Friendable, Inc. - Quarter Report: 2009 March (Form 10-Q)

f579310q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: March 31, 2009


Or


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

For the transition period from ____________ to _____________


Commission File Number: 333-146476


DIGITAL YEARBOOK, INC.
(Exact name of registrant as specified in its charter)

Nevada	98-0546715
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3938 E Grant Rd, #453 Tucson, Arizona	85712
(Address of principal executive offices)	(Zip Code)

(913) 660-0632
(Registrant's telephone number, including area code)



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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically And posted on it’s corporate Web site, if any, every interactive Data File Required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer Yes o No o	Accelerated Filer Yes o No o
Non-accelerated filer Yeso No o	Smaller Reporting Company Yes o No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)

Yes x No o

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of May 7, 2009:

5,151,000

TABLE OF CONTENTS


PART I - Financial Information
Financial Statements	3
Condensed Balance Sheets as of March 31, 2009 (unaudited) and December 31, 2008 (audited)	4
Unaudited Condensed Statements of Operations	5
Unaudited Statement of Stockholders Equity	6
Unaudited Condensed Statements of Cash Flows	7
Notes to Unaudited Condensed Financial Statements	8,9
Management’s Discussion and Plan of Operation	10,11
Controls and Procedures	12

PART II - Other Information
Unregistered Sales of Equity Securities	13
Exhibits and Reports on Form 8-K	14
SIGNATURES	15

PART I – FINANCIAL INFORMATION

Unaudited Financial Statements

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and pursuant to the rules and regulations of the Securities and Exchange Commission ("Commission"). While these statements reflect all normal recurring adjustments which are, in the opinion of management, necessary for fair presentation of the results of the interim period, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the interim period ended March 31, 2009 are not necessarily indicative of the results that can be expected for the full year. For further information, refer to the financial statements and footnotes thereto.

Digital Yearbook, Inc.

(a Development Stage Company)

Condensed Balance Sheets

ASSETS

	March 31,				December 31,
	2009				2008
	(Unaudited)				(audited)

PROPERTY AND EQUIPMENT, NET		$	5,250		$	5,833




TOTAL ASSETS		$	5,250		$	5,833


LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts Payable		$	808		$	200
Accrued expenses - related party			4,328			4,232

Total Current Liabilities			5,136			4,432

STOCKHOLDERS' EQUITY

Preferred stock, 50,00,000 shares authorized at par value
of $0.0001, no shares issued and outstanding			-			-
Common stock, 100,000,000 shares authorized at par value
of $0.0001, shares issued and outstanding
5,151,000 at December 31, 2008 and at March 31, 2009, respectively			515			515
Additional paid-in capital			57,435			57,435
Deficit accumulated during the development stage			(57,836	)		(56,549	)

Total Stockholders' Equity			114			1,401

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	5,250		$	5,833

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

Digital Yearbook, Inc.

(a Development Stage Company)

Unaudited Condensed Statements of Operations

	For the three months ended March 31, 2009			For the three months ended March 31, 2008			June 5, 2007 (Inception) through March 31, 2009


REVENUES	$	-		$	465		$	4,855

OPERATING EXPENSES

General and administrative		583			55,338			42,052

Professional fees		704			623			20,639

Total Operating Expenses		1,287			55,961			62,691

LOSS FROM OPERATIONS		(1,287	)		(55,496	)		(57,836	)

OTHER EXPENSES		0			0			0

NET LOSS BEFORE PROVISION FOR
INCOME TAXES		(1,287	)		(55,496	)		(57,836	)

PROVISION FOR INCOME TAX		0			0			0

NET LOSS	$	(1,287	)	$	(55,496	)	$	(57,836	)

BASIC LOSS PER SHARE	$	(0.00	)	$	(0.01	)		-

WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING		5,151,000			4,834,956			-

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

DIGITAL YEARBOOK, INC.
(A Development Stage Company)
Unaudited Statement of Stockholders’ Equity
For the period from June 05, 2007 (inception) to March 31, 2009

