operations.

Mobile lottery services, in general, are in the early stages of development. Our future revenue and profits are substantially dependent upon the widespread acceptance, growth, and use of mobile as an effective sales and purchasing medium. Most lotteries have generally relied upon more traditional forms of consumer sales of tickets through a variety of third-party owned stores, and most lottery operators have no, or only limited, experience on sales through mobile devices. Mobile lottery services are still in an early stage of development and may not be accepted by consumers or lottery operators for many reasons. If either the consumers or lottery operators reject our services, the commercial utility of our technology and services may not develop as we anticipate. If the market for mobile lottery services does not develop as we anticipate, our business could be materially and adversely affected.

Risks Related To Our Intellectual Property

We are only at the initial stage of development of our software. If we are not able to further develop our software our business could fail.

As of the date of this Annual Report, our mobile lottery software application has now been completed according to our stage 1 targets. It has been internally tested and reviewed is ready for commercial deployment for SMS and limited smart phone customers. It has not yet been commercially tested or utilized by any lottery operators and we have not yet generated any revenues from our technology. We have advanced our working demonstrations of our lottery and sports betting application (which is currently operable on most Blackberry smart phones including the Pearl, the Curve, the Bold, and 8800 series and soon IOS or apple platforms such as IPhones and IPads), as well as a scratch card game that is operating on Android devices. Our current lottery software solution includes four of the six components that together will constitute our full mobile lottery application. The completed components include lottery game selection, lottery number picking, lottery number authorization, lottery player registration and some aspects of player messaging functions. The two components remaining to be developed for a complete system include financial settlement and some remaining player messaging functions, which will be completed upon contracting.

Failure to adequately protect our intellectual property and proprietary rights could harm our competitive position and adversely affect our ability to conduct business which could result in loss of your entire investment in our Company.

Our success is substantially dependent upon our proprietary technology, which relates to a variety of business, security, and transactional processes associated with our mobile lottery services technology. We expect to rely on a combination of patent, trademark, copyright and trade secret laws to protect our proprietary rights. Although we have filed for certain patent protection over aspects of our technology, much of our proprietary information and processes may not be patentable. We cannot assure you that any pending patent applications will be issued or that their scope is broad enough to provide us with meaningful protection. Although we will file applications for registered trademarks covering certain of the marks we use in our business, we cannot assure you that we will be able to secure significant protection for these marks. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our technology and/or services or to obtain and use information that we regard as proprietary. We cannot assure you that our means of protecting our proprietary rights will be adequate or that our competitors will not independently develop similar technology or duplicate our services or design around patents issued to us or our other intellectual property rights. If we are unable to adequately protect our intellectual property and proprietary rights, our business and our operations could be materially and adversely affected.

We may be subject to intellectual property claims that create uncertainty about ownership of technology essential to our business and divert our managerial and other resources which could have a material adverse affect on our business.

There has been a substantial amount of litigation in the technology industry regarding intellectual property rights. Our success depends, in part, on our ability to protect our intellectual property and to operate without infringing on the intellectual property rights of others in the process. There can be no guarantee that any of our intellectual property will be adequately safeguarded, or that it will not be challenged by third parties. We may be subject to patent or trademark infringement claims or other intellectual property infringement claims that would be costly to defend and could limit our ability to use certain critical technologies. We may also become subject to interference proceedings conducted in the patent and trademark offices of various countries to determine the priority of inventions.

Any patent litigation or interference proceedings could have a negative effect on our business by diverting resources and management attention away from other aspects of our business and adding uncertainty as to the ownership of technology and services that we view as proprietary and essential to our business. Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, during the course of this kind of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments in the litigation. If investors perceive these results to be negative, it could have an adverse effect on the trading price of our common stock.

In addition, a successful claim of patent or trademark infringement against us and our failure or inability to obtain a license for the infringed or similar technology or trademark on reasonable terms, or at all, could have a material adverse effect on our business and the value of any investment in us. Also, an adverse determination of any litigation or defense proceedings could cause us to pay substantial damages, including treble damages if we are found to have willfully infringed, and, also, could put our patent applications at risk of not being issued.

The intellectual property may not be appropriately protected and we may be infringing upon the proprietary rights of third parties.

We depend on our ability to protect the core proprietary software technologies we have developed or acquired. In this regard, we rely on a combination of trade secrets, technical complexity, common law copyright and trademark protection, licensing agreements, password protection and software encryption schemes, as well as on the physical security of the source code. Despite these measures and precautions, it may be possible for an unauthorized third-party to copy our core technologies and either offer them to the marketplace as its own, or to use them without paying. To date, we have not sought to obtain patent protection for any of its software products, though we may do so in the future. There can be no assurance, however, that such registration will be granted if applied for. Also, certain aspects of the software products are not subject to intellectual property protection in law, and to the extent such protection might be available, practical and legal distinctions may apply in different jurisdictions. In addition, there can be no assurance that competitors will not develop similar technology, products and services, and if they do, this could reduce the value of our proprietary technology and our ability to effectively compete. Although we believe that we have the right to use all of the intellectual property incorporated in our software products, third parties may claim that our software products violate their proprietary rights, including copyrights and patents. The cost of litigation necessary to defend our right to use the intellectual property incorporated in its software products may be prohibitive. If any such claims are made and found to be valid or we determine it prudent to settle any such claims, we may have to re-engineer our software products or obtain licenses from third parties to continue offering the software products or cease using such technology, in whole or in part. Any efforts to re-engineer our software products or obtain licenses from third parties or cease using such technology may not be successful and could substantially increase its costs and have a material adverse effect on our business, financial condition and results of operations.

If we are not able to respond to the rapid technological change characteristic of our industry, our products and services may cease to be competitive and our business could fail and cause the entire loss of your entire investment in our Company.

The mobile industry is characterized by rapid change in business models and technological infrastructure, and we will need to constantly adapt to changing markets and technologies to provide new and competitive products and services. If we are unable to ensure that our users, lottery operators, and distribution partners have a high-quality experience with our services, then they may become dissatisfied and stop using our products and services. Accordingly, our future success will depend, in part, upon our ability to develop and offer competitive products and services. We may not, however, be able to successfully do so, and our competitors may develop innovations that render our products and services obsolete or uncompetitive. If we are not able to compete effectively, our business could fail which could result in the loss of your entire investment in our Company.

Our technical systems are vulnerable to interruption and damage that may be costly and time-consuming to resolve and may harm our business and reputation which could materially and adversely affect the value of your investment in our Company.

Our systems and operations are vulnerable to damage or interruption from fire, floods and other natural disasters. Furthermore, network failures, hardware failures, software failures, power loss, telecommunications failures, break-ins, terrorism, war or sabotage, computer viruses, penetration of our network by unauthorized computer users and “hackers” and other similar events, and other unanticipated problems all pose serious threats to our success. We may not have developed or implemented adequate protections or safeguards to overcome any of these events. We also may not have anticipated or addressed many of the potential events that could threaten or undermine our technology network. In addition, if a person is able to circumvent our security measures, he or she could destroy or misappropriate valuable information or disrupt our operations. Any of these occurrences could cause material interruptions or delays in our business, result in the loss of data or render us unable to provide services to our customers which could have the further result of materially and adversely affecting the value of your investment in our Company.

Our business depends on the protection of our intellectual property and proprietary information. If we are unable to adequately protect our intellectual property and proprietary information our business and your investment our Company could be materially and adversely affected.

We believe that our success depends, in part, on protecting our intellectual property in those countries in which we will do business. Our intellectual property includes certain pending patents and trademarks relating to our mobile technology and jurisdictional validation as well as proprietary or confidential information that is not subject to patent or similar protection. Our intellectual property protects the integrity of the systems, products and services, which is a core value of the industries in which we operate. For example, our intellectual property is designed to ensure the security of the distribution of the lottery tickets we provide as well as simple and secure validation of our lottery tickets sold. Competitors may independently develop similar or superior products, software, systems or business models. In cases where our intellectual property is not protected by an enforceable patent, such independent development may result in a significant diminution in the value of our intellectual property.

There can be no assurance that we will be able to protect our intellectual property. We expect to enter into confidentiality or license agreements with our employees, vendors, consultants, and, to the extent legally permissible, our customers. We intend to generally control access to, and the distribution of, our game systems and other software documentation and other proprietary information, as well as the designs, systems and other software documentation and other information we license from others. Despite our efforts to protect these proprietary rights, unauthorized parties may try to copy our gaming technology, business models or systems, use certain of our confidential information to develop competing products, or develop independently or otherwise obtain and use our gaming products or technology, any of which could have a material adverse effect on our business. Policing unauthorized use of our technology is difficult and expensive, particularly because of the global nature of our operations. The laws of other countries may not adequately protect our intellectual property.

There can be no assurance that our business activities, products and systems will not infringe upon the proprietary rights of others, or that other parties will not assert infringement claims against us. Any such claim and any resulting litigation, should it occur, could subject us to significant liability for damages and could result in invalidation of our proprietary rights, distract management, and/or require us to enter into costly and burdensome royalty and licensing agreements. Such royalty and licensing agreements, if required, may not be available on terms acceptable to us, or may not be available at all. In the future, we may also need to file lawsuits to defend the validity of our intellectual property rights and trade secrets, or to determine the validity and scope of the proprietary rights of others. Such litigation, whether successful or unsuccessful, could result in substantial costs and diversion of resources. If we are unable to adequately protect our intellectual property and proprietary information, our business and your investment our Company could be materially and adversely affected.

Risks Related To Our Business

Competitive environment

We currently faces competition from software providers and websites that also offer trading tools. Our challenge is to successfully differentiate ourselves from our competitors. The software industry is a rapidly changing environment with constant competition and many new product introductions. Our ability to achieve market success and a competitive advantage will depend on our capability for ongoing research and development and the integration of any technological advances into its products.

Product sustainability

We develop proprietary software based on the market behavior and trading algorithms comprised of a number of changing variables. Over time, those algorithms may prove to be obsolete and their underlying performance may be compromised by unforeseen market changes, which may adversely affect the value of our Software.

Our success will depend heavily on our management. If we fail to hire and retain qualified management and other key personnel, the implementation of our business plan will be materially and adversely affected.

Our performance is substantially dependent on the continued services and performance of our executive officers and other key personnel, and our ability to retain and motivate our officers and key employees. Our future success also depends on our ability to identify, attract, hire, train, retain and motivate other highly skilled technical, managerial and marketing personnel. Competition for qualified personnel is intense, and we cannot assure you that we will be successful in attracting and retaining such personnel. The failure to attract and retain our officers or the necessary technical, managerial and marketing personnel could have a material adverse effect on our business, prospects, financial condition and results of operations.

Our dependence on management and directors creates risks. The loss of our experienced officers, key employees, or directors could materially and adversely affect our ability to professionally manage our business.

Our plan for success is dependent, in large part, on the active participation of our executive officers and board of directors. The loss of their services would materially and adversely affect our business and future success. We do not have key-man life insurance in effect at the present time. Should any of our key employees die or become incapacitated, we may not be able to replace them in a timely or cost effective manner which could materially and adversely harm our business, financial condition and results of operations.

If we fail to attract and keep key employees and/or software personnel, we may be unable to successfully develop any of our current or future product candidates, conduct development efforts and commercialize any of our current or future product candidates.

Our success depends in part on our continued ability to attract, retain and motivate highly qualified personnel. We are highly dependent upon our personnel and other members of our senior management team. The loss of services of any of these individuals could delay or prevent the successful development of our current or future product pipeline, completion of our planned development efforts or the commercialization of our product candidates.

Competition for qualified personnel in our industry is intense due to the limited number of individuals who possess the skills and experience required by our industry. We will need to hire additional personnel as we expand our development and commercial activities. We may not be able to attract and retain quality personnel on acceptable terms, or at all. In addition, to the extent we hire personnel from competitors, we may be subject to allegations that they have been improperly solicited or that they have divulged proprietary or other confidential information, or that their former employers own their research

We expect that our anticipated future growth may strain our management, administrative, operational and financial infrastructure. Failure of our ability to reasonably manage anticipated growth could materially and adversely affect our business.

We anticipate that significant expansion of our present operations will be required to capitalize on market opportunities. This expansion is expected to place a significant strain on our management, operational and financial resources. We expect to add a substantial number of additional key personnel in the future, including key managerial, technical, and software development employees who will have to be fully integrated into our operations. In order to manage our growth, we will be required to continue to implement and improve our operational and financial systems, to expand existing operations, to attract and retain superior management, and to train, manage and expand our employee base. We cannot assure you that we will be able to effectively manage the expansion of our operations, that our systems, procedures or controls will be adequate to support our operations or that our management will be able to successfully implement our business plan. If we are unable to manage growth effectively, our business, financial condition and results of operations could be materially and adversely affected.

Providing our products to customers outside of the United States exposes us to risks inherent in international business which could have a material and adverse affect on our operations.

For the foreseeable future, we expect to pursue business outside of the United States. Accordingly, we are subject to risks and challenges that we would otherwise not face if we conducted our business only in the United States. The risks and challenges associated with providing our products to customers outside the United States include: localization of our products, including translation into foreign languages and associated expenses; laws and business practices favoring local competitors; compliance with multiple, conflicting and changing governmental laws and regulations; foreign currency fluctuations; different pricing environments; different tax regimes and regional economic and political conditions. Any of these factors, either individually or collectively, could have a material adverse effect on our business and results of operations.

We will need additional funding in the future to pursue our business strategy and expand our operations. If additional future funding is not available to us our financial condition could be materially and adversely affected and our business may fail.

There can be no assurance that additional financing arrangements will be available in amounts or on terms acceptable to us, if at all. Furthermore, if adequate additional funds are not available, we will be required to delay, reduce the scope of, or eliminate material parts of the implementation of our business strategy. If we do not obtain additional financing in amounts and on terms acceptable to us, our business may fail.

The current economic slowdown may adversely affect our business and financial condition in ways that we cannot predict. If the economy does not recover during the reasonably foreseeable future our ability to conduct business may not be viable and we may have to cease operations which could result in the entire loss of your investment in our Company.

The current economic slowdown may have a negative effect on our business and financial condition. We cannot predict the effect that the economic slowdown will have on us as it also impacts our customers, vendors and business partners. We believe that the lottery gaming businesses are less susceptible to reductions in consumer spending and other parts of the consumer sector. However, there can be no assurance that the continuation or worsening of the current economic slowdown will not negatively impact the lottery gaming businesses. If the economy does not recover during the reasonably foreseeable future, our ability to conduct business may not be viable and we may have to cease operations which could result in the loss of your entire investment in our Company.

