Cybergy (CYBG) 10-Q 23 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Oct. 02, 2015	Nov. 13, 2015
Document And Entity Information
Entity Registrant Name	Cybergy Holdings, Inc.
Document Type	10-Q
Document Period End Date	Oct. 2, 2015
Amendment Flag	false
Entity Central Index Key	1,397,951
Current Fiscal Year End Date	--12-31
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		20,800,603
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

Consolidated Condensed Balance

Consolidated Condensed Balance Sheets - USD ($)	Oct. 02, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 12,000	$ 1,415,000
Contract receivables, net	1,420,000	2,328,000
Prepaid expenses and other current assets	266,000	314,000
Total current assets	1,698,000	4,057,000
Non-Current Assets
Property and equipment, net	673,000	838,000
Other assets	60,000	60,000
Intangibles, net	1,390,000	1,959,000
Goodwill	4,075,000	4,075,000
Total non-current assets	6,198,000	6,932,000
Total assets	7,896,000	10,989,000
Current liabilities:
Accounts payable	1,435,000	449,000
Accrued liabilities	3,035,000	1,118,000
Related party payable	15,000	1,808,000
Line of credit	179,000	56,000
Current portion of other accrued liabilities	303,000	187,000
Current portion of long-term debt - other, net	803,000	57,000
Current portion of acquisition notes	5,020,000	3,800,000
Current portion of senior secured convertible notes, net	2,603,000	932,000
Derivative liability	4,925,000	53,834,000
Total Current Liabilities	$ 18,318,000	62,241,000
Non-Current Liabilities
Other accrued liabilities		387,000
Long term debt, less current portion - other	$ 5,000	53,000
Senior secured convertible notes, net		1,285,000
Acquisition notes, less current portion	$ 866,000	1,834,000
Derivative and put liabilities	11,441,000	390,184,000
Deferred rent	266,000	239,000
Total non-current liabilities	12,578,000	393,982,000
Total Liabilities	$ 30,896,000	$ 456,223,000
Commitments and contingencies
Stockholders' Equity (Deficit)
Common stock, $.0001 par value, 3,000,000,000 shares authorized; 33,817,548 issued and outstanding at October 2, 2015; 20,520,229 issued and outstanding as of October 2, 2015 and December 31, 2014 respectively	$ 22,000	$ 21,000
Series C preferred stock, $.0001 par value, 250,000,000 shares authorized; 53,734,436 and 52,379,436 shares issued and outstanding as of October 2, 2015 and December 31, 2014 respectively	$ 5,000	$ 5,000
Series B preferred stock, $.0001 par value, 1000 shares authorized, issued and outstanding
Paid in capital	$ 3,134,000
Accumulated deficit	(26,138,000)	$ (445,242,000)
Total Cybergy stockholders' equity (deficit)	(22,977,000)	(445,216,000)
Non-controlling interest in joint venture	(23,000)	(18,000)
Total stockholders' equity (deficit)	(23,000,000)	(445,234,000)
Total liabilities and stockholders' equity (deficit)	$ 7,896,000	$ 10,989,000

Consolidated Condensed Balance3

Consolidated Condensed Balance Sheets (Parenthetical) - $ / shares	Oct. 02, 2015	Dec. 31, 2014
Stockholders' Equity
Common stock, par value	$ .0001	$ .0001
Common stock, shares authorized	3,000,000,000	3,000,000,000
Common stock, shares issued	33,817,548	20,520,229
Common stock, shares outstanding	33,817,548	20,520,229
Series C Preferred stock, par value	$ .0001	$ .0001
Series C Preferred stock, shares authorized	250,000,000	250,000,000
Series C Preferred stock, shares issued	53,734,436	52,379,436
Series C Preferred stock, shares outstanding	53,734,436	52,379,436
Series B Preferred stock, par value	.0001	.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 Statemen

Consolidated Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 02, 2015	Sep. 30, 2014	Oct. 02, 2015	Sep. 30, 2014
Consolidated Condensed Statements Of Operations
Contract revenue	$ 1,716,000	$ 8,414,000	$ 15,328,000	$ 25,487,000
Cost of services	691,000	6,713,000	12,060,000	20,885,000
Gross profit	1,025,000	1,701,000	3,268,000	4,602,000
Operating Expenses:
Selling, general and administrative	2,104,000	1,970,000	6,727,000	5,962,000
Depreciation and amortization	245,000	251,000	742,000	762,000
Total operating expenses	2,349,000	2,221,000	7,469,000	6,724,000
Operating (loss)	(1,324,000)	(520,000)	(4,201,000)	(2,122,000)
Other (income) expense
Interest expense, net of interest income	746,000	$ 216,000	1,825,000	$ 524,000
Change in fair value of derivative and put liabilities	(10,534,000)		(428,093,000)
Other	2,626,000	$ (3,000)	2,968,000	$ 200,000
Total other (income) expense	(7,162,000)	213,000	(423,300,000)	724,000
Income (loss) before income taxes	$ 5,838,000	(733,000)	$ 419,099,000	(2,846,000)
Income tax (benefit) expense		(337,000)		(1,229,000)
Consolidated net income (loss)	$ 5,838,000	(396,000)	$ 419,099,000	$ (1,617,000)
Net income (loss) attributable to non-controlling interest in joint venture	(2,000)	(6,000)	(5,000)
Net income (loss) attributable to Cybergy	$ 5,840,000	$ (390,000)	$ 419,104,000	$ (1,617,000)
Basic earnings (loss) per share of common stock	$ 0.23		$ 19.01
Weighted average number of basic common shares outstanding	25,016,996		22,048,312
Diluted earnings (loss) per share of common stock	$ (0.01)		$ (0.01)
Weighted average number of diluted common shares outstanding	659,504,264		646,614,189

