UNITED STATES­­­­­

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2011

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

For the transition period from ___________ to ______________

Commission File Number: 000-53489

eCrypt Technologies, Inc.

 (Exact name of registrant as specified in its charter)

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

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 preceding 12 months (or for 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).

[ ] Yes   [ ] No

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

As of August 8, 2011, the Company had 135,086,052 shares issued and outstanding.

PART I-FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

The financial statements of eCrypt Technologies, Inc. (the "Company" or “eCrypt”), a Colorado corporation, included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission (“SEC”).  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company in the Company's Form 10-K for the fiscal year ended March 31, 2011, and all amendments thereto.

eCRYPT TECHNOLOGIES, INC.

(A DEVELOPMENT STAGE COMPANY)

FINANCIAL STATEMENTS

PERIOD ENDED JUNE 30, 2011

INDEX TO FINANCIAL STATEMENTS:	Page
Balance Sheets	3
Statements of Operations	4
Statement of Stockholders’ Equity (Deficit)	5
Statements of Cash Flows	7
Notes to Unaudited Financial Statements	9 – 15

2

eCrypt Technologies, Inc.
(A Development Stage Company)
BALANCE SHEETS
			June 30,	March 31,
			2011	2011
			(Unaudited)	(Audited)
ASSETS
CURRENT ASSETS
	Cash		$12,386	$42,417
	Prepaid expenses		232	710
	TOTAL CURRENT ASSETS		12,618	43,127
Property and equipment, net			23,812	12,560
TOTAL ASSETS			$36,430	$55,687
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
	Accounts payable and accrued liabilities		$44,082	$21,044
	Accrued interest on loan-related party		26,148	19,425
	Loan-related party		366,000	315,000
TOTAL CURRENT LIABILITIES			436,230	355,469
TOTAL LIABILITIES			436,230	355,469
STOCKHOLDERS' DEFICIT
	Preferred stock (10,000,000 Shares Authorized; No Par Value
		0 and 0 shares issued and outstanding as at June 30, 2011 and March 31, 2011)	-	-
	Common stock (500,000,000 Shares Authorized; No Par Value;
		135,086,052 and 134,798,552 shares issued and outstanding as at June 30, 2011 and March 31, 2011)	766,970	703,220
	Deficit accumulated during the development stage		(1,166,770)	(1,003,002)
TOTAL STOCKHOLDERS' DEFICIT			(399,800)	(299,782)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT			$36,430	$55,687
The accompanying notes are an integral part of these financial statements.

3

eCrypt Technologies, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
					Three Months Ended June 30, 2011	Three Months Ended June 30, 2010	Cumulative amount from Inception (April 19, 2007) to June 30, 2011
					(Unaudited)	(Unaudited)	(Unaudited)
	REVENUES
		Sales			$200	$434	$94,418
	OPERATING EXPENSES
		Amortization and depreciation			2,240	2,337	55,233
		Advertisement and promotion			3,753	255,651	341,275
		General and administrative			130,126	80,492	630,054
		Professional fees			20,819	14,122	199,333
	TOTAL OPERATING EXPENSES				156,938	352,602	1,225,895
	OPERATING LOSS				(156,738)	(352,168)	(1,131,477)
	OTHER INCOME (EXPENSES)
		Interest expense			(7,054)	595	(39,087)
		Gain on sale of fixed asset			-	-	600
		Interest income			24	(2,947)	3,194
		TOTAL OTHER INCOME (EXPENSES)			(7,030)	(2,352)	(35,293)
	NET LOSS				$(163,768)	$(354,520)	$(1,166,770)
	Loss per share
		Basic			$(0.00)	$(0.00)
	WEIGHTED AVERAGE SHARES OUTSTANDING
		Basic		134,823,827		134,469,189
	The accompanying notes are an integral part of these financial statements.