	Common Stock		Stock Amount		Additional Paid-in Capital		Deficit Accumulated During Development Stage			Total
Balance, June 5, 2007 (Inception)		0	$	0	$	0		0

Common Stock issued for cash
at $0.0001 per share		4,000,000		400		-	$	-		$	400

Common Stock issued for cash
at $0.05 per share		801,000		80		39,970					40,050

Net loss for the period ended
December 31, 2007		-		-		-		(21,874	)		(21,874	)

Balance, December 31, 2007		4,801,000		480		39,970		(21,874	)		18,576


Common Stock issued for creditors
at $0.05 per share		350,000		35		17,465					17,500

Net loss for the year
ended December 31, 2008		-		-		-		(34,675	)		(34,675	)

Balance, December 31, 2008		5,151,000		515		57,435		(56,549	)		1,401


Net loss for the three months
ended March 31, 2009		-		-		-		(1,287	)		(1,287	)

Balance, March 31, 2009		5,151,000	$	515	$	57,435	$	(57,836	)	$	114

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

Digital Yearbook, Inc.

(a Development Stage Company)

Unaudited Condensed Statements of Cash Flows

	For the three months ended			For the three months ended			June 5, 2007 (Inception) through
	March 31, 2009			March 31, 2008			March 31, 2009
Cash Flows from Operating Activities:
Net loss for the period	$	(1,287	)	$	(55,496	)	$	(57,836	)

Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Depreciation expense		583			-			1,750
Changes in Assets and Liabilities
Increase in accounts payable		608			1,555			808
Increase in accrued expenses – related party		96			-			4,328
Net Cash Used in Operating Activities		0			(53,941	)		(50,950	)

Cash Flows from Investing Activities:
Acquisition of property and equipment		-			-			(7,000	)
Net Cash Used in Investing Activities		-			-			(7,000	)

Cash Flows from Financing Activities:
Common stock issued for cash		-			-			40,450
Common stock issued for services		-			35,500			17,500
Net Cash Provided by Financing Activities		-			35,500			57,950

Net Increase in Cash and Cash Equivalents		-			(18,441	)		-

Cash and Cash Equivalents – Beginning		-			18,576			-

Cash and Cash Equivalents – Ending	$	-		$	135		$	-

Supplemental Cash Flow Information:
Cash paid for interest		-			-			-
Cash paid for income taxes		-			-			-

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

Digital Yearbook, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Financial Statements

Note 1 - Basis of presentation

The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these consolidated interim financial statements be read in conjunction with the audited financial statements of the Company for the period ended December 31, 2008 and notes thereto included in the Company's annual report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports.

Results of operations for the interim periods are not indicative of annual results.

Note 2 - History and organization of the company

The Company was organized on June 5, 2007 (Date of Inception) under the laws of the State of Nevada, as Digital Yearbook, Inc. The Company is authorized to issue up to 100,000,000 shares of its $0.0001 par value common stock and 50,000,000 shares of its $0.0001 par value preferred stock.

The Company is engaged in developing and offering software products for the creation of interactive digital yearbook software for high schools. The Company has limited operations and in accordance with Statement of Financial Accounting Standards No. 7 (SFAS #7), “Accounting and Reporting by Development Stage Enterprises,” the Company is considered a development stage company.

Note 3 - Going concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has incurred a net loss of ($57,836) and had sales of $4,855 for the period from June 5, 2007 (inception) to March 31, 2009. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities. The Company currently has limited liquidity, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.

Digital Yearbook, Inc.

(a Development Stage Company)

Notes to Unaudited Condensed Financial Statements

Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

Note 4 - Stockholders’ equity

The Company is authorized to issue up to 100,000,000 shares of common stock, each have a par value of $0.0001, and up to 50,000,000 shares of preferred stock, each with a par value of $0.0001.

On June 5, 2007 (inception), the Company issued 4,000,000 shares of its common stock to its Directors for cash of $400.

On August 1, 2007, the Company closed a private placement for 801,000 common shares at a price of $0.05 per share, or an aggregate of $40,050. The Company accepted subscriptions from 36 offshore non-affiliated investors.

