-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D2OVd9nt19PWHe/yMNOPbsPO+p+1ZHoiO9EfnG+MoOvh7A73I+QkF55nNFRWxhEI 8e4WZHGgcDMIpFM9wmsspg== 0001165527-07-000342.txt : 20070619 0001165527-07-000342.hdr.sgml : 20070619 20070619134816 ACCESSION NUMBER: 0001165527-07-000342 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20070619 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Your Digital Memories Inc CENTRAL INDEX KEY: 0001400000 IRS NUMBER: 980507522 STATE OF INCORPORATION: NV FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: SB-2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-143872 FILM NUMBER: 07928278 BUSINESS ADDRESS: STREET 1: 3625 BLUBONNET RD CITY: NORTH VANCOUVER STATE: A1 ZIP: V7R 4C9 BUSINESS PHONE: 604-7212560 MAIL ADDRESS: STREET 1: 3625 BLUBONNET RD CITY: NORTH VANCOUVER STATE: A1 ZIP: V7R 4C9 SB-2 1 g1779.txt FORM SB-2 OF YOUR DIGITAL MEMORIES, INC. As filed with the Securities and Exchange Commission on June 19, 2007 Registration No. 333-_______ ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 YOUR DIGITAL MEMORIES, INC. (Exact name of Registrant as specified in its charter)
Nevada 7372 98-0507522 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code) Identification No.)
15 Zichron Ya'akov, Suite 23 Entrance B. Jerusalem 94421 Israel Tel: + 1-877-651-2236 (Address and telephone number of Registrant's principal executive offices) EastBiz.com, Inc. 5348 Vegas Dr. Las Vegas, NV 89108 Phone: (702) 871-8678 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies of all Correspondence to: SRK Law Offices Rabin Science Park Rehovot, Israel Telephone No.: (718) 360-5351 Facsimile No.: (011) (972) 8-936-6000 Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement. If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: [ ] CALCULATION OF REGISTRATION FEE
========================================================================================================== Title of Class of Proposed Maximum Proposed Maximum Securities to be Amount to be Aggregate Price Aggregate Offering Amount of Registered Registered Per Share(1) Price(2) Registration Fee - ---------------------------------------------------------------------------------------------------------- Common Stock, $0.0001 1,410,600 $0.05 $70,530 $6.49 per share ==========================================================================================================
(1) The price of $0.05 is a fixed price at which the selling stockholders may sell their shares until our common stock is quoted on the OTC Bulletin Board at which time the shares may be sold at prevailing market prices or privately negotiated prices. (2) Estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended (the "Securities Act"). The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ PROSPECTUS SUBJECT TO COMPLETION DATED JUNE 18, 2007 Your Digital Memories, Inc. A MAXIMUM OF 1,410,600 SHARES OF COMMON STOCK OFFERING PRICE $0.05 PER SHARE The selling stockholders named in this prospectus are offering for resale 1,410,600 shares of our common stock. The selling stockholders have advised us that they may sell the shares of common stock from time to time after this prospectus is declared effective and they have set an offering price for these securities of $0.05 per share of common stock offered through this prospectus until our shares are quoted on the OTC Bulletin Board, or listed for trading or quoted on any other public market, and thereafter at prevailing market prices or privately negotiated prices. Our common stock is presently not traded on any market or securities exchange, and we have not applied for listing or quotation on any public market. Further, there is no assurance that our common stock will ever trade on any market or securities exchange. We will pay all expenses incurred in this offering. There is no assurance that an active trading market for our shares will develop, or, if developed, that it will be sustained. OUR BUSINESS IS SUBJECT TO MANY RISKS AND AN INVESTMENT IN OUR COMMON STOCK WILL ALSO INVOLVE A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING "RISK FACTORS" BEGINNING ON PAGE 5 BEFORE INVESTING IN OUR COMMON STOCK. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE INFORMATION IN THIS REGISTRATION STATEMENT IS NOT COMPLETE AND MAY BE AMENDED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. The date of this Prospectus is ________, 2007. The following table of contents has been designed to help you find information contained in this prospectus. We encourage you to read the entire prospectus. TABLE OF CONTENTS Page ---- SUMMARY INFORMATION 3 RISK FACTORS 5 FORWARD LOOKING STATEMENTS 14 USE OF PROCEEDS 15 DETERMINATION OF OFFERING PRICE 15 DILUTION 15 SELLING STOCKHOLDERS 15 PLAN OF DISTRIBUTION 17 LEGAL PROCEEDINGS 20 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS 21 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 22 DESCRIPTION OF SECURITIES 23 INTEREST OF NAMED EXPERTS AND COUNSEL 24 DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES 25 DESCRIPTION OF BUSINESS 25 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 31 DESCRIPTION OF PROPERTY 35 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 35 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 36 EXECUTIVE COMPENSATION 37 FINANCIAL STATEMENTS F-1 PART II INDEMNIFICATION OF DIRECTORS AND OFFICERS II-1 OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION II-1 RECENT SALES OF UNREGISTERED SECURITIES II-2 EXHIBITS II-3 UNDERTAKINGS II-4 SIGNATURES II-6 2 PROSPECTUS SUMMARY THIS SUMMARY HIGHLIGHTS CERTAIN INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY, INCLUDING OUR FINANCIAL STATEMENTS AND RELATED NOTES, AND ESPECIALLY THE RISKS DESCRIBED UNDER "RISK FACTORS" BEGINNING ON PAGE 8. ALL REFERENCES TO "WE," "US," "OUR," OR SIMILAR TERMS USED IN THIS PROSPECTUS REFER TO YOUR DIGITAL MEMORIES, INC. CORPORATE BACKGROUND We were incorporated on June 27, 2006. We are a development stage company that has not generated any revenue to date. We are focused on developing and offering software products for the creation of interactive photo slideshow products for pre-school and school-aged children. Our offices are currently located at 15 Zichron Ya'akov, Suite 23 Entrance B. Jerusalem 94421 Israel. Our telephone number is +1-877-651-2236. We have secured a domain name - www.interactiveslideshow.com but do not yet have an operating website. Our auditors have issued an audit opinion which includes a statement describing their doubts about whether we will continue as a going concern. In addition, our financial status creates substantial doubt whether we will continue as a going concern. SUMMARY OF THE OFFERING The Issuer: Your Digital Memories, Inc. Total Shares of Common Stock Outstanding Prior to the Offering: 9,022,600 Shares Shares of Common Stock Being Offered by the Selling Stockholders: 1,410,600 Shares Total Shares of Common Stock Outstanding After the Offering: 9,022,600 Shares Offering Price: $0.05 per share Use of Proceeds: We will not receive any proceeds from the sale of shares by the selling stockholders. Market for the Shares: There is no public market for our shares of common stock. We intend to have a market maker file an application on our behalf with the NASD to have our common stock quoted on the OTC Bulletin Board. There is no assurance that a trading 3 market will develop, or, if developed, that it will be sustained. Consequently, a purchaser of our common stock may find it difficult to resell the securities offered herein should the purchaser desire to do so when eligible for public resale. Risk Factors: See "Risk Factors" and the other information in this prospectus for a discussion of the factors you should consider before deciding to invest in shares of our common stock. SUMMARY FINANCIAL DATA The following summary financial information for the period from June 27, 2006 (inception) to May 31, 2007 includes balance sheet and statement of operations data from our audited financial statements. The information contained in this table should be read in conjunction with "Management's Discussion and Analysis of Financial Condition or Plan of Operation" and the financial statements and accompanying notes included in this prospectus. Statement of Operations For the period June 27, 2006 (inception) through May 31, 2007 ------------ Total Expenses $(28,079) Net loss $(28,079) Net loss per common share: Basic and diluted (less than ($0.01) per share $ (0) Balance Sheet Data May 31, 2007 ------------ Working capital $ 50,063 Total assets $ 50,063 Total liabilities -- Total Liabilities and Stockholders' Equity $ 50,063 4 RISK FACTORS An investment in our common stock involves a high degree of risk. You should carefully consider the following factors and other information in this prospectus before deciding to invest in our company. If any of the following risks actually occur, our business, financial condition, results of operations and prospects for growth would likely suffer. As a result, you could lose all or part of your investment. RISKS RELATING TO OUR BUSINESS 1. WE HAVE A GOING CONCERN OPINION FROM OUR AUDITORS, INDICATING THE POSSIBILITY THAT WE MAY NOT BE ABLE TO CONTINUE TO OPERATE. The Company has incurred net losses of $28,079 for the period from June 27, 2006 (inception) to May 31, 2007. At May 31, 2007 we had working capital of approximately $50,000 and stockholders' equity of approximately $50,063. We anticipate generating losses for at least the next 12 months. Therefore, we may be unable to continue operations in the future as a going concern. No adjustment has been made in the accompanying financial statements to the amounts and classification of assets and liabilities which adjustment may have to be made should we be unable to continue as a going concern. If we cannot continue as a viable entity, our shareholders may lose some or all of their investment in the Company. 2. WE ARE A DEVELOPMENT STAGE COMPANY AND MAY NEVER BE ABLE TO EXECUTE OUR BUSINESS PLAN. We were incorporated on June 27, 2006. We have never had any products, customers or revenues. Although we have begun initial planning for the development of our interactive photo slideshow software and have retained a consultant to assist us in attaining the milestones set forth in our business plan, we may not be able to execute our business plan unless and until we are successful in raising additional funds. In addition, our independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. As a result, we may not be able to obtain additional necessary funding. There can be no assurance that we will ever achieve any revenues or profitability. The revenue and income potential of our proposed business and operations are unproven, and the lack of an operating history makes it difficult to evaluate the future prospects of our business. 5 3. OUR BUSINESS PLAN MAY BE UNSUCCESSFUL AND WE MAY NOT BE ABLE TO CONTINUE OPERATIONS AS A GOING CONCERN. The success of our business plan is dependent on our developing and offering interactive photo slideshow SOFTWARE. Our ability to develop such software is unproven, and the lack of an operating history makes it difficult to validate our business plan. Our ability to continue as a going concern is dependent upon our generating cash flow sufficient to fund operations and reduce operating expenses. Our business plans may not be successful in addressing these issues. If we cannot continue as a going concern, our stockholders may lose their entire investment in our company. 4. WE EXPECT OUR LOSSES TO CONTINUE IN THE FUTURE AND AS A RESULT, WE MAY NOT BE ABLE TO CONTINUE OPERATIONS. UNLESS WE ARE ABLE TO GENERATE REVENUE AND MAKE A PROFIT, OUR STOCKHOLDERS MAY LOSE THEIR ENTIRE INVESTMENT IN US. We expect to incur losses over the next 12 months because we do not yet have any revenues to offset the expenses associated with the development and the marketing of our proposed software. We cannot guarantee that we will ever be successful in generating revenues in the future. We recognize that if we are unable to generate revenues, we will not be able to earn profits or continue operations and as a result our stockholders may lose their entire investment in us. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. 5. WE HAVE NO OPERATING HISTORY AND HAVE MAINTAINED LOSSES SINCE INCEPTION, WHICH WE EXPECT TO CONTINUE IN THE FUTURE. THERE IS NO ASSURANCE THAT OUR FUTURE OPERATIONS WILL RESULT IN PROFITABLE REVENUES. THESE FACTORS RAISE SUBSTANTIAL DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN. IF WE CANNOT GENERATE SUFFICIENT REVENUE TO OPERATE PROFITABLY, WE WILL LIKELY SUSPEND OR CEASE OPERATIONS AND INVESTORS COULD LOSE THEIR ENTIRE INVESTMENT IN OUR COMPANY. We incurred net losses of $28,079 for the period from June 27, 2006 (inception) to May 31, 2007. We expect to continue to incur operating losses in future periods. These losses will occur because we do not yet have any revenues to offset the expenses associated with the development and the marketing and sales of our software. We cannot guarantee that we will ever be successful in generating revenues in the future. We recognize that if we are unable to generate revenues, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail. 6 6. WE HAVE NEVER GENERATED ANY REVENUE FROM OUR BUSINESS AND WE WILL NEED TO RAISE FUNDS IN THE NEAR FUTURE. IF WE ARE NOT ABLE TO OBTAIN FUTURE FINANCING WHEN REQUIRED, WE MIGHT BE FORCED TO DISCONTINUE OUR BUSINESS. Because we have not generated any revenue from our business and we cannot anticipate when we will be able to generate revenue from our business, we will need to raise additional funds for the future development of our business and to respond to unanticipated requirements or expenses. Although we currently have approximately $50,000 in working capital, we anticipate incurring costs of at least $58,200 within the next 12 months. We will need to raise additional funds if we do not generate any revenues within the next 12 months. We do not currently have any arrangements for financing and we can provide no assurance to investors that we will be able to find such financing if required. The most likely source of future funds presently available to us will be through the sale of equity capital. Any sale of share capital will result in dilution to existing shareholders. Furthermore, there is no assurance that we will not incur debt in the future, that we will have sufficient funds to repay our future indebtedness or that we will not default on our future debts, jeopardizing our business viability. Finally, we may not be able to borrow or raise additional capital in the future to meet our needs or to otherwise provide the capital necessary to conduct business, which might result in the loss of some or all of your investment in our common stock. There can be no assurance that additional financing will be available to us on terms that are acceptable. Consequently, we may not be able to proceed with our intended business plans. Substantial additional funds will still be required if we are to reach our goals that are outlined in this Registration Statement. Without additional funding, we may not commence our planned business operations. 7. FUTURE LEGISLATION OR REGULATION OF THE INTERNET AND/OR INTERNET COMMERCE SERVICES COULD RESTRICT OUR BUSINESS, PREVENT US FROM OFFERING OUR SOFTWARE PRODUCTS AND SERVICES OR INCREASE OUR COST OF DOING BUSINESS, WHICH COULD RESULT IN A LOSS OF REVENUE. At present there are few laws, regulations or rulings that specifically address access to or commerce on the internet. We are unable to predict the impact, if any, that future legislation, legal decisions or regulations concerning the internet may have on our business, financial condition, and results of operations. Regulation may be targeted towards, among other things, assessing access or settlement charges, imposing taxes related to internet commerce, imposing tariffs or regulations based on encryption concerns or the characteristics and quality of software products and services. Any such regulation could restrict our business or increase our cost of doing business and consequently a loss of future revenue. 8. WE WILL BE HEAVILY DEPENDENT ON CONTRACTING WITH THIRD PARTY FIRM(S) TO DEVELOP AND MAINTAIN OUR SOFTWARE FOR US. IF WE ARE UNABLE TO LOCATE, HIRE AND RETAIN THESE FIRM(S), OUR BUSINESS WILL FAIL. We intend to hire a software development firm(s) to develop and maintain our interactive photo slideshow software. We budgeted $30,000 for this purpose. Should we be unable to contract qualified third parties firm(s) to develop and maintain our software, whether because we cannot find them, cannot attract them 7 to our company, or cannot afford them, we will never become profitable and our business will fail. RISK RELATED TO OUR COMPANY 9. BECAUSE OUR EXECUTIVE OFFICERS CONTROL A LARGE PERCENTAGE OF OUR COMMON STOCK, THEY HAVE THE ABILITY TO INFLUENCE MATTERS AFFECTING OUR SHAREHOLDERS. Our executive officers beneficially own approximately 83.2% of the issued and outstanding shares of our common stock. As a result, they have the ability to influence matters affecting our shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because our executive officers control such shares, investors may find it difficult to replace our management if they disagree with the way our business is being operated. 10. BECAUSE OUR EXECUTIVE OFFICERS AND DIRECTORS LIVE OUTSIDE OF THE UNITED STATES, YOU MAY HAVE NO EFFECTIVE RECOURSE AGAINST THEM FOR MISCONDUCT AND MAY NOT BE ABLE TO ENFORCE JUDGMENT AND CIVIL LIABILITIES AGAINST THEM. INVESTORS MAY NOT BE ABLE TO RECEIVE COMPENSATION FOR DAMAGES TO THE VALUE OF THEIR INVESTMENT CAUSED BY WRONGFUL ACTIONS BY OUR DIRECTORS AND OFFICERS. Both of our directors and officers live outside of the United States. Mr. Aaron Bard, our President and director is a citizen and a resident of Israel, and all or a substantial portion of his assets are located outside of the United States. Mr. Alan Sacks, our Secretary, Treasurer and a director is a citizen and a resident of Canada, and all or a substantial portion of his assets are located outside of the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our directors or officers, or obtain judgments against them outside of the United States that are predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Investors may not be able to receive compensation for damages to the value of their investment caused by wrongful actions by our directors and officers. 11. BECAUSE WE HAVE TWO DIRECTORS, DEADLOCKS MAY OCCUR IN OUR BOARD'S DECISION-MAKING PROCESS, WHICH MAY DELAY OR PREVENT CRITICAL DECISIONS FROM BEING MADE. Since we currently have an even number of directors, deadlocks may occur when such directors disagree on a particular decision or course of action. Our Articles of Incorporation and By-Laws do not contain any mechanisms for resolving potential deadlocks. While our directors are under a duty to act in the best interest of our company, any deadlocks may impede the further development of our business in that such deadlocks may delay or prevent critical decisions regarding our development. 8 12. BECAUSE OUR EXECUTIVE OFFICERS ARE UNABLE TO DEVOTE THEIR SERVICES TO OUR COMPANY ON A FULL TIME BASIS, THE PERFORMANCE OF OUR BUSINESS MAY SUFFER, OUR BUSINESS COULD FAIL AND INVESTORS COULD LOSE THEIR ENTIRE INVESTMENT. Mr. Aaron Bard, our President and a director, currently devotes approximately 10 to 20 hours per week to our company. Similarly, Mr. Alan Sacks, our Secretary, Treasurer and a director, is semi-retired and currently devotes 10 to 20 hours a week to our company. As discussed below, we depend heavily on the services of Messrs. Bard and Sacks. As a result, the management of our company could under-perform, our business could fail and investors could lose their entire investment. 13. OUR EXECUTIVE OFFICERS HAVE NO EXPERIENCE OR TECHNICAL TRAINING IN THE DEVELOPMENT, MAINTENANCE AND MARKETING OF INTERNET WEBSITES OR IN OPERATING BUSINESSES THAT LICENSE SOFTWARE OR SERVICES OVER THE INTERNET. THIS COULD CAUSE THEM TO MAKE INEXPERIENCED OR UNINFORMED DECISIONS THAT HAVE BAD RESULTS FOR US. AS A RESULT, OUR OPERATIONS COULD SUFFER IRREPARABLE HARM AND MAY CAUSE US TO SUSPEND OR CEASE OPERATIONS, WHICH COULD CAUSE INVESTORS TO LOSE THEIR ENTIRE INVESTMENT. Mr. Aaron Bard and Mr. Alan Sacks, have no experience or technical training in the development, maintenance and marketing of internet websites or in operating businesses that market software or services over the internet. Due to their lack of experience and knowledge in these areas, our executive officers could make the wrong decisions regarding the development, operation and marketing of our website and the operation of our business, which could lead to irreparable damage to our business. Consequently, our operations could suffer irreparable harm from mistakes made by our executive officers and we may have to suspend or cease operations, which could cause investors to lose their entire investment. 