SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

__________________________________

FORM 10-KSB



XAnnual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended October 31, 2003

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______________ to ___________________.



Commission File No. 333-74928


MONEYFLOW SYSTEMS INTERNATIONAL INC.

(Name of Small Business Issuer in Its Charter)

______________________________________

Nevada52-2325923(State or other jurisdiction of incorporation)(IRS Employer Identification No.)




Suite N, 7003 - Fifth Street SE
Calgary, AlbertaT2H 2G2(Address of Principal Executive Offices)(Zip Code)


Issuer's telephone number, including area code:  (403) 319-0236

_______________________________

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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.

X   Yes          No

Check if disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in

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definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.   X



The issuer's total net sales for the fiscal year ended October 31, 2003 were $1,291,801.



As of January 26, 2004, there were 18,037,000 outstanding shares of the issuer's common stock, par value $0.001 per share ("Common Stock"), which is the only class of common stock of the issuer.  As of January 26, 2004, the aggregate market value of the shares of Common Stock held by non-affiliates of the issuer, computed based on the closing bid price of the Common Stock as quoted on the OTC Bulletin Board, was approximately $915,000.



Documents Incorporated by Reference

None.

Transitional Small Business Disclosure Format:       Yes     X   No

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|TABLE OF CONTENTS                          
|-------------------------------------------
|                                           
|                                           
|PART I                                     
|                                           
|Item 1.                                    
|Item 2.                                    
|Item 3.                                    
|Item 4.                                    
|                                           
|PART II                                    
|Item 5.                                    
|Item 6.                                    
|Item 7.                                    
|Item 8.                                    
|                                           
|PART III                                   
|                                           
|Item 9.                                    
|Item 10.                                   
|Item 11.                                   
|                                           
|Item 12.                                   
|Item 13.                                   
|Item 14.                                   
|                                           
|CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
|                                           
|Report of Independent Auditors             



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PART I

ITEM 1.     BUSINESS









Unless the context otherwise requires, "Moneyflow", "Company", "we", "us" and "our" refer to Moneyflow Systems International Inc., and its subsidiaries combined.

Overview

Moneyflow Systems International Inc. ("Moneyflow") was incorporated on April 25, 2001 under the laws of the State of Nevada.  Security Bancorp Inc. ("Security Bancorp"), our wholly owned subsidiary, was organized on August 3, 1992 in Alberta, Canada and was inactive until January 5, 1999 when it changed its name to Security Bancorp Inc. and began operations under the name Ca$h StationTM.  In July, 2001, Security Bancorp and Moneyflow approved a share exchange agreement whereby Moneyflow issued 14,000,000 shares of its common stock in exchange for 100% of the issued and outstanding shares of Security Bancorp.  In connection with this agreement, Security Bancorp became a wholly owned subsidiary of Moneyflow.  On April 1, 2002, Moneyflow formed a wholly owned Canadian subsidiary, Intercash POS Systems Ltd., ("Intercash") through which Moneyflow conducts its Point-of-Sale business.  Point-of-Sale terminals allow customers to use their debit and credit cards to make purchases and obtain cash on the premises of businesses.  Security Bancorp and Intercash currently have a website located at http://www.cashstation.net.  Security Bancorp and Intercash operate their ATMs and Point-of-Sale terminals under the trademark "Ca$h StationTM."

Since May, 1999, Security Bancorp has been successful in supplying, installing, maintaining and managing ATM machines which it places on the premises of property owners and businesses for the purpose and convenience of dispensing cash and other services.  As of January 26, 2004, Security Bancorp and Intercash operate 237 ATMs and 236 Point-of-Sale terminals in five Canadian Provinces and utilize 5 independent distributors.  Security Bancorp is a member of the Automated Teller Machine Industry Association (ATMIA) which serves the industry in Canada and the United States.  Security Bancorp and Intercash have placed ATMs and Point-of-Sale terminals in convenience stores, grocery stores, service stations, hotels, motels, hospitals, night clubs, casinos, restaurants, truck stores, airports and many other locations.  Security Bancorp's ATMs accept VISA, Mastercard, Interac, Maestro, Cirrus, Circuit and American Express (Canada).

The Financial Transaction Industry

Security Bancorp has connection services and software licensing agreements with DataWest Ltd., a direct subscriber to Interac Association, operator of a proprietary electronic financial transaction exchange.  Security Bancorp's agreements with DataWest give it access to Interac.  Through access to Interac, Security Bancorp's customers can (for a fee) use their ATM cards, debit cards and credit cards at ATMs and Point-of-Sale machines not owned by their bank or credit card company.

Security Bancorp's customers pay a fee, or surcharge, for the use of its ATMs and Point-of-Sale machines.  Part of the fee generated by these transactions is paid to Security Bancorp and part of the fee is paid to the owner of the ATM.  DataWest charges a per transaction fee to Security Bancorp for each ATM and Point-of-Sale transaction.  DataWest also charges Security Bancorp a one-time fee for each ATM and Point-of-Sale terminal connected to DataWest's switch network.  Interac Association also collects a nominal fee per transaction from DataWest and its other members.

In addition, the issuer of the ATM card pays an "interchange" fee to Security Bancorp through DataWest for each transaction processed.  Interac Association sets a default level for the interchange fee.  DataWest forwards the interchange fee for Security Bancorp's transactions, net of fees owed to DataWest, to Security Bancorp.  Therefore, Security Bancorp's transaction fee revenues are actually generated from two sources  surcharges paid by the ATM users and interchange fees generated by issuers.

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The Benefits of Private ATMs and Point-of-Sale Terminals

As a result of laws enacted to deregulate the banking industry and provide competition, private ownership of ATM and Point-of-Sale terminals can be a profitable business.  The benefits to the owner of the ATM and the business where the ATM is located are:

- The owner of the ATM and Point-of-Sale terminal and the location operator each collect a portion of the transaction fees.
- The business owner increases traffic and spending in his place of business, which contributes to overall revenues, increased customer satisfaction and loyalty.
- Technology is rapidly developing which will allow the ATM and Point-of-Sale terminal to be part of business loyalty and other advertising programs, contributing further to revenue and profitability of both parties.  Loyalty advertising is rapidly becoming the preferred way for businesses to spend their advertising dollars.

The Current Stage of Corporate Development

Security Bancorp and Intercash sell, service and operate ATMs and Point-of-Sale machines in Canada.  Each time an ATM card, debit card or credit card is used in one of our machines, a fee is charged.  That fee is split between the owner of the machine, the owner of the location where the machine is located, and us.  Transaction fees account for approximately half of Moneyflow's revenue.  Sales of ATMs and Point-of-Sale terminals generate most of the other half of Moneyflow's revenue.

Security Bancorp enters into a transaction processing agreement with each client who acquires an ATM and each business owner who allows Security Bancorp to place an ATM at its business that is owned by Security Bancorp.  The processing agreement typically has an initial term of 5 years and grants to the client a non-exclusive, non-transferable, revocable license to use the software needed to operate the ATM.  The currency used to supply the machine is provided by the machine owner who is responsible for maintenance and supplies in the machine.  Machines owned by Security Bancorp are supplied by the owner of the business where the ATM is located.  Security Bancorp credits the client's bank account for the amount of the funds withdrawn by users of the ATM.

We have a sales force of independent agents in Canada who scout for locations where an ATM or Point-of-Sale machine might be a service that the business would like to provide its customers.  If the sales agent is successful in obtaining a location for the placement of an ATM or Point-of-Sale machine, the agent is paid a commission.

Typically, retail, food, hospitality and other businesses are interested in having an ATM or Point-of-Sale machine on their premises for the convenience of their customers and to encourage spending on the premises.

As of January 26, 2004, Security Bancorp and Intercash had placed and hold under management 237 ATMs and 236 Point-of-Sale terminals across Canada, primarily in the provinces of Ontario, Alberta, Saskatchewan and Manitoba.  We are also building a presence in British Columbia and certain other targeted Canadian provinces.

During 2002 and 2003, Moneyflow used five suppliers for the ATMs and Point-of-Sale terminals it sells  Hypercom Corporation, Schlumberger Sema, Tranax Technologies, Greenlink Technologies, and Triton Systems, Inc.  Two suppliers, Tranax Technologies and Greenlink Technologies, accounted for nearly all of Moneyflow's product purchases in fiscal year 2003.  Management believes that Moneyflow will be able to continue its relationship with these suppliers.  However, if Moneyflow is not able to continue its relationship with one or more of these suppliers, management believes that financial transaction hardware and software is readily available from alternate suppliers.

2

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All of Moneyflow's ATM and Point-of-Sale transactions are currently processed by DataWest.  However, Interac Association continues to add new members and management believes enough competition exists among Interac members to allow Moneyflow to find an alternative provider to process its transactions if its contracts with DataWest are terminated or not renewed.

As of January 26, 2004, we had

10
independent distributors.  Our typical independent distributor agreement has an initial term of two years.  The distributor gets paid a portion of the sales price of each ATM or Point-of-Sale machine sold and also earns residual income from transaction fees generated by those machines.

Security Bancorp owns some of the ATMs that it manages.  However, Security Bancorp holds these ATMs as inventory and intends to sell them to appropriate buyers in the ordinary course of business.  The business reason for placing an ATM that has not yet been sold is to secure a location Moneyflow thinks is desirable before it gets taken by a competitor.  In addition, when the Company places (owns) the ATM it receives a larger portion of the transaction revenue than if the ATM were sold to (owned by) the location.

In July, 2001, Security Bancorp entered into a distribution agreement with Hypercom Corporation, a leading manufacturer of financial transaction hardware and software.  The first of these Point-of-Sale terminals was deployed in late September, 2001.  Security Bancorp's agreement with Hypercom had a 12-month term, beginning August 31, 2001.  In February of 2003, Rycom, Inc., the official Canadian representative of Hypercom Corporation, assumed Hypercom's contract with Security Bancorp and extended the contract through February 7, 2004.  Moneyflow will seek to renew this contract upon its expiration and management believes that the contract will be renewed on substantially similar terms as the expiring agreement.

