Attached files
file | filename |
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EX-5.1 - BAETA CORP | v171420_ex5-1.htm |
EX-23.1 - BAETA CORP | v171420_ex23-1.htm |
EX-10.19 - BAETA CORP | v171420_ex10-19.htm |
EX-10.20 - BAETA CORP | v171420_ex10-20.htm |
EX-10.12.16 - BAETA CORP | v171420_ex10-12x16.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1/A
(Amendment
No. 8)
REGISTRATION
UNDER THE SECURITIES ACT OF 1933
BAETA
CORP.
|
(Exact
name of registrant as specified in its
charter)
|
New
Jersey
|
(State
or other jurisdiction of incorporation or
organization)
|
3841
|
(Primary
Standard Industrial Classification Code
Number)
|
26-0722186
|
(I.R.S.
Employer Identification Number)
|
1
Bridge Plaza
Second
Floor, Suite 275
Fort
Lee, NJ 07024
(201)
471-0988
|
(Address,
including zip code, and telephone number, including area code, of
registrant’s
principal
executive offices)
|
Leonid
Pushkantser
1
Bridge Plaza
Second
Floor, Suite 275
Fort
Lee, NJ 07024
(201)
471-0988
(Name,
address, including zip code, and telephone number, including area code, of
agent for service)
With
a copy to:
The
Sourlis Law Firm
Virginia
K. Sourlis, Esq.
214
Broad Street
Red
Bank, New Jersey 07701
www.SourlisLaw.com
Telephone:
(732) 530-9007
Facsimile:
(732) 530-9008
|
As soon as practicable after
this Registration Statement is declared effective.
|
(Approximate
date of commencement of proposed sale to the
public)
|
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box: x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer,”
"non-accelerated filer" and “smaller reporting company” in Rule 12b-2 of
the Exchange Act. (Check one):
Large
accelerated filer
|
o
|
Accelerated
filer
|
o
|
Non-accelerated
filer
|
o
|
Smaller
reporting
company
|
x
|
CALCULATION
OF REGISTRATION FEE
|
||||||||||||||||
Title of Each Class of Securities
to be Registered
|
Amount to be
Registered (1)
|
Proposed Maximum
Offering Price Per
Share
|
Proposed Maximum
Aggregate Offering
Price
|
Amount of
Registration Fee
|
||||||||||||
Common
Stock, par value $0.0001
per
share
|
915,400 | (1) | $ | 1.00 | $ | 915,400 | $ | 116.00 | (2) (3) |
|
(1)
|
Pursuant
to Rule 415 of the Securities Act, these securities are being offered by
the Selling Stockholders named herein on a delayed or continuous
basis.
|
|
(2)
|
Estimated
solely for the purpose of calculating the registration fee in accordance
with Rule 457(a) under the Securities
Act.
|
|
(3)
|
The
registration fee has been paid
previously.
|
The
Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section
8(a) of the Securities Act, or until this Registration Statement shall
become effective on such date as the Securities and Exchange Commission
(or the “SEC”), acting pursuant to said Section 8(a), may
determine.
|
SUBJECT
TO COMPLETION, DATED JANUARY 14, 2010
The
information in this prospectus is not complete and may be changed. Our Selling
Stockholders may not sell these securities until the Registration Statement
filed with the United States Securities and Exchange Commission is effective.
This Prospectus is not an offer to sell these securities and it is not
soliciting an offer to buy these securities in any state where the offer or sale
is not permitted.
PROSPECTUS
915,400
Shares of Common Stock
BAETA
CORP, INC.
$1.00
per Share
This
prospectus relates to the resale of up to 915,400 shares of our common stock by
the Selling Stockholders named in this prospectus. We are registering the shares
on behalf of the Selling Stockholders. To the best of our knowledge, none of the
Selling Stockholders are broker-dealers, underwriters or affiliates
thereof.
We have
arbitrarily set an offering price of $1.00 per share of common stock offered
through this prospectus. We are paying the expenses of registering these shares.
