SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM SB-2/A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(Amendment No. 1)
PHOTOMATICA, INC.
(Name of small business issuer in its charter)
Nevada 7330 20-4412118
(State or Other Jurisdiction (Primary Standard (IRS Employer
of Organization Industrial Classification Identification #)
Code)
PHOTOMATICA, INC. STATE AGENT & TRANSFER SYNDICATE, INC.
112 North Curry Street, 112 North Curry Street,
Carson City, NV 89703-4934 Carson City, NV 89703-4934
(775) 321-8243 (775) 882-1013
(Address and telephone of registrant's (Name, address and telephone number of
executive office) agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT
INVESTING IN THE COMPANY'S COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING AT PAGE XX OF THIS PROSPECTUS.
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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional common stock for an offering under
Rule 462(b) of the Securities Act, please check the following box and list the
Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. [ ]
If this Form is a post-effective amendment filed under Rule 462(c) of the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. [ ]
If this Form is a post-effective amendment filed under Rule 462(d) of the
Securities Act, check the following box and list the Securities Act Registration
Statement number of the earlier effective Registration Statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made under Rule 434, please
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Securities to be Amount To Be Offering Price Aggregate Registration
Registered Registered Per Share[1] Offering Price Fee[3]
Common Stock by Selling 3,200,000 $ 0.25 $ 800,000[2] $ 85.60
Shareholders
<FN>
[1] The offering price has been arbitrarily determined by the selling
shareholders and bears no relationship to assets, earnings, or any other
valuation criteria. No assurance can be given that the shares offered hereby
will have a market value or that they may be sold at this, or at any price.
[2] Photomatica will not receive any of the proceeds from the sale of common
stock by the selling security shareholders.
[3] Estimated solely for the purpose of calculating the registration fee based
on Rule 457 (c). Whereas all the securities are being offered by existing
security holders and if the security holders offer, if any, securities to the
general public, the registration fee is to be calculated upon the basis of the
proposed offering price to the general public.
</FN>
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 this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
The information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
PHOTOMATICA, INC.
SHARES OF COMMON STOCK
3,200,000 SHARES OF COMMON STOCK BEING SOLD BY SELLING SECURITY HOLDERS
Prior to this offering, there has been no public trading market for the
common stock of Photomatica, Inc. ("Photomatica"). Photomatica's common stock is
not presently traded on any market or securities exchange. Photomatica is
registering 3,200,000 shares of common stock on behalf of certain selling
shareholders, as named under "Selling Security Holders" within this Registration
Statement. The selling security holders are selling all of the shares. The
offering price for the shares will be $.25 per share until the shares are quoted
on the Over-The-Counter (OTC) Bulletin Board or an exchange. The selling
security holders may sell at prevailing market prices or privately negotiated
prices only after the shares are quoted on either the OTC Bulletin Board or an
exchange.
The selling securities holders may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. Photomatica does not receive any proceeds from the sale of any of the
shares held by the selling shareholders.
The securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission, nor has the Securities
and Exchange Commission or any state securities commission passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The offering will conclude when all 3,200,000 shares of common stock
registered in this statement have been sold, or when Photomatica decides to
terminate the registration of these shares.
The date of this prospectus is November 13, 2006
INVESTING IN THE COMPANY'S COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE
"RISK FACTORS" BEGINNING AT PAGE XX.
PRIOR TO THIS OFFERING, THERE HAS BEEN NO PUBLIC TRADING MARKET FOR THE COMMON
STOCK. PHOTOMATICA'S COMMON STOCK IS PRESENTLY NOT TRADED ON ANY MARKET OR
SECURITIES EXCHANGE.
PLEASE READ THIS PROSPECTUS CAREFULLY.
The information in this prospectus is not complete and may be changed. This
prospectus is not an offer to sell these securities and it is not soliciting an
offer to buy these securities in any state where the offer or sale is not
permitted.
TABLE OF CONTENTS
Page No.
Part I
Summary of our Prospectus
The Offering
Summary of Financial Information
Risk Factors
Forward Looking Statements
Available Information
Use of Proceeds
Determination of the Offering Price
Selling Security Holders
Plan of Distribution; Terms of the Offering
Legal Proceedings
Management
Executive Compensation
Principal Stockholders
Description of Securities
Description of Business
Management's Discussion and Analysis of our Financial Condition
and the Results of our Operations
Description of Property
Certain Transactions
Litigation
Experts
Financial Statements
Part II: Information not Required in this Prospectus Statements
Exhibits
Undertakings
Signatures
DEALER PROSPECTUS DELIVERY OBLIGATION
"Until ____________, (90 days after the effective date of this prospectus) 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 obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions."
SUMMARY OF OUR PROSPECTUS
This summary provides an overview of selected information contained elsewhere in
this prospectus. It does not contain all the information you should consider
before making a decision to purchase the shares we are offering. You should very
carefully and thoroughly read the more detailed information in this prospectus
and review our financial statements contained herein.
SUMMARY INFORMATION ABOUT PHOTOMATICA, INC.
Photomatica, Inc. ("Photomatica," "the company," or "we,") was incorporated in
the State of Nevada as a for-profit company on February 22, 2006 and established
a fiscal year end of April 30. We are a development-stage company organized to
enter into the stock photographic image sales industry with proprietary online
digital image transaction software we intend to provide. The company has created
a website branded "Photomatica" (www.photomatica.com) where its digital image
transaction software will be available for use by photographers and potential
customers. The company expects to provide low cost, original photographic
content to both low end and high end users of stock photographic images, such as
newsletter and magazine publishers and website designers.
Unlike established stock image houses, Photomatica will not purchase large
portfolios of stock images from a select group of established photographers.
Instead, photographers affiliated with Photomatica will maintain ownership of
their stock images. Photomatica will generate revenue by charging affiliate
photographers a modest commission on the images they sell through our website.
Photomatica's online transaction services will compete with traditional stock
image agencies, by providing photographers, illustrators, graphic designers,
animators, cinematographers and other visual artists a low cost, online venue to
sell their work to users of stock photographic images.
Our business office is located at 112 North Curry Street, Carson City NV
89703-4934 and our telephone number is (775) 321-8243, fax (604) 777-6912. Our
United States and registered statutory office is located at 112 North Curry
Street, Carson City NV 89703-4934, telephone number (775) 882-1013.
As of July 31, 2006, the end of the most recent fiscal quarter, Photomatica had
raised $23,000 through the sale of its common stock. There is $13,988 of cash on
hand in the corporate bank account. The company currently has no outstanding
liabilitiesThe company anticipates incurring costs associated with this offering
totaling approximately $4,498. As of the date of this prospectus, we have
generated no revenues from our business operations. The following financial
information summarizes the more complete historical financial information as
indicated on the audited financial statements of the company filed with this
prospectus.
SUMMARY OF THE OFFERING BY THE SELLING SECURITY HOLDERS
Certain selling security holders, as named under "Selling Security Holders"
within this Registration Statement, may endeavor to sell their shares of common
stock after this registration becomes effective. The percentage of total
outstanding common stock being offered by these selling shareholders is
approximately 31.4%. The price at which the selling security holders offer their
shares is a fixed price of $0.25 per share for the duration of the offering.
There is no arrangement to address the possible effect of the offering on the
price of the stock. Photomatica will not receive any proceeds from the sale of
the common stock by the selling security holders.
================================================================================
Securities being offered by the Up to 3,200,000 common shares are being
Selling Security Holders, offered by certain selling shareholders.
common stock, par value $0.001
================================================================================
Offering price per share by the A price, if and when the selling security
Selling Security Holders holders sell the shares of common stock, is
set at $0.25. However, the selling security
holders will be responsible to determine if
and when they sell their shares.
================================================================================
Number of shares outstanding 10,200,000 common shares are currently
before the offering of common issued and outstanding. 3,200,000 of the
shares issued and outstanding shares are being
offered for sale under this prospectus by
certain selling security holders.
================================================================================
Minimum number of shares to be None.
sold in this offering
================================================================================
Market for the common shares There is no public market for the common
shares. The price per share is $0.25. In
addition, the offering price for the shares
will remain $0.25 per share until such a
time the shares are quoted on the
Over-The-Counter (OTC) Bulletin Board or an
exchange. The selling security holders may
sell at prevailing market prices or
privately negotiated prices, only after the
shares are quoted on either the OTC Bulletin
Board or an exchange.
Photomatica may not be able to meet the
requirement for a public listing or
quotation of its common stock. Further, even
if Photomatica's common stock is quoted or
granted listing, a market for the common
shares may not develop. If a market
develops, the price of the shares in the
market may not be greater than or equal to
the price per share that investors in this
offering pay; in fact, the price of our
shares in any market that may develop could
be significantly lower.
================================================================================
Use of proceeds Photomatica will not receive
any proceeds from the sale of the common
stock by the selling security holders. The
expenses of this offering, including the
preparation of this prospectus and the
filing of this registration statement,
estimated at $4,498, are being paid for by
Photomatica.
================================================================================
Termination of the offering The offering will conclude when all of the
3,200,000 shares of common stock have been
sold, or 90 days after this registration
statement becomes effective with the
Securities and Exchange Commssion.
Photomatica at its discretion may extend the
offering for an additional 90 days.
================================================================================
Terms of the offering The selling security holders will determine
when and how they will sell the common stock
offered in this prospectus.
================================================================================
You should rely only upon the information contained in this prospectus.
Photomatica has not authorized anyone to provide you with information different
from that which is contained in this prospectus. The selling security holders
are offering to sell shares of common stock and seeking offers to buy shares of
common stock only in jurisdictions where offers and sales are permitted. The
information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus, or of any
sale of the common stock.
SUMMARY OF FINANCIAL INFORMATION
The following summary financial information for the periods stated summarizes
certain information from our financial statements included elsewhere in this
prospectus. You should read this information in conjunction with Management's
Plan of Operations and the financial statements and the related notes thereto
included elsewhere in this prospectus.
=============================================================================
BALANCE SHEET AS OF OCTOBER 31, 2006
=============================================================================
Total Assets $13,988
=============================================================================
Total Liabilities $0
=============================================================================
Shareholder's Equity $13,988
=============================================================================
OPERATING DATA FEBRUARY 22, 2006 (INCEPTION)
THROUGH OCTOBER 31, 2006
=============================================================================
Revenue $0.00
=============================================================================
Net Loss ($9,012)
=============================================================================
Net Loss Per Share ($0.00)
=============================================================================
As shown in the financial statements accompanying this prospectus, Photomatica
has had no revenues to date and has incurred only losses since its inception.
The company has had no operations and has been issued a "going concern" opinion
from their accountants, based upon the company's reliance upon the sale of our
common stock as the sole source of funds for our future operations.
RISK FACTORS
Our company is subject to those financial risks generally associated with
development stage companies.
Since we have sustained losses since inception, we will require financing to
fund our development activities and to support our operations. However, we may
be unable to obtain such financing. We are also subject to risks factors
specific to our business strategy and industry. Rapid changes in technology,
customer demands and industry standards associated with the Internet marketplace
(e-commerce) may require us to introduce new products and services on a
continual and timely basis before profitable operations can be attained. We may
be unable to introduce new products and services on a timely basis. Moreover,
there is no guarantee that any such products will allow us to achieve profitable
operations in the future. Photomatica considers the following to be the most
substantial risks to an investor regarding this offering. Photomatica should be
viewed as a high-risk investment and speculative in nature. An investment in our
common stock may result in a complete loss of the invested amount. Please
consider the following risk factors before deciding to invest in our common
stock.
AUDITOR'S GOING CONCERN
THERE IS SUBSTANTIAL DOUBT ABOUT PHOTOMATICA'S ABILITY TO CONTINUE AS A GOING
CONCERN.
Our auditor's report on our July 31, 2006 financial statements expresses an
opinion that substantial doubt exists as to whether we can continue as an
ongoing business. Since our sole officer and director may be unwilling or unable
to loan or advance additional capital to Photomatica, we believe that if we do
not raise additional capital within 12 months of the effective date of this
registration statement, we may be required to suspend or cease the
implementation of our business plans. You may be investing in a company that
will not have the funds necessary to continue to deploy its business strategies.
See "July 31, 2006 Audited Financial Statements - Auditors Report."
As the company has been issued an opinion by its auditors that substantial doubt
exists as to whether the company can continue as a going concern, it may be more
difficult for the company to attract investors.
RISKS RELATED TO OUR FINANCIAL CONDITION
SINCE THE COMPANY ANTICIPATES OPERATING EXPENSES WILL INCREASE PRIOR TO EARNING
REVENUE, WE MAY NEVER ACHIEVE PROFITABILITY.
The company anticipates increases in its operating expenses, without realizing
any revenues from its services. Within the next 12 months, these increases in
expenses will be attributed to the cost of (i) procuring our online stock image
transaction software, (ii) initiating the company's sales and marketing
capabilities (iii) hiring staff and (iv) other general corporate and working
capital purposes.
The company intends to hire a third party independent software developer to
provide the company with the correct mix of packaged and custom software to meet
the company's business requirements. The company anticipates that the majority
of the software used in our e-commerce systems can be purchased from third party
providers and very little custom software development will be required. The
first stage of the company's software procurement includes purchasing core
database functionality (estimated to cost $5,000), a search engine license
(estimated to cost $5,000), and image processing functionality (estimated to
cost $4,000).
The first stage of our sales and marketing plan involves launching the company's
website (estimated to cost $4,000) and soliciting stock images from a large
number of photographers (estimated to cost $8,000) by maintaining display booths
at the major photographic association conventions and trade shows.
The company will incur significant financial losses in the foreseeable future
for the procurement of image processing and e-commerce transaction software and
the solicitation of a large number of stock photographic images. There is no
history upon which to base any assumption as to the likelihood that the company
will prove successful. We cannot provide investors with any assurance that our
online transaction services will attract customers from established stock
photographic image houses, generate any operating revenue, or ever achieve
profitable operations. If we are unable to address these risks, there is a high
probability that our business will fail, which will result in the loss of your
entire investment.
IF WE DO NOT OBTAIN ADDEQUATE FINANCING, OUR BUSINESS WILL FAIL, WHICH WILL
RESULT IN THE COMPLETE LOSS OF YOUR INVESTMENT.
Our current operating funds are adequate for corporate existence over the next
twelve months. Photomatica's cash balance, as of October 31, 2006, is $13,988.
The company anticipates its monthly expenses will be approximately $1,000.
Besides its corporate existence, Photomatica will require additional financing
in order to implement its business plans and business strategy.
The company's president has indicated that he will provide the company with
finances through non interest bearing loans as required over the next 12 months
to maintain its corporate existence and become and remain a reporting issuer.
The company intends to raise additional capital through private placements once
it gains a listing on a recognized exchange. We require significant capital over
the next twelve months, to develop the core functionality of our image
transaction software, solicit a large inventory of stock images from a
significant number of affiliated photographers and finance our sales and
marketing initiatives. We will require additional funds to establish our website
and build our inventory of stock images by soliciting stock images from
photographers throughout North America. If we are not successful in earning
revenues once we have established our initial transaction services and commenced
business operations, we may require additional financing to sustain business
operations. Currently, we do not have any arrangements for financing and can
provide no assurance to investors that we will be able to obtain financing when
required. Obtaining additional financing would be subject to a number of
factors, including the company's ability to subscribe a large number
contributing photographers and attract purchasers of stock photographic images
from the customer base of established stock image houses. These factors may have
an effect on the timing, amount, terms, or conditions of additional financing,
and make such additional financing unavailable to us. See "Description of
Business."
No assurance can be given that the company will obtain access to capital markets
in the future, or that financing, adequate to satisfy the cash requirements of
implementing our business strategies, will be available on acceptable terms. The
inability of the company to gain access to capital markets, or obtain acceptable
financing, could have a material adverse effect upon the results of its
operations and upon its financial conditions.
RISKS RELATED TO THIS OFFERING
INVESTING IN THE COMPANY IS A HIGHLY SPECULATIVE INVESTMENT AND COULD RESULT IN
THE LOSS OF YOUR ENTIRE INVESTMENT.
A purchase of the offered shares is significantly speculative and involves
significant risks. The offered shares should not be purchased by any person who
cannot afford the loss of his or her entire purchase price. The business
objectives of the company are also speculative, and we may be unable to satisfy
those objectives. The shareholders of the company may be unable to realize a
substantial return on their purchase of the offered shares, or any return
whatsoever, and may lose their entire investment in the company. For this
reason, each prospective purchaser of the offered shares should read this
prospectus and all of its exhibits carefully and consult with their attorney,
business advisor and/or investment advisor.
INVESTORS WILL PAY MORE FOR PHOTOMATICA'S COMMON STOCK THAN THE PRO RATA PORTION
OF OUR ASSETS ARE WORTH; AS A RESULT, INVESTING IN OUR COMMON STOCK MAY RESULT
IN AN IMMEDIATE LOSS.
The offering price and other terms and conditions regarding the company's shares
have been arbitrarily determined by the company and do not bear any relationship
to assets, earnings, book value or any other objective criteria of value.
