Cybergy (CYBG) 10-Q 15 May 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	14-May-15
Document And Entity Information
Entity Registrant Name	Cybergy Holdings, Inc.
Document Type	10-Q
Document Period End Date	31-Mar-15
Amendment Flag	FALSE
Entity Central Index Key	1397951
Current Fiscal Year End Date	-19
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filer	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding		20,750,603
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

Consolidated_Condensed_Balance

Consolidated Condensed Balance Sheets (USD $)	Mar. 31, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$83,000	$1,415,000
Contract receivables	3,248,000	2,328,000
Prepaid expenses and other current assets	260,000	314,000
Total current assets	3,591,000	4,057,000
Non-Current Assets
Property and equipment, net	785,000	838,000
Other assets	60,000	60,000
Intangibles, net	1,769,000	1,959,000
Goodwill	4,075,000	4,075,000
Total non-current assets	6,689,000	6,932,000
Total assets	10,280,000	10,989,000
Current liabilities:
Accounts payable	716,000	449,000
Accrued liabilities	1,270,000	1,118,000
Related party payable	2,059,000	1,808,000
Line of credit		56,000
Current portion of other accrued liabilities	220,000	187,000
Current portion of long-term debt - other	197,000	57,000
Current portion of acquisition notes	3,919,000	3,800,000
Current portion of senior secured convertible notes, net	1,503,000	932,000
Derivative liability	77,641,000	53,834,000
Total Current Liabilities	87,525,000	62,241,000
Non-Current Liabilities
Other accrued liabilities	397,000	387,000
Long term debt, less current portion - other	47,000	53,000
Senior secured convertible notes, net	989,000	1,285,000
Acquisition notes, less current portion	1,898,000	1,834,000
Derivative and put liabilities	259,936,000	390,184,000
Deferred rent	237,000	239,000
Total non-current liabilities	263,504,000	393,982,000
Total Liabilities	351,029,000	456,223,000
Stockholders' Equity
Common stock, $.0001 par value, 3,000,000,000 shares authorized; 20,470,258 and 20,520,229 issued; 20,470,258 outstanding	21,000	21,000
Series C preferred stock, $.0001 par value, 250,000,000 shares authorized; 52,378,436 shares issued and outstanding	5,000	5,000
Series B preferred stock, $.0001 par value, 1,000 shares authorized, issued and outstanding
Paid in capital	63,000
Accumulated deficit	-340,822,000	-445,242,000
Total Cybergy stockholders' equity (deficit)	-340,733,000	-445,216,000
Non-controlling interest in joint venture	-16,000	-18,000
Total stockholders' equity (deficit)	-340,749,000	-445,234,000
Total liabilities and stockholders' equity (deficit)	$10,280,000	$10,989,000

Consolidated_Condensed_Balance1

Consolidated Condensed Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Consolidated Condensed Balance Sheets Parenthetical
Common stock, par value	$0.00	$0.00
Common stock, shares authorized	3,000,000,000	3,000,000,000
Common stock, shares issued	20,470,258	20,520,229
Common stock, shares outstanding	20,470,258	20,470,258
Series C Preferred stock, par value	$0.00	$0.00
Series C Preferred stock, shares authorized	250,000,000	250,000,000
Series C Preferred stock, shares issued	52,378,436	52,378,436
Series C Preferred stock, shares outstanding	52,378,436	52,378,436
Series B Preferred stock, par value	0.0001	0.0001
Series B Preferred stock, shares authorized	1,000	1,000
Series B Preferred stock, shares issued	1,000	1,000
Series B Preferred stock, shares outstanding	1,000	1,000

Consolidated_Condensed_Stateme

Consolidated Condensed Statements of Operations (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Consolidated Condensed Statements Of Operations
Contract revenue	$6,563,000	$8,803,000
Cost of services	5,384,000	7,032,000
Gross profit	1,179,000	1,771,000
Operating Expenses:
Selling, general and administrative	2,201,000	2,325,000
Depreciation and amortization	249,000	258,000
Total operating expenses	2,450,000	2,583,000
Operating (loss)	-1,271,000	-812,000
Other (income) expense
Interest expense, net of interest income	460,000	177,000
Change in fair value of derivative and put liabilities	-106,441,000
Other	288,000	59,000
Total other (income) expense	-105,693,000	236,000
Income (loss) before income taxes	104,422,000	-1,048,000
Income tax (benefit) expense		-536,000
Consolidated net income (loss)	104,422,000	-512,000
Net income (loss) attributable to non-controlling interest in joint venture	-2,000	-11,000
Net income (loss) attributable to Cybergy	$104,420,000	($523,000)
Basic and diluted earnings (loss) per share of common stock	$5.09
Weighted average number of basic common shares outstanding	20,498,591
Diluted earnings (loss) per share of common stock	$0
Weighted average number of diluted common shares outstanding	648,792,461

Unaudited_Consolidated_Condens

Unaudited Consolidated Condensed Statement Of Changes In Stockholders' Equity (Deficit) (USD $)	Preferred stock	Common Stock	Non-controlling interest in joint venture	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Amount at Dec. 31, 2014	$5,000	$21,000	($18,000)		($445,242,000)	($445,234,000)
Beginning Balance, Shares at Dec. 31, 2014	52,379,436	20,520,229
Share adjustment - rounding, Amount
Share adjustment - rounding, Shares		29
Cancellation of non-vested common stock for services, Amount
Cancellation of non-vested common stock for services, Shares		-50,000
Services in exchange for shares issued in 2014				50,000		50,000
Share-based compensation				13,000		13,000
Net income			2,000		104,420,000	104,420,000
Ending Balance, Amount at Mar. 31, 2015	$5,000	$21,000	($16,000)	$63,000	($340,822,000)	($340,749,000)
Ending Balance, Shares at Mar. 31, 2015	52,379,436	20,470,258

Consolidated_Condensed_Stateme1

Consolidated Condensed Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net income (loss)	$104,420,000	($523,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation	59,000	68,000
Amortization of intangibles	190,000	190,000
Amortization of debt issuance costs	42,000	41,000
Amortization of debt discount	276,000	15,000
Change in fair value of derivative liability	-106,441,000
Share-based compensation	13,000	1,000
Share-based services	50,000
Deferred rent	-1,000	4,000
Deferred taxes		-536,000
Earn out adjustment	183,000	59,000
Interest in JV	2,000	11,000
Changes in assets and liabilities, net of effect of acquisition:
Contract receivables	-920,000	-2,310,000
Prepaid and other current assets	12,000	-8,000
Accounts payable	267,000	-744,000
Accrued liabilities	208,000	300,000
Related party payables	251,000	2,703,000
Net cash used in operating activities	-1,389,000	-729,000
Cash flows from investing activities:
Purchases of property and equipment	-6,000	-19,000
Cash received in the acquisition of New West		897,000
Acquisition of New West		-500,000
Net cash (used in) provided by investing activities	-6,000	378,000
Cash flows from financing activities:
Proceeds from long term debt	140,000	1,000,000
Payments on long term debt	-6,000	-103,000
Payments on other accrued liabilities	-15,000	-43,000
Line of Credit, net	-56,000
Debt issuance costs		-183,000
Net cash provided by financing activities	63,000	671,000
Net increase (decrease) in cash and cash equivalents	-1,332,000	320,000
Cash and cash equivalents, beginning of period	1,415,000
Cash and cash equivalents, end of period	83,000	320,000
Supplemental Disclosure Cash Flow Information:
Cash paid for interest	23,000	39,000
Cash paid for taxes
Supplemental disclosure of non-cash activity:
Issuance of debt in the acquisition of New West		5,530,000
Issuance of common stock in the acquisition of New West		703,000
Conversion of Promissory notes to common stock		357,000
Issuance of Additional shares - EPA notes		77,000
Fair value of assets acquired		10,754,000
Less liabilities assumed		-4,081,000
Less cash acquired		-897,000
Plus shares issued		703,000
Business acquisition, net of cash acquired		$6,479,000