We will not receive any proceeds from this offering.
Our
common stock is presently not traded or quoted on any market or securities
exchange. The sales price to the public is fixed at $1.00 per share until such
time as our common stock is quoted on the Over-The-Counter (OTC) Bulletin Board.
Although we intend to request a registered broker-dealer apply to have of our
common stock quoted on the OTC Bulletin Board, public trading of our common
stock may never materialize or even if materialized, be sustained. If our common
stock is quoted on the OTC Bulletin Board, then the sales price to the public
will vary according to prevailing market prices on the OTC Bulletin Board or
privately negotiated prices by the Selling Stockholders.
THESE SECURITIES ARE SPECULATIVE AND
INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED ONLY BY PERSONS WHO CAN
AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. PLEASE REFER TO “RISK FACTORS”
BEGINNING ON PAGE 4.
THE SECURITIES AND EXCHANGE
COMMISSION AND STATE SECURITIES REGULATORS HAVE NOT APPROVED OR DISAPPROVED OF
THESE SECURITIES, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The
date of this preliminary prospectus is __________,
2010.
ii
PROSPECTUS
BAETA
CORP.
915,400
SHARES COMMON STOCK
$1.00
per Share
TABLE
OF CONTENTS
Item
|
Page
|
||
Summary
|
1 | ||
Risk
Factors
|
4 | ||
Description
of Business
|
11 | ||
Description
of Properties
|
28 | ||
Legal
Proceedings
|
28 | ||
Use
of Proceeds
|
28 | ||
Determination
of Offering Price
|
28 | ||
Dilution
|
29 | ||
Selling
Stockholders
|
29 | ||
Plan
of Distribution
|
35 | ||
Directors,
Executive Officers, Promoters and Control Persons
|
37 | ||
Security
Ownership of Certain Beneficial Owners and Management
|
49 | ||
Description
of Securities
|
50 | ||
Interest
of Named Experts and Counsel
|
54 | ||
Experts
|
54 | ||
Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
|
55 | ||
Organization
Within Last Five Years
|
55 | ||
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
55 | ||
Certain
Relationships and Related Transactions and Corporate
Governance
|
65 | ||
Market
for Common Equity and Related Stockholder Matters
|
69 | ||
Changes
in and Disagreements with Accountants and Financial
Disclosure
|
70 | ||
Where
You Can Find More Information
|
71 | ||
Financial
Statements
|
F-1 |
iii
SUMMARY
You
should read the entire prospectus before making an investment decision to
purchase our Common Stock.
Our
Company, BAETA Corp. (“BAETA,” the “Company,” “we,” “us” and similar terms),
designs and markets products for the monitoring, reporting, and recording of
pain and other health related products for the hospital and outpatient/consumer
settings. BAETA’s current line of products consist of a pain monitoring system
known as MyHealthTrends™ For
Pain (this product was formerly named MyPainAway) marketed as a
consumer product. Additionally, the company is developing MyPillsOntime™, an automatic
medication reminder/dispenser system for consumer market, MyHealthID, a patient
controlled and managed online repository for personal medical records, as well
as a commercial version of MyHealthTrends™ For Pain, for
use in the hospital and healthcare facility market that we are working to launch
in the fiscal year 2010. Other lines of products currently anticipated for
future development include MyHealthTrends™ For Weight
Control, intended to assist in weight loss and control, and MyHealthTrends™ For Smoking
Cessation, designed to help customers quit
smoking.
Organizational
History
Incorporated
in State of New Jersey on August 14, 2007, we are a development stage medical
technology company that develops and manufactures advanced products for use in
consumer households and in hospitals and other medical institutions. Our
flagship product, MyHealthTrends™ For Pain, is
a patent-pending pain management and assessment product targeted for the
estimated 25 million chronic pain sufferers in the United States. We
successfully launched this product (formerly named MyPainAway™) and its
interactive customer website during the fourth quarter of 2008. Since inception,
we have focused our operations towards the development and marketing of our
products and the development of our corporate infrastructure, and have not
generated any substantial revenue.
