SB-2













Exhibit 10.7  


		
	Copy No. - ________________________	Provided to - __________________







CONFIDENTIAL PRIVATE
PLACEMENT MEMORANDUM 








FutureIT Inc. 


Up to 50 Units, each Unit consisting of

100,000 shares of Common Stock and

Warrants to purchase 46,200 shares of Common Stock

at $30,000 per Unit 







FutureIT Inc. is offering for sale by
means of this confidential Private Placement Memorandum up to 50 Units, each Unit
consisting of 100,000 shares of our Common Stock and warrants to purchase 46,200 shares of
our Common Stock at $0.50 per share. 


Investment in the Units will be subject to numerous risks. See "Risk Factors." 



The Units are not and will not be
listed for trading or quoted on any securities market and will be subject to restrictions
on resale and transfer. See “WHO MAY INVEST – Transfer Restrictions.” 



NEITHER THE SECURITIES AND
EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF
THESE UNITS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PLACEMENT MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 



THE UNITS HAVE NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND ARE BEING
OFFERED AND SOLD IN THE UNITED STATES AND TO U.S. PERSONS AS DEFINED IN REGULATION S UNDER
THE SECURITIES ACT (“U.S. PERSONS”) ONLY IN TRANSACTIONS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF SUCH LAWS UNDER SECTION 4(2) OF THE SECURITIES ACT AND RULE
506 THEREUNDER, AND ONLY TO PERSONS MEETING THE DEFINITION OF “ACCREDITED
INVESTOR.” THE UNITS MAY ALSO BE OFFERED AND SOLD OUTSIDE THE UNITED STATES PURSUANT
TO REGULATION S UNDER THE SECURITIES ACT IN TRANSACTIONS TO WHICH THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT DO NOT APPLY. SEE “WHO MAY INVEST”. 







This is not an offer to sell or a
solicitation of an offer to buy any of the Units in any jurisdiction to any person to whom
it would be unlawful to make such an offer or sale. 














This Private Placement Memorandum
has been prepared by FutureIT Inc., or the Company, and serves as an offer of the Units
only if the Company has caused a copy number to be inserted in the upper left corner of
the front cover page, and the name of a specific offeree to be inserted in the upper right
corner of the front cover page. This Private Placement Memorandum is being submitted to
offerees confidentially solely to help them to decide whether or not to invest in the
Units. Delivery of this Private Placement Memorandum to anyone other than such an offeree
and the offeree’s professional advisors is unauthorized. By accepting delivery of
this Private Placement Memorandum, each offeree agrees not to reproduce any part of this
Private Placement Memorandum without the prior written consent of the Company, and to
return it to the Company upon the Company’s request, and in any event promptly after
the offeree decides not to purchase Units. 







        The
Units are being offered only to investors who meet certain suitability requirements, and
we reserve the right to approve or disapprove each investor, and accept or reject any
subscriptions in whole or in part in our sole discretion.  











The
date of this Private Placement Memorandum is May 10, 2007.  




2











THE SECURITIES DESCRIBED HEREIN ARE
BEING OFFERED ONLY TO “ACCREDITED INVESTORS,” AS THAT TERM IS DEFINED BY
REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
THEREUNDER, OR THE SECURITIES ACT, WHO DIRECTLY OR THROUGH THEIR ADVISORS, HAVE THE EXPERT
KNOWLEDGE TO EVALUATE INFORMATION AND DATA RELATING TO AUTOMATED SOLUTIONS FOR INFORMATION
TECHNOLOGY MANAGEMENT AND WHOSE POTENTIAL INVESTMENT IS SUFFICIENTLY LARGE TO JUSTIFY THE
UTILIZATION BY THEM OF THE ACCESS BEING GRANTED THEM TO OTHER INFORMATION. PROSPECTIVE
INVESTORS WILL BE GRANTED ACCESS TO ALL REASONABLY AVAILABLE, RELEVANT DATA CONCERNING US
AND ARE URGED TO REQUEST WHATEVER DOCUMENTS OR MATERIAL THEY BELIEVE WILL BE USEFUL IN
MAKING THEIR INVESTMENT DECISIONS. IT IS ASSUMED THAT POTENTIAL INVESTORS WILL BASE THEIR
INVESTMENT DECISIONS ON THEIR OWN ANALYSIS OF ALL INFORMATION THEY DEEM TO BE RELEVANT.
THE ADDRESS OF OUR PRINCIPAL EXECUTIVE OFFICES IS 4 HAMALCHA STREET, NORTH INDUSTRIAL
AREA, LOD, ISRAEL. OUR TELEPHONE NUMBER AT THIS ADDRESS IS +972.8.920.8070. 








THIS PRIVATE PLACEMENT MEMORANDUM
DOES NOT CONSTITUTE AN OFFER OR A SOLICITATION TO ANY PERSON IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. THIS OFFERING IS NOT BEING MADE TO, NOR WILL
SUBSCRIPTIONS BE ACCEPTED FROM OR ON BEHALF OF, RECIPIENTS OF THIS PRIVATE PLACEMENT
MEMORANDUM IN ANY JURISDICTION IN WHICH THE MAKING OR ACCEPTANCE THEREOF WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. HOWEVER, WE MAY, IN OUR SOLE AND ABSOLUTE
DISCRETION, TAKE SUCH ACTION AS WE MAY DEEM NECESSARY TO MAKE THIS OFFERING IN ANY SUCH
JURISDICTION AND EXTEND THIS OFFERING TO OFFEREES IN SUCH JURISDICTION. 






THIS PRIVATE PLACEMENT MEMORANDUM
CONTAINS PROJECTIONS OF FUTURE FINANCIAL PERFORMANCE. THESE PROJECTIONS ARE BASED ON
NUMEROUS ESTIMATES AND OTHER ASSUMPTIONS ABOUT FUTURE EVENTS AND CIRCUMSTANCES WHICH ARE
INHERENTLY UNRELIABLE, MANY OF WHICH WILL NOT BE WITHIN OUR CONTROL. WE BELIEVE THAT SUCH
ESTIMATES AND OTHER ASSUMPTIONS ARE REASONABLE UNDER THE CIRCUMSTANCES, BUT NO
REPRESENTATION, WARRANTY OR OTHER ASSURANCE IS GIVEN THAT SUCH PROJECTIONS WILL BE
REALIZED. THERE WILL BE VARIANCES BETWEEN THESE PROJECTIONS AND ACTUAL EVENTS AND RESULTS,
AND THESE VARIATIONS WILL LIKELY BE MATERIAL AND POTENTIALLY ADVERSE. 



THIS PRIVATE PLACEMENT MEMORANDUM
CONTAINS MARKET DATA AND CERTAIN INDUSTRY FORECASTS WHICH WERE OBTAINED FROM OUR INTERNAL
ANALYSIS, MARKET RESEARCH PUBLICLY AVAILABLE INFORMATION AND INDUSTRY PUBLICATIONS.
INDUSTRY PUBLICATIONS GENERALLY PROVIDE THAT THE INFORMATION CONTAINED THEREIN HAS BEEN
OBTAINED FROM SOURCES BELIEVED TO BE RELIABLE, BUT THAT THE ACCURACY AND COMPLETENESS OF
SUCH INFORMATION IS NOT GUARANTEED. SIMILARLY, INTERNAL SURVEYS, INDUSTRY FORECASTS AND
MARKET RESEARCH, WHILE BELIEVED TO BE RELIABLE, HAVE NOT BEEN INDEPENDENTLY VERIFIED BY US
OR THE PLACEMENT AGENT AND NEITHER WE NOR THE PLACEMENT AGENT MAKES ANY REPRESENTATION AS
TO THE ACCURACY OF THIS INFORMATION. 






NO PERSON HAS BEEN AUTHORIZED TO MAKE
ANY REPRESENTATIONS CONCERNING THIS OFFERING, AND NO PERSON OTHER THAN OUR DESIGNATED
REPRESENTATIVE HAS BEEN AUTHORIZED TO FURNISH ANY INFORMATION, OTHER THAN AS SET FORTH IN
THIS PRIVATE PLACEMENT MEMORANDUM OR OTHERWISE, AND, IF MADE OR GIVEN, THESE OTHER
REPRESENTATIONS OR INFORMATION MUST NOT BE RELIED UPON BY PROSPECTIVE INVESTORS. 



3










FOR NEW HAMPSHIRE
RESIDENTS:  



NEITHER THE FACT THAT A REGISTRATION
STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED WITH THE STATE OF NEW HAMPSHIRE
NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE
STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE THAT ANY DOCUMENT
FILED UNDER RSA 421-B OF THE NEW HAMPSHIRE UNIFORM SECURITIES ACT IS TRUE, COMPLETE AND
NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS
AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN
ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY
PERSON, SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY
PROSPECTIVE PURCHASER ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS
PARAGRAPH. 



FOR RESIDENTS OF THE
UNITED KINGDOM:  



NO PROSPECTUS OR MEMORANDUM WITH
RESPECT TO THE COMMON STOCK BEING OFFERED HEREBY HAS BEEN OR WILL BE PREPARED AND FILED IN
THE UNITED KINGDOM BY US PURSUANT TO THE U.K. PUBLIC OFFERS OF SECURITIES REGULATIONS
1995. ACCORDINGLY, THE COMMON STOCK SHARES MAY NOT BE OFFERED OR SOLD OR REOFFERED OR
RESOLD TO PERSONS IN THE UNITED KINGDOM, EXCEPT TO PERSONS WHOSE ORDINARY ACTIVITIES
INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING OR DISPOSING OF INVESTMENTS (AS PRINCIPAL OR
AGENT) FOR THE PURPOSES OF THEIR BUSINESS, OR OTHERWISE IN CIRCUMSTANCES THAT WILL NOT
CONSTITUTE OR RESULT IN AN OFFER TO THE PUBLIC IN THE UNITED KINGDOM WITHIN THE MEANING OF
THE U.K. PUBLIC OFFERS OF SECURITIES REGULATIONS 1995. THIS PRIVATE PLACEMENT MEMORANDUM
MAY NOT BE PASSED TO ANY PERSON IN THE UNITED KINGDOM WHO DOES NOT FALL WITHIN
ARTICLE 11(3) OF THE FINANCIAL SERVICES ACT 1986 (INVESTMENT ADVERTISEMENTS)
(EXEMPTIONS) ORDER 1996 OR WHO IS NOT OTHERWISE A PERSON TO WHOM THE DOCUMENT MAY LAWFULLY
BE ISSUED OR PASSED. 



FOR OTHER NON-UNITED
STATES RESIDENTS: 



IT IS YOUR RESPONSIBILITY TO SATISFY
YOURSELF AS TO FULL OBSERVANCE OF THE LAWS OF ANY RELEVANT TERRITORY OR JURISDICTION
OUTSIDE THE UNITED STATES IN CONNECTION WITH ANY SUCH PURCHASE, INCLUDING, WITHOUT
LIMITATION, OBTAINING ANY REQUIRED GOVERNMENTAL OR OTHER CONSENTS OR OBSERVING ANY OTHER
APPLICABLE REQUIREMENTS. 



4











In this Placement Memorandum,
references to “FutureIT”, the Company, “we,” “us”,
“ourselves” and “our” refer to FutureIT Inc., together with our
consolidated subsidiaries, unless the context otherwise requires. 



TABLE OF CONTENTS 




		
	Summary	6 
	Summary of Proposed Terms	8 
	Summary Historical Financial Information and Projections	11 
	Risk Factors	13 
	Who May Invest	21 
	Forward-Looking Statements	23 
	Use of Proceeds	23 
	Dividend Policy	24 
	Capitalization	24 
	Management Discussion and Analysis	25 
	Business	27 
	Management	34 
	Principal Shareholders	39 
	Certain Transactions	40 
	Description of Share Capital	42 
	Plan of Distribution	43 
	Subscription Procedures	43 
	Legal Matters	45 
	Experts	45 
	Historical Financial Statements	Exhibit A 







        We
have prepared our Financial Statements and the Notes thereto in United Stated Dollars and
in accordance with generally accepted accounting principles, as applied in the United
States. All references to “dollars” or “$” in this Placement
Memorandum are references to United States Dollars, and all references to “NIS”
are references to New Israeli shekels. 



        We
have filed for registration in the United States Patent and Trademark Office and in the
United Kingdom Patent and Trademark Office for EZMANAGE. All other brand names and
trademarks appearing in this Private Placement Memorandum are the property of their
respective holders. 



5











SUMMARY 



        This
summary highlights selected information contained elsewhere in this Placement Memorandum.
This summary does not contain all of the information that you should consider before
making an investment in our securities. Before deciding to invest in our securities, you
should read the entire Placement Memorandum, including the section entitled “Risk
Factors” and our Historical Financial Statements and the Notes thereto. 



        We
are engaged in the development, marketing, sale and support of software products that
provide affordable easy-to-use comprehensive database management and monitoring solutions
for small and medium sized enterprises, or SMEs, running different Microsoft SQL
(Structured Query Language) servers, versions 2000 and 2005, as well as MSDE Microsoft SQL
Server Desktop Engine and SQL Express. 



        We
were incorporated in the State of Delaware on October 26, 2006 under the name
“FutureIT, Inc.” On February 5, 2007 we acquired a 90% interest in Future I.T.
Ltd., an Israeli company and we have an option to acquire the remaining 10% by January
2008 for $100,000. 



        Our
recently acquired 90% owned subsidiary began selling products in December 2005 and had
revenues of $162,169 in the fiscal year ended December 31, 2006. We also have a
wholly-owned English subsidiary, Future IT Software Limited, that serves as a marketing
subsidiary. To date we have sold approximately 300 units of our SQL Manage product, in
both the Standard Edition Version (for automated management of databases) and the
Enterprise Edition Version (which further enables web interface for multiple users and
remote locations). We market our products through our subsidiaries and through
distributors and resellers in 17 countries but, revenues to date have been generated
almost exclusively from Israel with one sale in each of England, USA and Germany. A
significant percentage of our sales to date have been made through direct sales by our
Israeli subsidiary. 



