UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM
10-K









x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
      OF 1934




For
the fiscal year ended December 31, 2007




or




 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




Commission
file number 000-31361









ENCRYPTAKEY,
INC.


(Exact
name of registrant as specified in its charter)







State
      of New Jersey
            
            22-3720628(State
      or other jurisdiction of
              incorporation
      or organization)
            
            (I.R.S.
      Employer
              Identification
      No.)19200
      Von Karman Avenue, Suite 500, Irvine, CA
            
            92612(Address
      of principal executive officers)
            
            (Zip
      Code)




Registrant’s
telephone number, including area code (949) 622-5433




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




None.




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




Common
Capital Stock, par value $0.0001


(Title
of Class)









Indicate
by check mark if the registrant is a well known seasoned issuer, as defined in
Rule 405 of the Securities Act.   ̈  Yes    x  No




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.   ̈  Yes    x  No




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.   ̈  Yes    x  No




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.  x




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large accelerated filer   ̈
            
            Accelerated
      filer   ̈
            
            Non-accelerated
      filer   ̈
            
            Smaller reporting company  x(Do not check if a smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.):   x  Yes     ̈  No




The
aggregate market value of the voting stock held by non-affiliates of the
Registrant:  Unavailable




The
number of shares outstanding of the registrant’s common stock at $.0001 par
value as of July 23, 2008 was 99,006,784.




Documents
Incorporated by Reference: None










TABLE OF
CONTENTS







TABLE
OF CONTENTS




Page No.PART IItem
      1.
            
            Business
            1Item 1A.
            
            Risk
    Factors
            8Item
      2.
            
            Properties
            17Item
      3.
            
            Legal
      Proceedings
            17Item
      4.
            
            Submission of Matters to a Vote
      of Security Holders
            17PART IIItem
      5.
            
            Market for Registrant’s Common
      Equity, Related Stockholder Matters and Issuer Purchases of Equity
      Securities
            18Item
      6.
            
            Selected Financial
      Data
            18Item
      7.
            
            Management’s Discussion and
      Analysis of Financial Condition and Results of
      Operations
            18Item 7A.
            
            Quantitative and Qualitative
      Disclosures about Market RiskItem
      8.
            
            Financial Statements and
      Supplementary Data
            21Item
      9.
            
            Changes in and Disagreements With
      Accountants on Accounting and Financial Disclosure
            25Item 9A.
            
            Controls and
      Procedures
            25Item
      9B.
            
            Other
      Information
            25PART IIIItem 10.
            
            Directors, Executive Officers and
      Corporate Governance
            26Item
      11.
            
            Executive
      Compensation
            28Item
      12.
            
            Security Ownership of Certain
      Beneficial Owners and Management and Related Stockholder
      Matters
            29Item
      13.
            
            Certain Relationships and Related
      Transactions and Director Independence
            30Item
      14.
            
            Principal Accounting Fees and
      Services
            30PART IVItem
      15.
            
            Exhibits, Financial Statement
      Schedules
            31Signatures
            32







PART I





STATEMENT REGARDING FORWARD-LOOKING STATEMENTS





In this
annual report, references to “EncryptaKey, Inc.”,  “EncryptaKey”, “the
Company”, “we”, “us”, and “our” refer to EncryptaKey, Inc.





Certain
statements, other than purely historical information, including estimates,
projections, statements relating to our business plans, objectives, and expected
operating results, and the assumptions upon which those statements are based,
are “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements generally are identified by the words “believes,”
“project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,”
“may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and
similar expressions. We intend such forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995, and are including this
statement for purposes of complying with those safe-harbor provisions.
Forward-looking statements are based on current expectations and assumptions
that are subject to risks and uncertainties which may cause actual results to
differ materially from the forward-looking statements. Our ability to predict
results or the actual effect of future plans or strategies is inherently
uncertain. Factors which could have a material adverse affect on our operations
and future prospects on a consolidated basis include, but are not limited to:
changes in economic conditions, legislative/regulatory changes, availability of
capital, interest rates, competition, and generally accepted accounting
principles. These risks and uncertainties should also be considered in
evaluating forward-looking statements and undue reliance should not be placed on
such statements. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Further information concerning our business, including
additional factors that could materially affect our financial results, is
included herein and in our other filings with the SEC.




Item
1. Description of Business





Business
Development





We were
incorporated in the State of New Jersey on April 6, 2000, under the name “Segway
VI Corp.” On August 13, 2003, we changed our name to 3DLP International Inc. In
June of 2004, we changed our name to Futomic Industries, Inc. and subsequently
filed Articles of Amendment with the State of New Jersey formally implementing
that name change on October 15, 2005.  On March 12, 2007, we amended
our Articles of Incorporation changing our name to EncryptaKey,
Inc.  Currently, we are in the process of amending our Articles of
Incorporation to change our name to Priviam, Inc., which should be effective on
or about July 30, 2008.





On July
26, 2008, shareholders holding a majority of the issued and outstanding shares
of our common stock approved by written consent an amendment to our Certificate
of Incorporation, changing our name to Priviam, Inc., increasing the authorized
shares from 100,000,000 to number of authorized shares of common stock, par
value $0.0001 per share, of the Company from 100,000,000 shares to 500,000,000
shares; and amending the Company’s Certificate of Incorporation to effect a
reverse stock split of all of the outstanding shares of Common Stock of the
Company at a ratio of one (1) for 3.25.  On July 12, 2008, we mailed
shareholders who did not vote on the amendment an information statement
describing the aforementioned events and are in the process of amending our
Articles of Incorporation to effect these changes on July 31, 2008.





In June
2008, our Board appointed Louis Jack Musetti to act as our sole officer, serving
as each of CEO, CFO, President, Secretary and Treasurer. Our Board believes that
Mr. Musetti is best suited to develop products based on the EncryptaKey
technology and to develop, market, and sell applications utilizing this
technology to government, institutional, commercial, and individual
consumers.





Previously,
we were engaged in the research, development and distribution of various
technologies including a 3D Adapter for the Sony Playstation II, and an
incomplete 3D Laser projection system to display 3D images. On June 20, 2005, we
sold our video game related technologies to SplitFish Gameware Inc. of Edmonton,
Canada, a company owned by Mr. Ken Tetterington who was formerly our
principal shareholder, officer and director. As a result of this transaction, we
are no longer in the video game hardware business. The primary reason for
exiting this business was to allow us to focus on our other business, the
research and development of smart card technology related to the biometric
security industry. However, we lacked the funding to pursue this line of
business and were forced to delay it until we are able to acquire the necessary
capital to proceed. At present, and for the foreseeable future, our smart card
related security business plan remains on hold.




1





Our
current business plan is focused upon the research, development, manufacture and
sale of the biometric security technology we recently acquired from Owen
Consulting, LLC, a California limited liability company. On September 28, 2006,
we entered into an Asset Purchase Agreement with Owen Consulting LLC. Pursuant
to that agreement, we acquired technology called the “EncryptaKey Secure
Communication Portal” as described in a patent application pending before the
Patent and Trademark Office as application no. 60745514, filed April 24, 2006,
titled “Invisidesk Private Communication, Authentication and Connection Portal”
and the related intellectual property in exchange for 5,500,000 shares of our
restricted common stock. As a result of our acquisition of the EncryptaKey
technology, we have changed the focus of our efforts in the security products
business away from smart cards and towards more sophisticated biometric devices
that use the EncryptaKey technology.





Business
and Plan of Operation





Our
objective for our new technology is to have our first anticipated hardware
product, which we have preliminarily called “EncryptaKey,” function so as to
allow a user to (1) manage his finances, (2) shop online, and (3) access his
home or work computer remotely and securely. The EncryptaKey hardware device is
presently in the development stage and many significant technical and financial
challenges remain before we anticipate being able to deliver a viable product to
market. It is our plan that, when development is complete, the hardware
EncryptaKey will utilize biometric data to secure personal and financial
information.





We
believe that our EncryptaKey technology has the potential to effectively address
a number of security issues plaguing financial institutions and individuals
alike. Industry research suggests that identity fraud victimized 15 million
adults in the United States during 2006, and resulted in $56.6 billion in losses
for financial institutions and retailers in 2005, and endless frustration for
consumers.




As
presently designed, an EncryptaKey hardware device will be approximately the
size of a USB “Thumb Drive” (4” x 1” x .25”) and will contain both a pad which
will read and verify a user’s thumbprint and an active RFID transmitter which
can only be activated by the user. Inside the physical casing will be a 1
Gigabyte flash drive that will hold user data as well as the proprietary
operating system. This flash drive will be partitioned so that the data is kept
separate from the operating system. The system is designed so that, should
anyone attempt to physically access the flash drive, the memory is immediately
and completely erased. Further, attempts to hack the data from a lost or stolen
EncryptaKey will be fruitless as the user’s fingerprint is required to replicate
the unique access code.





As
designed, when an end-user receives or purchases an EncryptaKey hardware device,
he or she will first load it with personal and financial information. This will
be done by plugging the EncryptaKey directly into the USB port of the user’s
personal computer. The computer will then reboot to EncryptaKey’s proprietary
operating system and will connect through our web portal to the user’s financial
institutions to download information or perform online financial activities.
Once the device is set up with the user’s fingerprint, thereafter the
EncryptaKey will know who has logged on because a unique key will have been
created using biometric data from the user’s fingerprint as well as his or her
login name and password. This will not be able to be duplicated by anyone but
the user because of the universal uniqueness of the user’s
thumbprint.





Our plan
is for financial institutions and online retailers to adapt their current
systems to recognize users authenticated with an EncryptaKey. We believe that
they will do so because of the ability of EncryptaKey, as designed, to reduce
fraudulent transactions in general, particularly those based on identity theft.
There can be no assurance that we will be successful in convincing financial
institutions and online retailers to allow their online transaction systems to
work with EncryptaKey.





In
addition to providing secure transactions for online financial and retail
purchase transactions, we also intend for EncryptaKey to allow a user to
securely access home or work computers over the internet as an alternative to
storing sensitive information on a portable laptop. We believe that secure
remote access features will appeal to our target customers because the ability
to remotely access home and work computers greatly reduces the security risks
associated with the potential for having a laptop containing sensitive
information on the internal hard drive lost or stolen while traveling. Because
sensitive information will no longer need to be kept on the laptop in order for
EncryptaKey users to have access to the information, there is no security risk
if the laptop is lost or stolen. Users can remotely and securely access their
computers either from laptops or public terminals. No information ever resides
on the hard drive of the laptop or terminal, nor is it transmitted over the
internet. Therefore, it cannot be intercepted or mined later.





We
further believe that, over the longer term, the EncryptaKey could potentially
supplant traditional credit cards in many face to face retail purchase
transactions because of its security features. Despite the recent growth of
online retail purchase transactions, a vast number of credit card sales are
still face-to-face Point of Service (POS) transactions. We intend to design the
EncryptaKey such that, once a user’s credit card information is loaded into the
EncryptaKey as described above, it can be used for secure POS transactions,
provided the retailer has the appropriate hardware and software systems to
recognize EncryptaKey.




2




Our long
term goal with our technology is to have a system in widespread use that will
allow a user, when paying for merchandise at a retail counter, to pull out his
EncryptaKey instead of reaching for a credit card. We believe such a use has
considerable potential because, whereas credit cards can be lost or stolen and
used by others to run up charges, EncryptaKey will not be able to be used by
anyone but the primary user because of the built in biometric security features.
In order to pay for merchandise, a user would place his or her thumb on the
thumb pad of the EncryptaKey. The EncryptaKey would read and verify that the
thumb print matches the one on file for the registered user. This unlocks the
EncryptaKey and allows the user to select which credit or debit card he wishes
to use in order to pay for the merchandise, just as if the user was sitting at
his or her desktop computer making an online purchase. The user will then press
a transmit button while holding the EncryptaKey near the sensor pad of an
Automated Teller Machine or Wireless POS Terminal. The EncryptaKey’s low power
active RFID transmitter then transmits the requisite information to confirm
payment with the merchant and the bank. We have not yet designed or built, even
in the prototype phase, the hardware devices and supporting software systems
that would allow EncryptaKey to be used in POS transactions. There can be no
assurance that we will be able to do so or that we would be able to convince any
retail or financial institutions to adopt such systems.





Our first
product, the hardware EncryptaKey, is presently still under development. In
order to develop our product, we anticipate that, provided we are successful in
raising $1,500,000, we will be able to finalize all functions of the system and
test-market working prototypes by 2009. There can be no assurance that we will
successfully complete the design and testing of any products, including the
EncryptaKey hardware device. We do not have any facilities or equipment capable
of manufacturing the EncryptaKey in commercial quantities, nor do we have a
contract with a third party manufacturer. There can be no assurance that we will
be able to manufacture or contract for the manufacture of the EncryptaKey at a
reasonable cost, or at all.





Although
we have not yet built a working model of the EncryptaKey that includes the
thumbprint and active RFID security features we intend to include in our final
production model, we have successfully built a beta version of our proprietary
operating system and successfully installed it on a flash drive. We displayed
this working prototype at the Consumer Electronics Show in Las Vegas during the
4th
Quarter of 2006. We were pleased with the acceptance of our prototype and were
recognized by the trade show organizers with the Best of Show - New
Innovations award.





We do not
presently have any customers or contracts for sales or licensing of any product
using the EncryptaKey technology, including the EncryptaKey hardware device
presently under development. There can be no assurance that there will be any
market demand for any product we may develop.





We
presently lack the funds necessary to complete our business
plan.  During the 4th Quarter
of 2006, we raised $1,135,200 through a private placement of our common
stock.  Also during the 4th
Quarter, we spent approximately $845,000 of those funds on operations related to
the development of the Encryptakey technology.  After the end of the
reporting period, we raised an additional $834,985.  In total, we
privately placed 6,900,664 shares of common stock at a purchase price of $0.30
per share for total cash proceeds of $2,070,185. Despite this additional
capital, we will need to raise additional funds over the next twelve months,
through borrowing or through sales of securities, in order to continue to pursue
our business plan.





We
currently have forecasted the expenditure of approximately $1.4 million during
the next twelve months in order to further develop the EncryptaKey technology,
on sales and marketing, on general and administrative expenses, and for working
capital requirements, including the anticipated cost of compliance with the
reporting requirements of the Securities Exchange Act of 1934. These estimates
do not include any unanticipated capital requirements that may be needed should
we identify any products or business acquisitions that may add value to our
current products.





The
completion of our business plan for the next 12 months is contingent upon us
obtaining that financing. If we are unable to obtain sufficient financing, our
business plan will be significantly impaired. We do not have any formal
commitments or arrangements for the sales of stock or the advancement or loan of
funds. Without the necessary financing, we will not be able to pursue our plan
of operations until such time as the necessary funds are raised. There can be no
assurance that additional financing will be available to us when needed or, if
available that it can be obtained on commercially reasonable terms. If we are
not able to obtain the additional funding on a timely basis, if and when it is
needed, we will be forced to scale down or perhaps even cease operation of our
business.





In the
long-term, our ability to continue as a going concern is dependent upon
successful and sufficient market acceptance of our product offerings and any new
product offerings that we may introduce, the continuing successful development
of our products and related technologies, and finally achieving a profitable
level of operations. The issuance of additional equity securities by us could
result in a significant dilution of equity interest of our current stockholders.
Obtaining commercial loans, assuming those loans would be available, would
increase our liabilities and future cash commitments.




3




After the
close of the reporting period, on February 5, 2007, we entered into an Asset
Purchase Agreement with Owen Consulting Inc., a Nevada Corporation. Pursuant to
that agreement, we acquired assets consisting of all right, title and interest
in server hardware and software in exchange for 636,120 shares of our restricted
common stock. The equipment and software we acquired will allow us to continue
development of our primary product. We do not anticipate that we will need to
acquire a plant or purchase any additional, significant equipment during
2008.





Industry
Overview





As
computer use migrates towards a networked environment, and our economy shifts
towards information as a primary asset, individuals and organizations are
becoming more concerned with protecting individual privacy and ensuring the
security of information maintained on personal computers, the Internet, and
corporate networks.





Traditional
processes for authenticating and identifying individuals have long histories,
but inherent weaknesses. Criminals and imposters can easily compromise these
processes by falsifying credentials by forging a signature, altering a
photograph on a driver’s license or passport, or stealing a credit card.
Imposters can use the compromised credentials to gain unauthorized access to
confidential information, such as medical data and financial records, and cause
significant harm. Traditional authentication and identification methodologies
can also be cumbersome and inefficient to use. Individuals are required to
remember several passwords and PINs for the multitude of access, credit and
membership cards they carry. The costs incurred by organizations to administer
these traditional processes can be significant.





A number
of technologies and strategies have been developed in the Information Security
industry in recent years to address these concerns, including encryption
methods, firewalls, intrusion detection tools, access permission systems,
passwords, identification cards or tokens, magnetic stripe cards, digital
certificates, bootable thumb drives, and single sign-on applications. However,
the effectiveness of each of these technologies and strategies is dependent upon
the most critical and vulnerable component of the security process - positive
personal identification and authentication of the individual seeking
access.




With the
growth of electronic commerce and the realities of business operations, access
points to the Internet and enterprise networks have increased significantly, and
now include desktops, home PCs, mobile laptops, and hand-held devices including
cellular phones. Computer industry leaders have called for the end of passwords
as a means to access computers and networks. This is due to the fact that using
passwords as the primary method of verifying the identity of users (remote and
local) is subject to a number of security weaknesses. Passwords are frequently
shared. Passwords are often written down and placed where others can see them.
Common passwords like a pet’s name or spouse’s name can be guessed. More complex
passwords can be broken in minutes through sophisticated “dictionary” attacks
based on tools that are easily available from Internet websites. Attempts to
increase security by requiring complex passwords comprised of letters, numbers,
and symbols are often met with significant resistance by users. For large
organizations, there is also a measurable cost of managing forgotten and expired
passwords relating to administration overhead and lost employee
productivity.




Financial
organizations, government agencies, corporations, and other organizations
performing computer-based electronic transactions have sought a simple and
secure way of digitally authenticating identities. The use of biometric
authentication represents a cost-effective means of providing positive proof of
identity when approving computer-based transactions. The resultant audit trail
of events links certain events to an individual’s unique biometric
characteristics. Similar identification techniques can be applied to
point-of-service purchases at retail locations when paired with credit cards or
other instruments.




We
believe that a sustainable market is developing for higher assurance
authentication technologies used in information security, data privacy, and
electronic access control applications. There are several factors that we
believe will contribute to the growth of this industry:




·
            Highly
      publicized security breaches in computer networks and Internet sites,
      which have been traced to the vulnerability of password-based
      authentication systems by hackers and unauthorized access by disgruntled
      employees.





·
            The
      growth of e-commerce as a medium for business and consumer transactions,
      which requires the implementation of technologies that facilitate the
      positive identification of anonymous
parties.




4




·
            The
      cost and inconvenience of using multiple or complex passwords that are
      frequently changed. Businesses are realizing true cost and time savings by
      implementing password alternatives for user
  authentication.





·
            The
      information technology industry is beginning to utilize advanced solutions
      to protect computer information. The primary means of protecting computer
      information is data encryption, which requires protection of the
      encryption “keys” used to lock up the data. Today, these keys are
      generally stored in computers or smart cards and are commonly protected by
      PINs or passwords. We believe biometrics will play an increasingly
      important role in protecting these keys from unauthorized
      access.





·
            IT
      industry leaders such as Microsoft, Citrix, Computer Associates, Dell,
      Hewlett Packard, Novell, MPC Computers, IBM, and Intel are supporting the
      integration of biometrics within their system platforms and have publicly
      announced that information security is a top corporate
    focus.





·
            Falling
      prices for biometric collection devices, such as fingerprint sensors,
      digital cameras, microphones, etc., and improvements in accuracy,
      performance, and acceptance of this technology have made integration of
      biometrics for physical access, desktop PCs, and portable computers a cost
      effective security alternative for the public sector and commercial
      market.





·
            New
      biometric devices, such as silicon chip-based fingerprint sensors and iris
      recognition cameras, are now widely available from name-brand commercial
      vendors such as Targus and
Panasonic.




·
            The
      April 12, 2007 issue of the Wall Street Journal reported: “A majority of
      Americans have said they are comfortable with the use of biometric
      identification. In a survey published in February, Unisys found that 63%
      of those polled were worried about identity fraud and 69% said they would
      prefer that banks, credit-card companies, health-care providers, and
      government organizations adopt biometrics over smart-card readers,
      security tokens or passwords.”





·
            Legislation
      and regulations adoption—such as the landmark Health Insurance Portability
      and Accountability Act (HIPPA) healthcare regulations, the
      Gramm-Leach-Bliley Financial Modernization Act—require that customer
      information, data, and financial records be kept secured, and outline
      substantial penalties for failure to do so. The FDA regulation 21CFR Part
      11 requires positive authentication of digital signatures placed on
      electronic records created within regulated industries such as
      pharmaceutical manufacturing.




·
            The
      BioAPI Consortium, a group of over 120 organizations from the biometrics
      industry, government and information technology vendors, was successful in
      having the BioAPI Specification accepted as an official standard by the
      American National Standards Institute (ANSI). This specification defines a
      single industry-standard specification for connecting biometric devices to
      computer systems and is expected to encourage implementation of biometrics
      by facilitating the interoperability of different biometric technologies.
      This standard is now before the International Organization for Standards
      (ISO) for balloting to become an international
  standard.





Evolution
of Biometric Authentication and Identification Processes




The
inadequacies of traditional authentication and identification processes, coupled
with more stringent security requirements and an increasingly global economy and
mobile population, have in recent years contributed to the increased focus on
the development of biometrics for Information Security. Biometrics is the
automated use of unique physiological characteristics of individuals, such as
fingerprints, palm prints, faces or irises, to determine or verify an
individual’s identity. The individual’s biometric characteristic is captured and
encoded and then compared against previously encoded biometric data stored in an
electronic database to determine or verify the individual’s identity. Because
biometrics technology utilizes an unchanging, unique characteristic of a person
that cannot be lost, stolen, shared or forgotten, it has the capability to be
more accurate, convenient and cost-effective than traditional
methodologies.




Fingerprints
have been, and we believe will continue to be, the most widely used biometric
because they are relatively simple to capture, are relatively non-intrusive, and
benefit from a substantial existing infrastructure that employs fingerprints for
identification. The American National Standard Institute and the National
Institute of Standards and Technology have standardized a common format, called
ANSI/NIST, which is used to describe and classify fingerprints.




Growth
Expected in the Market for Fingerprint Biometrics Products and
Solutions




5




The
market for fingerprint biometrics solutions is expected to increase in coming
years. Advances in technology and widespread deployment of biometric systems are
resulting in both increased public awareness and acceptance of biometric
solutions and the establishment of an infrastructure that we believe will
expedite the adoption of other fingerprint biometrics solutions. Fingerprint
biometric solutions have become much more sophisticated and capable of
application in a number of other environments. Several initiatives requiring
increased spending on other fingerprint biometrics solutions have already begun.
For example, numerous foreign jurisdictions around the world have begun to
establish national identification card programs, which will require the issuance
of smart ID cards with embedded fingerprint information for each
citizen.




Foreign
jurisdictions such as Hong Kong, Italy, Morocco, the United Kingdom and Thailand
have implemented or are in the process of implementing national identification
programs. In addition, countries such as Venezuela have begun to use fingerprint
biometrics systems to streamline the voting process and prevent fraud in local
and national elections. Moreover, consumers have also begun to embrace
biometrics authentication, particularly for the purposes of providing increased
security on laptops, cell phones and other smart handheld devices that are
beginning to store increasing amounts of personal information.





Market
for Our Products and Services





We plan
on marketing our products and services to both institutions and end consumers.
While we believe that our institutional customers will push our products through
to the end user, the inverse is also true - demand from end users will encourage
large entities to embrace our products and services. Both markets will be driven
by a need to protect the privacy of their electronic information.





Individual
Users





With the
ongoing explosion of identity theft and financial fraud in the United States,
individuals are now, more than ever, looking for a way to protect their identity
and their private information from both online and more traditional theft.
EncryptaKey provides a comprehensive solution to the information security issues
facing individuals today. We will initially provide security for online
transactions, point-of-service retail transactions, internet access, access to
financial data and medical records, physically access to buildings and vehicles,
and access to desktop or laptop computers. A myriad of other possible future
applications suggests that our technology could become the cornerstone for an
individual’s complete security solution in the future.





Institutional
Users





The key
to EncryptaKey’s widespread acceptance and use is the adoption of our
technology, products, and services by large, institutional organizations such as
financial institutions, internet portals, government agencies, large
corporations, and healthcare organizations. They are highly motivated to secure
their data and transactions as they book billions of dollars of losses each year
as a result of fraud. If they adapt their infrastructure to allow us to provide
the solution to their information security issues, it will drive large numbers
of individuals who use their products and services to adapt and accept our
security solutions as well.





Financial
Institutions





The
finance industry is initially our primary target market. The nature of the
transactions in this industry, both online and face to face, and the level and
number of fraudulent transactions in the finance industry make it a perfect fit
with our EncryptaKey technology. EncryptaKey will allow users to securely access
and manage their bank accounts, stock portfolios, and other financial
information.




Corporate
Customers





With the
ever increasing amount of data to process, companies of every shape and size are
struggling with how to best secure their information from internal and external
threats. EncryptaKey provides the solution to this problem. EncryptaKey provides
intellectual property protection, SOX compliance, secure remote workforce
connections, and support for existing network infrastructure designed to protect
critical systems. The remote workforce connection application is particularly
appealing to corporations as the modern workforce continues to become more
mobile each year. When employees log in to a company’s computer network, or even
has the capability to do so, that company’s network and the data contained
thereon are at risk. By utilizing EncryptaKey, companies can provide a
significantly higher level of protection for their data and improved tracking of
data access, thus preventing significant losses from fraud, hacking, and
sabotage.




6




Government
Agencies





Government
agencies, like other large organizations, are concerned with protecting
sensitive data, allowing secure access from remote computers, and protecting
major systems from malicious attack. The EncryptaKey solution may enable
individuals secure access to various electronic government information and
services. In the future, this could evolve into electronic voting, passports,
national identity cards or access to social security records. Within the United
States government, there are several agencies that could benefit from the
EncryptaKey solution, including Law enforcement (police departments, CIA, FBI,
etc.); Homeland Security; Internal Revenue Service; Social Security
Administration; and Department of Veterans Affairs. Other national governments
around the world have similar agencies, which could similarly benefit from our
products and services.





Healthcare
Organizations





Health
care is a multi-billion dollar industry. Constantly seeking ways to bring
greater efficiencies to this market, many companies are offering technical
solutions covering every aspect of the healthcare value chain. Because of HIPAA
(Health Insurance Portability and Protection Act), one area receiving increasing
attention is the Electronic Medical Record (EMR).





From
doctors and nurses to technicians and billing clerks, roughly 150 different
people have access to at least part of a patient's records during
hospitalization. More than 600,000 payers, providers and other entities handle
the billing and payment of healthcare transactions. Because of the potential
productivity gains, the number one goal for the National Coordinator for Health
Information Technology is to build a national electronic health information
infrastructure capable of offering Electronic Medical Records (EMR) for most
Americans within the next seven years. EncryptaKey could be an important part of
that infrastructure.





Other
significant segments of the healthcare industry where EncryptaKey could provide
a solution to information access and security issues are hospitals and medical
centers; large physician medical groups; claims processing firms; physician
offices; and individual patients.




Competition





MasterCard PayPass is a new
contactless way to pay. By tapping a card, key fob, or mobile phone, consumers
can pay at retail checkout locations. PayPass uses a hidden
embedded computer chip and radio frequency antennae. After consumers tap their
PayPass at checkout,
payment details are sent wirelessly to the MasterCard network, and payment
confirmation is sent back. Speed and convenience are the hallmarks of this
product. However, should someone steal or find a consumer’s PayPass, there is nothing to
prevent them from making charges with the device until the consumer reports it
stolen. MasterCard compensates by offering the same liability protection they
offer with all their cards.





StealthSurfer is a Windows PC
compatible key-sized USB device that is preloaded with Firefox, Anonymizer,
RoboForm , and Thunderbird software configured and integrated for optimum
privacy. Users insert the device into a computer’s USB port - home computer,
laptop, or public terminal - and the computer reboots to the operating system
stored on StealthSurfer. Thereafter, all information is run through the
StealthSurfer - not the computer’s traditional memory and storage mediums. When
using StealthSurfer, all sensitive Internet files such as cookies, internet
history, and cache are stored on the StealthSurfer USB device instead of the
user’s computer. Password protection maintains the user’s data's privacy and
security. StealthSurfer conceals the user’s web surfing habits, files, and
visited web sites from anyone who has physical access to the user’s computer as
a way of blocking indentity theft. StealthSurfer keeps surfing information
encrypted, hidden, and anonymous - it protects identities. Passwords are stored
on the StealthSurfer with 3DES encryption and allows users to log on to web
sites quickly and easily. Advanced and secure E-mail programs are included in
StealthSurfer so your portable private email.




Dell, Hewlett-Packard, Sony,
IBM, and a myriad of other computer manufacturers now build laptops and
even desktop computers with biometric authentication available. Only users with
fingerprints, which have been authorized for use on that machine, will be
allowed access to the computer, eliminating the need for passwords and allaying
many data security concerns. The April 12, 2007 Wall Street Journal reports that
approximately 10% of new laptops sold in the United States come equipped with
fingerprint sensors.





Sony produces two additional
products that offer competitive solutions for information security concerns. The
first is a Micro Vault Fingerprint Access USB Flash Drive. It works as any other
flash drive, but a fingerprint scan is required to access the information on the
flash drive. The FIU-810 Personal Puppy Suite Fingerprint Identity Token Bundle
is also a fingerprint access USB flash drive. The FIU-810, however, can be used
to log in to Windows, effectively requiring biometric authentication for
computer access. It also encrypts files and replaces all of your online IDs and
passwords so that your fingerprint scan is required to access internet
sites.




7




Most
certainly, EncryptaKey will face formidable competitive challenges in the near
and long term as we compete with other companies who have significantly greater
resources than ourselves. While each of these companies, and many others like
them, are offering unique solutions to some of the problems facing the
information security industry, EncryptaKey offers the highest level of online
and in-person identity protection currently known to be available. With five
levels of authentication made up of something you have (the key), something you
know (user name, password and symbol) and something you are (biometric finger
print), EncryptaKey allows users to make credit card purchases, conduct online
financial transactions, and access, view and transmit sensitive personal or
corporate data with complete confidence.





Major
Customers





There is
no dependence on one or a few major customers.





Patents,
Licenses, Trademarks, Franchises, Concessions, Royalty Agreements, or Labor
Contracts





On
September 28, 2006, we entered into an Asset Purchase Agreement with Owen
Consulting LLC, a California limited liability company. Pursuant to that
agreement, we acquired assets consisting of all right, title and interest in
technology commonly known as the EncryptaKey Secure Communication Portal and
memorialized in a patent application pending before the Patent and Trademark
Office as application no. 60745514, filed April 24, 2006, titled “Invisidesk
Private Communication, Authentication and Connection Portal” and the related
intellectual property. The patent is still pending and has not yet been
granted.





We have
not yet sought protection for any of our intellectual property except as
contained in US patent application number 60745514.





Research
and Development





We did
not incur any research and development expenditures in the fiscal year ended
December 31, 2007. We incurred research and development expenditures in the
fiscal year ended December 31, 2006 of approximately $890,000, all of which was
related to our EncryptaKey technology.  During 2008 we anticipate
spending approximately $500,000 of our total anticipated capital needs of
approximately $1.4 million on further research and development of our
EncryptaKey technology. The focus of these expenditures during 2008 will be
further work on pilot programs and product launch.





Sales
and Marketing





We have
begun promoting and marketing our products through multiple channels in order to
develop pilot projects in our various verticals. We plan to direct our initial
marketing effort to target financial institutions, credit card processors, and
internet retailers. We will demonstrate the feasibility of our products to our
potential customers via pilot projects. We anticipate we will expend
approximately $800,000 during 2008 on sales and marketing activities, including
the salaries of any new or existing employees and consultants involved in sales
and marketing.





Compliance
with Environmental Laws





We did
not incur any costs in connection with the compliance with any federal, state,
or local environmental laws.





Employees





We
currently have two full-time employees.  We believe
that our relations with our employees are good.




Item
1A.  Risk Factors





You
should carefully consider the following risk factors and other information in
this report before deciding to become a shareholder of our common stock. Your
investment in our common stock is highly speculative and involves a high degree
of risk. You should not invest in our common stock unless you can afford to lose
your entire investment and you are not dependent on the funds you are
investing.




8




Please
note that throughout this report, the words "we", "our" or "us" refer to
EncryptaKey, Inc. and not to the selling stockholders.





Because
we have a limited operating history, you may not be able to accurately evaluate
our operations.





We have
had limited operations to date and have never generated revenue. Therefore, we
have a limited operating history upon which to evaluate the merits of investing
in the Company. Because we are in the early stages of operating our business, we
are subject to many of the same risks inherent in the operation of a business
with a limited operating history, including the potential inability to continue
as a going concern.





We
are dependent on outside financing for continuation of our
operations.





Because
we have never generated revenue and currently operate at a significant loss, we
are completely dependent on the continued availability of financing in order to
continue our business. There can be no assurance that financing sufficient to
enable us to continue our operations will be available to us in the future. Our
failure to obtain future financing or to produce levels of revenue to meet our
financial needs could result in our inability to continue as a going concern
and, as a result, investors in the Company could lose their entire
investment.





Our
business will not grow unless the market for biometric products and services
expands both domestically and internationally.





Our
revenues will be derived from the sale of biometric products and services.
Biometric products have not gained widespread commercial acceptance. We cannot
accurately predict the future growth rate, if any, or the ultimate size of the
biometric technology market. The expansion of the market for our anticipated
products depends on a number of factors including without
limitation:


·
            national
      or international events which may affect the need for or interest in
      biometric products or services;·
            the
      cost, performance and reliability of our products and services and those
      of our competitors;·
            customers’
      perception of the perceived benefit of biometric products and services and
      their satisfaction with our products and services;·
            public
      perceptions of the intrusiveness of these products and services and the
      manner in which firms are using the information
  collected;·
            public
      perceptions regarding the confidentiality of private
      information;·
            proposed
      or enacted legislation related to privacy of
      information; and·
            marketing
      efforts and publicity regarding these products and
    services.





The
Technologies We Have Developed May Not Gain Market Acceptance.





Our
biometric products utilize new technologies.  As with any new
technologies, in order for us to be successful, these technologies must gain
market acceptance.  Since the technologies that we are introducing to
the marketplace will encroach upon markets that presently utilize or are
serviced by products from competing technologies, meaningful commercial markets
may not develop for our technologies.





We
May Not Be Able To Compete Successfully.





Although
our biometric products represents a new technology, and although at present time
we are aware of only a limited number of companies that have publicly disclosed
their attempts to develop a similar technology, we anticipate that a number of
companies are or will attempt to develop technologies/products that compete or
will compete with our technologies.  Further, even if we are first to
market with a technology of this type, and even if the technology is protected
by patents or otherwise, because of the vast market of such a product, we
anticipate that the market will be flooded by a variety of competitors, many of
which will offer a range of products in areas other than those in which we
compete, which may make our competitors more attractive to prospective
customers.  In addition, many if not all of our competitors and
potential competitors will initially be larger and have greater financial
resources than we do. Some of the companies with which we may now be in
competition, or with which we may compete in the future, have or may have more
extensive research, marketing and manufacturing capabilities and significantly
greater technical and personnel resources than we do, and may be better
positioned to continue to improve their technology in order to compete in an
evolving industry. Further, technology in this industry may evolve rapidly once
an initially successful product is introduced, making timely product innovations
and use of new technologies essential to our success in the marketplace. The
introduction by our competitors of products with improved technologies or
features may render any product we initially market obsolete and unmarketable.
If we do not have available to us products that respond to industry changes in a
timely manner, or if our products do not perform well, our business and
financial condition will be adversely affected.




9




Certain
groups have publicly objected to the use of biometric products for some
applications on civil liberties grounds and legislation has been proposed to
regulate the use of biometric security products.





From time
to time, biometrics technologies have been the focus of organizations and
individuals seeking to curtail or eliminate such technologies on the grounds
that they may be used to diminish personal privacy rights. If such initiatives
result in restrictive legislation, the market for biometric solutions may be
adversely affected. Even if biometric solutions gain wide market acceptance, our
products and services may not adequately address the requirements of the market
and may not gain wide market acceptance.




We
may face intense competition from other biometric solution providers as well as
identification and security systems providers.





A
significant number of established and startup companies are marketing or
developing software and hardware for facial and/or fingerprint biometric
products and applications that may compete with our proposed
offerings.





The
biometric security market is a rapidly evolving and intensely competitive, and
we believe that additional significant long-term competitors will continue to
enter the market. We expect competition in the biometrics markets to increase
and intensify in the near term. Companies competing with us may introduce
products that are targeted at our target markets and competitively priced, have
increased performance or functionality or incorporate technological advances we
have not yet developed or implemented. Some present and potential competitors
have financial, marketing, research, and manufacturing resources substantially
greater than ours. Other players in the biometric do have the potential to
directly compete with us. Among these companies are Sagem Morpho, Inc., Cogent,
NEC, Printrak International, Inc., (a Motorola company), and Saflink. However,
these companies primarily focus on networked-based, or computer based systems
that require a sophisticated computer-based infrastructure to operate. Our
company’s products are embedded and self contained and do not require a computer
to operate.





The
biometrics industry is characterized by rapid technological change and requires
introduction of new and enhanced products at competitive
prices.





In order
to compete effectively in the biometrics market, we must continually design,
develop and market new and enhanced products at competitive prices and we must
have the resources available to invest in significant research and development
activities. Our future success will depend upon our ability to address the
changing and sophisticated needs of the marketplace. Frequently, technical
development programs in the biometric industry require assessments to be made of
the future directions of technology and technology markets generally, which are
inherently risky and difficult to predict. Delays in introducing new products,
services and enhancements, the failure to choose correctly among technical
alternatives or the failure to offer innovative products and services at
competitive prices may cause customers to forego purchases of our products and
services and purchase those of our competitors, and could adversely affect our
business operations, financial results and stock price.





If
we are unable to establish and maintain relationships with retailers and
insurance providers or attract franchisees, we may not be able to continue our
operations





We intend
to establish relationships with retailers and insurance
providers.  However, there is intense competition for these
relationships and we may not be able to attract and retain these group's
interest in light of competitors with larger budgets and pre-existing
relationships.  In addition, if we are unable to develop a market for
our products, it will be very difficult, if not impossible, to attract
franchisees interested in selling our products.





Our
operating results and revenue may be subject to fluctuations caused by many
economic factors associated with our industry and the markets for our products
and services which, in turn, may individually and collectively affect our
revenue, profitability and cash flow in adverse and unpredictable
ways.


10




Quarterly
and annual results of operations may be affected by a number of factors,
associated with our industry and the markets for our products and services,
including those listed below, which in turn could adversely affect our revenue,
profitability and cash flow in the future.





Our
operating results may vary and may fluctuate significantly in the future as a
result of a variety of factors, many of which are outside our control. These
factors include the following:




•
            the
      size, timing and shipment of individual orders for our
      products;•
            changes
      in our operating expenses;•
            the
      timing of personnel departures and new hires and the rate at which new
      personnel become productive;•
            the
      timing of the introduction or enhancement of our products and our
      competitors’ products;•
            customers
      deferring their orders in anticipation of the introduction of new products
      by us or our competitors;•
            market
      acceptance of new products;•
            changes
      in the mix of products sold;•
            changes
      in product pricing, including changes in our competitors’ pricing
      policies;•
            development
      and performance of our direct and indirect distribution channels and
      changes in the mix of vertical markets to which we sell our
      products;•
            the
      amount and timing of charges relating to restructurings and the impairment
      or loss of value of some of our assets, especially goodwill and intangible
      assets; and•
            general
      economic conditions.




To be competitive we may need to
acquire other companies or purchase or license technology from third parties in
order to introduce new products and services or enhance our existing products
and services.





We may
not be able to find businesses that have the technology we need and, if we find
such businesses, may not be able to purchase or license the technology on
commercially favorable terms or at all. Once we have completed an acquisition or
technology license, the acquired business or our relationship with the licensor
may not be successful. In addition, acquisitions and technology licenses are
difficult to identify and complete for a number of reasons, including the cost
of potential transactions, competition among prospective buyers and licensees
and the need for regulatory approvals. In order to finance a potential
transaction, we may need to raise additional funds by selling our stock or
borrowing money. We may not be able to find financing on favorable terms, and
the sale of our stock may result in the dilution of our existing
stockholders.





Some of our anticipated products may
have long and unpredictable sales cycles, which may impact our quarterly
operating results.





Transactions
for some of our anticipated products often involve large expenditures by our
customers. The sales cycles for these transactions can be long and unpredictable
due to a number of uncertainties such as:




•
            customers’
      willingness to invest potentially substantial resources and modify their
      network infrastructures to take advantage of our
  products;•
            customers’
      budgetary constraints;•
            the
      need to educate potential customers about our products’
      capabilities;•
            the
      timing of customers’ budget cycles;•
            delays
      caused by customers’ internal review
processes; and•
            for
      sales to government customers, governmental regulatory, approval and
      purchasing requirements.




11





During times when the global economy
experiences weakness or uncertainty, we may have difficulty selling our products
and services.





The
global economy, especially the technology sector, can be volatile, and an
economic slowdown can have serious negative consequences for our business and
operating results. For example, during a period of economic weakness or
uncertainty, current or potential customers may defer purchases, go out of
business or have insufficient capital to buy or pay for our products and
services. During the last several years, we have observed that many companies
have reduced their budgets for information technology products and services,
which may reduce or eliminate some potential sales of our products and
services.





If we fail to become competitive,
then we may fail to gain market share for our products and services.





We have
seen increased competition in our market in recent years, and we expect this
trend to continue. A number of competitive factors could cause us to lose
potential sales or to sell our products and services at lower prices or at
reduced margins, including, among others:




•
            Some
      of our competitors offer e-security products with features and
      functionality that our products do not currently offer. In addition,
      potential customers may perceive some of our competitors’ products and
      services as being more convenient and easier to use than
    ours.•
            Some
      computer and software companies that have not traditionally offered
      e-security products are now offering free or low-cost e-security products
      and functionality bundled with their own computer and software
      products.•
            Some
      of our current and potential competitors have greater financial, marketing
      and technical resources than we do, allowing them to leverage an installed
      customer base and distribution network, adapt more quickly to new
      technologies and changes in customer requirements, or devote greater
      resources to the promotion and sale of their products and services than we
      can.




We depend heavily on key, talented
employees in a competitive labor market.





Our
success depends on our ability to attract, motivate and retain skilled personnel
especially in the areas of management, sales and engineering. We compete with
other companies for a small pool of highly qualified employees. Although we
believe that our compensation plans are competitive, we may not be able to hire
and retain the employees we need.





If the market for e-security
solutions does not continue to grow, then demand for our products and services
may decrease.


12


The
market for some of our e-security solutions is continuing to develop, and demand
for our products and services depends on, among other things:




•
            the
      perceived ability of our products and services to address real customer
      problems;•
            the
      perceived quality, price, ease-of-use and interoperability of our products
      and services as compared to those of our competitors;•
            the
      market’s perception of how easy or difficult it is to deploy our products,
      especially in complex, heterogeneous network
  environments;•
            the
      continued evolution of electronic commerce as a viable means of conducting
      business;•
            market
      acceptance and use of new technologies and standards;•
            the
      ability of network infrastructures to support an increasing number of
      users and services;•
            the
      public’s perception of the need for secure electronic commerce and
      communications over both wired and wireless computer
networks;•
            the
      U.S. government’s continued focus on e-security as a means to
      counteract terrorism and other hostile acts;•
            the
      pace of technological change and our ability to keep up with these
      changes;•
            the
      market’s perception of our products’ ability to address the e-security
      aspects of various laws; and•
            general
      economic conditions, which, among other things, influence how much money
      our customers and potential customers are willing to allocate to their
      information technology budgets.




Unless we keep up with the ongoing
changes in e-security technology and standards, our
anticipated  products and services could become obsolete.





Our
success depends in part upon our ability to introduce new, competitively priced
products and solutions with features that meet changing market requirements, all
in a timely and cost-effective manner. A number of factors, including the
following, could have a negative impact on the success of our products and
services:




•
            quality,
      reliability or security failures, which could result in product returns,
      delays in collecting accounts receivable, unexpected service or warranty
      expenses, reduced orders and a decline in our competitive
      position;•
            delays
      or difficulties in the development of our products and
      services;•
            our
      competitors’ introduction of new products or services ahead of our new
      products or services, or their introduction of superior or cheaper
      products or services;•
            the
      availability of free, unpatented implementations of encryption algorithms
      and security protocols;•
            the
      market’s failure to accept new technologies, including consumer
      authentication, connected authentication devices, biometric devices,
      enterprise strong authentication, web access management and digital
      certificates;•
            our
      failure to include features in our products, or obtain industry and
      governmental certifications, that our customers or U.S. or foreign
      government regulators may require;•
            our
      failure to anticipate changes in customers’ requirements;
    and•
            the
      implementation of industry or government standards that are inconsistent
      with the technology embodied in our products and services.




13





International sales make up a
significant portion of our business.





We intend
to expand our international operations and international sales and marketing
activities. For example, we expect to expand our operations and marketing
activities throughout Asia, Europe, Latin America and South America. Expansion
in these international markets can require significant and continued management
attention and resources. We may also need to tailor some of our other services
for a particular market and to enter into international distribution and
operating relationships. We have limited experience in localizing our services
and in developing international distribution or operating relationships. We may
not succeed in expanding our services into international markets. Failure to do
so could harm our business. In addition, there are risks inherent in doing
business on an international basis, including, among others:




•
            foreign
      regulatory requirements and the burdens of complying with a wide variety
      of foreign laws;•
            legal
      uncertainty regarding liability and the costs of resolving or litigating a
      dispute internationally;•
            difficulties
      in the enforcement of intellectual property rights;•
            export
      and import restrictions on cryptographic technology and products
      incorporating that technology;•
            difficulties
      and delays in establishing international distribution
      channels;•
            the
      need to tailor or “localize” our products in order to compete in
      particular international markets and to comply with foreign
      laws;•
            difficulties
      in collecting international accounts receivable;•
            fluctuations
      in currency exchange rates;•
            potentially
      adverse tax consequences, including restrictions on the repatriation of
      earnings;•
            tariffs
      and other trade barriers; and•
            political
      instability.




We rely
on patents to protect our proprietary rights in our technology, but patents may
not provide complete protection:




•
            It
      is possible that any patent that we or our licensors hold might be
      invalidated, circumvented, challenged or terminated.•
            It
      is possible that patent examiners might reject the claims described in our
      pending or future patent applications.•
            The
      laws of some countries in which our products are now, or may in the future
      be, developed or sold may not protect our products and intellectual
      property rights to the same extent as the laws of the United
      States.•
            All
      patents expire after a period of years. When each of our patents expires,
      other companies may develop and sell products based on our previously
      patented technology.•
            During
      the life of a patent, third parties may design and sell “work-around”
      solutions that accomplish the goals of our patented inventions but do not
      infringe the patents themselves.




We must establish and maintain
strategic relationships.


14


We need
to create relationships with third parties, including some of our competitors,
to ensure that our products will interoperate with the third parties’ products.
If our products do not work with third-party products used by our customers and
potential customers, then our products could lose or fail to achieve market
acceptance. We may not be able to find appropriate strategic partners or may not
be able to enter into relationships on commercially favorable terms.
Furthermore, the relationships we do enter into may not be successful. Because
our strategic relationships are generally non-exclusive, our strategic partners
may decide to pursue alternative technologies or to develop alternative products
in addition to or instead of our products, either on their own or in
collaboration with our competitors.





Security technologies are under
constant attack.





The
strength of our cryptographic and other e-security technologies is constantly
being tested by computer professionals, academics and “hackers.” Any significant
advance in the techniques for attacking e-security solutions could make some or
all of our products obsolete or unmarketable. If a third party successfully
“hacks” any of our products and makes its findings public, then we may need to
dedicate engineering and other resources to eliminate the published
vulnerabilities. Customers could require that we replace some or all of their
EncryptaKey authenticators with authenticators that are more secure. If we are
required to make these replacements or if we cannot address the vulnerabilities
in our products in a timely fashion, then our business and operating results
could be adversely impacted. In addition, our customers and potential customers
could perceive our products as unreliable, making it more difficult for us to
sell our products.





We may incur significant expenses
and damages because of liability claims.





An actual
or perceived breach of network or data security at our facilities or at a
customer’s facilities could result in a product liability claim against us. A
substantial product liability claim against us could harm our operating results
and financial condition. In addition, any actual or perceived breach of network
or data security, whether or not caused by the failure of one of our products,
could hurt our reputation and cause potential customers to turn to our
competitors’ products.





Failure
to Achieve and Maintain Internal Controls in Accordance with Sections 302 and
404(a) of the Sarbanes-Oxley Act of 2002 Could Have A Material Adverse Effect on
Our Business and Stock Price.





If we
fail to maintain adequate internal controls or fail to implement required new or
improved controls, as such control standards are modified, supplemented or
amended from time to time; we may not be able to assert that we can conclude on
an ongoing basis that we have effective internal controls over financial
reporting. Effective internal controls are necessary for us to produce reliable
financial reports and are important in the prevention of financial
fraud.  If we cannot produce reliable financial reports or prevent
fraud, our business and operating results could be harmed, investors could lose
confidence in our reported financial information, and there could be a material
adverse effect on our stock price.   We have examined and evaluated
our internal control procedures to satisfy the requirements of Section 404(a) of
the Sarbanes-Oxley Act, as required for our Annual Report on Form 10-K for the
year ending December 31, 2007.





Our
independent registered public accounting firm has expressed substantial doubt
about our ability to continue as a going concern, which may hinder our ability
to obtain future financing.




Our
consolidated financial statements as of December 31, 2007 have been prepared
under the assumption that we will continue as a going concern for the year
ending December 31, 2008. Our independent registered public accounting firm has
issued a report dated June 28, 2008 that included an explanatory paragraph
expressing substantial doubt as to our ability to continue as a going concern
without additional capital or financing becoming available. Our ability to
continue as a going concern ultimately depends on our ability to generate a
profit which is likely dependent upon our ability to obtain additional
equity or debt financing, attain further operating efficiencies and, ultimately,
to achieve profitable operations. The financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.







RISKS
RELATING TO OUR COMMON STOCK





The market
price of our common stock is likely to be highly volatile and could fluctuate
widely in price in response to various factors, many of which are beyond our
control, including the following:





·
            technological
      innovations or new products and services by us or our
      competitors;





·
            intellectual
      property disputes;




15




·
            additions
      or departures of key personnel;





·
            sales
      of our common stock (particularly following effectiveness of
      the  resale  registration   statement  required  to  be  filed  in
      connection with the Private
Placement);





·
            our
      ability to execute our business
plan;





·
            operating
      results that fall below
expectations;





·
            loss
      of any strategic relationship;





·
            industry
      developments;





·
            economic
      and other external factors; and





·
            period-to-period
      fluctuations in our financial
results.





In
addition, the securities markets have from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies.  These market fluctuations may also materially
and adversely affect the market price of our Common Stock.





We
have never paid dividends and do not expect to pay dividends in the foreseeable
future. Any return on investment may be limited to the value of our common
stock.





We have
never paid cash dividends on our common stock and do not anticipate doing so in
the foreseeable future.  The payment of dividends on our common stock
will depend on earnings, financial condition and other business and economic
factors affecting it at such time as our board of directors may consider
relevant. If we do not pay dividends, a return on an investment in our common
stock will only occur if our stock price appreciates.





Our
common stock may be deemed a “penny stock”, which would make it more difficult
for our investors to sell their shares.





Our
common stock may be subject to the “penny stock” rules adopted under
Section 15(g) of the Securities Exchange Act of 1934.  The penny
stock rules apply to non-NASDAQ companies whose common stock trades at less
than $5.00 per share or that have tangible net worth of less than $5.0
million ($2.0 million if the company has been operating for three or more
years).  These rules require, among other things, that brokers
who trade penny stock to persons other than "established customers"
complete certain documentation, make suitability inquiries of investors and
provide investors with certain information
concerning trading  in  the  security,  including  a
risk  disclosure  document  and  quote information
under certain circumstances.  Many brokers have decided not to
trade penny stocks because of the requirements of the penny stock rules
and, as a result, the number of broker-dealers willing to act as market
makers in such securities are limited.  Remaining subject to the
penny stock rules for any significant period could have an adverse effect
on the market, if any, for our securities.  If our securities are
subject to the penny stock rules, investors will find it more difficult to
dispose of our securities.





Furthermore,
for companies whose securities are traded in the OTC Bulletin Board, it is
more difficult to obtain accurate quotations, obtain coverage for
significant news events because major wire services generally do not
publish press releases about such companies and obtain needed
capital.





Sales of a substantial number of
shares of our common stock may cause the price of our common stock to decline.





If our
stockholders sell substantial amounts of our common stock in the public
market, including shares issued upon the exercise of outstanding
options, the market price of our common stock could fall.  These
sales also may make it more difficult for us to sell equity or
equity-related securities in the future at a time and price that we deem
reasonable or appropriate.





Additional stock offerings may
dilute current stockholders.




16




Given our
expansion plans and our expectation that we may need additional capital and
personnel, we may need to issue additional shares of capital stock or
securities convertible or exercisable for shares of capital stock,
including preferred stock, options or warrants.  The issuance
of additional capital stock may dilute the ownership of our current
stockholders.





Being a public company will increase
our administrative costs and may add other burdens.





As a
public company, we will incur significant legal, accounting and other
expenses that we did not incur as a private company.  In addition,
the Sarbanes-Oxley Act of 2002, rules implemented by the Securities and
Exchange Commission, or SEC, and new listing requirements of the Nasdaq
National Market have required changes in corporate governance practices of
public companies.  We expect these new rules and regulations to
increase our legal and financial compliance costs and to make some
activities more time consuming and costly.  We also expect these
new rules and regulations to make it more difficult and more expensive for
us to obtain director and officer liability insurance, and we may be
required to accept reduced coverage or incur substantially higher costs
to obtain coverage.  These new rules and regulations could also
make it more difficult for us to attract and retain qualified members of
our board of directors, particularly those serving on our audit
committee.





We
will be exposed to risks relating to evaluations of our internal controls over
financial reporting required by Section 404 of the Sarbanes-Oxley Act of
2002.





As a
public company, absent an available exemption, we will be required to
comply with Section 404 of the Sarbanes-Oxley Act by no later than
December 31, 2007.  However, we cannot be certain as to the
timing of completion of our evaluation, testing and remediation actions or
the impact of the same on our operations.  Furthermore, upon
completion of this process, we may identify control deficiencies of varying
degrees of severity that remain unremediated. As a public company, we will
be required to report, among other things, control deficiencies that
constitute a "material weakness." A "material weakness" is a significant
deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the annual
or interim financial statements will not be prevented or
detected.  If we fail to implement the requirements of Section
404 in a timely manner, we might be subject to sanctions or investigation
by regulatory agencies such as the SEC. In addition, failure to comply with
Section 404 or the report by us of a material weakness may cause investors
to lose confidence in our financial statements and the trading price of our
common stock may decline.  If we fail to remedy any material
weakness, our financial statements may be inaccurate, our access to
the capital markets may be restricted and the trading price of our common
stock may decline.




Item 2. Description of Property





We
currently have a 12 month lease of our executive offices, consisting of 256
square feet, located at 19200 Von Karman Ave., Suite 500, Irvine, CA, at a cost
of $1,476 per month.  We believe our facilities are adequate for our
current needs.





Item 3. Legal Proceedings





We are
not a party to any pending legal proceeding. We are not aware of any pending
legal proceeding to which any of our officers, directors, or any beneficial
holders of 5% or more of our voting securities are adverse to us or have a
material interest adverse to us.





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





No
matters have been submitted to our security holders for a vote, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year ended December 31, 2007.


17




PART II





Item 5. Market for Common Equity and Related Stockholder Matters and
Issuer Purchases of Equity Securities





Market
Information





There is
presently no public market for our common stock.





Holders
of Our Common Stock





As of
December 31, 2007, we had approximately 45,092,330 holders of record of our
common stock.





Dividends





We have
never declared or paid any cash dividends on our capital stock. We currently
intend to retain earnings, if any, to support our growth strategy and do not
anticipate paying cash dividends in the foreseeable future. Payment of future
dividends, if any, will be at the discretion of our Board of Directors after
taking into account various factors, including our financial condition,
operating results, current and anticipated cash needs and plans for
expansion.





Securities
Authorized for Issuance under Equity Compensation Plans





No
securities have been authorized for issuance under an equity compensation plan
as of December 31, 2007.




Recent
Sales of Unregistered Securities





None.





Item
6. Selected Financial Data.





Not
Applicable.





Item
7.  Management’s Discussion and Analysis of Financial Condition and
Results of Operations.





Plan
of Operation





We are
still in our relative infancy as a viable commercial entity, and consequently
our focus has been on the identification of our market needs, the development of
products and services to meet those needs, and the branding of our company and
services. Please see “Description of Business and Plan of Operation,”
above.





The
Company has sufficient funds to complete initial product development within a
six month period and sustain its operations six months beyond product
development completion.  The Company anticipates additional funding
required during the product rollout cycle for operations growth and customer
pilot programs.