4

eCrypt Technologies, Inc.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For the Period from Inception (April 19, 2007) to June 30, 2011
							Stock	Retained	Total
Par Value of $0.001			Preferred Shares		Common Shares		Subscriptions	Earnings	Stockholders'
			Number	Amount	Number	Amount	Payable	(Deficit)	Equity
Balance at April 19, 2007 (Date of Inception)			-	$-	-	$-	$-	$-	$-
Shares issued			-	-	116,015,968	55,130	-	-	55,130
Net loss for the period			-	-	-	-	-	(32,505)	(32,505)
Balance March 31, 2008			-	$-	116,015,968	$55,130	$-	$(32,505)	$22,625
Stock subscriptions			-	-	-	-	4,875	-	4,875
Shares issued			-	-	17,502,248	151,572	-	-	151,572
Net loss for the period			-	-	-	-	-	(92,111)	(92,111)
Balance March 31, 2009			-	$-	133,518,216	$206,702	$4,875	$(124,616)	$86,961
Stock cancelled							(4,875)		(4,875)
Stock subscriptions			-	-	-	-	400,000	-	400,000
Shares issued			-	-	40,455	32,768	-	-	32,768
Net loss for the period			-	-	-	-	-	(184,480)	(184,480)
Balance March 31, 2010			-	$-	133,558,671	$239,470	$400,000	$(309,096)	$330,374
Shares issued for cash			-	-	952,381	400,000	(400,000)	-	-
Shares issued for compensation			-	-	287,500	63,750	-	-	63,750
Net loss for the period			-	-	-	-	-	(693,906)	(693,906)

5

Balance March 31, 2011			-	$-	134,798,552	703,220	-	(1,003,002)	(299,782)
Shares issued for compensation			-	-	287,500	63,750	-	-	63,750
Net loss for the period			-	-	-	-	-	(163,768)	(163,768)
Balance June 30, 2011 (Unaudited)			-	$-	135,086,052	766,970	-	(1,166,770)	(399,800)
The accompanying notes are an integral part of these financial statements.

6

7

8

eCRYPT TECHNOLOGIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(UNAUDITED)

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.

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 June 30 and the results of operations and cash flows presented herein have been included in the financial statements.  Operating results for the three months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending March 31, 2012. The financial statements should be read in conjunction with the Form 10-K for the year ended March 31, 2011 of the Company.

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.

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 since inception which 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. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

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.

9

eCRYPT TECHNOLOGIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(UNAUDITED)

2.

Significant Accounting Policies (cont’d)

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 estimated useful lives:

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

Revenue Recognition

Product revenue and miscellaneous income are recognized as earned.

Income Taxes

The Company accounts for income taxes as outlined in the Accounting Standards Codification ("ASC") 740 "Income Taxes”. Under ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC Topic 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Comprehensive Income

The Company adopted FASB Accounting Standards Codification 220 “Comprehensive Income”, which establishes standards for the reporting and display of comprehensive income and its components in the financial statements.  

Comprehensive income (loss) is the total of (1) net income (loss) plus (2) all other changes in the net assets arising from non-owner sources, which are referred to as comprehensive income.  

The Company has no components of other comprehensive loss.  Accordingly, net loss equals comprehensive loss for all periods.

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.

10

eCRYPT TECHNOLOGIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(UNAUDITED)

2.

Significant Accounting Policies (cont’d)

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.

Net Earnings (Loss) per Share

Basic and diluted net loss per share information is presented under the requirements of ASC Topic 260, 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:

	Three Months Ended June 30, 2011			Three Months Ended June 30, 2010
Net loss	$ (163,768)			$ (354,520)
Weighted-average number of shares outstanding
Basic	134,823,827			134,469,189
Loss per share
Basic	(0.00)			(0.00)

11

eCRYPT TECHNOLOGIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(UNAUDITED)

3.

Recent Accounting Pronouncements

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

4.

Property and Equipment

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

		June 30, 2011	June 30, 2011	March 31, 2011
		Accumulated
	Cost	Depreciation	Net	Net
Computer equipment	$9,812	$9,273	$539	$830
Computer software	14,445	14,445	0	0
Equipment	43,073	19,800	23,273	11,730
Total	$67,330	$43,518	$23,812	$12,560

Depreciation expense for the three months ended June 30, 2011 and 2010 were $2,240 and $2,337, respectively.

5.