Unaudited Consolidated Condense

Unaudited Consolidated Condensed Statement Of Changes In Stockholders' Equity (Deficit) - 9 months ended Oct. 02, 2015 - 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
Bifurcation of Bridge note and warrants				$ 213,000		$ 213,000
Exercise of warrants on a net exercise basis, Amount
Exercise of warrants on a net exercise basis, Shares		280,345
Sale of preferred stock, net of issuance cost of $47,000, Amount				$ 1,168,000		$ 1,168,000
Sale of preferred stock, net of issuance cost of $47,000, Shares	1,215,000
Conversion of Promissory Note due Director, Amount				140,000		140,000
Conversion of Promissory Note due Director, Shares	140,000
Shares issued related to the convertible debenture, Amount		$ 1,000		1,423,000		1,424,000
Shares issued related to the convertible debenture, Shares		13,066,945
Share-based compensation				$ 140,000		140,000
Non-controlling interest in joint venture			$ (5,000)			(5,000)
Net income (loss)					$ 419,104,000	419,104,000
Ending Balance, Amount at Oct. 02, 2015	$ 5,000	$ 22,000	$ (23,000)	$ 3,134,000	$ (26,138,000)	$ (23,000,000)
Ending Balance, Shares at Oct. 02, 2015	53,734,436	33,817,548

Consolidated Condensed Stateme6

Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Oct. 02, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income (loss)	$ 419,104,000	$ (1,617,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation	146,000	191,000
Amortization of intangibles	569,000	571,000
Amortization of debt issuance costs	42,000	75,000
Amortization of debt discount	1,231,000	$ 44,000
Financing costs	2,654,000
Change in fair value of derivative liability	(428,093,000)	$ 30,000
Share-based compensation	140,000	17,000
Share-based services	50,000	83,000
Deferred rent	$ 28,000	7,000
Deferred taxes		(1,229,000)
Earn out adjustment	$ 252,000	$ 200,000
Interest in JV	(5,000)
Changes in assets and liabilities, net of effect of acquisition:
Contract receivables	906,000	$ 431,000
Prepaid and other current assets	31,000	(3,000)
Accounts payable	987,000	(1,287,000)
Accrued liabilities	385,000	286,000
Related party payables	(1,792,000)	3,462,000
Net cash (used in) provided by operating activities	(3,365,000)	1,261,000
Cash flows from investing activities:
Sales (purchases) of property and equipment	$ 20,000	(20,000)
Cash received in the acquisition of New West		897,000
Acquisition of New West		(403,000)
Net cash (used in) provided by investing activities	$ 20,000	474,000
Cash flows from financing activities:
Proceeds from long term debt	1,267,000	1,750,000
Payments on long term debt	(560,000)	(306,000)
Payments on other accrued liabilities	(30,000)	(117,000)
Line of Credit, net	122,000	359,000
Debt issuance costs	(25,000)	$ (264,000)
Proceeds from the sale of preferred stock	1,215,000
Stock issuance costs	(47,000)
Net cash (used in) provided by financing activities	1,942,000	$ 1,422,000
Net increase (decrease) in cash and cash equivalents	(1,403,000)	$ 3,157,000
Cash and cash equivalents, beginning of period	1,415,000
Cash and cash equivalents, end of period	12,000	$ 3,157,000
Supplemental Disclosure Cash Flow Information:
Cash paid for interest	$ 128,000	$ 86,000
Cash paid for income taxes
Supplemental disclosure of non-cash activity:
Bifurcation of Bridge notes and warrants	$ 213,000
Conversion of Promissory note to preferred stock	$ 140,000
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
Supplemental cash flow information regarding the Company's acquisition of New West in 2014 is as follows:
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 SIGNIFI

SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Oct. 02, 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 wholly-owned 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 wholly-owned 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 31, 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 31, 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 accompanying consolidated condensed financial statements include the accounts of Cybergy, its wholly-owned subsidiaries; Partners, New West, Primetrix, Labs, and its 51% owned New West Energetics Joint Venture, LLC ("JV"). All intercompany accounts and transactions have been eliminated in consolidation. In 2015, the Company changed from a calendar period end date to a "4/4/5 weekly" quarterly close cycle. The Company's fiscal periods ended on October 2, 2015 and September 30, 2014. The results for the three and nine months ended October 2, 2015 are not necessarily indicative of the results to be expected for the full year or any other period. Going Concern In 2015 year to date, the Company has had negative cash flow from operations due to declining gross margin, increased personnel costs, as well as increased costs related to the acquisition and merger. The decline in gross margin was due primarily to the delay in the first half of the year on the transition from our JV contract to the follow-on MOTS contract with the Department of Energy. Although the MOTS contract began ramping up in the third quarter resulting in noticeable improvement in Gross Margin percent, and management implemented cost cutting measures in August that will be fully observed in the Company’s fourth quarter, we expect to incur additional operating losses for the year ending December 31, 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 31, 2015. We need to obtain significant additional capital resources in order to develop products, 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 October 2, 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 reducing expenses, 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 $1,935,000 from the sale of Series C preferred stock and short term bridge loans as more fully discussed in the following notes. $500,000 was used to repay a portion of the EPA note. In August 2015, the Company raised net proceeds of $500,000 through the sale of 1,139,200 shares of the Company's Common Stock and a Debenture as discussed in the following notes. The funds were used for working capital. Management believes the Company will need additional capital in 2015 of approximately $1.0 to $1.5 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. 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, stock based compensation, 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 95% and 93% of revenues for the nine months ended October 2, 2015 and September 30, 2014, respectively and 80% and 95% of revenues for the three months ended October 2, 2015 and September 30, 2014, respectively. One customer accounted for 20% and 88% of total revenues for the nine months ended October 2, 2015 and September 30, 2014 and 0% and 93% of revenues for the three months ended October 2, 2015 and September 30, 2014, respectively. At October 2, 2015 and December 31, 2014, the same customer accounted for 0% and 74% of total contract receivables, respectively. 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. Given the current financial position of the Company, it is impracticable to estimate the fair value of the Company's short and long term debt. 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 Contract receivables are stated net of an allowance for doubtful accounts of $30,000 and $-0- at October 2, 2015 and December 31, 2014, respectively. 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 work in progress 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. Included in Contract receivables are retainage amounts of $72,000 and $73,000 at October 2, 2015 and December 31, 2014, respectively. Property and Equipment Property and equipment are stated net of accumulated depreciation and amortization of $366,000 and $249,000 at October 2, 2015 and December 31, 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 $1,359,000 and $790,000 at October 2, 2015 and December 31, 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 and 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 primarily a Binomial Lattice ("Lattice") model. A Lattice approach is a preferred valuation methodology relative to a closed-form option pricing model (e.g., a Black-Scholes 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 share-based awards in accordance with the applicable accounting rules that require the measurement and recognition of compensation expense for all share-based 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 and diluted earnings per share for the three and nine months ended October 2, 2015: Three months ended Nine months ended October 2, 2015 Net income attributable to Cybergy $ 5,840,000 $ 419,104,000 Effect of dilutive securities: Preferred stock - - Stock options 11,000 11,000 Convertible debentures (5,014,000 ) (183,602,000 ) Warrants 850,000 (13,735,000 ) Put option (6,382,000 ) (230,052,000 ) Diluted net (loss) attributable to Cybergy $ (4,695,000 ) $ (8,274,000 ) The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the three and nine months ended October 2, 2015: Three months ended Nine months ended October 2, 2015 Weighted-average number of common shares outstanding 25,016,996 22,048,312 Effect of dilutive securities: Preferred stock 537,335,361 524,172,988 Stock options 11,287,924 11,490,452 Convertible debentures 80,313,600 80,313,600 Warrants 5,550,383 8,588,837 Put option - - Dilutive potential common shares 659,504,264 646,614,189 The following securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive: Three months ended Nine months ended October 2, 2015 Stock options 9,395,177 9,395,177 Warrants 507,707 507,707 9,902,884 9,902,884 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