The current economic slowdown and general unavailability of commercial credit may adversely affect our ability to obtain financing and could have a material adverse effect on our ability to conduct business.

The uncertainty surrounding the future of the global credit markets has resulted in reduced access to financing and credit worldwide. Major market disruptions and the current adverse changes in global market conditions and the evolving regulatory restrictions in the United States and worldwide may adversely affect our business or impair our ability to obtain funds as needed. The current adverse market conditions may last longer than we anticipate. These recent and developing economic and governmental factors may have a material adverse effect on our results of operations, financial condition or cash flows and could cause the price of our common stock to decline significantly. If we require credit financing for any aspect of our conducting business we may not be able to obtain it on a timely basis or on reasonable terms, if at all.

Our business is subject to evolving technology. If we are unable to upgrade our technologies responsive to changes in the industry we could fail.

The markets for all of our products and services are affected by changing technology, new legislation and evolving industry standards. Our ability to anticipate or respond to such changes and to develop and introduce new and enhanced products and services on a timely basis will be a significant factor in our ability to expand, remain competitive and attract new customers. We can give no assurance that we will achieve the necessary technological advances or have the financial resources needed to introduce new products or services on a timely basis or that we will otherwise have the ability to compete effectively in the markets. If we are unable to remain current with industry developments and upgrade our technologies in response to changes in the industry, we could fail and investors could lose their entire investment in us.

Our business competes on the basis of the security and integrity of our systems and our mobile lottery software application. If there is a breach in our security systems, our business and we could suffer materially adverse consequences.

We believe that our success depends, in part, on providing secure products and systems to the lottery operators and their playing customers. Attempts to penetrate security measures may come from various combinations of customers, retailers, vendors, employees and others. Our ability to monitor and ensure quality of our products is periodically reviewed and enhanced. Similarly, we intend to regularly assess the adequacy of our security systems to protect against security breaches and take reasonable measures to protect the integrity of the product for end-users. There can be no assurance that our business will not be affected by a security breach or lapse, which could have a material adverse impact on our results of operations, business or prospects.

Implementation of additions or changes in third-party hardware and software platforms used to deliver our services may result in performance problems and may not provide additionally anticipated functionality, which could result in material and adverse effects on our ability to conduct business.

From time to time, we may implement additions to or changes in the hardware and software platforms we use for providing our services. During and after the implementation of additions or changes, a platform may not perform as expected, which could result in interruptions in operations, an increase in response time or an inability to track performance metrics. In addition, in connection with integrating with our customers, we may move their operations to our hardware and software platforms or make other changes, any of which could result in interruptions in those operations. Any significant interruption in our ability to operate any of our services could have an adverse effect on our relationships with users and clients and, as a result, on our financial results. We rely on a combination of purchasing, licensing, internal development, and acquisitions to develop our hardware and software platforms. Our implementation of additions to or changes in these platforms may cost more than originally expected, may take longer than originally expected, and may require more testing than originally anticipated. In addition, we cannot provide assurance that additions to or changes in these platforms will provide the additional functionality and other benefits that were originally expected. If we are unable to conform our technology to third-party additions or changes in hardware and software platforms used to deliver our services, our business could be materially and adversely affected.

We rely on third party technology and hardware providers. A failure of service by these providers could adversely affect our business and reputation.

We will rely on third party providers for components of our technology platform, such as hardware and software providers. A failure or limitation of service or available capacity by any of these third party providers could materially and adversely affect our business and reputation with corresponding adverse effects upon the value of your investment in our Company.

Risks Related to the Legal and Regulatory Environment in Which We Operate

Government and legal regulations may require significant time, money and allocation of Company resources. If we are unable to allocate adequate Company resources for compliance with such regulations, our Company and our business could be materially and adversely affected.

During the foreseeable future, we expect to pursue our business outside of the United States until applicable laws in the United States permit sales of lottery tickets utilizing mobile telecommunications devices. As of the date of this Report, current U.S. laws prohibit sales of lottery tickets utilizing mobile telecommunications devices. Existing or future laws and regulations in other countries may impair our ability to expand our business and introduce new products and services, or may restrict the use of our services or the features we offer. Changes to the existing regulatory framework in countries where we intend to offer our services could adversely affect our business plans.

In addition to regulation of lottery ticket sales, the mobile telecommunications industry faces uncertainty related to future government regulation. Due to the rapid growth and widespread use of mobile telephones, legislatures have enacted and may continue to enact various laws and regulations applicable to the mobile telecommunications industry. Laws and regulations may be adopted in the future which directly govern mobile device lottery services. The adoption of laws or regulations could decrease the demand for our technology and services and increase our cost of doing business or otherwise have a material adverse effect on our business, prospects, financial condition and results of operations.

In addition, foreign governments may pass laws which could negatively impact our business and/or may prosecute us for violating existing laws. Such laws might include EU member country conforming legislation under applicable EU Privacy and Data Protection Directives. Any costs incurred in complying with foreign laws could negatively affect the viability of our business.

Our industry is subject to strict government regulations that may limit our existing operations and have a negative impact on our ability to grow, which could be materially adverse to our business and prospects.

In the United States and many other countries, lotteries and other forms of wagering must be expressly authorized by law. Once authorized, such activities are subject to extensive and evolving governmental regulation. Moreover, these gaming regulatory requirements vary from jurisdiction to jurisdiction. We expect to be subject to a wide range of complex gaming laws and regulations in the jurisdictions in which we intend to operate which could be time consuming, expensive and distracting to management. As a result, such regulatory requirements could be materially adverse to our business and prospects.

The regulatory environment in any particular jurisdiction may change in the future, and any such change could have a material adverse effect on our results of operations, business or prospects. Moreover, there can be no assurance that the sale of lottery services over mobile devices will be approved by additional jurisdictions or that those jurisdictions in which these activities are currently permitted will continue to permit such activities. Although we believe that we plan to develop procedures and policies to comply with the requirements of evolving laws, there can be no assurance that law enforcement or gaming regulatory authorities will not seek to restrict our business in their jurisdictions or institute enforcement proceedings if we are not compliant.

Moreover, in addition to the risk of enforcement action, we are also at risk of loss of business reputation in the event of any potential legal or regulatory investigation whether or not we are ultimately accused of or found to have committed any violation.

We may be required to obtain licenses from various jurisdictions in order to operate certain aspects of our business and we might be subject to extensive background investigations and suitability standards in our lottery business. Lottery authorities generally conduct background investigations of the selected vendor and its employees prior to and after the award of a lottery contract. Generally, regulatory authorities have broad discretion when granting, renewing or revoking these approvals. Lottery authorities may require the removal of any of our employees deemed to be unsuitable and are generally empowered to disqualify us from receiving a lottery contract or operating a lottery system as a result of any such investigation. Our failure, or the failure of any of our key personnel or systems in obtaining a required license or approval in one jurisdiction could negatively impact our ability (or the ability of any of our key personnel or systems) to obtain required licenses and approvals in other jurisdictions. The failure to obtain a required license or approval in any jurisdiction would decrease the geographic areas where we may operate and generate revenues, decrease our share in the gaming marketplace and put us at a disadvantage compared with our competitors.

Some jurisdictions also require extensive personal and financial disclosure and background checks from persons and entities beneficially owning a specified percentage (typically 5% or more) of our equity securities. The failure of these beneficial owners to submit to such background checks and provide required disclosure could jeopardize the award of a contract to us. Additional restrictions are often imposed by international jurisdictions.

While we are firmly committed to full compliance with all applicable laws, there can be no assurance that such steps will prevent the violation of one or more laws or regulations, or that a violation by us or an employee will not result in the imposition of a monetary fine or suspension or revocation of any contract.

Gaming opponents persist in their efforts to curtail legalized gaming, and particularly internet gaming which, if successful, could limit our operations or cause us to cease doing business.

Legalized gaming is subject to opposition from gaming opponents. There can be no assurance that this opposition will not succeed in preventing gaming in jurisdictions where these activities are presently legalized, prohibited or prohibiting or limiting the expansion of gaming where it is currently permitted. If we cannot legally conduct business, we could fail.

Failure to perform under lottery contracts may result in litigation, substantial monetary liquidated damages and contract termination which would materially and adversely affect our business.

Our business may subject us to contractual penalties and risks of litigation, including due to potential allegations that we have not fully performed under contracts or that goods or services we supply are defective in some respect. Lottery contracts typically permit a lottery authority to terminate the contract at any time for material failure to perform, other specified reasons and, in many cases, for no reason at all. Lottery contracts also frequently contain exacting implementation schedules and performance requirements and the failure to meet these schedules and requirements may result in substantial monetary liquidated damages, as well as possible contract termination. Material amounts of liquidated damages could be imposed on us in the future, which could, if imposed, have a material adverse effect on our results of operations, business or prospects and on our ability to continue to conduct business.

Risks Related To Our Stock

Our limited operating history makes evaluation of our business difficult, and may discourage trading in our stock which could adversely affect the price of our stock.

We started to develop our lottery technology in 2008 and we have not yet commercially deployed our technology. We, therefore, have limited historical financial data related to our current business upon which to analyze operating expenses or forecast accurately our future operating results. Our limited operating history will make it difficult for investors to evaluate our business and prospects which may discourage trading in our stock with potential further adverse effect on the price of our stock.

We will need to raise additional capital. If we are unable to raise additional capital, our business may fail.

We will need to raise additional capital to provide cash for our operations. Our current working capital is not expected to be sufficient to carry out all of our plans and to fund our operating losses until we are able to generate enough revenues to sustain our business. The fact that we have not generated any revenues to date may deter potential investors from providing financing. Uncertainty regarding our ability to generate revenues may make it difficult for us to find financing on acceptable terms. If we are unable to obtain adequate funding, we may not be able to successfully develop and market our products and our business will most likely fail. To secure additional financing, we may need to borrow money or sell more securities. Under the current circumstances, we may be unable to secure additional financing on favorable terms, if available at all.

The market price of our common stock may be volatile which could adversely affect the value of your investment in our common stock.

The trading price of our common stock may be highly volatile and could be subject to wide fluctuations in response to various factors. Some of the factors that may cause the market price of our common stock to fluctuate include:

	•	fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

	•	changes in estimates of our financial results or recommendations by securities analysts;

	•	failure of any of our products to achieve or maintain market acceptance;

	•	changes in market valuations of similar companies;

	•	significant products, contracts, acquisitions or strategic alliances of our competitors;

	•	success of competing products or services;

	•	changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

	•	regulatory developments in Canada, the United States or foreign countries;

	•	litigation involving our company, our general industry or both;

	•	additions or departures of key personnel;

	•	investors’ general perception of us; and

	•	changes in general economic, industry and market conditions.

In addition, if the market for technology or mobile lottery service stocks or the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to class action lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management, which could further adversely affect the value of your investment in our common stock.

Fluctuations in the value of foreign currencies could result in increased costs and operating expenses which could adversely affect our business.

For our projected international operations, the local currency will be designated as the functional currency. Accordingly, assets and liabilities must be translated into U.S. Dollars at year-end exchange rates, and revenues and expenses will be translated at average exchange rates prevailing during the year. Fluctuations in the value of other currencies in which we may generate revenues or incur costs may be difficult to predict and could cause us to incur currency exchange losses. Receivables and liabilities in currencies other than the functional currency could also move adversely to us from the date of accrual by us to the date of actual settlement of receivables or liabilities in a currency other than the functional currency. A disparity between the accrual and settlement amounts due to currency exchange costs could have a material adverse effect on our business. We cannot predict the effect of exchange rate fluctuations on our future operating results. Future fluctuations in currency exchange rates could materially and adversely affect our business.

Certain governments with whom we may do business may impose restrictions over the conversion of their currencies into U.S. dollars or other foreign currencies. There can be no assurance that we will be able to convert foreign revenues into U.S. dollars for repatriation and this may adversely affect our business.

We do not currently intend to pay dividends on our common stock and, consequently, the ability to achieve a return on your investment in our common stock will depend on appreciation in the price of our common stock. If our common stock does not appreciate in value, investors could suffer losses in their investment in our common stock.

We do not expect to pay cash dividends on our common stock. Any future dividend payments are within the absolute discretion of our Board of Directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure requirements, financial condition, contractual restrictions, business opportunities, anticipated cash needs, provisions of applicable law and other factors that our Board of Directors may deem relevant. We may not generate sufficient cash from operations in the future to pay dividends on our common stock. As a result, the success of your investment in our common stock will depend on future appreciation in its value. The price of our common stock may not appreciate in value or even maintain the price at which you purchased our shares. If our common stock does not appreciate in value, investors could suffer losses in their investment in our common stock.

You may experience dilution of your ownership interests due to the future issuance of additional shares of our common stock which could be materially adverse to the value of our common stock.

As of the date of this Annual Report, we have 168,476,221 shares of our common stock issued and outstanding. We are authorized to issue up to 300,000,000 shares of common stock. Our Board of Directors may authorize the issuance of additional common or preferred shares under applicable state law without shareholder approval. We may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock in connection with the hiring of personnel, future acquisitions, future private placements of our securities for capital raising purposes or for other business purposes. Future sales of substantial amounts of our common stock, or the perception that sales could occur, could have a material adverse effect on the price of our common stock. If we need to raise additional capital to expand or continue operations, it may be necessary for us to issue additional equity or convertible debt securities. If we issue equity or convertible debt securities, the net tangible book value per share may decrease, the percentage ownership of our current stockholders may be diluted and such equity securities may have rights, preferences or privileges senior or more advantageous to our common stockholders.

We anticipate that our common stock will continue to be considered to be a "Penny Stock" in the immediate future, which will cause the trading of our stock to be subject to significant regulations that could adversely affect the value of our common stock.

We anticipate that in the immediate future our common stock will continue to be a low-priced security, or a “penny stock” as defined under rules promulgated under the Exchange Act. A stock is a "penny stock" if it meets one or more of the definitions in Rules 15g-2 through 15g-6 promulgated under Section 15(g) of the Exchange Act. These include but are not limited to the following: (i) the stock trades at a price less than $5.00 per share; (ii) it is not traded on a "recognized" national exchange; (iii) it is not quoted on The NASDAQ Stock Market, or even if so, has a price less than $5.00 per share; or (iv) is issued by a company with net tangible assets less than $2.0 million, if in business more than a continuous three years, or with average revenues of less than $6.0 million for the past three years. The principal result or effect of being designated a "penny stock" is that securities broker-dealers cannot recommend the stock but must trade in it on an unsolicited basis.

