UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
  Form
10-K
  (Mark
One)
  x ANNUAL REPORT UNDER
SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the
Fiscal Period year ended December 31, 2008
  o TRANSITION REPORT UNDER
SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the
transition period from ______________ to ___________________
   Commission
file number: 000 - 51977
  MyECheck,
Inc.
 (Exact
name of small business issuer as specified in its charter)
  Nevada
                  
                  20-1884354(State
      or other jurisdiction of
                    incorporation
      or organization)
                  
                  (IRS
      Employer Number)
  1190
Suncast Lane, Suite 5
 El Dorado
Hills, CA 95762
 (Address
of principal executive offices)
 
 (916)
932-0900
 (Issuer's
telephone number)
  Former
Address: 916 West Broadway Street, Vancouver, British Columbia, V5Z
1K7
 Former
fiscal year: December 31
  (Former
name, former address and former fiscal year, if changed since last
report)
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.Yes o   No  x
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act.Yes o   No  x
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x   No  o
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  o
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer,” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
  Large
      accelerated filer o
                Accelerated
      filer o
                Non-accelerated
      filero
                Smaller
      reporting company x(Do
      not check if asmaller
      reporting company)
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o  No
x
  State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.)
  Aggregate
market value of the voting and non-voting common equity held by non-affiliates
(29,574,980 shares) computed by reference as of March 16, 2009 is
$17,449,238.
  State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date.
  As of
March 16, 2009, there are 69,937,500 common shares
outstanding.
  
   MyECheck,
Inc.
 
 FORM
10-K
 
 For the
Fiscal Year ended December 31, 2008
  Part
      IItem
      1.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Description
      of Business
                                                                                                                                                  4Item
      1A
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Risk
      FactorsItem
      2.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Description
      of Property
                                                                                                                                                  12Item
      3.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Legal
      Proceedings
                                                                                                                                                  12Item
      4.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Submission
      of Matters to a vote of Security Holders
                                                                                                                                                  12Part
      IIItem
      5.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Market
      for Common Equity and Related Stockholder Matters
                                                                                                                                                  12Item
      6
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Selected
      Financial Data
                                                                                                                                                  13Item
      7.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Management's
      Discussion and Analysis or Plan of Operation
                                                                                                                                                  13Item
      7A.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Quantitative
      and Qualitative Disclosures about Market Risk
                                                                                                                                                  14Item
      8.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Financial
      Statements
                                                                                                                                                  14Item
      9.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Changes
      In and Disagreements with Accountants on Accounting and Financial
      Disclosure
                                                                                                                                                  14Item
      9A.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Controls
      and Procedures
                                                                                                                                                  14Item
      9B.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Other
      Information
                                                                                                                                                  15Part
      IIIItem
      10.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Directors,
      Executive Officers, Promoters and Control Persons; Compliance with Section
      16(a) of the Exchange Ac
                                                                                                                                                  15Item
      11.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Executive
      Compensation
                                                                                                                                                  17Item
      12.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                                                                                                                                                  19Item
      13.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Certain
      Relationships and Related Transactions
                                                                                                                                                  20Item
      14.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Principal
      Accountants Fees and Services
                                                                                                                                                  20Item
      15.
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  Exhibits
                                                                                                                                                  21Signatures
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  
                                                                                                                                                  22
   2
  FORWARD
LOOKING STATEMENTS
  CERTAIN
STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-K, OR THE "REPORT," ARE
"FORWARD-LOOKING STATEMENTS." THESE FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE
NOT LIMITED TO, STATEMENTS ABOUT THE PLANS, OBJECTIVES, EXPECTATIONS AND
INTENTIONS OF MYECHECK, INC., A NEVADA CORPORATION AND OTHER STATEMENTS
CONTAINED IN THIS REPORT THAT ARE NOT HISTORICAL FACTS. FORWARD-LOOKING
STATEMENTS IN THIS REPORT OR HEREAFTER INCLUDED IN OTHER PUBLICLY AVAILABLE
DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, OR THE
"COMMISSION," REPORTS TO OUR SHAREHOLDERS AND OTHER PUBLICLY AVAILABLE
STATEMENTS ISSUED OR RELEASED BY US INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH COULD CAUSE OUR ACTUAL RESULTS,
PERFORMANCE (FINANCIAL OR OPERATING) OR ACHIEVEMENTS TO DIFFER FROM THE FUTURE
RESULTS, PERFORMANCE (FINANCIAL OR OPERATING) OR ACHIEVEMENTS EXPRESSED OR
IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. SUCH FUTURE RESULTS ARE BASED UPON
MANAGEMENT'S BEST ESTIMATES BASED UPON CURRENT CONDITIONS AND THE MOST RECENT
RESULTS OF OPERATIONS. WHEN USED IN THIS REPORT, THE WORDS "EXPECT,"
"ANTICIPATE," "INTEND," "PLAN," "BELIEVE," "SEEK," "ESTIMATE" AND SIMILAR
EXPRESSIONS ARE GENERALLY INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS,
BECAUSE THESE FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. THERE
ARE IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THOSE EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS, INCLUDING OUR
PLANS, OBJECTIVES, EXPECTATIONS AND INTENTIONS AND OTHER FACTORS.
   3
  PART
I
  Item 1.
Business
  Business
Summary
 
 MyECheck,
Inc. (“MyECheck” or the “Company”) is an early stage company engaged in the
payment processing industry; specifically MyECheck provides electronic check
image (“e-check”) services to merchants, payment services providers, banks and
other businesses. MyECheck was founded and incorporated in Delaware in October
2004 to capitalize on opportunities created by the passing of The Check Clearing
for the 21st  Century Act (“Check 21”). MyECheck has commenced formal
business operations and is generating revenue.
 
 MyECheck
was created to satisfy the demand for an alternative payment solution to credit
and debit cards for online commerce. MyECheck has developed and utilizes a
proprietary method of creating and clearing Remotely Created Check (“RCC”)
images on behalf of its e-commerce customers, having successfully implemented
its proprietary RCC service that enables companies to accept real-time check
payments from consumers and businesses online or over a telephone.
 
 MyECheck
provides additional services to support its RCC service including fraud loss
prevention services. MyECheck also provides a number of services such as check
remittance processing and remote deposit capture (“RDC”) services for brick and
mortar companies, such as banks and retailers.
 
 MyECheck
entered into a merger agreement with Sekoya Holdings Ltd., a Nevada corporation
in November 2007, amended and restated February 4, 2008. The merger was
effective March 14, 2008. Shareholders of Sekoya at the time of the merger would
own approximately 40% of the shares of the surviving company and shareholders of
MyECheck would own approximately 60% of the surviving company, with all parties
being diluted by additional financing to be completed following the Merger
(excluding 2,000,000 shares held in escrow as remedies for breaches of the
Merger Agreement)
  Revenue
is generated from transaction fees charged to companies that contract with
MyECheck to utilize the Company’s services. MyECheck has
experienced quarter over quarter revenue growth the last 12
months of 2008 and management believes that it will be possible for MyECheck to
be generating positive operating cash flows within the second calendar quarter
of 2009. As of January 2009, MyECheck was working to close additional pending
merchant agreements.
  About
Check 21
 
 Check 21
was signed into law on October 28, 2003, and became effective on October 28,
2004. Check 21 is designed to foster innovation in the payments system and to
enhance its efficiency by reducing some of the legal impediments to check
truncation. The law facilitates check truncation by creating a new negotiable
instrument called a substitute check, which permits banks to truncate original
checks, to process check information electronically, and to deliver substitute
checks to banks that want to continue receiving paper checks. A substitute check
is the legal equivalent of the original check and includes all the information
contained on the original check. The law does not require banks to accept checks
in electronic form nor does it require banks to use the new authority granted by
the Act to create substitute checks.
  Summary
History of MyECheck
 
 MyECheck
started processing transactions on version one of its software platform in July
of 2005 and continued through March of 2006, after which it ceased processing in
order to further develop and refine its service offerings.
 
 During
the period from March of 2006 through September 2007, MyECheck redesigned and
developed its software platform to better suit the demands of its prospective
customers and to ensure the accurate performance of the software.
 
 4
 MyECheck
has been sponsored by First Regional Bank, and successfully completed approval
and check image file (ANSI X9.37) testing with the Federal Reserve Bank in the
second quarter of 2007.
 
 Version
two of its software platform was launched in September of 2007 and MyECheck has
been steadily ramping up transaction volume on the system since
then.
 
 The
Services of MyECheck
 
 MyECheck
offers comprehensive, easily implemented solutions that include real-time check
authorization, payment guarantee, check image creation and clearing and complete
online reporting. Set out below are services that MyECheck provides and intends
to provide as part of its business plan.
 
 Remotely Created Check
Service
 
 Internet
merchants and other companies wishing to accept payments online or over a
telephone (“Merchants”) can directly integrate with MyECheck’s payment engine.
Payor check data is collected by the Merchant either at the Merchant’s website
or over the telephone, and is transmitted in real-time to MyECheck for
processing.
 
 MyECheck
uses patent pending technology to generate RCCs in accordance with the Federal
Reserve Check 21 specification. RCC images are formatted and are transmitted in
near real-time to banks, or more commonly directly to the Federal Reserve for
clearing on behalf of MyECheck’s partner bank(s).
  MyECheck
believes that its RCC service overcomes many of the shortcomings of Automated
Clearing House (“ACH”) based e-check systems and cost-effectively provides
higher transaction success rates, faster funds clearing and fewer returned
items.
  MyECheck
believes that it is positioned to capture a significant market share of the
alternative payments industry with a viable alternative payment method for
online payments. Compared to other online payment methods, MyECheck works with
more consumers, with the ability to guarantee payments at rates lower than
non-guaranteed card processing rates.
 
 Check Authorization
Service
 
 MyECheck
offers Check Authorization Service which enables merchants to verify consumer
provided data, check the status of the customer’s bank account, provide evidence
that the consumer has authorized the check and predict the likelihood of a check
being returned unpaid. Businesses that accept payments online through MyECheck
utilize this service to provide greater assurance that the check will clear.
Transactions can be approved or declined based upon the results of the Check
Authorization Service.
  Check Guarantee
Service
 
 MyECheck
co-markets with Check Guarantee Providers to offer Check Guarantee Service. The
Check Guarantee Provider warranties all approved checks and reimburses the Payee
for financial losses incurred as a result of returned checks. The Check
Guarantee Provider buys the returned checks that have been warranted from
merchants for the full face value of the returned checks. MyECheck merchants
utilize Check Guarantee Service so that they can ship products or provide
services immediately without having to wait for the check to clear. The Check
Guarantee Service also eliminates the need for Merchants to collect on returned
checks from their customers. The Check Guarantee Providers are independent third
parties whose services are offered to Merchants separately from the MyECheck
service. MyECheck is not compensated by, and does not compensate, Check
Guarantee Providers. MyECheck may in the future enter into compensated
arrangements with Check Guarantee Providers.
 
 Remote Deposit Capture and
Remittance Processing
 
 MyECheck
provides Remote Deposit Capture and Remittance Processing Solutions that enable
companies to scan paper checks at the brick and mortar point of sale or back
office, and remit check images to MyECheck for processing. MyECheck formats the
check images in accordance with the Federal Reserve Check 21 specification (ANSI
X9.37) and transmits the files in near real-time directly into the check
clearing system, as it does with its RCC image files. RDC reduces Merchant
handling and administrative costs, eliminates paper check transportation, speeds
clearing by an average of 2+ days and improves Merchant cash
flow.
   5
  International Payment
Service
 
 Through
relationships with foreign financial services organizations, MyECheck is
planning to add international bank transfer payment services that will allow
MyECheck merchants to accept non-card associated bank transfers in local
currencies from the world’s largest global markets.
 
