U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

Mark One

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

For the quarterly period ended February 29, 2016

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

For the transition period from _______to _______

Commission File No. 333-141060

EPCYLON TECHNOLOGIES, INC.
(Name of small business issuer in its charter)

34 King Street E, Suite 1010
Toronto, Ontario
Canada M5C 2X8
(Address of principal executive offices)

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

Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 [  ]

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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 (Section 229.405 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 [  ]      No [X]

Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes[ ] No[X] Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date:

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EPCYLON TECHNOLOGIES INC.

Form 10-Q

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PART I

ITEM 1. FINANCIAL STATEMENTS

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains certain forward-looking statements reflecting our current expectations with respect to our operations, performance, financial condition, and other developments. These forward-looking statements may generally be identified by the use of the words “may”, “will”, “believes”, “should”, “expects”, “anticipates”, “estimates”, and similar expressions. These statements are necessarily estimates reflecting management’s best judgment based upon current information and involve a number of risks and uncertainties. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made, and readers are advised that various factors could affect our financial performance and could cause our actual results for future periods to differ materially from those anticipated or projected. While it is impossible to identify all such factors, such factors include, but are not limited to, those risks identified in our periodic reports filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K.

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Epcylon Technologies Inc.
Consolidated Balance Sheets
(Unaudited)

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Epcylon Technologies Inc.
Consolidated statements of comprehensive income (loss)
(unaudited)

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Epcylon Technologies Inc.
Consolidated Cash flow statement
(unaudited)

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EPCYLON TECHNOLOGIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
FEBRUARY 29, 2016

NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION

The consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The Company believes that the disclosures made are adequate to make the information presented not misleading. The consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Form 10-K as filed with the Securities and Exchange Commission on September 14, 2015. The results of operations for the three and nine months ended February 29, 2016 are not indicative of results for the full fiscal year or any other period.

Organization and Business Description

Epcylon Technologies Inc., formerly known as Mobile Integrated Systems Inc. (the “Company” or “Epcylon”), together with its wholly owned subsidiaries Mobilotto Systems Inc., (“MIBI”), Delite Americas Inc., and Omega Smartbuild Americas Inc., are engaged through its Stealth branded products, in the business of researching, developing and commercializing proprietary algorithmic securities trading systems. The Company uses its Stealth trading system to trade securities with some of its existing excess capital to test the system. Furthermore, the Company, through its MOBI branded products, develops proprietary geolocation technology and services for the lottery, pari-mutuel and casino industries enabling next-generation mobile gaming. On July 29, 2013, the Company changed its name from Mobile Integrated Systems Inc., to Epcylon Technologies Inc. The Company trades on the OTCPINK under the symbol PRFC.

Since inception the Company has been engaged in developing its business model and software platforms. The Company has not earned any material revenue from operations.

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NOTE 1 – ORGANIZATION AND BASIS OF PRESENTATION (continued)

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 (inactive). which was incorporated in Ontario, Canada on July 8, 2013 and Omega Smartbuild Americas Inc. (inactive), which was incorporated in Ontario, Canada on July 8, 2013.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the Company’s May 31, 2015 annual financial statements.

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

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future either will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations, and cash flows when implemented.

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NOTE 3 – PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

NOTE 5 – SECURITIES SOLD NOT YET PURCHASED

Marketable securities owned and on margin consisting of equity securities owned by the Company. As at February 29, 2016 securities at market value were as follows:

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 – CONVERTIBLE DEBENTURES

On December 11, 2015, the Company closed $225,000 of a private placement offering of 8% secured convertible debentures.

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NOTE 7 – NOTES PAYABLE

NOTE 8 – STOCKHOLDERS’ EQUITY

Series A Preferred Stock

During the period June 1, 2015 through February 29, 2016, 2,501,375 of Series A Preferred Stock was redeemed at $0.20 per share for proceeds of $500,275.

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.

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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 250,000 Series B Preferred Stock at a price of $0.20 per share.

On August 21, 2015 a $950,000 note payable matured, and as per the provisions of the loan, the principal and partial interest automatically converted to 4,750,000 Series B Preferred Stock at a price of $0.20 per share.