Product
research and development performed during the duration of this plan will address
scalability issues of database and hardware over the short term.  On a more
long range basis, research and development will continue in the same areas as
that which produced the Company’s product and services, with an eye to spin-offs
from the technology for future projects and fine-tuning of the present
system.  There are several modules in the works to expand the utility of
the device.  There will be continued perfection of the EncryptaKey
device, including finalizing the programming of the Associated Portal and the
operating system.





There are
no plans for the purchase of significant capital equipment for the first six
months of the research and development phase.  Additional capital
equipment purchases are scheduled as funding permits.  These purchases
are related to telecom services expansion of the current infrastructure systems
and biometric hardware devices required for customer fulfillment.





Employee
growth will be minimal during the next twelve months and will increase
significantly after completion of additional financing.  The company
anticipates the addition of 18 to 25 employees by the first part of
2009.





18





Results
of Operations for the Years Ended December 31, 2007 and 2006





We
generated no income and incurred no expenses for the year ended December 31,
2007, for a net loss of $2,231,657 after loss of discontinued operations of
$2,231,657 is included. We generated no revenue and expenses of $1,143,949 for
the year ended December 31, 2006, for a net loss of $1,055,117 after a Gain on
Forgiveness of Debt of $88,832 is included. Our losses were significantly
greater in 2007 than in 2006 due primarily to discontinuing
operations.




Liquidity
and Capital Resources





As of
December 31, 2007 we had current assets of $0. Our total liabilities as of
December 31, 2006, were $1,264,429. Thus, our working capital as of December 31,
2007 was $0. As discussed in “Description of Business and Plan of Operation,”
above, we anticipate no revenue in 2008 and expenditures of approximately
$500,000 to $1,000,000 for Portal equipment software and infrastructure through
December 31, 2008.





Cash
flows provided by financing activities during the year ended December 31, 2007
consisted of $720,000 for proceeds related to the sale of common stock plus
$1,204,952 for Loans to Related Parties, resulting in a total of $1,924,951 in
cash provided by Financing Activities. Cash used by Investment Activities was
$61,224 for the year ended December 31, 2007, and Net Cash Used by Operating
Activities was $2,172,729.





We relied
on proceeds of private sales of our common stock to fund our operations during
the year ended December 31, 2007. We will need to raise additional funds over
the next twelve months, through borrowing or through sales of securities, in
order to continue to pursue our business plan in 2008.





Off
Balance Sheet Arrangements





As of
December 31, 2007, there were no off balance sheet arrangements.





Going
Concern





We have
incurred an accumulated total net loss of $3,712,053 for the period from
inception (June 24, 2003) through December 31, 2007 and are not presently
generating any revenue. We do not anticipate generating any revenue in
2008.  Our future is dependent upon successful and sufficient market
acceptance of our product offerings and any new product offerings that we may
introduce, the continuing successful development of our products and related
technologies, and finally achieving a profitable level of operations. We plan to
seek additional financing in a private equity offering to secure funding for our
operations. There can be no assurance that such additional financing will be
available to us on acceptable terms or at all. These factors, among others,
raise substantial doubt about our ability to continue as a going
concern.




Critical
Accounting Policies





In
December 2001, the SEC requested that all registrants list their three to five
most “critical accounting polices” in the Management Discussion and Analysis.
The SEC indicated that a “critical accounting policy” is one which is both
important to the portrayal of a company’s financial condition and results, and
requires management’s most difficult, subjective or complex judgments, often as
a result of the need to make estimates about the effect of matters that are
inherently uncertain. We believe that the following accounting policies fit this
definition.





Accounting
Basis





The
statements were prepared following generally accepted accounting principles of
the United States of America as consistently applied.




Management
Certification




19




The
financial statements herein are certified by the officers of the Company to
present fairly, in all material respects, the financial position, results of
operations and cash flows for the periods presented, in conformity with
accounting principles generally accepted in the United States of America,
consistently applied.





Fiscal
Year





The
Company operates on a December 31st fiscal
year end.





Research
and Development Costs





Research
and Development costs are expensed as incurred in accordance with generally
accepted accounting principles. Costs in association with the development of a
patented technology when computer software is developed will be capitalized when
technological feasibility is established in accordance with financial accounting
standard No. 86.





Basic
and Diluted Net Income (Loss) Per Share





The
Company computes net income (loss) per share in accordance with Statement of
Financial Accounting Standards (“SFAS”) No. 128, "Earnings per Share". SFAS No.
128 requires presentation of both basic and diluted earnings per share (EPS) on
the face of the income statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted EPS gives
effect to all dilutive potential common shares outstanding during the period
using the treasury stock method.





The
numerators and denominators used in the computations of basic and diluted EPS
are presented in the following table:




Decembers 31,
            
            2007
            
            
            2006Numerators
      for Basic and Diluted EPSNet income/(loss) to
      common shareholders
            
            $
            (2,231,657
            )
            
            $
            (1,055,117
            )Denominators
      for Basic EPSWeighted average of
      shares outstanding
            
            
            50,331,317
            
            
            
            39,818,551Basic
      and Diluted Earnings/(Loss) Per Share
            
            $
            (0.04
            )
            
            $
            (0.03
            )




Dividends





The
Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.





Use
of Estimates





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





Property
and Equipment





Property
and equipment are carried at cost and depreciated on a straight-line basis over
their useful lives. Office equipment is depreciated over five
years.




20




Income
Taxes





The
provision for income taxes is the total of the current taxes payable and the net
of the change in the deferred income taxes. Provision is made for the deferred
income taxes where differences exist between the period in which transactions
affect current taxable income and the period in which they enter into the
determination of net income in the financial statements.





Recently Issued Accounting
Pronouncements





Below is
a listing of the most recent accounting standards SFAS 150-154 and their effect
on the Company.





Statement
No. 150 Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity(Issued
5/03)





This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity.





Statement
No. 151 Inventory
Costs-an amendment of ARB
No. 43, Chapter 4 (Issued 11/04)





This
statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4,
previously stated that “...under some circumstances, items such as idle facility
expense, excessive spoilage, double freight and re-handling costs may be so
abnormal ass to require treatment as current period charges....” This Statement
requires that those items be recognized as current-period charges regardless of
whether they meet the criterion of “so abnormal.” In addition, this Statement
requires that allocation of fixed production overheads to the costs of
conversion be based on the normal capacity of the production
facilities.





Statement
No. 152 Accounting for Real
Estate Time-Sharing Transactions(an amendment of FASB Statements No.
66 and 67)





This
Statement amends FASB Statement No. 66, Accounting for Sales of Real
Estate, to reference the financial accounting and reporting guidance for
real estate time-sharing transactions that is provided in AICPA Statement of
Position (SOP) 04-2, Accounting for Real Estate
Time-Sharing Transactions.





This
Statement also amends FASB Statement No. 67, Accounting for Costs and Initial Rental
Operations of Real Estate Projects, states that the guidance for (a)
incidental operations and (b) costs incurred to sell real estate projects does
not apply to real estate time-sharing transactions. The accounting for those
operations and costs is subject to the guidance in SOP 04-2.





Statement
No. 153 Exchanges of
Non-monetary Assets(an
amendment of APB Opinion No. 29)





The
guidance in APB Opinion No. 29, Accounting for Non-monetary
Transactions, is based on the principle that exchanges of non-monetary
assets should be measured based on the fair value of the assets exchanged. The
guidance in that Opinion, however, includes certain exceptions to the principle.
This Statement amends Opinion 29 to eliminate the exception for non-monetary
exchanges of similar productive assts and replaces it with a general exception
for exchanges of non-monetary assets that do not have commercial substance. A
non-monetary exchange has commercial substance if the future cash flows of the
entity are expected to change significantly as a result of the
exchange.





Statement No.
154Accounting Changes and Error Corrections (a replacement of APB
Opinion No. 20 and FASB Statement No. 3)





This
Statement replaces APB Opinion No. 20, Accounting Changes, and FASB
Statement No. 3, Reporting
Accounting Changes in Interim Financial Statements, and changes the
requirements for the accounting for and reporting of a change in accounting
principle. This Statement applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting pronouncement in
the unusual instance that the pronouncement does not include specific transition
provisions. When a pronouncement includes specific transition provisions, those
provisions should be followed.





The
adoption of these new Statements is not expected to have a material effect on
the Company’s current financial position, results or operations, or cash
flows.





Item 8. Financial Statements and Supplementary Data





21




Financial
Statement Index
     Report of
      Independent Registered Public Accounting
      Firm
                F-1Balance Sheets as of
      December 31, 2007 and 2006
                F-2Statements of
      Operations for the years ended December 31, 2007, 2006 and from June 24,
      2003 (inception) to December 31, 2007
                F-3Statements of
      Changes in Shareholders' Equity from June 24, 2003 (inception) to December
      31, 2007
                F-4Statements of Cash
      Flows for the years ended December 31, 2007, 2006 and from June
      24, 2003 (inception) to December 31, 2007
                F-5Notes to the
      Financial Statements
                F-6
 
  MOORE
& ASSOCIATES, CHARTERED
 ACCOUNTANTS AND
ADVISORS
 PCAOB
REGISTERED
 
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 To
the Board of Directors
 EncryptaKey,
Inc.
 (A
Development Stage Company)
 
 We have
audited the accompanying balance sheets of EncryptaKey, Inc. (A Development
Stage Company) as of December 31, 2007 and December 31, 2006, and the related
statements of operations, stockholders’ equity and cash flows for the years
ended December 31, 2007 and December 31, 2006 and since inception on June 24,
2003 through December 31, 2007. These financial statements are the
responsibility of the Company’s management.  Our responsibility is to
express an opinion on these financial statements based on our
audits.
 
 We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (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 financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of EncryptaKey, Inc. (A Development
Stage Company) as of December 31, 2007 and December 31, 2006, and the related
statements of operations, stockholders’ equity and cash flows for the years
ended December 31, 2007 and December 31, 2006 and since inception on June 24,
2003 through December 31, 2007, in conformity with accounting principles
generally accepted in the United States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 3 to the
financial statements, the Company has accumulated a loss of $3,712,053 during
its development stage, which raises substantial doubt about its ability to
continue as a going concern.  Management’s plans concerning these
matters are also described in Note 3.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
 
 /s/
Moore & Associates, Chartered
 
 Moore
& Associates Chartered
 Las
Vegas, Nevada
 June 28,
2008
 
 2675 S. Jones Blvd. Suite
109, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501
 
 F-1
 EncryptaKey,
Inc.
 Formerly
Futomic Industries, Inc.
 (A
Development Stage Company)
 Balance
Sheets
  December
      31,
              
              
              December
      31,2007
              
              
              2006ASSETSCurrent
      AssetsCash
              
              $
              -
              
              
              $
              186,554Total
      Current Assets
              
              
              -
              
              
              
              186,554Long-Term
      AssetsFurniture
      and Equipment - Net
              
              
              -
              
              
              
              60,674Intangible
      AssetsInvisidesk
      Portal - Net
              
              
              -
              
              
              
              550Total
      Long Term Assets
              
              
              -
              
              
              
              61,224Total
      Assets
              
              $
              -
              
              
              $
              247,778LIABILITIES AND
      STOCKHOLDERS' DEFICITLiabilitiesAccounts
      Payable
              
              $
              59,478
              
              
              $
              -Notes
      Payable - Shareholders
              
              
              1,204,951
              
              
              
              -Total
      Liabilities
              
              
              1,264,429
              
              
              
              -Stockholders'
      DeficitPreferred
      Stock, authorized20,000,000
      shares, par value $0.0001,no
      preferred stock is outstanding
              
              
              -
              
              
              
              -Common
      Stock, authorized100,000,000
      shares, par value $0.0001,issued:
      51,228,450 and 49,859,000;outstanding:
      45,092,330 and 49,859,000 onDecember
      31, 2007 and 2006 respectively
              
              
              5,124
              
              
              
              4,986Paid
      in Capital
              
              
              2,633,887
              
              
              
              2,223,189Subscriptions
      Receivable
              
              
              -
              
              
              
              (500,000
              )(Deficit)
      Accumulated DuringDevelopment
      Stage
              
              
              (3,712,054
              )
              
              
              -Common
      Stock in Treasury: 6,136,120 sharesat
      cost
              
              
              (191,386
              )
              
              
              -Total
      Stockholders' Deficit
              
              
              (1,264,429
              )
              
              
              247,778Total
      Liabilities and Stockholders' Deficit
              
              $
              -
              
              
              $
              247,778
  The
accompanying notes are an integral part of these
statements
 F-2
  EncryptaKey,
Inc. Formerly
Futomic Industries, Inc.
 (A
Development Stage Company)
 Statements of Operation
   June
      24, 2003Year
      Ended
              
              
              (Inception)
      toDecember
      31,
              
              
              December
      31,2007
              
              
              2006
              
              
              2007Operating
      ExpensesGeneral
      and Administrative
              
              $
              -
              
              
              $
              89,988
              
              
              $
              771,058Interest
      Expense
              
              
              -
              
              
              
              -
              
              
              
              13,556Advertising
      and Promotion
              
              
              -
              
              
              
              129,961
              
              
              
              291,090Research
      and Development
              
              
              -
              
              
              
              890,000
              
              
              
              2,376,400Professional
      Fees
              
              
              -
              
              
              
              34,000
              
              
              
              349,825Total
      Expenses
              
              
              -
              
              
              
              1,143,949
              
              
              
              3,801,929Net
      (Loss) before Extraordinary Items
              
              
              -
              
              
              
              (1,143,949
              )
              
              
              (3,801,929
              )Extraordinary
      ItemsLoss
      on Discontinued Operations
              
              
              (2,231,657
              )Gain
      on Forgiveness of Debt
              
              
              -
              
              
              
              88,832
              
              
              
              89,832Interest
      Income
              
              
              -
              
              
              
              -
              
              
              
              44Net
      Income/(Loss) Before Income Taxes
              
              
              (2,231,657
              )
              
              
              (1,055,117
              )
              
              
              (3,712,053
              )Provision
      for Income Tax
              
              
              -
              
              
              
              -
              
              
              
              -Net
      Income/(Loss)
              
              $
              (2,231,657
              )
              
              $
              (1,055,117
              )
              
              $
              (3,712,053
              )Basic
      and Diluted(Loss)
      per Common Share
              
              $
              (0.05
              )
              
              $
              (0.03
              )Weighted
      AverageNumber
      of Common Shares
              
              
              45,092,229
              
              
              