 The
methodology expected to be employed with the international service would prevent
consumer initiated repudiation and charge-backs, eliminating most types of
international payments fraud. This service facilitates funds collection in over
50 countries and provides bank transfer remitting capabilities to bank accounts
in over 120 countries. The system currently supports 21 currencies and will
perform foreign exchange if required.
  Merchant
Reporting
 
 Through
our Merchant interface, MyECheck provides the following reports:
 o
                Detailed
      transaction historyo
                Successfulo
                Failedo
                MyECheck
      fees and settlement statements
 
 In
addition to the above, pertinent information is returned at the end of each
transaction to facilitate reporting on the Merchant side.
 
 Company
Competition
 
 Other new
alternative payment brands have emerged and have experienced tremendous success
in recent months and years. Management believes that MyECheck services are in
many ways more viable, and possess greater revenue potential than other
alternative payment services that have emerged.
 
 Most
other alternative payment services enable consumers to pay with either payment
cards or ACH based e-checks. One of the shortcomings of many of these payment
brands is that the consumer is redirected off of the merchant’s site in order to
complete the transaction.
 
 The check
is the largest non-cash payment method in the US, demonstrating that people
often prefer to use checks over cards. In the past 5 years, the number of online
check transactions per quarter has grown from 742,660 to 318,484,650,
approximately a 428% growth rate. In spite of this, many online merchants and
businesses offer no alternative to cards, resulting in lost sales due to many
consumers’ inability or unwillingness to purchase cards.
  MyECheck
provides access to more US consumers than any other payment method because it
can be used to clear checks from 100% of US checking accounts, including
business accounts and accounts where ACH does not work. MyECheck facilitates
faster funds clearing than cards or ACH providing same day or next day
availability of funds to the merchant’s bank. MyECheck also offers fraud control
tools including bank account verification, negative check-writer database
queries and payment guarantee at lower rates.
 
 Because
MyECheck does not use the ACH network, transactions are not subject to National
Automated Clearing House Association (“NACHA”) regulation, including their
rules, fees and fines. MyECheck RCCs are governed by Uniform Commercial Code
(State check laws), and Check 21 law, which is more favorable to the Payee than
NACHA rules and facilitates higher returned item collection rates. The lower
number of returns and higher return collection rates translates to fewer losses,
lower fees for payment guarantee and higher profit margins for MyECheck
Merchants.
  6
 E-commerce
& Internet Industry
  Worldwide,
more than one billion people are using the Internet. The number of American
homes and businesses with broadband access capabilities tops 50 million, and a
plethora of new services, entertainment options and time-saving solutions have
become widely available. The U.S. population is becoming more tech-savvy, with
at least 72% of American adults surfing the net on a regular basis. Confidence
in security for online transactions is on the rise, as is the ease of use of
most retail web sites.
 
 Online
advertising, including paid search inclusion at sites like Google and Yahoo!,
has ballooned into a $10 billion business in the U.S. alone, threatening
traditional advertising venues of all types.
 
 Management
believes that new methods of taking advantage of efficiencies created by the
Internet are becoming widely accepted as access to high-speed broadband Internet
connections become commonplace. Users of the Internet (both business and
consumer) are multiplying around the globe, and many companies are earning
substantial profits in serving those users.
 
 The
migration to more efficient payment mechanisms is affected by innovations,
incentives, and regulation. While advances in technology have yielded numerous
payment method alternatives, many have not been widely adopted. Numerous payment
innovations have not been widely adopted because many payment system
participants lacked sufficient incentives to change consumer
behavior.
  Gaining
market adoption is a major challenge in the migration to efficient payment
mechanisms. This can be particularly difficult considering the deep emotional
attachment of consumers to more traditional payment forms, e.g., checks, in the
United States. There are incentives that make U.S. consumers and businesses more
likely to adopt less efficient and less secure payment instruments, such as
credit and signature-based debit cards.
 
 Weak
authentication procedures are a main factor driving fraud. The legal and
regulatory framework protects consumers differently based on the payment
instrument used to make purchases.
 
 According
to a survey published June 29, 2006, approximately 74% of consumers would be
willing to spend about $960 more per year on music, games, subscriptions, and
other digital content online if they could use a form of payment that’s safer
and more convenient than a credit or debit card. Given current estimates of
active consumers online, that adds up to $14.4 billion in forgone sales annually
for Internet-based content sellers, according to Javelin Strategy &
Research.
 
 Aside
from those who say they would buy more if given alternatives, some 72% of online
consumers said they have abandoned a purchase when it came time to make payment.
The major finding of the poll is that the availability of secure and convenient
payment options beyond traditional credit and debit cards can drive significant
incremental purchases, subscriptions, and transactions.
 
 Although
many new payment schemes exist today with many more on the horizon, the vast
majority of these systems continue to be based upon the two fundamental payment
methods, credit and debit.
 
 Successful
solutions such as PayPal and more recently BillMeLater offer a slight twist to
the traditional payment mechanism of credit cards. PayPal for example, whose
primary merchant customers are small retailers who typically are not large
enough to qualify for their own merchant account at a bank, offers consumer
payment options consisting of either credit cards or bank debit through the ACH
network.
 
 BillMeLater
is a credit based system whereby the consumer applies for and, if approved, is
granted a line of credit at the time of the transaction.
 
 All other
e-check (online electronic check) solutions are based upon the ACH (automated
clearing house) system. ACH transactions are bank electronic funds transfers
whereby the consumer’s bank account is debited and the recipients account is
credited. ACH transactions work reasonably well in most instances, however the
system does suffer from some shortcomings which have impacted
adoption.
  ACH
transactions are governed by NACHA, (the National Automated Clearing House
Association), which imposes a substantial number of rules and regulations upon
the transactions and their users. Compliance with the many, and continuously
updating, NACHA operating rules can be complicated for Merchants.
 
 ACH
transactions take several days to clear through the system. During the clearing
period the recipient has no way to determine if the transaction is even going
clear or if it will result in an administrative return. ACH has more than 60
reasons why a transaction can fail. Many times it is because the consumer’s bank
has chosen not to participate in ACH, or hasn’t performed the correct system
integration.
 
 7
 Checks
continue to be the number one non-cash payment method in the US, with the value
of checks processed annually around one hundred trillion dollars. Up to 45% of
adults either have no payment cards or have no available credit on their cards,
meaning that as many as 80 Million US adults have no ability to buy online at
the many websites that only accept cards.
 
 Many
online merchants are dissatisfied with credit card and ACH solutions, and many
online industries such as travel and brokerage have no check solution at all.
Management believes this provides MyECheck with a significant market
opening.
 
 Employees
and Contractors
 
 As of
January 1, 2009, MyECheck had 5 full time employees and 6 independent
contractors.
 
 Leases
 
 The
Company leases its corporate office under a non-cancelable rental agreement
through December 2009. Monthly payments at the inception of the lease terms were
$ 8,576 and increase 4% annually.
  Regulation
 
 MyECheck
is not currently subject to direct federal, state or local regulation, and laws
or regulations applicable to access to or commerce on the Internet, other than
regulations applicable to businesses generally. MyECheck provides transaction
processing services and does not conduct transactions or hold or transfer cash
itself. However, there can be no assurances that MyECheck will not be subject to
such regulation in the future.
  Cost
of Compliance with Environmental Regulation
 
 MyECheck
currently has no costs associated with compliance with environmental
regulations. However, there can be no assurances that MyECheck will not incur
such costs in the future.
 
 Software
Development
 
 In April
2006, MyECheck entered into an open ended software development agreement with R
Systems International Ltd., a software product development company, and that
agreement continues to be in effect. MyECheck also develops some of its software
in-house and
utilizes an independent contractor. During the past three
years, research and development costs associated with the development of
the software have been approximately
$166,799.
  MyECheck
own proprietary software and intellectual property, and licenses patented
technologyfrom the
Company founder Edward R Starrs.
 
 Business
Partners
 
 MyECheck
has entered into a Processor Agreement with First Regional Bank. First Regional
Bancorp (NASDAQ: FRGB) is a bank holding company headquartered in Century City,
California. Its subsidiary, First Regional Bank, specializes in providing
businesses and professionals with the management expertise of a major bank and
the personalized service of an independent. First Regional Bank offers the
latest technology combined with a higher level of service, responsiveness and
cost savings not found at other institutions.
 
 First
Regional Bank has sponsored MyECheck at the Federal Reserve Bank, and MyECheck
is permitted to use First Regional Bank’s FedLine account to electronically
access the Federal Reserve check clearing system.
 
 MyECheck
has entered into an Agreement with Cardinal Commerce Corporation, a global
leader in enabling authenticated payments, secure transactions and alternative
payment brands for both eCommerce and mobile commerce. CardinalCommerce enables
payment brands such as Verified by Visa, MasterCard SecureCode, PayPal, eBillme,
Bill Me Later, Google Checkout, MyECheck, and NetCash (with Western Union and
NACHA Secure Vault Payments coming soon) to a network of over 30,000 merchants
and thousands of Banks.
 
 The
Cardinal mobile platform leverages its merchant network, bank network and
payment brands by linking them with end users’ mobile phones through an
integrated mobile platform.  Cardinal's proprietary and easily deployable
technology provides consumers, merchants, card issuers, and processors the
ability to conduct authenticated Internet, wireless and mobile transactions
safely and securely. Headquartered in Cleveland, Ohio, with facilities in the
United States, Europe and Africa, CardinalCommerce services a global customer
base.
   8
  MyECheck
is substantially reliant on these agreements for its business. If MyECheck
develops a broader base of customers and vendor relationships, that reliance may
decrease, but there can be no assurances as to the timing or extent of such
growth.
 
 The
Company has entered into an agreement with Simon Properties Group Inc. (NYSE:
SPG) and will be providing SPG with its comprehensive suite of electronic check
processing services.  This agreement allows Simon Property Group’s
customers to use their checking accounts as a form of online. MyECheck’s
patented system can clear checks from every U.S. checking account, even accounts
that ACH cannot; thus providing online financial access to more consumers and
businesses than any other payment method, at a fraction of the cost of card
transactions.
 
 On
November 17, 2008, the Company announced that it had signed the California State
Teachers’ Retirement Fund (CalSTRS) as a customer. CalSTRS primary
responsibility is to provide retirement related benefits and services to
teachers in public schools and community colleges. It administers retirement,
disability and survivor benefits for California's 813,000 public school
educators and their families from the state's 1,400 school districts, county
offices of education and community college districts.
  The
Merger Agreement
  MyECheck,
Inc., a Delaware corporation (“MEC”) and Sekoya Holdings, Limited (a Nevada
corporation) entered into a Merger Agreement in November 2007, which was amended
and restated as of February 4, 2008, and was filed as an exhibit to the Report
on Form 8-K filed on February 7, 2008 (the Report on Form 8-K and Merger
Agreement are incorporated herein by reference). The merger was effective March
14, 2008.
 
 A total
of 2,000,000 shares otherwise issuable to MEC’s shareholders have been held back
(the “Escrow Shares”) for purposes of compensating MEC and its officers,
directors, employees, agents and affiliates should they sustain any loss due to
a breach of Company’s representations, warranties, covenants or agreements
contained in the Merger Agreement or any related document (a “Loss”).
 
 Item
1A:  Risk Factors
  MYECHECK
IS A HIGH RISK, START-UP COMPANY AND, AS SUCH, THERE IS UNCERTAINTY REGARDING
WHETHER IT WILL SUCCESSFULLY EXECUTE OUR BUSINESS PLAN, GENERATE ENOUGH REVENUE
TO SUPPORT OPERATIONS, RECEIVE ANY INVESTMENT, OR ENGAGE ANY NEW
CUSTOMERS.
 