On December 23, 2016, all 5,000,000 Series B Preferred Stock were cancelled and converted to 5,000,000 common stock.

NOTE 9 - RELATED PARTY TRANSACTIONS

On May 21, 2014, the Company, authorized and approved the execution of a loan agreement dated May 21, 2014 between the Company and its Chief Executive Officer, Peter George ("George") in the principal amount of $50,000 (the "$50,000 Loan Agreement"). Effective July 24, 2014, the Company 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").

Borrowings under the Loan Agreements are unsecured and accrue interest at an annual rate of 5% on the unpaid balances. The Company 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 the Company intends to redeem. Payment of principal and interest will be calculated from the date of execution to date of redemption notice.

In addition, 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 the Company has 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 the Company's shares on the OTCQB by using the lowest share price of the preceding five (5) business days prior to the termination date of the Loan Agreement with a minimum price of $0.20.

See notes 7 and 8 regarding additional related party loans and the conversion of the notes to Series B Preferred Stock.

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.

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Rental expense, including real estate taxes and operating expenses, charged to operations for the nine months ended February 29, 2015 aggregated approximately $60,000 in 2015 and $nil in 2014.

NOTE 11 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial statements have been issued and has determined that there have been no other reportable subsequent events.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

We were incorporated in the state of Nevada on April 22, 2009, our subsidiary Omega Smartbuild Americas Inc. was incorporated in the province of Ontario, and our subsidiary Mobilotto was incorporated in the province of Ontario in September 2008. 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 (the "MOBI Products"). We have continued to develop our mobile lottery software. We are also marketing our Stealth Trader software as well as completed the development of the Colony Auto-Trader.

Effective July 29, 2013, we changed our name to Epcylon Technologies Inc. as part of an effort to re-brand us based upon the marketing of our various software products.

Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "Epcylon Technologies Inc.," refers to Epcylon Technologies Inc.

ASSET PURCHASE AGREEMENT

Effective on October 15, 2015, our Board of Directors authorized and approved the execution of that certain memorandum of understanding (the "MOU") between the Company and Bitumen pursuant to which the parties set forth their initial understanding regarding a proposed amalgamation, merger or other form of commercial arrangement between the Company and Bitumen. In accordance with the terms and provisions of the MOU: (i) we would enter into an asset purchase agreement with Bitumen, which on behalf of Bitumen will constitute a qualifying transaction as per Policy 2.4 of the TSX Venture Exchange; (ii) Bitumen will issue to us approximately 182,202,994 shares of its common stock in exchange for all of our assets; (iii) prior to closing of the Transaction, Bitumen will complete a reverse stock split of its common shares in the ratio of one share for 0.538 share resulting in an aggregate number of 7,000,000 issued and outstanding shares of common stock of Bitumen; and (iv) we intend to complete a private placement offering on or before January 31, 2016 for aggregate proceeds of $1,000,000 consisting of secured convertible debentures with a three year term and yielding at 8% at a purchase price of $0.20 per secured convertible debenture and one-half share purchase warrant with each whole share purchase warrant entitling its holder to purchase one share of common stock of Bitumen at a price of $0.30 per common share within 24 months from the date of the issuance of the share purchase warrant (the "Private Placement").

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The MOU was intended to be binding upon both the Company and Bitumen until execution of a definitive asset purchase agreement. After consummation of the Transaction, it is contemplated that the current shareholders of Bitumen will hold approximately 3.7% and our current shareholders will hold approximately 96.3% shares before giving effect to the Private Placement. The consummation of the Transaction was subject to the satisfaction of certain conditions, including the completion of satisfactory due diligence, the execution of an asset purchase agreement, obtaining required approval by shareholders, completion of the Private Placement and third party and regulatory approval.

On March 7, 2016, our Board of Directors and majority shareholders, believing it to be in the Company’s our best interests and our shareholders, approved the Asset Purchase Agreement. Since our inception, the Board of Directors and management have regularly evaluated our business and operations, long-term strategic goals and alternatives and prospects as an independent company with a goal of maximizing shareholder value. As part of these ongoing reviews, we also regularly considered the strategic alternatives available to us, including possibly strategic combinations, acquisitions and divestures. As of the date of this Quarterly Report, the Board of Directors intends to file an information statement on Form 14C regarding shareholder approval of the Asset Purchase Agreement.

