**UNITED
      STATES SECURITIES AND EXCHANGE COMMISSION**





Washington,
      D.C. 20549





**Form
      10-KSB**





[X]   
      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the Fiscal Year Ended: September
      30, 2005





Commission
      file number: 000-26969







**SVC
      FINANCIAL SERVICES, INC.**


*(Name
      of small business issuer in its charter)*






**Colorado,
                USA**
            
            **84-1343219***(State
                or other
                Jurisdiction*
            
            *(IRS
                Employer
                Identification No.)**of Incorporation or Organization)*






**235
      Montgomery Street, Suite 956, San Francisco, California 94104**


*(Address
      of principal executive offices)*






**(866)
      370-9600**


*(Issuer's
      Telephone Number)*




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




Securities
      to be registered pursuant to Section 12(g) of the Act: Common
      Shares, no par value


(Title
      of Class)




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such report(s), and (2) has been
      subject to such filing requirements for the past 90 days. Yes o No x




Check
      if
      disclosure of delinquent filers in response to Item 405 of Regulation S-B is
      not
      contained in this form, and no disclosure will be contained, to the best of
      registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. o




State
      the
      issuer's revenues for its most recent fiscal year: $11,224




The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates based upon the average bid and asked price at September 30,
      2005
      was $ 3,984,860.




As
      of
      September 30, 2005, issuer had 34,650,954 shares of common equity issued and
      outstanding.




Transitional
      Small Business Disclosure Format: Yes o No x





**SVC
      FINANCIAL SERVICES, INC.**





Form
      10-KSB





TABLE
      OF
      CONTENTS





**PART
      I**





ITEM
      1.
      DESCRIPTION OF BUSINESS





ITEM
      2.
      DESCRIPTION OF PROPERTY





ITEM
      3.
      LEGAL PROCEEDINGS





ITEM
      4.
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS











**PART
      II**





ITEM
      5.
      MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS





ITEM
      6.
      MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONS





ITEM
      7.
      FINANCIAL STATEMENTS





ITEM
      8.
      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE





ITEM
      8A.  CONTROLS AND PROCEDURES











**PART
      III**





ITEM
      9.
      DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS





ITEM
      10.
      EXECUTIVE COMPENSATION





ITEM
      11.
      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT





ITEM
      12.
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





ITEM
      13.
      PRINCIPAL ACCOUNTANTS FEES AND SERVICES





ITEM
      14.
      EXHIBITS AND REPORTS ON FORM 8-K










**PART
      I**





**ITEM
      1.     DESCRIPTION OF BUSINESS**




Historical
      Corporate Development




SVC
      Financial Services, Inc. (hereinafter also referred to as the "Company", SVC
      and/or the "Registrant") is a company in the development stage.   The
      Company was incorporated July 14, 1995 under the laws of the State of Colorado.
       Formerly known as Secure Sign, Inc., after completing a merger with
      Pocketpass.com, Inc., in October 2003, the Company changed its name to SVC
      Financial Services, Inc.




SVC
      offers two products, the Mazarin Media Platform that supports multi-media based
      E-commerce transactions, and "Scoot" Mobile Money Prepaid Debit cards that
      support mobile phone based transactions. These two products, described below,
      are both in beta testing and scheduled to be launched during the first three
      months of 2006.








*The
      Mazarin Media Platform*





The
      Mazarin Media Platform is a rapid application development system that creates
      payment-enabled multimedia applications that can be distributed over the
      Internet and via email. Mazarin Media Applications have a broad range of uses
      including corporate product marketing, fund raising for charities, and
      distributing music and video files. Users can download a Mazarin Media
      Application from a web site or Email and then make an online purchase or payment
      directly from the application without having to go to the seller's web site.
      We
      charge fees to set up the Mazarin Media Platform, and charge an additional
      small
      fee on every purchase made through a Mazarin application.





*Scoot
      Mobile Money*





Scoot
      Mobile Money Prepaid Debit cards allow anyone with a cell phone to store, send
      and receive funds anywhere in the world. Users purchase a prepaid Scoot debit
      card and then register with the Scoot Mobile Money service to link their cell
      phone number to their Scoot card number. Scoot users can now send money from
      one
      cardholder to another using their cell phone numbers as their unique identifier.
      Scoot is strategically focused on three markets: 1) sale of prepaid debit cards,
      2) card-to-card money transfer services and 3) marketing select products and
      services to Scoot users via their cell phones.





Since
      inception, we have devoted substantially all of our efforts to activities such
      as financial planning, capital raising and product development and have not
      recorded any significant revenue. For the fiscal years ended September 30,
      2005
      and 2004, we had net losses of $6,588,253 and $3,446,923, respectively. A t
      September 30, 2005, we had an accumulated deficit of $12,612,040. Since we
      have
      suffered recurring losses from operations, our auditors in their report on
      our
      financials for the fiscal year ended September 30, 2005, have expressed
      substantial doubt about our ability to continue as a going concern.




**GENERAL**




**Employees**




At
      September 30, 2005 the Company had no employees and operated with eleven
      consultants.




**Development
      Stage**




The
      Company is currently a development stage company and no significant revenues
      have been earned from operations.








**ITEM
      2.     DESCRIPTION OF PROPERTY**




Property
      consists of office furniture and equipment and approximately 1,400 square feet
      of leased office space at 235 Montgomery St, San Francisco, CA




**ITEM
      3.     LEGAL PROCEEDINGS**






***Weinberg
      & Company, P.A. v. SVC Financial Services, Inc.; Superior Court of
      California, County of Los Angeles Case No.
      BC330357***




On
      March
      16, 2005, Weinberg & Company, P.A., our former independent auditor
      ("Weinberg"), filed a lawsuit against us for breach of contract, open book
      account and quantum merit.  The complaint alleged that Weinberg provided
      accounting and auditing services for which they claim they were not fully
      compensated.  The lawsuit sought damages of $57,126 plus interest and
      attorney's fees and costs.  We filed a cross-complaint against Weinberg for
      breach of contract and professional negligence.  The case was settled and
      partial payment delivered. Because of restrictions as to issuance of S-8 stock
      attendant with the recent financing, we were unable to complete the settlement
      and approximately $20,000 remains due.




Claims
      have been made by Cappello Capital Corp and Pacific Wave Partners that they
      are
      due a fee related to the debt financing that closed on September 29, 2005.
      Management maintains that the investors who provided the funding were on an
      exclusion list with Cappello Capital Corp and Pacific Wave Partners.
      Additionally, neither Cappello nor Pacific Wave introduced the Company to these
      investors nor did they participate in the transaction. Accordingly,
      the Company
      believes that the claims are without merit and intends to vigorously defend
      its
      position. The ultimate outcome of this claim cannot presently be determined.
      However, in management’s opinion, the likelihood of a material adverse outcome
      is remote. Accordingly, adjustments, if any, that might result from the
      resolution of this matter have not been reflected in the financial
      statements.




The
      Company does not know of any other material, active or pending legal proceedings
      against it; nor is the Company involved as a plaintiff in any other material
      proceeding or pending litigation.




**ITEM
      4.     SUBMISSION OF MATTERS TO A VOTE FOR SECURITY HOLDERS**




An
      annual
      meeting was held on September 29, 2005 at which time the following proposals
      were voted upon by the shareholders:




1.
            To
                elect the following nominees for Director: Christopher Haigh, Harvey
                Bornstein, M. Yaqub Mirza, Inder Singh and Robert
                Gold.






2.
            To
                approve an amendment to the Company's Articles of Incorporation increasing
                the total number of authorized common shares of the Company to
                150,000,000.




Ninety-nine
      percent of voting shareholders voted in favor of proposal one to elect the
      directors. Also, ninety-nine percent of voting shareholders voted to amend
      the
      company’s Articles of Incorporation to increase the number of common shares
      authorized for issuance from to 150 million from 50 million.








**PART
      II**





**ITEM
      5.     MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS**




On
      November 3, 2000, the Company changed its name to Secure Sign, Inc. and the
      trading symbol changed to "SCSN" and on November 21, 2003, the Company once
      again changed its name to SVC Financial Services, Inc. and its shares are quoted
      on the NASDAQ OTCBB (bulletin board) under the symbol "SVCX".  Trading
      volume and high/low/closing prices for the past three years are disclosed in
      the
      following table.  The Company effected a 25 for 1 reverse split of its
      common shares on March 14, 2003 and the figures below reflect that split.





**Stock
      Trading Activity**





Quarter
                Ended
            
            High
            
            Low
            
            Close
            
            Volume9/30/2005
            
            $
                0.12
            
            $
                0.10
            
            $
                0.12
            
            1,481,1536/30/2005
            
            0.30
            
            0.30
            
            0.30
            
            476,2023/31/2005
            
            0.40
            
            0.40
            
            0.40
            
            619,74612/31/2004
            
            0.35
            
            0.35
            
            0.35
            
            286,5069/30/2004
            
            0.50
            
            0.45
            
            0.50
            
            415,7136/30/2004
            
            0.75
            
            0.70
            
            0.75
            
            464,6793/31/2004
            
            1.31
            
            1.00
            
            1.20
            
            1,565,62412/31/2003
            
            0.30
            
            0.20
            
            0.30
            
            557,3519/30/2003
            
            0.90
            
            0.18
            
            0.18
            
            87,3006/30/2003
            
            1.00
            
            0.25
            
            0.85
            
            165,1003/31/2003
            
            1.00
            
            0.03
            
            0.75
            
            14,66812/31/2002
            
            $ 0.03
            
            $    -
            
            $  0.01
            
            22,812








The
      Company has not declared any dividends on its common or preferred shares since
      its incorporation and does not anticipate that it will do so in the foreseeable
      future.   The present policy of the Company is to retain future earnings
      for use in its operations and expansion of its business.





The
      preferred shares of the Company are not registered and do not trade on any
      exchange.




During
      October and November 2004, 176,667 shares were issued for $55,000 in cash
      utilizing the Rule 4(2) exemption.





In
      December 2004, 526,500 restricted shares were issued for $112,500 in cash
      utilizing the Rule 4(2) exemption.





During
      the three months ended December 31, 2004, 123,829 shares worth $47,499 were
      issued to contractors and vendors in settlement of services rendered utilizing
      the Rule 4(2) exemption.  Also 83,335 of options valued at $40,000 vested.





During
      the three months ended March 31, 2005:


-
            116,080
                shares were issued for $29,020 in
                cash.


-
            141,754
                shares worth $49,265 were issued to contractors and vendors in settlement
                of services rendered.


-
            63,281
                restricted shares valued at $26,236 were issued for establishment
                of a
                credit facility.  See Financial Statement Note
                4.


-
            1,067,500
                shares valued at $290,125 were issued to the CEO for stock based
                compensation.


-
            All
                utilizing the Rule 4(2) exemption








During
      the three months ended June 30, 2005:


-
            283,000
                shares were issued for $66,995 in
                cash.


-
            35,156
                restricted shares valued at $7,163 were issued for establishment
                of a
                credit facility.  See Financial Statement Note
                4.


-
            98,930
                shares worth $ 29,758 were issued to contractors and vendors in settlement
                of services rendered.


-
            72,796
                shares valued at $12,375 were issued for fund raising
                activities.


-
            275,000
                shares valued at $46,750 were issued for investment banking and investor
                relations activities.


-
            All
                utilizing the Rule 4(2) exemption




During
      the three months ended September 30, 2005:


-
            400,021
                shares were issued for $50,967 in
                cash.


-
            35,156
                restricted shares valued at $5,977 were issued for establishment
                of a
                credit facility.  See Financial Statement Note
                4.


-
            294,139
                shares worth $38,979 were issued to contractors and vendors in settlement
                of services rendered.


-
            40,000
                shares valued at $4,600 were issued for fund raising
                activities.


-
            192,719
                shares issued valued at $25,063 were treated as issuance
                costs


-
            All
                utilizing the Rule 4(2) exemption




During
      October 2004 the company sold convertible debentures totaling $15,000 at 8%
      interest due March 31, 2006.  This debt was convertible to common shares at
      $.30 per share for a period of 180 days.  Warrants totaling 16,666
      exercisable at $.30 per share for 3 years were also issued with this debt.
      The
      issuance of these securities was exempt from registration under the Section
      4(2)
      of the Securities Act.




During
      November 2004 the company sold convertible debentures totaling $50,000 at 8%
      interest due November 15, 2006.  This debt was convertible to common shares
      at $.30 per share for a period of 180 days.  Warrants totaling 166,666
      exercisable at $.30 per share for 3 years were also issued with this debt.
      The
      issuance of these securities was exempt from registration under the Section
      4(2)
      of the


Securities
      Act.




On
      January 11, 2005 the Company concluded a loan agreement and credit facility
      with
      an existing accredited investor of $400,000 for convertible debentures payable
      two years after draw-down, bearing 12% interest.  The debentures and any
      accrued interest may be converted into common stock of the Company at the
      election of the holder at anytime utilizing a conversion ratio of $.10 per
      share.  These debentures also entitle the investor to 562,500 shares of
      restricted common stock as consideration for establishing the credit facility.
       As of September 30, 2005 the credit facility has been increased to
      $790,000 which has been entirely drawn down. The issuance of these securities
      was exempt from registration under the Section 4(2) of the Securities
      Act.




On
      March
      2, 2005 the Company concluded a loan agreement and credit facility with existing
      accredited investors of $45,000 for convertible debentures payable two years
      after draw-down, bearing 12% interest.  This credit line was subsequently
      increased to $95,000 which was entirely drawn down by September 30, 2005. The
      debentures and any accrued interest may be converted into common stock of the
      Company at the election of the holder at anytime utilizing a conversion ratio
      of
      $.10 per share.  These debentures also entitle the investors to 133,593
      shares of restricted common stock as consideration for establishing the credit
      facility.  The issuance of these securities was exempt from registration
      under the Section 4(2) of the Securities Act.





On
      September 29, 2005, the Company entered into a subscription agreement with
      two
      accredited investors for the sale and issuance of 10% secured promissory notes
      in the principal amount of $750,000 due in September 2007. The Notes may be
      converted at any time by the holder into shares of the Company's common stock,
      no par value, at a conversion price equal to the lesser of (i) $0.15, or (ii)
      75% of the average of the volume weighted average prices of the Common Stock
      for
      the three trading days preceding the date of conversion. The Company also issued
      to the Purchasers (i) five-year warrants to purchase a number of shares equal
      to
      the number of shares which would be issued on the Closing Date assuming the
      complete conversion of the Notes issued on the Closing Date at the Conversion
      Price then in effect, and (ii) warrants identical to the warrants under (i)
      except that they are exercisable for a period of one year from the effective
      date of the registration statement which the Company has agreed to file to
      register for resale the shares issuable upon conversion of the notes and
      exercise of the warrants. All warrants are exercisable at a price per share
      equal to 150% of the average of the volume weighted average of the Common Stock
      for the five trading days preceding the Closing Date. The investors also agreed
      to purchase an additional $750,000 in promissory notes on the fifth business
      day
      following the effective date of the registration statement and the completion
      by
      the Company of the sale of 20,000 money cards and other conditions.









During
      the year ended September 30, 2005, the Company had 1,979,173 options become
      vestedr.




The
      common stock issuable of $39,291 at September 30, 2005 consists of: $4,500
      of
      cash received in anticipation of issuing 18,000 shares of common stock; $4,236
      for services rendered in anticipation of issuing 16,944 shares of common stock,
      and $30,555 for services rendered in anticipation of issuing 80,407 shares
      of
      common stock.




During
      the year ended September 30, 2005 results include a charge of, $624,281 for
      the
      value of warrants related to debt financing, and $151,876 for the value of
      shares granted in consideration of credit facilities.





The
      results for the year ended September 30, 2005 include $875,894 for the value
      of
      beneficial conversion features on debt. The value of the warrants and beneficial
      conversion features of debt were calculated using the Black-Scholes method.
       The value of warrants associated with the debt is being amortized over the
      life of the warrants. The beneficial conversion feature was all expensed since
      the debt was convertible at any time.




At
      September 30, 2005, the warrant liability based on fair value of $2,465,882
      as
      determined by the Company, net of $750,000 debit to value of warrants resulted
      in a non-cash loss of $1,715,882 which has been reflected in the Non Cash
      Financing Charge on the consolidated statement of operations for the year ended
      September 30, 2005.




**ITEM
      6.     MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF
      OPERATIONS**




**GENERAL**




The
      past
      12 months have been filled with hard work and solid progress for SVC Financial
      Services, Inc.   Following the successful merger between PocketPass and
      Secure Sign (October 1, 2003), the name of the company was changed to SVC
      Financial Services and offices were established in the San Francisco Financial
      District.   The Company is under new management and new products are under
      development.




SVC's
      background was in developing a micropayment product for Internet purchases,
      however it was determined that a larger and more profitable market was possible
      if the company transitioned to a full- service Internet transaction company.
      One
      of the main challenges with that strategy was that the Internet transaction
      business has become a commodity business in the last 2-3 years, with price
      being
      the main driving force.




After
      a
      thorough analysis of the market SVC came to the conclusion that there
      is
      a significant opportunity in the payment processing/transaction space for a
      vertically integrated services provider that is able to offer value-added
      customer-facing services and aggressive pricing. Designed specifically to meet
      the needs of the millions of customers and merchants that make up the worldwide
      transaction market, SVC Financial intends to support every possible facet and
      stage of the payment processing/transaction experience, thus becoming an
      indispensable resource and partner to the ISO marketing groups, corporate
      customers, merchants and ultimately the consumer themselves.





In
      2003
      SVC started to look at the transaction space, with a focus on the Internet
      transactions business (debit cards/electronic checks/ACH/contactless
      transactions); what came out of that review was that we believe the transaction
      area is deeply flawed. It is price sensitive to an extraordinary extent, leading
      to a very high level of customer “churn”. As a result of the customer turnover
      there is no customer loyalty, customers will change transaction processor for
      a
      fraction of a percentage. There are significant security issues (ID theft and
      chargebacks), and no fully vertically integrated solution available. In short,
      the transaction space has become a commodity.










However,
      even with all of these issues the transaction space is absolutely necessary
      for
      the Internet to function as a business/retail channel. Last year US Debit
      transactions (on the Internet) exceeded $15 Billion dollars and are expected
      to
      grow rapidly 1 .