Additionally, since the company has recently formed and has only a limited
operating history and no earnings, the price of the offered shares is not based
on its past earnings. No investment banker, appraiser, or other independent
third party has been consulted concerning the offering price for the shares or
the fairness of the offering price used for the shares.
The arbitrary offering price of $0.25 per common share as determined herein, is
substantially higher than the net tangible book value per share of Photomatica's
common stock. Photomatica's assets do not substantiate a share price of $0.25
per share. This premium in share price applies to the terms of this offering and
does not attempt to reflect any forward looking share price subsequent to the
company obtaining a listing on any exchange, or becoming quoted on the OTC
Bulletin Board.
SINCE THE COMPANY HAS 75,000,000 AUTHORIZED SHARES, THE COMPANY'S MANAGEMENT
COULD ISSUE ADDITIONAL SHARES, DILLUTING THE COMPANY'S CURRENT SHARE HOLDERS'
EQUITY.
The company has 75,000,000 authorized shares, of which only 10,200,000 are
currently issued and outstanding and will be issued and outstanding after this
offering terminates. The company's management could, without the consent of the
company's existing shareholders, issue substantially more shares, causing a
large dilution in the equity position of the company's current shareholders.
Additionally, large share issuances by the company would generally have a
negative impact on the company's share price. It is possible that, due to
additional share issuance, you could loose a substantial amount, or all, of your
investment.
SINCE WE ARE A DEVELOPMENT STAGE COMPANY, WE DO NOT ANTICIPATE PAYING DIVIDENDS
IN THE FORESEEABLE FUTURE.
We do not anticipate paying dividends on our common stock in the foreseeable
future, but plan rather to retain earnings, if any, for the operation, growth
and expansion of our business.
SECURITIES MARKET FACTORS.
There is currently no traded public market for the company's common stock. There
are no assurances that any public market will be established or maintained for
the company's stock. As a result, the offering price and other terms and
conditions relative to the company's shares have been arbitrarily determined by
the company and do not bear any relationship to assets, earnings, book value or
any other objective criteria of value. Additionally, as the company was formed
recently and has only a limited operating history and no earnings, the price of
the offered shares is not based on its past earnings and no investment banker,
appraiser or other independent third party has been consulted concerning the
offering price for the shares or the fairness of the offering price used for the
shares.
AS WE MAY BE UNABLE CREATE OR SUSTAIN A MARKET FOR THE COMPANY'S SHARES, THEY
MAY BE EXTREMELY ILLIQUID.
If no market develops, the holders of our common stock may find it difficult or
impossible to sell their shares. Further, even if a market develops, our common
stock will be subject to fluctuations and volatility.
The company cannot apply directly to be quoted on the NASD Over-The-Counter
Bulletin Board (OTC). Additionally, the stock may be listed or traded only to
the extent that there is interest by broker-dealers in acting as a market maker
in the company's stock. Despite the company's best efforts, the company may not
be able to convince any broker/dealers to act as market-makers and make
quotations on the OTC Bulletin Board. The company may consider pursuing a
listing on the OTCBB after this registration becomes effective and the selling
shareholders have completed their offering.
IN THE EVENT THAT THE COMPANY'S SHARES ARE TRADED, THEY MAY TRADE UNDER $5.00
PER SHARE AND THUS WILL BE A PENNY STOCK. TRADING IN PENNY STOCKS HAS MANY
RESTRICTIONS AND THESE RESTRICTIONS COULD SEVERLY AFFECT THE PRICE AND LIQUIDITY
OF THE COMPANY'S SHARES.
In the event that our shares are traded, and our stock trades below $5.00 per
share, our stock would be known as a "penny stock", which is subject to various
regulations involving disclosures to be given to you prior to the purchase of
any penny stock. The U.S. Securities and Exchange Commission (the "SEC") has
adopted regulations which generally define a "penny stock" to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. Depending on market fluctuations, our common stock could be
considered to be a "penny stock". A penny stock is subject to rules that impose
additional sales practice requirements on broker/dealers who sell these
securities to persons other than established customers and accredited investors.
For transactions covered by these rules, the broker/dealer must make a special
suitability determination for the purchase of these securities. In addition, he
must receive the purchaser's written consent to the transaction prior to the
purchase. He must also provide certain written disclosures to the purchaser.
Consequently, the "penny stock" rules may restrict the ability of broker/dealers
to sell our securities, and may negatively affect the ability of holders of
shares of our common stock to resell them. These disclosures require you to
acknowledge that you understand the risks associated with buying penny stocks
and that you can absorb the loss of your entire investment. Penny stocks are low
priced securities that do not have a very high trading volume. Consequently, the
price of the stock is often volatile and you may not be able to buy or sell the
stock when you want to.
SINCE OUR COMPANY'S SOLE OFFICER AND DIRECTOR CURRENTLY OWNS 68.6% OF THE
OUTSTANDING COMMON STOCK, INVESTORS MAY FIND THAT HIS DECISIONS ARE CONTRARY TO
THEIR INTERESTS.
The company's sole officer and director owns 68.6% of the outstanding shares and
will own 68.6% after this offering is completed by the selling shareholders. As
a result, he will be able to choose all of our directors and control the
direction of the company. The company's sole officer and director's interests
may differ from the interests of other stockholders. Factors that could cause
his interests to differ from the interests of other stockholders include the
impact of corporate transactions on the timing of business operations and his
ability to continue to manage the business given the amount of time he is able
to devote to the company.
All decisions regarding the management of the company's affairs will be made
exclusively by its sole officer and director. Purchasers of the offered shares
may not participate in the management of the company and, therefore, are
dependent upon the management abilities of the company's sole officer and
director. The only assurance that the shareholders of the company, including
purchasers of the offered shares, have that the company's sole officer and
director will not abuse his discretion in executing the company's business
affairs, is his fiduciary obligation and business integrity. Such discretionary
powers include, but are not limited to, decisions regarding all aspects of
business operations, corporate transactions and financing. Accordingly, no
person should purchase the offered shares unless that person is willing to
entrust all aspects of management to the company's sole officer and director, or
his successors. Potential purchasers of the offered shares must carefully
evaluate the personal experience and business performance of the company's
management.
THE COMPANY CANNOT PROVIDE ANY GUIDANCE AS TO THE FEDERAL TAX IMPLICATIONS OR
CONSEQUENCES OF THE PURCHASE OR SALE OF THESE SHARES.
Neither the company nor the selling shareholders have obtained a ruling from the
Internal Revenue Service, or the opinion of counsel, with respect to the federal
income tax consequences of this offering. Consequently, purchasers of the
offered shares must evaluate for themselves the income tax implications that
result from their purchase and possible subsequent sale of the offered shares.
RISKS RELATED TO INVESTING IN OUR COMPANY
AS THE COMPANY'S SOLE OFFICER AND DIRECTOR HAS OTHER OUTSIDE BUSINESS
ACTIVITIES, HE MAY NOT BE IN A POSITION TO DEVOTE A MAJORITY OF HIS TIME TO THE
COMPANY, WHICH MAY RESULT IN PERIODIC INTERUPTIONS OR BUSINESS FAILURE.
Mr. Kardos, our sole officer and director, has other outside business activities
and currently devotes approximately 5-10 hours per week to our operations. Our
operations may be sporadic and occur at times which are not convenient to Mr.
Kardos, which may result in periodic interruptions or suspensions of our
business plan. If the demands of the company's business require the full
business time of our sole officer and director, he is prepared to adjust his
timetable to devote more time to the company's business. However, he may not be
able to devote sufficient time to the management of the company's business,
which may result in periodic interruptions in implementing the company's plans
in a timely manner. Such delays could have a significant negative effect on the
success of the business.
KEY MANAGEMENT PERSONNEL MAY LEAVE THE COMPANY, WHICH COULD ADVERSELY AFFECT THE
ABILITY OF THE COMPANY TO CONTINUE OPERATIONS.
The company is entirely dependent on the efforts of its sole officer and
director. The loss of its sole officer and director, or of other key personnel
in the future, could have a material adverse effect on the business and its
prospects. The company believes that all commercially reasonable efforts have
been made to minimize the risks attendant with the departure by key personnel
from service. The company plans to continue these efforts in the future.
However, there is no guarantee that replacement personnel, if any, will help the
company to operate profitably. The company does not maintain key person life
insurance on any of its sole officer and director.
SINCE OUR SOLE OFFICER AND DIRECTOR HAS NO DIRECT EXPERIENCE IN THE STOCK IMAGE
SALES INDUSTRY, OR IN OPERATING A WEB BASED BUSINESS, THE COMPANY MAY NEVER BE
SUCCESSFUL IN IMPLEMENTING ITS BUSINESS STRATEGY, WHICH WILL RESULT IN THE LOSS
OF YOUR INVESTMENT.
Our sole officer and director has no direct experience in the sales and
marketing of stock photographic images, and has not operated a web based
business. As a result, our management may not be fully aware of many of the
specific requirements on operating a web based stock image house. Management's
decisions and choices may not account for the purchasing or sales strategies
which are commonly deployed in the stock photographic image industry, or in
operating online transaction businesses. Consequently our operations, earnings
and ultimate financial success could suffer irreparable harm due to management's
lack of experience in these areas. As a result, we may have to suspend or cease
operations, which will result in the loss of your investment.
IF THE COMPANY IS DISSOLVED, IT IS UNLIKELY THAT THERE WILL BE SUFFICIENT ASSETS
REMAINING TO DISTRIBUTE TO THE SHAREHOLDERS.
In the event of the dissolution of the company, the proceeds realized from the
liquidation of its assets, if any, will be distributed to the shareholders only
after the claims of the company's creditors, if any, are satisfied. In that
case, the ability of purchasers of the offered shares to recover all or any
portion of his or her purchase price for the offered shares will depend on the
amount of funds realized and the claims to be satisfied there from.
COMPENSATION MAY BE PAID TO OUR OFFICERS, DIRECTORS, AND EMPLOYEES REGARDLESS OF
THE COMPANY'S PROFITABILITY. SUCH PAYMENTS MAY NEGATIVELY AFFECT OUR CASH FLOW
AND THE ABILITY OF THE COMPANY TO FINANCE ITS BUSINESS PLAN, WHICH WOULD CAUSE
OUR BUSINESS TO FAIL.
The sole officer and director and any future employees of the company may be
entitled to receive compensation, payments and reimbursements regardless of
whether the company operates at a profit or a loss. Any compensation received by
our sole officer and director, or any other management personnel in the future,
will be determined from time to time by the Board of Directors. We expect to
reimburse our sole officer and director and any future management personnel for
any direct out-of-pocket expenses they incur on behalf of the company.
THERE IS A LIMITATION ON LIABILITY OF THE SOLE OFFICER AND DIRECTOR OF THE
COMPANY. INVESTORS IN THIS OFFERING MAY NOT FEEL COMFORTABLE INVESTING IN A
COMPANY WHOSE SOLE OFFICER AND DIRECTOR HAS LIMITED OR NO LIABILITY TO ITS
SHAREHOLDERS FOR DAMAGES.
The Articles of Incorporation of the company include a provision eliminating or
limiting the personal liability of the company's sole officer and director and
its shareholders for damages for breach of fiduciary duty as a director or
officer. Accordingly, the officer and director may have no liability to the
shareholders for any mistakes or errors of judgment or for any act of omission,
unless such act or omission involves intentional misconduct, fraud or a knowing
violation of law or results in unlawful distributions to the shareholders.
RISKS RELATED TO THE COMPANY'S MARKET AND STRATEGY
SINCE WE ARE A NEW COMPANY AND LACK AN OPERATING HISTORY, WE FACE A HIGH RISK OF
BUSINESS FAILURE, WHICH MAY RESULT IN THE LOSS OF YOUR INVESTMENT.
Photomatica is a development stage company formed recently to carry out the
activities described in this prospectus and thus has only a limited operating
history upon which an evaluation of its prospects can be made. We were
incorporated on February 22, 2006 and to date have been involved primarily in
organizational activities, software evaluation and market research; we have
transacted no business operations. Thus, there is no internal or industry-based
historical financial data, for any significant period of time, upon which to
estimate the company's planned operating expenses.
The company expects that its results of operations may also fluctuate
significantly in the future as a result of a variety of factors. These include,
among other factors, the entry of new competitors into the stock image online
sales industry, the introduction and acceptance of new or enhanced products or
services by the company or its competitors, our ability to anticipate and
effectively adapt to developing markets and rapidly changing internet
technologies, our ability to attract, retain, and motivate qualified personnel,
the initiation, renewal, or expiration of affiliated photographers, pricing
changes by the company or its competitors, specific economic conditions and
general economic conditions. Accordingly, our future sales and operating results
are difficult to forecast.
The company's anticipated expenses are relatively fixed in the short term and we
expect that they will be partially offset by our future revenues. The company
may not be able to adjust spending in a timely manner to compensate for any
unexpected revenue shortfall. Accordingly, any significant shortfall in relation
to its expectations would have an immediate adverse impact upon the company's
business, financial condition, and the results of its operations. In addition,
the company may decide from time to time to make certain pricing, service or
marketing decisions or acquisitions that could have a short-term material
adverse effect on its business, financial condition or the results of its
operations, and may not result in the long-term benefits intended. Due to all of
the foregoing factors, it is probable that in some future period the company's
operating results may be less than the expectations of public market analyses
and investors. In such event, the price of the company's securities, including
its common stock, would probably be materially adversely affected.
As of the date of this prospectus, we have earned no revenue. Failure to
generate revenue will cause us to go out of business, which will result in the
complete loss of your investment.
ABILITY OF THE COMPANY TO IMPLEMENT ITS BUSINESS STRATEGY.
Although the company intends to pursue a strategy of aggressively marketing our
stock image products and online transaction services, implementation of this
strategy will depend in upon a number of factors. These include our ability to
establish a significant base of affiliated photographers and customers, maintain
favorable relationships with photographers and customers, effectively design
acceptable products and services for its photographers and customers, obtain
adequate financing on favorable terms in order to fund its business, maintain
appropriate procedures, policies and systems, hire, train and retain skilled
employees, and to continue to operate within an environment of increasing
competition. The inability of the company to obtain or maintain any or all of
these factors could impair our ability to implement our business strategy
successfully, which could have a material adverse effect on the results of its
operations and its financial condition.
DUE TO THE COMPANY'S DEPENDENCE ON COMPUTER AND TELECOMMUNICATIONS
INFRASTRUCTURE AND COMPUTER SOFTWARE, ANY SYSTEMS DISRUPTIONS OR OPERATING
MALFUNCTIONS WOULD AFFECT THE COMPANY'S COSTS OF DOING BUSINESS AND COULD CAUSE
OUR BUSINESS TO FAIL.
The company's website is central to its business operations and sales and
marketing process. For example, we will rely upon the internet to contact
prospective affiliates, process, upload and catalog their digital photographic
images, display our images to prospective customer and to transact the purchase
of, and payment for, our stock images online. The company's success will be
dependent in large part on computer systems that deliver its content and the
networks that connect those computer systems, especially the e-commerce
connections that allow the company to collect revenues for the services it
provides. Moreover, computer and telecommunication technologies are evolving
rapidly and are characterized by short product lifecycles, which may require the
company to anticipate technological developments. There can be no assurance that
the company will be successful in anticipating, managing, or adopting such
technological changes on a timely basis or that it will have the resources
available to invest in new technologies. In addition, the company's business is
highly dependent on its computer and telecommunications equipment and software
systems, the temporary or permanent loss of which, resulting from physical
damage or operating malfunction, could have a material adverse effect on the its
business. Operating malfunctions in the software systems of financial
institutions, market makers and other parties may also have an adverse affect on
the operations of the company.
AS THE COMPANY'S PRODUCT WILL BE MARKETED THROUGH THE INTERNET, OUR BUSINESS
SUCCESS WILL BE SUBSTANTIALLY DEPENDANT ON THE CONTINUED GROWTH AND USE OF THE
INTERNET, THE STABILITY OF THE INTERNET INFRASTRUCTURE, AND THE COMPANY'S
ABILITY TO ADOPT AND MANAGE INTERNET BASED TECHNOLOGICAL CHANGES.
The market for internet products and services is characterized by rapid
technological developments, evolving industry standards and customer demands and
frequent new product introductions and enhancements. For example, to the extent
that higher bandwidth internet access becomes more widely available through
cable modems or other technologies, the company may be required to make
significant changes to the design and content of its online products and
services to compete effectively. Failure of the company to adapt to these or any
other technological developments effectively could adversely affect its
business, operating results, and financial condition. Increasing the size of the
company's user base is critical to increasing revenues. If the company cannot
increase the size of its user base, it may not be able to generate additional
revenues, which could leave it unable to maintain or increase its business. To
increase its user base, the company must (i) continuously update its content,
(ii) increase brand recognition through advertising and syndication, (iii)
enhance its technology to improve the functionality of its website and (iv)
offer attractive opportunities to electronic commerce sponsors and users. If the
company does not achieve these objectives to increase its user base, its
business could be harmed.
THE COMPANY WOULD BE DETRIMENTALLY HARMED TO THE POINT OF BEING UNABLE TO
CONTINUE DOING BUSINESS IF LITIGATION OVER COPYRIGHT INFRINGEMENT OR PROPERTY
RIGHTS WERE INITIATED ON ITS OWN ACCOUNT OR IN RESPONSE TO THE CLAIMS OF OTHERS.