DESCRIPTION OF BUSINESS

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 is also 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 and license 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.

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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:

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:

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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’s goal with Colony is to establish a discretionary trading fund either within Epcylon or as a separate and independent entity and 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 will be used for internal purposes to generate revenue for the Company. Colony is currently under development.

MOBILOTTO

Founded in 2009, Mobilotto develops proprietary geolocation technology and services for the lottery, pari-mutuel and casino industries enabling next-generation mobile gaming. The Mobilotto solution focuses on location jurisdictional verification. Operators holding lottery licenses, or in partnership with the license holder can securely verify popular mobile games through Mobilotto technology. Mobilotto provides a comprehensive solution custom tailored to each operator’s regulatory environment, security needs, and player/client capabilities. The Mobilotto team represents both veteran lottery and mobile experts with over 30 years of technology experience.

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Patent US 20110269436

The geo-location patent awarded in 2015, is a method and system for enabling gaming via a mobile device are provided. A request is received from the mobile device to participate in gaming. Primary location information determined by the mobile device for the location of the mobile device is received with the request. The primary location information is verified with secondary location information for the geolocation of the mobile device determined using a location system external to said mobile device. Participation of the mobile device in a game is enabled if the primary location information is verified and if the mobile device at the location identified by the primary location information is eligible for the game.

Summary of Services

Mobilotto services leverage a proprietary geo-location technology to ensure and validate that your user is within the authorized jurisdictional boundary to better manage game revenue and activity.

Mobile Carrier Network Location

Applying the same network infrastructure that is used to locate emergency 911 calls, Mobile Carrier Network Location uses discrete location of either the device generating the session, or the user’s personal mobile device.

Advantages

IP Intelligence Data

Mobilotto delivers high-end IP Intelligence data for location compliance applications from vendors with only the highest standards. This technology can be used in combination with other geolocation practices and data services to identify whether the IP location of your user’s device is reliable.

Advantages

Wi-Fi Location

Our Wi-Fi location technology allows you to know the physical location of your Wi-Fi enabled smartphones, tablets and specialized gaming devices anywhere in the world. Combined with Mobile Carrier Network Location and IP Intelligence Data, you receive an extremely comprehensive collation of location information for compliance and verification.

Advantages

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CONTRACUAL AGREEMENTS

During the three month period ended Februayr 29, 2016, the Company entered into a number of contractual agreements as follows:

License Agreement

Effective on January 5, 2016, our Board of Directors authorized and approved the execution of that certain license agreement (the “License Agreement”) with Tactex Asset Management Inc., a corporation organized under the laws of the Province of Quebec (“Tactex”). In accordance with the terms and provisions of the License Agreement, the Company granted a license to Tactex to use its products including, but not limited to, the Stealth Console products, which are trading tools that filter real-time market data to generate market perception and sentiment visualization (the “Products”), within the structure of Tactex’s existing asset management organization by its employees and portfolio managers in the financial markets. Tactex is a duly licensed portfolio manager in Quebec, Ontario, New Brunswick, Alberta and British Columbia and is qualified to perform portfolio management of client accounts in full compliance with existing regulatory requirements. In further accordance with the terms and provisions of the License Agreement, Tactex agrees to pay to the Company certain fees associated with its use of the Company’s Products. The Company also has agreed to provide Tactex with initial training sessions of up to three months with one of the Company’s Stealth Console experts.

Referral Agreement

Effective on November 17, 2015, the Company also entered into that certain referral agreement (the “Agreement”) with Tactex. In accordance with the terms and provisions of the Agreement, the Company will from time to time refer certain potential clients to Tactex with respect to such persons desiring to receiving portfolio and wealth management services from Tactex, including opening and maintain a separately managed account with Tactex (the “Referred Client”). Tactex further agrees to provide portfolio and wealth management services to the Referred Client, complete its customary account opening process, and ensure compliance with all applicable laws with respect to the services delivered by it to such Referred Client.