LINE OF CREDIT

LINE OF CREDIT	9 Months Ended
	Oct. 02, 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 October 2, 2015 and December 31, 2014) or (ii) $3,750. Additionally, the Company is charged a monthly collateral fee of $2,000. We were fully funded as of October 2, 2015 and December 31, 2014 under the revolving line of credit. Average daily borrowings under the revolving line of credit were $150,000 and $324,000 during the nine months ended October 2, 2015 and September 30, 2014, respectively. 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 31, 2014 and October 2, 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 31, 2014 and October 2, 2015.

DEBT

DEBT	9 Months Ended
	Oct. 02, 2015
Notes to Financial Statements
NOTE C - DEBT	At October 2, 2015 and December 31, 2014, the Company had $4,230,000 and $3,525,000 of Senior Secured Convertible Debentures outstanding, respectively. 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 $991,000 and $1,309,000 at October 2, 2015 and December 31, 2014, respectively. We have not paid the interest due on $2,925,000 of our convertible debentures which was due in March, April, May, June, July, August and September 2015. While the Company is in technical default under the debenture agreement, to date, no holder has formally demanded an accelerated payment. The holder of the EPA note has agreed to defer the interest due pending the sale to another investor. In March 2015, the Company issued a Promissory Note in the amount of $140,000 to a Director of the Company. The note accrued interest at prime plus 5% and was 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 ("Bridge note"). The Bridge 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 Bridge note is paid within 90 days of the issue date, the amount due is $605,000. If the Bridge 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 Bridge note is stated net of the original issue discount of $33,000 and valuation of the warrants issued of $36,000 at October 2, 2015. In August 2015, the Company raised net proceeds of $500,000 through the sale of 1,139,200 shares of the Company's Common Stock and a Debenture for the full amount at a rate of five percent per annum with a maturity date of April 2, 2016. The holder of the Debenture also has the right to convert to the Company's Class C shares at a conversion price of $0.4389 per share. The Company entered into a Merchant Cash Advance unsecured loan agreement with Power Up Lending Group, Ltd. in September 2015. The face value of the loan was $150,000, carries an annualized interest rate of 113% and will be repaid in equal installments over an eight month period resulting in total payments of $195,000. The proceeds of the loan will be used for working capital. The Company and the holder of the EPA note entered into an oral arrangement whereby the EPA note would be repaid by another investor and the Holder would return the 1,267,200 shares of the Company's Series C preferred stock for the initial loan balance of $1,000,000. In April and May 2015, we repaid $500,000 of the EPA note. The remaining $500,000 is still outstanding and the due date has been extended to the earlier of December 31, 2015 or an equity capital raise of $2,500,000 or greater. As a result of the Member litigation, we have made no payments on the First notes due to the Member in 2015. 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 currently has short term debt and accrued interest of approximately $6,407,000 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. The Company has determined that an ESOP is not financially feasible. At this time the Company has not determined an alternate method to repay the Member. Additionally, the Company currently has a derivative liability accrued of $8,627,000 related to the Put option held by the Member. Any remaining derivative liability will also be eliminated upon the settlement. Without admitting liability or fault by either party, the Company or executed a legal dispute settlement of claims on October 25, 2011. In that settlement the Company agreed to pay the sum of $1,000,000 in equal installments over five years beginning on October 31, 2011. The Company made its monthly payment obligations from October 31, 2011 until February, 2015. At that time the Company entered into a forbearance agreement in which the other party forbears the Company's monthly payment obligations in full until September 2015 and by half until May 2016. All principal amounts deferred during the forbearance period will accrue interest at 1% per month. The Company has yet to begin payments for the partial forbearance period. As of this filing the Company is technically in default but has not received a demand letter from the other party. 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%). The Company filed a Form S-1 on May 14, 2015. After receiving questions from the SEC, an updated Form S-1/A was filed on September 24, 2015. As a result of the timing of the filing, the holders are due a 6% fee. Included in Other accrued liabilities as of October 2, 2015 and December 31, 2014, is $212,000 and $71,000, respectively related to this liability.

DERIVATIVE LIABILITIES

DERIVATIVE LIABILITIES	9 Months Ended
	Oct. 02, 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 and 2015 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. We utilize 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: October 2, 2015 December 31, 2014 Related to senior secured convertible notes, short term $ 4,925,000 $ 53,834,000 Related to warrants, short term - - Total short-term 4,925,000 53,834,000 Related to put option 8,627,000 238,679,000 Related to senior secured convertible notes, long term - 135,872,000 Related to warrants 2,814,000 15,633,000 Total long-term 11,441,000 390,184,000 Total derivative liability $ 16,366,000 $ 444,018,000 The following assumptions were utilized: October 2, 2015 December 31, 2014 Average expected volatility - debt 37.00% to 38.00% 30.19 % to 34.76% Average expected volatility - warrants 38.00% to 41.00% 37.92% to 38.05% Remaining expected term of the underlying securities - notes 0.25 to 0.56 years 6 to 15.8 months Remaining expected term of the underlying securities - warrants 4.0 to 4.9 years 4.8 years Remaining expected term of the put option 2.25 years 3.0 years Average risk free rate - debt 0.00% to 0.11% 0.12% to 0.38% Average risk free rate - warrants 1.14% to 1.35% 1.63% Average risk free rate - put option 0.89% 2.47% Expected dividend rate -0-% -0-% Closing price per share of common stock $ 0.106 $ 2.40 Exercise price of warrants per share of common stock $ 0.0222 to $0.100 $ 0.0218

INCOME TAXES

INCOME TAXES	9 Months Ended
	Oct. 02, 2015
Notes to Financial Statements
NOTE E - INCOME TAXES	As of October 2, 2015 and December 31, 2014, the Company has established a valuation allowance of $8,680,000 and $4,616,000, respectively, against our net deferred tax assets. As of October 2, 2015, the Company has estimated state and federal net operating loss carry forwards of approximately $22,074,000 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 October 2, 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	9 Months Ended
	Oct. 02, 2015
Notes to Financial Statements
NOTE F - COMMITMENTS AND CONTINGENCIES	Without admitting liability or fault by either party, the Company executed a legal dispute settlement of claims on October 25, 2011. In that settlement the Company agreed to pay the sum of $1,000,000 in equal installments over five years beginning on October 31, 2011. The Company made its monthly payment obligations from October 31, 2011 until February, 2015. At that time the Company entered into a forbearance agreement in which the other party forbears the Company's monthly payment obligations in full until September 2015 and by half until May 2016. All principal amounts deferred during the forbearance period will accrue interest at 1% per month. The Company has yet to begin payments for the partial forbearance period. As of this filing the Company is technically in default but has not received a demand letter from the other party. In August 2015, the Company raised net proceeds of $500,000 through the sale of 1,139,200 shares of the Company's Common Stock and a Debenture for the full amount at a rate of five percent per annum with a maturity date of April 2, 2016. The holder of the Debenture also has the right to convert to the Company's Class C shares at a conversion price of $0.4389 per share. The purchaser also received a warrant for 22,784,000 shares of the Company's Common Stock at an exercise price of $0.10 per share. There are ten milestones specified in the stock purchase agreement that the Company needs to achieve under certain timeframes. For every milestone that is not achieved in the specified timeframe, additional shares of common stock are to be issued to the buyer. For eight of the milestones the number of additional shares are 2,934,579 and 5,869,158 for the remaining two. Further, the warrant price shall be adjusted to the quotient equal to the (i) original principal amount of the debenture, divided by (ii) (a) the shares of common stock issuable pursuant to the terms of the debenture plus (b) the shares of common stock issued for milestones not achieved by the Company. The Company has recorded the related expense of $2,582,000 in other expense which is comprised of $1,291,000 of issuable stock classified as additional paid in capital and $1,291,000 of contingently issuable stock classified as a liability in accrued expenses as of October 2, 2015. In October 2014, a former employee filed a claim with the American Arbitration Association, alleging wrongful termination and a dispute regarding his individually-negotiated employment agreement, which was terminated by the Company on May 13, 2014. The parties previously tried to reach a settlement during mediation in July 2014. The Company denies any and all liability in this claim. In January 2015, The Company filed an Answer and Counterclaim under his Employment Agreement, Nondisclosure Agreement, and the Employee Handbook alleging counterclaims related to self-dealing, falsification of time records, false expense reimbursements, and disclosing proprietary and other private information to improper parties. On October, 20, 2015 the former employee filed suit in Arapahoe County, Colorado, District Court. The arbitration matter was then suspended. The Company believes that its defense of the original claim will demonstrate the Company acted within its rights to terminate, and that the Company's counterclaims are expected to result in a favorable judgement. In August 2015, the Company and several of its stockholders and directors were notified of a claim by an investor and his company alleging breach of contract, fraudulent and negligent misrepresentation, conversion and related claims concerning an agreement to purchase certain shares of the Company's Series C preferred stock. The plaintiffs are seeking damages in excess of $75,000, treble damages, and other relief. At this time, the Company believes that the lawsuit does not have merit, and it will vigorously defend the matter. Except as discussed in our Annual Report on Form 10-K for the year ended December 31, 2014 and noted above, the Company is not currently a party to any material litigation. Except as discussed in Note C and 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 31, 2014.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Oct. 02, 2015
Notes to Financial Statements
NOTE G - STOCKHOLDERS' EQUITY	In conjunction with the repayment and pending sale of the remaining EPA note, the holder will return 1,267,200 shares of Series C preferred stock upon closing. Additionally 1,139,200 shares of Series C preferred stock previously underlying the conversion feature in the $500,000 of convertible debentures repaid 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 into 140,000 shares of our Series C preferred stock. In April and May, 2015, the Company sold 1,215,000 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 $0.41 per share and 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 allow for cashless exercise. The equity value of the warrants was initially valued at $213,000. In connection with the settlement discussed in Note C, 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 October 31, 2015 to approximate market value, we would cancel approximately 128,863,000 shares of common equivalents or approximately 20% of our current fully diluted common shares. In August 2015, the Company raised net proceeds of $500,000 through the sale of 1,139,200 shares of the Company's Common Stock and a Debenture for the full amount at a rate of five percent per annum with a maturity date of April 2, 2016. The holder of the Debenture also has the right to convert to the Company's Class C shares at a conversion price of $0.4389 per share. The purchaser also received a warrant for 22,784,000 shares of the Company's Common Stock at an exercise price of $0.10 per share. There are ten milestones specified in the stock purchase agreement that the company needs to achieve under certain timeframes. For every milestone that is not achieved in the specified timeframe, additional shares of common stock are to be issued to the buyer. For eight of the milestones the number of additional shares are 2,934,579 and 5,869,158 for the remaining two. Further, the warrant price shall be adjusted to the quotient equal to the (i) original principal amount of the debenture, divided by (ii) (a) the shares of common stock issuable pursuant to the terms of the debenture plus (b) the shares of common stock issued for milestones not achieved by the Company. Share Based Compensation Plan Share Based compensation expense included in the consolidated condensed statements of operations was $140,000 and $13,000 for the nine months ended October 2, 2015 and September 30, 2014, respectively, and $78,000 and $7,000 for the three months ended October 2, 2015 and September 30, 2014, respectively is included in selling, general and administrative expenses. A summary of option activity at October 2, 2015, and changes during the nine months 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 31, 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 9,395,177 $ 0.2492 $ 0.1196 Exercised - - - Vested 3,975,594 $ 0.0483 $ 0.0279 Forfeited 6,256,102 $ 0.0001 $ 0.0045 Expired - - - As of October 2, 2015 Outstanding $ 0.00008 $ 2.40 20,918,937 $ 0.1120 7.79 $ 0.0561 $ 1,267,000 Vested and exercisable $ 0.00008 8,127,461 $ 0.0236 5.22 $ 0.0159 $ 829,000 Nonvested $ 0.00008 $ 2.40 12,791,476 $ 0.1681 9.42 $ 0.0817 $ 437,000 Assumptions: 2015 Expected Volatility 40.00% to 50.14 % Weighted-Average Volatility 41.90 % Expected Dividends -0-% Expected Term (years) 6.5 Risk-Free Rate 1.63% to 1.96 % Total intrinsic value of options exercised $ - Total fair value of shares vested $ 1,175,000 Unrecognized compensation cost related to nonvested awards $ 932,000 Weighted-average period over which nonvested awards are expected to be recognized 2.7 years