Stockholders’ Equity

a)

Authorized:

500,000,000 Common shares with no par value

10,000,000 Preferred shares with no par value issued or outstanding:

During the year ended March 31, 2008 the Company effected the following stock transactions:

The Company issued a total of 116,015,968 shares of the Company’s no par value common stock in exchange for cash of $55,130.

During the year ended March 31, 2009 the Company effected the following stock transactions:

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 became effective 10 days following the submission of the required notification forms to FINRA, on November 24, 2009.  On the effective date, the Company’s transfer agent 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 resulted in the increase in the

12

eCRYPT TECHNOLOGIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(UNAUDITED)

5.

Stockholders’ Equity (cont’d)

number of shares of the Company’s common stock issued and outstanding to 133,518,216 while keeping the number of authorized shares the same.

During the year ended March 31, 2009 the Company issued 17,502,248 shares of the Company’s no par value common stock in exchange for cash of $151,572.

During the year ended March 31, 2010, the Company effected the following stock transactions:

The Company issued a total of 40,455 shares of the Company’s no par value common stock at a conversion rate of $0.81 per share in full and final settlement of a convertible debenture dated July 2, 2007. The shares were issued on March 30, 2010 for total value of $32,769. The loan consisted of principal of $23,800 and interest of $8,969.  See Note 6.

During the year ended March 31, 2011, the Company effected the following stock transactions:

On April 5, 2010, the Company entered into a private placement agreement that would offer up to 952,381 units which consists of a subscription agreement and three warrants, Warrant #1 offers the holder to purchase 952,381 shares of the Corporation’s common stock at a price of $0.42 per share at any time within a 24 month period from the date of closing.

Warrant #2 entitles the holder to purchase a total of 714,286 shares of the Corporation’s common stock at a price of $0.56 per share at any time within a 24 month period from the date of closing.

Warrant #3 entitles the holder to purchase up to a total of 3,809,524 units at a price of $0.42 per unit at any time during the six month period from the date of closing of this offering. Each unit under warrant #3 consists of one share of common stock and two warrants. One warrant allows the holder to purchase up to 3,809,524 shares of common stock at a price of $0.42 any time during the period of twenty four months from the date of purchase. The other warrant allows the holder to purchase 2,857,142 shares of common

stock at a price of $0.56 per share any time during the twenty four months from the date of closing of the purchase of these units under warrant 3.

On April 22, 2010, the Company issued 952,381 shares of common stock, and three (3) warrants for a total value of $400,000, per the private placement agreement explained above.

On February 9, 2011, the Company issued 250,000 shares of common stock for director compensation for a value of $52,500.  The share price is valued at the adjusted closing price on the date of grant which was $.21 per share.  The compensation agreement calls for a total of 1,000,000 shares to be issued during a 12 month period.

On February 15, 2011, the Company issued 37,500 shares of common stock for director compensation for a value of $11,250.  The share price is valued at the adjusted closing price on the date of grant which was $.30 per share.  The compensation agreement calls for a total of 250,000 shares to be issued during a 12 month period.

On June 23, 2011, the Company issued 250,000 shares of common stock for director compensation for a value of $52,500.  The share price is valued at the adjusted closing price on the date of grant which was $.21 per share.  The compensation agreement calls for a total of 1,000,000 shares to be issued during a 12 month period.

13

eCRYPT TECHNOLOGIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(UNAUDITED)

5.

Stockholders’ Equity (cont’d)

On June 23, 2011, the Company issued 37,500 shares of common stock for director compensation for a value of $11,250.  The share price is valued at the adjusted closing price on the date of grant which was $.30 per share.  The compensation agreement calls for a total of 250,000 shares to be issued during a 12 month period.

6.

Convertible Loan-Related Party

On July 2, 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 ASC Topic 470 -20 the intrinsic value of the beneficial conversion feature has been valued at $0.   Some terms were amended on September 9, 2009 but the conversion price remained the same. The conversion terms were amended on February 26, 2010 to reflect the new conversion price of $0.81 per share of common stock, and adding that interest is also convertible.

On March 15, 2010, the Company authorized the issuance of 40,455 of common shares for the share price of $0.81 per share for a convertible debenture dated July 2, 2007.  The shares were issued on March 30, 2010 for $32,768 and the conversion of the debenture. The loan consisted of face value of $23,800 and interest of $8,969.

7.

Loan-Related Party

The Company acquired on May 9, 2011 a $36,000 unsecured note payable from a shareholder.  The note bears interest at 10%, compounded annually, matures in two years on May 9, 2013.  

The Company acquired on April 29, 2011 a $15,000 unsecured note payable from a shareholder.  The note bears interest at 10%, compounded annually, matures in two years on April 29, 2013.  

The Company acquired a $100,000 advance during the month of January 2011 from a related party.  The advance was non-interest bearing and due in six months.  As of June 30, 2011 and March 31, 2011, balance is $100,000.  On June 24, 2011 the loan was modified to bear interest at 10%, compounded annually, and extended to mature in two years on June 24, 2013.

The Company acquired on May 18, 2010 a $215,000 unsecured note payable from a shareholder.  The note bears interest at 10%, compounded annually, matures in two years on May 18, 2012.  

8.

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred $3,753 and $255,651 of advertising expense during the years ended June 30, 2011 and 2010.

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eCRYPT TECHNOLOGIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(UNAUDITED)

9.

Stock Compensation Program

On April 12, 2011, subject to shareholder approval, the Board of Directors of eCrypt Technologies, Inc. (the “Company”) approved the adoption of the eCrypt Technologies, Inc. Stock Compensation Program (the “Program”) under which 13,500,000 shares have been reserved for purposes of possible future issuance of incentive stock options, non-qualified stock options, and restricted stock grants to employees, directors and certain key individuals.  On April 15, 2011, pursuant to a written consent in lieu of a meeting, a majority of the Company’s shareholders approved the Program.  The purpose of the Program is to attract and retain key employees, consultants and other persons, and to provide such key individuals with an additional incentive to contribute to the success of the Company.  In order to maintain flexibility in the award of stock benefits, the Program constitutes a single “omnibus” plan, but is composed of three parts.  The first part is the Incentive Stock Option Plan (“Incentive Option Plan) which provides grants of incentive stock options under Section 422A of the Internal Revenue Code of 1986, as amended.  The second part is the Nonqualified Stock Option Plan (“Nonqualified Option Plan”) which provides grants of nonqualified stock options.  The third part is the Restricted Shares Plan (“Restricted Plan”) which provides grants of restricted shares of Company common stock. The Incentive Option Plan, the Nonqualified Option Plan and the Restricted Plan respectively comprise Plan I, Plan II, and Plan III of the Program.

10.

Subsequent Events

The Company acquired on July 6, 2011 a $40,000 unsecured note payable from a shareholder.  The note bears interest at 10%, compounded annually, matures in two years on July 6, 2013.

15

eCRYPT TECHNOLOGIES, INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED JUNE 30, 2011 AND 2010

(UNAUDITED)

ITEM 2.

 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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-Q 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.

Overview & Plan of Operation

eCrypt Technologies, Inc. was incorporated in the State of Colorado on April 19, 2007.  The Company provides encryption solutions which secure the transmission of, storage of, and access to digital information. Currently the Company is a development stage Company.  

eCrypt’s primary business focus is on information security solutions which assist individuals and entities in securely transmitting, storing, and accessing information.  The Company’s business operations are oriented around the development and sale of encryption software and services.  To date the Company has earned limited revenue. The Company believes the majority of its revenues will be derived from service subscriptions of both pre-packaged solutions and custom developed solutions for data encryption.  Initially, the Company’s business operations were also focused on the provision of Managed Communication Network Services (“MCNS”) and Information Technology (“IT”) consulting services.  However, due to the lack of demand for these services, the Company has discontinued offering MCNS and IT consulting services as part of its business operations.

Currently, eCrypt develops and sells device-based encryption and security software and web-based encryption services 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 first product to market, recently renamed eCrypt One on One, encryption software for email on BlackBerry® smartphones; as of March 31, 2011, the Company had earned limited revenue from sales of eCrypt One on One. The Company is also currently in the beta phase of its web-based solution, eCrypt.me, a secure email, and file storage service.  

16

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 and web-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 and web-based solutions, eCrypt is also developing and plans to sell appliance-based encryption solutions for securing email and the storage of and access to files stored on servers.  

Over the next twelve (12) months, eCrypt will continue developing new products and existing product enhancements and strengthening strategic alliances. In particular, eCrypt plans to launch its web-based encryption service, eCrypt.me.  The Company has also commenced research for development of other security software.  

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 eCrypt.me;

2.

commence and complete testing of eCrypt.me;

3.

commence distribution of eCrypt.me; and

4.

commence and complete development of downloadable User Interfaces for the access to eCrypt.me alternate to using a web browser, for popular wireless device models, including the BlackBerry smartphone, iPhone, and Android.

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 three months ended June 30, 2011, as compared to the three months ended June 30, 2010. The following discussion should be read in conjunction with the Financial Statements and related Notes appearing elsewhere in this Form 10-Q.

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

Results of Operation for eCrypt Technologies, Inc. for the Three Months Ended June 30, 2011 Compared to the Three Months Ended June 30, 2010.

Revenue

During the three months ended June 30, 2011, the Company had revenues of $200 as compared to revenues of $434 during the three months ended June 30, 2010, a decrease of $234, or approximately 53.9%. The decrease in revenue experienced by the Company was primarily attributable to a decrease in eCrypt One on One license sales.

Operating Expenses

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During the three months ended June 30, 2011, the Company had operating expenses of $156,938 as compared to operating expenses of $352,602 during the three months ended June 30, 2010, a decrease of $195,664 or approximately 55.49%. The decrease in operating expenses experienced by the Company was primarily attributable to the fact that the Company experienced a decrease in advertisement and promotion expenses.

Net Loss

The Company had a net loss of $(163,768) for the three months ended June 30, 2011, as compared to a net loss of $(354,520) for the three months ended June 30, 2010, a change of $190,752 or approximately 53.8%.  The change in net loss experienced by the Company was primarily attributable to the fact that the Company experienced a decrease in operating expenses during the three months ended June 30, 2011.

Liquidity and Capital Resources

Currently, we have limited operating capital.  The Company anticipates that it will require approximately $5,000,000 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.  Our current capital and our other existing resources will be sufficient only to provide a limited amount of working capital, and, to date, the revenues generated from our business operations have not been 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 generate capital or 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 to seek to generate the necessary capital to fund our business operations and complete our desired business activity through sales of our software eCrypt One on One, and subscriptions to our web-based service eCrypt.me.  However, as of the period ended March 31, 2011, we have generated limited revenue through sales of eCrypt One on One.   If we are unable to generate the necessary capital through the sales of these products, we may conduct a private placement offering to seek to raise the necessary working capital to fund our business operations.  

The following discussion outlines the state of our liquidity and capital resources as of June 30, 2011:

Total Current Assets & Total Assets

Our unaudited balance sheet reflects that: i) as of June 30, 2011, we have total current assets of $12,618 as compared to total current assets of $43,127 at March 31, 2011, a decrease of $30,509, or approximately 70.7%; and ii) as of June 30, 2011, we have total assets of $36,430, compared to total assets of $55,687 as of March 31, 2011, a decrease of $19,257, or approximately 34.58%.  The decrease in the Company’s total current assets and total assets from June 30, 2011 to March 31, 2011 was primarily attributable to the fact that the Company utilized available cash for operating expenses.

Cash: As of June 30, 2011, our unaudited balance sheet reflects that we have cash of $12,386, as compared to $42,417 at March 31, 2011, a decrease of $30,031, or approximately 70.799%.  The decrease in the Company’s cash from June 30, 2011 to March 31, 2011 was primarily attributable to the fact that the Company utilized available cash for operating expenses.

