Exhibit 10.26


 


SEERGATE LTD.


2014 ANNUAL REPORT


 




    	 



    	 



    

 


SEERGATE LTD.


2014 ANNUAL REPORT


 


TABLE OF CONTENTS


 


	 	Page
	REPORT OF INDEPENDENT ACCOUNTANTS
    FINANCIAL STATEMENTS - IN U.S. DOLLARS ($):	2
	Consolidated balance sheets	3
	Consolidated statements of operations	4
	Consolidated statements of capital deficiency	5
	Statements of cash flow	6
	Notes to financial statements	7-19


 




    	 



    	 



    

 


 


 


REPORT
OF INDEPENDENT AUDITORS


To the Shareholders of


SEERGATE LTD.


 


We have audited the accompanying consolidated
balance sheets of Seergate Ltd. (An Israeli Corporation, hereafter - the Company) as of December 31, 2014 and 2013, the related
consolidated statements of operations, capital deficiency and cash flows for the years then ended. These financial statements are
the responsibility of the Company’s board of directors and management. Our responsibility is to express an opinion on these
financial statements based on our audit.


 


We conducted our audit in accordance with
auditing standards generally accepted in Israel, including those prescribed by the Israeli Auditors (Mode of Performance) Regulations,
1973. Those standards require that we plan and perform the audit 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
the Company’s Board of Directors and management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.


 


In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of
December 31, 2014 and 2013, the consolidated results of operations, capital deficiency and cash flows for the years then ended,
in conformity with accounting principles generally accepted in the United States of America.


 


Without qualifying our opinion we draw
attention to the fact that the accompanying financial statements have been prepared assuming that the Company will continue as
a going concern.  As discussed in Note 1c to the financial statements, the continuance of the Company’s operation as
a going concern is depended on achieving financing from its shareholders or external inventors. The Company has incurred losses
since inception and has limited cash resources. These factors raise substantial doubt about its ability to continue as a going
concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.


 


Subsequent to the balance sheet date, the
Company was acquired by MyECheck, Inc. (see note 12.d).


 





	Tel-Aviv, Israel	Kesselman & Kesselman
	——————, 2015	Certified Public Accountants (lsr.)
	 	A member firm of PricewaterhouseCoopers International Limited




 


Kesselman & Kesselman, Trade Tower,
25 Hamered Street, Tel-Aviv 6812508, Israel,


P.O Box 50005 Tel-Aviv 6150001 Telephone:
+972 -3- 7954555, Fax:+972 -3- 7954556, www.pwc.com/il


 




    	 



    	 



    

 


SEERGATE LTD.


CONSOLIDATED BALANCE SHEETS


 


	 	 	December 31	 
	 	 	2014	 	 	2013	 
	 	 	U.S. dollars	 
	Assets	 	 	 	 	 	 	 	 
	CURRENT ASSETS:	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	 	-	 	 	 	90,720	 
	Accounts receivables - other (note 3b)	 	 	4,525	 	 	 	7,248	 
	TOTAL CURRENT ASSETS	 	 	4,525	 	 	 	97,968	 
	PROPERTY AND EQUIPMENT, net (note 3a)	 	 	4,781	 	 	 	22,195	 
	TOTAL ASSETS	 	 	9,306	 	 	 	120,163	 
	 	 	 	 	 	 	 	 	 
	Liabilities and Capital deficiency	 	 	 	 	 	 	 	 
	CURRENT LIABILITIES:	 	 	 	 	 	 	 	 
	Bank Overdraft	 	 	21,717	 	 	 	-	 
	Accounts payable and accruals:	 	 	 	 	 	 	 	 
	Trade	 	 	3,498	 	 	 	3,693	 
	Other (note 3c)	 	 	85,113	 	 	 	80,731	 
	Shareholders loan	 	 	1,268	 	 	 	3,482	 
	TOTAL CURRENT LIABILITIES	 	 	111,596	 	 	 	87,906	 
	LONG TERM LOAN (note 5)	 	 	330,269	 	 	 	317,565	 
	CONVERTIBLE LOAN (note 6)	 	 	646,772	 	 	 	301,463	 
	COMMITMENTS (note 7)	 	 	 	 	 	 	 	 
	TOTAL LIABILITIES	 	 	1,088,637	 	 	 	706,934	 
	CAPITAL DEFICIENCY (note 8):	 	 	 	 	 	 	 	 
	Ordinary Shares, no par value: 446,100,000 shares authorized at December 31, 2014 and 2013; 1,050,000 issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B1 preferred shares, no par value: 650,000  shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B2 preferred shares, no par value: 450,000 shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B3 preferred shares, no par value: 940,249 shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B4 preferred shares, no par value: 550,000 shares authorized at December 31, 2014 and 2013; 516,966 shares  issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B5 preferred shares, no par value: 1,350,000 shares authorized at December 31, 2014 and 2013; 318,078 shares issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B6 preferred shares, no par value: 407,082 shares authorized, issued and outstanding  at December 31, 2014 and 2013	 	 	 	 	 	 	 	 
	Series B7 preferred shares, no par value: 173,906 shares authorized, issued and outstanding   at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Additional paid  in capital	 	 	4,574,820	 	 	 	4,572,818	 
	Accumulated Deficit	 	 	(5,654,151	)	 	 	(5,159,589	)
	TOTAL CAPITAL DEFICIENCY	 	 	(1,079,331	)	 	 	(586,771	)
	LIABILITIES AND CAPITAL DEFICIENCY	 	 	9,306	 	 	 	120,163	 