              39,818,551
  The
accompanying notes are an integral part of these
statements
 F-3
  EncryptaKey,
Inc. Formerly
Futomic Industries, Inc.
 (A
Development Stage Company)
 Statement of stockholders'
Equity
 From June 24,
2003 (inception) to December 31, 2007
 
 DeficitAccumulatedPrice
              
              
              Common
              
              
              
              
              
              
              
              
              During
      theIssue
              
              Per
              
              
              Stock
              
              
              Paid
      in
              
              
              Subscriptions
              
              
              Development
              
              
              Treasury
              
              
              TotalDate
              
              Share
              
              
              Shares
              
              
              Amount
              
              
              Capital
              
              
              Receivable
              
              
              Stage
              
              
              Stock
              
              
              EquityBalance
      at inception, June 24, 2003
              
              
              
              
              
              
              25,000,000
              
              
              $
              2,500
              
              
              $
              502
              
              
              $
              -
              
              
              $
              (4,502
              )
              
              
              
              
              $
              (1,500
              )Adjustment
      effected in reverseacqusition
              15-Aug-03
              
              $
              0.002
              
              
              
              56,855,000
              
              
              
              5,686
              
              
              
              111,944
              
              
              
              
              
              
              
              4,502
              
              
              
              
              
              
              122,132Net
      (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (152,649
              )
              
              
              
              
              
              (152,649
              )Balance,
      December 31, 2003
              
              
              
              
              
              
              
              81,855,000
              
              
              
              8,186
              
              
              
              112,446
              
              
              
              -
              
              
              
              (152,649
              )
              
              
              -
              
              
              
              (32,017
              )Common
      shares issued for cash
              15-Mar-04
              
              $
              0.04
              
              
              
              375,000
              
              
              
              38
              
              
              
              14,962
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              15,000Common
      shares issued for cash
              15-Jul-04
              
              $
              0.10
              
              
              
              2,500,000
              
              
              
              250
              
              
              
              249,750
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              250,000Net
      (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (186,297
              )
              
              
              
              
              
              
              (186,297
              )Balance,
      December 31, 2004
              
              
              
              
              
              
              
              84,730,000
              
              
              
              8,474
              
              
              
              377,158
              
              
              
              -
              
              
              
              (338,946
              )
              
              
              -
              
              
              
              46,686Common
      shares re-purchased by theCompany
      and retired
              01-Jan-05
              
              $
              0.001
              
              
              
              (46,655,000
              )
              
              
              (4,666
              )
              
              
              (38,541
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (43,207
              )Net
      (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (87,334
              )
              
              
              
              
              
              
              (87,334
              )Balance,
      December 31, 2005
              
              
              
              
              
              
              
              38,075,000
              
              
              
              3,808
              
              
              
              338,617
              
              
              
              -
              
              
              
              (426,280
              )
              
              
              -
              
              
              
              (83,855
              )Common
      shares issued for purchaseof
      technology
              28-Sep-06
              
              $
              0.0001
              
              
              
              5,500,000
              
              
              
              550
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              550Common
      shares issued for cash
              12-Dec-06
              
              $
              0.30
              
              
              
              6,284,000
              
              
              
              628
              
              
              
              1,884,572
              
              
              
              (500,000
              )
              
              
              
              
              
              
              
              
              
              
              1,385,200Net
      (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,054,117
              )
              
              
              
              
              
              
              (1,054,117
              )Balance,
      December 31, 2006
              
              
              
              
              
              
              
              49,859,000
              
              
              
              4,986
              
              
              
              2,223,189
              
              
              
              (500,000
              )
              
              
              (1,480,397
              )
              
              
              -
              
              
              
              247,778Cash
      received on subscriptions
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              500,000
              
              
              
              
              
              
              
              
              
              
              
              500,000Common
      shares issued for cash
              07-Feb-07
              
              $
              0.30
              
              
              
              733,330
              
              
              
              74
              
              
              
              219,926
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              220,000Common
      shares issued to purchase assets
              07-Feb-07
              
              $
              0.30
              
              
              
              636,120
              
              
              
              64
              
              
              
              190,772
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              190,836Common
      shares returned to treasuryfor
      sale of assets
              15-Nov-07
              
              
              
              
              
              
              (6,136,120
              )
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (191,386
              )
              
              
              (191,386
              )Net
      (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (2,231,657
              )
              
              
              
              
              
              
              (2,231,657
              )Balance,
      December 31, 2007
              
              
              
              
              
              
              
              45,092,330
              
              
              $
              5,124
              
              
              $
              2,633,887
              
              
              $
              -
              
              
              $
              (3,712,054
              )
              
              $
              (191,386
              )
              
              $
              (1,264,429
              )On
      August 7, 2006 the Company exercised a 5:1 forward stock split that has
      been retroactively applied to this schedule thereby increasing the number
      of shares issued and decreasing the price per share.
 The
accompanying notes are an integral part of these statements
  F-4
  EncryptaKey,
Inc. Formerly
Futomic Industries, Inc.
 (A
Development Stage Company)
 Statements of Cash Flow
  June
      24, 2003Year
      Ended
              
              
              (Inception)
      toDecember
      31,
              
              
              December
      31,2007
              
              
              2006
              
              
              2007Operating
      ActivitiesNet
      Profit / (Loss)
              
              $
              (2,231,657
              )
              
              $
              (1,054,117
              )
              
              $
              (3,712,053
              )Adjustments
      to reconcile Net (Loss) to cash:Loss
      on Discontinued OperationsStock
      Issued to founders
              
              
              
              
              
              
              -
              
              
              
              3,002Adjustment
      for reverse acqusition
              
              
              -
              
              
              
              -
              
              
              
              117,630Depreciation
      and Amortization
              
              
              -
              
              
              
              1,070
              
              
              
              -Changes
      in Assets and LiabilitiesIncrease/(Decrease)
      in Accounts Payable
              
              
              59,478
              
              
              
              (3,625
              )
              
              
              59,478Increase/(Decrease)
      in Wages Payable
              
              
              -
              
              
              
              (18,711
              )
              
              
              -Net
      Cash (Used) by Operating Activities
              
              
              (2,172,179
              )
              
              
              (1,075,383
              )
              
              
              (3,531,943
              )Investment
      ActivitiesTreasury
      Stock
              
              
              (191,386
              )
              
              
              
              
              
              
              (191,386
              )Stock
      Issued for asset purchase
              
              
              190,836
              
              
              
              550
              
              
              
              191,386Equipment
      (Purchase)/Sale
              
              
              61,224
              
              
              
              (60,675
              )
              
              
              -Cash
      Used by Investment Activities
              
              
              60,674
              
              
              
              (60,125
              )
              
              
              -Financing
      ActivitiesNet
      Proceeds from loans - Related Parties
              
              
              1,204,951
              
              
              
              (93,253
              )
              
              
              1,204,950Purchase
      and Cancellation of Treasury Stock
              
              
              -
              
              
              
              -
              
              
              
              (43,207
              )Proceeds
      from sale of Common Stock
              
              
              720,000
              
              
              
              1,385,200
              
              
              
              2,370,200Cash
      Provided by Financing Activities
              
              
              1,924,951
              
              
              
              1,291,947
              
              
              
              3,531,943Net
      Increase/(Decrease) in Cash
              
              
              (186,554
              )
              
              
              156,439
              
              
              
              -Cash,
      Beginning of Period
              
              
              186,554
              
              
              
              30,665
              
              
              
              -Cash,
      End of Period
              
              $
              -
              
              
              $
              187,104
              
              
              $
              -Cash
      Paid For:Interest
              
              $
              10,033
              
              
              $
              -
              
              
              $
              13,556Income
      Taxes
              
              $
              -
              
              
              $
              -
              
              
              $
              -Non-cash
      Activities:Stock
      Issued to founders
              
              $
              -
              
              
              $
              -
              
              
              $
              3,002Adjustment
      for reverse acqusition
              
              $
              -
              
              
              $
              -
              
              
              $
              117,630Stock
      issued to purchase asset
              
              $
              190,836
              
              
              $
              550
              
              
              $
              191,386Stock
      returned to treasury for assets
              
              $
              (191,386
              )
              
              $
              -
              
              
              $
              (191,386
              )
  The
accompanying notes are an integral part of these statements
 
 F-5
  EncryptaKey,
Inc.
 Formerly
Futomic Industries, Inc.
 (A
Development Stage Company)
 NOTES
TO FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 
 
 NOTE
1.                      GENERAL
ORGANIZATION AND BUSINESS
 
 EncryptaKey,
Inc., (the Company), was incorporated in the state of New Jersey on April 6,
2000 as Segway VI Corp.  The company has undergone the following name
changes: on August 13, 2003 to 3DLP International Inc., on April 19 2004 to
Futomic Industries Inc.; and then on February 19, 2007, subsequent to the date
of these statements, to EncryptaKey, Inc.
 
 On August
15, 2003, the Company acquired Selectrics Corporation (Selectrics), a Delaware
Corporation organized on June 24, 2003, in a one-for-one common stock
exchange.  This transaction resulted in a change of control and was
treated as a reverse acquisition with EncryptaKey, Inc. being the surviving
legal entity and Selectrics the surviving accounting
acquirer.  Accordingly, the equity accounts and accumulated deficits
prior to the merger have been adjusted to reflect those of
Selectrics.  The Company is considered to be in the development
stage.
 
 The
Company is a development stage company as defined by SFAS 7.  The
company is in the business of developing and marketing identity and data
security technologies that enable the highest level of secure commercial and
financial transaction both in person and over the internet, providing an
effective shield to identity theft.
 
 
 NOTE  2.                     SUMMARY
OF SIGNIFICANT ACCOUNTING PRACTICES
 
 The
relevant accounting policies and procedures are listed below.
 
 Accounting
Basis
 
 The
statements were prepared following generally accepted accounting principles of
the United States of America consistently applied.
 
 Fiscal
Year
 
 The
Company operates on a December 31st fiscal
year end.
 
 Research and Development
Costs
 
 Research
and Development costs are expensed as incurred in accordance with generally
accepted accounting principles.  Costs in association with the
development of a patented technology when computer software is developed will be
capitalized when technological feasibility is established in accordance with
financial accounting standard No. 86
  F-6
 
 Basic and Diluted Net Income
(Loss) Per Share
 
 The
Company computes net income (loss) per share in accordance with Statement of
Financial Accounting Standards (“SFAS”) No. 128, "Earnings per Share". SFAS No.
128 requires presentation of both basic and diluted earnings per share (EPS) on
the face of the income statement. Basic EPS is computed by dividing net income
(loss) available to common shareholders (numerator) by the weighted average
number of shares outstanding (denominator) during the period. Diluted EPS gives
effect to all dilutive potential common shares outstanding during the period
using the treasury stock method.
 
 The
numerators and denominators used in the computations of basic and diluted EPS
are presented in the following table:
  31-Dec-2007
                
                
                31-Dec
      2006Numerators
      for Basic and Diluted EPSNet income/(loss) to common
      shareholders
                
                $
                (2,231,657
                )
                
                
                (1,055,117
                )Denominators for Basic and Diluted EPSWeighted average of
      shares outstanding
                
                
                45,092,229
                
                
                
                39,818,551Basic and Diluted
      Earnings/(Loss) Per Share
                
                $
                (0.05
                )
                
                $
                (0.03
                )
  Dividends
 
 The
Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.
 
 Property and
Equipment
 
 Property
and equipment are carried at cost and depreciated on a straight-line basis over
their useful lives.  Office Equipment is depreciated over five
years.
  F-7
 
 Income
Taxes
 
 The
provision for income taxes is the total of the current taxes payable and the net
of the change in the deferred income taxes. Provision is made for the deferred
income taxes where differences exist between the period in which transactions
affect current taxable income and the period in which they enter into the
determination of net income in the financial statements.
 
 
 NOTE
3.                      GOING
CONCERN
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern, which contemplates the realization of its
assets and the liquidation of its liabilities in the normal course of
business.  However, the Company is in its development stage and has
never generated revenues.  The Company has accumulated a loss of
$3,712,053 during its development stage.  This raises substantial
doubt about the Company’s ability to continue as a going concern.  The
financial statements do not include any adjustments that might result from this
uncertainty.
 
 Managements
Plan
 
 The
Company continues to seek funding from its shareholders and other qualified
investors to pursue its business plan.
 
 
 NOTE
4.                      STOCKHOLDERS’
EQUITY
 
 Preferred
Stock
 
 The
Company is authorized 20,000,000 shares of preferred stock at a $0.0001 par
value and currently has zero shares of preferred stock issued and
outstanding.
 
 Common
Stock
 
 The
Company is authorized to issue 100,000,000 shares of common stock, par value
$0.0001 per share.  As of December 31, 2006, there were 49,859,000
shares of common stock outstanding.  On August 7, 2006, the Company
exercised a five for one forward stock split.  All share amounts
herein are adjusted to give effect to the stock split and have also been
adjusted to reflect the adjusted equity resulting from the August 15, 2003
reverse merger.
 
 During
2003, the Company issued 81,855,000 post-split shares of common stock in the
following transactions:
 
 ·
                On
      June 24, 2003, the Company issued 25,000,000 shares to its founder for
      $3,002.
 
 ·
                On
      August 15, 2003 the Company issued 56,855,000 common shares to execute the
      acquisition of Selectrics Corporation in a one for one share exchange for
      a value of $121,882.  This acquisition was recorded as a reverse
      merger with Selectrics the surviving historical accounting
      company.  Accordingly, the equity and accumulated deficit are
      adjusted to reflect Seletrics
history.
  F-8
  During
2004, the Company issued 2,875,000 post-split shares of common stock in the
following transactions:
 
 ·
                On
      March 15, 2004, the Company issued 375,000 shares for $15,000 cash in a
      private placement.
 
 ·
                On
      July 23, 2004 the Company issued 2,500,000 shares in a private placement
      for $250,000 cash.
 
 During
2005, the Company received 46,655,000 common shares into its treasury from a
shareholder for cash and other property valued at $43,207.
 
 During
2006, the Company issued 11,784,000 shares of common stock in the following
transactions:
 
 ·
                On
      September 28, 2006, the Company entered into an Asset Purchase Agreement
      with Owen Consulting LLC to acquire the right, title and interest in
      technology commonly known as the EncryptaKey Secure communication Portal
      by issuing 5,500,000 shares of common stock at $0.0001 per
      share.  The technology and associated intellectual property has
      been memorialized by patent application.  However, it is still
      in development and the associated costs are expensed to research and
      development.  Because of the limited public market for the
      Company stock, Par-value was used to record this
    transaction.
 