        Our
strategy is to position ourselves as a leading provider to small and medium size
enterprise, or SME, markets of accessible and simple to use IT management solutions for
the Microsoft server environment. This includes solutions for administration, backup and
maintaining of Microsoft SQL Server and other Windows server based components. We also
plan to develop new products that will provide desired capabilities in the field of better
management to other popular Microsoft family servers. 



        Our
principal executive offices are located in Israel (telephone number: 972 8 925 8070) and
our address in the USA is 315 Bleecker St. Suite # 168 New York, NY 10014-3427. All
prospective investors are invited to visit our website at www.futureitsoft.com. The
information contained on our website is not a part of this Private Placement Memorandum
and investors should rely only upon the information contained herein. 



The Offering 



        We
are offering to eligible investors up to 50 Units in the Company at $30,000 per Unit. Each
Unit consists of 100,000 shares of our Common Stock and warrants to purchase 46,200 shares
of our Common Stock at $0.50 per share (the “Warrants”). The Warrants will be
exercisable until the earlier of (i) 30 months from the SB-2 registration becoming
effective, or (ii) the Closing of a Qualified IPO or merger or acquisition that results in
a change of control. The Offering is being made by J. H. Darbie & Co, Inc., our
exclusive Placement Agent (see “SUMMARY OF PROPOSED TERMS”). Any closing (the
“First Closing”) of the Offering is subject to our receipt, on or before May 22,
2007 (which may be extended to June 30, 2007 in the Company’s sole discretion) of
duly completed subscriptions for a minimum of 34 Units for aggregate gross proceeds of
$1,020,000 (the “Minimum Offering”). If the maximum number of Units offered is
sold (i.e., 50 Units), the gross proceeds to the Company would be $1,500,000 (the
“Maximum Offering”). 



6










        If
less than 50 Units are sold at the First Closing, we plan to continue the Offering and
hold one or more additional closings until the earlier of (i) the receipt of sufficient
subscriptions for the Maximum Offering, or (ii) June 30, 2007. 



        The
Placement Agent will act as a contact for, and will be available to consult with, any
prospective investor who is a recipient of this Private Placement Memorandum. Any
information will be made available to you only to the extent our management possesses the
information or can obtain it without unreasonable effort or expense. 



        We
undertake to make available to every investor, during the course of the transaction and
prior to sale, the opportunity to ask questions of and receive answers from us concerning
the terms and conditions of this offering and to obtain any appropriate additional
information necessary to verify the accuracy of the information contained in this
Placement Memorandum or for any other purpose relevant to a prospective investment in the
securities offered hereby. 



        All
communications or inquiries relating to this Private Placement Memorandum should be
directed to one of the following individuals at either the Company or J. H. Darbie &
Co., as follows: 



	 —  	J.
H. Darbie & Co., Inc., Financial Services, 99 Wall Street, 6th Floor, New York, NY 10005
Telephone 212-269-7271 Facsimile 212-269-7330. Attention: Mr. Daniel Schneierson. 






	—  	Future
I.T. Ltd., 4 Hamalcha Street, North Industrial Area, Lod, Israel, Telephone
+972.8.920.8070 Facsimile +972.8.925.8160. Attention: Mr. Shmuel Bachar. 






Eligible Investors 



        The
Offering is being made in the United States to a limited number of investors in a private
placement without registration under the Securities Act of 1933, as amended (the
“Securities Act”), or state securities laws. The Offering is also being made
outside the United States to prospective investors who are not U.S. Persons. To be
eligible to subscribe for Units, each investor who is in the United States or who is a
U.S. Person must be an “accredited investor” as defined in Rule 501(a) of
Regulation D under the Securities Act. See “Who May Invest” and
“Subscription Procedures.” 



Risks 



        You
should carefully consider the risks described in this placement memorandum.  See "Risk
Factors." 




January 2007 Bridge Loan 



        In
reliance upon the exemption from registration provided by Rule 505 under Regulation D, as
promulgated under the Securities Act of 1933, as amended, in January and February 2007, we
issued secured promissory notes and shares of Common Stock to a total of 12
“accredited investors” as that term is defined under the Securities Act of 1933,
as amended. The aggregate principal amount of the promissory notes sold was $400,000. The
promissory notes bear interest at the rate of 10% per annum. The interest is calculated
monthly on the basis of a 365 day year and is paid in quarterly installments on each April
30, July 31, October 31 and January 31 (or the next succeeding business day) and the
maturity date of the notes. In the event of default under the promissory notes the
interest will automatically increase to 18% per annum or the maximum rate allowed by
applicable law, whichever is less. The principal amount of the notes and any accrued and
unpaid interest shall become due and payable on the sooner to occur of (i) within three
(3) business days following the receipt by us of funds from private placements or a public
offering of shares of our Common Stock in which the we cumulatively raise a minimum
aggregate sum of $1,500,000, or (ii) January 26, 2008. The bridge loan is secured by a
security interest on all our assets. In addition, for each $25,000 in principal amount
loaned to us, we issued to the investors 90,000 shares of our Common Stock and in the
aggregate 1,440,000 shares of our Common Stock were issued to the investors. $75,000 of
the promissory notes and 270,000 shares of Common Stock were sold to our directors or
officers or their family members (or companies controlled by them). 



7











SUMMARY OF PROPOSED
TERMS 



        This
summary highlights certain of the proposed terms of the offering of the Units. This
summary does not contain all of the information that you should consider before purchasing
the Units. Before deciding to purchase the Units, you should read the entire Placement
Memorandum and the related documents, including the Subscription Agreement. 





	
Securities: 	
 Units of Common Stock and Warrants to purchase Common Stock









		
	Aggregate Offering Amount:  	 Up to $1.5 million,  to be sold in Units of $30,000.  A minimum of 34 Units will be required for the First
 Closing.


















		
	Escrow; Registration Statement: 	All monies will be kept in escrow until we file a registration  statement on Form SB-2 with the Securities
and  Exchange  Commission.  During this  period the funds in escrow will be placed in an interest  bearing
account.  If the  registration  statement is not filed within 60 days after the First  Closing,  all funds
(plus interest to be paid by us and not the escrow agent ) will be returned to the  purchasers  unless the
Placement  Agent notifies the escrow agent and us that the purchasers  holding a majority of the shares of
Common  Stock issued in the  Offering  and upon  exercise of the  Warrants  have elected not to have their
Purchase  Price  returned to them, in which case the escrow agent shall  simultaneously  (i) pay to us the
purchase price received from the purchasers  (including all interest or other earnings or income earned or
received on such  investment  and  reinvestment  of the purchase  price) and (ii) provide to the Placement
Agent on behalf of each purchasers the certificates issued and delivered by us for each such purchaser.











		
		If for any  unforeseen  reason the Form SB-2 is not  declared  effective by the SEC within 24 months after
the First  Closing,  each investor will have the option for 60 days,  following the  expiration of such 24
month period, to require us to buy back the Units at the price paid by the Investors.







8




















		
	Units: 	Each Unit will consist of 100,000  shares of our Common  Stock and 46,200  warrants to purchase our Common
Stock at $0.50 a share,  which represents 0.5% of our share capital on a fully diluted basis. The exercise
period  of the  Warrants  shall be from the First  Closing  until the  earlier  of (i) 30 months  from the
registration becoming effective,  or (ii) closing of a Qualified IPO or merger or acquisition that results
in a change of control.  A Qualified IPO shall mean a registered  public  offering of our Common Stock (i)
at an equity  value of not less than  $0.65 per share  yielding  net  proceeds  to us of not less than one
million dollars;  and (ii) following which our Common Stock is listed on a U.S. national exchange.  In the
event of an IPO, a merger or an  acquisition,  the holders of the Warrants  shall be given no less than 30
days notice prior thereto in order to exercise the Warrants.











		
		The Warrants are to be protected by anti-dilution protection in the event of stock splits, stock
dividends or other events having a similar effect.












		
		In the event that the registration statement referred to below in the "Registration Rights" description
is not declared effective within six months following the First Closing, the holders of the Warrants may
elect to exercise the Warrants on a net-cashless basis.









		
	Future Issuances/Sales:  	 We and our current  stockholders,  excluding the bridge investors  referred to below,  shall be restricted
 from  issuing  (other  than,  an issuance by the Company in a Qualified  IPO) or selling any shares of our
 Common  Stock  until  six  months  following  the date  that the Form SB-2 is  declared  effective  by the
 Securities  and Exchange  Commission  or 18 months from the First  Closing of the  Offering,  whichever is
 sooner.  However, if less than $1,500,000 is raised in the Offering,  we may issue shares in consideration
 for the difference  between  $1,500,000 and the amount actually raised.  Following the six month period we
 will be entitled to issue  shares of our Common  Stock at any price.  This  restriction  will not apply in
 the event we receive the consent of the majority of the investors in this offering in writing.








  
9








		
	Registration Rights:  	We have  undertaken  at our  expense to file a  registration  statement  on Form SB-2 with  respect to the
registration  of 5,000,000  shares of Common Stock issued  pursuant to the  Subscription  Agreement,  (ii)
2,310,000  shares of Common Stock issuable upon exercise of the Warrants,  and (iii)  1,440,000  shares of
Common Stock issued to the lenders  pursuant to that Bridge Loan  Agreement  dated January 26, 2007 and to
make our  commercially  reasonable  efforts to keep this  registration  statement  effective for 18 months
after it is declared  effective by the SEC. The Units and the Warrants  themselves will not be registered.
We have  undertaken  to indemnify the investors  for  liability  based upon alleged  untrue  statements or
omissions to state,  of material  facts,  and such Investors will indemnify us for liability  based solely
upon  written  information  provided  by  them to us for use in the  registration  statement,  preliminary
prospects,  final prospectus,  or any amendment or supplement  thereto.  In addition we have undertaken to
include all such shares of common stock in any further  registration  statement  that we may file with the
SEC.  These  registration  rights  will  expire  with  respect to any holder of our Common  Stock (and its
affiliates,  partners and former  partners) who may become eligible to sell such stock under Rule 144 in a
single transaction.











		
	Use of Proceeds: 	The proceeds from issuance of our Common Stock will be used to repay indebtedness  incurred in the January
2007 bridge loan, in the amount of $400,000 plus interest, and for general corporate purposes.








10











SUMMARY HISTORICAL
FINANCIAL INFORMATION AND PROJECTIONS 



Summary Historical
Financial Information 



        The
Summary Historical Financial Information set forth below should be read in conjunction
with the Historical Financial Statements, the Notes thereto and the other information
contained in this Placement Memorandum. Since we were incorporated in October 2006 and had
no operations and incurred no expenses during 2006, the Summary Historical Financial
Information is based solely on the operations of our Israeli subsidiary, of which we
acquired a 90% interest on February 5, 2007. 







		Year Ended

December 31, 2006
	Year Ended

December 31, 2005

	 		
			
			
			
	Statement of operations: 	 	 	 		 	 		 
	 	 	 
	  Revenues	 	 	$	  162,169	 	 	12,412	 
	  Gross profit	 	 	$	  144,127	 	 	4,980	 
	  Total operating expenses	 	 	$	  901,763	 	 	 	 
	  Income (loss) from operations	 	 	$	 (756,656	)	 	(188,182	)
	 	 	 
	  Other income (expense)	 	 
	  Net loss	 	 	$	 (824,621	)	 	(193,372	)
	 	 	 
	  Net loss per share	 	 	$	   (8,246	)	 	(1,934	)
	  Weighted  number  of  shares  common  stock	 	 
	  outstanding	 	 	 	100	 	 	100	 
			











		As at

December 31, 2006
	As at

December 31, 2005

			
			
			
			
	Balance Sheet: 	 	 	 		 	 		 
	  Cash	 	 	$	         26	 	 	-	 
	  Current assets	 	 	$	     62,808	 	 	91,678	 
	  Total assets	 	 	$	     84,738	 	 	100,554	 
	  Current liabilities	 	 	$	     94,356	 	 	442,198	 
	  Total liabilities	 	 	$	  1,251,003	 	$	    442,188	 
	   Total stockholders' (deficiency)	 	 	$	 (1,166,265	)	 	(341,644	)
			








Projected Summary
Statement of Operations Data 



        The
following Projected Summary Statement of Operations Data for each of the years ended
December 31, 2007 through December 31, 2010, was developed by our management. Although
management believes that the assumptions used to create these projections are reasonable
under the circumstances, projections are necessarily speculative. Projections are
inherently unreliable and unanticipated events and circumstances are likely to occur.
Actual results realized during any future period are likely to vary from the projections,
and the variations may be material and adverse. Neither we, the Placement Agent nor any
other person makes any representation or warranty as to the accuracy or completeness of
this information. This information is presented as of the date hereof and is subject to
change or amendment without notice. Prospective investors are cautioned not to place any
reliance on the projections. 



11










        No
one outside our company, including the Placement Agent, our independent auditors or our
counsel, has compiled or reviewed our projections. Accordingly, none of such parties
expresses any opinion on, nor gives any assurances with respect to, such projections. The
summary financial projections set forth below should be read in conjunction with the
information contained elsewhere in this Private Placement Memorandum, including the
section entitled “Risk Factors,” and the Historical Financial Statements and the
Notes thereto attached hereto as Exhibit A. 



Projected Summary
Statement of Operations Data 







		Numbers in $ thousands
		2007
	2008
	2009
	2010

	 				
					
					
	Sales	 	 	$	     960	 	$	 3040	 	$	 6440	 	$	 15280	 
	 	 	 
	Support & Maintenance	 	 	 	81	 	 	181	 	 	363	 	 	634	 
	 	 	 
	Gross Profit	 	 	 	879	 	 	2859	 	 	6078	 	 	14646	 
		
		
		
		
	
	 	 	 
	Research and Development Expenses	 	 	 	356	 	 	831	 	 	1324	 	 	2488	 
	 	 	 
	Marketing	 	 	 	515	 	 	769	 	 	1430	 	 	2466	 
	 	 	 
	General and Administrative	 	 	 	617	 	 	1204	 	 	1865	 	 	2870	 
	 	 	 
	Total Expenses	 	 	 	1488	 	 	2804	 	 	4619	 	 	7824	 
		
		
		
		
	
	 	 	 
	EBITDA (1)  	  	  	$ 	 (609 	) 	$ 	 55 	  	$ 	 1459 	  	$ 	 6822 	  
		
		
		
		
	







     (1)
          Represents earnings before interest, taxes, depreciation and amortization. 



