S-1 1 fs1_paybyday.htm REGISTRATION STATEMENT fs1_paybyday.htm
 
SECURITIES AND EXCHANGE COMMISSION
==================================
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
==================================
 
Pay By The Day Holdings, Inc.
(Exact Name of Small Business Issuer in its Charter)

Nevada
    
(State of Incorporation)
(Primary Standard Classification Code)
(IRS Employer ID No.)
     
 
Pay By The Day Holdings, Inc.
193 Jardin Drive, 2nd Floor West
Concord, ON L4K 1X5
( 905) 760-0475
Address and Telephone Number of Registrant’s Principal
Executive Offices and Principal Place of Business)
 
Pay By The Day Holdings, Inc.
193 Jardin Drive, 2nd Floor West
Concord, ON L4K 1X5
( 905) 760-0475
 (Name, Address and Telephone Number of Agent for Service)
 
Copies of communications to:
GREGG E. JACLIN, ESQ.
ANSLOW & JACLIN, LLP
195 Route 9 South, Suite204
Manalapan, NJ 07726
TELEPHONE NO.: (732) 409-1212
FACSIMILE NO.: (732) 577-1188
 
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. |X|
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, 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 of 1933, 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 of 1933, 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 Each Class Of Securities to be Registered
Amount to be
Registered
Proposed Maximum
Aggregate
Offering Price
per share
Proposed Maximum
Aggregate
Offering Price
Amount of
Registration fee
         
Common Stock, par value $0.001
369,000
$0.10
$36,900
$1.58
 
 
The offering price has been estimated solely for the purpose of computing the amount of the registration fee in accordance with Rule 457(o). Our common stock is not traded on any national exchange and in accordance with Rule 457; the offering price was determined by the price shareholders were sold to our shareholders in a private placement memorandum. The price of $0.10 is a fixed price at which the selling security holders 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. There can be no assurance that a market maker will agree to file the necessary documents with the Financial Industry Regulatory Authority, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved.
 
PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION DATED MARCH __, 2008
 
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.
 
 
  


 
 
 

 
 
ITEM 3.  Summary Information, Risk Factors and Ratio of Earnings to Fixed Charges.

 
This summary highlights selected information contained elsewhere in this prospectus.  This summary does not contain all the information that you should consider before investing in the common stock.  You should carefully read the entire prospectus, including “Risk Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements, before making an investment decision .
 
About Our Company

Pay By The Day Holdings, Inc. (“the Company” or “Pay By The Day”) was incorporated in Nevada in August 2007; on August 31, 2007 we entered into a Share Exchange Agreement with Pay By The Day Company Inc., an Ontario Corporation, whereby Pay By The Day Company Inc. became our wholly owned subsidiary.  The Company’s primary focus is on direct sales of Computer Products and Consumer Electronics. We were founded by Jordan Starkman who serves as President and Secretary, and Director. He will coordinate and manage all business functions of the Company, including marketing, finance and operations.
 
Revenues will be drawn from the sale of Computer Products and Consumer Electronics directly to consumers through a targeted multi-media direct marketing approach.  The company’s primary success will come from consumers desire to purchase products through a variety of financing options and payments starting at “a dollar a day”.  Our name is a reflection of today’s demanding financing environment.  We aim to be a one stop shop for our customers who may have limited access to capital and a need or desire to purchase our product offerings.
 
Where You Can Find Us

Our business office is located at 193 Jardin Drive, 2nd Floor West, Concord, ON L4K 1X5. This location is adequate for our current needs. Our telephone number is 905-760-0475.
 
Terms of the Offering

The selling shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. 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. The offering price of $0.10 was determined by the price shares were sold to our shareholders in a private placement memorandum and is a fixed price at which the selling security holders 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. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders.
 
 
 
The following summary financial data should be read in conjunction with “Management’s Discussion and Analysis,” “Plan of Operation” and the Financial Statements and Notes thereto, included elsewhere in this prospectus. The statement of operations and balance sheet data from inception (August 31, 2007) through November 30, 2007 are derived from our audited financial statements.
  
   
From Inception-
January 31, 2007 through
November 30, 2007
  
STATEMENT OF OPERATIONS
      
       
Revenues
    
383,252
  
Total Operating Expenses
    
233,325
  
Net Loss
    
(68,963)
  
 
   
As of
November 30, 2007
  
BALANCE SHEET DATA
      
       
Cash 
    
29,975
  
Total Assets 
    
35,838
  
Total Liabilities  
    
96,307
  
Stockholders’ Deficit  
    
35,838
  
 

  
 
 
 

 
 
 
369,000 SHARES OF
PAY BY THE DAY HOLDINGS, INC.
COMMON STOCK
 
 
 
 
The selling shareholders named in this prospectus are offering all of the shares of common stock offered through this prospectus. Our common stock is presently not traded on any market or securities exchange and have no voting rights. The 369,000 shares of our common stock can be sold by selling security holders at a fixed price of $0.10 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. There can be no assurance that a market maker will agree to file the necessary documents with The Financial Industry Regulatory Authority (“FINRA”), which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. We have agreed to bear the expenses relating to the registration of the shares for the selling security holders.
 
THE COMPANY IS CONSIDERED TO BE IN UNSOUND FINANCIAL CONDITION. PERSONS SHOULD NOT INVEST UNLESS THEY CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENTS.
 
THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. YOU SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING “RISK FACTORS” BEGINNING ON PAGE 3.
 
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 Date of This Prospectus Is:  March __, 2008
 
 
 
 
 
 
 






An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this prospectus before investing in our common stock. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. Please note that throughout this prospectus, the words “we”, “our” or “us” refer to the Company and not to the selling stockholders.
 
WE HAVE A LIMITED OPERATING HISTORY THAT YOU CAN USE TO EVALUATE US, AND THE LIKELIHOOD OF OUR SUCCESS MUST BE CONSIDERED IN LIGHT OF THE PROBLEMS, EXPENSES, DIFFICULTIES, COMPLICATIONS AND DELAYS FREQUENTLY ENCOUNTERED BY A SMALL DEVELOPING COMPANY.
 
We were incorporated in Nevada in August 2007. With the exception of $29,975 in cash, we have no significant financial resources and limited revenues to date. The likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company starting a new business enterprise and the highly competitive environment in which we will operate. Since we have a limited operating history, we cannot assure you that our business will be profitable or that we will ever generate sufficient revenues to meet our expenses and support our anticipated activities.
 
WE WILL REQUIRE FINANCING TO ACHIEVE OUR CURRENT BUSINESS STRATEGY AND OUR INABILITY TO OBTAIN SUCH FINANCING COULD PROHIBIT US FROM EXECUTING OUR BUSINESS PLAN AND CAUSE US TO SLOW DOWN OUR EXPANSION OF OPERATIONS.
 
We will need to raise additional funds through public or private debt or sale of equity to achieve our current business strategy. Such financing may not be available when needed. Even if such financing is available, it may be on terms that are materially adverse to your interests with respect to dilution of book value, dividend preferences, liquidation preferences, or other terms. Our capital requirements to implement our business strategy will be significant. Moreover, in addition to monies needed to continue operations over the next twelve months, we anticipate requiring additional funds in order to implement our plan of operations. No assurance can be given that such funds will be available or, if available, will be on commercially reasonable terms satisfactory to us. There can be no assurance that we will be able to obtain financing if and when it is needed on terms we deem acceptable.
 
If we are unable to obtain financing on reasonable terms, we could be forced to delay or scale back our plans for expansion. In addition, such inability to obtain financing on reasonable terms could have a material adverse effect on our business, operating results, or financial condition.

OUR AUDITOR HAS EXPRESSED SUBSTANTIAL DOUBT AS TO OUR ABILITY TO CONTINUE AS A GOING CONCERN.
 
Based on our financial history since inception, our auditor has expressed substantial doubt as to our ability to continue as a going concern. We are a development stage company that has never generated any revenue. From inception to November 30, 2007, we have incurred a net loss of $68,963, and an accumulated deficit of $81,558. If we cannot generate sufficient revenues from our services, we may have to delay the implementation of our business plan, including our initial go to market strategy.
 
 
 

 
OUR FUTURE SUCCESS IS DEPENDENT, IN PART, ON THE PERFORMANCE AND CONTINUED SERVICE OF JORDAN STARKMAN, OUR ONLY OFFICER. WITHOUT HIS CONTINUED SERVICE, WE MAY BE FORCED TO INTERRUPT OR EVENTUALLY CEASE OUR OPERATIONS.
 
We are presently dependent to a great extent upon the experience, abilities and continued services of Jordan Starkman our only Officer and Director. We currently do not have an employment agreement with Mr. Starkman. The loss of his services could have a material adverse effect on our business, financial condition or results of operation.
 
WE ARE SELLING OUR PRODUCTS IN A HIGHLY COMPETITIVE MARKET AND WE ARE UNSURE AS TO WHETHER OR NOT THERE WILL BE ANY CONSUMER DEMAND FOR OUR PRODUCTS.

Some of our competitors are much larger and better capitalized than we are. It may be that our competitors will better address the same market opportunities that we are addressing. These competitors, either alone or with collaborative partners, may succeed in developing business models that are more effective or have greater market success than our own. The Company is especially susceptible to larger manufacturers that invest more money in marketing. Moreover, the market for our products is large but highly competitive. There is little or no hard data that substantiates the demand for our products or how this demand will be segmented. It is possible that there will be low consumer demand for our products, or that interest in our products could decline or die out, which would cause us to be unable to sustain our operations.

WHILE NO CURRENT LAWSUITS ARE FILED AGAINST THE COMPANY, THE POSSIBILITY EXISTS THAT A CLAIM OF SOME KIND MAY BE MADE IN THE FUTURE.

While no current lawsuits are filed against the Company, the possibility exists that a claim of some kind may be made in the future. While we will work to insure high product quality and accuracy in all marketing and labeling, no assurance can be given that some claims for damages will not arise.

THE ABILITY TO SUCCESSFULLY DEPLOY OUR BUSINESS MODEL IS HEAVILTY DEPENDENT UPON UNITED STATES’ AND CANADIAN ECONOMIC CONDITIONS.

The ability to successfully deploy our business model is heavily dependent upon the general state of the US and Canadian economy. We cannot assure you that favorable conditions will exist in the future. A general economic recession in the United States and Canadian or a devaluation of the US Dollar and Canadian relative to the Euro could have a serious adverse economic impact on us and our ability to obtain funding and generate projected revenues.
 
 

 
THE OFFERING PRICE OF THE SHARES WAS ARBITRARILY DETERMINED, AND THEREFORE SHOULD NOT BE USED AS AN INDICATOR OF THE FUTURE MARKET PRICE OF THE SECURITIES. THEREFORE, THE OFFERING PRICE BEARS NO RELATIONSHIP TO THE ACTUAL VALUE OF THE COMPANY, AND MAY MAKE OUR SHARES DIFFICULT TO SELL.
 
Since our shares are not listed or quoted on any exchange or quotation system, the offering price of $.10 for the shares of common stock was arbitrarily determined. The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market. The offering price bears no relationship to the book value, assets or earnings of our company or any other recognized criteria of value. The offering price should not be regarded as an indicator of the future market price of the securities.
 
THERE IS NO ASSURANCE OF A PUBLIC MARKET OR THAT THE COMMON STOCK WILL EVER TRADE ON A RECOGNIZED EXCHANGE. THEREFORE, YOU MAY BE UNABLE TO LIQUIDATE YOUR INVESTMENT IN OUR STOCK.
 
There is no established public trading market for our common stock. Our shares are not and have not been listed or quoted on any exchange or quotation system. There can be no assurance that a market maker will agree to file the necessary documents with the National Association of Securities Dealers, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved or that a regular trading market will develop or that if developed, will be sustained. In the absence of a trading market, an investor may be unable to liquidate their investment.
 
OUR COMMON STOCK IS CONSIDERED A PENNY STOCK, WHICH IS SUBJECT TO RESTRICTIONS ON MARKETABILITY, SO YOU MAY NOT BE ABLE TO SELL YOUR SHARES.
 
If our common stock becomes tradable in the secondary market, we will be subject to the penny stock rules adopted by the Securities and Exchange Commission that require brokers to provide extensive disclosure to their customers prior to executing trades in penny stocks. These disclosure requirements may cause a reduction in the trading activity of our common stock, which in all likelihood would make it difficult for our shareholders to sell their securities.
 
Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system). Penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must 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, and monthly account statements showing the market value of each penny stock held in the customer’s account. The broker-dealer must also 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 requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit their market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

 
Item 4.  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 security holders.

 
Item 5. Determination of Offering Price


Since our shares are not listed or quoted on any exchange or quotation system, the offering price of the shares of common stock was arbitrarily determined. The offering price was determined by the price shares were sold to our shareholders in our private placement which was completed in December 2007 pursuant to an exemption under Rule 506 of Regulation D.
 
The offering price of the shares of our common stock has been determined arbitrarily by us and does not necessarily bear any relationship to our book value, assets, past operating results, financial condition or any other established criteria of value. The facts considered in determining the offering price were our financial condition and prospects, our limited operating history and the general condition of the securities market. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the Over The Counter Bulletin Board (OTCBB) concurrently with the filing of this prospectus. In order to be quoted on the Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved.

In addition, there is no assurance that our common stock will trade at market prices in excess of the initial public offering price as prices for the common stock in any public market which may develop will be determined in the marketplace and may be influenced by many factors, including the depth and liquidity.
 
 
Item 6. Dilution.


The common stock to be sold by the selling shareholders is common stock that is currently issued. Accordingly, there will be no dilution to our existing shareholders.
 
 
 
 
 

Item 7. Selling Security Holders.
 
 
The shares being offered for resale by the selling stockholders consist of the 369,000 shares of our common stock held by 41 shareholders of our common stock of which 259,000 shares were sold in our Regulation D Rule 506 offering completed in December 2007, 10,000 shares were issued for legal services rendered, and 100,000 were issued in consideration for cash.
 
The following table sets forth the name of the selling stockholders, the number of shares of common stock beneficially owned by each of the selling stockholders as of March 3, 2008 and the number of shares of common stock being offered by the selling stockholders. The shares being offered hereby are being registered to permit public secondary trading, and the selling stockholders may offer all or part of the shares for resale from time to time. However, the selling stockholders are under no obligation to sell all or any portion of such shares nor are the selling stockholders obligated to sell any shares immediately upon effectiveness of this prospectus. All information with respect to share ownership has been furnished by the selling stockholders.


Name of selling stockholder
Shares of common stock owned prior to offering 
Shares of common stock to be sold
 
Shares of common stock owned after offering 
Percent of common stock owned after offering
Maxwell Network Group Inc. (1)
100,000
100,000
0
0%
Itamar Cohen
100,000
100,000
0
0%
Gregg E. Jaclin
5,000
5,000
0
0%
Richard I. Anslow
5,000
5,000
0
0%
Iris Taxon
35,000
35,000
0
0%
Maital Cohen
5,000
5,000
0
0%
Sammy Anidjar
5,000
5,000
0
0%
Miriam Anidjar
5,000
5,000
0
0%
Neil Casselman
5,000
5,000
0
0%
Sandra Payer
5,000
5,000
0
0%
Dennis Payer
5,000
5,000
0
0%
Michael Payer
5,000
5,000
0
0%
Lorna Limasing
5,000
5,000
0
0%
Luz M. Sta Maria
5,000
5,000
0
0%
Minerva D. Atienza
5,000
5,000
0
0%
Mike Amorosso
5,000
5,000
0
0%
Mike Wilson
5,000
5,000
0
0%
Noreen Wilson
5,000
5,000
0
0%
Meir Waisenberg
5,000
5,000
0
0%
Valerie Afriat
5,000
5,000
0
0%
Angelo Toneguzzo
5,000
5,000
0
0%
Alena Danieli
5,000
5,000
0
0%
Nissan Danieli
5,000
5,000
0
0%
David Anidjar
5,000
5,000
0
0%
Anne Marks
5,000
5,000
0
0%
Deena Oziel
3,000
3,000
0
0%
Danny Rabizada
2,500
2,500
0
0%
Tammy Revizada
2,500
2,500
0
0%
Ghitel Grinfield
2,000
2,000
0
0%
Isaac Oziel
2,000
2,000
0
0%
Sherwin Shapiro
2,000
2,000
0
0%
Liran Cohen
1,000
1,000
0
0%
Tami Garson (2)
1,000
1,000
0
0%
Jeff Botnick
1,000
1,000
0
0%
Lawrence Rabie
1,000
1,000
0
0%
Annette Shapiro
1,000
1,000
0
0%
Jesse Shapiro
1,000
1,000
0
0%
Matthew Shapiro
1,000
1,000
0
0%
Ben Giterman
1,000
1,000
0
0%
Yona Giterman
1,000
1,000
0
0%
Alan Patel
1,000
1,000
0
0%
 
(1)  
Maxwell Network Group Inc. is controlled by Itamar Cohen.
(2)  
Tami Garson is the wife of Jordan Starkman the Company’s President

 Except as listed below, to our knowledge, none of the selling shareholders or their beneficial owners:

-
has had a material relationship with us other than as a shareholder at any time within the past three years; or
-
has ever been one of our officers or directors or an officer or director of our predecessors or affiliates 
  
-  
are broker-dealers or affiliated with broker-dealers. 
  
 
 

 
Item 8. Plan of Distribution.


The selling security holders may sell some or all of their shares at a fixed price of $0.10 per share until our shares are quoted on the OTC Bulletin Board and thereafter at prevailing market prices or privately negotiated prices. Prior to being quoted on the OTCBB, shareholders may sell their shares in private transactions to other individuals. Although our common stock is not listed on a public exchange, we will be filing to obtain a listing on the Over The Counter Bulletin Board (OTCBB) concurrently with the filing of this prospectus. In order to be quoted on the Bulletin Board, a market maker must file an application on our behalf in order to make a market for our common stock. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. There can be no assurance that a market maker will agree to file the necessary documents with FINRA, which operates the OTC Electronic Bulletin Board, nor can there be any assurance that such an application for quotation will be approved. However, sales by selling security holder must be made at the fixed price of $0.10 until a market develops for the stock.
 
Once a market has been developed for our common stock, the shares may be sold or distributed from time to time by the selling stockholders directly to one or more purchasers or through brokers or dealers who act solely as agents, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices, which may be changed. The distribution of the shares may be effected in one or more of the following methods:
 
O
ordinary brokers transactions, which may include long or short sales,
O
transactions involving cross or block trades on any securities or market where our common stock is trading, market where our common stock is trading,
O
through direct sales to purchasers or sales effected through agents,
O
through transactions in options, swaps or other derivatives (whether exchange listed of otherwise), or exchange listed or otherwise), or
O
any combination of the foregoing.
 
In addition, the selling stockholders may enter into hedging transactions with broker-dealers who may engage in short sales, if short sales were permitted, of 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 or to whom they may sell as principal, or both (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 will not receive any proceeds from the sale of the shares of the selling security holders 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 $25,000.
 
Notwithstanding anything set forth herein, no FINRA member will charge commissions that exceed 8% of the total proceeds of the offering.
 
 
Item 9. Description of Securities to be Registered.


General
 
Our authorized capital stock consists of 100,000,000 Shares of common stock, $0.001 par value per share. There are no provisions in our charter or by-laws that would delay, defer or prevent a change in our control.
 
Common Stock
 
As of March 3, 2008 619,000 shares of common stock are issued and outstanding and held by 41 shareholders. Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote.

 
 
 

 
The holders of our common stock have equal ratable rights to dividends from funds legally available if and when declared by our board of directors and are entitled to share ratably in all of our assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs. Our common stock does not provide the right to a preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights. Our common stock holders are entitled to one non-cumulative vote per share on all matters on which shareholders may vote.

All shares of common stock now outstanding are fully paid for and non-assessable and all shares of common stock which are the subject of this private placement are fully paid and non-assessable.  We refer you to our Articles of Incorporation, Bylaws and the applicable statutes of the state of Nevada for a more complete description of the rights and liabilities of holders of our securities.  All material terms of our common stock have been addressed in this section.

Holders of shares of our common stock do not have cumulative voting rights, which means that the holders of more than 50% of the outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose, and, in that event, the holders of the remaining shares will not be able to elect any of our directors.

Preferred Stock
 
Our articles of incorporation do not provide authorization to issue shares of preferred stock.
 
Dividends
 
We have not paid any cash dividends to shareholders.  The declaration of any future cash dividends is at the discretion of our board of directors and depends  upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions.  It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.

Warrants
 
There are no outstanding warrants to purchase our securities.
 
Options
 
There are no options to purchase our securities outstanding.
 
 
Item 10. Interests of Named Experts and Counsel
 

Other than Richard Anslow, and Gregg Jaclin, 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.  Richard Anslow and Gregg Jaclin are partners of Anslow & Jaclin, LLP.
 
The financial statements included in this prospectus and the registration statement have been audited by DNTW Chartered Accountants, LLP, to the extent and for the periods set forth in their report appearing elsewhere herein and in the registration statement, and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

 
Item 11. Information with Respect to the Registrant.


We were incorporated in August 2007 in the State of Nevada and 50,000 shares each of common stock were issued to Jordan Starkman.
 
 
 
 

General

Pay By The Day Holdings, Inc. (the “Company” or “PBTD” or “Pay By The Day”)) was incorporated in August 2007 in Nevada; on August 31, 2007 we entered into a Share Exchange Agreement with Pay By The Day Company Inc., an Ontario Corporation, whereby Pay By The Day Company Inc. became our wholly owned subsidiary. Our business office is located at 193 Jardin Drive, 2nd Floor West, Concord, ON L4K 1X5.  Our telephone number is 905-760-0475 or 1-800-854-7970.

The Company was incorporated in Nevada in August 2007 with the “Pay By The Day” branding as a basic premise of our business model with a primary focus on direct sales of Computer Products and Consumer Electronics.  Our name is a reflection of today’s demanding financing environment.  We are a one stop shop for our customers who may have limited access to capital and a need or desire to purchase our product offerings.

Our Company has recognized the sales and profit potential of selling Computer Products and Consumer Electronics to customers that may want or need to use credit facilities to make their purchases.   Our goal is to be a key player in the sale of Computer Products and Consumer Electronics directly to consumers through a targeted multi-media direct marketing approach.  The company’s primary success will come from consumers desire to purchase products through a variety of financing options and payments starting at “a dollar a day”.

We will negotiate financing for customers from coast to coast.  Pay By The Day Credit Services will offer products and information that will improve credit worthiness for this target group through a variety of Secured Credit products.

Pay By The Day’s mission is to become a key competitor in the direct sale of Computer Products and Consumer Electronics, while PBTD’s Credit Services division will become Canada’s leading marketer and provider of Secured Credit Card options for customers who wish to establish or re-establish credit history.

 Our concept consists of the following components:
 
    Company: To create a well respected and recognized brand in the sale of computers and consumer electronics on a financing basis. The company will also be a means for customers with poor credit rating to improve their credit rating by the repayment of financing provided to them by PDTD Computers. Product: To sell only top quality brand name merchandise.
   
    Economic: To operate the company on a sound financial basis of profitable growth, increasing value for shareholders, and creating career opportunities and financial rewards for our employees.
 
PBTD Computers Operation

Typical Revenue Producing Transaction:

A customer’s first experience with us will generally be when they call our toll free number in response to one of our marketing campaigns.  Our primary sales efforts will be directed towards customers who contact us as a result of our marketing campaign.  Our secondary sales efforts will be made through out bound sales calls from our offices.  Customers are also able to come to our offices and pick up their purchases from our head office.  We will also have the ability to accommodate on-the-spot purchases.

Once customer contact has been established, a credit application is filled out and sent to our financing partner where it is processed in order to review the customer’s credit history.  Credit applications are either filled out online or over the telephone.  Each application is carefully screened prior to being forwarded to our financing partners.  We attempt to collect as much information as possible to determine the credit worthiness of the customer in order to ensure a high approval rate with our financing partners and to minimize unnecessary credit checks on our customers.  Once we decide to forward an application to our financing partners, the customer is either approved or declined by our financing partner for our program.

If declined the customer has the option of paying by money order, certified check, cash or credit card.   The customer also has the option of choosing our internal “Pay By The Day” credit program through which they will automatically be approved upon providing us with a 50% down payment and the remainder of their payments to be spread out over a 12 month term.  This is a completely internal program and requires no outside financing assistance.  These customers will also be given the opportunity to receive the PBD CreditPLUS Secured card.

For customers that are approved by our financing partners, the finance company underwrites the credit.   Approved applications are extended a pre-determined level of credit ranging from $1500 -$5000.  Our thorough pre-screening process assures a high approval rate on all applications.  Our company’s success will depend on our ability to generate a high volume of credit worthy customers who will be approved for credit by our financial partners.
 
 

 
Once approved by our financing partners, our customers are sent all the necessary documentation and instructions on what identification they are to provide us with in order to finalize the deal.  The information customers must provide us with varies slightly based on the requirements stipulated by our individual financing partners.  We deal primarily through facsimile transmission.  In general a customer must provide us with the following information:

·  
All documents signed and dated
·  
A copy of a void check from their financial institution (for automatic withdrawals)
·  
A copy of picture identification, front and back (driver’s license, passport, etc.)
·  
A copy of proof or residence (phone bill, utility bill, etc.)

Once we receive the information by fax, we consider the deal to be finalized.  The information is sent to our financing partners.  The shipment is shipped via Purolator or Fed-Ex and our financing partners forward funds to us immediately upon shipment.  While we always send a self addressed stamped envelope to our clients and request the original documents to be sent back as soon as possible, the deal is considered done upon receipt of client information in any form.
 
Potential customers who call while our sales staff is unavailable are tracked a call capture system which allows us to contact  the customer from the downloaded phone numbers.  Our in-house sales staff will use its best efforts to return such calls immediately.

We market and sell brand name merchandise directly to consumers utilizing a multi-media approach through television, print media, radio and web based marketing efforts.  All advertising campaigns utilize toll free phone numbers for direct consumer response while also promoting our web site (www.paybytheday.com).  Our advertising campaigns are broad based across Canada with emphasis on our primary product, with delivery right to our customers’ front door, and no money down.

The Call Centre

We will collect leads through calls that come into the call centre as a result of our multi-media advertising campaigns.  We will also make outbound calls to individuals in targeted demographic groups throughout Canada.  In addition to the telephone operators we have a few contract based consultants in the areas of marketing and advertising.
 
PBTD CreditPLUS Canada Secured Credit Card

Typical Revenue Producing Transaction:

A customer’s first experience with us will generally be when they call our toll free number in response to one of our marketing campaigns.  We use Television and Print for most of our advertising.  Our primary sales efforts are directed towards customers who contact us as a result of our marketing campaigns.  Our secondary sales efforts are made through out bound sales calls from our call centre facility.  We have accumulated thousands of applications for product from customers that do not qualify for traditional financing but would be ideal candidates for the PBD Credit Services program.  Customers are also able to come to our offices to inquire and sign up for PBD Credit Services program offerings.

Once customer contact has been established, a credit application is filled out either over the phone, on-line, or the customer can mail in the application.  For those customers seeking a Secured MasterCard and/or Visa, the application will be forwarded to one of our finance partners.    In most cases a credit check will not be necessary.  If the customer wishes to view his/her credit report, we will steer them to our web site which has a link to Equifax.

Once approved internally, our customers are sent all the necessary documentation and instructions on what they are to provide us with in order to finalize the application process.  The application must be signed by the customer and sent back to us with their security deposit.  We will accept a personal cheque, money order, or on the application the customer can fill out the Pre-Authorized Payment section and PBTD will have the ability to debit their account on the day specified on the application. Once the security deposit has been received, we will process the application and the customer will receive their introduction package containing the PBD CreditPLUS card, the Disclosure Statement and Cardholder Agreement, and an overview of our product selection highlighting the monthly promotion.  The customers deposit will be held in an interest bearing account with interest (currently 1.5%) payable annually.  The security deposit will be 100% refundable assuming the customers account has a $0 balance.

PBTD currently has a relationship with the two major credit bureaus in Canada. Once the customers file has been set-up internally, PBTD will report to Equifax all customer account information, and update each file on a monthly basis.
 
MasterCard:

Through our MasterCard program, almost all applications will be automatically approved for a Secured MasterCard.  This card can be used in millions of locations throughout the entire world.  Customers will be able to place phone and internet orders, rent cars, book hotels and airline tickets and avoid carrying cash for all but the most essential situations.  We will also grant customers a 10% discount on all items that they purchase through the PBTD web site.  The Secured MasterCard will have a $500 minimum credit limit with all regular credit card fees attached to it.

 
 

 
Products to Purchase:

PBTD will have an on-line product catalogue consisting of hundreds of products ranging from $20-$1500.  We will have many products available for sale under $100 to accommodate the customers with a credit limit below $200.  PBTD will only offer brand name merchandise from IBM, Sony, Nike, Panasonic, Black and Decker, Kitchen Aid and others.  The product spectrum will consist of computers, electronics ranging from X-Box to DVD players to hand held PDA’s to cordless phones.  We will also carry small kitchen appliances, giftware, toys, and other household items.  The idea is to give the customer as much of a selection as possible to entice the customer to proceed with the PBTD internal card rather than the Secured MasterCard.  If the customers feel they can purchase most of their purchases through PBTD and do without the convenience of a Visa/MasterCard, we should achieve a higher closure rate.  For the customers without access to our on-line catalogue we will have a smaller version of our offering which will be mailed to the customers.  When purchases are made through our sales representatives the client must provide the password listed on the account. i.e. Mother’s maiden name.  All purchases will be shipped by Purolator or Fed-Ex.  All shipping charges are added to the cost of the product.  Statements will be sent monthly along with product listings, specials and other promotions.
 
Used and Refurbished Computers and Computer Components

We have formed a relationship with Imported Brands of Toronto, Ontario to supply us with Used and Refurbished computers.  Used computers will be offered as an option to individuals that fail to meet the criteria for financing through our financing partners or those customers that choose to purchase lower priced systems that fall below the minimum financing threshold.

New Computers

Pay By The Day has created a relationship with Supercom of Richmond Hill, Ontario to be supplied with IBM/Lenovo Computer Systems and Peripherals.  The brand recognition of IBM products and the infrastructure of Supercom, IBM Canada’s largest distributor, are an ideal fit for Pay By The Day.  Supercom is capable of handling all shipping details and will temporarily warehouse computers for Pay By The Day.  We are currently discussing credit terms with Supercom and will have an agreement in place by the next fiscal quarter.  When supply is low with Supercom, we have arranged for alternative supply through other distributors including Ingram Micro, IBM directly, and ALC Micro.

Electronic Equipment

We currently purchase our electronics through wholesalers or retailers in the U.S. because of the lower cost base and the strength of the Canadian dollar.   We deal with and sell only recognizable and well-established brand name products.  Sony, Samsung, and JVC boast an extensive selection of products primarily in consumer audio and video, offering digital cameras, Camcorders, Televisions, DVD players and complete Audio Systems.
 
Credit Limit:

The credit limit will always be set at the security deposit amount.  The customer can put down as little as $200, or as much as $2,500.  The customer can increase the limit on the card by sending additional funds to PBTD and clearly indicating that they are requesting a credit line increase.  If an overpayment is made but a request is not made to have the credit limit raised, the available credit will increase temporarily, but the credit limit will remain the same.  The customer may make purchases up to the limit of the PBTD card or they can use their card to make cash advances by calling PBTD. The PBTD card is a revolving line of credit. As the customer uses the card, they are continually borrowing against their line of credit and repaying it. The amount of credit available at any time will vary depending on the current outstanding balance.

Cash Advances:

Customers in need of a cash advance may request one by calling PBTD customer service.  Customers must have made at least 3 payments prior to any cash advance.  We will only make cash advances available for a minimum of $100.00.  There will be a cash advance fee of $8 charged on the customer’s next billing statement. We are currently negotiating with InterCash Canada to implement a debit card feature on our PBD CreditPlus card which will allow for an easier transfer of cash and increase the marketability of the card.

Payments:

The minimum monthly payment will be 5% of the outstanding balance or $20, whichever is greater.  Customers are required to pay at least the minimum monthly payment on the statement by the statement due date.  The security deposit will not be used to pay off balances except in default.  Payments can be made by mailing a cheque or money order directly to PBTD with the enclosed envelope provided with the statement.  The customer may also provide PBTD with their banking information for a direct debit to their account for the payment amount.

 
 
 

 
Refunds and Card Cancellation:

Deposits will be held as long as the account with PBTD remains open.   A written request is required for a refund.  A request for withdrawal of the Security Deposit will be treated as a request to terminate the Agreement and cancel the Account with all of its rights and privileges.  After the debt is paid in full we will return the remaining balance of the Security Deposit plus any earned interest.
 
Referral Program:

For every new customer brought in by a PBTD customer, we will award them with a credit on the PBTD site for $20 in PBTD merchandise.  For every new PBTD customer brought in by the new customer, the top level customer will receive a $10 “Legacy” credit, good towards purchases on the PBTD site.

Revenue Stream:

There will be a one-time set up fee of $99 charged to the customer on the first statement.  There will also be a monthly service charge of $7.50 which will provide PBTD with recurring revenue.  We will have a 0% interest rate.  We believe the 0% interest will be attractive to the customers as we want to help them and not bury them with high interest rates.  The 0% interest is also a very powerful sales tool.  Almost all lenders have interest rates in the low to mid twenties.  We are the first to introduce 0% interest.  In lieu of the interest rate charges, we will have a monthly late fee which will be added to the customer’s next monthly statement.  Each customer will have a 3-day grace period after which the late charge will be applied.  Other applicable fees include NSF and over limit fee if over by more than 10% of the credit limit.  Through our MasterCard affiliate company, they will pay us a $30 fee for every approved application.

Once PBTD has opened a significant number of accounts with regular monthly statements being sent to the customers, we will negotiate with advertisers to place advertisements in the envelopes.  This will be an additional revenue stream which goes right to the bottom line.
 
Competition

We will compete based on our ability to market and sell products to individuals and small businesses who, in order to purchase our products, require credit with no down payment and low monthly payments.  Our primary competitive advantage is actually a service rather than a product.  We will help our customers find financing.  In selling Computer Products and Consumer Electronics, we face significant competition.   We consider the retail channel competition to be primarily price driven, whereas we have found the direct channel provides us with greater margins, less competition and greater growth opportunities.

In Canada our biggest competitors in the area of phone and web computer sales are Dell Computers and MDG Canada.  Nationwide Computer and Consumer Electronics retailers include Best Buy, Circuit City, and the Future Shop which are our retail channel competition.

There are three companies in Canada pursuing the Secured Credit Card business: Capital One, Peoples Trust, and Home Trust.  The main problem with People’s Trust and Home Trust is the minimum credit limit is $500 and $1000 respectively.  We believe customers with poor credit live pay check to pay check and it would be extremely difficult for one to come up with a security deposit that large.  Capital One is the main contender who actively pursues bankrupt individuals and they will take on customers with a security deposit as low as $200.  The main advantage in this space is that it is wide open.  The Canadian market is considerably different from the US market.  In the US, there are 150-200 different companies and banks offering Secured Credit Card products.  The three companies in Canada do not aggressively advertise to a large audience, and we believe our TV advertising campaign will build tremendous brand name recognition.
 
Competitive Advantage

We believe that the direct marketing approach to the sale of Computer Products and Consumer Electronics is very different to that of traditional retailing.  Traditional retailers sell to consumers that are significantly more price-conscious.  We compete based on our ability to market and sell products to individuals who are less price-conscious and require credit and low monthly payments to make their purchases.  These low monthly payments are extremely important to consumers who do not have the resources to make large cash purchases and do not have access to or have used up other credit made available to them.

 
 
We have recognized a strong demand for our products in rural and remote areas where access to traditional retailers is limited.  We intend to capitalize on this market by offering various products with “right to the customer’s front door” delivery.
 
Market

Our marketplace is nationwide across Canada with a planned expansion to the US market once we have penetrated the Canadian market.  Based on previous direct marketing experience, we will be targeting specific communities and demographic groups throughout Canada.  Our initial advertising focus will be placed on suburban communities throughout Canada.  These areas will include the Northern portions of Canadian provinces, East Coast provinces and Western provinces.  Our typical customer profile will be that of an individual with an acceptable credit history but insufficient funds to buy our products outright or one who chooses not to pay for the full amount at the time of purchase.

Customer Profile
 
Our typical customer has the following Profile:

Average income $30,000 Per Annum
65% Rent their homes, 35% Own their homes
Employed at their job 3-5 years
Age 25+

Long Term Objectives

Over the long term, we believe that the Pay By The Day business model can be exported throughout the world.  We are currently researching markets in the United States and the United Kingdom.  For CreditPLUS Canada our goal is to have our own branded secured and unsecured Visa/MasterCard.

Revenue Breakdown

Sales will be generated in the following manner:

1. Approximately 50% from inquiries to our toll-free numbers.
2. 40% internet based orders
3. 10% will come from outbound sales calls and prospecting
 
 

Our principal executive office location and mailing address is 193 Jardin Drive, 2nd Floor West, Concord, ON L4K 1X5. Currently, this space is sufficient to meet our needs; however, if we expand our business to a significant degree, we will have to find a larger space.

 

There are no legal proceedings pending or threatened against us.


MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
There is presently no public market for our shares of 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 apart. However, we can provide no assurance that our shares of common stock will be traded on the Bulletin Board or, if traded, that a public market will materialize.
 
Holders of Our Common Stock
 
As of the date of this registration statement, we had 41 shareholders of our common stock.
 
 
 
Rule 144 Shares
 
As of March 3, 2008 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.  After April 2008, the 50,000 shares issued to Jordan Starkman will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act.  After April 2008 the 200,000 shares issued pursuant to The Share Exchange Agreement between Pay By The Day Company Inc., an Ontario Corporation, and Pay By The Day Holdings, Inc., held by Mr. Starkman will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act.  After April 2008, the 100,000 shares held by Itamar Cohen will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act.  After April 2008, the shares 5000 shares issued to Richard Anslow for legal services rendered, and 5000 shares issued to Gregg Jaclin for legal services rendered will become available for resale to the public and in accordance with the volume and trading limitations of Rule 144 of the Act.  After June 2008, all of the shares of our common stock held by the 38 shareholders who purchased their shares in the Regulation D 506 offering by us will become available for resale to the public. Sales under Rule 144 are subject availability of current public information about the company.
 
Stock Option Grants
 
To date, we have not granted any stock options.
 
Registration Rights
 
We have not granted registration rights to the selling shareholders or to any other persons.

 
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the common stock offered hereby. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedule thereto, certain parts of which are omitted in accordance with the rules and regulations of the SEC. For further information regarding our common stock and our company, please review the registration statement, including exhibits, schedules and reports filed as a part thereof. Statements in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement, set forth the material terms of such contract or other document but are not necessarily complete, and in each instance reference is made to the copy of such document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.
 
We are also subject to the informational requirements of the Exchange Act which requires us to file reports, proxy statements and other information with the SEC. Such reports, proxy statements and other information along with the registration statement, including the exhibits and schedules thereto, may be inspected at public reference facilities of the SEC at 100 F Street N.E , Washington D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the SEC at prescribed rates. You may call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Because we file documents electronically with the SEC, you may also obtain this information by visiting the SEC’s Internet website at  http://www.sec.gov.
 


 

 

 
PAY BY THE DAY HOLDINGS INC.
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
30 NOVEMBER 2007
 
 
 
 

PAY BY THE DAY HOLDINGS INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
 
AS AT
 
(Expressed in United States Dollars)

   
30 November
2007
(Unaudited)
    
31 August
 2007
(Audited)
  
ASSETS
            
Current Assets
            
Cash
   $ 29,975     $ 154  
Available-for-sale investments, at fair value (cost - $5,405)
     750       750  
Accounts receivable
     62       -  
Prepaid and sundry assets
     -       306  
Total Current Assets
     30,787       1,210  
Long Term Assets
                
Equipment
     3,631       3,901  
Deferred taxes
     1,420       1,420  
Total Long Term Assets
     5,051       5,321  
Total Assets
   $ 35,838     $ 6,531  
LIABILITIES AND STOCKHOLDERS' DEFICIT
                
Current Liabilities
                
Accounts payable and accrued liabilities
   $ 13,392     $ 9,042  
Advances from shareholder
     12,084       11,159  
Advances from related party
     70,831       42,720  
Total Liabilities
     96,307       62,921  
Stockholders' Deficit
                
Capital stock
     458       250  
Additional paid-in capital
     20,592       -  
Accumulated other comprehensive loss
     (12,556 )     (8,415 )
Deficit accumulated during the development stage
     (68,963 )     (48,225 )
Total Stockholders' Deficit
     (60,469 )     (56,390 )
Total Liabilities and Stockholders' Deficit
   $ 35,838     $ 6,531  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 

PAY BY THE DAY HOLDINGS INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
 
(Unaudited)
 
(Expressed in United States Dollars)
 
   
For the Three Months Ended 30 November
2007
    
For the Three Months Ended 30 November 2006
    
For the Period from Inception (5 June 2003) to 30 November 2007
  
                   
REVENUE
                  
Sales
     327       6,664       371,708  
Interest income
     132       4       11,544  
      459       6,668       383,252  
COST OF GOODS SOLD
     -       4,925       258,816  
GROSS PROFIT
     459       1,743       124,436  
                         
EXPENSES
                        
Professional fees
     16,851       1,150       85,377  
Salaries and wages
     2,112       -       2,112  
Telecommunications
     813       539       23,297  
Interest and bank charges
     431       316       15,046  
Office and general
     354       1,235       27,768  
Advertising and promotion
     25       140       29,770  
Vehicle
     -       187       638  
Rent
     -       -       27,683  
Bad debts
     -       -       9,774  
Depreciation
     270       898       11,860  
TOTAL OPERATING EXPENSES
     20,856       4,465       233,325  
LOSS FROM OPERATIONS
     (20,397 )     (2,722 )     (108,889 )
Realized gain on disposal of available-for-sale securities
     -       -       3,078  
Foreign exchange (loss)gain
    (342 )     -       20,484  
Gain on extinguishment of debt
     -       -       19,126  
    Loss on disposal of assets
     -       -       (2,762 )
NET LOSS
     (20,739 )     (2,722 )     (68,963 )
Foreign currency translation adjustment
     (4,141 )     (12,359 )     (9,780 )
Unrealized loss on available-for-sale securities, net of tax
     -       -       (2,815 )
COMPREHENSIVE LOSS
   $ (24,880 )   $ (15,081 )   $ (81,558 )
LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
   $ (0.05 )   $ (0.01 )        
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
     458,000       200,000          

The accompanying notes are an integral part of these consolidated financial statements.
 
 

PAY BY THE DAY HOLDINGS INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
(Expressed in United States Dollars)
 
   
For the Three Months Ended 30 November
2007
    
For the Three Months Ended 30 November 2006
    
For the Period from Inception (5 June 2003) to 30 November
2007
  
CASH FLOWS FROM OPERATING ACTIVITIES
                  
Net loss
   $ (20,739 )   $ (2,722 )   $ (68,963 )
Adjustments to reconcile net loss to net cash used in operating activities:
                        
Depreciation
     270       898       11,860  
Loss on disposal of assets
     -       -       2,762  
Common stock issued for services
     1,000       -       1,000  
Changes in operating assets and liabilities:
                        
Accounts receivable
     (62 )     -       (62 )
Prepaid and sundry assets
     306       31       -  
Accounts payable and accrued liabilities
     4,355       (376 )     13,392  
Deferred taxes
     -       -       (1,420 )
CASH FLOWS USED IN OPERATING ACTIVITIES
     (14,870 )     (2,169 )     (41,431 )
CASH FLOWS FROM INVESTING ACTIVITIES
                        
Available-for-sale securities
     -       (9,871 )     (750 )
Disposition of equipment
     -       -       4,462  
Acquisition of equipment
     -       (399 )     (22,715 )
CASH FLOWS USED IN INVESTING ACTIVITIES
     -       (10,270 )     (19,003 )
CASH FLOWS FROM FINANCING ACTIVITIES
                        
Advances from shareholder
     921       21,379       12,084  
Advances from related parties
     28,111       1,290       70,831  
Issuance of common stock for cash
     19,800       202       20,050  
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
     48,832       22,871       102,965  
EFFECT OF FOREIGN CURRENCY TRANSLATION
     (4,141 )     (8,503 )     (9,741 )
UNREALIZED LOSS ON AVAILABLE-FOR-SALE SECURITIES, NET OF TAX
     -       -       (2,815 )
NET INCREASE (DECREASE) IN CASH
     29,821       1,929       29,975  
CASH, BEGINNING OF PERIOD
     154       3,183       -  
CASH, END OF PERIOD
   $ 29,975     $ 5,112     $ 29,975  
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 


PAY BY THE DAY HOLDINGS INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED 30 NOVEMBER 2007
 
(Expressed in United States Dollars)
 
1.
NATURE OF OPERATIONS AND ORGANIZATION
 
Nature of Operations
 
Pay by the Day Company Inc. ("PBDC") was incorporated in Canada on 13 June 2003 and was acquired by Pay by the Day Holdings, Inc. (the "Company" or "PBDH") on 31 August 2007. PBDH was incorporated in the State of Nevada on 31 August 2007.  The Company is a development stage company whose principal line of business is selling computers and other electronic components through telephone and web orders, which the company then finances through a third party.
 
Organization
 
In August 2007, PBDC consummated a Share Exchange Agreement, whereby 100% of its shares were acquired by PBDH, a Nevada corporation, in exchange for 200,000 shares of PBDH.  As a result of the transaction, the former shareholders of PBDC received 100% ownership of PBDH.  The merger was therefore accounted for as a recapitalization of PBDC into a shell company.  Accordingly, the issuance of shares will be recorded by eliminating PBDH's assets, share capital and earnings.
 
The above transaction has been accounted for as a reverse merger (recapitalization) with PBDC  being deemed the accounting acquirer and PBDH being deemed the legal acquirer.  Accordingly, the historical financial information presented in the financial statements is that of PBDC (since 13 June 2003 the date of inception) as adjusted to give effect to any difference in the par value of the issuer’s and the accounting acquirer’s stock with an offset to additional paid in capital.  The basis of the assets and liabilities of PBDC, the accounting acquirer, has been carried over in the recapitalization.  The terms of the Agreement were consummated on 31 August 2007 and PBDH now owns 100% of the equity interests of PBDC.
 
2.
BASIS OF PRESENTATION
 
The Company has earned limited revenues from limited principal operations and accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth in Statement of Financial Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by Development Stage Enterprises (“SFAS No. 7 “).  Among the disclosures required by SFAS No. 7 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operation, stockholders' deficit and cash flows disclose activity since the date of the Company's inception.
 
The accompanying unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. for interim financial information and with the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended 30 November 2007 are not necessarily indicative of the results that may be expected for the year ending 31 August 2008. For further information, refer to the financial statements and footnotes thereto included in the Company’s annual report for the year ended 31 August 2007.
 




PAY BY THE DAY HOLDINGS INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED 30 NOVEMBER 2007
 
(Expressed in United States Dollars)
 
3.
GOING CONCERN
 
These consolidated financial statements have been prepared assuming the Company will continue on a going-concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.
 
There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in these consolidated financial statements.
 
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.
 
4.
RECENT ACCOUNTING PRONOUNCEMENTS
 
In June 2006, the FASB issued FASB Interpretation No. (“FIN”) 48, Accounting for Uncertainty in Income Taxes, which is an interpretation of SFAS No. 109, Accounting for Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  FIN 48 is effective for fiscal years beginning after 15 December 2006.  Management believes the adoption of this pronouncement will not have a material impact on the Company's consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157, Defining Fair Value Measurement ("SFAS No. 157"), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements.  SFAS No. 157 is effective for financial statements issued for fiscal years beginning after 15 November 2007. The Company is currently evaluating the impact of adopting SFAS No. 157 on its consolidated financial statements.
 
In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB 108 requires that public companies utilize a "dual-approach" to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after 15 November 2006. Management believes the adoption of this pronouncement will not have a material impact on the Company's consolidated financial statements.
 
 
 

PAY BY THE DAY HOLDINGS INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED 30 NOVEMBER 2007
 
(Expressed in United States Dollars)
 
4.
RECENT ACCOUNTING PRONOUNCEMENTS (Continued)
 
In December 2006, the FASB issued FASB Staff Position Emerging Issues Task Force ("FSP EITF") 00-19-2, Accounting for Registration Payment Arrangements ("FSP 00-19-2") which addresses accounting for registration payment arrangements.  FSP 00-19-2 specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with FASB Statement No. 5, Accounting for Contingencies.  FSP 00-19-2 further clarifies that a financial instrument subject to a registration payment arrangement should be accounted for in accordance with other applicable generally accepted accounting principles without regard to the contingent obligation to transfer consideration pursuant to the registration payment arrangement. For registration payment arrangements and financial instruments subject to those arrangements that were entered into prior to the issuance of EITF 00-19-2, this guidance is effective for financial statements issued for fiscal years beginning after 15 December 2006 and interim periods within those fiscal years.  The adoption of FSP 00-19-2 is not expected to have a material impact on the Company’s financial condition or results of operations.
 
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial instruments, and certain other items, at fair value. SFAS No. 159 applies to reporting periods beginning after 15 November 2007. The adoption of SFAS No. 159 is not expected to have a material impact on the Company’s financial condition or results of operations.
 
In December 2007, the FASB issued SFAS No. 141 (R) Business Combinations. SFAS 141R establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS 141R also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The guidance will become effective as of the beginning of the Company’s fiscal year beginning after 15 December 2008. Management believes the adoption of this pronouncement will not have a material impact on the Company's consolidated financial statements.
 
In December 2007, the FASB issued SFAS No. 160 Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51. SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance will become effective as of the beginning of the Company’s fiscal year beginning after 15 December 2008. Management believes the adoption of this pronouncement will not have a material impact on the Company's consolidated financial statements.
 
5.
ADVANCES FROM SHAREHOLDER
 
The advances from the shareholder are non-interest bearing, unsecured and have no specific terms of repayment.  The carrying value of the advances approximates the market value due to the short-term maturity of the financial instruments.


PAY BY THE DAY HOLDINGS INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED 30 NOVEMBER 2007
 
(Expressed in United States Dollars)
 
6.
RELATED PARTY TRANSACTIONS
 
The transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties. Related party transactions not disclosed elsewhere in these consolidated financial statements are as follows:
 
a) Paid consulting fees of $4,654 to a director of the Company during the quarter.
 
7.
CAPITAL STOCK

Authorized
        
  100,000,000  
common stock, $0.001 par value
    
           
           
       
30 November 2007
31 August 2007
Issued
        
  458,000  
common stock (31 August 2007 - 250,000)
$   458
$   202
 
During fiscal 2003, the Company completed non-brokered private placements of 200,000 common shares for proceeds of $200.
 
In August 2007, the Company completed non-brokered private placements of 50,000 common shares for proceeds of $50.
 
In September 2007, the Company issued 10,000  shares of common stock in exchange for legal services rendered, at a price of $0.10 per share for an aggregate price of $1,000.
 
In September 2007, the Company issued 198,000 shares of common stock to various investors, at a price of $0.10 per share for an aggregate price of $19,800.
 
8.
SUPPLEMENTAL CASH FLOW INFORMATION
 
During the three months ended 30 November 2007 and for the period from inception to 30 November 2007, there were no interest or taxes paid by the Company.
 
9.
SUBSEQUENT EVENTS
 
In December 2007, an additional 161,000 shares of common stock were issued to various investors, at a price of $0.10 per share for an aggregate price of $16,100.


31 AUGUST 2007
 
CONTENTS

 
Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
1
CONSOLIDATED FINANCIAL STATEMENTS
  
Consolidated Balance Sheets
2
Consolidated Statements of Operations and Comprehensive Loss
3
Consolidated Statements of Stockholders' Deficit
4
Consolidated Statements of Cash Flows
5
Notes to the Consolidated Financial Statements
6 - 14


 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Board of Directors and Stockholders of
Pay By The Day Holdings, Inc.

 
We have audited the accompanying consolidated balance sheets of Pay By The Day Holdings, Inc. (a Development Stage Company) as of 31 August 2007 and 2006 and the related consolidated statements of operations and comprehensive loss, stockholders' deficit and cash flows for the years ended 31 August 2007 and 2006 and for period from the date of inception (5 June 2003) to 31 August 2007.  These consolidated financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting.  Our audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstance, but not for expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Pay By The Day Holdings, Inc. (A Development Stage Company) as of 31 August 2007 and 2006, and the results of its operations and comprehensive loss, cash flows and changes in stockholders' deficit for the years ended 31 August 2007 and 2006 and for the period from the date of inception (5 June 2003) to 31 August 2007 in conformity with accounting principles generally accepted in the United States of America.
 
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the consolidated financial statements, the Company has significant operating losses, is in the development stage with no established source of revenue and is dependent on its ability to raise capital from shareholders or other sources to sustain operations, which raise substantial doubt about its ability to continue as a going concern.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
/s/ DNTW Chartered Accountants, LLP
Markham, Canada 
28 February 2008

 
 
PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
 
AS AT 31 AUGUST
 
(Expressed in United States Dollars)
 
   
Note
    
2007
    
2006
  
                   
ASSETS
                  
Current Assets
                  
Cash
         $ 154     $ 3,183  
Available-for-sale securities, at fair value (cost - $5,405)
           750       104,540  
Prepaid and sundry assets
           306       265  
Total Current Assets
           1,210       107,988  
Long Term Assets
                      
Equipment
    
5
       3,901       12,480  
Deferred taxes
             1,420       -  
Total Long Term Assets
             5,321       12,480  
Total Assets
           $ 6,531     $ 120,468  
LIABILITIES AND STOCKHOLDERS' DEFICIT
                        
Current Liabilities
                        
Accounts payable and accrued liabilities
           $ 9,042     $ 4,029  
Advances from shareholder
    
6
       11,159       5,072  
Advances from related party
    
7
       42,720       135,365  
Total Liabilities
             62,921       144,466  
Stockholders' Deficit
                        
Capital stock
    
8
       250       200  
    Accumulated other comprehensive (loss) income
             (8,415 )     7,082  
Deficit accumulated during the development stage
             (48,225 )     (31,280 )
Total Stockholders' Deficit
             (56,390 )     (23,998 )
Total Liabilities and Stockholders' Deficit
           $ 6,531     $ 120,468  
 
The accompanying notes are an integral part of these consolidated financial statements.

 
PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
 
(Expressed in United States Dollars)

   
For the Year Ended 31 August2007
    
For the Year Ended 31 August 2006
    
For the Period from Inception (5 June 2003) to 31 August 2007
  
                   
REVENUE
                  
Sales
   $ 11,267     $ 22,560     $ 371,381  
Interest income
     3,352       114       11,412  
      14,619       22,674       382,793  
COST OF GOODS SOLD
     6,541       19,601       258,816  
GROSS PROFIT
     8,078       3,073       123,977  
                         
EXPENSES
                        
Professional fees
     26,491       6,708       68,526  
Rent
     4,462       -       27,682  
Telecommunications
     3,388       3,660       22,484  
Bad debts
     3,123       4,473       9,774  
Office and general
     2,081       4,009       27,416  
Interest and bank charges
     1,928       1,280       14,615  
Advertising and promotion
     1,649       1,102       29,745  
Vehicle
     343       295       638  
Depreciation
     1,422       3,592       11,590  
TOTAL OPERATING EXPENSES
     44,887       25,119       212,470  
LOSS FROM OPERATIONS
     (36,809 )     (22,046 )     (88,491 )
Realized gain on disposal of available-for-sale securities
     3,078       -       3,078  
Foreign exchange gain
     422       3,658       20,826  
Gain on extinguishment of debt
     19,126       -       19,126  
    Loss on disposal of assets
     (2,762 )     -       (2,762 )
NET LOSS
    $ (16,945 )    $ (18,388 )    $ (48,225 )
Foreign currency translation adjustment
     (12,682 )     8,200       (5,601 )
Unrealized loss on available-for-sale securities, net of tax
     (2,815 )     -       (2,815 )
COMPREHENSIVE LOSS
   $ (32,442 )   $ (10,188 )   $ (56,641 )
LOSS PER WEIGHTED NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
   $ (0.08 )   $ (0.09 )        
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC AND DILUTED
     200,137       200,000          
 
The accompanying notes are an integral part of these consolidated financial statements.
 
 
PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM THE DATE OF INCEPTION (5 JUNE 2003) TO 31 AUGUST 2007
 
(Expressed in United States Dollars)
 
   
 
                      
Deficit 
        
                     
Accumulated 
    
Accumulated 
        
               
Additional 
     Other     
During The  
     Total   
   
Common Stock 
    
Paid In  
     Comprehensive      Development     
Stockholders' 
  
   
Shares
    
Amount
    
Capital
    
Loss
    
Stage
    
 Deficit
  
Issuance of common stock at inception
     200,000     $ 200     $ -     $ -     $ -     $ 200  
Foreign currency translation
     -       -       -       (109 )     -       (109 )
Net loss
     -       -       -       -       (1,257 )     (1,257 )
Balance, 31 August 2003
     200,000       200       -       (109 )     (1,257 )     (1,166 )
Foreign currency translation
     -       -       -       (505 )     -       (505 )
Net loss
     -       -       -       -       (5,825 )     (5,825 )
Balance, 31 August 2004
     200,000       200       -       (614 )     (7,082 )     (7,496 )
Foreign currency translation
     -       -       -       (504 )     -       (504 )
Net loss
     -       -       -       -       (5,810 )     (5,810 )
Balance, 31 August 2005
     200,000       200       -       (1,118 )     (12,892 )     (13,810 )
Foreign currency translation
     -       -       -       8,200       -       8,200  
Net loss
     -       -       -       -       (18,388 )     (18,388 )
Balance, 31 August 2006
     200,000       200       -       7,082       (31,280 )     (23,998 )
Issuance of common stock for cash
     50,000       50       -       -       -       50  
Unrealized loss on available-for-sale securities, net of taxes
     -       -       -       (2,815 )     -       (2,815 )
Foreign currency translation
     -       -       -       (12,682 )     -       (12,682 )
Net loss
     -       -       -       -       (16,945 )     (16,945 )
Balance, 31 August 2007
     250,000     $ 250     $ -     $ (8,415 )   $ (48,225 )   $ (56,390 )
 
The accompanying notes are an integral part of these consolidated financial statements.

 
 
PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Expressed in United States Dollars)

   
For the Year Ended 31 August2007
    
For the Year Ended 31 August 2006
    
For the Period from Inception (5 June 2003) to 31 August 2007
  
CASH FLOWS FROM OPERATING ACTIVITIES
                  
Net loss
   $ (16,945 )   $ (18,388 )   $ (48,225 )
Adjustments to reconcile net loss to net cash used in operating activities:
                        
Depreciation
     1,422       3,592       11,590  
Loss on disposal of assets
     2,762       -       2,762  
Changes in operating assets and liabilities:
                        
Accounts receivable
     -       2,467       -  
Inventory
     -       2,117       -  
Prepaid and sundry assets
     (41 )     (148 )     (306 )
Accounts payable and accrued liabilities
     5,014       572       9,043  
Deferred taxes
     (1,420 )     -       (1,420 )
CASH FLOWS USED IN OPERATING ACTIVITIES
     (9,208 )     (9,788 )     (26,556 )
CASH FLOWS FROM INVESTING ACTIVITIES
                        
Available-for-sale securities
     103,790       (102,107 )     (750 )
Disposition of equipment
     4,462       -       4,462  
Acquisition of equipment
     -       (1,597 )     (22,282 )
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
     108,252       (103,704 )     (18,570 )
CASH FLOWS FROM FINANCING ACTIVITIES
                        
Advances from (to) shareholder
     6,087       (26,515 )     11,159  
Advances (to) from related parties
     (92,645 )     135,365       42,720  
Issuance of common stock for cash
     50       198       250  
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES
     (86,508 )     109,048       54,129  
EFFECT OF FOREIGN CURRENCY TRANSLATION
     (12,750 )     7,265       (6,034 )
UNREALIZED LOSS ON AVAILABLE-FOR-SALE SECURITIES, NET OF TAX
     (2,815 )     -       (2,815 )
NET (DECREASE) INCREASE IN CASH
     (3,029 )     2,821       154  
CASH, BEGINNING OF YEAR
     3,183       362       -  
CASH, END OF YEAR
   $ 154     $ 3,183     $ 154  
 
The accompanying notes are an integral part of these consolidated financial statements.

 
 
PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
(Expressed in United States Dollars)
 
1.
NATURE OF OPERATIONS AND ORGANIZATION
 
Nature of Operations
 
Pay by the Day Company Inc. ("PBDC") was incorporated in Canada on 13 June 2003 and was acquired by Pay by the Day Holdings, Inc. (the "Company" or "PBDH") on 31 August 2007. PBDH was incorporated in the State of Nevada on 31 August 2007.  The Company is a development stage company whose principal line of business is selling computers and other electronic components through telephone and web orders, which the company then finances through a third party.
 
Organization
 
In August 2007, PBDC consummated a Share Exchange Agreement (the “Agreement”), whereby 100% of its shares were acquired by PBDH, a Nevada corporation, in exchange for 200,000 shares of PBDH.  As a result of the transaction, the former shareholders of PBDC received 100% ownership of PBDH.  The merger was therefore accounted for as a recapitalization of PBDC into a shell company.  Accordingly, the issuance of shares will be recorded by eliminating PBDH's assets, share capital and earnings.
 
The above transaction has been accounted for as a reverse merger (recapitalization) with PBDC  being deemed the accounting acquirer and PBDH being deemed the legal acquirer.  Accordingly, the historical financial information presented in the financial statements is that of PBDC (since 13 June 2003 the date of inception) as adjusted to give effect to any difference in the par value of the issuer’s and the accounting acquirer’s stock with an offset to additional paid in capital.  The basis of the assets and liabilities of PBDC, the accounting acquirer, has been carried over in the recapitalization.  The terms of the Agreement were consummated on 31 August 2007 and PBDH now owns 100% of the equity interests of PBDC.
 
2.
BASIS OF PRESENTATION
 
The Company has earned limited revenues from limited principal operations and accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth in Statement of Financial Accounting Standards (“SFAS”) No. 7, Accounting and Reporting by Development Stage Enterprises (“SFAS No. 7 “).  Among the disclosures required by SFAS No. 7 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operation and comprehensive loss, stockholders' deficit and cash flows disclose activity since the date of the Company's inception.
 
3.
GOING CONCERN
 
These consolidated financial statements have been prepared assuming the Company will continue on a going-concern basis. The Company has incurred losses since inception and the ability of the Company to continue as a going-concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. Management is actively targeting sources of additional financing to provide continuation of the Company’s operations. In order for the Company to meet its liabilities as they come due and to continue its operations, the Company is solely dependent upon its ability to generate such financing.

 
 
 
PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
(Expressed in United States Dollars)
 
3.
GOING CONCERN (Continued)
 
There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet is obligations. Should the Company be unable to realize its assets and discharge its liabilities in the normal course of business, the net realizable value of its assets may be materially less than the amounts recorded in these consolidated financial statements.
 
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence.

   
2007
    
2006
  
             
Working capital deficiency
   $ (61,711 )   $ (36,478 )
Deficit
     (48,225 )     (31,280 )
 
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
The accounting policies of the Company are in accordance with accounting principles generally accepted in the United States of America.  Presented below are those policies considered particularly significant:
 
Revenue Recognition
 
The Company's revenue recognition policies are in compliance with Staff Accounting Bulletin ("SAB") 104.  Revenue from sales to customers are recognized at the date a formal arrangement exists, the price is fixed and determinable, the goods are shipped to the customer and no other significant obligation of the Company exists and collectibility is reasonably assured.
 
Available-For-Sale Securities
 
Available-for-sale securities are reported at fair value and consist of securities not classified as trading securities or as held-to-maturity securities. Unrealized holding gains and losses on available-for-sale securities, net of deferred income taxes, are reported as a net amount in accumulated other comprehensive income within stockholders' equity.  Gains and losses on the sale of available-for-sale securities are determined using the weighted average cost method.
 
Declines in the fair value of individual held-to-maturity and available-for-sale securities below their cost that are other than temporary would result in write-downs of the individual securities to their fair value. Such write-downs would be included in earnings.
 
 

PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
(Expressed in United States Dollars)
 
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Cash and Cash Equivalents
 
Cash and cash equivalents consist of commercial accounts and interest-bearing bank deposits and are carried at cost, which approximates current value. Items are considered to be cash equivalents if the original maturity is three months or less.
 
Fair Value of Financial Instruments
 
The Company's financial instruments consist of cash, available-for-sale securities, accounts payable and accrued liabilities, advances from shareholder and advances from related party and other amounts payable.  Unless otherwise noted, it is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments.  The fair value of these financial instruments approximate their carrying values, unless otherwise noted.
 
Foreign Translation Adjustment
 
The accounts of the Company were translated into United States dollars in accordance with the provisions of SFAS No. 52, Foreign Currency Translation.  In accordance with the provisions of SFAS No. 52, transaction gains and losses on these assets and liabilities are included in the determination of income for the relevant periods.  Adjustments resulting from the translation of the consolidated financial statements from their functional currencies to United States dollars are accumulated as a separate component of accumulated other comprehensive income and have not been included in the determination of income for the relevant periods.
 
Income Taxes
 
The Company accounts for income taxes pursuant to SFAS No. 109, Accounting for Income Taxes.  Deferred tax assets and liabilities are recorded for differences between the consolidated financial statements and tax basis of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.  Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period.
 
Use of Estimates
 
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the period in which they become known.
 
 

PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
(Expressed in United States Dollars)
 
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Earnings or Loss Per Share
 
The Company accounts for earnings per share pursuant to SFAS No. 128, Earnings per Share, which requires disclosure on the consolidated financial statements of "basic" and "diluted" earnings (loss) per share. Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding for the year.  Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common stock outstanding plus common stock equivalents (if dilutive) related to stock options and warrants for each year.
 
There were no dilutive financial instruments for the year ended 31 August 2007 and 2006 or for the period from inception (13 June 2003) to 31 August 2007.
 
Comprehensive Income
 
The Company adopted SFAS No. 130, Reporting Comprehensive Income. SFAS No. 130 establishes standards for reporting and presentation of comprehensive income and its components in a full set of consolidated financial statements.  Comprehensive income is presented in the statements of changes in stockholders' equity, and consists of net loss and unrealised gains (losses) on available for sale marketable securities;  foreign currency translation adjustments and changes in market value of future contracts that qualify as a hedge; and negative equity adjustments recognized in accordance with SFAS No. 87.  SFAS No. 130 requires only additional disclosures in the consolidated financial statements and does not affect the Company's financial position or results of operations.
 
Concentration of Credit Risk
 
SFAS No. 105, Disclosure of Information About Financial Instruments with Off-Balance-Sheet Risk and Financial Instruments with Concentration of Credit Risk, requires disclosure of any significant off-balance-sheet risk and credit risk concentration.  The Company does not have significant off-balance-sheet risk or credit concentration.  The Company maintains cash with major financial institutions.  From time to time, the Company may have funds on deposit with commercial banks that exceed federally insured limits.  Management does not consider this to be a significant risk.
 
Equipment
 
Equipment is stated at cost less accumulated depreciation.  Depreciation, based on the estimated useful lives of the assets, is provided using the under noted annual rates and methods:
 

Furniture and fixtures
20% declining balance
Computer
30% declining balance
 
 
 
PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
(Expressed in United States Dollars)
 
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Stock-Based Compensation
 
In December 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123R, Share-Based Payment ("SFAS No. 123R"). SFAS No. 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services.  It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments.  SFAS No. 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions.  SFAS No. 123R requires that the compensation cost relating to share-based payment transactions be recognized in the consolidated financial statements.  That cost will be measured based on the fair value of the equity or liability instruments issued.
 
Impairment of Long-Lived Assets
 
In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets ("SFAS No. 144"), long-lived assets to be held and used are analyzed for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable.  The Company evaluates annually at year end whether events and circumstances have occurred that indicate possible impairment.  If there are indications of impairment, the Company uses future undiscounted cash flows of the related asset or asset grouping over the remaining life in measuring whether the assets are recoverable.  In the event such cash flows are not expected to be sufficient to recover the recorded asset values, the assets are written down to their estimated fair value.  Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value of asset less cost to sell.  As described in note 3, the long-lived assets have been valued on a going concern basis.  However, substantial doubt exists as to the ability of the Company to continue as a going concern.  If the Company ceases operations, the asset values may be materially impaired.
 
Recent Accounting Pronouncements
 
In June 2006, the FASB issued FASB Interpretation No. (“FIN”) 48, Accounting for Uncertainty in Income Taxes, which is an interpretation of SFAS No. 109, Accounting for Income Taxes. FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109 and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.  FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  FIN 48 is effective for fiscal years beginning after 15 December 2006.  Management believes the adoption of this pronouncement will not have a material impact on the Company's consolidated financial statements.
 
In September 2006, the FASB issued SFAS No. 157, Defining Fair Value Measurement ("SFAS No. 157"), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements.  SFAS No. 157 is effective for financial statements issued for fiscal years beginning after 15 November 2007. The Company is currently evaluating the impact of adopting SFAS No. 157 on its consolidated financial statements.
 
 

PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
(Expressed in United States Dollars)
 
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Recent Accounting Pronouncements (Continued)
 
In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. SAB 108 requires that public companies utilize a "dual-approach" to assessing the quantitative effects of financial misstatements. This dual approach includes both an income statement focused assessment and a balance sheet focused assessment. The guidance in SAB 108 must be applied to annual financial statements for fiscal years ending after 15 November 2006. Management believes the adoption of this pronouncement will not have a material impact on the Company's consolidated financial statements.
 
In December 2006, the FASB issued FASB Staff Position Emerging Issues Task Force ("FSP EITF") 00-19-2, Accounting for Registration Payment Arrangements ("FSP 00-19-2") which addresses accounting for registration payment arrangements.  FSP 00-19-2 specifies that the contingent obligation to make future payments or otherwise transfer consideration under a registration payment arrangement, whether issued as a separate agreement or included as a provision of a financial instrument or other agreement, should be separately recognized and measured in accordance with FASB Statement No. 5, Accounting for Contingencies.  FSP 00-19-2 further clarifies that a financial instrument subject to a registration payment arrangement should be accounted for in accordance with other applicable generally accepted accounting principles without regard to the contingent obligation to transfer consideration pursuant to the registration payment arrangement. For registration payment arrangements and financial instruments subject to those arrangements that were entered into prior to the issuance of EITF 00-19-2, this guidance is effective for financial statements issued for fiscal years beginning after 15 December 2006 and interim periods within those fiscal years.  The adoption of FSP 00-19-2 is not expected to have a material impact on the Company’s financial condition or results of operations.
 
In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial instruments, and certain other items, at fair value. SFAS No. 159 applies to reporting periods beginning after 15 November 2007. The adoption of SFAS No. 159 is not expected to have a material impact on the Company’s financial condition or results of operations.
 
In December 2007, the FASB issued SFAS No. 141 (R) Business Combinations. SFAS 141R establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. SFAS 141R also provides guidance for recognizing and measuring the goodwill acquired in the business combination and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The guidance will become effective as of the beginning of the Company’s fiscal year beginning after 15 December 2008. Management believes the adoption of this pronouncement will not have a material impact on the Company's consolidated financial statements.

 
 
PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
(Expressed in United States Dollars)
 
4.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Recent Accounting Pronouncements (Continued)
 
In December 2007, the FASB issued SFAS No. 160 Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51. SFAS 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The guidance will become effective as of the beginning of the Company’s fiscal year beginning after 15 December 2008. Management believes the adoption of this pronouncement will not have a material impact on the Company's consolidated financial statements.
 
5.
EQUIPMENT
 
 
The components of equipment were as follows:
 
 
   
Cost
    
Accumulated Depreciation
    
Net
2007
    
Net
2006
  
                         
Furniture and equipment
   $ 1,798     $ (880 )   $ 918     $ 7,336  
Computer
     10,271       (7,288 )     2,983       5,144  
    $ 12,069     $ (8,168 )   $ 3,901     $ 12,480  
 
6.
ADVANCES FROM SHAREHOLDER
 
The advances from the shareholder are non-interest bearing, unsecured and have no specific terms of repayment.  The carrying value of the advances approximates the market value due to the short-term maturity of the financial instruments.
 
7.
RELATED PARTY TRANSACTIONS
 
The transactions with related parties were in the normal course of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by the parties. Related party transactions not disclosed elsewhere in these consolidated financial statements are as follows:
 
 
a) Accrued or paid management fees of $20,517 (2006 - $Nil) to a director and a spouse of a director of the Company.
 
b) Extinguished debt to a company controlled by the director in the amount of $19,126 (2006 - $Nil).
 
 

PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
(Expressed in United States Dollars)
 
8.
CAPITAL STOCK
 
Authorized
        
  100,000,000  
common stock, $0.001 par value
    
           
           
       
 2007
 2006
Issued
        
  250,000  
common stock (2006 - 200,000)
$   250
$   200
 
During fiscal 2003, the Company completed non-brokered private placements of 200,000 common shares for proceeds of $200.
 
During fiscal 2007, the Company completed non-brokered private placements of 50,000 common shares for proceeds of $50.
 
9.
SUPPLEMENTAL CASH FLOW INFORMATION
 
During the year ended 31 August 2007, 2006 and for the period from inception to 31 August 2007, there were no interest or taxes paid by the Company.
 
10.
INCOME TAXES
 
The Company accounts for income taxes in accordance with SFAS No. 109.  SFAS No. 109 prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates.  The effects of future changes in tax laws or rates are not anticipated.
 
Under SFAS No. 109 income taxes are recognized for the following: a) amount of tax payable for the current year, and b) deferred tax liabilities and assets for future tax consequences of events that have been recognized differently in the financial statements than for tax purposes.
 
The Company has income tax losses available to be applied against future years income as a result of the losses incurred since inception.  However, due to the losses incurred in the period and expected future operating results, management determined that it is more likely than not that the deferred tax asset resulting from the tax losses available for carryforward will not be realized through the reduction of future income tax payments.  Accordingly a 100% valuation allowance has been recorded for income tax losses available for carryforward.

 
 
PAY BY THE DAY HOLDINGS, INC.
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
(Expressed in United States Dollars)
 
10. 
INCOME TAXES (Continued)
 
The components of deferred income taxes, have been determined at the combined Canadian federal and provincial statutory rate of 36.12% (2006 - 36.12%) and US federal statuatory rate of 15% and are as follows:
 
   
2007
    
2006
  
             
Deferred income tax assets:
            
Income tax losses available for carryforward
   $ 7,230     $ 1,150  
Unrealized loss on available-for-sale securities
     1,420       -  
Valuation allowance
     (7,230 )     (1,150 )
Deferred income taxes
   $ 1,420     $ -  
 
11.
 SUBSEQUENT EVENTS
 
Subsequent to 31 August 2007;
 
a) The Company issued 10,000 shares of common stock for legal services rendered in the amount of $1,000.
 
b) The Company issued 198,000 shares of common stock for proceeds of $19,800.
 


 

This section of the Registration Statement includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. 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. You should not place undue certainty on these forward-looking statements. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our predictions.


Pay By The Day is currently seeking funding for our planned expansion.  The Company requires a minimum of $200,000 and a maximum of $500,000 in order to achieve the financial projections for Years 1-3.   To achieve our goals, a large portion of the funds raised will be invested in advertising.

The proceeds raised will be used to launch the PBTD Credit Plus program as well as to continue the growth of PBTD.

Our success is contingent upon our customers seeing our ads and calling our 1-800 phone number.  There is a distinct correlation between the number of dollars invested in advertising and the number of sales made.  Our calculations show approximately a 10% response rate on dollars invested.  This means for every 1,000 dollars invested, we should receive approximately 100 leads.  Our experience and calculations show that not every customer who actually calls or fills out an on line application makes a purchase.

Approximately 60% of the customers who make contact with us, either by phone or on line, will fill out an application for credit.  The approval rate through our finance partners is approximately 10%.  Out of the approvals received, approximately 65%-70% make a purchase.  Taking into account these statistics, we conclude that 5% of the leads captured result in a final sale.  The philosophy is simple; the more money invested in advertising, the more leads generated; the more leads generated, the more sales.

We are currently in discussions with a Canadian based media company to produce an infomercial which will air on stations across Ontario.  We have produced a 30 second spot which has aired nation wide with a focus on Northern Ontario and all of Alberta.  The new television advertising campaign will be initiated with the guidance of an advertising agency.  We determine the areas of interest and the agency provides us with various rates, time slots available, and the stations catering to our focus area.

The launch of CreditPLUS Canada will begin with the production of a 30 second direct response commercial.  The initial campaign will be nationwide with multiple station coverage.

The Company plans to hire 2-3 additional sales people plus 1 administrative staff member.  In addition, we will upgrade our current database to allow for easier access to customer files for all sales people and management.  Depending on the number of incoming calls to the company, we may also be required to upgrade our phone system.

We have currently formed a relationship with Equifax.  This will allow us to process the credit files ourselves prior to sending the application to the finance partner.  This is an additional expense to the company which will be added into the sale amount.

The relationship with The Credit Group (TCG) is one which will expedite our growth process.  They have the ability to finance both A and B level credit on a Conditional Sales Contract program.  We are currently being funded on deals once the merchandise has been shipped from our facilities and the customer acknowledges receipt of goods.  We currently have a 3-5 hour turn around time for approvals or declines.  We have discussed with TCG the implementation of a 5 minute turn around time.  They are willing to accommodate our needs as the volume increases.

Limited Operating History

We have generated less than one full year of financial information and have not previously demonstrated that we will be able to expand our business through an increased investment in our product line and/or marketing efforts. We cannot guarantee that the expansion efforts described in this Registration Statement will be successful. Our business is subject to risks inherent in growing an enterprise, including limited capital resources and possible rejection of our products and/or sales methods.

If financing is not available on satisfactory terms, we may be unable to continue expanding our operations. Equity financing will result in a dilution to existing shareholders.
 
 

 
Results of Operations
 
For the period from inception through November 30, 2007, we had $383,252 in revenue. Expenses for the period totaled $233,325 resulting in a loss of $68,963. Expenses for the period were $233,325.
 
Capital Resources and Liquidity
 
As of November 30, 2007 we had $29,975 in cash.
 
We believe we can satisfy our cash requirements for the next twelve months with our current cash and expected revenues. However, completion of our plan of operation is subject to attaining adequate revenue. We cannot assure investors that adequate revenues will be generated. In the absence of our projected revenues, we may be unable to proceed with our plan of operations. Even without adequate revenues within the next twelve months, we still anticipate being able to continue with our present activities, but we may require financing to potentially achieve our profit, revenue, and growth goals.
 
We anticipate that our operational, and general & administrative expenses for the next 12 months will total approximately $20,000. We do not anticipate the purchase or sale of any significant equipment. We also do not expect any significant additions to the number of employees. The foregoing represents our best estimate of our cash needs based on current planning and business conditions. The exact allocation, purposes and timing of any monies raised in subsequent private financings may vary significantly depending upon the exact amount of funds raised and our progress with the execution of our business plan.
 
In the event we are not successful in reaching our initial revenue targets, additional funds may be required, and we may not be able to proceed with our business plan for the development and marketing of our core services. Should this occur, we would likely seek additional financing to support the continued operation of our business. We anticipate that depending on market conditions and our plan of operations, we may incur operating losses in the foreseeable future. Therefore, our auditors have raised substantial doubt about our ability to continue as a going concern.

 
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

There have been no changes in or disagreements with accountants on accounting or financial disclosure matters.

 
 

 
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

Our executive officer’s and director’s and their respective ages as of March 3, 2008 are as follows:
 
NAME
AGE
POSITION
     
Jordan Starkman
38
President, Secretary and Director
 
Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years.

JORDAN STARKMAN, 38, President. Mr. Starkman brings over fifteen years experience in sales, financial consulting, and investor and client relations to the Pay By The Day team.  Prior to joining Pay By The Day, Jordan led the sales team at The Buck A Day Company, an Ontario based direct sales company focused on sales of computers and consumer electronics.  Jordan has an extensive background in finance and business development.  He worked for 7 years as an independent consultant for various publicly traded companies responsible for initiating new business and developing long-term relationships with customers.  Jordan also holds a BA in Statistics from the University of Western Ontario.

Term of Office
 
Our directors are appointed for a one-year term to 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.



Summary Compensation Table; Compensation of Executive Officers

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named executive officers paid by us during the period ended October 31, 2007 in all capacities for the accounts of our executives, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO):
 
SUMMARY COMPENSATION TABLE
 
Name and Principal Position
  
Year 
  
Salary
($) 
  
Bonus
($) 
  
Stock
Awards
($)
  
Option Awards
($) 
  
Non-Equity Incentive Plan Compensation ($) 
  
Non-Qualified Deferred Compensation Earnings
($) 
  
All Other Compensation
($) 
  
Totals
($)
  
                                       
Jordan Starkman President, Secretary, and Director
    
2007
  
$
0
    
0
    
0
    
0
    
0
    
0
    
0
  
$
0
  
                                                         
 
Option Grants Table. There were no individual grants of stock options to purchase our common stock made to the executive officer named in the Summary Compensation Table through November 30, 2007.

Aggregated Option Exercises and Fiscal Year-End Option Value Table. There were no stock options exercised during period ending November 30, 2007 by the executive officer named in the Summary Compensation Table. 
 
 
 
 
Long-Term Incentive Plan (“LTIP”) Awards Table.
 
There were no awards made to a named executive officer in the last completed fiscal year under any LTIP
 
 Compensation of Directors

Directors are permitted to receive fixed fees and other compensation for their services as directors. The Board of Directors has the authority to fix the compensation of directors. No amounts have been paid to, or accrued to, directors in such capacity.

Employment Agreements

We do not have any employment agreements in place with our officers or directors.


 
The following table provides the names and addresses of each person known to us to own more than 5% of our outstanding shares of common stock as of March 3, 2008 and by the officers and directors, individually and as a group. Except as otherwise indicated, all shares are owned directly.
 
 
Title of Class
Name and Address
of Beneficial Owner
Amount and Nature
of Beneficial Owner
Percent
of Class (1)
       
Common Stock
Jordan Starkman
193 Jardin Drive, 2nd Floor West
Concord, ON L4K 1X5
250,000(1)
40.38%
       
Common Stock
Maxwell Network Group Inc.
3100 Steeles Avenue West PH
Vaughn, ON L4K  3R1
100,000(2)
16.15%
       
Common Stock
     Itamar Cohen
     3100 Steeles Ave West PH
     Vaughn, ON L4K 3R1
100,000 (2)
16.15%
       
Common Stock
All executive officers
and directors as a group
250,000
40.38%
       
 
 
(1)
The percent of class is based 619,000 shares of our common stock issued and outstanding as of March 3, 2008.
 
(2)
Itamar Cohen control the Maxwell Network Group Inc. which owns 100,000 shares of our common stock and therefore may be deemed to be the beneficial owner of these shares.


TRANSACTIONS WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

In August 2007, we issued 50,000 founder shares of common stock to Jordan Starkman pursuant to the exemption from registration set forth in section 4(2) of the Securities Act of 1933.  The total purchase price of the Shares was $50.


Item 12A. Disclosure of Commission Position on Indemnification of Securities Act Liabilities.
 
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION OF SECURITIES ACT LIABILITIES

Our director and officer is indemnified as provided by the Nevada Statutes and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 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.
 
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.

 
 

 

PAY BY THE DAY HOLDINGS, INC.
369,000 SHARES OF COMMON STOCK

PROSPECTUS

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL COMMON STOCK AND IS NOT SOLICITING AN OFFER TO BUY COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
 
Until _____________, all dealers that effect transactions in these securities whether or not participating in this offering may be required to deliver a prospectus. This is in addition to the dealer’s obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

The Date of This Prospectus Is:  March __, 2008

 
 
 
 
 
 

 
PART II -- INFORMATION NOT REQUIRED IN THE PROSPECTUS


Item 13. Other Expenses Of Issuance And Distribution.
 
Securities and Exchange Commission registration fee
  
$
1.58
  
Federal Taxes
  
$
0.00
  
State Taxes and Fees
  
$
0.00
  
Transfer Agent Fees
  
$
0.00
  
Accounting fees and expenses
  
$
10,000.00
  
Legal fees and expense
  
$
15,000.00
  
Blue Sky fees and expenses
  
$
0.00
  
Miscellaneous
  
$
0.00
  
Total
  
$
25,001.58
  
 
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.
 
 
Item 14. Indemnification Of Directors And Officers.
 
Our director and officer is indemnified as provided by the Nevada Statutes and our Bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 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.
 
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.


 

Item 15. Recent Sales Of Unregistered Securities.
 
We were incorporated in the State of Nevada in August 2007 and 50,000 shares of common stock were issued to Jordan Starkman for $50. These shares were issued in reliance on the exemption under Section 4(2) of the Securities Act of 1933, as amended (the “Act”) and were issued to Mr. Starkman as founders shares. These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Mr. Starkman had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.

In August 2007 we entered into a Share Exchange Agreement with Pay By The Day Company Inc., an Ontario Corporation, whereby we exchanged 200,000 shares of common stock for all of the issued and outstanding shares of Pay By The Day Company Inc., Mr. Starkman as the sole shareholder of Pay By The Day Company Inc. is the holder of the 200,000 common shares.  These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Mr. Starkman had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.

In September 2007 we issued 100,000 common shares to Itamar Cohen in exchange for $10,000 ($0.10 per share).  These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Mr. Cohen had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.

In September 2007 we issued 5,000 common shares to Richard Anslow, and 5,000 common shares to Gregg Jaclin in exchange for legal services rendered.  These shares of our common stock qualified for exemption under Section 4(2) of the Securities Act of 1933 since the issuance shares by us did not involve a public offering. The offering was not a “public offering” as defined in Section 4(2) due to the insubstantial number of persons involved in the deal, size of the offering, manner of the offering and number of shares offered. We did not undertake an offering in which we sold a high number of shares to a high number of investors. In addition, Mr. Anslow, and Mr. Jaclin had the necessary investment intent as required by Section 4(2) since they agreed to and received share certificates bearing a legend stating that such shares are restricted pursuant to Rule 144 of the 1933 Securities Act. This restriction ensures that these shares would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(2) of the Securities Act of 1933 for this transaction.

 
In December 2007, we completed a Regulation D Rule 506 offering in which we sold 259,000 shares of common stock to 38 investors, at a price per share of $.10 for an aggregate offering price of $25,900. The following sets forth the identity of the class of persons to whom we sold these shares and the amount of shares for each shareholder:
 
 
 
Maxwell Network Group Inc. (1)
100,000
Iris Taxon
35,000
Maital Cohen
5,000
Sammy Anidjar
5,000
Miriam Anidjar
5,000
Neil Casselman
5,000
Sandra Payer
5,000
Dennis Payer
5,000
Michael Payer
5,000
Lorna Limasing
5,000
Luz M. Sta Maria
5,000
Minerva D. Atienza
5,000
Mike Amorosso
5,000
Mike Wilson
5,000
Noreen Wilson
5,000
Meir Waisenberg
5,000
Valerie Afriat
5,000
Angelo Toneguzzo
5,000
Alena Danieli
5,000
Nissan Danieli
5,000
David Anidjar
5,000
Anne Marks
5,000
Deena Oziel
3,000
Danny Rabizada
2,500
Tammy Revizada
2,500
Ghitel Grinfield
2,000
Isaac Oziel
2,000
Sherwin Shapiro
2,000
Liran Cohen
1,000
Tami Garson (2)
1,000
Jeff Botnick
1,000
Lawrence Rabie
1,000
Annette Shapiro
1,000
Jesse Shapiro
1,000
Matthew Shapiro
1,000
Ben Giterman
1,000
Yona Giterman
1,000
Alan Patel
1,000

(1)  
Maxwell Network Group, Inc. is controlled by Itamar Cohen.
(2)  
Tami Garson is the wife of the Company’s President Jordan Starkman

The Common Stock issued in our Regulation D, Rule 506 Offering was issued in a transaction not involving a public offering in reliance upon an exemption from registration provided by Rule 506 of Regulation D of the Securities Act of 1933. In accordance with Section 230.506 (b)(1) of the Securities Act of 1933, these shares qualified for exemption under the Rule 506 exemption for this offerings since it met the following requirements set forth in Reg. ss.230.506:
 
(A)
No general solicitation or advertising was conducted by us in connection with the offering of any of the Shares.
   
(B)
 
At the time of the offering we were not: (1) subject to the reporting requirements of Section 13 or 15 (d) of the Exchange Act; or (2) an “investment company” within the meaning of the federal securities laws.
   
(C)
Neither we, nor any of our predecessors, nor any of our directors, nor any beneficial owner of 10% or more of any class of our equity securities, nor any promoter currently connected with us in any capacity has been convicted within the past ten years of any felony in connection with the purchase or sale of any security.
   
(D)
The offers and sales of securities by us pursuant to the offerings were not attempts to evade any registration or resale requirements of the securities laws of the United States or any of its states.
   
(E)
None of the investors are affiliated with any of our directors, officers or promoters or any beneficial owner of 10% or more of our securities.
 
Please note that pursuant to Rule 506, all shares purchased in the Regulation D Rule 506 offering completed in December 2007 were restricted in accordance with Rule 144 of the Securities Act of 1933. In addition, each of these shareholders were either accredited as defined in Rule 501 (a) of Regulation D promulgated under the Securities Act or sophisticated as defined in Rule 506(b)(2)(ii) of Regulation D promulgated under the Securities Act.
 
We have never utilized an underwriter for an offering of our securities. Other than the securities mentioned above, we have not issued or sold any securities.
 

  
 
Item 16. Exhibits and Financial Statement Schedules.
   
EXHIBIT NUMBER
DESCRIPTION
3.1
3.2
5.1
10.1
23.1
23.2
Consent of Counsel, as in Exhibit 5.1
24.1
 
Item 17. Undertakings.
 
(A) 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:
 
 
(i)
To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
 
(ii)
Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information set forth 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) 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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in 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
 
(iii)
 
Include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.
 
(2)
That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering therein, and the offering of such securities at that time shall be deemed 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 which remain unsold at the termination of the offering.
 
(B) The issuer is subject to Rule 430C (ss. 230. 430C of this chapter): Each prospectus filed pursuant to Rule 424(b)(ss. 230. 424(b) of this chapter) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (ss. 230. 430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
 
 
 
 
 
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 on Form S-1 and authorized this registration statement to be signed on its behalf by the undersigned, in Concord, Ontario Canada on March 3, 2008.
 
PAY BY THE DAY HOLDINGS, INC. 
 
By:
/s/Jordan Starkman
 
Jordan Starkman
 
President, Chief Executive Officer, Chairman of the Board of Directors
Chief Financial Officer, Controller, Principal Accounting Officer
 
 
 
 
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jordan Starkman and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities (including his capacity as a director and/or officer of Pay By The Day Holdings, Inc.) to sign any or all amendments (including post-effective amendments) to this registration statement and any and all additional registration statements pursuant to rule 462(b) of the Securities Act of 1933, as amended, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the SEC, granting unto each said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

In accordance with the requirements of the Securities Act of 1933, as amended, this registration statement was signed below by the following persons in the capacities and on the dates stated.

By:
/s/ Jordan Starkman
 
Jordan Starkman
 
President, Chief Executive Officer, Chief Financial Officer, Controller, Principal Accounting Officer and Chairman of the Board of Directors


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