Summary
Financial Information
The table
below summarizes:
|
·
|
The
restated audited financial statements of BAETA Corp. for the fiscal years
ended December 31, 2008** and 2007;
and
|
|
·
|
the
unaudited financial statements for the quarter ended September 30,
2009:
|
Balance Sheet
Summary:
At December 31,
2008**
|
At December 31, 2007
|
At September 30, 2009
|
||||||||||
(Taken from the
Restated Audited
Financial
Statements*)
|
(Taken from the Audited
Financial Statements*)
|
(Unaudited)
|
||||||||||
Balance
Sheet
|
||||||||||||
Cash
and Cash Equivalents
|
$ | 14,475 | $ | 10,150 | $ | 1,924 | ||||||
Total
Assets
|
$ | 82,452 | $ | 10,471 | $ | 224,894 | ||||||
Total
Liabilities
|
$ | 259,011 | $ | 20,000 | $ | 499,374 | ||||||
Total
Stockholders’ Deficit
|
$ | (176,559 | ) | $ | (9,529 | ) | $ | (274,480 | ) |
* The
auditors did not audit the contents of this table.
Statement of Operations
Summary:
For the Fiscal Year
Ended December 31,
2008**
|
For the Fiscal Year
Ended December 31,
2007
|
For the Nine
Months Ended
September 30,
2009
|
For the Period
August 14, 2007
(Inception) to
September 30, 2009
|
|||||||||||||
(Taken from the
Restated Audited
Financial Statements*)
|
(Taken from the
Audited Financial
Statements*)
|
(Unaudited)
|
(Unaudited)
|
|||||||||||||
Statement
of Operations:
|
||||||||||||||||
Revenue
|
$ | 71.00 | $ | 0 | $ | 9,003 | $ | 9.074 | ||||||||
Net
Loss
|
$ | (548,200 | ) | $ | (11,529 | ) | $ | (527,464 | ) | $ | (1,087,193 | ) | ||||
Net
Loss Per Share of Common Stock , basic and diluted
|
$ | (0.03 | ) | $ | (0.00 | ) | $ | (0.02 | ) | — |
* The
auditors did not audit the contents of this table.
**
Restatement of 2008 Financial Results
On May
26, 2009, Stan J.H. Lee, CPA, CMA, declined to stand for re-election as auditor
of BAETA Corp. This decision came with approval by BAETA’s sole director, Dr.
Alexander Gak.
Subsequently,
the Company hired W.T. Uniack & Co., CPAs, P.C. as independent public
auditor going forward, as of 6/30/2009. At this time, Management conducted a
review of the December 31, 2008 audited financial statements, and determined
that many material errors were present necessitating a re-audit, and as such,
directed W.T. Uniack & Co., CPAs, P.C. to re-audit the Company financials
for the year ending December 31, 2008. The re-audited and corrected financial
statements for the year ending December 31, 2008, are now provided. The errors
resulted in a change in Net Income Before Tax from ($596,661) to ($547,700) and
Net Income from ($597,193) to ($548,200).
AVAILABLE
INFORMATION
Upon the
effectiveness of the Company’s registration statement on Form S-1, of which this
prospectus is a part, with the Securities and Exchange Commission (“SEC”), the
Company will be subject to the reporting and information requirements of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), and will
therefore be required to file annual and quarterly reports and other reports and
statements with the SEC. Such reports and statements will be available free of
charge on the SEC’s website, www.sec.gov.
DIVIDEND
POLICY
We have
never paid or declared dividends on our securities. The payment of cash
dividends, if any, in the future is within the discretion of our Board and will
depend upon our earnings, our capital requirements, financial condition and
other relevant factors. We intend, for the foreseeable future, to retain future
earnings for use in our business.
PRINCIPAL
EXECUTIVE OFFICES
Our
principal executive offices are located at 1 Bridge Plaza, 2nd Floor, Suite 275,
Fort Lee, NJ 07024. Our telephone number is (201) 471-0988.
2
OFFERING
SUMMARY
|
|
The
Issuer:
|
BAETA
Corp., a New Jersey corporation.
|
Selling
Stockholders:
|
The
Selling Stockholders named in this prospectus are existing stockholders of
our company who purchased shares of our common stock exempt from the
registration requirements of the Securities Act of 1933, as amended, or
the Securities Act, under Section 4(2) of the Securities
Act.
|
Securities Being
Offered:
|
Up
to 915,400 shares of our common stock, par value $0.0001 per
share.
|
Offering
Price:
|
The
offering price of the common stock has been arbitrarily set at $1.00 per
share. We intend to request a registered broker-dealer to apply to have
our common stock quoted on the OTC Bulletin Board upon our becoming a
reporting entity under the Securities Exchange Act of 1934, as amended, or
the Exchange Act. If our common stock is quoted on the OTC Bulletin Board
and a market for our common stock develops, the actual price of stock will
be determined by prevailing market prices at the time of sale or by
private transactions negotiated by the Selling
Stockholders. The offering price would thus be determined by market
factors and the independent decisions of the Selling
Stockholders.
|
Minimum
Number of Shares to
|
|
Be Sold in This
Offering:
|
None
|
Capitalization:
|
Common Stock:
100,000,000 shares authorized; 22,501,052 shares outstanding as of the
date of this prospectus.
Preferred
Stock: 10,000,000 shares authorized; 100 shares of Series A
Preferred Stock outstanding. The outstanding shares of Series A Preferred
Stock shall vote together with the shares of Common Stock of the Company
as a single class and, regardless of the number of shares of Series A
Preferred Stock outstanding and as long as at least one of such shares of
Series A Preferred Stock is outstanding, shall represent eighty percent
(80%) of all votes entitled to be voted at any annual or special meeting
of shareholders of the Company or action by written consent of
shareholders. Each outstanding share of the Series A Preferred Stock shall
represent its proportionate share of the 80% which is allocated to the
outstanding shares of Series A Preferred Stock. The outstanding 100 shares
of Series A Preferred Shares are held by Dr. Alexander Gak, our President
and Chairman.
The
voting rights of the Company’s Series A Preferred Stock effectively
eliminate the voting rights of our common stockholders. Potential
investors should consider this as a risk of investment prior to purchasing
our common stock. See “Risk Factors”.
|
Common
Stock Outstanding
Before and After the
Offering:
|
22,501,052
Shares of our common stock are issued and outstanding as of the date of
this prospectus and will continue to be issued and outstanding upon the
completion of this offering. All of the common stock to be sold under this
prospectus will be sold by existing stockholders.
|
Use of
Proceeds:
|
We
will not receive any proceeds from the sale of the common stock by the
Selling Stockholders. All of the proceeds of the offering will go to the
Selling Stockholders.
|
Risk
Factors:
|
See
“Risk Factors” and the other information in this prospectus for a
discussion of the factors you should consider before deciding to invest in
shares of our common
stock.
|
3
RISK
FACTORS
An investment in our common stock
involves a high degree of risk. In addition to the other information
in this prospectus, you should carefully consider the following factors in
evaluating us and our business before purchasing the shares of common stock
offered hereby. This prospectus contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below, as well as
those discussed elsewhere in this prospectus, including the documents
incorporated by reference.
Risks Related to Our
Business
We
are not currently profitable and may not become profitable.
We have
incurred significant operating losses since our formation and expect to incur
substantial losses and negative operating cash flows for the foreseeable future,
and we may not achieve or maintain profitability. We expect to incur substantial
losses for the foreseeable future and may never become profitable. We also
expect to continue to incur significant operating and capital expenditures for
the next several years and anticipate that our expenses will increase
substantially in the foreseeable future. We also expect to experience negative
cash flow for the foreseeable future as we fund our operating losses and capital
expenditures. As a result, we will need to generate significant revenues in
order to achieve and maintain profitability. We may not be able to generate
these revenues or achieve profitability in the future. Our failure to achieve or
maintain profitability could negatively impact the value of our common stock. At
December 31, 2008, we had $14,475 cash on-hand and our stockholder’s deficit was
($176,559), and there is substantial doubt as our ability to continue as a going
concern.