In accordance with these rules, broker-dealers participating in transactions in low-priced securities must first deliver a risk disclosure document which describes the risks associated with such stocks, the broker-dealer’s duties in selling the stock, the customer’s rights and remedies and certain market and other information. Furthermore, the broker-dealer must make a suitability determination approving the customer for low-priced stock transactions based on the customer’s financial situation, investment experience and objectives. Broker-dealers must also disclose these restrictions in writing to the customer, obtain specific written consent from the customer, and provide monthly account statements to the customer. The effect of these restrictions probably decreases the willingness of broker-dealers to make a market in our common stock, decreases liquidity of our common stock and increases transaction costs for sales and purchases of our common stock as compared to other securities. As a result of these effects, the trading value of our common stock could be materially and adversely affected.

Broker-dealer requirements may affect the trading and liquidity of our stock which could materially and adversely affect the value of our common stock.

Section 15(g) of the Securities Exchange Act of 1934, as amended, and Rule 15g-2 promulgated there under by the SEC require broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document before effectuating any transaction in a penny stock for the investor's account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor's financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise. These requirements could discourage interest in trading in our common stock and could materially and adversely affect the public trading value of our common stock.

Our securities will be subject to sales restrictions imposed by state “Blue Sky Laws” that will limit the States where our stock may be traded and could reduce the public market value of our stock.

State securities regulations may affect the transferability of our shares. We have not registered any of our shares for sale or resale under the securities or "blue sky" laws of any state. We do not currently plan to register or qualify our shares for sale or resale in any state. In many states, but not all states, shareholders can generally make unsolicited sales of securities through registered broker-dealers. Arkansas, Georgia, Illinois, Louisiana, New York, North Dakota, Ohio, Oregon and Tennessee, do not permit shareholders to make unsolicited sales of securities through broker dealers. Persons who desire to purchase our shares in any trading market that may develop in the future should be aware that these state regulations may limit sales and purchases of our shares. The inability to trade or sell our common stock in certain states could materially and adversely affect the public market value of our stock.

If a trading market for our securities develops, it may be volatile which could make it difficult to sell shares of common stock or cause sales of common stock at a loss.

If an active trading market does develop, the market price of our common stock is likely to be highly volatile due to, among other things, the nature of our business and because we are a new public company with a limited operating history. Furthermore, even if a public market develops, the volume of trading in our common stock will presumably be limited and likely be dominated by a few individual stockholders. The limited volume, if any, will make the price of our common stock subject to manipulation by one or more stockholders and will significantly limit the number of shares that one can purchase or sell in a short period of time.

The equity markets have recently experienced significant price and volume fluctuations that have adversely affected the market prices for many companies' securities. These fluctuations may not be directly attributable to the operating performance of these companies. Any such fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. As a result, stockholders may be unable to sell their shares, or may be forced to sell shares of our common stock at a loss.

Shares eligible for future sale may adversely affect the market price of our common stock. The future sale of a substantial amount of our restricted stock in the public marketplace could reduce the price of our common stock.

From time to time, certain of our stockholders may be eligible to sell their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 of the Securities Act of 1933, as amended, subject to certain compliance requirements. In general, under Rule 144, unaffiliated stockholders (or stockholders whose shares are aggregated) who have satisfied a six month holding period may sell shares of our common stock, so long as we have filed all required reports under Section 13 or 15(d) of the Exchange Act during the applicable period preceding such sale. Generally, once a period of six months has elapsed since the date the common stock was acquired from us or from an affiliate of ours, unaffiliated stockholders can freely sell shares of our common stock so long as the requisite conditions of Rule 144 and other applicable rules have been satisfied. Also generally, twelve months after acquiring shares from us or an affiliate, unaffiliated stockholders can freely sell their shares without any restriction or requirement that we are current in our SEC filings. Any substantial sales of common stock pursuant to Rule 144 may have an adverse effect on the market price of our common stock.

Failure to achieve and maintain internal controls in accordance with Sections 302 and 404(a) of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price.

If we fail to maintain adequate internal controls or fail to implement required new or improved controls, as such control standards are modified, supplemented or amended from time to time, we may not be able to assert that we can conclude on an ongoing basis that we have effective internal controls over financial reporting. Effective internal controls are necessary for us to produce reliable financial reports and are important in the prevention of financial fraud. If we cannot produce reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and there could be a material adverse effect on our stock price.

Pursuant to proposals related to Section 404 of the Sarbanes-Oxley Act of 2002, we have been required to furnish a report by our management on our internal control over financial reporting. If we cannot provide reliable financial reports or prevent fraud, then our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our stock could drop significantly.

To maintain compliance with Section 404 of the Act, we engage in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging and requires management to dedicate scarce internal resources and to retain outside consultants.

During the course of our testing, we may identify deficiencies which we may not be able to remediate in time for securities disclosure reporting deadlines. In addition, if we fail to maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition, are necessary for us to produce reliable financial reports and are important to helping prevent financial fraud.

Certain holders of our common stock exert significant influence over our company and may make decisions with which other stockholders may disagree that could reduce the value of our stock.

2238646 Ontario Inc. owns a total of 97,040,000 of 168,476,221 issued and outstanding shares. This represents 57.6% of our issued and outstanding shares. As a result 2238646 Ontario Inc. has the ability to exert significant influence over our business and may make decisions with which other stockholders may disagree, including, among other things, the appointment of officers and directors, changes in our business plan, delaying, discouraging or preventing a change of control of the Company or a potential merger, consolidation, tender offer, takeover or other business combination.

The costs to meet our reporting requirements as a public company subject to the Securities Exchange Act of 1934 will be substantial and may result in us having insufficient funds to operate our business.

We will incur ongoing expenses associated with professional fees for accounting and legal expenses associated with being a public company. We estimate that these costs will range up to $75,000 per year for the next few years. Those fees will be higher if our business volume and activity increases. Those obligations will reduce and possibly eliminate our ability and resources to fund our operations and may prevent us from meeting our normal business obligations.

Additional issuance of equity securities may result in dilution to our existing stockholders.

Our Articles of Incorporation, as amended, authorize the issuance of 300,000,000 shares of common stock. The Board of Directors has the authority to issue additional shares of our capital stock to provide additional financing in the future, including issuances in accordance with certain contractual terms, and the issuance of any such shares may result in a reduction of the book value or market price of the then outstanding shares of our common stock. If we do issue any such additional shares, including shares of preferred stock, such issuance also will cause a reduction in the proportionate ownership and voting power of all other stockholders. As a result of such dilution, the proportionate ownership interest and voting power of our shareholders will be decreased accordingly. Further, any such issuance could result in a change of control.

ITEM 1B: UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2: PROPERTIES

Our principal executive offices are located at 34 King Street East, Suite 1010, Toronto, Ontario, Canada M5C 2X8. At the present time, we do not own any real estate. We do not have any policies regarding investments in real estate, securities or other forms of property. The Company is obligated under a lease agreement through May, 2018 which provides for annual rentals, on a straight-line basis, of approximately $34,000. In addition, the Company will pay, as additional rent, its proportionate share of real estate taxes and certain operating expenses.

ITEM 3: LEGAL PROCEEDINGS

We are not aware of any pending or threatened litigation against us that we expect will have a material adverse effect on our business, financial condition, liquidity, or operating results. We cannot assure you that we will not be adversely affected in the future by legal proceedings.

ITEM 4: MINE SAFETY DISCLOSURES

Not Applicable.

PART II

ITEM 5:

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock trades on the over-the-counter bulletin board quotation system (OTCQB) under the symbol “PRFC”. The following table shows the range of high and low bids per share of our Common Stock as reported by the Over-the-Counter Bulletin Board for the fiscal year periods indicated. Such over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions. The information set forth below has been adjusted to reflect the Company’s five for one stock split on March 26, 2012. The Company’s shares trade on the Over-the-Counter Bulletin Board.

Common Stock
	High	Low
Quarter Ended August 31, 2015	.12	.05
Quarter Ended May 31, 2015	.18	.09
Quarter Ended February 28, 2015	.15	.09
Quarter Ended November 30, 2014	.18	.11
Quarter Ended August 31, 2014	.19	.12
Quarter Ended May 31, 2014	.28	.13
Quarter Ended February 28, 2014	.28	.10
Quarter Ended November 30, 2013	.15	.10
Quarter Ended August 31, 2013	.29	.13
Quarter Ended May 31, 2013	.20	.11
Quarter Ended February 29, 2013	.25	.16
Quarter Ended November 30, 2012	.30	.18
Quarter Ended August 31, 2012	.41	.20
Quarter Ended May 31, 2012	.32	.20
Quarter Ended February 28, 2012	.30	.20
Quarter Ended November 30, 2011	.58	.34
Quarter Ended August 31, 2011	.58	.40

Holders

As of September 10, 2015, there are 168,476,221 shares of common stock issued and outstanding.

As of the date of this Report there are 32 holders of record of our common stock in certificate form, exclusive of those brokerage firms and/or clearing houses holding our Common Stock in street name for their clientele (with each such brokerage house and/or clearing house being considered as one holder).

Dividend Policy

We have not paid any dividends to the holders of our common stock and we do not expect to pay any such dividends in the foreseeable future as we expect to retain our future earnings for use in the operation and expansion of our business. Holders of Series A preferred stock are entitled to a quarterly dividend based on the income generated from the funds invested by them.

Securities Authorized for Issuance Under Equity Compensation Plans

As of the date of this Annual Report, we do not have any equity compensation plans authorized by our Board of Directors.

RECENT SALES OF UNREGISTERED SECURITIES

During the fiscal year ended May 31, 2015, there were no issuances of any common or preferred stock.

Redemption of Series A Preferred

Effective on June 1, 2015, our Board of Directors authorized the redemption of 750,000 shares of Series A preferred stock at a redemption price of $0.20 per share for aggregate amount of $150,000.

Previously, our Board of Directors authorized and approved the execution of that certain account management agreement dated April 29, 2014 (the "Account Management Agreement") with Four Seasons Trust (the "Investor"). In accordance with the terms and provisions of that certain non-U.S. subscription agreement (the "Subscription Agreement"), the Investor purchased 10,000,000 shares of Series A preferred stock at a per share price of $0.20 for aggregate proceeds of $2,000,000. Effective April 29, 2014, our Board of Directors approved and authorized the Subscription Agreement pursuant to which it issued an aggregate of 10,000,000 shares of Series A preferred stock to the Investor at $0.20 per share. In accordance with the rights and preferences of the Series A preferred stock, the Investor had at its option the ability to convert the shares of Series A Preferred Stock into shares of common stock on a one preferred share for 1.333333 common share basis. We could by providing a five day notice to the Investor redeem such Series A Preferred Shares at a redemption price of $0.20 per share plus all unpaid and accrued Earned Dividends. In the event of receipt of the notice of redemption by the holder of the Series A Preferred Shares, the Investor shall have five business days from date of receipt to convert into shares of common stock.

We tendered our notice of redemption to the Investor dated May 22, 2015, which provided that the Investor had five business days within which to elect to convert the shares to common stock. The Investor did not make such election and, therefore, on June 1, 2015, the Board of Directors authorized the redemption of 750,000 shares of the Series A preferred stock.
Therefore, as of the date of this Annual Report, we have 9,250,000 shares of Series A preferred stock that remain issued and outstanding.

ITEM 6: SELECTED FINANCIAL DATA

Pursuant to permissive authority under Regulation S-K, Rule 301, we have omitted Selected Financial Data.

ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Selected Financial Data

Pursuant to permissive authority under Regulation S-K, Rule 301, we have omitted selected financial data.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

Forward Looking Statements

The following discussion of the financial condition and results of operations of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Report. Some of the statements contained in this Report that are not historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which can be identified by the use of terminology such as "estimates," "projects," "plans," "believes," "expects," "anticipates," "intends," or the negative or other variations, or by discussions of strategy that involve risks and uncertainties. However, as the Company intends to issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, the Company is ineligible to rely on these safe harbor provisions. We urge you to be cautious of the forward-looking statements. All such forward-looking statements, which are contained in this Report, reflect our current beliefs with respect to future events and involve known and unknown risks, uncertainties and other factors affecting our operations, market growth, services, products and licenses. No assurances can be given regarding the achievement of future results, as actual results may differ materially as a result of the risks we face, and actual events may differ from the assumptions underlying the statements that have been made regarding anticipated events. Factors that may cause actual results, our performance or achievements, or industry results, to differ materially from those contemplated by such forward-looking statements include without limitation:

Our ability to attract and retain management, and to integrate and maintain technical information and management information systems;
Our ability to raise capital when needed and on acceptable terms and conditions;
The intensity of competition;
General economic conditions; and
Changes in government regulations.

We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained or incorporated by reference herein to reflect future events or developments.

Plan of Operation

We are a development stage technology company that operates within the financial services industry and the broader gaming industry. We are engaged, through our Stealth branded products, in the business of researching, developing and maintaining proprietary algorithmic securities trading systems. Furthermore, through our MOBI branded products, develops software and interactive games for use by charitable organizations and government regulated lotteries.

We are marketing the acquired Stealth software to securities traders. This software provides an algorithmic stock signals intelligence system that predicts future stock behavior. It is our intention to license our financial software to financial organizations and individuals as a primary source of revenue. We have no intention of becoming a broker-dealer or any other type of finance company or engage in any type of regulated activity. Our financial software is expected to be distributed through software app stores and distribution agreements.

The Stealth branded products has been commercialized for both institutional traders and retail traders alike. To date the products are available on Bloomberg terminals worldwide via the Bloomberg App Portal. Furthermore, we are in discussions to make the Stealth product suite available to various institutions via integration with in-house technologies.

Our Stealth trading platform offers a suite of software applications designed to encourage better customer interaction and help brokerages to modernize. Stealth Analytics is a mathematical and cognitive psychology based market visualization instrument that filters complex market data to vividly and explicitly depict the sentiment and perception of market participants.

Our MOBI branded products are currently being customized for various charitable organizations to integrate the product suite with in-house technologies.

Our goal is to provide lottery operators worldwide with a complete solution to enable consumers to play lottery and other games of chance and skill via mobile devices. For the players, the solution makes mobile-play much more exciting and convenient compared to paper ticket play. For the operator, MOBI can deploy in 60 days, without capital costs, and expand revenues by reaching mobile savvy players and analytically-enriched in-game marketing.

The MOBI products have two main target groups. The first such group for MOBI Interactive solutions are lottery operators. These operators have a pressing need to expand into new sales and distribution channels but generally are hampered by their expensive retail-terminal networks that need a high density of players to be cost-effective. MOBI GameCore solves this issue by enabling lottery ticket play via mobile devices. Consequently, there is no need for a player to go to a lottery retail outlet. Operators can now reach anyone that has a mobile device in the jurisdiction.