EMPLOYEE BENEFIT PLAN

EMPLOYEE BENEFIT PLAN	9 Months Ended
	Oct. 02, 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 expensed $135,000 and $189,000 for the nine months ended October 2, 2015 and September 30, 2014, respectively, and $42,000 and $39,000 for the three months ended October 2, 2015 and September 30, 2014, respectively, related to matching contributions to the Plan.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	9 Months Ended
	Oct. 02, 2015
Notes to Financial Statements
NOTE I - FAIR VALUE MEASUREMENTS	The accounting standard for fair value measurements defines fair value, and establishes a market based 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 October 2, 2015 and December 31, 2014 and the level they fall within the fair value hierarchy: Amounts Amounts Recorded at Fair Value Financial Statement Classification Fair Value Hierarchy October 2, 2015 December 31, 2014 Derivative liability - note, redeemable common stock, and warrant bifurcation Derivative liability – current and long-term Level 3 $ 7,739,000 $ 205,339,000 Put option derivative liability Derivative liability – long-term Level 3 $ 8,627,000 $ 238,679,000

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	9 Months Ended
	Oct. 02, 2015
Notes to Financial Statements
NOTE J - RELATED PARTY TRANSACTIONS	On November 6, 2015 the Company entered into an agreement with Vukota Capital Management Inc. to sell $77,000 of common stock at a price of $0.0219 per share. In addition, Vukota Capital Management Inc. received an equal amount of warrant coverage at a price of $0.10 per share. The Company also entered into a one year consulting agreement with Tom Vukota, President of Vukota Capital Management. Mr. Vukota, who is also a member of the Company's board and is chairman of its audit committee, will be paid for his services in common shares of the Company's stock a total of $92,000 at a price of $0.0219 per share.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Oct. 02, 2015
Notes to Financial Statements
NOTE K - SUBSEQUENT EVENTS	On October 15, 2015 the Company entered into a factoring agreement with Bay View Funding (BVF). This financing agreement has a capacity of $1,000,000 and allows the Company to access 85% of its current receivables with no concentration limit on any single customer. Terms of the factoring line are 1.0 percent of the amount borrowed for the first 30 days, and 0.5 percent for each subsequent ten day period after the first thirty days. Additionally a finance fee of prime rate plus 2.5 percent will be charged against the average monthly funds advanced. At closing, BVF paid off the Company's former credit facility with Enterprise Growth Capital, Inc. On October 20, 2015 the Company was notified that per the terms of the Confidential Settlement Agreement between the Cybergy Parties and the Williamson Parties, the Company failed to make the Settlement Purchase payment of $2,565,000 on or before September 30, 2015 and that consequently Cybergy is required to deposit $50,000 in escrow to be held by Offit Kurman, P.A as escrow agent as an advance payment of the Settlement Purchase. To date the company has not made that deposit. On November 6, 2015 the Company entered into an agreement with Vukota Capital Management Inc. to sell $77,000 of common stock at a price of $0.0219 per share. In addition, Vukota Capital Management Inc. received an equal amount of warrant coverage at a price of $0.10 per share. The Company also entered into a one year consulting agreement with Tom Vukota, President of Vukota Capital Management. Mr. Vukota, who is also a member of the Company's board and is chairman of its audit committee, will be paid for his services in common shares of the Company's stock a total of $92,000 at a price of $0.0219 per share. On November 9, 2015 the Company closed a transaction to purchase The Binary Group, Inc. (Binary) a Maryland Corporation, for $4,322,000 less a Working Capital Adjustment of $118,000 resulting in a net price of $4,204,000. $3,000,000, less the working capital adjustment, will be paid for in common shares of the Company's stock at a price of $0.1017 per share. The Company retired a loan held by Binary in the amount of $1,322,000 at closing which comprised the balance of the purchase price. This transaction was funded by entering into an amended factoring agreement with Bay View Funding (BVF) whereas the Company increased its factoring line to $2,500,000 under the same terms noted earlier in this section. At closing BVF paid directly the bank at which Binary held its loan by factoring current receivables held by Binary. The $77,000 raised from Vukota Capital was also used in the closing of the Binary Transaction.