In November, 2000, Security Bancorp entered into a three year contract for Point-of-Sale Connection Services and Software Licensing agreements with DataWest Ltd., enabling Security Bancorp to provide electronic transaction solutions for the Point-of-Sale and Interac Direct Payment (IDP) market.  This contract automatically continues and remains in force for two (2) successive terms of two (2) years each, unless terminated by either party.  In January 2002, Moneyflow entered into a new Connection Services Agreement with DataWest Ltd. to facilitate ATM transactions.  This agreement has an initial term of three years and is renewable for successive two year terms.  Security Bancorp pays DataWest a fee for each transaction processed and also pays a one-time fee for each ATM and Point-of-Sale terminal connected to DataWest's transaction processing network.

These agreements enable Security Bancorp to acquire, sell, service and manage ATM and Point-of-Sale terminals and related financial transactions.

New Product

In early 2003, Moneyflow introduced a new product, the CS Surveillance System ("CS Surveillance").  CS Surveillance is a remote access digital recording system.  The images recorded may be viewed remotely over the Internet.  Moneyflow expects that customers for this product would include retail and commercial businesses, homes, industrial facilities, government facilities and educational facilities.  Moneyflow assembles, tests and sells the CS Surveillance product to its
customers. The CS Surveillance product is also leased to customers through third
parties.  Management is considering whether to seek intellectual property
protection for this new product.

Trademarks and Licenses

Our registered Canadian trademarks are:  "CA$H STATION" and "CASH FOR YOUR CUSTOMERS WHEN AND WHERE THEY NEED IT", both of which are owned by our subsidiary, Security Bancorp.  We believe that these trademarks are known and recognized within our market and are valuable to our business.  We intend to vigorously enforce all violations of our trademarks as we believe the goodwill associated with them is important to the development of our business.  Currently, Security Bancorp licenses its "CA$H STATION"trademark to Intercash for its use in connection with its Point-of-

3

Sale terminal operations.  All trademarks and trade names used in this Form 10-KSB are the property of their respective owners.

Growth Strategy and Market Niche

Moneyflow's plan is to capture immediate growth in the electronic financial transactions market as follows:

Short Term Strategy

- The immediate pursuit of additional sales agents, promotion, sale and installation of itsCS Surveillance Systems.
- The purchase, sale and placement of additional ATMs and Point-of-Sale terminals over the next 18 months.
- To generate adequate working capital from operations and/or financing for growth in sales and leasing of ATMs and Point-of-Sale terminals.



Long Term Strategy

- Acquisition of existing ATM and Point-of-Sale networks owned by others.
- To expand our independent distribution sales force to provide uniform geographic coverage in target markets in Canada.
- To source potential merger/amalgamation candidates, identify and participate in joint ventures and strategic alliances with industry partners.
- To engage in new product development through technology acquisition, strategic alliances and joint venture opportunities.
- To identify and locate potential opportunities to expand our operations.



The ATM & Point-of-Sale Markets

In 1996 and 1997, deregulation of the banking system in Canada and the United States provided an opportunity for private investors and businesses to own, place, operate and collect transaction fees from customers for providing the convenience of a bank machine on their premises.  Prior to this deregulation, only financial institutions could access the Interac network, which allows consumers to withdraw cash at an ATM that is not owned by their financial institution.

In Canada, technology became available in 1997 to enable the private ownership of ATMs and they are increasingly being purchased by investors and businesses.  Private ATMs are now becoming common in various types of locations, including convenience stores, bars, hotels, grocery stores, nightclubs, service stations and other locations.  These systems are generally placed where there is deemed to be sufficient traffic to support the economics of the investment of purchasing and operating the ATM.  The current cost of a privately owned ATM model is approximately CDN $10,000.  The lower cost of the new ATMs designed for the private ownership market is due in part to the systems requiring a lower level of security because they are designed to be used in secure locations and during business hours. In addition, technology advances and greater volume of sales helps to make prices lower.

Charges for use of an ATM vary.  Generally, fees range from $1 to $2 and in some cases a 10% charge is levied, based upon the amount of money withdrawn.  The average amount of money withdrawn per transaction ranges from $50 to $74.



Competition

Banks and other financial institutions typically maintain ATMs at their own branch locations but

4

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can service any location.  Security Bancorp and its primary competitors described below place ATMs solely in private businesses such as grocery stores, convenience stores and dry cleaners.  Although Security Bancorp competes directly with banks and other financial institutions in placing its ATMs, its management does not view banks and other financial institutions as its primary competition as historically they have not selected prime private business locations.  Security Bancorp and its primary competitors compete by locating the most attractive locations for their machines based on expected transaction volume and making arrangements with the owners of those properties to place ATMs there before a competitor can take that location.  Location is the most important factor in the success of an ATM because ATMs depend on consumer traffic to generate large volumes of ATM transactions.  If Security Bancorp cannot secure prime locations for its ATMs, it will likely lose those locations to its competitors, which negatively impacts Security Bancorp's growth.  Management believes that only a finite number of prime locations exist for the placement of its machines and once they are gone, Security Bancorp must settle for less profitable locations.  Security Bancorp's competitors offer very similar services to those of Security Bancorp.  Security Bancorp does not offer discounted fees in comparison to its competitors and does not offer a distinctive product or service.



We face competition for our new product, the CS Surveillance System.  In
Canada, our competitors include ADT, Honeywell, GE and smaller companies which distribute
surveillance products. The products offered by these competitors are similar to
the CS Surveillance System, although management believes that the CS Surveillance
System offers a level of quality and available features equivalent to the other
products on the market as of the date of this filing.  Management also
believes that Moneyflow's history of controlling the cost of the CS Surveillance
System is a key factor in the product being competitive with similar products
offered by our competitors.

Known Canadian Competitors

There are approximately eleven significant competitors in the Canadian ATM market.  Several currently, or are expected to in the near future, participate in the Point-of-Sale market as well.  It is not yet possible to determine, due to the lack of published data, how many Point-of-Sale terminals each company presently has deployed.  The following list represents the competitors of whom the management of Moneyflow is aware:

Direct Cash is the current Canadian market leader in the private ATM business with approximately 1500 machines in operation.  Its distribution covers major centers in Canada and includes sales and service of Triton, NCR, and Tranax equipment.  It has acquired its own "switch," allowing it to process its own transactions directly with Interac.

Meta-4, a Montreal-based company, is reported to have over 1,000 ATMs deployed.  Its business originated in the security field and has grown to encompass financial transaction hardware including ATMs.

Laser Cash is an Ontario-based organization with in excess of 650 ATMs distributed, primarily in Eastern Canada.

Frisco Bay is a well established security system and ATM supply and maintenance company.  We estimate that their installed base of ATM systems exceeds 1000 units.

Cash-n-Go, based in Edmonton Alberta, has over 1000 ATMs in operation, primarily from the manufacturer Triton.  It recently acquired a micro-switch to facilitate partial processing of its transactions.

Canadian ABM is a Toronto-based outfit selling NCR equipment.  It has approximately 150 systems deployed.

Ready Cash, a division of Canadian Imperial Bank of Commerce, is active across Canada.  The number of ATMs it has in service is unknown.

Cash-line, headquartered in Victoria, B.C., sells Triton ATMs.  It has in excess of 300 systems in service.

Express Cash, a Vancouver based operation with approximately 250 ATMs deployed, is located primarily in Western Canada.



5

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Haliburton and White, a Montreal-based national company, is in the business of currency counting, coin and cash dispensing.  It is thought to have approximately 500 ATMs, with approximately 50% of placements in the province of Quebec.

Vencash, headquartered in Calgary, has approximately 300 ATMs under management and recently acquired an interest in POSTRAC, a Canadian Point-of-Sale company.

Employees

We currently have eleven full-time employees and one part-time employee.  We have also engaged consultants to assist us in our operations.  As of January 26, 2004, we had


10independent sales agents assisting us.

Government Regulations

As of the date of this filing, there are no pervasive regulations of our business.

ITEM 2.

PROPERTIES



Moneyflow's principal offices are located at Suite N, 7003  Fifth Street SE, Calgary, Alberta T2H 2G2, telephone number (403) 319-0236.  These offices consist of 3,746 square feet on a lease that runs through April 30, 2007.  The monthly rental fee is CDN $2,029 (approximately US $1,292) plus taxes and operating costs.  The Company's management believes that all facilities occupied by the Company are adequate for present requirements, and that the Company's current equipment is in good condition and is suitable for the operations involved.

ITEM 3.

LEGAL PROCEEDINGS

We are not currently involved in any legal proceedings.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of shareholders of the Company during the fiscal year ended October 31, 2003.

PART II

ITEM 5.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Moneyflow had 18,037,000 shares of common stock outstanding as of January 26, 2004.

Number of Shareholders

The number of beneficial shareholders of record of the Common Stock of the Company as of the close of business on January 26, 2004 was approximately 52.

Dividend Policy

To date, the Company has no cash dividends on its Common Stock, and does not expect to pay cash dividends in the near term.  The Company intends to retain future earnings, if any, to provide funds for operation and growth of its business.

Our common stock is currently traded on the National Association of Securities Dealers Automated Quotation System Over the Counter Bulletin Board ("OTCBB") under the symbol "MNYF.OB."  There is limited trading activity in our securities, and there can be no assurance a regular trading market for our common stock will be sustained. We began trading on the OTCBB on October 11, 2002. The following table sets forth, for the periods indicated, the bid price range of our common stock.

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PeriodAverage LowAverage HighFourth Quarter 2003$0.06$0.25Third Quarter 2003$0.10$0.36Second Quarter 2003$0.16$1.01First Quarter 2003$0.10$1.33Fourth Quarter 2002$0.25$0.25


Such market quotations reflect the high bid and low prices as reflected by the OTCBB or by prices, without retail mark-up, markdown or commissions and may not necessarily represent actual transactions.

