UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

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

For the Fiscal Year Ended March 31, 2009

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

For the transition period from ___________ to ______________

eCrypt Technologies, Inc.

 (Exact name of registrant as specified in its charter)

Colorado	000-1449574	32-0201472
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)
4750 Table Mesa Dr. Boulder CO, 80305
(Address of principal executive offices)
Registrant’s telephone number, including area code: 1.866.241.6868

Securities registered under Section 12(b) of the Act:

None

Securities registered under Section 12(g) of the Act:    

Common Stock, par value $0.001

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

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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Not Applicable.

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

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

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

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of the last business day of the registrant’s most recently completed second fiscal quarter. $0.00.

As of June 30, 2009, the Company had 33,384,304 shares issued and outstanding.

EXPLANATORY NOTE:  

eCrypt Technologies, Inc., a Colorado corporation is filing this Amendment No. 1 on Form 10-K/A (this "Amendment") to its annual report on Form 10-K, which was filed with the Securities and Exchange Commission on July 8, 2009 (the "Original Filing") to restate and reissue its audited financial statements for fiscal year ended March 31, 2009 contained in the Original Filing to include the opinion of De Joya Griffith and Company, LLC, a registered public accounting firm.  The previously issued statements were audited by Moore and Associates Chartered Accountants and Advisors whose registration was revoked in August of 2009.

Additionally, the audited financial statements for  fiscal year ended March 31, 2009 have been restated: i)  to reclassify and amortize a license fee; ii) to recalculate the value of certain convertible debt; iii) to reflect stock subscriptions converted to common stock and a 4-for-1 forward stock split subsequently announced; and iv) to reflect reclassification of assets and adjust depreciation for these assets.  The effect of the restatement is described in note 14 in the notes to the financial statements contained in this Amendment

In addition to the restatements discussed above, this Amendment: i) amends the information contained in Item 7 in the Original Filing; ii) amends the information contained in Item 9A of the Original Filing; iii) clarifies that the name of eCrypt Technologies, Inc.’s main product is eCrypt which has applications for BlackBerry® smartphones; and iv) clarifies that eCrypt Technologies, Inc.’s website has changed from  shop.ecryptinc.com to www.ecryptinc.com.   

Except as described above, no other changes have been made to the Original Filing.  Except as described above, this Amendment No. 1 on Form 10-K/A does not reflect events occurring after the filing of the Original Filing or modify or update those disclosures, including any exhibits to the Original Filing affected by subsequent events. Information not affected by the changes described above is unchanged and reflects the disclosures made at the time of the Original Filing.  Accordingly, this Amendment No. 1 on Form 10-K/A should be read in conjunction with our filings made with the Securities and Exchange Commission subsequent to the filing of the Original Filing, including any amendments to those filings.

PART I

ITEM 1.

BUSINESS.

Overview

eCrypt Technologies, Inc., a Colorado corporation (hereinafter “we,” “us,” “eCrypt,” the “Company,” or the “Registrant"), was incorporated in the State of Colorado, on April 19, 2007.  The Company provides encryption software which secures the transmission of, storage of, and access to digital information.  

Principal Products

eCrypt’s primary business focus is on Information Security solutions which assist individuals and entities in securely transmitting, storing, and accessing information.  The Company believes its business will come from three primary areas: (1) Software sales; (2) Managed Communication Network Services (“MCNS”); and (3) Information Technology (“IT”) consulting services.  The Company believes that a majority of its revenues will be derived from software sales, while some of its revenue will be derived from MCNS and IT consulting services.

3

Software Sales - eCrypt is developing and plans to sell device-based encryption and security software for Personal Digital Assistants (“PDAs”), wireless handheld devices, laptop and desktop computers, pocket computers, cellular phones, smartphones, and other file storage devices. The Company has developed, and is now selling via its eCommerce website, its flagship product, eCrypt for BlackBerry® smartphones, encryption software for messaging on BlackBerry smartphones; as of March 31, 2009, the Company had not earned any revenue from sales of eCrypt for BlackBerry smartphones. The Company is also in the process of developing the next generation version of eCrypt for BlackBerry smartphones.  In 2007, eCrypt secured a 50-user BETA test group for eCrypt for BlackBerry smartphones.  eCrypt has also received a commitment from the 50-user BETA test group for the purchase of at least 100 licenses of eCrypt for BlackBerry smartphones upon successful completion of BETA testing; each individual license will be sold for $49.95.

 eCrypt is also developing and plans to sell device-based encryption and security software which protects email, Short Message Service (“SMS”), peer-to-peer (“P2P”), PIN-to-PIN, Instant Messaging (“IM”), Multimedia Message Service (“MMS”), and voice communications for users on such devices and mobile devices.  Additionally, eCrypt is developing and plans to sell device-based secure access interfaces which allow users to conduct financial activities on mobile devices, as well as secure access User Interfaces (“UIs”) for mobile devices.  eCrypt has the ability to customize its device-based encryption and security software, as well as its secure access UIs, for the purpose of securely storing, communicating and accessing information.  In addition to the device-based software, eCrypt is also developing and plans to sell appliance-based encryption software for email servers and for the files stored on servers.  

Managed Communications Network Service – eCrypt also operates a Managed Communications Network Services business through which eCrypt assists its clients with managing their electronic communication needs.  

IT Consulting Services– eCrypt also will provide IT consulting services through which eCrypt will assist its clients with establishing solutions for deficiencies or weaknesses in the client’s business equipment, communications infrastructure, communications network security, and/or business practices in relation to the security of information.

Growth and Development

The eCrypt team assembled in June 2006, at which time the members began concept development for what has become the Company’s flagship product, eCrypt for BlackBerry® smartphones.  The Company formally incorporated in the State of Colorado, on April 19, 2007 (“Incorporation Date”) and commenced product development shortly thereafter.

Since its Incorporation Date, the Company has performed a number of tasks in furtherance of the Company’s business.  These tasks include, but are not limited to:  i) setting up bank accounts; ii) establishing supplier accounts; iii) purchasing business equipment and software; iv) completing an initial private placement offering of common stock; v) entering into a service agreement with a client for MCNS; vi) entering into an OEM License agreement with Certicom (for the development of eCrypt for BlackBerry® smartphones) and a BlackBerry ISV (Independent Software Vendor) Alliance with Research In Motion (“RIM”), as more fully explained within this section; and vii) applying for Mass Market Commodity Classification for eCrypt for BlackBerry smartphones from the United States Department of Commerce Bureau of Industry and Security.  The Company is currently in the process of developing a second generation version of its flagship product, eCrypt, encryption software for messaging on BlackBerry Wireless Handheld devices.

4

Certicom OEM

Effective January 31, 2008, eCrypt entered into an OEM License Agreement (the “OEM License Agreement”) with Certicom Corp., a cryptography company specializing in public key infrastructure implementations, device security, anti-counterfeiting, product authentication, asset management, and fixed-mobile convergence.  Pursuant to the OEM License Agreement, eCrypt was granted a worldwide, non-exclusive, non-transferable license to develop a software product which combines eCrypt’s software with Certicom’s software, Security Builder Crypto-C for RIM, Version 3.2, as compiled within the Research in Motion Crypto API (“Security Builder”).  Additionally, through the OEM License Agreement eCrypt was granted a license to reproduce and use the object code of the libraries, sample code, and other items specifically designated as “runtime” in Security Builder for distribution purposes.  eCrypt is required to pay Certicom a production fee of $1.00 per unit for each application sold by eCrypt, with an initial $10,000 production fee for the first 10,000 units having been paid upon execution of the OEM License Agreement.  The term of the OEM License Agreement is three (3) years.