SUMMARY OF BUSINESS AND SIGNI18

SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Oct. 02, 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 wholly-owned 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 wholly-owned 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 31, 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 31, 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 accompanying consolidated condensed financial statements include the accounts of Cybergy, its wholly-owned subsidiaries; Partners, New West, Primetrix, Labs, and its 51% owned New West Energetics Joint Venture, LLC ("JV"). All intercompany accounts and transactions have been eliminated in consolidation. In 2015, the Company changed from a calendar period end date to a "4/4/5 weekly" quarterly close cycle. The Company's fiscal periods ended on October 2, 2015 and September 30, 2014. The results for the three and nine months ended October 2, 2015 are not necessarily indicative of the results to be expected for the full year or any other period.
Going Concern	In 2015 year to date, the Company has had negative cash flow from operations due to declining gross margin, increased personnel costs, as well as increased costs related to the acquisition and merger. The decline in gross margin was due primarily to the delay in the first half of the year on the transition from our JV contract to the follow-on MOTS contract with the Department of Energy. Although the MOTS contract began ramping up in the third quarter resulting in noticeable improvement in Gross Margin percent, and management implemented cost cutting measures in August that will be fully observed in the Company’s fourth quarter, we expect to incur additional operating losses for the year ending December 31, 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 31, 2015. We need to obtain significant additional capital resources in order to develop products, 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 October 2, 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 reducing expenses, 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 $1,935,000 from the sale of Series C preferred stock and short term bridge loans as more fully discussed in the following notes. $500,000 was used to repay a portion of the EPA note. In August 2015, the Company raised net proceeds of $500,000 through the sale of 1,139,200 shares of the Company's Common Stock and a Debenture as discussed in the following notes. The funds were used for working capital. Management believes the Company will need additional capital in 2015 of approximately $1.0 to $1.5 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.
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, stock based compensation, 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 95% and 93% of revenues for the nine months ended October 2, 2015 and September 30, 2014, respectively and 80% and 95% of revenues for the three months ended October 2, 2015 and September 30, 2014, respectively. One customer accounted for 20% and 88% of total revenues for the nine months ended October 2, 2015 and September 30, 2014 and 0% and 93% of revenues for the three months ended October 2, 2015 and September 30, 2014, respectively. At October 2, 2015 and December 31, 2014, the same customer accounted for 0% and 74% of total contract receivables, respectively.
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. Given the current financial position of the Company, it is impracticable to estimate the fair value of the Company's short and long term debt. 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	Contract receivables are stated net of an allowance for doubtful accounts of $30,000 and $-0- at October 2, 2015 and December 31, 2014, respectively. 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 work in progress 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. Included in Contract receivables are retainage amounts of $72,000 and $73,000 at October 2, 2015 and December 31, 2014, respectively.
Property and Equipment	Property and equipment are stated net of accumulated depreciation and amortization of $366,000 and $249,000 at October 2, 2015 and December 31, 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 $1,359,000 and $790,000 at October 2, 2015 and December 31, 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 and 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 primarily a Binomial Lattice ("Lattice") model. A Lattice approach is a preferred valuation methodology relative to a closed-form option pricing model (e.g., a Black-Scholes 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 share-based awards in accordance with the applicable accounting rules that require the measurement and recognition of compensation expense for all share-based 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 and diluted earnings per share for the three and nine months ended October 2, 2015: Three months ended Nine months ended October 2, 2015 Net income attributable to Cybergy $ 5,840,000 $ 419,104,000 Effect of dilutive securities: Preferred stock - - Stock options 11,000 11,000 Convertible debentures (5,014,000 ) (183,602,000 ) Warrants 850,000 (13,735,000 ) Put option (6,382,000 ) (230,052,000 ) Diluted net (loss) attributable to Cybergy $ (4,695,000 ) $ (8,274,000 ) The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the three and nine months ended October 2, 2015: Three months ended Nine months ended October 2, 2015 Weighted-average number of common shares outstanding 25,016,996 22,048,312 Effect of dilutive securities: Preferred stock 537,335,361 524,172,988 Stock options 11,287,924 11,490,452 Convertible debentures 80,313,600 80,313,600 Warrants 5,550,383 8,588,837 Put option - - Dilutive potential common shares 659,504,264 646,614,189 The following securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive: Three months ended Nine months ended October 2, 2015 Stock options 9,395,177 9,395,177 Warrants 507,707 507,707 9,902,884 9,902,884
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

SUMMARY OF BUSINESS AND SIGNI19

SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	9 Months Ended
	Oct. 02, 2015
Summary Of Business And Significant Accounting Policies Tables
Earnings (loss) per share	The following is a reconciliation of net earnings used in the calculation of basic and diluted earnings per share for the three and nine months ended October 2, 2015: Three months ended Nine months ended October 2, 2015 Net income attributable to Cybergy $ 5,840,000 $ 419,104,000 Effect of dilutive securities: Preferred stock - - Stock options 11,000 11,000 Convertible debentures (5,014,000 ) (183,602,000 ) Warrants 850,000 (13,735,000 ) Put option (6,382,000 ) (230,052,000 ) Diluted net (loss) attributable to Cybergy $ (4,695,000 ) $ (8,274,000 ) The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the three and nine months ended October 2, 2015: Three months ended Nine months ended October 2, 2015 Weighted-average number of common shares outstanding 25,016,996 22,048,312 Effect of dilutive securities: Preferred stock 537,335,361 524,172,988 Stock options 11,287,924 11,490,452 Convertible debentures 80,313,600 80,313,600 Warrants 5,550,383 8,588,837 Put option - - Dilutive potential common shares 659,504,264 646,614,189
Diluted net earnings per share	Three months ended Nine months ended October 2, 2015 Stock options 9,395,177 9,395,177 Warrants 507,707 507,707 9,902,884 9,902,884

DERIVATIVE LIABILITIES (Tables)

DERIVATIVE LIABILITIES (Tables)	9 Months Ended
	Oct. 02, 2015
Derivative Liabilities Tables
Summary of Derivative Liabilities	October 2, 2015 December 31, 2014 Related to senior secured convertible notes, short term $ 4,925,000 $ 53,834,000 Related to warrants, short term - - Total short-term 4,925,000 53,834,000 Related to put option 8,627,000 238,679,000 Related to senior secured convertible notes, long term - 135,872,000 Related to warrants 2,814,000 15,633,000 Total long-term 11,441,000 390,184,000 Total derivative liability $ 16,366,000 $ 444,018,000
Summary of assumptions	October 2, 2015 December 31, 2014 Average expected volatility - debt 37.00% to 38.00% 30.19 % to 34.76% Average expected volatility - warrants 38.00% to 41.00% 37.92% to 38.05% Remaining expected term of the underlying securities - notes 0.25 to 0.56 years 6 to 15.8 months Remaining expected term of the underlying securities - warrants 4.0 to 4.9 years 4.8 years Remaining expected term of the put option 2.25 years 3.0 years Average risk free rate - debt 0.00% to 0.11% 0.12% to 0.38% Average risk free rate - warrants 1.14% to 1.35% 1.63% Average risk free rate - put option 0.89% 2.47% Expected dividend rate -0-% -0-% Closing price per share of common stock $ 0.106 $ 2.40 Exercise price of warrants per share of common stock $ 0.0222 to $0.100 $ 0.0218