12











RISK FACTORS 



        Any
investment in the Units involves a high degree of risk. You should consider carefully the
following information, together with the other information contained in this Private
Placement Memorandum, before you decide to buy our securities. If any of the following
events actually occurs, our business, financial condition or results of operations would
likely suffer. In this case, the market price, if any, of our Common Stock could decline,
and you could lose all or part of your investment in our Units. 



We have a limited
operating history and limited historical financial information upon which you may evaluate our
performance.  



        You
should consider, among other factors, our prospects for success in light of the risks and
uncertainties encountered by companies that, like us, are in their early stages of
development. We may not successfully address these risks and uncertainties or successfully
implement our existing and new products and services. If we fail to do so, it could
materially harm our business and impair the value of our Common Stock. Even if we
accomplish these objectives, we may not generate positive cash flows or profits we
anticipate in the future. We were incorporated in October 2006. On February 5, 2007 we
acquired a 90% interest in Future I.T. Ltd., an Israeli limited liability company and we
have an option to acquire the remaining 10% until January 8, 2008. As of March 31, 2007,
we have long term debt of $1,150,000, including $500,000 of bank debt and $650,000 of long
term debt owed to DataSafe Group Ltd., our controlling shareholder (“DataSafe”)
and debts to suppliers of approximately $50,000. Unanticipated problems, expenses and
delays are frequently encountered in establishing a new business and developing new
products and services. These include, but are not limited to, inadequate funding, lack of
consumer acceptance, competition, product development, and inadequate sales and marketing.
The failure by us to meet any of these conditions would have a materially adverse effect
upon us and may force us to reduce or curtail operations. No assurance can be given that
we can or will ever operate profitably. 



We have incurred losses
since inception and we may be unable to achieve profitability or generate positive cash
flow.  



        We
incurred aggregate net losses of $821,621 in 2006 and the first quarter of 2007, and we
may be unable to achieve profitability in the future. If we continue to incur losses in
future periods, we may be unable to implement our business plan described herein,
including the following: 



	—  	increase
the number of products we distribute






	—  	increase
our sales and marketing activities, including the number of our sales personnel;






	—  	acquire
additional businesses






        As
of December 31, 2006, we had an accumulated deficit of $1,166,265. We may not achieve
profitability if our revenues increase more slowly than we expect, or if operating
expenses exceed our expectations or cannot be adjusted to compensate for lower than
expected revenues. If we do achieve profitability, we may be unable to sustain or increase
profitability on a quarterly or annual basis. Any of the factors discussed above could
cause our stock price to decline, if and when our Common Stock is approved for trading, of
which there is no assurance. 



We may not be able to
meet our future capital needs.  



        We
anticipate that our existing capital resources as well as the proceeds which will be
received in this Offering will be adequate to satisfy our working capital and capital
expenditure requirements until at least December 2008, but we may need to raise additional
funds in the future for a number of uses, including: 



13











	—  	implementing
marketing and sales activities for our products and services;






	—  	expanding
research and development programs;






	—  	repaying
our outstanding debts;






	—  	meeting
any shortfall arising from an unexpected deviation from our budget;






	—  	expanding
investment in fixed assets; and






	—  	hiring
additional qualified personnel.






        We
may not be able to obtain additional funds on acceptable terms or at all. If we cannot
raise needed funds on acceptable terms, we may be required to delay, scale back or
eliminate some aspects of our operations and we may not be able to: 



	—  	develop
new products;






	—  	enhance
our existing products;






	—  	remain
current with evolving industry standards;






	—  	take
advantage of future opportunities; or






	—  	respond
to competitive pressures or unanticipated requirements.







        Any
equity or debt financings, if available at all, may cause dilution to our then-existing
shareholders. If additional funds are raised through the issuance of equity securities,
the net tangible book value per share of our Common Stock would decrease and the
percentage ownership of then current shareholders would be diluted. 



We may not be able to
sustain our current ISV Royalties Agreement with Microsoft.  



        In
March 2006 we entered into an agreement with Microsoft for a period of two years whereby
we are permitted to sell certain Microsoft software products (that we purchase at reduced
prices) together with our products, thus increasing the attractiveness of our products to
potential customers and our profits from these sales. If Microsoft does not renew our
agreement or significantly reduces the discount at which we purchase Microsoft products
under the agreement, the sale of our products and our profitability may be adversely
affected. 



We may not accurately
anticipate the timing of the market needs for our products and develop such products at the
appropriate times, which could harm our operating results and financial condition.  



        Accurately forecasting and meeting our customers’ requirements is
critical to the success of our business. Forecasting to meet customers’ needs is
particularly difficult in connection with newer products and products under development.
Our ability to meet customer demand depends on our ability to configure our product
applications to the complex architecture that our customers have developed, the
availability of components and other materials and the ability of our contract
manufacturers to scale their production of our products. Our ability to meet customer
requirements depends on our ability to obtain sufficient volumes of these components and
materials in a timely fashion. If we fail to meet customers’ supply expectations, our
net revenues will be adversely affected, and we will likely lose business. 



14











The failure to develop
additional distribution channels to market and sell our products will impact the viability
of our company.  



        The
majority of our sales to date have been direct sales to companies in Israel. Although we
have executed agreements with various distributors and resellers in 17 countries, these
channels have not yet generated significant revenues. Although we intend to broaden our
base of distributors and resellers, these parties as well as our existing channels may not
succeed in marketing our products to their customers. 



Since many of our target
clients have limited resources, we may face a loss of customers or experience a high level
of non-collectible accounts.  



        We
intend to concentrate on serving small and medium-sized businesses. This target market
contains many businesses that may not be successful. Moreover, we believe a significant
portion of this target market is highly sensitive to price, and sales may be lost to
low-cost competitors. Additionally, if a customer becomes dissatisfied with our products,
cancellation, non-payment, or non-renewal becomes more likely. 



Because we also market
through distributors and resellers, we may face inability to collect the proceeds of sales
made through them.  



        As
our goal is to expand the sale of our products internationally, we will need to market and
sell our products through companies that function as distributors and resellers. By
relying upon such companies we may face a risk of inability to collect the proceeds
received by them. We may face obstacles to collect the payments to which we are entitled
from those companies. Such obstacles may lead to further spending on litigation and may
result in loss of profit. This loss of profit may result in curtailing our marketing,
sales, research and development activities and by that fact we may not achieve our
financial goals. 



We may not effectively
execute our strategy and as a result, others may seize the market opportunity.  



        If
we fail to execute our server management strategy in a timely or effective manner, our
competitors may be able to seize the opportunity we have identified to address the server
management needs of SMEs. Our business strategy is complex and requires that we
successfully and simultaneously complete many tasks, and the failure to complete any one
of these may jeopardize our strategy as a whole. In order to be successful, we will need
to: 



	—  	market
our services and build our brand name effectively;






	—  	develop
new products and services;






	—  	enhance
the efficiency of our infrastructure to accommodate additional customers; 






	—  	expand
our customer base; respond to competitive developments; and 






	—  	attract,
retain and motivate qualified personnel.






We may face intense
competition and may not be able to operate profitably in our markets.  



        The
server management markets for SMEs may become highly competitive, which could hinder our
ability to successfully market our products and services. We may not have the resources,
expertise or other competitive factors to compete successfully in the future. There are no
substantial barriers to entry and we expect to face additional competition from existing
competitors and new market entrants in the future. Many of our competitors have greater
name recognition and more established relationships in the industry than us. As a result,
these competitors may be able to: 



15










	—  	develop
and expand their products and service offerings more rapidly;






	—  	adapt
to new or emerging technologies and changes in customer requirements more quickly;






	—  	take
advantage of acquisition and other opportunities more readily; and,






	— 	devote
greater resources to the marketing and sale of their services and adopt more aggressive
pricing policies than we can. 






        Current
and potential competitors in the market include companies that develop and sell products
directed to database administrators; and large information technology firms that provide
interdisciplinary and wide array of products and services pertaining to information
technology. These competitors may operate in one or more of these areas and include
companies such as Quest Software Inc., Red Gate Software Limited, Microsoft Corporations
and Idera, a division of BBS Technologies, Inc. Furthermore, Microsoft
currently provides without charge to its SQL server clients a software product which is
intended to manage and maintain the server. We will face a more competitive environment if
Microsoft upgrades its product to provide more features and this will pose substantial
competition to our product solutions. 



We are reliant on
DataSafe for services.  



        Our
principal operations were acquired from DataSafe, that owns approximately 92% of our
outstanding share capital, and almost all our software development was carried out by
DataSafe or its subsidiaries and we are currently dependent on DataSafe for various
ongoing services, such as accounting, secretarial and other general services. In addition,
DataSafe has provided us with loans and guarantees required to secure bank financing. In
the event that DataSafe terminates any of these services, we believe that we will be able
to secure these services from other third party suppliers to perform the required
activities internally, however, the cost to us may be significantly higher and this may
have a material adverse effect on our operations and profitability. See “CERTAIN
TRANSACTIONS – Related Party Transactions”. 



Our ability to
successfully market our products and services could be substantially impaired if we cannot deploy
new products or if new products we deploy prove to be unreliable, defective or
incompatible.  



        We
may experience difficulties that could delay or prevent the successful development,
introduction or marketing of database administration software in the future. If any newly
introduced products suffer from reliability, quality or compatibility problems, market
acceptance of our services could be greatly hindered and our ability to attract new
customers could be adversely affected. New products we deploy may suffer from reliability,
quality or compatibility problems. If we incur increased costs or cannot, for technical or
other reasons, enhance our ability to successfully market our products and services, our
operations could be substantially impaired. In addition, new products and services may not
be accepted by our customers. 



Impairment of our
proprietary information and trade secrets could negatively affect our business or could allow
competitors to minimize any advantage that our proprietary technology may give us.  



        We
currently have no patented technology that would preclude or inhibit competitors from
entering the markets that we serve. While it is our practice to enter into agreements with
all employees and some of our customers and suppliers to prohibit or restrict the
disclosure of proprietary information, we cannot be sure that these contractual
arrangements or the other steps we take to protect our proprietary rights will prove
sufficient to prevent illegal use of our proprietary rights or to deter independent,
third-party development of similar proprietary assets. 



16











        Effective
copyright, trademark, trade secret and patent protection may not be available in every
country in which our products and services are offered. In the future, we may be involved
in legal disputes relating to the validity or alleged infringement of our intellectual
property rights or those of a third party. Intellectual property litigation is typically
extremely costly and can be disruptive to business operations by diverting the attention
and energies of management and key technical personnel. In addition, any adverse decisions
could subject us to significant liabilities, require us to seek licenses from others,
prevent us from using, licensing or selling certain of our products and services, or cause
severe disruptions to operations or the markets in which we compete which could decrease
profitability. 



Our products may contain
defects that may be costly to correct, delay market acceptance of our products and expose
 us to litigation.  



        Despite
testing by us, errors may be found in our software products. If defects are discovered, we
may not be able to successfully correct them in a timely manner or at all. Defects and
failures in our products could result in a loss of, or delay in, market acceptance of our
products and could damage our reputation. Although our standard license agreement with our
customers contains provisions designed to limit our exposure to potential product
liability claims, it is possible that these provisions may not be effective or enforceable
under the laws of some jurisdictions, and we could fail to realize revenues and suffer
damage to our reputation as a result of, or in defense of, a substantial claim. We
currently do not carry product liability insurance for our products. 



If we are unable to attract and
retain senior management and key personnel, we may not be able to compete
effectively in our market. 



        Our
success will depend, in part, on our ability to attract and retain senior management and
key, technical and sales and marketing personnel. We attempt to enhance our management and
technical expertise by recruiting qualified individuals who possess desired skills and
experience in certain targeted areas. We experience strong competition for such personnel
in the server management industry. Our inability to retain senior management and attract
and retain sufficient additional employees, and information technology, engineering and
technical support resources, could have a material adverse effect on our business,
financial condition, results of operations and cash flows. The loss of senior management
and key personnel could limit our ability to develop and market our products and services. 



Changes in technology and
industry standards may cause our products to be non-competitive or increase our product
costs.  



        In
the server management industry, software and service providers must keep pace with
evolving technologies in order to offer relevant, sophisticated products and services on a
timely basis to meet rapidly changing customer demands. Our success depends, in part, upon
the ability to offer products and services that incorporate leading technologies, address
the increasingly sophisticated and varied needs of our current and prospective customers
who require server management products and services, and respond to technological advances
and emerging industry standards and practices on a timely and cost-effective basis. The
market for server management products and services is characterized by evolving industry
standards, changes in interfaces which derive new and special customer needs, emerging
competition and frequent introductions of new products and services. We also believe that
to compete successfully, our services must remain compatible with products offered by
various vendors. Enhanced or newly developed third-party products may not be compatible
with our infrastructure or adequately address the needs of our customers. Although we
currently intend to support emerging standards, industry standards may not be established.
Even if they are established, we may not be able to conform to these new standards swiftly
enough to remain competitive. Our failure to conform to the prevailing standard could
cause us to lose customers or fail to attract new customers. In addition, third-party
products, services or technologies could render our services noncompetitive or obsolete. 



17










We are subject to risks
associated with international operations.  



        We
are based in Israel and generate a large percentage of our sales outside the United
States. We had no significant sales outside Israel for the year ended December 31, 2006
and for the period ending March 31, 2007. Although we continue to expand our international
operations and commit significant management time and financial resources to developing
direct and indirect international sales and support channels, we cannot be certain that we
will be able to maintain or increase international market demand for our products. To the
extent that we cannot do so in a timely manner, our business, operating results and
financial condition will be adversely affected. 



        International
operations are subject to inherent risks, including the impact of possible recessionary
environments in multiple foreign markets and longer receivables collection periods and
greater difficulty in accounts receivable collection. 