Summary_Of_Business_And_Signif

Summary Of Business And Significant Accounting Policies	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE A - SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES	Reverse merger transaction
	On October 3, 2014, Cybergy Holdings, Inc. (“Cybergy”, “the Company”), formerly Mount Knowledge Holdings, Inc. (“MKHD”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MK Merger Acquisition Sub, Inc., a whollyowned subsidiary of MKHD (“Merger Sub”), Access Alternative Group S.A., and Cybergy Partners, Inc. (“Partners”), providing for the merger of Merger Sub with and into Partners (the “Merger”), with Partners surviving the Merger as a whollyowned subsidiary of MKHD. Pursuant to the Merger Agreement, the shareholders of Partners and MKHD initially exchanged shares in the respective companies for 88% and 12% ownership, respectively, of the surviving company.
	The Merger of Partners and MKHD, a nonoperating public shell corporation, resulted in the owners and management of Partners obtaining actual and effective voting and operating control of the combined company. The Merger was treated as a public shell reverse acquisition and therefore treated as a capital transaction in substance, rather than a business combination. The historical financial statements of MKHD before the Merger were replaced with the historical financial statements of Partners before the Merger. As a result of the Merger, Cybergy acquired the business of Partners, and has continued the existing business operations of Partners.
	Principles of Consolidation, Basis of Presentation, and Fiscal Periods
	The accompanying unaudited consolidated condensed financial statements of Cybergy Holdings, Inc. (“Cybergy”, “Company”, “we”, “us” or “our”) have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information reflects all normal and recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position of the Company and its results of operations for the interim periods set forth herein. The consolidated condensed balance sheet as of December 31, 2014 presented herein has been derived from the audited balance sheet included in the Company’s Annual Report on Form 10-K for the year ended December 2014.
	Certain information and footnote disclosures, which are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to SEC rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. The accompanying unaudited consolidated condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 2014. The information reflects all normal and recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position of the Company and its results of operations for the interim periods set forth herein.
	The results for the three months ended March 2015 are not necessarily indicative of the results to be expected for the full year or any other period.
	The accompanying consolidated condensed financial statements include the accounts of Cybergy, its whollyowned subsidiaries; Partners, New West, Primetrix, Labs, and its 51% owned New WestEnergetics Joint Venture, LLC (“JV”). All intercompany accounts and transactions have been eliminated in consolidation.
	In 2015, the Company changed from a calendar end date to a “4/4/5 weekly” quarterly close cycle. The Company’s three month fiscal periods ended on April 3, 2015 and March 31, 2014. Our balance sheet dates are referred to herein as March 2015 and December 2014. Our three month fiscal periods are referred to herein as March 2015 and 2014.
	Going Concern
	In 2014 and 2015, the Company had negative cash flow from operations due to declining gross margin, increased personnel costs as well as merger and acquisition costs related to the acquisition and merger. The decline in gross margin was due primarily to the delay on the transition from our JV contract to the follow-on MOTS contract with the Department of Energy. We expect to incur additional operating losses for the year ending December 2015.
	These circumstances raise substantial doubt about our ability to continue as a going concern.
	The Company does not currently believe that its existing cash resources are sufficient to meet its anticipated needs for the year ending December 2015. We need to obtain significant additional capital resources in order to develop products and fund operations and make scheduled debt payments.
	The accompanying unaudited consolidated condensed financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has a history of recurring losses and had negative working capital at March 2015.
	There can be no assurance that the Company will be successful in reducing its negative operating cash flows, and that such cash flows will be sufficient to sustain the Company’s operations through 2015. Nor can there be any assurance that the Company can raise additional capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated condensed financial statements were prepared assuming that the Company is a going concern. The consolidated condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plans in regard to these matters are focused on managing its cash flow, the proper timing of its capital expenditures, and raising additional capital or financing in the future.
	In April and May 2015, the Company raised net proceeds of $1,660,000 from the sale of Series C preferred stock and short term bridge loans as more fully discussed in the following notes.
	Management believes the Company will need additional capital in 2015 of approximately $1.5 to $2.0 million to further fund operations and market expansion of the SmartFile software. The Company intends to cover its future operating expenses through additional financing from existing and prospective investors, revenue from existing and new contracts, revenue from potential grants and collaborative marketing agreements, as well as revenue from the commercialization of products and services. However, we may not be successful in obtaining funding from new or existing collaborative agreements or the commercialization of our products and services. Further, actual revenue may be less than forecasted.
	Additionally, we have engaged a financial advisor to raise capital through the sale of stock, issuance of convertible debt or asset based loans, which has a track record of successfully raising capital for hundreds of development stage to midcap scale companies.
	Use of Estimates
	The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
	Significant estimates affecting the financial statements include accruals for contract reserves, recoverability of goodwill and intangible assets and earnout obligations related to the acquisition of New West, warrant, conversion, and put valuations and income taxes. The valuation of the warrant, conversion, and put derivative liabilities using a Lattice model is based upon interest rates, stock prices, maturity estimates, volatility and other factors. The Company believes these estimates and assumptions are reliable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions. It is at least reasonably possible that the estimates used will change in the near term.
	Cash and Cash Equivalents
	The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash and cash equivalents. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests.
	Concentration of Credit Risk/Fair Value of Financial Instruments
	Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash, cash equivalents and trade receivables. We believe that concentrations of credit risk with respect to trade receivables are limited as they are primarily from government agencies.
	Credit Risk
	The Company grants credit in the normal course of business to customers in the United States. The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk. Contracts with the federal government, either as a prime or subcontractor, accounted for approximately 94% and 93% of revenues in 2015 and 2014, respectively and one customer accounted for 92% and 83% of total revenues in 2015 and 2014, respectively. At March 2015 and December 2014, the same customer accounted for 74% of total contract receivables.
	Financial Instruments
	The Company uses fair value measurements in areas that include, but are not limited to: the allocation of purchase price consideration to tangible and identifiable intangible assets and valuation of derivative liabilities. The carrying values of cash and cash equivalents, contract receivables, accounts payable, and other current assets and liabilities approximate their fair values because of the short-term nature of these instruments. The carrying value of our bank debt approximates fair value due to the variable nature of the interest rates under our Credit Facility and current rates available to the Company for debt with similar terms and risk. Since the put option is embedded in an outstanding share, management chose the “fair value option” in which the entire instrument (the common stock and the put feature) is recorded at fair value.
	The conversion features embedded in, and warrants attached to, the convertible debentures and the put liability are valued at estimated fair value utilizing a Lattice model. The Company, using available market information and appropriate valuation methodologies, has estimated the fair value of its financial instruments. However, considerable judgment is required in interpreting data to develop the estimates of fair value.
	Contract Receivables
	The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated credit risk by evaluating customers' creditworthiness and actively pursuing past due accounts. Management of the Company reviews the collectability of customer receivables on an individual basis based on its historical collection experience with customers. Many of the Company's customers are governmental agencies and are, therefore, subject to the terms and conditions of the Prompt Payment Act, which, with certain exceptions, requires the U.S. government to pay the Company within 30 days from the date of submission of a properly prepared invoice.
	Government contract receivables arise from long-term U.S. government prime contracts and subcontracts. Unbilled contract receivables represent services provided but not yet billed. The amount reflects the actual amount anticipated to be billed. The Company evaluates unbilled amounts for collectability based on estimates of workinprogress that may not be billed based on knowledge of individual balances.
	The Company does not accrue finance or interest charges on its receivables. Contract receivables determined to be uncollectible are expensed in the period such determination is made. No allowance was considered necessary as of March 2015 or December 2014.
	Included in Contract receivables are retainage amounts of $76,000 and $73,000 at March 2015 and December 2014, respectively.
	Property and Equipment
	Property and equipment are stated net of accumulated depreciation and amortization of $308,000 and $249,000 at March 2015 and December 2014, respectively.
	Goodwill
	We review goodwill for impairment annually during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable.
	Intangibles
	Intangibles are stated net of accumulated amortization of $980,000 and $790,000 at March 2015 and December 2014, respectively.
	Derivative liabilities
	The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency.
	The Company reviews the terms of convertible debt and equity instruments it issues to determine whether there are derivative instruments, including an embedded conversion or put options that are required to be bifurcated and accounted for separately as a derivative financial instrument. In circumstances where a host instrument contains more than one embedded derivative instrument, including a conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Also, in connection with the sale of convertible debt and equity instruments, the Company may issue freestanding warrants or put options that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity.
	Derivative instruments are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as nonoperating income or expense. When the convertible debt or equity instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds allocated to the convertible host instruments are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the convertible instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method.
	The Company has determined that certain of the features (specifically, the embedded conversion feature, the mandatory conversion feature, the antidilution provisions, and default interest) embedded in its Convertible debentures were not considered “clearly and closely related” to the economic characteristics of the Convertible debenture, nor did they meet the definition of being indexed to the Company’s own stock. The Company applies the applicable accounting provisions for the accounting of the valuation of these features and associated warrants. The liability is adjusted quarterly to the estimated fair value based upon then current market conditions. The Company records the change in the estimated fair value of the derivative liability in other income or expense.
	The derivative liability was valued using a combination of a Brownian Motion technique and a Binomial Lattice (“Lattice”) model. A Lattice approach is a preferred valuation methodology relative to a closedform option pricing model (e.g., a BlackScholes option pricing model) because (i) it embodies all of the assumptions that market participants would likely consider in negotiating the transfer of the Convertible debentures, (ii) it simulates the exercise of the Convertible debentures prior to the expiration date, and iii) it incorporates potential variability for inputs that are not static such as the occurrence of a mandatory conversion, an event of default or a dilutive issuance. The Lattice model utilizes interest rates, stock prices, contractually remaining term of the underlying financial instruments and volatility factors. We utilize historical volatility over a period generally commensurate with the remaining contractual term of the underlying financial instruments and use daily intervals for price observations. However, the Company does not have sufficient trading activity on which to base an estimate of future stock price volatility. Therefore, management determined that use of historical volatility of a comparable peer group over a term consistent with the remaining contractual terms of the Convertible debentures was the best indicator of the stock’s future volatility. The Company believes these estimates and assumptions are reliable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions.
	Revenue Recognition
	Substantially all of our work is performed for our customers on a contract basis based on time and materials. Revenues result from work performed on these contracts by our employees and our subcontractors and from costs for materials and other work related costs allowed under our contracts.
	Revenues for time and materials contracts are recorded on the basis of contract allowable labor hours worked multiplied by the contract defined billing rates, plus the direct costs and indirect cost burdens associated with materials and subcontract work used in performance on the contract. Generally, gross profit on time and materials contracts result from the difference between the cost of services performed and the contract defined billing rates for these services.
	Under certain contracts with the U.S. government and other governmental entities, contract costs, including indirect costs, are subject to audit by and adjustment through negotiation with governmental representatives. Revenue is recorded in amounts expected to be realized on final settlement of any such audits.
	Share-Based Compensation
	We account for sharebased awards in accordance with the applicable accounting rules that require the measurement and recognition of compensation expense for all sharebased payment awards based on estimated fair values. That cost is recognized over the requisite service period in which the employee is required to provide service in exchange for the award, which is usually the vesting period.
	Net Earnings (Loss) per Share of Common Stock
	Basic earnings (loss) per common share are computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period adjusted to reflect potentially dilutive securities. The computation of earnings (loss) per share is based on the weighted average number of shares outstanding during each of the periods based upon the exchange ratio of shares issued in the merger.
	The shareholders of Partners received Series C preferred stock in connection with the Merger, therefore the exchange ratio to common stock was zero. Through the merger date in 2014, there were no outstanding common shares.
	The following is a reconciliation of net earnings used in the calculation of basic earnings per share and diluted earnings per share for the three months ended March 2015:
	Net income attributable to Cybergy	$	104,420,000
	Effect of dilutive securities:
	Preferred stock		-
	Stock options		8,000
	Convertible debentures		(43,067,000	)
	Warrants		(3,562,000	)
	Put option		(59,453,000	)
Diluted net income (loss) attributable to Cybergy	$	(1,654,000	)
The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share for the three months ended March 2015:
Weighted-average number of common shares outstanding	20,498,591
Effect of dilutive securities:
Preferred stock		523,785,360
Stock options		17,712,458
Convertible debentures		80,313,600
Warrants		6,482,452
Put option		-
Dilutive potential common shares		648,792,461
The following securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive:
Stock options	503,295
Warrants		501,755
		1,005,050
Income Taxes
The current provision for income taxes represents estimated amounts payable or refundable on tax returns filed or to be filed for the year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the consolidated balance sheets. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to tax expense in the period of enactment.
When appropriate, we record a valuation allowance against net deferred tax assets to offset future tax benefits that may not be realized. In determining whether a valuation allowance is appropriate, we consider whether it is more likely than not that all or some portion of our deferred tax assets will not be realized, based in part upon management’s judgments regarding future events and past operating results.
The Company follows the guidance of Accounting Standards Codification ("ASC") Topic 740, Accounting for Uncertainty in Income Taxes. ASC Topic 740 prescribes a more-likely-than-not measurement methodology to reflect the financial statement impact of uncertain tax positions taken or expected to be taken in a tax return.
Recent Accounting Pronouncements
The Financial Accounting Standards Board (FASB) recently released ASU 2015-03; Interest—Imputation of Interest, Simplifying the Presentation of Debt Issuance Costs that requires debt issuance costs be presented as a direct deduction from the carrying amount of the debt instead of as a noncurrent asset. The change brings requirements into line with those of premiums and discounts on debt. ASU 2015-03 is effective for fiscal years and interim periods beginning after December 15, 2015. Early adoption is permitted. The Company expects to adopt ASU 2015-03 in 2016 and does not expect the adoption will have a significant impact on the consolidated balance sheet.

