$MYEC 10-Q

MyECheck’s prior full fiscal year ending December 31, 2014 is not indicative of MyECheck’s current business plan and operations. Incorporated in October 2004, MyECheck currently has limited revenues and is deemed an early stage Company. This plan of operation will focus on MyECheck’s business plan and operations current. There can be no assurance that MyECheck will generate positive cash

flow and there can be no assurances as to the level of revenues, if any, MyECheck may actually achieve from its operations.

On November 2nd, 2015, Mr. Bill Delgado, a former member of the Company’s Board of Directors and the Company came to a verbal agreement and executed a settlement by which the Company agreed to compensate Mr. Delgado with 25,000,000 shares of the Company’s common stock. An Issuance Resolution has been executed and sent to the Company’s Transfer Agent and is currently in processing at this time. There were no legal proceedings filed at any time.

Implementation Plan

Following is an outline of MyECheck’s plan to build a widely used payment system. The success of MyECheck depends on a number of factors including the careful selection and active participation of qualified Value Added Resellers (“VARs”) and Payment Service Providers (“PSPs”). The VARs / PSPs commitment to MyECheck will depend on the commercial viability of MyECheck’s solutions and web-based services.

MyECheck targets internet payment gateways and payments software and service providers for partnership and reseller opportunities.

Early emphasis has been on building sales channels through partnerships. MyECheck has experienced early success in partnerships with PSP Cardinal Commerce and is in discussions and other major PSPs.

In addition to its in-house direct sales department, MyECheck has engaged a number of specialized independent sales agents such as Sheffield Resource Network and others, who leverage their existing contacts for direct sales.

MyECheck has an active PR program and issues press releases on a regular basis which generate in-bound leads and interest from industry press. Company management conducts interviews with national press. MyECheck attends and exhibits at industry trade shows, conferences and other networking events.

MyECheck’s in-house sales force and independent sales agents also use email and cold calling marketing techniques, focusing on the industry’s largest target companies. MyECheck is currently in discussion with a large Independent Sales Organization (ISOs) regarding partnership and representation opportunities.

In addition to the effective marketing and distribution of MyECheck’s services, MyECheck’s infrastructure must be able to support a significant increase in transaction volume. MyECheck plans to enhance its infrastructure by adding a new data center and new hardware in anticipation of increased transaction volume. MyECheck plans to continue to scale it’s infrastructure in advance of the need.

Overview

Results of Operations

We incurred a net loss of $992,923 for the year ended December 31, 2014 and a net loss for the three and nine-month periods ended September 30, 2015 of $1,903,726 and $3,660,413, respectively. At September 30, 2015 we had cash and cash equivalents of $4,534 and a working capital deficit of $2,566,277.

Three Months Ended September 30, 2015 Compared with Three Months Ended September 30, 2014

We had revenue from continuing operations in the three-month periods ended September 30, 2015 of $82,389 and $48,802 for 2014. An increase of $33,587, or 69%. S, G & A was $1,878,535 in 2015 compared to $526,568 in 2014, an increase of $1,351,967 or 257%. The following table sets forth, for the periods indicated, the dollar and variance percentages of operating expenses in our financial statements:

Three months ending:                   9/30/2015      9/30/2014         $ VAR        % VAR
Salaries & Related Expenses           $   101,510     $  155,276     $   (53,766 )       35 %
Contract Labor & Consulting                     -              -               -          0 %
Legal & Professional Fees                 291,198         60,390         230,808        382 %
Amortization of Loan Fees                  21,551              -          21,551        100 %
Insurance                                   1,285          1,469            (184 )      -13 %
Advertising & Marketing Development         1,701         15,969         (14,268 )       89 %
Research & Development                    258,261        139,324         106,973         77 %
Rent                                       35,216         14,598          20,618        141 %
Employee Stock Compensation             1,135,200        107,778       1,027,422        953 %
Miscellaneous                              32,613         31,764             849          3 %
Total Expenses                        $ 1,878,535     $  526,568     $ 1,351,967        257 %

Nine Months Ended September 30, 2015 Compared with Nine Months Ended September 30, 2014

We had revenue from continuing operations in the nine-month periods ended September 30, 2015 of $640,498 and $772,865 for 2014. A decrease of $132,000, or 17%. S, G & A was $3,088,262 in 2015 compared to $716,025 in 2014, an increase of $2,372,237 or 331%. The following table sets forth, for the periods indicated, the percentage of the dollar and variance percentages in our financial statements:

Nine months ending:                    9/30/2015      9/30/2014         $ VAR        % VAR
Salaries & Related Expenses           $   503,460     $  220,989     $   282,471        128 %
Contract Labor & Consulting                20,849              -          20,849        100 %
Legal & Professional Fees                 470,641        101,129         369,512        365 %
Amortization of Loan Fees                 150,869              -         150,169        100 %
Insurance                                  33,677          2,571          31,106       1210 %
Advertising & Marketing Development        30,468         26,412           4,056         15 %
Research & Development                    489,221        180,683         308,538        171 %
Rent                                      109,390         15,198          94,192        620 %
Employee Stock Compensation             1,145,033        107,778       1,037,255        962 %
Miscellaneous                             134,654         61,265          73,389        120 %
Total Expenses                        $ 3,088,262     $  716,025     $ 2,372,237        331 %

Other Income (Expense)

Interest income (expense) for the nine months ended September 30, 2015 and 2014 was ($96,195) and ($10,409), respectively for increase of $85,786 from the same period in 2014.

Other income (expense) for the nine months ended September 30, 2015 and 2014 was ($1,071) and $119,576 respectively for a decrease of $(120,647) over the same period in 2014.

Cash Flows

September 30, 2015 and 2014

Cash provided by operating activities

At September 30, 2015, the Company generated revenue from licensing, consulting, maintenance and transactional fees in the amount of $583,932 and commission income from a new customer in the amount of $56,666 for a total generated revenue of $640,498, of which $44,540 was accounts receivable less $25,000 from deferred revenue for a net operating cash revenue of $660,763.

At September 30, 2014 the Company generated revenues of $772,865, deducting net change of accounts receivable of $48,500 resulting in net cash receipts of $724,365, of which $584,529 was used to pay operating expenses of $538,002 and $46,527 for cost of revenues, $11,300 in accrued liabilities, $21,346 comprised accounts payable and the remaining $45,821 comprised prepaid expenses for a net operating cash of $61,369.

Cash used in investing activities

The Company had net cash of $41,014 used in investing activities for the nine months ended September 30, 2015 of which $25,491 was for the acquisition of new furniture and computer equipment, $4,900 came from investment in other assets and the company invested $10,623 in the acquisition of new websites. We had $88,175 used in investing activities in the nine months ended September 30, 2014 which comprised of $36,363 for the acquisition of furniture and computer equipment, a security deposit on the new facility of $32,812, costs incurred from capitalized website of $9,000 and $10,000 for the purchase of treasury stock.

Cash used in financing activities

Net cash provided by financing activities totaled $565,105 which comprised of a net payment of ($75,000) for the acquisition of Seergate, proceeds from convertible debt of $425,149, proceeds on a loan payable from a related party of $61,446, and proceeds of a loan payable (other) of $153,510 for the nine months ended September 30, 2015 compared to net cash provided by financing activities $78,551 of which was comprised of proceeds from loans payable from related parties of $18,001, loan proceeds from the acquisition of a subsidiary in the amount of $83,300 and the repayment of a convertible note payable in the amount of $22,750 for the nine months ended September 30, 2014

Liquidity and Capital Resources

Nine -Month Period Ended September 30, 2015

At September 30, 2015, the Company had cash of $4,534 and a working capital deficit of $2,566,277. At December 31, 2014, the Company had cash of $51,261 and a working capital deficit of $1,345,517. This decrease in cash was due primarily to operating losses during the nine months ended September 30, 2015.

The Company’s business plan calls for significant expenses in connection with the growing development of the Company’s products and services. As a developmental stage company, to date the Company has funded its operations with capital raised through the issuances of convertible notes, debt securities and credit facilities. The Company does not currently have sufficient funds to conduct continued development on its product and services and requires additional financing in order to continue its product and service development efforts. The Company may also require additional financing if the costs of development process are greater than anticipated. Additionally, the Company may require additional financing to sustain its business operations if the Company is not successful in earning sufficient revenue upon completion of its products and services. However the Company cannot ensure that additional financing will be available when needed on favorable terms, or at all. Even if the Company is able to raise the funds required, it is possible that the Company could incur unexpected costs and expenses or experience unexpected cash requirements that would force the Company to seek alternative financing. Furthermore, if the Company issues additional equity or debt securities, stockholders may experience additional dilution or the new equity securities may have rights, preferences or privileges senior to those of existing holders of its common stock.

Capital Resources

Management estimates that the Company will require $986,968 to operate for the next twelve (12) months.