Charitable funds represent the second target group for MOBI. Charitable lotteries are an excellent way to contribute to the ever-growing needs of a community. MobiCharity is a customizable lottery solution that supports fund raising events that involve tickets or pledges. Player functions include registration, pledging, payment, social messaging and notifications. Operator functions feature donor management and support, campaign design and execution and reporting. Besides the convenient features for the purchaser, the charity can sell more tickets at a faster rate. This speeds the close out of the fund raising effort and helps reduce promotion costs.

Results of Operations

We have concentrated our efforts on developing our business strategy. We have been working on further developing the Stealth application to bring it to working models ready for demonstration for both our Stealth and Mobilotto applications. During the year the major developments were:

Continuous upgrades of both Stealth Analytics, Stealth Professional, Back tester, and Robotic trading system.

Our mobile lottery software application has now been developed and tested, but we have derived only limited revenues from our technology. There is no guarantee that we will be able to successfully expand the use of our technology or that it will generate sufficient revenue to sustain our operations.

Liquidity and Capital Resources

As of May 31, 2015 our current assets were $2,686,456 and our current liabilities were $1,352,303, which resulted in a working capital surplus of $1,334,153. As of May 31, 2015, current assets were comprised of: (i) $2,626,664 in cash; (ii) $44,649 in local tax receivable; (iii) $9,421 security deposit on an office lease and (iv) $5,722 in prepaid expense. As of May 31, 2015, current liabilities were comprised of: (i) $91,443 in accounts payable and accrued expenses, (ii) $5,107 in deferred rent, (iii) $1,033,271 in notes payable and (iv) $222,482 of marketable securities sold short.

As of May 31, 2015, our total assets were $2,718,670 comprised of the current assets noted above and $32,214 in property and equipment. The increase in total assets from fiscal year ended May 31, 2014 was primarily due to the $1,000,000 proceeds received from the issuance of notes payable.

As of May 31, 2015, our total liabilities were $1,352,303 comprised the current liabilities noted above. The increase in liabilities from fiscal year ended May 31, 2014 was primarily due to the issuance of the notes payable for approximately $1,000,000, plus accrued interest of $33,271.

Stockholders’ deficit decreased from $1,976,620 for fiscal year ended May 31, 2014 to $1,366,368 for fiscal year ended May 31, 2015.

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities due to a lack of a source of revenues. For the year ended May 31, 2015, net cash flows used in operating activities was $686,182 compared to $449,925 used during the year ended May 31, 2014.

Cash Flows from Investing Activities

For the year ended May 31, 2015, cash flows from investing activities comprised of acquisition of computer equipment, furniture and leaseholds in the amount of $38,778 (2014 - $nil), proceeds on the sale of securities $71,371,569 (2014 -$3,247,513) and the purchase of securities in the amount of $71,392,256 (2014 - $2,840,984). In May 2014, the Company began trading its own funds using its proprietary Stealth trading program.

Cash Flows from Financing Activities

We have financed our operations primarily from debt or the issuance of equity instruments. For the year ended May 31, 2015 net cash flows provided from financing activities was $950,000 consisting of a loan from the former CEO of the Company. In 2014 net cash flows provided from Financing activities consisted of $2,000,000 in issuance of preferred stock, $80,000 from the exercise of warrants and $262,936 in proceeds from related party loans.

As of May 31, 2015, we had cash of $2,626,664. This represented an increase from May 31, 2014, at which time we had cash in the amount of $2,475,413. We also own property and equipment with a cost of $38,986 which consists of computer equipment, office furniture and equipment and leasehold improvements. The Company’s total assets as of May 31, 2015 were $2,718,670, which was an increase from $2,481,234 as of May 31, 2014. As at May 31, 2015, $2,000,000 of the cash has restricted use, as per a management agreement with the Series A preferred stock holders. Our current cash on hand will not be sufficient to maintain our operations for the next 12 months.

As a development stage company, we have limited capital and limited operating resources. During the fiscal year ended May 31, 2015, we raised $950,000 through the issuance of a note payable. During the fiscal year ended May 31, 2014, we raised $2,000,000 pursuant to the closing of a private placement of 10,000,000 Series A preferred stock and $80,000 in connection with the exercise of certain warrants, at an exercise price of $0.20 per share. During the fiscal year ended May 31, 2013 we raised $1,043,875 pursuant to the closing of a private placement of 6,900,000 shares and the issuance 333,500 shares of common stock in connection with the exercise of certain warrants, at an exercise price of $0.20 per share. From inception through May 31, 2013, we raised $5,107,478 in initial funding and private placements of restricted common stock and $2,000,000 in preferred stock. The funds raised in the prior private placements will not be sufficient to meet our projected cash flow deficits from operations or to fund the development of our technology and products.

The cash on hand (less restricted cash) in our bank accounts is not sufficient to maintain our planned operations for the next twelve months. Management believes that without obtaining additional financing or developing an ongoing source of revenue, we will not launch successfully. Although we have actively been pursuing new business opportunities, we cannot give assurance that we will succeed in this endeavor, or be able to enter into necessary agreements to pursue our business on terms favorable to us. Should we be unable to generate additional revenues or raise additional capital, we could eventually be forced to cease business activities altogether.

Results of Operations for the Twelve Months Ended May 31, 2015 and May 31, 2014

Income

Since inception, we have received minimal revenue. For the twelve months ended May 31, 2015, we generated revenue in the amount of $17,999 (2014: $13,269). We have concentrated our efforts on developing our business strategy and obtaining financing. We have working models ready for demonstration. We spent much of the year internally testing the Stealth applications. There is no guarantee that we will be able to successfully develop and launch our technology or that it will generate sufficient revenue to sustain our operations.

Expenses and other items

For the twelve months ended May 31, 2015, we incurred $744,688 (2014 - $577,057) in general and administrative expenses. General and administrative expenses consisted of: (i) professional fees of $86631 (2014: $29,683; (ii) bank charges of $11,536 (2014: $2,393; (iii) consulting of $172,960 (2014: $106,744; (iv) depreciation of $6,771 (2014: $1,743; (v) filing fees of $13,466 (2014: $11,428); (vi) insurance of $34,389 (2014: $45,678); (vii) office expenses of $65,235 (2014: $75,349); (viii) rent of $38,591 (2014: $34,507); (ix) subscriptions of $2,971 (2014: $997); (x) telephone and internet $1,931 (2014: $4,513); (xi) marketing of $36,910 (2014: $10,217); (xii) travel of $39,236 (2014: $2,366); (xiii) salary and benefits of $196,531 (2014: $236,495); (xiv) transfer agent fees of $4,086 (2014: $8,226); and (xv) interest of $33,444 (2014: $6,718).

We also had interest income of $1,340 (2014 –$96), a realized gain on marketable securities of $173,364 (2014 - $62,372), unrealized loss on investments of $13,231 (2014 - $54,828), and a gain on forgiveness of debt of nil (2014 -$315,955). The gain on the forgiveness of debt in the prior year was the result of some of our creditors agreeing to write off amounts owing to them.

Our net loss for the fiscal year ended May 31, 2015 was $563,151. This was an increase in net loss of $322,958 from the twelve months ended May 31, 2014, when we incurred a loss of $240,193.

The increase in loss is attributed to the following changes compared to the prior year:

An increase in general and administrative expense in the amount of $167,631 – General and administrative increased as the business activity grew. We received a loan from the former CEO in the amount of $1,000,000. This infusion of capital allowed us to advance our business plan. In order to do so, we had to build an infrastructure support the activity. As such we hired additional employees, engaged new consultants and rented a new office space (and incurred higher rent and related office costs). These costs were the primary reason for the year-over-year increase in this expense category. In additional, there was an increase in legal fees related to the our attempts to list on another public stock exchange.
A decrease in gain on forgiveness of debt in the amount of $315,955 – as noted above, in the prior year some of the company’s creditors agreed to write off amounts owed to them. No such transaction in the current year.
An increase in realized gains on marketable securities of $110,992 – In May 2014, we began using Stealth internally to generate cash flow. These gains represent the profits generated from these trading activities.
A decrease in unrealized losses on marketable securities in the amount of $41,597
An increase in interest income of $1,244, and;
An increase in gain on foreign exchange in the amount of $2,066

During the twelve months ended May 31, 2015, we also had a foreign currency transactional adjustment of ($53,102) (2014: ($5,082), which resulted in a comprehensive loss of $616,252 compared to a comprehensive loss of $245,275 during the twelve months ended May 31, 2014.

Our Plan of Operation for the Next Twelve Months

Our path to revenue is based upon completing the following work plan over the next twelve months:

1. Adherence to our Marketing Plan .

2. Completion of the systems development and testing to ensure we have robust products.

3. Develop new products around the Stealth application and find other ways to license its use.

4. Launch new mobile solutions

5. As opportunities arise, partner with existing suppliers of games to lottery operators in order to mobilize existing lottery games.

6. Remain flexible in our business model to operate as a lottery retailer/distributor, license the technology for use, or sell the technology for use in a pre-defined jurisdiction, preferably in that order, as conditions deem appropriate.

7. Complete appropriate certifications in promising jurisdictions to become a lottery retailer/distributor and/or supplier to specific lottery operators.

8. Partner with the emerging internet gaming suppliers and new lottery licensees to mobilize their offerings.

9. Proactively communicate and present our product and brand to prospective lottery operators, and understand their needs for new sources of revenue.

Marketing Plan

Our marketing plan is a combination of branding, communication, presentations, and meetings with potential customers, public messaging, and partnership initiatives with other corporate entities. Specifically, our plan calls for:

1.	Face to face sales to potential corporate customers.
2.	Internet sales through search engine optimization (SEO), banner ads and press work.
3.	Implement a demand generation engine that will provide the technical infrastructure to sell our software direct to users on our website.
4.	Through a variety of social media, email, Broker partners, and media campaigns, we will drive traffic to weekly webinars in our live trade room and multiple trading community sites promoting the Stealth Analytics and our other products and services.

Working Capital

We are actively seeking additional private financing in the amount of $1,000,000 to help fund working capital.

Contractual Obligations and Other Commercial Commitments

Effective on May 21, 2014, our Board of Directors authorized and approved the execution of that certain loan agreement dated May 21, 2014 with our then Chief Executive Officer, Peter George ("George") in the principal amount of $50,000 (the "$50,000 Loan Agreement"). Effective July 24, 2014, our Board of Directors authorized and approved the execution of a second loan agreement dated July 24, 2014 with George in the principal amount of $950,000 (the "$950,000 Loan Agreement"), and collectively, the "Loan Agreements").

The Loan Agreements are unsecured and accrue interest at an annual rate of 5% on the unpaid balances. We will pay all principal and accrued interest thirteen months from the date of execution of either the $50,000 Loan Agreement or the $950,000 Loan Agreement. Any prior payments shall be applied first to interest and then to principal. The Company may at any time during the term of the Loan Agreements redeem the respective loan by providing a five day notice to George that we intend to redeem. Payment of principal and interest will be calculated from the date of execution to date of redemption notice.

Lastly, the Loan Agreements provide that George may convert all or part of the loan, including principal and accrued interest, into shares of Series B preferred stock at a per share price of $0.20. In the event that neither we have redeemed the Loan Agreements nor George has converted the Loan Agreements, there shall be an automatic conversion of the Loan Agreements into shares of the Series B preferred stock. The conversion price per share shall be the lowest trading price of our shares on the OTCQB by using the lowest share price of the preceding five business days prior to the termination date of the Loan Agreement with a minimum price of $0.20.

None.

Significant Business Challenges

In addition to the challenge of raising adequate capital in order to fully deploy our business plan, the significant business challenges that our management expects to encounter over the next year and beyond, as well as the known trends, demands, uncertainties that may affect our Company’s financial condition include the following matters:

We have not yet completed the software development of all components constituting our full feature mobile lottery application and all of our planned Stealth products, and our financial condition would be materially and adversely affected if we are not able to complete our software development;
Since there has not yet been full commercial utilization of our applications, it will be more difficult for us to close sales of our untested product with prospective lottery operator customers of our Company and we may not able to derive any revenues from our product;
If our product does not perform as anticipated, we may be unable to obtain any contracts with lottery operators, or if we are able to enter into contracts but the product is not performing, we could become subject to litigation, which in either case could adversely affect our financial condition;
Our patent application is currently pending and if the patent is not granted we may not be able to fully protect our intellectual property which could adversely affect our ability to benefit from our technology;

If our pending patent is granted, the costs of enforcing our patent and other intellectual property rights may be disproportionate to any potential revenues, or we may be required to defend allegations from third parties alleging infringement of their rights, which in either case could adversely affect our financial condition;
We rely on a small management team and a small group of employees who may not be able to be fully responsive to all aspects of operating our business, and if we increase our personnel the additional administrative and overhead costs could be burdensome, which in either case could adversely affect our financial condition;
The international focus of our business model implicates higher costs and expenses than domestic companies, including foreign language translation, compliance with local laws, business practices favoring local competitors, compliance with multiple, conflicting and changing governmental laws and regulations as well as changing governments, any of which could adversely affect our financial condition;
We expect intensifying competition in our target markets which could force us to lower our pricing, reduce our margins, lower our market share and reduce expectations of profitability;
Foreign competitors who are not subject to U.S. anti-corruption laws and regulations may engage in illegal and unfair business practices with which we cannot compete that could impair our ability to obtain contracts from lottery operators in our target foreign markets;
Our financial results could be damaged if prospective customers decide to develop their own mobile solutions or utilize a third party solution using alternative software and hardware technologies;
The market for mobile lottery services is still in the early stages of development, and if the market for our services does not develop as we anticipate, it will have an adverse effect on our financial condition;
Our business is subject to evolving technology and if we are unable to upgrade our technologies responsive to changes in the industry our financial condition could be adversely affected;
We will rely on third party technology and hardware providers and if there is a failure of the products or services rendered by these providers our financial condition could be adversely affected;
Implementation of additions or changes in third-party hardware and software platforms used to deliver our services to our customers and end-users may result in performance problems which could adversely affect our financial condition;
There has not yet been adoption of international standards applicable to mobile lottery solutions and as such we may have to change or modify our application to conform to disparate standards which could adversely affect our financial condition;
If we are able to enter into contracts with international lottery operators, we will be subject foreign currency exchange risks, different pricing environments; different tax regimes and regional economic and political conditions. Any of these factors, either individually or collectively, could have a material adverse effect on our business and results of operations; and
Gaming opponents persist in their efforts to curtail legalized gaming which, if successful, could limit our operations or cause us to cease doing business.