There has been substantial litigation in both the computer and the publishing
industries regarding intellectual property rights. The company may not be able
to ensure that photographic images posted for sale on our website are genuinely
the property of the posting photographers. Third parties may, in the future,
dispute the ownership of images posted on our website. Third parties may claim
infringement by the company with respect to current or future photographic
content, online services, trademarks or other proprietary rights. The company
may be forced to counterclaim against any such parties in such claims. There is
also no assurance that the company will not be forced to initiate costly and
time-consuming litigation against third parties in order to protect against the
infringement or misappropriation of the company's intellectual property rights.
Any such claims or counterclaims could be time-consuming, result in costly
litigation, delay product releases, require the company to redesign or reproduce
its products or require the company to enter into royalty or licensing
agreements, any of which could have a material adverse effect upon its business,
operating results and financial condition. Such royalty or licensing agreements,
if required, may not be available on terms acceptable to the company, or at all.
THERE IS NO GUARANTEE THAT THERE WILL BE ANY SIGNIFICANT MARKET ACCEPTANCE FOR
THE COMPANY'S PRINCIPAL CONTENT OR SERVICES.
The strategy of the company for growth is substantially dependent upon its
ability to affiliate a large number of contributing photographers, develop a
large inventory of stock images and market its content and services successfully
to prospective customers. There can be no assurance that its online image
processing and transaction services will achieve significant acceptance among
the photographic community, or that its photographic content and services will
achieve significant market acceptance among publishers and other traditional
purchasers of stock photographic images. Such acceptance, if achieved, may not
be sustained for any significant period of time. There is no guarantee that any
substitute services or products we develop will be sufficient to permit the
company to recover our associated costs. Failure of the products of the company
to achieve or sustain market acceptance could have a material adverse effect on
our business, financial conditions and the results of our operations.
INTERNET MARKETING METHODS ARE SUBJECT TO RAPID CHANGE AND THERE IS NO ASSURANCE
THAT THE COMPANY WILL BE ABLE KEEP PACE WITH THE RATE OF CHANGE.
The internet has changed marketing patterns in a wide variety of industries. The
significance of personal computer usage may lead to entirely new methods of
marketing and sales of services and products. The company may not be able to
keep pace with the rate of change in its markets brought about by the internet
and may invest in internet-based projects that future changes may render
obsolete.
THE COMPANY'S BUSINESS MAY BE NEGATIVELY AFFECTED BY THE COMPANY'S INABILITY TO
CONTROL UPLOADED CONTENT.
The company is not currently subject to direct regulation by any government
agency in the United States, other than regulations applicable to businesses
generally and there are currently few laws or regulations directly applicable to
commerce on the internet. Due to the increasing popularity and use of the
internet, it is possible that a number of laws and regulations may be adopted
with respect to the internet, relating to issues such as user privacy, pricing,
characteristics and quality of products and services. For example, the company
may be subject to the provisions of the recently enacted Communications Decency
Act (the "CDA") should the company fail to assure that the content uploaded to
our website meets the decency standards established by this statute. The
constitutionality of the CDA, the manner in which the CDA will be interpreted
and enforced and its effect on operations cannot be determined at this time.
However, it is possible that the CDA could expose the company to substantial
liability. The CDA could also reduce the growth in use of the internet generally
and decrease the acceptance of the internet as a communications and commercial
medium and could, thereby, have a material adverse effect on our business, the
results of our operations, and our financial condition. A number of other
countries also have enacted, or may enact, laws that regulate internet content.
Other nations, including Germany, have taken actions to restrict the
distribution of material deemed to be objectionable on the internet and the
European Union has recently adopted privacy and copyright directives that may
impose additional burdens and costs on the company's international operations.
THE COMPANY CANNOT OFFER ANY ASSURANCES THAT IT WILL RECEIVE SIGNIFICANT
REVENUES OR CAN ACHIEVE OPERATING PROFITS. IF THE COMPANY CANNOT MAKE A PROFIT,
SHAREHOLDERS MAY LOSE THEIR ENTIRE INVESTMENT.
The company may be unable to develop consistent revenues or its operations may
fail to profit.
THERE IS A RISK THE COMPANY COULD LOSE ITS ABILITY TO CONTINUE ITS CONTENT AND
SERVICES OR DISCONTINUE OPERATIONS IF IT EXPERIENCES UNINSURED LOSSES OR AN ACT
OF GOD.
The company may, but is not required to, obtain comprehensive liability and
other business insurance of the types customarily maintained by similar
businesses. There are certain types of extraordinary occurrences, however, which
may be either uninsurable or not economically insurable. For example, in the
event of a major earthquake or other natural disaster, the company's internet
content delivery infrastructure could be rendered inoperable for protracted
periods of time, which would adversely affect its financial condition. In the
event of a war, terrorist attack or other major civil disturbance, the company's
operations could be adversely affected. Should such an uninsured loss occur, the
company could lose significant revenues and financial opportunities in amounts
that would not be partially or fully compensated by insurance proceeds.
THE COMPANY'S ENTIRE BUSINESS STRATEGY IS DEPENDENT ON THE SALE OF ITS
PHOTOGRAPHIC CONTENT AND THE DEVELOPMENT OF NEW CONTENT. IF THE COMPANY IS
UNABLE TO ACHIEVE ITS SALES ESTIMATES IT MAY FAIL AND SHAREHOLDERS MAY LOSE
THEIR INVESTMENT.
The strategy of the company for growth may be substantially dependent upon its
ability to market and distribute content successfully and may require it to
introduce successful new products and services. Other companies, including those
with substantially greater financial, marketing and sales resources, compete
with the company. There can be no assurance that the company will be able to
market and distribute its products and services on acceptable terms, or at all.
There can be no assurance that the company will be able to develop new products
and services that will be commercially successful. Failure to market its
products and services successfully, or develop, introduce and market new
products and services successfully, could have a material adverse effect on the
company's business, financial condition, or results of operations.
THE COMPANY IS DEPENDANT ON THIRD-PARTY PROVIDERS FOR CERTAIN SERVICES AND MAY
NOT BE ABLE TO CONTINUE OPERATIONS IF THERE IS A DISRUPTION IN THE SUPPLY OF
SUCH SERVICES, OR IF THEIR SERVICES ARE OF POOR QUALITY.
The company will depend upon third party independent photographers to supply our
inventory of photographic content. Further, we plan on retaining independent
contractors to provide essential services to the company. For example, we plan
to retain third party independent software developers to provide our online
image processing and e-commerce transaction systems. The company also
anticipates hiring contractors to build its website. Such third party suppliers
and contractors have no fiduciary duty to the shareholders of the company and
may not perform as expected. Inasmuch as the capacity for certain services by
certain third parties may be limited, the inability of those third parties, for
economic or other reasons, to provide adequate services could have a material
adverse effect upon the results of our operations and financial condition.
THE COMPANY MAY NOT BE ABLE TO MARKET ITS PRODUCTS VIA THE INTERNET AND MAY LOSE
MARKET SHARE AS A RESULT.
The internet has changed traditional marketing patterns in a wide variety of
industries. The significance of personal computer usage may lead to entirely new
methods of marketing and sales of services and products. The company may not be
able to keep pace with the rate of change in its markets brought about by the
internet and may need to move towards traditional non-electronic sales,
marketing and distribution schemes which could adversely affect the companies
ability to meet its business objectives.
RISKS RELATED TO INVESTING IN OUR INDUSTRY
AS THE COMPANY'S PRODUCTS ARE INTENDED FOR USE IN THE PRINTING, PUBLISHING AND
E-PUBLISHING INDUSTRIES, A DOWNTURN IN THESE INDUSTRIES WOULD REDUCE THE DEMAND
FOR OUR SERVICES AND PRODUCTS AND COULD MAKE OUR BUSINESS UNPROFITABLE.
In addition to traditional purchasers of stock photographic images, such as
publishers of print media, the company has identified a growing market among
electronic publications, such as online newsletters, for its low cost digital
photographic content. Many factors could lead to a downturn in the e-publishing
industry, such as the risk of additional government regulation of the internet
discussed above. Any such industry downturns would restrict our target market
and adversely affect the company's ability to conduct its business and achieve
profitability.
THE COMPANY'S BUSINESS STRATEGY ANTICIPATES INTERNATIONAL SALES. THERE IS
SIGNIFICANT RISK ASSOCIATED WITH DOING BUSINESS IN INTERNATIONAL MARKETS AND THE
COMPANY MAY FAIL TO MEET SALES LEVELS REQUIRED IN ORDER TO REMAIN IN BUSINESS.
An aspect of the company's strategy is to promote and commercially exploit its
content and services in international markets. There is no assurance that the
company will be able to market and operate its content and services in foreign
markets successfully. In addition to the uncertainty as to the company's ability
to generate revenues from foreign operations and create an international
presence, there are certain risks inherent in doing business internationally,
such as unexpected changes in regulatory requirements, export restrictions,
trade barriers, difficulties in staffing and managing foreign operations, longer
payment cycles, problems in collecting accounts receivable, political
instability, fluctuations in currency exchange rates, seasonal reductions in
business activity in certain parts of the world and potentially adverse tax
consequences which could adversely impact the success of the company's
international operations. There can be no assurance that one or more of such
factors will not have a material adverse effect on the company's potential
future international operations and, consequently, on the company's business,
operating results and financial condition.
GENERAL COMPETITION.
The company has identified a market opportunity for low cost stock digital
images produced by amateur and less established professional photographers and
sold over the internet. Our business model is novel in that we will allow
contributing photographers to retain ownership of their images. Competitors may
enter this segment of the stock image sales industry with superior transaction
software and services, thus rendering our services and products obsolete and
nullifying our competitive advantage. There may be companies in certain vertical
markets, such as such a traditional stock image houses, that are better financed
and have long standing business relationships with photographers and publishers,
our primary potential customers. For example, Getty One has a user friendly
website where its large inventory of stock photographic images may be previewed
and purchased by prospective customers. There can be no guarantee that such
pre-existing companies will not mimic Photomatica's unique business model and
transaction services, allowing less established photographers a venue for their
work and providing low cost images to our prospective customers in the
publishing business. This would infringe on our client and customer base and
have an adverse affect upon our business and the results of our operations.
An example of such competitive developments is the recent emergence of so-called
"micro stock" photography houses. Microstock photography is an offshoot of
traditional (macro) stock photography. What defines a company as a microstock
photography company is that they (1) source their images almost exclusively via
the internet, (2) do so from a wider range of photographers than the traditional
stock agencies (including a willingness to accept images from "amateurs" and
hobbyists) and (3) sell their images at a very low rate (anywhere from $.20 -
$10) for a royalty-free image. The pioneer of microstock photography was Bruce
Livingston when he created iStockphoto, originally a free stock photo site that
quickly became an industry phenomenon. Many newer companies have attempted to
duplicate iStockphoto's business model ShutterStock, Fotolia, BigStockPhoto and
Dreamstime are among the competitors to iStockphoto, all with hundreds of
thousands of photos available for download.
OTHER TECHNOLOGICAL FACTORS.
The market for stock photographic images sold over the internet is characterized
by rapidly changing technology that could result in the obsolescence, or short
life cycle, of our e-commerce services. These market characteristics are
exacerbated by the emerging nature online transaction technology and the fact
that in the near future many companies are expected to introduce stock image
products and services similar to those offered by the company. Similarly, web
based businesses are characterized by continuous development and introduction of
new services and technologies to replace outdated services and technologies.
Accordingly, the ability of the company to compete in this industry will depend
upon its ability to continually enhance and improve its services, and to provide
new and innovative services. There can be no assurance that competitors will not
develop services or technologies that render those of the company obsolete or
less marketable. In addition, there can be no assurance that the company's
services will prove to be sufficiently robust in wide spread commercial
application.
FORWARD LOOKING STATEMENTS
This prospectus contains certain statements that constitute "forward-looking
statements", within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995, regarding management's plans and objectives for future operations,
including plans and objectives relating to our planned entry into the stock
photography and e-commerce sales industry. 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. Any statements that express or involve discussions with
respect to predictions, business strategy, budgets, developments opportunities
or projects, the expected timing of transactions or other expectations, beliefs,
plans, objectives, assumptions or future events or performance are not
statements of historical fact and may be deemed "forward-looking statements".
Forward-looking statements are based upon expectations, estimates and
projections at the time the statements are made that involve a number of known
and unknown risks and uncertainties which could cause actual results or events
to differ materially from those Photomatica anticipates.
The forward-looking statements and associated risks set forth in this prospectus
include or relate to, among other things, (a) our projected profitability, (b)
our growth strategies, (c) anticipated trends in our industry, (d) our ability
to obtain and retain sufficient capital for future operations, and (e) our
anticipated needs for working capital. These statements may be found under
"Management's Discussion and Analysis or Plan of Operation" and "Description of
Business," as well as in this prospectus generally. Actual events or results may
differ materially from those discussed in these forward-looking statements as a
result of various factors, including, without limitation, the risks outlined
under "Risk Factors" and matters described in this prospectus generally. In
light of these risks and uncertainties, the forward-looking statements contained
in this prospectus may not in fact occur.
The forward-looking statements herein are based on current expectations that
involve a number of risks and uncertainties. Such forward-looking statements are
based on the assumptions that we will be able to continue our business
strategies on a timely basis, that we will attract customers, that there will be
no material adverse competitive or regulatory changes in the conditions under
which our business operates, that our sole officer and director will remain
employed as such, and that our forecasts accurately anticipate market demand.
The foregoing assumptions are based on judgments with respect to, among other
things, future economic, competitive and market conditions, and future business
decisions, all of which are difficult or impossible to predict accurately and
many of which are beyond our control. Accordingly, although we believe that the
assumptions underlying the forward-looking statements are reasonable, any such
assumption could prove to be inaccurate and therefore there can be no assurance
that the results contemplated in forward-looking statements will be realized.
In addition, as disclosed elsewhere in this "Risk Factors" section of this
prospectus, there are a number of other risks inherent in our business and
operations which could cause our operating results to vary markedly and
adversely from prior results or the results contemplated by the forward-looking
statements. Increases in the cost of developing and maintaining our stock
photography systems and services or in our general or administrative expenses,
or the occurrence of extraordinary events, could cause actual results to vary
materially from the results contemplated by these forward-looking statements.
Management decisions, including budgeting, are subjective in many respects and
subject to periodic revisions in order to reflect actual business conditions and
developments. The impact of such conditions and developments could lead us to
alter our marketing, capital investment or other expenditures and may adversely
affect the results of our operations. In light of the significant uncertainties
inherent in the forward-looking information included in this prospectus, the
inclusion of such information should not be regarded as a representation by us
or any other person that our objectives or plans will be achieved.
AVAILABLE INFORMATION
Photomatica filed a registration statement on Form SB-2 with the Securities and
Exchange Commission, under the Securities Act of 1933, covering the securities
in this offering. As permitted by rules and regulations of the Commission, this
prospectus does not contain all of the information in the registration
statement. For further information regarding both Photomatica, Inc. and the
securities in this offering, we refer you to the registration statement,
including all exhibits and schedules, which may be inspected without charge at
the public reference facilities of the Commission's Washington, D.C. office, 100
F Street, N.E., Washington, D.C. 20549. Copies may be obtained upon request and
payment of prescribed fees.
USE OF PROCEEDS
Photomatica, Inc. will not receive any proceeds from the sale of the securities
being registered pursuant to this statement on behalf of the selling
shareholders.
DETERMINATION OF OFFERING PRICE
As there is no established public market for our shares, the offering price and
other terms and conditions relative to our shares have been arbitrarily
determined by Photomatica and do not bear any relationship to assets, earnings,
book value, or any other objective criteria of value. In addition, no investment
banker, appraiser or other independent third party has been consulted concerning
the offering price for the shares or the fairness of the offering price used for
the shares.
The price of the current offering is fixed at $0.25 per share. This price is
significantly greater than the price paid by the company's sole officer and
director for common equity since the company's inception on February 22, 2006.
The company's sole officer and director paid $0.001 per share, a difference of
$0.249 per share lower than the share price in this offering.
SELLING SECURITY HOLDERS
Photomatica is registering, for offer and sale, shares of common stock held by
certain selling security holders listed below. The selling security holders may
offer their shares for sale on a continuous or delayed basis pursuant to Rule
415 under the 1933 Act.
To date, no steps have been taken to list Photomatica's common stock on any
public exchange. We intend to apply for listing on a public exchange as soon as
meeting listing requirements; however, there is no assurance that Photomatica
will be granted a listing. Moreover, even if we are granted a listing for our
common stock, the selling shareholders will be limited to selling the shares at
$0.25 per share (the set offering price per share pursuant to this prospectus)
until the shares are quoted on the Over-The-Counter (OTC) Bulletin Board or an
exchange.
All of the shares registered herein will become tradable on the effective date
of this registration statement. The following table sets forth information as of
the date of this offering, with respect to the beneficial ownership of our
common stock both before and after the offering. The table includes all those
who beneficially own any of our outstanding common stock and are selling their
shares in the offering. The company is not aware of any selling security holders
being a broker-dealer or being affiliated with a broker-dealer.