The foregoing description of the OEM License Agreement does not purport to be complete and is qualified in its entirety by reference to the OEM License Agreement which was filed as Exhibit 10.1 to the Company’s Form 10 registration statement filed with the Securities and Exchange Commission on November 11, 2008.

BlackBerry ISV with RIM

Effective April 2, 2008, eCrypt entered into a BlackBerry Alliance Program – Master Alliance Agreement and joined the BlackBerry Alliance Program with Research in Motion Limited (“RIM”), a leading designer, manufacturer, and marketer of wireless solutions for the worldwide mobile communications market.  Specifically, eCrypt is part of the BlackBerry® Independent Software Vendor (ISV) Alliance Program (the “Alliance Program”).  The Alliance Program is intended to provide certain support to members who are interested in integrating marketable third party applications for BlackBerry wireless handheld devices.  As a BlackBerry® ISV Alliance Member™, eCrypt receives resources, support and tools from RIM needed to develop and sell software applications for BlackBerry® smartphone users.

Members of the Alliance Program are granted the personal, non-exclusive, non-transferrable right to distribute BlackBerry Solutions or Third Party Software for RIM Products in the Member’s designated territory.  eCrypt’s designated territory is the United States of America.  As part of the Alliance Program, RIM and eCrypt are permitted to engage in joint marketing efforts with the other on a non-exclusive basis from time to time.

The initial term of the Alliance Program was one (1) year.  Pursuant to the terms of the Alliance Program – Master Alliance Agreement, RIM elected to renew the relationship with eCrypt for a period from April 2009 to August 2009.  In August RIM will commence a new Alliance Program.  At that point eCrypt will need to enter into a new agreement with RIM to continue its participation in the Alliance Program.  

The foregoing description of the BlackBerry Alliance Program – Master Alliance Agreement does not purport to be complete and is qualified in its entirety by reference to the BlackBerry Alliance Program – Master Alliance Agreement which was filed as Exhibit 10.2 to the Company’s Form 10 registration statement filed with the Securities and Exchange Commission on November 11, 2008.

Research and Development

Since its inception, eCrypt’s founders have collectively contributed thousands of uncompensated hours to

5

the research and development necessary to form the Company and launch the Company’s business operations.  The time contributed has primarily been focused on development and testing of the Company’s flagship software product, eCrypt for BlackBerry® smartphones, research of the information security industry, research of target markets, and research of the legal regulatory environment applicable to encryption software.    

Over the next twelve (12) months, eCrypt plans to continue developing product enhancements and strengthening strategic alliances.  In particular, eCrypt plans to complete development of the second generation version of it’s flagship product, eCrypt for BlackBerry® smartphones, and commence development of additional language support for both versions of eCrypt for BlackBerry smartphones.  The Company also plans to commence research for development of encryption software solutions for platforms other than the BlackBerry Wireless Handheld, as well as research for development of other security software for mobile devices.  Additionally, the Company will engage BETA test groups in anticipation of software releases.

eCrypt was represented by Brad Lever, our Chief Executive Officer and Gabriel Rosu, our Chief Development Officer at the Wireless Enterprise Symposium (“WES”) in May of 2009, a conference billed as the “biggest BlackBerry event of the year”.  At WES, eCrypt had the opportunity to perform informal market research among potential end users, fellow Alliance Members, and potential competitors, as well as to establish contact with potential strategic partners such as global wireless carriers.  

The Company has begun prospecting for distribution alliance partners.  Furthermore, eCrypt will pursue strategic engagements of individuals considered to be leading authorities in the field of cryptography for the purposes of seeking advice, testing software, and providing other relevant product-specific research and guidance.

The Company will commence marketing campaigns with Media2O Productions (http://media2o.com/), an innovative multimedia content development company, and commence a global marketing campaign which will include video, social networking, and potential involvement in Data Privacy Day (January 28).  The Company has completed negotiations and is awaiting a final copy of the agreement.

The Company will also continue to develop it’s relationship with RIM and engage in cooperative marketing.  Also build on relationships established at WES with the major global wireless carriers and other BlackBerry smartphone resellers.

Production  

Software - All eCrypt software is currently developed under the supervision of Brad Lever, Gabriel Rosu and Kasia Zukowska, the initial founders of eCrypt (collectively referred to as the “Founders”).  Software testing and troubleshooting is carried out by all Founders of the Company.  The software is then deployed for use and testing by BETA groups, who provide feedback to the Company regarding bugs and other problems which may be discovered in the software.  The Founders organize regular meetings to absorb and address the feedback received from these testing sessions.

Managed Communications Network Services – For its MCNS business, eCrypt gathers and analyzes information on-site at a client’s place of business.  Concept development is then completed at eCrypt’s offices.  Once completed, the final solution is presented to the client; the implementation of the concept may require the purchase of appropriate equipment, as well as the engagement of a data center, which will host one or more of the servers required for the solution.  Upon the client’s acceptance of the concept, eCrypt installs and configures all necessary equipment and trains clients on its use.  eCrypt then provides ongoing

6

user assistance, as well as recurring visits to the client’s site for maintenance purposes.

IT Consulting – eCrypt will provide IT consulting services at the client’s place of business.  In typical IT consulting service projects, clients will engage eCrypt to discover, address, and propose solutions for deficiencies or weaknesses in the client’s business equipment, communications infrastructure, communications network security, and/or business practices in relation to the security of information.

Suppliers

eCrypt’s major suppliers for its recurring business needs include, but are not limited to: i) Certicom; ii) Research in Motion (“RIM”); iii) AT&T Mobility; iv) Init Seven; and v) Stargate Connections Ltd.

Certicom - Certicom provides the Company with cryptography Application Program Interfaces (“APIs”), which enable developers to secure applications, communications, and mobile devices while protecting content and other critical assets using cryptography. As noted above, eCrypt has a three (3) year OEM License Agreement with Certicom.  

Research in Motion - eCrypt is a RIM BlackBerry® ISV Alliance Member™.  As part of the BlackBerry Alliance, RIM provides the Company with resources, support and tools necessary to develop and sell innovative, market-driven applications for BlackBerry smartphone users.  The initial term of the Alliance Program is one (1) year.  Thereafter, RIM may elect to renew the relationship with eCrypt for successive one-year periods.   

AT&T - AT&T Mobility provides the Company with wireless data services and devices for the Company’s Managed Communications Network Services.  AT&T Mobility also provides the Company with wireless services and devices for the Company’s internal operations.  

Init Seven - Init Seven, AG provides the Company with co-location services, commonly referred to as server hosting services.

Stargate Connections Ltd. - Stargate Connections Ltd., provides the Company with co-location services, commonly referred to as server hosting services.  

Distribution

The Company plans to distribute its software globally, in accordance with applicable import and export regulations, through a number of distribution channels.  The primary method of distribution will be through the Company’s eCommerce website at www.ecryptinc.com.  The Company will also pursue strategic distribution alliances with service providers, carrier dealers, and software vendors to distribute its software.  The Company does not currently have any strategic distribution alliance contracts in place.  To date the Company has not distributed any products.  The Company has, however, provided it’s Managed Communications Network Services to a client.

All of eCrypt’s products and services will be offered and distributed globally, in accordance with applicable import and export regulations.

Customers and Marketing

Customers

7

To date, the Company’s only current customer through which the Company has generated revenue is a party utilizing the Company’s services related to its MCNS business.

Marketing

The Company will initially make efforts to market its product(s) on the internet, using the Company website (www.ecryptinc.com), as well as a Company microsite developed by Media2O Productions, and on social networking sites such as Twitter and Facebook.  Additionally the Company is exploring the potential of listing its flagship product, eCrypt for BlackBerry® smartphones on online application marketplace websites such as MobiHand and Handango.   Additionally, the Company will list it’s flagship product, eCrypt for BlackBerry smartphones in Research In Motion’s BlackBerry Solutions Catalogue, and explore joint marketing opportunities.  The Company plans to have both casual (without a booth) and official (with a booth or as a Speaker) presence at trade shows such as the Financial Forum hosted in Vancouver, BC Canada; the IDC IT FORUM & EXPO hosted in Boston, MA USA; the ISCE International Satellite & Communications Exchange Conference and Expo hosted in LA, CA USA; DIGITAL DOWNTOWN (D2) hosted in NY, NY USA; GLOBALCOMM hosted in Las Vegas, NV USA; and other such trade shows and expos, internationally.  The Company will also market its solution to Celebrities and Personalities at conventions such as the Sundance Film Festival.  Additionally the Company will seek to place advertisements in various LifeStyle, Technology, and Business magazines. Additionally the Company is considering engaging in strategic marketing alliances (eg: sponsoring an athlete).  Remaining marketing will be word of mouth, and referrals.

Competition

eCrypt’s flagship software product, eCrypt for BlackBerry® smartphones, faces direct competition from three primary development companies: SAMURAI by BabelSecure, SecureMessage by Cworx, and SecretMail by Link2.   Each of the foregoing companies currently offers and sells a software product similar to our flagship product, eCrypt for BlackBerry smartphones.   These companies are at a more advanced stage of business operations than eCrypt because their products are currently available in the market place.  Although there is no assuarance that we will be able to successfully compete with these companies once we release eCrypt for BlackBerry smartphones to the marketplace, we currently believe that we will be able to successfully compete with these companies because we believe that eCrypt for BlackBerry smartphones will have better functionality and will be easier to use than the products of our competitors.  With respect to the Company’s other security software, eCrypt faces tangential competition from Ascendo, Inc. and Rove (formerly Idokorro Mobile).  eCrypt also faces general competition to its security applications from other information security companies, such as PGP, Entrust, and Voltage.  

Property

The Company does not currently own any real property.  However, the Company has negotiated the lease of office space located at 103 - 248 East 2nd Avenue, Vancouver, British Columbia, Canada.  The space is currently under construction; eCrypt anticipates that the space will be ready for occupancy in November 2009.  This office will serve as the Company’s headquarters.  Currently the Company runs its business operations at 2129 - 4951 Netarts Hwy W, Tillamook OR, 97141.

The Company utilizes a Switzerland-based co-location facility to host its email servers and a Canadian-based co-location facility to host its eCommerce server.  The eCommerce server will serve as the mechanism through which the Company will distribute its software online, for both purchase and evaluation purposes.

8

eCrypt owns the following internet domain names: ecryptinc.com, ecryptinc.ca, ecryptinc.org, ecryptinc.net, ecryptinc.cc, and ecryptinc.mobi.  

Intellectual Property and Agreements

Trademarks

eCrypt has applied for trademarks with the United States Patent and Trademark Office for each of the following:

1)  A stylized version of the eCrypt logo in relation to products and services offered by the Company.  The mark consists of the letter “e” in small circle and a stylized version of the word “crypt.”  The mark appears as follows:

2)  A stylized version of the “e” icon in relation to products and services offered by the Company.  The mark consists of the letter “e” in a small circle.  The mark appears as follows:

3)  The word mark “control is key,” without stylization, in relation to products and services offered by the Company.  The mark consists only of the words of which it is comprised.

Patents

eCrypt is currently investigating whether its original processes developed in association with its flagship encryption software, eCrypt for BlackBerry® smartphones are patenable.  If the Company determines that its original processes are patentable, then the Company will apply for patent protection with the United States Patent and Trademark Office.

Licenses

9

The research, development and commercialization of a encryption software often involves alternative development and optimization routes, which are presented at various stages in the development process. The preferred routes cannot be predicted at the outset of a research and development program because they will depend upon subsequent discoveries and test results.  There are numerous third-party patents in our field, and it is possible that to pursue the preferred development route of one or more of our products we will need to obtain a license to a patent, which would decrease the ultimate profitability of the applicable product. If we cannot negotiate a license, we might have to pursue a less desirable development route or terminate the program altogether.

As noted above, effective January 31, 2008, eCrypt entered into an OEM License Agreement with Certicom Corp., a cryptography company specializing in public key infrastructure implementations, device security, anti-counterfeiting, product authentication, asset management, and fixed-mobile convergence.  Pursuant to the OEM License Agreement, eCrypt was granted a worldwide, non-exclusive, non-transferable license to develop a software product which combines eCrypt’s software with Certicom’s software, Security Builder Crypto-C for RIM, Version 3.2, as compiled within the Research in Motion Crypto API.  Additionally, through the OEM License Agreement eCrypt was granted a license to reproduce and use the object code of the libraries, sample code, and other items specifically designated as “runtime” in Security Builder for distribution purposes.  eCrypt is required to pay Certicom a production fee of $1.00 per unit for each application sold by eCrypt, with an initial $10,000 production fee for the first 10,000 units having been paid upon execution of the OEM License Agreement.  The term of the OEM License Agreement is three (3) years.

 

Trade Secrets

The Company also relies on trade secrets, proprietary know-how and continuing technological innovation to develop and maintain a competitive position in our product areas.  eCrypt employees and officers must sign a Non-Disclosure Agreement before they are authorized to discuss particulars of the functionality of the Company’s software products.  All current employees and officers of the Company who are privy to confidential information have signed Non-Disclosure and Non-Competition Agreements with the Company.  The foregoing description of our Non-Disclosure Agreement does not purport to be complete and is qualified in its entirety by reference to the Non-Disclosure Agreement which was filed as Exhibit 10.3 to the Company’s Form 10 registration statement filed with the Securities and Exchange Commission on November 11, 2008

Additionally, Gabriel Rosu, the Company’s Chief Development Officer, has signed a Software Development Partnership Agreement with the Company, pursuant to which eCrypt specifically retains ownership rights to all codes created and developed by Mr. Rosu in the scope of his engagement by the Company.  The foregoing description of the Software Development Partnership Agreement does not purport to be complete and is qualified in its entirety by reference to the Software Development Partnership Agreement which is attached hereto as Exhibit 10.4 and is hereby incorporated by reference.

Environmental Issues

The Company’s goods and services, or the production or provision thereof, do not directly impact the environment.  Notwithstanding the foregoing, the Company strives to be environmentally friendly in all aspects of its operations.

Governmental Regulations

Encryption Software is classified as a “dual-use good,” meaning that it can be used by both the general

10

public and the military.  Export of such goods is regulated by The Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies (the “Wassenaar Arrangement”).

The Wassenaar Arrangement was established in order to contribute to regional and international security and stability by promoting transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies, thus preventing destabilizing accumulations. Participating States seek, through their national policies, to ensure that transfers of these items do not contribute to the development or enhancement of military capabilities which undermine these goals, and are not diverted to support such capabilities.