        If
any payments resulting from fluctuations on the exchange of foreign currencies were
imposed, our business could be adversely affected as a result of the multi-currency
business environment in which we operate. Although exposure to multi-currency fluctuations
to date has not had a material adverse effect on our business, there can be no assurance
such fluctuations in the future will not have a material adverse effect on revenues from
international sales and, consequently to our business, operating results and financial
condition. 



We are vulnerable to
software failures, which could harm our reputation and cause our customers to seek reimbursement
from us and take their business to another provider.  



        The
software products that we distribute must be able to perform on the servers and properly
manage them around the clock without interruption. Our support operations depend upon our
ability to supply our costumers with telephone and e-mail assistance and our support
center may suffer damages emanating from human error, force majeure, power loss,
telecommunications failures, sabotage, intentional acts of vandalism and similar events.
Future interruptions could: 



	—  	cause
customers or end users to seek damages for losses incurred;






	—  	require
us to replace existing equipment or add redundant facilities;






	—  	damage
our reputation for reliable service;






	—  	cause
existing customers to cancel their contracts; or






	—  	make
it more difficult for us to attract new customers.








We do not anticipate
paying any dividends.  



        As
holders of our Common Stock, you will only be entitled to receive those dividends that are
declared by our board of directors out of surplus. We do not expect to have surplus
available for declaration of dividends in the foreseeable future. Indeed, there is no
assurance that such surplus will ever materialize to permit payment of dividends. Our
board of directors will determine future dividend policy based upon our results of
operations, financial condition, capital requirements, reserve needs and other
circumstances. 



18













We have not voluntarily
implemented various corporate governance measures, in the absence of which stockholders
may have reduced protections against interested director transactions, conflicts of
interest and other matters.  



        We
are not presently subject to any law, rule or regulation requiring that we adopt any of
the corporate governance measures that are required by the rules of national securities
exchanges such as the requirement for a majority of independent directors and the
establishment of an audit committee. It is possible that if we were to adopt some or all
of the corporate governance measures, stockholders would benefit from somewhat greater
assurances that internal corporate decisions were being made by disinterested directors
and that policies had been implemented to define responsible conduct. Prospective
investors should bear in mind our current lack of corporate governance measures in
formulating their investment decisions. 





We may be exposed to
potential risks relating to our internal controls over financial reporting and our ability
to have those controls attested to by our independent auditors.  



        As
directed by Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX 404”), the
Securities and Exchange Commission adopted rules requiring public companies to include a
report of management on the company’s internal controls over financial reporting in
their annual reports. In the event we become a reporting company under the Securities
exchange Act of 1934, we will need to expend significant resources in developing the
necessary documentation and testing procedures required by SOX 404, and there is a risk
that we will not comply with all of the requirements imposed thereby. In the event we
identify significant deficiencies or material weaknesses in our internal controls that we
cannot remediate in a timely manner, investors and others may lose confidence in the
reliability of our financial statements and our ability to obtain equity or debt financing
could suffer. 



Our executive officers,
directors and 5% or greater shareholders have the ability to significantly influence matters requiring a
shareholder vote and other shareholders may not have the ability to influence corporate transactions.  





        Currently,
our existing officers, directors and principal shareholders in the aggregate beneficially
own approximately 91.5% of our outstanding shares of Common Stock. Upon completion of this
Offering (and assuming no issuance of shares of Common Stock upon the exercise of warrants
issued in connection with the Offering or stock options reserved for issuance pursuant to
our employees’ stock option plan), this group will continue to own approximately 67%
of our outstanding shares of Common Stock. As a result, such persons, acting together,
will have the ability to significantly influence the vote on all matters requiring
approval of our shareholders, including the election of directors and approval of
significant corporate transactions. 



There is no public
trading market for our Common Stock.   



        Currently,
there is no trading market for our Common Stock, and there can be no assurance that such a
market will commence in the future. There can be no assurance that an investor will be
able to liquidate his or her investment without considerable delay, if at all. If a
trading market does commence, the price may be highly volatile. Factors discussed herein
may have a significant impact on the market price of the shares offered. Moreover, due to
the relatively low price of our securities, many brokerage firms may not effect
transactions in our Common Stock if a market is established. Rules enacted by the SEC
increase the likelihood that most brokerage firms will not participate in a potential
future market for our Common Stock. Those rules require, as a condition to brokers
effecting transactions in certain defined securities (unless such transaction is subject
to one or more exemptions), that the broker obtain from its customer or client a written
representation concerning the customer’s financial situation, investment experience
and investment objectives. Compliance with these procedures tends to discourage most
brokerage firms from participating in the market for certain low-priced securities. 



19











Risks Related to Our
Operations in Israel 



We are headquartered in
Israel and therefore our results may be adversely affected by political, economic and military
instability in Israel.  



        Our
principal offices and research and development facilities and many of our suppliers are
located in Israel. Accordingly, political, economic and military conditions in Israel may
directly affect our business. Since the establishment of the State of Israel in 1948, a
number of armed conflicts have taken place between Israel and its Arab neighbors, as well
as incidents of civil unrest. During the summer of 2006, Israel was engaged in an armed
conflict with Hezbollah, a Lebanese Islamist Shiite militia group and political party.
This conflict involved missile strikes against civilian targets in northern Israel that
have resulted in economic losses. Any hostilities involving Israel or the interruption or
curtailment of trade between Israel and its present trading partners could adversely
affect our operations. Since September 2000, terrorist violence in Israel has
increased significantly and negotiations between Israel and Palestinian representatives
have effectively ceased. The establishment of a government in the Palestinian Authority in
early 2006 by representatives of the Hamas militant group has created additional unrest
and uncertainty in the region. 



        We
can give no assurance that security and political conditions will not have an impact on
our business in the future. Hostilities involving Israel or the interruption or
curtailment of trade between Israel and its present trading partners could adversely
affect our operations and could make it more difficult for us to raise capital. 



        Although
our main headquarters are located in central Israel, the adverse effects of this conflict
have negatively affected business conditions in Israel. Ongoing and revived hostilities or
other adverse political or economic developments in Israel or the region could harm our
operations and product development and cause sales of any approved products to decrease.
In addition, Israel and companies doing business with Israel have, in the past, been
subject to economic boycotts. Several countries, principally those in the Middle East,
still restrict business with Israel and Israeli companies. These restrictive laws and
policies may seriously limit our ability to sell any approved products in these countries. 



        Our
business insurance does not cover losses that may occur as a result of events associated
with the security situation in the Middle East. Although the Israeli government currently
covers the reinstatement value of direct damages that are caused by terrorist attacks or
acts of war, we cannot assure you that this government coverage will be maintained. Any
losses or damages incurred by us could have a material adverse effect on our business. Any
armed conflicts or political instability in the region would likely negatively affect
business conditions and could harm our results of operations. 



Our operations could be
disrupted as a result of the obligation of management or key personnel to perform military
service in Israel.  



        Many
of our male employees in Israel, including members of senior management, are obligated to
perform military reserve duty annually for extended periods of time through the age of 45
(or older for citizens with certain occupations) and, in the event of a military conflict,
could be called to active duty. In response to increases in terrorist activity, there have
been periods of significant call-ups of military reservists, and recently some of our
employees have been called up in connection with armed conflicts. It is possible that
there will be additional call-ups in the future. Our operations could be disrupted by the
absence of a significant number of our employees related to military service or the
absence for extended periods of military service of one or more of our key employees. 



It may be difficult to
enforce a U.S. judgment against us, our officers and directors and some of the experts named
in this Private Placement Memorandum or to assert U.S. securities law claims in
Israel.  



        All
of our executive officers and directors are not residents of the U.S., and a majority of
our assets and the assets of these persons are located outside of the U.S. Therefore, it
may be difficult to enforce a judgment obtained in the U.S., against us or any of these
persons, in U.S. or Israeli courts based on the civil liability provisions of the U.S.
federal securities’ laws. Additionally, it may be difficult for you to enforce civil
liabilities under U.S. federal securities laws in original actions instituted in Israel.
Furthermore, if a foreign judgment is enforced by an Israeli court, it will be payable in
Israeli currency. 



20











WHO MAY INVEST 



Suitability Requirements 



        The
risks associated with an investment in our securities and the illiquidity of our Common
Stock make the investment suitable only for an investor who has substantial net worth and
who individually, or in reliance upon the advice of professional advisors, has the
knowledge and experience in financial and business matters and investments in
organizations similar to us so as to enable such investor to evaluate the merits and all
of the risks associated with a purchase of our securities In particular, a potential
investor in our securities or the advisors to such investor must be experts in evaluating
the database administration markets and have a thorough knowledge of our technology and
operations and the structure of the database management products industry. Subscriptions
will be accepted only from “accredited investors,” as that term is defined in
Regulation D promulgated under the Securities Act. 



        Prior
to the sale of any of our securities, we will require each prospective investor to
represent in writing that, among other things, the following: 



	— 	by
reason of the investor’s business or financial experience, or the business or
financial experience of the investor’s professional advisor, the investor is capable
of evaluating the merits and risks of an investment in our securities and of protecting
its own interests in connection with the transaction; 






	— 	the
investor is acquiring our securities for its own account, for investment only and not
with a view toward the resale or distribution thereof; 






	—  	the
investor is aware that none of our securities has been  registered  under the Securities
Act or any      state or foreign securities laws;






	— 	the
investor is aware that the transfer of our securities is restricted by the Securities
Act, applicable state or foreign securities laws and the Subscription Agreement, and that
there is no market for our Common Stock; and 






	—  	the
investor meets the suitability requirements set forth below.






        The
Offering is being made in the United States to a limited number of investors in a private
placement without registration under the Securities Act or state securities laws. The
Offering is also being made outside the United States to prospective investors who are not
U.S. Persons. To be eligible to subscribe for Units, each investor who is in the United
States or who is a U.S. Persons must meet one of the definitions of “accredited
investor” set forth in Rule 501(a) of Regulation D under the Securities Act described
in the subscription agreement. The Placement Agent and the Company may, each in its sole
discretion, reject any subscription for Units. 



        The
definition of “accredited investor” set forth in Rule 501(a) includes, among
others: 



	 	(a) 	a
natural person whose individual net worth, or joint net worth with that
               person’s spouse, exceeds $1,000,000; 






	 	(b) 	a
natural person who had an individual income in excess of $200,000 in each of
               the two most recent years or joint income with that person’s spouse
in                excess of $300,000 in each of those years and has a reasonable
expectation of                reaching the same income level in the current year; 






	 	(c) 	any
corporation, partnership, limited liability company or business trust not
               formed for the specific purpose of acquiring the Units with total assets
in                excess of $5,000,000; 






	 	(d) 	any
trust, with total assets in excess of $5,000,000 not formed for the specific
               purpose of acquiring the Units, whose purchase is directed by a
sophisticated                person; 






21











	 	(e) 	an
entity in which all of the equity owners are accredited investors; 






	 	(f) 	any
plan established and maintained by a state, its political subdivisions, or
               any agency or instrumentality of a state or its political subdivisions,
for the                benefit of its employees with total assets in excess of
$5,000,000; 






	 	(g) 	any
employee benefit plan within the meaning of the Employee Retirement Income
               Security Act of 1974, as amended (“ERISA”), if the investment
decision                is made by a plan fiduciary, as defined in Section 3(21) of
ERISA, which is                either a bank, savings and loan association, insurance
company or registered                investment adviser, or if the employee benefit plan
has total assets in excess                of $5,000,000 or, if a self-directed plan, with
investment decisions made solely                by persons that are accredited investors;
and 






	 	(h) 	an
“individual retirement account” (or “IRA”) as defined in
               Section 408(a) of the Code owned by and for the benefit of an accredited
               investor. 






Transfer Restrictions 



        The
Units, shares of Common Stock and Warrants sold by us in this Offering have not been
registered under the Securities Act and they are therefore subject to significant resale
restrictions. You must treat an investment in our Units as a long-term investment and
expect to bear the economic risk of the ownership of those securities for an indefinite
period. Under the Securities Act, a holder of our securities will be prohibited from
transferring any securities until those securities are registered under the Securities Act
or there is an exemption therefrom. 



        All
certificates representing our securities will contain a restrictive legend to this effect. 



Market Liquidity 



        There
is no public market for our securities and this offering will not result in the
establishment of such a market. Because we are not currently subject to the requirements
of the United States Securities Exchange Act of 1934, or the Exchange Act, we do not
prepare the reports generally required under the Exchange Act. If and when a public
offering of any of our securities is successfully completed, or as otherwise required, we
intend to comply with all requisite reporting requirements of the Exchange Act. 



Agreements 



        As
a condition of any sale of Units pursuant to this offering, we will require the execution
of a Subscription Agreement, which will include customary provisions regarding
representations and warranties and conditions to the First Closing. 



22











FORWARD-LOOKING
STATEMENTS 



        All
statements other than statements of historical facts included in this Placement
Memorandum, including, without limitation, statements regarding our future financial
position, our projections, our strategy, the anticipated development of our technologies
and products and our operations, the development of the database administration industry
and other related industries, our anticipated use of proceeds, our development of
additional revenue sources, our development and expansion of strategic relationships and
alliances, the market acceptance of our technologies and products, and our technological
advancement, our ability to cope with existing and future competition, our ability to
research and develop future products, the establishment of distributors and resellers
network and the possible breakthrough of our products to international markets are
forward-looking statements. Forward-looking statements generally can be identified by the
use of forward-looking terminology such as “may,” “expect,”
“intend,” “estimate,” “anticipate,” “believe” or
“continue” or the negative thereof or variations thereon or similar terminology.
Although we believe that the expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will prove to have been
correct. Important factors that could cause actual results to differ materially from our
expectations (“cautionary statements”) are disclosed under “Risk
Factors” and elsewhere in this Placement Memorandum, including, without limitation,
in conjunction with the forward-looking statements included in this Placement Memorandum.
All subsequent written and oral forward-looking statements attributable to us, or persons
acting on our behalf, are expressly qualified in their entirety by the cautionary
statements included in this Placement Memorandum. 