SVC
      determined that an integrated approach could be very attractive to large-scale
      customers and debit card issuers. This new approach needed to be based on a
      strategy of creating value-added customer-facing software applications that
      offer unique user services plus very aggressive transaction processing pricing.





At
      the
      core of SVC’s product offering is a proprietary Stored Value Card (Debit Card)
      strategy. Analysts predict that stored value cards are going to change the
      way
      people do business in the United States According to payments industry
      newsletter, *The
      Nilson Report* ( http://www.nilsonreport.com/index.htm ), the
      number of debit cards in circulation worldwide reached one billion in 2003
      and
      debit card sales volume will double by 2007.




As
      well
      as bringing much-needed convenience to a larger proportion of consumers, debit
      cards will allow consumers, retailers and even employers to save money. “The
      Pelorus group estimates that as many as 3 million people could receive payroll
      cards in 2004. We further estimate that another 5 million could receive payroll
      cards in 2005. Eventually this number could swell to 25 million people.” www.pelorus-group.com .





Stored
      value cards (debit cards) have changed the way consumers use cash, checks and,
      most importantly, traditional credit cards. Recently, there is an upsurge in
      the
      use of debit card products in the consumer market and, in fact, the global
      market for electronic payment systems is currently experiencing significant
      growth as the shift continues away from paper-based payment processes such
      as
      cash, personal checks, gift certificates, and coupons, vouchers, and travelers
      cheques. Electronic payment systems are becoming the system of choice more
      and
      more often because of their convenience and security. Consumers are increasing
      their use of electronic payments and, in turn, decreasing their use of cash,
      checks and other paper-based payment processes.





We
      are a
      development-stage transaction management company that offers two products,
      the
      Mazarin Media Platform that supports multi-media-based E-commerce transactions,
      and "Scoot" Mobile Money Prepaid Debit cards that support mobile-phone-based
      "M-Commerce" transactions. These two products, described below, are both in
      beta
      testing and scheduled to be launched during Q1 of 2006.





**Mazarin
      Overview**





*The
      Mazarin Media Platform:* The
      Mazarin Media Platform is a rapid application development system that creates
      payment-enabled multimedia applications that can be distributed over the
      Internet and via email. Mazarin Media Applications have a broad range of uses
      including corporate product marketing, fund raising for charities, and
      distributing music and video files. Users can download a Mazarin Media
      Application from a web site or Email and then make an online purchase or payment
      directly from the application without having to go to the seller's web site.
      We
      charge fees to set up the Mazarin Media Platform, and charge an additional
      small
      fee on every purchase made through a Mazarin application.





The
      Mazarin platform is focused on several niche markets including non-profit
      organizations, political fund raising, music and entertainment, and
      business-to-business sales and consumer specialty marketing.





·
            Non-profit
                Organizations: Typically, non-profit organizations use volunteers
                and
                other resources to build web sites and solicit donations via phone
                and
                direct mail. Mazarin applications can help them reach out to their
                members
                with a much more compelling message to inspire
                donations.


·
            Political
                Campaigns: Mazarin applications can help create awareness for fund
                raising. Our Interactive Political Profile application is designed
                for
                local, state, federal and specific issue campaign
                messaging.


·
            Music
                and Entertainment: The entertainment industry demands multimedia.
                Mazarin
                applications allow users to sample video and music before buying.


·
            Corporate
                and Consumer Marketing: Mazarin applications can be used to create
                unique
                promotions for retail and commercial products by creating a standalone
                digital brochure that is linked directly into the merchant's online
                sales
                system.




1Source:
      www.adb.org/Documents/Periodicals/Microfinance/finance-200561.pdf












We
      intend
      to distribute the Mazarin Media Platform through three distribution channels:
      direct selling on an SVC web site (www.GetMazarin.com), independent sales
      organizations that are associated with each of our target markets, and through
      advertising and marketing agencies that wish to manage online messaging
      campaigns for their larger clients.




**Scoot**





**Overview**





*Scoot
      Mobile Money:* Scoot
      Mobile Money Prepaid Debit cards allow anyone with a cell phone to store, send
      and receive funds anywhere in the world. Users purchase a prepaid Scoot debit
      card and then register with the Scoot Mobile Money service to link their cell
      phone number to their Scoot card number. Scoot users can now send money from
      one
      cardholder to another using their cell phone numbers as their unique identifier.
      Scoot is strategically focused on three markets: 1) sale of prepaid debit cards,
      2) card-to-card money transfer services and 3) marketing select products and
      services to Scoot users via their cell phones. The traditional money transfer
      industry currently generates $15 billion in annual fees. 2 The
      prepaid card industry is projected to grow over 400% in the next 4 years and
      reach $4 billion in fees by 2007 according to Aaron McPherson, a leading
      industry analyst 3 . Buying
      goods and services with a cell phone is one of the fastest growing segments
      worldwide.




Scoot
      also has a specific focus on the Hispanic market. Mexico accounts for 27.7
      percent of all immigrants, with 7.9 million immigrants living in United States,
      more than the number of immigrants from any other part of the world. Immigrants
      from Mexico, Central and South America, the Caribbean, and East Asia make up
      the
      majority of immigrants, with 69 percent of the foreign-born coming from these
      areas. 4




Scoot
      cards will be sold through a network of independent sales and marketing partners
      ("master distributors") such as Bison International. Currently, these master
      distributors represent over a hundred agents covering the major card market
      areas in the United States.





Master
      distributors maintain a distribution channel of independent sales agents who
      sell Scoot cards through retail locations, employers and other affinity groups
      partners such as community organizations and charities.




To
      date
      we have sold the Scoot system to two customers (master distributors). We intend
      to establish Scoot as the low-cost, high-value market leader in the new emerging
      space of cell phone money transfer. Our marketing and sales strategy is focused
      on the estimated 10 million US households that can not, or choose not, to get
      bank accounts (the “unbanked”), 5  including
      migrant workers, recent immigrants, students, travelers and those with a credit
      history precluding them from opening a checking account.




**Pre-Paid
      Debit Cards**






2 
        www.adb.org/Documents/Periodicals/Microfinance/finance-200561.pdf
 3 Source:
        www.intelecard.com/features/03features.asp?A_ID=382
 4
        Source: www.cis.org/articles/2001/back101.html
 5 
        Source:
        www.fdic.gov/regulations/examinations/supervisory/insights/siwin04/latino_mkt.html





The
      pre-paid Scoot debit card provides an essential financial tool for the estimated
      56 million US residents who are "unbanked" 6  or
      are
      otherwise credit-challenged (e.g. students, military personnel, moderate to
      low
      income, and recent immigrants). It may also reflect a cultural bias against
      trusting banks, as up to 50% of all Latin Americans are unbanked. 7


By
      place-shifting service delivery away from banks, ATMs and check cashing stores,
      to the user's cell phone, Scoot offers new cardholders a low-cost and highly
      functional entry point into the mainstream "plastic" economy. SVC charges a
      small fee for every point-of-sale transaction, for withdrawing money at an
      ATM,
      and for transferring money. SVC also plans to provide additional services such
      as payday loans and insurance and medical benefits to its cardholders via their
      cell phones. We expect that Scoot cards will be sold "wholesale" for between
      $2.00 to $5.00 each and retail for $9.95. We also charge Scoot cardholders
      transaction and maintenance fees associated with the use of the Scoot card,
      including a monthly maintenance fee of $2.95, an ATM withdrawal fee of $1.50,
      a
      purchase fee at Point of Sale (POS) of $0.75, and a funds transfer fee of $4.50
      to send money from one Scoot cardholder to another. We anticipate delivering
      the
      first Scoot cards during the first quarter of 2006.





**Money
      Transfer Services**





Total
      revenue for the money transfer industry is currently estimated between $15
      billion and $18 billion, and the demand for person-to-person money transfers
      is
      expected to increase steadily in the future 8.




The
      money
      transfer industry is currently dominated by two market leading competitors:
      Western Union and MoneyGram, which control an estimated 12% and 1% of the global
      money transfer market, respectively 9 .
      SVC
      intends to compete in this industry on three key aspects: lower price, better
      convenience and brand development.





We
      believe that Scoot can capture a significant portion of this market due to
      the
      higher convenience of cell phones and being much lower cost than "Wire
      Transfers" offered by companies such as Western Union and MoneyGram.





Scoot
      is
      more convenient than wire transfers for both the sender, who does not need
      to go
      to a wire transfer location, and the recipient, who is notified via cell phone
      that he can access his funds at an ATM rather than at a wire transfer location.
      Scoot also provides people without bank accounts (the "unbanked") a way to
      store
      and manage their money including the ability to have their paychecks deposited
      directly to their Scoot card.





Scoot
      provides instant money transfer worldwide for a flat rate of $4.50 for sending
      up to the maximum of $2,500. This is a fraction of the cost of the current
      market leaders which typically charge a percentage-based fee in addition to
      a
      base rate fee of $5 to $10 per transfer.





According
      to testimony given by Dr. Manuel Orozco, Project Director for Central America
      for the Inter-American Dialogue, to the US Senate Committee on Banking, Housing,
      and Urban Affairs (February 28, 2002) the costs for sending $200 from the US
      to
      various countries in Latin America ranged from $7 to $26. He noted that since
      the average household income for Central American and Caribbean families is
      below $200 a month, the typical cost of sending and receiving remittances
      amounts to more than an additional month’s income each year 10 .





Additionally,
      based on our research with focus groups we believe that the ability to send
      and
      receive money via a cell phone will make using Scoot much more convenient for
      both the sender and recipient than having to go to a wire transfer store
      location.





SVC
      also
      intends to develop a brand development campaign that will position the Scoot
      name and logo as a trusted service mark for low-cost, secure
      transfers 11 .




6  
      Source: www.forbes.com/business/2005/02/23/0223findsvpunbanked.html


7  
        Source: www.thedialogue.org/publications/country_studies/remittances/econ_identity.pdf
 
 8  
        Source:
        www.adb.org/Documents/Periodicals/Microfinance/finance-200561.pdf.
 
 9  
        Source:
        http://businessweek.com/magazine/content/05_06/b3919046_mz011.htm
 
 10Source: http://banking.senate.gov/02_02hrg/022802/orozco.htm
 
 11
        Source: www.adb.org/Documents/Periodicals/Microfinance/finance-200561.pdf.





The
      Scoot
      system is highly dependent on relationships with various third parties. The
      Scoot system requires several core provider relationships: a debit card issuing
      bank, MetaBank, which is a member of the debit/ATM networks (STAR,
      Cirrus/Maestro); a debit card processor (ElectraCard Services, Inc.); and
      relationships with various independent sales and distributor organizations
      (Bison International). Each of these partners provides a "commodity" service
      that could be replaced with another provider of equal quality. In addition,
      we
      have taken steps to identify potential alternate partners to ensure business
      continuity in case any of these relationships should fail for any reason.
      Nevertheless, if any of these key relationships are impacted by external factors
      such as changes in federal banking regulations and technical failure, the Scoot
      system could be rendered inoperable and our business could be significantly
      negatively affected.




We
      are
      subject to two types of regulations: Federal banking regulations (e.g., Bank
      Secrecy Act) and the money transfer provisions of the US Patriot Act. Because
      of
      the War on Terror and the campaign against money laundering, it is expected
      that
      these laws and regulations will become more complex over time, thereby raising
      the financial burden of compliance. The operation of our business is designed
      to
      limit the amount of reports that are required to be submitted to regulators,
      and
      we believe that we are in substantial compliance with all applicable rules
      and
      the regulations. Nevertheless, non-compliance with any of the reporting or
      other
      rules and regulations may have an adverse impact on our ability to conduct
      our
      business if any of the authorities choose to enforce such rules.




We
      believe that the consumer market for financial products is continually evolving,
      and is highly dependent upon changes in the demographic and social trends that
      have resulted in significant growth in this industry in the past few years.
      We
      will encounter aggressive competition from numerous competitors, many of whom
      have significantly greater financial resources than we do. Competitors with
      greater resources than ours may be able to enter into more effective
      distribution channel relationships. Our competitors vary by the nature of the
      distribution channel. We believe that our ability to compete will depend upon
      our ability to react quickly to expected and perceived customer requirements
      and
      desires, and maintain relationships with our existing strategic partners and
      identify and reach agreements with new partners. However, there can be no
      assurance that our assessment of the marketplace is correct, or that our
      products will be accepted now or in the future.




**Significant
      Developments**




In
      the
      last 8 months SVC has:


·
            Acquired
                a bank partner; MetaBank


·
            Has
                been approved by MasterCard


·
            Has
                been approved as a STAR Network
                partner


·
            Has
                signed its first Master Agent; Bison
                International


·
            Has
                signed three (3) distributors


·
            Has
                been approved to issue its first
                card


·
            Has
                filed a Patent for its Scoot
                Technology


·
            Has
                started a pilot Scoot transfer program in
                Israel


·
            Completed
                a significant round of financing





During
      July 2005 a patent titled “System and Method For Telephone-Based Payment” was
      filed with the United States Patent Office.





Title
      of
      Invention: System and Method for Carrying Out A Financial
      Transaction





Field
      of
      Invention: The present invention relates to financial transactions. More
      particularly, the present invention relates to a system and method for carrying
      out a financial transaction.








Background:
      Billions of financial transactions occur between individuals and institutions
      every year. In particular, for individuals without a bank account, cash
      transactions are burdened by the need to have the correct amount of cash or
      by
      the need to provide change. Furthermore, the handling and managing of paper
      cash
      and coins is inconvenient, costly and time consuming for both individuals and
      financial institutions.





An
      individual without a bank account seeking to send money to a family member
      located in another country would typically carry out such a transaction by
      paying a fee based on the amount transferred to a local branch or a financial
      institution. The individual would then contact the family member to pick up
      the
      money from a respective local branch of the financial institution. Such
      transactions are costly and time consuming.





With
      the
      current advances and popularity in cellular telephone usage, it would be
      desirable to allow an individual without a bank account to use his or her
      existing wireless telephone to instantly make purchases and send remittances
      to
      another user worldwide based only on the recipient’s phone number. Accordingly,
      a need exists for a system and method for carrying out a financial transaction
      for individuals without bank accounts. A primary purpose of the present
      invention is to solve these needs and provide further, related
      advantages.





Brief
      Description of the Invention: To carry out a financial transaction between
      a
      first financial account and a second financial account, at least a portion
      of a
      first telephone number is associated with the first financial account. At least
      a portion of a second telephone number is associated with the second financial
      account. A transaction request applicable to the first and second financial
      accounts is received. The transaction request included at least a representation
      of the first telephone number, a representation of the second telephone number,
      and a representation of a transaction amount. The transaction request is
      authenticated using at least a portion of the first telephone number and carried
      out in response to the authentication.





During
      early 2005 a trademark application for “Scoot”, "Mobile Money Card", "Makes your
      Money Mobile and More", and “Mazarin” were filed with the United States Patent
      and Trademark Office.





**Significant
      Financial Developments**




The
      Company has authorized 150,000,000 shares of Common Stock with no par value,
      of
      which 34,650,954 and 30,765,641 shares were issued and outstanding at September
      30, 2005 and 2004, respectively.  Holders of Common Stock are entitled to
      one vote for each share held.




On
      October 1, 2003, the Company acquired all the outstanding shares of
      Pocketpass.com, Inc. (incorporated on August 23, 1999) in exchange for
      16,092,744 restricted shares of its common stock and changed its name to SVC
      Financial Services, Inc.  The acquisition has been accounted for as a
      reverse merger (recapitalization) with Pocketpass.com deemed to be the
      accounting acquirer.  Accordingly, the historical financial statements
      presented herein are those of Pocketpass.com, as adjusted to give effect to
      any
      difference in the par value of the issuer's and the accounting acquirer's stock
      with an offset to capital in excess of par value, and those of SVC (the legal
      acquirer) since the merger.  The retained earnings of the accounting
      acquirer have been carried forward after the acquisition and Pocketpass.com's
      basis of its assets and liabilities were carried over in the recapitalization.
       Operations prior to the business combination are those of the accounting
      acquirer.







*Significant
      Transactions during the year ended September 30, 2005*




During
      October and November 2004, 176,667 shares were issued for $55,000 in cash
      utilizing the Rule 4(2) exemption.





In
      December 2004, 526,500 restricted shares were issued for $112,500 in cash
      utilizing the Rule 4(2) exemption.





During
      the three months ended December 31, 2004, 123,829 shares worth $47,499 were
      issued to contractors and vendors in settlement of services rendered utilizing
      the Rule 4(2) exemption.  Also 83,335 of options valued at $40,000 vested.








During
      the three months ended March 31, 2005:


-
            116,080
                shares were issued for $29,020 in
                cash.


-
            141,754
                shares worth $49,265 were issued to contractors and vendors in settlement
                of services rendered.


-
            63,281
                restricted shares valued at $26,236 were issued for establishment
                of a
                credit facility.  See Financial Statement Note
                4.


-
            1,067,500
                shares valued at $290,125 were issued to the CEO for stock based
                compensation.


-
            All
                utilizing the Rule 4(2) exemption





During
      the three months ended June 30, 2005:


-
            283,000
                shares were issued for $66,995 in
                cash.


-
            35,156
                restricted shares valued at $7,163 were issued for establishment
                of a
                credit facility.  See Financial Statement Note
                4.


-
            98,930
                shares worth $ 29,758 were issued to contractors and vendors in settlement
                of services rendered.


-
            72,796
                shares valued at $12,375 were issued for fund raising
                activities.


-
            275,000
                shares valued at $46,750 were issued for investment banking and investor
                relations activities.


-
            All
                utilizing the Rule 4(2) exemption








During
      the three months ended September 30, 2005:


-
            400,021
                shares were issued for $50,967 in
                cash.


-
            35,156
                restricted shares valued at $5,977 were issued for establishment
                of a
                credit facility.  See Financial Statement Note
                5.


-
            294,139
                shares worth $38.979 were issued to contractors and vendors in settlement
                of services rendered.


-
            40,000
                shares valued at $4,600 were issued for fund raising
                activities.