 





	 	/s/ EDWARD R. STARRS	 
	 	Chief Executive	 
	 	Officer and Director	 




 


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


 




    	3



    	 



    

 


SEERGATE LTD.


CONSOLIDATED STATEMENTS OF OPERATIONS


 


	 	 	Year ended December 31
	 
	 	 	2014
	 	 	2013
	 
	 	 	U.S. dollars
	 
	OPERATING COSTS AND EXPENSES:	 	 	 	 	 	 	 	 
	Research and development, net (note 10a)	 	 	200,823	 	 	 	244,869	 
	Marketing, general and administrative (note 10b)	 	 	253,483	 	 	 	296,755	 
	OPERATING LOSS	 	 	454,306	 	 	 	541,624	 
	FINANCIAL EXPENSES	 	 	26,967	 	 	 	161,465	 
	CAPITAL LOSS	 	 	13,289	 	 	 	-	 
	LOSS FOR THE YEAR	 	 	494,562	 	 	 	703,089	 



 


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


 




    	4



    	 



    

 


SEERGATE LTD.


CONSOLIDATED STATEMENTS OF CAPITAL DEFICIENCY


 





	 	 	Share capital


	 	 	 	 	 	 	 	 	 	 
	 	 	Ordinary

                                         shares
	 	 	Preferred

                                         shares
	 	 	Additional

    paid-in	 	 	Accumulated



	 	 	Total 

    capital	 
	 	 	Number of shares


	 	 	capital
*
	 	 	Deficit
	 	 	deficiency
	 
	 	 	 	 	 	 	 	 	U.S. Dollars


	 
	BALANCE AT JANUARY 1, 2013	 	 	1,050,000	 	 	 	2,875,293	 	 	 	3,447,049	 	 	 	(4,456,500	)	 	 	(1,009,451	)
	CHANGES DURING 2013:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Conversion of convertible loan into Series B6 Preferred shares	 	 	 	 	 	 	407,082	 	 	 	671,134	 	 	 	 	 	 	 	671,134	 
	Conversion of convertible loan into Series B7 Preferred shares	 	 	 	 	 	 	173,906	 	 	 	418,646	 	 	 	 	 	 	 	418,646	 
	Benefit component in connection with options granted to employees and
    service providers	 	 	 	 	 	 	 	 	 	 	35,989	 	 	 	 	 	 	 	35,989	 
	Loss for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(703,089	)	 	 	(703,089	)
	BALANCE AT DECEMBER 31, 2013	 	 	1,050,000	 	 	 	3,456,281	 	 	 	4,572,818	 	 	 	(5,159,589	)	 	 	(586,771	)
	CHANGES DURING 2014:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Benefit component in connection with options granted to employees and
    service providers	 	 	 	 	 	 	 	 	 	 	2,002	 	 	 	 	 	 	 	2,002	 
	Loss for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(494,562	)	 	 	(494,562	)
	BALANCE AT DECEMBER 31, 2014	 	 	1,050,000	 	 	 	3,456,281	 	 	 	4,574,820	 	 	 	(5,654,151	)	 	 	(1,079,331	)








  


* Net of
share issuance expenses.


 


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


 




    	5



    	 



    

 


SEERGATE LTD.


CONSOLIDATED STATEMENTS OF CASH FLOWS


 





	 	 	Year ended December 31	 
	 	 	2014	 	 	2013	 
	 	 	U.S dollars	 
	CASH FLOWS FROM OPERATING ACTIVITIES:	 	 	 	 	 	 	 	 
	Loss for the year	 	 	(494,562	)	 	 	(703,089	)
	Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	 
	Depreciation	 	 	7,148	 	 	 	8,219	 
	Financial expenses in connection with convertible loan	 	 	13,603	 	 	 	142,494	 
	Financial expenses in connection with long term loan	 	 	12,704	 	 	 	10,791	 
	Benefit component in connection with options granted to employees and service providers	 	 	2,002	 	 	 	35,989	 
	Capital loss from disposal  of fixed assets	 	 	13,289	 	 	 	-	 
	Changes in asset and liability items:	 	 	 	 	 	 	 	 
	Decrease (increase) in government institutions and prepaid expenses	 	 	2,723	 	 	 	(2,003	)
	Increase  (decrease) in accounts payable and accruals	 	 	4,187	 	 	 	(529	)
	Net cash used in operating activities	 	 	(438,906	)	 	 	(508,128	)
	CASH FLOWS FROM INVESTING ACTIVITIES -	 	 	 	 	 	 	 	 
	Purchase of fixed assets	 	 	(3,023	)	 	 	(7,418	)
	Net cash used in investing activities	 	 	(3,023	)	 	 	(7,418	)
	CASH FLOWS FROM FINANCING ACTIVITIES:	 	 	 	 	 	 	 	 
	Shareholders loan	 	 	(2,214	)	 	 	(7,064	)
	Loan received	 	 	-	 	 	 	306,774	 
	Convertible loan received	 	 	331,706	 	 	 	300,000	 
	Net cash provided by financing activities	 	 	329,492	 	 	 	599,710	 
	INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	 	 	(112,437	)	 	 	84,164	 
	CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	 	 	90,720	 	 	 	6,556	 
	CASH AND CASH EQUIVALENTS (BANK OVERDRAFT) AT END OF YEAR	 	 	(21,717	)	 	 	90,720	 
	SUPPLEMENTARY INFORMATION ON ACTIVITIES NOT INVOLVING CASH FLOWS –	 	 	 	 	 	 	 	 
	Conversion of convertible loan into Preferred shares	 	 	-	 	 	 	1,089,780	 








 


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


 




    	6



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS


 


NOTE 1 - GENERAL:


 


		a.	Seergate Ltd. (the “Company”) was incorporated as an Israeli corporation on May 30, 2007, and commenced operations
on that date.



			Seergate Inc. (the “Subsidiary”) was incorporated as a Delaware corporation in the United States on July 6, 2009,
as a wholly owned subsidiary of the Company.



 


		b.	The Company develops a transactional “e-mailing” system that enables Real-time Authorization and Settlement of
electronic transactions through a global secure proprietary Network.



 


		c.	Since its inception, the Company has devoted substantially most of its efforts to business planning,
research and development, recruiting management and technical staff, and raising capital. On June 10, 2014, the FASB issued the
final standard on development stage entities, which eliminates the concept of a development stage entity from U.S. GAAP. Entities
that are in their development stage would no longer be required to present and disclose incremental information, such as inception-to-date
information. The Company adopted the new standard.



 


		d.	The continuance of the Company’s operation as a going concern is subject to continued finance
from its shareholders’ or external inventors. The Company has incurred losses since inception and has limited cash resources.
These factors raise substantial doubt about its ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



 


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:


 


The significant
accounting policies applied are as follows:


 


		a.	Principles of consolidation



 


The consolidated financial statements include the
accounts of the Company and its wholly owned subsidiary. All inter-company transactions have been eliminated in consolidation.


 


		b.	Functional currency



 


The currency of the primary economic environment in
which the operations of the Company are conducted is the U.S. dollar (“dollar”; “$”). The Company’s
financing is mostly in dollars and revenue is expected to be in dollars. Thus, the functional currency of the Company is the dollar.


 


Transactions and balances originally denominated
in dollars are presented at their original amounts. Balances in non-dollar currencies are translated into dollars using historical
and current exchange rates for non-monetary and monetary balances, respectively. For non-dollar transactions and other items (stated
below) reflected in the statements of operations, the following exchange rates are used: (i) for transactions - exchange rates
at transaction dates or average rates; and (ii) for other items (derived from non-monetary balance sheet items such as depreciation
and amortization, changes in inventories, etc.) - historical exchange rates. Currency transaction gains or losses are carried to
financial income or expenses, as appropriate.


 




    	7



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
(continued):


 


		c.	Use of estimates



 


The preparation of financial statements in conformity
with accounting principles generally accepted in the United States 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 reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimate.


 


		d.	Cash equivalents



 


The Company considers all highly liquid investments,
which include short-term bank deposits (up to three months from date of deposit) that are not restricted as to withdrawal or use
to be cash equivalents.


 


		e.	Research and development



 


ASC 985 requires capitalization
of certain software development costs subsequent to the establishment of technological feasibility.


 


Based on the Company’s product development
process, technological feasibility is established upon completion of a working model. The Company does not incur material costs
between the completion of the working model and the point at which the products are ready for general release. Therefore, research
and development costs are charged to the statement of operations as incurred.


 


		f.	Property and equipment



 


			Property and equipment are stated at cost. Depreciation is computed by the straight-line method over
the estimated useful life of the assets.



 


Annual rates of depreciation
are as follows:


 


	 	 	%
	Computers and software 	 	33
	Office furniture and equipment	 	7-15


 


Leasehold improvements are amortized by the straight
line method over the term of the lease, which is shorter than the estimated useful life of the improvements.


 


		g.	Fair value of financial instruments



 


The carrying amount of some of
the Company's financial instruments, including cash equivalents, accounts receivables, accounts payable and accrued liabilities
approximate their fair value, due to their short maturities.


 


		h.	Income taxes



 


Income taxes are accounted for
using the asset and liability approach. The asset and liability approach requires the recognition of taxes payable or refundable
for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized
in the Company’s financial statements or tax returns. The measurement of current and deferred tax liabilities and assets
is based on provisions of the relevant tax law. The measurement of deferred tax assets is reduced, if necessary, by the amount
of any tax benefits that, based on available evidence, are not expected to be realized.


 




    	8



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
(continued):


 


The Company applies ASC 740-10
which prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain
tax positions taken or expected to be taken in income tax returns (see note 9). The adoption of the pronouncement had no material
effect on the Company's financial statements.


 


		i.	Comprehensive income



 


The Company applies ASC 220 which establishes standards
for reporting and display of comprehensive income and its components in a full set of general purpose financial statements. There
was no difference between the Company’s net loss and its total comprehensive loss for the period ending December 31, 2014,
and the Company has not accumulated other comprehensive income or loss as of December 31, 2014.


 


		j.	Stock-based compensation



 


The Company applies ASC 718 which requires awards
classified as equity awards be accounted for using the grant-date fair value method. The fair value of share-based payment transactions
is recognized as expense over the requisite service period.


As a result of applying ASC 718, operating expenses
during the year ending December 31, 2014 and 2013, include a non-cash charge of approximately $2,002 and $35,989 for stock-based
compensation, respectively.


The Company elected to recognize compensation cost
for an award with only service conditions that has a graded vesting schedule using the accelerated multiple option approach.


 


NOTE 3 - SUPPLEMENTARY BALANCE SHEET
INFORMATION:


 


		a.	Property and equipment, net:



	 	 	December 31
	 
	 	 	2014
	 	 	2013
	 
	 	 	U.S. dollars
	 
	Cost:	 	 	 	 	 	 	 	 
	Office furniture and equipment	 	 	-	 	 	 	14,560	 
	Computers and software	 	 	32,035	 	 	 	53,896	 
	Leasehold improvements	 	 	-	 	 	 	2,507	 
	 	 	 	32,035	 	 	 	70,963	 
	Less - Accumulated depreciation:	 	 	 	 	 	 	 	 
	Office furniture and equipment	 	 	-	 	 	 	4,903	 
	Computers and software	 	 	27,254	 	 	 	42,886	 
	Leasehold improvements	 	 	-	 	 	 	979	 
	 	 	 	27,254	 	 	 	48,768	 
	 	 	 	4,781	 	 	 	22,195	 



 




    	9



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE
3 - SUPPLEMENTARY BALANCE SHEET INFORMATION (continued):


 


		b.	Accounts receivables - other:



	 	 	December 31
	 
	 	 	2014
	 	 	2013
	 
	 	 	U.S. dollars
	 
	 	 	 	 	 	 	 
	Short term prepaid	 	 	654	 	 	 	654	 
	Government institutions	 	 	3,871	 	 	 	6,594	 
	 	 	 	4,525	 	 	 	7,248	 



 


		c.	Accounts payable and accruals:



 


	Government institutions	 	 	13,769	 	 	 	13,582	 
	Employees and employees institutions	 	 	19,456	 	 	 	22,199	 
	Provisions for vacation pay	 	 	45,888	 	 	 	41,950	 
	Accrued expenses	 	 	6,000	 	 	 	3,000	 
	 	 	 	85,113	 	 	 	80,731	 



 


NOTE
4 - LIABILITY FOR SEVERANCE PAY


 


Israeli labor law generally requires payment of
severance pay upon dismissal of an employee or upon termination of employment in certain other circumstances. The Company's pension
and severance pay liability to certain employees is covered mainly by purchase of insurance policies. Pursuant to section 14 of
the Severance Compensation Act, 1963 ("section 14"), all of the Company's employees are entitled to monthly deposits,
at a rate of 8.33% of their monthly salary, made in their name with insurance companies. Payments in accordance with section 14
relieve the Company from any future severance payments in respect of those employees and as such the Company may only utilize the
insurance policies for the purpose of disbursement of severance pay.