NOTE: As of the date of this prospectus, our sole officer and director, Alain
Kardos, owns 7,000,000 common shares, which are subject to Rule 144
restrictions. There are currently thirty-three (33) shareholders of our common
stock.
The percentages determined in these calculations are based upon the 10,200,000
of our common shares issued and outstanding as of the date of this prospectus.
The following table shows the number of shares and percentage before and after
this offering:
_______________________________________________________________________________________________________________________
NAME AND ADDRESS OF OWNERSHIP % TOTAL SHARES TOTAL SHARES AFTER %
BENEFICIAL OWNERS OF BEFORE BEFORE OFFERED FOR OFFERING OWNED AFTER
COMMON STOCK OFFERING OFFERING SALE OFFERING
(1)
_______________________________________________________________________________________________________________________
Alain Kardos 7,000,000 68.6% 7,000,000 7,000,000 68.6%
_______________________________________________________________________________________________________________________
Peter J. Chalmers 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Eric Gamley 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Krister Kottmeier 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Karl Kottmeier 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Zulfikar Mamdami 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Shamir Mamdani 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Arka Chorbajian 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Leigh Anne Sojonky 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Rahoul Sharan 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Kershaw Enterprises, Inc. 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Derek Pink 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Ivano Veschini 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Sohail Pasha Sheikh 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Norman Ali 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Sandra Collins 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Frank Savereux 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Bridget Abt 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Sunanda Savereux 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Christina Fellows 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Terry Fellows 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Peter Dunfield 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Brenda Argut 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Ergun Argut 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Gurshawan Atwal 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Lakhbir Atwal 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Tatayana Ribnitska 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Ken Babakaiff 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Olga Sidorenko 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Anthony Collins 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Natalia Sidorenko 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Ellisia Faedo 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
Tiberio Faedo 100,000 .98% 100,000 0 0%
_______________________________________________________________________________________________________________________
<FN>
(1) Based on 10,200,000 common shares outstanding prior to the primary offering
</FN>
EXCEPT AS PURSUANT TO APPLICABLE COMMUNITY PROPERTY LAWS, THE
PERSONS NAMED IN THIS TABLE HAVE SOLE VOTING AND INVESTMENT POWER
WITH RESPECT TO ALL SHARES OF COMMON STOCK.
As a group, the 32 selling security holders are hereby registering 3,200,000
common shares. The price per share is $0.25 and will remain so unless and until
the shares are quoted on the Over-The-Counter (OTC) Bulletin Board or an
exchange. The selling security holders may sell at prevailing market prices or
privately negotiated prices only after the shares are quoted on either the OTC
Bulletin Board or an exchange (please see "Plan of Distribution" below).
The shares owned by the selling security holders were acquired in May, June,
July and August of 2006. We issued a total of 3,200,000 common shares for
consideration of $16,000, which was accounted for as a purchase of common stock.
The shares owned by the selling security holders are being registered pursuant
to Rule 415 of the General Rules and Regulations of the Securities and Exchange
Commission, which Rule pertains to delayed and continuous offerings and sales of
securities. In regard to the shares offered under Rule 415, Photomatica
undertakes in Part II of this registration statement to keep this registration
statement current during any period in which offers or sales are made pursuant
to Rule 415.
In the event the selling security holders receive payment for the sale of their
shares, Photomatica will not receive any of the proceeds from such sales.
Photomatica is bearing all expenses in connection with the registration of the
shares of the selling security holders.
To our knowledge, none of the selling security holders has either (1) had a
material relationship with Photomatica, other than as a shareholder as noted
above, at any time since inception (February 22, 2006) or (2) ever been an
officer or director of Photomatica
PLAN OF DISTRIBUTION
The selling security holders are registering 3,200,000 shares of common stock
for possible resale at the price of $0.25 per share. The percentage of the total
outstanding common stock being offered by the selling shareholders is
approximately 31.4% based upon the 10,200,000 common shares that are issued and
outstanding as of the date of this prospectus. There is no arrangement to
address the possible effect of the offerings on the price of the stock.
Photomatica will not receive any proceeds from the sale of the shares by the
selling security holders. The price per share is $0.25 and will remain so unless
and until the shares are quoted on the Over-The-Counter (OTC) Bulletin Board or
an exchange. The selling security holders may sell at prevailing market prices
or privately negotiated prices only after the shares are quoted on either the
OTC Bulletin Board or an exchange. However, Photomatica's common stock may never
be quoted on the OTC Bulletin Board or listed on any exchange.
If and when the common stock is quoted on the OTC Bulletin Board or listed on an
exchange, the selling security holders' shares may be sold to purchasers from
time to time directly by, and subject to the discretion of, the selling security
holders. Further, the selling security holders may occasionally offer their
shares for sale through underwriters, dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the selling security holders and/or the purchasers of the shares for whom
they may act as agents. The shares sold by the selling security holders may be
sold occasionally in one or more transactions, either at an offering price that
is fixed or that may vary from transaction to transaction depending upon the
time of sale, or at prices otherwise negotiated at the time of sale. Such prices
will be determined by the selling security holders or by agreement between the
selling security holders and any underwriters.
In the event that the selling security holders enter into an agreement, after
the effective date of this Registration Statement, to sell their shares through
a broker-dealer that acts as an underwriter, Photomatica will file a
post-effective amendment to this Registration Statement and to file the
agreement as an exhibit to the amended Registration Statement. The amendment
will identify the underwriter, provide the required information on the plan of
distribution and revise the appropriate disclosures in the Registration
Statement.
Any underwriter, dealer, or agent who participates in the distribution of the
securities registered in this Registration Statement may be deemed to be an
"underwriter" under the Securities Act. Further, any discounts, commissions or
concessions received by any such underwriter, dealer or agent may be deemed to
be underwriting discounts and commissions under the Securities Act. If and when
a particular offer is made by or on the behalf of the selling security holders,
we will prepare a registration statement, including any necessary supplements
thereto, setting forth the number of shares of common stock and other securities
offered and the terms of the offering, including:
(a) the name or names of any underwriters, dealers, or agents, the
purchase price paid by any underwriters for the shares purchased from
the selling security holders, and
(b) any discounts, commissions and other items constituting compensation
from the selling security holders, and
(c) any discounts, commissions or concessions allowed, realized or paid to
dealers, and
(d) the proposed selling price to the public.
Pursuant to Regulation M of the General Rules and Regulations of the Securities
and Exchange Commission, no person engaged in a distribution of securities on
behalf of a selling security holder may simultaneously bid for, purchase or
attempt to induce any person to bid for or purchase securities of the same class
during the period of time starting five business days prior to the commencement
of such distribution and continuing until the selling security holder, or other
person engaged in the distribution, is no longer a participant in the
distribution.
In order to comply with the applicable securities laws of certain states, the
securities will be offered or sold in such states only through registered or
licensed brokers or dealers in those states. In addition, in certain states, the
securities may not be offered or sold unless they have been registered or
qualified for sale in such states or an exemption from such registration or
qualification requirement is available and with which Photomatica has complied.
In addition and without limiting the foregoing, the selling security holders
will be subject to applicable provisions, rules and regulations under the
Exchange Act with regard to security transactions during the period of time when
this Registration Statement is effective.
Photomatica will pay all expenses incidental to the registration of the shares
(including registration pursuant to the securities laws of certain states) other
than commissions, expenses, reimbursements and discounts of underwriters,
dealers or agents, if any.
LEGAL PROCEEDINGS
We are not a party to any material legal proceedings and to our knowledge; no
such proceedings are threatened or contemplated by any party.
MANAGEMENT
OFFICERS AND DIRECTORS
Our sole director serves until his successor is elected and qualified. Our sole
officer is elected by the Board of Directors to a term of one (1) year and
serves until his successor is duly elected and qualified, or until he is removed
from office. The Board of Directors has no nominating or compensation
committees. The company's current Audit Committee consists of our sole officer
and director.
The name, address, age, and position of our present officer and director is set
forth below:
Name and Address Age Position(s)
Alain Kardos 58 President, Secretary/Treasurer,
303 - 1050 Bowron Court Chief Financial Officer and
North Vancouver, British Columbia Chairman of the Board of Directors.
Canada V7H 2X6
The person named above has held his offices/positions since inception of our
company and is expected to hold his offices/positions at least until the next
annual meeting of our stockholders.
BACKGROUND OF OFFICERS AND DIRECTORS
Mr. Alain Kardos brings extensive experience as a corporate executive and an
entrepreneur. Alain has had successful senior executive careers with Nortel and
Wang Computers. In the USA he founded Kardos-Long Inc., a sports, promotion and
marketing company responsible for promoting America's return to Grand Prix
racing.
Already a successful entrepreneur, Alain returned to Canada and from 1998 until
2000 assisted Avcan Corp., a CDNX listed company, develop a US presence.
From January 2000 until January 2001 he was president and CEO of Fibre Crown
Manufacturing Inc., a Vancouver based manufacturing company which under his
direction became a publicly traded company.
From January 2001 to October 2004, Alain was the President, CEO and Director of
Image Innovations Holdings, Inc., a sports and entertainment marketing company
focused on branding products licensed by the NFL, NHL, and ABC Sports. Alain's
strategic thinking and strong focus on sales and marketing has been invaluable
to the development and expansion of Image Innovations Holdings, Inc.
CONFLICTS OF INTEREST
At the present time, the company does not foresee any direct conflict of
interest between Mr. Kardos' other business interests and his involvement in
Photomatica.
EXECUTIVE COMPENSATION
SUMMARY OF COMPENSATION
Photomatica has made no provisions for paying cash or non-cash compensation to
its sole officer and director. No salaries are being paid at the present time
and none will be paid unless and until our operations generate sufficient cash
flows.
The following table sets forth the compensation paid by us from inception on
February 22, 2006 through July 31, 2006. The compensation addresses all
compensation awarded to, earned by, or paid to our named executive officer up to
July 31, 2006. This information includes the dollar value of base salaries,
bonus awards and number of stock options granted and certain other compensation,
if any.
Summary Compensation Table
Long-Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securities
Restricted
Other Under Shares or Other
Annual Options/ Restricted Annual
Names Executive Compensation SARs Share LTIP Compensation
Officer and Year Salary Bonus Granted Units Payouts
Principal Ended (US$) (US$) (US$) (#) (US$) (US$) (US$)
Position
Alain Kardos 2006 0 0 0 0 0 0 0
President
We have did not pay any salaries in 2006. We do not anticipate beginning to pay
salaries until we have adequate funds to do so. There are no other stock option
plans, retirement, pension or profit sharing plans for the benefit of our
officers and director other than as described herein.
LONG-TERM INCENTIVE PLAN AWARDS
We do not have any long-term incentive plans that provide compensation intended
to serve as incentive for performance.
EMPLOYMENT AGREEMENTS
At this time, Photomatica has not entered into an employment agreement with our
sole officer and director. If there is sufficient cash flow available from our
future operations, the company may in the future enter into employment
agreements with our sole officer and director or future key staff members.
INDEMNIFICATION
Under our Articles of Incorporation and Bylaws of the corporation, we may
indemnify an officer or director who is made a party to any proceeding,
including a lawsuit, because of his position, if he acted in good faith and in a
manner he reasonably believed to be in our best interest. We may advance
expenses incurred in defending a proceeding. To the extent that the officer or
director is successful on the merits in a proceeding as to which he is to be
indemnified, we must indemnify him against all expenses incurred, including
attorney's fees. With respect to a derivative action, indemnity may be made only
for expenses actually and reasonably incurred in defending the proceeding, and
if the officer or director is judged liable, only by a court order. The
indemnification is intended to be to the fullest extent permitted by the laws of
the State of Nevada.
Regarding indemnification for liabilities arising under the Securities Act of
1933, which may be permitted to directors or officers under Nevada law, we are
informed that, in the opinion of the Securities and Exchange Commission,
indemnification is against public policy, as expressed in the Act and is,
therefore, unenforceable.
PRINCIPAL STOCKHOLDERS
The following table sets forth, as of the date of this prospectus, the total
number of shares owned beneficially by our sole officer and director and key
employees, individually and as a group and the present owners of 5% or more of
our total outstanding shares. The table also reflects what his ownership will be
assuming completion of the sale of all shares in this offering. The stockholder
listed below has direct ownership of his shares and possesses sole voting and
dispositive power with respect to the shares.
Name and Address Number of Shares Number of Shares Percentage of
Beneficial Ownership [1] Before the Offering After Offering Ownership After the
Assuming all of the Offering Assuming
Shares are Sold all of the Shares
are Sold
Alain Kardos, 7,000,000 7,000,000 68.6%
303 - 1050 Bowron Court
North Vancouver, BC
Canada V7H 2X6
All Officers and Directors 7,000,000 7,000,000 68.6%
as a Group (1 person)
<FN>
[1] The person named above may be deemed to be a "parent" and "promoter" of
our company, within the meaning of such terms under the Securities Act of
1933, as amended, by virtue of his direct and indirect stock holdings. Mr.
Kardos is the only "promoter" of our company.
</FN>
FUTURE SALES BY EXISTING STOCKHOLDERS
On March 6, 2006, a total of 7,000,000 shares of common stock were issued to our
sole officer and director, all of which are restricted securities, as defined in
Rule 144 of the Rules and Regulations of the SEC promulgated under the
Securities Act. Under Rule 144, the shares can be publicly sold, subject to
volume restrictions and restrictions on the manner of sale, commencing one year
after their acquisition. Under Rule 144, a shareholder can sell up to 1% of
total outstanding shares every three months in brokers' transactions. Shares
purchased in this offering, which will be immediately resalable, and sales of
all of our other shares after applicable restrictions expire, could have a
depressive effect on the market price, if any, of our common stock and the
shares we are offering.
Our sole officer and director will continue to own the majority of our common
stock after the offering, regardless of the number of shares sold. Since he will
continue to control our company after the offering, investors in this offering
will be unable to change the course of our operations. Thus, the shares we are
offering lack the value normally attributable to voting rights. This could
result in a reduction in value of the shares you own because of their
ineffective voting power. None of our common stock is subject to outstanding
options, warrants or securities convertible into common stock.
DESCRIPTION OF SECURITIES
COMMON STOCK
Our authorized capital stock consists of 75,000,000 shares of common stock, par
value $0.001 per share. 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;
* 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;
* do not have preemptive, subscription or conversion rights and there are no
redemption or sinking fund provisions or rights;
* and are entitled to one non-cumulative vote per share on all matters on
which stockholders may vote.
We refer you to the Bylaws of our Articles of Incorporation and the applicable
statutes of the State of Nevada for a more complete description of the rights
and liabilities of holders of our securities.
NON-CUMULATIVE VOTING
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. After this offering is completed, our
founder and sole officer and director will own approximately 68.6% of our
outstanding shares.
CASH DIVIDENDS
As of the date of this prospectus, we have not declared or paid any cash
dividends to stockholders. The declaration of any future cash dividend will be
at the discretion of our Board of Directors and will depend 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.
ANTI-TAKEOVER PROVISIONS
There are no Nevada anti-takeover provisions that may have the affect of
delaying or preventing a change in our control. Provisions 78.378 through
78.3793 of the Nevada Revised Statutes relates to control share acquisitions
that may delay to make more difficult acquisitions or changes in our control.
However, these provisions only apply when we have 200 or more stockholders of
record, at least 100 of whom have addresses in the State of Nevada appearing on
our stock ledger, and we do business in this state directly or through an
affiliated corporation. Neither of the foregoing events seems likely to occur.
Currently, we have no Nevada shareholders and, since this offering will not be
made in the State of Nevada, no shares will be sold to Nevada residents.
Further, we do not do business in Nevada directly or through an affiliate
corporation and we do not intend to do business in the State of Nevada in the
future. Accordingly, there are no anti-takeover provisions that have the affect
of delaying or preventing a change in our control.
REPORTING
After we complete this offering, we will not be required to furnish you with an
annual report. Further, we will not voluntarily send you an annual report. We
will be required to file reports with the SEC under section 15(d) of the
Securities Act. The reports will be filed electronically. The reports we will be
required to file are Forms 10-KSB, 10-QSB, and 8-K. You may read copies of any
materials we file with the SEC at the SEC's Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC also maintains an Internet site that will contain copies of the reports we
file electronically. The address for the Internet site is www.sec.gov.
STOCK TRANSFER AGENT
We have not engaged the services of a transfer agent at this time, however,
within the next twelve months we anticipate doing so. Until such a time a
transfer agent is retained, Photomatica will act as its own transfer agent.
STOCK OPTION PLAN
The Board of Directors of Photomatica has not adopted a stock option plan
("Stock Option Plan"). The company has no plans to adopt a stock option plan but
may choose to do so in the future. If such a plan is adopted, this plan may be
administered by the board or a committee appointed by the board (the
"Committee"). The committee would have the power to modify, extend or renew
outstanding options and to authorize the grant of new options in substitution
therefore, provided that any such action may not, without the written consent of
the optionee, impair any rights under any option previously granted. Photomatica
may develop an incentive based stock option plan for its officers and directors
and may reserve up to 10% of its outstanding shares of common stock for that
purpose.