 “Going
concern” opinion by auditors
 
 The
report of the auditors accompany the Company’s financial statements included
herein notes that the Company has a net loss of $1,003,376 and net cash used in
operations of $429,901 for the year ended December 31, 2008, and
at December 31, 2008 had a working capital deficit of $329,323, an
accumulated deficit of $2,370,320 and a stockholders’ deficit of $316,459. As a
result of these factors, the auditors noted that there was “substantial doubt”
about the Company’s ability to continue as a going concern.
 
 Product
Risk
 
 There are
no assurances that MyECheck will continue to be able to provide its services.
Changes in laws or interpretation of existing laws may pose significant risk and
may prevent MyECheck from providing its service. MyECheck is dependent on a bank
relationship and there are assurances that MyECheck will be able to maintain its
current bank relationships, or develop new bank relationships.
 
 Market
Risk
  There are
no assurances that the market demand for MyECheck’s services exist, or will
continue to exist in the future. The Internet and high technology industries are
rapidly evolving and changing, and new products or services may be introduced
that may make MyECheck’s services less viable or obsolete.
  9
 Reliance
on Key Employees
  At least
in its early stage, the Company's business depends to a large extent on
retaining the services of its founder, Mr. Edward R Starrs (Chairman of the
Board of Directors and Chief Executive Officer), as well as MyECheck’s Chief
technical Officer Mr. R. Stephen Blandford and MyECheck’s Chief Financial
Officer Mr. James R Heidinger. The Company's operations could be materially
adversely affected if, for any reason, one or more of the above officers ceases
to be active in MyECheck's management. MyECheck has minimized the possible loss
of Mr. Starrs, Blandford and Heidinger to competitors by having each of them
execute employment agreements containing non-competition and non-disclosure
covenants. MyECheck has no key-person life insurance policy on any of the
above-mentioned key personnel.
  Financial
Risk
  There are
no assurances that MyECheck will always have sufficient money to continue
operations.
  Competitive
Risk
  There are
no assurances that MyECheck will be able to effectively compete against larger,
better funded competitors. Although MyECheck is apparently first to market with
its RCC service, competing services may be developed that may offer more
advantages, cost less or may have higher sales and marketing
success.
  Dependence
on the Internet
  Because
MyECheck’s products and services are provided directly over the Internet, the
future success of MyECheck will depend in large part on whether the Internet
proves to be a viable commercial marketplace. Whether because of inadequate
development of the necessary infrastructure or as a result of fraud, or any
other cause, if customers lack confidence in sourcing products over the
Internet, MyECheck’s business, operating results and financial condition will be
materially adversely affected.
  Rapid
Technologic Change; Dependence on New Product Development
  The
Internet market in which MyECheck intends to compete is characterized by rapid
and significant technological developments, frequent new product introductions
and enhancements, continually evolving business expectations and swift changes.
To compete effectively in such markets, MyECheck must continually improve and
enhance its products and services and develop new technologies and services that
incorporate technological advances, satisfy increasing customer expectations and
compete effectively on the basis of performance and price. MyECheck’s success
will also depend substantially upon its ability to anticipate, and to adapt its
products and services to its collaborative partner’s preferences. There can be
no assurance that technological developments will not render some of MyECheck's
products and services obsolete, or that MyECheck will be able to respond with
improved or new products, services, and technology that satisfy evolving
customers’ expectations. Failure by MyECheck to acquire, develop or introduce
new products, services, and enhancements in a timely manner could have a
material adverse effect on MyECheck’s business, financial condition and
operations. Also, to the extent one or more of MyECheck's competitors introduces
products and services that better address a customer’s needs, MyECheck’s
business would be materially adversely affected.
  Delays
in New Product and Service Development and Introduction
  The
process of developing products and services such as those offered by MyECheck
may prove to be extremely complex and it is highly likely that MyECheck will
experience delays in developing and introducing new products and services in the
future. If MyECheck is unable to develop and introduce new products, services or
enhancements to existing products and services in a timely manner in response to
changing market conditions or customer requirements, MyECheck's business,
operating results and financial conditions would be materially adversely
affected. Also, announcements of currently planned or other new products and
services may cause customers to delay their subscription decisions in
anticipation of such products and services, which could have a material adverse
effect on MyECheck's business, operating results and financial condition,
especially if the introduction of such products and services is
delayed.
  10
 Flaws
and Defects in Products and Services
  Products
and services as complex as those offered by MyECheck may contain undetected
flaws or defects when first introduced or as new versions are released. Any
inaccuracy or defects may result in adverse products and service reviews and a
loss or delay in market acceptance. There can be no assurance that flaws or
defects will not be found in MyECheck’s products and services. If found, flaws
and defects would have a material adverse effect upon MyECheck’s business
operations and financial condition.
  Management
of Potential Growth
 MyECheck's
ability to manage its future growth, if any, will require it to continue to
implement and improve its operational, financial and management information
systems and control and to hire and train new employees, including management
and technical personnel, and also to motivate and manage its new employees and
to integrate them into its overall operations and culture. Although the
management team has successfully grown other companies, there can be no
assurance that MyECheck will be able to perform such actions successfully.
MyECheck's failure to manage growth effectively would have a material adverse
effect on MyECheck’s results of operations and its ability to execute its
business strategy.
  Lack
of a Public Market
  There has
not been a regular trading public market for MyECheck’s shares there are no
assurances that a regular trading market will develop in the near term or that,
if developed, it will be sustained. In the event a regular public trading market
does not develop, any investment in MyECheck’s Common Stock would be highly
illiquid. Accordingly, investors in MyECheck may not be able to readily sell
their shares.
 
 There
are risks in trading in “microcap” stocks, including shares of the
Company
  The
Securities and Exchange Commission has advised investors to use caution in
investing in shares of “microcap” companies, which would include the
Company.  http://www.sec.gov/investor/pubs/microcapstock.htm.  The
Company encourages investors to consider the information provided by the SEC
prior to making an investment in the Company’s stock.
  Dividends
  MyECheck
has not paid any dividends or made distributions to its investors and is not
likely to do so in the foreseeable future. MyECheck presently intends to retain
earnings for use in its business. Additionally, MyECheck may fund a portion of
its future expansion through debt financing, and a condition of such financing
may prohibit the payment of dividends while the debt is outstanding. Therefore,
management's goal is to build value by increasing the size of the business and
not by paying dividends.
  Competition
  With the
ever-growing popularity of the Internet and as computer hardware (i.e., servers)
and creating/maintaining virtual private networks becomes more affordable, other
on-line services may appear or are already established which will try to create
an electronic link to provide similar products and services that MyECheck
offers. Some of those businesses may have far greater financial and marketing
resources, operating experience and name recognition than MyECheck. Potential
competitors include PayPal, Google Checkout, BillMeLater and others. All these
companies take different approaches to processing electronic transactions and to
the best of MyECheck's knowledge, none of them currently offer services of the
same type as MyECheck. Notwithstanding, these potential competitors, as well as
the entry of more competitors offering similar services, could have a material
adverse effect upon MyECheck's business, operating results and financial
condition.
 
 Reliance
on license with affiliated party
  The
Company has entered into a memorandum of understanding with Ed Starrs, its
founder and CEO, under which the Company will become the sole licensee of a
newly granted patent for check processing technology.  No royalties
will be due for the patent for one year, and future royalties are subject to
negotiation by the Company and Mr. Starrs.  The Company believes that
it will obtain a competitive advantage from the ability to access the patent.
Failure to agree on future terms of the license could have a material adverse
impact on the Company.
 
 11
 Item
1B. Unresolved Staff Comments.
 
 Not
applicable
 
 Item
2: Description of Property
  MyECheck’s
operates its executive offices from approximately 3,300 square feet of Class A
office space in a business park located in El Dorado Hills, CA. Certain
contractors operate from their homes located in various regions throughout the
country. MyECheck’s primary operational data center is located
in a tier IV data center in Sacramento, CA. Our telephone number is (916)
932-0900.
  Item
3: Legal Proceedings
  MyECheck
may from time to time be involved in various claims, lawsuits, and disputes with
third parties, actions involving allegations of discrimination, intellectual
property infringement, or breach of contract actions incidental to the operation
of its business. However, litigation is subject to inherent uncertainties, and
an adverse result in these or other matters may arise from time to time that may
harm its business. MyECheck is currently not aware of any such legal proceedings
or claims that they believe will have, individually or in the aggregate, a
material adverse affect on its business, financial condition or operating
results.
  MyECheck
and Ed Starrs were sued in 2005 by an investor in a prior company in which Mr.
Starrs was involved and which was developing a related, but different,
technology. MyECheck intends to defend these claims vigorously. The
investor is seeking return of approximately $350,000 and additional
damages.The
parties to the lawsuit reached a conditional settlement
agreement in January 2009.  No assurances can be provided that
the settlement will be finalized.  The matter is scheduled for trial
in May 2009.
  Item
4: Submission of Matters to a Vote of Security Holders
  There
were no matters submitted to a vote of security holders during the fiscal period
ended
December 31, 2008.
  PART
II
  Item
5: Market for Common Equity, Related Stockholder Matters and Small Business
Issuer Purchases of Equity Securities
  The
Company's Common stock is presently listed on the OTC Bulletin Board under the
symbol "MYEC". Our common stock has been listed on the OTC Bulletin Board since
October 2006. There is currently no active trading in our common stock and there
has been no active trading since our common stock has been listed on the OTC
Bulletin Board. Prior to the merger, any trading in the Company’s shares did not
represent trading based on the current operations or business of the
Company.
  As of
December 31, 2008, the approximate number of holders of Common Stock of the
Company is 32. As of December 31, 2008, the approximate number of holders of
Common Stock of the Company is 36.
 
 Since
our inception date, our boards of directors have not declared any dividend
payments to the shareholders. The declaration and payment of dividends to
holders of our common stock by us, if any, are subject to the discretion of our
board of directors. Our board of directors will take into account such matters
as general economic and business conditions, our strategic plans, our financial
results and condition, contractual, legal and regulatory restrictions on the
payment of dividends by us, and such other factors as our board of directors may
consider to be relevant.
  The
company has never issued securities for any equity compensation
plan.
 
 On March
14, 2008, as a result of the Merger, the former shareholders of MEC became
shareholders of approximately 60% of the Company’s outstanding common
stock.   The transaction was exempt from registration under
Section 4(1) of the Securities Act of 1933.
 
 MyECheck
has entered into subscription agreements with Youngal Group Ltd. and Anshan
Finance Ltd. (together the “Investors”) who have agreed, in the aggregate, to
purchase 4,000,000 shares of MyECheck’s common stock  following the
Effective Time of the Merger. The shares were issued in reliance upon an
exemption from the registration requirements of the Securities Act of 1933
provided by Regulation S.  A total of 4,000,000
shares have been issued under those subscription agreements, but the
Investors did not fully perform.
 
 
 12
 
 Item
6: Selected Financial Data
 
 Omitted
per Item 301 (c) of Regulation S-K.
 
 Item
7.   Management's Discussion and Analysis or Plan of
Operation
  The
following discussion contains certain forward-looking statements that are
subject to business and economic risks and uncertainties, and MyECheck's actual
results could differ materially from those forward-looking statements. The
following discussion regarding the financial statements of MyECheck should be
read in conjunction with the financial statements and notes
thereto.
 