Disclosure of Equity Compensation Plans

The Company maintains the 2002 Stock Option Plan (the "Option Plan"), pursuant to which it may grant equity awards to eligible persons.  The Option Plan allows a committee of the Board of Directors to grant options to purchase up to 180,000 shares per individual per year to employees, officers, directors, consultants and advisors of the Company.  As of January 26, 2004, no options had been granted under the Option Plan.

|Plan Category                                          |  | Number of securities to be issued upon exercise of outstanding options, warrants and rights (#) |  | Weighted-average exercise price of outstanding options, warrants and rights ($) |  | Number of securities remaining available for future issuance under equity compensation plans
|------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------
|Equity compensation plans approved by shareholders     |  | N/A                                                                                             |  | N/A                                                                             |  | 1,800,000                                                                                   
|Equity compensation plans not approved by shareholders |  | N/A                                                                                             |  | N/A                                                                             |  | N/A                                                                                         
|Total                                                  |  | N/A                                                                                             |  | N/A                                                                             |  | N/A                                                                                         

ITEM 6.







MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Through its operating subsidiaries, Security Bancorp, Intercash and Moneyflow is in the business of supplying, installing, maintaining and managing ATMs, Point-of-Sale terminals and other electronic funds transfer devices and providing transaction processing services for these devices.  The machines are placed on the premises of property owners and businesses for the purpose and convenience of dispensing cash and other services to the public. Moneyflow currently operates 237 ATM terminals and 236 Point-of-Sale terminals in five Canadian provinces and employs

10independent distributors. Its terminals accept Visa, Mastercard, Interac, Maestro, Cirrus, Circuit and American Express (Canada). Presently, the Company only has locations in Canada.  In 2003 the Company developed, tested and began installing its "Remote Access Digital Surveillance Systems."  The testing phase has been completed and management expects to install a number of these systems in a variety of locations in the coming year.

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Critical Accounting Policies



Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. In consultation with our Board of Directors, we have identified several accounting principles that we believe are key to an understanding of our financial statements. These important accounting policies require management's most difficult, subjective judgments.



Principles of Consolidation



The consolidated financial statements include the accounts of Moneyflow Systems International, Inc. and its wholly owned subsidiaries, Security Bancorp, Inc. and InterCash POS Systems, Ltd.



All material inter-company accounts and transactions have been eliminated.



Revenue Recognition Policy



Revenue from the sale of Automated Teller Machines and Point of Sale Terminals is recognized when the earning process is complete and the risk and rewards of ownership have transferred to the customer, which is generally considered to have occurred upon the delivery of the machine to our customer and the acceptance and activation of the machine by the customer.



Revenue from transaction and service fees are earned daily and are electronically transferred to the Company from the processors.



Accounts and Contracts Receivable



Accounts and contracts receivable are reported at the customers' outstanding balances less any allowance for doubtful accounts. Interest is not accrued on overdue accounts receivable.



Allowance for Doubtful Accounts



The allowance for doubtful accounts on accounts and contracts receivable is charged to income in amounts sufficient to maintain the allowance for uncollectible accounts at a level management believes is adequate to cover any probable losses. Management determines the adequacy of the allowance based on historical write-off percentages and information collected from individual customers. Accounts receivable are charged off against the allowance when collectibility is determined to be permanently impaired (bankruptcy, lack of contact, account balance over one year old, etc.).



Inventories



Inventories are valued at the lower of cost or market. Cost is determined as follows:



Automated Teller Machines and Point of Sale Terminals held for resale  actual cost for the machine purchased.



Automated Teller Machines and Point of Sale Terminals  placements  actual cost for the machine purchased less accumulated depreciation. Depreciation is computed on the straight line basis over 10 years.

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Surveillance equipment, parts, supplies and counterfeit detectors  first-in, first-out method.



Property and Equipment



Property and equipment are stated at cost. Major renewals and improvements are charged to the asset accounts while replacements, maintenance, and repairs, which do not improve or extend the lives of the respective assets, are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts.  Gains or losses from retirements or sales are credited or charged to income.



Moneyflow depreciates property and equipment as follows:



Financial statement reporting  straight line method as follows:



Furniture and fixtures

10 years

Computer equipment

5 years

Telephone equipment

5 years

Surveillance equipment

5 years



Accounting Estimates



Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were used.





Income Taxes



Provisions for income taxes are based on taxes payable or refundable for the current year and deferred taxes on temporary differences between the amount of taxable income and pretax financial income and between the tax bases of assets and liabilities and their reported amounts in the financial statements. Deferred tax assets and liabilities are included in the financial statements at currently enacted income tax rates applicable to the period in which the deferred tax assets and liabilities are expected to be realized or settled as prescribed in FASB Statement No. 109, Accounting for Income Taxes. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.



Foreign Currency Translation



The financial statements of our Canadian subsidiaries are measured using the Canadian dollar as the functional currency. Assets, liabilities and equity accounts of the companies are translated at exchange rates as of the balance sheet date or historical acquisition date, depending on the nature of the account. Revenues and expenses are translated at average rates of exchanges in effect during the year. The resulting cumulative translation adjustments have been recorded as a separate component of stockholders' equity. The financial statements are presented in United States of America dollars.



Shipping and Handling Costs



The Company's policy is to classify shipping and handling costs as part of cost of goods sold in the statement of operations.

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Selected Financial Information

Year Ended



10/31/03

10/31/02



Statement of Operations Data



Total revenue

$

1,291,801

$

963,671

Operating income (loss)

$

13,880

$

( 731,568)

Net income (loss) after tax

$

28,566

$

( 746,804)

Net income (loss) per share

$                0.00

$             ( 0.04)







Year Ended



10/31/03

10/31/02



Balance Sheet Data



Total assets

$

483,035

$

478,185

Total liabilities

$

116,050

$

188,086

Stockholders' equity

$

366,985

$

290,099





Results of Operations



Year ended October 31, 2003 compared to year ended October 31, 2002.



Revenues



Revenues increased 34% from $963,671 in the year ended October 31, 2002 to $1,291,801 in the year ended October 31, 2003. The increase in revenues is summarized as follows:



Sales of Machines and Terminals.Sales of machines and terminals increased 44% from $412,272 in the year ended October 31, 2002 to $597,294 in the year ended October 31, 2003.



CS Surveillance Systems.  Sales of the new surveillance product accounted for $59,670 of the $185,022 of sales increases, or 32% of the total increase in sales.  This product was not sold in fiscal year 2002.



Fee Income.  Fee income increased 26% from $532,506 in the year ended October 31, 2002 to $671,575 in the year ended October 31, 2003. The increase was due to an increase in the number of machines and terminals on long-term contracts and an increase in the number of transactions on those machines and terminals.  Management's focus is to strategically market its machines and terminals in order to capture prime locations. The Company's long-term marketing strategy is to generate fee income through placing machines and terminals as rapidly as possible.



Cost of Sales and Gross Profit



The cost of sales of $465,842 in the year ended October 31, 2003 increased from $392,050 for the year ended October 31, 2002. The gross profit percentage for the year ended October 31, 2003 was 22% compared to 5% for the year ended October 31, 2002. The increase in gross profit percentage was primarily due to an increase in sales prices for our products, an increase in sales of products with greater margins, and a reduction in the cost of machines purchased.

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Selling, General and Administration Expenses



Selling, general and administrative expenses increased 28% to $812,079 for the year ended October 31, 2003 from $636,522 for the year ended October 31, 2002. The increase in expenses resulted from increases in accounting, agent fees and payroll of $8,400, $19,800 and $68,669, respectively. Included in the increased expenses is approximately $22,000 which was attributable to additional marketing and payroll for the new surveillance product.  Professional fees of $146,000 for legal and accounting services were incurred to comply with SEC filing requirements.



Consulting Fees, Non-Cash



For the year ended October 31, 2002, the Company expensed the balance of its non-cash consulting fees in the amount of $666,667. The Company did not have any non-cash consulting fee expense in the year ended October 31, 2003.



Insurance Recovery



For the year ended October 31, 2003, the Company was able to recover $18,000 from an insurance carrier for cash that was stolen from ATM machines in prior years.



Interest Expense



Interest expense increased to $3,125 in the year ended October 31, 2003 from $72 in the year ended October 31, 2002. The increase in interest is a result of a capital lease entered into in November 2002 and an interest bearing loan received from a stockholder.



Net Income (Loss) Before Corporation Income Taxes (Benefit)



The Company had a net income before corporation income taxes of $28,566 for the year ended October 31, 2003 compared to a net loss of $733,391 for the year ended October 31, 2002. The decrease in net loss was primarily the result of:



a.

$666,667 of prepaid consulting fees being amortized for the year ended October 31, 2002

that were completely amortized in that year and therefore not present in the year ended October 31, 2003.



b.

Increase in net profit from operations due to the increase in revenues of $328,130.



Corporation Income Taxes (Benefit)



Corporation income tax for the year ended October 31, 2003 was $0 compared to a tax of $13,413 for the year ended October 31, 2002.  No income tax expense was due for the year ended October 31, 2003 due to the availability of net operating loss carryforwards.



Foreign Currencies



The key foreign currencies in which the Company effects transactions are the Canadian dollar and the United States dollar. For the year ended October 31, 2003, the average exchange rate was 1.44309 United States dollars to Canadian dollars. This is an 8% decrease from the year ended October 31, 2002 in which the average exchange rate was 1.57379 United States dollars to Canadian dollars.

11



Capital and Sources of Liquidity

Moneyflow currently has no material commitments for capital expenditures and has nominal fixed expenses such as an annual lease payment of approximately $15,000 to $20,000 per year.

Management of Moneyflow expects that cash and the cash flow from future operations will be sufficient to allow us to meet the expected growth in demand for our products and services.  However, we cannot be assured that our sales will meet our growth expectations.  Should this fail to occur, we may elect to (i) reduce the planned expansion of operations or (ii) pursue other financing alternatives such as an equity offering or borrowings.  Our planned growth and profitability could be delayed or diminished if the two options listed above are not implemented or financing is unavailable.

