Document:

Exhibit 10.26

 

SEERGATE LTD.

2014 ANNUAL REPORT

 

    

     

    

 

SEERGATE LTD.

2014 ANNUAL REPORT

 

TABLE OF CONTENTS

 

	 	Page
	 	 
	INDEPENDENT AUDITOR'S REPORT	2
	CONSOLIDATED FINANCIAL STATEMENTS - IN U.S. DOLLARS ($):	 
	Balance sheets	3
	Statements of operations and comprehensive loss	4
	Statements of changes in capital deficiency	5
	Statements of cash flows	6
	Notes to consolidated financial statements	7-18

 

 

 

 

  

    

     

    

 

 

INDEPENDENT AUDITOR'S REPORT

To the board of directors of

SEERGATE LTD.

 

We have audited the accompanying consolidated
financial statements of Seergate Ltd. (hereafter- the Company) and its subsidiary, which comprise the consolidated balance sheets
as of December 31, 2014 and 2013, and the related consolidated statements of operations and comprehensive loss, changes in capital
deficiency and cash flows for the years then ended.

 

Management's Responsibility for the
Consolidated Financial Statements

 

Management is responsible for the preparation
and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the
United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

 

Auditor's Responsibility

 

Our responsibility is to express an opinion
on the consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.

 

Opinion

 

In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of Seergate Ltd. and its subsidiary
at December 31, 2014 and 2013, and the results of their operations and their cash flows for the years then ended in accordance
with accounting principles generally accepted in the United States of America.

 

Emphasis of Matters

 

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 consolidated
financial statements, the Company has had recurring losses, negative cash flows from operating activities and has significant future
commitments that raise substantial doubt about its ability to continue as a going concern.

 

Management’s plans in regard to these
matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome
of this uncertainty.

 

Subsequent to the balance sheet date, the
Company was acquired by MyECheck, Inc. (see Note 1e).

 

As discussed in Note 2l to the consolidated
financial statements, the Company has restated its 2013 financial statements to correct errors. Our opinion is not modified with
respect to this matter.

 

	Tel-Aviv, Israel	/S/Kesselman & Kesselman
	August 12, 2015	Certified Public Accountants (lsr.)
	 	A member firm of PricewaterhouseCoopers International Limited

 

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

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

 

    

     

    

SEERGATE LTD.

CONSOLIDATED BALANCE SHEETS

 

	 	 	December 31
	 
	 	 	2014
	 	 	2013 
	 
	 	 	U.S. dollars
	 
	 	 	 	 	 	Restated
	 
	Assets	 	 	 	 	 	 	 	 
	CURRENT ASSETS:	 	 	 	 	 	 	 	 
	Cash and cash equivalents	 	 	-	 	 	 	90,720	 
	Current assets (note 3.a)	 	 	4,525	 	 	 	7,248	 
	TOTAL CURRENT ASSETS	 	 	4,525	 	 	 	97,968	 
	PROPERTY AND EQUIPMENT,
    net (note 4)	 	 	4,781	 	 	 	22,195	 
	TOTAL ASSETS	 	 	9,306	 	 	 	120,163	 
	 	 	 	 	 	 	 	 	 
	Liabilities and capital deficiency	 	 	 	 	 	 	 	 
	CURRENT LIABILITIES:	 	 	 	 	 	 	 	 
	Bank Overdraft	 	 	21,717	 	 	 	-	 
	Accounts payable and accruals (note 3.b)	 	 	141,611	 	 	 	84,424	 
	Related party loan	 	 	1,268	 	 	 	3,482	 
	TOTAL CURRENT LIABILITIES	 	 	164,596	 	 	 	87,906	 
	CONVERTIBLE LOANS (note 6)	 	 	687,445	 	 	 	311,850	 
	COMMITMENTS (note 8)	 	 	 	 	 	 	 	 
	TOTAL LIABILITIES	 	 	852,041	 	 	 	399,756	 
	CAPITAL DEFICIENCY (note
    9):	 	 	 	 	 	 	 	 
	Ordinary shares, no par value: 446,100,000 shares authorized at December 31, 2014 and 2013; 1,050,000 shares issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B1 preferred shares, no par value: 650,000  shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B2 preferred shares, no par value: 450,000 shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B3 preferred shares, no par value: 940,249 shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B4 preferred shares, no par value: 550,000 shares authorized at December 31, 2014 and 2013; 516,966 shares  issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B5 preferred shares, no par value: 1,350,000 shares authorized at December 31, 2014 and 2013; 318,078 shares issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Series B6 preferred shares, no par value: 407,082 shares authorized, issued and outstanding at December 31, 2014 and 2013	 	 	 	 	 	 	 	 
	Series B7 preferred shares, no par value: 173,906 shares authorized, issued and outstanding at December 31, 2014 and 2013;	 	 	 	 	 	 	 	 
	Additional paid in capital	 	 	4,820,259	 	 	 	4,819,906	 
	Accumulated deficit	 	 	(5,662,994	)	 	 	(5,099,499	)
	TOTAL CAPITAL DEFICIENCY	 	 	(842,735	)	 	 	(279,593	)
	TOTAL LIABILITIES AND CAPITAL DEFICIENCY	 	 	9,306	 	 	 	120,163	 

  

	/s/ Edward R. Starrs	 	/s/ Bruce M. Smith
	Chief Executive	 	Chief Financial
	Officer and Director	 	Officer 

 

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

 

    	 	3	 

     

    

SEERGATE LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS

 

	 	 	Year ended December 31
	 
	 	 	2014
	 	 	2013
	 
	 	 	U.S. dollars
	 
	 	 	 	 	 	Restated
	 
	OPERATING COSTS AND EXPENSES:	 	 	 	 	 	 	 	 
	Research and development, net 	 	 	199,765	 	 	 	218,377	 
	Marketing, general and administrative 	 	 	305,892	 	 	 	286,344	 
	Loss from disposal of assets	 	 	13,289	 	 	 	-	 
	OPERATING LOSS	 	 	518,946	 	 	 	504,721	 
	FINANCIAL EXPENSES	 	 	44,549	 	 	 	48,165	 
	LOSS AND COMPREHENSIVE LOSS FOR THE YEAR	 	 	563,495	 	 	 	552,886	 

 

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

    	 	4	 

     

    

SEERGATE LTD.

CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
DEFICIENCY

 

	 	 	
        Share
        capital
	 	 	 	 	 	 	 	 	 	 
	 	 	
        Ordinary

        shares
	 	 	
        Preferred

        shares
	 	 	Additional

 paid-in	 	 	Accumulated	 	 	Total

capital	 
	 	 	Number of shares	 	 	capital *	 	 	
        deficit
	 	 	deficiency	 
	 	 	 	 	 	 	 	 	U.S. dollars	 
	BALANCE AT JANUARY 1, 2013**	 	 	1,050,000	 	 	 	2,875,293	 	 	 	3,653,528	 	 	 	(4,546,613	)	 	 	(893,085	)
	CHANGES DURING 2013**:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Conversion of convertible loan into Series B6 Preferred shares	 	 	 	 	 	 	407,082	 	 	 	483,611	 	 	 	 	 	 	 	483,611	 
	Conversion of convertible loan into Series B7 Preferred shares	 	 	 	 	 	 	173,906	 	 	 	376,906	 	 	 	 	 	 	 	376,906	 
	Investment by shareholders	 	 	 	 	 	 	 	 	 	 	306,775	 	 	 	 	 	 	 	306,775	 
	Share-based compensation	 	 	 	 	 	 	 	 	 	 	(914	)	 	 	 	 	 	 	(914	)
	Comprehensive Loss	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(552,886	)	 	 	(552,886	)
	BALANCE AT DECEMBER 31, 2013**	 	 	1,050,000	 	 	 	3,456,281	 	 	 	4,819,906	 	 	 	(5,099,499	)	 	 	(279,593	)
	CHANGES DURING 2014:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Share-based compensation	 	 	 	 	 	 	 	 	 	 	353	 	 	 	 	 	 	 	353	 
	Comprehensive Loss	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(563,495	)	 	 	(563,495	)
	BALANCE AT DECEMBER 31, 2014	 	 	1,050,000	 	 	 	3,456,281	 	 	 	4,820,259	 	 	 	(5,662,994	)	 	 	(842,735	)

 

* Net of
share issuance expenses.

** Restated

 

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

 

    	 	5	 

     

    

SEERGATE LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

	 	 	Year ended December 31 
	 
	 	 	2014
	 	 	2013 
	 
	 	 	U.S dollars
	 
	CASH FLOWS FROM OPERATING ACTIVITIES:	 	 	 	 	 	 	 	 
	Loss for the year	 	 	(563,495	)	 	 	(552,886	)
	Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	 
	Depreciation	 	 	7,148	 	 	 	8,219	 
	Financial expenses	 	 	43,889	 	 	 	39,984	 
	Share-based compensation	 	 	353	 	 	 	(914	)
	Loss from disposal of assets	 	 	13,289	 	 	 	-	 
	Changes in asset and liability items:	 	 	 	 	 	 	 	 
	Decrease (increase) in current assets	 	 	2,723	 	 	 	(2,003	)
	Increase (decrease) in accounts payable and accruals	 	 	57,187	 	 	 	(529	)
	Net cash used in operating activities	 	 	(438,906	)	 	 	(508,129	)
	CASH FLOWS FROM INVESTING ACTIVITIES -	 	 	 	 	 	 	 	 
	purchase of fixed assets	 	 	(3,023	)	 	 	(7,418	)
	Net cash used in investing activities	 	 	(3,023	)	 	 	(7,418	)
	CASH FLOWS FROM FINANCING ACTIVITIES:	 	 	 	 	 	 	 	 
	Bank overdraft	 	 	21,717	 	 	 	-	 
	Repayment of related party  loan	 	 	(2,214	)	 	 	(7,064	)
	Investment by shareholders	 	 	-	 	 	 	306,775	 
	Convertible loan received	 	 	331,706	 	 	 	300,000	 
	Net cash provided by financing activities	 	 	351,209	 	 	 	599,711	 
	INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	 	 	(90,720	)	 	 	84,164	 
	CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	 	 	90,720	 	 	 	6,556	 
	CASH AND CASH EQUIVALENTS AT END OF YEAR	 	 	-	 	 	 	90,720	 
	 	 	 	 	 	 	 	 	 
	SUPPLEMENTARY INFORMATION ON ACTIVITIES NOT INVOLVING CASH FLOWS –	 	 	 	 	 	 	 	 
	conversion of convertible loan into Preferred shares	 	 	-	 	 	 	860,517	 

 

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

 

    	 	6	 

     

    

SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 - GENERAL:

 

		a.	Seergate Ltd. (the “Company”) was incorporated as an Israeli corporation on May 30, 2007, and commenced operations
on that date. Seergate Inc. (the “Subsidiary”) was incorporated as a Delaware corporation in the United States on July
6, 2009, as a wholly owned subsidiary of the Company.

 

		b.	The Company develops a transactional e-mailing system that enables real-time authorization and settlement of electronic transactions
through a global secure proprietary network.

 

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

 

		d.	The continuance of the Company’s operations as a going concern is subject to continued finance
from its shareholders’ or external investors. The Company has incurred losses since inception and has limited cash resources.
These factors raise substantial doubt about its ability to continue as a going concern. Management intends to continue to develop
the existing technology in order to derive revenues and achieve profitability. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

 

		e.	In May 2015 all shares of the Company were sold to MyECheck, Inc. for a total stock value of $3
million.

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

 

The significant
accounting policies applied are as follows:

 

		a.	Principles of consolidation

 

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

 

		b.	Functional currency

 

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

 

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

 

    	 	7	 

     

    

 SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
(continued):

 

		c.	Use of estimates

 

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

 

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

 

		d.	Research and development

 

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

 

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

 

		e.	Property and equipment

 

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

 

Annual rates of depreciation
are as follows:

 

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

 

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

 

		f.	Fair value of financial instruments

 

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

 

		g.	Income taxes

 

Deferred income taxes are determined
by the asset and liability method based on the estimated future tax effects of differences between the financial accounting and
the tax bases of assets and liabilities under the applicable tax law. Deferred tax balances are computed using the tax rates expected
to be in effect at the time when these differences reverse. Valuation allowances in respect of the deferred tax assets are provided
when it is more likely than not that all or a portion of the deferred income tax assets will not be realized.

 

The Company applies ASC 740-10
which prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain
tax positions taken or expected to be taken in income tax returns.

    	 	8	 

     

    

 

SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (continued)

 

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
(continued):

 

		h.	Comprehensive income

 

The Company applies ASC 220 which establishes standards
for reporting and presentation of comprehensive income. There was no difference between the Company’s net loss and its total
comprehensive loss for the period ending December 31, 2014, and the Company does not have accumulated other comprehensive income
or loss as of December 31, 2014.

 

		i.	Stock-based compensation

 

The Company applies ASC 718 which requires awards
classified as equity awards be accounted for using the grant-date fair value method. The fair value of share-based payment transactions
is recognized as expense over the requisite service period. The Company elected to recognize compensation cost for an award with
only service conditions that has a graded vesting schedule using the accelerated multiple option approach.

 

		j.	Fair value measurement

 

Fair value is based on the price that would be received
from the sale of an asset or that would be paid to transfer a liability in an orderly transaction between market participants at
the measurement date. In order to increase consistency and comparability in fair value measurements, the guidance establishes a
fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which
are described as follows:

 

Level 1:   Quoted prices (unadjusted)
in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest
priority to Level 1 inputs.

 

Level 2:   Observable prices that
are based on inputs not quoted on active markets, but corroborated by market data.

 

Level 3:   Unobservable inputs are
used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

 

In determining fair value, the Company utilizes valuation
techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers
counterparty credit risk in its assessment of fair value.

 

		k.	Newly issued and recently adopted accounting pronouncements

 

In August 2014, FASB issued ASU 2014-15—Presentation
of Financial Statements—Going Concern (ASC Subtopic 205-40): “Disclosure of Uncertainties about an Entity’s Ability
to Continue as a Going Concern”. The update requires management to assess a company’s ability to continue as a going
concern and to provide related footnote disclosures in certain circumstances. All entities are required to apply the new requirements
in annual periods ending after December 15, 2016, and interim periods thereafter. Early application is permitted. The Company is
required to adopt these provisions for the annual period ending December 31, 2016. The Company is currently evaluating the impact
of FASB ASU 2014-15 but does not expect the adoption thereof to have a material effect on its financial statements.

 

    	 	9	 

     

    

SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (continued)

 

NOTE 2 - SIGNIFICANT
ACCOUNTING POLICIES (continued):

 

		l.	Restatement of financial statements

 

The Company
has restated its 2013 financial statements to correct the following errors:

 

		1)	The Company has not accounted previously for the automatic conversion feature

embedded
in its convertible loans as an embedded derivative that requires bifurcation and a fair value measurement in each balance sheet
date.

 

		2)	A correction to the Black and Scholes assumptions that impact the resultant share-based compensation
expenses.

 

		3)	Reclassification of certain debt instruments previously presented as long-term liabilities into shareholders'
equity based on the nature of the instrument being an equity instrument although its legal form is a debt instrument.

 

Following is the effect of the
restatement on the Company’s financial statements as of December 31, 2013 and for the year then ended:

 

Consolidated
statements of operations for the year ended December 31, 2013:

 

	 	 	As previously 
 reported
	 	 	Adjustment
	 	 	Restated
	 
	 	 	U.S dollars
	 
	Research and development, net	 	 	244,869	 	 	 	(26,492	)	 	 	218,377	 
	Marketing, general and administrative	 	 	296,755	 	 	 	(10,411	)	 	 	286,344	 
	Operating loss	 	 	541,624	 	 	 	(36,903	)	 	 	504,721	 
	Financial expenses	 	 	161,465	 	 	 	(113,300	)	 	 	48,165	 
	Loss for the year	 	 	703,089	 	 	 	(150,203	)	 	 	552,886	 

 

Consolidated balance sheets and
capital deficiency as of December 31, 2013:

 

	 	 	As previously 
 reported
	 	 	Adjustment
	 	 	Restated
	 
	 	 	U.S dollars
	 
	Convertible loans	 	 	301,463	 	 	 	10,387	 	 	 	311,850	 
	Long term loan	 	 	317,565	 	 	 	(317,565	)	 	 	-	 
	Accumulated deficit	 	 	(5,159,589	)	 	 	60,090	 	 	 	(5,099,499	)
	Additional paid  in capital	 	 	4,572,818	 	 	 	247,088	 	 	 	4,819,906	 

 

	 	 	As previously 
 reported 
	 	 	Adjustment
	 	 	Restated
	 
	 	 	U.S dollars
	 
	Additional paid in capital at January 1, 2013	 	 	3,447,049	 	 	 	206,479	 	 	 	3,653,528	 
	Accumulated deficit at January 1, 2013	 	 	(4,456,500	)	 	 	(90,113	)	 	 	(4,546,613	)
	Capital deficiency at January 1, 2013	 	 	(1,009,451	)	 	 	116,366	 	 	 	(893,085	)
	Additional paid in capital at December 31, 2013	 	 	4,572,818	 	 	 	247,088	 	 	 	4,819,906	 
	Accumulated deficit at December 31, 2013	 	 	(5,159,589	)	 	 	60,090	 	 	 	(5,099,499	)
	Capital deficiency at December 31, 2013	 	 	(586,771	)	 	 	307,178	 	 	 	(279,593	)

 

The restatement
had no effect on the Company's cash flows.

 

    	 	10	 

     

    

SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (continued)

 

NOTE 3 - SUPPLEMENTARY CONSOLIDATED
BALANCE SHEET INFORMATION:

 

		a.	Current assets:

 

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

 

		b.	Accounts payable and accruals:

 

	Provisions for vacation	 	 	45,888	 	 	 	41,950	 
	Payroll and related expenses	 	 	13,806	 	 	 	15,984	 
	Employee related institutions	 	 	19,419	 	 	 	19,797	 
	Accrued expenses	 	 	59,000	 	 	 	3,000	 
	Trade	 	 	3,498	 	 	 	3,693	 
	 	 	 	141,611	 	 	 	84,424	 

 

NOTE 4 - PROPERTY AND EQUIPMENT, net:

 

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

 

* During 2014 the Company moved
to a new office which includes office furniture.

 

Depreciation expense totaled $7,148
and $8,219 for the years ended December 31, 2014 and 2013, respectively.

    	 	11	 

     

    

 

SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (continued)

 

NOTE
5 - LIABILITY FOR SEVERANCE PAY

 

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

 

NOTE
6 - convertible LOANs:

 

		a.	On October 30, 2011 the Company signed a convertible loan agreement with certain lenders in the amount of approximately $594
thousand, which bears annual interest of 7%.

 

In the event of a next financing round (“NFR”)
of at least $1 million within 9 months period from the agreement date, in a preferred share class of the Company, the loan amount
would automatically be converted into the same class of shares issued in the NFR, at a price per share reflecting a 25% discount
from the price per share of the NFR.

 

In the event that such NFR is less than $1 million
("Non-Qualified NFR"), the lenders have the option to convert the loan into the same class of shares issued in the Non-Qualified
NFR, at a price per share reflecting a 25% discount from the price per share in the Non-Qualified NFR.

 

In the event no NFR nor Non-Qualified NFR occurred
within 9 months after the date hereof, the loan shall be automatically converted into Preferred B6 Shares of the Company, at a
conversion price that reflect a discount of 30% from the price per share paid for the Preferred B5 Shares.

 

The Loan shall only be repaid upon
a consummation of an M&A transaction, as such term is defined in the Company’s articles of association and in accordance
with the Liquidation Preferences mentioned in note 7.

 

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

 

In September 2013, the convertible loan was converted
into 407,082 shares of Series B6 Preferred Shares based on the 30% discount rate.

 

		b.	On July 3, 2012 the Company signed a credit line agreement with certain lenders for an amount of up to $500 thousand, which
shall bear monthly interest of 5%. As of December 31, 2012 the Company received an amount of approximately $232 thousand of the
credit line.

 

In the event of a next financing round (“NFR”)
of at least $1 million within 9 months period from the agreement date, in a preferred share class of the Company, the outstanding
credit line shall be automatically converted into the same class of shares issued in the NFR, at a price per share reflecting a
20% discount from the price per share of the NFR.

 

In the event that such NFR has occurred in an amount
less than $1 million ("Non-Qualified NFR"), the lenders have the option to convert the outstanding credit line into the
same class of shares issued in the Non-Qualified NFR, at a price per share, reflecting a 20% discount from the price per share
of the Non-Qualified NFR.

    	 	12	 

     

    

SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

 

NOTE
6 - convertible LOANS (continued):

 

In the event no NFR nor Non-Qualified NFR occurred
within 9 months after the date hereof, the outstanding credit line shall be automatically converted into Preferred B7 Shares of
the Company, at a conversion price that reflect a discount of 20% from the price per share paid for the Preferred B5 Shares.

 

The Loan shall only be repaid upon
a consummation of an M&A transaction, as such term is defined in the Company’s articles of association and in accordance
with the Liquidation Preferences mentioned in note 7.

 

Total interest expense in respect with the credit
line during 2013 amounted $111 thousand and was recorded as financial expenses.

 

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

 

		c.	On October 3, 2013 the Company signed a convertible loan agreement with certain existing investors under which the Company
shall receive an amount of up to $600 thousand. According to the agreement, the convertible loan shall bear annual interest of
2%. The Company received an amount of approximately $300 thousand.

 

In the event of a next financing round ("NFR"),
the lenders have the option to convert the outstanding loan into the same class of shares issued in the NFR, at a price per share
equal to the lesser of a) a price per share reflecting a 20% discount from the price per share in the NFR, or b) $1.76 per share.

 

During a period of 24 months after the date hereof,
the lenders have the option to convert the outstanding loan into Preferred B8 Shares of the Company, at a conversion price of a)$
2.20 per share, if converted during the first 12 months period after the date hereof, or b) $ 1.76 per share, if converted during
the consecutive 12 months period.

 

The Loan shall only be repaid upon
a consummation of an M&A transaction, as such term is defined in the Company’s articles of association and in accordance
with the Liquidation Preferences mentioned in note 7.

 

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

 

		d.	On 17 April 2014, the Company signed a convertible loan agreement with certain existing investors under which the Company shall
receive an amount of up to $230 thousand (with option to increase the convertible loan amount during a period of 30 days). According
to the agreement, the loan shall bear annual interest of 4%.

 

In the event of a next financing round (“NFR”)
of at least $1 million, the lenders have the option to convert the outstanding loan into the same class of shares issued in the
NFR, at a price per share reflecting a 20% discount from the price per share in the NFR.

 

Any outstanding Loan Amount that was not converted
during the NFR, shall bear interest at a rate of 6% (in lieu of the 4% interest rate) calculated from the NFR.

 

    	 	13	 

     

    

 

SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (continued)

 

NOTE
6 - convertible LOANS (continued):

 

The Loan shall only be repaid upon
a consummation of an M&A transaction, as such term is defined in the Company’s articles of association and in accordance
with the Liquidation Preferences mentioned in note 7 and except if both parties agree to a prepayment.

 

Total interest expense in respect of the loan during
2014 are amounted approximately $7 thousand, and was recorded as financial expenses.

 

		e.	On 26 November 2014, the Company signed a convertible loan agreement with certain existing investors under which the Company
shall receive an amount of $100 thousand. According to the agreement, the loan shall bear annual interest of 7%.

 

In the event of a next financing round (“NFR”)
in a preferred share class of the Company, the lenders have the option to convert the outstanding loan into the same class of shares
issued in the NFR, at a price per share reflecting a 15% discount from the price per share in the NFR.

 

In the event no NFR has occurred within 12 months after
the date hereof, the lenders have the option to convert the outstanding loan into Preferred B8 Shares of the Company, at a conversion
price per share of $0.60 per share.

 

The Loan shall only be repaid upon
a consummation of an M&A transaction, as such term is defined in the Company’s articles of association and in accordance
with the Liquidation Preferences mentioned in note 7.

 

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

 

Accounting
treatment of the loans

 

The automatic and/or optional conversion feature
in the loans has been bifurcated and accounted for as an embedded derivative, measured initially and subsequently at fair value
with changes in fair value recorded as finance expenses. Upon an automatic or optional conversion, the conversion feature provides
the loans holders the right to receive a variable number of the most senior class of shares at a value which is based on a fixed
monetary amount (i.e. based on the discount mechanism). Such feature continuously resets as the underlying share price increases
or decreases to provide a fixed monetary amount on the conversion date and is akin to contingent prepayment feature that is settleable
in variable equity instruments. As the settleable amount that would be transferred is significantly higher than the principal amount,
such feature has been bifurcated from the loan and accounted for as an embedded derivative. The bifurcated embedded derivative
was presented in the Company's balance sheet on a combined basis with the related host contract. The loans were measured at amortized
costs using the effective interest rate method.

 

    	 	14	 

     

    

 

SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (continued)

 

NOTE 7 - FAIR VALUE MEASURMENTS

 

The Company’s
liabilities that are measured at fair value as of December 31, 2014 and 2013 are classified in the tables below in one of the three
categories described in Note 2j above:

 

	 	 	December 31
	 
	 	 	2014
	 	 	2013
	 
	 	 	Level 3
	 
	Embedded derivatives*	 	 	316,811	 	 	 	288,156	 

 

* The embedded
derivatives were presented in the Company's balance sheets on a combined

basis with
the related host contract (the convertible loans).

 

The fair value of each of the embedded
derivatives described in Note 6 was estimated using a probability- weighted analysis of the value of the conversion component under
the possible scenarios for each convertible loan.

 

The table below sets forth a summary
of the changes in the fair value of the Company’s financial liabilities classified as Level 3 (the derivative embedded in
the convertible loans):

 

	 	 	2014
	 	 	2013
	 
	 	 	Embedded derivatives
	 
	Balance at beginning of year	 	 	288,156	 	 	 	19,490	 
	Derivatives embedded in loans received during the year	 	 	138,889	 	 	 	288,433	 
	Conversion of convertible loans	 	 	-	 	 	 	-	 
	Changes in fair value during the period	 	 	(110,234	)	 	 	(19,767	)
	Balance at end of year	 	 	316,811	 	 	 	288,156	 

 

 

NOTE 8 - COMMITMENTS:

 

		a.	On December 26, 2012, the Company entered into a lease for the premises it used as new office space for a
period of 12 months ending December 31, 2013. The monthly lease payment was approximately New Israeli Shekel (NIS) 10
Thousands ($3 thousand). During 2014, the agreement ended and the Company does not pay any lease payments for the new
premises.

 

In March 2015, the Company entered
into a new lease for the premises it uses as new office space. The monthly lease payment was approximately NIS 3.5 thousand ($1
thousand). This agreement includes an option to end the engagement in one month advance announcement without any commitment.

 

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

 

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

 

In July 2015, the Company received
final approval from the Chief Scientist for closing the project. However, in case the Company wishes to transfer its Intellectual
Property to any third party it will need to obtain a pre-approval from the Chief Scientist.

 

    	 	15	 

     

    

SEERGATE LTD.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (continued)

 

NOTE
9 - SHAREHOLDERS' EQUITY (CAPITAL DEFICIENCY):

 

		a.	Preferred Shares - Rights attached to shares

 

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

 

Conversion

 

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

 

Voting

 

Every Shareholder shall have one vote for each share
held.