On March 21, 2008, the Company issued 350,000 shares of its common stock to cure an account payable in lieu of cash in the aggregate of $17,500.

As of March 31, 2009, there have been no other issuances of common stock.

Management's Discussion and Plan of Operation

Forward-Looking Statements

This Quarterly Report contains forward-looking statements about Digital Yearbook, Inc.’s business, financial condition and prospects that reflect management’s assumptions and beliefs based on information currently available. We can give no assurance that the expectations indicated by such forward-looking statements will be realized. If any of our management’s assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, Digital Yearbook’s actual results may differ materially from those indicated by the forward-looking statements.

The key factors that are not within our control and that may have a direct bearing on operating results include, but are not limited to, acceptance of our services, our ability to expand our customer base, managements’ ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry.

There may be other risks and circumstances that management may be unable to predict. When used in this Quarterly Report, words such as, "believes," "expects," "intends," "plans," "anticipates," "estimates" and similar expressions are intended to identify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions.

Management’s Discussion and Analysis

Digital Yearbook, Inc. was incorporated in Nevada on June 5, 2007. We produce user-friendly software that creates interactive digital yearbook software for schools and allows them to create and burn their own interactive digital yearbooks on CD/DVD. From our inception to March 31, 2009, we generated minimal revenues of $4,855. We have no recurring customers and have limited revenue-generating capability at this time.

In the execution of our business, we incur various general and administrative costs, consisting of office expenditures, and professional fees in pursuit of developing our software and to the cost of becoming a public reporting company. During the three months ended March 31, 2009, our total operating expenses were $1,287, consisting of $704 in professional fees and $583 in general and administrative costs. Similarly during the three months ended March 31, 2008, our total operating expenses were $55,961 consisting of $623 in professional fees and $55,338 in general and administrative costs. The expenses were substantially less in the 2009 period due to the current market condition. Since our inception, we incurred aggregate expenses of $62,691 of which $42,052 is related to general and administrative expenses and $20,639 attributable to professional fees.

During the year ended 31st December, 2008 we have reversed the stock issue of 360,000 shares of its common stock to cure an account payable in lieu of cash in the aggregate of $18,000. Management didn’t issue any share certificate for this transaction initially when the shares are allotted. Also since the work was not executed and completed by the creditor we have reversed the expenses of $18,000 from general and administrative cost on 31st December, 2008. Based on auditor’s recommendation, we have capitalized $7,000 during 31st December, 2008. Earlier this was booked under general and administrative cost. Due to these two major expense adjustments, general and administrative cost for the three months ended 31st March, 2008 shows more then the aggregate of from inception to 31st March, 2009 amounts. Going forward, we expect to incur additional software development fees and other costs of start-up operations. The specific levels of such expenses are unpredictable and may exceed our current capital resources.

As a result of our minimal amount of revenues and ongoing expenditures in pursuit of our business, we incurred net losses since our inception. During the most recent quarter ended March 31, 2009, our net loss was $1,287. Since our inception to March 31, 2009, our accumulated deficit was $57,836. We expect to incur ongoing losses for the next 12 months of operations unless we are able to successfully market and receive revenues from our digital yearbook software.

We expect to have negative cash flows for the fiscal year 2009, as we have a limited ability to realize cash flows from sales. Since our inception, we have raised capital through sales of our common stock. In June 2007, we sold a total of 4,000,000 shares of common stock to two officers and directors for cash of $400. In August 2007, we raise $40,050 in a private placement of our common stock, whereby we sold 801,000 shares of common stock at a price per share of $0.05. We believe that our cash on hand as of March 31, 2009, in the amount of $0 is not sufficient to sustain our expected operations. We believe that in order to continue as a going concern, we need to raise additional capital by issuing equity or debt securities in exchange for cash. There are no agreements or commitments for these funds and there can be no assurance that we will be able to secure any such funds to stay in business. Our principal accountants have expressed substantial doubt about our ability to continue as a going concern because we have limited operations and have not fully commenced planned principal operations.