Net cash used by operating activities was $45,977 for the year ended October 31, 2003 compared to $15,599 used for the year ended October 31, 2002.  The $30,378 increase in cash used by operating activities was primarily due to the following:

October 31, 2003



Cash was provided by:



Net income plus depreciation and

provision for doubtful accounts

$

66,066

Decrease in inventories

21,720

Others

1,571



Total

$

89,357



Cash was used by:



Increase in accounts, contracts and other receivables

$

25,885

Increase in prepaid expenses and deposits

4,968

Reduction in accounts payable, accrued

expenses and deferred income

41,660

Payment of corporation taxes

62,821



Total

$

135,334



Net cash used by operating activities

$

45,977



October 31, 2002



Cash was provided by:



Decrease in accounts, contracts and other receivables

$

2,954

Increase in accounts payable, accrued

expenses and deferred income

80,885

Increase in corporation taxes

18,005



Total

$

101,844



12

---



Cash was used by:



Net loss less depreciation, provision for

doubtful accounts and non-cash

consulting fees

$

41,185

Increase in inventories

70,207

Increase in prepaid expenses and deposits

6,051



Total

$

117,443



Net cash used by operating activities

$

15,599



Net cash used by investing activities decreased to $15,229 for the year ended October 31, 2002 from $19,999 for the year ended October 31, 2001.  Cash used by investing activities for the year ended October 31, 2003 was for the acquisition of property and equipment.

Net cash provided by financing activities for the year ended October 31, 2003 was $10,910 as compared to cash used of $138 for the year ended October 31, 2002. The cash provided for the year ended October 31, 2003 was from the proceeds of $32,158 from an officer's note, net of $21,248 used to repay notes and capital leases payable.

In January 2003, Moneyflow executed a letter agreement with 1st SB Partners Ltd., located in New York, New York.  1st SB Partners Ltd.
was to provide financial consulting services to Moneyflow, to seek capital funding for Moneyflow on a best efforts basis.  In exchange for these services, Moneyflow
paid US $5,000, and was obligated to issue 750,000 shares of its common stock to 1st SB Partners Ltd. upon the receipt of the initial funds raised, along with a fee of 10% of capital raised.  After
payment of the $5,000 and prior to any fund raising or share issuance the parties mutually agreed to cancel the agreement with no further obligation on the part of either party.

As of October 31, 2003, Moneyflow had working capital of $330,657, consisting of current assets of $427,639 and current liabilities of $96,982.  Moneyflow had working capital of approximately $262,000 at October 31, 2002 consisting of current assets of approximately $446,000 and current liabilities of approximately $184,000.  Moneyflow believes that its working capital is sufficient to fund its present operations.

Concentration of Credit Risk

Moneyflow's financial instruments that are exposed to concentrations of credit risk consist of cash, which includes checking accounts placed with federally insured financial institutions. Such accounts may at times exceed federally insured limits.  Moneyflow has not experienced any losses on such accounts.

Impact of Inflation

Inflation has historically not had a material effect on Moneyflow's operations.

Cautionary Note Regarding Forward-looking Statements and Risk Factors

The Company's Form 10-KSB, any Form 10-QSB or any Form 8-K of the Company or any other written or oral statements made by or on behalf of the Company may contain forward-looking statements which reflect the Company's current views with respect to future events and financial performance. The words "believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," and similar expressions identify forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans,

13

strategies and objectives of management for future operations; any statements concerning proposed new products, services, developments or industry rankings; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

The Company wishes to caution investors that any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other factors include, but are not limited to the Risk Factors listed below (many of which have been discussed in prior SEC filings by the Company). Though the Company has attempted to list comprehensively these important factors, the Company wishes to caution investors that other factors could in the future prove to be important in affecting the Company's results of operations. New factors emerge from time to time and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Readers are further cautioned not to place undue reliance on such forward-looking statements as they speak only of the Company's views as of the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Risk Factors

You should consider the following discussion of risks as well as other information regarding our common stock.  The risks and uncertainties described below are not the only ones.  Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.  If any of the following risks actually occur, our business could be harmed.

Our ongoing reporting obligations as a public company may result in ongoing operating losses.

Operating an American public company involves substantial costs to comply with reporting obligations under federal securities laws which are continuing to increase as provisions of the Sarbanes Oxley Act of 2002 are implemented.  These reporting obligations have already increased our operating costs and adversely affected our profits.  We may not reach sufficient size to justify our public reporting status.  If we were forced to become a private company, then you may lose your ability to sell your shares or to sell them at a premium over what you paid for them.

The demand for our services may decline or we may lose operating locations, which would result in a decline of operations and a corresponding decline in profitability of our company.

If Moneyflow were to lose some or all its lucrative locations or if demand for the accessibility and convenience of its machines declines, Moneyflow's revenues may significantly decline.  Our sales could decrease in the event of significant or sustained price discounting in the industry, which would reduce our profitability.

If we have to comply with any new government regulations, or if old government regulations are reenacted, we may not be able to comply with them or we may have to spend large amounts of resources to meet these new regulations, which we may not have the resources to do, and which may result in a loss of revenue and reduced profitability.

In Canada, our services currently comply with or are exempt from regulation of the Canadian government and we are unaware of any proposed legislation that would change the current status.  In the event the regulations change or new laws or regulations are enacted, our financial resources could decrease due to costs involved in complying with any new regulation.  We are also interested in

14

expanding our operations into other countries and the initial costs of such an expansion while we comply with regulations in these new areas could result in a loss of profitability and a drain of our resources.

The deregulation of the ATM and Point-of-Sale industries in Canada created an opportunity for Moneyflow to enter these industries.  However, if the Canadian government reenacts regulation, Moneyflow could be prohibited from operating in Canada, which is currently the only country in which we do business.

We depend upon third parties to market and sell most of our products and services. Thus, a loss of a significant number of these independent third parties marketing or selling our systems would result in a loss of revenue and affect our ability to expand.

We rely significantly on independent sales agents to market and sell our ATMs and Point-of-Sale machines.  If these independent agents were to go to work for any of our competitors, it could adversely affect our future operations.  Several of our competitors are larger than we are and many have greater financial resources that allow them to offer more lucrative terms to our sales agents.  Our agreements with our sales agents are generally for an initial term of two years and can be canceled by the agents without significant financial consequence.  Furthermore, if we had to hire employees to replace our independent sales personnel, our operating expenses would increase significantly and would reduce our overall profitability.

Our need for additional financing is uncertain, as is our ability to raise further financing, if required.

Although we anticipate that our available cash resources combined with our anticipated revenues will meet any foreseeable working capital needs we have, we will need to raise additional capital to expand into new locations and markets.  A shortfall in projected revenues may negatively impact existing operations.  We recently entered into an arrangement for outside sources of financing, but we cannot provide any assurance that such financing will be raised.

Because several of our competitors are much larger than we are, we may not be able to compete effectively and gain additional market share.

Based on the number of ATMs and Point-of-Sale machines deployed, several of our Canadian competitors are much larger than we are.  At least three of our competitors have over 650 ATMs in service.  One competitor, Direct Cash, has even acquired its own "switch" and is therefore not dependent on a third party to process its transactions with Interac.  We also experience competition for our CS Surveillance product, and some of our competitors are larger than we are.  There is nothing proprietary about any of our products and we could be forced out of business by competitors which significantly undercut our prices.

We depend on key management personnel and the loss of any of them would seriously disrupt our operations.

At present, we operate with elevenfull-time employees, including Harold Schultz, our President and CEO, and Richard Scott, our Vice President of Corporate Sales, and Cori Crawford, our Vice President of Operations.  The loss of these employees would have a material adverse effect on our operations and we may not be able to hire satisfactory employees to replace these employees.  Even if we could locate suitable replacements, it is unlikely that we could hire them on or upon terms and conditions comparable to what we presently pay our current employees.  We do not currently have employment contracts with these employees.

Our operations are not diversified and we will not have the benefit of reducing our financial risks by relying on other revenues.

We are engaged in the business of supplying, installing, maintaining and operating electronic financial transaction terminals commonly referred to as Automated Teller Machines or ATMs and Point-of-Sale Terminals, which are placed on the premises of businesses to dispense cash and provide purchase

15

payment systems and other services to consumers.  We also assemble and sell a surveillance product.  As a result, our financial viability will depend exclusively on our ability to generate revenues from our operations.  We will not have the benefit of reducing our financial risks by relying on revenues derived from other operations.

We depend on the revenues generated by our wholly-owned subsidiaries, Security Bancorp Inc. and Intercash POS Systems Ltd.  Should they fail to continue producing revenues to fund our operations, we would have to seek alternative methods of financing such as selling our stock or borrowing money.

The funds used to finance our operations come from our wholly owned subsidiaries, Security Bancorp and Intercash.  If their operations decline or if their profitability decreases, the funds we have to work with will be seriously compromised.  We would then have to seek to sell shares of our stock or borrow money from either financial institutions or private lenders.  The terms and conditions of any stock sales or borrowings may not be available on terms and conditions that are favorable to us, or may not be available to us at all.

There is a limited market for our common stock.

Currently only a very limited trading market exists for Moneyflow common stock.  Our common stock trades on the OTC Bulletin Board under the symbol "MNYF.OB."  The Bulletin Board is a limited market and subject to substantial restrictions and limitations in comparison to the NASDAQ system.  Any broker/dealer that makes a market in our stock or other person that buys or sells our stock could have a significant influence over its price at any given time.  We cannot assure our shareholders that a market for our stock will be sustained.  There is no assurance that our shares will have any greater liquidity than shares which do not trade on a public market.

Our common stock is subject to penny stock regulation.

Our shares are subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly referred to as the "penny stock" rule.  Section 15(g) sets forth certain requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.  The Commission generally defines penny stock to be any equity security that has a market price less than $5.00 per share, subject to certain exceptions.  Rule 3a51-1 provides that any equity security is considered to be penny stock unless that security is: registered and traded on a national securities exchange meeting specified criteria set by the Commission; authorized for quotation on The NASDAQ Stock Market; issued by a registered investment company; excluded from the definition on the basis of price (at least $5.00 per share) or the registrant's net tangible assets; or exempted from the definition by the Commission.  Since our shares are deemed to be "penny stocks", trading in the shares will be subject to additional sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors.



ITEM 7.

FINANCIAL STATEMENTS

The information required by this Item is submitted as a separate section of this Form 10-KSB.  See Item 13.



ITEM 8.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Change in Certifying Accountants

On September 27, 2002, Moffitt & Company, P.C. resigned as the independent auditors for the Company.  On November 14, 2002, the Board of Directors engaged Farber & Hass, L.L.P. as the new independent auditors for the Company.