 

Liquidation and Dividend Preference

 

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

 

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

 

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

 

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

 

		3)	Notwithstanding the above, in the event that a pro-rata distribution (without taking into account the preference) would entitle
the holders of a class of Preferred B Shares to an amount that is equal to or exceeds 2 times its respective portion of the B Preference
Amount, then the preference above shall not apply to such class of Preferred B Shares and if the pro-rata distribution (without
taking into account the preference under the

 

    	 	16	 

     

    

 

SEERGATE LTD.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

 

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

 

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

 

		b.	Investment
                                         by shareholders

 

In February
2013, the Company signed an agreement with certain existing investors under which the Company shall receive an amount of up to
$350 thousand. According to the agreement, the funds shall bear dividends of of 4% per year. As of December 31, 2014, the Company
received an amount of approximately $306 thousand.

 

The funds shall only be repaid
upon a consummation of an M&A transaction, as such term is defined in the Company’s articles of association and in accordance
with the Liquidation Preferences mentioned above.

 

		c.	Option plan

 

In November 2007, the Company’s Board of Directors
approved a share option plan (the “Plan”). Options granted under the Plan, with respect to persons subject to US tax
laws may be incentive stock options or non-statutory stock options. Stock rights may also be granted under the Plan. The option
shall not exceed 7 years from the date of grant. Each option can be exercised to purchase one Ordinary Share of no par value of
the Company. The options shall vest over 3 years and become exercisable in accordance with the terms and conditions stipulated
in the applicable option agreement.

 

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

 

A summary status of the option plans as of December
31, 2014 and 2013 and changes during the years ended on those dates is presented below (the number of options represents Ordinary
Shares exercisable in respect thereof).

 

	 	 	Number of options
	 
	Outstanding at January 1, 2013 at an exercise price of $0.7	 	 	296,000	 
	Changes during the period:	 	 	 	 
	Granted	 	 	-	 
	Exercised	 	 	-	 
	Forfeited	 	 	(75,000	)
	Outstanding at December 31, 2013	 	 	221,000	 
	Changes during the period:	 	 	 	 
	Granted	 	 	-	 
	Exercised	 	 	-	 
	Forfeited	 	 	-	 
	Outstanding at December 31, 2014	 	 	221,000	 

 

There are no unvested options as of December 31, 2014.

    	 	17	 

     

    

 

SEERGATE LTD.

NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (continued)

 

NOTE
10 - taxes on income:

 

		a.	The Company is taxed under the Israeli law and the Subsidiary is taxed under the federal law of the
U.S. The income of the Company is taxed at a tax rate of 25% in 2013 and 26.5% in 2014.

 

		b.	The Company has final tax assessments through 2010. There are no uncertain tax positions recorded
in the Company's financial statements.

 

		c.	As of December 31, 2014, the Company has NOLs of approximately $5 million. Under Israeli tax laws,
the NOLs are linked to the Israeli Consumer Price Index and can be utilized indefinitely. A full valuation
allowance was created against these NOLs since the realization of any future benefit from these net operating losses cannot be
sufficiently assured at December 31, 2014 and 2013.

 

NOTE 11 - SUBSEQUENT EVENTS:

 

		a.	On February 2, 2015 the investment by shareholders and the convertible loans were converted into 2,711,214 Ordinary Shares.

 

		b.	On February 2, 2015 all of the Preferred B Shares were converted into 3,456,281 Ordinary Shares.

 

		c.	On February 10, 2015 the Company signed a share purchase agreement with certain investors under which
the Company issued 3,106,998 Ordinary Shares for a total consideration of $200 thousand.

 

		d.	In May 2015, all shares of the Company were sold to MyECheck, Inc. for a total stock value of $3 million.

 

		e.	The Company evaluated subsequent event through August 12, 2015, which is the date the financial statements
were available to be issued.

 

 

 

 

  

    	 	18Exhibit 10.27 

 

UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL INFORMATION FOR

THE

TWELVE MONTHS ENDED DECEMBER 31, 2014
AND THE SIX MONTHS ENDED

JUNE 30, 2015

 

On May 6, 2015, MyECheck purchased all the shares of Seergate,
a foreign Israel company, under a Share Purchase Agreement by issuing to Seergate’s stockholder’ one hundred fifty
million (150,000,000) MyECheck ordinary shares. MyECheck issued to Seergate’s stockholders one Seergate ordinary share for
each share of MyECheck common stock outstanding and thereby became the parent of Seergate. Immediately after the consummation of
the acquisition, MyECheck stockholders, in the aggregate, owned approximately 100% of the combined company’s ordinary shares
on a fully diluted basis (using the treasury stock method). Accordingly, the acquisition was accounted for as a business combination
and the purchase price consideration was allocated to the tangible and intangible assets acquired and liabilities assumed from
Seergate.

 

The following Unaudited Pro Forma Condensed Combined Statement
of Operations for the six months ended June 30, 2015 and for the year ended December 31, 2014 combines the historical consolidated
statements of operations of MyECheck and Seergate, giving effect to the acquisition as if it had been consummated on January 1,
2014. Assumptions and estimates underlying the unaudited pro forma adjustments are described in these notes, which should be read
in conjunction with the Unaudited Pro Forma Condensed Combined Financial Information.

 

The pro forma combined financial information has been prepared
in accordance with SEC Regulation S-X Article 11. The pro forma combined financial information is presented for illustrative purposes
only and is not necessarily indicative of the combined operating results that would have occurred if the acquisition had been consummated
on the dates and in accordance with the assumptions described herein, nor is it necessarily indicative of future results of operations
of the combined company.