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	9 Months Ended
	Oct. 02, 2015
Stockholders Equity Tables
Summary of option activity	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 31, 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 9,395,177 $ 0.2492 $ 0.1196 Exercised - - - Vested 3,975,594 $ 0.0483 $ 0.0279 Forfeited 6,256,102 $ 0.0001 $ 0.0045 Expired - - - As of October 2, 2015 Outstanding $ 0.00008 $ 2.40 20,918,937 $ 0.1120 7.79 $ 0.0561 $ 1,267,000 Vested and exercisable $ 0.00008 8,127,461 $ 0.0236 5.22 $ 0.0159 $ 829,000 Nonvested $ 0.00008 $ 2.40 12,791,476 $ 0.1681 9.42 $ 0.0817 $ 437,000 Assumptions: 2015 Expected Volatility 40.00% to 50.14 % Weighted-Average Volatility 41.90 % Expected Dividends -0-% Expected Term (years) 6.5 Risk-Free Rate 1.63% to 1.96 % Total intrinsic value of options exercised $ - Total fair value of shares vested $ 1,175,000 Unrecognized compensation cost related to nonvested awards $ 932,000 Weighted-average period over which nonvested awards are expected to be recognized 2.7 years

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	9 Months Ended
	Oct. 02, 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 October 2, 2015 December 31, 2014 Derivative liability - note, redeemable common stock, and warrant bifurcation Derivative liability – current and long-term Level 3 $ 7,739,000 $ 205,339,000 Put option derivative liability Derivative liability – long-term Level 3 $ 8,627,000 $ 238,679,000

SUMMARY OF BUSINESS AND SIGNI23

SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 02, 2015	Sep. 30, 2014	Oct. 02, 2015	Sep. 30, 2014
Summary Of Business And Significant Accounting Policies Details
Net income (loss) attributable to Cybergy	$ 5,840,000	$ (390,000)	$ 419,104,000	$ (1,617,000)
Effect of dilutive securities:
Preferred stock
Stock options	$ 11,000		$ 11,000
Convertible debentures	(5,014,000)		(183,602,000)
Warrants	850,000		(13,735,000)
Put option	(6,382,000)		(230,052,000)
Diluted net (loss) attributable to Cybergy	$ (4,695,000)		$ (8,274,000)
Weighted-average number of common shares outstanding	25,016,996		22,048,312
Effect of dilutive securities:
Preferred stock	537,335,361		524,172,988
Stock options	11,287,924		11,490,452
Convertible debentures	80,313,600		80,313,600
Warrants	5,550,383		8,588,837
Put option
Dilutive potential common shares	659,504,264		646,614,189

SUMMARY OF BUSINESS AND SIGNI24

SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details 1) - shares	3 Months Ended	9 Months Ended
	Oct. 02, 2015	Oct. 02, 2015
Summary Of Business And Significant Accounting Policies Details 1
Stock options	9,395,177	9,395,177
Warrants	507,707	507,707
Total securities	9,902,884	9,902,884

SUMMARY OF BUSINESS AND SIGNI25

SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 02, 2015	Sep. 30, 2014	Oct. 02, 2015	Sep. 30, 2014	Dec. 31, 2014
Summary Of Business And Significant Accounting Policies Details Narrative
Accounted revenues	80.00%	95.00%	95.00%	93.00%
Customer accounted total revenue	0.00%	93.00%	20.00%	88.00%
Allowance for doubtful accounts in contract receivables	$ 30,000		$ 30,000		$ 0
Customer accounted receivables	0.00%		0.00%		74.00%
Concentration of Contract receivables	$ 72,000		$ 72,000		$ 73,000
Accumulated depreciation and amortization	366,000		366,000		249,000
Accumulated amortization	$ 1,359,000		$ 1,359,000		$ 790,000

LINE OF CREDIT (Details Narrati

LINE OF CREDIT (Details Narrative) - USD ($)	9 Months Ended
	Oct. 02, 2015	Sep. 30, 2014	Dec. 31, 2014
Line Of Credit Details Narrative
Accured interest for line of credit	6.25%		6.25%
Borrowing line of credit	$ 150,000	$ 324,000

DEBT (Detalis Narrative)

DEBT (Detalis Narrative) - USD ($)	Oct. 02, 2015	Dec. 31, 2014
Debt Detalis Narrative
Senior secured convertible debentures outstanding	$ 4,230,000	$ 3,525,000
Debt discount	991,000	1,309,000
Net discount issued in original warrants	33,000
Company issued warrants	36,000
Other accrued liabilities	$ 212,000	$ 71,000

DERIVATIVE LIABILITIES (Details

DERIVATIVE LIABILITIES (Details) - USD ($)	Oct. 02, 2015	Dec. 31, 2014
Total short-term	$ 4,925,000	$ 53,834,000
Total long-term	11,441,000	390,184,000
Total derivative liability	16,366,000	444,018,000
Related to put option [Member]
Total long-term	8,627,000	238,679,000
Related to senior secured convertible notes [Member]
Total short-term	$ 4,925,000	53,834,000
Total long-term		$ 135,872,000
Related to warrants [Member]
Total short-term
Total long-term	$ 2,814,000	$ 15,633,000