 


NOTE
5 - LONG TERM LOAN


 


In February 2013, the Company singed a loan agreement
with certain existing investors under which the Company shall receive an amount of up to $350 thousands. According to the agreement,
the loan shall bear annual interest of 4%.


Up to date, the Company received an amount of approximately
$306 thousands.


 


Total interest expenses in respect with the loan
during 2014 and 2013 are amounted approximately $13 thousands and $11 thousands, respectively, and recorded as financial expenses.


 


NOTE
6 - convertible LOAN:


 


		a.	In October 2011 the Company signed a convertible loan agreement with certain lenders in the amount of approximately $594 thousands,
which shall bear annual interest of 7%.



 


The loan and accrued Principal and all interest will
be due and payable or converted into the Company's Preferred Shares subject to the terms and conditions specified in the convertible
loan agreement.


 


As of December 31, 2011 the Company received an amount
of approximately $565 thousands from the lenders. In April 2012 the Company received an additional amount of approximately $29
thousands from the lenders.


 




    	10



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE
6 - convertible LOAN (continued):


 


Total interest expenses in respect with the loan during
2013 are amounted approximately $30 thousands, and recorded as financial expenses.


 


In September 2013, the convertible loan was converted
into 407,082 shares of Series B6 Preferred Share.


 


		b.	In July 2012 the Company signed a credit line agreement with certain lenders in an amount of up to $500 thousands, which shall
bear monthly interest of 5%.



 


The credit line and accrued Principal and all interest
will be due and payable or converted into the Company's Preferred Shares subject to the terms and conditions specified in the credit
line agreement.


 


As of December 31, 2012 the Company received an amount
of approximately $232 thousands out of the credit line.


 


Total interest expenses in respect with the credit
line during 2013 are amounted approximately $111 thousands, and recorded as financial expenses.


 


In September 2013, the credit line was converted into
173,906 shares of Series B7 Preferred Share.


 


		c.	On October 3, 2013 the Company singed a convertible loan agreement with certain existing investors under which the Company
shall receive an amount of up to $600 thousands. According to the agreement, the convertible loan shall bear annual interest of
2%. The terms and conditions of the conversion is as stipulated in the agreement.



Up to date, the Company received an amount of approximately
$300 thousands.


 


Total interest expenses in respect with the loan during
2014 and 2013 are amounted approximately $6 thousands and $1 thousand, respectively, and recorded as financial expenses.


 


		d.	In April 2014, the Company signed a convertible loan agreement with certain existing investors
under which the Company shall receive an amount of up to $230 thousands (with option to increase
the convertible loan amount during a period of 30 days). According to the agreement, the loan shall bear annual interest of 4%.
The terms and conditions of the conversion is as stipulated in the agreement.



Up to date, the Company received an amount of approximately
$231 thousands.


 


Total interest expenses in respect with the loan during
2014 are amounted approximately $7 thousands, and recorded as financial expenses.


 


		e.	In November 2014, the Company signed a convertible loan agreement with certain existing investors
under which the Company shall receive an amount of $100 thousands. According to the agreement, the
loan shall bear annual interest of 7%. The terms and conditions of the conversion is as stipulated in the agreement.



Up to date, the
Company received the full loan amount.


 


Total interest expenses in respect with the loan during
2014 are amounted approximately $1 thousand, and recorded as financial expenses.


 




    	11



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE 7 - COMMITMENTS:


 


		a.	On December 26, 2012, the
Company was engaged in a leasing agreement with a certain lessor for a premises it uses as new office space for a period of
12 months ending December 31, 2013. The monthly lease payment was approximately NIS 10 Thousands.



 


During 2014, the agreement ended
and the Company does not pay any lease payments for the new premises.


 


In March 2015, the Company was
engaged in a new leasing agreement with a certain lessor for a premises it uses as new office space. The monthly lease payment
was approximately NIS 3.5 Thousands. This agreement includes an option to end the engagement in one month advance announcement
without any commitment.


 


		b.	In April 2010, the Subsidiary signed a lease agreement for a premises it uses as office space.
The monthly lease payments under the agreement are approximately $200. During
2013, the agreement ended.



 


		c.	The Company is committed to pay royalties to the Chief Scientist of the Israeli Ministry of Industry, Trade and Employment
on the proceeds from sales of systems resulting from research and development project in which the Chief Scientist’s Office
participates by way of grant, at royalty rates of 3% to 3.5%, of sales of the products arising from such research program, up to
a maximum of 100% plus interest at the LIBOR rate.



 


During the year 2014, the Company
did not have revenues; therefore the Company did not pay any royalties.


 


Currently, the Company is in
the process of receiving final approval from the Chief Scientist closing the commitment.


 


NOTE
8 - SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY):


 


		a.	Rights attached to shares



 


The rights, preferences and privileges with respect
to the Preferred Shares are as follows:


 


Conversion


 


Each Preferred B Share shall be (i) convertible into
Ordinary Shares at the option of the holder thereof, at any time after the date on which such Preferred B Share was issued by the
Company (the “Original Issue Date”); and (ii) automatically converted into Ordinary Shares simultaneously with the
occurrence of the first to occur of (A) an IPO; or (B) the written consent of holders of a majority of the issued and outstanding
Preferred B Shares, subject to the terms and conditions specified in the Agreement.


 


Voting


 


Every Shareholder shall have one vote for each share
held by him of record, on every resolution, without regard to whether the vote thereon is conducted by a show of hands, by written
ballot or by any other means.


 


Liquidation and Dividend Preference


 


In the event of a Liquidation Event or Deemed Liquidation
or distribution of dividends, any assets of the Company available for distribution (the “Liquidation/Dividend Proceeds”)
shall be distributed to the Shareholders of the Company
only pursuant to the following order of preference as follows:


 




    	12



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE
8 - SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY) (continued):


 


		1)	First, the holders of Preferred B Shares shall receive, prior to and in preference to any other securities
of the Company, with respect to each Preferred B Share held by them, an amount equal to the Original Issue Price applicable to
their specific Preferred B Shares plus any declared but unpaid dividends less any amount of Liquidation/Dividend Proceeds previously
paid in preference on such share according to the Agreement (the "B Preference Amount").



In the event that the Liquidation/Dividend Proceeds
shall be insufficient for the distribution of the B Preference Amount in full to all of the holders of Preferred B Shares, the
Liquidation/Dividend Proceeds shall be distributed among the holders of Preferred B Shares in proportion to the portion of the
B Preference Amount such holders would have received had the Liquidation/Dividend Proceeds been sufficient for the distribution
of the B Preference Amount in full;


 


		2)	After the distribution of the B Preference Amount holders of the Ordinary Shares and holders of Preferred B Shares will receive,
on a pro rata basis, any remaining proceeds (with all Preferred B Shares treated on an as-converted basis).



 


		3)	Notwithstanding the above, in the event that a pro-rata distribution (without taking into account the preference under the
Agreement) would entitle the holders of a class of Preferred B Shares to an amount that is equal to or exceeds 2 times its respective
portion of the B Preference Amount, then the preference above shall not apply to such class of Preferred B Shares and if the pro-rata
distribution (without taking into account the preference under the Agreement) would entitle the holders of all classes of Preferred
B Shares to an amount that is equal to or exceeds their respective portion of the B Preference Amount, then all proceeds shall
be distributed on a pro-rata basis, without preference; provided however that in the event a distribution is made under the Agreement,
each such class of Preferred B Shares that is not receiving its portion of the B Preference Amount shall receive at least an amount
equal to 2 times its Original Issue Price plus any declared but unpaid dividends less any amount of Liquidation/Dividend Proceeds
previously paid in preference on such share according to the Agreement.



 


		b.	Issuance
                                         of Shares capital



 


In September 2013, the convertible loan mention in
note 6.a was converted into 407,082 shares of Series B6 Shares of no par value.


 


In September 2013, the credit line mention in note
6.a was converted into 173,906 shares of Series B7 Preferred Shares of no par value.


 




    	13



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE
8 - SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY) (continued):


 


		c.	Option plan



 


In November 2007, the Company’s Board of Directors
approved a share option plan (the “Plan”). Options granted under the Plan, with respect to persons subject to US tax
laws may be incentive stock options or non-statutory stock options. Stock rights may also be granted under the Plan. The option
shall not exceed 7 years from the date of grant. Each option can be exercised to purchase one Ordinary Shares of no par value of
the Company. The options shall vest and become exercisable in accordance with the terms and conditions stipulated in the applicable
option agreement.


 


The Company’s Board of Directors also approved
the Plan for the purpose of Section 102 of the Israeli Tax ordinance. The Company’s Board of Directors selected the capital
gains tax track for options granted to the Company's employees.


 


As of December 31, 2014 the Company's Board of Directors
approved the grant of 424,000 stock options to services providers and employees. The Company has recorded compensation expenses
in relation with the option granted to service providers during 2014 and 2013 in the amount of $2,002 and $35,989, respectively.


 


NOTE
9 - taxes on income:


 


		a.	The Company is taxed under the Israeli law and the Subsidiary is taxed under the federal law of the
U.S.



 


		b.	The income of the Company is taxed at a regular rate.



 


On December 6, 2011, the "Tax
Burden Distribution Law" Legislation Amendments (2011) (hereinafter - the "2011 amendment") was published in the
official gazette. Under this law, the previously approved gradual decrease in corporate tax is discontinued and corporate tax rate
will increase to 25% as from 2012.


 


On August 5, 2013, the Law for
Change of National Priorities (Legislative Amendments for Achieving the Budgetary Goals for 2013-2014), 2013 (hereinafter - the
Law) was published in Reshumot (the Israeli government official gazette), enacting, among other things, raising the corporate tax
rate beginning in 2014 and thereafter to 26.5% (instead of 25%).


 


		c.	The Company has final tax assessments since incorporation through 2010.



 


		d.	As of December 31, 2014, the Company has NOLs of approximately $5 Million. Under Israeli tax laws,
those NOLs are linked to the Israeli CPI and can be utilized indefinitely.



 


		e.	The application of ASC 740-10 has no material effect on the Company's financial statements.



 


		f.	A full valuation allowance was created against deferred tax assets since the realization of any future
benefit from deductible temporary differences, net operating loss and tax credit carry forward cannot be sufficiently assured at
December 31, 2014.



 




    	14



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE 10 - SUPPLEMENTARY STATEMENT OF
OPERATIONS INFORMATION:


 


	 	 	Year ended	 
	 	 	December 31	 
	 	 	2014	 	 	2013	 
	 	 	U.S. dollars	 
	a.   Research and development costs:	 	 	 	 	 	 	 	 
	Consultants and related expenses	 	 	-	 	 	 	1,630	 
	Development cost	 	 	-	 	 	 	22,072	 
	Payroll and related expenses	 	 	200,823	 	 	 	221,167	 
	 	 	 	200,823	 	 	 	244,869	 
	b.   Marketing, general and administrative costs:	 	 	 	 	 	 	 	 
	Payroll and related expenses	 	 	182,409	 	 	 	184,023	 
	Consultants and related expenses	 	 	-	 	 	 	16,000	 
	Travel abroad	 	 	15,018	 	 	 	19,826	 
	Professional fees	 	 	20,529	 	 	 	18,063	 
	Rent and related expenses	 	 	17,565	 	 	 	34,319	 
	Other	 	 	17,962	 	 	 	24,524	 
	 	 	 	253,483	 	 	 	296,755	 



 




    	15



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE 11 - NOMINAL ISRAELI CURRENCY DATA:


 


		a.	Balance sheets



	 	 	December 31
	 
	 	 	2014
	 	 	2013
	 
	 	 	NIS
	 
	Assets	 	 	 	 	 	 	 	 
	CURRENT ASSETS:	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	 	-	 	 	 	314,888	 
	Accounts receivables – other	 	 	15,489	 	 	 	24,962	 
	TOTAL CURRENT ASSETS	 	 	15,489	 	 	 	339,850	 
	PROPERTY AND EQUIPMENT, net	 	 	17,546	 	 	 	81,719	 
	TOTAL ASSETS	 	 	33,035	 	 	 	421,569	 
	 	 	 	 	 	 	 	 	 
	Liabilities and Capital deficiency	 	 	 	 	 	 	 	 
	CURRENT LIABILITIES:	 	 	 	 	 	 	 	 
	Bank Overdraft	 	 	84,456	 	 	 	-	 
	Accounts payable and accruals:	 	 	 	 	 	 	 	 
	Trade	 	 	13,129	 	 	 	18,374	 
	Other	 	 	331,000	 	 	 	280,216	 
	Shareholders loan	 	 	2,724	 	 	 	12,842	 
	TOTAL CURRENT LIABILITIES	 	 	431,309	 	 	 	311,432	 
	LONG TERM LOAN	 	 	1,200,670	 	 	 	1,151,269	 
	CONVERTIBLE LOAN	 	 	2,339,427	 	 	 	1,092,344	 
	TOTAL LIABILITIES	 	 	3,971,406	 	 	 	2,555,045	 
	CAPITAL DEFICIENCY:	 	 	 	 	 	 	 	 
	Ordinary Shares, no par value: 446,100,000 shares authorized at December 31, 2014 and 2013; 1,050,000 issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B1 preferred shares, no par value: 650,000  shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B2 preferred shares, no par value: 450,000 shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B3 preferred shares, no par value: 940,249 shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B4 preferred shares, no par value: 550,000 shares authorized at December 31, 2014 and 2013; 516,966 shares  issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B5 preferred shares, no par value: 1,350,000 shares authorized at December 31, 2014 and 2013; 318,078 shares issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B6 preferred shares, no par value: 407,082 shares authorized, issued and outstanding  at December 31, 2014 and 2013	 	 	 	 	 	 	 	 
	Series B7 preferred shares, no par value: 173,906 shares authorized, issued and outstanding   at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Additional paid-in capital	 	 	17,496,760	 	 	 	17,489,595	 
	Accumulated Deficit	 	 	(21,435,131	)	 	 	(19,623,071	)
	TOTAL CAPITAL DEFICIENCY	 	 	(3,938,371	)	 	 	(2,133,476	)
	LIABILITIES AND CAPITAL DEFICIENCY	 	 	33,035	 	 	 	421,569	 