 

These Unaudited Pro Forma Condensed Combined Statement of Operations
have been developed from and should be read in conjunction with the audited consolidated financial statements of MyECheck contained
in its Registration Statement on Form 10 for the fiscal year ended December 31, 2014, incorporated herein by reference, Exhibit
10.27 as well as the Seergate audited consolidated financial statements as of and for the years ended December 31, 2014 and 2013,
incorporated herein by reference, Exhibit 10.26.

 

    	 	1	 

     

    

 

MYECHECK, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS

FOR THE TWELVE MONTHS ENDED DECEMBER
31, 2014

 

	 	 	 	 	 	USD	 	 	Pro Forma	 	 	Pro Forma for	 
	 	 	MyECheck	 	 	Seergate	 	 	Adjustments	 	 	Seergate Acquisition	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	952,156	 	 	 	-	 	 	 	-	 	 	$	952,159	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cost of Revenues	 	 	99,976	 	 	 	-	 	 	 	-	 	 	 	99,976	 
	Gross Profit	 	 	852,180	 	 	 	-	 	 	 	-	 	 	 	852,180	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	General and administrative	 	 	1,203,794	 	 	 	305,892	 	 	 	 	 	 	 	1,509,686	 
	Loss from disposal of assets	 	 	-	 	 	 	13,289	 	 	 	-	 	 	 	13,289	 
	Research and development	 	 	254,580	 	 	 	199,765	 	 	 	643,952	(a)	 	 	1,098,297	 
	Total Operating Expenses	 	 	1,458,374	 	 	 	518,946	 	 	 	643,952	 	 	 	2,621,272	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income or (Loss) from Operations	 	 	(606,194	)	 	 	(518,946	)	 	 	(643,952	)	 	 	(1,769,092	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other Income/(Expense)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Derivative liability	 	 	(488,246	)	 	 	-	 	 	 	-	 	 	 	(488,246	)
	Change in fair value of derivative liabilities	 	 	48,878	 	 	 	-	 	 	 	-	 	 	 	48,878	 
	Interest expense net of interest income	 	 	(24,266	)	 	 	(44,549	)	 	 	40,673	(c)	 	 	(28,142	)
	Loss on convertible note	 	 	(62,980	)	 	 	-	 	 	 	-	 	 	 	(62,980	)
	Other income cost recovery	 	 	140,685	 	 	 	-	 	 	 	-	 	 	 	140,685	 
	Total Other Income/(Expense)	 	 	(385,929	)	 	 	(44,549	)	 	 	40,673	 	 	 	(389,805	)
	Net income or (loss) before income taxes	 	 	(992,123	)	 	 	(563,495	)	 	 	(603,279	)	 	 	(2,158,897	)
	Provision for income taxes	 	 	(800	)	 	 	-	 	 	 	-	 	 	 	(800	)
	Net (Loss) or
    Income	 	$	(992,923	)	 	$	(563,495	)	 	$	(603,279	)	 	$	(2,159,697	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net income (loss) per common share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 
	Diluted	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Weighted average common shares outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic	 	 	4,198,671,107	 	 	 	 	 	 	 	150,000,000	(b)	 	 	4,348,671,107	 
	Diluted	 	 	4.198.671,107	 	 	 	 	 	 	 	150,000,000	(b)	 	 	4,348,671,107	 

 

See accompanying Notes to Unaudited Pro
Forma Condensed Combined Financial Statements, which are an

Integral part of these statements.

 

    	 	2	 

     

    

  

MYECHECK, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2015

 

	 	 	MyECheck	 	 	USD	 	 	 	 	 	 	 
	 	 	Inc.	 	 	Seergate	 	 	Pro Forma	 	 	MyECheck, Inc.	 
	 	 	Historical	 	 	Historical	 	 	Adjustments	 	 	Pro
    Forma	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Revenues	 	$	558,109	 	 	$	-	 	 	$	-	 	 	$	558,109	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cost of Revenues	 	 	2,344	 	 	 	-	 	 	 	-	 	 	 	2,344	 
	Gross Profit	 	 	555,765	 	 	 	-	 	 	 	-	 	 	 	555,765	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	General and administrative	 	 	978,767	 	 	 	34,965	 	 	 	-	 	 	 	1,013,732	 
	Loss from disposal of assets	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	Research and development	 	 	230,960	 	 	 	155,943	 	 	 	222,172	(a)	 	 	609,075	 
	Total Operating Expenses	 	 	1,209,727	 	 	 	190,908	 	 	 	222,172	 	 	 	1,622,807	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Income or (Loss) from Operations	 	 	(653,962	)	 	 	(190,908	)	 	 	(222,172	)	 	 	(1,067,042	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Other Income/(Expense)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Derivative liability	 	 	(139,670	)	 	 	-	 	 	 	-	 	 	 	(139,670	)
	Change in fair value of derivative liabilities	 	 	303,044	 	 	 	-	 	 	 	-	 	 	 	303,044	 
	Interest expense net of interest income	 	 	(36,593	)	 	 	(993	)	 	 	-	 	 	 	(37,586	)
	Loss on convertible note	 	 	(1,229,550	)	 	 	-	 	 	 	-	 	 	 	(1,229,550	)
	Other income and expenses	 	 	1,114	 	 	 	-	 	 	 	-	 	 	 	1,114	 
	Other income cost recovery	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	Other income forgiveness of debt	 	 	-	 	 	 	-	 	 	 	-	 	 	 	-	 
	Total Other Income/(Expense)	 	 	(1,101,925	)	 	 	(993	)	 	 	-	 	 	 	(1,102,648	)
	Net income or (loss) before income taxes	 	 	(1,755,887	)	 	 	(191,901	)	 	 	(222,172	)	 	 	(2,169,960	)
	Provision for income taxes	 	 	(800	)	 	 	-	 	 	 	-	 	 	 	(800	)
	Net (Loss) or
    Income	 	$	(1,756,687	)	 	$	(191,901	)	 	$	(222,172	)	 	$	(2,170,760	)
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net income (loss) per common share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic	 	$	0.00	 	 	$	0.00	 	 	 	 	 	 	$	0.00	 
	Diluted	 	$	0.00	 	 	$	0.00	 	 	 	 	 	 	$	0.00	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Weighted average common shares outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Basic	 	 	4,123,327,847	 	 	 	 	 	 	 	105,248,619	(b)	 	 	4,228,576,466	 
	Diluted	 	 	4.123,327,847	 	 	 	 	 	 	 	105,248,619	(b)	 	 	4,228,576,466	 