        All
forward-looking statements attributable to us or persons acting on our behalf apply only
as of the date of this Placement Memorandum and are expressly qualified in their entirety
by the cautionary statements included in this Private Placement Memorandum. We undertake
no obligation to publicly update or revise forward-looking statements to reflect events or
circumstances after the date made or to reflect the occurrence of unanticipated events,
except as otherwise required by applicable law. 



        Market
data and forecasts used in this Placement Memorandum, including, for example, estimates of
growth in our target markets, have been obtained from independent industry sources. We
have not independently verified the data obtained from these sources and we cannot assure
you of the accuracy or completeness of the data. Forecasts and other forward-looking
information obtained from these sources are subject to the same qualifications and the
additional uncertainties accompanying any estimates of future market size. 





USE OF PROCEEDS 



        The
gross proceeds to us from the sale of the Units offered by us (assuming the Maximum
Offering) are estimated to be $1,500,000, before deducting the Placement Agent’s fees
and expenses, and the estimated offering expenses payable by us, which are estimated to be
approximately $350,000. If all Warrants issued in this offering are exercised (assuming
the Maximum Offering), we will receive an additional $1,155,000 in proceeds. 



        We
intend to use the net proceeds of this offering for repayment of a bridge loan in the
principal amount of $400,000, plus accrued and unpaid interest, and the remainder,
including any proceeds from exercise of the Warrants, for general corporate purposes,
including the following: 



	—  	expanding
our research and development efforts, including the hiring of additional personnel;






	—  	expanding
our sales and marketing operations;






	—  	enhancing
our infrastructure;






	—  	building
brand recognition;






23











	—  	working
capital; and






	—  	the
 purchase  of the  remaining  10% of the  outstanding  shares  of  Future  IT  Ltd.  that
we do not      currently own.






        Our
management will have broad discretion in the allocation of the net proceeds of this
offering. Pending such uses, we intend to invest the net proceeds from this offering in
short-term, interest-bearing investments, including bank accounts in Israel and elsewhere. 





DIVIDEND POLICY  



        We
have never declared or paid dividends on our share capital, and we do not intend to
declare or pay dividends on our share capital in the foreseeable future. We intend to
retain any earnings to fund the development and growth of our business. Our board of
directors will determine future dividend policy based upon our results of operations,
financial condition, capital requirements, reserve needs and other circumstances. 





CAPITALIZATION 



	 	
The
following table sets forth our capitalization as of December 31, 2006:  






	 	1. 	on
an as adjusted basis to give effect to effect to the acquisition of Future           I.T
Ltd. as of December 31, 2006; and 






	 	2. 	on
an as adjusted basis to reflect the increase in the number of shares           authorized
to 30,000,000, the issuance of 1,940,000 shares of our Common Stock           since
December 31, 2006 for par value and the sale of our Common Stock in this
          offering, and the application of the estimated net proceeds of $1,150,000 from
          this Offering, after deducting the estimated offering fees and expenses payable
          by us, which are estimated to be approximately $350,000. 









	 		December 31, 2006

	 		Actual(1)
	As adjusted

	 	 		
	 			
	 			
	 	Cash and cash equivalents	 	 	$	          0	 	$	  1,150,000	 
	 		
		
	
	 	 	 	 
	 	Shareholders' equity:	 	 
	 	   Shares of Common Stock, $ 0.0001 par value per share; 15,000,000 shares	 	 
	 	      authorized; 15,000,000 shares issued and outstanding actual; 30,000,000	 	 
	 	      shares authorized; 21,940,000 shares issued and outstanding as adjusted (2)	 	 	$	      1,500	 	$	      2,194	 
	 	 	 	 
	 	   Additional paid in capital	 	 	 	 	 	 	1,149,306	 
	 		
		
	
	 	   Accumulated deficit	 	 	$	 (1,166,265	)	$	 (1,166,265	)
	 		
		
	
	 	        Total shareholders' equity (deficit)	 	 	$	 (1,164,765	)	$	    (14,765	)
	 		
		
	







	 	(1) 	Gives
effect to the acquisition of Future I.T Ltd. of December 31, 2006. 




	 	(2) 	Excludes
2,500,000 shares of Common Stock reserved for issuance pursuant to our
               employees’ stock option plan and pursuant to the Warrants issued in
the                Offering. 






24











MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 



Disclaimer Regarding
Forward Looking Statements 



        Please
review carefully the section entitled “FORWARD-LOOKING STATEMENTS”. 



Overview 



        We
are engaged in the development, marketing, sale and support of software products that
provide affordable easy-to-use comprehensive database management, backup and monitoring
capabilities for small and medium sized enterprises, running Microsoft SQL 2000 / 2005
(Structured Query Language) servers. In years to come we also plan to develop new products
that will provide desired capabilities in the field of better management to other popular
Microsoft family servers. 



        Since
we were incorporated in October 2006 and had no operations and incurred no expenses during
2006, the information below is based solely on the operations of our Israeli subsidiary,
of which we acquired a 90% interest on February 5, 2007. 



Plan of Operations 



        Assuming
the Maximum Offering is completed and we receive gross proceeds of $1,150,000, in the
twelve month period following the First Closing we anticipate that we will have sufficient
resources to meet our cash requirements and will be able to continue our operations as
contemplated, however if an interesting business proposal arises, we may wish to raise
additional financing in order to exploit this opportunity. 



        We
intend to continue our investment in research and development activities to further
increase the functionality and user friendly features of our software products and to
complete development of our EZ Manage AD (Active Directory) product, see “BUSINESS
– Our Products: New Application.” We expect to increase the number of our full
time employees in our company by between five to ten persons. . We do not expect to
purchase or sell any significant equipment in the twelve month period. 



Year ended December 31, 2006
compared to the Year ended December 31, 2005 



Results of Operations 



Revenues and Loss from
Operations  



        Our
revenue, operating expenses and net (loss) from operations for the year ended December 31,
2006 as compared to the year ended December 31, 2005 are as follows: 




		Year Ended

December 31, 2006
	Year Ended

December 31, 2005
	Percentage

Change

Increase

(Decrease)

	 			
				
				
				
	Revenue	 	 	$	 162,169	 	$	  12,412	 	 	1307	%
	Operating expenses	 	 	 	901,763	 	 	183,182	 	 	492	%
		
		
			
	Net loss from operations	 	 	$	 756,656	 	$	 188,182	 	 	402	%
		
		
			






25










        Our
revenues increased by $149,757 for the year ended December 31, 2006 as compared to the
year ended December 31, 2005, as a result of the fact that 2006 is the first full year in
which our first product is sold. During the same time periods, our operating expenses
increased by $718,581 due to the fact that our research and development expenses increased
to $574,831 and our selling and G&A expenses increased to $326,932. As a result, we
had a net loss from operations of $756,656 for the year ended December 31, 2006, as
compared to a net loss of $188,182 for the year ended December 31, 2005. 



Liquidity and Capital
Resources 



        During
year ended December 31 2006, we incurred net losses of $756,656 and a negative cash flow
from operations of $836,168. 



        Our
cash and cash equivalents, total current assets, total assets, total current liabilities,
and total liabilities as of December 31, 2006 as compared to December 31, 2005, are as
follows: 




		December
31

2006
	December 31,

2005

	 		
			
			
			
	Cash	 	 	$	        26	 	$	         -	 
	Total current assets	 	 	 	62,808	 	 	91,678	 
	Total assets	 	 	 	84,738	 	 	100,554	 
	Total current liabilities	 	 	 	94,356	 	 	442,198	 
	Total liabilities	 	 	 	1,251,003	 	 	442,198	 






Cash Requirements  



        Our
cash requirements are expected to grow significantly over the years 2007 and 2008 due to
increase in our: marketing, selling expenses, research and development expenses, G&A
expenses and paying principal and interest on our loan facilities. 



        On
December 20, 2006, we received a loan from Israel Discount Bank in the amount of $500,000.
The principal of this loan is to be repaid to the Bank in 18 equal monthly installments
commencing in July 2008. On December 31, 2006, we received a loan from DataSafe in the
amount of $650,000, the principal of which is to be repaid in 18 equal monthly
installments commencing in July 2008. Both these loans bear interest at the three-month
Dollar LIBOR rate plus 1.75%, which such interest shall be paid in 54 monthly payments
starting on January, 2007. 



        We
raised $400,000 by means of a bridge loan from private lenders in January 2007. This loan
bears interest at the rate of 10% per annum, payable quarterly, and the entire amount of
the loan and all accrued and unpaid interest will be paid from the proceeds of the
Offering. 



        In
order to continue with our business plan we will need to raise additional funds which
there is no assurance that we will be able to do. 



Operations, Investment
and Financing 



        During
the year ended December 31, 2006, we generated a positive cash flow of $26. This was a
result of net cash used by operating activities of $(836,168), and net cash provided by
investment activities of $48,275 and net cash provided in financing activities of
$787,919. 



26











        Net
cash provided by operating activities consisted primarily of a net loss of $ 824,621 



        We
are expected to incur losses at least during the fiscal years 2007 and 2008. 





BUSINESS 



Overview 



        We are
engaged in the development, marketing, sale and support of software products that provide
affordable easy-to-use comprehensive database management and monitoring solutions for
small and medium sized enterprises, running different Microsoft SQL servers, versions 2000
and 2005, as well as MSDE and SQL Express. 



        We
were incorporated in the State of Delaware on October 26, 2006 under the name
“FutureIT, Inc.” On February 5, 2007 we acquired a 90% interest in Future I.T.
Ltd., an Israeli company and we have an option to acquire the remaining 10% by January
2008. 



        Our
recently acquired 90% owned Israeli subsidiary began selling our SQL Standard Manage
Edition and SQL Manage Enterprise Edition, or our products, in December 2005 and had
revenues of $162,169 in the fiscal year ended December 31, 2006. We also have a
wholly-owned English subsidiary, Future IT Software Limited, that serves as a marketing
subsidiary. To date we have sold approximately 300 units of SQL Manage product in both the
Standard Edition Version (for automated management of databases) and Enterprise Edition
Version (which further enables web interface for multiple users and remote locations). We
market our products through our subsidiaries and through distributors and resellers in 17
countries but, revenues to date have been generated almost exclusively from Israel with
one initial sale in each of England, USA and Germany. A large part of our sales to date
have been made through direct sales by our Israeli subsidiary. 



        Our
strategy is to position ourselves as a leading provider to the SME market of accessible
and simple to use IT management solutions for the Microsoft server environment. This
includes solutions for administration, backup and maintaining of Microsoft SQL Server and
other Windows server based components. 



Industry Background 



        We
estimate that there are millions of Microsoft SQL servers in different versions used by
SMEs (up to 500 users). SQL server users need to ensure that malfunctions do not paralyze
the operations of such businesses. Currently, the databases of such enterprises are
maintained by in house database administrators or by external computer software and
hardware professionals. This is both quite costly to these enterprises, and in the event
of system malfunction there is often delay and slowdown until a suitable professional is
available to remedy the problem. We believe that there is a large market for low cost and
automated SQL server management that can be maintained by personnel without any technical
background or any computer expertise. As far as we are aware there are no product
offerings in the market that provide a low cost comprehensive automated solution, other
than our software product solutions, to this market needs. 



Our Solution 



        We
are engaged in the development, marketing, sale and support of software products that
provide affordable easy-to-use comprehensive database management and monitoring solutions
for small and medium sized enterprises, running different Microsoft SQL servers. 



27











        Key
benefits of our solution for automating the management of databases include the following:






	—  	Meeting
the challenges of database management and monitoring – SQL Manage monitors databases
and servers in the background, round the clock, and immediately notifies customers by e-mail
and pop-ups of problems that might lead to failures. The system recommends automatic
fixes to problems, significantly reducing failures and avoiding downtime.








	— 	SQL
Manage’s extensive maintenance features and fine tuning abilities enable
administrators as well as regular users to make more informed decisions and run important
tasks that make the database more efficient and ensures minimized maintenance time and
optimized job mix for enhanced application performance. 






	— 	SQL
Manage is innovative in that it provides a comprehensive solution that suits ordinary
people utilizing information technology and not only database experts. This allows
customers to gain independence from expensive database experts and to enjoy an affordable
24/7 automatic solution that everyone can use. With an installation and implementation
time of approximately thirty minutes, coupled with automated policies and rules to manage
single or multiple databases on any number of servers, SQL Manage is deployed quickly.
The intuitive interface, combined with clear built-in tutorials and wizards, eliminates
the need for specialized training. 






	— 	Integrated
within the solution is a backup that ensures customers are always only two clicks away
from a full or specific point-in-time restore. The backup solutions allow automatic
compression of backups to 90% of their original size – big savings on disk space and
management. SQL Manage backup technology expands the backup beyond customers’ database
and allows the easy inclusion of other related files associated with the database such
as: office documents, logos, templates, PDF forms and any other file which is not within
the database but works alongside it. 






	— 	As
part of the solution, a built-in Disaster Recovery Planning(DRP)capability
is included allowing the customers to automatically send either full or differential
backups to a more remote location, other network location or even an encrypted file
transfer protocol (FTP) site over the web. Like all other components of SQL Manage the
customer is only required to set up once and deploy it on ay number of databases or
servers. 






	— 	The
customer can decide in which situations to receive an alert. A data recovery plan allows
the customer to send a file from one location to another. The customer determines when a
backup file expires. The customer can also set up a program to restore files from any
point in time or create a new database from an old backup. In just a few clicks the
customer can restore its database. 






Our Strategy 



        Our
strategy is to position ourselves as a leading provider to SMEs of accessible and simple
to use IT management solutions for the Microsoft server environment. This includes
solutions for administration, backup and maintaining of Microsoft SQL Server (that are
already in the market), Microsoft Active Directory and other Windows server based
components (still under development). For this purpose we intend to: 



	— 	 Continue
to Deliver Accessible and Simplified Solutions. SQL Manage, our Microsoft SQL Server
administration and management solution, makes it possible for the huge market of small
and medium size enterprises to enjoy enterprise level database management without the
need to hire expensive database administrators. By making the whole process intuitive,
simple and affordable, companies can run a rapid process of implementing SQL Manage and
immediately enjoy a much better work-flow of their critical mission applications running
on Microsoft SQL Server. 