 MyECheck's
prior full fiscal year ending December 31, 2007 is not indicative of MyECheck's
current business plan and operations. Incorporated in October 2004, MyECheck
currently has limited revenues and is deemed an early stage Company. This plan
of operation will focus on MyECheck's business plan and operations current.
There can be no assurance that MyECheck will generate positive cash flow and
there can be no assurances as to the level of revenues, if any, MyECheck may
actually achieve from its operations.
  Implementation
Plan
 
 Following
is an outline of MyECheck's plan to build a widely used payment system. The
success of MyECheck depends on a number of factors including the careful
selection and active participation of qualified Value Added Resellers (“VARs”)
and Payment Service Providers (“PSPs”). The VARs / PSPs commitment to MyECheck
will depend on the commercial viability of MyECheck’s solutions and web-based
services.
 
 MyECheck
targets internet payment gateways and payments software and service providers
for partnership and reseller opportunities. Early emphasis has been on building
sales channels through partnerships. MyECheck has experienced early success in
partnerships with Cardinal Commerce and is in discussions and other major
PSPs.
 
 In
addition to its in-house direct sales department, MyECheck has engaged a number
of specialized independent sales agents such as Sheffield Resource Network and
others, who leverage their existing contacts for direct sales.
 
 MyECheck
has an active PR program and issues press releases on a regular basis which
generate in-bound leads and interest from industry press. Company management
conducts interviews with national press. MyECheck attends and exhibits at
industry trade shows, conferences and other networking events.
 
 MyECheck
in-house sales force and independent sales agents also use email and cold
calling marketing techniques, focusing on the industry’s largest target
companies. MyECheck is currently in discussion with large Independent Sales
Organizations (ISOs) regarding partnership and representation
opportunities.
 
 In
addition to the effective marketing and distribution of MyECheck’s services,
MyECheck’s infrastructure must be able to support a significant increase in
transaction volume. MyECheck plans to enhance its infrastructure by adding a new
data center and new hardware in anticipation of increased transaction volume.
MyECheck plans to continue to scale it’s infrastructure in advance of the
need.
  Liquidity
 
 As of
December 31, 2008, MyECheck had cash on hand amounting to $23,999. MyECheck is
currently operating cash flow negative and its operating expenses exceed its
operating income.
 
 There are
currently no commitments for capital expenditures.
 
 13
 There are
trends in sales that would have a material affect on MyECheck. In recent months
there has been a marked increase in the number of applications for MyECheck’s
services. Management expects this trend to continue throughout 2009, however
there can be no assurances that the current trend will continue.
 
 There are
currently no guarantees or other off balance sheet arrangements.
 
 Revenue
from operations during the year period ended December 31, 2008 was $548,159.
During the year ended December 31, 2007, revenue from operations was
$46,051.
 
 MyECheck
started processing transactions on version one of its software platform in July
of 2005 and continued through March of 2006, after which it ceased processing in
order to further develop and refine its service offerings. During the period
from March of 2006 through September 2007, MyECheck redesigned and developed its
software platform to better suit the demands of its prospective customers and to
ensure the accurate performance of the software. MyECheck launched revenue
generating operations on version two of its software platform in September
2007.
 
 The
Company’s auditors have issued a “going concern” qualification to their opinion
on the Company’s financial statements.  The Company expects to require
additional capital infusions during 2009 and may not survive without such
capital infusions.
 
 Item 7A: Quantitative and Qualitative Disclosures About Market
Risk
 
 Omitted
per Item 305(e)  of Regulation S-K.
 
 Item
8: Financial Statements
  The
consolidated financial statements required to be filed pursuant to this Item 8
begin on page F-1 of this report.
  Item
9: Changes In Disagreements With Accountants on Accounting and Financial
Disclosure
  Berman
& Company, P.A., the Company’s Independent Registered Public Accounting
Firm (the “Firm”), have been the only auditor since inception and there
have been no disagreements between MyECheck and the Firm.
  Item
9A: Controls and Procedures
  Our Chief
Executive Officer and Chief Financial Officer (the "Certifying Officers") are
responsible for establishing and maintaining disclosure controls and procedures
for the Company. The Certifying Officers have designed such disclosure controls
and procedures to ensure that material information is made known to them,
particularly during the period in which this report was prepared. The Certifying
Officers have evaluated the effectiveness of the Company's disclosure controls
and procedures within 90 days of the date of this report and believe that the
Company's disclosure controls and procedures are effective based on the required
evaluation. There have been no significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
  Internal
control over financial reporting is a process to provide reasonable assurance
regarding the reliability of consolidated financial reporting and the
preparation of financial statements for external purposes in accordance with
U.S. generally accepted accounting principles. There has been no change in the
Company’s internal control over financial reporting during the year ended
December 31, 2008 that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
 
 The
Company’s management, including the Company’s CEO and CFO, does not expect that
the Company’s disclosure controls and procedures or the Company’s internal
controls will prevent all errors and all fraud. A control system, no matter how
well conceived and operated, can provide only reasonable, not absolute,
assurance that the objectives of the control system are met. Further, the design
of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because
of the inherent limitations in all control systems, no evaluation of the
controls can provide absolute assurance that all control issues and instances of
fraud, if any, within the Company have been detected.
  14
  Management
conducted an evaluation of the effectiveness of our internal control over
financial reporting based on the framework in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Based on this evaluation, management concluded that the company’s
internal control over financial reporting was effective as of
December 31, 2008.
 
 Berman
& Company, P.A., the Company’s independent registered public accounting
firm, has not issued an attestation report on the effectiveness of the Company’s
internal controls over financial reporting since we are not yet required to
comply with this provision of Section 404(B) of the Sarbanes-Oxley
Act.
  Changes in Internal Control
over Financial Reporting
  There
were no changes in the Company’s internal control over financial reporting
during the Company’s fiscal quarter ending December
31, 2008, that have materially affected, or are reasonably likely to
materially affect, the Company’s internal control over financial
reporting.
  Item
9B: Other Information
  None
  Item
10: Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act
  There is
no involvement by any of Director, Executive Officer or Control Person in
bankruptcy, criminal proceeding, injunctions, or violation of securities law in
the past 5 years.
 
 The
following table sets forth the names and ages of the current directors and
executive officers of MyECheck, the principal offices and positions with
MyECheck held by each person and the date such person became a director or
executive officer of MyECheck. The executive officers of MyECheck are elected
annually by the Board of Directors. The directors serve one year terms until
their successors are elected. The executive officers serve terms of one year or
until their death, resignation or removal by the Board of Directors. There are
no family relationships between any of the directors and executive officers. In
addition, there was no arrangement or understanding between any executive
officer and any other person pursuant to which any person was selected as an
executive officer.
  The
directors and executive officers of MyECheck are as follows:
 
 Name
                                                                                  
                                                                                  Age
                                                                                  
                                                                                  Position(s)
                                                                                  
                                                                                  Date
      AppointedEdward
      Robert Starrs
                                                                                  
                                                                                  48
                                                                                  
                                                                                  President
                                                                                  
                                                                                  October
      29, 2004Chief
      Executive OfficerChairman
      of the BoardDirectorRobert
      Stephen Blandford
                                                                                  
                                                                                  48
                                                                                  
                                                                                  Vice
      President of Technology
                                                                                  
                                                                                  October
      29, 2004Chief
      Technology OfficerSecretaryDirectorJames
      Ronald Heidinger
                                                                                  
                                                                                  52
                                                                                  
                                                                                  Vice
      President of Finance
                                                                                  
                                                                                  May
      15, 2006Chief
      Financial OfficerTreasurerDirector
  15
 Edward R
Starrs
 
 Mr.
Starrs has 20 years experience as an international business executive with
management experience in multiple industries. He has been an officer and
director of MyECheck since its formation in 2004. Previously, Mr. Starrs was
President of Starnet Systems International, Inc., a wholly owned subsidiary of a
public company that was processing more than $2 billion annually in Internet
transactions.
 
 Mr.
Starrs owned and operated several successful companies including, ERS Marketing,
Inc., where he produced over $20 million in contracts for his clients, and Bay
Distributing, Inc. a major distributor of over 800 product categories to Fortune
500 accounts.
 
 From
January, 2002 through October, 2004, Mr. Starrs was President of Digency, Inc.,
an online payment processing company engaged in credit card and eCheck
transaction processing for Internet Merchants.
 
 Starrs
has also held senior management positions with Fortune 100 companies including
McCaw Communications, Inc. (AT&T), and AMF, Inc., the world’s largest
sporting goods conglomerate.
  R Stephen
Blandford
 
 Mr.
Blandford possesses more than 15 years experience as a Senior Information
Technology Professional including serving as CTO for companies in the online
entertainment and gaming industries.
 
 Mr.
Blandford’s professional experience includes i2 Corp, MXM Media, Maxum
Entertainment Group, Perspective Technologies, WinStreak and
others.
 
 From
January 2002 through October 2004, Mr. Blandford was Chief Technology Officer
for Digency, Inc., an online payment processing company engaged in credit card
and eCheck transaction processing for Internet Merchants.
 
 Mr.
Blandford has expertise in the design and implementation of Java streaming media
solutions for multiple platforms, using Coldfusion, PHP, & SQL DBs. For more
than a decade Blandford has architected systems featuring virtually every
emerging technology.
 
 James Heidinger, BS,
CPA
 
 During
the period from 2000 through 2005, Mr. Heidinger served as Chief Financial
Officer for ORBA Financial Management, an investment and insurance sales and
marketing firm licensed in all 50 states.  With over 450 independent
registered representatives and premium and investment sales of over $750
million, ORBA is the top production leader for Western Reserve Life and
InterSecurities, both subsidiaries of AEGON NV, the third largest
international insurance firm in the world and a major investor in ORBA Financial
Management.
 
 Previously,
Mr. Heidinger was recruited to create and implement a corporate accounting
system, provide financial statements, perform a systems conversion and set up a
cash management system for Cucina Holdings, Inc. a $50 million food and beverage
manufacturer, wholesaler and retailer.  Its branded names include Java City
Coffee, Caravali Coffees and La Petite Boulangerie.
 
 16
 Audit Committee Financial
Expert
  We do not
have an audit committee financial expert as we believe the cost related to
retaining a financial expert at this time is prohibitive. Further, because we
are only beginning our commercial operations, at the present time, we believe
the services of a financial expert are not warranted.
  Conflicts of
Interest
  The only
conflict that we foresee is that our officers and directors devote time to
projects that do not involve us.
  SECTION
16(A) BENEFICIAL OWNER REPORTING COMPLIANCE
  Section
16(a) of the Securities and Exchange Act of 1934 requires that the Company's
directors, executive officers, and persons who own more than 10% of registered
class of the Company's equity securities, or file with the Securities and
Exchange Commission (SEC), initial reports of ownership and report of changes in
ownership of common stock and other equity securities of the Company. Officers,
directors, and greater than 10% beneficial owners are required by SEC regulation
to furnish the Company with copies of all Section 16(a) reports they
file.
  Code of
Ethics
  The
Company has adopted code of ethics for all of the employees, directors and
officers.
  Item
11: Executive Compensation
  On
January 1, 2007, MyECheck entered into a three year Employment Agreement with
Mr. Edward R Starrs, MyECheck's President and Chief Executive Officer, whereby
MyECheck will pay Mr. Starrs an annual salary of $240,000. The Agreement also
requires MyECheck to provide, at its expense, complete health insurance coverage
for Mr. Starrs and his children.
 
 MyECheck
pays. R Stephen Blandford, MyECheck's Vive President of Technology and Chief
Technology Officer, an annual salary of $90,000 and provides health insurance
coverage for Mr. Blandford..
 
 MyECheck
pays Mr. James R Heidinger, MyECheck's Vice President of Finance and Chief
Financial Officer, an annual salary of $135,000 and provides complete health
insurance coverage for Mr. Heidinger.
 
 MyECheck
does not provide compensation for its directors.
 