14. WE DEPEND HEAVILY ON MR. ALAN SACKS AND MR. AARON BARD. THE LOSS OF EITHER PERSON WILL HAVE A SUBSTANTIAL NEGATIVE EFFECT ON OUR BUSINESS AND MAY CAUSE OUR BUSINESS TO FAIL. We depend entirely on Mr. Sacks and Mr. Bard for all of our operations. The loss of either person will have a substantial negative effect on us and may cause our business to fail. Our officers did not receive any compensation for their services and it is highly unlikely that they will receive any compensation unless and until we generate substantial revenues. We do not have any employment agreements or maintain key person life insurance policies on our officers. If our officers do not devote sufficient time towards our business, we may never be able to effectuate our business plan. 15. WE MAY NOT BE SUCCESSFUL IN DEVELOPING INTERACTIVE PHOTO SLIDESHOW SOFTWARE THAT ACHIEVE MARKET ACCEPTANCE. The success or failure of developing interactive photo slideshow software depends in large part on their desirability and ease of application in the target market. We cannot be sure that our development efforts will produce software that will fulfill the needs and appeal to the tastes of pre-school and school-aged children, or their parents. 9 The computer-based interactive photo imaging industry is characterized by technological change, frequent product introductions and evolving industry standards. Our success will depend, to a significant extent, on our ability to develop software and introduce new software products to satisfy an expanded range of customer needs and achieve market acceptance. There can be no assurance that we will have sufficient resources to make the necessary investments or that we will be able to develop and implement the technological advances required to maintain a competitive position. 16. WE MAY NEVER BE ABLE TO ACHIEVE SALES REVENUES SUFFICIENT TO BECOME PROFITABLE. We believe that the acceptance of our software products will depend on our ability to: * Effectively market our software products and develop brand recognition; * Develop user-friendly software products that appeal to children and their caretakers; * Price and license the software products in a manner that is appealing to potential customers and to partners that would promote our software products; * Develop and maintain a favorable reputation among our customers; and * Have the financial ability to withstand downturns in the general economic environment or conditions that would slow the licensing of our software products. There can be no assurance that our software will achieve a level of market acceptance that will make us profitable. 17. WE FACE INTENSE COMPETITION FROM OTHER BUSINESSES THAT CURRENTLY MARKET INTERACTIVE PHOTO SLIDESHOW SOFTWARE FOR PRE-SCHOOL AND SCHOOL-AGED CHILDREN. Competition will come not only from those who deliver their products through traditional retail establishments but also from those who deliver their products and software through the internet. Our competitors have longer operating histories, greater brand recognition, larger marketing budgets and installed customer bases. In addition, these companies are able to field full-time, directly employed sales personnel to better cover certain markets and customers. They can also invest greater resources in the development of technology, content and research which will allow them to react to market changes faster, putting us at a possible competitive disadvantage. 18. MANY OF OUR COMPETITORS AND POTENTIAL COMPETITORS HAVE SIGNIFICANTLY MORE FINANCIAL RESOURCES, WHICH COULD ALLOW THEM TO DEVELOP SOFTWARE THAT COULD RENDER OUR PROPOSED SOFTWARE INFERIOR. Our competition, including Ulead, Photodex and Wondershare Software, may have software or may develop software that will render our proposed software inferior. We will likely need to obtain and maintain certain advantages over our competitors in order to be competitive, which require resources. There can be no 10 assurance that we will have sufficient financial resources to maintain our R&D, marketing, sales and customer support efforts on a competitive basis, or that we will be able to make the improvements necessary to maintain a competitive advantage with respect to our software products. 19. MARKETING AND MAKING OUR SOFTWARE PRODUCTS AVAILABLE ON THE INTERNET EXPOSE US TO REGULATORY AND LEGAL ISSUES. A range of exposures may exist due to how we intend to market our software products. If we create and utilize a web site, as we plan to do, online access through a company-operated web site requires careful consideration of legal and regulatory compliance requirements and issues. We will need sufficient security measures to protect information and preserve the privacy of our customers and monitor the use of the site. This may require extensive legal services that may become an increased cost component when considering the development of our software and technologies. 20. IF A THIRD PARTY ASSERTS THAT WE INFRINGE UPON ITS PROPRIETARY RIGHTS, WE COULD BE REQUIRED TO REDESIGN OUR SOFTWARE, PAY SIGNIFICANT ROYALTIES OR ENTER INTO LICENSE AGREEMENTS. Although presently we are not aware of any such claims, a third party may assert that our technology or technologies of entities we acquire violates its intellectual property rights. As the number of software products in our markets increases and the functionality of these software products further overlap, we believe that infringement claims will become more common. Any claims against us, regardless of their merit, could: - be expensive and time consuming to defend; - result in negative publicity; - force us to stop licensing our software products that incorporate the challenged intellectual property; - require us to redesign our software products; - divert management's attention and our other resources; or - require us to enter into royalty or licensing agreements in order to obtain the right to use necessary technologies, which may not be available on terms acceptable to us, if at all. We believe that any successful challenge to our use of a trademark or domain name could substantially diminish our ability to conduct business in a particular market or jurisdiction and thus decrease our revenues and result in possible losses to our business. 11 RISKS RELATED TO THE OFFERING 21. OUR STOCK PRICE AFTER THE OFFERING COULD BE BELOW THE OFFERING PRICE. The offering price of our common stock was arbitrarily determined by us and does not necessarily bear any relationship to our book value, assets, financial condition, or to any other established criteria of value. Our common stock price after the offering could be below the offering price. 22. THERE IS NO PUBLIC MARKET FOR OUR COMMON STOCK AND OUR STOCKHOLDERS MAY NOT BE ABLE TO RESELL THEIR SHARES AT OR ABOVE THE PRICE AT WHICH THEY PURCHASED THEIR SHARES, OR AT ALL. There is currently no market for our common stock and we can provide no assurance that a market will develop. We intend to have a market maker file an application on our behalf with the NASD to have our common stock quoted on the OTC Bulletin Board after the registration statement is declared effective by the SEC. We do not yet have a market maker who has agreed to file such application. If for any reason our common stock is not quoted on the OTC Bulletin Board or a public trading market does not otherwise develop, purchasers of the shares may have difficulty selling their common stock should they desire to do so. No market makers have committed to becoming market makers for our common stock and none may do so. Even if a trading market develops, we cannot predict how liquid that market might become. The initial public offering price may not be indicative of prices that will prevail in the trading market. The initial public offering price of the common stock was determined by us arbitrarily. The price is not based on our financial condition and prospects, market prices of similar securities of comparable publicly traded companies, certain financial and operating information of companies engaged in similar activities to ours, or general conditions of the securities market. The price may not be indicative of the market price, if any, for the common stock in the trading market after this offering. The market price of the securities offered herein, if any, may decline below the initial public offering price. The trading price of our common stock following the offering is therefore likely to be highly volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control. These factors include: - Quarterly variations in our results of operations or those of our competitors; - Announcements by us or our competitors of acquisitions, new software products, significant contracts, commercial relationships or capital commitments; - Disruption to our operations; - Commencement of, or our involvement in, litigation; - Any major change in our board or management; - Changes in governmental regulations or in the status of our regulatory approvals; and - General market conditions and other factors, including factors unrelated to our own operating performance. 12 In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of such public companies. Such fluctuations may be even more pronounced in the trading market shortly following this offering. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our actual operating performance. In addition, in the past, following periods of volatility in the overall market and the market price of a company's securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management's attention and resources. 23. FUTURE SALES BY OUR STOCKHOLDERS COULD CAUSE THE STOCK PRICE TO DECLINE. No predictions can be made of the effect, if any, that market sales of shares of our common stock or the availability of such shares for sale will have on the market price prevailing from time to time. Nevertheless, sales of significant amounts of our common stock could adversely affect the prevailing market price of the common stock, as well as impair our ability to raise capital through the issuance of additional equity securities. 24. STATE SECURITIES LAWS MAY LIMIT SECONDARY TRADING, WHICH MAY RESTRICT THE STATES IN WHICH YOU CAN SELL THE SHARES OFFERED BY THIS PROSPECTUS. If you purchase shares of our common stock sold in this offering, you may not be able to resell the shares in any state unless and until the shares of our common stock are qualified for secondary trading under the applicable securities laws of such state or there is confirmation that an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in such state. There can be no assurance that we will be successful in registering or qualifying our common stock for secondary trading, or identifying an available exemption for secondary trading in our common stock in every state. If we fail to register or qualify, or to obtain or verify an exemption for the secondary trading of, our common stock in any particular state, the shares of common stock could not be offered or sold to, or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in our common stock, the market for the common stock will be limited which could drive down the market price of our common stock and reduce the liquidity of the shares of our common stock and a stockholder's ability to resell shares of our common stock at all or at current market prices, which could increase a stockholder's risk of losing some or all of his investment. 25. OUR STOCK IS A PENNY STOCK. TRADING OF OUR STOCK MAY BE RESTRICTED BY THE SEC'S PENNY STOCK REGULATIONS AND THE NASD'S SALES PRACTICE REQUIREMENTS, WHICH MAY LIMIT A STOCKHOLDER'S ABILITY TO BUY AND SELL OUR STOCK. If a trading market does develop for our stock, it is likely we will be subject to the regulations applicable to "Penny Stock." The regulations of the SEC promulgated under the Exchange Act that require additional disclosure relating to the market for penny stocks in connection with trades in any stock defined as a penny stock. The SEC regulations define penny stocks to be any non-NASDAQ equity security that has a market price of less than $5.00 per share, subject to certain exceptions. Unless an exception is available, those regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, 13 a standardized risk disclosure schedule prepared by the SEC, to provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the purchaser's account, to make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a stock that becomes subject to the penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage market investor interest in and limit the marketability of our common stock. In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, the NASD has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Some discussions in this prospectus may contain forward-looking statements that involve risks and uncertainties. These statements relate to future events or future financial performance. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this prospectus. Forward-looking statements are often identified by words like: "believe", "expect", "estimate", "anticipate", "intend", "project" and similar expressions or words which, by their nature, refer to future events. In some cases, you can also identify forward-looking statements by terminology such as "may", "will", "should", "plans", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled Risk Factors beginning on page 8, that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. In addition, you are directed to factors discussed in the Business section beginning on page 28, the Management's Discussion and Analysis or Plan of Operation section beginning on page 34 and as well as factors discussed elsewhere in this prospectus. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. 14 Our financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. USE OF PROCEEDS The selling stockholders are selling shares of common stock covered by this prospectus for their own account. We will not receive any of the proceeds from the resale of these shares. We have agreed to bear the expenses relating to the registration of the shares for the selling stockholders. DETERMINATION OF OFFERING PRICE There has been no public market for our common shares. The price of the shares was arbitrarily determined at $0.05 per share. We believe that this price reflects the appropriate price that a potential investor would be willing to invest in us at this initial stage of our development. The price we arbitrarily determined bears no relationship whatsoever to our business plan, the price paid for our shares by our founders, our assets, earnings, book value or any other criteria of value. The offering price should not be regarded as an indicator of the future market price of the securities, which is likely to fluctuate. DILUTION The common stock to be sold by the selling stockholders is common stock that is currently issued and outstanding. Accordingly, there will be no dilution to our existing stockholders. SELLING STOCKHOLDERS The selling stockholders named in this prospectus are offering all of the 1,410,600 shares of common stock offered through this prospectus. The selling stockholders are all non-U.S. persons who acquired the 1,410,600 shares of common stock from us in a series of Regulation S private placement transactions made between January 2007 and April 2007. None of the selling stockholders are affiliates or controlled by our affiliates and none of the selling stockholders are now or were at any time in the past an officer or director of ours or any of any of our predecessors or affiliates. The following table provides as of June 15, 2007 information regarding the beneficial ownership of our common stock held by each of the selling stockholders, including: 1. the number of shares beneficially owned by each prior to this offering; 2. the total number of shares that are to be offered by each; 3. the total number of shares that will be beneficially owned by each upon completion of the offering; and 4. the percentage owned by each upon completion of the offering. 15
Beneficial Ownership Beneficial Ownership Before Offering(1) Number of After Offering(1) -------------------- Being -------------------- Name of Number of Shares Number of Selling Stockholder(1) Shares Percent(2) Offered Shares Percent(2) - ---------------------- ------ ---------- ------- ------ ---------- Abraham David Karniol 5,000 * 5,000 0 0 Asher Karniol 5,000 * 5,000 0 0 Malka Karniol 5,000 * 5,000 0 0 Isaac Friedman 5,000 * 5,000 0 0 Gita Gross 5,000 * 5,000 0 0 Avraham Ya'akov Baum 6,000 * 6,000 0 0 Inbar Kuta 19,000 * 19,000 0 0 Rachel Langnoier 10,000 * 10,000 0 0 Jeshyahey Lanegnoier 10,000 * 10,000 0 0 Israel Eli Wiess 6,000 * 6,000 0 0 Rachel Pines 199,600 2.21 199,600 0 0 Aron Meirovich 6,000 * 6,000 0 0 Arie Friedman 10,000 * 10,000 0 0 Golda Friedman 10,000 * 10,000 0 0 Hadas David 300,000 3.32 300,000 0 0 Alfred Eliazer Fuchs 6,000 * 6,000 0 0 Issac Philip 5,000 * 5,000 0 0 Oded Ofarim 160,000 1.77 160,000 0 0 Moshe Dirnfeld 6,000 * 6,000 0 0 Anat Ofarim 140,000 1.55 140,000 0 0 Israel Fink 8,000 * 8,000 0 0 Baruch Zehev Feder 6,000 * 6,000 0 0 Dov Behar Richman 5,000 * 5,000 0 0 Shalom Porgesz 7,000 * 7,000 0 0 Betzalel Glandor 5,000 * 5,000 0 0
16
Pinchas Yechezkel Babad 6,000 * 6,000 0 0 Hinde Klein 5,000 * 5,000 0 0 Joseph Ringel 6,000 * 6,000 0 0 Chava Ausch 5,000 * 5,000 0 0 Efraim Sharf 8,000 * 8,000 0 0 Moshe Brown 5,000 * 5,000 0 0 D'vori Manheim 6,000 * 6,000 0 0 Shalom Lemberger 10,000 * 10,000 0 0 Nachman Rutner 5,000 * 5,000 0 0 Nisan Ringel 5,000 * 5,000 0 0 Akiva Pines 400,000 4.43 400,000 0 0 TOTAL 1,410,600 15.63% 1,410,600 NIL *
NOTES * Represents less than 1% (1) The named party beneficially owns and has sole voting and investment power over all shares or rights to these shares, unless otherwise shown in the table. The numbers in this table assume that none of the selling stockholders sells shares of common stock not being offered in this prospectus or purchases additional shares of common stock, and assumes that all shares offered are sold. (2) Applicable percentage of ownership is based on 9,022,600 shares of common stock outstanding as of June 15, 2007. PLAN OF DISTRIBUTION This prospectus relates to the registration of 1,410,600 common shares on behalf of the selling stockholders. NO CURRENT MARKET FOR OUR SHARES There is currently no market for our securities. Our common stock is not traded on any exchange or on the over-the-counter market. After the effective date of the registration statement relating to this prospectus, we intend to have a market maker file an application with the National Association of Securities Dealers, Inc. for our common stock to be eligible for trading on the Over - -the-Counter Bulletin Board. We do not yet have a market maker who has agreed to file such application. We cannot give you any assurance that the shares you purchase will ever have a market value or that if a market for our shares ever develops, that you actually will be able to sell your shares in this market. Further, even assuming we do locate such a market maker, it could take several months before the market maker's listing application for our shares is approved, 17 if such approval is obtained. In addition, even if a public market for our shares develops, there is no assurance that a secondary public market will be sustained. The OTC Bulletin Board is maintained by the National Association of Securities Dealers. The securities traded on the Bulletin Board are not listed or traded on the floor of an organized national or regional stock exchange. Instead, these securities transactions are conducted through a telephone and computer network connecting dealers in stocks. Over-the-counter stocks are traditionally stocks of smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange. Even if our shares are quoted on the OTC Bulletin Board, a purchaser of our shares may not be able to resell the shares. Broker-dealers may be discouraged from effecting transactions in our shares because they will be considered penny stocks and will be subject to the penny stock rules. Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, impose sales practice and disclosure requirements on NASD brokers-dealers who make a market in a "penny stock." A penny stock generally includes any non-NASDAQ equity security that has a market price of less than $5.00 per share. Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transactions is otherwise exempt. In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt. A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities. Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks. The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which could severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market, assuming one develops. The selling stockholders may sell some or all of their shares at a fixed price of $0.05 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. Sales by selling stockholders must be made at the fixed price of $0.05 until a market develops for the stock. The shares may be sold or distributed from time to time by the selling stockholders or by pledgees, donees or transferees of, or successors in interest to, the selling stockholders, directly to one or more purchasers (including pledgees) or through brokers or dealers who act solely as agents. The distribution of the shares may be effected in one or more of the following methods: 18 * ordinary broker transactions, which may include long or short sales, * transactions involving cross or block trades on any securities or market where our common stock is trading, * purchases by brokers or dealers as principal and resale by such purchasers for their own accounts pursuant toothis prospectus, * in other ways not involving market makers or established trading markets, including direct sales to purchasers or sales effected through agents, * any combination of the foregoing. In addition, the selling stockholders may enter into hedging transactions with broker-dealers who may engage in shares in the course of hedging the positions they assume with the selling stockholders. The selling stockholders may also enter into option or other transactions with broker-dealers that require the delivery by such broker-dealers of the shares, which shares may be resold thereafter pursuant to this prospectus. Brokers, dealers, or agents participating in the distribution of the shares may receive compensation in the form of discounts, concessions or commissions from the selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agent (which compensation as to a particular broker-dealer may be in excess of customary commissions). Neither the selling stockholders nor we can presently estimate the amount of such compensation. We know of no existing arrangements between the selling stockholders and any other stockholder, broker, dealer or agent relating to the sale or distribution of the shares. We do not anticipate that either our stockholders or we will engage an underwriter in the selling or distribution of our shares. We will not receive any proceeds from the sale of the shares of the selling stockholders pursuant to this prospectus. We have agreed to bear the expenses of the registration of the shares, including legal and accounting fees, and such expenses are estimated to be approximately $15,007. The selling stockholders named in this prospectus must comply with the requirements of the Securities Act and the Exchange Act in the offer and sale of the common stock being offered by them. The selling stockholders and any broker-dealers who execute sales for the selling stockholders may be deemed to be an "underwriter" within the meaning of the Securities Act in connection with such sales. In particular, during such times as the selling stockholders may be deemed to be engaged in a distribution of the common stock, and therefore be considered to be an underwriter, they must comply with applicable laws and may among other things: 1. Not engage in any stabilization activities in connection with our common stock; 2. Furnish each broker or dealer through which common stock may be offered, such copies of this prospectus from time to time, as may be required by such broker or dealer, and 3. Not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities permitted under the Exchange Act. 19 Any commissions received by broker-dealers and any profit on the resale of shares sold by them while acting as principals might be deemed to be underwriting discounts or commissions under the Securities Act. REGULATION M We have informed the selling stockholders that Regulation M promulgated under the Securities Exchange Act of 1934 may be applicable to them with respect to any purchase or sale of our common stock. In general, Rule 102 under Regulation M prohibits any person connected with a distribution of our common stock from directly or indirectly bidding for, or purchasing for any account in which it has a beneficial interest, any of the shares or any right to purchase the shares, for a period of one business day before and after completion of its participation in the distribution. During any distribution period, Regulation M prohibits the selling stockholders and any other persons engaged in the distribution from engaging in any stabilizing bid or purchasing our common stock except for the purpose of preventing or retarding a decline in the open market price of the common stock. None of these persons may effect any stabilizing transaction to facilitate any offering at the market. As the selling stockholders will be offering and selling our common stock at the market, Regulation M will prohibit them from effecting any stabilizing transaction in contravention of Regulation M with respect to the shares. We also have advised the selling stockholders that they should be aware that the anti-manipulation provisions of Regulation M under the Exchange Act will apply to purchases and sales of shares of common stock by the selling stockholders, and that there are restrictions on market-making activities by persons engaged in the distribution of the shares. Under Regulation M, the selling stockholders or their agents may not bid for, purchase, or attempt to induce any person to bid for or purchase, shares of our common stock while such selling stockholders are distributing shares covered by this prospectus. Regulation M may prohibit the selling stockholders from covering short sales by purchasing shares while the distribution is taking place, despite any contractual rights to do so under the Agreement. We have advised the selling stockholders that they should consult with their own legal counsel to ensure compliance with Regulation M. LEGAL PROCEEDINGS We know of no existing or pending legal proceedings against us, nor are we involved as a plaintiff in any proceeding or pending litigation. There are no proceedings in which any of our directors, officers or any of their respective affiliates, or any beneficial shareholder, is an adverse party or has a material interest adverse to our interests. 20 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS Our officers and directors and their ages and positions are as follows: Name Age Position ---- --- -------- Aaron Bard 24 President and Director Alan Sacks 52 Secretary, Treasurer and Director MR. AARON BARD Mr. Aaron Bard has been our President and Director since September 13th 2006. Over the past five years Mr. Bard has been a full-time instructor, including computer-related instruction, at the "Bletz" Yeshiva in Jerusalem, Israel. In this capacity, one of his functions is to interact with children between the ages of 6 and 18 years. Through instructing children in the use of computers Mr. Bard identified a need for a user-friendly software package aimed at children that will enable them to organize and assort personal photographs into an interactive slide show. MR. ALAN SACKS Mr. Alan Sacks, our Secretary, Treasurer and Director since October 31, 2006, has been involved in the hospitality industry for 30 years. From 1992 to the present, he has served as the president of A.B.D.M. Enterprises Inc. located in North Vancouver, B.C. Canada. A.B.D.M. Enterprises Inc. is involved in the hospitality procurement service industry. Mr. Sacks served as the corporate director of Food and Beverage for Delta Hotels & Resorts, Canada and as general manager of several of their properties in Ontario and B.C., Canada. Until 2004, Mr. Sacks was an instructor in the Department of Hospitality Management (Labour Relations, Business Law & Facilities Management) at the Vancouver Community College in Vancouver BC Canada. Mr. Sacks has an Honors Degree in Hotel Catering from the University of Surrey, Guildford, Surrey, England. TERM OF OFFICE Our directors are appointed for one-year terms and hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our Bylaws. Our officers are appointed by our Board of Directors and hold office until removed by the Board. The officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of our directors. We have not compensated our directors for service on our Board of Directors or reimbursed them for expenses incurred for attendance at meetings of our Board of Directors. Officers are appointed annually by our Board of Directors and each officer serves at the discretion of our Board of Directors. 21 Our Board of Directors may in the future determine to pay directors' fees and reimburse directors for expenses related to their activities. Our officers and directors have not filed any bankruptcy petition, been convicted of or been the subject of any criminal proceedings or the subject of any order, judgment or decree involving the violation of any state or federal securities laws within the past five years. COMMITTEES OF THE BOARD OF DIRECTORS We do not presently have a separately constituted audit committee, compensation committee, nominating committee, executive committee or any other committees of our Board of Directors. As such, our entire Board of Directors acts as our audit committee. AUDIT COMMITTEE FINANCIAL EXPERT Our Board of Directors does not currently have any members who qualify as "audit committee financial experts." We believe that the cost related to retaining such a financial expert at this time is prohibitive. INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS No director, nominee for director or executive officer of the Company has appeared as a party in any legal proceeding that may bear on his ability or integrity during the past five years. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth the number and percentage of shares of our common stock owned as of June 15, 2007, by all persons (i) known to us who own more than 5% of the outstanding number of such shares, (ii) by all of our directors, and (iii) by our officers and directors as a group. Unless otherwise indicated, each of the stockholders has sole voting and investment power with respect to the shares beneficially owned. Name and Address of Amount and Nature Percentage of Title of Class Beneficial Owner(2) of Beneficial Ownership Class(1) - -------------- ------------------- ----------------------- -------- Common Stock Mr. Alan Sacks 5,012,000 55.5% Common Stock Mr. Aaron Bard 2,500,000 27.7% All officers as a Group 7,512,000 83.2% - ---------- (1) Based on 9,022,600 shares of our common stock outstanding. (2) The address for Mr. Sacks is 3625 Blubonnet Road, North Vancouver BC V7R 4C9. The address for Mr. Bard is 15 Zichron Ya'acov, Suite 23 Entrance B. Jerusalem, Israel 94421. 22 CHANGES IN CONTROL There are no arrangements which may result in a change in control of us. DESCRIPTION OF SECURITIES COMMON STOCK Our Certificate of Incorporation authorizes us to issue 100,000,000 shares of common stock at a par value of $0.0001 per share. As of June 15, 2007, 9,022,600 shares of common stock were issued and outstanding. Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued and outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. Subject to the terms of any outstanding series of preferred stock, the holders of common stock are entitled to share in all dividends that the Board of Directors, in its discretion, declares from legally available funds. In the event of liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock. PREFERRED STOCK Our Certificate of Incorporation authorizes us to issue 50,000,000 shares of preferred stock at a par value of $0.0001 per share. As of June 15, 2007, we have not issued any shares of preferred stock. Our Board of Directors has the ability to issue "blank check" preferred stock in various series, and shares of each series will have such rights, preferences, and privileges fixed by the Board of Directors in the resolutions authorizing the issuance of that particular series. The Board of Directors may issue any such series of blank check preferred stock without action by the holders of the common stock. Accordingly, the issuance of blank check preferred stock may adversely affect the rights of the holders of our common stock. In addition, the issuance of blank check preferred stock may be used as an "anti-takeover" device without further action on the part of the holders of our common stock. The issuance of preferred stock may also dilute the voting power of the holders of common stock, in that a series of preferred stock may be granted enhanced per 23 share voting rights and the right to vote on certain matters separately as a class, and may render more difficult the removal of current management, even if such removal may be in the best interests of our common shareholders. We have no current plans to issue any shares of preferred stock. WARRANTS There are no outstanding warrants to purchase our securities. OPTIONS There are no options to purchase our securities outstanding. We may in the future establish an incentive stock option plan for our directors, employees and consultants. TRANSFER AGENT We have appointed the following transfer agent for our shares of common stock: Island Capital Management, LLC, d/b/a Island Stock Transfer, 100 Second Avenue S., Suite 300N St. Petersburg, Fl 33701 Phone: (727) 287-0010 Fax: (727) 287-0069. The transfer agent is responsible for all record-keeping and administrative functions in connection with our issued and outstanding common stock. INTEREST OF NAMED EXPERTS AND COUNSEL No expert or counsel named in this prospectus as having prepared or certified any part of this prospectus or having given an opinion upon the validity of the securities being registered or upon other legal matters in connection with the registration or offering of the common stock was employed on a contingency basis, or had, or is to receive, in connection with the offering, a substantial interest, direct or indirect, in the registrant or any of its parents or subsidiaries. Nor was any such person connected with the registrant or any of its parents or subsidiaries as a promoter, managing or principal underwriter, voting trustee, director, officer, or employee. SRK Law Offices, our independent legal counsel, has provided an opinion on the validity of our common stock. Our financial statements for the period from inception to May 31, 2007, included in this registration statement have been audited by Moore & Associates, Chartered, as set forth in their report included in this registration statement. 24 DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION OF SECURITIES ACT LIABILITIES Our directors and officers are indemnified as provided by the Nevada Revised Statutes. We have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under the Securities Act is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be governed by the court's decision. DESCRIPTION OF BUSINESS OVERVIEW OF THE COMPANY We are a development stage company that was formed on June 27, 2006. We have commenced only limited operations, primarily focused on organizational matters in connection with this offering and we have retained the services of a consultant to assist us in reaching the milestones that we have set in our plan of operation. We have never declared bankruptcy, have never been in receivership, and have never been involved in any legal action or proceedings. We have not made any significant purchase or sale of assets, nor has the Company been involved in any mergers, acquisitions or consolidations. We are not a blank check registrant as that term is defined in Rule 419(a)(2) of Regulation C of the Securities Act of 1933, since we have a specific business plan or purpose. Neither we nor our officers, directors, promoters or affiliates, have had preliminary contact or discussions with, nor do we have any present plans, proposals, arrangements or understandings with any representatives of the owners of any business or company regarding the possibility of an acquisition or merger. Our initial board of directors consisted of two members, Mr. Benny Karasik and Mr. Shlomo Friedman, who also respectively served as our President, Treasurer and Secretary. On September 12, 2006 and October 31, 2006, Mr. Benny Karasik and Mr. Shlomo Friedman respectively resigned from all their positions as officers and directors of the Company and Mr. Aaron Bard and Mr. Alan Sacks were elected as the new directors and respectively, as President, Treasurer and Secretary of the Company to serve until their successors are elected and qualified. OBJECTIVES We intend to focus on developing user-friendly software that creates interactive photo slideshows for children to watch and play on a personal computer. Our software will turn selected family digital photos into interactive slideshows complete with music, transitions, captions and interactive games. The traditional photo slideshow is a display of a series of chosen images. We intend to develop software that will enable parents to turn their family digital photos into an interactive photo slideshow and game based on their personal family photos. We plan to develop themes for the interactive photo slideshow specially designed for children ages 3 to 12 years of age. Our target market is the 25 parents of children who wish to capture their family memories in a fun and interesting way for their children to watch and play for years to come and eventually hand down to their children and grandchildren. Our planned software involves the following three-step process for the creation and interactive manipulation of photo slideshows: STEP 1: IMPORT PHOTOS - a parent imports photos from a digital camera, scanner, hard drive and the internet. STEP 2: CHOOSE A THEME - a parent chooses a theme and determines the overall appearance of the interactive photo slideshow by applying corresponding slideshow and menu elements. These elements include visual styles, motion effects, and background music. Themes can be selected from specially designed theme templates in categories such as Holidays, Birthdays, Kindergarten, Preschool and Elementary school. STEP 3: BURN & INTERACTIVE PLAY - a parent records the interactive photo slideshow on a CD or DVD disc that can be played on any domestic CD or DVD player or personal computer. Our software products will enable parents and children to manipulate their photo slideshows and play a number of different interactive games like puzzles and memory match games with the photos. We plan to develop a software product that will be easy enough for anyone to use, regardless of his/her level of computer literacy. Our software product will provide useful features, contain help support and be easy to install. We intend to concentrate our efforts on: * EASE OF USE - The set-up of the photo slideshow will be easy to use, simplifying the task of creating and sharing photos with others. * SLIDESHOW FUNCTIONALITY - the photo slide-show will contain basic functions, including: * Timing Control * Drag-and-Drop Placement * Slideshow Preview * Text and Captions * HELP/SUPPORT - We will use a variety of sources to provide support to users, including built-in help manuals and step-by-step tutorials, email support and frequently asked questions (FAQ) pages. In the future, after we begin to generate revenues, we plan to add enhanced features such as: * Educational content for children ages 3 - 12. * Audio Synchronization * Video Clips * Voice Recording * Hotkeys 26 Once we set up our website and complete our software development, a parent will be able to purchase and download our software directly from our website. We plan to price our software at below $100 for a downloadable version and slightly higher for a boxed version. According to our business model, the majority of our revenues will come from online sales of our software. For additional information, please see "Plan of Operation" below. We do not currently have sufficient capital to operate our business, and we will require additional funding in the future to sustain our operations. There is no assurance that we will have revenue in the future or that we will be able to secure the necessary funding to develop our business. Our offices are currently located at 15 Zichron Ya'akov, Suite 23 Entrance B. Jerusalem 94421 Israel. Our telephone number is +1-877-651-2236. We have secured a domain name - www.interactiveslideshow.com but do not yet have an operating website. THE MARKET OPPORTUNITY We plan to market our interactive photo slideshow software to parents of children between the ages of 3 and 12. According to the following surveys in the United States and Canada, our target market in North America is very large: The U.S. Census Bureau's 2005 estimate for the number of families residing in the United States was 74,341,149 (with an average family size of 3.18 people). Of these 74,341,149 families, 35,083,508 (approximately 47%) had children under 18 years of age. (http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id=01000US&-qr_name =ACS_2005_EST_G00_S1101&-ds_name=ACS_2005_EST_G00_&-redoLog=false) The Bureau also has estimated the number of children under the age of 15 to be 60,559,408. (http://factfinder.census.gov/servlet/STTable?_bm=y&-geo_id= 01000US&-qr_name=ACS_2005_EST_G00_S0101&-ds_name=ACS_2005_EST_G00)_ According to Statistics Canada, in 2004 there were approximately 8,701,700 families residing in Canada, with an average family size of three people. Notably, there was an increase in the number of families between the years 2000 and 2004 of approximately 321,600 (with an average annual increase of about 0.946%), (http://www40.statcan.ca/l01/cst01/famil40.htm). Also, in 2001, of the 8,371,020 families residing in Canada, 5,311,795 (approximately 63.45%) had children at home (http://www40.statcan.ca/l01/cst01/famil54a.htm). Furthermore, based on a census conducted in 2006, the number of children residing in Canada younger than 15 years of age was 5,644,600, (http://www40.statcan.ca/l01/cst01/demo10a.htm). Based on the foregoing information, we believe that attracting only a small percentage of our target market in North America will enable us to operate profitably. There can be no assurance, however, that our software products will appeal to parents of children between the ages of 3 and 12. 