10QSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

(Mark One)

x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2006.
o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ______________

Commission file number: 0-32355

CYOP Systems International, Inc.

(Exact Name of Small Business Issuer as Specified in its Charter)

Nevada	98-0222927
(State or Other Jurisdiction of	(IRS Employer
Incorporation or Organization)	Identification No.)

Golden Cross House
8 Duncannon Street, Strand,
London, UK WC2N 4JF	(310) 691-2585
(Address of Principal Executive Offices)	(Issuer’s Telephone Number, Including Area Code)

Check whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x  No o

As of November 10, 2006, the registrant had 378,498,160 shares of common stock outstanding.

Transitional Small Business Disclosure Form (Check one): Yes o No x

INDEX

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of or Plan of Operation	2
Item 3.	Controls and Procedures	4
PART II	OTHER INFORMATION	5
Item 1.	Legal Proceedings	5
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5
Item 3.	Default Upon Senior Securities	5
Item 4.	Submission of Matters to a Vote of Security Holders	5
Item 5	Other Information	5
Item 6.	Exhibits	5
SIGNATURE PAGE		6
CERTIFICATIONS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Consolidated Financial Statements

(Expressed in U.S. Dollars)

September 30, 2006

Index

Consolidated Balance Sheets as of September 30, 2006	F-2
Consolidated Statements of Operations for the nine months and three months ended September 30, 2006 and 2005	F-3
Consolidated Statements of Cash Flows for the nine months ended September 30, 2006 and 2005	F-4
Consolidated Statements of Shareholder Deficit for the nine months ended September 30, 2006	F-5
Notes to the Consolidated Financial Statements	F-6

-1-

CYOP SYSTEMS INTERNATIONAL INCORPORATED
Consolidated Balance Sheets
Unaudited
(Expressed in U.S. Dollars)
	September 30, 2006			December 31, 2005
ASSETS
Current
Cash and cash equivalents	$	1,465		$	218,844
Accounts receivable		711			711
Prepaid expenses and deposit		197,762			473,518
Loan receivable		1,500			—
Total current assets		201,438			693,073
Fixed assets, net		77,821			92,694
Investment in equity - method investee		1,579,339			1,618,278
Intangible assets, net		—			28,916
Total assets	$	1,858,598		$	2,432,962
LIABILITIES
Current
Accounts payable and accrued liabilities	$	409,034		$	244,326
Demand loans related party		1,458,634			1,161,167
Player funds on deposit		46,717			46,088
Short-term loan		212,725			212,725
Convertible debenture		1,474,557			1,369,660
Derivative conversion liability		—			30,949
Total Liabilities		3,601,666			3,064,915
STOCKHOLDERS' DEFICIENCY
Share capital
Authorized:
500,000,000 shares of common stock with a par value of $0.00002 per share
Issued, allotted and outstanding:
378,498,160 shares of common stock (2005 - 333,429,702)		7,569			6,669
Additional paid-in capital		5,403,210			4,778,610
Deficit accumulated		(7,153,847	)		(5,417,232	)
Total stockholders' deficiency		(1,393,068	)		(631,953	)
Total liabilities and stockholders' deficiency	$	1,858,598		$	2,432,962

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

F-2

CYOP SYSTEMS INTERNATIONAL INCORPORATED
Consolidated Statements of Operations
(Unaudited)
(Expressed in U.S. Dollars)
	For the Three Months						For the Nine Months
	Ended September 30						Ended September 30
	2006			2005			2006			2005
Revenues
Service fees		—			1,386			—			5,695
Sale - Crediplay - related party (Note 6)		—			(58	)		—			315
Banking fees		—			43			—			394
Total Revenues		—			1,371			—			6,404
Cost of sales		(215	)		(11,505	)		(397	)		(47,910	)
Gross profit (loss)		(215	)		(10,134	)		(397	)		(41,506	)
Sales and Marketing expenses		—			(38,000	)		(12,724	)		(94,460	)
Consultants fees		(654,589	)		(128,000	)		(848,478	)		(1,131,232	)
Corporate finance fees		—			(31,000	)		(10,000	)		(173,156	)
General and admin fees		(383,463	)		(62,731	)		(775,300	)		(175,688	)
Operating Loss		(1,038,267	)		(269,865	)		(1,646,899	)		(1,616,042	)
Other income (loss)
Interest expense		(68,517	)		(18,075	)		(196,769	)		(71,137	)
Equity in losses of equity-method investee		(14,847	)		(10,289	)		(38,939	)		(41,128	)
Mark-to-market adjustment		—			—			145,993			—
Net loss for the period		(1,121,631	)		(298,229	)		(1,736,614	)		(1,728,307	)
Loss per share - basic and diluted
Loss from operations		(0.0030	)		(0.0008	)		(0.0049	)		(0.0054	)
Net loss		(0.0032	)		(0.0009	)		(0.0051	)		(0.0058	)
Weighted average number of
common shares outstanding		348,172,073			333,429,702			338,443,214			299,368,435

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

F-3

CYOP SYSTEMS INTERNATIONAL INCORPORATED
Consolidated Statement of Stockholders' Deficiency
For the periods ended September 30, 2006 and 2005
(Expressed in U.S. Dollars)
					Additional					Total
	Common stock				paid-in		Deficit			Stockholders'
	Shares		Amount		capital		accumulated			(deficiency)
Balance, December 31, 2003		142,973,160		2,860		695,464		(2,355,677	)		(1,657,353	)
Shares issued for legal services at $0.03995 per share		212,500		4		7,434		—			7,438
on January 27, 2004
Shares issued for corporate finance fees at $0.032 per		7,500,000		150		262,350		—			262,500
share on January 27, 2004
Shares issued for escrow agent services at $0.032 per		312,500		6		10,931		—			10,937
share on January 27, 2004
Shares issued to Cornell Capital at $0.0032 per share		3,125,000		63		12,437		—			12,500
on September 9, 2004
Shares issued to Cornell Capital at $0.0011 per share		4,545,454		91		11,273		—			11,364
on November 5, 2004
Shares issued to Cornell Capital at $0.0015 per share		3,333,333		67		7,266		—			7,333
on November 10, 2004
Shares issued to Cornell Capital at $0.0013 per share		3,846,154		77		8,385		—			8,462
on November 16, 2004
Shares issued to Cornell Capital at $0.00185 per share		5,405,405		108		16,108		—			16,216
on November 23, 2004
Balance, December 31, 2003		171,253,506		3,426		1,031,648		(2,355,677	)		(1,320,603	)
Shares issued to Cornell Capital at $0.00185 per share		5,405,405		108		17,189		—			17,297
on November 30, 2004
Shares issued to Cornell Capital at $0.00185 per share		4,444,444		89		14,133		—			14,222
on November 30, 2004
Net loss for the year		—		—		—		(1,049,505	)		(1,049,505	)
Balance, December 31, 2004		181,103,355		3,623		1,062,970		(3,405,182	)		(2,338,589	)
Balance, Forward		181,103,355		3,623		1,062,970		(3,405,182	)		(2,338,589	)
Shares issued to Cornell Capital at $0.0071 per share		107,394,805		2,146		760,033		—			762,179
Shares issued for services at $0.0174 per share		45,000,000		900		782,100		—			783,000
Write down of deferred revenue		—		—		2,173,507		—			2,173,507
Net loss for the year		—		—		—		(2,012,050	)		(2,012,050	)
Balance, December 31, 2005		333,498,160		6,669		4,778,610		(5,417,232	)		(631,953	)
Balance, Forward		333,498,160		6,669		4,778,610		(5,417,232	)		(631,953	)
Shares issued for services at $0.0139 per share		45,000,000		900		624,600		—			625,500
Net loss for the period		—		—		—		(1,736,615	)		(1,736,616	)
Balance, September 30, 2006		378,498,160		7,569		5,403,210		(7,153,847	)		(1,743,069	)

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

F-4

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Consolidated Statements of Cash Flows

(Unaudited)

(Expressed in U.S. Dollars)

	For the Nine Months
	Ended September 30,
	2006			2005
Cash flows from (used in) operating activities
Net loss for the period	$	(1,736,617	)	$	(1,728,307	)
Adjustments to reconcile net loss to net cash
Used in operating activities:
- amortization of intangible assets		28,917			21,687
- depreciation of fixed assets		27,327			13,558
- imputed interest		196,769			—
- share issuance for services		625,500			899,307
- investment in equity interest		38,939			41,128
- accredited to convertible debenture		(76,052	)		—
Changes in assets and liabilities:
- accounts receivable		—			49,347
- prepaid expenses and deposits		275,756			(141,018	)
- loan receivable		(1,500	)		—
- accounts payable and accrued liabilities		(32,062	)		(38,029	)
- player funds on deposit		632			1,183
- deferred revenue		—			(315	)
		(652,391	)		(881,459	)
Cash flows from (used in) investing activities
Increase in due from a director	$	297,467		$	44,410
Purchase of fixed assets		(12,455	)		(39,115	)
		285,012			5,295
Cash flows from financing activities
Shares issued	$	—		$	642,826
Proceeds from promissory note		—			(100,000	)
Proceeds from convertible debenture		150,000			580,000
Proceeds from short-term loan		—			—
		150,000			1,122,826
Foreign exchange gain (loss) on cash held in foreign currency		—			3,046
Increase (decrease) in cash and cash equivalents		(217,379	)		249,708
Cash, beginning of period		218,844			7,337
Cash (deficiency), end of period	$	1,465		$	257,045
Cash represented by:
Cash on hand	$	1,168		$	253,173
Cash with processors		296			3,872
	$	1,465		$	257,045

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

F-5

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

1.	Nature and Continuance of Operations
	The Company was incorporated on October 29, 1999 as Triple 8 Development Corporation under the laws of the State of Nevada to engage in any lawful business or activity for which corporations may be organized under the laws of the State of Nevada. The Company changed its name to CYOP Systems International Incorporated on October 30, 2000. On November 3, 2000, the Company acquired 100% of the issued and outstanding shares of CYOP Systems Inc., Barbados (“CYOP Barbados”). This transaction was accounted for as a reverse acquisition and a recapitalization.
	CYOP Barbados was incorporated under the laws of Barbados on June 20, 2000. On April 29, 2005 the Company incorporated Red Felt Software Ltd. under the laws of the United Kingdom.
	The Company, and its subsidiaries, is a provider of multimedia transactional technology solutions and services for the entertainment industry. The Company’s range of products and services include financial transaction platforms for on-line video games and integrated e-commerce transaction technology for on-line merchants. These services are considered as one segment only based on internal organizational structure.
	These consolidated financial statements have been prepared using the generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has suffered recurring losses from operations and has a net capital deficiency. The ability of the Company to continue as a going concern is dependent upon many factors, including the ability of the Company to obtain financing to fund working capital requirements, the degree of competition encountered by the Company, technology risks, government regulation and general economic conditions. The Management’s plan in this regard is to raise equity financing as required and keep abreast with the multimedia technology. These consolidated financial statements do not include any adjustments that might result from this uncertainty.
2.	Significant Accounting Policies
	(a)	Basis of Consolidation
		These consolidated financial statements, prepared in accordance with accounting principles generally accepted in the United States of America, include the accounts of the Company and its wholly owned subsidiary CYOP Barbados and Red Felt Software, LTD. Significant inter- company accounts and transactions have been eliminated.

F-6

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

2.	Significant Accounting Policies (continued)
	(b)	Accounting Estimates
		The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period. Actual results may differ from those estimates.
	(c)	Cash Equivalents
		For purposes of the statement of cash flows cash equivalents usually consist of highly liquid investments which are readily convertible into cash with maturity of three months or less when purchased.
	(d)	Equity Investments
		The Company has certain investment in equity securities. These investments are accounted for using the equity method of accounting if the investment gives the Company the ability to exercise significant influence, but not control, over an investee. Significant influence is deemed to exist if the Company has an ownership interest in the voting stock of the investee of between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors and the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. The Company records its investment in equity-method investees on the consolidated balance sheet as “Investments in equity-method investees” and its share of the investees’ earnings or losses as “Equity in losses of equity-method investees”.
	(e)	Fixed Assets
		Fixed assets are recorded at historical cost. Depreciation is charged to earnings in amounts sufficient to allocate the costs over their estimated useful lives, as follows:

Audio and visual equipment	20% declining-balance basis
Computer hardware	30% declining-balance basis
Computer software	50% declining-balance basis
Office furniture and equipment	20% declining-balance basis
Leasehold improvements	20% straight-line basis

F-7

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

2.	Significant Accounting Policies (continued)
	(f)	Revenue recognition
		The Company derives revenue from providing services on software development and online internet transaction platform maintenance. Service revenues are recognized when services have been performed and delivered in accordance with service agreements, the Company has no significant remaining performance requirements, there are no material uncertainties regarding customer acceptance and collection of the resulting receivable is deemed probable.
	(g)	Software Development Costs
		Software development costs incurred prior to the establishment of technological feasibility are charged to expenses as incurred
	(h)	Foreign Currency Transactions
		The Company, CYOP Barbados and Red Felt Software Ltd., maintain their accounting records in the reporting currency. Foreign currency transactions are translated into their reporting currency in the following manner. At the transaction date, each asset, liability, revenue and expense is translated into the reporting currency by the use of the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations. The Company does not have any assets or liabilities in foreign countries or foreign denominations that would create translation income or losses under other comprehensive income.
	(i)	Income Taxes
		The Company has adopted Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes", which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. The effect on deferred income tax assets and liabilities of a change in income tax rates is included in the period that includes the enactment date.

F-8

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

2.	Significant Accounting Policies (continued)
	(j)	Long-Lived Assets Impairment
		Effective January 1, 2002, certain long-term assets of the Company are reviewed when changes in circumstances require consideration as to whether their carrying value has become impaired pursuant to guidance established in Statement of Financial Accounting Standards (“SFAS”) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. If impairment is deemed to exist, the assets will be written down to fair value. Prior to January 1, 2002, the Company evaluated long-term assets of the Company in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of. The adoption of SFAS No. 144 did not have a material effect on the consolidated financial statements.
	(k)	Financial Instruments and Concentration of Risks
		Fair value of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.
		The carrying value of cash and cash equivalents, interest receivable, note receivable, demand loans, accounts payable and accrued liabilities, player funds on deposit and short-term loans approximate their fair values because of the short-term maturity of these instruments.
		Financial instruments that potentially subject the Company to concentration of credit risk consist of interest receivable and note receivable, the balances of which are stated on the balance sheet. The Company performs ongoing credit evaluations of its debtors and maintains allowances for possible losses with, when realized, have been within the range of management’s expectations. The Company places its cash in high credit quality financial institutions. The Company does not require collateral or other security to support financial instruments subject to credit risk.
	(l)	Accounting for Derivative Instruments and Hedging Activities
		The Financial Accounting Standards Board (“FASB”) issued SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133 requires companies to recognize all derivatives contracts as either assets or liabilities in the balance sheet and to measure them at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the designated as a hedging instrument, the gain or loss is recognized in income in the period of change. As at September 30, 2006, the Company has not entered into any derivative contracts either to hedge existing risks or for speculative purposes.

F-9

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

2.	Significant Accounting Policies (continued)
	(m)	Net Income (Loss) Per Share
		Basic net income (loss) per share are computed using the weighted-average number of shares of common stock outstanding during the period. Diluted net income (loss) per share incorporates the incremental shares issuable upon the assumed exercise of stock options and other dilutive securities.
	(n)	Stock-based Compensation
		On December 2004 the Financial accounting Standards Board issued Financial accounting Standard 123R “Share Based Payments” (“SFAS 123R”), which superseded APB 25 and amended Statement of Financial accounting Standards 123 (“SFAS 123”), “ Accounting for Stock Based Compensation”. Pursuant to SFAS 123R all compensation to employees must be valued using the fair value method for fiscal years ending after December 15, 2005. The Company has adopted SFAS 123R and does not believe such pronouncement will have an effect on it’s financial statements.
	(o)	Goodwill and Other Intangible assets
		Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets”. This statement requires that intangible assets with an indefinite life are not amortized. Intangible assets with a definite life are amortized over its useful life or estimated of its useful life. Indefinite life intangible assets will be tested for impairment annually, and will be tested for impairment between annual tests if any events occur or circumstances change that would indicate that the carrying amount may be impaired. Intangible assets with a definite life are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated non- discounted cash flows used in determining the fair value of the assets. The amount of the impairment loss to be recorded is calculated by the excess of the assets carrying value over its fair value.

F-10

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

2.	Significant Accounting Policies (continued)
	(p)	New Accounting Pronouncements
		In January 2003, the Financial Accounting Standard Board issued FASB Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities - An Interpretation of Accounting Research Bulletin (ARB) No. 51. This interpretation addressed the requirements for business enterprises to consolidate related entities in which they are determined to be the primary economic beneficiary as a result of their variable economic interest. The interpretation is intended to provide guidance in judging multiple economic interests in an entity and in determining the primary beneficiary. The interpretation outlines disclosure requirements for VIEs in existence prior to January 31, 2003, outlines consolidation requirements for VIEs created after January 31, 2003. The company has reviewed its major commercial relationship and its overall economic interests with other companies consisting of related parties, vendors, loan creditors and other suppliers to determine the extent of its variable economic interest in these parties. The review has not resulted in a determination that the Company would be judged to be the primary economic beneficiary in any material relationships, or that any material entities would be judged to be Variable Interest Entities of the Company.
		In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities". This Statement amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". This Statement is effective for contracts entered into or modified after June 30, 2003. We do not expect the implementation of SFAS No. 149 to have a material impact on our consolidated financial statements.
		In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity". This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). This Statement is effective for financial instruments entered into or modified after May 30, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. We do not expect the implementation of SFAS No. 150 to have a material impact on our consolidated financial statements.

F-11

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

2.	Significant Accounting Policies(continued)
	In December 2004, The Financial Accounting Standards Board issued Statement of Financial Accounting Standard number 123r, “ Share Based Payments” (“SFAS 123r”) which superseded SFAS 123 and APB No. 25. This statement eliminates the use of the intrinsic method as previously allowed under APB 25 and is effective for small issuers for years ending after December 15, 2005. The Company does not expect adoption of this statement to have an impact on their operations.
	In December 2004, The Financial Accounting Standards Board issued Statement of Financial Accounting Standard number 153 “Exchanges of Non Monetary Assets - An Amendment of APB No 29”. This statement removed the exemption in APB 29 to the use of the fair value method in certain transactions and is effective for years beginning after June 15, 2005. The Company does not expect the adoption of this statement to have an impact on their operations.
3.	Investment in equity method investee
	At December 31, 2004, the Company’s equity-method investee approximate ownership interest consisted of a 19.99% interest based on the outstanding shares of Gaming Transactions, Inc. (OTC:GGTS). The Company does not have the ability to significantly influence GGTS. Summarized Balance Sheet and Operations information is as follows:
	The Company acquired the investment in December 2004 and valued the investment at $1,674,973. During the month of December 2004 the Company recorded a $6,688 loss based on the proportionate share of the investee’s loss which resulted in a reduction in the carrying amount to $1,668,285 at December 31, 2004. During the period January 1, 2005 to September 30, 2006 the Company recorded a further loss of $88,946 reducing the carrying value to $1,579,339.

F-12

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

4.	Fixed assets
				September 30, 2006
		Cost		Accumulated depreciation		Net book Value
	Audio and visual equipment	$	21,558	$	16,031	$	5,527
	Computer hardware		140,234		88,689		51,545
	Computer software		30,700		11,666		19,034
	Office furniture and equipment		9,227		7,512		1,715
	Total	$	201,719	$	123,898	$	77,821

5.	Intangible Assets
	On May 21, 2002, the Company terminated the software development agreement and a software licensing, technical support and operation of customer service and data centre agreement with a related company (related by a common director) was terminated. As at that date, $240,000 license fees were billed with $200,000 remaining unpaid at May 21, 2002.
	In satisfaction of this unpaid amount and in consideration of terminating the agreement, the related company assigned all right, title and interest in:
	the Skill-Bingo Patents and the Skill-Bingo Inventions purchased from FYRC Inc. The above has been collectively recorded as intellectual property with an expected useful life of 5 years.

F-13

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

5.	Intangible Assets (continued)
	the Skill-Bingo game software
	the website located at http://www.bigrbingo.com
	the trademark “BiG’rBingo”
	the BiG’rBingo customer deposits
	As of September 30, 2006, due to market conditions, and a lack of adequate capitalization to fund certain activities, the Company has elected to wind down skill-related gaming operations. The remaining carrying value of the skill gaming technology at March 31, 2006 was 21,688. At September 30, 2006, this value was impaired and revalued at nil. On November 16, 2005 the Company entered into an Asset Purchase Agreement (“APA”) with FutureBet Systems, Inc. (“FB”) to acquire the software code of FutureBet Systems, version 4 software. Pursuant to this agreement the Company deposited $350,000 with FB and was required to meet certain other terms to acquire the software. On June 22, 2006 the Company amended the payment terms of an additional $255,000 to August 7, 2006. The Company did not make such payment and is in default of the original agreement. The Company has determined that it is probable that the deposit will not be recovered and that such software will not be developed by the Company and subsequently has written off the deposit in this quarter.