 17
 The
following table sets forth the total compensation MyECheck pays its
Officers.
  Annual
      Compensation
                                                                    
                                                                    Long-Term
      CompensationAwards
                                                                    
                                                                    Pay-outsName and
                                                                      Principal
                                                                      Position
                                                                    
                                                                    
                                                                    Year
                                                                    
                                                                    Salary($)
                                                                    
                                                                    Bonus($)
                                                                    
                                                                    Other
      Annual
                                                                      Compensation
      ($)
                                                                    
                                                                    Restricted
                                                                      Stock
                                                                      Award(s)
      ($)
                                                                    
                                                                    Securities
                                                                      Underlying
                                                                      Options/SARs
      (#)
                                                                    
                                                                    LTIP
                                                                      Payouts
                                                                    
                                                                    All
      Other
                                                                      Compensation
      ($)Edward
      R Starrs
                                                                    
                                                                    
                                                                    2008
                                                                    
                                                                    240,000
                                                                    
                                                                    0
                                                                    
                                                                    $     
      10,919
                                                                    
                                                                    0
                                                                    
                                                                    0
                                                                    
                                                                    0
                                                                    
                                                                    0(Chairman
      & CEO)R
      Stephen Blandford
                                                                    
                                                                    
                                                                    2008
                                                                    
                                                                    90,000
                                                                    
                                                                    0
                                                                    
                                                                    5,777
                                                                    
                                                                    0
                                                                    
                                                                    0
                                                                    
                                                                    0
                                                                    
                                                                    0(Chief
      Technology Officer, Director)James
      R Heidinger
                                                                    
                                                                    
                                                                    2008
                                                                    
                                                                    135,000
                                                                    
                                                                    0
                                                                    
                                                                    7,830
                                                                    
                                                                    0
                                                                    
                                                                    0
                                                                    
                                                                    0
                                                                    
                                                                    0(Chief
      Financial Officer, Director)
 Option/SAR
Grants
  There are
no stock option, retirement, pension, or profit sharing plans for the benefit of
our officers and directors.
  Long-Term
Incentive Plan Awards
  We do not
have any long-term incentive plans.
  Compensation
of Directors
  We do not
have any plans to pay our directors any compensation for Board
participation.
  Indemnification
  The
Corporation Laws of the State of Nevada and MyECheck's Bylaws provide for
indemnification of MyECheck's Directors for liabilities and expenses that they
may incur in such capacities. In general, Directors and Officers are indemnified
with respect to actions taken in good faith in a manner reasonably believed to
be in, or not opposed to, the best interests of MyECheck, and with respect to
any criminal action or proceeding, actions that the indemnitee had no reasonable
cause to believe were unlawful. Furthermore, the personal liability of the
Directors is limited as provided in MyECheck's Articles of
Incorporation
  Regarding
indemnification for liabilities arising under the Securities Act of 1933, which
may be permitted to directors or officers under Nevada law, we are informed
that, in the opinion of the Securities and Exchange Commission, indemnification
is against public policy, as expressed in the Act and is, therefore,
unenforceable.
  18
 Item
12: Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
 
 The
following table sets forth information with respect to MyECheck's equity
securities owned of record or beneficially by (i) each Officer and Director of
MyECheck; (ii) each person who owns beneficially more than 5% of each class of
MyECheck's outstanding equity securities; and (iii) all Directors and Executive
Officers as a group, after giving effect to Merger and to the financing and
warrant transactions described herein.
  Name
      and Address of Beneficial Owner
                                                                      
                                                                      Common
      Stock
                                                                      
                                                                      PercentageEdward
      Robert Starrs
                                                                      
                                                                      
                                                                      29,168,751
                                                                      
                                                                      
                                                                      41.71
                                                                      %674
      Platt CircleEl
      Dorado Hills, CA 95762Robert
      Stephen Blandford
                                                                      
                                                                      
                                                                      2,769,375
                                                                      
                                                                      
                                                                      3.96
                                                                      %2624
      Alana CtCameron
      Park, CA 95682James
      Ronald Heidinger
                                                                      
                                                                      
                                                                      1,978,125
                                                                      
                                                                      
                                                                      2.83
                                                                      %488
      Lakeridge CourtEl
      Dorado Hills, CA 95762Anshan Finance Ltd *
                                                                      
                                                                      
                                                                      4,000,000
                                                                      
                                                                      
                                                                      5.72
                                                                      %Jasmine Court35ARegent
      StreetBelize City,BelizeYoungal Group Ltd.*
                                                                      
                                                                      
                                                                      4,000,000
                                                                      
                                                                      
                                                                      5.72
                                                                      %Jasmine Court35ARegent
      StreetBelize City,Belize
  * Anshan
Finance Ltd has agreed to purchase 2,000,000 shares from MyECheck for
$1,000,000, and may be entitled to warrants from MyECheck to acquire an
additional 2,000,000 shares from MyECheck at the price of $2.00 per share.
Youngal Group Ltd.  has
agreed to purchase 2,000,000 shares from MyECheck for $1,000,000, and
may be entitled to warrants from MyECheck to acquire an additional
2,000,000 shares from MyECheck at the price of $4.00 per share. Youngal Group Ltd.  owes MyECheck $400,000
pursuant to a subscription receivable and the remaining investment has been
received by MyECheck.
 
 As of
December 31, 2008, the Company determined that the balance duepursuant
to a subscription receivable owed byYoungal
Group Ltdwas
deemed uncollectible.  The Company wrote off the balance due of
$400,000 as a provision for uncollectible stock subscriptions at December
31, 2008.
 
 Except as
described above, there are currently no options, warrants, rights or other
securities conversion privileges granted to our officers, directors or
beneficial owners.
  Securities
Authorized for Issuance Under Equity Compensation Plans.
  We have
no equity compensation plans.
  19
 Item
13: Certain Relationships and Related Transactions
 
 MyECheck
has entered into subscription agreements with Youngal Group Ltd. and Anshan
Finance Ltd. (together the “Investors”) who have agreed, in the aggregate, to
purchase 4,000,000 shares of MyECheck’s common stock (the “Shares”) following
the Effective Time of the Merger. The Shares will be issued in reliance upon an
exemption from the registration requirements of the Securities Act of 1933 (the
“Act”) provided by Regulation S and may only be transferred in accordance with
the provisions of Regulation S, pursuant to an effective registration under the
Act, or pursuant to an available exemption from registration under the
Act
  In
connection with the sale of the Shares, MyECheck has entered into warrant
agreements with Youngal Group Ltd. and Anshan Finance Ltd. (the “Warrants”). The
terms of the Warrants provide the Investors the opportunity to purchase up to
4,000,000 additional shares of MyECheck’s common stock for a purchase price of
$4.00 per share or $2.00 per share, respectively. The Warrants may only be
exercised following the effective time of the proposed merger between MyECheck
and Sekoya and the right to exercise the warrants terminates as of 5:00 p.m.
local time in Vancouver, B.C. on the third anniversary of issuance. The Warrants
were to be issued in reliance upon an exemption from the registration
requirements of the Act provided by Regulation S and may only be transferred in
accordance with the provisions of Regulation S, pursuant to an effective
registration under the Act, or pursuant to an available exemption from
registration under the Act.
  The
Investors are affiliates of Shirley Wong, a promoter of Sekoya.
 
 MyECheck
is not required as a Bulletin Board listed company to have independent directors
and at the present time does not have any directors who are not also members of
management.
  Item
14: Principal Accountant Fees and Services
  1) Audit
Fees
  The
aggregate fees billed for the last two fiscal years for professional services
rendered by the principal accountant for the audit of the Company's annual
financial statements and review of financial statements included in the
Company's Form 10-Qs or services that are normally provided by the accountant in
connection with statutory and regulatory engagements for those fiscal years
was:
  2008 -
Berman & Company, P.A.  $40,000
  2007 -
 Berman & Company, P.A.  $36,000
 
 2) Audit
- Related Fees
  The
aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of the Company's financial statements and are
not reported in the preceding paragraph:
  2008 -
Berman & Company, P.A.  None
  2007 -
Berman & Company, P.A.   $6,000
  20
 3) Tax
Fees - None
  The
aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning was:
  2008 -
Berman & Company, P.A. - None
  2007 -
Berman & Company, P.A.  None
  4) All
Other Fees
  The
aggregate fees billed in each of the last two fiscal years for the products and
services provided by the principal accountant, other than the services reported
in paragraphs (1), (2), and (3) was:
  2008 -
Berman & Company, P.A.  None
  2007 -
Berman & Company, P.A.  None
 
 Item
15: Exhibits
  Exhibit
      No.
                
                Description31
                
                Certification
      of the Chief Executive Officer and Chief Financial Officer pursuant to
      Rule 13a-14 of the Securities and Exchange Act of 1934 as amended, as
      adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      200232
                
                Certification
      of the Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350 as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
   21
  SIGNATURES
  Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on this 31st day
of March, 2009.
  MyECheck,
Inc.
  (Registrant)
  By: /s/
Ed Starrs
  Ed
Starrs
  President
and Chief Executive Officer
   Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
  Signature
                            
                            Title
                            
                            Date/s/
      Ed Starrs
                            
                            
                            
                            March
      31, 2009Edward
      Robert Starrs
                            
                            President,
      Chief Executive Officer,Chairman
      of the Board, Director/s/
      James Heidinger
                            
                            
                            
                            March
      31, 2009James
      Ronald Heidinger
                            
                            Vice
      President of Finance,Chief
      Financial Officer, Treasurer, Director/s/
      Robert Stephen Blandford
                            
                            
                            
                            March
      31, 2009Robert
      Stephen Blandford
                            
                            Vice
      President of Technology,Chief
      Technology Officer, Secretary, Director
   22





MYECHECK,
INC. AND SUBSIDIARY


CONSOLIDATED
FINANCIAL STATEMENTS


DECEMBER
31, 2008 AND 2007








F-1





Contents




PageReport
      of Independent Registered Public Accounting Firm
                                
                                F-3Consolidated
      Balance Sheets as of December 31, 2008 and 2007
                                
                                F-4Consolidated
      Statements of Operations for the Years EndedDecember
      31, 2008 and 2007
                                
                                F-5Consolidated
      Statements of Changes in Stockholders’ Deficit for the Years
      EndedDecember
      31, 2008 and 2007
                                
                                F-6Consolidated
      Statements of Cash Flows for the Years EndedDecember
      31, 2008 and 2007
                                
                                F-7Notes
      to Consolidated Financial Statements for the Years EndedDecember
      31, 2008 and 2007
                                F-8
      – F-21


F-2









F-3




MyECheck, Inc. and SubsidiaryConsolidated Balance
  SheetsDecember 31,2008
                                          
                                          
                                          2007ASSETSCurrent
      AssetsCash
                                          
                                          $
                                          23,999
                                          
                                          
                                          $
                                          98,732Accounts
      receivable
                                          
                                          
                                          13,253
                                          
                                          
                                          
                                          -Total
      Current Assets
                                          
                                          
                                          37,252
                                          
                                          
                                          
                                          98,732Other
      AssetsDeposit
                                          
                                          
                                          12,864
                                          
                                          
                                          
                                          12,864Total
      Assets
                                          
                                          $
                                          50,116
                                          
                                          
                                          $
                                          111,596LIABILITIES AND STOCKHOLDERS'
      DEFICITCurrent
      LiabilitiesCash
      overdraft
                                          
                                          $
                                          -
                                          
                                          
                                          $
                                          41,373Accounts
      payable
                                          
                                          
                                          84,971
                                          
                                          
                                          
                                          21,300Accrued
      expenses - other
                                          
                                          
                                          80,777
                                          
                                          
                                          
                                          -Accrued
      compensation - related parties
                                          
                                          
                                          96,485
                                          
                                          
                                          
                                          -Accrued
      rent
                                          
                                          
                                          18,784
                                          
                                          
                                          