-
            192,719
                shares issued valued at $25,063 were treated as issuance
                costs


-
            All
                utilizing the Rule 4(2) exemption




During
      October 2004 the company sold convertible debentures totaling $15,000 at 8%
      interest due March 31, 2006.  This debt was convertible to common shares at
      $.30 per share for a period of 180 days.  Warrants totaling 16,666
      exercisable at $.30 per share for 3 years were also issued with this debt.
      The
      issuance of these securities was exempt from registration under the Section
      4(2)
      of the Securities Act.




During
      November 2004 the company sold convertible debentures totaling $50,000 at 8%
      interest due November 15, 2006.  This debt was convertible to common shares
      at $.30 per share for a period of 180 days.  Warrants totaling 166,666
      exercisable at $.30 per share for 3 years were also issued with this debt.
      The
      issuance of these securities was exempt from registration under the Section
      4(2)
      of the Securities Act.




On
      January 11, 2005 the Company concluded a loan agreement and credit facility
      with
      an existing accredited investor of $400,000 for convertible debentures payable
      two years after draw-down, bearing 12% interest.  The debentures and any
      accrued interest may be converted into common stock of the Company at the
      election of the holder at anytime utilizing a conversion ratio of $.10 per
      share.  These debentures also entitle the investor to 562,500 shares of
      restricted common stock as consideration for establishing the credit facility.
       As of September 30, 2005 the credit facility has been increased to
      $790,000 which has been entirely drawn down. The issuance of these securities
      was exempt from registration under the Section 4(2) of the Securities
      Act.




On
      March
      2, 2005 the Company concluded a loan agreement and credit facility with existing
      accredited investors of $45,000 for convertible debentures payable two years
      after draw-down, bearing 12% interest.  This credit line was subsequently
      increased to $95,000 which was entirely drawn down by September 30, 2005. The
      debentures and any accrued interest may be converted into common stock of the
      Company at the election of the holders at anytime utilizing a conversion ratio
      of $.10 per share.  These debentures also entitle the investors to 133,593
      shares of restricted common stock as consideration for establishing the credit
      facility.  The issuance of these securities was exempt from registration
      under the Section 4(2) of the Securities Act.







On
      September 29, 2005, the Company entered into a subscription agreement with
      two
      accredited investors for the sale and issuance of 10% secured promissory notes
      in the principal amount of $750,000 due in September 2007. The Notes may be
      converted at any time by the holder into shares of the Company's common stock,
      no par value, at a conversion price equal to the lesser of (i) $0.15, or (ii)
      75% of the average of the volume weighted average prices of the Common Stock
      for
      the three trading days preceding the date of conversion. The Company also issued
      to the Purchasers (i) five-year warrants to purchase a number of shares equal
      to
      the number of shares which would be issued on the Closing Date assuming the
      complete conversion of the Notes issued on the Closing Date at the Conversion
      Price then in effect, and (ii) warrants identical to the warrants under (i)
      except that they are exercisable for a period of one year from the effective
      date of the registration statement which the Company has agreed to file to
      register for resale the shares issuable upon conversion of the notes and
      exercise of the warrants. All warrants are exercisable at a price per share
      equal to 150% of the average of the volume weighted average of the Common Stock
      for the five trading days preceding the Closing Date. The investors also agreed
      to purchase an additional $750,000 in promissory notes on the fifth business
      day
      following the effective date of the registration statement upon the completion
      by the Company of the sale of 20,000 money cards and other
      conditions.




The
      common stock issuable of $39,291 at September 30, 2005 consists of: $4,500
      of
      cash received in anticipation of issuing 18,000 shares of common stock; $4,236
      for services rendered in anticipation of issuing 16,944 shares of common stock,
      and $30,555 for services rendered in anticipation of issuing 80,407 shares
      of
      common stock. The Common Stock Issuable consists of settlement of liabilities
      denominated in shares already and that cannot be settled in cash. The number
      of
      shares has already been determined therefore this is an equity account, not
      a
      debt account.




The
      results for the year ended September 30, 2005 include $908,292 of interest
      expense representing $132,135 in interest expense on debt, $624,281 for the
      value of warrants related to debt, and $151,876 for the value of shares granted
      in consideration of credit facilities.





The
      results for the year ended September 30, 2005 includes a charge $875,894 for
      the
      value of beneficial conversion features on debt. The value of the warrants
      (calculated using the Black-Scholes option pricing model) is being amortized
      over the life of the warrants.  The value attributable to the beneficial
      conversion feature was all expensed since the debt was convertible at any time
      by the holder.




At
      September 30, 2005, we recorded a non-cash financing charge of $1,715,882 as
      result of derivative liabilities associated with the warrants issued in
      conjunction with convertible debentures. We determined the amount of the
      liability based on fair value of the warrants and beneficial conversion feature
      The fair value of the liability at September 30, 2005 was.$2,465,882.




**FISCAL
      YEAR ENDED SEPTEMBER 30, 2005 COMPARED TO FISCAL YEAR ENDED SEPTEMBER 30, 2004**




**Revenues**




During
      the year ended September 30, 2005 the Company generated revenues of $11,224,
      virtually the same as compared to the year ended September 30, 2004 during
      which
      the Company generated revenues of $11,258.  Management expects that none of
      the Company's previous businesses will generate any revenues in future periods.
        Future revenue will come from products currently under
      development.




**Operating
      Expenses**





Total
      operating expenses increased $1,224,237 (67%) from $1,840,432 during the year
      ended September 30, 2004 to $3,064,669 during the year ended September 30,
      2005
      due to activities related to adding financial management, product development,
      marketing development and securing additional capital.   Increases in
      specific areas are as follows:









·
              a
                  $141,638 (46%) increase in compensation related to additional financial
                  management and administrative staff. There were no increases in
                  individual
                  compensation; the increased amount is due to the addition of a
                  CFO and one
                  additional contractor. The CFO was hired to manage financial operations
                  in
                  general and specifically to strengthen internal controls, ensure
                  timely
                  completion of quarterly reviews and the annual audit by the Independent
                  Public Accounting Firm, ensure timely filing of SEC reports, develop
                  short
                  and long term business plans, and assist in funding efforts.
 ·
              a
                  $308,132 increase in stock based compensation which the net of
                  the fair
                  market value of options valued at $520,208 granted to officers,
                  less a
                  decrease of $212,076 in the fair market value of shares earned
                  by
                  contractors and vendors during 2005 due to a 58% decrease in the
                  average
                  share price in 2005 from 2004.
 ·
              a
                  $
                  430,336 (59%) increase in professional fees which consists of a
                  $145,113
                  decrease in accounting and audit services, a $144,452 decrease
                  in legal
                  expenses, a $505,494 increase in investment banking expenses related
                  to
                  securing additional capital (primarily the Black Scholes valuation
                  of
                  warrants granted to three investment bankers), a $157,291 increase
                  in
                  software and website consultants related to product development,
                  a $51,977
                  increase in marketing and business development consultants and
                  a $29,000
                  increase in regulatory consultants all related to marketing and
                  business
                  development .
 ·
              a
                  $37,793 (107%) increase in facilities costs for additional office
                  space,
                  telephones, online services and utilities.
 ·
              a
                  $38,859 (61%) increase in marketing costs, primarily public relations
                  and
                  trade shows.
 ·
              a
                  $260,515 (365%) increase in administrative expenses, the major
                  factors
                  being a $32,858 increase in printing costs, a $100,000 write-off
                  of
                  capitalized software development due to a move to a different platform,
                  and a $73,636 increase in travel
                  costs.
 ·
              a
                  $6,964 (558%) increase in depreciation expense based on a $19,709
                  increase
                  in fixed assets with expected lives of eighteen to thirty-six
                  months.




**Interest
      Expense**





Interest
      expense decreased $535,760 (37%) from $1,444,052 during the year ended September
      30, 2004 to $908,292 during the year ended September 30, 2005. Imputed interest
      expense on warrants as calculated using the Black Scholes method decreased
      $758,241, the value of shares granted in consideration for a credit facility
      increased $151,876, and the interest on debt increased $70,605 due to a
      $1,700,000 increase in debt over the course of the year, almost all at higher
      interest rates than on the debt existing at September 30, 2004.




**Other
      income and expenses**




Other
      expense for the year ended September 30, 2005 includes an $875,894 expense
      as
      the value of the beneficial conversion feature of some debt, an increase of
      $676,667 (340%) over the $199,227 expense for the year ended September 30,
      2004.
      The beneficial conversion feature expense is calculated using the Black Scholes
      method.  The value of the beneficial conversion feature is required to be
      expensed immediately since the debt is convertible at any time.




At
      September 30, 2005, the classification of warrants as a liability having an
      estimated fair value of $2,465,882 resulted in a non-cash loss of $1,715,882
      which has been shown as a Non Cash Financing Charge in the consolidated
      statement of operations for the year ended September 30, 2005.




Financing
      fees were $34,490 for the year ended September 30, 2005 compared to $1,000
      for
      the year ended September 30, 2004. Financing fees were paid to four investment
      bankers in the United States and Australia for capital raising
      activities.







There
      was
      no gain on extinguishment of debt for the year ended September 30, 2005 compared
      to a $26,666 gain for the year ended September 30, 2004.




The
      net
      loss increased $3,141,330 (91%) from $3,446,923 during the year ended September
      30, 2004 to $6,588,253 during the year ended September 30, 2005.




**Liquidity
      and Capital Resources**




During
      the year ended September 30, 2005 net cash used in operating activities was
      $1,231,314 compared to cash used by operating activities of $591,262 during
      the
      year ended September 30, 2004.




For
      the
      year ended September 30, 2005 investing activities used $19,709 of cash compared
      to $100,473 in 2004.  Investment in the Mazarin Platform software
      development used none in 2005 and $90,000 in 2004; $19,709 was spent on fixed
      assets in 2005 and $10,473 was spent in 2004, primarily for computers and
      servers in both years.




For
      the
      year ended September 30, 2005, financing activities provided $1,791,870 of
      funds: $201,982 from issuance of common stock (net of issuance costs) compared
      to $390,714 in 2004, $945,500 from borrowings on related party notes payable
      compared to $269,500 in 2004, and $644,388 ($750,000 gross less issuance costs
      of $105,612) from long term convertible debt compared to none in 2004.  As
      of September 30, 2005, we had indebtedness of $5,625,741 compared to $1,112,800
      at September 30, 2004.




The
      second $750,000 round of financing discussed below is expected in early 2006
      and
      is critical to fund our operations.   Our current liabilities exceed our
      current assets by $4,008,789 at September 30, 2005 of which $2,715,882 is the
      warrant and beneficial conversion liability, leaving $1,292,907 of negative
      working capital that will require cash. We have not sustained positive earnings
      or cash flow and we are required to incur significant expenses to complete
      product development, take it to market and be competitive.   Consequently,
      the second round of funding is necessary to execute our strategy of acquiring
      new business opportunities.





On
      January 11, 2005 we concluded a loan agreement and credit facility with an
      existing accredited investor of $400,000 for convertible debentures payable
      two
      years after draw-down, bearing 12% interest.  The debentures and any
      accrued interest may be converted into our common stock at the election of
      the
      holder at anytime utilizing a conversion ratio of $.10 per share.  These
      debentures also entitle the investor to 562,500 shares of restricted common
      stock as consideration for establishing the credit facility. As
      of
      September 30, 2005 the credit facility has been increased to $790,000 which
      has
      been entirely drawn down.





We
      announced on February 1, 2005 that Grant Bettingen, Inc., a highly respected
      investment bank focused on growth companies, has agreed to provide us with
      investment banking, market-making and other business advisory services. The
      services provided by Grant Bettingen, Inc., will assist us in executing our
      plan
      to be the market and technology leader in electronic and wireless payment
      systems, digital rights management and pre-paid stored-value cards.





During
      March 2005, an additional $45,000 was raised from existing accredited investors
      via convertible debentures payable on March 2, 2007, bearing 12% interest.
       Additional amounts of $25,000 during June 2005 and $25,000 in July 2005
      were raised on the same terms and payable in June 2007 through July 2007.
 These debentures may be converted into our common stock of, at the
      election of the holder, at anytime in the ensuing 6-month period, utilizing
      a
      conversion ratio of $0.10 per share.




On
      September 29, 2005, the Company entered into a subscription agreement with
      two
      accredited investors for the sale and issuance of 10% secured promissory notes
      in the principal amount of $750,000 due in September 2007. The Notes may be
      converted at any time by the holder into shares of the Company's common stock,
      no par value, at a conversion price equal to the lesser of (i) $0.15, or (ii)
      75% of the average of the volume weighted average prices of the Common Stock
      for
      the three trading days preceding the date of conversion. The Company also issued
      to the Purchasers (i) five-year warrants to purchase a number of shares equal
      to
      the number of shares which would be issued on the Closing Date assuming the
      complete conversion of the Notes issued on the Closing Date at the Conversion
      Price then in effect, and (ii) warrants identical to the warrants under (i)
      except that they are exercisable for a period of one year from the effective
      date of the registration statement which the Company has agreed to file to
      register for resale the shares issuable upon conversion of the notes and
      exercise of the warrants. All warrants are exercisable at a price per share
      equal to 150% of the average of the volume weighted average of the Common Stock
      for the five trading days preceding the Closing Date. The investors also agreed
      to purchase an additional $750,000 in promissory notes on the fifth business
      day
      following the effective date of the registration statement upon the completion
      by the Company of the sale of 20,000 money cards and other
      conditions.







We
      cannot
      predict the extent of investor interest in us, which may affect the future
      sales
      of equity and debt securities to fund our current business.  It is unlikely
      that we will raise significant amounts of capital through borrowing or through
      the issuance of debt instruments.  Therefore, we are currently seeking new
      capital through the sale of additional common shares, either through a public
      offering or private placement. Historically, we have sold our shares through
      private placements to accredited and qualified investors. Sales of a substantial
      number of shares of our common stock in the public market could adversely affect
      the market price of our common stock.  We may also seek the advice and
      assistance of investment bankers and other financial professionals to assist
      us
      in raising additional capital and we expect to pay fees for these services.





We
      have a
      nominal amount of revenue, and we have not generated positive operational cash
      flow. We continue to incur significant expenses to develop our product offering
      and in bringing our product offering to market.





The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles, which contemplate continuation of
      the
      Company as a going concern.   However, the Company has no established
      source of revenue, has experienced net operating losses of $12,612,040 since
      inception, had a net loss of $6,588,253 and a negative cash flow from operations
      of $1,231,314 for the year ended September 30, 2005, and has working capital
      and
      stockholder's deficiencies of $4,008,789 and $4,922,658, respectively, as of
      September 30, 2005. These factors raise substantial doubt about the Company's
      ability to continue as a going concern.   Without realization of additional
      capital, it would be unlikely for the Company to continue as a going concern.
       Management is in the process of seeking additional capital.  These
      financial statements do not include any adjustments relating to the
      recoverability and classification of recorded asset amounts, or amounts and
      classification of liabilities that might result from this uncertainty. We
      anticipate, based on currently proposed plans and assumptions relating to the
      implementation of our business plan, that we will need approximately $750,000
      to
      satisfy our operations and capital requirements for the next 12 months.
      Therefore, we believe that the proceeds from the financing plus projected
      revenues from operations will be sufficient to meet our capital requirements.
      However, there can be no assurance that these funds will not be expended prior
      thereto due to unanticipated changes in economic conditions or other unforeseen
      circumstances or that we will generate less revenues than we currently
      anticipate. In addition, if the investors decide not to convert the convertible
      notes, we will have to repay the entire $1,500,000 plus interest. This will
      have
      a negative effect on our ability to expand our operations and may adversely
      impact our ability to raise additional funds. In addition, we are dependent
      upon
      raising additional equity financing to support our operations beyond the next
      twelve months. There can be no assurance that we will be successful in raising
      sufficient capital to fund our working capital requirements on terms acceptable
      to us, or at all. If we are not successful in raising sufficient capital, it
      could have a material adverse effect on our business, which may require us
      to
      significantly curtail or cease our operations.




**Factors
      That May Affect Future Results Of Operations**




In
      addition to the other information included in this Report, the following factors
      should be considered in evaluating our business and future prospects:




Because
      we are a Development Stage Company and have a limited operating history, an
      investor in our common stock must consider the risks and difficulties frequently
      encountered by early stage companies.  We cannot guarantee that we will
      succeed in achieving these goals, and there can be no assurance we will ever
      achieve or sustain profitability . See "Management's Discussion and Analysis of Financial Condition and Results
      of
      Operations" for detailed information on our limited operating history.







We
      incurred net losses of approximately $6,588,253 for the fiscal year ended
      September 30, 2005.   At September 30, 2005, we had an accumulated deficit
      of approximately $12,612,040 as compared to $6,023,787 for the fiscal year
      ended
      September 30, 2004.   We expect to incur significant operating losses on a
      quarterly basis in the near future.




**Related
      Party Transactions**




A
      major
      shareholder provided legal services to the Company.  The charges for such
      legal services amounted to approximately $71,000 and $152,000 for the years
      ended September 30, 2005 and 2004, respectively. Approximately $120,000 was
      due
      this shareholder at September 30, 2005 of which $80,000 will be paid in
      shares.




Two
      former directors provided marketing and business consulting services to the
      Company.  The charges for such marketing and business consulting services
      amounted to $10,500 and $57,200 for the year ended September 30, 2005 and 2004
      respectively.  Amounts due these directors amounted to $7,300 and $49,200
      at September 30, 2005 and 2004, respectively and are included in accounts
      payable and accrued expenses.




**Recent
      Accounting Pronouncements** ****




In
      December 2004, the Financial Accounting Standards Board ("FASB") released a
      revision to Statement of Financial Accounting Standard ("SFAS") No. 123,
      Accounting for Stock-Based Compensation ("FAS 123R").  FAS 123R addresses
      the accounting for share-based payment transactions in which an enterprise
      receives employee services in exchange for (a) equity instruments of the
      enterprise or (b) liabilities that are based on the fair value of the
      enterprise's equity instruments or that may be settled by the issuance of such
      equity instruments.  The statement would eliminate the ability to account
      for share-based compensation transactions using APB Opinion No. 25, Accounting
      for Stock Issued to Employees, and generally would require instead that such
      transactions be accounted for using a fair-value-based method.  We adopted
      FAS 123R effective with the year ended September 30, 2005.  With the
      adoption of this new statement, we will have to recognize substantially more
      compensation expense related to stock based compensation issued to employees.
       This may have a material adverse impact on our financial position and
      results of operations.