6.	Loans
	(a)	Demand Loans Related Party

		September 30, 2006
i. Interest bearing and unsecured at 5% per annum:
- Andrea Carley - an officer	$	96,673
- Mitch White - an officer, director and stockholder		1,069,393
- Gordon Samson - a former director		108.949
- Patrick Smyth - a former director		138,993
Total	$	1,414,008

On June 15, 2006, the Company executed a second amendment of the SPA of December 15, 2005 Cornell Capital LP. One of the revised terms gives Mitch White, an officer and a director of the Company, the option to convert such portion of his outstanding shareholder loan (valued at September 30 at $1,069,393) into common shares -- at a 20% discount to the market price -- so as to effect a majority ownership of the shares of CYOP, with the balance of the shareholder loan, if any, being convertible into a newly-created series of preferred shares in CYOP, the terms of which must be agreed upon by both the Company and Cornell. Alternatively, Mr. White may convert the entire balance of his outstanding shareholder loan into common shares of the Company at a 35% discount to the market price, which would however also give Cornell the right to convert its convertible debenture, in whole or in part, into common shares of the Company at a 35% discount to the market price. As of November 10, no election has been made by Mr. White.

(b) Short term Loan

i. Non-Interest bearing and unsecured September 30, 2006

- Jack Carley - related to a director and stockholder	$	44,625
Total	$	44,625

(c) Short-term Loan Related Party

	September 30, 2006
i. Interest at 10% per annum:
- RedRuth Ventures		212,725
Total	$	212,725

F-14

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

6.	Loans (continued)
	(d)	Convertible debenture
		On September 2, 2005, the Company executed a Convertible Debenture for $650,000 with Cornell Capital Partners, LP, with a one (1) year term and accrues annual interest of twelve percent (12%). The Convertible Debentures are also convertible at the holder’s option at a conversion price equal to $0.055, which may be adjusted pursuant to the terms of the Convertible Debentures. The Convertible Debentures are secured by substantially all the assets of the Company. The Convertible Debentures also extinguished a May 4, 2005 note for $200,000 with Cornell Capital Partners,LP “May 4 Note”. On execution of the May 4 Note, $60,000 was advanced and $140,000 recorded as a receivable to be advanced on filing a new SB-2 registration statement.
		As at September 30, 2006, outstanding amounts on the May 4 Note was $0.00.
		On December 15, 2005, the Company entered into a Securities Purchase Agreement (“SPA”) with Cornell Capital LP. Pursuant to the Securities Purchase Agreement, Cornell Capital Partners purchased secured convertible debentures in the original principal amount of $1,350,000. The debentures have a three-year term and accrue annual interest of 10%. The $700,000 under the secured convertible debenture was disbursed to the Company upon the execution of the Securities Purchase Agreement on December 15, 2005. A second closing of $150,000 was disbursed to the Company on June 15, 2006. The balance of $500,000 will be disbursed upon the discharge of certain conditions placed upon the Company in the SPA. The debentures mature on December 15, 2008 and June 15, 2009 respectively. The secured convertible debentures may be redeemed by the Company at any time, in whole or in part. The Company will pay a redemption premium of 20% of the amount redeemed in addition to such redemption. The debentures are convertible from time to time into common stock of CYOP Systems by Cornell at a price per share equal to ninety percent (90%) of the lowest average volume weighted average price, as quoted by Bloomberg, LP, for the thirty (30) trading days immediately preceding the conversion date. Cornell was granted a security interest in certain of the Company’s assets pursuant to an amended and restated security agreement dated December 15, 2005. Cornell also received five year warrants to purchase 2,970,000 shares of common stock, 1,350,000 shares at an exercise price of $0.05 per share and 1,620,000 shares at an exercise price of $0.06 per share.
		The outstanding amount as of September 30, 2006 for this convertible debenture is $1,500,000. Pursuant to SFAS 133 the options were valued upon issuance using black scholes at $30,949. Such amount has been bifurcated from the debt and allocated to deferred interest expense and is being amortized over three years which is the term of the debenture.

F-15

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

7.	Sale and License-back of Computer Software
	On December 14, 2001, the Company sold computer software identified as Crediplay System to the sole director and a major stockholder and creditor of the Company for $3,000,000. The purchase price was settled by retiring $1,200,000 of debt owed to the purchaser and a promissory note for $1,800,000. The promissory note bears interest at 5% per annum with maturity on December 14, 2010. The promissory note is secured through a first priority lien and security interest in the Crediplay System and amount due to Mr. Mitch White (the “Purchaser”) totaling $517,613 (2001 - nil). As at December 31, 2002, the present value of the promissory note is $1,585,034 after calculating at the discount of 7% and accruing interest at 5%. Interest receivable was calculated at 1,800,000 X 5% or $90,000. As at December 31, 2003, the present value of the promissory note is $1,605,986 after calculating at the discount of 7% and accruing interest at 5%. Interest receivable was calculated at $1,800,000 X 5% or $90,000.
	Pursuant to a Marketing, Development and Distribution Agreement entered into on the same date, the Crediplay System was licensed back to the Company for a term of 15 years. A licensing fee payable will be calculated on Gross Earnings derived from the Crediplay System as follows:

2002	Gross Earnings x 20%
2003	Gross Earnings x 17%
2004	Gross Earnings x 15%
2005 to 2017	Gross Earnings x 10%

As there have been only minor revenues since inception due to the lack of capitalization of the Company, the Promissory Note for $1.8 million (“the note”) was assigned to an affiliated company, Gaming Transactions Inc., after releasing the guarantee provided by the shareholder loan of Mitch White in consideration of twenty five (25) million shares of restricted stock of Gaming Transactions Inc., (“GGTS) a pink sheet issuer. As at December (Form 8-K filed December 13, 2004) this company was thinly traded and a deemed price of $0.075 per share was used. As no reductions have been made as contemplated in the agreements executed December 31, 2001 and filed on Edgar by Form 8-K on April 15, 2002 a market asset was exchanged to ensure value to the Company.