In further accordance with the terms and provisions of the Agreement, Tactex shall pay to the Company a referral fee equal to the aggregate net management fees, performance fees and other commissions derived by Tactex from the Referred Client during a calendar quarter less the following amounts that shall be retained by Tactex: (i) 50 basis points calculated on total AUM held in the account of the Referred Client during the relevant period (calculated daily); (ii) 25% of any performance fee charged to the account during the relevant period (calculated monthly); and (iii) administrative costs of managing the respective account.

The Agreement may be terminated either by Tactex or the Company under the following circumstances: (i) material breach by either party of this Agreement, which is not remedied within thirty day of notice of such breach; (ii) interpretation of new or existing laws that precludes the parties from acting under the terms of the Agreement; (iii) ninety day prior written notice; or (iv) insolvency or bankruptcy of the Company or Tactex.

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Supplier and Reseller Agreement

Effective on December 1, 2015, our Board of Directors authorized and approved the execution of that certain supplier and reseller agreement (the “Agreement”) with Jitney Trade Inc. (“Jitney”). In accordance with the terms and provisions of the Agreement, the Company will offer Jitney’s retail and professional traders the following products: (i) the Stealth Trading Platform, which is designed for professional traders; (ii) the Stealth Console, which uses four signals to condense and visualize complex trends in the market giving the user a clear trading advantage and can be embedded into any trading platform with additional Stealth technical indicators modules; (iii) the Stealth Mobile application, which will be available the first fiscal quarter of 2016; and (iv) the Stealth Analytics platform. In further accordance with the terms and provisions of the Agreement, the Company has agreed to adopt a revenue sharing model with Jitney consisting of 30% of all revenues from software sales on a monthly basis credited to Jitney and 70% credited to the Company. Lastly, the Company has agreed to provide custom training for Jitney’s clients in addition to the existing training videos that can be found on the internet and the Company’s website http://www.epcylon.com. Jitney’s trade financial technology provider, Finlogik, Inc., will develop the FIX gateway integration to Jitney’s trade web-based platform.

The Agreement takes effect immediately and the Company will offer Jitney’s clients a thirty day free trial on the Stealth Console and Analytics Platform. The Agreement can be cancelled by either party upon a thirty day notice.

CQG Order Routing Service Agreement

Effective on April 12, 2016, our Board of Directors authorized and approved the execution of that certain one-year CQG Order Routing Service Agreement (the “Agreement”) with CQG, LLC and its affiliates (“CQG”). CQG has an electronic order/trade routing service that provides access to market trading platforms (“ORS”). The Company desires its market trading software to interface with the ORS for the purpose of processing orders entered by its customers, whose brokers have entered into a CQG order routing service broker agreement with CQG.

Therefore, in accordance with the terms and provisions of the Agreement: (i) CQG will work with the Company to develop and maintain an interface between the Company’s software and the ORS pursuant to which CQG will provide the Company with an application program interface for CQG’s ORS (“API”); and (ii) CQG will pay certain amounts due to the Company in accordance with a fee schedule within thirty days after fees are collected (the “Fee Schedule”). The Fee Schedule may be changed by CQG on ninety (90) days written notice to the Company. In accordance with the Fee Schedule, the Company and CQG shall share equally all transaction fees collected by CQG for orders placed through the Company’s trading software except that if transaction fees in a given month are less than $250, CQG shall retain 100%. CQG and the Company shall also share equally all fixed user fees charged to customers for their use of the ORS in connection with the Company’s trading software. The Agreement shall have an initial term of one year and shall automatically renew thereafter until either party shall give at least 90 days’ notice of termination.

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Moreover, CQG does not make any representations, warranties or guarantees, express or implied, with respect to the ORS or any software used in connection with the ORS or its content. Lastly, the Company understands that technical problems or other conditions may delay or prevent persons from entering or cancelling an order or receiving information through the ORS and, therefore, CQG shall not be liable for and the Company shall not hold CQG or its affiliates liable for any loss, cost or damage (including trading losses or data losses), whether in contract or tort, suffered or incurred by the Company or any third party. CQG grant of the right to use the ORS is granted “as is” with all faults.