The Participating States of the Wassenaar Arrangement include:  Argentina, Australia, Austria, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Romania, Russian Federation, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom and United States.

In the United States, the Bureau of Industry and Security (“BIS”) is responsible for implementing and enforcing the Export Administration Regulations (“EAR”), which regulate the export and re-export of most commercial items.  Encryption software is subject to the EAR and other U.S. law, and may not be exported or re-exported to certain countries (currently Cuba, Iran, North Korea, Sudan and Syria) or to persons or entities prohibited from receiving U.S. exports.  Because of this, the Company has applied and has received approval for Mass Market Status Export Authorization from the BIS.  Mass Market Status is given to encryption products which have been reviewed and classified by the BIS as exportable under certain rules and regulations, including the mass market encryption rules of the EAR.  

On June 11, 2008 eCrypt received a Mass Market Commodity Classification for eCrypt for BlackBerry® smartphones from the United States Department of Commerce; a copy of the Commodity Classification was attached as Exhibit 10.5 to the Form 10 registration statement filed by the Company with the Securities and Exchange Commission on November 11, 2008, and is hereby incorporated by reference.  Because the Company has received this Commodity Classification, eCrypt is allowed to export its software to all people, except restricted parties, such as Specially Designated Nationals, Denied Parties, Denied Entities, and any other prohibited end uses and users (such as end uses/users involving the design, development, production or use of WMDs or missiles), and all countries, except embargoed destinations identified in the EAR.

Employees

The Company does not currently have any full-time employees.  Founder Kasia Zukowska has been contracted by the Company to perform administrative duties on behalf of the Company.  The remaining founders of the Company are currently fulfilling the roles described herein without wages or salaries.

Reports to Security Holders

We are subject to the informational requirements of the Securities Exchange Act of 1934 which requires us to file reports, proxy statements and other information with the Securities and Exchange Commission. Such reports, proxy statements and other information may be inspected at public reference facilities of the SEC at 100 F Street, NE, Room 1580, Washington D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the SEC at 100 F Street, NE, Room 1580, Washington, D.C. 20549 at prescribed rates. The public could obtain information on the operation of the public reference room by calling the Securities and Exchange Commission at 1-800-SEC-0330.  Because we file documents electronically with the SEC, you may also obtain this information by visiting the SEC's Internet website at http://www.sec.gov.

11

ITEM 1A.

RISK FACTORS

Not Applicable.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

ITEM 2.

 PROPERTIES.

The Company does not currently own any real property.  However, the Company has negotiated the lease of office space located at 103 - 248 East 2nd Avenue, Vancouver, British Columbia, Canada.  The space is currently under construction; eCrypt anticipates that the space will be ready for occupancy in November 2009.  This office will serve as the Company’s headquarters.  Currently the Company runs its business operations at 2129 - 4951 Netarts Hwy W, Tillamook OR, 97141.

The Company utilizes a Switzerland-based co-location facility to host its email servers and a Canadian-based co-location facility to host its eCommerce server.  The eCommerce server will serve as the mechanism through which Company will distribute its software online, for both purchase and evaluation purposes.

eCrypt owns the following internet domain names: ecryptinc.com, ecryptinc.ca, ecryptinc.org, ecryptinc.net, ecryptinc.cc, ecryptinc.mobi.  

ITEM 3.

LEGAL PROCEEDINGS.

The Company is not a party to any significant pending legal proceedings, and no such proceedings are known to be contemplated. No director, officer or affiliate of the Company, and no owner of record or beneficial owner of more than 5.0% of the securities of the Company, or any associate of any such director, officer or security holder is a party adverse to the Company or has a material interest adverse to the Company in reference to pending litigation.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were submitted to a vote of the security holders of the Company during the fourth quarter of the fiscal year which ended March 31, 2009.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information.  

The Company’s shares are approved for trading on the OTCBB under the symbol “ECRY.”   However, there is no established or liquid trading market for the Company’s shares because very limited, if any, trading has occurred with the Company’s common stock over the last two fiscal years.

12

  

Holders.  

As of June 30, 2009 there were 33,384,304 shares of common stock issued and outstanding and approximately 62 shareholders of record.

Dividends.  

The Company has not declared or paid any cash dividends on its common stock during the fiscal years ended March 31, 2009 or 2008.  There are no restrictions on the common stock that limit the ability of us to pay dividends if declared by the Board of Directors and  the loan agreements and general security agreements covering the Company’s assets do not limit its ability to pay dividends.  The holders of common stock are entitled to receive dividends when and if declared by the Board of Directors, out of funds legally available therefore and to share pro-rata in any distribution to the stockholders. Generally, the Company is not able to pay dividends if after payment of the dividends, it would be unable to pay its liabilities as they become due or if the value of the Company’s assets, after payment of the liabilities, is less than the aggregate of the Company’s liabilities and stated capital of all classes

ITEM 6.

 SELECTED FINANCIAL DATA.

Not Applicable.  

ITEM 7.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

SPECIAL NOTE OF CAUTION REGARDING FORWARD-LOOKING STATEMENTS

CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, ARE WHAT ARE KNOWN AS "FORWARD LOOKING STATEMENTS", WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE. FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE. WORDS SUCH AS "PLANS," "INTENDS," "WILL," "HOPES," "SEEKS," "ANTICIPATES," "EXPECTS "AND THE LIKE OFTEN IDENTIFY SUCH FORWARD LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD LOOKING STATEMENT. SUCH FORWARD LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS. NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. THEREFORE, THE READER IS ADVISED THAT THE FOLLOWING DISCUSSION SHOULD BE CONSIDERED IN LIGHT OF THE DISCUSSION OF RISKS AND OTHER FACTORS CONTAINED IN THIS REPORT ON FORM 10-K AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. NO STATEMENTS CONTAINED IN THE FOLLOWING DISCUSSION SHOULD BE CONSTRUED AS A GUARANTEE OR ASSURANCE OF FUTURE PERFORMANCE OR FUTURE RESULTS.

13

Overview & Plan of Operation

eCrypt Technologies, Inc. was incorporated in the State of Colorado, on April 19, 2007.  The Company provides encryption software which secures the transmission of, storage of, and access to digital information.  Currently the Company is in the developmental stage and is in the process of establishing its business operations.  Over the next twelve (12) months, eCrypt will continue developing product enhancements and strengthening strategic alliances.  In particular, eCrypt plans to complete development of the second generation version of it’s flagship product eCrypt for BlackBerry® smartphones, and commence development of additional language support for both versions of eCrypt for BlackBerry smartphones.  The Company has commenced research for development of encryption software solutions for platforms other than the BlackBerry smartphone as well as research for development of other security software for mobile devices.  

CEO and President, Brad Lever, represented the Company at the Wireless Enterprise Symposium (“WES”) in May of 2009, a conference billed as the “biggest BlackBerry event of the year,” as a new BlackBerry® ISV Alliance Member™ guest of RIM.  At WES, Brad Lever had the opportunity to perform informal market research among potential end users, fellow Alliance Members, and potential competitors.  Additionally, the Company has begun prospecting for distribution alliance partners and will be seeking to formalize these relationships in the first or second quarter of the 2010 fiscal year.  Furthermore, eCrypt will pursue strategic engagements of individuals considered to be leading authorities in the field of cryptography for the purposes of seeking advice, testing software, and providing other relevant product-specific research and guidance.

In addition to the foregoing, in an effort to advance the business operations of the Company, over the next twelve (12) months the Company plans to undertake the following actions in the order in which they are listed:

1

complete development of the second generation version of eCrypt for BlackBerry® smartphones;

2

commence and complete BETA testing of the second generation version of eCrypt for BlackBerry smartphones;

3

commence distribution of second generation version of eCrypt for BlackBerry® smartphones, in accordance with all applicable import and export rules and regulations;

The foregoing business actions are goals of the Company.  There is no assurance that the Company will be able to complete any, or all, of the foregoing actions.

Results of Operations

The following discussion and analysis provides information that we believe is relevant to an assessment and understanding of our results of operation and financial condition for the fiscal year ended March 31, 2009. The following discussion should be read in conjunction with the Financial Statements and related Notes appearing elsewhere in this Form 10-K.

Our financial statements are stated in US Dollars and are prepared in accordance with generally accepted accounting principals of the United States (“GAAP”).

Results of Operation for eCrypt Technologies, Inc. for the Fiscal Year Ended March 31, 2009 Compared to the Fiscal Year Ended March 31, 2008.

Revenue

14

Revenue.  During the fiscal year ended March 31, 2009, the Company had revenues of $46,350 as compared to revenues of $11,000 during the fiscal year ended March 31, 2008, an increase of $35,350, or approximately 321%. The increase in revenue experienced by the Company was primarily attributable to the Company earning 75%, or $46,350, of the fees due under a pre-paid MCNS contract which commenced July 1st, 2008 and continues for a term of 1 year.  The remaining amount due under the contract of $15,450 is classified as deferred revenue.

Operating Expenses

Operating Expenses.  During the fiscal year ended March 31, 2009, the Company had operating expenses of $136,346 as compared to operating expenses of $40,368 during the fiscal year ended March 31, 2008, an increase of approximately 238%. The increase in operating expenses experienced by the Company was primarily attributable to an increase in amortization and depreciation, general and administrative expenses, and professional fees.

Net Loss

The Company had a net loss of $(92,111) for the fiscal year ended March 31, 2009 as compared to a net loss of $(35,505) for the fiscal year ended March 31, 2008, a change of $56,606 or approximately 159%.  The change net loss experienced by the Company was primarily attributable to an increase in operating expenses experienced by the Company.

Liquidity and Capital Resources

Currently, we have limited operating capital.  The Company anticipates that it will require approximately $2,000,000 of working capital to complete all of its desired business activity during the next twelve months.  The Company has earned limited revenue from its business operations relating to its MCNS business through which eCrypt assists its clients with managing their electronic communication needs.  We expect that our current capital and our other existing resources will be sufficient only to provide a limited amount of working capital, and the revenues generated from our business operations alone may not be sufficient to fund our operations or planned growth.  As noted above, we will likely require additional capital to continue to operate our business, and to further expand our business.   We may be unable to obtain the additional capital required.   Our inability to raise additional funds when required will have a negative impact on our operations, business development and financial results.   

 During the next twelve months, we plan on generating the necessary capital to fund our business operations and complete our desired business activity through sales of our flagship product, eCrypt, and eCrypt PayPerUse..  As of the period ended September 30, 2009, we have not generated any revenue through sales of eCrypt or eCrypt PayPerUse.   If we are unable to generate the necessary capital through the sales of eCrypt, and eCrypt PayPerUse, we may conduct a private placement offering to raise the necessary working capital to fund our business operations.   We may be unable to obtain the additional capital required.   Our inability to generate capital or raise additional funds when required will have a negative impact on our operations, business development and financial results.

In an effort to raise additional funds, during the period ended March 31, 2009, the Company completed a private placement offering pursuant to which the Company raised a total of $136,546 through the sale of 182,062 Units at a purchase price of $.75 per Unit. Each Unit consisted of one share of common stock (the “Common Stock”) and one Warrant (the “Warrants”). Each Warrant entitles the holder thereof to purchase one share of Common Stock at a price of $0.90 per share at any time up to 24 months from the subscription date. The warrants expire on or before May 4, 2011.  

  

15

The following discussion outlines the state of our liquidity and capital resources for the fiscal year ended March 31, 2009, compared to the period from April 19, 2007 (inception) to March 31, 2008 (fiscal year end):

Total Current Assets & Total Assets

Our audited balance sheet reflects that: i) as of March 31, 2009, we have total current assets of $99,432, as compared to total current assets of $20,079 at March 31, 2008, an increase of $79,353, or approximately 395%; and ii) as of March 31, 2009, we have total assets of $134,619, compared to total assets of $57,764 as of March 31, 2008, an increase of $76,855, or approximately 133%.  The increase in the Company’s total current assets and total assets from March 31, 2009 to March 31, 2008 was primarily attributable to the collection of financing proceeds via a private placement offering of the Company’s common stock.

Cash As of March 31, 2009, our audited balance sheet reflects that we have cash of $95,994, as compared to $19,528 at March 31, 2008, an increase of $76,466, or approximately 392%.  The increase in the Company’s cash and short term investments from March 31, 2009 to March 31, 2008 was primarily attributable to the collection of financing proceeds via a private placement offering of the Company’s common stock.

Total Current Liabilities

As of March 31, 2009, our audited balance sheet reflects that we have total liabilities of $47,658 as compared to total liabilities of $35,139 at March 31, 2008, an increase of $12,519, or approximately 36%.  The increase in the Company’s total liabilities from March 31, 2009 to March 31, 2008 was primarily attributable to collected but deferred revenue of $15,450 for pre-paid MCNS contract which commenced on July 1, 2008 for a term of 1 year, and an increase in accrued interest on convertible loan due to a related party.

Deferred Revenue As of March 31, 2009, our balance sheet reflects that we have deferred revenue of $15,450, as compared to deferred revenue of $nil as of March 31, 2009.  The increase in our deferred revenue was attributable to the fact that on July 1, 2008 the Company entered into an agreement to provide a client with network services for a one-year term.  The agreement provides for a prepayment of $61,800 for the full term of the contract. $46,350 represents the earned balance of the prepayment at March 31, 2009.

Cash Flow for the Company for the Fiscal Year Ended March 31, 2009 as Compared to the Fiscal Year Months Ended March 31, 2008

Operating Activities During the fiscal year ended March 31, 2009, the net cash used by the Company in operating activities was $61,837 as compared to net cash used in operating activities of $16,735 during the fiscal year ended March 31, 2008, a change of $45,102.

Investing Activities During the fiscal year ended March 31, 2009, the net cash used by the Company in investing activities was $18,144, as compared to net cash used in investing activities of $42,667 during the fiscal year ended March 31, 2008, a change of $24,523. The change in net cash used by investing activities was primarily attributable to depreciation of office and business equipment and hardware.

Financing Activities During the fiscal year ended March 31, 2009, the net cash provided by financing activities was $156,447, as compared to net cash provided by financing activities of $78,930 for the during the fiscal year ended March 31, 2009, an increase of $77,517, or approximately 98%. The change in net cash provided by financing activities was primarily attributable to the private placement offering conducted by the Company.

Off Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements.

16

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements of the Company required by Article 8 of Regulation S-X are attached to this report.

17

eCRYPT TECHNOLOGIES, INC.