F-16

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

7.	Sale and License-back of Computer Software (continued)
	The development costs of the Crediplay System expended by the Company amounted to approximately $1,273,406 of which $778,348 was expensed previously. Management of the Company has estimated the $3,000,000 value based on the discounted future cash flow projection and the estimate provided by knowledgeable parties of the software.

The gain on the sale of the Crediplay System is calculated as follows:

Sales price
Retirement of loan due to the purchaser	$	1,200,000
Present value of $1,800,000 promissory note
discounted at 7% per annum		1,565,452
		2,765,452
Software development costs incurred in 2001		(495,058	)
Deferred gain 2001	$	2,270,394
Recognized gain		(71,842	)
Deferred gain 2002	$	2,198,552
Recognized gain in 2003		(16,040	)
Deferred gain in 2003	$	2,182,512
Recognized gain in 2004		(8,690	)
Deferred gain 2004		2,173,822
Recognized gain in 2005		(315	)
Deferred gain 2005		2,173,507
Pursuant to the Marketing and Distribution Agreement executed on December 1, 2001, the anticipated revenue, considered more than adequate to pay down the promissory at the time of the Agreement, had not materialized as at December 31, 2005. In view of this lack of revenue, the Company has concluded that the realization of the deferred revenue was highly improbable for the foreseeable future, thereby changing management’s estimate of realizeability. The Company wrote this deferred revenue down by $2,173,507 to a value of nil, and credited the Company’s additional paid-in capital for this amount.

F-17

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

8.	Stockholders’ Equity (Deficit)
	(a)	Issuance of Common Shares
		During 2004, the Company issued 88,130,195 shares to Cornell Capital Partners LP including a corporate finance fee including 312,500 to Newbridge Securities Corp as an escrow agent fee and 50,000,000 in escrow in connection with the Standby equity underwriting agreement for financing as originally filed on the Company’s SB-2 on March 1, 2004. During 2005, the Company has issued to Cornell, as of March 31, 2006 107,326,347 common shares drawing down the escrow shares as well as new issuances to Cornell Capital Partners LP   with 68,458 common shares remaining in escrow with Cornell Capital Partners LP.
	(b)	2003 Consultant Stock Plan
		On October 21, 2003, the Board of Directors of the Company approved and adopted “2003 Consultant Stock Plan” (“2003 Plan”). Pursuant to the 2003 Plan, it is a ten (10) year plan to grant common shares or right to receive common shares by consultants (per individual agreement) to a maximum 2,500,000 shares (restated for the company’s stock split). The allocated number of shares includes an indeterminate number of additional shares that may be issued to adjust the number of shares issued pursuant to the stock plan described herein as the result of any future stock split, stock dividend or similar adjustment of the registrant's outstanding common stock.
		On Feb 18, 2005, the Board of Directors of the Company approved and filed the “2005 Consultant Stock Plan” (“2005 Plan”).
		On Sep 1, 2006, the Board of Directors of the Company approved and filed the “2006 Consultant Stock Plan” (“2006 Plan”).
	(c)	Stock Option
		There were no stock options granted for the period ended September 30, 2006.

9.	Income Taxes
	As at September 30, 2006, the Company has non-capital losses and undepreciated capital cost of approximately $4,092,000 and $2,080,000, respectively, which can be carried forward for tax purposes and are available to reduce taxable income of future   years. The non-capital losses expire commencing in 2006 through 2010.
	(a)	The tax effect of temporary differences that give rise to the Company’s deferred tax assets are as follows:

		2006			2005
Undepreciated capital cost of capital assets over their net book value	$	30,000		$	19,000
Estimated tax loss carryforward		1,000,000			715,000
Less: valuation allowance		(1,030,000	)		(734,000	)
		—			—
The valuation allowance reflects the realization of the tax assets is unlikely.

F-18

CYOP SYSTEMS INTERNATIONAL INCORPORATED

Notes to Consolidated Financial Statements

For the three months and nine months ended September 30, 2006 and 2005

(Expressed in U.S. dollars)

10.	Related Party Transactions
	Related party transactions not disclosed elsewhere in the consolidated financial statements are as follows:
	(a)	The Company to September 30, 2006 has accrued interest of $45,252 at an interest rate of 5% per annum on current loans totaling $1,458,633 from directors of the Company.
	(b)	See Note 6, and 7.
		On December 1, 2004, by agreement (Form 8-K December 13, 2004) the discounted promissory note, face value $1,800,000.00 dated December 1, 2001 and maturing December 14, 2010 (the “note”) was assigned to an affiliated company, Gaming Transactions Inc., (“assignee”) in consideration of 25 million restricted shares of the assignee’s common stock. This has been recorded as an equity investment and is booked as $1,579,339 as of September 30, 2006.
11.	Geographic Information
	All the Company’s operations and fixed assets are located in the United States.
12.	Derivative Option Liability
	On December 15, 2005, the Company entered into a convertible debt instrument which contained options to settle the debt by issuance of the Company’s common stock at the option of the holder. Pursuant to SFAS 133 (“Accounting for Derivative Instruments and Hedging Activities”) the Company determined the value of such instruments at $30,949 and bifurcated the amount from the debt instrument.
	Pursuant to SFAS 133, the Company valued the options at September 30, 2006, with a value being calculated at nil.

F-19

Item 2. Management’s Discussion and Analysis or Plan of Operation

Certain statements in this Quarterly Report and in future filings by the Company with the SEC and in the Company’s written and oral statements that are not statements of historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “intend,” “will” and similar expressions are examples of words that identify forward-looking statements. Forward-looking statements include, without limitation, statements regarding our future financial position, business strategy and expected cost savings. These forward-looking statements are based on our current beliefs, as well as assumptions we have made based upon information currently available to us.