	— 	Targeting
the SME Market. The worldwide SME corporate market is large and going through a
dramatic transformation in terms of Information Technology. This market demands a
completely different approach in solving unique Information Technology challenges,
without creating additional burdens for the companies. We bring to the market solutions
that solve real Information Technology problems without requiring customers to make large
investments. 






28











	— 	Offer
Easily Accessible and Free Product Testing. As a strategic decision, we encourage all
potential clients to download without any cost from our site (and our resellers’ sites)
fully functional evaluation versions of our products. Thus, clients can experience the
added value of our products for a limited time period before they make a commitment. 






	— 	Offer
our Solutions to the Market Using An International Network of Distributors and Business
 Relationships. During last year we established a network of distributors
in 5 continents. This includes business relationships with Microsoft, SAP and
distribution alliances in the USA, the UK, Germany, France and China. 






Our Products 



        SQL
Manage Standard Edition  




        SQL
Manage offers an affordable, easy-to-use solution for database management. Providing
customers with a comprehensive maintenance solution from one centralized console, SQL
Manage automates and simplifies traditional database administrator’s tasks such as
monitoring, re-indexing, backup and restore, compression, and beyond. SQL Manage is a real
“all-in-one” solution, allowing anyone with or without a technical background to
effectively manage their SQL Server environment. The software operates as an automated
database administrator working around the clock to maintain and protect data, thus
alleviating the need to invest financial and time related resources in small and medium
sized enterprises. SQL Manage is a Microsoft platform test approved solution. SQL Manage
provides customers enhanced performance, work continuity, higher availability, a dramatic
decline in overhead and fewer failures, all of which will reduce overall information
technology costs to return to the customers the investment in the software. 



        In
today’s information technology dependent world, high availability and uninterrupted
data flow are vital requirements for customer business demands. SQL Manage provides a
solution that protects productivity, profitability, reliability and business continuity
and decreases SQL server down-time. 



        SQL
Manage is easily configured to automatically run all the important tasks that protect
customers’ data and provides an immediate alert upon malfunctions. It is specifically
designed to meet the needs of the entire market, including the non SQL-professional market
segment. There is no need to invest in several different products because SQL Manage
offers customers an all-in-one software solution: monitoring, maintenance, backup,
compression, recovery, alerts and more, providing a rapid return on investment. 



Technical Features: 



	— 	Variety
of default settings in the areas of maintenance tasks, backup and
monitoring/notifications providing an ultimate answer for administrating an enterprise
environment of almost every type of SQL Server and database. In utilizing the SQL Manage
intelligent analysis mechanism, the customer can apply each database and SQL server with
its suitable default settings in a matter of seconds. 






	— 	An
advanced backup mechanism, providing customers with backup abilities extending beyond the
scope of the SQL Server: fast and high compression for backup files (with compression
rates of about 80% – 90%), transference of completed backup files to remote network
or FTP (file transfer protocol) locations and command line abilities to be performed upon
failure or success. 






	— 	Extended
restore mechanism which makes database restoration and/or duplication a safe and easy
task by: selecting a full or point-of-time restore from a clear graphical interface,
automatic decompression of compressed backup sets, real-time location select for moved or
missing backup files and easy creation of new databases from existing backup files. 






29











	— 	Set
of predefined rules or the step-by-step wizard assistance in creating and understanding
complex scheduled and immediate tasks for database maintenance and optimization, and a
clear graphical view for attaching these rules on multiple databases across SQL Servers
making the difficult task of administrating an SQL Server easier than ever. 






	— 	Extended
management center for each SQL Server, providing an overall view of the logical drives on
systems, showing the disk size used by the databases, controlling both SQL and system
related services, and providing a summary view of the database. Provides comprehensive
database and SQL Server alerting, based upon user-defined thresholds for monitoring the
server’s databases, processor, memory, logical drives and services, database sizes,
properties, backup and restoration. It allows customers to deliver notifications to
user-defined groups of SMTP (Simple Mail Transfer Protocol) recipients, according to each
alert. It also provides a graphical indicator showing the status of each connected SQL
Server, as well as drill down capabilities up to the database level. All notification
settings can easily be set for each database/server by a simple notification form. 






	— 	Increase
database and applications’ overall performance by implementing database optimization
mechanism. This is achieved by utilizing an intelligent index optimization for real-time
index defrag and rebuild. A significant gain is also achieved on physical storage by
using a powerful data compression engine. 






	— 	Powerful
database management center allowing customers to alter database properties, view and
control user connection, track backup history and graphically view database files. It
also enables performing complex database tasks for maintenance and optimization in an
easy and user-friendly interface. 






        SQL
Manage Enterprise Edition  




        This
product was released during the fourth quarter of 2006 and is intended to simultaneously
manage large arrays of SQLs. The SQL Manage Enterprise Edition is designed to enable web
interface for multiple users and remote locations. This new product includes additional
features and further simplifies the management of SQL servers in SMEs. Some of the
product’s features include security management and assistance in complying with the
SOX and FDA regulations. 



        New
Application  




        During
2007, we intend to launch an additional software product – EZ Manage AD
(Active Directory). This product is planned to meet the global demand for over the web
management of the complex active directory server. The product will provide medium and
large companies with better management abilities as well as many desired capabilities
relating to organizing users, managing them with ease and giving help desk personnel
abilities that will reduce the amount of management time needed by system managers. The
new product will be web based thus allowing system managers a real advantage in the way
they connect to, and manage their servers. 



Customers 



        Our
products are sold to small and mid-size enterprises (up to 500 users). We have sold
approximately 300 units of our products to date to over 100 separate customers. 



Sales and Marketing 



        Our
products and services are sold through both direct and indirect channels, including
distributors and, value-added resellers. We maintain direct sales operations through our
wholly owned subsidiaries in Israel and the United Kingdom. Our field force is comprised
of 3 persons in Israel and 2 persons in the United Kingdom. 



30











        We
have entered into more than twenty agreements with resellers and distributors in
Australia, Taiwan, China, India, The Netherlands, USA, Russia, Spain, Germany, Finland,
United Kingdom, Belgium, Denmark, Brazil, South Africa and Israel. 



        The
agreements grant nonexclusive rights in the respective territory of each agreement to
resell our products. The resellers receive a discount according to a price list. The
resellers commit to promote the distribution of our products. We retain ownership of
intellectual property rights in the products. The resellers are also committed to
confidentiality undertakings. 



        The
term of the agreements are generally for one year; automatically renewable, unless a party
notified the other 60 days prior to the renewal of its intention to terminate the
agreement. 



Research and Development 



        The
software industry is characterized by rapid product change resulting from new
technological developments, performance improvements and lower hardware costs and is
highly competitive with respect to timely product innovation. As of March 31, 2007, we
employed 3 persons in research and development. In addition, we have an agreement with
DataSafe Systems Ltd., an Israeli sister company pursuant to which DataSafe Systems
undertook to provide us software development services at a price of $54 per hour. We are
not obliged to order any services or to accept any products. All rights to products or
technologies developed by DataSafe Systems on our behalf belong to us. The agreement is in
force until December 31, 2008. 



        The
research and development activities are designated to conceive interdisciplinary solutions
to further automate and integrate the maintenance and operation of small and medium sized
enterprises in view of the different and changing requirements of such enterprises.
Furthermore, we anticipate that we will invest additional financial resources and expand
our team of researchers in order to successfully overcome future challenges that we may
encounter as a result of: the need to provide solutions to different requirements stemming
from the use of new technologies; the current competition in the SQL servers’ Data
Base Administration market and the automated management market; the acceleration of the
competition in the automated management market due to greater competition in this emerging
market; to answer global demand to expand line of products to such as for email
maintenance. 



        To
date, we have spent approximately $800,000 on our research and development activities. 



Proprietary Rights 



        We do
not hold any patents and rely upon a combination of security devices, copyrights, trade
secret laws and contractual restrictions to protect our rights in our products. Our policy
is for our customers to sign non-transferable software licenses providing contractual
protection against unauthorized use of the software. In addition, our employees and
independent contractors are generally required to sign non-disclosure agreements. 



        We
have filed trademark and service mark applications in the U.S. and the U.K. for the mark
EZ MANAGE. 



        Preventing
the unauthorized use of software is difficult, and unauthorized software use is a
persistent problem in the software industry. However, we believe that, because of the
rapid pace of technological change in the software industry, the legal protections for our
products are less significant factors in our success than the knowledge, ability and
experience of our employees, the frequency of product enhancements and the timeliness and
quality of support services provided by us. 



31











Competition 



        The
market for products for automated management solutions for SMEs using SQL servers may
capture prominence in lieu of the current market relying on data base administrators.
There are no substantial barriers to entry, and we expect that competition will intensify
in the future. We believe that our ability to compete successfully is contingent upon a
number of factors, including: market presence; simplicity of the different products’
interface tools; the capacity, reliability, availability and capabilities of the products;
technical expertise and functionality, performance and quality of services; customization;
the number and nature of future competitors and their pricing policies; the variety of
products; the timing of introductions of new products by us and our competitors; customer
support; our ability to support products compatible to evolving industry standards; and
industry and general economic trends. 



        Many
of our competitors have greater market presence; engineering and marketing capabilities;
and, financial, technological and personnel resources, than those available to us. As a
result, they may be: able to develop products designed to automate the management of
database servers; offer advanced solutions for performance acceleration more quickly;
adapt more swiftly to new or emerging technologies and changes in customer requirements;
take advantage of acquisitions and other opportunities more readily; and, devote greater
resources to the marketing and sale of their products than can us. In addition, various
organizations may enter into or form joint ventures or consortiums to provide products and
services similar to ours. 



        Furthermore,
the market for solutions directed at SMEs may addressed by current providers of solutions
targeted at larger sized enterprises, who are more established than us. We believe that
new competitors, including large computer hardware, software, media and other technology
companies will enter the database administration related products and services markets,
resulting in additional competition for us. There can be no assurance that we will have
the financial resources, technological innovation, technical expertise or marketing and
support capabilities to compete successfully. 



Government Regulation 



        We
are not currently subject to direct regulation by any governmental agency, except for
regulations applicable to businesses in general. However, in the future, we may become
subject to regulation of regulatory agencies. 



Employees 



        As
of May 1, 2007, we employed 9 employees, comprised of 3 persons in research and
development, 1 person in product and customer support, 1 person in software services, 3
persons in marketing and sales and 1 person in general administration and management. All
our employees are currently located in Israel except for 2 in the United Kingdom. 



        Certain
provisions of the collective bargaining agreements between the Histadrut (General
Federation of Labor in Israel) and the Coordination Bureau of Economic Organizations
(including the Industrialists’ Association) are applicable to our employees by order
of the Israeli Ministry of Labor. These provisions concern mainly the length of the
workday, minimum daily wages for professional workers, contributions to a pension fund,
insurance for work-related accidents, procedures for dismissing employees, determination
of severance pay and other conditions of employment. We generally provide our employees
with benefits and working conditions beyond the required minimums. 



32











        Pursuant
to Israeli law, we are legally required to pay severance benefits in certain
circumstances, including the retirement or death of an employee or the termination of
employment of an employee without due cause. Israeli employers and employees are required
to pay predetermined amounts to the National Insurance Institute, which is similar to the
United States Social Security Administration. Payments to the National Insurance Institute
amount to approximately 16.3% of wages (up to a maximum amount), of which approximately
two-thirds was contributed by employees with the balance contributed by the employer. 



Facilities 



        Our
executive offices and research and development facilities are located in Israel. On July
20, 2006, we entered into a lease agreement with DataSafe Systems Ltd., or DataSafe
Systems, an affiliated company and a 96.5% subsidiary of DataSafe. This agreement is a
sub-lease agreement under which DataSafe provides us office space and equipment for a
period ending on August 31, 2008. The term is subject to three 24 month extensions, each
contingent upon the extension of the term of the main lease agreement by DataSafe Systems
with a third party, in its sole discretion. The extensions are subject to our providing
120 days’ prior written notice, and contingent upon the exercise of the options
granted to DataSafe Systems in the main lease agreement. The sub-lease may be terminated
by each party upon 60 days’ prior written notice. 



        The
monthly rent is $ 2,000. The rent will increase as follows: 



	—  	for
the period commencing on January 1, 2007 and ending on August 31, 2008, we will pay a
rental      increase  of 18.7%;






	—  	for
the period commencing on September 1, 2008 and ending on August 31, 2011, we will pay a
rental      increase  of 6%;






	— 	for
the period commencing on September 1, 2011 and ending on August 31, 2014, we will pay a
pay a rental increase of 6%. 






Furthermore, we are required to pay
an additional monthly fee of $1,750 for maintenance, insurance and other services.
DataSafe may transfer its rights and undertakings under the agreement to third parties
without our consent. 



        On
March 21, 2007, we entered into an addendum to the sublease. Under the addendum we changed
the location and size of our offices within the DataSafe Systems’ space. The base
rent was changed to $ 3,870. This amount is inclusive of all expenses and maintenance
except for the insurance requirements that are borne by us. All other terms and conditions
are subject to the original agreement. 



Legal Proceedings 



        We
are not a party to any material litigation. 



33











MANAGEMENT 



EXECUTIVE OFFICERS,
DIRECTORS AND KEY PERSONNEL 



        The
following table sets forth information regarding our executive officers and directors: 




	Name	Age	Position
	 		
			
			
			
	Shmuel Bachar	52	Director, Chairman of the Board
	Omer Nirhod	38	President and Director
	Michael Avnimelech	63	Director
	Ofer Gur-Arie	49	Director
	Nimrod Zahavi	32	Chief Executive Officer
	Moti Awadish	53	Chief Financial Officer
	Ziv Gad	27	Vice President, Research & Development
	Oren Martan	38	Vice President - Sales and Marketing
	Nir Ben Yehuda	32	CEO of FutureIT Software Limited






        Our
Amended and Restated Certificate of Incorporation and Bylaws provide that the number of
members of our Board of Directors shall be not less than one (1) and not more than five
(5) members. We currently have four directors. Directors are elected by shareholders at
the annual meeting and serve until their successors are duly elected and qualified. All
our officers serve at the discretion of our Board of Directors. 