Line_Of_Credit

Line Of Credit	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE B - LINE OF CREDIT	In April 2014, the Company entered into an asset based loan agreement ("Credit Facility") with a bank. The Credit Facility provides the Company a revolving line of credit with a borrowing base equal to the lesser of $1,000,000 or 85% of eligible non JV accounts receivables and the lessor of 25% or $250,000 on New West's receivable from the JV. The accounts receivable of the JV are not included in the borrowing base. Amounts borrowed on the line of credit accrue interest monthly at the greater of: (i) prime plus 3% (6.25% at March 2015 and December 2014) or (ii) $3,750. Additionally, the Company is charged a monthly collateral fee of $2,000.
	We had no balance outstanding as of March 2015 and were fully funded as of December 2014 under our revolving line of credit. Average daily borrowings under the revolving line of credit were $136,000 during 2015. The Credit Facility is collateralized by substantially all the assets of the Company. The Credit Facility contains standard business and financial covenants including a minimum tangible net worth requirement and a prohibition of dividend payments.
	At December 2014 and March 2015, the Company was in technical default of the tangible net worth requirement under our revolving line of credit agreement as a result of recording the Derivative and put liabilities. The bank provided a waiver as of December 2014 and March 2015.

Dedt

Dedt	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE C - DEBT	At March 2015 and December 2014, the Company had $3,525,000 of Senior Secured Convertible Debentures outstanding. The convertible debentures are stated net as a result of recording discounts associated with the valuation of the conversion feature, Additional shares, and warrants issued of $1,033,000 and $1,309,000 at March 2015 and December 2014, respectively.
	In March 2015, the Company issued a Promissory Note in the amount of $140,000 to a Director of the Company. The note accrues interest at prime plus 5% (8.25% at March 2015) and is due on earlier of: (i) June 30, 2015, or (ii) the closing of an equity or debt financing with gross proceeds to the Company of not less than $1,000,000. In May 2015, the holder converted the note into 140,000 shares of our Series C preferred stock.
	On April 28, 2015 (“issue date”), the Company issued a Promissory Note in the amount of $705,000. The note includes an original issue discount of up to $200,000 with an effective interest rate of approximately 80% and is due October 28, 2015. If the note is paid within 90 days of the issue date, the amount due is $605,000. If the note is paid within 135 days of the issue date, the amount due is $655,000. After 135 days of the issue date, the amount due is $705,000.
	The Company and the holder of the EPA note entered into an agreement whereby the Company would prepay the EPA note and the Holder would cancel the related Additional shares for the initial value paid of up to $1,000,000. In April and May 2015, we repaid $359,000 of the EPA note.
	As a result of the ongoing Member litigation, we made no payments on the First notes due to the Member in 2015. See discussion of the settlement of the litigation in Note J.
	Pursuant to a registration rights agreement with the purchasers of our Senior Secured Convertible Debentures, Cybergy was required to file a shelf registration statement for the resale of the common stock issuable upon conversion of the convertible debentures and the Additional Shares issued to the convertible note purchasers by December 3, 2014. As the Company did not file by that date, there is a monthly fee, equal to 1.0% of the aggregate purchase price of the convertible debentures (not to exceed 20%). As a result of the anticipated timing of the filing, the holders will be due a 6% fee. Included in Other accrued liabilities as of March 2015 and December 2014, is $176,000 and $71,000, respectively related to this liability.

Derivative_Liabilities

Derivative Liabilities	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE D - DERIVATIVE LIABILITIES	The Company applies the applicable accounting provisions for the accounting of the valuation of the embedded derivatives in our convertible debentures, warrants and put option. Accordingly, we recorded a derivative liability equal to the estimated fair value of the various features in 2014 with a corresponding discount to the underlying financial instruments issued. The liability is adjusted quarterly to the estimated fair value based upon then current market conditions. The Company records the change in the estimated fair value of the liability as an adjustment to other income or expense. The Company utilizes historical volatility over a period generally commensurate with the remaining contractual term of the underlying financial instruments and uses daily intervals for price observations.
	Derivative liabilities consisted of the following at:
			Mar-15		Dec-14
	Related to senior secured convertible notes, short term	$	(72,611,000	)	$	(53,834,000	)
	Related to warrants, short term		(5,030,000	)		-
	Total short-term		(77,641,000	)		(53,834,000	)
	Related to put option		(179,226,000	)		(238,679,000	)
	Related to senior secured convertible notes, long term		(73,669,000	)		(135,872,000	)
	Related to warrants		(7,041,000	)		(15,633,000	)
	Total long-term		(259,936,000	)		(390,184,000	)
	Total derivative liability	$	(337,577,000	)	$	(444,018,000	)
	The following assumptions were utilized:
		Mar-15			Dec-14
	Average expected volatility - debt	36.74% to 39.69		%	30.19% to 34.76		%
	Average expected volatility - warrants	37.40% to 37.44		%	37.92% to 38.05		%
	Average expected volatility – put option		34.97	%		35.47	%
	Remaining expected term of the underlying securities - notes		3 to 12.8 months			6 to 15.8 months
	Remaining expected term of the underlying securities - warrants		4.5 years			4.8 years
	Remaining expected term of the put option		2.76 years			3.0 years
	Average risk free interest rate – debt		0.03% to 0.281	%		0.12% to 0.38	%
	Average risk free interest rate – warrants		1.33	%		1.63	%
	Average risk free interest rate – put option		2.82	%		2.47	%
	Expected dividend rate		-0-	%		-0-	%
	Closing price per share of common stock	$	1.86		$	2.4
	Exercise price of warrants per share of common stock	$	0.0218		$	0.0218

Income_Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE E - INCOME TAXES	As of March 2015 and December 2014, the Company has established a valuation allowance of $5,406,000 and $4,616,000, respectively, against our net deferred tax assets.
	As of March 2015, the Company has estimated state and federal net operating loss carry forwards of approximately $15,953,000 expiring in 2033 through 2035. Under the Internal Revenue Code (“IRC”) Section 382, annual use of our net operating loss carryforwards to offset taxable income may be limited based on cumulative changes in ownership. We have not completed an analysis to determine whether any such limitations have been triggered as of March 2015.
	Income tax expense attributable to income from operations for 2015 differed from the amount computed by applying the U.S. federal income tax rate of 34% to pretax loss from operations primarily as a result of state tax credit, nontaxable fair value of derivative liabilities, and the increase in the valuation allowance.
	Income tax expense attributable to income from operations for 2014 differed from the amount computed by applying the U.S. federal income tax rate of 34% to pretax loss from operations primarily as a result of state tax credit, the release of Partners valuation allowance related to its 2013 net operating loss carry forward, and nondeductible acquisition costs.

Commitments_And_Contingencies

Commitments And Contingencies	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE F - COMMITMENTS AND CONTINGENCIES	Except as discussed in our Annual Report on Form 10-K for the year ended December 2014, the Company is not currently a party to any material litigation. Except as discussed in Note J, there has been no change in the status of the litigation as discussed in our Annual Report on Form 10-K for the year ended December 2014.

Stockholders_Equity

Stockholders Equity	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE G - STOCKHOLDERS' EQUITY	In conjunction with the repayment of the EPA note, the holder will cancel 909,850 shares of Series C preferred stock in May 2015. Additionally, 817,946 shares of Series C preferred stock previously underlying the conversion feature in the convertible debentures are no longer issuable. However, the shares remain eligible for registration under a registration rights agreement.
	In May 2015, the holder of the $140,000 promissory note converted the note in to 140,000 shares of our Series C preferred stock.
	In April and May, 2015, the Company sold an additional 1,180,000 shares of its Series C preferred stock for $1.00 per share.
	In conjunction with the issuance of the Promissory Note in April 2015, the note holder received warrants to purchase 363,636 shares of common stock, exercisable for a period of 5 years from issue date, at an exercise price of $.41 per share and will allow for cashless exercise. On May 1st, the holder exercised the warrant in a cashless manner for 280,345 shares of restricted common stock. Additionally, the financial advisor received warrants to purchase 5,952 shares of common stock, exercisable for a period of 5 years from issue date, at an exercise price of $1.85 (110% of the closing share price) per share and will allow for cashless exercise.
	In connection with the settlement discussed in Note J, the Member will cancel a portion of the 15,451,258 shares of our Series C preferred stock owned. The preferred stock is convertible into 154,512,580 shares of common stock which represents just less than 24% of our fully diluted common shares. For example, using the closing price of May 11, 2015 to approximate market value, we would cancel approximately 152,540,000 shares of common equivalents or approximately 23.5% of our fully diluted common shares.
	ShareBased Compensation Plan
	Compensation expense included in the consolidated statements of operations was $13,000 and $1,000 in 2015 and 2014, respectively, and is included in selling, general and administrative expenses. A summary of option activity at March 2015, and changes during the quarter then ended is presented below.
		Range of Exercise Price					Stock Options		Wgt. Avg. Exercise Price		Wgt. Avg. Remaining Contractual Life (years)		Wgt. Avg. Grant Date Fair Value		Aggregate Intrinsic Value
	As of December 2014
	Outstanding				$	0.00008		17,779,862	$	0.00008		9.25	$	0.0045	$	42,670,000
	Vested and exercisable				$	0.00008		4,151,867	$	0.00008		9.24	$	0.0045	$	9,964,000
	Nonvested				$	0.00008		13,627,995	$	0.00008		9.25	$	0.0045	$	32,706,000
	Period Activity
	Issued							502,995	$	1.97			$	0.98
	Exercised							-		-				-
	Vested							1,481,655	$	0.00008			$	0.0045
	Forfeited							-		-				-
	Expired							-		-				-
	As of March 2015
	Outstanding	$	0.00008		$	2.4		18,282,857	$	0.054		9.03	$	0.0314	$	33,069,000
	Vested and exercisable				$	0.00008		5,633,522	$	0.00008		8.99	$	0.0045	$	10,478,000
	Nonvested	$	0.00008		$	2.4		12,649,335	$	0.078		9.07	$	0.0434	$	22,591,000
	Assumptions:	2015
	Expected Volatility	49.29% to 50.14		%
	Weighted-Average Volatility		49.45	%
	Expected Dividends		-0-	%
	Expected Term (years)		6.5
	Risk-Free Rate		1.63% to 1.84	%
	Total intrinsic value of options exercised	$	-
	Total fair value of shares vested	$	10,478,000
	Unrecognized compensation cost related to nonvested awards	$	539,000
	Weighted-average period over which nonvested awards are expected to be recognized		2.9 years