We
are a development stage company and are subject to all of the complications and
difficulties associated with new enterprises.
We have a
limited history upon which an evaluation of our prospects and future performance
can be made. Our proposed operations are subject to all business risks
associated with new enterprises. The likelihood of our success must be
considered in light of the problems, expenses, difficulties, complications, and
delays frequently encountered in connection with the expansion of a business
operation in an emerging industry, and the continued development of advertising,
promotions, and a corresponding customer base. There is a possibility that we
could sustain losses in the future, and there are no assurances that we will
ever operate profitably.
We are an
early-stage medical technology company and while our management believes that it
can implement our business plan, attract highly talented personnel and develop a
market for its products and services, our plan of operations is subject to
changing needs of patients, market conditions and various other factors out of
our control. For these and other reasons, the purchase of the Shares should only
be made by persons who can afford to lose their entire investment.
Our
primary assets consist of intangibles, and there is no assurance that our
operations will be successful.
Our
primary asset consists of Intellectual Property, concepts, methods and
strategies related to MyHealthTrends™ For Pain pain tracking system, its
associated online user portal and MyPillsOntime automatic pill dispensing unit.
Furthermore, we have filed patent applications for our technologies, however, no
such patents have yet been granted, nor are there any assurances that such
patents will be granted. As a result of the foregoing, we will likely incur
additional losses in the future. There is no assurance that our operations will
be successful or that it will be profitable in the future.
4
We
will need to obtain additional financing.
We will
be required to obtain additional financing to continue to operate our business.
There can be no assurance that any additional financing, if required, will be
available to us on acceptable terms, if at all. Any inability of us to obtain
additional financing, if required, could have a material adverse effect on our
financial condition and results of operations.
Our
product lines may never gain commercial acceptance.
We
believe that our plan to develop and attract a significant proprietary presence
in the vital signs monitoring market offers significant growth potential. There
can be no guarantee that our plan of operation will be commercially accepted at
revenue levels sufficient to permit us to achieve or maintain profitable
operations.
We
may be unable to adequately protect our proprietary rights or may be sued by
third parties for infringement of their proprietary rights.
The
medical technology industry is characterized by the existence of a large number
of patents and frequent litigation based on allegations of trade secret,
copyright or patent infringement. We may inadvertently infringe a patent of
which we are unaware. In addition, because patent applications can take many
years to issue, there may be a patent application now pending of which we are
unaware that will cause us to be infringing when it is issued in the future. If
we make any acquisitions, we could have similar problems in those industries.
Although we are not currently involved in any intellectual property litigation,
we may be a party to litigation in the future to protect our intellectual
property or as a result of our alleged infringement of another’s intellectual
property, forcing us to do one or more of the following:
|
o
|
Cease selling, incorporating or
using products or services that incorporate the challenged intellectual
property;
|
|
o
|
Obtain from the holder of the
infringed intellectual property right a license to sell or use the
relevant technology, which license may not be available on reasonable
terms; or
|
|
o
|
Redesign those products or
services that incorporate such
technology.
|
A
successful claim of infringement against us, and our failure to license the same
or similar technology, could adversely affect our business, asset value or stock
value. Infringement claims, with or without merit, would be expensive to
litigate or settle, and would divert management resources.
A
dispute concerning the infringement or misappropriation of our proprietary
rights or the proprietary rights of others could be time consuming and costly,
and an unfavorable outcome could harm our business.