CQG provides market data and other information, which CQG obtains from exchanges and other information providers. The Company will comply with all applicable requirements of the exchanges including, but not limited to: (i) ensuring that each customer’s use of the market data is tracked in the ORS by linking the Company’s entitlement system to CQG; (ii) ensuring that the market data is not made available to customers in an uncontrolled data fees so that customers are only able to use the market data within the Company’s application; and (iii) collecting and storing any agreements or non-professional declarations from customers as required by the exchanges.

Memorandum of Understanding

Effective on February 23, 2016, our Board of Directors authorized and approved the execution of that certain memorandum of understanding (the “Memorandum of Understanding”) with Inditrade Capital Ltd., a corporation organized under the laws of the Republic of India (“INT”).

The Company completed and is currently commercializing version 1 of its sentiment trading proprietary technology for desktops and is set to launch its new Mobile application version in addition to a new version 2 of the Stealth Trader (the “Stealth Trading Proprietary Technology”). The Company’s business mandate is to seek international and local partners, joint ventures and licenses within the top fifty capital markets worldwide to supply retail and profession traders with the Stealth Trading Proprietary Technology. The Company wishes to license its Stealth Trading Proprietary Technology to broker dealers, retail trading houses specializing in equities, commodities, currencies and other securities around the world as a value added and innovative research tool.

Therefore, in accordance with the terms and provisions of the Memorandum of Understanding: (i) the Company will offer INT’s retail, professional and institutional clients the Stealth Console designed for professional traders, the Stealth Signal which is embedded in a platform of choice with additional technical indicators available on demand, the Stealth Mobile and the Stealth Analytics; (ii) INT and the Company desire to enter into a mutually exclusive 36 month license agreement to enable INT to offer its customers the Stealth Trading Proprietary Technology, both desktop and mobile application; (iii) the Company and INT agree to collaborate on setting up suppliers that are local for Indian stock quotes and data fees that will serve as the base of information to be fed into the Stealth Trader and algorithms; and (iv) INT shall have the responsibility of bearing start-up costs and branding.

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In further accordance with the terms and provisions of the Memorandum of Understanding, the Company and INT will enter into the proposed licensing agreement whereby INT will be responsible for the day-to-day operational duties, marketing and client service and the Company will be responsible for necessary changes dictated by the Indian market regulations and establish the Indian version of the Stealth Trading Proprietary Technology for the trading of securities in India. The parties will further determine the revenue sharing, which will vary by product type, i.e. desk top or mobile application, and volume of users/businesses. It is further intended that once the Stealth Trading Proprietary Technology is fully established with Indian securities and research signals, a six month testing period will take place with respect to the accuracy of the trading signals at which point INT will have the right to negotiate with the Company as to the creation of a new proprietary/client account trading structure to be launched in India using the research signals of the Stealth Trading Proprietary Technology.

RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our unaudited financial statements and the related notes that appear elsewhere in this Quarterly Report. The following discussion and analysis addresses the results of operations for the three and nine months ended February 29, 2016 as compared to the results of operations for the three and nine months ended February 28, 2015. The discussion and analysis then addresses the liquidity and financial condition of the Company, and other matters. The following discussion further contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Quarterly Report. Our reviewed financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

We have incurred recurring losses since inception. Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We may require additional capital to meet our long-term operating requirements. Additional capital could be raised through, among other things, the sale of equity or debt securities.

Three Month Period Ended February 29, 2016 Compared to the Three Month Period Ended February 28, 2015.

Our net income for the three month period ended February 29, 2016 was $44,215 compared to a net loss of $68,851 for the three month period ended February 28, 2015, an increase of $113,066. We generated revenue from our Stealth trading platform in the amount of $5,303 for the three months ended February 29, 2016, compared to $2,824 for the three months ended February 28, 2015, an increase of $2,479.

During the three months ended February 29, 2016 we incurred operating expenses of $204,978 compared to $135,334 incurred during the three months ended February 28, 2015, an increase of $69,644.

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Our operating loss during the three month period ended February 29, 2016 was $199,675 compared to an operating loss of $132,510 during the three month period ended February 28 2015.

During the three month period ended February 29, 2016, we also had a net interest $38,800 (2015 - $13,098), realized trading gains of $273,766 (2015 – loss $68,392, net change in unrealized loss on securities sold short of $51,514 (2015 – gain $109,544), and a foreign exchange loss of $17,162 (2015 – gain $35,605).