AUDITED FINANCIAL STATEMENTS

FOR THE FISCAL YEAR ENDED MARCH 31, 2009

	Page
Report of Independent Registered Public Accounting Firm	19
Consolidated Balance Sheet	20
Consolidated Statements of Operations & Comprehensive Income	21
Consolidated Statements of Stockholders’ Equity	22
Consolidated Statements of Cash Flows	23
Notes to Consolidated Financial Statements	24 - 43

18

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

eCrypt Technologies, Inc.

Tillamook, OR 97141

We have audited the accompanying balance sheets of eCrypt Technologies, Inc. (A Development Stage Enterprise) as of March 31, 2009 and March 31, 2008 and the related statements of operations, stockholders’ (deficit) and cash flows for the years then ended and from inception (April 19, 2007) through March 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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 also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, 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 financial statements referred to above present fairly, in all material respects, the financial position of eCrypt Technologies, Inc. (A Development Stage Enterprise) as of March 31, 2009 and March 31, 2008 and the results of its operations and cash flows for the years then ended and from inception (April 19, 2007) through March 31, 2009 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 14 and Note 12 for 2009 and 2008, respectively, to the financial statements, the Company’s total assets and total stockholders’ equity, for the years ended March 31, 2009 and 2008 have been restated from previously reported amounts.  We also audited the adjustments described in Note 14 and Note 12 that were applied to restate the 2009 and 2008 financial statements, respectively.  In our opinion, such adjustments are appropriate and have been properly applied.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 11 and Note 9 for years ended 2009 and 2008 respectively, to the financial statements, the Company has suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern. Management’s plan in regards to these matters is also described in Note 11 and Note 9 for years ended 2009 and 2008 respectively. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ De Joya Griffith & Company, LLC

Henderson, Nevada

November 18, 2009

19

20

21

22

23

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

1.

Nature of Operations

eCrypt Technologies Inc., a Colorado corporation (“the Company”), was incorporated on April 19, 2007.  The Company develops and sells encryption software which secures the transmission of, storage of, and access to digital information.  Software applications range from device based (for Personal Digital Assistants (“PDAs”), wireless handheld devices, laptop and desktop computers, pocket computers, cellular phones, smartphones, and other file storage devices), to server-based encryption software for email servers and for file-store server.

In addition to information security software, the Company also offers IT Consulting and Managed Private Network Services.

2.

Significant Accounting Policies

Basis of Presentation

The financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles of the United States of America (“US GAAP”).

In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position as of March 31, 2009 and the results of operations and cash flows presented herein have been included in the financial statements. 

The  Company  has  evaluated  subsequent  events  through  the  date  which the financial statements were available to be issued, November 18, 2009.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that impact the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenue and expense during the reporting period.  Actual results could differ from those estimates.

Cash, Cash Equivalents and Investments

Cash equivalents consist of highly liquid investments with original maturities at the date of purchase of three months or less.  Short term investments mature in less than one year from the balance sheet date.

The Company places its cash and short-term investments with financial institutions with high credit quality investments in accordance with its investment policy designed to protect the principal investment.  Therefore, the Company believes that its exposure due to concentration of credit risk is minimal and has not experienced credit losses on investments in these instruments to date.

Property and Equipment

Property and Equipment are stated at cost less accumulated depreciation.  Depreciation is calculated using the straight line basis over their useful lives:

Computer equipment	2 years straight line basis
Computer software	1 years straight line basis
Equipment	5 years straight line basis

2.

Significant Accounting Policies (cont’d)

24

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

Revenue Recognition

Product revenue and miscellaneous income are recognized as earned.

Income Taxes

The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”, which requires an asset and liability approach to financial accounting and reposting for income taxes. Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce the deferred tax assets to the amount expected to be realized. Income tax expense is payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

Comprehensive Income

SFAS No.130, “Reporting Comprehensive Income”, requires the presentation of comprehensive income, in addition to the existing statements of operations. Comprehensive income is defined as the change in equity during the year from transactions and other events, excluding the changes resulting from investments by owners and distributions to owners.

Related Parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.  Parties are also considered to be related if they are subject to common control or common significant influence.

Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, highly liquid short-term investments, interest receivable, accounts payable and accrued liabilities, stockholder loans and a convertible loan.  The Company does not hold or issue financial instruments for trading purposes and does not hold any derivative financial instruments.

The Company’s investment policy is to achieve, in order of importance, the financial objectives of preservation of principal, liquidity and return on investment.  Investments are made in U.S. obligations and bank securities provided the obligations are guaranteed or carry ratings appropriate for the policy.

The policy risks are primarily the opportunity cost of the conservative nature of the allowable investments.  As the Company is currently in the development stage, the Company has chosen to avoid investments of a trade or speculative nature.

Foreign Currency Translation

The measurement currency of the Company is the U.S. dollar. Transactions in foreign currencies are translated at the exchange rate in effect at the transaction date.  Monetary assets and liabilities denominated in other than the measurement currency are translated at the exchange rates in effect at the balance sheet date.  The resulting exchange gains and losses are recognized in earnings.

2.

Significant Accounting Policies (cont’d)

25

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

Net Earnings (Loss) per Share

Basic and diluted net loss per share information is presented under the requirements of SFAS No.128, Earnings per share. Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period, less shares subject to repurchase. Diluted net loss per share reflects the potential dilution of securities by adding other common stock equivalents, including stock options, shares subject to repurchase, warrants and convertible notes in the weighted-average number of common shares outstanding for a period, if dilutive. The computation of earnings (loss) per share is as follows:

	2009			2008
Net Loss	$           (92,111)			$        (35,205)
Weighted-average number of shares outstanding
Basic	32,987,648			9,679,828
Earnings (Loss) per share
Basic	(0.00)			(0.00)

3.

Property and Equipment

The components of the Company’s equipment are presented below:

		2009		2008
		Accumulated
	Cost	Amortization	Net	Accumulated Amortization	Net
Computer equipment	$      9,188	$              4,290	$      4,898	$               689	$         4,821
Computer software	13,783	10,921	2,862	2,571	5,504
Equipment	27,839	6,523	21,316	1,166	17,916
	$    50,810	$           21,734	$    29,076	$           4,426	$      28,241

26

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

3.

Property and Equipment (cont’d)

Intangibles

The components of the Company’s license are presented below:

		March 31, 2009		March 31,
		Accumulated		2008
	Cost	Amortization	Net	Net
License	$           10,000	$                     3,889	$           6,111	$                9,444
	$           10,000	$                     3,889	$           6,111	$                9,444

4.

Stockholders’ Equity

a)

Authorized:

500,000,000 Common shares with par value $0.001 each

10,000,000 Preferred shares with no par value

b)

Issued or outstanding:

	Number of      shares	Amount
Balance, April 19, 2007	-	$           -
Common shares issued and outstanding	33,379,554	33,380
Paid in Capital	-	173,322
Stock Subscriptions	-	4,875
Balance, March 31, 2009	33,379,554	$211,577

On October 09, 2008, the company announced a 4:1 forward stock split on its common shares. 33,203,992 common shares were issued for 8,300,998 common shares.

On November 12, 2009 the Board of Directors of the Company consented to and approved a four-for-one forward split of the Company’s 33,379,554 issued and outstanding shares of common stock.  Pursuant to Rule 10b-17, the Forward Split will become effective 10 days following the submission of the required notification forms to FINRA. The Company anticipates the effective date to be November 24, 2009.  On the effective date, the Company’s transfer agent will cause to be issued and mailed to the eligible shareholders of record, three additional shares of common stock for each share of common stock held by the shareholder.  The forward split will result in the increase in the number of shares of the Company’s common stock issued and outstanding to 133,518,216 while keeping the number of authorized shares and par value of such shares the same.