 




    	16



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE 11 - NOMINAL ISRAELI CURRENCY DATA
(continued):


 


		b.	Statements of operations:



 


	 	 	Year ended December 31	 
	 	 	2014	 	 	2013	 
	 	 	NIS	 
	OPERATING COSTS AND EXPENSES:	 	 	 	 	 	 	 	 
	Research and development, net	 	 	720,816	 	 	 	882,244	 
	Marketing, general and administrative	 	 	911,012	 	 	 	1,070,413	 
	OPERATING LOSS	 	 	1,631,828	 	 	 	1,952,657	 
	FINANCIAL EXPENSES	 	 	131,803	 	 	 	564,994	 
	CAPITAL LOSS	 	 	48,429	 	 	 	-	 
	LOSS FOR THE YEAR	 	 	1,812,060	 	 	 	2,517,651	 



 




    	17



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE 11 - NOMINAL ISRAELI CURRENCY DATA
(continued):


 


		c.	statements of capital deficiency



 


	 	 	Share
                                         capital
	 	 	 	 	 	 	 	 	 	 
	 	 	Ordinary

                                         Shares
	 	 	Preferred

                                         shares
	 	 	Additional

    paid-in	 	 	Accumulated	 	 	Total

    capital	 
	 	 	Number
                                         of shares
	 	 	capital
*
	 	 	Deficit
	 	 	deficiency
	 
	 	 	 	 	 	NIS
	 
	BALANCE
    AT JANUARY 1, 2013	 	 	1,050,000	 	 	 	2,875,293	 	 	 	13,210,463	 	 	 	(17,105,420	)	 	 	(3,894,957	)
	CHANGES DURING
    2013:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Conversion
of convertible loans into Series B6 Preferred shares	 	 	 	 	 	 	407,082	 	 	 	2,548,418	 	 	 	 	 	 	 	2,548,418	 
	Conversion
    of convertible loans into Series B7 Preferred shares	 	 	 	 	 	 	173,906	 	 	 	1,600,839	 	 	 	 	 	 	 	1,600,839	 
	Benefit
    component in connection with options granted to employees and service providers	 	 	 	 	 	 	 	 	 	 	129,875	 	 	 	 	 	 	 	129,875	 
	Loss
    for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(2,517,651	)	 	 	(2,517,651	)
	BALANCE AT DECEMBER
    31, 2013	 	 	1,050,000	 	 	 	3,456,281	 	 	 	17,489,595	 	 	 	(19,623,071	)	 	 	(2,133,476	)
	CHANGES DURING 2014:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Benefit
    component in connection with options granted to employees and service providers	 	 	 	 	 	 	 	 	 	 	7,165	 	 	 	 	 	 	 	7,165	 
	Loss
    for the year	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(1,812,060	)	 	 	(1,812,060	)
	BALANCE AT DECEMBER
    31, 2014	 	 	1,050,000	 	 	 	3,456,281	 	 	 	17,496,760	 	 	 	(21,435,131	)	 	 	(3,938,371	)



 


* Net of
share issuance expenses.


 




    	18



    	 



    

 


SEERGATE LTD.


NOTES TO FINANCIAL STATEMENTS
(continued)


 


NOTE 12 - SUBSEQUENT EVENTS:


 


		a.	On February 2, 2015 the loan and the convertible loans mention in note 5 and note 6 above were
converted to 2,711,214 Ordinary Shares.



 


		b.	On February 2, 2015 all of the Preferred B Shares were converted to 3,456,281 ordinary shares.



 


		c.	On February 10, 2015 the Company signed a share purchase agreement with certain investors under
which the Company issued 3,106,998 Ordinary Shares bearing no par value per share, for a total consideration of $200 thousand.



 


		d.	In May 2015 all shares of Seergate ltd. were sold to MyECheck, Inc. ("The Acquirer")
in return for the Acquirer's Restricted Common Stocks for a total stock value equivalent to $3 million.



 




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