STOCK AWARDS PLAN
The company has not adopted a Stock Awards Plan, but may do so in the future.
The terms of any such plan have not been determined.
DESCRIPTION OF BUSINESS
COMPANY HISTORY
Photomatica, Inc. ("Photomatica") is a development stage company, incorporated
on February 22, 2006, in the State of Nevada, to enter into the stock
photographic image online sales industry, specializing in low cost but high
quality images. The company intends to create an affiliate-based website,
branded "Photomatica.com," where the company's content is available for viewing,
purchasing and downloading. The company plans to solicit its photographic
originals from photographers and create an inventory of stock images available
for online viewing. The company plans to attend meetings of professional
photographers throughout North America that attract the photographers required
to contribute content to the company's website. The website includes still
photographic images, illustrations, clip art and video clips.
To date, the company's operations have been limited to researching our
e-commerce business model and software systems. We have not yet implemented our
business model or developed our subscription-based website. To date, we have
generated no revenues from our operations.
Photomatica has provided the following information concerning the company and
its business for inclusion in this offering. The information contained herein
does not purport to be all-inclusive or to contain all the information that a
prospective investor may desire. This information contains statements that
constitute "forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Any statements that express or involve
discussions with respect to predictions, business strategy, budgets,
developments opportunities or projects, the expected timing of transactions or
other expectations, beliefs, plans, objectives, assumptions or future events or
performance are not statements of historical fact and may be "forward-looking
statements". Forward-looking statements are based on expectations, estimates and
projections at the time the statements are made that involve a number of known
and unknown risks and uncertainties which could cause actual results or events
to differ materially from those anticipated by Photomatica, Inc.
COMPANY DESCRIPTION
Photomatica, Inc. owns a website located at www.Photomatica.com. This website
will feature content including digital images, video clips and clip art.
Customers will be able to freely browse our inventory of stock images and
download thumbnail sketch samples of stock images. However, customers must pay
the contributing photographer to download the usable images.
Photomatica will generate revenues by charging its affiliated photographers a
sale commission of approximately 30% on all sales transacted on the company'
website. The target audience is publishers looking to purchase high quality
digital images.
Photomatica is a business designed for the new digital economy. The key features
of the Photomatica system are:
Digital Product.
Digital Transaction.
Digital Delivery.
Business-to-Business
The advantage of this type of business is greatly reduced costs. Unlike
companies that sell physical products, Photomatica's products are digital in
nature and do not require brick and mortar facilities to warehouse products and
consequently no staff is required to manage inventory and prepare orders.
Likewise, monetary transactions and the delivery of purchases are accomplished
digitally, so no sales and fulfillment staff are required and no shippers,
drivers or vehicles are needed.
Photomatica takes advantage of a computer's ability to efficiently handle
repetitive processes with more speed and accuracy that humans can. The computer
will not replace staff completely, but will greatly reduce their numbers. Staff
will be required in the areas of administration, marketing and support and
wherever possible, information we gain from staff activities will be used to
further automate the Photomatica's processes.
MARKET OPPORTUNITY
The worldwide digital content market, including the market for stock digital
photographic images, reached $2.9 billion annually as of 2004 and was then
estimated to reach $3.2 billion in 2005.
Getty Images, the largest stock agency in North America, had annual sales in
2005 of $733 million.
Getty Images has spent more than $1 billion in the past couple of years buying
other agencies (24 in total) including: The Image Bank ($183 million, 30 million
images), and Photodisc (the largest on the internet), and has invested $50
million in digitizing some of their images.
Corbis, founded in 1989 and wholly owned by Microsoft Chairman, Bill Gates owns
several collections including the Bettman archive (17 million images) and Sygma
(the European Press Agency, 40 million images). Corbis employs 850 people and
currently has annual revenues of $228 million.
Corbis mostly owns their images and has 65 million images in total, of which 2.1
million are digitized.
PRODUCT DESCRIPTION
Photomatica is an online stock image transaction application. Photomatica is
similar to other online stock image agency websites in that it has the
capabilities for corporations and individuals to purchase image usage rights
online and to take digital delivery of the image electronically.
For the average professional photographer stock photography agencies are not all
that accessible, in fact it is quite difficult for photographers to have their
photographs listed with a stock agency. The agencies prefer to deal with a
smaller number of photographers that will in turn commit to providing the agency
with a large body of work. Usually photographers must provide an initial body of
500 or more acceptable and marketable images and commit to providing additional
images over time.
In addition, agencies usually take physical possession and control of the
photographer's images and restrict the photographer's ability to sell their own
images thereafter. Taking possession and control of these images means that the
agency has to have staff to edit, digitize, catalog and store the images.
Photographic images are fragile and need to be stored in temperature and
humidity controlled environments, further adding to the agency's overhead and
potential liability.
Stock image agencies may also buy out entire collections of images and then have
no further business relationship with the photographer.
FEATURES AND FUNCTIONALITY FOR PHOTOGRAPHERS
Photographers require all of the functions associated with uploading and
cataloging images, negotiating with clients and transacting and delivering
images to the client. The website will have all of these features and the
functionality necessary to manage them. The second objective is to make the
photographer's interface with this functionality as intuitive and simple as
possible. The photographer will be able to use the Photomatica website to:
o Set-up an account
o Login
o Manage image processing:
o Image upload
o Image cataloging
o Image management
o Viewing rooms
o Maintain account management (monetary)
o Enter into negotiations
o Use templates for their own website transaction capability.
o FAQ's Help, and Support
o Terms of Service agreement
o Maintain legal ownership.
ACCOUNT SETUP
Photographers wishing to participate with Photomatica will be directed to a
section of the website that contains information about the service, the Terms of
Service agreement (TOS) and a registration form. Photographers will need to
supply a real name and address as payments can only be made to the name on file
and sent to the corresponding address. Accounts can be setup in real-time and
the photographer can begin using the service right away.
To avoid fraud, the system will perform several checks on the registration and
flag the account for staff intervention if anomalies appear (Postal code or
phone number does not match address, PO box instead of street address, free
web-based email address, etc.) If the registration appears to be fraudulent, a
staff member will follow-up to determine if the person registering is bona fide
and will also scrutinize the uploads to see if they conform to the TOS.
Fraudulent accounts will be closed and the person warned about legal action if
they persist. Fraudulent registration attempts will be logged so that if the
same information is used in a future registration staff will be alerted.
A change of address will require an email confirmation from the registered
client to prevent having payments re-routed to an unauthorized individual.
LOGIN
Photographers will be allowed to choose a username and password to access their
account area and will be able to change their password at will.
IMAGE PROCESSING
IMAGE UPLOAD
Photographers will have a section where they can manage the upload of
raw images. The images must be in one of a prescribed number of image
formats that the website supports. Images can be uploaded immediately
or can be scheduled for automatic upload during quiet periods when
there is little or no demand on computer time or internet access. Raw
images will sit in a holding area accessible only to the photographer
until cataloged.
IMAGE CATALOGING
When the photographer wishes to make the image accessible to the
public, they must first catalog the image. The cataloging is
fundamental to the client search capabilities. The process involves the
following steps:
o Generate an FPO image (for position only), proof and thumbnail. This
is done with the websites image processing software. The FPO image will
have the word "Photomatica" in outline across the image to prevent
unauthorized use and the FPO image may be downloaded freely by clients
and visitors without charge.
o With the proof image open in front of him the photographer will begin
to supply information about the image, using radio buttons to choose
between things like indoor/outdoor, urban/suburban/nature,
day/night/artificial light, etc.
Images can be cataloged using various parameters, including:
o Text area to identify the main subject(s) using keywords
o Text area to identify the background using keywords.
o Text area to add intangibles such as business, moody, dynamic, etc.
o Geographic Location
SET THE ACCESSIBILITY
o Econo - Lower prices images with restrictions on usage. Client must
specify Econo in search parameters
o Standard - Comes up in normal searches and is purchasable at standard
pricing.
o Gold - Comes up in searches but has pricing set by photographer or by
negotiation.
o Restricted - Images do not come up in searches but photographer can
control who sees them by setting up Viewing Rooms with passwords. Can
be used where image contains nudity or something that is of
questionable content.
o Private - Only the photographer can see the image. Used where
photographer does not want the image to be publicly available at this
time.
SWEAR TO OWNERSHIP, MODEL RELEASES AND TOS.
A series of accept buttons will cause the photographer to avow that
they are the owner of the image, that model releases are secured for
recognizable people in the image, and that other site conditions are
met.
MANAGEMENT
Photographers will be able to look at all or any of their images on
file individually or collectively in a list view. Information available
includes:
Image status (Standard, Gold, Restricted, Private),
- How many times an image has been viewed and downloaded as an FPO
- How many times an image has been purchased and by who
- How many Client portfolios the image is in
- What star ratings Clients have indicated
- How many Client photographer lists the photographer is on
- Overall Photomatica image sales statistics and averages
- How the photographer ranks among his peers in terms of sales and
images on file.
Some information will be statistical only. For example, when an image
is in a client's portfolio, in order to prevent photographers from
soliciting that client, the photographer will not know which client has
chosen the image.
Information will also be available regarding the image types that are
popular with purchasers and the types of images that are successful.
PORTFOLIOS
Photographers will be able to organize their images into their own
separate portfolios to better manage their online database of images.
Photographers can have as many portfolios as they wish and each can be
named to indicate the type of images that it contains. These portfolios
are for the photographers use only and will not be visible to clients.
IMAGE ACCESSIBILITY
ECONO
Images can be put into this category by the photographer and appear in
searches where the client has specifically searched in this category.
Images are about 1/2 the price of Standard images and some restrictions
on their use will apply. Images in the Standard classification can be
reclassified by the system based upon certain factors, including, lack
of sales, overall low sales for the photographer or recommendations by
Photomatica.
STANDARD
Images put into this category by the photographer become available at
standard Photomatica rates and conditions. Price is based on the
resolution chosen in pixels and the intended usage must conform to
Photomatica's usage guidelines for Standard images. Images placed in
this category by the photographer must conform to "Content Guidelines"
established by Photomatica. Images in the Standard category are fully
searchable by clients. Images in the Standard category can be purchased
for commercial or editorial use (different rates apply).
GOLD
Image placed in the Gold category by photographers are deemed to have
more commercial value than Standard images and are purchased using the
negotiation forms provided on the website. Images placed in this
category by the photographer must conform to "Content Guidelines"
established by Photomatica. Images in the Gold category are fully
searchable by clients
RESTRICTED
The restricted category is primarily used where the content is outside
the Content Guidelines for Standard and Gold images but still within
Content Guidelines for the site. For example, an artistic nude can be
placed in the Restricted category, but a photo depicting sexual acts
cannot be placed anywhere on Photomatica. Restricted images do not
appear in standard searches. Images in the restricted category can be
purchased using the Negotiation forms provided.
PRIVATE
The photographer uses the private category for images that they do not
want to come up in any searches or be visible to the public in any way.
The private category is used by a photographer to withhold images from
the public, while still keeping them on the system.
VIEWING ROOMS
Viewing rooms are used when the photographer wishes to control access to certain
images. Any number of restricted (as well as Standard and Gold) images can be
placed in a viewing room and photographers can setup up to 50 separate viewing
rooms. Viewing rooms will all have their own unique URL, along with usernames
and passwords. The photographer may communicate a viewing room's URL, username
and password to clients by email and the client will have access to all images
within that viewing room.
ACCOUNT INFORMATION
Monetary information about the photographers account: sales to date,
year-to-date, etc.
o ACCOUNT BALANCE - Money owed to the photographer or in some cases by
the photographer.
o SALES NOTIFICATION - When an image is sold and the credit card
transaction has been approved an email notice will be sent to the
photographer confirming the sale.
o TRANSACTIONS - The ability to look at a list of all transactions or to
look at an individual transaction in more detail. Invoice and payments
will indicate that the transaction took place between the client and
the photographer.
o PAYMENT REQUEST - All payments are made when the photographer makes a
"Payment Request" by filling out a form as to how much he would like to
be paid. The system will do a double-check of payments, sales and
rejected credit cards, make sure that the photographer's request is
valid and then will automatically write a check or other credit
document.
o USER FEES - After the photographer's free period expires (either 6
months or 1 year) annual site admin fees will start. Proposed fees are
$60.00 annually in advance. These fees will help to clear the system of
photographers that are not using the system effectively and provide
some means of revenue from unsuccessful sellers who may wish to stay on
the system in spite of a lack of sales. Unpaid user fees will result in
account termination after several notices.
o COMPARISON STATISTICS - Sales statistics regarding a photographer's
sales in general and how he/she compares with other photographers.
Statistics will include the number of images on file, the total sales
to date, the average number of images on file per sale, the top 10
photographers in terms of sales, the images on file, the top selling
images and the average number of images per photographer.
o FAQ'S AND SUPPORT - Users may experience problems with the payment
system or may have disagreements as to how much is owed to them. As
much information as possible about a photographers account will be
available, as well as a number to call to speak to an account
representative.
o EXISTING CLIENTS - When a photographer signs up with Photomatica, they
can list their existing clients with the Photomatica system. The
existing clients feature is used in the "First Contact" rule discussed
below. Photographers can deal with their existing clients through the
Photomatica system and receive a reduced commission rate. Photomatica
will abide by terms and not use this information to contact the client
to solicit business.
o ACCOUNT CLOSURE - Photographers may choose to close their accounts at
any time. They will be advised that all images and catalog information
will be deleted and any outstanding balance will be paid. In the event
that a photographer owes Photomatica money, the debt will be forgiven
on closure. Accounts may also be terminated by Photomatica for having
an unpaid balance, inactivity or violation of the TOS (terms of
service) agreement. All accounts will be backed-up daily prior to
closing.
NEGOTIATIONS
It may be the case that a proposed image use falls outside the standard usage
conditions or that some images are so special that individual pricing is
necessary. Photomatica will provide photographers and purchasers with the
ability to conduct negotiations for image usage rights. Purchasers will fill out
an online form and state the intended use, circulation and audience and then
submit it to the photographer for a quotation. The photographer will be
immediately notified by email that someone has requested a quote. They will then
logon to the system and read the request. They can either ask clarifying
questions or submit a quotation.
The Photomatica system will be able to assist the photographer in their
quotation by providing ranges that other photographers have used in similar
situations. The prospective purchaser can either accept the offer, reject it or
counter offer. When Photomatica is available in other languages the system will
allow negotiations to take place with each user working in their native
language. Negotiations will be considered to be between the photographer and the
client, with Photomatica merely supplying the interface.
TEMPLATES FOR PHOTOGRAPHER'S WEBSITE
Photographers will have the ability to use a section in their own website for
selling stock images. Photomatica will make template pages available to the
photographer to use on their website. Photographers or their respective
webmasters will configure and install the templates on their website giving them
transaction and delivery capabilities. The transactions will be routed through
Photomatica and to the purchaser it will seem that they are conducting their
business with the photographer only. A small link to Photomatica will be placed
on the template pages.
The photographer will have all the functionality necessary to conduct direct
sales, including the ability to register a prospective purchaser and gather
credit card information. Credit card information will not be visible to the
photographer. For photographers that lack the necessary web skills to set-up
their own web pages, Photomatica will provide a paid service to create and
upload the pages.
Clients that are not already registered with Photomatica will be treated as the
photographer's Client exclusively and the information on file will not be
available to Photomatica's marketing department. This does not prevent
Photomatica from marketing to this Client should the Client's contact
information become available to the marketing department from other sources, nor
does it prevent the Client from independently discovering Photomatica and
registering.
As part of this arrangement, Photomatica will ask for a reciprocal link back to
the Photomatica system. If the Photographer's website visitor does not find what
they want, they can follow a link that says "for more images, visit
Photomatica". We can use our programming to identify where new users of the
Photomatica system came from and reward the photographer for new visitors, new
clients and any subsequent sales the client makes. This will in effect work as
an affiliate program and bring new visitors and potentially new clients from
potentially millions of websites around the world
FIRST CONTACT RULE
Photographers will be entitled to a lower commission rate on their own website
with the following proviso:
THE CLIENT MUST NOT HAVE PREVIOUSLY VIEWED THE PHOTOGRAPHER'S WORK ON THE
PHOTOMATICA SYSTEM. If the client is already a registered Photomatica user and
has viewed any images of the photographer in question, the commission will be at
the Photomatica rate even if the client is using the photographer's website for
the transaction. The exception to this is when a photographer has listed the
client as one of their existing clients when registering or has added the client
to their list prior to the client registering with Photomatica and/or viewing
any of the photographer's work.
Photographers will have an opportunity to list their existing clients with
Photomatica when setting up their initial account, when setting up their own
website templates for image transaction and delivery and have an opportunity to
add clients at any later date as they get new clients. Conflicts will be
identified immediately during listing. If the system detects that a client being
added by the photographer is already registered and has previously viewed the
photographer's work on the Photomatica system, then the listing will be rejected
as being the photographer's client and will be deemed to be Photomatica's
client. Photographers may dispute the decision by providing proof of previous
dealings with the client (e.g., a purchase order or invoice).
