Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations and other parts of this quarterly report on Form 10-Q contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can also be identified by words such as "intends," "anticipates," "expects," "believes," "plans," "predicts," and similar terms. Forward-looking statements are not guarantees of future performance and our actual results may differ significantly from the results discussed in the forward-looking statements. Factors that might cause such differences include, but are not limited to, those set forth below under "Certain Risk Factors." The following discussion should be read in conjunction with our unaudited consolidated financial statements and notes thereto included in this Form 10-Q and the audited financial statements of the Company, included in our Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission and management's discussion and analysis contained therein. We assume no obligation to revise or update any forward-looking statements for any reason, except as require by law.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants discuss their most "critical accounting policies" in management's discussion and analysis of financial condition and results of operations. The SEC indicated that a "critical accounting policy" is one which is both important to the portrayal of the company's financial condition and results and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

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

See note "Summary of Significant Accounting Policies" in the Notes to the Condensed Financial Statements and our current report on Form 10-KSB for the year ended December 31, 2008, for discussion of significant accounting policies, recent accounting pronouncements and their effect, if any, on the Company.

Results of Operations

Three and Six Months Ended June 30, 2009 and 2008.

MyECheck currently has limited revenues. The Company will rely on outside investment capital to supply cash until the time, if any, that its operations are profitable and cash flow positive. 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.

For the three months ended June 30, 2009, we reported revenue from operations of $225,074 compared to $110,805 reported for the same period in 2008. The operating loss for the three months ended June 30, 2009, was $421,318 compared to an operating loss of $210,540 for the same period in 2008.

For the six months ended June 30, 2009, we reported revenue from operations of $388,825 compared to $169,718 reported for the same period in 2008. The operating loss for the six months ended June 30, 2009, was $535,392 compared to an operating loss of $475,175 for the same period in 2008.

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The Company commenced revenue generating operations with clients since September 30, 2007. The Company believes that its revenue generating operations will continue and expand during 2009.

There are trends in sales that would have a material affect on MyECheck. In recent months there has been a marked increase in the number of applications and inquiry for MyECheck's services. Management expects this trend to continue throughout 2009, however there can be no assurances that the current trend will continue.

In 2009 the Company's revenue increases over the prior year is attributed to increased volume from additional merchant customers.

The general and administrative expenses associated with the Company's operations increased primarily due to non-cash expenses related to stock based compensation of $247,838, common stock issued for services of $23,032 and loss incurred by the issuance of common stock for the settlement of accounts payable of $52,818. Other non-cash expenses were attributed to recognition of derivative expense of $79,044 and the change in fair value of derivative liabilities of $6,420. In addition, legal fees have decreased in 2009 because of the current disposition of legal proceedings described in Part II: Other Information, Item 1: Legal Proceedings.

Research and development costs for 2009 were slightly lower than 2008 as the Company continues to enhance its information technology systems and operations.

Liquidity

As of June 30, 2009, MyECheck had cash on hand amounting to $50,868. MyECheck is currently operating cash flow negative and reflects a net loss. Management believes that the combination of revenue from operations and the proceeds from outside investment will be sufficient to fund operations, however there can be no assurance that revenues will be earned or that the expected investments will materialize.

Net cash provided by financing activities was $32,200 for the six months ended June 30, 2009, compared to $391,300 of net cash provided by financing activities for the six months ended June 30, 2008. The net cash provided by financing activities for the six months ended June 30, 2009, resulted from proceeds from a $35,000 convertible note and cash paid for debt issue costs of $2,800. The net cash provided by financing activities for the six months ended June 30, 2008 resulted from $400,000 for stock subscriptions from outside investors, $1,300 from proceeds from loans payable from a third party and a $10,000 repayment of a loan payable from a related party.

There are currently no commitments for capital expenditures.

There are currently no guarantees or other off balance sheet arrangements.

Our continued operations will depend on whether we are able to raise additional funds through various potential sources, such as equity and debt financing. Such additional funds may not become available on acceptable terms and there can be no assurance that any additional funding that we do obtain will be sufficient to meet our needs in the long term. We will continue to fund operations from cash on hand and through revenues previously described. We can give no assurances that any additional capital that we are able to obtain will be sufficient to meet our needs long term.

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Going Concern Consideration

We had a net loss of $535,392 and net cash used in operating activities of $5,331 for the six months ended June 30, 2009. In addition, we have an accumulated deficit of $2,905,712 as of June 30, 2009. At June 30, 2009, due to numerous negative indicators such as a loss from operations, net cash used in operations, and an accumulated deficit, there are concerns regarding our ability to continue as a going concern. Our financial statements included in this report, and the audited financial statements included in our Annual Report for the year ended December 31, 2008, contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors.