UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-QSB

[X]	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended March 31, 2007

[ ]	Transition Report pursuant to 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period to __________

	Commission File Number: 000-31361

EncryptaKey, Inc

(Exact name of small business issuer as specified in its charter)

New Jersey	22-3720628
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

10805 Holder Street Suite 210, Cypress, CA 90630

(Address of principal executive offices)

714-821-8093

(Issuer’s telephone number)

Futomic Industries, Inc.

(Former name, former address and former fiscal year, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [ ] No

State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 50,906,784 common shares as of March 23, 2007.

Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]

	TABLE OF CONTENTS	Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis or Plan of Operation	4
Item 3.	Controls and Procedures	13
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	14
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	14
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Submission of Matters to a Vote of Security Holders	15
Item 5.	Other Information	15
Item 6.	Exhibits	15

Table of Conents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our unaudited financial statements included in this Form 10-QSB are as follows:
F-1	Balance Sheet as of March 31, 2007;
F-2	Statements of Operations for the three months ended March 31, 2007 and 2006;
F-3	Statements of Cash Flows for the three months ended March 31, 2007 and 2006;
F-4	Notes to Financial Statements;

These unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10-QSB. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended March 31, 2007 are not necessarily indicative of the results that can be expected for the full year.

Table of Conents

Encryptakey, Inc.

formerly Futomic Industries, Inc.

(A Development Stage Company)

Balance Sheet

			March 31, 2007 (Unaudited)			December 31, 2006

	ASSETS

Current Assets
Cash		$	264,377		$	186,554
Security Deposits			-			-
Total Current Assets			264,377			186,554

Fixed Assets
Furniture and Equipment - Net			257,090			60,674
Invisidesk Portal - Net			550			550

Total Long Term Assets			257,640			61,224

Total Assets			$ 522,017			$ 247,778


	LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
Notes Payable		$	310,000		$	-
Accrued Expenses			-			-

Total Liabilities			310,000			-

Stockholders' Equity



Preferred Stock, authorized 20,000,000 shares, par value $0.0001, no preferred stock is outstanding			-			-

Common Stock, authorized 100,000,000 shares, par value $0.0001, issued and outstanding on March 31, 2007 and December 31, 2006 is 51,228,450 and 49,859,000 shares respectively				5,124			4,986

Paid in Capital				2,633,887			2,223,189

Subscriptions Receivable				-			(500,000)


Accumulated Deficit During Development Stage				(2,426,994)			(1,480,397)

Total Stockholders' Equity				212,017			247,778

Total Liabilities and Stockholders' Equity			$	522,017		$	247,778

The accompanying notes are an integral part of these statements

F-1

Table of Conents

Encryptakey, Inc.

formerly Futomic Industries, Inc.

(A Development Stage Company)

Statements of Operation

		Three Months Ended March 31,				June 24, 2003 (Inception) to March 31,
		2007		2006		2006

Operating Expenses
General and Administrative	$	93,026	$	3,869	$	426,000
Interest Expense		-		-		3,523
Advertising and Promotion		50,222		-		180,183
Research and Development		700,000		-		1,766,327
Professional Fees		103,349		-		137,349

Total Expenses		946,597		3,869		2,513,382

Net (Loss) before Extraordinary Items		(946,597)		(3,869)		(2,513,382)

Extraordinary Items
Gain on Forgiveness of Debt		-		-		89,832
Interest Income		-		-		44

Net Income/(Loss)	$	(946,597)	$	(3,869)	$	(2,423,506)

Basic and Diluted
(Loss) per Share	$	(0.02)	$	(0.00)

Weighted Average
Number of Shares		39,818,551		7,615,000


a = Less than ($0.01) per share

The accompanying notes are an integral part of these statements

F-2

Table of Conents

Encryptakey, Inc.

formerly Futomic Industries, Inc.

(A Development Stage Company)

Statements of Cash Flow

	Three Months Ended March 31,				June 24, 2003 (Inception) to March 31,
	2007		2006		2007

Operating Activities

Net Profit / (Loss)	$	(946,597)	$	(3,869)	$	(2,423,506)

Significant Non-Cash Transactions
Stock Issued to founders		-		-		3,002
Adjustment for reverse acqusition		-		-		117,630
Stock issued to purchase asset		190,856		-		191,406
Depreciation		3,487		435		5,280
Changes in Assets and Liabilities
(Increase)/Decrease in Deposits		-		-		-
Increase/(Decrease) in Accounts Payable		-		2,886		-
Increase/(Decrease) in Accrued Liabilities		-		-		-
Increase/(Decrease) in Wages Payable		-		(3,000)		-

Net Cash (Used) by Operating Activities		(752,254)		(3,548)		(2,106,188)

Investment Activities
Purchase of Invisidesk Portal		-		-		(550)
Equipment Purchase		(199,903)		-		(265,858)

Cash Used by Investment Activities		(199,903)		-		(266,408)

Financing Activities
Net Proceeds from loans - Related Parties		310,000		(27,009)		310,000
Purchase of Treasury Stock		-		-		(43,207)
Proceeds from sale of Common Stock		719,980		-		2,370,180

Cash Provided by Financing Activities		1,029,980		(27,009)		2,636,973

Net Increase/(Decrease) in Cash		77,823		(30,557)		264,377

Cash, Beginning of Period		186,554		30,665		-

Cash, End of Period	$	264,377	$	108	$	264,377

Supplemental Information:
Interest Paid	$	-	$	-	$	3,523
Income Taxes Paid	$	-	$	-	$	-

Significant Non-Cash Transactions

1. The company issued 25,000,000 post-split common shares to the founders valued at $3,002.

2. The Company issued 56,855,00 common shares valued at $117,630 and decreased the accumulated deficit by $4,502 to effect a reverse acqusition on August 15, 2003.

3. On September 28, 2006 the Company issued 5,500,000 common shares at $0.0001 par-value to acquire technology.

4. The Company issued 636,120 common shares valued at $190,836 to acquire assets.

The accompanying notes are an integral part of these statements

F-3

Table of Conents

EncryptaKey, Inc.

Formerly Futomic Industries, Inc.

(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(March 31, 2007 and December 31, 2006)

NOTE 1. GENERAL ORGANIZATION AND BUSINESS

EncryptaKey, Inc., (the Company), was incorporated in the state of New Jersey on April 6, 2000 as Segway VI Corp. The company has undergone the following name changes: on August 13, 2003 to 3DLP International Inc., on April 19 2004 to Futomic Industries Inc.; and then on February 19, 2007, subsequent to the date of these statements, to EncryptaKey, Inc.

On August 15, 2003, the Company acquired Selectrics Corporation (Selectrics), a Delaware Corporation organized on June 24, 2003, in a one-for-one common stock exchange. This transaction resulted in a change of control and was treated as a reverse acquisition with EncryptaKey, Inc. being the surviving legal entity and Selectrics the surviving accounting acquirer. Accordingly, the equity accounts and accumulated deficits prior to the merger have been adjusted to reflect those of Selectrics. The Company is considered to be in the development stage.

The company is in the business to develop and market identity and data security technologies that enable the highest level of secure commercial and financial transaction both in person and over the internet, providing an effective shield to identity theft.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

The relevant accounting policies and procedures are listed below.

Accounting Basis

The statements were prepared following generally accepted accounting principles of the United States of America consistently applied.

Management Certification

The financial statements herein are certified by the officers of the Company to present fairly, in all material respects, the financial position, results of operations and cash flows for the periods presented, in conformity with accounting principles generally accepted in the United States of America, consistently applied.

Fiscal Year

The Company operates on a December 31^st fiscal year end.

F-4

Table of Conents

Research and Development Costs

Research and Development costs are expensed as incurred in accordance with generally accepted accounting principles. Costs in association with the development of a patented technology when computer software is developed will be capitalized when technological feasibility is established in accordance with financial accounting standard No. 86

Basic and Diluted Net Income (Loss) Per Share

The Company computes net income (loss) per share in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 128, "Earnings per Share". SFAS No. 128 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method..

The numerators and denominators used in the computations of basic and diluted EPS are presented in the following table:

	31-Mar-2007	2005
Numerators for Basic and Diluted EPS Net income/(loss) to common shareholders	($946,597)	($1,054,117)

Denominators for Basic and Diluted EPS Weighted average of shares outstanding	50,726,318	39,818,55

Basic and DilutedEarnings/(Loss) Per Share	($0.02)	($0.00)

Dividends

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.

Use of Estimates

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 the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

F-5

Table of Conents

Property and Equipment

Property and equipment are carried at cost and depreciated on a straight-line bases over their useful lives. Office Equipment is depreciated over five years.

Income Taxes

The provision for income taxes is the total of the current taxes payable and the net of the change in the deferred income taxes. Provision is made for the deferred income taxes where differences exist between the period in which transactions affect current taxable income and the period in which they enter into the determination of net income in the financial statements.

NOTE 3. GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of its assets and the liquidation of its liabilities in the normal course of business. However, the Company is in its development stage and has never generated revenues. The Company has accumulated a loss of $2,423,506 during its development stage. This raises substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from this uncertainty.

Management’s Plan

Management has successfully raised $2,105,200 in a private offering that closed on February 7, 2007. The Company continues to seek funding from its shareholders and other qualified investors to pursue its business plan.

NOTE 4. STOCKHOLDERS’ EQUITY

Preferred Stock

The Company is authorized 20,000,000 shares of preferred stock at a $0.0001 par value and currently has zero shares of preferred stock issued and outstanding.

Common Stock

The Company is authorized to issue 100,000,000 shares of common stock, par value $0.0001 per share. As of December 31, 2006, there were 49,859,000 shares of common stock outstanding. On August 7, 2006, the Company exercised a five for one forward stock split. All share amounts herein are adjusted to give effect to the stock split and have also been adjusted to reflect the adjusted equity resulting from the August 15, 2003 reverse merger.

F-6

Table of Conents

During 2003, the Company issued 81,855,000 post-split shares of common stock in the following transactions:

·	On June 24, 2003, the Company issued 25,000,000 shares to its founder for $3,002.

On August 15, 2003 the Company 56,855,000 common shares to execute the acquisition of Selectrics Corporation in a one for one share exchange for a value of $121,882. This acquisition was recorded as a reverse merger with Selectrics the surviving historical accounting company. Accordingly the equity and accumulated deficit are adjusted to reflect Seletrics history.

During 2004, the Company issued 2,875,000 post-split shares of common stock in the following transactions:

·	On March 15, 2004, the Company issued 375,000 shares for $15,000 cash in a private placement.

·	On July 23, 2004 the Company issued 2,500,000 shares in a private placement for $250,000 cash.

During 2005, the Company received 46,655,000 common shares into its treasury from a shareholder for cash and other property valued at $43,207.

During 2006, the Company issued 11,784,000 shares of common stock in the following transactions:

On September 28, 2006, the Company entered into an Asset Purchase Agreement with Owen Consulting LLC to acquire the right, title and interest in technology commonly known as the EncryptaKey Secure communication Portal by issuing 5,500,000 shares of common stock at $0.0001 per share. The technology and associated intellectual property has been memorialized by patent application. However, it is still in development and the associated costs are expensed to research and development. Because of the limited public market for the Company stock, Par-value was used to record this transaction.

·	On December 12, 2006, the Company issued 6,284,000 common shares in a private offering at $0.30 per share for $1,385,200 and $500,000 subscriptions receivable. The Company extended the closing of the offering to February 7, 2007

During 2007, the Company issued 1,369,450 common shares in the following transactions:

·	On February 7, 2007 the Company issued 733,330 common shares in a private offering at $0.30 per share for $220,000 and received cash on outstanding subscription receivable in the amount of $500,000.

·	On February 7, 2007 the Company issued 636,120 common shares at $0.30 per share to purchase fixed assets valued at $190,836.

F-7

Table of Conents

NOTE 5. COMMITMENTS AND CONTINGENCIES - RELATED PARTY

Research and Development with Owens Consulting, LLC

On September 28, 2006, the Company entered into an Asset Purchase Agreement with Owen Consulting LLC, a California limited liability company with Mr. Kelly Owen, the Company’s CEO the principle member. Pursuant to that agreement, the Company issued 5,500,000 shares of common stock and acquired assets consisting of all right, title and interest in a biometric security technology commonly known as the EncryptaKey Secure Communication Portal memorialized in a patent application.

On October 1, 2006 the Company entered into an associated consulting agreement with Owen Consulting, LLC to complete the development of the EncryptaKey Secure Communication Portal. The terms of the agreement require payment at the rate of $25.00 per hour for actual hours incurred for research and development. The project involves the efforts of over 100 programmers and technicians. As of December 31, 2006 the Company has been invoiced and paid $890,000 on this contract which has been expensed as Research and Development costs.

During the first quarter of 2007 the company has be invoiced and paid an additional $700,000 on this contract and expects that its commitment to complete the development of the EncryptaKey technology to exceed $2,500,000.

Gain on Forgiveness of Debt

From time-to-time shareholders advance the Company its working capital needs. The balance at December 31, 2006 and 2005 was $0.00 and $95,942 respectively. Interest is accrued on these loans at a rate of 3% on an annual basis.

As of December 31, 2006 the Company recognized forgiveness of related party debt in a transaction that included the transfer of the Company’s assets. Forgiveness of debt amounted to $89,832.

NOTE 6. PROVISION FOR INCOME TAXES

The Company provides for income taxes under Statement of Financial Accounting Standards NO. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of an asset and liability approach in accounting for income taxes.

SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The total deferred tax asset is $325,687 as of December 31, 2006 which is calculated by multiplying a 22% estimated tax rate by the cumulative NOL of $860,646 The total valuation allowance is a comparable $325,687.

F-8

Table of Conents

The provision for income taxes for the period ended December 31, 2006 and 2005 follows:

Year Ended December 31,	2006	2005
Deferred Tax Asset	$231,906	$19,216
Valuation Allowance	(231,906)	(19,216)
Current Taxes Payable	0.00	0.00
Income Tax Expense	$ 0.00	$ 0.00

Below is a chart showing the estimated federal net operating losses and the years in which they will expire.

Year	Amount	Expiration
2003	$152,649	2023
2004	186,296	2024
2005	87,334	2025
2006	1,054,117	2006

Total	$1,480,396

NOTE 7. COMMITMENTS AND CONTINGENCIES

On October 1, 2006 the Company entered into a consulting agreement with Owen Consulting, LLC to complete the development of the EncryptaKey Secure Communication Portal. The terms of the agreement require payment at the rate of $25.00 per hour actual hour incurred for research and development through September 30, 2007. The project currently involves the efforts of over 100 programmers and technicians. As of December 31, 2006 the Company has been invoiced and paid $890,000 on this contract.

During the first quarter of 2007 the company has be invoiced and paid an additional $700,000. The Company expects that its commitment to complete the development of the EncryptaKey technology to exceed $2,500,000.

NOTE 8. THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

Below is a listing of the most recent Statement of Financial Accounting Standards (SFAS) SFAS 155-157 and their effect on the Company.

Statement No. 155 - Accounting for Certain Hybrid Financial Instruments

In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments, which amends SFAS No. 133, Accounting for Derivatives Instruments and Hedging Activities and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities. SFAS No. 155 amends SFAS No. 133 to narrow the scope exception for interest-only and principal-only strips on debt instruments to include only such strips representing rights to receive a specified portion of the contractual interest or principle cash flows. SFAS No. 155 also amends SFAS No. 140 to allow qualifying special-purpose entities to hold a passive derivative financial instrument pertaining to beneficial interests that itself is a derivative instrument.

F-9

Table of Conents

Statement No. 156 - Accounting for Servicing of Financial Assets

In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets, which provides an approach to simplify efforts to obtain hedge-like (offset) accounting. This Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. The Statement (1) requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to service a financial asset by entering into a servicing contract in certain situations; (2) requires that a separately recognized servicing asset or servicing liability be initially measured at fair value, if practicable; (3) permits an entity to choose either the amortization method or the fair value method for subsequent measurement for each class of separately recognized servicing assets or servicing liabilities; (4) permits at initial adoption a one-time reclassification of available-for-sale securities to trading securities by an entity with recognized servicing rights, provided the securities reclassified offset the entity's exposure to changes in the fair value of the servicing assets or liabilities; and (5) requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in the balance sheet and additional disclosures for all separately recognized servicing assets and servicing liabilities. SFAS No. 156 is effective for all separately recognized servicing assets and liabilities as of the beginning of an entity's fiscal year that begins after September 15, 2006, with earlier adoption permitted in certain circumstances. The Statement also describes the manner in which it should be initially applied.

Statement No. 157 - Fair Value Measurements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, to clarify how to measure fair value and to expand disclosures about fair value measurements. The expanded disclosures include the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value on earnings and is applicable whenever other standards require (or permit) assets and liabilities to be measured at fair value. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years.

The adoption of these new Statements is not expected to have a material effect on the Company’s current financial position, results or operations, or cash flows.

F-10

Table of Conents

Item 2. Management’s Discussion and Analysis or Plan of Operation

Forward-Looking Statements

Certain statements, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believes,” “project,” “expects,” “anticipates,” “estimates,” “intends,” “strategy,” “plan,” “may,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. We intend such forward-looking statements to be covered by the safe-harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and are including this statement for purposes of complying with those safe-harbor provisions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse affect on our operations and future prospects on a consolidated basis include, but are not limited to: changes in economic conditions, legislative/regulatory changes, availability of capital, interest rates, competition, and generally accepted accounting principles. These risks and uncertainties should also be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Further information concerning our business, including additional factors that could materially affect our financial results, is included herein and in our other filings with the SEC.

Business Development

We were incorporated in the State of New Jersey on April 6, 2000 under the name “Segway VI Corp.” On August 13, 2003, we changed our name to 3DLP International Inc. In June of 2004, we changed our name to Futomic Industries, Inc. and subsequently filed Articles of Amendment with the State of New Jersey formally implementing that name change on October 15, 2005. On February 19, 2007, our Board of Directors unanimously resolved to amend our articles of incorporation to change our name to EncryptaKey, Inc. Subsequently, a majority of our shareholders, acting by written consent, consented to the name change and the amendment to our articles of incorporation necessary to effect that change. Under our articles and bylaws, no other approvals are necessary or required. On February 22, 2007 we filed a Form DEF 14C with the SEC effecting the above actions. On March 13, 2007 we filed a Certificate of Amendment to our Articles of Incorporation with the Division of Revenue of the State of New Jersey effecting the name change.

Table of Conents

Previously, we were engaged in the research, development and distribution of various technologies including a 3D Adapter for the Sony Playstation II, and an incomplete 3D Laser projection system to display 3D images. On June 20, 2005, we sold our video game related technologies to SplitFish Gameware Inc. of Edmonton, Canada, a company owned by Mr. Ken Tetterington who was formerly our principal shareholder, officer and director. As a result of this transaction, we are no longer in the video game hardware business. The primary reason for exiting this business was to allow us to focus on our other business, the research and development of smart card technology related to the biometric security industry. However, we lacked the funding to pursue this line of business and were forced to shelve it until such time as we were able to acquire the necessary capital to proceed. At present, and for the foreseeable future, our smart card related security business plan remains on hold.

Our current business plan is focused upon the research, development, manufacture and sale of the biometric security technology we recently acquired from Owen Consulting, LLC, an entity owned and controlled by our current CEO and director, Kelly Owen. On September 28, 2006, we entered into an Asset Purchase Agreement with Owen Consulting LLC, a California limited liability company. Pursuant to that agreement, we acquired technology called the “EncryptaKey Secure Communication Portal” as described in a patent application pending before the Patent and Trademark Office as application no. 60745514, filed April 24, 2006, titled “Invisidesk Private Communication, Authentication and Connection Portal” and the related intellectual property in exchange for 5,500,000 shares of our restricted common stock. As a result of our acquisition of the EncryptaKey technology, we have changed the focus of our efforts in the security products business away from smart cards and towards more sophisticated biometric devices that use the EncryptaKey technology.

Also on September 28, 2006, our Board of Directors resolved to expand the size of the Board to two members and appointed Kelly Owen to fill the newly created seat. Our Board also appointed Mr. Owen to act as our sole officer, serving as each of CEO, CFO, President, Secretary and Treasurer. Our Board believes that Mr. Owen is best suited to develop products based on the EncryptaKey technology and to develop, market, and sell applications utilizing this technology to government, institutional, commercial, and individual consumers.

On October 1, 2006, we retained Owen Consulting, LLC, to develop the EncryptaKey technology into a marketable product. We paid Owen Consulting $890,000 during 2006 and $700,000 during the three month period ended March 31, 2007 pursuant to this contract.

On February 5, 2007, we entered into an Asset Purchase Agreement with Owen Consulting Inc., a Nevada Corporation. Pursuant to that agreement, we acquired assets consisting of all right, title and interest in server hardware and software in exchange for 636,120 shares of our restricted common stock. The equipment and software we acquired will allow us to continue development of our primary product. We do not anticipate that we will need to acquire a plant or purchase any additional, significant equipment during 2007.

Table of Conents

articles of incorporation necessary to effect that change. Under our articles and bylaws, no other approvals are necessary or required. On February 22, 2007 we filed a Form DEF 14C with the SEC effecting the above actions. On March 13, 2007 we filed a Certificate of Amendment to our Articles of Incorporation with the Division of Revenue of the State of New Jersey effecting the name change.

Description of Business and Plan of Operation

Our objective for our new technology is to have our first anticipated hardware product, which we have preliminarily called “EncryptaKey,” function so as to allow a user to (1) manage his finances, (2) shop online, and (3) access his home or work computer remotely and securely. The EncryptaKey hardware device is presently in the development stage only and many significant technical and financial challenges remain before we anticipate being able to deliver a viable product to market. We anticipate that, provided we are successful in raising the funding necessary to do so, we will be able to finalize all functions of the system and test-market working prototypes by the end of 2007. It is our plan that, when development is complete, the EncryptaKey hardware will utilize biometric data to secure personal and financial information.

We believe that our EncryptaKey technology has the potential to effectively address a number of security issues plaguing financial institutions and individuals alike. Industry research suggests that identity fraud victimized nine million adults in the United States during 2005, resulting in $56.6 Billion in losses for financial institutions and retailers, and endless frustration for consumers. We believe that EncryptaKey technology has the potential to become a cost effective means for businesses and consumers to reduce these losses.

As presently designed, an EncryptaKey hardware device will be approximately the size of a USB “Thumb Drive” (4” x 1” x .25”) and will contain both a pad which will read and verify a user’s thumbprint and an active RFID transmitter which can only be activated by the user. Inside the physical casing will be a 1 Gigabyte flash drive that will hold user data as well as the proprietary operating system. This flash drive will be partitioned so that the data is kept separate from the operating system. The system is designed so that, should anyone attempt to physically access the flash drive, the memory is immediately and completely erased. Further, attempts to hack the data from a lost or stolen EncryptaKey will be fruitless as the user’s fingerprint is required to replicate the unique access code.

As designed, when an end-user receives or purchases an EncryptaKey hardware device, he or she will first load it with personal and financial information. This will be done by plugging the EncryptaKey directly into the USB port of the user’s personal computer. The computer will then reboot to EncryptaKey’s proprietary operating system and will connect through our web portal to the user’s financial institutions to download information or perform online financial activities. Once the device is set up with the user’s fingerprint, thereafter the EncryptaKey will know who has logged on because a unique key will have been created using biometric data from the user’s fingerprint as well as his or her login name and password. This will not be able to be duplicated by anyone but the user because of the universal uniqueness of the user’s thumbprint.

Table of Conents

Our plan is to partner with financial institutions and online retailers who will adapt their current systems to recognize users authenticated with an EncryptaKey. We believe that they will do so because of the ability of EncryptaKey, as designed, to reduce fraudulent transactions in general, and particularly those based on identity theft. There can be no assurance, however, that we will be successful in convincing financial institutions and online retailers to allow their online transaction systems to work with EncryptaKey.

In addition to providing secure transactions for online financial and retail transactions, we also intend for EncryptaKey to allow a user to securely access home or work computers over the internet as an alternative to storing sensitive information on a portable laptop. We believe that secure remote access features will appeal to our target customers because the ability to remotely access home and work computers greatly reduces the security risks associated with the potential for having a laptop containing sensitive information on the internal hard drive lost or stolen while traveling. Because sensitive information will no longer need to be kept on the laptop in order for EncryptaKey users to have access to the information, there is no security risk if the laptop is lost or stolen. Users can remotely and securely access their computers either from laptops or public terminals. No information ever resides on the hard drive of the laptop or terminal, nor is it transmitted over the internet. Therefore, it cannot be intercepted or mined later.

We further believe that, over the longer term, the EncryptaKey could potentially supplant traditional credit cards in many face to face retail purchase transactions because of its security features. Despite the recent growth of online retail purchase transactions, a vast number of credit card sales are still face-to-face Point of Service (POS) transactions. We intend to design the EncryptaKey such that, once a user’s credit card information is loaded into the EncryptaKey as described above, it can be used for secure POS transactions, provided the retailer has the appropriate hardware and software systems to recognize EncryptaKey.

Our long term goal with our technology is to have a system in widespread use that will allow a user, when paying for merchandise at a retail counter, to pull out his EncryptaKey instead of reaching for a credit card. We believe such a use has considerable potential because, whereas credit cards can be lost or stolen and used by others to run up charges, EncryptaKey cannot be used by anyone but the primary user because of the built in biometric security features. In order to pay for merchandise, a user would place his or her thumb on the thumb pad of the EncryptaKey. The EncryptaKey would read and verify that the thumb print matches the one on file for the registered user. This unlocks the EncryptaKey and allows the user to select which credit or debit card he wishes to use in order to pay for the merchandise, just as if the user was sitting at his or her desktop computer making an online purchase. The user will then press a transmit button while holding the EncryptaKey near the sensor pad of an Automated Teller Machine or Wireless POS Terminal. The EncryptaKey’s low power active RFID transmitter then transmits the requisite information to confirm payment with the merchant and the bank. We have not yet designed or built, even in the prototype phase, the hardware devices and supporting software systems that would allow EncryptaKey to be used in POS transactions. There can be no assurance that we will be able to do so or that we would be able to convince any retail or financial institutions to adopt such systems.

Table of Conents

Our first product, the hardware EncryptaKey, is presently still under development. We anticipate that, provided we are successful in raising the funding necessary to do so, we will be able to finalize all functions of the system and test-market working prototypes by the end of 2007. There can be no assurance that we will successfully complete the design and testing of any products, including the EncryptaKey hardware device. We do not have any facilities or equipment capable of manufacturing the EncryptaKey in commercial quantities, nor do we have a contract with a third party manufacturer. There can be no assurance that we will be able to manufacture or contract for the manufacture of the EncryptaKey at a reasonable cost, or at all.

Although we have not yet built a working model of the EncryptaKey that includes the thumbprint and active RFID security features we intend to include in our final production model, we have successfully built a beta version of our proprietary operating system and successfully installed it on a flash drive. We displayed this working prototype at the Consumer Electronics Show in Las Vegas during the 4th Quarter of 2006. We were pleased with the acceptance of our prototype and were recognized by the trade show organizers with the Best of Show - New Innovations award.

We do not presently have any customers or contracts for sales or licensing of any product using the EncryptaKey technology, including the EncryptaKey hardware device presently under development. There can be no assurance that there will be any market demand for any product we may develop.

We presently lack the funds necessary to complete our business plan. During the 4th Quarter of 2006, we raised $1,135,200 through an ongoing private placement of our common stock. Also during the 4th Quarter, we spent approximately $845,000 of those funds on operations related to the development of the Encryptakey technology. During the three month period ended March 31, 2007, we raised an additional $969,985.20 in that same private placement, which closed February 7, 2007. During the three month period ended March 31, 2007, we spent approximately $700,000 on operations related to the development of the Encryptakey technology. Despite this additional capital, we will need to raise additional funds over the next twelve months, through borrowing or through sales of securities, in order to continue to pursue our business plan in 2007.

We currently have forecasted the expenditure of approximately $3,600,000 during the next twelve months in order to further develop the EncryptaKey technology, for sales and marketing, for general and administrative expenses, and for working capital requirements, including the anticipated cost of compliance with the reporting requirements of the Securities Exchange Act of 1934. These estimates do not include any unanticipated capital requirements that may be needed should we identify any products or business acquisitions that may add value to our current products.

The completion of our business plan for the next 12 months is contingent upon us obtaining that financing. If we are unable to obtain sufficient financing, our business plan will be significantly impaired. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds. Without the necessary financing, we will not be able to pursue our plan of operations until such time as the necessary funds are raised. There can be no assurance that additional financing will be available to us when needed or, if available that it can be

Table of Conents

obtained on commercially reasonable terms. If we are not able to obtain the additional funding on a timely basis, if and when it is needed, we will be forced to scale down or perhaps even cease operation of our business.

In the long-term, our ability to continue as a going concern is dependent upon successful and sufficient market acceptance of our product offerings and any new product offerings that we may introduce, the continuing successful development of our products and related technologies, and finally achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution of equity interest of our current stockholders. Obtaining commercial loans, assuming those loans would be available, would increase our liabilities and future cash commitments.

Results of Operations for the three months ended March 31, 2007 and 2006

We did not earn any revenue for the three month period ended March 31, 2007, nor did we earn any revenue for the three month period ended March 31, 2006.

We incurred expenses in the amount of $946,597 for the three month period ended March 31, 2007, compared to $3,869 for the same period the prior year. The increase in expenses can be attributed to changing our business strategy to the acquisition and development of our EncryptaKey technology since the end of the three month period ended March 31, 2006. The main component of our expenses for the three month period ended March 31, 2007 was Research and Development Costs in the amount of $700,000. Our other expenses were attributable to developing and marketing the EncryptaKey technology, and providing general and administrative support for the business.

Liquidity and Capital Resources

As of March 31, 2007, we had current assets in the amount of $264,377 and $0 in current liabilities, resulting in working capital in the amount of $264,377. As discussed above, the completion of our business plan for the next 12 months is contingent upon us obtaining additional financing. If we are unable to obtain additional financing, our business plan will be significantly impaired. We do not have any formal commitments or arrangements for the sales of stock or the advancement or loan of funds. Without the necessary cash flow, we will not be able to pursue our plan of operations until such time as the necessary funds are raised in the equity securities market.

We currently do not have enough cash to satisfy our minimum cash requirements for the next twelve months. This raises substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to raise additional capital based upon the company’s desired plan of operation. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Off Balance Sheet Arrangements

As of March 31, 2007, there were no off balance sheet arrangements.

Table of Conents

Going Concern

We have incurred an accumulated total net loss of $3,459,979 or the period from inception (June 24, 2003) through March 31, 2007 and are not presently generating any revenue. We do not anticipate generating any revenue in 2007. Our future is dependent upon successful and sufficient market acceptance of our product offerings and any new product offerings that we may introduce, the continuing successful development of our products and related technologies, and finally, achieving a profitable level of operations. We plan to seek additional financing in a private equity offering to secure funding for our operations. There can be no assurance that such additional financing will be available to us on acceptable terms or at all. These factors, among others, raise substantial doubt about our ability to continue as a going concern.

Critical Accounting Policies

In December 2001, the SEC requested that all registrants list their most “critical accounting polices” in the Management Discussion and Analysis. The SEC indicated that a “critical accounting policy” is one which is both important to the portrayal of a 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. We believe that the following accounting policies fit this definition.

Accounting Basis

The statements were prepared following generally accepted accounting principles of the United States of America consistently applied.

Management Certification

Fiscal Year

The Company operates on a December 31^st fiscal year end.

Research and Development Costs

Table of Conents

Basic and Diluted Net Income (Loss) Per Share

Dividends

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid during the periods shown.

Use of Estimates

Property and Equipment

Property and equipment are carried at cost and depreciated on a straight-line bases over their useful lives. Office Equipment is depreciated over five years.

Income Taxes

Recently Issued Accounting Pronouncements

Below is a listing of the most recent accounting standards SFAS 150-154 and their effect on the Company.

Statement No. 150 Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (Issued 5/03)

This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity.