Employee_Benefit_Plan

Employee Benefit Plan	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE H - EMPLOYEE BENEFIT PLAN	The Company has adopted a 401(k) plan (the Plan) for the benefit of all eligible employees of the Company, as defined in the Plan Agreement. Qualified nonelective contributions or discretionary contributions may be made at the Company's discretion. The Company contributed $47,000 and $70,000 to the Plan in 2015 and 2014, respectively.

Fair_Value_Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE I - FAIR VALUE MEASUREMENTS	The accounting standard for fair value measurements defines fair value, and establishes a marketbased framework or hierarchy for measuring fair value. The standard is applicable whenever assets and liabilities are measured at fair value. The fair value hierarchy established in the standard prioritizes the inputs used in valuation techniques into three levels as follows:
	Level 1 – Observable inputs – quoted prices in active markets for identical assets and liabilities;
	Level 2 – Observable inputs other than the quoted prices in active markets for identical assets and liabilities – includes quoted prices for similar instruments, quoted prices for identical or similar instruments in inactive markets, and amounts derived from valuation models where all significant inputs are observable in active markets, for substantially the full term of the financial instrument; and;
	Level 3 – Unobservable inputs – includes amounts derived from valuation models where one or more significant inputs are unobservable and require us to develop relevant assumptions.
	The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of March 2015 and December 2014 and the level they fall within the fair value hierarchy:
				Amounts
	Amounts Recorded at Fair Value	Financial Statement Classification	Fair Value Hierarchy	Mar-15		Dec-14
	Derivative liability - note, redeemable common stock, and warrant bifurcation	Derivative liability – current and long-term	Level 3	$	158,351,000	$	205,339,000
	Put option derivative liability	Derivative liability – long-term	Level 3	$	179,226,000	$	238,679,000

Subsequent_Event

Subsequent Event	3 Months Ended
	Mar. 31, 2015
Notes to Financial Statements
NOTE J - SUBSEQUENT EVENT	On May 8, 2015, the Company and the Member agreed to a settlement on the litigation initiated in September 2014. Under the terms of the agreement, the Company has agreed to establish an ESOP for its employees before December 1, 2015. The ESOP will purchase from the Member that amount of Cybergy stock equal to a current market value of $2,565,000 (the “settlement”). The remainder of the Cybergy stock owned by the Member will be canceled. All other amounts owed by the Company to the Member will be discharged and the Put option will be cancelled. The Member also assumes all obligations under the Management Performance Units Plan. The Company is assessing the financial impact of the settlement. The Company currently has short term debt and accrued interest of approximately $4,309,000 and long term debt of $1,898,000 due to the Member. Upon settlement, these amounts and any additional accrued interest will be removed from the Company’s books and replaced with the debt of the ESOP of $2,565,000. Additionally, the Company currently has a derivative liability accrued of $179,226,000 related to the Put option held by the Member. Any remaining derivative liability will also be eliminated upon the settlement.

Summary_Of_Business_And_Signif1

Summary Of Business And Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2015
Summary Of Business And Significant Accounting Policies Policies
Reverse merger transaction	On October 3, 2014, Cybergy Holdings, Inc. (“Cybergy”, “the Company”), formerly Mount Knowledge Holdings, Inc. (“MKHD”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with MK Merger Acquisition Sub, Inc., a whollyowned subsidiary of MKHD (“Merger Sub”), Access Alternative Group S.A., and Cybergy Partners, Inc. (“Partners”), providing for the merger of Merger Sub with and into Partners (the “Merger”), with Partners surviving the Merger as a whollyowned subsidiary of MKHD. Pursuant to the Merger Agreement, the shareholders of Partners and MKHD initially exchanged shares in the respective companies for 88% and 12% ownership, respectively, of the surviving company.
	The Merger of Partners and MKHD, a nonoperating public shell corporation, resulted in the owners and management of Partners obtaining actual and effective voting and operating control of the combined company. The Merger was treated as a public shell reverse acquisition and therefore treated as a capital transaction in substance, rather than a business combination. The historical financial statements of MKHD before the Merger were replaced with the historical financial statements of Partners before the Merger. As a result of the Merger, Cybergy acquired the business of Partners, and has continued the existing business operations of Partners.
Principles of Consolidation, Basis of Presentation, and Fiscal Periods	The accompanying unaudited consolidated condensed financial statements of Cybergy Holdings, Inc. (“Cybergy”, “Company”, “we”, “us” or “our”) have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information reflects all normal and recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position of the Company and its results of operations for the interim periods set forth herein. The consolidated condensed balance sheet as of December 31, 2014 presented herein has been derived from the audited balance sheet included in the Company’s Annual Report on Form 10-K for the year ended December 2014.
	Certain information and footnote disclosures, which are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted pursuant to SEC rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. The accompanying unaudited consolidated condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 2014. The information reflects all normal and recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the financial position of the Company and its results of operations for the interim periods set forth herein.
	The results for the three months ended March 2015 are not necessarily indicative of the results to be expected for the full year or any other period.
	The accompanying consolidated condensed financial statements include the accounts of Cybergy, its whollyowned subsidiaries; Partners, New West, Primetrix, Labs, and its 51% owned New WestEnergetics Joint Venture, LLC (“JV”). All intercompany accounts and transactions have been eliminated in consolidation.
	In 2015, the Company changed from a calendar end date to a “4/4/5 weekly” quarterly close cycle. The Company’s three month fiscal periods ended on April 3, 2015 and March 31, 2014. Our balance sheet dates are referred to herein as March 2015 and December 2014. Our three month fiscal periods are referred to herein as March 2015 and 2014.
Going Concern	In 2014 and 2015, the Company had negative cash flow from operations due to declining gross margin, increased personnel costs as well as merger and acquisition costs related to the acquisition and merger. The decline in gross margin was due primarily to the delay on the transition from our JV contract to the follow-on MOTS contract with the Department of Energy. We expect to incur additional operating losses for the year ending December 2015.
	These circumstances raise substantial doubt about our ability to continue as a going concern.
	The Company does not currently believe that its existing cash resources are sufficient to meet its anticipated needs for the year ending December 2015. We need to obtain significant additional capital resources in order to develop products and fund operations and make scheduled debt payments.
	The accompanying unaudited consolidated condensed financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has a history of recurring losses and had negative working capital at March 2015.
	There can be no assurance that the Company will be successful in reducing its negative operating cash flows, and that such cash flows will be sufficient to sustain the Company’s operations through 2015. Nor can there be any assurance that the Company can raise additional capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated condensed financial statements were prepared assuming that the Company is a going concern. The consolidated condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plans in regard to these matters are focused on managing its cash flow, the proper timing of its capital expenditures, and raising additional capital or financing in the future.
	In April and May 2015, the Company raised net proceeds of $1,660,000 from the sale of Series C preferred stock and short term bridge loans as more fully discussed in the following notes.
	Management believes the Company will need additional capital in 2015 of approximately $1.5 to $2.0 million to further fund operations and market expansion of the SmartFile software. The Company intends to cover its future operating expenses through additional financing from existing and prospective investors, revenue from existing and new contracts, revenue from potential grants and collaborative marketing agreements, as well as revenue from the commercialization of products and services. However, we may not be successful in obtaining funding from new or existing collaborative agreements or the commercialization of our products and services. Further, actual revenue may be less than forecasted.
	Additionally, we have engaged a financial advisor to raise capital through the sale of stock, issuance of convertible debt or asset based loans, which has a track record of successfully raising capital for hundreds of development stage to midcap scale companies.
Use of Estimates	The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
	Significant estimates affecting the financial statements include accruals for contract reserves, recoverability of goodwill and intangible assets and earnout obligations related to the acquisition of New West, warrant, conversion, and put valuations and income taxes. The valuation of the warrant, conversion, and put derivative liabilities using a Lattice model is based upon interest rates, stock prices, maturity estimates, volatility and other factors. The Company believes these estimates and assumptions are reliable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions. It is at least reasonably possible that the estimates used will change in the near term.
Cash and Cash Equivalents	The Company considers all highly liquid instruments purchased with an original maturity of three months or less to be cash and cash equivalents. The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests.
Concentration of Credit Risk/Fair Value of Financial Instruments	Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash, cash equivalents and trade receivables. We believe that concentrations of credit risk with respect to trade receivables are limited as they are primarily from government agencies.
Credit Risk	The Company grants credit in the normal course of business to customers in the United States. The Company periodically performs credit analysis and monitors the financial condition of its customers to reduce credit risk. Contracts with the federal government, either as a prime or subcontractor, accounted for approximately 94% and 93% of revenues in 2015 and 2014, respectively and one customer accounted for 92% and 83% of total revenues in 2015 and 2014, respectively. At March 2015 and December 2014, the same customer accounted for 74% of total contract receivables.
Financial Instruments	The Company uses fair value measurements in areas that include, but are not limited to: the allocation of purchase price consideration to tangible and identifiable intangible assets and valuation of derivative liabilities. The carrying values of cash and cash equivalents, contract receivables, accounts payable, and other current assets and liabilities approximate their fair values because of the short-term nature of these instruments. The carrying value of our bank debt approximates fair value due to the variable nature of the interest rates under our Credit Facility and current rates available to the Company for debt with similar terms and risk. Since the put option is embedded in an outstanding share, management chose the “fair value option” in which the entire instrument (the common stock and the put feature) is recorded at fair value.
	The conversion features embedded in, and warrants attached to, the convertible debentures and the put liability are valued at estimated fair value utilizing a Lattice model. The Company, using available market information and appropriate valuation methodologies, has estimated the fair value of its financial instruments. However, considerable judgment is required in interpreting data to develop the estimates of fair value.
Contract Receivables	The Company extends unsecured credit to its customers in the ordinary course of business but mitigates the associated credit risk by evaluating customers' creditworthiness and actively pursuing past due accounts. Management of the Company reviews the collectability of customer receivables on an individual basis based on its historical collection experience with customers. Many of the Company's customers are governmental agencies and are, therefore, subject to the terms and conditions of the Prompt Payment Act, which, with certain exceptions, requires the U.S. government to pay the Company within 30 days from the date of submission of a properly prepared invoice.