                                          53,221Loans
      payable - related party
                                          
                                          
                                          38,864
                                          
                                          
                                          
                                          43,547Loans
      payable - other
                                          
                                          
                                          46,694
                                          
                                          
                                          
                                          -Capital
      stock subscribed
                                          
                                          
                                          -
                                          
                                          
                                          
                                          1,200,000Total
      Current Liabilities
                                          
                                          
                                          366,575
                                          
                                          
                                          
                                          1,359,441Long
      term LiabilitiesAccrued
      rent - net of current portion
                                          
                                          
                                          -
                                          
                                          
                                          
                                          18,828Total
      Liabilities
                                          
                                          
                                          366,575
                                          
                                          
                                          
                                          1,378,269Commitments
      and Contingencies (See note 5)Stockholders'
      DeficitCommon
      stock, $0.001 par value, 200,000,000 shares authorized69,937,501
      and 26,375,000 shares issued and outstanding
                                          
                                          
                                          69,938
                                          
                                          
                                          
                                          26,375Additional
      paid in capital
                                          
                                          
                                          1,983,923
                                          
                                          
                                          
                                          73,896Accumulated
      deficit
                                          
                                          
                                          (2,370,320
                                          )
                                          
                                          
                                          (1,366,944
                                          )Total
      Stockholders' Deficit
                                          
                                          
                                          (316,459
                                          )
                                          
                                          
                                          (1,266,673
                                          )Total
      Liabilities and Stockholders' Deficit
                                          
                                          $
                                          50,116
                                          
                                          
                                          $
                                          111,596
 
  F-4


MyECheck, Inc. and
Subsidiary
 Consolidated Statements of
Operations


For the Years Ended December
      31,2008
                          
                          
                          2007Processing
      Revenues
                          
                          $
                          548,159
                          
                          
                          $
                          46,051Operating
      ExpensesGeneral and
      administrative
                          
                          
                          1,568,276
                          
                          
                          
                          702,886Research and
      development
                          
                          
                          24,632
                          
                          
                          
                          53,634Total Operating
      Expenses
                          
                          
                          1,592,908
                          
                          
                          
                          756,520Loss from
      Operations
                          
                          
                          (1,044,749
                          )
                          
                          
                          (710,469
                          )Other
IncomeOther
income
                          
                          
                          (41,373
                          )
                          
                          
                          -Total Other
      Income
                          
                          
                          (41,373
                          )
                          
                          
                          -Net Loss
                          
                          $
                          (1,003,376
                          )
                          
                          $
                          (710,469
                          )Net Loss Per Share - Basic and
      Diluted
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.03
                          )Weighted average number of shares
      outstandingduring the year -
      basic and diluted
                          
                          
                          59,687,159
                          
                          
                          
                          26,375,000








F-5
 
  MyECheck,
      Inc. and SubsidiaryConsolidated
      Statements of Changes in Stockholders' DeficitFor the Years Ended December 31, 2008 and
      2007Common
      Stock
                                      
                                      
                                      Additional
                                      
                                      
                                      AccumulatedShares
                                      
                                      
                                      Amount
                                      
                                      
                                      Paid
      -in Capital
                                      
                                      
                                      Deficit
                                      
                                      
                                      TotalBalance,
      December 31, 2006
                                      
                                      
                                      26,375,000
                                      
                                      
                                      $
                                      26,375
                                      
                                      
                                      $
                                      73,896
                                      
                                      
                                      $
                                      (656,475
                                      )
                                      
                                      $
                                      (556,204
                                      )Net
      loss, 2007
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (710,469
                                      )
                                      
                                      
                                      (710,469
                                      )Balance,
      December 31, 2007
                                      
                                      
                                      26,375,000
                                      
                                      
                                      
                                      26,375
                                      
                                      
                                      
                                      73,896
                                      
                                      
                                      
                                      (1,366,944
                                      )
                                      
                                      
                                      (1,266,673
                                      )Issuance of shares in reverse acquisition treated
      as a recapitalization
                                      
                                      
                                      39,562,501
                                      
                                      
                                      
                                      39,563
                                      
                                      
                                      
                                      (85,973
                                      )
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (46,410
                                      )Stock
      issued for cash ($0.50/share)
                                      
                                      
                                      4,000,000
                                      
                                      
                                      
                                      4,000
                                      
                                      
                                      
                                      1,996,000
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      2,000,000Net
      loss, 2008
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (1,003,376
                                      )
                                      
                                      
                                      (1,003,376
                                      )Balance,
      December 31, 2008
                                      
                                      
                                      69,937,501
                                      
                                      
                                      $
                                      69,938
                                      
                                      
                                      $
                                      1,983,923
                                      
                                      
                                      $
                                      (2,370,320
                                      )
                                      
                                      $
                                      (316,459
                                      )
  F-6
  MyECheck, Inc. and SubsidiaryConsolidated Statements of Cash
      FlowsFor
      the Years Ended December 31,2008
                                                                      
                                                                      
                                                                      2007Cash
      Flows from Operating Activities:Net
      loss
                                                                      
                                                                      $
                                                                      (1,003,376
                                                                      )
                                                                      
                                                                      $
                                                                      (710,469
                                                                      )Adjustments
      to reconcile net loss to net cash used inoperating
      activities:Provision
      for uncollectible subscription receivable
                                                                      
                                                                      
                                                                      400,000
                                                                      
                                                                      
                                                                      
                                                                      -Changes
      in operating assets and liabilities:Increase
      in:Accounts
      receivable
                                                                      
                                                                      
                                                                      (13,253
                                                                      )
                                                                      
                                                                      
                                                                      -Increase
      (decrease) in:Accounts
      payable
                                                                      
                                                                      
                                                                      62,731
                                                                      
                                                                      
                                                                      
                                                                      (60,889
                                                                      )Accrued
      expenses - other
                                                                      
                                                                      
                                                                      80,777
                                                                      
                                                                      
                                                                      
                                                                      (184,237
                                                                      )Accrued
      compensation - officer
                                                                      
                                                                      
                                                                      96,485
                                                                      
                                                                      
                                                                      
                                                                      (43,912
                                                                      )Accrued
      rent
                                                                      
                                                                      
                                                                      (53,265
                                                                      )
                                                                      
                                                                      
                                                                      -Net
      Cash Used in Operating Activities
                                                                      
                                                                      
                                                                      (429,901
                                                                      )
                                                                      
                                                                      
                                                                      (999,507
                                                                      )Cash
      Flows from Investing Activities:Cash
      acquired in reverse acquisition
                                                                      
                                                                      
                                                                      259
                                                                      
                                                                      
                                                                      
                                                                      -Net
      Cash Provided by Investing Activities
                                                                      
                                                                      
                                                                      259
                                                                      
                                                                      
                                                                      
                                                                      -Cash
      Flows from Financing Activities:Cash
      overdraft forgiven by bank
                                                                      
                                                                      
                                                                      (41,373
                                                                      )
                                                                      
                                                                      
                                                                      -Proceeds
      of loans payable - related parties
                                                                      
                                                                      
                                                                      17,317
                                                                      
                                                                      
                                                                      
                                                                      19,059Repayments
      of loans payable - related parties
                                                                      
                                                                      
                                                                      (22,000
                                                                      )
                                                                      
                                                                      
                                                                      (119,214
                                                                      )Proceeds
      of loans payable - other
                                                                      
                                                                      
                                                                      1,300
                                                                      
                                                                      
                                                                      
                                                                      -Repayment
      of loan payable - other
                                                                      
                                                                      
                                                                      (335
                                                                      )
                                                                      
                                                                      
                                                                      (2,500
                                                                      )Proceeds
      from capital stock subscribed
                                                                      
                                                                      
                                                                      400,000
                                                                      
                                                                      
                                                                      
                                                                      1,200,000Net
      Cash Provided by Financing Activities
                                                                      
                                                                      
                                                                      354,909
                                                                      
                                                                      
                                                                      
                                                                      1,097,345Net
      Increase (Decrease) in Cash
                                                                      
                                                                      
                                                                      (74,733
                                                                      )
                                                                      
                                                                      
                                                                      97,838Cash
      at Beginning of Year
                                                                      
                                                                      
                                                                      98,732
                                                                      
                                                                      
                                                                      
                                                                      894Cash
      at End of Year
                                                                      
                                                                      $
                                                                      23,999
                                                                      
                                                                      
                                                                      $
                                                                      98,732Supplemental Disclosure of Cash Flow
      InformationCash
      Paid for:Taxes
                                                                      
                                                                      $
                                                                      1,651
                                                                      
                                                                      
                                                                      $
                                                                      -Interest
                                                                      
                                                                      $
                                                                      -
                                                                      
                                                                      
                                                                      $
                                                                      -


F-7
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007




Note 1 Basis of
Presentation, Organization and Nature of Operations





MyECheck,
Inc. (“MEC”) (“the Company”) was
incorporated in thestate of Delaware on October 29, 2004.  The
Company’s office is located in El Dorado Hills, California.





Sekoya
Holdings, Ltd. (“Sekoya”) was incorporated in Nevada on May 19, 2005, and was in
the process of developing an online payment system for use in the Chinese online
community. Sekoya never achieved revenues and was a development stage
company.  See discussion of reverse acquisition and
recapitalization.





Reverse
Acquisition and Recapitalization





On March
14, 2008, Sekoya Holdings, Ltd. (“Sekoya”), a then shell corporation, merged
with MEC and MEC became the surviving corporation. This transaction was
accounted for as a reverse acquisition. Sekoya did not have any operations and
majority-voting control was transferred to MEC.  The transaction also
requires a recapitalization of MEC. Since MEC acquired a controlling voting
interest, it was deemed the accounting acquirer, while Sekoya was deemed the
legal acquirer. The historical financial statements of the Company are those of
MEC, and of the consolidated entities from the date of merger and
subsequent.





Since the
transaction is considered a reverse acquisition and recapitalization, the
guidance in SFAS No. 141 does not apply for purposes of presenting
pro-forma financial information.





Pursuant
to the Merger, Sekoya’s majority stockholder cancelled 125,000,000 shares of
common stock and the Company concurrently issued 39,562,501 shares of common
stock to MEC.  Upon the closing of the reverse acquisition, MEC
stockholders held 60% of the issued and outstanding shares of common
stock.





In
connection with the reverse acquisition and recapitalization, all share and per
share amounts have been retroactively restated.





Nature
of Operations





The
Company provides the following services:





(A)
Electronic Check Processing





Provided
to merchants who transact business over the internet allowing them to process
checks electronically from their customers.





(B)
Financial Verification





Provided
to merchants to check the status of their customer’s bank account in order to
provide greater assurance that the check will clear.




F-8
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007




(C)
Guarantee Services





Guarantee
services provide the merchant with guaranteed payment on any returned items for
a fee on all items processed as a means to insure guaranteed payment for
products sold or services rendered.





(D)
Identity Services





In 2007,
identity services were provided to merchants to verify that the user of the
Company’s check processing service is valid providing the merchant with greater
assurance that the customer is the true identity holder of the bank
account.





Note 2 Summary of
Significant Accounting Policies




Principles
of Consolidation





The
consolidated financial statements include the accounts of MEC and Sekoya
(collectively, the “Company”).  All intercompany accounts have been
eliminated in consolidation.





Risks
and Uncertainties





The
Company operates in an industry that is subject to intense competition and rapid
technological change and is in a state of fluctuation as a result of the credit
crisis occurring in the United States.  The Company's operations are
subject to significant risk and uncertainties including financial, operational,
technological, and regulatory risks including the potential risk of business
failure.





Also see
Note 3 regarding going concern matters.





Use
of Estimates





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





A
significant estimate in 2008 and 2007 included a 100% valuation allowance for
deferred taxes due to the Company’s continuing and expected future
losses.





F-9
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





Cashand Cash
Equivalents





The
Company considers all highly liquid investments with original maturities of
three months or less at the time of purchase to be cash
equivalents.  At December 31, 2008 and 2007, the Company had no cash
equivalents.





The
Company minimizes its credit risk associated with cash by periodically
evaluating the credit quality of its primary financial institution. The balance
at times may exceed federally insured limits. At December 31, 2008 and 2007,
there were no balances that exceeded the federally insured limit.





At
December 31, 2008, the Company’s bank wrote off a liability recorded on the
books as a cash overdraft in the amount of $41,373.  The Company
recorded the forgiveness as other income.





Accounts
Receivable





Accounts
receivable represents obligations from customers that are subject to normal
collection terms.  The Company periodically evaluates the
collectability of its accounts receivable and considers the need to adjust an
allowance for doubtful accounts based upon historical collection experience and
specific customer information. Actual amounts could vary from the recorded
estimates.





Concentrations





Statement
of Position 94-6, “Disclosureof Certain Significant Risks and Uncertainties”, addresses corporate
vulnerability to concentrations. For the Company, the exposure area includes the
concentration with certain of its customers as it pertained to accounts
receivable and sales.





At
December 31, 2008 and 2007, the Company had a concentration of accounts
receivable with one customer of 97% and 0%, respectively.





During
the years ended December 31, 2008 and 2007, respectively, the Company earned 96%
and 99%, respectively, of its revenues from one customer.





Fair
Value of Financial Instruments





The
carrying amounts of the Company’s short-term financial instruments, including
accounts payable, accrued expenses, accrued compensation – related parties,
accrued rent, loans payable – related parties and loans payable - other,
approximate fair value due to the relatively short period to maturity for these
instruments.





F-10
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





Minority
Interest





Under
generally accepted accounting principles, when losses applicable to the minority
interest in a subsidiary exceed the minority interest in the equity capital of
the subsidiary, the excess is not charged to the minority interest since there
is no obligation of the minority interest to make good on such
losses.  The Company, therefore, has included losses applicable to the
minority interest against its interest. If future earnings do materialize, the
Company will be credited to the extent of such losses previously
absorbed.  For financial reporting purposes, minority interest will
not be presented until the minority’s share of profit exceeds its previously
recorded deficit.





Revenue
Recognition





The
Company follows the guidance of the Securities and Exchange Commission’s Staff
Accounting Bulletin No. 104 for revenue recognition.  The Company records
revenue when all of the following have occurred; (1) persuasive evidence of an
arrangement exists, (2) product delivery has occurred, (3) the sales price to
the customer is fixed or determinable, and (4) collectibility is reasonably
assured.





Services
are performed under a contract with a customer, which states the services to be
utilized and the terms and fixed price for all services under
contract.  The price of these services may be a fixed fee per
transaction and/or a percentage of the transaction processed depending on the
service.





Revenue
from electronic check processing is derived from fees collected from merchants
to convert merchant customer check data into an electronic image of a paper
draft, which allows the Company to deposit the funds to the merchant’s bank
through check 21 image clearing with the Federal Reserve on behalf of the
bank.  The Company recognizes the revenue related to electronic check
processing fees when the services are performed.





Revenue
from financial verification is derived from fees collected from merchants to
process requests to validate financial verifications to an outside service
provider under contract with the Company.  This revenue is recognized
when the transaction is processed, since the Company has no further
obligations.





Revenue from check guarantee services
is derived from fees collected from merchants to process transaction to an
outside service provider under contract with the Company.  This
revenue is recognized when the transaction is processed, since the Company has
no further obligations.





In 2007,
revenue from identity verification was derived from fees collected from
merchants to process requests to validate identity verifications to an outside
service provider under contract with the Company.  This revenue was
recognized when the transaction was processed, since the Company had no further
obligations.




F-11
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





Processing
Expense





During
2007, the Company’s processing model changed, whereby, the Company decided to no
longer settle merchant accounts.  Instead, the merchants would hold
their own account at the Company’s sponsoring bank.  This change
allowed for the elimination of bank processing fees and return item charges
levied on the company for merchant activity.  The Company recorded
processing expense as a component of general and administrative
expense.





Earnings
per Share





Basic
earnings (loss) per share is computed by dividing net income (loss) by weighted
average number of shares of common stock outstanding during each
period.  Diluted earnings (loss) per share is computed by dividing net
income (loss) by the weighted average number of shares of common stock, common
stock equivalents and potentially dilutive securities outstanding during each
period.  At December 31, 2008 and 2007, the Company had no common
stock equivalents that could potentially dilute future earnings (loss) per
share; hence, a separate computation of diluted earnings (loss) per share is not
presented, as the Company reflects a net loss and the effect of considering any
common stock equivalents if outstanding would have been
anti-dilutive.





Income
Taxes





The Companyaccounts for income taxes under the
liability method in accordance with Statement of Financial
AccountingStandards No.
109,"Accounting for
Income Taxes."Under this method,  deferred
income tax assets and liabilities are determined based on
differences  between the financial reporting and tax bases of assets
and  liabilities  and are measured using the enacted tax
rates and laws  that will be in effect  when
the  differences  are  expected  to
reverse.





The
Company adopted the provisions of FASB Interpretation No. 48; “Accounting for Uncertainty in
Income Taxes-An Interpretation of FASB Statement No. 109” (“FIN
48”).  FIN 48 contains a two-step approach to recognizing and
measuring uncertain tax positions. The first step is to evaluate the tax
position for recognition by determining if the weight of available evidence
indicates it is more likely than not, that the position will be sustained on
audit, including resolution of related appeals or litigation processes, if any.
The second step is to measure the tax benefit as the largest amount, which is
more than 50% likely of being realized upon ultimate settlement. The Company
considers many factors when evaluating and estimating the Company’s tax
positions and tax benefits, which may require periodic adjustments. At December
31, 2008 and 2007, the Company did not record any liabilities for uncertain tax
positions.




F-12
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





Advertising





In
accordance with Statement of Position 93-7, costs incurred for producing and
communicating advertising of the Company, are charged to operations as
incurred.  Advertising expense for the years ended December 31, 2008
and 2007 was $41,457 and $57,766, respectively.





Research
and Development





The
Company expenses all research and development costs as incurred for which there
is no alternative future use. During years ended December 31, 2008 and 2007,
these costs primarily consisted of software development fees.





Stock-Based
Compensation





All
share-based payments to employees will be recorded and expensed in the statement
of operations as applicable under SFAS No. 123R “Share-Based
Payment”.  The Company has not issued any stock based
compensation during the years ended December 31, 2008 and 2007 to
employees.





Non-Employee
Stock Based Compensation





Stock-based
compensation awards issued to non-employees for services will be recorded at
either the fair value of the services rendered or the instruments issued in
exchange for such services, whichever is more readily determinable, using the
measurement date guidelines enumerated in Emerging Issues Task Force Issue EITF
No. 96-18, “Accounting for
Deficit Instruments That Are Issued to Other Than Employees for Acquiring, or in
Conjunction with Selling, Goods or Services” (“EITF
96-18”).  For the years ended December 31, 2008 and 2007, the Company
has not issued any stock based compensation to third parties.





Segment
Information





The
Company follows Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information."  During 2008 and 2007, the
Company only operated in one segment; therefore, segment information has not
been presented.





Recent
Accounting Pronouncements





In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(“SFAS 157”), which clarifies the principle that fair value should be based on
the assumptions that market participants would use when pricing an asset or
liability.  It also defines fair value and established a hierarchy
that prioritizes the information used to develop assumptions.  SFAS
No. 157 is effective for financial statements issued for fiscal years beginning
after November 15, 2007.  The adoption of SFAS No. 157 did not have a
material effect on the Company’s financial position, results of operations or
cash flows.




F-13
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





In
February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial
Assets and Financial Liabilities”(“SFAS 159”), which permits entities to
choose to measure many financial instruments and certain other items at fair
value. The unrealized gains and losses on items for which the fair value option
has been elected should be reported in earnings.  The decision to
elect the fair value option is determined on an instrument-by-instrument basis,
should be applied to an entire instrument and is irrevocable.  Assets
and liabilities measured at fair values pursuant to the fair value option should
be reported separately in the balance sheet from those instruments measured
using other measurement attributes.  SFAS No. 159 is effective as
of the beginning of the Company’s 2008 fiscal year. The adoption of SFAS No. 159
did not have a material effect on the Company’s financial position, results of
operations or cash flows.





In December 2007, the FASB issued SFAS
No. 160,“Noncontrolling
Interests in Consolidated Financial Statements, an amendment of Accounting
Research Bulletin No 51”(“SFAS 160”). SFAS 160 establishes accounting and
reporting standards for ownership interests in subsidiaries held by parties
other than the parent, changes in a parent’s ownership of a noncontrolling
interest, calculation and disclosure of the consolidated net income attributable
to the parent and the noncontrolling interest, changes in a parent’s ownership
interest while the parent retains its controlling financial interest and fair
value measurement of any retained noncontrolling equity investment. SFAS 160 is
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Early adoption
is prohibited.The adoption of SFAS No. 160 is not expected to have a
material effect on the Company’s financial position, results of operations or
cash flows.





In December 2007, the FASB issued SFAS
141R,“Business
Combinations”(“SFAS 141R”), which replaces FASB SFAS
141,“Business
Combinations”.This Statement retains the
fundamental requirements in SFAS 141 that the acquisition method of accounting
be used for all business combinations and for an acquirer to be identified for
each business combination. SFAS 141R defines the acquirer as the entity that
obtains control of one or more businesses in the business combination and
establishes the acquisition date as the date that the acquirer achieves
control.  SFAS 141R will require an entity to record separately from
the business combination the direct costs, where previously these costs were
included in the total allocated cost of the acquisition.  SFAS 141R
will require an entity to recognize the assets acquired, liabilities assumed,
and any non-controlling interest in the acquired at the acquisition date, at
their fair values as of that date.  This compares to the cost
allocation method previously required by SFAS No. 141.  SFAS 141R will
require an entity to recognize as an asset or liability at fair value for
certain contingencies, either contractual or non-contractual, if certain
criteria are met.  Finally, SFAS 141R will require an entity to
recognize contingent consideration at the date of acquisition, based on the fair
value at that date.  This Statement will be effective for business
combinations completed on or after the first annual reporting period beginning
on or after December 15, 2008.  Early adoption of this standard is not
permitted and the standards are to be applied prospectively
only.  Upon adoption of this standard, there would be no impact to theCompany’s results of
operations and financial condition for acquisitions previously
completed.The adoption of SFAS No. 141R is not expected to
have a material effect on the Company’s financial position, results of
operations or cash flows.




F-14
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





In
January 2008, the SEC released SAB No. 110, which amends SAB No. 107 which
provided a simplified approach for estimating the expected term of a “plain
vanilla” option, which is required for application of the Black-Scholes option
pricing model (and other models) for valuing share options. At the time, the
Staff acknowledged that, for companies choosing not to rely on their own
historical option exercise data (i.e., because such data did not provide a
reasonable basis for estimating the term), information about exercise patterns
with respect to plain vanilla options granted by other companies might not be
available in the near term; accordingly, in SAB No. 107, the Staff permitted use
of a simplified approach for estimating the term of plain vanilla options
granted on or before December 31, 2007. The information concerning exercise
behavior that the Staff contemplated would be available by such date has not
materialized for many companies. Thus, in SAB No. 110, the Staff continues to
allow use of the simplified rule for estimating the expected term of plain
vanilla options until such time as the relevant data becomes widely available.
The Company does not expect its adoption of SAB No. 110 to have a material
impact on its financial position, results of operations or cash
flows.





In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative
Instruments and Hedging Activities—An Amendment of FASB Statement
No. 133.” (“SFAS161”).SFAS161 establishes the
disclosure requirements for derivative instruments and for hedging activities
with the intent to provide financial statement users with an enhanced
understanding of the entity’s use of derivative instruments, the accounting of
derivative instruments and related hedged items under Statement 133 and its
related interpretations, and the effects of these instruments on the entity’s
financial position, financial performance, and cash flows. This statement
is effective for financial statements issued for fiscal years beginning after
November 15, 2008. The Company does not expect its adoption of SFAS 161 to
have a material impact on its financial position, results of operations or cash
flows.





In April
2008, the FASB issued FASB Staff Position (“FSP”) SFAS No. 142-3, “Determination of the Useful Life of
Intangible Assets”. This FSP amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life
of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible
Assets”(“SFAS 142”). The intent of this FSP is to improve the
consistency between the useful life of a recognized intangible asset under
SFAS 142 and the period of expected cash flows used to measure the fair
value of the asset under SFAS 141R, and other GAAP. This FSP is effective for
financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. Early adoption is
prohibited. The Company is currently evaluating the impact of SFAS FSP 142-3,
but does not expect the adoption of this pronouncement will have a material
impact on its financial position, results of operations or cash
flows.




F-15
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles” (“SFAS 162”).  SFAS 162 identifies the
sources of accounting principles and the framework for selecting principles to
be used in the preparation of financial statements of nongovernmental entities
that are presented in conformity with generally accepted accounting principles
in the United States.  This statement is effective 60 days following the
SEC’s approval of the Public Company Accounting Oversight Board’s amendments to
AU section 411, The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles.  The Company is currently evaluating
the impact of SFAS 162, but does not expect the adoption of this pronouncement
will have a material impact on its financial position, results of operations or
cash flows.





In May
2008, the FASB issued FSP Accounting Principles Board (“APB”) 14-1 “Accounting for Convertible Debt
instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)” (“FSP APB
14-1”). FSP APB 14-1 requires the issuer of certain convertible debt
instruments that may be settled in cash (or other assets) on conversion to
separately account for the liability (debt) and equity (conversion option)
components of the instrument in a manner that reflects the issuer’s
non-convertible debt borrowing rate. FSP APB 14-1 is effective for fiscal years
beginning after December 15, 2008 on a retroactive basis. The Company does not
believe the adoption of FSP APB 14-1 will have a significant effect on its
financial position, results of operations or cash flows.





In
October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a
Financial Asset When the Market For That Asset Is Not Active” (“FSP FAS157-3”), with an immediate effective
date, including prior periods for which financial statements have not been
issued.FSPFAS157-3 amends FAS 157 to clarify the application of fair value in
inactive markets and allows for the use of management’s internal assumptions
about future cash flows with appropriately risk-adjusted discount rates when
relevant observable market data does not exist.  The objective of FAS 157
has not changed and continues to be the determination of the price that would be
received in an orderly transaction that is not a forced liquidation or
distressed sale at the measurement date.  The adoption ofFSPFAS157-3
is not expected to have a material effect on the Company’s financial position,
results of operations or cash flows.





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




F-16
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007




Reclassifications





Certain
amounts in the year 2007 financial statements have been reclassified to conform
to the year 2008 presentation.  The results of these reclassifications
did not materially affect financial position, results of operations or cash
flows.





Note 3 Going
Concern





As
reflected in the accompanying financial statements, the Company has a net loss
of $1,003,376 and net cash used in operations of $429,901 for the year ended
December 31, 2008; and a working capital deficit of $329,323, an accumulated
deficit of $2,370,320 and stockholders’ deficit of $316,459 at December 31,
2008.





The
ability of the Company to continue as a going concern is dependent on
Management's plans, which include the raising of capital through debt and/or
equity markets.  The Company will require additional funding during
the next twelve months to finance the growth of its current and expected
operations and achieve strategic objectives. Additionally, the Company will need
to continually generate revenues through its current business operations in
order to generate enough cash flow to fund operations through
2009.  The Company is also dependent on maintaining their positive
approval status with the Federal Reserve.  If the Company were to lose
this approval, their ability to provide services would be affected
negatively.





The
Company believes its current available cash, along with anticipated revenues,
may be insufficient to meet its cash needs for the near future.  There
can be no assurance that financing will be available in amounts or terms
acceptable to the Company, if at all.





The
accompanying financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business.  These financial statements do not
include any adjustments relating to the recovery of the recorded assets or the
classification of the liabilities that might be necessary should the Company be
unable to continue as a going concern.





Note 4 Loans Payable and
Capital Stock Subscribed





(A) Loans
Payable – related parties





During
the year ended December 31, 2007, the Company received working capital advances
from certain of its officers aggregating $19,059.  These loans were
non-interest bearing, unsecured and due on demand.  During the year
ended December 31, 2007, the Company repaid $119,214 in loans to these
officers.




F-17
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





During
the year ended December 31, 2008, Company received working capital advances from
certain of its officers aggregating $17,317. During the year ended December 31,
2008 the Company repaid $22,000 in loans to these officers.





(B) Loans
Payable – other





During
the year ended December 31, 2007, the Company repaid $2,500 to a third
party.





During
the year ended December 31, 2008, the Company received working capital advances
from a third party aggregating $1,300.  These loans were non-interest
bearing, unsecured and due on demand.  During the year ended December
31, 2008, the Company repaid $335 in loans to a third party.





(C) Capital
Stock Subscribed and Related Stock Issuance





In
connection with the March 14, 2008 Merger, the Company had agreed to sell
4,000,000 units of common stock at $0.50/unit for $2,000,000 to third
parties.  Each unit consists of one share of common stock and one
warrant.  The Company will issue 2,000,000 warrants exercisable at
$2/share and 2,000,000 warrants exercisable at $4/share.  The warrants
expire two years from the grant date. At December 31, 2007, the Company had
received $1,200,000, and during the year ended December 31, 2008, the Company
received an additional $400,000 for aggregate consideration of
$1,600,000.





On July
24, 2008, under the terms of the Merger, the Company issued 4,000,000 shares of
common stock in exchange for $2,000,000, which included a subscription
receivable of $400,000.  In addition, the previously recorded stock
subscription liability, of $1,200,000 received during 2007, was reclassified to
equity, as the stock was issued. On December 31, 2008, the Company deemed the
subscription receivable to be uncollectible and recognized a provision for
uncollectible subscription receivable of $400,000.  The Company
reflects this provision as a component of general and administrative
expense.









Note 5 Commitments and
Contingencies





(A)
Litigations, claims and assessments





From time
to time, the Company may become involved in various lawsuits and legal
proceedings, which arise in the ordinary course of business. However, litigation
is subject to inherent uncertainties, and an adverse result in these or other
matters may arise from time to time that may harm its business. The Company is
currently not aware of any such legal proceedings or claims, other than
disclosed below; that they believe will have, individually or in the aggregate,
a material adverse affect on its business, financial condition or operating
results.




F-18
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





During
2005, a lawsuit against the Company was filed in the State of California. The
plaintiffs claim the Company is using the technology created by the plaintiff
company. The Company is defending these claims based on its position that the
technology is different and the parties entered into a settlement agreement
regarding the investment when the relationship with the plaintiffs had
ended.  On January 13, 2009, all parties involved in the litigation
reached a conditional settlement agreement. The conditional settlement agreement
is expected to be finalized by April 16, 2009, if and when final, would settle
the case without any further liability to the Company and would be settled
directly with the Company’s Chief Executive Officer. No assurances can be
provided that the settlement will be finalized. The matter is scheduled for
trial in May, 2009.





At
December 31, 2008, it was not possible to provide an assessment as to the
likelihood of an unfavorable outcome; therefore, no estimate of the range of
potential loss is possible.





(B)
Accrued Rent





Effective
May 1, 2007, the Company executed a repayment plan for $104,969 in rent payments
that have been in default.  The Company agreed to repay the
outstanding balance within twenty-four months plus 9% interest for total
repayment of $115,092 ($4,796/month).  The Company has $18,784 of
scheduled repayments remaining during 2009.  During 2008, the Company
repaid $53,265 of the accrued rent.





(C)
Operating Lease





The
Company leases its corporate office under a non-cancelable rental agreement from
May 2005 through December 2009.  Monthly payments at the inception of
the lease terms were $ 8,576 and increase 4% annually.





At the
inception of the lease, the Company’s CEO paid $12,864 as a security
deposit.  This payment was included as a component of the CEO’s loan
account and was repaid to the CEO during 2007.





Total
rent expense amounted to approximately $114,449 and $111,617 for the years ended
December 31, 2008 and 2007, respectively.





(D)
Employment Agreement





On
January 1, 2007, the Company executed a three-year employment agreement with its
Chief Executive Officer.  Compensation is $240,000 per
year.  At December 31, 2008, the company had accrued compensation of
$63,993 to the Chief Executive Officer.





F-19
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





Note 6 Income
Taxes





SFAS No.
109 requires the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the financial statements and the tax
basis of assets and liabilities, and for the expected future tax benefit to be
derived from tax losses and tax credit carryforwards.  SFAS No. 109
additionally requires the establishment of a valuation allowance to reflect the
likelihood of realization of deferred tax assets.





The
Company has a net operating loss carryforward for tax purposes totaling
approximately $1,716,000 at December 31, 2008 expiring through the year
2028.  Internal Revenue Code Section 382 places a limitation on the
amount of taxable income that can be offset by carryforwards after a change in
control (generally greater than a 50% change in ownership).  Temporary
differences, which give rise to a net deferred tax asset, are as
follows:





Significant
deferred tax assets at December 31, 2008 and 2007 are approximately as
follows:





2008
                
                
                2007Gross
      deferred tax assets:Accrued
      salaries
                
                $
                (98,000
                )
                
                $
                -Net
      operating loss carryforwards
                
                
                (640,000
                )
                
                
                (499,000
                )Total
      deferred tax assets
                
                
                (738,000
                )
                
                
                (499,000
                )Less:
      valuation allowance
                
                
                738,000
                
                
                
                499,000Deferred
      tax asset – net
                
                $
                -
                
                
                $
                -





The
valuation allowance at December 31, 2007 was approximately
$499,000.  The net change in valuation allowance during the year ended
December 31, 2008 was an increase of approximately $239,000.  In
assessing the realizability of deferred tax assets, management considers whether
it is more likely than not that some portion or all of the deferred income tax
assets will be realized.  The ultimate realization of deferred income
tax assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become
deductible.  Management considers the scheduled reversal of deferred
income tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment. Based on consideration of these items,
management has determined that enough uncertainty exists relative to the
realization of the deferred income tax asset balances to warrant the application
of a full valuation allowance as of December 31, 2008.




F-20
 MyECheck,
Inc. And Subsidiary
 Notes
to Consolidated Financial Statements
 December 31, 2008 and
2007





The
actual tax benefit differs from the expected tax benefit for the years
ended    December 31, 2008 and 2007 (computed by applying
the U.S. Federal corporate tax rate of 34% to income before taxes and 8.84% for
California state taxes, a blended rate of 39.83%) as follows:





2008
                
                
                2007Expected
      tax expense (benefit) – Federal
                
                $
                (311,000
                )
                
                $
                (232,000
                )Expected
      tax expense (benefit) - State
                
                
                (88,000
                )
                
                
                (28,000
                )Provision
      for uncollectible subscription receivable
                
                
                159,000
                
                
                
                -Meals
      and entertainment
                
                
                1,000
                
                
                
                1,000Change
      in valuation allowance
                
                
                239,000
                
                
                
                259,000Actual
      tax expense (benefit)
                
                $
                -
                
                
                $
                -





F-21