DERIVATIVE LIABILITIES (Detai29

DERIVATIVE LIABILITIES (Details 1) - $ / shares	9 Months Ended	12 Months Ended
	Oct. 02, 2015	Dec. 31, 2014
Remaining expected term	6 years 6 months
Expected dividend rate	$ 0	$ 0
Closing price per share of common stock	$ 0.106	2.40
Exercise price of warrants per share of common stock		$ .0218
Minimum [Member]
Average expected volatility	40.00%
Average risk free interest rate	1.63%
Exercise price of warrants per share of common stock	$ 0.0222
Maximum [Member]
Average expected volatility	50.14%
Average risk free interest rate	1.96%
Exercise price of warrants per share of common stock	$ 0.100
Debt [Member] | Minimum [Member]
Average expected volatility	37.00%	30.19%
Remaining expected term	3 months	6 months
Average risk free interest rate	0.00%	0.12%
Debt [Member] | Maximum [Member]
Average expected volatility	38.00%	34.76%
Remaining expected term	6 months 22 days	15 months 24 days
Average risk free interest rate	0.11%	0.38%
Warrants [Member]
Remaining expected term		4 years 9 months 18 days
Average risk free interest rate		1.63%
Warrants [Member] | Minimum [Member]
Average expected volatility	38.00%	37.92%
Remaining expected term	4 years
Average risk free interest rate	1.14%
Warrants [Member] | Maximum [Member]
Average expected volatility	41.00%	38.05%
Remaining expected term	4 years 10 months 24 days
Average risk free interest rate	1.35%
Put Option [Member]
Remaining expected term	2 years 3 months	3 years
Average risk free interest rate	0.89%	2.47%

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	9 Months Ended
	Oct. 02, 2015	Dec. 31, 2014
Income Taxes Details Narrative
Valuation allowance	$ 8,680,000	$ 4,616,000
Net operating loss carry forwards	$ 22,074,000
Expiration of net operating loss carry forwards	2033 and 2035

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative)	9 Months Ended
	Oct. 02, 2015USD ($)
Other expense	$ 2,582,000
Additional Paid In Capital [Member]
Other expense	1,291,000
Accrued Expenses [Member]
Other expense	$ 1,291,000

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)	9 Months Ended
	Oct. 02, 2015USD ($)$ / sharesshares
Exercise Price Share Per Share
Stock option issued and exercisable, Beginning Balance	$ 0.00008
Vested and exercisable	0.00008
Nonvested	$ 0.00008
Number of Stock Options
Outstanding at beginning of year | shares	17,779,862
Vested and exercisable at beginning of year | shares	4,151,867
Nonvested at beginning of year | shares	13,627,995
Issued | shares	9,395,177
Exercised | shares
Vested | shares	3,975,594
Forfeited | shares	6,256,102
Expired | shares
Outstanding at end of year | shares	20,918,937
Vested and exercisable at end of year | shares	8,127,461
Nonvested at end of year | shares	12,791,476
Weighted Average Exercise Price
Outstanding at beginning of year	$ 0.00008
Vested and exercisable at beginning of year	0.00008
Nonvested at beginning of year	0.00008
Issued	$ 0.2492
Exercised
Vested	$ 0.0483
Forfeited	$ 0.0001
Expired
Outstanding at end of year	$ 0.112
Vested and exercisable at end of year	0.0236
Nonvested at end of year	$ 0.1681
Weighted Average Remaining Contractual Life
Outstanding	9 years 3 months
Vested and exercisable	9 years 2 months 27 days
Nonvested	9 years 3 months
Outstanding	7 years 9 months 15 days
Vested and exercisable	5 years 2 months 19 days
Nonvested	9 years 5 months 1 day
Wgt. Avg. Grant Date Fair Value
Wgt. Avg. Grant Date Fair Value Outstanding at beginning of year	$ 0.0045
Vested and exercisable at beginning of year	0.0045
Nonvested at beginning of year	0.0045
Issued	$ 0.1196
Exercised
Vested	$ 0.0279
Forfeited	$ 0.0045
Expired
Wgt. Avg. Grant Date Fair Value Outstanding at end of year	$ 0.0561
Vested and exercisable at beginning of year	0.0159
Nonvested at beginning of year	$ 0.0817
Aggregate Intrinsic Value
Aggregate Instrinsic Value, Outstanding | $	$ 42,670,000
Aggregate Instrinsic Value, Vested and exercisable | $	9,964,000
Nonvested | $	32,706,000
Aggregate Instrinsic Value, Outstanding | $	1,267,000
Aggregate Instrinsic Value, Vested and exercisable | $	829,000
Nonvested | $	$ 437,000
Minimum [Member]
Exercise Price Share Per Share
Stock option issued and exercisable, Ending Balance	$ 0.00008
Vested and exercisable
Nonvested	$ 0.00008
Maximum [Member]
Exercise Price Share Per Share
Stock option issued and exercisable, Ending Balance	2.4
Vested and exercisable	0.00008
Nonvested	$ 2.4

STOCKHOLDERS' EQUITY (Details 1

STOCKHOLDERS' EQUITY (Details 1)	9 Months Ended
	Oct. 02, 2015USD ($)shares
Weighted-Average Volatility	41.90%
Expected dividends
Expected Term (years)	6 years 6 months
Total intrinsic value of options exercised
Total fair value of shares vested | shares	1,175,000
Unrecognized compensation cost related to non-vested awards	$ 932,000
Weighted-average period over which non-vested awards are expected to be recognized	2 years 8 months 12 days
Minimum [Member]
Expected Volatility	40.00%
Risk-free rate	1.63%
Maximum [Member]
Expected Volatility	50.14%
Risk-free rate	1.96%

STOCKHOLDERS' EQUITY (Details N

STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 02, 2015	Sep. 30, 2014	Oct. 02, 2015	Sep. 30, 2014
Stockholders Equity Details Narrative
Share-based compensation	$ 78,000	$ 7,000	$ 140,000	$ 17,000

EMPLOYEE BENEFIT PLAN (Details

EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Oct. 02, 2015	Sep. 30, 2014	Oct. 02, 2015	Sep. 30, 2014
Employee Benefit Plan Details Narrative
Employee benefit plan expense	$ 42,000	$ 39,000	$ 135,000	$ 189,000

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($)	Oct. 02, 2015	Dec. 31, 2014
Derivative liability - note, redeemable common stock, and warrant bifurcation [Member]
Derivative liability	$ 7,739,000	$ 205,339,000
Put option derivative liability [Member]
Derivative liability	$ 8,627,000	$ 238,679,000