5.

Stock Subscriptions

The Company issued private placement subscription agreements. The total amount of common shares subscribed for cash as at March 31, 2009 and 2008 is 0 and 0, respectively.

27

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

5.

Stock Subscriptions (cont’d)

	Number of     Common     shares	Number of preferred shares	Amount
Balance, April 19, 2007	-	-	$-
Shares subscribed for cash	-	-	-
Balance, March 31, 2008	-	-	-
Shares subscribed for cash	-	-	-
Balance, September 30, 2008	-	-	-
Additional shares due to share split 1:4	-	-	-
Shares issued	-	-	-
Shares subscribed for cash	-	-	4,875
Balance, March 31, 2009	-	-	$4,875

6.

Convertible Loan-Related Party

On July 02, 2007, the Company issued a convertible debenture with a face value totaling $23,800. This loan, or any portion, is convertible at any time until paid in full at a rate of 1 common share per $0.001 of the debt converted.  The loan bears interest at an annual rate of 12% percent compounded monthly. In accordance with EITF 98-5, the intrinsic value of the beneficial conversion feature has been recorded and valued at $-0.

7.

Warrants

182,062 warrants were issued during the period along with 182,062 stock subscriptions. The exercise price of the warrants is $0.75 per common share.  The warrants expire on or before December 04, 2010.

8.

Income Taxes

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 35% to the net loss before provision for income taxes for the following reasons:

	March 31,           2009	March 31, 2008
Income tax expense at statutory rate	($32,239)	($11,377)
Valuation allowance	32,239	11,377
Income tax expense per books	$   -	$   -

28

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

8.

Income Taxes (cont’d)

Net deferred tax assets consist of the following components as of:

	March 31,           2009	March 31, 2008
NOL carryover	$32,239	$11,377
Valuation allowance	(32,239)	(11,377)
Net deferred tax asset	$   -	$   -

9.

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred $14,359 and $808 of advertising expense included in General and Administrative expenses in the 12 months ended March 31, 2009 and 2008, respectively.

10.

Deferred Revenue, Commitments, and Contingencies

On July 1, 2008 the Company entered into an agreement to provide a client with network services for a one year term.

The agreement provides for a prepayment of $61,800 for the full term of the contract. $15,450 represents the unearned balance of the prepayment as of March 31, 2009.

11.

Uncertainty as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. However, the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon its ability to generate profitable operations in the future and/or obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through a private placement and public offering of its common stock. These plans, if successful, will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern.

12.

 Recent Accounting Pronouncements

In June 2009,  the  FASB  issued  SFAS  No. 166,  "Accounting  for Transfers of Financial  Assets,  an  amendment  to  SFAS  No. 140,"  ("SFAS 166"). SFAS  166 eliminates  the concept of a "qualifying special-purpose entity," changes  the requirements  for  derecognizing  financial  assets,  and  requires additional disclosures  in  order  to  enhance  information reported to users of financial statements  by providing greater transparency  about  transfers  of  financial assets, including  securitization transactions,  and  an  entity's  continuing involvement  in  and  exposure  to  the  risks related to transferred financial assets.  SFAS 166 is effective for fiscal years  beginning  after  November 15, 2009. The  Company  will  adopt  SFAS 166  in fiscal 2010. The Company does not expect  that  the  adoption of SFAS 166 will have  a  material  impact  on  the financial statements.

 

12.

 Recent Accounting Pronouncements (cont’d)

29

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

In May 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 165 (ASC 855-10), “Subsequent Events” (SFAS 165). SFAS 165 (ASC 855-10) establishes authoritative accounting and disclosure guidance for recognized and non-recognized subsequent events that occur after the balance sheet date but before financial statements are issued. SFAS 165 also requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The Company does not expect the adoption of SFAS 165 (ASC 855-10) will have a material impact on its financial condition or results of operation.

 

In April 2009, the FASB issued FSP No. FAS 157-4 (ASC 820-10). “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”) (ASC 820-10).  FSP FAS 157-4 (ASC 820-10) provides guidance on estimating fair value when market activity has decreased and on identifying transactions that are not orderly.  Additionally, entities are required to disclose in interim and annual periods the inputs and valuation techniques used to measure fair value.  This FSP is effective for interim and annual periods ending after June 15, 2009.  The Company does not expect the adoption of FSP FAS 157-4 (ASC 820-10) will have a material impact on its financial condition or results of operation.

In October 2008, the FASB issued FSP No. FAS 157-3 (ASC 820-10), “Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active,” (“FSP FAS 157-3”) (ASC 820-10), which clarifies application of SFAS 157 in a market that is not active.  FSP FAS 157-3 (ASC 820-10) was effective upon issuance, including prior periods for which financial statements have not been issued.  The adoption of FSP FAS 157-3 (ASC 820-10) had no impact on the Company’s results of operations, financial condition or cash flows.

In December 2008, the FASB issued FSP No. FAS 140-4 and FIN 46(R)-8 (ASC 860-10), “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.”  This disclosure-only FSP improves the transparency of transfers of financial assets and an enterprise’s involvement with variable interest entities, including qualifying special-purpose entities.  This FSP is effective for the first reporting period (interim or annual) ending after December 15, 2008, with earlier application encouraged.  The Company adopted this FSP effective January 1, 2009.  The adoption of the FSP had no impact on the Company’s results of operations, financial condition or cash flows.

In December 2008, the FASB issued FSP No. FAS 132(R)-1 (ASC 715-20-65), “Employers’ Disclosures about Postretirement Benefit Plan Assets” (“FSP FAS 132(R)-1”) (ASC 715-20-65).  FSP FAS 132(R)-1 (ASC 715-20-65) requires additional fair value disclosures about employers’ pension and postretirement benefit plan assets consistent with guidance contained in SFAS 157.  Specifically, employers will be required to disclose information about how investment allocation decisions are made, the fair value of each major category of plan assets and information about the inputs and valuation techniques used to develop the fair value measurements of plan assets. This FSP is effective for fiscal years ending after December 15, 2009.  The Company does not expect the adoption of FSP FAS 132(R)-1 (ASC 715-20-65) will have a material impact on its financial condition or results of operation.

In September 2008, the FASB issued exposure drafts that eliminate qualifying special purpose entities from the guidance of SFAS No. 140, (ASC 860-10) “Accounting for Transfers and Servicing of Financial  Assets and  Extinguishments of Liabilities,” and  FASB  Interpretation 46 (revised December 2003) (ASC 810-10), “Consolidation of  Variable  Interest Entities − an interpretation of ARB  No. 51,” as well as other modifications.  While the proposed revised pronouncements have not been finalized and the proposals are subject to further public comment, the Company anticipates the changes will not have a significant impact on the Company’s financial statements.  The changes would be effective March 1, 2010, on a prospective basis.

30

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

12.

 Recent Accounting Pronouncements (cont’d)

In June 2008, the FASB issued FASB Staff Position EITF 03-6-1 (ASC 260-10), Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, (“FSP EITF 03-6-1”). FSP EITF 03-6-1 (ASC 260-10) addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the computation of earnings per share under the two-class method as described in FASB Statement of Financial Accounting Standards No. 128, “Earnings per Share.” FSP EITF 03-6-1 (ASC 260-10) is effective for financial statements issued for fiscal years beginning on or after December 15, 2008 and earlier adoption is prohibited. We are not required to adopt FSP EITF 03-6-1 (ASC 260-10); neither do we believe that FSP EITF 03-6-1 (ASC 260-10) would have material effect on our consolidated financial position and results of operations if adopted.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, (ASC 944-20) “Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60”.  SFAS No. 163 (ASC 944-20) clarifies how Statement 60 applies to financial guarantee insurance contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts. SFAS No. 163 (ASC 944-20) is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years. SFAS No. 163 (ASC 944-20) has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”.  SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards. SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.

In March 2008, the Financial Accounting Standards Board, or FASB, issued SFAS No. 161 (ASC 815-10), Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133.  This standard requires companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. The Company has not yet adopted the provisions of SFAS No. 161 (ASC 815-10), but does not expect it to have a material impact on its consolidated financial position, results of operations or cash flows.

 In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110 regarding the use of a "simplified" method, as discussed in SAB No. 107 (SAB 107), in developing an estimate of expected term of "plain vanilla" share options in accordance with SFAS No. 123 (R), Share-Based Payment.  In particular, the staff indicated in SAB 107 that it will accept a company's election to use the simplified method, regardless of whether the company has sufficient information to make more refined estimates of expected term. At the time SAB 107 was issued, the staff believed that more detailed external information about employee exercise behavior (e.g., employee exercise patterns by industry and/or other categories of companies) would, over time, become readily available to companies. Therefore, the staff stated in SAB 107 that it would not expect a company to use the simplified method for share option grants after December 31,

12.

 Recent Accounting Pronouncements (cont’d)

2007. The staff understands that such detailed information about employee exercise behavior may not be

31

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

widely available by December 31, 2007. Accordingly, the staff will continue to accept, under certain circumstances, the use of the simplified method beyond December 31, 2007. The Company currently uses the simplified method for “plain vanilla” share options and warrants, and will assess the impact of SAB 110 for fiscal year 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In December 2007, the FASB issued SFAS No. 160 (ASC 810-10), Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51.  This statement amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Before this statement was issued, limited guidance existed for reporting noncontrolling interests. As a result, considerable diversity in practice existed. So-called minority interests were reported in the consolidated statement of financial position as liabilities or in the mezzanine section between liabilities and equity. This statement improves comparability by eliminating that diversity. This statement is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008 (that is, January 1, 2009, for entities with calendar year-ends). Earlier adoption is prohibited. The effective date of this statement is the same as that of the related Statement 141 (revised 2007). The Company will adopt this Statement beginning March 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In December 2007, the FASB, issued FAS No. 141 (revised 2007) (ASC 805-10), Business Combinations’.  This Statement replaces FASB Statement No. 141, Business Combinations, but retains the fundamental requirements in Statement 141.  This Statement establishes principles and requirements for how the acquirer: (a) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; (b) recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; and (c) determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. This statement applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. The effective date of this statement is the same as that of the related FASB Statement No. 160 (ASC 810-10), Noncontrolling Interests in Consolidated Financial Statements.  The Company will adopt this statement beginning March 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.

In February 2007, the FASB, issued SFAS No. 159 (ASC 825-10), The Fair Value Option for Financial Assets and Liabilities—Including an Amendment of FASB Statement No. 115.  This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. This option is available to all entities. Most of the provisions in FAS 159 are elective; however, an amendment to FAS 115 Accounting for Certain Investments in Debt and Equity Securities applies to all entities with available for sale or trading securities. Some requirements apply differently to entities that do not report net income. SFAS No. 159 (ASC 825-10) is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the

previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of SFAS No. 157 (ASC 820-10) Fair Value Measurements.  The Company will adopt SFAS No. 159 (ASC 825-10) beginning March 1, 2008 and is currently evaluating the potential impact the adoption of this pronouncement will have on its consolidated financial statements.

12.

 Recent Accounting Pronouncements (cont’d)

In September 2006, the FASB issued SFAS No. 157 (ASC 820-10), Fair Value Measurements. This statement defines fair value, establishes a framework for measuring fair value in generally accepted

32

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

accounting principles (GAAP), and expands disclosures about fair value measurements. This statement applies under other accounting pronouncements that require or permit fair value measurements, the Board having previously concluded in those accounting pronouncements that fair value is the relevant measurement attribute. Accordingly, this statement does not require any new fair value measurements.

However, for some entities, the application of this statement will change current practice. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including financial statements for an interim period within that fiscal year. The Company will adopt this statement March 1, 2008, and it is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.

13.

Subsequent Events

On July 1, 2008 the Company entered into an agreement to provide a client with network services for a one year term.  The agreement provides for a prepayment of $61,800 for the full term of the contract.

As disclosed on Form 8-KA filed with the Securities and Exchange Commission on November 13, 2009, on November 12, 2009, the Board of Directors of the Company, consented to and approved a Four-for-one forward split of the Company’s 33,379,554 issued and outstanding shares of common stock (the “Forward Split”) while maintaining the current number of authorized shares of common stock (500,000,000 shares) and the current par value per share ($0.001). The Company set the Record Date for determining the shareholders entitled to receive the Forward Split shares as November 12, 2009.  Pursuant to Rule 10b-17, the Forward Split will become effective 10 days following the submission of the required notification forms to FINRA. The Company anticipates the effective date to be November 24, 2009 (the “Effective Date”).  As a result of the Forward Split, all shareholders of record on the Record Date will receive 4 shares of common stock for every one share of common stock they currently own.  On the Effective Date, the Company’s transfer agent will cause to be issued and mailed to the eligible shareholders of record, three additional shares of common stock for each share of common stock held by the shareholder, thereby effectuating the Forward Split on a 4:1 basis.  The Forward Split will result in the increase in the number of shares of the Company’s common stock issued and outstanding to 133,518,216 while keeping the number of authorized shares and par value of such shares the same.  

14.

Restatements

On September 15, 2009 the Company determined that a restatement of its previously filed financial statements for the period of April 17, 2007 (Inception) to March 31, 2008 was necessary to properly value the $23,800 of convertible loan-related party.  This loan, or any portion, is convertible at any time until paid in full at a rate of 1 common share per $0.001 of the debt converted.  The loan bears interest at an annual rate of 12% percent compounded monthly. In accordance with EITF 98-5 the intrinsic value of the beneficial conversion feature has been recorded and valued at $0.

On October 09, 2008 the Company announced a 4:1 forward stock split on its common shares. 33,203,992 common shares were issued for 8,300,998 common shares.  Also, the company elected to issues all shares of stock as of the date of subscription.

On November 6, 2009 the Company determined that a license fee of $10,000 was improperly classes as prepaid expense and has reclassified the license fee as an intangible asset.  The asset is being amortized 14.  Restatements (cont’d)

over 3 years.

On November 6, 2009 the Company determined that certain assets were incorrectly classified and

33

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

reclassified these assets.  The Company also adjusted depreciation to reflect these assets.

The effect of these restatements on the Company’s previously issued audited March 31, 2009 and 2008 financial statements is detailed below:

(continued on following pages)

34

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

14.

Restatements (cont’d)

35

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

14.

Restatements (cont’d)

36

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

14.

Restatements (cont’d)

37

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

14.

Restatements (cont’d)

38

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

14.

Restatements (cont’d)

39

eCRYPT TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

For the Years Ended March 31, 2009 and 2008

14.

Restatements (cont’d)