During the three month period ended February 29, 2016, we also had a foreign currency transactional adjustment of $5,122 (2015 - $37,821).

Therefore, our comprehensive income during the three month period ended February 29, 2016 was $49,337 or $0.00 per share compared to a comprehensive loss of $106,672 or $0.00 per share during the three month ended February 28, 2015. The weighted average number of shares outstanding was 171,031,777 for the three months ended February 29, 2016 and 168,476,221 for the three months ended February 28, 2015.

Nine Month Period Ended February 29, 2016 Compared to the Nine Month Period Ended February 28, 2015

Our net loss for the nine month period ended February 29, 2016 was $161,395 compared to a net loss of $501,561 for the nine month period ended February 28, 2015, a decrease of $340,166. We generated revenue from our Stealth trading platform in the amount of $16,691 for the nine months ended February 29, 2016, compared to $10,100 for the nine months ended February 28, 2015, an increase of $6,591.

During the nine months ended February 29, 2016 we incurred operating expenses of $543,140 compared to $438,992 incurred during the nine months ended February 28, 2015, an increase of $104,148.

Our operating loss during the nine month period ended February 29, 2016 was $526,449 compared to an operating loss of $428,892 during the nine month period ended February 28, 2015.

During the nine month period ended February 29, 2016, we also had a net interest of $26,717 (2015 - $30,750), realized trading gains of $451,547 (2015 – $112,021), net change in unrealized loss on securities sold short of $115,156 (2015 – $181,901), and a foreign exchange gain of $1,946 (2015 –$27,961).

During the nine month period ended February 29, 2016, we also had a foreign currency transactional adjustment of $1,425 (2015 - ($69,269).

Therefore, our comprehensive loss during the nine month period ended February 29, 2016 was $162,820 or $0.00 per share compared to a comprehensive loss of $570,830 or $0.00 per share during the nine month ended February 28, 2015. The weighted average number of shares outstanding was 169,321,809 for the nine months ended February 29, 2016 and 168,476,221 for the nine months ended February 28, 2015.

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During the nine months ended February 29, 2016, we focused on raising funds and refining our business plan to help expedite the commercialization our products. In order to help achieve our goals, we signed a Memorandum of Understanding (MOU) with Bitumen Capital Inc. (TSXV: BTM.H) ("Bitumen") whereby Bitumen and Epcylon will enter into an Asset Purchase Agreement. Related to the MOU, we formed an Independent Advisory Committee (the " Committee"), which consisted of two independent members (from Bitumen). The Committee has been providing ongoing advice with respect to the business plan and overall direction of the company. This new Committee shall remain in effect until such time as the Bitumen transaction has been completed and/or otherwise approved between the parties.

LIQUIDITY AND CAPITAL RESOURCES

As of February 29, 2016 our current assets were $2,733,552 and our current liabilities were $1,059,593, which resulted in a working capital of $1,673,959. As of February 29, 2016, current assets were comprised of: (i) $2,657,111 in cash; (ii) $66,111 in local tax receivable; and (iii) $10,330 in prepaid expense. As of February 29, 2016, total and current liabilities were comprised of: (i) $98,254 in accounts payable and accrued expenses (iii) $229,438 of convertible debentures and accrued interest (iii) $526,573 of marketable securities sold short and (iv) $205,328 of notes payable and accrued interest.

As of February 29, 2016, our long term assets were $34,783 comprised of $25,966 of equipment and leasehold improvements, and a security deposit in the amount of $8,817.

As of February 29, 2016, our total liabilities were comprised of current liabilities and deferred rent of $5,468. The decrease in liabilities during the period was primarily due to the conversion of the notes payable to series B preferred stock (offset by the increase in securities sold short and convertible debentures issued).

The proceeds received from the issuance of the Series A preferred stock in 2014 are subject to an account management agreement between the Corporation and the preferred stock holder. The funds are in a restricted account whose sole purpose is for investing and testing the Stealth system, or as otherwise agreed to.

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 nine months ended February 29, 2016, net cash flows used in operating activities was $508,191 compared to $446,951 used during the nine months ended February 28, 2015.