	Government contract receivables arise from long-term U.S. government prime contracts and subcontracts. Unbilled contract receivables represent services provided but not yet billed. The amount reflects the actual amount anticipated to be billed. The Company evaluates unbilled amounts for collectability based on estimates of workinprogress that may not be billed based on knowledge of individual balances.
	The Company does not accrue finance or interest charges on its receivables. Contract receivables determined to be uncollectible are expensed in the period such determination is made. No allowance was considered necessary as of March 2015 or December 2014.
	Included in Contract receivables are retainage amounts of $76,000 and $73,000 at March 2015 and December 2014, respectively.
Property and Equipment	Property and equipment are stated net of accumulated depreciation and amortization of $308,000 and $249,000 at March 2015 and December 2014, respectively.
Goodwill	We review goodwill for impairment annually during the fourth quarter or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable.
Intangibles	Intangibles are stated net of accumulated amortization of $980,000 and $790,000 at March 2015 and December 2014, respectively.
Derivative liabilities	The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency.
	The Company reviews the terms of convertible debt and equity instruments it issues to determine whether there are derivative instruments, including an embedded conversion or put options that are required to be bifurcated and accounted for separately as a derivative financial instrument. In circumstances where a host instrument contains more than one embedded derivative instrument, including a conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. Also, in connection with the sale of convertible debt and equity instruments, the Company may issue freestanding warrants or put options that may, depending on their terms, be accounted for as derivative instrument liabilities, rather than as equity.
	Derivative instruments are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as nonoperating income or expense. When the convertible debt or equity instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds allocated to the convertible host instruments are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the convertible instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. The discount from the face value of the convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method.
	The Company has determined that certain of the features (specifically, the embedded conversion feature, the mandatory conversion feature, the antidilution provisions, and default interest) embedded in its Convertible debentures were not considered “clearly and closely related” to the economic characteristics of the Convertible debenture, nor did they meet the definition of being indexed to the Company’s own stock. The Company applies the applicable accounting provisions for the accounting of the valuation of these features and associated warrants. The liability is adjusted quarterly to the estimated fair value based upon then current market conditions. The Company records the change in the estimated fair value of the derivative liability in other income or expense.
	The derivative liability was valued using a combination of a Brownian Motion technique and a Binomial Lattice (“Lattice”) model. A Lattice approach is a preferred valuation methodology relative to a closedform option pricing model (e.g., a BlackScholes option pricing model) because (i) it embodies all of the assumptions that market participants would likely consider in negotiating the transfer of the Convertible debentures, (ii) it simulates the exercise of the Convertible debentures prior to the expiration date, and iii) it incorporates potential variability for inputs that are not static such as the occurrence of a mandatory conversion, an event of default or a dilutive issuance. The Lattice model utilizes interest rates, stock prices, contractually remaining term of the underlying financial instruments and volatility factors. We utilize historical volatility over a period generally commensurate with the remaining contractual term of the underlying financial instruments and use daily intervals for price observations. However, the Company does not have sufficient trading activity on which to base an estimate of future stock price volatility. Therefore, management determined that use of historical volatility of a comparable peer group over a term consistent with the remaining contractual terms of the Convertible debentures was the best indicator of the stock’s future volatility. The Company believes these estimates and assumptions are reliable. However, these estimates and assumptions may change in the future based on actual experience as well as market conditions.
Revenue Recognition	Substantially all of our work is performed for our customers on a contract basis based on time and materials. Revenues result from work performed on these contracts by our employees and our subcontractors and from costs for materials and other work related costs allowed under our contracts.
	Revenues for time and materials contracts are recorded on the basis of contract allowable labor hours worked multiplied by the contract defined billing rates, plus the direct costs and indirect cost burdens associated with materials and subcontract work used in performance on the contract. Generally, gross profit on time and materials contracts result from the difference between the cost of services performed and the contract defined billing rates for these services.
	Under certain contracts with the U.S. government and other governmental entities, contract costs, including indirect costs, are subject to audit by and adjustment through negotiation with governmental representatives. Revenue is recorded in amounts expected to be realized on final settlement of any such audits.
Share-Based Compensation	We account for sharebased awards in accordance with the applicable accounting rules that require the measurement and recognition of compensation expense for all sharebased payment awards based on estimated fair values. That cost is recognized over the requisite service period in which the employee is required to provide service in exchange for the award, which is usually the vesting period.
Net Earnings (Loss) per Share of Common Stock	Basic earnings (loss) per common share are computed by dividing net earnings (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period adjusted to reflect potentially dilutive securities. The computation of earnings (loss) per share is based on the weighted average number of shares outstanding during each of the periods based upon the exchange ratio of shares issued in the merger.
	The shareholders of Partners received Series C preferred stock in connection with the Merger, therefore the exchange ratio to common stock was zero. Through the merger date in 2014, there were no outstanding common shares.
	The following is a reconciliation of net earnings used in the calculation of basic earnings per share and diluted earnings per share for the three months ended March 2015:
	Net income attributable to Cybergy	$	104,420,000
	Effect of dilutive securities:
	Preferred stock		-
	Stock options		8,000
	Convertible debentures		(43,067,000	)
	Warrants		(3,562,000	)
	Put option		(59,453,000	)
	Diluted net income (loss) attributable to Cybergy	$	(1,654,000	)
	The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share for the three months ended March 2015:
	Weighted-average number of common shares outstanding	20,498,591
	Effect of dilutive securities:
	Preferred stock		523,785,360
	Stock options		17,712,458
	Convertible debentures		80,313,600
	Warrants		6,482,452
	Put option		-
	Dilutive potential common shares		648,792,461
	The following securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive:
	Stock options	503,295
	Warrants		501,755
			1,005,050
Income Taxes	The current provision for income taxes represents estimated amounts payable or refundable on tax returns filed or to be filed for the year. Deferred tax assets and liabilities are recorded for the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the consolidated balance sheets. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. Effects of changes in enacted tax laws on deferred tax assets and liabilities are reflected as adjustments to tax expense in the period of enactment.
	When appropriate, we record a valuation allowance against net deferred tax assets to offset future tax benefits that may not be realized. In determining whether a valuation allowance is appropriate, we consider whether it is more likely than not that all or some portion of our deferred tax assets will not be realized, based in part upon management’s judgments regarding future events and past operating results.
	The Company follows the guidance of Accounting Standards Codification ("ASC") Topic 740, Accounting for Uncertainty in Income Taxes. ASC Topic 740 prescribes a more-likely-than-not measurement methodology to reflect the financial statement impact of uncertain tax positions taken or expected to be taken in a tax return.
Recent Accounting Pronouncements	The Financial Accounting Standards Board (FASB) recently released ASU 2015-03; Interest—Imputation of Interest, Simplifying the Presentation of Debt Issuance Costs that requires debt issuance costs be presented as a direct deduction from the carrying amount of the debt instead of as a noncurrent asset. The change brings requirements into line with those of premiums and discounts on debt. ASU 2015-03 is effective for fiscal years and interim periods beginning after December 15, 2015. Early adoption is permitted. The Company expects to adopt ASU 2015-03 in 2016 and does not expect the adoption will have a significant impact on the consolidated balance sheet.