        The
following is a biographical summary of the business experience of our directors and
executive officers: 



        Shmuel
Bachar, Director, Chairman of the Board. Mr. Bachar has been a director of
our company since its formation in October 2006. He has held various positions in the
areas of corporate finance and budgeting beginning at Bank Hapoalim and extending to top
management positions at US/Israeli public investment and investment management companies.
His areas of responsibility included M&A, public and private fundraising,
strategic planning and general management. Since May 2002 and until present he has provide
business consulting services to a number of companies and projects (some simultaneously).
The businesses activities are provided through a company named Shamad Orland Ltd. He
serves as chairman of the board of directors of DataSafe and two subsidiaries of DataSafe
– DataSafe Systems and RDV Systems Ltd. He is also a director of Top I Vision, and of
Yashir Investment House Underwriters. On December 31, 2004 Mr. Bachar
completed a 5 year term as an outside director at Afikim Mutual Funds Management Ltd. 



        Omer
Nirhod, President and Director.  Mr. Nirhod has been the President and
director of our company since its formation in October 2006. He is the founder and has
been the CEO of DataSafe since 1995. Mr. Nirhod received his MA in Neuro Psychology (magna
cum laude) and a BA in Psychology (cum laude) from the Hebrew University in Jerusalem. 



34












        Nimrod
Zahavi, Chief Executive Officer. Mr. Zahavi has served as Chief Executive
Officer of our company since its formation. Prior to joining our Israeli subsidiary
in September 2005 as Chief Executive Officer he held senior business development and
general management positions at the following high tech and financial services companies
as an independent consultant: Account Manager, Insite Computer Group, Richmond Hill
between 2000 to 2002, Business Development Manager, ASG Financial Corp. between 2003 to
2005 and VP, Business Development at Genex Capital Inc. between 2004 to 2005. 



        Michael
Avnimelech , Financial Director. Mr. Avnimelech will serve as
a director of our company effective on the date of the First Closing. He has been the
owner and manager of MA Investments, M&A Consulting Ltd., a firm that specializes in
international acquisitions and investments in numerous sectors and countries, since 1991.
In this capacity he served on the board of directors of numerous companies and also served
on the board of directors of two public companies, Okiana Advanced Industries Ltd. (in
which he also serves on the investment committee) and Altshuler Shaham Provident Fund
Management Ltd. 



        Mr.
          Avnimelech has over 30 years of experience in business development strategies,
          valuations, mergers and acquisitions. Mr. Avnimelech served as a managing
          director of Deloitte- Brightman Management Services Ltd. – a business and
          management consulting firm, earlier he managed ABC & Co., a leading
business           consulting firm. Previously, Mr. Avnimelech held a number of senior
Government           positions – Israel’s Consul for Economic Affairs in New
York, Economic           Advisor to the Minister of Finance, and Team Manager in charge
of water sources,           electricity and environment, in the Bureau of the Budget in
the Ministry of           Finance. Mr. Avnimelech holds B.A. and M.A. degrees in
Economics and Business           from the Hebrew University of Jerusalem and attended an
advanced course in           Financial Policy at the International Monetary Fund (IMF) in
Washington D.C.  




        Ofer
Gur-Arie, CEO of Future IT Ltd.  Mr. Gur-Arie will serve as a director of
our company effective on the date of the First Closing. He is a computer engineer with a
degree from the Technion in Haifa (1986), with extensive professional and administrative
experience. For over a decade he has provided project supervision and management services
in the domain of computerization to many entities in Israel and Europe. This activity has
involved major entities (government ministries, local authorities, commercial companies in
Israel and Europe) in the fields of computerization, communications, telephony, internet
and cellular telephony. He served as a member of the Ramat Gan City Council for 15
years and as Deputy Mayor for five years. He also served in the management of the
automation company at the Center for Local Government in Israel, which supplies
computerized solutions to 250 local authorities throughout Israel. From June 2004 to date,
he has managed the ERAMOR Project between Israel and the European Union on behalf of the
State of Israel. He served as Director General (CEO) of Israel Local Authorities Data
Processing Center from June 2003 to June 2004 and as CEO of the Zefunot Company between
1991 and May 2003. 



        Moti
Awadish, Chief Financial Officer.  Mr. Avadish has served as our Chief
Financial Officer since February 2007. Since 2000 he has served as the Chief Financial
Officer of the DataSafe Group Ltd. and its subsidiaries. He has a B.A. in economics and
accounting from the Hebrew University in Jerusalem. 



        Ziv
Gad, Vice President- Research & Development Manager.  Mr. Gad has been
our Vice President, Research & Development since February 2007. Before joining our
company, Mr. Gad served in the following positions: as a Technical Support Manager for
Pelephone Communication Inc. (an Israeli cell phone operator) from October 1998 to January
2004, as a solution developer at GadWorks Technologies (a software solutions company) from
June 2004 until October 2004 and as a web developer for In House Travel (BRAZIL) from
November 2004 until February 2005. 



        Oren
Martan Vice President – Sales and Marketing . Mr. Martan has been our
Vice President – Sales and Marketing since December 2006. He has over eight years of
experience in the software industry and held several sales and channel management
positions with software companies, very experienced in the European & Middle East
markets. Prior to his joining us he served as: a Sales and Channel Manager at Preton Ltd.,
between June 2005 and November 2006; as a sales manager at SourceIT Ltd. which is the
reseller of iPass Inc., between June 2005 and March 2006; at Finjan Software Inc., between
March 2004 –April 2005; Libi Technologies Inc., between October 2002and March 2003
and Commtouch Software Inc as a sales manager between March 2002 and August 2002. 



35











Election of Directors 



        The
holders of our Common Stock do not have cumulative voting rights in the election of
directors. Thus, the holders of our Common Stock conferring more than 50% of the voting
power have the power to elect all the directors, to the exclusion of the remaining
shareholders. See “PRINCIPAL SHAREHOLDERS”. 



Indemnification of
Directors and Officers 



        Our
Amended and Restated Certificate of Incorporation provides that the Company shall, to the
fullest extent permitted by the law of the State of Delaware, indemnify any and all
persons whom it shall have power to indemnify from and against any and all of the
expenses, liabilities or other matters referred to in or covered by the applicable
provisions of Delaware law, and the indemnification provided for will not be deemed
exclusive of any other rights to which those indemnified may be entitled under any By-Law,
agreement, vote of stockholders or disinterested directors or otherwise, both as to action
in their official capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors and administrators of such a
person. 



Compensation of
Directors and Officers 



        The
Chairman of our Board of Directors, Mr. Shmuel Bachar, who plays an active role in our
business, receives compensation of US$ 2,000 per month. This compensation will increase to
75% of the CEO’s annual compensation commencing January 1, 2008. We also intend to
issue to Mr. Bachar options to purchase 540,000 shares of our shares of Common Stock at an
exercise price of $0.0001, the par value of such shares. 



        Mr.
          Omer Nirhod, our President and Director, receives compensation of US$ 2,000 per
          month. This compensation will increase to 50% of the CEO’s compensation on
          an annual basis commencing January 1, 2008. We also intend to issue to Mr.
          Nirhod options to purchase 899,000 shares of our shares of Common Stock at an
          exercise price of $0.0001, the par value of such shares.  




        Mr.
          Michael Avnimelech who will act as an independent director and financial expert
          effective from the First Closing and Mr. Ofer Gur Arie who will act as a
          director effective from the Initial First Closing will each receive a
          compensation of $500 per month and $300 per meeting of our Board of Directors
or           Board committee that he attends. We also intend to issue to each of Mr.
          Avnimelech and Mr. Ofer Gur Arie options to purchase 50,000 shares of our
Common           Stock at an exercise price of $0.0001, the par value of such shares.  




Employment Agreements 



        Omer
Nirhod – Our President, Mr. Omer Nirhod, did not receive any additional
compensation other than the compensation as set out in the section entitled
“MANAGEMENT – Compensation of Directors and Officers”. 



36











        Nimrod
Zahavi – The effective date of our CEO’s employment agreement with our
Israeli subsidiary was September 1, 2005. Mr. Zahavi receives a gross salary of NIS 21,000
(approximately US$5,200) per month, quarterly bonuses of NIS 9,000 each (approximately USD
2,200) and a yearly bonus of at least two months’ salary. Mr. Nimrod will not be
entitled, in the event of termination of his employment to severance pay other than the
insurance payable under a manager’s insurance policy. As is customary in Israel, we
provide Mr. Zahavi with the use of a car. Mr. Zahavi has signed a non-disclosure agreement
and is obligated to maintain in strict confidentiality all information pertaining to the
business of our company and its subsidiaries, and not disclose such information for any
purpose other than for the benefit of the company. Mr. Zahavi will be entitled to 60
days’ notice payment in case of resignation by Mr. Zahavi or in case of termination
of his employment by us, except for “cause.” We intend to issue to Mr. Zahavi
options to purchase 360,000 shares of our shares of Common Stock at an exercise price of
$0.0001, the par value of such shares. 



        Ziv
Gad – The effective date of our research & development manager’s
 employment agreement with our Israeli subsidiary is as of March 1, 2006.
Mr. Gad receives a gross salary of NIS 15,000 (approximately US$3,700) per month. Mr. Gad
will not be entitled, in the event of termination of his employment to severance pay other
than the insurance payable under a manager’s insurance policy. As is customary in
Israel, we provide Mr. Gad with the use of a car. Mr. Gad has signed a non-disclosure
agreement and is obligated to maintain in strict confidentiality all information
pertaining to the business of our company and its subsidiaries, and not disclose such
information for any purpose other than for the benefit of the company. Mr. Gad will be
entitled to 30 days’ notice payment under Israeli law, in case of termination of his
employment by us, except for “cause.” We intend to issue to Mr. Gad options to
purchase 40,000 shares of our shares of Common Stock at an exercise price of $0.0001, the
par value of such shares. 



        
 Oren Martan – The effective date of his employment with our Israeli
subsidiary is as of December 2006. Mr. Martan receives a gross salary of NIS 17,000
(approximately US$ 4,200) per month. Mr. Martan has signed a non-disclosure agreement and
is obligated to maintain in strict confidentiality all information pertaining to the
business of our company and its subsidiaries, and not disclose such information for any
purpose other than for the benefit of the company. Mr. Martan will be entitled to notice
payment under Israeli law, in case of termination of his employment by us.” We intend
to issue to Mr. Martan options to purchase 15,000 shares of our shares of Common Stock at
an exercise price of $0.0001, the par value of such shares. 



        Stock Option Plan 



        Our
2006 Stock Option Plan, or the Plan, authorizes the grant of options to purchase up to
2,500,000 shares of our Common Stock. Employees, officers, directors and consultants of
our company, its subsidiaries and affiliates (including DataSafe and its subsidiaries) are
eligible to participate in the Plan. Awards under the Plan may be granted in the forms of
incentive stock options as provided in Section 422 of the U.S. Internal Revenue Code of
1986, as amended, non-qualified stock options, options granted pursuant to Section 102 of
the Israeli Tax Ordinance and options granted pursuant to Section 3.9 of the Israeli Tax
Ordinance. The Plan has a term of ten (10) years and will terminate in 2017. No award of
options may be made after such date. 



        The
Plan is currently administered by our Board of Directors, which in the future may delegate
such administration to a committee of directors. Subject to the provisions of the Plan and
applicable law, the Board or the Committee has the authority, to determine, among other
things, to whom options may be granted, the number of shares of Common Stock to which an
option may relate, the exercise price for each share, the vesting period of the option,
and the terms, conditions and restrictions thereof; to construe and interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to such Plan; and to make
all other determinations deemed necessary or advisable for the administration of the Plan. 



37










        The
Board or such committee has the authority to determine the persons to whom options will be
granted, the number of shares of Common Stock to be covered by each option, the time or
times at which options will be granted or exercised, and the other terms and provisions of
the options. The exercise price of an incentive stock option (ISO) granted under the Plan
may not be less than 100% (110% in the case of a 10% shareholder) and the exercise price
of a non-qualified option may not be less than 100% of the fair market value (as defined
in the plan) of our shares of Common Stock on the date of the grant. 






        As
of May 1, 2007, options to purchase 2,359,000 shares of our Common Stock have been set
aside for grant to our employees, consultants, directors and employees of DataSafe and its
subsidiaries under the Plan, all at exercise prices of $0.0001, the par value per
share, out of which options to purchase 1,954,000 shares of our Common Stock have
been set aside for grant to our executive officers and directors as a group, consisting of
9 persons. The grant of all these options will be effective upon approval of the Plan by
the Israeli tax authorities, which is expected to occur before the end of June 2007. None
of these option grants will be incentive stock option (ISO) grants. 



38











PRINCIPAL SHAREHOLDERS 



        The
following table sets forth certain information regarding the beneficial ownership of our
shares of Common Stock as of May 1, 2007, by the following: (i) each person who beneficial
owns more than 5% of the shares of our Common Stock; (ii) each of our executive officers
and directors; and (iii) all executive officers and directors as a group. As of May 1,
2007 there were 16,940,000 shares of our Common Stock outstanding 



        The
table below lists the beneficial ownership of our voting securities as of the date of this
Private Placement Memorandum by each person known by us to be the beneficial owner of more
than 5% of such securities, as well as by all our directors and officers. Unless otherwise
indicated, the shareholders listed possess sole voting and investment power with respect
to the shares shown. The table is based only on the issued and outstanding shares and does
not take into account Warrants pursuant to this offering or options in connection with the
Company’s incentive stock option plan. 