In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standard (SFAS) No. 153, "Exchanges of Nonmonetary Assets
      -
      an amendment of APB Opinion No. 29", which amends Opinion 29 by eliminating
      the
      exception for nonmonetary exchanges of similar productive assets and replaces
      it
      with a general exception for exchanges of nonmonetary assets that do not have
      commercial substance.  A nonmonetary exchange has commercial substance if
      the future cash flows of the entity are expected to change significantly as
      a
      result of the exchange.  SFAS No. 153 is effective for fiscal years
      beginning after June 15, 2005, and implementation is done prospectively.
 Management does not expect the implementation of this new standard to have
      a material impact on the Company's financial position, results of operations
      and
      cash flows.





In
      December 2004, the Financial Accounting Standards Board (FASB) issued Statement
      of Financial Accounting Standard (SFAS) No. 154, Accounting Changes and Error
      Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3.
       SFAS No. 154 requires retrospective application to prior periods'
      financial statements of changes in accounting principle, unless it is
      impracticable to determine either the period-specific effects or the cumulative
      effect of the change.  SFAS No. 154 also requires that retrospective
      application of a change in accounting principle be limited to the direct effects
      of the change.  Indirect effects of a change in accounting principle, such
      as a change in nondiscretionary profit-sharing payments resulting from an
      accounting change, should be recognized in the period of the accounting change.
       SFAS No. 154 also requires that a change in depreciation, amortization or
      depletion method for long-lived, non-financial assets be accounted for as a
      change in accounting estimate effected by a change in accounting principle.
       SFAS No. 154 is effective for accounting changes and corrections of errors
      made in fiscal years beginning after December 15, 2005.  Early adoption is
      permitted for accounting changes and corrections of errors made in fiscal years
      beginning after the date this Statement is issued.  Management does not
      expect the implementation of this new standard to have a material impact on
      the
      Company's financial position, results of operations and cash flows.








In
      March
      2005, the SEC released Staff Accounting Bulletin No. 107, "Share-Based Payment"
      ("SAB 107"), which provides interpretive guidance related to the interaction
      between SFAS 123(R) and certain SEC rules and regulations.  It also
      provides the SEC staff's views regarding valuation of share-based payment
      arrangements.  In April 2005, the SEC amended the compliance dates for SFAS
      123(R), to allow companies to implement the standard at the beginning of their
      next fiscal year, instead of the next reporting period beginning after June
      15,
      2005.  Management is currently evaluating the impact SAB 107 will have on
      the Company's consolidated financial statements.




**FORWARD-LOOKING
      STATEMENTS**




From
      time-to-time, the Company or its representatives may have made or may make
      forward-looking statements, orally or in writing . Such forward-looking statements may be included in, but not limited to, press
      releases, oral statements made with the approval of an authorized executive
      officer or in various filings made by the Company with the Securities and
      Exchange Commission or other regulatory agencies . Words or phrases "will likely result", "are expected to", "will continue",
      "is
      anticipated", "estimate", "project or projected", or similar expressions are
      intended to identify "forward-looking statements" within the meaning of the
      Private Securities Litigation Reform Act of 1995 (the "Reform Act").   The
      Reform Act does not apply to initial registration statements, including this
      filing by the Company . The Company wishes to ensure that meaningful cautionary statements accompany
      such statements, so as to maximize to the fullest extent possible the
      protections of the safe harbor established in the Reform Act.  
Accordingly, such statements are qualified in their entirety by reference to
      and
      are accompanied by the following discussion of certain important factors that
      could cause actual results to differ materially from such forward-looking
      statements.












**ITEM
      7.     FINANCIAL STATEMENTS**








**SVC
      Financial Services, Inc., and Subsidiary**


**(A
      Development-Stage Enterprise)**





**Consolidated
      Financial Statements**


**September
      30, 2005**





**TABLE
      OF CONTENTS**











Reports
                of Independent Registered Public Accounting Firms
            F-1-2Consolidated
                Balance Sheet
            F-3Consolidated
                Statements of Operations
            F-4Consolidated
                Statements of Cash Flows
            F-5Consolidated
                Statements of Changes in Stockholders' Deficit
            F-6Notes
                to Consolidated Financial Statements
            F-7
                - 21

























**Report
      of Independent Registered Public Accounting Firm**





To
      the
      Stockholders


SVC
      Financial Services, Inc. and Subsidiary


San
      Francisco, California




We
      have
      audited the accompanying consolidated balance sheet of SVC Financial Services,
      Inc. and subsidiary ("SVC") as of September 30, 2005, and the related
      consolidated statements of operations, stockholders' deficit and cash flows
      for
      years ended September 30, 2005, 2004 and for the period starting January 1,
      2002
      and ending September 30, 2005.  These consolidated financial statements are
      the responsibility of the Company's management.  Our responsibility is to
      express an opinion on these consolidated financial statements based on our
      audits.  We did not audit the consolidated financial statements of SVC
      (f/k/a PocketPass.com, Inc.) from inception on August 23, 1999 through December
      31, 2001.  The consolidated financial statements as of December 31, 2001
      and for the period from inception on August 23, 1999 through December 31, 2001,
      were audited by other auditors whose reports reflected a net loss of $1,654,526
      of the total net loss from inception.  Those statements were audited by
      other auditors whose report has been furnished to us, and our opinion, insofar
      as it relates to the amounts included for such prior periods, is based solely
      on
      the report of the other auditors.




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 consolidated financial statements referred to above present fairly,
      in all material respects, the consolidated financial position of SVC Financial
      Services, Inc. as of September 30, 2005 and the consolidated results of their
      operations and their consolidated cash flows for each of the years ended
      September 30, 2005 and 2004, in conformity with accounting principles generally
      accepted in the United States of America.




The
      accompanying consolidated financial statements have been prepared assuming
      that
      the Company will continue as a going concern.  As discussed in Note 1 to
      the accompanying consolidated financial statements, for the year ended September
      30, 2005 the Company experienced a net loss from operations of $3,053,695 and
      as
      of September 30, 2005, the Company had a negative working capital deficit of
      $4,008,789 and had a negative stockholders' deficit of $4,922,658.  These
      conditions raise substantial doubt about its ability to continue as a going
      concern.  Management's plan in regard to these matters is also discussed in
      Note 1.  These consolidated financial statements do not include any
      adjustments that might result from the outcome of this uncertainty.





/s/
      Pohl,
      McNabola, Berg & Company, LLP


Pohl,
      McNabola, Berg & Company, LLP




San
      Francisco, California


October
      18, 2005















**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**











The
      Board
      of Directors and Stockholders


Pocketpass.com,
      Inc. and Subsidiary








We
      have
      audited the consolidated statements of operations, stockholders' deficit and
      cash flows for the period from inception (August 23, 1999) to December 31,
      2001
      (not presented separately herein) of Pocketpass.com, Inc. and subsidiary (a
      development stage enterprise). These consolidated financial statements are
      the
      responsibility of the Company's management. Our responsibility is to express
      an
      opinion on these consolidated financial statements based on our
      audit.





We
      conducted our audit in accordance with auditing standards of the Public Company
      Accounting Oversight Board (United States). 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 consolidated
      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 audit provides
      a
      reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements of Pocketpass.com, Inc. referred
      to above present fairly, in all material respects, the results of its operations
      and its cash flows for the period from inception (August 23, 1999) to December
      31, 2001, in conformity with accounting principles generally accepted in the
      United States of America.





The
      consolidated financial statements referred to above have been prepared assuming
      that the Company will continue as a going concern. As discussed in Note 2 to
      the
      consolidated financial statements (not presented separately herein), the Company
      has incurred losses from operations since inception. In addition, current
      liabilities exceed its total current assets by $859,860 at December 31, 2001.
      This raises substantial doubt about the Company's ability to continue as a
      going
      concern. Management's plans in regard to these matters are described in the
      notes to the consolidated financial statements. The consolidated financial
      statements (not presented separately herein) do not include any adjustments
      that
      might result from the outcome of this uncertainty.








/s/
      Perry-Smith, LLP


Perry-Smith,
      LLP








Sacramento,
      California


November
      7, 2002











**SVC
                FINANCIAL SERVICES INC. AND SUBSIDIARY****(A
                DEVELOPMENT STAGE ENTERPRISE)****CONSOLIDATED
                BALANCE SHEET****September
                30, 2005****ASSETS****Current
                Assets**Cash
            
            $
            568,885Prepaid
                expense and other
            
            
            60,672**Total
                Current Assets**
            
            
            **629,557****Property
                and Equipment**Cost
            
            
            107,472Accumulated
                Depreciation
            
            
            (86,752
            )**Net**
            
            
            **20,720****Other
                Assets**Deferred
                Financing Fees - non current portion
            
            
            52,806**Total
                Other Assets**
            
            
            **52,806****Total
                Assets**
            
            **$**
            **703,083****LIABILITIES
                AND STOCKHOLDERS' DEFICIENCY****Current
                Liabilities**Accounts
                Payable and accrued liabilities
            
            $
            633,128Accrued
                Interest on related party notes
            
            
            225,719Notes
                Payable to related parties
            
            
            870,500Derivative
                Liability
            
            
            2,715,882Deferred
                compensation
            
            
            193,117**Total
                Current Liabilities**
            
            
            **4,638,346****Long
                Term Liabilities**Convertible
                Notes Payable, net of unamortized discount of $750,000
            
            
            -Notes
                Payable to related parties
            
            
            935,000Accrued
                Interest on related party notes
            
            
            52,395**Total
                Long Term Liabilities**
            
            
            **987,395****Total
                Liabilities**
            
            
            **5,625,741****Commitments
                and Contingencies**
            
            
            **-****Stockholders'
                Deficiency:**Common
                Stock, no par value, 150,000,000 and 50,000,000 shares authorized,
                34,650,
                shares issued and outstanding
            
            
            7,650,091Common
                Stock Issuable, 115,351 shares
            
            
            39,291Deficit
                Accumulated During the Development Stage
            
            
            (12,612,040
            )**Total
                Stockholders' Deficiency**
            
            
            **(4,922,658**
            **)****Total
                Liabilities and Stockholders' Deficiency**
            
            **$**
            **703,083****The
                accompanying notes are an integral part of these consolidated financial
                statements**















**SVC
                FINANCIAL SERVICES INC. AND SUBSIDIARY****(A
                DEVELOPMENT STAGE ENTERPRISE)****CONSOLIDATED
                STATEMENTS OF OPERATIONS****For
                the Years Ended September 30, 2005 and 2004,
                and****For
                the Period from Inception (August 23, 1999) to September 30,
                2005**




**Inception****Years
                  Ended September 30,**
              
              **(August
                  23, 1999) to****2005**
              
              **2004**
              
              **September
                  30, 2005**Revenue
              
              $
              11,224
              
              $
              11,258
              
              $
              72,484Cost
                  of Goods Sold
              
              
              250
              
              
              136
              
              
              37,690**Gross
                  Profit**
              
              
              **10,974**
              
              
              **11,122**
              
              
              **34,794**Operating
                  Expenses:Salaries
              
              
              447,971
              
              
              306,333
              
              
              1,489,897Stock
                  Based Compensation
              
              
              935,303
              
              
              627,171
              
              
              1,562,474Professional
                  Fees
              
              
              1,165,209
              
              
              734,873
              
              
              2,587,177Facilities
              
              
              73,054
              
              
              35,261
              
              
              316,463Marketing
              
              
              103,059
              
              
              64,200
              
              
              205,907Administrative
                  Expense
              
              
              331,860
              
              
              71,345
              
              
              882,022Depreciation
              
              
              8,213
              
              
              1,249
              
              
              77,812**Total
                  Operating Expenses**
              
              
              **3,064,669**
              
              
              **1,840,432**
              
              
              **7,121,752****Loss
                  from operations**
              
              
              **(3,053,695**
              **)**
              
              **(1,829,310**
              **)**
              
              **(7,086,958**
              **)**Other
                  (Income) Expense:Interest
                  Expense
              
              
              908,292
              
              
              1,444,052
              
              
              2,757,313Beneficial
                  conversion expense on debt
              
              
              875,894
              
              
              199,227
              
              
              1,075,121Non
                  cash financing charge
              
              
              1,715,882
              
              
              -
              
              
              1,715,882Financing
                  fees
              
              
              34,490
              
              
              1,000
              
              
              85,665Gain
                  on Extinguishment of Debt
              
              
              -
              
              
              (26,666
              )
              
              (76,755
              )Interest
                  Income
              
              
              -
              
              
              -
              
              
              (5,130
              )**Total
                  Other (Income) Expense**
              
              
              **3,534,558**
              
              
              **1,617,613**
              
              
              **5,552,096****Net
                  loss before minority interest in net loss of
                  subsidiary**
              
              **$**
              **(6,588,253**
              **)**
              **$**
              **(3,446,923**
              **)**
              **$**
              **(12,639,054**
              **)****Minority
                  interest in net loss of subsidiary**
              
              
              -
              
              
              -
              
              
              27,014**Net
                  Loss**
              
              **$**
              **(6,588,253**
              **)**
              **$**
              **(3,446,923**
              **)**
              **$**
              **(12,612,040**
              **)**Basic
                  and diluted loss per common share
              
              $
              (0.20
              )
              $
              (0.13
              )
              $
              (0.41
              )Weighted
                  Average Shares Outstanding, basic and diluted
              
              
              32,393,290
              
              
              27,352,608
              
              
              31,032,050















**SVC
                  FINANCIAL SERVICES INC. AND SUBSIDIARY****(A
                  DEVELOPMENT STAGE ENTERPRISE)****CONSOLIDATED
                  STATEMENTS OF CASH FLOWS****For
                  the Years Ended September 30, 2005 and 2004
                  and****For
                  the Period from Inception (August 23, 1999) to September 30,
                  2005**




**Inception****Years
                  Ended September 30,**
              
              **(August
                  23, 1999) to****2005**
              
              **2004**
              
              **September
                  30, 2005**Cash
                  flows from operating activities:Net
                  Loss
              
              $
              (6,588,253
              )
              $
              (3,446,923
              )
              $
              (12,612,040
              )Adjustments
                  to reconcile net loss to net cash provided by operating
                  activities:Depreciation
                  & Amortization
              
              
              8,213
              
              
              1,249
              
              
              86,752Bad
                  debt expense
              
              
              -
              
              
              5,000
              
              
              5,000Warrant
                  valuation & Amortization
              
              
              2,880,675
              
              
              1,581,749
              
              
              4,481,335Issuance
                  of common stock for services
              
              
              -
              
              
              675,173
              
              
              685,754Common
                  stock issuable for services
              
              
              342,491
              
              
              -
              
              
              382,491Common
                  stock issuable for performance based compensation and deferred
                  salary
              
              
              103,458
              
              
              -
              
              
              103,458Common
                  stock options vesting expense
              
              
              679,169
              
              
              -
              
              
              679,169Write-off
                  software under development
              
              
              100,000
              
              
              -
              
              
              100,000Loss
                  on disposal of fixed assets
              
              
              -
              
              
              -
              
              
              10,712Beneficial
                  conversion feature expense
              
              
              875,894
              
              
              -
              
              
              875,894Gain
                  on extinguishment of debt
              
              
              -
              
              
              (26,666
              )
              
              (50,089
              )Changes
                  in operating assets and liabilities:(Increase)
                  Decrease in Prepaid expenses and other
              
              
              (6,574
              )
              
              (1,292
              )
              
              (7,866
              )Increase
                  in Accrued interest payable
              
              
              131,877
              
              
              60,972
              
              
              439,379Increase
                  in Accounts payable & Accrued Liabilities
              
              
              241,736
              
              
              559,476
              
              
              944,366Net
                  cash used in operating activities
              
              
              (1,231,314
              )
              
              (591,262
              )
              
              (3,875,685
              )Cash
                  flows from investing activities:Software
                  under development
              
              
              -
              
              
              (90,000
              )
              
              (100,000
              )Purchase
                  of fixed assets
              
              
              (19,709
              )
              
              (10,473
              )
              
              (118,184
              )Net
                  cash used in investing activities
              
              
              (19,709
              )
              
              (100,473
              )
              
              (218,184
              )Cash
                  flows from financing activities:Borrowings
                  on related party notes payable
              
              
              945,500
              
              
              269,500
              
              
              2,468,500Borrowings
                  on convertible debt - net of costs
              
              
              644,388
              
              
              -
              
              
              644,388Proceeds
                  from issuance of common stock net of issuance costs
              
              
              201,982
              
              
              390,714
              
              
              1,484,916Common
                  Stock Issuable
              
              
              -
              
              
              -
              
              
              64,950Net
                  cash provided by financing activities
              
              
              1,791,870
              
              
              660,214
              
              
              4,662,754Increase
                  (Decrease) in cash
              
              
              540,847
              
              
              (31,521
              )
              
              568,885Cash
                  at beginning of period
              
              
              28,038
              
              
              59,559
              
              
              -Cash
                  at end of period
              
              $
              568,885
              
              $
              28,038
              
              $
              568,885**NON
                  CASH FINANCING AND INVESTING ACTIVITIES:**Issuance
                  of common stock for services
              
              $
              -
              
              $
              675,173
              
              $
              685,754Common
                  stock issuable for services
              
              $
              342,491
              
              $
              -
              
              $
              382,491Common
                  stock issuable for performance based compensation and deferred
                  salary
              
              $
              103,458
              
              $
              -
              
              $
              103,458Common
                  stock issuable in settlement of accounts payable
              
              $
              30,555
              
              $
              438,986
              
              $
              493,063Common
                  stock issuable in settlement of accrued interest
              
              $
              -
              
              $
              161,265
              
              $
              161,265Issuance
                  of common shares in redemption of debt
              
              $
              -
              
              $
              623,500
              
              $
              623,500Value
                  of warrants
              
              $
              2,880,675
              
              $
              1,382,522
              
              $
              4,263,197Value
                  of beneficial debt conversion feature
              
              $
              875,894
              
              $
              199,227
              
              $
              1,075,121Assumption
                  of liabilities in connection with merger
              
              $
              -
              
              $
              171,583
              
              $
              171,583**The
                  accompanying notes are an integral part of these consolidated financial
                  statements.**









**SVC
                FINANCIAL SERVICES INC. AND SUBSIDIARY****(A
                DEVELOPMENT STAGE ENTERPRISE)****CONSOLIDATED
                STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY****For
                the Period From Inception (August 23, 1999) to September 30, 2005
                and
                2004**




**Common
                Stock****Shares**
            
            
            **Amount**
            
            
            **Common**
              **Stock
                Issuable**
            
            
            **Accumulated
                Deficiency**
            
            
            **Total**
              **Shareholders'
                Equity**
              **(Deficiency)**Common
                Stock issued
            
            
            13,639,236
            
            $
            718,432
            
            
            
            
            
            
            
            $
            718,432Net
                loss for the year ended September 30, 1999
            
            
            
            
            
            
            
            
            
            
            $
            (113,449
            )
            
            (113,449
            )**Balance
                at September 30, 1999**
            
            
            **13,639,236**
            
            
            **718,432**
            
            
            
            
            
            **(113,449**
            **)**
            
            **604,983**Common
                Stock issued
            
            
            2,299,015
            
            
            184,538
            
            
            
            
            
            
            
            
            184,538Net
                loss for the year ended September 30, 2000
            
            
            
            
            
            
            
            
            
            
            
            (1,014,258
            )
            
            (1,014,258
            )**Balance
                at September 30, 2000**
            
            
            **15,938,251**
            
            
            **902,970**
            
            
            
            
            
            **(1,127,707**
            **)**
            
            **(224,737**
            **)**Common
                Stock issued
            
            
            141,128
            
            
            377,124
            
            
            
            
            
            
            
            
            377,124Net
                loss for the year ended September 30, 2001
            
            
            
            
            
            
            
            
            
            
            
            (376,762
            )
            
            (376,762
            )**Balance
                at September 30, 2001**
            
            
            **16,079,379**
            
            
            **1,280,094**
            
            
            
            
            
            **(1,504,469**
            **)**
            
            **(224,375**
            **)**Net
                loss for the year ended September 30, 2002
            
            
            
            
            
            
            
            
            
            
            
            (532,793
            )
            
            (532,793
            )Common
                Stock issued for services
            
            
            13,365
            
            
            8,093
            
            
            
            
            
            
            
            
            8,093Equity
                adjustment from disposal of subsidiary
            
            
            
            
            
            
            
            
            
            
            
            27,015
            
            
            27,015**Balance
                at September 30, 2002**
            
            
            **16,092,744**
            
            
            **1,288,187**
            
            
            
            
            
            **(2,010,247**
            **)**
            
            **(722,060**
            **)**Net
                loss for the year ended September 30, 2003
            
            
            
            
            
            
            
            
            
            
            
            (566,617
            )
            
            (566,617
            )**Balance
                at September 30, 2003**
            
            
            **16,092,744**
            
            
            **1,288,187**
            
            
            **-**
            
            
            **(2,576,864**
            **)**
            
            **(1,288,677**
            **)**Net
                Loss - Year ended September 30, 2004
            
            
            
            
            
            
            
            
            
            
            
            (3,446,923
            )
            
            (3,446,923
            )Reverse
                Merger adjustment
            
            
            1,989,251
            
            
            (171,583
            )
            
            
            
            
            
            
            
            (171,583
            )Common
                Stock issued for services
            
            
            651,734
            
            
            374,881
            
            
            
            
            
            
            
            
            374,881Stock
                Based compensation
            
            
            388,890
            
            
            186,667
            
            
            
            
            
            
            
            
            186,667Black
                Scholes valuation of warrants
            
            
            
            
            
            1,245,575
            
            
            
            
            
            
            
            
            1,245,575Issuance
                costs
            
            
            
            
            
            (58,600
            )
            
            
            
            
            
            
            
            (58,600
            )Common
                Stock issued included in Common Stock Issuable at September 30,
                2003
            
            
            4,000,000
            
            
            200,000
            
            
            
            
            
            
            
            
            200,000Common
                Stock issued in settlement of debt and accrued interest
            
            
            5,178,427
            
            
            802,764
            
            
            
            
            
            
            
            
            802,764Common
                Stock issued for cash
            
            
            1,010,667
            
            
            295,000
            
            
            
            
            
            
            
            
            295,000Common
                Stock issued in settlement of accounts payable
            
            
            1,313,928
            
            
            184,100
            
            
            
            
            
            
            
            
            184,100Warrants
                exercised in settlement of accounts payable
            
            
            40,000
            
            
            20,000
            
            
            
            
            
            
            
            
            20,000Warrants
                exercised for cash
            
            
            100,000
            
            
            51,000
            
            
            
            
            
            
            
            
            51,000Value
                of warrants issued for debt extension
            
            
            
            
            
            328,012
            
            
            
            
            
            
            
            
            328,012Value
                of beneficial debt conversion feature
            
            
            
            
            
            199,227
            
            
            
            
            
            
            
            
            199,227Common
                Stock Issuable
            
            
            
            
            
            
            
            
            104,311
            
            
            
            
            
            104,311**Balance
                at September 30, 2004**
            
            
            **30,765,641**
            
            **$**
            **4,945,230**
            
            **$**
            **104,311**
            
            **$**
            **(6,023,787**
            **)**
            **$**
            **(974,246**
            **)**Net
                Loss - Year ended September 30, 2005
            
            
            
            
            
            
            
            
            
            
            $
            (6,588,253
            )
            
            (6,588,253
            )Common
                Stock issued for cash
            
            
            975,768
            
            
            201,982
            
            
            
            
            
            
            
            
            201,982Restricted
                common shares issued for establishment of credit facility
            
            
            696,093
            
            
            151,876
            
            
            
            
            
            
            
            
            151,876Common
                Stock issued for services
            
            
            987,045
            
            
            216,851
            
            
            
            
            
            
            
            
            216,851Issuance
                costs
            
            
            265,515
            
            
            -
            
            
            
            
            
            
            
            
            -Value
                of beneficial conversion feature of convertible debt
            
            
            -
            
            
            625,894
            
            
            
            
            
            
            
            
            625,894Black
                Scholes valuation of warrants
            
            
            -
            
            
            620,006
            
            
            
            
            
            
            
            
            620,006Stock
                Based compensation
            
            
            678,610
            
            
            103,458
            
            
            
            
            
            
            
            
            103,458Vesting
                of common stock options
            
            
            -
            
            
            679,169
            
            
            
            
            
            
            
            
            679,169Correction
                to debt conversion to equity in prior period
            
            
            14,486
            
            
            -
            
            
            
            
            
            
            
            
            -Common
                Shares issued from Common Stock Issuable
            
            
            241,457
            
            
            65,625
            
            
            (65,625
            )
            
            
            
            
            -Reclassification
                to accrued liabilities
            
            
            
            
            
            40,000
            
            
            (29,950
            )
            
            
            
            
            10,050Adjustment
                to shares exchanged during merger
            
            
            26,339
            
            
            -Common
                Shares to be issued in settlement of accounts payable
            
            
            
            
            
            
            
            
            30,555
            
            
            
            
            
            30,555**Balance
                at September 30, 2005**
            
            
            **34,650,954**
            
            **$**
            **7,650,091**
            
            **$**
            **39,291**
            
            **$**
            **(12,612,040**
            **)**
            **$**
            **(4,922,658**
            **)****The
                accompanying notes are an integral part of these consolidated financial
                statements.**











**SVC
      Financial Services, Inc. and Subsidiary**


**(A
      Development Stage Enterprise)**


**Notes
      to Consolidated Financial Statements**


**September
      30, 2005 and 2004**




**1.** **Nature
      of Operations**




SVC
      Financial Services, Inc. (the “SVC” or “the Company”), formerly Secure Sign, Inc., was incorporated on
      July 14, 1995 under the laws of the state of Colorado. SVC is a software and
      intellectual property enterprise with products, which provides a platform for
      transaction management. The Company provides integrated financial transaction
      management services and value-added software for accelerating sales. SVC
      has
      developed Scoot,
      a
      revolutionary Mobile ATM Money Card allowing anyone with a cell phone to store,
      send, receive and transact funds anywhere in the world. ScootTM Mobile Money is a
      low cost, global approach to supporting the large and growing markets for funds
      transfer, unbanked money management, and secure payment remittances and
      reimbursements. SVC
      has
      also pioneered a scalable, integrated media and transaction management solution,
      the Mazarin Media Platform that provides rapid application delivery for any
      size
      organization.  SVC enables its customers to deliver smart applications that
      inspire consumers to make immediate, informed decisions.  SVC solutions
      have a broad range of applicability and provide value to the music and
      entertainment, political, non-profit, research and testing, and corporate and
      consumer marketing areas.  Since inception, the Company has devoted
      substantially all of its efforts to activities such as financial planning,
      capital raising and product development and has not recorded any significant
      revenue.  Accordingly, the Company is in the development stage, as defined
      by the Statement of Financial Accounting Standards ("SFAS") No. 7, "Accounting
      and Reporting by Development State Enterprises."





History





On
      October 1, 2003, the Company acquired all the outstanding shares of
      Pocketpass.com, Inc. (incorporated on August 23, 1999) in exchange for
      16,092,744 restricted shares of its common stock. The acquisition has been
      accounted for as a reverse merger (recapitalization) with Pocketpass.com deemed
      to be the accounting acquirer. Accordingly, the historical financial statements
      presented herein are those of Pocketpass.com, as adjusted to give effect to
      any
      difference in the par value of the issuer's and the accounting acquirer's stock
      with an offset to capital in excess of par value, and those of SVC (the legal
      acquirer) since the merger. The retained earnings of the accounting acquirer
      have been carried forward after the acquisition and Pocketpass.com's basis
      of
      its assets and liabilities were carried over in the recapitalization. Operations
      prior to the business combination are those of the accounting
      acquirer.





Secure
      Sign, Inc. purchased Contractor's Directory, Inc., on April 17, 1999 in a stock
      for stock transaction exchange. In September 2003 Secure Sign, Inc., sold
      ninety-five percent (95%) of its wholly owned subsidiary, Contractor's
      Directory, Inc. to the former CEO of the Company for $5,000 and assumption
      of
      all corporate debts related to Contractor's Directory, Inc.





**Going
      Concern**





The
      accompanying financial statements have been prepared in conformity with
      generally accepted accounting principles, which contemplate continuation of
      the
      Company as a going concern. However, the Company has no established source
      of
      revenue, has experienced net operating losses of $12,612,040 since inception,
      had a net loss of $6,588,253 and a negative cash flow from operations of
      $1,231,314 for the year ended September
      30, 2005 ,
      and has
      working capital and stockholder's deficiencies of $4,008,789 and $4,922,658,
      respectively, as of September
      30, 2005 .
      These
      factors raise substantial doubt about the Company's ability to continue as
      a
      going concern. Without realization of additional capital, it would be unlikely
      for the Company to continue as a going concern. These financial statements
      do
      not include any adjustments relating to the recoverability and classification
      of
      recorded asset amounts, or amounts and classification of liabilities that might
      result from this uncertainty.  The Company has developed new products, has
      developed a sales team and is vigorously pursuing new business.  On
      September 29, 2005, management raised additional capital of $750,000 through
      the
      issuance of convertible debt. Additionally, the Company has an agreement with
      investors whereby it would receive an additional $750,000 in debt financing
      if
      it meets certain objectives.








**2.** **Summary
      of Significant Accounting Policies**




Basis
      of Consolidation





The
      consolidated financial statements include the accounts of SVC
      Financial Services, Inc. ,
      and its
      wholly owned subsidiary, PocketPass.com, Inc. All significant intercompany
      accounts and transactions have been eliminated upon consolidation.





Revenue
      Recognition





The
      Company recognizes revenues from contracts in which the Company provides
      consulting services as the services are performed. The contractual terms of
      the
      agreements dictate the recognition of revenue by the Company. The Company
      recognizes revenue in accordance with Staff Accounting Bulletin No. 104, REVENUE
      RECOGNITION ("SAB104").





SAB
      104
      requires that four basic criteria must be met before revenue can be recognized:
      (1) persuasive evidence of an arrangement exists; (2) delivery has occurred;
      (3)
      the selling price is fixed and determinable; and (4) collectibility is
      reasonably assured. Determination of criteria (3) and (4) are based on
      management's judgments regarding the fixed nature of the selling prices of
      the
      products delivered and the collectibility of those amounts. Provisions for
      discounts and rebates to customers, estimated returns and allowances, and other
      adjustments are provided for in the same period the related sales are recorded.
      The Company defers any revenue for which the product has not been delivered
      or
      is subject to refund until such time that the Company and the customer jointly
      determine that the product has been delivered or no refund will be required.





SAB
      104
      incorporates Emerging Issues Task Force 00-21 ("EITF 00-21"),
      MULTIPLE-DELIVERABLE REVENUE ARRANGEMENTS. This issue addresses determination
      of
      whether an arrangement involving more than one deliverable contains more than
      one unit of accounting and how the arrangement consideration should be measured
      and allocated to the separate units of accounting. EITF 00-21 became effective
      for revenue arrangements entered into in periods beginning after June 15,
      2003. For revenue arrangements occurring on or after August 1, 2003, the
      Company revised its revenue recognition policy to comply with the provisions
      of
      EITF 00-21.





Amounts
      collected prior to satisfying the above revenue recognition criteria are
      included in deferred revenue and advance payments in the accompanying
      consolidated balance sheets. The Company received no such payments as of
      September 30, 2005.





Cash
      Equivalents




For
        purposes of the Statements of Cash Flows, the Company considers all highly
        liquid debt instruments purchased with a maturity date of three months or
        less
        to be cash equivalents. The company had cash and cash equivalents of $568,885
        which is $468,885 in excess of the federally insured limits of
        $100,000.




Concentrations
      of Risk




Cash
      and
      cash equivalents are maintained with several financial institutions. Deposits
      held with banks may exceed the amount of insurance provided on such deposits.
      Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC)
      up
      to $100,000. At September 30, 2005 and 2004 the Company had approximately
      $468,885 and none, respectively, in excess of FDIC insured limits. The Company
      has not experienced any losses in such accounts. Generally, these deposits
      may
      be redeemed upon demand and are maintained with financial institutions of
      reputable credit and therefore bear minimal credit risk.





Allowance
      for Doubtful Accounts





The
      Company establishes an allowance for doubtful accounts on a case-by-case basis
      when it believes the required payment of specific amounts owed is unlikely
      to
      occur after a review of historical collection experience, subsequent collections
      and management's evaluation of existing economic conditions.








Advertising




Advertising
      costs are expensed in the year incurred.  Advertising costs for the years
      ended September 30, 2005 and 2004 were $6,904 and none,
      respectively.




Research
      and Development





The
      Company accounts for research and development costs in accordance with the
      Financial Accounting Standards Board’s Statement of Financial Accounting
      Standards No. 2 (“SFAS 2”), “Accounting for Research and Development Costs.
      Under SFAS 2, all research and development costs must be charged to expense
      as
      incurred. Accordingly, internal research and development costs are expensed
      as
      incurred. Third-party research and developments costs are expensed when the
      contracted work has been performed or as milestone results have been achieved.
      Company-sponsored research and development costs related to both present and
      future products are expensed in the period incurred. The Company incurred no
      research and product development costs for the years ended September 30, 2005
      and 2004.





Fixed
      Assets




Property
      and equipment were stated at cost less accumulated depreciation and
      amortization.  Expenditures for major additions and improvements of $1,000
      or greater were capitalized, and minor replacements, maintenance and repairs
      were charged to expense as incurred.  Whenever an asset is retired or
      disposed of, its cost and accumulated depreciation or amortization is removed
      from the respective accounts and the resulting gain or loss is credited or
      charged to income.




Depreciation
      is computed using the straight-line and declining-balance methods over the
      following estimated useful lives:




Computers
                and software
            3
                yearsFurniture
                and Fixtures
            5
                to 7 years





Long-Lived
      Assets





The
      Company has adopted Statement of Financial Accounting Standards No. 144 (SFAS
      144). The Statement requires that long-lived assets and certain identifiable
      intangibles held and used by the Company be reviewed for impairment whenever
      events or changes in circumstances indicate that the carrying amount of an
      asset
      may not be recoverable. Events relating to recoverability may include
      significant unfavorable changes in business conditions, recurring losses, or
      a
      forecasted inability to achieve break-even operating results over an extended
      period. The Company evaluates the recoverability of long-lived assets based
      upon
      forecasted undercounted cash flows. Should impairment in value be indicated,
      the
      carrying value of intangible assets will be adjusted, based on estimates of
      future discounted cash flows resulting from the use and ultimate disposition
      of
      the asset. SFAS No. 144 also requires assets to be disposed of be reported
      at
      the lower of the carrying amount or the fair value less costs to sell.




Segment
      Information





The
      Company adopted Statement of Financial Accounting Standards No. 131, Disclosures
      about Segments of an Enterprise and Related Information ("SFAS 131"). SFAS
      131
      establishes standards for reporting information regarding operating segments
      in
      annual financial statements and requires selected information for those segments
      to be presented in interim financial reports issued to stockholders. SFAS 131
      also establishes standards for related disclosures about products and services
      and geographic areas. Operating segments are identified as components of an
      enterprise about which separate discrete financial information is available
      for
      evaluation by the chief operating decision maker, or decision making group,
      in
      making decisions how to allocate resources and assess performance. The Company
      has determined that it has only one operating segment.








Earnings
      (Loss) Per Share





SFAS
      No.
      128, “Earnings Per Share” requires presentation of basic earnings (loss) per
      share and diluted earnings per share. The computation of basic loss per share
      is
      computed by dividing loss available to common stockholders by the weighted
      average number of outstanding common shares during the period. Diluted earnings
      per share gives effect to all dilutive potential common shares outstanding
      during the period. These potentially dilutive securities, which are convertible
      into 57,372,541 shares of common stock, were not included in the calculation
      of
      loss per share for the years ended September
      30, 2005 and
      2004 because
      the Company incurred a loss during such periods and thus their effect would
      have
      been anti-dilutive.  Accordingly, basic and diluted loss per share are the
      same for the years ended September
      30, 2005 and
      2004 .





Income
      Taxes





Income
      taxes are provided based on the asset and liability method for financial
      reporting purposes in accordance with the provisions of Statements of Financial
      Standards No. 109, "Accounting for Income Taxes".. Under the asset and liability
      method, deferred income taxes are determined based on differences between the
      financial reporting and tax bases of assets and liabilities. They are measured
      using the enacted tax rates and laws that will be in effect when the differences
      are expected to reverse. The Company is required to adjust its deferred tax
      liabilities in the period when tax rates or the provisions of the income tax
      laws change. Valuation allowances are established to reduce deferred tax assets
      to the amounts expected to be realized.




Capitalized
      Software Costs




The
      Company accounts for the development cost of software in accordance with
      Statement of Financial Accounting Standards No. 86 “Accounting for Costs of
      Computer Software to be Sold, Leased or Otherwise Marketed” (“SFAS 86”). SFAS 86
      requires product development costs to be charged to expense as incurred until
      technological feasibility is attained. Technological feasibility is attained
      when the Company’s software has completed system testing and has been determined
      viable for its intended use. The time between the attainment of technological
      feasibility and completion of software development has been short with
      immaterial amounts of development costs incurred during this period.
      Accordingly, the Company did not capitalize any development costs in 2005 or 2004 .





The
      Company has adopted SOP 98-1, "Accounting for the Costs of Computer Software
      Developed or Obtained for Internal Use." The Company capitalizes software
      purchased from third parties if the related software product under development
      has reached technological feasibility or if there are alternative future uses
      for the purchased software provided that capitalized amounts will be realized
      over a period not exceeding five years. Costs incurred prior to the
      establishment of technological feasibility are charged to general and
      administrative expense. As a result, the Company has no capitalized software
      costs at September
      30, 2005 .





Disclosures
      about Fair Value of Financial Instruments




The
      carrying amount of the Company's financial instruments, which include accounts
      receivable, due from related parties, accounts payable, notes payable and
      accrued expenses approximate their fair values at September 30, 2005 and 2004.





Estimates





The
      presentation of financial statements in conformity with generally accepted
      accounting principles requires management to make certain estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amounts of revenues and expenses during the
      reporting period.  Examples of estimates include the useful lives of fixed
      assets based upon historical experience, accruals for invoices not received
      before final close of the period based upon detailed review of purchase orders
      and expenditures and the commonly accepted Black Scholes method to measure
      the
      value of warrants and options. We believe that the estimates, judgments and
      assumptions upon which we rely are reasonable based upon information available
      to us at the time that these estimates, judgments and assumptions are made.
      Variances of estimates from actual results have been minimal and immaterial
      on a
      historical basis with the possible exception of the Black Scholes valuation
      of
      warrants, the accuracy of which has been a subject of much public debate. Actual
      results could differ from those estimates. Future estimates and assumptions
      will
      be based upon information available to us at the time of the
      estimate.







Comprehensive
      Income





Statement
      of Financial Accounting Standards No. 130 (“SFAS 130”), “Reporting Comprehensive
      Income,” establishes standards for reporting and displaying of comprehensive
      income, its components and accumulated balances. Comprehensive income is defined
      to include all changes in equity except those resulting from investments by
      owners and distributions to owners. Among other disclosures, SFAS 130 requires
      that all items that are required to be recognized under current accounting
      standards as components of comprehensive income be reported in a financial
      statement that is displayed with the same prominence as other financial
      statements. The Company does not have any items of comprehensive income in
      any
      of the periods presented.





Stock-Based
      Compensation





The
      Company accounts for its stock-based compensation plan based on Accounting
      Principles Board ("APB") Opinion No. 25, Financial Interpretation No. 44, and
      SFAS 123, "Accounting for Stock-Based Compensation."  For the years ended
      September 30, 2005 and 2004, the Company has not changed to the fair value
      method and continued to use APB Opinion No. 25 for measurement and recognition
      of any expense related to employee stock based transactions.  All
      non-employee stock option and warrant grants are accounted for under the fair
      value method.  As such, compensation expense for employee stock option and
      warrant grants would be recorded on the date of grant only if the current market
      price of the underlying stock exceeds the exercise price.





The
      FASB
      issued SFAS No.148, "Accounting for Stock-Based Compensation - Transition and
      Disclosure."  This statement amends SFAS No.123, "Accounting for
      Stock-Based Compensation," to provide alternative methods of transition for
      a
      voluntary change to the fair value-based method of accounting for stock-based
      employee compensation.  Pursuant to SFAS No.123, the Company would expense
      the fair market value of stock options newly granted to third parties and
      disclose the pro forma results based on the fair value of options/warrants
      granted to employees.





During
      the years ended September 30, 2005 and 2004, the Company did not issue any
      stock
      based compensation to employees.





Recent
      Accounting Pronouncements




In
      December 2004, the Financial Accounting Standards Board ("FASB") released a
      revision to Statement of Financial Accounting Standard ("SFAS") No. 123,
      Accounting for Stock-Based Compensation ("FAS 123R").  FAS 123R addresses
      the accounting for share-based payment transactions in which an enterprise
      receives employee services in exchange for (a) equity instruments of the
      enterprise or (b) liabilities that are based on the fair value of the
      enterprise's equity instruments or that may be settled by the issuance of such
      equity instruments.  The statement would eliminate the ability to account
      for share-based compensation transactions using APB Opinion No. 25, Accounting
      for Stock Issued to Employees, and generally would require instead that such
      transactions be accounted for using a fair-value-based method.  We adopted
      FAS 123R effective with the year ended September 30, 2005.  With the
      adoption of this new statement, we will have to recognize substantially more
      compensation expense.  This may have a material adverse impact on our
      financial position and results of operations.





In
      December 2004, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standard (SFAS) No. 153, "Exchanges of Nonmonetary Assets
      -
      an amendment of APB Opinion No. 29", which amends Opinion 29 by eliminating
      the
      exception for nonmonetary exchanges of similar productive assets and replaces
      it
      with a general exception for exchanges of nonmonetary assets that do not have
      commercial substance.  A nonmonetary exchange has commercial substance if
      the future cash flows of the entity are expected to change significantly as
      a
      result of the exchange.  SFAS No. 153 is effective for fiscal years
      beginning after June 15, 2005, and implementation is done prospectively.
 Management does not expect the implementation of this new standard to have
      a material impact on the Company's financial position, results of operations
      and
      cash flows.








In
      December 2004, the Financial Accounting Standards Board (FASB) issued Statement
      of Financial Accounting Standard (SFAS) No. 154, Accounting Changes and Error
      Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3.
       SFAS No. 154 requires retrospective application to prior periods'
      financial statements of changes in accounting principle, unless it is
      impracticable to determine either the period-specific effects or the cumulative
      effect of the change.  SFAS No. 154 also requires that retrospective
      application of a change in accounting principle be limited to the direct effects
      of the change.  Indirect effects of a change in accounting principle, such
      as a change in nondiscretionary profit-sharing payments resulting from an
      accounting change, should be recognized in the period of the accounting change.
       SFAS No. 154 also requires that a change in depreciation, amortization or
      depletion method for long-lived, non-financial assets be accounted for as a
      change in accounting estimate effected by a change in accounting principle.
       SFAS No. 154 is effective for accounting changes and corrections of errors
      made in fiscal years beginning after December 15, 2005.  Early adoption is
      permitted for accounting changes and corrections of errors made in fiscal years
      beginning after the date this Statement is issued.  Management does not
      expect the implementation of this new standard to have a material impact on
      the
      Company's financial position, results of operations and cash flows.





In
      March
      2005, the SEC released Staff Accounting Bulletin No. 107, "Share-Based Payment"
      ("SAB 107"), which provides interpretive guidance related to the interaction
      between SFAS 123(R) and certain SEC rules and regulations.  It also
      provides the SEC staff's views regarding valuation of share-based payment
      arrangements.  In April 2005, the SEC amended the compliance dates for SFAS
      123(R), to allow companies to implement the standard at the beginning of their
      next fiscal year, instead of the next reporting period beginning after June
      15,
      2005.  Management is currently evaluating the impact SAB 107 will have on
      the Company's consolidated financial statements.





In
      July
      2004, the EITF issued a draft abstract for EITF Issue No. 04-08, “The Effect of
      Contingently Convertible Debt on Diluted Earnings per Share” (“EITF 04-08”).
      EITF 04-08 reflects the Task Force's tentative conclusion that contingently
      convertible debt should be included in diluted earnings per share computations
      regardless of whether the market price trigger has been met. The consensus
      reached by the Task Force in this Issue is effective for reporting periods
      ending after December 15, 2004. Prior period earnings per share amounts
      presented for comparative purposes would be required to be restated to conform
      to this consensus and the Company would be required to include the shares
      issuable upon the conversion of the Notes in the diluted earnings per share
      computation for all periods during which the Notes are outstanding. The
      implementation of this new standard did not have a material impact on the
      computation of diluted earnings per share.




**3.** **Property
      and Equipment**




Property
      and equipment consist of the following:




2005Computer
                  equipment
              
              
              
              
              $
              59,741Furniture
                  and fixtures
              
              
              
              
              
              36,195Software
              
              
              
              
              
              11,536107,472Less
                  accumulated depreciation and amortization
              
              
              
              
              
              (86,752
              )$
              20,720





Depreciation
      expense for the years ended September 30, 2005 and 2004 was approximately
      $8,213, and $1,249, respectively.





The
      Company capitalizes software acquired through technology purchases if the
      related software under development has reached technological feasibility or
      if
      there are alternative future uses for the software.  As a result, the
      Company had capitalized software costs at September 30, 2004 of $100,000. These
      amounts were installment payments made to a third party vendor. A working model
      of the software was completed and delivered to be put into service, therefore,
      under paragraph 4.b.(1) of Statement of Financial Accounting Standards No.
      86 *Accounting
      for the Costs of Computer Software to Be Sold, Leased, or Otherwise
      Marketed* ,
      the
      installment payments were capitalized. Due to rapid changes in technology,
      the
      software quickly became obsolete and was written off during the quarter ended
      March 31, 2005. The
      Company’s initial market strategy was to select an application authoring
      platform that could be used by SVC and its customers to rapidly deploy
      email-based multimedia presentations of products and services. The approach
      is
      marketed under the product name of Mazarin Media Platform (aka Mazarin). A
      product was selected for its menu driven approach to building dynamic rich
      media
      presentations that could be received by the target audiences via email
      solicitations. In 2005, the Company discovered that the product was difficult
      to
      work with for the end users. Also, the fact that this products applications
      required the end recipient to download a runtime software component became
      a
      significant barrier.. Additionally, the internet market shifted due to virus
      attacks, use of firewalls, and other such items, that made it unacceptable
      for
      recipient of solicitations based upon this product to download the required
      runtime components. The Company reviewed numerous other platforms , and selected
      OpenLaszlo, based on an IBM open source solution, for Mazarin. OpenLaszlo has
      proven to be acceptable in the market since all applications developed using
      this solution can be received by anyone that can display a browser (Mac, PC,
      UNIX).




**4.** **Equity**




Amendment
      to Articles of Incorporation.





In
      September 2005 at the annual shareholders’ meeting, the shareholders of the
      Company approved an amendment to the Company’s Articles of Incorporation, which
      increased the number of authorized shares of common stock from 50,000,000 shares
      to 150,000,000 shares. There were 34,650,954 and 30,765,641 shares of common
      stock, which has no par value, issued and outstanding at September 30, 2005
      and
      2004, respectively. Holders of Common Stock are entitled to one vote for each
      share held.




On
      October 1, 2003, the Company acquired all the outstanding shares of
      Pocketpass.com, Inc. (incorporated on August 23, 1999) in exchange for
      16,092,744 restricted shares of its common stock and changed its name to SVC
      Financial Services, Inc.  The acquisition has been accounted for as a
      reverse merger (recapitalization) with Pocketpass.com deemed to be the
      accounting acquirer.  Accordingly, the historical financial statements
      presented herein are those of Pocketpass.com, as adjusted to give effect to
      any
      difference in the par value of the issuer's and the accounting acquirer's stock
      with an offset to capital in excess of par value, and those of SVC (the legal
      acquirer) since the merger.  The retained earnings of the accounting
      acquirer have been carried forward after the acquisition and PocketPass.com's
      basis of its assets and liabilities were carried over in the recapitalization.
       Operations prior to the business combination are those of the accounting
      acquirer.





*Significant
      Transactions during the year ended September 30, 2005*




During
      October and November 2004, 176,667 shares were issued for $55,000 in cash
      utilizing the Rule 4(2) exemption. All investors in these transactions were
      accredited with access to sufficient corporate information.





In
      December 2004, 526,500 restricted shares were issued for $112,500 in cash
      utilizing the Rule 4(2) exemption. All investors in these transactions were
      accredited with access to sufficient corporate information.





During
      the three months ended December 31, 2004, 123,829 shares worth $47,499 were
      issued to contractors and vendors in settlement of services rendered.  Also
      83,335 of options valued at $40,000 vested utilizing the Rule 4(2)
      exemption.  All investors in these transactions were accredited with access
      to sufficient corporate information.








During
      the three months ended March 31, 2005:


-
            116,080
                shares were issued for $29,020 in
                cash.


-
            63,281
                restricted shares valued at $26,236 were issued for establishment
                of a
                credit facility.


-
            141,754
                shares worth $ 49,265 were issued to contractors and vendors in settlement
                of services rendered.


-
            1,067,500
                shares valued at $290,125 were issued for stock based
                compensation.


-
            All
                utilizing the Rule 4(2) exemption.All
                investors in these transactions were accredited with access to sufficient
                corporate information.





During
      the three months ended June 30, 2005:


-
            283,000
                shares were issued for $66,995 in
                cash.


-
            35,156
                restricted shares valued at $7,163 were issued for establishment
                of a
                credit facility.


-
            98,930
                shares worth $ 29,758 were issued to contractors and vendors in settlement
                of services rendered.


-
            275,000
                shares valued at $46,750 were issued for investor relations
                services.


-
            72,796
                shares valued at $12,375 were issued in settlement of issuance
                costs.


-
            All
                utilizing the Rule 4(2) exemption.All
                investors in these transactions were accredited with access to sufficient
                corporate information.




During
      the three months ended September 30, 2005:


-
            400,021
                shares were issued for $50,967 in
                cash.


-
            35,156
                restricted shares valued at $5,977 were issued for establishment
                of a
                credit facility.


-
            294,139
                shares worth $38.979 were issued to contractors and vendors in settlement
                of services rendered.


-
            40,000
                shares valued at $4,600 were issued for fund raising
                activities.


-
            192,719
                shares issued valued at $25,063 were treated as issuance
                costs


-
            All
                utilizing the Rule 4(2) exemption.All
                investors in these transactions were accredited with access to sufficient
                corporate information.





During
      October 2004 the company sold convertible debentures totaling $15,000 at 8%
      interest due March 31, 2006.  This debt was convertible to common shares at
      $.30 per share for a period of 180 days.  Warrants totaling 16,666
      exercisable at $.30 per share for 3 years were also issued with this
      debt. All
      investors in these transactions were accredited with access to sufficient
      corporate information.





During
      November 2004 the company sold convertible debentures totaling $50,000 at 8%
      interest due November 15, 2006.  This debt was convertible to common shares
      at $.30 per share for a period of 180 days.  Warrants totaling 166,666
      exercisable at $.30 per share for 3 years were also issued with this debt.
      All
      investors in these transactions were accredited with access to sufficient
      corporate information.




On
      January 11, 2005 the Company concluded a loan agreement and credit facility
      with
      an existing accredited investor of $400,000 for convertible debentures payable
      two years after draw-down, bearing 12% interest.  The debentures and any
      accrued interest may be converted into common stock of the Company at the
      election of the holder at anytime utilizing a conversion ratio of $.10 per
      share.  These debentures also entitle the investor to 562,500 shares of
      restricted common stock as consideration for establishing the credit facility.
       As of September 30, 2005 the credit facility has been increased to
      $790,000 which has been entirely drawn down. The
      investor in this transaction was accredited with access to sufficient corporate
      information.




On
      March
      2, 2005 the Company concluded loan agreements and credit facilities with
      existing accredited investors totaling $45,000 for convertible debentures
      payable two years after draw-down, bearing 12% interest.  These credit
      lines were subsequently increased to $95,000, in total, which was entirely
      drawn
      down by September 30, 2005. The debentures and any accrued interest may be
      converted into common stock of the Company at the election of the holder at
      anytime utilizing a conversion ratio of $.10 per share.  These debentures
      also entitle the investors to a total of 133,593 shares of restricted common
      stock as consideration for establishing the credit facilities. The
      investor in this transaction was accredited with access to sufficient corporate
      information.









During
      the year ended September 30, 2005, the Company recorded a charge for $679,169
      as
      a result of 1,979,173 options becoming vested.




The
      common stock issuable of $39,291 at September 30, 2005 consists of: $4,500
      of
      cash received in anticipation of issuing 18,000 shares of common stock; $4,236
      for services rendered in anticipation of issuing 16,944 shares of common stock,
      and $30,555 for services rendered in anticipation of issuing 80,407 shares
      of
      common stock. The Common Stock Issuable consists of settlement of liabilities
      denominated in shares already and that cannot be settled in cash. The number
      of
      shares has already been determined therefore this is an equity account, not
      a
      debt account.




The
      results for the year ended September 30, 2005 include $908,292 of interest
      expense representing $132,135 in interest expense on debt, $624,281 for the
      value of warrants related to debt, and $151,876 for the value of shares granted
      in consideration of credit facilities.





The
      results for the year ended September 30, 2005 include $875,894 for the value
      of
      beneficial conversion features on debt. The value of the warrants and beneficial
      conversion features of debt were calculated using the Black-Scholes method.
       The value of warrants associated with the debt is being amortized over the
      life of the warrants.  The beneficial conversion feature was all expensed
      since the debt was convertible at any time.





**5.** **Other
      Stock-Related Information**




The
      Company grants stock options to consultants and warrants to investors.  The
      fair value of each stock option and warrant is estimated on the date of grant
      using the Black-Scholes pricing model with the following weighted average
      assumptions for both 2005 and 2004:  risk-free interest rate of 3%;
      expected dividend yield of 0%; expected volatility of approximately 434% in
      2005
      and 419% in 2004 and expected lives of approximately 3 years to ten years.




The
      cost
      of stock options is recognized on a straight-line basis over its vesting
      period.









Number
                of Options
              &
                Warrants
            
            Weighted
              average
              exercise
              price
            
            Average
                Market
              PriceBalance
                outstanding at September 30, 2001
            
            
            5,570,000
            
            $
            0.02
            
            $
            0.25Granted
            
            
            3,288,900
            
            
            0.16
            
            
            0.22Exercised
            
            
            -Expired
            
            
            -Balance
                outstanding at September 30. 2002
            
            
            8,858,900
            
            
            0.07
            
            
            0.24Granted
            
            
            5,547,499
            
            
            0.12
            
            
            0.52Exercised
            
            
            -Expired
            
            
            (1,020,000
            )
            
            (0.01
            )Balance
                outstanding at September 30, 2003
            
            
            13,386,399
            
            
            0.10
            
            
            0.37Granted
            
            
            7,280,666
            
            
            0.49
            
            
            0.66Exercised
            
            
            (200,000
            )
            
            0.84
            
            
            0.86Expired
            
            
            (2,005,000
            )
            
            (0.04
            )Balance
                outstanding at September 30, 2004
            
            
            18,462,065
            
            
            0.26
            
            
            0.50Granted
            
            
            24,993,265
            
            
            0.03
            
            
            0.14Exercised
            
            
            -
            
            
            
            
            
            -Expired
            
            
            (3,452,666
            )
            
            (0.72
            )Balance
                outstanding at September 30, 2005
            
            
            40,002,664
            
            $
            0.17
            
            $
            0.31

















**Summarized
                information about stock options and warrants outstanding as of September
                30, 2005 is as follows:****Options
                & Warrants Outstanding**
            
            **Options
                & Warrants Exercisable****Exercise
                Price Range**
            
            **Number**
            
            **Weighted**
              **average**
              **exercise**
              **price**
            
            **Average**
              **Remaining**
              **Life
                (years)**
            
            **Number**
            
            **Weighted**
              **average
                exercise**
              **price**$.01
                - $.10
            
            
            9,825,000
            
            $
            0.06
            
            
            3.08
            
            
            7,443,069
            
            $
            0.05$.15
            
            
            8,370,000
            
            
            0.15
            
            
            2.75
            
            
            8,370,000
            
            
            0.150.185
            
            
            17,004,668
            
            
            0.19
            
            
            2.09
            
            
            17,004,668
            
            
            0.19$.23
                - .375
            
            
            4,367,631
            
            
            0.31
            
            
            2.74
            
            
            4,367,631
            
            
            0.31$.75
            
            
            435,365
            
            
            0.75
            
            
            1.53
            
            
            435,365
            
            
            0.75**40,002,664**
            
            **$**
            **0.17**
            
            
            **2.54**
            
            
            **37,620,733**
            
            **$**
            **0.17**








**Summarized
                information about stock options and warrants outstanding as of September
                30, 2004 is as follows:****Options
                & Warrants Outstanding**
            
            **Options
                & Warrants Exercisable****Exercise
                Price Range**
            
            **Number**
            
            **Weighted**
              **average**
              **exercise**
              **price**
            
            **Average**
              **Remaining**
              **Life
                (years)**
            
            **Number**
            
            **Weighted**
              **average**
              **exercise**
              **price**$.01
                - $.10
            
            
            4,825,000
            
            $
            0.03
            
            
            3.76
            
            
            4,213,896
            
            $
            0.03$.15
            
            
            8,370,000
            
            
            0.15
            
            
            4.01
            
            
            8,370,000
            
            
            0.15$.28
                - $.50
            
            
            3,003,065
            
            
            0.39
            
            
            4.27
            
            
            3,003,065
            
            
            0.39$.75
            
            
            1,132,000
            
            
            0.75
            
            
            2.64
            
            
            1,132,000
            
            
            0.75$1.00
            
            
            1,132,000
            
            
            1.00
            
            
            0.90
            
            
            1,132,000
            
            
            1.00**18,462,065**
            
            **$**
            **0.26**
            
            
            **2.88**
            
            
            **17,850,961**
            
            **$**
            **0.26**








**6.** **Income
      Taxes**




The
      tax
      effects of the primary temporary differences giving rise to the Company's net
      deferred tax assets and liabilities at September 30, 2005 and 2004 are
      summarized as follows:





**2005****Deferred
                Tax Asset**
            
            **State**
            
            **Federal**
            
            **Total**Accrued
                expenses and deferred compensation
            
            $
            19,133
            
            $
            73,587
            
            $
            92,720NOL
                Carryforward
            
            
            388,599
            
            
            2,059,149
            
            
            2,447,748Total
            
            
            407,732
            
            
            2,132,736
            
            
            2,540,468Less
                valuation allowance
            
            
            (407,732
            )
            
            (2,132,736
            )
            
            (2,540,468
            )Net
                Deferred Tax Asset
            
            $
            -
            
            $
            -
            
            $
            -













**2004****Deferred
                  Tax Asset**
              
              **State**
              
              **Federal**
              
              **Total**Accrued
                  expenses and deferred compensation
              
              $
              8,571
              
              $
              32,967
              
              $
              41,538NOL
                  Carryforward
              
              
              217,181
              
              
              960,315
              
              
              1,177,496Total
              
              
              225,752
              
              
              993,282
              
              
              1,219,034Less
                  valuation allowance
              
              
              (225,752
              )
              
              (993,282
              )
              
              (1,219,034
              )Net
                  Deferred Tax Asset
              
              $
              -
              
              $
              -
              
              $
              -





The
      Company, based upon its history of losses during its development stage and
      management's assessment of when operations are anticipated to generate taxable
      income, has concluded that it is more likely than not that none of the net
      deferred income tax assets will be realized through future taxable earnings
      and
      has established a valuation allowance for them.




The
      Company has available federal net operating loss carry forwards of $7,554,914
      which expire at various dates through the year 2025.  The Company has
      available state net operating loss carry forwards of $4,395,917, which expire
      at
      various dates through the year 2015.




The
      difference between the statutory tax rate and Company's effective tax rate
      is
      summarized as follows:





Years
                ended September 30,2005
            
            2004Statutory
                federal income tax rate
            
            
            (34.00
            )%
            
            (34.00
            )%State
                income taxes, net of Federal benefit
            
            
            (8.84
            )%
            
            (8.84
            )%Change
                in valuation allowance
            
            
            42.84
            %
            
            42.84
            %




Tax
            
            
            0.00
            %
            
            0.00
            %





The
      valuation allowance increased by $1,321,433 and $740,850 during the years ended
      September 30, 2005 and 2004, respectively.  The deferred income tax benefit
      of the loss carryforward is the only significant deferred income tax asset
      or
      liability of the Company and has been offset by a valuation allowance since
      management does not believe the recoverability of this deferred tax asset during
      the next fiscal year is more likely than not.  Accordingly, a deferred
      income tax benefit for the year ended September 30. 2005 has not been recognized
      in these financial statements.




**7.** **Transactions
      with Shareholders and Directors**




A
      major
      shareholder provided legal services to the Company.  The charges for such
      legal services amounted to approximately $71,000 and $152,000 for the years
      ended September 30, 2005 and 2004, respectively. Approximately $120,000 was
      due
      this shareholder at September 30, 2005 of which $80,000 will be paid in
      shares.




Two
      directors provided marketing and business consulting services to the Company.
       The charges for such marketing and business consulting services amounted
      to $10,500 and $57,200 for the year ended September 30, 2005 and 2004
      respectively.  Amounts due these directors amounted to $7,300 and $49,200
      at September 30, 2005 and 2004, respectively and are included in accounts
      payable and accrued expenses.









**8.** **Commitments**




On
      February 28, 2004, the Company entered into an operating lease for its office
      space in San Francisco expiring in February 28, 2006 which was amended in July
      2004 and February 2005 to increase the leased space to approximately 1,400
      square feet and extend the term to August 31, 2008.  Increases in rent are
      tied to the inflation rate therefore there is no need for deferred rent. The
      lease requires minimum lease payments as follows:





Years
                ending September 30,2006
            
            $
            45,4552007
            
            
            46,2252008
            
            
            43,323Future
                minimum lease payments
            
            $
            135,003








**9.** **Notes
      Payable - Related Parties**




Notes
      payable to related parties are due to five principal shareholders or to entities
      controlled by the principal shareholders. **** The
      notes
      payable to related parties consist of the following at September 30:





20058%
                per annum promissory notes due and payable on March 31, 2006.  The
                notes are secured by substantially all of the assets of the
                Company.
            
            
            
            
            $
            415,50010%
                per annum convertible promissory note due and payable on March 31,
                2006.  This note is secured by substantially all of the assets of the
                Company.
            
            
            
            
            
            450,0008%
                per annum promissory notes due and payable in November 15, 2006.
 The
                notes are secured by substantially all of the assets of the
                Company.
            
            
            
            
            
            50,0008%
                per annum promissory note due and payable on March 31, 2006 to Chris
                Dieterich
            
            
            
            
            
            5,00012%
                per annum convertible promissory notes comprising a line of credit.
                Notes
                are due and payable on various dates from December 7, 2006 through
                September 28, 2007. Principal and interest may be converted to common
                shares at $.10 per share.
            
            
            
            
            
            885,000Note
                due Lichter Weil
            
            
            
            
            
            -1,805,500Less
                current portion
            
            
            
            
            
            (870,500
            )$
            935,000





**Maturities
                of Notes Payable - Related Parties are as
                follows:****Year
                Ending September 30**
            
            **Amount**2006
            
            $
            870,5002007
            
            
            935,000**$**
            **1,805,500**














$175,500
      of 8% promissory notes were assumed with the PocketPass acquisition. On July
      16,
      2004, the Company concluded a placement with existing accredited investors
      of
      $150,000 of 8% convertible debentures. The conversion feature, which has since
      expired, was into common stock of the Company, at the election of the holders,
      at anytime in the ensuing 6-month period, utilizing a conversion ratio of $0.30
      per share.  These debentures also entitled the investors to warrants to
      purchase an additional 500,000 shares of the Company's common stock at an
      exercise price of $0.30 per share, for a total of $150,000.  The warrants
      have an exercise period of three years. During September 2004 the company sold
      convertible debentures totaling $75,000 at 8% interest originally due March
      21,
      2005.  This debt was convertible to common shares at $.30 per share for a
      period of 180 days, which conversion feature has expired.  Warrants
      totaling 250,000 exercisable at $.30 per share for 3 years were also issued
      with
      this debt





$450,000
      of 10% promissory notes were assumed with the PocketPass acquisition. On April
      30, 2004, the Company renegotiated the terms and conditions of its loan from
      Transfund Ventures such that the then-current indebtedness, through April 30,
      2004, of approximately $450,000 would be due and payable, in full, on February
      28, 2005.  The principal and any unpaid interest could be converted, at the
      holder's option, into common stock of the Company on a basis of $0.75 per share.
       Further, Transfund received 1,000,000 warrants, having a two-choice
      exercise provision, with an exercise term of three (3) years.  If the
      exercise is "cashless", then the exercise price will be $0.60 per share.
 If actual cash is paid upon exercise, then the exercise price will be
      $0.375 per share.  All other terms and conditions of the Transfund note
      will remain as originally executed.  The value of the warrants was
      calculated to be $328,012 using the Black-Scholes method and is being amortized
      over the life of the warrants.  The results for the year ended September
      30, 2004 include $164,005 interest expense as amortization expense on the value
      of the warrants of this transaction and also includes $121,988 expense which
      is
      the value of the beneficial conversion feature of this debt.





During
      October 2004 the company sold convertible debentures totaling $15,000 at 8%
      interest due March 31, 2006. This debt was convertible to common shares at
      $.30
      per share for a period of 180 days, the conversion period having now expired.
       Warrants totaling 16,666 exercisable at $.30 per share for 3 years were
      also issued with this debt.





During
      November 2004 the company sold convertible debentures totaling $50,000 at 8%
      interest due November 15, 2006.  This debt was convertible to common shares
      at $.30 per share for a period of 180 days, the conversion period having now
      expired.  Warrants totaling 166,666 exercisable at $.30 per share for 3
      years were also issued with this debt.





The
      $5,000 8% note payable to Chris Dieterich and the $4,500 note payable to Lichter
      Weil arose from the acquisition transaction with PocketPass.





On
      January 11, 2005 the Company concluded a loan agreement and credit facility
      with
      an existing accredited investor of $400,000 for convertible debentures payable
      two years after draw-down, bearing 12% interest.  The debentures and any
      accrued interest may be converted into common stock of the Company at the
      election of the holder at anytime utilizing a conversion ration of $.10 per
      share.  These debentures also entitle the investor to 562,500 shares of
      restricted common stock as consideration for establishing the credit facility.
       As of September 30, 2005 the credit facility has been increased to
      $790,000 which has been entirely drawn down.








On
      March
      2, 2005 the Company concluded a loan agreement and credit facility with an
      existing accredited investor of $45,000 for convertible debentures payable
      two
      years after draw-down, bearing 12% interest.  This credit line was
      subsequently increased to $95,000 which was entirely drawn down by September
      30,
      2005. The debentures and any accrued interest may be converted into common
      stock
      of the Company at the election of the holder at anytime utilizing a conversion
      ration of $.10 per share.  These debentures also entitle the investor to
      133,593 shares of restricted common stock as consideration for establishing
      the
      credit facility.





**10.** **Convertible
      Promissory Notes**





The
      long
      term notes payable consist of the following at September 30:


200510%
                secured convertible promissory notes due and payable on September
                30,
                2007. The notes are secured by substantially all of the assets of
                the
                Company. The notes may be converted at the lesser of $.15 or 75%
                of theaverage
                of the volume weighted average prices of the Common Stock for the
                three
                trading days preceding the date of conversion
            
            
            
            
            $
            750,000Less:
                Unamortized discount
            
            
            
            
            
            (750,000
            )$
            -








**Maturities
                of Convertible Promissory Notes are as follows:****Year
                Ending September 30**
            
            **Amount**2006
            
            $
            -2007
            
            
            750,000**$**
            **750,000**





***Debt
      Issued with Stock Purchase Warrants─Fair Value of Warrants Recorded as a
      Liability***





On
      September 29, 2005, the Company issued 10% convertible promissory notes in
      the
      aggregate principal amount of $750,000 (the Notes) and detachable warrants
      to
      purchase the Company's common stock (the Warrants) to two accredited investors.
      The Notes bear interest at a rate of 10%, mature on September 30, 2007, and
      are
      convertible into shares of the Company's common stock at a conversion price
      of
      the lesser of (i) $0.15 (“Maximum Conversion Price”), or (ii) 75% of the average
      of the volume weighted average prices of the Common Stock as reported by
      Bloomberg L.P. for the Principal Market for the three trading days preceding
      a
      Conversion Date.. The beneficial conversion feature (an embedded derivative)
      included in these notes resulted in a charge of $250,000. The associated A
      Warrants are exercisable for 18,968,326 shares of common stock at an exercise
      price of $0.179 per share; the B Warrants are exercisable for 16,968,326 shares
      of common stock at an exercise price of $0.179 per share. The A Warrants, which
      expire five years after issuance, were assigned a value of $1,362,941, estimated
      using the Black-Scholes valuation model. The B Warrants, which expire one year
      after issuance, were assigned a value of $1,102,941, estimated using the
      Black-Scholes valuation model. The following assumptions were used to determine
      the fair value of the A Warrants using the Black-Scholes valuation model: a
      term
      of five years, risk-free rate of 4.67%, volatility of 445.5%, and dividend
      yield
      of zero. The following assumptions were used to determine the fair value of
      the
      B Warrants using the Black-Scholes valuation model: a term of one year,
      risk-free rate of 4.67%, volatility of 445.5% (which covers the period from
      December 31, 2002 to September 30, 2005), and dividend yield of zero. In
      accordance with EITF No. 00-19, EITF No. 00-27, *Application
      of Issue No. 98-5 to Certain Convertible Instruments* ,
      the
      values assigned to both the Notes and the Warrants were allocated based on
      their
      l fair values. The amount allocated as a discount on the Notes for the the
      value
      of the Warrants will be amortized to interest expense, using the effective
      interest method, over the term of the Notes.


The
      holders of the Notes and Warrants have registration rights that require the
      Company to file a registration statement with the Securities and Exchange
      Commission to register the resale of the common stock issuable upon conversion
      of the Notes or the exercise of the Warrants. Under EITF No. 00-19, *Accounting
      for Derivative Financial Instruments Indexed to, and Potentially Settled in,
      a
      Company's Own Stock* ,
      the
      ability to register stock is deemed to be outside of the Company's control.
      Accordingly, the initial aggregate fair value of the Warrants of $2,465,882
      was
      recorded as an accrued warrant liability in the consolidated balance sheet,
      and
      is marked to market at the end of each reporting period. At September 30, 2005,
      the recording of the derivative liabilities associated with this debt financing
      resulted in a non-cash loss of $1,965,882 which has been reflected in the
      consolidated statement of operations for the year ended September 30, 2005.
      All
      investors in these transactions were accredited with access to sufficient
      corporate information.








**11.** **Contingencies**





*Claims
      and Legal Proceedings*





The
      Company is subject to various claims and legal proceedings covering a wide
      range
      of matters that arise in the ordinary course of its business activities.
      Management believes that any liability that may ultimately result from the
      resolution of these matters will not have a material adverse effect on the
      financial condition or results of operations of the Company.





Claims
      have been made by Cappello Capital Corp and Pacific Wave Partners that they
      are
      due a fee related to the funding that closed on September 29, 2005 described
      in
      note 10 above. Management maintains that the investors who provided the funding
      were on an exclusion list with Cappello Capital Corp and Pacific Wave Partners.
      Additionally, neither Cappello nor Pacific Wave introduced the Company to these
      investors nor did they participate in the transaction. Accordingly,
      the Company
      believes that the claims are without merit and intends to vigorously defend
      its
      position. The ultimate outcome of this claim cannot presently be determined.
      However, in management’s opinion, the likelihood of a material adverse outcome
      is remote. Accordingly, adjustments, if any, that might result from the
      resolution of this matter have not been reflected in the financial
      statements.