Summary_Of_Business_And_Signif2

Summary Of Business And Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2015
Summary Of Business And Significant Accounting Policies Tables
Earnings (loss) per share	The shareholders of Partners received Series C preferred stock in connection with the Merger, therefore the exchange ratio to common stock was zero. Through the merger date in 2014, there were no outstanding common shares.
	The following is a reconciliation of net earnings used in the calculation of basic earnings per share and diluted earnings per share for the three months ended March 2015:
	Net income attributable to Cybergy	$	104,420,000
	Effect of dilutive securities:
	Preferred stock		-
	Stock options		8,000
	Convertible debentures		(43,067,000	)
	Warrants		(3,562,000	)
	Put option		(59,453,000	)
	Diluted net income (loss) attributable to Cybergy	$	(1,654,000	)
	The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share for the three months ended March 2015:
	Weighted-average number of common shares outstanding	20,498,591
	Effect of dilutive securities:
	Preferred stock		523,785,360
	Stock options		17,712,458
	Convertible debentures		80,313,600
	Warrants		6,482,452
	Put option		-
	Dilutive potential common shares		648,792,461
Diluted net earnings per share	The following securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive:
	Stock options	503,295
	Warrants		501,755
			1,005,050

Derivative_Liabilities_Tables

Derivative Liabilities (Tables)	3 Months Ended
	Mar. 31, 2015
Derivative Liabilities Tables
Summary of Derivative Liabilities	The Company utilizes historical volatility over a period generally commensurate with the remaining contractual term of the underlying financial instruments and uses daily intervals for price observations.
	Derivative liabilities consisted of the following at:
			Mar-15		Dec-14
	Related to senior secured convertible notes, short term	$	(72,611,000	)	$	(53,834,000	)
	Related to warrants, short term		(5,030,000	)		-
	Total short-term		(77,641,000	)		(53,834,000	)
	Related to put option		(179,226,000	)		(238,679,000	)
	Related to senior secured convertible notes, long term		(73,669,000	)		(135,872,000	)
	Related to warrants		(7,041,000	)		(15,633,000	)
	Total long-term		(259,936,000	)		(390,184,000	)
	Total derivative liability	$	(337,577,000	)	$	(444,018,000	)
	The following assumptions were utilized:
		Mar-15			Dec-14
	Average expected volatility - debt	36.74% to 39.69		%	30.19% to 34.76		%
	Average expected volatility - warrants	37.40% to 37.44		%	37.92% to 38.05		%
	Average expected volatility – put option		34.97	%		35.47	%
	Remaining expected term of the underlying securities - notes		3 to 12.8 months			6 to 15.8 months
	Remaining expected term of the underlying securities - warrants		4.5 years			4.8 years
	Remaining expected term of the put option		2.76 years			3.0 years
	Average risk free interest rate – debt		0.03% to 0.281	%		0.12% to 0.38	%
	Average risk free interest rate – warrants		1.33	%		1.63	%
	Average risk free interest rate – put option		2.82	%		2.47	%
	Expected dividend rate		-0-	%		-0-	%
	Closing price per share of common stock	$	1.86		$	2.4
	Exercise price of warrants per share of common stock	$	0.0218		$	0.0218

Stockholders_Equity_Tables

Stockholders Equity (Tables)	3 Months Ended
	Mar. 31, 2015
Stockholders Equity Tables
Summary of option activity	A summary of option activity at March 2015, and changes during the quarter then ended is presented below.
		Range of Exercise Price					Stock Options		Wgt. Avg. Exercise Price		Wgt. Avg. Remaining Contractual Life (years)		Wgt. Avg. Grant Date Fair Value		Aggregate Intrinsic Value
	As of December 2014
	Outstanding				$	0.00008		17,779,862	$	0.00008		9.25	$	0.0045	$	42,670,000
	Vested and exercisable				$	0.00008		4,151,867	$	0.00008		9.24	$	0.0045	$	9,964,000
	Nonvested				$	0.00008		13,627,995	$	0.00008		9.25	$	0.0045	$	32,706,000
	Period Activity
	Issued							502,995	$	1.97			$	0.98
	Exercised							-		-				-
	Vested							1,481,655	$	0.00008			$	0.0045
	Forfeited							-		-				-
	Expired							-		-				-
	As of March 2015
	Outstanding	$	0.00008		$	2.4		18,282,857	$	0.054		9.03	$	0.0314	$	33,069,000
	Vested and exercisable				$	0.00008		5,633,522	$	0.00008		8.99	$	0.0045	$	10,478,000
	Nonvested	$	0.00008		$	2.4		12,649,335	$	0.078		9.07	$	0.0434	$	22,591,000
	Assumptions:	2015
	Expected Volatility	49.29% to 50.14		%
	Weighted-Average Volatility		49.45	%
	Expected Dividends		-0-	%
	Expected Term (years)		6.5
	Risk-Free Rate		1.63% to 1.84	%
	Total intrinsic value of options exercised	$	-
	Total fair value of shares vested	$	10,478,000
	Unrecognized compensation cost related to nonvested awards	$	539,000
	Weighted-average period over which nonvested awards are expected to be recognized		2.9 years