16

The Company's financial statements to the date of Moffitt & Company's resignation did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles.  The Company did not have any disagreements with Moffitt & Company on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Moffitt & Company, would have caused it to make a reference to the subject matter of the disagreements in connection with its report, nor were there any "reportable events" as defined in Item 304(a)(1)(v) of Regulation S-B.  During the two fiscal years ended October 31, 2001 and 2002, and between October 31, 2002 and February 13, 2003, neither the Registrant nor anyone acting on its behalf consulted with Farber & Hass, L.L.P. regarding (i) either the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Registrant's financial statements; or (ii) any matter that was either the subject of a disagreement with Moffitt & Company, P.C. or a reportable event with respect to Moffitt & Company, P.C.

ITEM 8A.

CONTROLS AND PROCEDURES

(a)

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the design and operation of our disclosure controls and procedures, as such term is defined under Rules 13a-14(c) and 15d-14(c) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), within 90 days of the filing date of this report.  Based on that evaluation, our principal executive officer and our principal financial officer concluded that the design and operation of our disclosure controls and procedures were effective to ensure that information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.

(a)

In addition, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the Evaluation Date, including any corrective actions with regard to significant deficiencies and material weaknesses.



PART III

ITEM 9.

DIRECTORS AND EXECUTIVE OFFICERS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The names of our directors and executive officers, their ages, and certain other information about them are set forth below:



NameAgePositionHarold F. Schultz71Chairman of the Board, President, CEO, CFODale B. Tingley51DirectorRichard J. Scott56Director, Vice President  Corporate Sales DevelopmentDouglas A. McDougall55Director




All of the above officers and directors began their initial terms in April of 2001, except for Mr. McDougall, who began his term in July of 2003.

17

Harold F. Schultz, Chairman of the Board, President, CEO and CFO.  Mr. Schultz is a founding shareholder of Moneyflow as well as serving as its President and Chief Operating Officer since Moneyflow was formed in 2001.  Mr. Schultz is also President and Director of Security Bancorp, Inc., Moneyflow's wholly owned subsidiary.  Mr. Schultz has been President of Security Bancorp, Inc. since 1999.  Mr. Schultz has over 40 years experience in the areas of construction, real estate and the oil and gas industry.  Prior to joining Security Bancorp, Inc., Mr. Schultz was Chairman of Enviro FX, Inc., a publicly traded Canadian company, from 1996 until 1998.  Mr. Schultz has been President of Advance Contracting Services Ltd., a private holding company, since 1972.  Mr. Schultz is a member of the 400 Club, a founder of the Lakeview Community Association and many other community organizations.

Dale P. Tingley, Director.  Mr. Tingley has served as a Director of Moneyflow since its formation.  Mr. Tingley also serves as a Director of Security Bancorp, Inc., Moneyflow's wholly owned subsidiary.  Mr. Tingley has been a successful businessman and entrepreneur in Canada.  Mr. Tingley was a dealer principal for four automobile dealerships from 1977 - 1999.  Since 1989, Mr. Tingley has been President of Helix Property Management, a real estate development company.

Richard J. Scott, P. Eng., Director, Vice President  Corporate Sales.  Mr. Scott has been a Director and Vice President of Moneyflow since its inception.  Mr. Scott also serves as a Director of Security Bancorp, Inc. and has held that position since 1999.  Mr. Scott is a Professional Engineer and has over 28 years experience in developing and implementing marketing plans and strategies for the Canadian and international marketplace.  Prior to joining Security Bancorp, Inc., Mr. Scott served as marketing coordinator for a Canadian public company, Enviro FX, Inc. from 1998 to 1999.  Prior to that, Mr. Scott was division manager of Industrial Equipment Brokers International from 1996 to 1997.

Alec McDougall, Director.  Mr. McDougall's career has spanned several senior engineering posts with CP Rail, the City of Calgary, the City of Lethbridge, Alberta and positions in private engineering firms.  In 1997 he joined Canadian Crude Separators (CCS) as President and COO.  Mr. McDougall is also President of ECCO Waste Systems, a company involved in the disposal of construction and demolition debris and non hazardous waste.  He is currently Project Director for the TPO Project with the City of Calgary and five private sector partners.  He is responsible for design and construction of major transportation and land development projects. His diverse professional and business experience continues to be a valuable asset to the Company.  Mr. McDougall received his BSc in Civil Engineering in 1972.

Conflicts of Interest Policy

Moneyflow has adopted a policy that any transactions with directors, officers or entities of which they are also officers or directors or in which they have a financial interest, will only be on terms consistent with industry standards.  These transactions must also be approved by a majority of the disinterested directors of Moneyflow's Board of Directors.

18



ITEM 10.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE



|                                      | Annual Compensation | Long Term Compensation
|------------------------------------- | ------------------- | ----------------------
|Awards                                | Payouts            
|Name and Principal Position           | Year                | Salary
(US $)         
|Harold Schultz (President, CEO & CFO) | 2001                | 26,250                
|                                      | 2002                | 38,800                
|                                      | 2003                | 41,577                



Members of the Board of Directors do not receive any compensation for their service as Directors but the Company may determine to pay Directors a per meeting fee in the future if these Directors are not separately compensated by Moneyflow for other services.  All expenses for meeting attendance or out of pocket expenses connected directly with their Board representation will be reimbursed by Moneyflow.

Director liability insurance may be provided to all members of the Board of Directors. Moneyflow has not yet obtained such insurance and does not have any specifics for available cost and coverage.  Moneyflow does not have a specific time frame to obtain the insurance.  No differentiation is made in the compensation of "outside directors" and those officers of Moneyflow serving in that capacity.

ITEM 11.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

There are currently 18,037,000 common shares outstanding.  The following tabulates holdings of shares of Moneyflow by each person who, subject to the above, as of January 26, 2004, holds of record or is known by Management to own beneficially more than 5.0% of the common shares and, in addition, by all directors and officers of Moneyflow individually and as a group.

19

---





SHARE OWNERSHIP AS OF JANUARY 26, 2004Name and Address of 
Beneficial Owner (1)Amount of 
Common Shares OwnedPercent of 
Common Shares OwnedHarold F. Schultz (2) (3)3,916,70021.7%Box 4456 Station "C"Calgary, Alberta T2T 5N3Douglas A. McDougall (2) (4)1,144,0006.3%916 Rideau Road, SWCalgary, Alberta T2S 0R6Dale Tingley (2)4,472,00024.8%Suite N  7003 5th Street SECalgary, Alberta T2H 2G2Richard J. Scott (2)2,023,30011.2%Suite N  7003 5th Street SECalgary, Alberta T2H 2G2All Officers and Directorsas a group (4 persons)10,412,00057.7%




(1)

Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended, beneficial ownership of a security consists of sole or shared voting power (including the power to vote or direct the voting) and/or sole or shared investment power (including the power to dispose or direct the disposition) with respect to a security whether through a contract, arrangement, understanding, relationship or otherwise. Unless otherwise indicated, each person indicated above has sole power to vote, or dispose or direct the disposition of all shares beneficially owned, subject to applicable community property laws.

(2)

Denotes officer or director of Moneyflow.

(3)

All shares beneficially owned by Mr. Schultz are held of record by Advance Contracting Services Ltd., an entity owned and controlled by Mr. Schultz, President of Moneyflow.

(4)

All shares beneficially owned by Mr. McDougall are held of record by Altess Investments, an entity owned and controlled by Mr. McDougall, a director of Moneyflow.

ITEM 12.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Since inception, Moneyflow through its wholly owned subsidiary, Security Bancorp Inc., has had an arrangement with Advance Contracting Services Ltd., whose sole shareholder, officer and director is Harold F. Schultz, President of Moneyflow.  As part of this arrangement, Security Bancorp pays a monthly consulting fee to Advance in the amount of CDN$5,000 (approximately US$3,465) for Mr. Schultz's services to Security Bancorp.  No written agreement has been entered into and this arrangement is terminable at will.  The parties anticipate entering into a formal employment agreement with Mr. Schultz to ensure that Mr. Schultz continues to work for Moneyflow.

Since inception, Moneyflow through its wholly owned subsidiary, Security Bancorp Inc., has had an arrangement with Laresco Holdings Ltd., whose sole shareholder, officer and director is Richard J. Scott, Vice President of Moneyflow.  As part of this arrangement, Security Bancorp pays a monthly consulting fee to Laresco in the amount of CDN$4,000 (approximately US$2,770) for Mr. Scott's services to Security Bancorp.  No written agreement has been entered into and this arrangement is terminable at will.  The parties anticipate entering into a formal employment agreement with Mr. Scott to ensure that Mr. Scott continues to work for Moneyflow.

20





ITEM 13.

EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K

(a)

The following documents are filed as part of this report:

Page Number

1.

Financial Statements:

Report of Independent Auditors

F-1

Consolidated Balance Sheets at October 31, 2003

F-3

Consolidated Statements of Operations for each of the two years
ended October 31, 2003

F-4

Consolidated Statements of Stockholders' Equity for each of the two years
ended October 31, 2003

F-5

Consolidated Statements of Comprehensive (Loss) for each of the two years
ended October 31, 2003

F-6

Consolidated Statements of Cash Flows for each of the two years
 ended October 31, 2003

F-7

Notes to Consolidated Financial Statements

F-8

Exhibits included or incorporated herein:  See Exhibit Index.

(b)

Reports on Form 8-K:

None.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

For the fiscal year ended October 30, 2003, Farber and Hass, L.L.P. ("Farber and Hass") served as our principal independent accountant.  Farber and Hass billed the approximate fees respectively set forth below:

Audit Fees

Aggregate fees for services rendered in connection with its audit of the Company's consolidated financial statements
 and review of the Company's Form 10-QSBs were
$19,015 in fiscal year 2003 and $6,380 in fiscal year 2002.

Financial Information Systems Design and Implementation Fees

Aggregate fees for financial information systems design and implementation services were $0 by Farber and Hass, during the year ended October 30, 2003.

The Company makes all management decisions with respect to its financial information systems, and is responsible for evaluating the adequacy of such systems and for establishing and maintaining the Company's system of internal accounting controls.

All Other Fees

Aggregate fees for (i) tax services were
$__0____ by Farber and Hass; and (ii) non-financial statement audit services such as due diligence procedures associated with acquisitions and assistance with regulatory filings were
$__0___  by Farber and Hass.