We may be
exposed to future litigation by third parties based on claims that our programs
infringe the intellectual property rights of others. If we become involved in
litigation, it could consume a substantial portion of our managerial and
financial resources, regardless of whether we win or lose. We may not be able to
afford the costs of litigation. Any legal action against us or our collaborators
could lead to:
|
·
|
payment
of damages, potentially treble damages, if we are found to have willfully
infringed a party’s patent rights;
|
|
·
|
injunctive
or other equitable relief that may effectively block our ability to
further develop, commercialize and sell products;
or
|
|
·
|
we
or our collaborators having to enter into license arrangements that may
not be available on commercially acceptable terms, if at
all.
|
As a
result of the foregoing, we could be prevented from commercializing current or
future products.
5
We
may not be able to successfully patent our technologies, which could have
potentially devastating effects on our business and ability to compete in the
marketplace.
Our
intellectual property consists of the following:
|
1.
|
MyPainAway brand
trademark. Trademark registration filed January
2008.
|
|
2.
|
MyHealthTrends™ For
Pain brand trademark. Trademark registration to be
filed.
|
|
3.
|
MyHealthTrends™ and
MyHealthTrends™ For Pain pain
monitoring system integrated hardware and software
technology.
|
|
4.
|
Patent
pending for “Device, Method and/or System for Monitoring the Condition of
a Subject,” docket No U.S. 1488/07, originally submitted July
2007.
|
|
5.
|
Patent
pending for “Automatic Reminder and Dispensing Device, System and Method
Therefore,” docket No U.S. 1509/08, originally submitted May
2008.
|
The is no
assurance that the U.S. Patent and Trademark Office will grant us patents on any
of our proprietary technologies, nor any assurances that we can adequately
protect any of our intellectual property from infringement claims or
prosecutions.
We
are highly dependent on the services of Dr. Alexander Gak, our President and
sole director.
Our
success depends on the efforts and abilities of Dr. Alexander Gak, our President
and sole director. The loss of the services of Dr. Gak would have a material
adverse effect on us. Our success also depends upon our ability to attract and
retain qualified personnel required to fully implement our business plan. There
can be no assurance that we will be successful in these efforts.
As
our business grows, we will need to attract additional employees which we might
not be able to do.
We have
one full-time officer, Mr. Leonid Pushkantser, the Chief Executive Officer. In
order to grow and implement our business plan, we would need to add managerial
talent to support our business plan. There is no guarantee that we will be
successful in adding such managerial talent.
We
may not be able to compete successfully with current and future
competitors.
We will
compete, in our current and proposed businesses, with other companies, some of
which have far greater marketing and financial resources and experience than we
do. We cannot guarantee that we will be able to penetrate our intended market
and be able to compete profitably, if at all. In addition to established
competitors, there is ease of market entry for other companies that choose to
compete with us. Effective competition could result in price reductions, reduced
margins or have other negative implications, any of which could adversely affect
our business and chances for success. Competition is likely to increase
significantly as new companies enter the market and current competitors expand
their services. Many of these potential competitors are likely to enjoy
substantial competitive advantages, including: larger technical staffs, greater
name recognition, larger customer bases and substantially greater financial,
marketing, technical and other resources. To be competitive, we must respond
promptly and effectively to the challenges of technological change, evolving
standards and competitors' innovations by continuing to enhance our services and
sales and marketing channels. Any pricing pressures, reduced margins or loss of
market share resulting from increased competition, or our failure to compete
effectively, could seriously damage our business and chances for
success.
6
We
may not be able to manage our growth effectively.
We must
continually implement and improve our products and/or services, operations,
operating procedures and quality controls on a timely basis, as well as expand,
train, motivate and manage our work force in order to accommodate anticipated
growth and compete effectively in our market segment. Successful implementation
of our strategy also requires that we establish and manage a competent,
dedicated work force and employ additional key employees in corporate
management, product design, client service and sales. We can give no assurance
that our personnel, systems, procedures and controls will be adequate to support
our existing and future operations. If we fail to implement and improve these
operations, there could be a material, adverse effect on our business, operating
results and financial condition.
If
we do not continually update our products, they may become obsolete and we may
not be able to compete with other companies.