Cash Flows from Investing Activities

For the nine months ended February 29, 2016, cash used in investing activities comprised the net purchase/sales of securities in the amount of $609,407 (2015 – $220,208) and the cost of equipment and leasehold improvements of $2,604 (2015 - $32,125).

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Cash Flows from Financing Activities

We have financed our operations primarily from debt or the issuance of equity instruments. For the nine months ended February 29, 2016 net cash used in financing activities was $69,948 consisting of payments of $500,276 (2014 - $nil) on the redemption of the Class A preferred stock, offset by the proceeds from notes payable of $205,328 (2014 - $953,875), and convertible debentures of $225,000 (2015 - $nil).

As of February 29, 2016, we had cash of $2,657,111, compared to $2,626,664 at May 31, 2015. As at February 29, 2016, $2,655,314 of the cash has restricted use, as per a management agreement with the Series A preferred stock holders.

CURRENT OUTLOOK

We expect that working capital requirements will continue to be funded through a combination of our existing funds, financings and generation of revenues. Our working capital requirements are expected to increase in line with the growth of our business. Our principal demands for liquidity are to increase capacity, sales distribution and marketing, and general corporate purposes. We intend to meet our liquidity requirements, including capital expenditures and the expansion of our business, through cash flow provided by operations.

Existing working capital, financings/advances and anticipated cash flow are expected to be adequate to fund our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. We may have additional financial expenses with further issuances of securities and debt issuances. Any additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all.

We may hire more staff in the areas of product development, customer support, sales, marketing, and risk management. Additional staff is critical as we scale our products and continually add new and innovative features to our product suite to enhance the customer experience.

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

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Working Capital

We are actively seeking sources of funding.

MATERIAL COMMITMENTS

We are obligated under a lease agreement through May, 2018 which provides for annual rental, 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.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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.

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ITEM 4. CONTROLS AND PROCEDURES DISCLOSURE CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures.

We maintain controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosures. Based upon their evaluation of those controls and procedures performed as of the end of the period covered by this report, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective.

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 our 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:

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 we have material defects in our internal control over financial reporting. Specifically they determined (i) that there was a lack of entity level control; and (ii) that the size of our accounting staff and low number of supervisory personnel prevented an appropriate segregation of accounting functions. Accordingly, based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of February 29, 2016.

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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 February 29, 2016 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

AUDIT COMMITTEE

Our audit committee consists of Todd Halpern and John 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 engaged 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 experience qualifies 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 two 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 quarter ended February 29, 2016 to the procedures by which security holders may recommend nominees to our board of directors.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We received a statement of claim from a former employee alleging constructive dismissal.

Management is not aware of any other legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

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ITEM 1A. RISK FACTORS

No report required

ITEM 2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS

During the quarter we issued $225,000 of 8% secured convertible debentures. Proceeds are being used to fund working capital requirements.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

No report required.

ITEM 4. MINE SATEFY DISCLOSURES

No report required.

ITEM 5. OTHER INFORMATION

Effective on September 22, 2015, the Board of Directors accepted the resignation of Jack J. Bensimon as the Chief Executive Officer and member of the Board of Directors of the Company. We previously reported in our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 29, 2015 that Mr. Bensimon had not expressed any disagreement with us on any matter relating to our operations, policies or practices.

Subsequently, we received a letter dated September 28, 2015 from Jack J. Bensimon (the "Letter) pursuant to which Mr. Bensimon stated that he had certain disagreements with us. Our management adamantly opposes the accuracy and/or truthfulness of Mr. Bensimon's position regarding his concerns and issues. As of the date of this Quarterly Report, our management is working to address and resolve the issues.

Effective November 19, 2015, the Board of Directors accepted the resignation of Leon Redensky. Mr. Redensky has 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, Gary Schwartz, and John Fitzgerald.

Gary Schwartz, as director of lead strategies on behalf of the Company, will be overseeing our day-to-day operations until a replacement for Chief Executive Officer has been appointed. As of the date of this Quarterly Report, certain prospects for appointment as the Chief Executive Officer are under consideration by the Board of Directors based upon prospective future business operations of the Company.

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ITEM 6. EXHIBITS

The following exhibits are filed as part of this Quarterly Report.

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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.

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