21

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

MONEYFLOW SYSTEMS INTERNATIONAL, INC.,

a Nevada corporation

Date:  February 5, 2004

By:/s/ Harold F. Schultz



Harold F. Schultz

Chairman of the Board, President, Chief Financial

Officer 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:

SignatureTitleDate/s/ Harold F. Schultz

Harold F. SchultzChairman of the Board, President, Chief Financial Officer and Chief Executive OfficerFebruary 5, 2004/s/ Dale Tingley

Dale TingleyDirectorFebruary
    3, 2004/s/ Richard James Scott

Richard James ScottVice President  Corporate Sales and Director
February 5, 2004/s/ Douglas Alec McDougall

Douglas Alec McDougallDirectorFebruary
    6, 2004




---

EXHIBIT INDEX



|Exhibit No. | Description                                                                                                                                        
|----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|2.11        | Acquisition Agreement dated as of July 15, 2001 between Moneyflow Systems International Inc. and Security Bancorp Inc.                             
|3.11        | Articles of Incorporation                                                                                                                          
|3.21        | Bylaws                                                                                                                                             
|4.21        | 2001 Stock Option Plan dated November 1, 2001                                                                                                      
|4.36        | 2002 Stock Option Plan, dated July 31, 2002                                                                                                        
|10.13       | Connection Services Agreement dated December 20, 2001 with TCS Canada, Ltd.                                                                        
|10.23       | Agreement for Credit Card Processing Services dated November 15, 2001 with TCS Canada, Ltd.                                                        
|10.53       | Letter Agreement dated July 26, 2001 with Hypercom Canada, Ltd., as amended and assumed by Letter Agreement dated February 7, 2003 with Rycom, Inc.
|10.82       | Lockup Agreement dated December 2001, between Moneyflow Systems International Inc. and John F. Kearney                                             
|10.95       | Letter Agreement dated January 17, 2003 with 1st SB Partners Ltd.                                                                                  
|10.106      | Director's Loan dated February 24, 2003                                                                                                            
|16.14       | Letter on Change in Certifying Accountant                                                                                                          
|21.15       | Subsidiaries of the Company.                                                                                                                       
|24.15       | Power of Attorney (see signature page of the Annual Report on Form 10-KSB).                                                                        
|317         | Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer and Principal Financial Officer                                              
|327         | Section 1350 Certification                                                                                                                         

_______________

1.

Incorporated by reference from the Company's Form SB-2, filed with the SEC on December 11, 2001.

2.

Incorporated by reference from the Company's Form SB-2/A, filed with the SEC on May 7, 2002.

3.

Incorporated by reference from the Company's Form SB-2/A, filed with the SEC on June 11, 2002.

4.

Incorporated by reference from the Company's Form 8-K/A, filed with the SEC on January 27, 2003.

5.

Incorporated by reference from the Company's Form 10-KSB, filed with the SEC on February 14, 2003.

6.

Incorporated by reference from the Company's Form 10-QSB, filed with the SEC on September 15, 2003.

7.

Filed herewith.

---

INDEPENDENT
AUDITORS' REPORT





To
the Board of Directors and Stockholders

of
Moneyflow Systems International, Inc.:



We
have audited the accompanying consolidated balance sheet of Moneyflow Systems
International, Inc. (the "Company") as of October 31, 2003 and
the related consolidated statement of operations, stockholders' equity,
comprehensive income (loss) and cash flows for the years ended October 31, 2003
and 2002. These consolidated financial statements are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audit.



We
conducted our audit in accordance with auditing standards generally accepted in
the United States.  Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements.  We believe that our
audit provides a reasonable basis for our opinion.



In
our opinion, the accompanying consolidated financial statements present fairly,
in all material respects, the financial position of the Company at October 31,
2002 and the results of its operations and its cash flows for the years ended
October 31, 2003 and 2002 in conformity with accounting principles generally
accepted in the United States.









s/s
Farber & Hass, LLP





Camarillo,
California

January
16, 2004



---



MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

OCTOBER 31, 2003







ASSETS





CURRENT
ASSETS

Cash
and cash equivalents

$

77,356



Accounts
and contracts receivable, net of

allowance
for doubtful accounts of $24,262

95,497



G.S.T.
refund

5,994

Inventories

225,644

Prepaid
expenses and other current assets

23,148





TOTAL
CURRENT ASSETS

$

427,639











PROPERTY
AND EQUIPMENT, NET

OF
ACCUMULATED DEPRECIATION

53,264













OTHER
ASSETS

Rent
security deposit

2,132













TOTAL
ASSETS

$

483,035





















See Accompanying Notes.



1

---





LIABILITIES
AND STOCKHOLDERS'EQUITY





CURRENT
LIABILITIES

Accounts
payable and accrued expenses

$

59,505

Deferred
income

2,745

G.S.T.
and P.S.T. payable



1,571

Canadian
income taxes payable

15,567

Note
payable, stockholder

12,223

Note
payable, automobile, current portion

3,393

Capital
lease payable, current portion

1,978



TOTAL
CURRENT LIABILITIES

$

96,982





LONG
- TERM LIABILITIES

Note
payable, automobile, long-term portion

13,291

Capital
lease payable, long-term portion

5,777



TOTAL
LONG-TERM LIABILITIES

19,068



STOCKHOLDERS'EQUITY

Common
stock,  par value $.001 per share

Authorized
50,000,000 shares

Issued
and outstanding  - 18,037,000 shares

18,037



Paid
in capital in excess of par value of stock

1,203,359



Accumulated
deficit

(
864,449)

Accumulated
other comprehensive income



(Primarily
cumulative translation adjustment)

10,038



TOTAL
STOCKHOLDERS'EQUITY

366,985





TOTAL
LIABILITIES AND

STOCKHOLDERS'EQUITY

$

483,035

















See Accompanying Notes.



2

---



MONEYFLOW
SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF INCOME

FOR
THE YEARS ENDED OCTOBER 31, 2003 AND 2002





2003

2002





REVENUES

Sales of machines and
terminals

$

597,294

$

412,272

Fee income

671,575

532,506

Other revenue

22,932

18,893



TOTAL REVENUES

1,291,801

963,671



COST AND EXPENSES

Cost of sales

465,842

392,050

Selling, general and
administrative expenses

812,079

636,522



TOTAL COSTS AND EXPENSES

1,277,921

1,028,572



INCOME (LOSS) BEFORE CONSULTING FEES

13,880

( 64,901)



CONSULTING FEES, NON-CASH

0

666,667



INCOME (LOSS) FROM OPERATIONS

13,880

( 731,568)



OTHER (INCOME) EXPENSES

Insurance recovery

( 17,818)

0

Interest expense

3,125

72

Interest income

( 48)

( 589)

Loss on disposal of
assets

55

2,340



TOTAL OTHER (INCOME) EXPENSES, NET

( 14,686)

1,823



INCOME (LOSS) BEFORE CORPORATION

INCOME TAXES (BENEFIT)

28,566

( 733,391)



CORPORATION INCOME TAXES (BENEFIT)

0

13,413



NET INCOME (LOSS)

$

28,566

$

( 746,804)



NET INCOME (LOSS) PER COMMON SHARE

Basic and diluted

$

0.0

$

( 0.4)



WEIGHTED AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING

Basic and diluted

18,037,000

18,037,000





See Accompanying Notes.



3



---



MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS'EQUITY

FOR THE YEARS ENDED OCTOBER 31, 2003 AND 2002



|                             |                  |  |        |        |  | Capital in |           |             |         |               | Accumulated   |            |          |  |         
|---------------------------- | ---------------- |  | ------ | ------ |  | ---------- | --------- | ----------- | ------- | ------------- | ------------- | ---------- | -------- |  | --------
|                             |                  |  |        |        |  |            | Excess of |             |         |               |               |            | Other    |  | Deferred
|                             | Common
    Stock |  |        |        |  |            |           |             |         |               |               |            |          | 
|                             |                  |  |        |        |  | Par Value  |           | Accumulated |         | Comprehensive |               | Consulting |         
|                             | Shares           |  | Amount |        |  | of Stock   |           |             | Deficit |               | Income (Loss) |            | Services | 
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Balance, November 1, 2001    | 18,037,000       |  | $      | 18,037 |  | $          | 1,203,359 |             | $       | (146,211)     |               | $          | (38,912) |  | $       
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Deferred Consulting Services |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Amortized to Operations      | 0                |  |        | 0      |  |            | 0         |             |         | 0             |               |            | 0        |  |         
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Foreign Currency             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Translation Adjustment       | 0                |  |        | 0      |  |            | 0         |             |         | 0             |               |            | 630      |  |         
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Net (Loss) For The Year      |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Ended October 31, 2002       | 0                |  |        | 0      |  |            | 0         |             |         | (746,804)     |               |            | 0        |  |         
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Balance, October 31, 2002    | 18,037,000       |  |        | 18,037 |  |            | 1,203,359 |             |         | (893,015)     |               |            | (38,282) |  |         
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Foreign Currency             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Translation Adjustment       | 0                |  |        | 0      |  |            | 0         |             |         | 0             |               |            | 48,320   |  |         
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Net Income For The Year      |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Ended October 31, 2003       | 0                |  |        | 0      |  |            | 0         |             |         | 28,566        |               |            | 0        |  |         
|                             |                  |  |        |        |  |            |           |             |         |               |               |            |          |  |         
|Balance, October 31, 2003    | 18,037,000       |  | $      | 18,037 |  | $          | 1,203,359 |             | $       | (864,449)     |               | $          | 10,038   |  | $       



See Accompanying Notes.



4

---



MONEYFLOW
SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

FOR
THE YEARS ENDED OCTOBER 31, 2003 AND 2002







2003

2002







NET
INCOME (LOSS)

$

28,566

$

(
746,804)



OTHER
COMPREHENSIVE INCOME





FOREIGN
CURRENCY TRANSLATION

ADJUSTMENT

48,320

630



NET
COMPREHENSIVE INCOME (LOSS)

$

76,886

$

(
746,174)







See Accompanying Notes.