Each forward-looking statement reflects our current view of future events and is subject to risks, uncertainties and other factors that could cause actual results to differ materially from any results expressed or implied by our forward-looking statements. Important factors that could cause actual results to differ materially from the results expressed or implied by any forward-looking statements include:

• our ability to fund future growth;

• our ability to become profitable;

• the volatility of the price of our Common Stock;

• market demand for and market acceptance for our products;

• our ability to protect our intellectual property rights;

• new regulation and legislation;

• trends for the continued growth of our business and other businesses we may acquire;

• our ability to successfully market existing products and services and develop and market new products and services;

• our ability to expand our market for existing products and services;

• the effects of our accounting policies and general changes in accounting principles generally accepted in the United States of America;

• General economic conditions of the telecommunications market, including the new and evolving market for next-generation communications solutions; and

• other risks and uncertainties disclosed in our Annual Report.

The following management's discussion and analysis of the Company should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report for the three months and nine months ended September 30, 2006. This quarterly report contains certain forward-looking statements and the Company's future operation results could differ materially from those discussed herein.

Liquidity and Capital Resources

The Company does not yet have an adequate source of reliable, long-term revenue to fund operations. As a result, the Company is reliant on outside sources of capital funding. There can be no assurances that the Company will in the future achieve a consistent and reliable revenue stream adequate to support continued operations. The Company has exhausted a source of capital funding, as an equity funding with regulatory clearance of the SB-2 registration statement granted with the August 12, 2004 filing of the SB-2/A. We have started the process of authoring a further SB-2 registration statement.

The Company had cash and cash equivalents of $1,465 at September 30, 2006 and a working capital deficit of ($3,050,228) with the deficiency arising primarily from $1,458,634 in loans from related parties and a $1,474,557 convertible debenture with Cornell Capital Partners LP.

During the nine month period ended September 30, 2006, the Company had a net loss of $1,386,616 compared to a net loss of $1,728,307 in the period ended September 30, 2005. This decrease is due primarily to a decrease in consultants fees and corporate finance fees, which reflect decreased activities in these areas of the Company.

Our future capital requirements will depend on a number of factors, including costs associated with development of our Web portal, the success and acceptance of our new games and the possible partnerships and/or acquisition of complementary businesses, products and technologies. At present, the Company lacks sufficient cash and cash equivalents on hand to conduct operations through the end of 2006.

-2-

As disclosed herein the Company concluded an underwriting in the first quarter of 2004 with Cornell Capital Partners LP and the associated SB-2 was filed on March 1, 2004 and as amended on May 6, 2004, June 22, 2004, and August 5, 11, 12 and 16, 2004 on Edgar.

The Company’s consolidated financial statements have been prepared on a continuing operation basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.

Results of operations for the nine months ended September 30, 2006 as compared to the nine months ended September 30, 2005.

Revenue

For the nine months ended September 30, 2006, the Company generated revenues of nil from operations. The same nine month period ending September 30, 2005 generated revenues of $6,404. The reduction in revenues for the comparable period is primarily due to operations being placed on standby, owing to insufficient liquid resources to fund them.

General and Administrative expenses

General and administrative expenses consist primarily of, legal and audit professional fees, and other general corporate and office expenses, for the nine-month period ending September 30, 2006 of $425,300. General and administrative expenses increased by $249,612 from the nine-month period ended September 30, 2005 from $175,688. This increase is primarily due to increased legal and audit fees.

Consultants Fees

Consultant fees consist of the company’s contract labor, primarily technical services and management. For the nine-month period ending September 30, 2006, the Company had consultant fees expense of $848,478. This compares to consultant fees of $1,131,232 for the nine-month period ending September 30, 2005. The decrease is due primarily to the 2006 Consultant Stock Plan issuance occurring at a lower deemed share price than the 2005 Consultant Stock Plan issuance. An equal number of shares were issued for these plans.

Interest Expense

Interest expense increased to $196,769 for the nine months ended September 30, 2006 from $71,137 for the nine months ended September 30, 2005 due primarily to interest accruing on the convertible debenture issued by Cornell Capital LP, as described above and in the notes to the financial statements, which convertible debenture had not been issued in the same period of 2005.

Equity Method Investment

During the nine months ended September 30, 2006, the Company recorded $38,939 of losses from it’s investment in equity securities accounted for by the equity method. The Company acquired the investment in December 2004.

Results of operations for the quarter ended September 30, 2006 as compared to the quarter ended September 30, 2005.

Revenue

For the quarter ended September 30, 2006 the Company generated revenue of nil from operations. The same quarter period ending September 30, 2005 generated revenues of $1,371. The reduction in revenues for the comparable period is primarily due to operations being placed on standby in 2006, owing to insufficient liquid resources to fund them.

General and Administrative expenses

General and administrative expenses consist primarily of, legal and audit professional fees, insurance and other general corporate and office expenses, for the three-month period ending September 30, 2006 of $33,463. General and administrative expenses decreased by $29,268 from the three-month period ended September 30, 2005 from $62,371. This decrease is due primarily to decreased legal and audit fees.

We expect to continue to incur general and administrative expenses to support the business, and there can be no assurances that the Company will be able to generate sufficient revenue to cover these expenses. The Company will be relying on the equity financing to support operations.