Total Current Liabilities

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Our unaudited balance sheet reflects that: i) as of June 30, 2011, we have total current liabilities of $436,230, as compared to total current liabilities of $355,469 at March 31, 2011, an increase of $80,761, or approximately 22.7%; and ii) as of June 30, 2011, we have total liabilities of $436,230, as compared to total liabilities of $355,469 at March 31, 2011, an increase of $80,761, or approximately 22.7%.  The increase in the Company’s total current liabilities and total liabilities from June 30, 2011 to March 31, 2011 was primarily attributable to the fact that the Company received a loan from a related party, and realized an increase in its accounts payable and accrued liabilities.

Cash Flow for the Company for the Three Month Period Ended June 30, 2011 as Compared to the Three Month Period Ended June 30, 2010

Operating Activities During the three month period ended June 30, 2011, the net cash used by the Company in operating activities was $(67,538) as compared to net cash used in operating activities of $(342,135) during the three month period ended June 30, 2010, a change of $274,597 or approximately 80.26%.  The decrease in our net cash used in operating activities was primarily attributable to a decrease in net loss.

Financing Activities During the three month period ended June 30, 2011, the net cash provided by financing activities was $51,000 as compared to net cash provided by financing activities of $215,000 during the three month period ended June 30, 2010, a decrease of $164,000, or approximately 76.279%. The change in net cash provided by financing activities was primarily attributable to the fact that the Company received less cash via multiple loans from a related party.

Investing Activities During the three month period ended June 30, 2011, the net cash used in investing activities was $13,493 as compared to net cash used in investing activities of $nil during the three month period ended June 30, 2010, an increase of $13,493, or 100%. The change in net cash used in investing activities from the three month period ended June 30, 2011 and the three month period ended June 30, 2010 was primarily attributable to an increase in equipment.

Off Balance Sheet Arrangements

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

ITEM 4.

CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to chief executive and chief financial officers to allow timely decisions regarding disclosure.

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As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.  

Our principal officers also concluded that disclosure controls and procedures are also effective to ensure that information required to be disclosed in reports that we file under the Exchange Act is accumulated and communicated to management including our principal officers to allow timely decisions regarding timely disclosures.

Changes in Internal Control over Financial Reporting

There was no change in the Company's internal control over financial reporting during the period ended June 30, 2011, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II-OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

The Company is not a party to any 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 1A.

 RISK FACTORS.

Not Applicable.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

On June 23, 2011, the Company issued 250,000 shares of common stock for director compensation for a value of $52,500, pursuant to the terms and conditions of a Restricted Shares Agreement; a copy of the Restricted Shares Agreement was filed as exhibit 10.7 to a Form 8-K filed by the Company with the Securities and Exchange Commission on February 9, 2011, which is hereby incorporated by reference.  The share price is valued at the adjusted closing price on the date of grant which was $.21 per share.  The Restricted Shares Agreement calls for a total of 1,000,000 shares to be issued during a 12 month period.  For the above share issuances, the shares were not registered under the Securities Act in reliance upon the exemptions from registration contained in Section 4(2) of the Securities Act of 1933 (the “1933 Act”).  No underwriters were used, nor were any brokerage commissions paid in connection with the above share issuances.

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On June 23, 2011, the Company issued 37,500 shares of common stock for director compensation for a value of $11,250, pursuant to the terms and conditions of a Restricted Shares Agreement; a copy of the Restricted Shares Agreement was filed as exhibit 10.8 to a Form 8-K filed by the Company with the Securities and Exchange Commission on February 15, 2011, which is hereby incorporated by reference.    The share price is valued at the adjusted closing price on the date of grant which was $.30 per share.  The Restricted Shares Agreement calls for a total of 250,000 shares to be issued during a 12 month period.  For the above share issuances, the shares were not registered under the Securities Act in reliance upon the exemptions from registration contained in Section 4(2) of the Securities Act of 1933 (the “1933 Act”).  No underwriters were used, nor were any brokerage commissions paid in connection with the above share issuances.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

(REMOVED AND RESERVED).

ITEM 5.    

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

(a)

The following exhibits are filed herewith:

31.1

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2

Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

eCRYPT TECHNOLOGIES, INC.

By:  /S/ Brad Lever

Brad Lever, Chief Executive Officer, Chief Financial Officer

August 15, 2011

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