Publicly Reporting Company Considerations

We will continue to face several material challenges of operating as a publicly reporting company and we expect to incur significant costs and expenses applicable to us as a public company. We anticipate that our ongoing costs and expenses of complying with our public reporting company obligations will be approximately $166,000 annually which we expect to pay for out of proceeds from our financing efforts during the next twelve months from the date of this Report. Subsequent to the next twelve month reporting and compliance period, we expect to pay for our publicly reporting company compliance and reporting costs from our revenues. We must structure, establish, maintain and operate our Company under corporate policies designed to ensure compliance with all required public company laws, rules, regulations, including, without limitation, the Securities Act of 1933, the Securities Act of 1934, the Sarbanes-Oxley Act of 2002, the Foreign Corrupt Practices Act and the respective rules and regulations promulgated thereunder. Some of our more significant challenges of being a publicly reporting company include the following:

We will have to carefully prepare and file in the format mandated by the SEC all periodic filings required by the Securities Exchange Act of 1934 (Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and interim reports of material significant events on Form 8-K), as well as insider reporting compliance for all officers and director under Section 16 of the Securities Exchange Act of 1934 on Forms 3, 4 and 5;
In addition to auditing our annual financial statements and maintaining our books and records in accordance with the requirements of the Securities Act of 1934, we will have to comply with Section 404 of the Sarbanes-Oxley Act of 2002, which requires increased corporate responsibility and accountability;
We will have to assure that our Board committee charters, corporate governance principles, Board committee minutes are properly drafted and maintained;
We will have to carefully analyze and assess all disclosures in all forms of public communications, including periodic SEC filings, press releases, website postings, and investor conferences to assure legal compliance;
We will have assure corporate and SEC legal compliance with respect to proxy statements and information statements circulated for our annual shareholder meetings, shareholder solicitations and other shareholder information events;
We will have to assure securities law compliance for all equity-based employee benefit plans, including registration statements and prospectus distribution procedures;
We will have to continuously analyze the specific impact on our Company of all significant SEC initiatives, policies, proposals and developments, as well as assess the rules of Public Company Accounting Oversight Committee on governance procedures of Company and our audit committee;
We will have to comply with the specific listing requirements of a stock exchange if we qualify and apply for such listing;
We expect that being a public company will increase our director and officer liability-insurance costs;
We will have to engage and interface with a Transfer Agent regarding issuance and trading of our common stock, which may include Rule 144 stock transfer compliance matters; and
We will incur additional costs for legal services as a function of our needs to seek guidance on securities law disclosure questions and evolving compliance standards.

In addition to the foregoing, our reporting and compliance costs and expenses may increase substantially if we are able to deploy our business model on an international basis, which will add significant cross-border jurisdictional complexity to our regulatory compliance program and our accounting controls and procedures. We have assigned a high priority to corporate compliance and our public company reporting obligations, however, there can be no assurance that we will have sufficient cash resources available to satisfy our public company reporting and compliance obligations. If we are unable to cover the cost of proper administration of our public company compliance and reporting obligations, we could become subject to sanctions, fines and penalties, our stock could be barred from trading in public capital markets and we may have to cease operations.

Our actual results may differ from our projections if there are material changes in any of the factors or assumptions upon which we have based our projections. Such factors and assumptions, include, without limitation, the development of our proprietary technology platform and our products, the timing of such development, market acceptance of our products, protection of our intellectual property, our success in implementing our strategic, operating and personnel initiatives and our ability to commercialize our products, any of which could impact sales, costs and expenses and/or planned strategies and timing. As a result, it is possible that we may require significantly more capital resources to meet our capital needs.

Off-Balance Sheet Arrangements

None.

Material Commitments

We are obligated under a lease agreement through May, 2018 which provides for annual rentals, on a straight-line basis, of approximately $34,000. In addition, we will pay, as additional rent, our proportionate share of real estate taxes and certain operating expenses.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment during the next twelve months.

ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We did not have any operations which implicated market risk as of the end of the latest fiscal year. We expect that our planned operations will engender market risk, particularly with respect to foreign currency exchange rate risk. We intend to implement an analysis and assessment program which will on a regular basis determine exposures of the Company to such risks. We expect to report the results of all such quantitative and qualitative risk assessments prior to entering into any material agreements, and on a regular monthly and annual basis to our audit committee so that responsive risk management measures can be discussed and actions taken to the extent reasonably feasible. Inflationary factors in the future, such as increases in overhead costs, may adversely affect our operating results. A high rate of inflation in the future may have an adverse effect on our ability to manage selling, general and administrative expenses as a percentage of net revenues if our revenues do not increase with these increased costs.

Market risk represents the risk of loss that may impact our financial position, results of operations or cash flows due to adverse change in foreign currency and interest rates.

Exchange Rate

Our reporting currency is United States Dollars (“USD”). In the event we acquire any properties outside of the United States, the fluctuation of exchange rates may have positive or negative impacts on our results of operations.

Interest Rate

Interest rates in the United States are generally stable. Any potential future loans will relate mainly to acquisition of properties and will be mainly short-term. However, our debt may be likely to rise in connection with expansion and if interest rates were to rise at the same time, this could have a significant impact on our operating and financing activities. We have not entered into derivative contracts either to hedge existing risks for speculative purposes.

Paritz & Company, P.A.	15 Warren Street, Suite 25
	Hackensack, New Jersey 07601
	(201)342-7753
	Fax: (201) 342-7598

To the Board of Directors and
Stockholders of Epcylon Technologies, Inc.

We have audited the accompanying balance sheets of Epcylon Technologies, Inc. as of May 31, 2015 and 2014, and the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of years in the two year period ended May 31, 2015 and 2014. Epcylon Technology’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Epcylon Technology, Inc. as of May 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two year period ended May 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

/s/Paritz & Company, P.A.

Hackensack, NJ

September 11, 2015

ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Epcylon Technologies Inc. (Formerly Mobile Integrated Systems Inc. )
Consolidated Balance Sheets

		May 31, 2015			May 31, 2014

CURRENT ASSETS:
Cash	$	2,626,664		$	2,475,413
Local tax receivable		44,649			3,241
Security deposit		9,421			-
Prepaid expense		5,722			2,580
TOTAL CURRENT ASSETS		2,686,456			2,481,234
Property and equipment, net (note 3)		32,214			-
TOTAL ASSETS	$	2,718,670		$	2,481,234

LIABILITIES and STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued expenses (note 4)	$	91,442		$	59,504
Deferred rent		5,107		$	-
Securities sold not yet purchased (note 5)		222,482			398,985
Notes payable - related party (note 6 & 10)		1,033,271			46,125
CURRENT LIABILITIES AND TOTAL LIABILITIES		1,352,302			504,614

STOCKHOLDER'S EQUITY:
Series A Preferred shares, par value $0.0001 15,000,000 shares authorized 10,000,000 shares issued and outstanding (note 7)		1,000			1,000
Common stock, par value $0.0001 300,000,000 shares authorized 168,476,221 issued and outstanding as of May 31, 2015, 2014 (respectively (note 7)		16,846			16,846
Additional paid-in capital		8,388,459			8,382,459
Other comprehensive loss		(57,726	)		(4,624	)
Accumulated deficit		(6,982,211	)		(6,419,061	)
TOTAL STOCKHOLDERS' EQUITY		1,366,368			1,976,620
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,718,670		$	2,481,234

Epcylon Technologies Inc. (Formerly Mobile Integrated Systems Inc. )
Consolidated Income statements
(unaudited)

		For the Year			For the Year
		Ended			Ended
		May 31, 2015			May 31, 2014

REVENUE	$	17,999		$	13,269

EXPENSES
General and administrative expenses		744,688			577,057

OPERATING LOSS		(726,689	)		(563,788	)

OTHER INCOME (EXPENSE)
Interest income, net		1,340			96
Realized gain on marketable securities		173,364			62,372
Unrealized loss on marketable securities		(13,231	)		(54,828	)
Gain on forgiveness of debt		0			315,955
Gain of foreign exchange		2,066			0

NET LOSS		(563,150	)		(240,193	)

Deemed dividend on Preferred stock		-			266,666

NET LOSS ATTRIBUTABLE TO EPCYLON		(563,150	)		(506,859	)


Net loss per common share		($0.00	)		($0.00	)

Basic and fully diluted weighted average common shares outstanding		168,476,221			165,094,395

COMPREHENSIVE LOSS
Net Loss		(563,150	)		(240,193	)
Foreign currency translation adjustment		(53,102	)		(5,082	)
NET COMPREHENSIVE LOSS	$	(616,252	)	$	(245,275	)

Epcylon Technologies Inc. (formerly Mobile Integrated Systems Inc.)
Consolidated Cash flow statement
For the year ended May 31, 2015
(unaudited)

		For the year			For the year
		Ended			Ended
		May 31, 2015			May 31, 2014
OPERATING ACTIVITIES:
Net loss	$	(563,150	)	$	(240,193	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		6,770			1,743
Gain on forgiveness of debt		-			(315,955	)
Imputed rent		6,000			7,000
Realized trading gains		(173,364	)		(62,372	)
Unrealized loss on marketable securities		13,231			54,828
Imputed Interest		-			6,719
Changes in operating assets and liabilities:
Prepaid expenses		(3,142	)		53,234
Local tax receivable		(41,408	)		62,985
Accounts payable and accrued liabilities		31,939			(17,914	)
Accrued interest on related party loans		37,146
NET CASH USED IN OPERATING ACTIVITIES		(685,978	)		(449,925	)
					-
INVESTING ACTIVITIES:
Acquisition of property & equipment		(38,984	)		-
Purchases of securities		(71,392,256	)		(2,840,984	)
Proceeds from sale of securities		71,371,571			3,247,513
NET CASH USED IN INVESTING ACTIVITIES		(59,669	)		406,529

FINANCING ACTIVITIES:
Proceeds from exercise of warrants		-			80,000
Proceeds from issuance of preferred stock		-			2,000,000
Proceeds from related party loans		950,000			262,936
NET CASH PROVIDED BY INVESTING ACTIVITIES		950,000			2,342,936

Effect of exchange rates on cash		(53,102	)		(5,082	)

INCREASE IN CASH		151,251			2,294,458
CASH - BEGINNING OF YEAR		2,475,413			180,955

CASH - END OF YEAR	$	2,626,664		$	2,475,413


Suplemental cash for disclosure
Cash paid for interest	$	8,639		$	-

Epcylon Technologies Inc (formerly Mobile Integrated Systems Inc.)
Consolidated Statement of Stockholders' equity
For the year ended May 31, 2015
(unaudited)

	Common Stock		Series A Preferred Stock		Accumulated	Accumulated		comprehensive
	Shares	Amount	Shares	Amount	Paid in capital	Deficit		loss		Total
		$		$	$	$		$		$
BALANCE - May 31, 2014	168,476,221	16,846	10,000,000	1,000	8,382,459	(6,419,061	)	(4,624	)	1,976,619
Imputed rent	-	-	-	-	6,000	-		-		6,000
Other comprehensive gain / (loss) resulting from foreign exchange conver	-	-	-	-	-	-		(53,102	)	(53,102.00	)
Net loss	-	-	-	-	-	(563,150	)	-		(563,150	)
BALANCE -May 30, 2015	168,476,221	16,846	10,000,000	1,000	8,388,459	(6,982,211	)	(57,726	)	1,366,368

EPCYLON TECHNOLOGIES INC.
(formerly known as Mobile Integrates Systems Inc., formerly known as Loto Inc)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2015

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION Organization and Business Description

Epcylon Technologies Inc., formerly known as Mobile Integrated Systems Inc. and formerly as Loto Inc. (the “Company” or “Epcylon”), together with its wholly owned subsidiaries Mobilotto Systems Inc., (“MIBI”), Delite Americas Inc., and Omega Smartbuild Americas Inc., are development stage companies. The Company is engaged, through its Stealth branded products, in the business of researching, developing and maintaining proprietary algorithmic securities trading systems. The Company uses its Stealth trading system to trade securities with some of its existing excess capital. Furthermore, the Company, through its MOBI branded products, develops software and interactive games for use by charitable organization and government regulated lotteries. The Company trades on the OTCQB under the symbol PRFC.

Since inception the Company has been engaged in organizational activities, has been developing its business model and software, and marketing its product to lottery operators, but has not earned any material revenue from operations, other than a onetime payment for a new mobile application in the prior year. Accordingly, the Company’s activities have been accounted for as those of a “Development Stage Enterprise”, as set forth in authoritative guidance issued by the Financial Accounting Standards Board. Among the disclosures required are that the Company’s financial statements be identified as those of a development stage company, and that the statements of operations, stockholders’ equity and cash flows disclose activity since the date of the Company’s inception.

Basis of Consolidation

These consolidated financial statements include the accounts of Epcylon Technologies Inc., which was incorporated on April 22, 2009 in the state of Nevada and its wholly-owned subsidiaries, Mobilotto Systems, Inc., which was incorporated in Ontario, Canada on September 16, 2008, Delite Americas Inc. which was incorporated in Ontario, Canada on July 8, 2013 and Omega Smartbuild Americas Inc., which was incorporated in Ontario, Canada on July 8, 2013.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, and are expressed in US dollars. All intercompany balances and transactions have been eliminated.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

The Company considers all highly liquid instruments with an original maturity or remaining maturity at the date of purchase of three months or less to be cash equivalents.

Trading Securities

Trading securities are recorded at fair value on a recurring basis and consist primarily of investments in corporate stocks. Realized trading gains and losses and unrealized gains and losses (fair value adjustments) are reported in statement of operations.

Property and Equipment

Property and Equipment are stated at cost less accumulated amortization. Amortization is calculated on a straight-line basis over the expected useful life as follows:

Computer equipment and software	3 years
Office furniture and equipment	5 years
Leasehold improvements	Term of the lease

Repairs and maintenance expenditures are charged to operating expense as incurred. Replacements and major renewals are capitalized.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of the asset may not be recoverable. For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset, or group of assets, is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and the fair value. Fair values are determined based on quoted market values, discounted cash flows, or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.

Use of Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

Revenue is recognized when it is realized or realizable and earned. Revenue is realized or realizable when there is persuasive evidence of an arrangement, prices are fixed or determinable, services or products are provided to the customer, and collectability is probable and reasonably assured depending upon the applicable revenue recognition guidance followed. The following are specific revenue recognition policies.

MIBI expects to have contracts between the mobile network operators and/or the lottery operators, depending upon the jurisdiction of business. Revenue from lottery services is determined as a percentage of the amount of retail sales of lottery tickets pursuant to the terms of the contract. This revenue will be recognized when the lottery purchase transaction is completed and confirmed to the mobile device.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued)

Revenue from the sale of a lottery system, which includes the customization of software, is recognized on the percentage of completion method of accounting, based on the ratio of costs incurred to estimated costs to complete.

Revenue from the stealth software is recognized when subscription funds are received.

Revenue derived from software maintenance on lottery software is recognized ratably over the maintenance period.

Revenue derived from enhancements to lottery software is recognized at the time such enhancements are accepted by the customer.

Accounts Receivable and Allowance for Doubtful Accounts

We have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable credit losses in our existing accounts receivable. We extend credit to our customers based on an evaluation of their financial condition and other factors. We generally do not require collateral or other security to support accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for potential bad debts if required. We determine whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we use assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are reevaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. We may also record a general allowance as necessary. Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate that we should abandon such efforts.

As of May 31, 2015 and 2014, there was no allowance required.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Revenue and expenses accounts are translated at average exchange rates during the period. Historical cost balances are re-measured using historical exchange rates. Gains and losses arising on settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in Canadian dollars. The Company has not, to the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

Income Taxes

We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued)

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

Fair Value of Financial Instruments

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial instruments, including cash, prepaid rent, receivables, accrued liabilities, and notes payable are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities
Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable
Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Stock-Based Compensation

We recognize compensation expense for stock-based compensation in accordance with ASC Topic 718. For employee stock-based awards, we calculate the fair value of the award on the date of grant using the Black-Scholes method for stock options and the quoted price of our common stock for unrestricted shares; the expense is recognized over the service period for awards expected to vest. For non-employee stock-based awards, we calculate the fair value of the award on the date of grant in the same manner as employee awards. However, the awards are revalued at the end of each reporting period and the pro rata compensation expense is adjusted accordingly until such time the nonemployee award is fully vested, at which time the total compensation recognized to date equals the fair value of the stock-based award as calculated on the measurement date, which is the date at which the award recipient’s performance is complete. The estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustment in the period estimates are revised. We consider many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – (continued)

Convertible Instruments

We evaluate and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

We account for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: We record when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. We also record when necessary, deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares.

Preferred Stock

We apply the guidance enumerated in ASC 480 “Distinguishing Liabilities from Equity” when determining the classification and measurement of preferred stock. Preferred shares subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair value. We classify conditionally redeemable preferred shares (if any), which includes preferred shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control, as temporary equity. At all other times, we classified our preferred shares in stockholders’ equity.

Rental expense

Rental expense is accounted for on the straight-line method. Deferred rent payable as of May 31, 2015 represents the excess of rent recognized in the financial statements over scheduled lease payments.

Recent Accounting Pronouncements

Accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption.

Concentration of Credit Risk

Financial instruments that potentially expose us to concentrations of credit risk consist principally of cash and cash equivalents. We maintain our cash accounts at high quality financial institutions with balances, at times, in excess of federally insured limits. Management believes that the financial institutions that hold our deposits are financially sound and therefore pose minimal credit risk.

Research and development

Research and development expenditures are charged to operations as incurred.

NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

				Accumulated		2015
		Cost		Depreciation		Net		2014
Leasehold improvements	$	16,011	$	1,601	$	14,410	$	0
Computer equipment		22,975		5,169		17,806		0

Total	$	38,986	$	6,770	$	32,214	$	0

Depreciation expense for the years ended May 31, 2015 and 2014 was $6,770 and $1,743 respectively

NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

		May 31, 2015		May 31, 2014
Programming and systems testing	$	-	$	-
Legal		45,891		19,051
Audit		11,000		15,000
Consulting		15,360		9,040
General and administrative		19,192		16,413
Total	$	91,443	$	59,504

NOTE 5– SECURITIES SOLD NOT YET PURCHASED

Marketable securities owned and on margin consisting of equity securities owned by the Company. As at May 31, 2015 securities at market value were as follows:

		Fair value
Options sold short	$	222,482

The securities are reported at fair value using level 1 input based on the quoted market price of the securities at each reporting period.

NOTE 6 – NOTES PAYABLE

		May 31, 2015		May 31, 2014
Note payable due the former Chief Executive Officer with interest payable at 5% per annum, due June 21, 2015, unsecured. On Maturity, the loan automatically converts to Series B Preferred shares at a minimum price of $0.20 per stock (see note 11).	$	50,000	$	46,125
Note payable due to the former Chief Executive Officer with interest payable at 5% per annum, due August 24, 2015, unsecured. On Maturity, the loan automatically converts to Series B Preferred shares at a minimum price of $0.20 per stock (see note 11).		950,000		-
Accrued interest on notes payable		33,271		-
	$	1,033,271	$	46,125

NOTE 7 – STOCKHOLDERS’ EQUITY

Series B Preferred Stock

On September 17, 2014 the Company filed a Certificate of Designation of Series B Convertible Preferred Stock. Each share of Series B Convertible Preferred Stock carries a par value of $0.001 and is convertible into common stock on a 1 preferred share for 1 common share basis. Preferred shares are entitled to a dividend at the discretion of the Board of Directors. The Corporation may, by providing a five day notice, redeem such Series B Preferred Stock at a redemption price of $0.20. Each holder of Series B Preferred Stock shall at their option convert the shares of Series B Preferred Stock into shares of common stock on a one preferred share for one common share basis.

As at May 31, 2015, no Series B Preferred Stock has been issued.

NOTE 8 – INCOME TAXES

The Company was incorporated in the U.S, and its operations are in Canada. Currently, the Company has no operations or transactions in the U.S.

The comparison of income tax expense at the U.S. statutory rate of 35% in tax years 2015 and 2014, to the Company’s effective tax is as follows:

		May 31,
		2015			2014

U.S. Statutory Rate of 35%	$	(197,000	)	$	(84,000	)
Tax rate difference between Canadian and U.S		51,000			16,000
Change in valuation allowance	$	146,000		$	38,000

Effective Tax	$	0		$	0

Deferred income taxes assets are summarized as follows:

Available net operating losses	$	2,100,000		$	1,900,000
Valuation allowance		(2,100,000	)		(1,900,000	)
	$	-		$	-

At May 31, 2015, the Company has approximately $7,000,000 of net operating loss carryforwards available to reduce future taxable income which expire through 2036. Utilization of these carryforwards may be revised under Internal Revenue Code section 382 that reduces utilizable losses following a greater than 50% ownership change as determined under regulations.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the 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. Based on the assessment, management established a full valuation allowance against the entire deferred tax asset relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.

NOTE 9 – STOCK OPTION GRANTS

A summary of the Company’s stock option activity and related information is as follows:

Stock options	Number of shares			Weighted average		Aggregate
				exercise price per		Intrinsic
				share		Value
Outstanding, June 1, 2013	16,376,500		$	0.1971	$	3,227,333
Cancelled or expired	(8,626,500	)	$	0.1971	$	(2,963,833	)
Outstanding, May 31, 2014	7,750,000		$	0.1650	$	263,500
Cancelled or expired	(7,750,000	)	$	0.1650	$	(263,500	)
Outstanding, May 31, 2015	-			-		-

The Company did not issue any options in 2015 and 2014.

NOTE 10 – COMMITMENTS

The Company is obligated under a lease agreement through May, 2018 which provides for annual rentals, on a straight-line basis, of approximately $34,000. In addition, the Company will pay, as additional rent, its proportionate share of real estate taxes and certain operating expenses.

Rental expense, including real estate taxes and operating expenses, charged to operations for the year ended May 31, 2015 aggregated approximately $38,000 in 2015 and $nil in 2014.

NOTE 11 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial statements have been issues. Other then what is discussed below, there have been no other subsequent events.

On June 21, 2015, a $50,000 note payable matured, and as per the provisions of the loan, the principal and interest automatically converted to Series B Preferred Stock at a price of $0.20 per stock.

On August 21, 2015 a $950,000 note payable matured, and as per the provisions of the loan, the principal and interest automatically converted to Series B Preferred Stock at a price of $0.20 per stock.

ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

We have not had any changes in or disagreements with our accountants regarding accounting and financial disclosure.

ITEM 9A: CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by our management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of May 31, 2015. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Company’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Based on such evaluation, our management concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the SEC's rules and forms.

Subsequent to the period covered by this Report, the Company initiated new procedures regarding internal controls over financial reporting and disclosure controls and procedures. The Company anticipates that such controls and procedures will be effective in the future for purposes of recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the SEC's rules and forms. We intend to further upgrade the amount of financial and personnel resources we spend on our accounting function as our operations develop and expand.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process, under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer, designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with United States generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

•	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

•	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and

•	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Our management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). That evaluation disclosed that the Company has material defects in its internal control over financial reporting. Specifically they determined that there is a lack of expertise in U.S. GAAP among the Company’s management personnel. They also determined that the size of the Company’s accounting staff and low number of supervisory personnel prevented an appropriate segregation of accounting functions. Accordingly, based on this evaluation, management concluded that our internal control over financial reporting was not effective as of May 31, 2015.

Changes in Internal Control Over Financial Reporting

We anticipate that our controls and procedures will be effective in the future for purposes of recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the SEC's rules and forms. We intend to further upgrade the amount of financial and personnel resources we spend on our accounting function as our operations develop and expand.

There were no further changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the quarter ended May 31, 2015 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

ITEM 9B: OTHER INFORMATION

Not applicable.

DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS

PART III

ITEM 10: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE GOVERNANCE

MANAGEMENT AND CERTAIN SECURITY HOLDERS

Directors, Executive Officers, Promoters and Control Persons

Our Board of Directors accepted the resignation from Peter George as our President, Chief Executive Officer and a member of the Board of Directors effective March 4, 2015. Our board of Directors accepted the resignation from Loris Macor as a member of the Board of Directors effective January 14, 2015. Mr. George and Mr. Macor have not expressed any disagreement with us on any matter relating to our operations, policies or practices. Therefore, as of the date of this Quarterly Report, the Board of Directors consists of the following members: Todd Halpern, Jack Bensimon, John Fitzgerald, Gary Schwartz, and Leon Redensky.

The Board of Directors accepted the consent of Jack Bensimon as a member of the board of directors and as Chief Executive Office effective March 10, 2015.

The Board of Directors accepted the consent of Gary Schwartz as a member of the board of directors and as Chief Executive Officer, effective May 5, 2015.

The Board of Directors accepted the consent of Leon Redensky as a member of the board of directors effective June 25, 2015.

The Board of Directors accepted the consent of John Fitzgerald as a member of the board of directors effective June 25, 2015.

The following table presents information with respect to our officers, directors and significant employees as of May 31, 2015:

Name	Age	Position
Jack Bensimon	45	Chief Executive Officer and Director
Kyle Appleby	40	Chief Financial Officer
Adam Sculthorpe	46	Chief Technology Officer
Todd Halpern	56	Director
Gary Schwartz	50	Director
John Fitzgerald	53	Director
Leon Redensky	38	Director

Biographical Information Regarding Officers and Directors

Todd Halpern- Chairman and Director

Mr. Halpern currently resides as President of Halpern Enterprises. Mr. Halpern and his family have been in the business of importing fine wines and spirits into Canada for over 57 years. Mr. Halpern joined Halpern Enterprises in 1979, and since has grown the company tremendously. Today, the company represents over 100 of the World’s finest wine and spirit producers.

Serving on the Toronto General Hospital Board since 2005, Mr. Halpern is Board Champion of the Krembil Neuroscience Centre’s Krembil Discovery Tower and Krembil Neuro Program. He is also Chair of the Grand Cru Culinary Wine Festival, which benefits research at University Health Network.

Mr. Halpern was also a member of the Board of Sentinelle Medical Inc. and was involved in the successful acquisition of the company by Hologic Inc.

Jack Bensimon, LL.M., B.A., CAMS, CIMA, CFSA, CCSA – Chief Executive Officer and Director

Mr. Bensimon has been involved in the securities industry for the past twenty years of which fourteen years has been dedicated to compliance, proven performance assessing and mitigating regulatory risk. His knowledge entails corporate governance, regulatory risk management, training and development, leadership expertise, banking, securities and corporate law, disclosure controls and procedures.

Mr. Bensimon is currently a principal and compliance consultant with Black Sawn Diagnostics, Inc., which has provided such services to certain clients for the past fifteen years as follows: (i) Epcylon Technologies Inc. where his duties included oversight of intellectual property, proprietary trading and operations, risk management, regulatory compliance and business development; (ii) Terra Cotta Capital Inc. as a senior securities compliance advisor where his duties included development and filing of all documents to establish an EMD for discretionary wealth management firm; (iii) Amherst Funding Group LP as a securities consultant where he provided advice on SHL reporting and new reporting requirements by the Federal Reserve Bank of New York; (iv) Difference Capital Management as a compliance consultant where he provided an independent compliance risk assessment for the OSC and TSX-regulated entities including an analysis of disclosure controls and procedures, difference capital finance, board guidance on managing conflict of interests, proxy statements and other board governance concerns and regulatory filings; (v) Stableview Asset Management as a regulatory compliance consultant where he registered a new PM license with the OSC, developed and implemented policies and procedures manual, advised on establishing a registered entity under the U.S. Investment Advisor Act to raise capital for offshore hedge fund, provided P&P and CRM2 requirements for newly registered EMD/IFM entities under the OSC; (vi) Europacific Canada where he independently audited and tested compliance governance controls under IIROC platform and presented recommendations to senior management on actionable items to close compliance gaps; (vii) Nagel & Associates as a lead securities fraud consultant where he assisted forensic accountant in securities litigation matter against a bank and provided an expert report before arbitration panel, advised hedge fund on offshore compliance issues and risks and fraud risk exposures; (viii) Nottingham Consulting as a chief compliance officer where he oversaw corporate finance activity; and (ix) President's Choice Bank where he independently tested AML compliance governance controls under FINTRAC/OSFI platform, presented recommendations to senior management on actionable items to close gaps, managed AML project team to include compliance managers and analysts; (x) Fraser Mackenzie Ltd as a chief compliance officer where he oversaw trade surveillance, AML, registration, continuing education, corporate finance, investment banking and regulatory audits. Other clients included Experis Finance, Wellington West Capital Markets, Orbixa, Canadian Scholarship Trust and BCI Canada Securities.