27 OUR COMPETITIVE POSITION IN THE PHOTO SLIDESHOW SOFTWARE INDUSTRY The photo slideshow software industry is highly competitive. The photo slideshow software we plan to introduce will encounter strong competition from many other companies, including many with greater financial resources than ours as well as from larger and more established companies. Our competitors include companies such as: * Ulead - CD & DVD PictureShow (http://www.ulead.com/dps/runme.htm) * Photodex Corporation - ProShow (http://www.photodex.com/products/proshow/) * Wondershare Software - DVD SlideShow Builder (http://www3.photo2vcd.com/index.html) These companies currently dominate the photo slideshow market and we expect them to remain the dominant force for the time being. These companies offer do-it-yourself photo slideshow software programs which are similar to our future product. We seek to differentiate ourselves by providing our customers with more than the traditional photo slideshow. Our software will enable parents and children to be active with their photo slideshows and play a number of different interactive games like puzzles and memory match games with the photos. MARKETING & SALES STRATEGY We plan to market our photo slideshow software with a web-based marketing campaign; this web-based campaign will include the following: E-MAIL MARKETING E-mail marketing is one of the most powerful marketing tools available for today's small businesses. According to DoubleClick's Email Consumer Study, over 78% of online shoppers have purchased products because of permission-based e-mails and 59% of e-mail recipients have bought in a retail store as a result of a merchant's e-mail. Source: (http://www.doubleclick.com/us/about_doubleclick/ press_releases/default.asp?p=534). We have budgeted $10,000 from our marketing budget for a mass e-mail campaign BANNER ADVERTISING The main vehicle for commercial sector advertising on the Web is called the "banner ad." These advertisements are the same as you might see in a newspaper, only they usually appear in the margin or top of a Web page, and they can also be far more dynamic than a print ad. 28 The effectiveness of these ads is still in question. Given the ease with which statistics can be collected on the number of times ads have been "clicked" by users, there is strong evidence that they are often ignored. Nevertheless, it is difficult to determine whether these Web ads are more or less effective than other forms of advertising. We budgeted $5,000 from our marketing campaign for banner advertising. We intend to place banner ads on websites that specifically target parents of young children such as www.parents.com. SUBMISSION TO DIRECTORIES We plan to submit our website to directories in order to increase our presence on the Internet, as well as to get better rankings on search results. There are several directories to which we plan to submit our website for free, such as (http://www.yahoo.com - regional Yahoos also exist), Google (http://www.google.com), Altavista (http://www.altavista.com) and Excite (http://www.excite.com). The submission of our website to the above directories is at no cost to the Company. DISTRIBUTION We plan to price our software at below $100 for a downloadable version and slightly higher for a boxed version. According to our business model, the majority of our revenues will come from online sales of our software. SOURCES AND AVAILABILITY OF PRODUCTS AND SUPPLIES There are no constraints on the sources or availability of products and supplies related to our business. We are producing our own software product and the distribution of the software product and services will be primarily over the internet. DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS We plan on selling our software products and services directly to consumers over the internet. Our photo slideshow software will be priced for mass market consumption. Therefore, we do not anticipate dependence on one or a few major customers for at least the next 12 months or the foreseeable future. PATENT, TRADEMARK, LICENSE & FRANCHISE RESTRICTIONS AND CONTRACTUAL OBLIGATIONS & CONCESSIONS We have not entered into any franchise agreements or other contracts that have given, or could give rise to obligations or concessions. We are planning to develop our interactive photo slideshow software. Beyond our trade name, we currently do not hold any other intellectual property, and except for the copyright to our software product we do not anticipate any additions in the foreseeable future. We plan to rely for the most part on trade secrecy laws 29 and contractual proprietary rights and non-disclosure provisions to protect any intellectual property rights that we create in our photo slideshow software products. EXISTING OR PROBABLE GOVERNMENT REGULATIONS If we create and utilize a web site, as we plan to do, online access through a company-operated web site requires careful consideration of legal and regulatory compliance requirements and issues. RESEARCH AND DEVELOPMENT ACTIVITIES AND COSTS We have not incurred any costs to date and, except for outsourcing the development of our photo slideshow software, we have no plans to undertake any research and development activities during the first year of operation. EMPLOYEES We have no employees at the present time. Our officers and directors, are responsible for all planning, developing and operational duties, and will continue to do so throughout the early stages of our growth. We have no intention of hiring employees until the business has been successfully launched and we have sufficient, reliable revenue from our operations. Since our ongoing operation is not labor intensive, our officers and directors will do whatever work is required until our business reaches the point of having positive cash flow. Human resource planning will be part of an ongoing process that will include regular evaluation of operations and revenue realization. We do not expect to hire any employees within the first year of operation. Instead, we plan on outsourcing the necessary tasks. REPORTS TO STOCKHOLDERS We will voluntarily make available to stockholders an annual report, including audited financials, on Form 10-KSB. We are not currently a fully reporting company, but upon effectiveness of this registration statement, we will be required to file reports with the SEC pursuant to the Securities Exchange Act of 1934; such as quarterly reports on Form 10-QSB and current reports on Form 8-K. WHERE YOU CAN GET MORE INFORMATION In accordance with the Securities Act of 1933, we filed with the SEC a registration statement on Form SB-2 covering the securities in this offering. As permitted by rules and regulations of the SEC, this prospectus does not contain all of the information in the registration statement. For further information regarding both our Company and the securities in this offering, we refer you to the registration statement, including all exhibits and schedules, which you may inspect without charge at the public reference facilities of the SEC's Washington, D.C. office, 100 F Street, N.E., Washington, D.C. 20549, and on the SEC Internet site at http:\\www.sec.gov. 30 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION THE FOLLOWING DISCUSSION OF OUR PLAN OF OPERATION SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES THAT APPEAR ELSEWHERE IN THIS PROSPECTUS. THIS DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS, INCLUDING THOSE DISCUSSED IN "RISK FACTORS" BEGINNING ON PAGE 8 OF THIS PROSPECTUS. ALL FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. WE UNDERTAKE NO OBLIGATION TO UPDATE SUCH STATEMENTS TO REFLECT EVENTS THAT OCCUR OR CIRCUMSTANCES THAT EXIST AFTER THE DATE ON WHICH THEY ARE MADE. OVERVIEW We are a development stage company with limited operations and no revenues from our business operations. Our auditors have issued a going concern opinion. This means that our auditors believe there is substantial doubt that we can continue as an on-going business for the next twelve months. We do not anticipate that we will generate any revenues until we complete the development of our interactive photo slideshow software. Accordingly, we must raise cash from sources other than our operations in order to implement our marketing plan. PLAN OF OPERATION Our plan of operation is to establish ourselves as a company that will produce and distribute interactive photo slideshow software. Distribution would primarily be via download from the Internet directly to consumers. Our target market is the parents of children who wish to capture their family memories in a fun and interesting way for their children to watch and engage in interactive play for years to come and eventually hand down to their children and grandchildren. In the opinion of our management, widespread use of digital cameras and scanners makes it very easy to capture, catalog, distribute and enjoy personal family photographs. The increasing trend has been to share family photos on-line for all to see. Examples of this can be seen in the vast popularity of websites such as Flicker (www.flicker.com), Google Photos (picasaweb.google.com) and Yahoo! Photos (photos.yahoo.com). Our concept takes this trend to a new level by using the vast collection of family photos in an interactive, entertaining and interesting photo slideshow especially designed to appeal to children. Our business objectives are: * To develop the interactive photo slideshow software that will benefit both parents and children alike. * To execute our web-based marketing campaign and to create interest in our product. * To establish a brand name that will be associated with user-friendly photo slideshow software that enables interactive play. Our goals over the next 12 months are: * To establish a customer data-base from our mass e-mail campaign. 31 * To drive traffic to our website and achieve 250 visitors per day. * To generate revenue by the first quarter of 2008. * To achieve break-even results of operations over the next 12 months. During the first stages of our growth, our officers and directors will provide all of the labor required to execute our business plan at no charge, except we do intend to hire a website programmer on a contract basis for two months at an estimated cost of $6,000 to set up our website and we do plan to outsource initial software development tasks at an estimated cost of $30,000. Management has no intention of hiring any employees during the first year of operations. Due to our limited financial resources, each member of the management team will dedicate approximately 10 - 20 hours per week in order to execute our plan of operation. EXPENDITURES In our management's opinion, we will incur the following expenses to fund our plan of operation over the next twelve months: Legal, Accounting and Transfer Agent fees * $30,000 Software development $30,000 Website programmer + hosting with Yahoo! Shops or similar $ 7,200 Web-Based Marketing $15,000 ------- Total $58,200 ======= - ---------- * Total expenses of approximately $30,000 of which we have prepaid $24,000. These expenditures are described in detail in the section entitled "Milestones" below. ACTIVITIES TO DATE Our management wrote the software requirements specification (SRS) for our photo slideshow software in order to reduce the development effort and to estimate the costs and schedules for developing the software. The SRS addressed the following: * FUNCTIONALITY What is the software supposed to do? * EXTERNAL INTERFACES. How does the software interact with end-users? * PERFORMANCE. What is the speed, availability, response time, recovery time of various software functions? During April 2007 we hired a freelance business consultant to assist our directors in attaining the following milestones & decisions with respect to our Plan of Operation. In consideration for this professional advice we paid an amount of $1,672. 32 We have secured a domain name "www.interactiveslideshow.com" but do not yet have an operating website. MILESTONES The following is a chronological itemization of the milestones that we intend to achieve over the next 12 months. We are currently in the first period of the milestones noted below. JUNE - SEPTEMBER, 2007 During the first 4 months we will be focusing on developing our interactive photo slideshow software. Our director, Alan Sacks, will be in charge of engaging a third party software development company to develop our purposed software product. OCTOBER - DECEMBER, 2007 We plan to set up an e-commerce website with "Yahoo! Shops" or with a similar provider to sell our interactive photo slideshow software. Yahoo! Shops is a turnkey online shopping cart system for merchants who wish to sell their products online. The website's main features will include: * Product Catalog * Shopping Cart and Checkout * Customer Service * Marketing (search engine friendly pages, automatic submission to Yahoo! and Google) * Product promotion * Payment processing (accepting credit, debit, and PayPal payments online) * Shipping and Taxes We plan to retain a website programmer on an independent contractor basis for two months at the cost of $6,000 to set up our website. The contractor's main duties will include: * Custom design of our website. * Set up our product page with product details and picture. * Set up custom fields for order info. * Track site statistics. * Train our Secretary, Treasurer and director, Alan Sacks, on how to maintain our online store on a day to day basis. At this stage we have not budgeted for any extension of the two-month computer programmer budget. 33 JANURARY, 2008 - JUNE, 2008 We plan to start our web-based marketing campaign and have budgeted $15,000 to be spent over a six-month period. We will commence our initial marketing plan using a mass e-mail campaign targeted specifically at parents with children between the ages of 3 and 12 in the North American market. We hope to gain a customer base as a result of this campaign. We plan to contact a number of internet sites that target the same demographic market and we plan to purchase banner ads on those websites. In parallel, we plan to place a survey on our website that will gather information on how entrants to our website arrived at our site. We will then focus our marketing efforts towards the most successful platform. PURCHASE OF SIGNIFICANT EQUIPMENT We do not expect to purchase any significant equipment over the twelve months. EMPLOYEES Currently our only employees are our directors and officers. We do not expect any other material changes in the number of employees over the next 12 months. LIQUIDITY AND CAPITAL RESOURCES We have raised $ 7,612 from the sale of stock to our officer and directors and $70,530 through a private placement to 35 non-affiliated investors. Our financial statements report a net loss of $28,079 for the period from June 27, 2006 (date of inception) to May 31, 2007. Our net loss is primarily due to $1,646 on general and administrative fees, $1,672 on consulting fees, $807 filing fees and $24,000 for professional fees. On June 15, 2007 we had a working capital of approximately $50,000. In the opinion of our management, funds currently available will not satisfy our working capital requirements up to May 31st, 2008. Estimated funding required during the twelve month period ending May 31st 2008 is $58,200. Given our current cash position of 50,000 this leaves us with a shortfall of $8,200. Since June 27th, 2006 (inception) to June 15, 2007 we sold 9,022,600 shares. We have never had any income from operations. We will require additional funds to implement our plans. These funds may be raised through equity financing, debt financing, or other sources, which may result in the dilution in the equity ownership of our shares. We will also need more funds if the costs of the development of our website costs greater than we have budgeted. We will also require additional financing to sustain our business operations if we are not successful in earning revenues. We currently do not have any arrangements for further financing and we may not be able to obtain financing when required. Our future is dependent upon our ability to obtain financing. 34 We have suffered recurring losses from operations. Our continuation is dependent upon us raising additional capital. In this regard we have raised additional capital through the private placements noted above but we will still require additional funds to continue our operations and plans. The continuation of our business is dependent upon us obtaining further financing, the successful development of our website, a successful marketing and promotion program, attracting and, further in the future, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. We will pursue various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations. GOING CONCERN CONSIDERATION Our independent auditors included an explanatory paragraph in their report on the accompanying financial statements regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors. OFF-BALANCE SHEET ARRANGEMENTS We have no off-balance sheet arrangements. DESCRIPTION OF PROPERTY We do not lease or own any real property. We currently maintain our corporate office at 15 Zichron Ya'akov, Suite 23 Entrance B. Jerusalem 94421 Israel. This space is sufficient until we commence full operations. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Other than the transactions discussed below, we have not entered into any transaction nor are there any proposed transactions in which any of our directors, executive officers, shareholders or any member of the immediate family of any of the foregoing had or is to have a direct or indirect material interest. 35 Mr. Aaron Bard, our President and director, has contributed office space for our use for all periods presented. There is no charge to us for the space since the value of such space is nominal and covers a limited amount of time. Mr. Shlomo Friedman our former Secretary, Treasurer and Director purchased by subscription 100,000 shares of our common stock on June 27, 2006 (inception) for $0.001 share or an aggregate of $100. Mr. Aaron Bard, our President and director, purchased by subscription 2,500,000 shares of our common stock on September 13, 2006 for $0.001 share or an aggregate of $2,500. Mr. Alan Sacks, our Secretary, Treasurer and director, purchased by subscription 5,012,000 shares of our common stock on October 31, 2006 for $0.001 share or an aggregate of $5,012. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS NO PUBLIC MARKET FOR COMMON STOCK There is presently no public market for our common stock. We anticipate applying for trading of our common stock on the over-the-counter bulletin board upon the effectiveness of the registration statement of which this prospectus forms a part. However, we can provide no assurance that our shares will be traded on the bulletin board or, if traded, that a public market will materialize. RULE 144 As of June 15, 2007, there are no shares of our common stock which are currently available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act. In general, under Rule 144 as currently in effect, a person who has beneficially owned shares of a company's common stock for at least one year is entitled to sell within any three month period a number of shares that does not exceed 1% of the number of shares of the company's common stock then outstanding which, in our case, would equal 90,220, shares as of the date of this prospectus. Sales under Rule 144 are also subject to manner of sale and notice requirements and to the availability of current public information about the company. Under Rule 144(k), a person who is not one of the company's affiliates at any time during the three months preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. STOCK OPTION GRANTS As of June 15, 2007, we have not granted any stock options. 36 REGISTRATION RIGHTS We have not granted registration rights to the selling shareholders or to any other persons. HOLDERS OF OUR COMMON STOCK As of June 15, 2007, we have 38 registered shareholders. DIVIDENDS Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock. Although we intend to retain our earnings, if any, to finance the expansion and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future. Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors that our Board of Directors may deem relevant. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS None. EXECUTIVE COMPENSATION We have not paid, nor do we owe, any compensation to our executive officers. We have not paid any compensation to our officers since inception. We have no employment agreements with any of our executive officers or employees. SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation(1) ------------------------------ ----------------------------------- Awards Payouts ------ ------- Securities Restricted Underlying Shares or Name and Options/ Restricted Principal SARs Share LTIP Position Year(6) Salary Bonus Other(1) Granted Units Payouts All Other - -------- ------- ------ ----- -------- ------- ----- ------- --------- AARON BARD 2007 Nil Nil Nil Nil Nil Nil Nil President and 2006 Nil Nil Nil Nil Nil Nil Nil director(2) ALAN SACKS Secretary, 2007 Nil Nil Nil Nil Nil Nil Nil Treasurer and 2006 Nil Nil Nil Nil Nil Nil Nil director(3)
37
BENNY KARASIK Former officer and director(4) 2006 Nil Nil Nil Nil Nil Nil Nil SHLOMO FRIEDMAN Former officer and director(5) 2006 Nil Nil Nil Nil Nil Nil Nil