 

See accompanying Notes to Unaudited Pro
Forma Condensed Combined Financial Statements, which are an

Integral part of these statements.

 

    	 	3	 

     

    

  

NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS

 

NOTE 1. DESCRIPTION OF THE TRANSACTION

 

On May 6, 2015, MyECheck, Inc. completed its acquisition of
Seergate. Pursuant to the May 5, 2015 purchase agreement, MyECheck issued 150,000,000 shares of the Company’s common stock
to the shareholders of Seergate on a pro rata basis thereby making Seergate an indirect, wholly-owned subsidiary of MyECheck. On
February 2, 2015, in contemplation of the acquisition, Seergate shareholders approved a conversion of all outstanding Seergate
preferred shares and convertible debt into common stock.

 

NOTE 2. BASIS OF PRO FORMA PRESENTATION

 

The following Unaudited Pro Forma Condensed Combined Statement
of Operations for the six months ended June 30, 2015 and for the year ended December 31, 2014 combines the historical consolidated
statements of operations of MyECheck and Seergate, giving effect to the acquisition as if it had been consummated on January 1,
2014.

 

The acquisition is reflected in the Unaudited Pro Forma Condensed
Combined Statement of Operations as an acquisition of Seergate by MyEcheck in accordance with Accounting Standards Codification
Topic 805, “Business Combinations,” using the acquisition method of accounting with MyECheck as the accounting acquirer.
For the purpose of measuring the estimated fair value of the assets acquired and liabilities assumed, MyECheck estimated the fair
values as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants as of the measurement date. The fair value measurements utilize estimates based on key assumptions of the acquisition,
including historical and current market data.

 

Transaction costs have been excluded from the Unaudited Pro
Forma Condensed Combined Statement of Operations as they reflect charges directly related to the acquisition, which do not have
an ongoing impact. In addition, the Unaudited Pro Forma Condensed Combined Statement of Operations does not include one-time costs
directly attributable to the transaction, employee retention costs or professional fees incurred by MyECheck or Seergate pursuant
to provisions contained in the purchase agreement, as those costs are not considered part of the purchase price.

 

MyECheck and Seergate did not incur significant costs associated
with integrating the operations of MyECheck and Seergate after the acquisition was completed. The Unaudited Pro Forma Condensed
Combined Statement of Operations does not reflect the costs of any integration activities or benefits that may result from realization
of future cost savings from operating efficiencies or revenue synergies expected to result from the acquisition.

 

MyECheck’s management determined that the purchase price
of Seergate’s mobile application was valued at Three Million US Dollars ($3,000,000) or 150,000,000 shares. The benefit to
MyECheck is the acceleration of the mobile application to market.

 

    	 	4	 

     

    

  

NOTES TO UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL STATEMENTS (CONT.)

 

Under the purchase method of accounting,
the estimated purchase price of the Acquisition was allocated to Seergate’s net tangible and identifiable intangible assets
and liabilities assumed based on their estimated fair values as of the date of the completion of the Acquisition, as follows:

 

	Cash	 	$	67,413	 
	Computer Equipment	 	 	6,145	 
	Other assets	 	 	7,777	 
	Total assets	 	 	81,335	 
	 	 	 	 	 
	Less Liabilities:	 	 	 	 
	Payroll accrual	 	 	(45,885	)
	Development costs and reimbursement of expenses owed by MyECheck to Seergate	 	 	(178,382	)
	Total liabilities	 	 	(224,267	)
	Excess liabilities greater than assets	 	 	(142,932	)
	IP for mobile application	 	 	3,217,962	 
	 	 	$	3,075,030	 

 

NOTE 4. PRO FORMA ADJUSTMENTS

 

The unaudited adjustments included in the Unaudited Pro Forma
Condensed Combined Financial Statements are as follows:

 

(a) Amortization IP. Amortization
expense is recorded in research and development as a result of the fair market value of the Intellectual Property (IP) for the
mobile application acquired. The estimated fair value of amortizable intangible assets of $3,217,962 million will be amortized
on a straight-line basis over the estimated useful lives of the IP that has been estimated to be 5 years.

 

(b) Shares outstanding. The unaudited pro forma weighted
average number of basic shares outstanding is calculated for each period presented by adding the weighted average number of basic
shares issued of 150,000,000 as of January 1, 2014. At June 30, 2015, an adjustment of 105,248.691 was added to adjust the weighted
average share had the transaction occurred as of January 1, 2014.

 

(c) Interest expense as a result of conversion before the
acquisition. The interest expense adjustment was a result of the conversion of debt and derivative liability expense being
converted after the announcement but before the date of acquisition.

 

    	 	5

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