Mr. Bensimon also was engaged in anti-money laundering (AML) positions as follows: (i) Instinet Canada Ltd. where he provided advise on AML regulatory compliance training and development to OSC and IIROC registrants; (ii) Arcade Coin & Stamp Gallery where he led risk assessment of AMl program for Money Services Business to prepare for FINTRAC audit; (iii) OSFI/FINTRAC as a compliance consultant where he led AML risk assessment of OSFI governance program for Schedule II bank to prepare for OSFI audit, advised bank on risks including proprietary trading under the Volcker Rule and provided recommendations to senior management to minimum regulatory risks; and (iv) FinCEN/FINTRAC where he was retained by leading litigation firm to represent plaintiff as an expert AML witness against a bank, provided analysis regarding compliance with US and Canadian AML rules and regulations, provided independent report to law firm and testified as an expert witness before the Competition Tribunal.

Mr. Bensimon was further engaged in internal audits as follows: (i) First Canadian Title as a compliance consultant where he advised on independent review and testing of OSFI Outsourcing Guideline related party transactions; (ii) TransCanada Pipelines where he led internal audit testing for selected financial controls for Colombian subsidiary; (iii) Flint Energy Services Ltd. where he was a SOX ELC lead consultant and assisted with publication of the Control Certification Report; and (iv) Canadian Tire Corp as a senior SOX QA consultant where he led the independent review and risk assessment of board governance controls and program.

Mr. Bensimon earned a Honors Bachelor of Arts, Economics and Math at the University of Toronto, a Masters of Laws, General and Securities Law, from the Osgoode Hall Law School, York University, and a Masters of Laws, Business Law, from the University of Toronto. Mr. Bensimon holds a certification as a CFA Level I from the CFA Institute, a Certified Investment Management Analyst from the University of Pennsylvania, a Certified Anti-Money Laundering Specialist from ACAMS and a Certified Financial Services Auditor from the Institute of Internal Auditors.

Adam Sculthorpe - Chief Technology Officer

During the past twenty-five years, Mr. Sculthorpe has been a cyber security technologist serving clients in many countries. He is experienced in online security, technology risk assessment and vulnerability testing, marketing and advertising technology, software development and managing and mentoring staff members. Mr. Sculthorpe has a keen understanding and insight into the development of sophisticated intelligence tools from experience gained while developing and implementing software solutions for corporate, financial, military and government clients. His expertise helped protect the integrity and security of daily banking transactions exceeding USD $350 billion for leading Swiss, U.S. and U.K. investment banks. Mr. Sculthorpe also has extensive product management, business development and technical sales experience that helped facilitate a number of multi-million dollar software sales.

As our Chief Technology Officer, Mr. Sculthorpe will be responsible for managing the product development and support team, guiding our technical direction and ensuring alignment of technology and business strategies for sustainable success. He will also be responsible for development of our long-term technology vision and communication to all of our partners, clients and insiders. Mr. Sculthorpe will identify customer needs for mapping into a product development plan. He will be setting and maintaining the Company's technical culture to help attract and retain top technical talent, drive marketing technology adoption, support business development and strategic partner engagement, evangelize our vision and serve as the public face for our technology.

From approximately December 2009 to current date, Mr. Sculthorpe has been the chief executive officer/chief technology officer at Arador where he pioneered and developed a proprietary breach detection system (PatrolX) that sends an alert when customer data is stolen and misused. Mr. Sculthorpe is also responsible for hiring and managing product and software engineers, programmers, designers, analysts and developers to create software as a service (SaaS) solutions. He has also developed a high-performance web accelerator (bitVelocity) to help secure and scale the delivery of dynamic cloud-based content at low cost. His duties also include responsibility for the design and development of infrastructure as a service (IaaS) and providing consulting services, marketing technology, online security services and software development solutions.

From approximately March 2003 through December 2009, Mr. Sculthorpe was the chief executive officer/chief technology officer of Clickrisk where he developed security intelligence software and services solutions to identify fraud in online advertising platforms. He also managed programmers, analysts and developers, was responsible for research and development, data collection, correlation, analysis and reporting platform producing intelligence products based on data from thousands of sources. Mr. Sculthorpe's successes included identifying and preventing more than a billion dollars in fraud for large advertiser clients, resulting in significant class action law suits against major search engines, including Google and Yahoo.

From approximately September 2001 through November 2002, Mr. Sculthorpe was engaged as a senior security consultant for UBS where he worked with the security development team on a high-profile intrusion detection, vulnerability assessment and SIEM project to protect UBS' intellectual technology infrastructure.

From approximately March 2000 through August 2001, Mr. Sculthorpe was engaged as a senior security consultant for Internet Security Systems where he provided internet security consulting services related to intrusion detection, investigation, incident response, analysis, vulnerability assessment, internal and external training and education for worldwide telecommunications, banking, media, military, government and corporate clients. He was the European team leader for advanced SIEM software. He also worked with product managers to improve user experience, usability and features, including data collection, event correlation and analysis and reporting functionality. Mr. Sculthorpe also represented Internet Security Systems at meetings, trade shows, marketing events, seminars and industry groups, supported international teams and further worked with the senior management to assist with the closing of sales. Mr. Sculthorpe also assisted with the design and deployment of the largest intrusion detection, vulnerability assessment and security intelligence systems worldwide.

From approximately April 1999 through March 2000, Mr. Sculthorpe was engaged as a security specialist for TNT where he was responsible for TNT Post Group’s IT security. Mr. Sculthorpe developed TNT's worldwide security threat assessment, incident response and investigation capability and policies. He also guided solutions development, vendor selection, management and implementation of intrusion detection, vulnerability assessment, firewall, auditing, logging and monitoring systems and identified and specified new technologies including SSO and PKI solutions, advising on standards and compliance. Mr. Sculthorpe reported to executive board on incident response and management issues and was responsible for handling a number of sensitive investigations where he assisted law enforcement and security agencies with international security investigations. He also worked with numerous departments and internal and external development teams to ensure the latest security technology and standards were incorporated into high profile projects and was responsible for training a security team.

Mr. Sculthorpe has appeared as a guest on television and radio and has been featured in the worldwide press as a security expert, discussing his research and security tools, identifying and resolving significant issues and helping bring about industry level changes.

Gary Schwartz- Director

Over the past 15 years, Mr. Schwartz has played a leadership role in the mobile industry. He is the author of "THE IMPULSE ECONOMY" and "FAST SHOPPER, SLOW STORE" published by Simon & Schuster, Atria Imprint. Gary is presently writing a book on the Internet of Everything (IoT) titled "IF THINGS COULD SPEAK".

In 2013, Mr. Schwartz was recognized by Mobile Marketer publication as the "Mobile Commerce Evangelist of the Year” and in 2014 Gary was selected as the Retail Innovator of the Year by Retail Touchpoints. Gary is Chair Emeritus of mobile committee of the Interactive Advertising Bureau (IAB) and the Mobile Entertainment Forum (MEF) and is presently is the Global Director of the Location Based Marketing Association (LBMA).

Mr. Schwartz is an alum of Columbia University in New York and the Stanford University Center in Yokohama, where he was the recipient of the Asia and Japan Foundation Fellowships.

John Fitzgerald- Director

Mr. Fitzgerald, a senior investment banker and investor, has sourced and executed a wide variety of large and complex transactions across multiple industries, including the healthcare, digital media and natural resources sectors. Mr. Fitzgerald worked in a senior banking capacity for 20+ years in New York and London at Dresdner Kleinwort Wasserstein, Credit Suisse First Boston and Lehman Brothers International where he won multiple “Deal of the Year” awards. Mr. Fitzgerald has significant expertise in capital markets, acquisition finance, structured finance, securitization and project finance.

In addition to his investment banking activities, Mr. Fitzgerald has served as a valued advisor to, and member of, the Board of Directors of numerous technology businesses. Most recently, Mr. Fitzgerald served as Board Member and Chairman of the Audit Committee of Daystar Technologies (NASDAQ-listed solar panel manufacturer), Director and Interim CEO of Harvest Wind (wind turbine manufacturer), Advisor to iSense Corporation (medical device manufacturer), Director and Interim President of BostonPoly (medical polymer manufacturer) and Advisor and Board Observer for Trustwater plc (water filtration for industrial and medical application).

Mr. Fitzgerald received a B.A. with Distinction from Bowdoin College, an MSc.(Econ) from The London School of Economics and an M.B.A. from The Wharton School, University of Pennsylvania. Mr. Fitzgerald lives in Toronto and Ketchum, Idaho.

Leon Redensky – Director

Mr. Redensky is a founding partner of Lynx Capital Partners, LLC, a technology and equity trading company, with offices in New York, Montreal, Kiev (Ukraine), and the Cayman Islands. Lynx trades equity products for its own account as well as develops trading technology for other clearing and trading firms in the capital markets space. Mr. Redensky manages the daily operations of the firm.

In addition, Mr. Redensky was one of the founding members of Viridian Spirits, which re-introduced Absinthe in the United States after a 95-year ban. After 5 years of leading the company, Viridian was sold to another distillery. Based in Manhattan, NY, Mr. Redensky graduated from the University of Pennsylvania with a BSE in bioengineering and a minor in economics.

Kyle Appleby- Chief Financial Officer

Mr. Appleby, CPA, CA serves as our Chief Financial Officer. Mr. Appleby has over 15 years’ experience in public accounting and has been providing part-time CFO, and other financial accounting and compliance services to both public and private companies since 2007. Prior to 2007 Mr. Appleby worked for several public accounting firms in Canada. Mr. Appleby is a member of the Chartered Professional Accountants of Canada.

Term of Office

All of our directors are appointed for a one-year term to hold office until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. Executive officers serve at the discretion of the Board of Directors, and are elected or appointed to serve until the next Board of Directors meeting following the annual meeting of stockholders. Our executive officers are appointed by our Board of Directors and hold office until removed by the Board.

Significant Employees

At the present time, we have one key employee in addition to our officers and directors.

John Hollander– Employee, Programmer. John serves as Head of IT Programming of Epcylon Technologies, Inc. and is responsible for project management and systems design, John is an expert in the development and optimization of market analysis tools and automated trading systems.

Family Relationships

There are no family relationships between or among the directors, executive officers or persons nominated or chosen by us to become directors or executive officers.

Involvement in Certain Legal Proceedings

To the best of our knowledge, during the past five years, none of the following occurred with respect to a present director (or person nominated to become director), executive officer, founder, promoter or control person: (1) any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his or her involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires that the executive officers and directors, and persons who beneficially own more than 10% of the equity securities of reporting companies, file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms we received, we believe that during the year ended May 31, 2015, and to current date of this Annual Report, certain filings have not been made. We will be working with our officers and directors to ensure that such delinquent filings will be made and that in the future all such filings will be timely made.

CORPORATE GOVERNANCE

Board Committees

Our Board of Directors does not currently have a compensation committee or nominating and corporate governance committee because, due to the only recent significant increase in operational activity, the Board of Directors believes it had been able to effectively manage the issues normally considered by such committees. However, our Board of Directors is currently underway to undertake a review of the procedures required to establish these committees in the near future.

Code of Ethics

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code. To the knowledge of the Company, there have been no reported violations of the Code of Ethics. In the event of any future amendments to, or waivers from, the provisions of the Code of Ethics, we intend to describe on our Internet website, www.epcylon.com, within four business days following the date of a waiver or a substantive amendment, the date of the waiver or amendment, the nature of the amendment or waiver, and the name of the person to whom the waiver was granted.

Whistleblower Procedures Policy

In accordance with the requirements of Section 301 of the Sarbanes-Oxley Act of 2002, the Board of Directors of the Company has adopted a Whistleblower Procedures Policy, stating that all employees of the Company and its subsidiaries are strongly encouraged to report any evidence of financial irregularities which they may become aware of, including those with respect to internal controls, accounting or auditing matters. Under the Whistleblower Procedures Policy, the management of the Company shall promptly and periodically communicate to all employees with access to accounting, payroll and financial information the means by which they may report any such irregularities. In the event an employee is uncomfortable for any reason reporting irregularities to his or her supervisor or other management of the Company, employees may report directly to any member of the Board of Directors of the Company. The identity of any employee reporting under these procedures will be maintained as confidential at the request of the employee, or may be made on an anonymous basis. Notice must be provided to all of the Company’s employees with access to accounting, payroll and financial information in respect of these procedures.

Board Committees

Audit Committee

Our audit committee consists of Todd Haplern and Jon Fitzgerald. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and (5) funding for the outside auditors and any outside advisors engagement by the audit committee.

Audit Committee Financial Expert

Todd Halpern is the audit committee’s financial expert. Our Board of Directors has determined that Mr. Halpern’s education and experience qualify him for such position. The Board of Directors has analyzed the independence of each of our directors and has determined that Mr. Halpern is one of our four independent directors under the rules of the NASDAQ Stock Market LLC, including the definition of “independent director” under Section 5605(a)(2) of the NASDAQ Manual.

Disclosure Committee

Disclosure committee functions are performed by our entire board of directors.

Director Nominations

There have been no changes in the year ended May 31, 2015 to the procedures by which security holders may recommend nominees to our board of directors.

Advisory Board

On February 12, 2014, our Board of Directors authorized the establishment of an advisory board (the "Advisory Board"). The Advisory Board shall have the responsibility of advising our Board of Directors and management regarding development of our intellectual property and technology, including trans-border technology transfer efforts (the "Proprietary Technology"). The Proprietary Technology relates to our operations including, but not limited to, its mobile lottery software application (the "MOBI Products") and its Stealth products for proprietary algorithmic securities trading systems.

Board Leadership Structure and Role in Risk Oversight

Mr. Todd Halpern serves as Chairman of the Board of Directors and our Board of Directors is primarily responsible for overseeing our risk management processes. The Board of Directors receives and reviews periodic reports from management, auditors, legal counsel, and others, as considered appropriate regarding our assessment of risks. The Board of Directors focuses on the most significant risks facing us and our general risk management strategy, and also ensures that risks undertaken by us are consistent with the board’s appetite for risk. While the Board of Directors oversees our risk management, management is responsible for day-to-day risk management processes. We believe this division of responsibilities is the most effective approach for addressing the risks facing our company and that our board leadership structure supports this approach.

ITEM 11: EXECUTIVE COMPENSATION

Executive Compensation

The following table sets forth compensation for each of the past two fiscal years with respect to each person who served as our Chief Executive Officer and each of our four most highly-compensated executive officers who earned a total annual salary and bonuses that exceeded $100,000 in any of the two preceding fiscal years.