Consultants Fees

Consultant fees consist of the company’s contract labor primarily technical services and management. Of the total $654,589 expense in the period $127,640 was accrued compensation and $552,000 was related to the 2006 Consultant Stock Plan through which 45 million shares were issued to consultants.

Interest Expenses

Interest expenses of $68,517 is a reflection of accrued interest on related party loans and a convertible debenture. The imputed amount for the same quarter in 2005 was $18,075. This increase is due primarily to a convertible debenture payable that had not yet been issued to the Company in 2005.

Equity Method Investment

In the quarter ended September 30, 2006, the Company recorded $14,847 of losses from it’s investment in equity securities accounted for by the equity method. The Company acquired the investment in December 2004.

-3-

Item 3: Controls and Procedures

The Company’s Chief Executive Officer and principal financial officer has evaluated the Company’s controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report, as required by paragraph (b) of Rules 13a-15 or 15d-15 of the Exchange Act. Based on such evaluation, such officer has concluded that, as of the end of the period covered by this Quarterly Report, the Company’s controls and procedures are effective.

-4-

PART II-OTHER INFORMATION

Item 1. Legal Proceedings

The Company is not a party to any material legal proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None. 

Item 4. Submission of Matters to a Vote of Security Holders

On March 28, 2006, the Company held a special meeting of shareholders (the “Special Meeting”), to approve an increase in the number of authorized shares of the Company’s common stock from 500,000,000 to 1,000,000,000. A quorum was not obtained so the meeting was adjourned without the vote necessary to increase the Company’s authorized capital.

Item 5. Other Information

On March 16, 2006, Michael Ozerkevich, a director of the Company, resigned as a director the Company. The resignation by Mr. Ozerkevich was not due to any disagreement with the Company.

On  March 29, 2006, Jorge Andrade, Jr. was elected to the Company’s board of directors. Mr. Andrade is the founder & President of West Coast Health Consulting Inc. a leading consulting firm dedicated to providing services for medical providers as well testing for patients in the workers compensation sector.  Since 1998, he has managed Colgate-Palmolive Corp.’s awareness’s for the “Bright Smiles Bright Futures” program in a number of regions including Oakland, San Francisco, Oregon, Texas, Florida, Phoenix, Michigan and San Diego. 

Mr. Andrade is also involved in a number of businesses, and has experience in building long-term returns from start-up ventures.  A nationally certified dentist, he is one of the initial founders of the Washington School Literary Club and also sits on the health advisory board for the Long Beach Head Start program.

On June 23, 2006, the Company received a Notice of Termination from ShockoMedia, Inc. terminating the Software License Agreement dated April 1, 2005 due to default. The Company is in the process of taking down its website www.skillarcade.com and is no longer in the skillgaming business.

Item 6. Exhibits

The exhibits required to be filed with this Quarterly Report are set forth on the Exhibit Index filed herewith.

-5-

SIGNATURE

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CYOP SYSTEMS INTERNATIONAL, INC.
Date: November 13, 2006	By:	/s/ Mitch White
		Mitch White
		Chief Executive Officer and Chairman of the Board of Directors

Date: November 13,2006	By:	/s/ Canon Byran
		Canon Byran
		Chief Financial Officer

-6-

EXHIBIT INDEX

3.1.1 Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on October 30, 2001)

3.1.2 Certificate of Amendment to Articles of Incorporation. (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on October 30, 2001)

3.1.3 Certificate of Amendment to Articles of Incorporation. (Incorporated by reference to Exhibit 99.3 to the Company’s Form 8-K filed with the Securities and Exchange Commission on October 8, 2003)

3.1.4	Bylaws. (Incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on October 30, 2001)
10.1	Second Amendment to Asset Purchase Agreement dated June 26, 2006 by and between the Company and FB Software, Ltd. Filed herewith.
31.1	Rule 13a-14(a)/15d-14(a) Certification by the Company’s Chief Executive Officer. Filed herewith.
31.2	Rule 13a-14(a)/15d-14(a) Certification by the Company’s Principal Financial Officer. Filed herewith.
32.1	Section 1350 Certification by the Company’s Chief Executive Officer and Principal Financial Officer. Filed herewith.
32.2	Section 1350 Certification by the Company’s Principal Financial Officer. Filed herewith.

-7-

EX-31.1

Exhibit 31.1

Certification

I, Mitch White, Chief Executive Officer of CYOP Systems International, Inc. certify that:

1. I have reviewed this Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 of CYOP Systems International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. As the small business issuer’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: November 20, 2006

   /s/ Mitch White Mitch White Chairman of the Board and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

I, Canon Bryan, Chief Financial Officer of CYOP Systems International, Inc. certify that:

1. I have reviewed this Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 of CYOP Systems International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. As the small business issuer’s other certifying officer(s) and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: November 20, 2006

   /s/ Canon Bryan Canon Bryan Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

I, Mitch White, Chairman of the Board and Chief Executive Officer of CYOP Systems International, Inc. (the “Company”), do hereby certify in accordance with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Quarterly Report on Form 10-QSB of the Company for the period ended September 30, 2006 (the “Periodic Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§78m or 78o(d)); and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 20, 2006

   /s/ Mitch White Mitch White, Chairman of the Board, Chief Executive Officer

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

I, Canon Bryan, Principal Financial Officer of CYOP Systems International, Inc. (the “Company”), do hereby certify in accordance with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Quarterly Report on Form 10-QSB of the Company for the period ended September 30, 2006 (the “Periodic Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. §§78m or 78o(d)); and

2. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 20, 2006

   /s/ Canon Bryan Canon Bryan, Principal Financial Officer