- ---------- (1) The value of perquisites and other personal benefits, securities and property for the executive officers that do not exceed the lesser of $50,000 or 10% of the total of the annual salary and bonus is not reported herein. (2) Aaron Bard became our President and a director of our company, on September 13, 2006. (3) Alan Sacks became our Secretary and a director of our company, on October 31, 2006. (4) Benny Karasik resigned as our President and a director of our company on September 12, 2006. (5) Shlomo Friedman resigned as our Treasurer, Secretary and director of our company on October 31, 2006. (6) We were incorporated on June 27, 2006. OPTION/SAR GRANTS We do not currently have a stock option plan. No individual grants of stock options, whether or not in tandem with stock appreciation rights known as SARs or freestanding SARs have been made to any executive officer or any director since our inception; accordingly, no stock options have been granted or exercised by any of the officers or directors since we were founded. LONG-TERM INCENTIVE PLANS AND AWARDS We do not have any long-term incentive plans that provide compensation intended to serve as incentive for performance. No individual grants or agreements regarding future payouts under non-stock price-based plans have been made to any executive officer or any director or any employee or consultant since our inception; accordingly, no future payouts under non-stock price-based plans or agreements have been granted or entered into or exercised by any of the officers or directors or employees or consultants since we were founded. COMPENSATION OF DIRECTORS There are no arrangements pursuant to which directors are or will be compensated in the future for any services provided as a director. EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, CHANGE-IN-CONTROL ARRANGEMENTS There is currently no employment or other contracts or arrangements with officers or directors. There are no compensation plans or arrangements, including payments to be made by us, with respect to our officers, directors or 38 consultants that would result from the resignation, retirement or any other termination of such directors, officers or consultants from us. There are no arrangements for directors, officers, employees or consultants that would result from a change-in-control. DIRECTOR COMPENSATION We have paid no compensation to our directors for their services as directors and we have no agreements with the directors for their services as directors. The following table sets forth the aggregate compensation paid or accrued by the Company to the Directors from inception until June 15, 2007. 39 FINANCIAL STATEMENTS Your Digital Memories, Inc. FINANCIAL STATEMENTS May 31, 2007 Index Page Number ------ Financial Statements Report of Independent Registered Public Accounting Firm F-2 Balance Sheets F-3 Statements of Operations F-4 Statement of Stockholders' Equity F-5 Statements of Cash Flow F-6 Notes to audited Financial Statements F-7 F-1 MOORE & ASSOCIATES, CHARTERED ACCOUNTANTS AND ADVISORS PCAOB REGISTERED REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors Your Digital Memories Inc. (A Development Stage Company) We have audited the accompanying balance sheet of Your Digital Memories Inc. as of May 31, 2007, and the related statements of operations, stockholders' equity and cash flows (Inception) June 27, 2006 through May 31, 2007. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Your Digital Memories Inc. as of May 31, 2007 and the results of its operations and its cash flows from Inception June 27, 2006 through May 31, 2007, in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 6 to the financial statements, the Company has net losses $28,079 which raise substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also described in Note 6. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Moore & Associates, Chartered - ---------------------------------------- Moore & Associates Chartered Las Vegas, Nevada June 8, 2007 2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7511 Fax (702) 253-7501 F-2 YOUR DIGITAL MEMORIES, INC. (A Development Stage Company) BALANCE SHEETS May 31, 2007 -------- ASSETS Current Assets Cash $ 50,063 -------- Total Assets $ 50,063 ======== LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities $ -- -------- Total Liabilities $ -- -------- Stockholders' Equity (Note 4, 5) Common Stock, authorized 100,000,000 shares, par value $0.0001 Preferred Stock, authorized 50,000,000 shares, par value $0.0001 Issued and outstanding: 9,022,600 common shares 902 Additional paid-in capital 77,240 Deficit accumulated during the development stage (28,079) -------- Total Stockholders' Equity 50,063 -------- Total Liabilities and Stockholders' Equity $ 50,063 ======== The accompanying notes are an integral part of these statements F-3 YOUR DIGITAL MEMORIES, INC. (A Development Stage Company) STATEMENTS OF OPERATIONS Cumulative Cumulative Amounts From Amounts From Date of Date of Incorporation on Incorporation on June 27,2006 June 27,2006 to to May 31, 2007 May 31, 2007 ------------ ------------ REVENUE $ -- $ -- OPERATING EXPENSES General and Administrative 1,646 1,646 Professional Fees 24,000 24,000 Consulting 1,672 1,672 Filing Fees 807 807 ----------- ----------- Total Expenses 28,124 28,124 ----------- ----------- Loss from operations (28,124) (28,124) =========== =========== Interest income 45 45 Loss before income taxes (28,079) (28,079) ----------- ----------- Provision for income taxes -- -- =========== =========== Net loss $ (28,079) $ (28,079) Basic and Diluted (Loss) per Share a a ----------- ----------- Weighted Average Number of Shares (Note 4) 5,061,492 5,061,492 =========== =========== - ---------- a = Less than ($0.01) per share The accompanying notes are an integral part of these statements F-4 YOUR DIGITAL MEMORIES, INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY JUNE 27, 2006 (INCEPTION) TO MAY 31, 2007
Common Stock --------------------- Paid in Accumulated Total Shares Amount Capital Deficit Equity ------ ------ ------- ------- ------ INCEPTION JUNE 27, 2006 -- $ -- $ -- $ -- $ -- Common Shares issued to director for cash June 27, 2006 100,000 10 90 100 Common Shares issued to director for cash Sept 12, 2006 2,500,000 250 2,250 2,500 Common Shares issued to director for cash October 31, 2006 5,012,000 501 4,511 5,012 Private placement closed April 30, 2004 1,410,600 141 70,389 70,530 Net loss for the year (28,079) (28,079) ---------- ------- -------- --------- --------- BALANCE, MAY 31, 2007 9,022,600 $ 902 $ 7,240 $ (28,079) $ 49,963 ========== ======= ======== ========= =========
The accompanying notes are an integral part of these statements F-5 YOUR DIGITAL MEMORIES, INC. (A Development Stage Company) STATEMENTS OF CASH FLOW
Cumulative Amounts From Date of Date of Incorporation on Incorporation on June 27,2006 June 27,2006 to to May 31, 2007 May 31, 2007 ------------ ------------ Operating Activities Net (Loss) for the year $(28,079) $(28,079) Net Cash (Used) by Operating Activities (28,079) (28,079) -------- -------- Financing Activities Proceeds from sale of Common Stock 78,142 78,142 -------- -------- Cash Provided by Financing Activities 78,142 78,142 -------- -------- Net Increase in Cash 50,063 50,063 Cash, Beginning of Period -- -- -------- -------- Cash, End of Period $ 50,063 $ 50,063 ======== ======== Supplemental disclosure with respect to cash flows: Cash paid for income taxes $ -- $ -- Cash paid for interest $ -- $ --
The accompanying notes are an integral part of these statements F-6 YOUR DIGITAL MEMORIES, INC. (A Development Stage Company) NOTES TO AUDITED FINANCIAL STATEMENTS (MAY 31, 2007) NOTE 1. GENERAL ORGANIZATION AND BUSINESS Your Digital Memories, Inc, (A Development Stage Company) was incorporated on June 27, 2006 under the laws of the State of Nevada. The company has limited operations and in accordance with SFAS #7 is considered to be in the development stage, and has had no revenues from operations to date. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES The Company's only significant asset at May 31, 2007 is cash. The relevant accounting policies and procedures are listed below. The company has adopted a May 31 year end. ACCOUNTING BASIS These financial statements are prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America. 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. CASH AND CASH EQUIVALENTS For the purpose of the statement of cash flows, cash equivalents include all highly liquid investments with maturity of three months or less. EARNINGS (LOSS) PER SHARE The basic earnings (loss) per share are calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per share are calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted as of the first of the year for any potentially dilutive debt or equity. There are no diluted shares outstanding. F-7 DIVIDENDS The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during the period shown. 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. No provision for income taxes is included in the statement due to its immaterial amount, net of the allowance account, based on the likelihood of the Company to utilize the loss carry-forward 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. NET INCOME PER COMMON SHARE Net income (loss) per common share is computed based on the weighted average number of common shares outstanding and common stock equivalents, if not anti-dilutive. The Company has not issued any potentially dilutive common shares. REVENUE AND COST RECOGNITION The Company has no current source of revenue; therefore the Company has not yet adopted any policy regarding the recognition of revenue or cost. NOTE 3. INCOME TAXES: Income taxes are provided in accordance with Statement of Financial accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. F-8 Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. NOTE 4. STOCKHOLDERS' EQUITY AUTHORIZED The Company is authorized to issue 100,000,000 shares of $0.0001 par value common stock and 50,000,000 shares of preferred stock, par value $0.0001 per share. All common stock shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company. ISSUED AND OUTSTANDING On June 27, 2006 (inception) the Company issued 100,000 shares of its common stock to its Director, Mr. Shlomo Friedman for cash. See Note 5. On September 13, 2006 (inception), the Company issued 2,500,000 shares of its common stock to its Director, Mr. Aaron Bard for cash of $2,500. See Note 5. On October 31, 2006, the Company issued 5,012,000 shares of its common stock to its Director for cash of $5,012. See Note 5. On April 30, 2007, the Company accepted subscriptions for 1,410,600 common shares from 35 investors under a private placement. The private placement was not subject to any minimum investment and was priced at $0.05 per share. The Company accepted the subscriptions on various dates throughout inception to April 30, 2007 from 35 offshore non-affiliates investors. As of May 31, 2007 the Company had 9,022,600 shares of common stock issued and outstanding. NOTE 5. RELATED PARTY TRANSACTIONS The Company's neither owns nor leases any real or personal property. A Director of the Company provides office space free of charge. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts. On June 27, 2006 (inception) the Company issued 100,000 shares of its common stock to its Director, Mr. Shlomo Friedman for cash. See Note 4. On September 13, 2006, the Company issued 2,500,000 shares of its common stock to its Director, Mr. Aaron Bard for cash of $2,500. See Note 4. F-9 On October 31, 2006, the Company issued 5,012,000 shares of its common stock to its Director for cash of $5,012. See Note 4. NOTE 6. GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has net losses for the period from inception to May 31, 2007 of $28,079. This condition raises substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent on its ability to meet its obligations, to obtain additional financing as may be required and ultimately to attain profitability. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. NOTE 7. NET OPERATING LOSSES As of May 31, 2007, the Company has a net operating loss carry forward of approximately $28,079, which will expire 20 years from the date the loss was incurred. NOTE 8. OPERATING LEASES AND OTHER COMMITMENTS: The Company currently has no operating lease commitments or any other commitments. F-10 PART II INFORMATION NOT REQUIRED IN PROSPECTUS INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS Our officers and directors are indemnified as provided by the Nevada Revised Statutes and by our Articles of Incorporation and Bylaws. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and control persons pursuant to the foregoing provisions or otherwise, we have been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the expenses in connection with the issuance and distribution of the securities being registered hereby. All such expenses will be borne by the registrant; none shall be borne by any selling stockholders. Name of Expense Amount --------------- ------ Securities and Exchange Commission registration fee $ 7 Legal fees and expenses (1) 12,500 Accounting fees and expenses (1) 2,000 Miscellaneous (1) 500 ------- Total (1) $15,007 ======= - ---------- (1) Estimated. All amounts are estimates other than the Commission's registration fee. We are paying all expenses of the offering listed above. No portion of these expenses will be borne by the selling shareholders. The selling shareholders, however, will pay any other expenses incurred in selling their common stock, including any brokerage commissions or costs of sale II-1 RECENT SALES OF UNREGISTERED SECURITIES The following sets forth information regarding all sales of our unregistered securities during the past three years. None of the holders of the shares issued below have subsequently transferred or disposed of their shares and the list is also a current listing of the Company's stockholders. During the last three years, we have issued unregistered securities to the persons, as described below. None of these transactions involved any underwriters, underwriting discounts or commissions or any public offering, and we believe that each transaction was exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 4(2) thereof, or Regulation D promulgated thereunder. All recipients had adequate access, through their relationships with us, to information about us. On June 27, 2006, we sold 100,000 shares of our common stock to Mr. Shlomo Friedman, our former Secretary, Treasurer and Director, for cash payment to us of $100. We believe this issuance was deemed to be exempt under Regulation D and Section 4(2) of the Securities Act. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made only to accredited investors, and transfer was restricted by us in accordance with the requirements of the Securities Act of 1933. On September 13, 2006, we sold 2,500,000 shares of our common stock to Mr. Aaron Bard, our President and director, for cash payment to us of $2,500. We believe this issuance was deemed to be exempt under Regulation D and Section 4(2) of the Securities Act. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made only to accredited investors, and transfer was restricted by us in accordance with the requirements of the Securities Act of 1933. On October 31, 2006, we sold 5,012,000 shares of our common stock to Mr. Alan Sacks, our Secretary, Treasurer and director, for cash payment to us of $5,012. We believe this issuance was deemed to be exempt under Regulation D and Section 4(2) of the Securities Act. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made only to accredited investors, and transfer was restricted by us in accordance with the requirements of the Securities Act of 1933. During the time period beginning in January 2007 and ending on April 30, 2007, we issued and sold 1,410,600 shares of our common stock to our non-US seed capital investors at a purchase price of $0.05 per share, without registering the shares with the Securities and Exchange Commission. We completed this offering pursuant to Regulation S of the Securities Act. Each purchaser represented to us that they were a non-US person as defined in Regulation S. We did not engage in distribution of these offerings in the United States. II-2 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Exhibits: The following exhibits are filed as part of this registration statement: Exhibit Description - ------- ----------- 3.1 Articles of Incorporation of Registrant. 3.2 By-Laws of Registrant. 4.1 Specimen Stock Certificate. 5.1 Opinion of Legal Counsel. 10.1 Sample of Subscription Agreement executed by the Selling Stockholders. 23.1 Consent of Moore & Associates, Chartered 23.2 Consent of Legal Counsel (incorporated in Exhibit 5.1) II-3 UNDERTAKINGS The undersigned Registrant hereby undertakes: 1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to: (a) Include any prospectus required by Section 10(a)(3) of the Securities Act; (b) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (c) Include any additional or changed material information on the plan of distribution. 2. To, for the purpose of determining liability under the Securities Act, treat each post-effective amendment as a new registration statement relating to the securities offered, and the offering of the securities at that time to be the initial bona fide offering thereof. 3. To remove from registration, by means of a post-effective amendment, any of the securities being registered hereby that remains unsold at the termination of the offering. 4. For purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's Annual report pursuant to Section 13(a) or 15(d) of the Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons pursuant to the provisions above, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act, and is, therefore, unenforceable. II-4 In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling person sin connection with the securities being registered, we will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue. II-5 SIGNATURES In accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing this Form SB-2 and has authorized this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Jerusalem, Israel on June 18, 2007. YOUR DIGITAL MEMORIES, INC. By: /s/ Aaron Bard ------------------------------------- Name: Aaron Bard Title: President and Director In accordance with the requirements of the Securities Act of 1933, this registration statement was signed by the following persons in the capacities and on the dates stated: Date: June 18, 2007 /s/ Aaron Bard ---------------------------------------- Name: Aaron Bard Title: President and Director (Principal Executive and Financial Officer) Date: June 18, 2007 /s/ Alan Sacks ---------------------------------------- Name: Alan Sacks Title: Secretary, Treasurer and Director II-6 EX-3.1 2 ex3-1.txt ARTICLES OF INCORPORATION Exhibit 3.1 DEAN HELLER Secretary of State 206 North Carson Street Carson City, Nevada 89701-4298 (775) 684-5708 Website: secretaryofstate.biz Entity # E0483492006-0 Document Number 20060410573-58 Date Filed: 6/27/2006 4:10:19 PM In the office of /s/ Dean Heller Dean Heller Secretary of State ARTICLES OF INCORPORATION (PURSUANT TO NRS 78) 1. Name of Corporation: Your Digital Memories 2. Resident Agent Name & Street Address: EastBiz.com, Inc. 5348 Vegas Dr. Las Vegas, NV 89108 3. Shares: Number of Shares with par value 150,000,000 Par value: $.0001 4. Name & Address of Board Of Directors/Trustees: 5. Purpose: The purpose of this Corporation shall be: to engage in any legal activity 6. Name, Address & Signature Of Incorporator: Mr. George Choriatis /s/ George Choriatis 26 East Hawthorne Avenue Valley , NY 11580 7. Certificate of Acceptance Of Appointment of Resident Agent: I hereby accept appointment as Resident Agent for the above named corporation. Authorized Signature of R.A. Date ATTACHMENT TO ARTICLES OF INCORPORATION OF YOUR DIGITAL MEMORIES INC. 8. The governing board of Your Digital Memories Inc. (the "Corporation") shall be styled as a "Board of Directors", and any member of said Board shall be styled as a "Director." The first Board of Directors of the corporation shall consist of two directors. The number of directors of the Corporation may be increased or decreased in the manner provided in the Bylaws of the Corporation; provided, that the number of directors shall never be less than one. hi the interim between elections of directors by stockholders entitled to vote, all vacancies, including vacancies caused by an increase in the number of directors and including vacancies resulting from the removal of directors by the stockholders entitled to vote which are not filled by said stockholders, may be filled by the remaining directors, though less than a quorum. 9. (a) The total number of shares of stock which the Corporation shall have authority to issue is One Hundred Fifty Million (150,000,000) which shall consist of (I) One Hundred Million (100,000,000) shares of common stock, par value $0.0001 per share (the "Common Stock"), and (ii) Fifty Million (50,000,000) shares of preferred stock, par value $0.0001 per share (the "Preferred Stock"). (b) The Preferred Stock may be issued in one or more series, from time to time, with each such series to have such designation, relative rights, preferences or limitations, as shall be stated and expressed in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors of the Corporation (the "Board"), subject to the limitations prescribed by law and in accordance with the provisions hereof, the Board being hereby expressly vested with authority to adopt any such resolution or resolutions. The authority of the Board with respect to each series of Preferred Stock shall include, but not be limited to, the determination or fixing of the following: (i) The distinctive designation and number of shares comprising such series, which number may (except where otherwise provided by the Board increasing such series) be increased or decreased (but not below the number of shares then outstanding) from time to time by like action of the Board; (ii) The dividend rate of such series, the conditions and time upon which such dividends shall be payable, the relation which such dividends shall bear to the dividends payable on any other class or classes of Stock or series thereof or any other series of the same class, and whether such dividends shall be cumulative or non- cumulative; (iii) The conditions upon which the shares of such series shall be subject to redemption by the Corporation and the times, prices and other terms and provisions upon which the shares of the series may be redeemed; (iv) Whether or not the shares of the series shall be subject to the operation of a retirement or sinking fund to be applied to the purchase or redemption of such shares and, if such retirement or sinking fund be established, the annual amount thereof and the terms and provisions relative to the operation thereof; (v) Whether or not the shares of the series shall be convertible into or exchangeable for shares of any other class or classes, with or without par value, or of any other series of the same class, and, if provision is made for conversion or exchange, the times, paces, rates, adjustments and other terms and conditions of such conversion or exchange; (vi) Whether or not the shares of the series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; (vii) The rights of the shares of the series in the event of voluntary or involuntary liquidation, dissolution or upon the distribution of assets of the Corporation; and (viii) Any other powers, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof of the shares of such series, as the Board may deem advisable and as shall not be inconsistent with the provisions of this Articles of Incorporation. (c) The holders of shares of the Preferred Stock of each series shall be entitled to receive, when and as declared by the Board, out of funds legally available for the payment of dividends, dividends (if any) at the rates fixed by the Board for such series before any cash dividends shall be declared and paid or set apart for payment, on the Common Stock with respect to the seine dividend period. (d) The holders of shares of the Preferred Stock of each series shall be entitled, upon liquidation or dissolution or upon the distribution of the assets of the Corporation, to such preferences as provided in the resolution or resolutions creating such series of Preferred Stock, and no more, before any distribution of the assets of the Corporation shall be made to the holders of shares of the Common Stock. Whenever the holders of shares of the Preferred Stock shall have been paid the full amounts to which they shall be entitled, the holders of shares of the Common Stock shall be entitled to share ratably in all remaining assets of the Corporation. 10. The Corporation shall have perpetual existence. 11. The personal liability of the directors of the Corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Nevada, as the same may be amended and supplemented. Any repeal or amendment of this Article by the stockholders of the Corporation shall be prospective. 12. The Corporation shall, to the fullest extent permitted by the General Corporation Law of the State of Nevada, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Law from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said Law, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person. 13. The nature of the business of the Corporation and the objects or the purposes to be transacted, promoted, or carried on by it are to engage in any lawful activity. 14. The Corporation reserves the right to amend, alter, change, or repeal any provision contained in these Articles of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein axe granted subject to this reservation. ROSS MILLER Secretary of State 206 North Carson Street Carson City, Nevada 89701-4298 (775) 684-5708 Website: secretaryofstate.biz CERTIFICATE OF AMENDMENT (PURSUANT TO NRS 78.385 AND 78.390) Certificate of Amendment to Articles of Incorporation For Nevada Profit Corporations (Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock) 1. Name of Corporation: YOUR DIGITAL MEMORIES, INC. 2. The articles have been amended as follows (provide article numbers, if available): ARTICLE 4: NAMES AND ADDRESSES OF DIRECTORS/OFFICERS ARE AS FOLLOWS: PRESIDENT AND DIRECTOR: AARON BARD, ARAV SOROTSKIN 26 STREET, JERUSALEM, 94464, ISRAEL SECRETARY, TREASURER AND DIRECTOR: ALAN SACKS, 3625 BLUEBONNET RD, NORTH VANCOUVER, BC, V7R 4C9, CANADA 3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the * articles of incorporation have voted in favor of the amendment is 4. Effective date of filing (optional) 5. Officer Signature (Required) X /s/ A Sacks ------------------------- EX-3.2 3 ex3-2.txt BYLAWS Exhibit 3.2 BY-LAWS OF YOUR DIGITAL MEMORIES, INC. (the "Corporation") * * * * * * * * * * * ARTICLE I Offices The Corporation may have offices at such other places, both within and without the State of Nevada, as the Board of Directors may determine and designate from time to time or the business of the Corporation requires. ARTICLE II Books The books and records of the Corporation may be kept (except as otherwise provided by the laws of the State of Nevada) outside of the State of Nevada and at such place or places as may be designated by the Board of Directors. ARTICLE III Stockholders Section 1. Place of Meetings, etc. Except as otherwise provided in these Bylaws, all meetings of the stockholders shall be held at such dates, times and places, within or without the State of Nevada, as shall be determined by the Board of Directors or the President of the Corporation and as shall be stated in the notice of the meeting or in waivers of notice thereof. If the place of any meeting is not so fixed, it shall be held at the registered office of the Corporation in the State of Nevada. Section 2. Annual Meetings. The Annual Meeting of stockholders of the Corporation for the election of Directors and the transaction of such other business as may properly come before said meeting shall be held at the principal business office of the Corporation or at such other place or places either within or without the State of Nevada as may be designated by the Board of Directors and stated in the notice of the meeting, on a date not later than 120 days following the close of the fiscal year of the Corporation as designated by the Board of Directors. Section 3. Special Meetings. Special meetings of the stockholders of the Corporation shall be held whenever called in the manner required by the laws of the State of Nevada for purposes as to which there are special statutory provisions, and for other purposes whenever called by resolution of the Board of Directors, or by the President, or by the holders of a majority of the outstanding shares of capital stock of the Corporation the holders of which are entitled to vote on matters that are to be voted on at such meeting. Any such Special Meetings of stockholders may be held at the principal business office of the Corporation or at such other place or places, either within or without the State of Nevada, as may be specified in the notice thereof. Business transacted at any Special Meeting of stockholders of the Corporation shall be limited to the purposes stated in the notice thereof. The notice shall state the date, time, place and purpose or purposes of the proposed meeting. Section 4. Notice of Meetings. Except as otherwise required or permitted by law, whenever the stockholders of the Corporation are required or permitted to take any action at a meeting, written notice thereof shall be given, stating the place, date and time of the meeting and, unless it is the annual meeting, by or at whose direction it is being issued. The notice also shall designate the place where the stockholders' list is available for examination, unless the list is kept at the place where the meeting is to be held. Notice of a Special Meeting also shall state the purpose or purposes for which the meeting is called. A copy of the notice of any meeting shall be delivered personally or shall be mailed, not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each stockholder of record entitled to vote at the meeting. If mailed, the notice shall be given when deposited in the United States mail, postage prepaid and shall be directed to each stockholder at his or her address as it appears on the record of stockholders, unless he or she shall have filed with the Secretary of the Corporation a written request that notices to him or her be mailed to some other address, in which case it shall be directed to him or her at the other address. Notice of any meeting of stockholders shall not be required to be given to any stockholder who shall attend the meeting, except for the express purpose of objecting at the beginning thereof to the transaction of any business because the meeting is not lawfully called or convened, or who shall submit, either before or after the meeting, a signed waiver of notice. Unless the Board of Directors, after the adjournment of such meeting, shall fix a new record date for an adjourned meeting or unless the adjournment is for more than thirty (30) days, notice of an adjourned meeting need not be given if the place, date and time to which the meeting shall be adjourned is announced at the meeting at which the adjournment is taken. Section 5. List of Stockholders. The officer of the Corporation who shall have charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order and showing the address and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of at least ten (10) days prior to the meeting, either at a place specified in the notice of the meeting or at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder present at the meeting. Section 6. Quorum. Except as otherwise expressly provided by the laws of the State of Nevada, or by the Certificate of Incorporation of the Corporation, or by these Bylaws, at any and all meetings of the stockholders of the Corporation there must be present, either in person or by proxy, stockholders owning a majority of the issued and outstanding shares of the capital stock of 2 the Corporation entitled to vote at said meeting. At any meeting of stockholders at which a quorum is not present, the holders of, or proxies for, a majority of the stock which is represented at such meeting, may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally noticed. If the adjournment is for more than thirty (30) days, or if after adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 7. Organization. The President shall call to order meetings of the stockholders and shall act as Chairman of such meetings. The Board of Directors or the stockholders may appoint any stockholder or any Director or officer of the Corporation to act as Chairman at any meeting in the absence of the President. The Secretary of the Corporation shall act as secretary of all meetings of the stockholders, but in the absence of the Secretary, the presiding officer may appoint any other person to act as secretary of the meeting. Section 8. Voting. Except as otherwise provided by the Certificate of Incorporation of the Corporation or these Bylaws, at any meeting of the stockholders each stockholder of record of the Corporation having the right to vote thereat shall be entitled to one (1) vote for each share of stock outstanding in his or her name on the books of the Corporation as of the record date and entitling him or her to so vote. A stockholder may vote in person or by proxy. Except as otherwise provided by the law of the State of Nevada or by the Certificate of Incorporation of the Corporation, any corporate action to be taken by a vote of the stockholders, other than the election of directors, shall be authorized by not less than a majority of the votes cast at a meeting by the stockholders present in person or by proxy and entitled to vote thereon. Directors shall be elected as provided in Section 1 of Article IV of these Bylaws. Written ballots shall not be required for voting on any matter unless ordered by the Chairman of the meeting. Section 9. Proxies. Every proxy shall be executed in writing by the stockholder or by his or her attorney-in-fact. Section 10. Consent of Stockholders in Lieu of Meeting. Unless otherwise provided in the Certificate of Incorporation of the Corporation, whenever the vote of the stockholders at a meeting thereof is required or permitted to be taken in connection with any corporate action by any provisions of the laws of the state of Nevada or of the Certificate of Incorporation, such corporate action may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed, in person or by proxy, by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted in person or by proxy. Prompt notice of the taking of the corporate action 3 without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing, but who were entitled to vote on the matter. ARTICLE IV Directors Section 1. Number, Election and Term of Office. The business and affairs of the Corporation shall be managed by the Board of Directors. The number of Directors which shall constitute the whole Board shall be not less than one (1) nor more than nine (9). Within such limits, the number of Directors may be fixed from time to time by vote of the stockholders or of the Board of Directors, at any regular or special meeting, subject to the provisions of the Certificate of Incorporation. The initial board shall consist of two (2) Directors. Directors need not be stockholders. Directors shall be elected at the Annual Meeting of the stockholders of the Corporation, except as provided in Section 2 of this Article IV, to serve until their respective successors are duly elected and qualified. When used in these Bylaws, the phrase "entire Board" means the total number of directors which the Corporation would have if there were no vacancies. Section 2. Vacancies and Newly Created Directorships. Except as hereinafter provided, any vacancy in the office of a Director occurring for any reason other than the removal of a Director pursuant to Section 3 of this Article, and any newly created Directorship resulting from any increase in the authorized number of Directors, may be filled by a majority of the Directors then in office. In the event that any vacancy in the office of a Director occurs as a result of the removal of a Director pursuant to Section 3 of this Article, or in the event that vacancies occur contemporaneously in the offices of all of the Directors, such vacancy or vacancies shall be filled by the stockholders of the Corporation at a meeting of stockholders called for that purpose. Directors chosen or elected as aforesaid shall hold office until their respective successors are duly elected and qualified. Section 3. Removals. At any meeting of stockholders of the Corporation called for that purpose, the holders of a majority of the shares of capital stock of the Corporation entitled to vote at such meeting may remove from office any or all of the Directors, with or without cause. Section 4. Resignations. Any director may resign at any time by giving written notice of his or her resignation to the Corporation. A resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt, and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. Section 5. Place of Meetings. Except as otherwise provided in these Bylaws, all meetings of the Board of Directors shall be held at the principal business office of the Corporation or at such other place, within or without the State of Nevada, as the Board determines from time to time. 4 Section 6. Annual Meetings. The annual meeting of the Board of Directors shall be held either (a) without notice immediately after the annual meeting of stockholders and in the same place, or (b) as soon as practicable after the annual meeting of stockholders on such date and at such time and place as the Board determines. Section 7. Regular Meetings. Regular meetings of the Board of Directors shall be held on such dates and at the principal business office of the Corporation or at such other place, either within or without the State of Nevada, as the Board determines. Notice of regular meetings need not be given, except as otherwise required by law. Section 8. Special Meetings. Special meetings of the Board of Directors may be called by the President or any two Directors on notice given to each Director, and such meetings shall be held at the principal business office of the Corporation or at such other place, either within or without the State of Nevada, as shall be specified in the notices thereof. The request shall state the date, time, place and purpose or purposes of the proposed meeting. Section 9. Notice of Meetings. Notice of each special meeting of the Board of Directors (and of each annual meeting held pursuant to subdivision (b) of Section 6 of this Article IV) shall be given, not later than 24 hours before the meeting is scheduled to commence, by the President or the Secretary and shall state the place, date and time of the meeting. Notice of each meeting may be delivered to a Director by hand or given to a director orally (whether by telephone or in person) or mailed or telegraphed to a Director at his or her residence or usual place of business, provided, however, that if notice of less than 72 hours is given it may not be mailed. If mailed, the notice shall be deemed to have been given when deposited in the United States mail, postage prepaid, and if telegraphed, the notice shall be deemed to have been given when the contents of the telegram are transmitted to the telegraph service with instructions that the telegram immediately be dispatched. Notice of any meeting need not be given to any Director who shall submit, either before or after the meeting, a signed waiver of notice or who shall attend the meeting, except if such Director shall attend for the express purpose of objecting at the beginning thereof to the transaction of any business because the meeting is not lawfully called or convened. Notice of any adjourned meeting, including the place, date and time of the new meeting, shall be given to all Directors not present at the time of the adjournment, as well as to the other Directors unless the place, date and time of the new meeting is announced at the adjourned meeting. Section 10. Quorum. Except as otherwise provided by the laws of the State of Nevada or in these Bylaws, at all meetings of the Board of Directors of the Corporation a majority of the entire Board shall constitute a quorum for the transaction of business, and the vote of a majority of the Directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. A majority of the Directors present, whether or not a quorum is present, may adjourn any meeting to another place, date and time. 5 Section 11. Conduct of Meetings. At each meeting of the Board of Directors of the Corporation, the President or, in his or her absence, a Director chosen by a majority of the Directors present shall act as Chairman of the meeting. The Secretary or, in his or her absence, any person appointed by the Chairman of the meeting shall act as Secretary of the meeting and keep the minutes thereof. The order of business at all meetings of the Board shall be as determined by the Chairman of the meeting. Section 12. Committees of the Board. The Board of Directors, by resolution adopted by a majority of the entire Board of Directors, may designate an executive committee and other committees, each consisting of one (1) or more Directors. Each committee (including the members thereof) shall serve at the pleasure of the Board of Directors and shall keep minutes of its meetings and report the same to the Board of Directors. The Board of Directors may designate one or more Directors as alternate members of any committee. Alternate members may replace any absent or disqualified member or members at any meeting of a committee. In addition, in the absence or disqualification of a member of a committee, if no alternate member has been designated by the Board of Directors, the members present at any meeting and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member. Except as limited by the laws of the State of Nevada, each committee, to the extent provided in the resolution establishing it, shall have and may exercise all the powers and authority of the Board of Directors with respect to all matters. Section 13. Operation of Committees. A majority of all the members of a committee shall constitute a quorum for the transaction of business, and the vote of a majority of all the members of a committee present at a meeting at which a quorum is present shall be the act of the committee. Each committee shall adopt whatever other rules of procedure it determines for the conduct of its activities. Section 14. Consent to Action. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee may be taken without a meeting if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. Section 15. Meetings Held Other Than in Person. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors or any committee may participate in a meeting of the Board of Directors or committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation shall constitute presence in person at the meeting. Section 16. Compensation of Directors. Directors, as such, shall not receive any stated salary for their services, but, by resolution of the Board, a fixed sum and expenses of attendance, if any, may be allowed for the attendance 6 at each regular or special meeting of the Board; however nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity and receiving compensation therefore. ARTICLE V Officers Section 1. Number, Election and Term of Office. The officers of the Corporation shall be a President, a Secretary, and a Treasurer, and may at the discretion of the Board of Directors include a Chief Executive Officer, a Chief Financial Officer, Chairman of the Board and one or more Vice Presidents, Director of Corporate Development, General Managers, Assistant Financial Officers and Assistant Secretaries. The officers of the Corporation shall be elected annually by the Board of Directors at its meeting held immediately after the Annual Meeting of the stockholders, and shall hold their respective offices until their successors are duly elected and qualified. Any two (2) or more offices may be held by the same person. The Board of Directors may from time to time appoint such other officers and agents as the interests of the Corporation may require and may fix their duties and terms of office. Any officer may devote less than one hundred percent (100%) of his or her working time to his or her activities as such. Section 2. The President. The President shall be the chief executive and operating officer of the Corporation, and shall preside at all meetings of the stockholders and of the Board of Directors. The President shall have general and active management of the business and affairs of the Corporation, subject to the control of the Board, shall see that all orders and resolutions of the Board are effectuated, and shall have such other powers and duties as the Board assigns to him. He shall ensure that the books, reports, statements, certificates and other records of the Corporation are kept, made or filed in accordance with the laws of the State of Nevada. He shall cause to be called regular and special meetings of the stockholders and of the Board of Directors in accordance with these Bylaws. He may sign, execute and deliver in the name of the Corporation all deeds, mortgages, bonds, contracts or other instruments authorized by the Board of Directors, except in cases where the signing, execution or delivery thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or where required by law to be otherwise signed, executed or delivered. He may sign, jointly with the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Financial Officer, certificates of stock of the Corporation. He shall appoint and remove, employ and discharge, and fix the compensation of all servants, agents, employees and clerks of the Corporation other than the duly elected or appointed officers, subject to the approval of the Board of Directors. In addition to the powers and duties expressly conferred upon him by these Bylaws, he shall, except as otherwise specifically provided by the laws of the State of Nevada, have such other powers and duties as shall from time to time be assigned to him by the Board of Directors. 7 Section 3. The Vice President. There may be such Vice Presidents as the Board of Directors shall determine from time to time, with duties determined by the Board of Directors. If there is only one Vice President appointed by the Board, he shall perform, in the absence or disability of the President, the duties and exercise the powers of the President and shall have such other powers and duties as the Board or the President assigns to him. Section 4. The Secretary. The Secretary may sign all certificates of stock of the Corporation jointly with the President. He shall record all the proceedings of the meetings of the stockholders and the Board of Directors of the Corporation in the books to be kept for that purpose. He shall have safe custody of the seal of the Corporation and, when authorized by the Board, he shall affix the same to any corporate instrument, and when so affixed he may attest the same by his signature. He shall keep the transfer books, in which all transfers of the capital stock of the Corporation shall be registered, and the stock books, which shall contain the names and addresses of all holders of the capital stock of the Corporation and the number of shares held by each. He shall keep the stock and transfer books available during business hours for inspection by any stockholder and for the transfer of stock. He shall notify the Directors and stockholders of the respective meetings as required by law or by these Bylaws of the Corporation. He shall have and perform such other powers and duties as may be required by law or the Bylaws of the Corporation, or which the Board or the President may assign to him from time to time. Section 5. Assistant Secretaries. The Assistant Secretaries shall, during the absence or incapacity of the Secretary, assume and perform all functions and duties which the Secretary might lawfully do if present and not under any incapacity. Section 6. The Treasurer. Subject to the control of the Board, the Treasurer shall have the care and custody of the corporate funds and the books relating thereto. He shall perform all other duties incident to the office of the Treasurer. He shall have such other powers and duties as the Board or the President assigns to him from time to time. He shall keep full and accurate accounts of all receipts and disbursements of the Corporation in books belonging to the Corporation and shall deposit all monies and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. He shall disburse the funds of the Corporation as may be ordered by the Board, and shall render to the President or the Directors, whenever they may require it, an account of all his transactions as Treasurer and an account of the business and financial position of the Corporation. Section 7. Assistant Financial Officers. The Assistant Financial Officers shall, during the absence or incapacity of the Treasurer, assume and perform all functions and duties which the Treasurer might lawfully do if present and not under any incapacity. 8 Section 8. Transfer of Duties. The Board of Directors may transfer the power and duties, in whole or in part, of any officer to any other officer, or other persons, notwithstanding the provisions of these Bylaws, except as otherwise provided by the laws of the State of Nevada. Section 9. Removals. Subject to his or her earlier death, resignation or removal as hereinafter provided, each officer shall hold his or her office until his or her successor shall have been duly elected and shall have qualified. Any officer or agent of the Corporation may be removed from office at any time, with or without cause, by the affirmative vote of a majority of the entire Board, at a meeting of the Board of Directors called for that purpose. Section 10. Resignations. Any officer or agent of the Corporation may resign at any time by giving written notice of his or her resignation to the Board of Directors or to the President or Secretary of the Corporation. Any such resignation shall take effect at the time specified therein or, if the time when it shall become effective shall not be specified therein, immediately upon its receipt, and, unless otherwise specified therein, the acceptance of a resignation shall not be necessary to make it effective. Section 11. Vacancies. If the office of President, Secretary or Treasurer becomes vacant for any reason, the Board of Directors shall choose a successor to hold such office for the unexpired term. If any other officer or agent becomes vacant for any reason, the Board of Directors may fill the vacancy, and each officer so elected shall serve for the remainder of his or her predecessor's term. Section 12. Compensation of Officers. The officers shall receive such salary or compensation as may be determined by the Board of Directors. 9 ARTICLE V Contracts, Checks and Notes Section 1. Contracts. Unless the Board of Directors shall otherwise specifically direct, all contracts of the Corporation shall be executed in the name of the Corporation by the President or a Vice President. Section 2. Checks and Notes. All negotiable instruments of the Corporation shall be signed by such officers or agents of the Corporation as may be designated by the Board of Directors. ARTICLE VI Provisions Relating to Stock Certificates and Stockholders Section 1. Certificates of Stock. Certificates for the Corporation's capital stock shall be in such form as required by law and as approved by the Board. Each certificate shall be signed in the name of the Corporation by the President or any Vice President and by the Secretary, the Treasurer or any Assistant Secretary or any Assistant Financial Officer and shall bear the seal of the Corporation or a facsimile thereof. If any certificate is countersigned by a transfer agent or registered by a registrar, other than the Corporation or its employees, the signature of any officer of the Corporation may be a facsimile signature. In case any officer, transfer agent or registrar who shall have signed or whose facsimile signature was placed on any certificate shall have ceased to be such officer, transfer agent or registrar before the certificate shall be issued, it may nevertheless be issued by the Corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue. Section 2. Lost Certificates, etc. The Corporation may issue a new certificate for shares in place of any certificate theretofore issued by it, alleged to have been lost, mutilated, stolen or destroyed, and the Board may require the owner of the lost, mutilated, stolen or destroyed certificate, or his legal representatives, to make an affidavit of that fact and to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, mutilation, theft or destruction of the certificate or the issuance of a new certificate. Section 3. Transfer of Stock. Upon surrender to the Corporation or the transfer agent of the Corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. Section 4. Record Date. For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining stockholders entitled to receive payment of any dividend or other distribution or the allotment of any rights, or for the purpose of any other action, the Board may fix in advance, a record date, which shall be not more than sixty (60) nor less than ten (10) days 10 before the date of any such meeting, nor more than sixty (60) days prior to any other action. Section 5. Registered Stockholders. The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to, or interest in, such share or shares by any other person, whether or not it shall have notice thereof, except as expressly provided by the laws of the State of Nevada. ARTICLE VII General Provisions Section 1. Dividends. To the extent permitted by law, the Board shall have full power and discretion, subject to the provisions of the Certificate of Incorporation of the Corporation and the terms of any other corporate document or instrument binding upon the Corporation, to determine what, if any, dividends or distributions shall be declared and paid or made. Dividends may be paid in cash, in property, or in shares of capital stock, subject to the provisions of the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sums as the Directors think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors think conducive to the interests of the Corporation. The Directors may modify or abolish any such reserve in the manner in which it was created. Section 2. Seal. The corporate seal of the Corporation shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Nevada." Section 3. Fiscal Year. The fiscal year of the Corporation shall be end on December 31. Section 4. Voting Shares in Other Corporations. Unless otherwise directed by the Board, shares in other corporations which are held by the Corporation shall be represented and voted only by the President or by a proxy or proxies appointed by him or her. Section 5. Indemnification. (a) The Corporation shall indemnify any person who was, or is threatened to be made, a party to a proceeding (as hereinafter defined) by reason of the fact that he or she (i) is or was a director, officer, employee or agent of the Corporation, or (ii) while a director, officer, employee or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee, agent or similar functionary of another corporation, partnership, joint venture, trust or other enterprise, to the fullest extent permitted under the Revised Statutes of the State of Nevada, as the same exists or may hereafter be amended. Such right shall be a contract right and as such shall run to the benefit of any director or officer who is elected and accepts the position of director or officer of the Corporation or elects to continue to serve as a director or officer of the Corporation while this Article VII is in 11 effect. The rights conferred above shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, bylaw, resolution of stockholders or directors, agreement or otherwise. (b) As used herein, the term "proceeding" means any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, any appeal in such an action, suit or proceeding and any inquiry or investigation that could lead to such an action, suit or proceeding. (c) A director or officer of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except for liability (i) for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law; or (ii) for the payment of distributions in violation of the Revised Statutes of the State of Nevada. Any repeal or amendment of this Article VII by the shareholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation arising from an act or omission occurring prior to the time of such repeal or amendment. In addition to the circumstances in which a director or officer of the Corporation is not personally liable as set forth in the foregoing provisions of this Article VII, a director or officer shall not be liable to the Corporation or its stockholders to such further extent as permitted by any law hereafter enacted, including, without limitation, any subsequent amendment to the Revised Statutes of the State of Nevada. ARTICLE VIII Amendments These Bylaws may be adopted, altered, amended or repealed or new Bylaws may be adopted by the stockholders, or by the Board of Directors by the Certificate or Incorporation, at any regular meeting of the stockholders or of the Board of Directors or at any special meeting of the stockholders or of the Board of Directors if notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such special meeting. If the power to adopt, amend or repeal Bylaws is conferred upon the Board of Directors by the Certificate of Incorporation it shall not divest or limit the power of the stockholders to adopt, amend or repeal Bylaws. 12 EX-4.1 4 ex4-1.txt SPECIMEN STOCK CERTIFICATE Exhibit 4.1 INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA Your Digital Memories, Inc. TOTAL AUTHORIZED ISSUE 150,000,000 SHARES
100,000,000 SHARES PAR VALUE $.0001 EACH 50,000,000 SHARES PAR VALUE $.0001 EACH COMMON STOCK PREFERRED STOCK
This is to certify that ________________________________________ is the owner of - -------------------------------------------------------------------------------- FULLY PAID AND NON-ASSESABLE SHARES OF PREFERRED STOCK OF Your Digital Memories, Inc. transferrable on the books of the corporation by the holder hereof in person or by duly authorized Attorney upon surrender of this Certificate properly endorsed. Witness the seal of the corporation and the signatures of its duly authorized officers. Dated: Secretary President Seal EX-5.1 5 ex5-1.txt OPINION & CONSENT OF COUNSEL Exhibit 5.1 [SRK LAW OFFICES LOGO] June 15, 2007 VIA ELECTRONIC TRANSMISSION Your Digital Memories, Inc. 15 Zichron Ya'akov, Suite 23 Entrance B. Jerusalem 94421 Israel RE: Your Digital Memories, Inc.; Form SB-2 Registration Statement Ladies and Gentlemen: We refer to the above-captioned registration statement on Form SB-2 ("Registration Statement") under the Securities Act of 1933, as amended ("Act"), filed by Your Digital Memories, Inc., a Nevada corporation ("Company"), with the Securities and Exchange Commission. The Registration Statement relates to the offer and sale by the selling stockholders named therein of up to 1,410,600 shares of common stock, par value $0.0001 per share (the "Common Stock"), of the Company. We have examined the originals, photocopies, certified copies or other evidence of such records of the Company, certificates of officers of the Company and public officials, and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as certified copies or photocopies and the authenticity of the originals of such documents. Based on our examination mentioned above, we are of the opinion that the shares of Common Stock outstanding on the date hereof that are being registered for resale by the selling stockholders of the Company are validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to our firm under "Legal Matters" in the Registration Statement. In giving the foregoing consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Commission. /s/ Steve Kronengold, Attorney - ---------------------------------- EX-10.1 6 ex10-1.txt SUBSCRIPTION AGREEMENT Exhibit 10.1 Your Digital Memories, Inc. 15 Zichron Ya'akov, Suite 23 Entrance B. Jerusalem 94421 REGULATION S SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION SECTION 1. 1.1 Subscription. (a) The undersigned, intending to be legally bound, hereby irrevocably subscribes for and agrees to purchase ____________ shares (the "Shares") of the common stock (the "Common Stock") of Your Digital Memories, Inc, a Nevada corporation (the "Company") in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The undersigned understands that the Shares are being sold in connection with an offering by the Company of an aggregate of up to 1,500,000 shares of Common Stock for total proceeds of up to $75,000. 1.2 Purchase of Shares. The undersigned understands and acknowledges that the purchase price to be remitted to the Company in exchange for the Shares shall be ____________ dollars ($______) or $0.05 per Share. The Company shall deliver the Shares to the undersigned promptly after the acceptance of this Subscription Agreement by the Company. 1.3 Acceptance or Rejection. (a) The undersigned understands and agrees that the Company reserves the right to reject this subscription for the Shares if, in its reasonable judgment, it deems such action in the best interest of the Company, at any time prior to the Closing, notwithstanding prior receipt by the undersigned of notice of acceptance of the undersigned's subscription. (b) The undersigned understands and agrees that its subscription for the Shares is irrevocable. (c) In the event the sale of the Shares subscribed for by the undersigned is not consummated by the Company for any reason (in which event this Subscription Agreement shall be deemed to be rejected), this Subscription Agreement and any other agreement entered into between the undersigned and the Company relating to this subscription shall thereafter have no force or effect and the Company shall promptly return or cause to be returned to the undersigned the purchase price remitted to the Company by the undersigned, without interest thereon or deduction therefrom, in exchange for the Shares. SECTION 2. 2.1 Closing. The closing (the "Closing") of the purchase and sale of the Shares, shall occur simultaneously with the acceptance by the Company of the undersigned's subscription, as evidenced by the Company's execution of this Subscription Agreement. SECTION 3. 3.1 Investor Representations and Warranties. The undersigned hereby acknowledges, represents and warrants to, and agrees with, the Company and its affiliates as follows: (a) Investment Purposes. The undersigned is acquiring the Shares for his own account as principal, not as a nominee or agent, for investment purposes only, and not with a view to, or for, resale, distribution or fractionalization thereof in whole or in part and no other person has a direct or indirect beneficial interest in such Shares or any portion thereof. Further, the undersigned does not have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to the Shares for which the undersigned is subscribing or any part of the Shares. (b) Authority. The undersigned has full power and authority to enter into this Agreement, the execution and delivery of this Agreement has been duly authorized, if applicable, and this Agreement constitutes a valid and legally binding obligation of the undersigned. (c) No General Solicitation. The undersigned is not subscribing for the Shares as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting, or any solicitation of a subscription by person previously not known to the undersigned in connection with investment securities generally. (d) No Obligation to Register Shares. The undersigned understands that the Company is under no obligation to register the Shares under the Securities Act, or to assist the undersigned in complying with the Securities Act or the securities laws of any state of the United States or of any foreign jurisdiction. (e) Investment Experience. The undersigned is (i) experienced in making investments of the kind described in this Agreement, (ii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its affiliates or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and (iii) able to afford the entire loss of its investment in the Shares. 2 (f) Exemption from Registration. The undersigned acknowledges his understanding that the offering and sale of the Shares is intended to be exempt from registration under the Securities Act. In furtherance thereof, in addition to the other representations and warranties of the undersigned made herein, the undersigned further represents and warrants to and agrees with the Company and its affiliates as follows: (1) The undersigned realizes that the basis for the exemption may not be present if, notwithstanding such representations, the undersigned has in mind merely acquiring the Shares for a fixed or determinable period in the future, or for a market rise, or for sale if the market does not rise. The undersigned does not have any such intention; (2) The undersigned has the financial ability to bear the economic risk of his investment, has adequate means for providing for his current needs and personal contingencies and has no need for liquidity with respect to his investment in the Company; and (3) The undersigned has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Shares. The undersigned also represents it has not been organized for the purpose of acquiring the Shares; and (4) The undersigned has been provided an opportunity for a reasonable period of time prior to the date hereof to obtain additional information concerning the offering of the Shares, the Company and all other information to the extent the Company possesses such information or can acquire it without unreasonable effort or expense. (g) Economic Considerations. The undersigned is not relying on the Company, or its affiliates or agents with respect to economic considerations involved in this investment. The undersigned has relied solely on its own advisors. (h) No Other Company Representations. No representations or warranties have been made to the undersigned by the Company, or any officer, employee, agent, affiliate or subsidiary of the Company, other than the representations of the Company contained herein, and in subscribing for Shares the undersigned is not relying upon any representations other than those contained herein. (i) Compliance with Laws. Any resale of the Shares during the `distribution compliance period' as defined in Rule 902(f) to Regulation S shall only be made in compliance with exemptions from registration afforded by Regulation S. Further, any such sale of the Shares in any jurisdiction outside of the United States will be made in compliance with the securities laws of such jurisdiction. The Investor will not offer to sell or sell the Shares in any jurisdiction unless the Investor obtains all required consents, if any. (j) Regulation S Exemption. The undersigned understands that the Shares are being offered and sold to him in reliance on an exemption from the registration requirements of United States federal and state securities laws under Regulation S promulgated under the Securities Act and that the Company is relying upon the 3 truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Investor set forth herein in order to determine the applicability of such exemptions and the suitability of the Investor to acquire the Shares. In this regard, the undersigned represents, warrants and agrees that: (1) The undersigned is not a U.S. Person (as defined below) and is not an affiliate (as defined in Rule 501(b) under the Securities Act) of the Company and is not acquiring the Shares for the account or benefit of a U.S. Person. A U.S. Person means any one of the following: (A) any natural person resident in the United States of America; (B) any partnership or corporation organized or incorporated under the laws of the United States of America; (C) any estate of which any executor or administrator is a U.S. person; (D) any trust of which any trustee is a U.S. person; (E) any agency or branch of a foreign entity located in the United States of America; (F) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person; (G) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated or (if an individual) resident in the United States of America; and (H) any partnership or corporation if: (i) organized or incorporated under the laws of any foreign jurisdiction; and (ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the Securities Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) under the Securities Act) who are not natural persons, estates or trusts. (2) At the time of the origination of contact concerning this Agreement and the date of the execution and delivery of this Agreement, the undersigned was outside of the United States. (3) The undersigned will not, during the period commencing on the date of issuance of the Shares and ending on the first anniversary of such date, or 4 such shorter period as may be permitted by Regulation S or other applicable securities law (the "Restricted Period"), offer, sell, pledge or otherwise transfer the Shares in the United States, or to a U.S. Person for the account or for the benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S. (4) The undersigned will, after expiration of the Restricted Period, offer, sell, pledge or otherwise transfer the Shares only pursuant to registration under the Securities Act or an available exemption therefrom and, in accordance with all applicable state and foreign securities laws. (5) The undersigned was not in the United States, engaged in, and prior to the expiration of the Restricted Period will not engage in, any short selling of or any hedging transaction with respect to the Shares, including without limitation, any put, call or other option transaction, option writing or equity swap. (6) Neither the undersigned nor or any person acting on his behalf has engaged, nor will engage, in any directed selling efforts to a U.S. Person with respect to the Shares and the Investor and any person acting on his behalf have complied and will comply with the "offering restrictions" requirements of Regulation S under the Securities Act. (7) The transactions contemplated by this Agreement have not been pre-arranged with a buyer located in the United States or with a U.S. Person, and are not part of a plan or scheme to evade the registration requirements of the Securities Act. (8) Neither the undersigned nor any person acting on his behalf has undertaken or carried out any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States, its territories or possessions, for any of the Shares. The undersigned agrees not to cause any advertisement of the Shares to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the Shares, except such advertisements that include the statements required by Regulation S under the Securities Act, and only offshore and not in the U.S. or its territories, and only in compliance with any local applicable securities laws. (9) Each certificate representing the Shares shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities laws: (A) "THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE SECURITIES ACT")) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT." 5 (B) "TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT." (10) The undersigned consents to the Company making a notation on its records or giving instructions to any transfer agent of the Company in order to implement the restrictions on transfer of the Shares set forth in this Section 3. (k) Accredited Investor. The undersigned is an "accredited investor" as that term is defined in Rule 501 of the General Rules and Regulations under the Securities Act by reason of Rule 501(a)(3). (l) Potential Loss of Investment; Risk Factors. The undersigned understands that an investment in the Shares is a speculative investment which involves a high degree of risk and the potential loss of his entire investment. The undersigned understands that the following factors, among others, could cause the loss of any or all of his investment. (1) The Company is a development stage company with no operating history for the undersigned to evaluate its business. The Company was incorporated in the State of Nevada in June 2006, and as a result is only in the very early stages of development. Because the Company has no operating history, it is difficult to evaluate its business and future prospects. The undersigned has also considered the uncertainties and difficulties frequently encountered by companies, such as the Company, in their early stages of development. The Company's revenue and income potential is unproven and its business model is still emerging. If its business model does not prove to be profitable, the undersigned may lose all of his investment. (2) The Company currently does not have enough working capital to satisfy its capital needs. The Company is dependent upon its management team to fund its ongoing operations, and cannot be certain that future financing will be available to it on acceptable terms when it needs it. The Company can give no assurances that it will be able to sell any portion of this offering or that management will continue to fund its ongoing operations. This, along with the possibility of other factors and circumstances the Company cannot predict, may require it to seek additional financing faster than anticipated. If the Company is unable to obtain financing to meet its needs, the undersigned may lose of his investment. (3) The Company's officers and directors will only devote a limited amount of time to the Company. Their divided interests may hinder the Company's ability to generate revenue. This could result in missed business opportunities and worse-than-expected operating results. The undersigned may lose his entire investment. (4) Management has never operated in the industry in which it intends to operate. This lack of experience may result in the Company's needing to employ outside experts that have such experience. The additional cost could result in a net operating loss and, ultimately, could result in the Company's 6 failure. Management's inexperience may limit the Company's ability to generate revenues. The Company may never achieve successful operations, and the undersigned may lose his entire investment. (m) Investment Commitment. The undersigned's overall commitment to investments which are not readily marketable is not disproportionate to the undersigned's net worth, and an investment in the Shares will not cause such overall commitment to become excessive. (n) Receipt of Information. The undersigned has received all documents, records, books and other information pertaining to the undersigned's investment in the Company that has been requested by the undersigned. (o) Investor Questionnaire. The undersigned represents and warrants to the Company that all information that the undersigned has provided to the Company, including, without limitation, the information in the Investor Questionnaire attached hereto as Exhibit 1 or previously provided to the Company (the "Investor Questionnaire"), is correct and complete as of the date hereof. (p) No Reliance. Other than as set forth herein, the undersigned is not relying upon any other information, representation or warranty by the Company or any officer, director, stockholder, agent or representative of the Company in determining to invest in the Shares. The undersigned has consulted, to the extent deemed appropriate by the undersigned, with the undersigned's own advisers as to the financial, tax, legal and related matters concerning an investment in the Shares and on that basis believes that his or its investment in the Shares is suitable and appropriate for the undersigned. (q) No Governmental Review. The undersigned is aware that no federal or state agency has (i) made any finding or determination as to the fairness of this investment, (ii) made any recommendation or endorsement of the Shares or the Company, or (iii) guaranteed or insured any investment in the Shares or any investment made by the Company. (r) Price of Shares. The undersigned understands that the price of the Shares offered hereby bear no relation to the assets, book value or net worth of the Company and were determined arbitrarily by the Company. The undersigned further understands that there is a substantial risk of further dilution on his or its investment in the Company. SECTION 4. 4.1 Company's Representations and Warranties. The Company represents and warrants to the undersigned as follows: (a) Organization of the Company. The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada. (b) Authority. (a) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Shares; (b) the execution and delivery of this Agreement by the 7 Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or stockholders is required; and (c) this Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors' rights and remedies or by other equitable principles of general application. (c) Exemption from Registration; Valid Issuances. The sale and issuance of the Shares, in accordance with the terms and on the bases of the representations and warranties of the undersigned set forth herein, may and shall be properly issued by the Company to the undersigned pursuant to any applicable federal or state law. When issued and paid for as herein provided, the Shares shall be duly and validly issued, fully paid, and nonassessable. Neither the sales of the Shares pursuant to, nor the Company's performance of its obligations under, this Agreement shall (a) result in the creation or imposition of any liens, charges, claims or other encumbrances upon the Shares or any of the assets of the Company, or (b) entitle the other holders of the Common Stock of the Company to preemptive or other rights to subscribe to or acquire the Common Stock or other securities of the Company. The Shares shall not subject the undersigned to personal liability by reason of the ownership thereof. (d) No General Solicitation or Advertising in Regard to this Transaction. Neither the Company nor any of its affiliates nor any person acting on its or their behalf (a) has conducted or will conduct any general solicitation (as that term is used in Rule 502(c) of Regulation D) or general advertising with respect to any of the Shares, or (b) made any offers or sales of any security or solicited any offers to buy any security under any circumstances that would require registration of the Common Stock under the Securities Act. SECTION 5. 5.1 Indemnity. The undersigned agrees to indemnify and hold harmless the Company, its officers and directors, employees and its affiliates and their respective successors and assigns and each other person, if any, who controls any thereof, against any loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all expenses whatsoever reasonably incurred in investigating, preparing or defending against any litigation commenced or threatened or any claim whatsoever) arising out of or based upon any false representation or warranty or breach or failure by the undersigned to comply with any covenant or agreement made by the undersigned herein or in any other document furnished by the undersigned to any of the foregoing in connection with this transaction. 5.2 Modification. Neither this Agreement nor any provisions hereof shall be modified, discharged or terminated except by an instrument in writing signed by the party against whom any waiver, change, discharge or termination is sought. 8 5.3 Notices. Any notice, demand or other communication which any party hereto may be required, or may elect, to give to anyone interested hereunder shall be sufficiently given if (a) deposited, postage prepaid, in a United States mail letter box, registered or certified mail, return receipt requested, addressed to such address as may be given herein, or (b) delivered personally at such address. 5.4 Counterparts. This Agreement may be executed through the use of separate signature pages or in any number of counterparts and by facsimile, and each of such counterparts shall, for all purposes, constitute one agreement binding on all parties, notwithstanding that all parties are not signatories to the same counterpart. Signatures may be facsimiles. 5.5 Binding Effect. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, successors, legal representatives and assigns. If the undersigned is more than one person, the obligation of the undersigned shall be joint and several and the agreements, representations, warranties and acknowledgments herein contained shall be deemed to be made by and be binding upon each such person and his heirs, executors, administrators and successors. 5.6 Entire Agreement. This Agreement and the documents referenced herein contain the entire agreement of the parties and there are no representations, covenants or other agreements except as stated or referred to herein and therein. 5.7 Assignability. This Agreement is not transferable or assignable by the undersigned. 5.8 Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts of law principles. 5.9 Pronouns. The use herein of the masculine pronouns "him" or "his" or similar terms shall be deemed to include the feminine and neuter genders as well and the use herein of the singular pronoun shall be deemed to include the plural as well. 5.10 Further Assurances. Upon request from time to time, the undersigned shall execute and deliver all documents, take all rightful oaths and do all other acts that may be necessary or desirable, in the reasonable opinion of the Company or its counsel, to effect the subscription for the Shares in accordance herewith. 9 IN WITNESS WHEREOF, the undersigned has executed this Agreement on the day of ________________, 2007. Amount of Investment: $ --------------------- INDIVIDUAL INVESTOR: By: --------------------- Address: ---------------- - ------------------------ - ------------------------ (Signature) PARTNERSHIP, CORPORATION, TRUST, CUSTODIAL ACCOUNT, OTHER INVESTOR - ------------------------------ (Name of Entity) By: --------------------------- Name: ------------------------- Title: ------------------------ Address: ---------------------- Taxpayer Identification Number:_____________ 10 INVESTOR QUESTIONNAIRE A. General Information 1. Print Full Name of Investor: Individual: -------------------------------- First, Middle, Last Partnership, Corporation, Trust, Custodial Account, Other: -------------------------------- Name of Entity 2. Address for Notices: -------------------------------- -------------------------------- -------------------------------- 3. Name of Primary Contact Person: ----------------------------- Title: 4. Telephone Number: -------------------------------- 5. E-Mail Address: -------------------------------- 6. Facsimile Number: -------------------------------- 7. Permanent Address: -------------------------------- (if different from Address for Notices above) 8. Authorized Signatory: -------------------------------- 9. U.S. Investors Only: U.S. Taxpayer Identification or Social Security Number: -------------------------------- 11 The Investor understands that the foregoing information will be relied upon by the Company for the purpose of determining the eligibility of the Investor to purchase the Shares. The Investor agrees to notify the Company immediately if any representation or warranty contained in this Subscription Agreement, including this Investor Questionnaire, becomes untrue at any time. The Investor agrees to provide, if requested, any additional information that may reasonably be required to substantiate the Investor's status as an accredited investor or to otherwise determine the eligibility of the Investor to purchase the Shares. The Investor agrees to indemnify and hold harmless the Company and each officer, director, shareholder, agent and representative of the Company and their respective affiliates and successors and assigns from and against any loss, damage or liability due to or arising out of a breach of any representation, warranty or agreement of the Investor contained herein. INDIVIDUAL: -------------------------- (Signature) -------------------------- (Print Name) PARTNERSHIP, CORPORATION, TRUST, CUSTODIAL ACCOUNT, OTHER: -------------------------- (Name of Entity) By: -------------------------------- (Signature) -------------------------- (Print Name and Title) 12 EX-23.1 7 ex23-1.txt CONSENT OF MOORE & ASSOCIATES Exhibit 23.1 MOORE & ASSOCIATES, CHARTERED ACCOUNTANTS AND ADVISORS PCAOB REGISTERED CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the use, in the registration statement on Form SB-2 of Your Digital Memories Inc. of our report dated June 8, 2007 on our audit of the financial statements of Your Digital Memories Inc. as of May 31, 2007 and the related statements of operations, stockholders' equity and cash flows from inception June 27, 2006 through May 31, 2007 and for the period then ended, and the reference to us under the caption "Experts." /s/ Moore & Associates, Chartered - --------------------------------------- Moore & Associates Chartered Las Vegas, Nevada June 13, 2007 2675 S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7511 Fax (702) 253-7501 -----END PRIVACY-ENHANCED MESSAGE-----