	Name and Address

of Beneficial Owner
	Amount and Nature of Beneficial Ownership
	% Before Offering
	% After Offering

	 			
				
				
				
	DataSafe Group Ltd.	 	 	 		 	 		 	 		 
	4 Hamalcha Street,	 	 
	North Industrial Area, Lod,	 	 
	Israel	 	 	 	15,500,000	1	 	91.5	%	 	66.13	%
				
	Shmuel Bachar	 	 	 	90,000	2	 	0.53	%	 	0.38	%
	Omer Nirhod	 	 	 	15,590,000	3	 	92.09	%	 	66.51	%
	Michael Avnimelech	 	 	 	0	 	 	0	 	 	0	 
	Ofer Gur-Arie	 	 	 	0	 	 	0	 	 	0	 
	Nimrod Zahavi	 	 	 	0	 	 	0	 	 	0	 
	Moti Awadish	 	 	 	0	 	 	0	 	 	0	 
	Ziv Gad	 	 	 	0	 	 	0	 	 	0	 
	Oren Martan	 	 	 	0	 	 	0	 	 	0	 
	Nir Ben Yehuda	 	 	 	0	 	 	0	 	 	0	 
	All officers and directors as a Group	 	 	 	15,680,000	 	 	92.56	%	 	66.89	%










	
1          DataSafe
Group Ltd. is controlled by Mr. Omer Nirhod.  




	
2          The
shares are held by his spouse and were issued in our January 2007 bridge           loan
financing.  




	
3          The
shares are held by the DataSafe Group Ltd.  







39











CERTAIN TRANSACTIONS 



Related Party
Transactions 



        On
January 1, 2006, we entered into an agreement with DataSafe Systems, a 96.5% owned
subsidiary of DataSafe, which currently owns 92% of the holdings in our company. This
agreement is an outsourcing agreement pursuant to which we received software development
services for “MANAGE SQL.” The consideration paid for the services was $233,750,
an amount calculated to be cost + 20%. Under the agreement we are the owners of the
intellectual property rights in the software product. 



        On
January 16, 2006, we entered into an agreement with DataSafe Systems to purchase
“Active Manage” a software product for the management of Microsoft 2003 servers.
We paid DataSafe Systems $75,000, and agreed to pay royalties for three years following
the date of the agreement, at the rate of 10% of sales but not more than $100,000 per
year, with a minimum annual royalty payment of $25,000. DataSafe Systems also agreed to
continue to develop the software at an hourly rate of $54. We are the owners of the
intellectual property rights in the software product. In April 2007 we notified DataSafe
Systems that we will use our own research and development in order to finalize this
product. 



        In
our January 2007 bridge loan transaction, we sold $75,000 of promissory notes and 270,000
shares of Common Stock to certain of our directors and officers and their family members
(or companies controlled by them). See “January 2007 Bridge Loan” and see
“PRINCIPAL SHAREHOLDERS”. 



        We
entered into another agreement with DataSafe on May 17, 2006 for software development
services. The software to be developed by DataSafe is entitled “SQL Replicator”
and DataSafe is required to develop the product according to the specifications we
provided. The consideration for the services was cost + 20%, to a pre-calculated total of
$137,500. The payments were to be made in three installments upon the achievement of three
milestones, namely: (a) the completion of characterization and basic code entitles (30% of
the total costs); (b) the completion of version 1.0 of the software product (50% of the
total costs); and, (c) the completion of quality assurance for the software product (20%
of the total costs). We are the owners of the intellectual property rights in the software
product SQL Replicator that is the subject matter of the agreement. In April 2007, we
notified DataSafe that we are terminating the agreement in light of the change in this
products nature, accordingly it will be included as part of other products either as a
feature or module, and not a “stand alone” product. DataSafe confirmed the
validity of this termination. 



        On
July 20, 2006, we entered into a services agreement with DataSafe Systems, according to
which DataSafe Systems provides us with: use of cars leased by DataSafe Systems under a
leasing agreement; communication services (cell phones and stationary phones); secretarial
and accounting services; further general services (graphics, technician jobs, computer
maintenance etc.); and service providers use (advertising, couriers etc.). The
consideration for the services is as follows: 



	—  	For
the cars leased - according to the leasing agreement between DataSafe and the leasing
companies;






	—  	For
the communication services - approximately $ 350 for the stationary phones; and the
actual      monthly cost for the cell phones;






	—  	For
the secretarial and accounting services - a total of approximately US$ 3,500  per month;






	—  	For
other general services - an hourly rate of  US$45; and,






	—  	Service
providers use – according to the fees charged by each supplier. 






40











The term of the agreement is until
July 20, 2008. We are entitled to terminate the agreement (or any portion of the services)
upon 30 days’ prior written notice. On March 7, 2007 we entered into a letter
agreement with DataSafe Systems that automatically extends the term of the agreement for
additional 12 month periods unless a party notifies the other of termination in a written
notice of 90 days prior to the renewal. 



        On
January 8, 2007 we entered into an option agreement with Future I.T. Ltd, controlled by
Omer Nirhod, a director and president of our company who is a controlling shareholder of
DataSafe, and Shamed Orlan Ltd., an Israeli company controlled by Shmuel Bachar, Chairman
of our Board of Directors. The option under the agreement was to purchase 90% of the
issued and outstanding share capital of Future I.T. Ltd. in consideration of $100,000 and
the grant of guarantees to Future I.T. Ltd., for all debts it incurred in the ordinary
course of business. We exercised the option to purchase the 90% interest in Future I.T.
Ltd. on February 5, 2007. The agreement also provides an option exercisable until January
8, 2008 to purchase the remaining 10% shares from Shamed Orland Ltd., a company owned by
Shmuel Bachar, the Chairman of our Board of Directors and Mr. Omer Nirhod, the controlling
shareholder of DataSafe and a director and President of our company, for an additional
aggregate amount of $100,000, 



Loans 



        On
December 20, 2006, we received a loan from Israel Discount Bank in the amount of $500,000.
The principal of this loan is to be repaid to the Bank in 18 equal monthly installments
commencing in July 2008. On December 31, 2006, we received a loan from DataSafe in the
amount of $650,000, the principal of which is to be repaid in 18 equal monthly
installments commencing in July 2008. Both these loans bear interest at the three-month
Dollar LIBOR rate plus 1.75%, which such interest shall be paid in 54 monthly payments
starting on January 2007. 



        We
raised $400,000 by way of a bridge loan from private lenders in January 2007. This loan
bears interest at the rate of 10% per annum, payable quarterly, and the entire amount of
the loan and all accrued and unpaid interest will be paid from the proceeds of the
Offering. See “January 2007 Bridge Loan”. 



41











DESCRIPTION OF SHARE
CAPITAL 



General  



        The
following is a summary of the rights of our shares of Common Stock and certain provisions
of our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws,
as will be in effect upon the completion of this offering. 




        Immediately
following the completion of the Offering, our authorized share capital will be 30,000,000
shares, with a par value of $0.0001 per share. As of May 1, 2007 we had outstanding
16,940,000 shares of Common Stock, held of record by 12 stockholders. 




Common Stock  



        The
holders of our Common Stock are entitled to one vote per share on all matters to be voted
on by the stockholders. Holders of Common Stock are entitled to receive ratably such
dividends as may be declared by the board of directors out of funds legally available
therefor. In the event we liquidate, dissolve or wind up, holders of Common Stock are
entitled to share ratably in all assets remaining after payment of liabilities and the
liquidation preferences of any outstanding shares of preferred stock. Holders of Common
Stock have no preemptive, conversion or subscription rights. There are no redemption or
sinking fund provisions applicable to the Common Stock. All outstanding shares of Common
Stock are, and all shares of Common Stock to be outstanding upon completion of this
offering will be, fully paid and non-assessable. 



The Warrants 



        The
description below is a summary of the material provisions of the Warrants. This summary
does not purport to be complete. Reference is made to form of the Warrant Agreement, a
copy of which will be provided to potential Investors upon request, for a complete
description of the terms and provisions of such Warrant Agreement. 



General 



        Each
Warrant entitles the holder to purchase 46,200 shares of our Common Stock. 



        The
Warrants are protected by anti-dilution protection in the event of stock splits, stock
dividends or other events having a similar effect. 



Exercise Price and Terms 



        The
exercise price for each Warrant is $0.50 per share. The exercise period of the Warrants
shall be from the Initial First Closing until the earlier of (i) 30 months from the
registration of the registration statement of form SB-2 becoming effective, or (ii) First
Closing of a Qualified IPO or merger or acquisition that results in a change of control. A
Qualified IPO shall mean a registered public offering of our Common Stock (i) at an equity
value of not less than $0.65 per share yielding net proceeds to us of not less than one
million dollars and (ii) following which our Common Stock is listed on a U.S. national
exchange. In the event of an IPO, a merger or an acquisition, the holders of the Warrants
shall be given no less than 30 days notice prior thereto in order to exercise the
Warrants. 



Warrant Holder Not a
Shareholder 



        The
Warrants do not confer upon holders thereof any voting, dividend or other rights as
shareholders of the Company until exercise of the Warrants in accordance with their terms. 



42











PLAN OF DISTRIBUTION 



        The
Minimum Offering will consist of 34 Units ($1,020,000) and the Maximum Offering will
consist of 50 Units ($1,500,000). We have retained J. H. Darbie & Co., Inc as our
exclusive Placement Agent with respect to the Offering. We have undertaken to pay the
Placement Agent a fee of 10% of the gross proceeds raised in the Offering and warrants to
purchase 10% of the shares of our Common Stock issued in the Offering at an exercise price
of $0.30 per share. We have also undertaken to issue to the Placement Agent 1,500,000
shares of our Common Stock if the maximum of 50 Units are sold in this Offering, which
will be reduced proportionally according to the number of Units actually sold. 



        We
have also retained Mr. Michael Michaelson as our consultant in connection with the
Offering and have undertaken to pay Mr. Michaelson a fee of 2% of the gross proceeds
raised in the Offering. 



        The
Company may at any time withdraw the Offering, rescind any subscription and return funds
received without deduction or interest. The price for each Unit shall be payable to the
designated trustee upon execution of the Subscription Agreement. 





SUBSCRIPTION PROCEDURES 



        If
you meet the suitability standards described above under “Who May Invest”, you
may purchase Units by 



         (1)       
          reading this entire placement memorandum and the Subscription Agreement and
          Registration Rights Agreement provided to you by us or by the Placement Agent,
          and the other exhibits hereto, 



         (2)       
          filling out and signing the Subscription Agreement, including the applicable
          Schedules thereto, and Registration Rights Agreement (a copy of the form of each
          of the agreements is available from us or from the Placement Agent), 



         (3)       
          making your bank draft or certified check payable to the American Stock Transfer
          and Trust Company as Escrow Agent, and 



         (4)       
          sending your Subscription Agreement and bank draft or certified check to the
          Escrow Agent. 



        By
purchasing Units, you confirm that you meet the suitability standards for purchasers of
Units and agree to be bound by all of the terms of the subscription agreement the other
agreements attached thereto. 



        Subscription
funds will be deposited with the Escrow Agent which will hold them in escrow pending the
First Closing on that subscription. Such funds will be deposited in an interest bearing
bank account. The Company reserves the right to accept or reject subscriptions in whole or
in part at its discretion and to close the subscription books at any time without notice.
Any subscription funds for subscriptions that the Company does not accept will be
returned, without interest, promptly after the Company has determined not to accept such
subscription. 



Your Representations and
Warranties in the Subscription Agreement 



        By
executing and delivering the Subscription Agreement and the Schedules thereto, you are
representing and warranting to, and agreeing with, us that, among other things, 



43











	—  	you
have received and read this Placement Memorandum,






	—  	you
meet the  suitability  standards  set forth in the  Subscription  Agreement  and in this
 placement      memorandum under "Who May Invest",






	—  	you
are  purchasing  the Units for your  benefit  or  account,  and not for the  benefit  or
account of      another person,






	—  	you
adopt and agree to be bound by the Subscription Agreement,






	—  	you
 acknowledge  that the Units have not been  registered  under the  Securities Act or the
securities      laws of any State,






	—  	you
have sufficient  knowledge in business  matters to be capable of evaluating the risks of
investment in the Units,






	— 	you
acknowledge that you have read carefully this Private Placement Memorandum and the
financial statements of our Israeli subsidiary for the year ended December 31, 2006 and
understand these and have consulted your own attorney, accountant and/or investment
adviser with respect to the investment contemplated hereby and its suitability for you; 






	— 	you
acknowledge that in making its decision to purchase the Units, you have relied upon
independent investigations made by you and your representatives, if any, and you and such
representatives, if any, have been provided access and the opportunity to examine all
material, publicly available books and records of the Company, all material contracts and
documents relating to this Offering and have had an opportunity to ask questions and to
receive answers from the Company or persons acting on its behalf concerning the terms and
conditions of this Offering; 






	—  	you
have the full power and authority to execute the Subscription Agreement and the related agreements,








	— 	you
confirm that, to the best of your knowledge: (1) none of the cash or property that you
have paid, will pay or will contribute to us has been or shall be derived from, or
related to, any activity that is deemed criminal under United States federal laws; and
(2) no contribution or payment by you to us, to the extent that they are within your
control, shall cause us to be in violation of the United States Bank Secrecy Act, the
United States Money Laundering Control Act of 1986 or the United States International
Money Laundering Abatement and Anti-Terrorist Financing Act of 2001; and 






	—  	you
agree to hold  our confidential information in confidence.






        These
representations and warranties are being made to us to assure us that you understand the
investment you are making and for us to rely on in determining that we can sell securities
to you.  If you act in a manner contrary to these representations and warranties, we
would assert that you could not do so based upon the representations and warranties you
made in the Subscription Agreement. 



44











LEGAL MATTERS 



        The
validity of the Common Stock being offered hereby and certain other legal matters in
connection with this offering will be passed upon for us by Carter, Ledyard & Milburn
2 Wall Street, New York, NY 10005, United States. 





EXPERTS 



        Brightman
Almagor, a member of Deloitte & Touche and independent auditors, have audited the
Historical Financial Statements at December 31, 2005 and December 31, 2006. 



45











EXHIBIT A 



HISTORICAL FINANCIAL
STATEMENTS 



FUTURE I.T. Ltd. 



AS OF DECEMBER 31, 2006