Table of Conents

Statement No. 151 Inventory Costs-an amendment of ARB No. 43, Chapter 4 (Issued 11/04)

This statement amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that “…under some circumstances, items such as idle facility expense, excessive spoilage, double freight and re-handling costs may be so abnormal ass to require treatment as current period charges….” This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of “so abnormal.” In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities.

Statement No. 152 Accounting for Real Estate Time-Sharing Transactions (an amendment of FASB Statements No. 66 and 67)

This Statement amends FASB Statement No. 66, Accounting for Sales of Real Estate, to reference the financial accounting and reporting guidance for real estate time-sharing transactions that is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions.

This Statement also amends FASB Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, states that the guidance for (a) incidental operations and (b) costs incurred to sell real estate projects does not apply to real estate time-sharing transactions. The accounting for those operations and costs is subject to the guidance in SOP 04-2.

Statement No. 153 Exchanges of Non-monetary Assets (an amendment of APB Opinion No. 29)

The guidance in APB Opinion No. 29, Accounting for Non-monetary Transactions, is based on the principle that exchanges of non-monetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, includes certain exceptions to the principle. This Statement amends Opinion 29 to eliminate the exception for non-monetary exchanges of similar productive assts and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange.

Statement No. 154 Accounting Changes and Error Corrections (a replacement of APB Opinion No. 20 and FASB Statement No. 3)

This Statement replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include

Table of Conents

specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed.

The adoption of these new Statements is not expected to have a material effect on the Company’s current financial position, results or operations, or cash flows.

Item 3. Controls and Procedures

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2007. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, Mr. Kelly Owen. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2007, our disclosure controls and procedures are effective. There have been no changes in our internal controls over financial reporting during the quarter ended March 31, 2007.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Internal Controls

Our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material error. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Table of Conents

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

We are not a party to any pending legal proceeding. We are not aware of any pending legal proceeding to which any of our officers, directors, or any beneficial holders of 5% or more of our voting securities are adverse to us or have a material interest adverse to us.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The information set forth below relates to our issuances of securities without registration under the Securities Act during the reporting period which were not previously included in a Current Report on Form 8-K.

On December 13, 2006 we filed a Form 8-K announcing the close of an unregistered private placement of 6,284,000 shares of our common stock at $0.30 for total gross proceeds of $1,885,200. We were unable to collect all payments by the January 15, 2007 deadline and decided it was in the best interest of the Company to extend the offering to allow for additional interested investors to submit subscription agreements and payments until February 7, 2007.

On February 7, 2007, we closed the unregistered private placement of 6,900,664 shares of our common stock at $0.30 per share for total gross proceeds of $2,070,185.70. All subscription agreements and funds have been received and approved.

Shares in this offering were sold by directors, officers and employees of the Company without commissions or other compensation.

In making this offering, we relied on the exemptions provided by Section 4(2) of the United States Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D Promulgated thereunder. The Units were offered only to institutional or other investors who are “accredited investors” (as defined under Rule 501(a) of Regulation D under the Securities Act). Investors represented in writing that they were given adequate information about us to make an informed investment decision and that they have had an opportunity to ask questions of and receive answers from representatives of our Company with respect to our Company and its business, the shares and the offering. Investors were also required to represent that they are accredited investors and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the shares and that they are able to withstand a complete loss of their investment. Investors were also required to represent that they were acquiring the shares for investment only and not with a view towards distribution. The shares, when issued, will be subject to restrictions on transferability and may not be resold or otherwise transferred unless the sales or transfers have been registered, or are exempt from registration, under the Securities Act and applicable state laws. We did not engage in any general solicitation or advertising.

Table of Conents

Item 3. Defaults upon Senior Securities

None

Item 4. Submission of Matters to a Vote of Security Holders

Except as described below, no matters have been submitted to our security holders for a vote, through the solicitation of proxies or otherwise, during the quarterly period ended March 31, 2007.

On February 19, 2007, our Board of Directors unanimously resolved to amend our articles of incorporation to change our name to EncryptaKey, Inc. Subsequently, a majority of our shareholders, acting by written consent, consented to the name change and the amendment to our articles of incorporation necessary to effect that change. Under our articles and bylaws, no other approvals are necessary or required. On February 22, 2007 we filed a Form DEF 14C with the SEC effecting the above actions. On March 13, 2007 we filed a Certificate of Amendment to our Articles of Incorporation with the Division of Revenue of the State of New Jersey effecting the name change.

Item 5. Other Information

None.

Item 6. Exhibits

Exhibit Number	Description of Exhibit
10.1	Consulting Agreement with Owen Consulting, Inc. dated October 1, 2006.
31.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Table of Conents

SIGNATURES

In accordance with the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	EncryptaKey, Inc

Date:	June 25, 2007

	By: /s/ Kelly Owen Kelly Owen Title: Chief Executive Officer and Director

EncryptaKey, Inc. 10-Q