5

---



MONEYFLOW
SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CASH FLOWS

FOR
THE YEARS ENDED OCTOBER 31, 2003 AND 2002





2003

2002





CASH
FLOWS FROM OPERATING ACTIVITIES:







Net
Income (Loss)

$

28,566

$

(
746,804)



Adjustments
to reconcile net income (loss)

to
net cash (used) by operating activities:

Depreciation

23,774

17,207

Amortization

0

153



Loss
on disposal of assets

0

2,340

Consulting
fees, non cash

0

666,667



Provision
for doubtful accounts

13,726

19,252

Changes
in operating assets and liabilities:



Accounts,
contracts and other receivables

(
22,485)

2,954





GST
refund

(
3,399)

0

Inventories

21,720

(
70,207)



Prepaid
expenses and deposits

(
4,968)

(
6,051)



Accounts
payable and accrued expenses

(
37,590)

74,069

Customer
deposits

(
2,769)

2,769



Deferred
income

(
1,302)

4,047



Corporate
income taxes

(
50,495)

18,005

P.S.T.
payable

1,571

0

G.S.T.
assessment

(
12,326)

0



NET
CASH (USED) BY

OPERATING
ACTIVITIES

(
45,977)

(
15,599)





CASH
FLOWS FROM INVESTING ACTIVITIES:

Cash
in Automated Teller Machines

0

16,474



Purchases
of property and equipment

(
15,229)

(
36,728)



Proceeds
from sale of property and equipment

0

255





NET
CASH (USED) BY

INVESTING
ACTIVITIES

(
15,229)

(19,999)





CASH
FLOWS FROM FINANCING ACTIVITIES:

Proceeds
from note payables

32,158

0

Repayment
of note payables

(
20,218)

0



Repayment
of capital lease payable

(
1,030)

(
138)





NET
CASH PROVIDED BY

FINANCING
ACTIVITIES

10,910

(
138)





EFFECT
OF EXCHANGE RATE CHANGES ON CASH

AND
CASH EQUIVALENTS

48,320

630



See Accompanying Notes.



6

---



MONEYFLOW
SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED)

FOR
THE YEARS ENDED OCTOBER 31, 2003 AND 2002







2003

2002





NET
(DECREASE) IN CASH

AND
CASH EQUIVALENTS

$

(
1,976)

$

(
35,106)



CASH
AND CASH EQUIVALENTS, BEGINNING

OF
YEAR                                                                                                      
79,332                
114,438



CASH
AND CASH EQUIVALENTS, END OF YEAR

$

77,356

$

79,332









SUPPLEMENTAL
DISCLOSURE OF CASH

FLOW
INFORMATION



CASH
PAID DURING THE YEAR FOR:





Interest

$

3,125

$

72



Taxes

$

15,567

$

29,945



SCHEDULE
OF NON-CASH INVESTING AND

FINANCING
ACTIVITIES



Purchase
of property and equipment



with
capital lease financing and note payable

$

16,967

$

8,311

































See Accompanying Notes.



7

---





MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002









NOTE
1

SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES



Nature
of Business and History of Company



Moneyflow Systems International Inc. (hereinafter referred to as
the Company) was organized on April 25, 2001, under the laws of the State of
Nevada.  The Company operates as a holding Company for acquisitions of
subsidiaries.



Security Bancorp Inc. (hereinafter referred to as SBI) was
organized on August 3, 1992, in Alberta, Canada and was inactive until January
5, 1999 when it changed its name to Security Bancorp Inc. and began operations
under the trademark name of Ca$h Station(r).



SBI is headquartered in Calgary, Canada and is in the business
to supply, install, maintain and manage Automated Teller Machines (ATM'S) and
other Electronic Funds Transfer Devices and to provide transaction processing
services for these devices.  The machines are placed on the premises of
property owners and businesses for the purpose and convenience of dispensing
cash and other services to the public.



InterCash POS Systems, LTD. (hereinafter referred to as POS) was
organized on April 1, 2002 in Alberta, Canada and sells point of sale terminals
and other electronic funds transfer devices.



Principles
of Consolidation



The consolidated financial statements include the accounts of
Moneyflow Systems International Inc. and its wholly-owned subsidiaries, Security
Bancorp Inc. and InterCash POS Systems, LTD.



All material inter-company accounts and transactions have been
eliminated.



Cash
and Cash Equivalents



For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with an original maturity
of three months or less to be cash equivalents.



Accounts
and Contracts Receivable



Accounts and contracts receivable are reported at the customers'outstanding balances less any allowance for doubtful accounts.  Interest is
not accrued on overdue accounts receivable. Contracts receivable normally are
payable equally over a twelve month period and include interest ranging from 7%
to 9% (Canadian)









8

---





MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002







NOTE
1

SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Allowance
for Doubtful Accounts



The allowance for doubtful accounts on accounts and contracts
receivable is charged to income in amounts sufficient to maintain the allowance
for uncollectible accounts at a level management believes is adequate to cover
any probable losses.  Management determines the adequacy of the allowance
based on historical write-off percentages and information collected from
individual customers.  Accounts and contracts receivable are charged off
against the allowance when collectibility is determined to be permanently
impaired (bankruptcy, lack of contact, account balance over one year old, etc.).



Inventories



Inventories
are valued at the lower of cost or market.  Cost is determined as follows:



Automated Teller Machines and Point of Sale Terminals held for
resale - actual cost for the machine purchased.



Automated Teller Machines and Point of Sale Terminals -
placements - actual cost for the machine purchased less accumulated
depreciation.  Depreciation is computed on the straight line basis over 10
years.



Surveillance equipment, parts, supplies and counterfeit
detectors - first-in, first-out method.





Property
and Equipment



Property and equipment are stated at cost.  Major renewals
and improvements are charged to the asset accounts while replacements,
maintenance and repairs, which do not improve or extend the lives of the
respective assets, are expensed.  At the time property and equipment are
retired or otherwise disposed of, the asset and related accumulated depreciation
accounts are relieved of the applicable amounts.  Gains or losses from
retirements or sales are credited or charged to income.



The
Companies depreciate the property and equipment as follows:



Financial
statement reporting - straight line method as follows:



Furniture
and fixtures

10
years



Computer
equipment

5
years



Telephone
equipment

5
years

Surveillance
equipment

5
years

Automobile

5
years









9

---





MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002









NOTE
1

SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Long-Lived
Assets



The Company assesses
recoverability of the carrying value of an asset by estimating the future net
cash flows expected to result from the asset, including eventual disposition.
 If the future net cash flows are less than the carrying value of the
asset, an impairment loss is recorded equal to the difference between the asset's
carrying value and fair value.  This standard did not have a material
effect on the Company's results of operations, cash flows or financial
position.



Revenue
Recognition Policy



Revenue from the sale of Automated Teller Machines and Point of
Sale Terminals is recognized when the earning process is complete and the risk
and rewards of ownership have transferred to the customer, which is generally
considered to have occurred upon the delivery of the machine to our customer and
the acceptance and activation of the machine by the customer.



Revenue from transaction and service fees are earned daily and
are electronically transferred to the Company from the processors.



Shipping
and Handling Costs



The Company's policy is to classify shipping and handling
costs as part of cost of goods sold in the statement of operations.



Advertising



Security Bancorp Inc. and InterCash POS Systems, LTD. expenses
all advertising as incurred.  Advertising expenses for the year ended
October 31, 2003 and 2002 were $7,758 and $3,719, respectively.





















10

---





MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002









NOTE
1

SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Income
Taxes



Provisions for income taxes are based on taxes payable or
refundable for the current year and deferred taxes on temporary differences
between the amount of taxable income and pretax financial income and between the
tax bases of assets and liabilities and their reported amounts in the financial
statements.  Deferred tax assets and liabilities are included in the
financial statements at currently enacted income tax rates applicable to the
period in which the deferred tax assets and liabilities are expected to be
realized or settled as prescribed in FASB Statement No.109, Accounting for
Income Taxes.  As changes in tax laws or rates are enacted, deferred tax
assets and liabilities are adjusted through the provision for income taxes.



Net
Income (Loss) Per Share



The Company adopted Statement of Financial Accounting Standards
No. 128 that requires the reporting of both basic and diluted earnings (loss)
per share.  Basic earnings (loss) per share is computed by dividing net
income (loss) available to common stockholders by the weighted average number of
common shares outstanding for the period.  Diluted earnings (loss) per
share reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock.
 In accordance with FASB 128, any anti-dilutive effects on net earnings
(loss) per share are excluded.



Accounting
Estimates



Management uses estimates and assumptions in preparing financial
statements in accordance with generally accepted accounting principles.
 Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses.  Actual results could vary from the
estimates that were used.



Concentration of Credit Risk



Financial Instruments



Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of cash and trade accounts
receivable.  The Company places its temporary cash investments in reputable
financial institutions.















11

---





MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002









NOTE
1

SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Concentration of Credit Risk (Continued)



Financial Instruments (Continued)



Concentrations of credit risk with respect to trade receivables
are limited due to the large number of customers comprising the Company's
customer base and their dispersion across different geographic areas.  The
Company routinely assesses the financial strength of its customers.  The
Company normally does not require a deposit to support large customer orders.



Purchases



The Company relies primarily on two suppliers for its products.
 Purchases for the years ended 2003 and 2002 are as follows:

2003

2002





Supplier A

$

278,044

$

0

Supplier B

179,254

156,103

Supplier C

8,271

1,129

Supplier D

0

174,423



Total

$

465,569

$

331,655



Revenues



For the year ended October 31, 2003, the Company had two
customers which accounted for 31% (21% and 10%) of total revenues.  For the
year ended October 31, 2002, the Company had no customers which exceeded 10% of
total revenues.



Disclosure
about Fair Value of Financial Instruments



The Company estimates that the fair value of all financial
instruments at October 31, 2003, as defined in FASB 107, does not differ
materially from the aggregate carrying values of its financial instruments
recorded in the accompanying balance sheet.  The estimated fair value
amounts have been determined by the Company using available market information
and appropriate valuation methodologies.  Considerable judgement is
required in interpreting market data to develop the estimates of fair value, and
accordingly, the estimates are not necessarily indicative of the amounts that
the Company could realize in a current market exchange.