The photographer's client list is only for the purpose of determining commission
rates and will not be used by Photomatica for any other purpose. All invoices
and payment statements to photographers at the higher commission rate will
indicate the client's status and the date they joined the Photomatica system.
FAQ'S AND HELP
In order to minimize the human intervention required for photographers to get
set-up with Photomatica, extensive online FAQ's, tutorials, examples and
screenshots will be available. Telephone support will be available, but with
potentially millions of photographer users and the service being free for a
period, human support will need to be minimized or charged for. All support
incidents will be analyzed to see if the online help facility can be updated to
prevent similar inquiries from requiring human intervention.
TERMS OF SERVICE AGREEMENT (TOS)
All photographer users will be subject to TOS agreements during registration and
with each new image upload and cataloging and with each transaction. Each time a
user presses a submit button they will be agreeing to the terms of service. The
TOS is designed to protect Photomatica from litigation and to prevent abuse of
the system.
Since photographers must provide real names and addresses in order to be paid
and because they will invest time in uploading and cataloging their images, the
threat of account termination will be an effective deterrent to abuse.
Serious breaches of the system that may result in immediate termination or
suspension include:
o Uploading images that photographer does not own.
o Model releases not available or complaints from the model in question.
o Inappropriate images as defined by our image guidelines (pornography, overt
sexuality, disturbing images, hate, racism, etc)
o Keyword loading - adding non applicable keywords to come up in searches
better.
o Inappropriate behavior with clients (rudeness, insults, berating client)
o Unpaid account balance. o Bypassing Photomatica to deal with the client
directly*.
*Note: Photographers are permitted to negotiate paid assignments with any
Photomatica client, however they are obligated by the TOS agreement to sell
stock images to Photomatica clients only through the Photomatica system, except
where they have listed the client under the First Contact proviso.
To ensure that Photomatica is dealing with bona fide individuals and to ensure
the smooth and problem free operation of the Photomatica system, we will have
some checks in place when photographers register and are new to the system:
o Address/postal code match from database
o Area code/address match from database
o Free web based email flag
o Follow-up phone call for suspicious registrations
o Probationary period where uploads may be monitored
o Ability for clients and other photographers to report violations
o A legal fund and a zero tolerance stance to abuse
o IP blocking.
FEATURES AND FUNCTIONALITY FOR PURCHASERS OF STOCK IMAGES
CASUAL BROWSERS
People not registered as purchasers will have the ability to search for and
browse the images on Photomatica and will be able to download FPO images. They
will not have the ability to make portfolios or purchase images until they have
registered with Photomatica
CLIENT REGISTRATION
New users of the system must register once to receive a username and password
that will allow them to build portfolios and purchase image rights. Registration
requires that the individual or business provide an address and a valid credit
card number.
CLIENT FEATURES
Purchasers will be able to search using the same criteria that the photographers
use to catalog their images. They can specify indoor or outdoor, color or black
and white, natural or artificial light, use subject keywords and background
keywords and recently added images. They can restrict their searches to Econo,
Standard or Gold rate images. Any image retrieved and scrutinized will have
choices available that will assist the searcher both in this search and in
future searches. Image selections will have the following checkboxes and buttons
associated with them:
o Purchase commercial or editorial rights (Standard images).
o Negotiate rights (Gold images and Restricted images)
o Download an FPO image (640 X 480 pixel watermarked image).
o Add an image to a specific portfolio (a user can have an unlimited number of
named portfolios).
o Allow an image in future searches (an image may come up again if the criteria
matches).
o Delete an image from future searches (eliminates inappropriate images from
future searches).
o Omit previously viewed images from searches.
o Add a photographer to a list (adds a photographer to one of several shortlists
for future reference).
o Omit a photographer from future searches (eliminates all of a particular
photographer's work from future searches).
o Report TOS violation (if the image appears to contravene the TOS guidelines)
o Viewing Rooms - clients will have access to Viewing Rooms where the
photographer has granted and communicated that access.
PORTFOLIOS
A registered user may create portfolios at any time and move images into and out
of portfolios or from one portfolio to another whenever they choose. Portfolios
can be named to help identify the kinds of images they contain (e.g., business
people, technology, motion, general), for specific projects (e.g., "March
Newsletter"), or even for the name of the photographer.
Over time the process of eliminating images and adding to portfolios will allow
the user to more quickly find the images they need.
STAR RATING
Images in Client portfolios can be given a star rating from 1-5 and Portfolios
can be re-sorted placing the highest rated images at the top or filtered to only
allow top level images to show.
PURCHASE IMAGE RIGHTS
For standard uses the image is sold according to size in pixels up to the
maximum available from the original upload. For sizes beyond the maximum upload
size, negotiation forms must be used to contact the photographer and the
photographer will have to rescan and deliver the higher resolution image (or
provide the original).
30 DAY GRACE PERIOD.
Any image purchased can be refunded within 30 days by canceling the order on the
Photomatica website and by avowing that the image was not used in any way.
(Photographers will have to wait 30 days before being paid).
NEGOTIATING RIGHTS
Photomatica will provide forms that potential purchasers can use to negotiate a
one time use price from the photographer. The forms will have text boxes to
describe the use, the intended audience, the circulation and the form the image
will be used in. When the form is submitted, the photographer will receive an
email notification and will logon to Photomatica in response. Forms will allow
for counter-offerings and when accepted will deliver the image in digital form,
if that is what is agreed upon. If the agreement involves using the original
image, it is incumbent on the photographer to deliver the image and take any
necessary precautions to safeguard it.
FIND PHOTOGRAPHERS
In the process of searching for images, the purchaser may come across
photographers of interest that they may want to note for future reference. The
Photomatica system will include a biographical page for photographers listing
their name, a short bio and photo, their spoken language(s), the photographer's
accreditations and awards, their clients and the campaigns they have been
involved in. Photomatica clients can easily add a photographer to one of several
Photographer Lists so that the photographer can be easily referenced for future
projects. Full contact information is provided on the bio page and direct
contact between client and photographer is permitted and even encouraged, as
long as any stock image transactions are done through Photomatica.
TERMS OF SERVICE (TOS)
Purchasers will be required to adhere to a terms of Service agreement as well.
Primarily they will be promising to honor the system of purchasing stock images
through Photomatica and not going directly to the photographer except where they
wish to hire the photographer for an assignment. Photomatica does not require or
expect a commission from any arrangement they may agree upon as long as it does
not involve stock images.
The TOS will also make it clear that when purchasing image rights, the agreement
is directly with the photographer and not through Photomatica. It will be
incumbent on the photographer to conduct any due diligence to ensure that the
image was used according to the agreement. Any disputes will be between the
client and the photographer. Photomatica will not become involved in individual
disputes, but will use its TOS agreements to ensure that parties conduct
themselves in a respectful and dignified manner. Purchasers will be given some
degree of latitude since they are the primary source of revenue but will be
barred from the system if they repeatedly breach the TOS.
MODULAR SYSTEM
One can think of this database as a collection of related modules that contain
either data or business process functionality, or in some cases, combinations of
the two. By using a modular approach, data exists in a separate module from the
functionality of the system and will not be affected by upgrades to the business
process module. It also means that we can roll out the company in two or more
stages. Once Phase One of building the system is complete, the photographers can
begin to add images to the Photomatica system while we continue work on the
Client functionality module and Administration module.
COMPETITIVE ADVANTAGES
Photomatica differs from other stock image services in several respects: It is
open to all photographers, illustrators, cinematographers and digital artists
worldwide even if they only have a small number of marketable images.
Photomatica functions somewhat like a photographer's co-operative where members
have access to common services that are not otherwise available to photographers
on an individual basis: marketing services, a large pool of clients, online
searchable database of images and monetary transaction processing capabilities.
Many photographers have websites, but virtually none of them have the
capabilities that Photomatica provides. It is neither practical nor economically
feasible for an individual photographer to have these kinds of capabilities.
Photomatica not only provides access to these capabilities through the
Photomatica system, but it also allows photographers to have these capabilities
available on their own website.
In a traditional stock agency, agency staff take physical possession of the
photographer's images and perform the functions necessary to edit, digitize,
upload and catalog them. With Photomatica, photographers retain possession and
control of their images and do the editing, digitizing, uploading and cataloging
of their images themselves, resulting in reduced staff requirements for
Photomatica and no expensive climate controlled storage facilities. This also
results in lower commission rates so photographers retain more of the proceeds
of the sale than with traditional stock agencies.
________________________________________________________________________________
TRADITIONAL STOCK IMAGE HOUSES PHOTOMATICA
________________________________________________________________________________
Represents only a few photographers and it Open to all photographers
is difficult for photographers to join. worldwide, easy for a
photographer to join.
________________________________________________________________________________
Require a significant and exclusive No minimum number of images and
commitment on the part of the photographer. no exclusivity.
________________________________________________________________________________
Own images outright or have exclusive Photographers retain ownership
rights to images. and control of their images.
________________________________________________________________________________
Retain possession of images and require Photographers retain possession.
staff and archival storage facilities. Handling and archival storage
done by photographers.
________________________________________________________________________________
Staff required to handle, edit and catalog, Photographers upload digital
and store images. Transactions often require images to system and catalog the
staff intervention. images themselves. Transactions
automated or between parties.
________________________________________________________________________________
Commission rates 40% to 60% of revenue to Photographers pay 30% commission
cover higher overhead. making Photomatica a more
economical choice.
________________________________________________________________________________
Clients have a reduced diversity of image Greater diversity of styles due
style due to fewer numbers of photographers. to larger number of
photographers.
________________________________________________________________________________
ADVANTAGES TO PHOTOGRAPHERS
It is very difficult for photographers to register with a stock agency. Stock
agencies have the luxury of picking and choosing which photographers they want
to deal with and for the most part they are able to dictate the conditions and
commission rates to the photographers. Stock agencies represent only a small
fraction of professional photographers and the remainder have very limited
options for selling stock images.
It is technically difficult and expensive for an individual photographer to set
up digital image transaction and delivery capabilities on their own website. In
addition setting up digital transaction and delivery is no guarantee that people
will find the photographer's website in searches or that they will find an image
they need among a relatively small body of work.
By participating in Photomatica, photographers will enjoy:
o The ability to sell stock images online to a worldwide audience
o Their own online portfolio, bio, and online image database in the Photomatica
system.
o Exposure from Photomatica's ongoing marketing and promotion to businesses.
o The ability to sell and deliver stock images from the photographer's own
website.
o New assignments and clients from Photomatica introductions
ADVANTAGES TO IMAGE PURCHASERS
In time, Photomatica could represent a much larger number of photographers and
illustrators than all other stock agencies combined. This will result in a
diversity of styles, content, culture, and geography. Photomatica's number of
images on file could conceivably surpass those of the top agencies, making
Photomatica one of the top choices to go to find stock images. Photomatica will
also be a resource for people looking for a photographer. The diversity of
styles, content and culture will provide for a rich variety of choices for
companies and individuals looking to hire a photographer.
Photomatica will have a category of images designated "Econo", which will make
low cost images available to small entities such as community publications,
websites, and charitable organizations. Econo images will allow photographers to
market images that would not otherwise be salable through standard sock image
website. Customers searching for images will be able to tailor their search to
include, exclude or restrict their search to the Econo class of images.
One of the keys to the success of Photomatica will be its intelligent search
engine that will allow clients to find the image they want in a short period of
time. The search engine will allow for refining the initial search by excluding
certain results, saving potential candidates to one of a number of portfolios
and removing certain images and even photographers from future searches.
One of the major keys to the company's success will be subscriber loyalty
through the regular addition of new contributing photographers and content. The
company attends various photographic competitions and conventions to find new
talent and content for the company's website.
Photomatica is designed to be international, multi-lingual in scope. The service
will be designed so that users of the system will be able to operate in their
language of choice and over time, translation capabilities will be incorporated
so that users of the system will still be able to communicate and negotiate even
though they do not speak the same language. English will be the primary
language, and languages will be added over time as Photomatica expands into
foreign markets. The anticipated additional languages in the early stages
include: Japanese, Spanish, German, French, Russian and Chinese.
MARKETING
The internet product and services industry has developed some time tested
marketing techniques that are still valid in today's market environment.
Internet marketing can be very cost effective in branding a product to a very
large audience. These techniques include non-spam direct mail initiatives,
registration with well-established industry-wide search engines and reciprocal
marketing arrangements with similar websites.
Photomatica, Inc. plans to promote the awareness of the www.photomatica.com
website through a marketing plan that consists of nine major components:
1. Register the website with Internet search engines.
2. List the website on free directories.
3. Develop link exchanges with similar websites.
4. Provide free sample content to other websites to drive traffic to our
website.
5. Post information on bulletin boards.
6. Post free sample content on related newsgroups.
7. Sponsor photographer searches on the Internet.
8. Sponsor photography competitions.
9. Develop non-spam direct email campaigns.
The company intends to register the www.photomatica.com website on as many
Internet search engines as is practical. Photomatica believes that the most
important search engine on which it can register the website is the Google
search engine because many other search engines, such as Lycos and Excite, use
it as a primary source for their search results.
A link exchange means that Photomatica places a link to a related website on the
www.photomatica.com website. In exchange, the related website reciprocates by
placing a link to www.photomatica.com on their website. The company anticipates
being able to establish at least 60 link exchanges within the next twelve
months.
The initial marketing push will be towards encouraging photographers to join
Photomatica and upload and catalog their images. Marketing efforts may include:
Participating in photographic trade shows.
Direct marketing.
Magazine and online advertising.
Approaching Photographic organizations such as ASMP, PPAC, PPABC.
The company believes that some of its competitive strengths include the branding
of www.photomatica.com domain name, ease of use of the website and quality of
content. The company intends to build strong brand recognition and increase the
amount of products and services offered as the company builds its website and
increases exposure on the Internet by advertising and search engine
registration.
REVENUE MODEL
The methods by which Photomatica will generate revenue from the system include:
Commission Fees
From sales on the Photomatica website: 30% of the sale price to
Photomatica. (this compares to (50-70% for standard stock agencies.)
From sales from the photographer's own website using Photomatica's
transaction processing: 15% of the sale.
User fees
After the "Free Trial" period (6 months or 1 year): $60/year paid in advance.
Free Trial: At the outset, a core group of photographers may be given a
2 year free trial, along with reduced transaction fees to encourage
early adoption and to build a large body of stock images. Subsequent
photographers will be given a 1 year free trial and after the system
has an adequate number of photographers and stock images, the free
trial period may be reduced to 6 months. Since it will take a
significant investment in time and effort for a photographer to build a
large store of images, and consequently begin enjoying sales, we feel
that 6 months is the minimum period for a Free Trial.
Help and Support (photographers)
Setting up a photographer's website with templates for transactions:
$250
Support Contracts: For help for photographers beyond what is freely
available from the website or after 3 (free) support calls.
Banner advertising
On the photographer's section - Photo related advertising. On the
purchasers section - Business related advertising.
Photomatica owned Images
Photomatica may at times decide to purchase an image collection
outright and make it available on the Photomatica system. Sales of
these images will result in 100% of transaction fees going to
Photomatica.
Licensing of the Photomatica System
To photographers associations and organizations, competitor stock
agencies, and/or re-purposed for other digital files (audio, CADD,
animation).
STAFFING
As of October 31, 2006, Photomatica has no permanent staff other than its sole
officer and director, Mr. Alain Kardos, who is the President and Chairman of the
company. Mr. Kardos is employed elsewhere and has the flexibility to work on
Photomatica up to 10 hours per week and is prepared to devote more time, as may
be required. He is not being paid at present.
EMPLOYEES AND EMPLOYMENT AGREEMENTS
At present, Photomatica has no employees other than its current sole officer and
director, Mr. Kardos, who has not been compensated. There are no employment
agreements in existence. The company presently does not have, pension, health,
annuity, insurance, stock options, profit sharing or similar benefit plans;
however, the company may adopt plans in the future. There are presently no
personal benefits available to the company's director.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This section of the prospectus includes a number of forward-looking statements
that reflect our current views with respect to future events and financial
performance. You should not place undue certainty on these forward-looking
statements, which apply only as of the date of this prospectus. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ materially from our plans or predictions.
Please see the section of this prospectus entitled "Forward Looking Statements".
COMPANY OVERVIEW
We are a development-stage company organized to enter into the online sales
industry specializing stock photographic images. We have recently commenced
business operations and have not generated any revenues.
Our auditors have issued a "going concern" opinion. This means that there is
substantial doubt that we can continue as an on-going business for the next
twelve months unless we obtain additional capital to pay our bills. This is
because we have not generated any substantial revenues and no substantial
revenues are anticipated until we have completed the financing anticipated in
this offering. Accordingly, we must raise cash from sources other than from the
sale of our content and services. Our only other source for cash at this time is
investments by others in this offering. We must raise cash to implement our
business strategy and stay in business. The amount of the offering will likely
allow us to operate for at least one year. Our success or failure will be
determined by our ability to pay for and develop new content and services.
As of October 31, 2006, Photomatica had $13,988 cash on hand and in the bank.