Summary Compensation Table

Change in

Pension

Value and

Non-Equity

Nonqualified

Stock

Option

Incentive Plan

Deferred

All Other

Name and Principal

Salary

Bonus

Awards

Compensation

Total

Position (1)

Year

($)

Earnings ($)

($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

Jack Bensimon (2)
Chief Executive Officer and Director

2015

40,000

Peter George (2)
Chief Executive Officer and Director

2015
2014

$0
$0

Kyle Appleby (3)
Chief Financial Officer

2015
2014

$12,,000
$8,000

$12,000

$24,000
$,8000

Cato Kemmler (4)
President and Director

2014

Abbas Damji (5)
Chief Financial Officer,
Former Chief Executive Officer and
Former Director

2014

	(1)	Other than as set forth above, no other officers of the Company earned over $100,000.

	(2)	On March 4, 2015, Mr. Peter George resigned as our Chief Executive Officer and to the Board of Directors, and on March 10, 2015 Mr. Jack Bensimon was appointed as Chief Executive Office and to the Board of Directors.

	(3)	On February 6, 2014, Mr. Kyle Appleby was appointed as our Chief Financial Officer.

	(4)	Effective June 3, 2013, Mr. Abbas Damji was appointed as our Chief Executive Officer and to the Board of Directors. Mr. Abbas Damji resigned on October 11, 2013.

	(5)	Effective February 6, 2014, Mr Emlyn David resigned as our Chief Financial Officer. Effective as of May 14, 2012, Mr. Emlyn David resigned as our Chief Executive Officer.

Employment Agreements

We entered into a consulting agreement with Jack Bensimon, through BLACK SWAN DIAGNOSTICS INC (a company owned by Mr. Bensimon). Mr. Bensimon shall receive a monthly retainer of $10,000.

We entered into a consulting agreement with Mr. Appleby pursuant to which a company owned by Mr. Appleby shall be compensated for his services to us at a rate of $2,000 Dollars per month, payable by $1,000 in cash and $1,000 in common stock.

At the present time, we do not have an employment agreement with any other officer of the Company.

Director Compensation for the year ended May 31, 2015

During the fiscal year ended May 31, 2015, none of our directors received any compensation for their services, except for as set forth in the Summary Compensation Table above.

ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS

The following table sets forth the number of shares of common stock beneficially owned as of September 10, 2015 by (i) those persons or groups known to us to beneficially own more than 5% of our common stock; (ii) each director; (iii) each executive officer; and (iv) all directors and executive officers as a group. Except as indicated below, each of the stockholders listed below possesses sole voting and investment power with respect to their shares. The percentage of ownership set forth below reflects each holder’s ownership interest in the 168,476,221 shares of the Company’s common stock issued and outstanding as of September 10, 2015.

Amount and Nature of Beneficial Ownership

				Percentage of
		Options/		Shares
Name and Address of Beneficial Owner	Shares	Warrants (1)	Total (1)	Outstanding (1)
Officers and Directors
				%
Jack Bensimon	-0-	-0-	-0-	-0-
Kyle Appleby	-0-	-0-	-0-	-0-
Adam Sculthorpe	-0-	-0-	-0-	-0-
Todd Halpern	375,000	-0-	-0-	-0-
Gary Schwartz	-0-	-0-	-0-	-0-
John Fitzgerald	-0-	-0-	-0-	-0-
Leon Redensky	-0-	-0-	-0-	-0-

All officers and directors as a group (6 persons)	375,000	0	375,000	0 %
Five Percent Stockholders 2238646 Ontario Inc. (2)	97,040,000	0	97,040,000	57.6 %

For each individual or entity listed above, the mailing address is: c/o Epcylon Technologies, Inc., 34 King Street, Suite 1010, Toronto, Ontario, Canada M5C 2L9, except as otherwise indicated below.

(1) Includes options and warrants exercisable as of the date hereof or within 60 days hereafter. The Company is unaware of any pledges of any shares, options or warrants by any of the individuals or entities listed above.

(2) Debra Swain in Trust has sole voting and dispositive control over shares of our common stock owned by 2238646 Ontario Inc., an Ontario corporation located at 23 Bedford Road, Toronto, Ontario M5R 2J9, Canada. Debra Swain is the sole officer, director and shareholder of 2238646 Ontario Inc.

Potential Changes in Control

At the present time, there are no arrangements known to us, including any pledge by any person of securities of the Company, the operation of which may at a subsequent date result in a change in control of the Company.

Stock Option Plan Information

To date, we have not adopted a Stock Option Plan. We may adopt an option plan in the future.

Adverse Interests

We are not aware of any material proceeding to which any of our directors, officers, or affiliates, or any owner of record or beneficially of more than five percent of any class of our voting securities, or security holder is a party adverse to us or has a material interest adverse to us.

ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

BOARD COMMITTEES; DIRECTOR INDEPENDENCE

Currently, all actions that would otherwise be performed by standing committees of the Board of Directors are performed by the entire Board, except for our audit committee, which handles the hiring of our independent public accountants and the oversight of the independent auditor relationship, the review of our significant accounting policies and our internal controls. Our audit committee consists of Todd Halpern.

The Board of Directors has analyzed the independence of each director and has determined that four of the Company’s five directors: Jack Bensimon, Gary Schwartz, John Fitzgerald, Leon Redensky and Todd Halpern, are independent under the rules of the NASDAQ Stock Market LLC. The Board of Directors has determined that each of the Company’s remaining directors has relationships that would cause him and her not to be an “independent director” under the specific criteria of Section 5605(a)(2) of the NASDAQ Manual.

ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

The aggregate fees of Paritz & Company, P.A. for professional services rendered for the audit of the Company's annual financial statements for the year ended May 31, 2015, totaled $15,000. The aggregate fees of Paritz & Company, P.A for professional services rendered for the audit of the Company's annual financial statements for the year ended May 31, 2014, totaled $15,000.

Audit-Related Fees

The aggregate fees billed by Paritz & Company, P.A. for audit related services for the year ended May 31, 2015 and which are not disclosed in “Audit Fees” above, were $3,500. The aggregate fees billed by Paritz & Company, P.A. for audit related services for the year ended May 31, 2014 and which are not disclosed in “Audit Fees” above, were $2,000.

Tax Fees

The aggregate fees billed by Paritz & Company, P.A for tax compliance for the year ended May 31, 2015, were $0. The aggregate fees billed by Paritz & Company, P.A for tax compliance for the year ended May 31, 2014, were $0.

All Other Fees

The aggregate fees billed for services other than those described above, for the years ended May 31, 2015 and May 31, 2014, were $0.

Audit Committee Pre-Approval Policies

Our Board of Directors reviewed the audit and non-audit services rendered by Paritz & Company, P.A during the periods set forth above and concluded that such services were compatible with maintaining the auditors’ independence. All audit and non-audit services performed by our independent accountants are pre-approved by our Board of Directors to assure that such services do not impair the auditors’ independence from us.

PART IV

ITEM 15: EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements

Financial Statements for the period from inception (September 16, 2008) to May 31, 2015.

Exhibit No.		Description of Exhibits

Exhibit 3.1		Articles of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on June 10, 2009.

Exhibit 3.2		Bylaws of the Company, incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on June 10, 2009.

Exhibit 3.3		Amendment to the Articles of Incorporation of the Company, incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on June 10, 2009.

Exhibit 3.4		Bylaws of the Company, as amended, incorporated by reference to Exhibit 3.4 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on April 23, 2012.

Exhibit 3.5		Amendment to the Articles of Incorporation of the Company, incorporated by reference to Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on April 23, 2012.

Exhibit 10.12		Share Cancellation Agreement, by and between the Company, A Few Brilliant Minds Inc. and Gino Porco, dated as of June 16, 2011, incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 13, 2011.

Exhibit 10.13		Share Cancelation Agreement, by and between the Company and NAC Investment Ltd., dated as of June 20, 2011, incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 13, 2011.

Exhibit 10.14		Share Cancellation Agreement, by and between the Company and 2208155 Ontario Inc., dated as of June 20, 2011, incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 13, 2011.

Exhibit 10.15		Employment Agreement, by and between the Company and Fulvio Ciano, dated as of October 21, 2011, incorporated by reference to Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.16		Stock Option Agreement, by and between the Company and Randall Barrs, dated as of November 29, 2011, incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.17		Stock Option Agreement, by and between the Company and Alan Ralph, dated as of November 29, 2011, incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.18		Stock Option Agreement, by and between the Company and Todd Halpern, dated as of November 29, 2011, incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.19	Stock Option Agreement, by and between the Company and Todd Halpern, dated as of November 29, 2011, incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.20	Stock Option Agreement, by and between the Company and Fulvio Ciano, dated as of November 29, 2011, incorporated by reference to Exhibit 10.20 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.21	Stock Option Agreement, by and between the Company and Donald Ziraldo, dated as of November 29, 2011, incorporated by reference to Exhibit 10.21 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.22	Stock Option Agreement, by and between the Company and Donald Ziraldo, dated as of November 29, 2011, incorporated by reference to Exhibit 10.22 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.23	Stock Option Agreement, by and between the Company and Randall Barrs, dated as of November 29, 2011, incorporated by reference to Exhibit 10.23 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.24	Stock Option Agreement, by and between 2238646 Ontario Inc. and Emlyn David, dated as of April 25, 2012.

Exhibit 10.25	Employment Agreement, by and between the Company and Murray Simser, dated as of May 14, 2012.

Exhibit 10.26	Stock Option Agreement by and between 2238646 Ontario Inc. and Murray Simser, dated as of May 14, 2012.

Exhibit 10.27	Arrangement Agreement, by and between the Company, Quantitative Alpha Trading Inc. and 2338584 Ontario Inc., dated as of August 20, 2012

Exhibit 10.28	Corporate Development Agreement, by and between the Company and 2238646 Ontario Inc., dated as of November 1, 2012, incorporated by reference to Exhibit 10.28 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 22, 2013.

Exhibit 10.29	Consulting Agreement dated by and between Epcylon Technologies Inc. and CFO Advantage Inc. dated February 1, 2014, incorporated by reference to Exhibit 10.29 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on April 14, 2014.

Exhibit 21	List of Subsidiaries.

Exhibit 31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2	Certification of the Chief Financial 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

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EPCYLON TECHNOLOGIES, INC.

	By:	/s/ Jack Bensimon
		Name: Jack Bensimon
		Title: Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Kyle Appleby
		Name: Kyle Appleby
		Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Dated: September 14, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Jack Bensimon
Name: Jack Bensimon
Title: Director
Dated: September 14, 2015

/s/ Gary Schwartz
Name: Gary Schwartz
Title: Director
Dated: September 14, 2015

/s/ Todd Halpern
Name: Todd Halpern
Title: Director
Dated: September 14, 2015

/s/ John Fitzgerald
Name: John Fitzgerald
Title: Director
Dated: September 14, 2015

/s/ Leon Rudensky
Name: Leon Redensky
Title: Director
Dated: September 14, 2015

Exhibit Index

Exhibit No.		Description of Exhibits

Exhibit 3.1		Articles of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on June 10, 2009.

Exhibit 3.2		Bylaws of the Company, incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on June 10, 2009.

Exhibit 3.3		Amendment to the Articles of Incorporation of the Company, incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on June 10, 2009.

Exhibit 3.4		Bylaws of the Company, as amended, incorporated by reference to Exhibit 3.4 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on April 23, 2012.

Exhibit 3.5		Amendment to the Articles of Incorporation of the Company, incorporated by reference to Exhibit 3.5 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on April 23, 2012.

Exhibit 10.12		Share Cancellation Agreement, by and between the Company, A Few Brilliant Minds Inc. and Gino Porco, dated as of June 16, 2011, incorporated by reference to Exhibit 10.12 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 13, 2011.

Exhibit 10.13		Share Cancelation Agreement, by and between the Company and NAC Investment Ltd., dated as of June 20, 2011, incorporated by reference to Exhibit 10.13 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 13, 2011.

Exhibit 10.14		Share Cancellation Agreement, by and between the Company and 2208155 Ontario Inc., dated as of June 20, 2011, incorporated by reference to Exhibit 10.14 to the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on September 13, 2011.

Exhibit 10.15		Employment Agreement, by and between the Company and Fulvio Ciano, dated as of October 21, 2011, incorporated by reference to Exhibit 10.15 to the Company’s Quarterly Report on Form 10- Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.16		Stock Option Agreement, by and between the Company and Randall Barrs, dated as of November 29, 2011, incorporated by reference to Exhibit 10.16 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.17		Stock Option Agreement, by and between the Company and Alan Ralph, dated as of November 29, 2011, incorporated by reference to Exhibit 10.17 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.18		Stock Option Agreement, by and between the Company and Todd Halpern, dated as of November 29, 2011, incorporated by reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.19		Stock Option Agreement, by and between the Company and Todd Halpern, dated as of November 29, 2011, incorporated by reference to Exhibit 10.19 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.20	Stock Option Agreement, by and between the Company and Fulvio Ciano, dated as of November 29, 2011, incorporated by reference to Exhibit 10.20 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.21	Stock Option Agreement, by and between the Company and Donald Ziraldo, dated as of November 29, 2011, incorporated by reference to Exhibit 10.21 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.22	Stock Option Agreement, by and between the Company and Donald Ziraldo, dated as of November 29, 2011, incorporated by reference to Exhibit 10.22 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.23	Stock Option Agreement, by and between the Company and Randall Barrs, dated as of November 29, 2011, incorporated by reference to Exhibit 10.23 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 23, 2012.

Exhibit 10.24	Stock Option Agreement, by and between 2238646 Ontario Inc. and Emlyn David, dated as of April 25, 2012.

Exhibit 10.25	Employment Agreement, by and between the Company and Murray Simser, dated as of May 14, 2012.

Exhibit 10.26	Stock Option Agreement, by and between 2238646 Ontario Inc. and Murray Simser, dated as of May 14, 2012.

Exhibit 10.27	Arrangement Agreement, by and between the Company, Quantitative Alpha Trading Inc. and 2338584 Ontario Inc., dated as of August 20, 2012.

Exhibit 10.28	Corporate Development Agreement, by and between the Company and 2238646 Ontario Inc., dated as of November 1, 2012, incorporated by reference to Exhibit 10.28 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on January 22, 2013.

Exhibit10.29	Consulting Agreement dated by and between Epcylon Technologies Inc. and CFO Advantage Inc. dated February 1, 2014, incorporated by reference to Exhibit 10.29 to the Company’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission on April 14, 2014.

Exhibit 21	List of Subsidiaries.

Exhibit 31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 32.2	Certification of the Chief Financial 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

Attached files

Epcylon Technologies, Inc. Reports

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