Our management does not anticipate the need to hire additional full- or part- time employees over the next 12 months, as the services provided by our current officers and directors appear sufficient at this time. Our officers and directors work for us on a part-time basis, and are prepared to devote additional time, as necessary.

Our management does not expect to incur research and development costs.

We do not have any off-balance sheet arrangements.

We currently do not own any significant plant or equipment that we would seek to sell in the near future.

We have not paid for expenses on behalf of our directors. Additionally, we believe that this fact shall not materially change.

We currently do not have any material contracts and or affiliations with third parties.

There are no known trends, events or uncertainties that have had or that are reasonably expected to have a material impact on our revenues from continuing operations.

Controls and Procedures

We maintain a set of disclosure controls and procedures designed to ensure that information required to be disclosed by us in our reports filed under the Securities Exchange Act, is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that this information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Based upon their evaluation as of the end of the period covered by this report, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are streamlined to ensure that information required to be included in our periodic SEC filings is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms.

Our board of directors was advised by Moore & Associates, Chartered, our independent registered public accounting firm, that during their performance of audit procedures for 2007 Moore & Associates, Chartered identified a material weakness as defined in Public Company Accounting Oversight Board Standard No. 2 in our internal control over financial reporting. We are in the process of reviewing our internal controls over financial reporting and plan to institute additional controls to ensure stronger internal controls without material weaknesses.

PART II - OTHER INFORMATION

Unregistered Sales of Equity Securities

The following sets forth information regarding all sales of our unregistered securities during the past three years. None of the holders of the shares issued below have subsequently transferred or disposed of their shares and the list is also a current listing of the Company's stockholders.

During this year, we have issued unregistered securities to the persons, as described below. None of these transactions involved any underwriters, underwriting discounts or commissions or any public offering, and we believe that each transaction was exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 4(2) thereof, or Regulation D promulgated thereunder. All recipients had adequate access, through their relationships with us, to information about us.

On June 5, 2007, we sold 2,000,000 shares of our common stock to Mr. Ohad David, our ex-President and ex-director, for cash payment to us of $200. We believe this issuance was deemed to be exempt under Regulation D and Section 4(2) of the Securities Act. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made only to accredited investors, and transfer was restricted by us in accordance with the requirements of the Securities Act of 1933.

On June 5, 2007, we sold 2,000,000 shares of our common stock to Ms. Ruth Navon, our ex-Secretary, ex-Treasurer and ex-director, for cash payment to us of $200. We believe this issuance was deemed to be exempt under Regulation D and Section 4(2) of the Securities Act. No advertising or general solicitation was employed in offering the securities. The offerings and sales were made only to accredited investors, and transfer was restricted by us in accordance with the requirements of the Securities Act of 1933.

On March 21, 2008, we issued 350,000 shares of our common stock to Service Merchants Corp., for payment in lieu of cash for services rendered valued at $17,500. We believe this issuance was deemed to be exempt under Section 4(2) of the Securities Act and the common stock bears a restrictive legend. No advertising or general solicitation was employed in offering the securities.

Exhibits and Reports on Form 8-K

Exhibit Number	Name and/or Identification of Exhibit


3	Articles of Incorporation & By-Laws

	a. Articles of Incorporation (1)

	b. Bylaws (1)


31	Rule 13a-14(a)/15d-14(a) Certification


32	Certification under Section 906 of the Sarbanes-Oxley Act (18 U.S.C. Section 1350)


(1)	Incorporated by reference to the Registration Statement on Form SB-2, previously filed with the SEC on October 3, 2007.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereto duly authorized.

DIGITAL YEARBOOK, INC.

(Registrant)

By: /s/ Arunkumar Rajapandy, CEO

In accordance with the requirements of the Securities Act of 1933, this Registration Statement was signed by the following persons in the capacities and on the dates stated:

Signature	Title	Date


/s/ Arunkumar Rajapandy	CEO	May 7, 2009



/s/ Arunkumar Rajapandy	Chief Financial Officer	May 7, 2009



/s/ Arunkumar Rajapandy	Chief Accounting Officer	May 7, 2009