Management believes this amount will satisfy our cash requirements for the next
twelve months or until such time that additional proceeds are raised. We plan to
satisfy our future cash requirements - primarily the working capital required
for the development of our e-commerce systems and marketing campaign and to
offset legal and accounting fees - by additional equity financing. This will
likely be in the form of private placements of common stock. There is no
additional offering planned at present.
Management believes that if subsequent private placements are successful, we
will generate sales revenue within the following twelve months thereof. However,
additional equity financing may not be available to us on acceptable terms or at
all, and thus we could fail to satisfy our future cash requirements.
If Photomatica is unsuccessful in raising the additional proceeds through a
private placement offering it will then have to seek additional funds through
debt financing, which would be highly difficult for a new development stage
company to secure. Therefore, the company is highly dependent upon the success
of the anticipated private placement offering described herein and failure
thereof would result in Photomatica having to seek capital from other resources
such as debt financing, which may not even be available to the company. However,
if such financing were available, because Photomatica is a development stage
company with no operations to date, it would likely have to pay additional costs
associated with high risk loans and be subject to an above market interest rate.
At such time these funds are required, management would evaluate the terms of
such debt financing and determine whether the business could sustain operations
and growth and manage the debt load. If Photomatica cannot raise additional
proceeds via a private placement of its common stock or secure debt financing it
would be required to cease business operations. As a result, investors in
Photomatica's common stock would lose all of their investment.
The staged procurement of our e-commerce systems will continue over the next 12
months. Other than this software procurement, Photomatica does not anticipate
researching any further products or services. Photomatica does not expect the
purchase or sale of plant or any significant equipment and Photomatica does not
anticipate any change in the number of our employees. Photomatica's current
material commitments include the total costs of the planned offering as provided
herein, estimated at $4,498.
Photomatica has no current plans, preliminary or otherwise, to merge with any
other entity.
PLAN OF OPERATION
One of the advantages of working with database applications is that they can be
developed in stages and expanded and enhanced over time. Over the 12 month
period starting upon the effective date of this registration statement, the
company must raise capital and start the staged procurement of online image
processing and e-commerce transaction software. During the first stage of our
software procurement, the company expects to source free share ware applications
that will enable our photographers to catalog their own work and upload it to
their own websites. The company expects to begin offering this free share ware
within 90 days of the effective date of this registration statement. People
downloading the freeware product will be required to supply their email address
and will subsequently be advised of updates to the software. Overlapping this
procurement stage we will be sourcing the image upload and cataloging system,
required in advance of client functionality. We expect to source this software
within 180 days of the effective date of this registration statement.
As soon as the upload and cataloging functions are ready, the existing base of
professional photographers will be contacted and invited to join the new system.
In conjunction with this marketing initiative, we will begin to proactively
encourage amature photographers to join the system and begin adding cataloged
images to the system within 240 days of the effective date of this registration
statement. Concurrently with this phase we will continue work on the Client,
Transaction, and Administration modules and other functionality. We expect these
systems to be released within 360 days of the effective date of this
registration statement.
If we can complete these stages and we receive a positive reaction from our
potential customers, we will attempt to raise money through a private placement,
public offering or through loans in order to purchase additional digital
capabilities and software.
At present, our sole officer and director is unwilling to make any commitment to
loan the company any money, but may reconsider if we make meaningful progress on
our business plan. His unwillingness to loan us additional money at this time is
simply because he does not want to. At the present time, we have not made any
arrangements to raise additional cash. If we need additional cash but are unable
to raise it, we will either suspend marketing operations until we do raise the
cash or cease operations entirely. Other than as described in this paragraph, we
have no other financing plans.
If we are unable to complete any phase of our systems development or marketing
efforts because we don't have enough money, we will cease our development and or
marketing operations until we raise money. Attempting to raise capital after
failing in any phase of our software development plan would be difficult. As
such, if we cannot secure additional proceeds we will have to cease operations
and investors would lose their entire investment.
Management does not plan to hire additional employees at this time. Our sole
officer and director will be responsible for the initial product sourcing. Once
the company begins building its Internet website, it will hire an independent
consultant to build the site. The company also intends to hire sales
representatives initially on a commission only basis to keep administrative
overhead to a minimum.
DESCRIPTION OF PROPERTY
The company does not own any real estate or other properties. The company's
office is located at 112 North Curry Street, Carson City NV 89703-4934 and our
telephone number is (775) 321-8243 and our fax number is (604) 777-6912.
CERTAIN TRANSACTIONS
In October 31, 2006, we issued a total of 7,000,000 shares of common stock to
Alain Kardos, our sole officer and director, for total cash consideration of
$7,000. This was accounted for as a purchase of common stock. From May 2006
through to August 2006, we issued a total of 3,200,000 common shares for
consideration of $16,000, which was accounted for as a purchase of common stock.
LITIGATION
We are not a party to any pending litigation and none is contemplated or
threatened.
EXPERTS
Our financial statements for the period from inception to October 31, 2006
included in this prospectus have been audited by Dale Matheson Carr-Hilton
LaBonte, Chartered Accountants, 1700 - 1140 West Pender Street, Vancouver,
British Columbia, Canada V6E 4G1 as set forth in their report included in this
prospectus. Their report is provided on their authority as experts in accounting
and auditing.
Thomas E. Puzzo, Attorney at Law, the Law Offices of Thomas E. Puzzo, PLLC 4216
NE 70th Street, Seattle WA 98115, has acted as our legal counsel. Mr. Puzzo has
provided his opinion on the legality of the 3,200,000 shares of common stock
being registered on behalf of the selling security holders by way of this
prospectus.
FINANCIAL STATEMENTS
Our fiscal year end is April 30th. We will provide audited financial statements
to our stockholders on an annual basis, as prepared by Independent Chartered
Accountants.
Our financial statements immediately follow:
FINANCIAL STATEMENTS unaudited, October 31, 2006 Page
Balance Sheet F-2
Statements of Operations F-3
Statement of Stockholders' Equity (Deficit) F-4
Statements of Cash Flows F-5
Notes to the Financial Statements F-6 thru 8
FINANCIAL STATEMENTS Audited, July 31, 2006 Page
Auditors Report F-9
Balance Sheet F-10
Statements of Operations F-11
Statement of Stockholders' Equity (Deficit) F-12
Statements of Cash Flows F-13
Notes to the Financial Statements F-14 thru 16
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
OCTOBER 31, 2006
(UNAUDITED)
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
October 31, 2006 April 30, 2006
_________________________________________________________________________________________________________________
(unaudited)
ASSETS
CURRENT ASSETS
Cash $ 13,988 $ -
=================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Due to related party (Note 5) $ - $ 1,379
_________________________________________________________________________________________________________________
STOCKHOLDERS' EQUITY (DEFICIT)
Capital stock (Note 4)
Authorized
75,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
10,200,000 shares of common stock (April 30, 2006 - 7,000,000)
10,200 7,000
Additional paid-in capital 12,800 -
Share subscriptions receivable - (7,000)
Deficit accumulated during the development stage (9,012) (1,379)
_________________________________________________________________________________________________________________
13,988 (1,379)
_________________________________________________________________________________________________________________
$ 13,988 $ -
=================================================================================================================
The accompanying notes are an integral part of these financial statements.
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
Cumulative from
inception
Three months Six months February 22,
ended ended 2006 (inception)
October 31, October 31, to October 31,
2006 2006 2006
____________________________________________________________________________________________________________
EXPENSES
Office and general $ 633 $ 633 $ 2,012
Professional fees $ 7,000 $ 7,000 $ 7,000
____________________________________________________________________________________________________________
NET LOSS $ (7,633) $ (7,633) $ (9,012)
============================================================================================================
BASIC AND DILUTED LOSS PER SHARE $ 0.00 $ 0.00
============================================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING -
BASIC AND DILUTED 7,959,363 5,432,836
============================================================================================================
The accompanying notes are an integral part of these financial statements.
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FEBRUARY 22, 2006 (INCEPTION) TO OCTOBER 31, 2006
Deficit
Additional Share Accumulated
Paid-in Subscription During the
Common Stock Capital Receivable Development Stage Total
______________________________________________________________________________________________
Number of shares Amount
________________________________________________________________________________________________________________________________
Balance, February 22,2006 - $ - $ - $ - $ - $ -
Common stock issued at $0.001
per share on March 6, 2006 7,000,000 7,000 - (7,000) - -
Net loss - - - - (9,012) (9,012)
________________________________________________________________________________________________________________________________
Balance, April 30, 2006 7,000,000 7,000 (7,000) (1,379) (1,379)
Proceeds received from share - - - 7,000 - 7,000
subscriptions receivable
Common stock issued at $0.005
per share.
May 31, 2006 200,000 200 800 1,000
June 8, 2006 300,000 300 1,200 1,500
June 11, 2006 100,000 100 400 500
June 14, 2006 200,000 200 800 1,000
July 7, 2006 100,000 100 400 500
July 12, 2006 200,000 200 800 1,000
July 26, 2006 300,000 300 1,200 1,500
July 27,2006 200,000 200 800 1,000
July 31, 2006 200,000 200 800 1,000
August 1, 2006 600,000 600 2,400 3,000
August 2, 2006 100,000 100 400 500
August 3, 2006 400,000 400 1,600 2,000
August 7, 2006 100,000 100 400 500
August 16, 2006 200,000 200 800 1,000
Net loss - - - - (7,633) (7,633)
________________________________________________________________________________________________________________________________
Balance, July 31, 2006 10,200,000 $10,200 $12,800 $ - $ (9,012) $ 13,988
================================================================================================================================
The accompanying notes are an integral part of these financial statements.
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Cumulative results
of operations from
Three months Six months inception
ended ended (February 22,
October 31, 2006 October 31, 2006) to October
2006 31, 2006
________________________________________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (7,633) $ (7,633) $ (9,012)
Changes in operating assets and liabilities
Amounts due to related party (1,379) (1,379) -
________________________________________________________________________________________________________
NET CASH USED IN OPERATING ACTIVITIES - (9,012) (9,012)
________________________________________________________________________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 8,500 23,000 23,000
________________________________________________________________________________________________________
NET INCREASE (DECREASE) IN CASH (512) 13,988 13,988
CASH, BEGINNING 14,500 - -
________________________________________________________________________________________________________
CASH, ENDING $ 13,988 $ 13,988 $ 13,988
========================================================================================================
Supplemental cash flow information:
Cash paid for:
Interest $ - $ - $ -
========================================================================================================
Income taxes $ - $ - $ -
========================================================================================================
The accompanying notes are an integral part of these financial statements.
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 2006
________________________________________________________________________________
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Photomatica, Inc. (the "Company") is in the initial development stage and has
incurred losses since inception totaling $9,012. The Company was incorporated on
February 22, 2006 in the State of Nevada. The fiscal year end of the Company is
April 30. The Company was organized to enter into the stock photographic image
sales industry. Photomatica will generate revenues in the form of sales
commissions from its contributing photographers.
The ability of the Company to continue as a going concern is dependent on
raising capital to fund its business plan and ultimately to attain profitable
operations. Accordingly, these factors raise substantial doubt as to the
Company's ability to continue as a going concern. The Company is funding its
initial operations by way of issuing Founders' shares and entering into a
private placement offering for 4,000,000 shares at $0.005 per share. As of
October 31, 2006, the Company had issued 7,000,000 Founders shares at $0.001 per
share for proceeds of $7,000 and 3,200,000 shares at $0.005 per share for
proceeds of $16,000, which has been received by the Company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
________________________________________________________________________________
BASIS OF PRESENTATION
These financial statements are presented in United States dollars and have been
prepared in accordance with accounting principles generally accepted in the
United States.
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
INCOME TAXES
The Company follows the liability method of accounting for income taxes in
accordance with Statements of Financial Accounting Standards ("SFAS") No.109,
"Accounting for Income Taxes." Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax balances. Deferred tax assets and
liabilities are measured using enacted or substantially enacted tax rates
expected to apply to the taxable income in the years in which those differences
are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the date of enactment or substantive enactment.
NET LOSS PER SHARE
Basic loss per share includes no dilution and is computed by dividing loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Dilutive loss per share reflects the potential
dilution of securities that could share in the losses of the Company. Because
the Company does not have any potentially dilutive securities, diluted loss per
share is equal to basic loss per share.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance
with SFAS No. 52, "Foreign Currency Translation", foreign denominated monetary
assets and liabilities are translated to their United States dollar equivalents
using foreign exchange rates which prevailed at the balance sheet date.
Non-monetary assets and liabilities are translated at exchange rates prevailing
at the transaction date. Revenue and expenses are translated at average rates of
exchange during the period. Related translation adjustments are reported as a
separate component of stockholders' equity (deficit), whereas gains or losses
resulting from foreign currency transactions are included in results of
operations
STOCK-BASED COMPENSATION
The Company has not adopted a stock option plan and has not granted any stock
options. Accordingly no stock-based compensation has been recorded to date.
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123R, "SHARE-BASED PAYMENT." 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 financial statements. That
cost will be measured based on the fair value of the equity or liability
instruments issued. Public entities that file as small business issuers will be
required to apply SFAS No. 123R in the first interim or annual reporting period
that begins after December 15, 2005. Management is currently evaluating the
impact of the adoption of this standard on our results of operations and
financial position.
In March 2005, the SEC staff issued Staff Accounting Bulletin ("SAB") No. 107,
"SHARE-BASED PAYMENT," to give guidance on the implementation of SFAS No. 123R.
Management will consider SAB No. 107 during the implementation of SFAS No. 123R.
RECENT ACCOUNTING PRONOUNCEMENTS
In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 157, "FAIR VALUE MEASURES" ("SFAS No. 157"). This Statement defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles (GAAP), expands disclosures about fair value measurements,
and applies under other accounting pronouncements that require or permit fair
value measurements. SFAS No. 157 does not require any new fair value
measurements. However, the FASB anticipates that for some entities, the
application of SFAS No. 157 will change current practice. SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, which for the Company would be the fiscal year beginning
January 1, 2008. The Company is currently evaluating the impact of SFAS No. 157
but does not expect that it will have a material impact on its financial
statements.
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans." This Statement requires
an employer to recognize the over funded or under funded status of a defined
benefit post retirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position, and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income. SFAS No. 158 is effective for fiscal years ending after December 15,
2006. The Company does not expect that the implementation of SFAS No. 158 will
have any material impact on its financial position and results of operations.
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 No. 108 addresses how
the effects of prior year uncorrected misstatements should be considered when
quantifying misstatements in current year financial statements. SAB No. 108
requires companies to quantify misstatements using a balance sheet and income
statement approach and to evaluate whether either approach results in
quantifying an error that is material in light of relevant quantitative and
qualitative factors. SAB No. 108 is effective for periods ending after November
15, 2006. The Company is currently evaluating the impact of adopting SAB No. 108
but does not expect that it will have a material effect on its financial
statements.
NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS
________________________________________________________________________________
In accordance with the requirements of SFAS No. 107, the Company has determined
the estimated fair value of financial instruments using available market
information and appropriate valuation methodologies. The fair value of financial
instruments classified as current assets or liabilities approximate their
carrying value due to the short-term maturity of the instruments.
________________________________________________________________________________
NOTE 4 - CAPITAL STOCK
________________________________________________________________________________
The Company's capitalization is 75,000,000 common shares with a par value of
$0.001 per share. No preferred shares have been authorized or issued.
As of October 31, 2006, the sole director had purchased 7,000,000 shares of the
common stock in the Company at $0.001 per share with proceeds to the Company
totalling $7,000.
PRIVATE PLACEMENT
On March 6, 2006, the Company authorized a private placement offering of up to
4,000,000 shares of common stock at a price of $0.005 per share. The total
amount to be raised in this financing is $20,000. During the six months ended
October 31, 2006, the Company issued 3,200,000 shares at $0.005 per share and
received $16,000 from the sale of its private placement stock.
NOTE 5 - RELATED PARTY TRANSACTIONS
________________________________________________________________________________
As of October 31, 2006, the Company repaid the advances from a director in the
amount of $1,379 to pay for Incorporation costs. The amount due to the related
party was unsecured, non-interest bearing and has no set terms of repayment.
NOTE 6 - INCOME TAXES
________________________________________________________________________________
As of October 31, 2006, the Company had net operating loss carry forwards of
approximately $9,000 that may be available to reduce future years' taxable
income and will expire commencing in 2026. Availability of loss usage is subject
to change of ownership limitations under Internal Revenue Code 382. Future tax
benefits which may arise as a result of these losses have not been recognized in
these financial statements, as their realization is determined not likely to
occur and, accordingly, the Company has recorded a full valuation allowance for
the deferred tax asset relating to these tax loss carryforwards.
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JULY 31, 2006
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
BALANCE SHEETS
STATEMENTS OF OPERATIONS
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
STATEMENTS OF CASH FLOWS
NOTES TO FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of Photomatica, Inc.
We have audited the accompanying balance sheets of Photomatica, Inc. (a
development stage company, as of July 31, 2006 and April 30, 2006 and the
related statements of operations, stockholders' equity (deficit) and cash flows
for the three months ended July 31, 2006 and the period from February 22, 2006
(inception) through April 30, 2006. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform an audit to obtain reasonable assurance whether the 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 audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of Photomatica, Inc. as of July 31, 2006 and
April 30, 2006 and the results of its operations and its cash flows for the
three month period ended July 31, 2006 and the period from February 22, 2006
(inception) through April 30, 2006, in conformity with accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has not generated revenues since inception,
has incurred losses in developing its business, and further losses are
anticipated. The Company requires additional funds to meet its obligations and
the costs of its operations. These factors raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in this
regard are described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
DMCL
DALE MATHESON CARR-HILTON LABONTE LLP
CHARTERED ACCOUNTANTS
Vancouver, Canada
October 31, 2006
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
July 31, 2006 April 30, 2006
__________________________________________________________________________________________________________________
ASSETS
CURRENT ASSETS
Cash $ 14,500 $ -
==================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Due to related party (Note 5) $ 1,379 $ 1,379
__________________________________________________________________________________________________________________
STOCKHOLDERS' EQUITY (DEFICIT)
Capital stock (Note 4)
Authorized
75,000,000 shares of common stock, $0.001 par value,
Issued and outstanding
8,800,000 shares of common stock (April 30, 2006 - 7,000,000) 7,000 7,000
Additional paid-in capital 9,000 -
Share subscriptions receivable (1,500) (7,000)
Deficit accumulated during the development stage (1,379) (1,379)
__________________________________________________________________________________________________________________
13,121 (1,379)
__________________________________________________________________________________________________________________
$ 14,500 $ -
==================================================================================================================
The accompanying notes are an integral part of these financial statements.
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
Cumulative Cumulative
results of results of
operations from operations from
inception February 22,
Three months ended (February 22, 2006 (date of
July 31, 2006 2006) to April inception) to
30, 2006 July 31, 2006
____________________________________________________________________________________________________
EXPENSES
Office and general $ 1,379 $ 1,379
-
Professional fees
- - -
____________________________________________________________________________________________________
NET LOSS - $ (1,379) $ (1,379)
====================================================================================================
BASIC AND DILUTED NET LOSS PER SHARE $ 0.00 $ 0.00
=============================================================================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING - BASIC AND DILUTED 7,575,000 5,681,159
=============================================================================
The accompanying notes are an integral part of these financial statements.
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
FROM INCEPTION (FEBRUARY 22, 2006) TO JULY 31, 2006
Deficit
Accumulated
Additional Share During the
Paid-in Subscription Development
Common Stock Capital Receivable Stage Total
______________________________________________________________________________________
Number of shares Amount
____________________________________________________________________________________________________________________________________
Balance, February 22,2006 - $ - $ - $ - $ - $ -
Common stock issued at $0.001 per share on 7,000,000 7,000 - (7,000) - -
March 6, 2006
Net loss - - - - (1,379) (1,379)
____________________________________________________________________________________________________________________________________
Balance, April 30, 2006 7,000,000 7,000 (7,000) (1,379) (1,379)
Proceeds received from share subscriptions 7,000 7,000
receivable
- - - - - -
Common stock issued at $0.005 per share.
(May 1, 2006 to July 31, 2006) 1,800,000 1,800 7,200 (1,500) - 7,500
Net loss - - - - - -
____________________________________________________________________________________________________________________________________
Balance, July 31, 2006 8,800,000 $8,800 $7,200 $(1,500) $(1,379) $13,121
====================================================================================================================================
The accompanying notes are an integral part of these financial statements.
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Cumulative results Cumulative results
of operations from of operations from
Three months ended inception (February inception (February
July 31, 2006 22, 2006) to April 22, 2006) to July
30, 2006 31, 2006
______________________________________________________________________________________________________________________________
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ - $ (1,379) $ (1,379)
Changes in operating assets and liabilities
Amounts due to related party - 1,379 1,379
______________________________________________________________________________________________________________________________
NET CASH PROVIDED BY OPERATING ACTIVITIES -
______________________________________________________________________________________________________________________________
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 14,500 14,500
______________________________________________________________________________________________________________________________
NET CASH PROVIDED BY FINANCING ACTIVITIES 14,500 14,500
______________________________________________________________________________________________________________________________
NET INCREASE IN CASH 14,500 -
CASH, BEGINNING -
______________________________________________________________________________________________________________________________
CASH, ENDING $ 14,500 $ 14,500
==============================================================================================================================
Supplemental cash flow information and noncash financing
activities: Cash paid for:
Interest $ - $ - $ -
==============================================================================================================================
Income taxes $ - $ - $ -
==============================================================================================================================
The accompanying notes are an integral part of these financial statements.
PHOTOMATICA, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2006
________________________________________________________________________________
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Photomatica, Inc. (the "Company") is in the initial development stage and has
incurred losses since inception totaling $1,379. The Company was incorporated on
February 22, 2006 in the State of Nevada. The fiscal year end of the Company is
April 30. The Company was organized to enter into the stock photographic image
sales industry. Photomatica will receive revenues in the form of sales
commissions from its contributing photographers.
The ability of the Company to continue as a going concern is dependent on
raising capital to fund its business plan and ultimately to attain profitable
operations. Accordingly, these factors raise substantial doubt as to the
Company's ability to continue as a going concern. The Company is funding its
initial operations by way of issuing Founders' shares and entering into a
private placement offering for 4,000,000 shares at $0.005 per share. As of July
31, 2006, the Company had issued 7,000,000 Founders shares at $0.001 per share
for receipt of $7,000 and 1,800,000 shares at $0.005 per share for receipt of
$9,000, of which $7,500 has been paid to the Company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
________________________________________________________________________________
BASIS OF PRESENTATION
These financial statements are presented in United States dollars and have been
prepared in accordance with accounting principles generally accepted in the
United States.
USE OF ESTIMATES AND ASSUMPTIONS
Preparation of the financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
INCOME TAXES
The Company follows the liability method of accounting for income taxes in
accordance with Statements of Financial Accounting Standards ("SFAS") No.109,
"Accounting for Income Taxes." Under this method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax balances. Deferred tax assets and
liabilities are measured using enacted or substantially enacted tax rates
expected to apply to the taxable income in the years in which those differences
are expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the date of enactment or substantive enactment.
NET LOSS PER SHARE
Basic loss per share includes no dilution and is computed by dividing loss
available to common stockholders by the weighted average number of common shares
outstanding for the period. Dilutive loss per share reflects the potential
dilution of securities that could share in the losses of the Company. Because
the Company does not have any potentially dilutive securities, the accompanying
presentation is only of basic loss per share.
FOREIGN CURRENCY TRANSLATION
The financial statements are presented in United States dollars. In accordance
with SFAS No. 52, "Foreign Currency Translation", foreign denominated monetary
assets and liabilities are translated to their United States dollar equivalents
using foreign exchange rates which prevailed at the balance sheet date.
Non-monetary assets and liabilities are translated at exchange rates prevailing
at the transaction date. Revenue and expenses are translated at average rates of
exchange during the period. . Related translation adjustments are reported as a
separate component of stockholders' equity (deficit), whereas gains or losses
resulting from foreign currency transactions are included in results of
operations
STOCK-BASED COMPENSATION
The Company has not adopted a stock option plan and has not granted any stock
options. Accordingly no stock-based compensation has been recorded to date.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2004, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 123R, "SHARE-BASED PAYMENT." 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 financial statements. That
cost will be measured based on the fair value of the equity or liability
instruments issued. Public entities that file as small business issuers will be
required to apply SFAS No. 123R in the first interim or annual reporting period
that begins after December 15, 2005. Management is currently evaluating the
impact of the adoption of this standard on our results of operations and
financial position.
In March 2005, the SEC staff issued Staff Accounting Bulletin ("SAB") No. 107,
"SHARE-BASED PAYMENT," to give guidance on the implementation of SFAS No. 123R.
Management will consider SAB No. 107 during the implementation of SFAS No. 123R.
In September 2006, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 157, "FAIR VALUE MEASURES" ("SFAS No. 157"). This Statement defines fair
value, establishes a framework for measuring fair value in generally accepted
accounting principles (GAAP), expands disclosures about fair value measurements,
and applies under other accounting pronouncements that require or permit fair
value measurements. SFAS No. 157 does not require any new fair value
measurements. However, the FASB anticipates that for some entities, the
application of SFAS No. 157 will change current practice. SFAS No. 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, which for the Company would be the fiscal year beginning
January 1, 2008. The Company is currently evaluating the impact of SFAS No. 157
but does not expect that it will have a material impact on its financial
statements.
In September 2006, the FASB issued SFAS No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Postretirement Plans." This Statement requires
an employer to recognize the over funded or under funded status of a defined
benefit post retirement plan (other than a multiemployer plan) as an asset or
liability in its statement of financial position, and to recognize changes in
that funded status in the year in which the changes occur through comprehensive
income. SFAS No. 158 is effective for fiscal years ending after December 15,
2006. The Company does not expect that the implementation of SFAS No. 158 will
have any material impact on its financial position and results of operations.
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 No. 108 addresses how
the effects of prior year uncorrected misstatements should be considered when
quantifying misstatements in current year financial statements. SAB No. 108
requires companies to quantify misstatements using a balance sheet and income
statement approach and to evaluate whether either approach results in
quantifying an error that is material in light of relevant quantitative and
qualitative factors. SAB No. 108 is effective for periods ending after November
15, 2006. The Company is currently evaluating the impact of adopting SAB No. 108
but does not expect that it will have a material effect on its financial
statements.
NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS
________________________________________________________________________________
In accordance with the requirements of SFAS No. 107, the Company has determined
the estimated fair value of financial instruments using available market
information and appropriate valuation methodologies. The fair value of financial
instruments classified as current assets or liabilities approximate their
carrying value due to the short-term maturity of the instruments.
NOTE 4 - CAPITAL STOCK
________________________________________________________________________________
The Company's capitalization is 75,000,000 common shares with a par value of
$0.001 per share. No preferred shares have been authorized or issued.
As of July 31, 2006, the sole Director had purchased 7,000,000 shares of the
common stock in the Company at $0.001 per share with proceeds to the Company
totaling $7,000.
PRIVATE PLACEMENT
On March 6, 2006, the Company authorized a private placement offering of up to
4,000,000 shares of common stock at a price of $0.005 per share. The total
amount to be raised in this financing is $20,000. As of July 31, 2006, the
Company had issued 1,800,000 shares at $0.005 per share and received $7,500 from
the sale of its private placement stock, the unpaid balance of $1,500 is
reflected as a subscriptions receivable in shareholder equity.
NOTE 5 - RELATED PARTY TRANSACTIONS
________________________________________________________________________________
As of July 31, 2006, the Company received advances from a Director in the amount
of $1,379 to pay for Incorporation costs. The amount due to the related party
are unsecured, non-interest bearing and have no set terms of repayment.
NOTE 6 - INCOME TAXES
________________________________________________________________________________
As of July 31, 2006, the Company had net operating loss carry forwards of
approximately $1,379 that may be available to reduce future years' taxable
income and will expire commencing in 2026. Availability of loss usage is subject
to change of ownership limitations under Internal Revenue Code 382. Future tax
benefits which may arise as a result of these losses have not been recognized in
these financial statements, as their realization is determined not likely to
occur and, accordingly, the Company has recorded a full valuation allowance for
the deferred tax asset relating to these tax loss carryforwards.
NOTE 7 - SUBSEQUENT EVENTS
________________________________________________________________________________
On August 8, 2006, the Company received private placement subscriptions totaling
$6,000 and issued 1,200,000 shares. On August 16, 2006, the Company received
private placement subscriptions totalling $1,000 and issued 200,000 shares.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
Dale Matheson Carr-Hilton LaBonte, Chartered Accountants, operating from their
Vancouver, British Columbia, Canada office, are our auditors. There have been no
changes in or disagreements with accountants regarding our accounting, financial
disclosures or any other matter.
PART II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Independently of whether or not all shares are sold, the estimated expenses of
the offering, all of which are to be paid by the registrant, are as follows:
Legal and Accounting $ 2,062.00
SEC Filing Fee 86.00
Printing 250.00
__________
Transfer Agent 2,100.00
__________
TOTAL $ 4,498.00
__________
RECENT SALES OF UNREGISTERED SECURITIES
(A) PRIOR SALES OF COMMON SHARES
Photomatica is authorized to issue up to 75,000,000 shares of common stock with
a par value of $0.001. As of October 31, 2006, we have issued 7,000,000 common
shares to our sole officer and director for total consideration of $7,000. In
addition, we have issued 3,200,000 common shares for total consideration of
$16,000 to a total of thirty-two (32) registered shareholders, all of whom
reside outside the United States.
Photomatica is not listed for trading on any securities exchange in the United
States and there has been no active market in the United States or elsewhere for
the common shares.
During the past year, the company has sold the following securities which were
not registered under the Securities Act of 1933, as amended:
MARCH 6, 2006
We issued 7,000,000 common shares to the sole officer and director of the
company for cash proceeds of $7,000, or $0.001 per share.
In May, 2006 we issued 200,000 common shares to two (2) individual investors for
cash proceeds of $0.005 per share.
In June, 2006 we issued 600,000 common shares to six (6) individual investors
for cash proceeds of $0.005 per share.
In July, 2006 we issued 1,000,000 common shares to ten (10) individual investors
for cash proceeds of $0.005 per share.
In August, 2006 we issued 1,400,000 common shares to fourteen (14) individual
investor for cash proceeds of $0.005 per share.
(B) USE OF PROCEEDS
We have spent a portion of the above proceeds to pay for costs associated with
this prospectus and expect the balance of the proceeds to be mainly applied to
further costs of this prospectus and administrative costs.
We shall report the use of proceeds on our first periodic report filed pursuant
to sections 13(a) and 15(d) of the Exchange Act after the effective date of this
Registration Statement and thereafter on each of our subsequent periodic reports
through the later of 1) the disclosure of the application of the offering
proceeds, or 2) disclosure of the termination of this offering.
EXHIBITS
The following exhibits are filed as part of this Registration Statement,
pursuant to Item 601 of Regulation K. All exhibits have been previously filed
unless otherwise noted.
================================================================================
EXHIBIT NO. DOCUMENT DESCRIPTION
================================================================================
3.1 Articles of Incorporation of Photomatica, Inc.
================================================================================
3.2 Bylaws of Photomatica, Inc.
================================================================================
5.1 Opinion of Thomas E. Puzzo, Esq. regarding the legality of the
securities being registered
================================================================================
23.1 Consent of Dale Matheson Carr-Hilton LaBonte, Chartered
Accountants
================================================================================
All other exhibits called for by Rule 601 of Regulation S-B are not applicable
to this filing. Information pertaining to our common stock is contained in our
Certificate of Incorporation and Bylaws.
(B) DESCRIPTION OF EXHIBITS
* EXHIBIT 3.1
Articles of Incorporation of Photomatica, Inc., dated February 22, 2006.
* EXHIBIT 3.2
Bylaws of Photomatica, Inc., approved and adopted on February 6, 2006.
* EXHIBIT 5.1
Opinion of Thomas Puzzo, Attorney at Law, the Law Offices of Thomas E. Puzzo,
PLLC 4216 NE 70th Street, Seattle WA 98115, dated November 8, 2006, regarding
the legality of the securities being registered.
EXHIBIT 23.1
Consent of Dale Matheson Carr-Hilton LaBonte, Chartered Accountants, 1700 - 1140
West Pender Street, Vancouver, British Columbia, Canada V6E 4G1, dated January
24, 2007, regarding the use in this Registration Statement of their report of
the financial statements of Photomatica, Inc. for the period ending October 31,
2006.
* Previously filed on Form SB-2 on November 14, 2006
UNDERTAKINGS
Presently the sole officer and director of Photomatica, Inc. is not covered by
liability insurance. However, Photomatica's Articles of Incorporation state that
the company may indemnify its officers, directors, employees, and agents to the
full extent permitted by the laws of the State of Nevada. No other statute,
charter provision, by-law, contract, or other arrangement to insure or indemnify
a controlling person, director or officer of Photomatica exists which would
affect his liability in that capacity.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities, other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant 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, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by itself is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes:
1. To file, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement:
a. To include any prospectus required by Section 10(a)(3) of the
Securities Act;
b. To 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 the volume of securities offered, if the
total dollar value of securities offered would not exceed that which
is 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
c. To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any 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 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.
SIGNATURES
Pursuant to 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 of filing on this Form SB-2 and authorized this Registration
Statement and has duly caused this Form SB-2 Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in Vancouver,
British Columbia, on this 13th day of November, 2006.
Photomatica, Inc.
/s/ ALAIN KARDOS
______________________________
Alain Kardos
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer.
Know all men by these present, that each person whose signature appears below
constitutes and appoints Alain Kardos, as agent, with full power of
substitution, for his and in his name, place, and stead, in any and all
capacities, to sign any and all amendments, including post-effective amendments,
to this Registration Statement, and to file the same, therewith, with the
Securities and Exchange Commission, and to make any and all state securities law
or blue sky filings, granting unto said attorney-in-fact and agent, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in about the premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying the confirming all that said
attorney-in-fact and agent, or any substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Form SB-2
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
/s/ ALAIN KARDOS January 24, 2007
______________________________
Alain Kardos
President and Director
Principal Executive Officer
Principal Financial Officer
Principal Accounting Officer.