12

---





MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002









NOTE
1

SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



Foreign
Currency Translation



The financial statements of SBI and POS are measured using the
Canadian dollar as the functional currency. Assets, liabilities and equity
accounts of SBI and POS are translated at exchange rates as of the balance sheet
date.
 Revenues and expenses are translated at average rates of exchange in
effect during the year.  The resulting cumulative translation adjustments
have been recorded as a separate component of stockholders'equity.
 Foreign currency transaction income in the amount of $1,015 are included
in consolidated net income.  The financial statements are presented in
United States of America dollars.



Recent
Accounting Pronouncements



The FASB recently issued the following statements:



FASB 145

-

Rescission of FASB statements 4, 44 and 64 and amendment of FASB
13

FASB 146

-

Accounting for costs associated with exit or disposal activities

FASB 147

-

Acquisitions of certain financial institutions

FASB 148

-

Accounting for stock-based compensation

FASB 149

-

Amendment of statement 133 on derivative instruments and hedging
activities

FASB 150

-

Accounting for certain financial instruments with
characteristics of both liabilities and equity



These FASB statements did not have a material impact on the
Company's financial position and results of operations.



NOTE 2

ACCOUNTS AND CONTRACTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL
ACCOUNTS



Accounts and contracts receivable comprised of the
following:



Trade accounts receivable

$

70,488

Contracts receivable

49,271



$

119,759











13

---



MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002









NOTE 2

ACCOUNTS AND CONTRACTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL
ACCOUNTS (CONTINUED)



A summary of the allowance for doubtful accounts is as
follows:



Balances, November 1, 2002

$

10,536

Addition to allowance

13,726



Balance, October 31, 2003

$

24,262



NOTE
3

INVENTORIES



Inventories
are comprised of the following:



Automated
teller machines

$

92,623

Point
of Sale Terminals

122,341

Surveillance
equipment

4,128

Counterfeit
detectives

1,159

Parts
and supplies

5,393



Total
inventory

$

225,644



NOTE
4

PROPERTY
AND EQUIPMENT



Property
and equipment consists of the following:



Furniture
and fixtures

$

23,876

Computer
equipment

25,101

Telephone
equipment (Capital lease)

7,261

Surveillance
equipment

1,915

Automobile

16,590

74,743

Less
accumulated depreciation

21,479



Total
property and equipment

$

53,264

























14

---



MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002









NOTE
5

INCOME
TAXES

2003

2002





Pretax
Income (Loss)



United
States of America

$

(
18,906)

$

(
7,735)

Canadian

47,472

(
725,656)



Total

$

28,566

$

(
733,391)



Provision (Benefit)



The provision (benefit) for/or refund of income taxes for the
years ended October 31, 2003 and 2002 consist of the following:



2003

2002



Current





United
States of America

$

0

$

0

Canadian

0

13,413



Deferred



United
States of America

0

0

Canadian

0

0





Total
provision (benefit)

$

0

$

13,413



Deferred
Tax Components



Significant
components of the Company's deferred tax assets are as follows at October 31,
2003:



Net
operating loss carryforwards

$

371,000

Fixed
assets

(6,500)

364,500

Less
valuation allowance

364,500

Net
deferred tax assets

$

0



The valuation allowance increased approximately $61,500 in the
year ended October 31, 2003, representing primarily net Canadian taxable losses
in 2003.  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 tax assets will not be realized.  The ultimate realization of
deferred 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 tax liabilities,
projected future taxable income and tax planning strategies in making this
assessment.



15

---



MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002







NOTE
5

INCOME
TAXES (CONTINUED)



Net
Operating Loss Carryforwards



United
States Corporation Income Taxes



Year
of Loss

Amount

Expiration
Date





October
31, 2001

$

182,000

October
31, 2021



October
31, 2002

549,000

October
31, 2022

$

731,000



Canadian
Income Taxes



Amount

Year
of Loss



(Canadian
Dollars)



Expiration
Date





October
31, 2001

$

48,000

October
31, 2008



October
31, 2002

312,000

October
31, 2009

October
31, 2003

165,000

October
31, 2010



$

525,000



NOTE
6

NOTE
PAYABLE, STOCKHOLDER



On February 24, 2003, the Company received a loan from a
stockholder.  The original amount of the loan was $32,158, of which the
Company has repaid $19,935. The loan bears interest at 12% per annum and is
payable in monthly installments of $2,857, including principal and interest.
 The Company retains the right to increase the monthly payments and to pay
the entire loan and interest earlier than the due date of March 1, 2004. The
loan is secured by all of the assets of POS which totaled $196,761 at October
31, 2003.



Future
minimum principal payments are as follows:



For
the year ended:



October
21, 2004

$

12,223

















16



---



MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002









NOTE
7

NOTE
PAYABLE, AUTOMOBILE



Note payable, automobile is due in monthly payments

of principal and interest of $283, including interest at

8%. The note matures on September 30, 2008 and is

secured by an automobile which costs $16,970 and

has a book value of $16,100.

$

16,684



Less: current portion

3,393



Net long-term debt

$

13,291



Maturities
of long-term debt are as follows:



October
31, 2004

$

3,393

October
31, 2005

3,393

October
31, 2006

3,394

October
31, 2007

3,394

October
31, 2008

3,110



$

16,684



NOTE
8

BUSINESS
SEGMENTS



FASB Statement No. 131 "Disclosures about Segments of an
Enterprise and Related Information,"requires companies to provide certain
information about their operating segments.  The Company has three
reportable segments:  Automated Teller Machines, Point of Sale Terminals
and General Corporation Administration.  Management evaluates performance
based upon the operating earnings after income taxes.  All sales are in
Canada.



Summarized financial information concerning the Company's
reportable segments is shown on the following table:

Automated



Point
of

General

Teller

Sale

Corporation

Machines

Terminals

Administration

(Canada)

(Canada)

(United
States)

Total



2003



Net
revenues to

external
customers

$

927,996

$

363,805

$

0

$

1,291,801

Operating
earnings (loss)

(
51,319)

84,105

(
18,906)

13,880

Total
assets

273,810

196,761

12,464

483,035

Depreciation
and amortization

15,296

8,478

0

23,774

Capital
expenditures

32,196

0

0

32,196











17

---



MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002







NOTE
8

BUSINESS
SEGMENTS (CONTINUED)



Automated



Point
of

General

Teller

Sale

Corporation

Machines

Terminals

Administration

Total



2002



Net
revenues to

external
customers

$

767,086

$

196,585

$

0

$

963,671

Operating
earnings (loss)

(454,875)

(268,958)

(7,735)

(731,568)

Total
assets

246,288

225,711

6,186

478,185

Depreciation
and amortization

11,988

5,372

0

17,360

Capital
expenditures

31,959

4,769

0

36,728





NOTE
9

COMMITMENTS
AND CONTINGENCIES



Lease



On March 15, 2002, SBI leased its office facilities for a five
year period that began on May 1, 2002. The lease requires monthly rentals of
approximately $1,292 ($2,029 Canadian dollars) plus taxes and operating cost,
with rent increasing yearly by $.38 ($.50 Canadian dollars) per square footage
of gross leaseable area.



Future
minimum lease payments excluding taxes and expenses are as follows:



October
31, 2004



$
  19,218

October
31, 2005

20,640

October
31, 2006

22,062

October
31, 2007



11,388



$
 73,308





Rent
expense including rental costs and taxes for the years ended October 31, 2003
and 2002 was $16,224 and $13,232, respectively.



Taxes



The Company's P.S.T. tax  returns were reviewed by a
provincial tax department. The Company has accepted the assessment of $5,964 and
has paid the assessment in full.  As a result of the review, the Company is
required to file current and future provincial sales tax returns in Saskatchewan
and British Columbia. At October 31, 2003, the current amount payable is $1,571.







18

---



MONEYFLOW SYSTEMS INTERNATIONAL INC. AND SUBSIDIARIES

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER
31, 2003 AND 2002







NOTE
10

EMPLOYEE
STOCK OPTIONS



The Board of Directors and stockholders approved the
Moneyflow Systems International, Inc. 2002 Equity Incentive Plan which permits
the Board of Directors to grant, for a ten year period, both stock purchase
rights and stock options. The Company has reserved 1,800,000 shares of its
common stock for issuance to the directors, employees and consultants under the
Plan.  The Plan is administered by the Committee, which is made up of two
or more directors who are non-employee directors and outside directors and serve
at the pleasure of the board. The
committee has the authority and discretion, subject to the provisions of the
Plan, to select persons to whom stock purchase rights or options will be
granted, to designate the number of shares to be covered by each option or stock
purchase right, to specify the type of consideration to be paid, and to
establish all other terms and conditions of each option or stock purchase right.
 Options granted  under the Plan will not have a term that exceeds ten
years from date of grant.



The stock subject to the Plan and issuable upon exercise of
options granted under the Plan are shares of the corporation's common stock,
no par value, which may be either unissued, restricted or grants of options to
purchase shares of common stock.



The exercise price is the fair market value of the shares at the
date of the grant of the options.



Vesting terms of the options are determined by the Committee.



The Company has elected to account for stock-based compensation
under APB Opinion No. 25, under which no compensation expense has been
recognized for stock options granted to employees at fair market value.
 
Nooptionsweregrantedin2003.



NOTE 11

4TH QUARTER INTERIM RESULTS OF OPERATIONS



Revenues

$

283,853



Costs and expenses

286,949



Loss from operations

$

( 3,096)























19



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Exhibit 31

CERTIFICATION

I, Harold F. Schultz , Chief Executive Officer and Chief Financial Officer, certify that:

1.

I have reviewed this annual report on Form 10-KSB of Moneyflow Systems International, Inc.;

2.

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

3.

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

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)

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

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

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

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

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

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  February 5, 2004

By: /s/ Harold F. Schultz



Harold F. Schultz
Chief Executive Officer and Chief Financial Officer

---

Exhibit 32

Section 1350 Certification

Pursuant to 18 U.S.C. § 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Moneyflow Systems International Inc., a Nevada corporation (the "Company"), hereby certifies that:

To my knowledge, the Annual Report on Form 10-KSB of the Company for the year ended October 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  February 5, 2004





By: /s/ Harold F. Schultz



Harold F. Schultz
Chief Executive Officer and Chief Financial Officer





2