Consulting
      Agreements





The
      Company has various consulting agreements that provide for issuance of the
      Company’s common stock and/or stock options/stock purchase warrants in exchange
      for services rendered by the consultants. These agreements relate primarily
      to
      raising of capital, accounting services, legal services, and professional
      services rendered in connection with the Company’s strategic development
      efforts. The Company has no amounts due under these agreements as of September
      30, 2005.








**12.** **Subsequent
      Events**




On
      November 10, 2005, the Company filed a Registration Statement, Form SB-2,
      pertaining to the sale of 65,631,214 shares of its common stock, of which none
      are issued and outstanding, and the shares are issuable upon conversion of
      promissory notes issued on September 29, 2005 (see Note 9), warrants and other
      conversion privileges to acquire common stock. The shares are issuable upon
      conversion or exercise of securities, which were issued, by the Company in
      private placement transactions. The Securities and Exchange Commission reviewed
      the Registration Statement filing and issued comments on December 7, 2005.
      Management is currently preparing a response to the comments.








**ITEM
      8.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS**







None











**ITEM
      8A.    CONTROLS AND PROCEDURES**





We
      maintain disclosure controls and procedures designed to ensure that information
      required to be disclosed in our filings under the Securities Exchange Act of
      1934 is recorded, processed, summarized and reported within the time periods
      specified in the Securities and Exchange Commission's rules and forms. Our
      chief
      executive officer and chief financial officer have evaluated our disclosure
      controls and procedures at the end of the year included in the filing of this
      annual report of Form 10-KSB and have determined that such disclosure controls
      and procedures are effective.




There
      have been no significant changes in our internal controls or in other factors
      that could significantly affect internal controls subsequent to the date of
      their evaluation including any corrective actions with regard to significant
      deficiencies and material weaknesses.






**INFORMATION
      RELATING TO THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS**




The
      purpose of the Audit Committee is to assist the Board of Director in the
      oversight of the integrity of the consolidated financial statements of the
      Company, the Company's compliance with legal and regulatory matters, the
      independent auditor's qualifications and independence, and the performance
      of
      the Company's independent auditors.





The
      primary responsibilities of the Audit Committee are set forth in the charter,
      and include various matters with respect to the oversight of the Company's
      accounting and financial reporting process and audits of the consolidated
      financial statements of the Company on behalf of the Board of Directors. 
The Audit Committee also selects the independent certified public accountants
      to
      conduct the annual audit of the consolidated financial statements of the
      Company; reviews the proposed scope of the audit; reviews accounting and
      financial controls of the Company with the independent public accountants and
      financial accounting staff; and reviews and approves transactions between the
      Company and its directors, officers, and their affiliates.




Due
      to
      the limited number of Board Members, the entire board of directors is acting
      as
      a small business issuer's audit committee as specified in section 3(a)(58)(B)
      of
      the Exchange Act (15 U.S.C. 78c(a)(58)(B).







**PART
      III**





**ITEM
      9.     DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS,**




**** **COMPLIANCE
      WITH SECTION  16(a) OF THE EXCHANGE ACT**




The
      table
      below lists, as of September 30, 2005 the names of the Directors and Executive
      Officers of the Company. The Directors have served in their respective
      capacities since their election and/or appointment and will serve until the
      next
      Annual Shareholders' Meeting or until a successor is duly elected, unless the
      office is vacated in accordance with the Articles/By-Laws of the Company. The
      Executive Officers serve at the pleasure of the Board of Directors. All
      Directors and Executive Officers are residents and citizens of the United
      States.







**Directors
      and Executive Officers**





**NAME**
            **POSITION**
            **HELD
                POSITION SINCE**Robert
                Gold
            Director
            September
                29, 2005Harvey
                Bornstein
            Director
            September
                12, 2003
              (Resigned
                November 22, 2005)Christopher
                Haigh
            President/CEO/Director
            September
                12, 2003M.
                Yaqub Mirza
            Director
            September
                12, 2003Inder
                Singh
              Charles
                L. Nuzum
            Director
              Exec
                VP/CFO
            September
                12, 2003
              March
                1, 2005





Mr.
      Gold
      is a small business entrepreneur, President of Esquire Executive Suites, from
      1991 through the present, and the managing member of Radio Call Acquisition,
      LLC, a paging and answering service. Mr. Gold holds a BA from the University
      of
      California-Berkeley and an MBA from the University of Southern California.
      He
      worked with Price Waterhouse as an auditor for several years before starting
      his
      independent business enterprises.




Christopher
      Haigh, 54, is currently the President of the Tyburn Group, which
      provides marketing and management services to entertainment and communications
      companies, since 1986.  Mr. Haigh has been creative director and department
      head at Transcom Software and an executive at MSH Entertainment from 1996 to
      1999.  During 2000, he led marketing initiatives at ePIT systems and
      Chuckwalla.  He has founded two companies: East End Communications in 1981
      and eCurator.com in 1999.  He is a graduate of Oxford University and the
      Central School of Drama in London.




M.
      Yaqub
      Mirza, 57.  Dr. Mirza has served as a director of LynuxWorks, Inc. since
      1992.  Since June 1998, Dr. Mirza served as President and Chief Executive
      Officer of Sterling Management Group, a business development and management
      consulting services company.  Since March 1995, Dr. Mirza has served as
      President and Chief Executive Officer of MarJac Investments, an international
      investment firm, and served as it Executive Vice-President from April 1997
      to
      March 1995.  Dr. Mirza also serves as Chairman of the Board of Directors of
      Jugos Concentrados, a Chilean manufacturer of juice concentrates and as Trustee
      and Chairman of Amana Mutual Funds Trust.  Dr. Mirza holds a B.S. in
      Physics and Mathematics from the University of Punjab, Pakistan, a M.S. in
      Physics from the University of Karachi, Pakistan and a Ph.D. in Physics and
      M.A.
      in Teaching Science from the University of Texas at Dallas.




Inder
      Singh, 59. Mr. Singh is Chairman, CEO and President of LynuxWorks. 
Mr. Singh founded and served as Chief Executive Officer of Excelan, a local
      area network, or LAN, company from May 1982 to April 1985.  In April 1997,
      Mr. Singh co-founded Kalpana, a Lan switch company.  Mr. Singh currently
      serves as Chairman and President of the Embedded Linux Consortium.  Mr.
      Singh holds a B.S. in Electrical Engineering from the Indian Institute of
      Technology, Delhi, India, and an M.S. in Electrical Engineering and Computer
      Science from Polytechnic Institute of New York and a Ph.D. in computer science
      from Yale University.




Harvey
      Bornstein, 65, has been the owner of Bornstein & Associates from 1985 to the
      present and has served continuously as its Chief Executive Officer.  The
      Company provides management consulting and financial guidance to small,
      rapidly-growing high-technology companies.  Mr. Bornstein graduated from
      the University of Southern California in 1963 with a B.S. in Finance and Real
      Estate.




Charles
      Nuzum, 57, Executive Vice President and Chief Financial Officer, was previously
      Vice President Finance & Administration for Tiburon, Inc. the world leader
      in public safety and justice information systems. Previously, he served as
      CFO
      of Winebid.com, the world's leading e-commerce wine auction company. For more
      than two decades, Mr. Nuzum was Executive Vice President and CFO of Loomis
      Armored Inc., the well-known provider of ATM cash servicing, armored car and
      other security services. He also served in other senior executive positions
      in
      the U.S. and abroad for Loomis, as well as for SPL WorldGroup and OCS
      Technologies. Mr. Nuzum, a Certified Public Accountant, earned his BA at the
      University of Washington at Seattle. A U.S. Army Special Forces veteran in
      Vietnam, he earned the Bronze Star and the Army Commendation Medal.







**Involvement
      in Certain Legal Proceedings**




None.




**Family
      Relationships**




There
      are
      no family relationships between any of the officers and/or directors.




**Section
      16(a) Beneficial Ownership Reporting Compliance**




Section
      16(a) of the Securities Exchange Act of 1934 requires the Company's executive
      officers, directors and persons beneficially owning more than 10% of the
      Company's common stock to file reports of ownership and changes in ownership
      with the Securities and Exchange Commission. The Company has undertaken an
      extensive review of the Section 16(a) reports filed on behalf of each person
      subject to Section 16(a) prior to September 30, 2005, to determine whether
      all
      of their reportable transactions in the Company's common stock were timely
      reported and to ensure proper reporting of all of their beneficial holdings.
      The
      review revealed that most, if not all, transactions were timely reported and
      the
      Company will undertake to assist the subject persons to file the necessary
      forms
      in the future. The Company has also developed new procedures to ensure improved
      compliance with Section 16(a) on an on-going basis.




Based
      solely on copies of such forms furnished as provided above, to the Company's
      knowledge all reports required under Section 16(a) during the most recent fiscal
      year or prior years has filed a Form 3.




**Audit
      Committee Financial Expert**




The
      Company's Audit Committee consists of Robert Gold, Harvey Bornstein and Charles
      L. Nuzum.  As of September 30, 2005, our Board of Directors has designated
      one audit committee financial expert as that term is defined in Item 401(e)(2)
      of Regulation S-B.  Charles L. Nuzum serves as the audit committee
      financial expert for the Company. Mr. Nuzum is not an independent
      director.




**Code
      of Ethics**




We
      have
      adopted a "Code of Ethics for Directors, Officers and Employees", a code of
      ethics that applies to all employees, including our executive officers. A copy
      of our Code of Ethics for Directors, Officers and Employees was filed with
      the
      Securities and Exchange Commission as Exhibit 14.1 to the annual
      report for the year ended September 30, 2004. In the event that we make any
      amendments to, or grant any waivers of, a provision of the Code of Ethics for
      Directors, Officers and Employees that applies to the principal executive
      officer, principal financial officer, or principal accounting officer that
      requires disclosure under applicable SEC rules, we intend to disclose such
      amendment or waiver and the reasons therefore on a Form 8-K or on our next
      periodic report.







**ITEM
      10.     EXECUTIVE COMPENSATION**




We
      have
      an agreement with the Tyburn Group to provide Christopher Haigh, an employee
      of
      Tyburn Group, as the Chief Executive Officer of the Company.  The contract
      provides for current compensation of $150,000 and deferred compensation of
      up to $75,000 to Mr. Haigh.  Mr. Haigh also has options for 1,000,000
      shares of the Company at an exercise price of $.05 per share and a performance
      based bonus, with a grant of 3,000,000 options by our Board of
      Directors.








We
      have a
      contract with Charles L. Nuzum as Executive Vice President and Chief Financial
      Officer of the Company. The contract provides for annual compensation of
      $120,000, a bonus to be paid in options for common shares exercisable at $.11
      per share based upon achievement of certain milestones, as well as options
      for
      750,000 shares of the Company at an exercise price of $.05 per
      share.








We
      have
      no material bonus or profit sharing plans pursuant to which cash or non-cash
      compensation is or may be paid to the Company's Directors or Executive Officers.
      The Company has no stock option or other long-term compensation program.




During
      fiscal 2005, no funds were set aside or accrued by the Company to provide
      pension, retirement or similar benefits for Directors or Executive Officers.




We
      have
      no plans or arrangements in respect of remuneration received or that may be
      received by Executive Officers of the Company in Fiscal 2005 to compensate
      such
      officers in the event of termination of employment (as a result of resignation,
      retirement, change of control) or a change of responsibilities following a
      change of control.




Our
      only
      written employment agreements are those with the Tyburn Group and Charles L.
      Nuzum mentioned above.




Other
      than that disclosed above, no compensation was paid during Fiscal 2005 to any
      of
      the officers or directors of the Company to the extent that they were
      compensated in excess of $60,000.





**Summary
                Compensation Table****Name
                and Principal Position**
            **Year**
            **Annual
                Compensation**
            **Long-Term
                Compensation**
            **All
                Other Compensation****Awards**
            **Payouts****Salary**
            **Bonus**
            **Other
                Annual Compensation**
            **Restricted
                Stock Award(s)**
            **Securities
                Underlying Options/SARs**
            **LTIP
                Payouts****(a)**
            **(b)**
            **($)
                (c)**
            **($)
                (d)**
            **($)
                (e)**
            **($)
                (f)**
            **(#)
                 (g)**
            **($)
                (h)**
            **($)
                 (i)****Christopher
                Haigh**
            2005
            225,000
            0
            0
            280,000
            0
            0
            0*President/CEO/Director*
            2004
            225,000
            0
            0
            0
            0
            0
            02003
            37,500
            0
            0
            0
            0
            0
            0**Charles
                Nuzum**
            2005
            70,000
            0
            0
            252,858
            0
            0
            0*Exec
                VP & CFO*
            2004
            0
            0
            0
            0
            0
            0
            02003
            0
            0
            0
            0
            0
            0
            0**M.
                Yaqub Mirza**
            2005
            0
            0
            0
            0
            0
            0
            0*Director*
            2004
            0
            0
            0
            0
            0
            0
            02003
            0
            0
            0
            0
            0
            0
            0**Inder
                Singh**
            2005
            0
            0
            0
            0
            0
            0
            0*Director*
            2004
            0
            0
            0
            0
            0
            0
            02003
            0
            0
            0
            0
            0
            0
            0**Harvey
                Bornstein**
            2005
            0
            0
            0
            0
            0
            0
            8,000*Director*
            2004
            0
            0
            0
            0
            0
            0
            33,6002003
            0
            0
            0
            0
            0
            0
            0**Robert
                Gold**
            2005
            0
            0
            0
            0
            0
            0
            0*Director*
            2004
            0
            0
            0
            0
            0
            0
            02003
            0
            0
            0
            0
            0
            0
            0







**ITEM
      11.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
      MANAGEMENT**




The
      Registrant is a publicly owned corporation, the shares of which are owned by
      United States residents. The Registrant is not controlled directly or indirectly
      by another corporation or any foreign government.


The
      tables below lists, as of September 30, 2005, all persons/companies the
      Registrant is aware of as being the beneficial owner of more than five percent
      (5%) of the common stock of the Registrant.





**Shareholdings
                of Directors, Executive Officers and 5%
                Holders**As
                of September 30, 2005**Name**
            **Position**
            **Shares**
            **Percentage**Douglas
                Denoff
            5%
                Holder
            4,000,000
            **11.5%**W.
                Lewis Perdue
            5%
                Holder
            1,891,667
            **5.5%**Harvey
                Bornstein
            Director
            30,574
            **0.1%**Robert
                Gold
            Director
            3,363,167
            **9.7%**Yaqub
                Mirza *
            Director
            2,416,526
            **7.0%**Inder
                Singh *
            Director
            6,943,002
            **20.0%**Christopher
                Haigh
            Director,
                CEO
            1,242,582
            **3.6%**Charles
                L. Nuzum
            CFO
            408,459
            **1.2%**Officers
                & Directors as a group
            
            14,404,310
            **41.6%**





*
      Includes shares beneficially owned by these shareholders, directly and
      indirectly





**ITEM
      12.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**




A
      major
      shareholder provided legal services to the Company.  The charges for such
      legal services amounted to approximately $71,000 and $152,000 for the years
      ended September 30, 2005 and 2004, respectively. Approximately $120,000 was
      due
      this shareholder at September 30, 2005 of which $80,000 will be paid in
      shares.




Two
      directors provided marketing and business consulting services to the Company.
       The charges for such marketing and business consulting services amounted
      to $10,500 and $57,200 for the year ended September 30, 2005 and 2004
      respectively.  Amounts due these directors amounted to $7,300 and $49,200
      at September 30, 2005 and 2004, respectively and are included in accounts
      payable and accrued expenses.




**ITEM
      13.    PRINCIPAL ACCOUNTING FEES AND
      SERVICES.**




Pohl,
      McNabola, Berg & Company, LLP  fees total $62,250 which is $42,500
      related to the annual financial statement audit, $2,500 related to review of
      the
      annual financial statements filed in the reports on Form 10-K and $17,250
      related to reviews of quarterly financial statements filed in the reports on
      Form 10-Q.  No tax, consulting or other services were
      provided.




**ITEM
      14.    EXHIBITS AND REPORTS ON FORM 8-K**




(a)
      The
      following documents are filed as part of this report:




I.
           1.     Index to Financial
      Statements




2.   
      Independent Auditors' Reports





3.    
      Consolidated Balance Sheets at September 30, 2005 and 2004









4.   Consolidated
      Statement of Loss and Accumulated Deficit for the years ended September 30,
      2005
      and 2004




5. Consolidated
      Statement of Cash Flows for the years ended September 30, 2005 and 2004 and
      the
      period from August 23, 1999 (inception) to September 30, 2005




6.  
      Statement of Statement of Changes in Stockholders' Equity for the years ended
      September 30, 2005 and 2004 and period from August 23, 1999 (inception) to
      September 30, 2005




7.   Notes
      to Financial Statements





II.    
      Financial statement schedules required to be filed by Item 8 and paragraph
      (d)
      of this Item 13:




All
      schedules are omitted because they are not applicable or the required
      information is shown in the financial statements or notes thereto.







III.
      The exhibits are listed in the index of exhibits




(c)
      The
      index of exhibits





14.1
            Code
                of Ethics31.1
            Rule
                13a-14a/15d-14(a) Certification of Chief Executive
                Officer31.2
            Rule
                13a-14a/15d-14(a) Certification of Chief Financial
                Officer32.1
            Section
                1350 Certification of Chief Executive Officer32.2
            Section
                1350 Certification of Chief Financial Officer99.1
            ElectraCard
                Services contract99.2
            Tyburn
                contract99.3
            Note
                Payble to Marjac99.4
            Bison
                International contract99.5
            MetaBank
                contract99.6
            MetaBank
                contract - first amendment99.7
            Nuzum
                contract99.8
            Note
                Payable to Singh January 15, 200199.9
            Note
                Payable to Singh July 15, 200199.10
            Note
                Payable to Transfund99.11
            Note
                Payable to York




















**SIGNATURES**





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





SVC
      Financial Services, Inc.,


a
      Colorado corporation




Date:
       January 12, 2006





By: /s/
      Christopher Haigh


Christopher
      Haigh, President and Director




By: /s/
      Charles L. Nuzum


Charles
      L. Nuzum, Executive Vice President and Chief Financial Officer




By: /s/ 
      Robert Gold


Robert
      Gold, Director




By: /s/
      M.
      Yaqub Mirza


M.
      Yaqub
      Mirza, Director




By: /s/
      Inder Singh


Inder
      Singh, Director