 ·
                On
      December 12, 2006, the Company issued 6,284,000 common shares in a private
      offering at $0.30 per share for $1,385,200 and $500,000 subscriptions
      receivable.  The Company extended the closing of the offering to
      February 7, 2007.
 
 During
2007, the Company issued 1,369,450 common shares in the following
transactions:
 
 ·
                On
      February 7, 2007 the Company issued 733,330 common shares in a private
      offering at $0.30 per share for $220,000 and received cash on outstanding
      subscription receivable in the amount of
  $500,000.
 
 ·
                On
      February 7, 2007 the Company issued 636,120 common shares at $0.30 per
      share to purchase fixed assets valued at
  $190,836.
 
 ·
                On
      November 15, 2007 the Company received 6,136,120 for the sale of all
      assets with a net value of
$191,386
  F-9
  NOTE
5.                      COMMITMENTS
AND CONTINGENCIES - RELATED PARTY
 
 Research and Development
with Owens Consulting, LLC
 
 On
September 28, 2006, the Company entered into an Asset Purchase Agreement with
Owen Consulting, LLC, a California limited liability company with Mr. Kelly
Owen, the Company’s CEO the principle member.  Pursuant to that
agreement, the Company issued 5,500,000 shares of common stock and acquired
assets consisting of all right, title and interest in a biometric security
technology commonly known as the EncryptaKey Secure Communication Portal as
memorialized in a patent application.
 
 On
October 1, 2006 the Company entered into an associated consulting agreement with
Owen Consulting, LLC to complete the development of the EncryptaKey Secure
Communication Portal.  The terms of the agreement required payment at
the rate of $25.00 per hour for actual hours incurred for research and
development.  The project involved the efforts of over 100 programmers
and technicians.  As of December 31, 2006 the Company had been
invoiced and paid $1,066,327 on this contract which had been expensed as
Research and Development costs.
 
 During
the year of 2007 the company was invoiced and paid an additional $1,501,459 on
this contract.
 
 Contingency
 
 On
September 20, 2006, an Officer of the Company entered into a settlement
agreement with an individual who was to be employed with the company as the
result of a planned merger that was cancelled.  The settlement
agreement stipulated the issue of 4,000,000 common shares in settlement of all
outstanding issues between the parties involved which included the
Company.  The Officer of the Company agreed to transfer shares from is
personal holdings in settlement of this contingency.
 
 NOTE
7.                      SALE
OF ASSETS – DISCONTINUED OPERATIONS
 
 On
November 15, 2007 the Company discontinued operations and sold all its assets to
a related party for the return of 6,136,120 common shares valued at $191,386 and
ended its consulting contract with Owen Consulting, LLC.
 
 BeforeDiscontinued
                
                
                
                
                
                AdjustedOperations
                
                
                Adjustment
                
                
                BalanceAssets
                
                $
                304,163
                
                
                $
                (304,163
                )
                
                $
                -Liabilities
                
                
                1,508,133
                
                
                
                (243,705
                )
                
                
                1,264,428Common
      Stock
                
                
                5,124
                
                
                
                (614
                )
                
                
                4,510Paid
      in Capital
                
                
                2,633,888
                
                
                
                (190,772
                )
                
                
                2,443,116Accumulated
      Deficit
                
                
                (3,842,982
                )
                
                
                130,928
                
                
                
                (3,712,054
                )Total
      Equity
                
                
                (1,203,970
                )
                
                
                (60,458
                )
                
                
                (1,264,428
                )Total
      Liabilities andStockholders
      Equity
                
                $
                304,163
                
                
                $
                (304,163
                )
                
                $
                -
  F-10
 
 NOTE
8.                      PROVISION
FOR INCOME TAXES
 
 The
Company provides for income taxes under Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes.
 
 SFAS No.
109 requires the reduction of deferred tax assets by a valuation allowance if,
based on the weight of available evidence, it is more likely than not that some
or all of the deferred tax assets will not be realized.  The total
deferred tax asset is $816,652 as of December 31, 2007 which is calculated by
multiplying a 22% estimated tax rate by the cumulative NOL of
$3,712,053.  The total valuation allowance is a comparable
$816,652.
 
 The
provision for income taxes for the period ended December 31, 2006 and 2005
follows:
   Year Ended December
      31,
                
                2007
                
                
                2006Deferred Tax
      Asset
                
                $
                490,965
                
                
                $
                231,906Valuation
      Allowance
                
                
                (490,965
                )
                
                
                (231,906
                )Current Taxes
      Payable
                
                
                0.00
                
                
                
                0.00Income Tax
      Expense
                
                $
                0.00
                
                
                $
                0.00
 
 Below is
a chart showing the estimated federal net operating losses and the years in
which they will expire:
 Year
                  
                  Amount
                  
                  Expiration2003
                  
                  $
                  152,649
                  
                  20232004
                  
                  
                  186,296
                  
                  20242005
                  
                  
                  87,334
                  
                  20252006
                  
                  
                  1,054,117
                  
                  20262007
                  
                  
                  2,231,657
                  
                  2027Total
                  
                  $
                  3,712,053
  F-11
  
 NOTE
9.                      NOTES
PAYABLE – SHAREHOLDERS – SUBSEQUENT EVENT
 
 During
the year ended months ended December 31, 2007 the Company has received a total
of $1,204,950 in loans from various shareholders company
shareholder.  With the sale of the assets the notes have been assumed
by the purchaser and the Company has issued common stock as an incentive for the
note holders to agree to the assumption and hold the company
harmless.
 
 
 NOTE  10.                  THE
EFFECT OF RECENTLY ISSUED ACCOUNTING  STANDARDS
 
 Below is
a listing of the most recent Statement of Financial
Accounting Standards (SFAS) SFAS 155-160 and 141 (revised 2007) and their
effect on the Company.
 
 Statement
No. 155 –Accounting
for Certain Hybrid Financial Instruments
  In
February 2006, the FASB issued SFAS No. 155,Accounting
for Certain Hybrid Financial Instruments, which amends SFAS No. 133,
Accounting for Derivatives
Instruments and Hedging Activities and SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of
Liabilities.  SFAS No. 155 amends SFAS No. 133 to narrow the
scope of the exception for interest-only and principal-only strips on debt
instruments to include only such strips representing rights to receive a
specified portion of the contractual interest or principle cash
flows.  SFAS No. 155 also amends SFAS No. 140 to allow qualifying
special-purpose entities to hold a passive derivative financial instrument
pertaining to beneficial interests that itself is a derivative
instrument.
  Statement
No. 156 –Accounting
for Servicing of Financial Assets
  In March
2006, the FASB issued SFAS No. 156,Accounting
for Servicing of Financial Assets, which provides an approach to simplify
efforts to obtain hedge-like (offset) accounting.  This Statement
amends FASB Statement No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, with
respect to the accounting for separately recognized servicing assets and
servicing liabilities. The Statement (1) requires an entity to recognize a
servicing asset or servicing liability each time it undertakes an obligation to
service a financial asset by entering into a servicing contract in certain
situations; (2) requires that a separately recognized servicing asset or
servicing liability be initially measured at fair value, if practicable; (3)
permits an entity to choose either the amortization method or the fair value
method for subsequent measurement for each class of separately recognized
servicing assets or servicing liabilities; (4) permits at initial adoption a
one-time reclassification of available-for-sale securities to trading securities
by an entity with recognized servicing rights, provided the securities
reclassified offset the entity's exposure to changes in the fair value of the
servicing assets or liabilities; and (5) requires separate presentation of
servicing assets and servicing liabilities subsequently measured at fair value
in the balance sheet and additional disclosures for all separately recognized
servicing assets and servicing liabilities. SFAS No. 156 is effective for all
separately recognized servicing assets and liabilities as of the beginning of an
entity's fiscal year that begins after September 15, 2006, with earlier adoption
permitted in certain circumstances. The Statement also describes the manner in
which it should be initially applied.
  22
  Statement
No. 157 – Fair Value
Measurements
  In
September 2006, the FASB issued SFAS No. 157, Fair
Value Measurements, to clarify how to measure fair value and to expand
disclosures about fair value measurements.  The expanded disclosures
include the extent to which companies measure assets and liabilities at fair
value, the information used to measure fair value, and the effect of fair value
on earnings and is applicable whenever other standards require (or permit)
assets and liabilities to be measured at fair value.  SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007 and interim periods within those fiscal years.
  Statement No. 158 –Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements
No. 87, 88, 106, and 132(R)
  In
September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements
No. 87, 88, 106, and 132(R).To improve financial reporting by
requiring an employer to recognize the overfunded or underfunded status of a
defined benefit postretirement plan (other than a multi-employer plan) as an
asset or liability in its statement of financial position and to recognize
changes in that funded status in the year in which the changes occur through
comprehensive income of a business entity or changes in unrestricted net assets
of a not-for-profit organization. This Statement also improves financial
reporting by requiring an employer to measure the funded status of a plan as of
the date of its year-end statement of financial position, with limited
exceptions.
  Statement No. 159 –The Fair Value Option for Financial
Assets and Financial Liabilities—Including an amendment of FASB Statement No.
115
  In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities—Including an amendment of FASB Statement No.
115.This Statement permits entities to choose to measure many
financial instruments and certain other items at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions.  This Statement is expected to expand the use of fair
value measurement, which is consistent with the Board’s long-term measurement
objectives for accounting for financial instruments.
  23
  Statement No. 141 (revised 2007) –Business
Combinations
  In
December 2007, the FASB revised SFAS No. 141, Business
Combinations.This revision changes the way the minority
interest in a company is measured, recorded and reported in the parent company’s
financial statements to the end that a statement user can better evaluate the
nature and financial effects of the business combination.
  Statement No. 160 –Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No. 51
  In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements—an amendment of ARB No.
51.A noncontrolling interest, sometimes called a minority
interest, is the portion of equity in a subsidiary not attributable, directly or
indirectly, to a parent. The objective of this Statement is to improve the
relevance, comparability, and transparency of the financial information that a
reporting entity provides in its consolidated financial statements related to
the noncontrolling or minority interest.
  The
adoption of these new Statements is not expected to have a material effect on
the Company’s current financial position, results or operations, or cash
flows.
  NOTE
11.                    SUBSEQUENT
EVENTS
 
 During
the quarter ended March 31, 2008 the Company issued 3,949,999 common shares to
settle $1,204,950 in notes payable.
 
 During
the three month period ended June 30, 2008 the Company issued 19,500,000 Common
shares for executive compensation and 25,000,000 Common Shares for certain
assets contributed to the Company.
 
 On July
1, 2008 the Board of Directors authorized and filed for a Name Change to
Priviam, Inc. and increased is authorized stock to 500,000,000 common
shares.  The Company also approved a 1 to 3.25 reverse stock split on
the same resolution to be effected on July 30, 2008.
  24


Item
9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure





No
disagreements with auditors.





Item
9A.  Controls and Procedures





Evaluation
and Conclusion of Disclosure Controls and Procedures




The
Company conducted an evaluation, under the supervision and with the
participation of the Company’s principal executive officer and principal
financial officer, of the effectiveness of the design and operation of the
Company’s disclosure controls and procedures (as defined in the Securities
Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e), as amended) as of
December 31, 2007.




Based
upon that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company’s disclosure controls and procedures as of the end of
the period covered by this Report were not effective as a result of a material
weakness in internal control over financial reporting as of December 31, 2007 as
discussed below.




Management’s
Annual Report on Internal Control Over Financial Reporting




Management
is responsible for establishing and maintaining adequate internal control over
financial reporting (as defined in the Securities Exchange Act of 1934
Rules 13a-15(f) and 15d-15(f), as amended) of the Company. Internal
control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with accounting
principles generally accepted in the United States of America.




The
Company’s internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with accounting principles generally accepted
in the United States of America, and that receipts and expenditures of the
Company are being made only in accordance with authorizations of management and
directors of the Company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of the Company’s assets that could have a material effect on the financial
statements.




Management
conducted an evaluation of the effectiveness of internal control over financial
reporting based on the framework in Internal Control—Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission. Based
on this evaluation, management concluded that the Company’s internal control
over financial reporting was not effective as of December 31, 2007. Management’s
assessment identified the following material weakness in internal control over
financial reporting:





Management
determined there was an insufficient number of personnel with appropriate
technical accounting and SEC reporting expertise to adhere to certain control
disciplines, and to evaluate and properly record certain non-routine and complex
transactions.




Based on
this evaluation, management concluded that the Company’s internal control over
financial reporting was not effective as of December 31, 2007 because of the
material weakness described in the preceding paragraph. A material weakness in
internal control over financial reporting is a deficiency, or combination of
deficiencies, in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of the annual or interim
financial statements would not be prevented or detected on a timely
basis.  Management’s report was not subject to attestation by our
registered public accounting firm pursuant to temporary rules of the SEC that
permit us to provide only management’s report in this Annual
Report.




Item
9B.  Other Information.





None.


25


PART III





Item 10. Directors, Executive Officers and Corporate
Governance




The
following information sets forth the names of our current directors and
executive officers, their ages and their present positions.





Name
            Age
            Position(s)
      and Office(s) HeldLouis
      Jack Musetti
            52
            Chief
      Executive Officer, Chief Financial Officer, and
  Director







Set forth
below is a brief description of the background and business experience of each
of our current executive officers and directors.





Jack
Musetti, President & CEO





Louis
Jack Musetti is Chairman of the Board of Directors, President and Chief
Executive Officer of Encryptakey, Inc. since June 2008.  Mr. Musetti
has extensive executive level experience in business development and risk
management combined with P&L, general management and strategic planning
ability in both commercial and defense technology industries.  Prior
to joining Encryptakey, Mr. Musetti was CEO of Nanopower Technologies, a
developer and manufacture of Radio Frequency Identification (RFID) Integrated
Circuits, NASA/JPL MEMS Silicon Microgyro microelectronics and advanced CMOS
design libraries.





Term
of Office





Our
directors are appointed for a one-year term to hold office until the next annual
meeting of our shareholders or until removed from office in accordance with our
bylaws.




Our
executive officers are appointed by our board of directors and hold office until
removed by the board.





Significant
Employees





We have
no significant employees other than our officers and directors.





Family
Relationships





There are
no family relationships between or among the directors, executive officers or
persons nominated or chosen by us to become directors or executive
officers.





Involvement
in Certain Legal Proceedings





To the
best of our knowledge, during the past five years, none of the following
occurred with respect to a present director, person nominated to become
director, executive officer, or control person: (1) any bankruptcy petition
filed by or against any business of which such person was a general partner or
executive officer either at the time of the bankruptcy or within two years prior
to that time; (2) any conviction in a criminal proceeding or being subject to a
pending criminal proceeding (excluding traffic violations and other minor
offenses); (3) being subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his or her involvement in any type of business, securities or banking
activities; and (4) being found by a court of competent jurisdiction (in a civil
action), the SEC or the Commodities Futures Trading Commission to have violated
a federal or state securities or commodities law, and the judgment has not been
reversed, suspended or vacated.





Audit
Committee





We do not
have a separately-designated standing audit committee. The entire board of
directors performs the functions of an audit committee, but no written charter
governs the actions of the board of directors when performing the functions of
that would generally be performed by an audit committee. The board of directors
approves the selection of our independent accountants and meets and interacts
with the independent accountants to discuss issues related to financial
reporting. In addition, the board of directors reviews the scope and results of
the audit with the independent accountants, reviews with management and the
independent accountants our annual operating results, considers the adequacy of
our internal accounting procedures and considers other auditing and accounting
matters including fees to be paid to the independent auditor and the performance
of the independent auditor.




26




We do not
have an audit committee financial expert because of the size of our
company and our board of directors at this time. We believe that we do not
require an audit committee financial expert at this time because we retain
outside consultants who possess these attributes. .





Nominating
Committee





We do not
have a nominating committee. The board of directors acts as the nominating
committee and members of the board participate in the discussions. We believe
that, with a board currently composed of one individual, a separate nominating
committee is not necessary. If the size of the board expands, the board will
reconsider the need or desirability of a nominating committee.





Compensation
Committee





We do not
have a compensation committee. We believe that, with a board currently composed
of one individual, a separate compensation is not necessary. If the size of the
board expands, the board will reconsider the need or desirability of a
compensation committee.








For the
fiscal year ending December 31, 2007, the board of directors:





1.
            Reviewed
      and discussed the audited financial statements with management,
      and





2.
            Reviewed
      and discussed the written disclosures and the letter from our independent
      auditors on the matters relating to the auditor's
      independence.





Based
upon the board of directors’ review and discussion of the matters above, the
board of directors authorized inclusion of the audited financial statements for
the year ended December 31, 2007 to be included in this Annual Report on Form
10-K and filed with the Securities and Exchange Commission.





Compliance
with Section 16(a) of the Exchange Act





Based
solely upon a review of Forms 3, 4 and 5, and amendments thereto, furnished to
the Company during fiscal year ended December 31, 2007, the Company is not aware
of any director, officer or beneficial owner of more than ten percent of the
Company’s Common Stock that failed to file reports required by
Section 16(a) of the Securities Exchange Act of 1934 on a timely basis
during the fiscal year ended December 31, 2007.





Name
      and principal position
            Number
      of
              late
      reports
            Transactions
      not
              timely
      reported
            Known
      failures to
              file
      a required formAlan
      Shinderman
              Former
      Chief Executive Officer, President, Chief Financial Officer, and Director
      (1)
            1
            1
            0Kelly
      Owen
              Former
      Chief Executive Officer, President, Chief Financial Officer, and Director
      (2)
            1
            1
            0





(1)
            Mr.
      Shinderman resigned as our Chief Executive Officer and Chief Financial
      Officer on June 6, 2008. The information provided in the summary
      compensation table includes all compensation paid to Mr. Shinderman for
      the full fiscal year ended December 31,
2007.





(2)
            Mr.
      Owen resigned as our Chief Executive Officer and Chief Financial Officer
      on November 27, 2007. The information provided in the summary compensation
      table includes all compensation paid to Mr. Owen for the full fiscal year
      ended December 31, 2006.




27




Code
of Ethics Disclosure





We
adopted a Code of Ethics for Financial Executives, which include our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. The code of ethics was
filed as an exhibit to the annual report on Form 10-KSB for the fiscal year
ended December 31, 2005 and filed with the SEC on March 10, 2006.





Item 11. Executive Compensation





Summary
Compensation Table




The table
below summarizes all compensation awarded to, earned by, or paid to our former
or current executive officers for the fiscal years ended 2007, 2006 and
2005.





SUMMARY
      COMPENSATION TABLEName
              and
              principal
              position
            
            Year
            
            
            Salary($)
            
            
            Bonus
              ($)
            
            
            Stock
              Awards
              ($)
            
            
            Option
              Awards
              ($)
            
            
            Non-Equity
              Incentive
      Plan
              Compensation
              ($)
            
            
            Nonqualified
              Deferred
              Compensation
              Earnings
      ($)
            
            
            All
      Other
              Compensation
              ($)
            
            
            Total
              ($)Alan
      Shinderman (1)
              Former
      CEO & CFO
            
            2007
            
            
            
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -Kelly
      Owen (2)
              Former
      CEO & CFO
            
            2006
            
            
            
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            60,000
            
            
            
            -Francisco
              Schipperheijn
              Former
      CEO & CFO (3)
            
            
            2006
      2005
            
            
            
            -
      3,160
            
            
            
            -
      -
            
            
            
            -
      -
            
            
            
            -
      -
            
            
            
            -
      -
            
            
            
            -
      -
            
            
            
            -
      -
            
            
            
            -
      3,160





(1)
            Mr.
      Shinderman resigned as our Chief Executive Officer and Chief Financial
      Officer on June 6, 2008. The information provided in the summary
      compensation table includes all compensation paid to Mr. Shinderman for
      the full fiscal year ended December 31,
2007.





(2)
            Mr.
      Owen resigned as our Chief Executive Officer and Chief Financial Officer
      on November 27, 2007. The information provided in the summary compensation
      table includes all compensation paid to Mr. Owen for the full fiscal year
      ended December 31, 2006.




(3)
            Mr.
      Schipperheijn resigned as our Chief Executive Officer and Chief Financial
      Officer on September 28, 2006. The information provided in the summary
      compensation table includes all compensation paid to Mr. Schipperheijn for
      the full fiscal year ended December 31, 2006 and
  2005.






Narrative
Disclosure to the Summary Compensation Table




Except as
disclosed below, we did not compensate our executive officers for services
rendered during the fiscal year ended December 31, 2007 or 2006.





The
amounts disclosed as “All Other Compensation” relate to consulting fees earned
by our executive officers for the periods indicated.





On
October 1, 2006, we entered into a Consulting Agreement with Owen Consulting,
LLC, an entity owned and controlled by our director and sole officer, Mr. Kelly
Owen to provide consulting services to us, primarily related to the development
of our EncryptaKey technology and to run our operations. The Consulting
Agreement is effective for a period of one year commencing October 1, 2006 and
we have a right to cancellation anytime upon thirty (30) days written notice.
Under the terms of the Consulting Agreement, Owen Consulting, LLC, is
compensated for services rendered to us at a rate of $25 per hour. The total
compensation paid to Owen Consulting, LLC, during the fiscal year ended December
31, 2006 was $890,000; approximately $20,000 per month of which went to Mr. Owen
directly. This compensation is included in the summary compensation table
above in “All Other Compensation.”




In
addition, on September 28, 2006, we entered into an Asset Purchase Agreement
with Owen Consulting LLC, pursuant to which we acquired technology called the
“EncryptaKey Secure Communication Portal” as described in a patent application
pending before the Patent and Trademark Office as application no. 60745514,
filed April 24, 2006, titled “Invisidesk Private Communication, Authentication
and Connection Portal” and the related intellectual property in exchange for
5,500,000 shares of our restricted common stock. The aggregate fair value of
these shares was computed in accordance with FAS 123R and is reported in the
summary compensation table above in the column titled “All Other
Compensation.”




28




At no
time during the last fiscal year was any outstanding option repriced or
otherwise modified. There was no tandem feature, reload feature, or
tax-reimbursement feature associated with any of the stock options we granted to
our executive officers or otherwise.





Compensation
of Directors





We did
not compensate our directors in fees, cash or stock options for services
rendered during the fiscal year ended December 31, 2007.





Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters





The
following table identifies, as of July 23, 2008, the number and percentage of
outstanding shares of Common Stock owned by (i) each person known to the Company
who owns more than five percent of the outstanding Common Stock, (ii) each named
executive officer and director, and (iii) and all executive officers and
directors of the Company as a group:





Name
      and Address of Beneficial Owner (1)
            
            Common
      Stock Beneficially Owned
            
            
            Percentage
      of Common StockLouis
      Jack Musetti (2)
            
            
            44,500,000
            
            
            
            44.95
            %Musetti
      & Associates, LLC (2)
            
            
            44,500,000
            
            
            
            44.95
            %Owen
      Consulting LLC
              9717-53
      Avenue, 2nd
      Fl.
              Edmonton,
      AB, Canada
            
            
            5,500,000
            
            
            
            5.55
            %Bishop
      Equity Partners
              10300
      West Charleston, Ste. 13-378
              Las
      Vegas, NV 89135
            
            
            5,200,000
            
            
            
            5.25
            %All
      executive officers and directors as a group (consisting of 1
      individual)
            
            
            44,500,000
            
            
            
            44.95
            %(1)
      Beneficial Ownership is determined in accordance with the rules of the
      Securities and Exchange Commission and generally includes voting or
      investment power with respect to securities. Shares of Common Stock
      subject to options, warrants, or convertible debt currently exercisable or
      convertible, or exercisable or convertible within 60 days of July 1, 2008
      are deemed outstanding for computing the percentage of the person holding
      such option or warrant but are not deemed outstanding for computing the
      percentage of any other person. Percentages are based on a total of
      99,006,784 shares of Common Stock outstanding on July 1, 2008, and the
      shares issuable upon the exercise of options, warrants exercisable, and
      debt convertible on or within 60 days of July 1, 2008. Except as
      otherwise indicated, the address of each person named in this table is c/o
      EncryptaKey, Inc., 19200 Von Karman Ave., Ste. 500, Irvine, CA
      92612.(2)
      Louis Jack Musetti holds voting and dispositive power
      over the shares of Musetti & Associates, LLC.




Securities Authorized for Issuance
Under Equity Compensation Plans.





None.





29





Item
13. Certain Relationships and Related Transactions, and Director
Independence





Except as
disclosed below, none of our directors or executive officers, nor any proposed
nominee for election as a director, nor any person who beneficially owns,
directly or indirectly, shares carrying more than 5% of the voting rights
attached to all of our outstanding shares, nor any members of the immediate
family (including spouse, parents, children, siblings, and in-laws) of any of
the foregoing persons has any material interest, direct or indirect, in any
transaction since the beginning of our last fiscal year or in any presently
proposed transaction which, in either case, has or will materially affect
us.





On
September 28, 2006, we entered into an Asset Purchase Agreement with Owen
Consulting LLC, a California limited liability company. Pursuant to that
agreement, we acquired assets consisting of all right, title and interest in
technology commonly known as the EncryptaKey Secure Communication Portal and
memorialized in a patent application pending before the Patent and Trademark
Office as application no. 60745514, filed April 24, 2006, titled “Invisidesk
Private Communication, Authentication and Connection Portal” and the related
intellectual property in exchange for 5,500,000 shares of our restricted common
stock. Owen Consulting LLC is wholly owned and controlled by Mr. Owen, our
former Chief Executive Officer and former Chief Financial Officer.





On
October 1, 2006, we entered into a Consulting Agreement with Owen Consulting,
LLC, an entity owned and controlled by our director and sole officer, Mr. Kelly
Owen to provide consulting services to us, primarily related to the development
of our EncryptaKey technology and to run our operations. The Consulting
Agreement is effective for a period of one year commencing October 1, 2006 and
we have a right to cancellation anytime upon thirty (30) days written notice.
Under the terms of the Consulting Agreement, Owen Consulting, LLC, is
compensated for services rendered to us at a rate of $25 per hour. The total
compensation paid to Owen Consulting, LLC, during the fiscal year ended December
31, 2006 was $890,000.





On
February 5, 2007, we entered into an Asset Purchase Agreement with Owen
Consulting Inc., a Nevada Corporation. Pursuant to that agreement, we acquired
assets consisting of all right, title and interest in server hardware and
software in exchange for 636,120 shares of our restricted common stock. Owen
Consulting, Inc. is wholly owned and controlled by Mr. Owen.





Director
Independence





As the
Company’s sole officer and director, Louis Jack Musetti is not considered to be
independent under the listing standards of the Rules of NASDAQ, as set forth in
the NASDAQ Manual.




Item
14. Principal Accountant Fees and Services





Audit
Fees





The
aggregate fees billed by our auditors for professional services rendered in
connection with a review of the financial statements included in our quarterly
reports on Form 10-QSB and the audit of our annual consolidated financial
statements for the fiscal years ended December 31, 2007 and December 31, 2006
were approximately $6,000 and $1,500 respectively.





Audit-Related
Fees





Our
auditors did not bill any additional fees for assurance and related services
that are reasonably related to the performance of the audit or review of our
financial statements.





Tax
Fees





The
aggregate fees billed by our auditors for professional services for tax
compliance, tax advice, and tax planning were $0 and $0 for the fiscal years
ended December 31, 2007 and 2006.





All
Other Fees





The
aggregate fees billed by our auditors for all other non-audit services, such as
attending meetings and other miscellaneous financial consulting, for the fiscal
years ended December 31, 2007 and 2006 were $0 and $0 respectively.





30





Item
15. Exhibits, Financial Statement Schedules.





Exhibit
              Number
            Description3.1
            Articles
      of Incorporation, as amended on March 12, 2007. (1)3.2
            By-laws,
      as amended. (2)10.1
            Asset
      Purchase Agreement with Owen Consulting, LLC, dated September 28, 2006.
      (2)10.2
            Consulting
      Agreement with Owen Consulting, Inc. dated October 1,
  2006.10.3
            Asset
      Purchase Agreement with Owen Consulting, Inc. dated February 5, 2007.
      (3)31.1
            Certification
      of Chief Executive Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
            Certification
      of Chief Financial Officer pursuant to Securities Exchange Act Rule
      13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
            Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.





(1)
            Incorporated
      by reference to Annual report on Form 10-KSB filed on April 17,
      2007.(2)
            Incorporated
      by reference to Current report on Form 8-K filed on October 4,
      2006.(3)
            Incorporated
      by reference to Current report on Form 8-K filed on February 9,
      2007.





31


SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, as
amended, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.






ENCRYPTAKEY,
    INC.July
      30, 2008
              By:
              /s/ Louis
      Jack MusettiLouis
      Jack MusettiChief
      Executive Officer, Chief Financial Officer and Director


Pursuant
to the requirements of Section 13 or 15(d) of the 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:




July
      30, 2008
            By:
            /s/ Louis
      Jack MusettiLouis
      Jack MusettiChief
      Executive Officer, Chief Financial Officer and Director









32