Fair_Value_Measurements_Tables

Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2015
Fair Value Measurements Tables
Summarizes the financial assets and liabilities measured at fair value on a recurring basis				Amounts
	Amounts Recorded at Fair Value	Financial Statement Classification	Fair Value Hierarchy	Mar-15		Dec-14
	Derivative liability - note, redeemable common stock, and warrant bifurcation	Derivative liability – current and long-term	Level 3	$	158,351,000	$	205,339,000
	Put option derivative liability	Derivative liability – long-term	Level 3	$	179,226,000	$	238,679,000

Recovered_Sheet1

SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Summary Of Business And Significant Accounting Policies Details
Net income (loss) attributable to Cybergy	$104,420,000	($523,000)
Effect of dilutive securities:
Preferred stock
Stock options	8,000
Convertible debentures	-43,067,000
Warrants	-3,562,000
Put option	-59,453,000
Diluted net income (loss) attributable to Cybergy	($1,654,000)
Weighted average number of basic and diluted common shares outstanding	20,498,591
Effect of dilutive securities:
Preferred stock	523,785,360
Stock options	17,712,458
Convertible debentures	80,313,600
Warrants	6,482,452
Put option
Dilutive potential common shares	648,792,461

Recovered_Sheet2

SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 1)	Mar. 31, 2015
Summary Of Business And Significant Accounting Policies Details 1
Stock options	503,295
Warrants	501,755
Total securities	1,005,050

Recovered_Sheet3

SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Summary Of Business And Significant Accounting Policies Details Narrative
Customer accounted receivables	74.00%	74.00%
Concentration of Contract receivables	$76,000	$73,000
Accumulated depreciation and amortization	308,000	249,000
Accumulated amortization	$980,000	$790,000

LINE_OF_CREDIT_Details_Narrati

LINE OF CREDIT (Details Narrative)	Mar. 31, 2015	Dec. 31, 2014
Line Of Credit Details Narrative
Accured interest for line of credit	6.25%	6.25%

DEBT_Detalis_Narrative

DEBT (Detalis Narrative) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Debt Detalis Narrative
Senior secured convertible debentures outstanding	$3,525,000	$3,525,000
Debt discount	1,033,000	1,309,000
Other accrued liabilities	$176,000	$71,000

DERIVATIVE_LIABILITIES_Details

DERIVATIVE LIABILITIES (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Total short-term	($77,641,000)	($53,834,000)
Total long-term	-259,936,000	-390,184,000
Total derivative liability	-337,577,000	-444,018,000
Related to senior secured convertible notes [Member]
Total short-term	-72,611,000	-53,834,000
Total long-term	-73,669,000	-135,872,000
Related to warrants [Member]
Total short-term	-5,030,000
Total long-term	-7,041,000	-15,633,000
Related to put option [Member]
Total long-term	($179,226,000)	($238,679,000)

DERIVATIVE_LIABILITIES_Details1

DERIVATIVE LIABILITIES (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Remaining expected term	6 years 6 months
Expected dividend rate	0	0
Closing price per share of common stock	1.86	2.4
Exercise price of warrants per share of common stock	0.0218	0.0218
Minimum [Member]
Average expected volatility	49.29%
Average risk free interest rate	1.63%
Maximum [Member]
Average expected volatility	50.14%
Average risk free interest rate	1.84%
Debt [Member] | Minimum [Member]
Average expected volatility	36.74%	30.19%
Remaining expected term	3 months	6 months
Average risk free interest rate	0.03%	0.12%
Debt [Member] | Maximum [Member]
Average expected volatility	39.69%	34.76%
Remaining expected term	12 years 9 months 18 days	15 years 9 months 18 days
Average risk free interest rate	0.28%	0.38%
Warrants [Member]
Remaining expected term	4 years 6 months	4 years 9 months 18 days
Average risk free interest rate	1.33%	1.63%
Warrants [Member] | Minimum [Member]
Average expected volatility	37.40%	37.92%
Warrants [Member] | Maximum [Member]
Average expected volatility	37.44%	38.05%
Put Option [Member]
Average expected volatility	34.97%	35.47%
Remaining expected term	2 years 9 months 4 days	3 years
Average risk free interest rate	2.82%	2.47%

INCOME_TAXES_Details_Narrative

INCOME TAXES (Details Narrative) (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Income Taxes Details Narrative
Valuation allowance	$5,406,000	$4,616,000
Net operating loss carry forwards	$15,953,000
Expiration of net operating loss carry forwards	2033 and 2035

STOCKHOLDERS_EQUITY_Details

STOCKHOLDERS' EQUITY (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Exercise Price Share Per Share
Stock option issued and exercisable, Beginning Balance	$0.00
Vested and exercisable	$0.00
Nonvested	$0.00
Stock option issued and exercisable, Ending Balance	$0.00	$0.00
Number of Stock Options
Outstanding at beginning of year	17,779,862
Vested and exercisable at beginning of year	4,151,867
Nonvested at beginning of year	13,627,995
Issued	502,995
Exercised
Vested	1,481,655
Forfeited
Expired
Outstanding at end of year	18,282,857	17,779,862
Vested and exercisable at end of year	5,633,522	4,151,867
Nonvested at end of year	12,649,335	13,627,995
Weighted Average Exercise Price
Outstanding at beginning of year	$0.00
Vested and exercisable at beginning of year	$0.00
Nonvested at beginning of year	$0.00
Issued	$1.97
Exercised
Vested	$0.00
Forfeited
Outstanding at end of year	$0.05	$0.00
Vested and exercisable at end of year	$0.00	$0.00
Nonvested at end of year	$0.08	$0.00
Weighted Average Remaining Contractual Life
Outstanding	9 years 11 days	9 years 3 months
Vested and exercisable	8 years 11 months 27 days	9 years 2 months 27 days
Nonvested	9 years 26 days	9 years 3 months
Wgt. Avg. Grant Date Fair Value
Wgt. Avg. Grant Date Fair Value Outstanding at beginning of year	$0.00
Vested and exercisable at beginning of year	$0.00
Nonvested at beginning of year	$0.00
Issued	$0.98
Exercised
Vested	$0.00
Forfeited
Expired
Vested and exercisable	$0.00
Nonvested	$0.04
Wgt. Avg. Grant Date Fair Value Outstanding at end of year	$0.03	$0.00
Vested and exercisable at beginning of year	$0.00	$0.00
Nonvested at beginning of year	$0.04	$0.00
Aggregate Instrinsic Value, Outstanding	$33,069,000	$42,670,000
Aggregate Instrinsic Value, Vested and exercisable	10,478,000	9,964,000
Nonvested	$22,591,000	$32,706,000
Minimum [Member]
Exercise Price Share Per Share
Stock option issued and exercisable, Beginning Balance	$0.00
Nonvested	$0.00
Maximum [Member]
Exercise Price Share Per Share
Stock option issued and exercisable, Beginning Balance	$2.40
Vested and exercisable	$0.00
Nonvested	$2.40

STOCKHOLDERS_EQUITY_Details_1

STOCKHOLDERS' EQUITY (Details 1) (USD $)	3 Months Ended
	Mar. 31, 2015
Weighted-Average Volatility	49.45%
Expected dividends
Expected Term (years)	6 years 6 months
Total intrinsic value of options exercised
Total fair value of shares vested	10,478,000
Unrecognized compensation cost related to non-vested awards	$539,000
Weighted-average period over which non-vested awards are expected to be recognized	2 years 10 months 24 days
Minimum [Member]
Expected Volatility	49.29%
Risk-free rate	1.63%
Maximum [Member]
Expected Volatility	50.14%
Risk-free rate	1.84%

FAIR_VALUE_MEASUREMENTS_Detail

FAIR VALUE MEASUREMENTS (Details) (Fair Value, Inputs, Level 3 [Member], USD $)	Mar. 31, 2015	Dec. 31, 2014
Derivative liability - note, redeemable common stock, and warrant bifurcation [Member]
Derivative liability	$158,351,000	$205,339,000
Put option derivative liability [Member]
Derivative liability	$179,226,000	$238,679,000