We cannot
assure you that we will be able to keep pace with technological advances or that
our products will not become obsolete. We cannot assure you that competitors
will not develop related or similar products and bring them to market before we
do, or do so more successfully, or that they will not develop technologies and
products more effective than any that we have or are developing. If that
happens, our business, prospects, results of operations and financial condition
will be materially adversely affected.
The
ability to generate long-term contracts for the sale of our products is
vital.
We lack
long-term contracts and there can be no assurance that we will successfully
establish or maintain any long-term contracts in the future.
Our
product lines may be subject to future government regulation.
While our
product lines are not currently subject to regulation by the U.S. Food and Drug
Administration (“FDA”), there is no guarantee that our products won’t become
subject to future regulation. Any future regulation by the FDA or other
governmental authority could potentially have devastating effects on our ability
to conduct operations.
Failure
by us or our suppliers to comply with the Food and Drug Administration (“FDA”)
regulations and similar foreign regulations applicable to the products we
manufacture or distribute could expose us to enforcement actions or other
adverse consequences.
We
design, manufacture, install and distribute medical vital signs monitoring
devices that are currently not subject to FDA regulation. However, while we are
investigating this matter diligently and are of the opinion that FDA regulation
does not apply to our current products, we can make no guarantees that our
products will not be subject to future regulation by the FDA in the United
States and similar agencies in other countries. Failure to comply with
applicable regulations could result in future product recalls, injunctions
preventing the shipment of products or other enforcement actions that could have
a material adverse effect on our revenues and profitability. Additionally,
certain of our suppliers may be subject to FDA regulations, and the failure of
these suppliers to comply with regulations could adversely affect
us.
We
have agreed to indemnify our officers and directors against lawsuits to the
fullest extent of the law.
We are a
New Jersey corporation. New Jersey law permits the indemnification of officers
and directors against expenses incurred in successfully defending against a
claim. New Jersey law also authorizes New Jersey corporations to indemnify their
officers and directors against expenses and liabilities incurred because of
their being or having been an officer or director. Our organizational documents
provide for this indemnification to the fullest extent permitted by
law.
We
currently do not maintain any insurance coverage. In the event that we are found
liable for damage or other losses, we would incur substantial and protracted
losses in paying any such claims or judgments. We have not maintained liability
insurance in the past, but intend to acquire such coverage immediately upon
resources becoming available. There is no guarantee that we can secure such
coverage or that any insurance coverage would protect us from any damages or
loss claims filed against it.
7
If
we are unable to establish sales and marketing capabilities or enter into
agreements with third parties to sell and market any products we may develop, we
may not be able to generate revenue.
We do not
have an organization for the sales, marketing and distribution of our
products. We must
build our sales, marketing, managerial and other non-technical capabilities or
make arrangements with third parties to perform these services. In addition, we
have no experience in developing, training or managing a sales force and will
incur substantial additional expenses in doing so. The cost of establishing and
maintaining a sales force may exceed our cost effectiveness. If we are unable to
establish adequate sales, marketing and distribution capabilities, whether
independently or with third parties, we may not be able to generate product
revenue and may not become profitable.
If
we engage in any acquisition, we will incur a variety of costs and may never
realize the anticipated benefits of the acquisition.
We may
attempt to acquire businesses, technologies, services or products or license
technologies that we believe are a strategic fit with our business. We have
limited experience in identifying acquisition targets, and successfully
completing and integrating any acquired businesses, technologies, services or
products into our current infrastructure. The process of integrating any
acquired business, technology, service or product may result in unforeseen
operating difficulties and expenditures and may divert significant management
attention from our ongoing business operations. As a result, we will incur a
variety of costs in connection with an acquisition and may never realize our
anticipated benefits.
We
may engage in transactions that present conflicts of interest.
The
Company and officers and directors may enter into agreements with the Company
from time to time which may not be equivalent to similar transactions entered
into with an independent third party. A conflict of interest arises whenever a
person has an interest on both sides of a transaction. While we believe that it
will take prudent steps to ensure that all transactions between the Company and
any officer or director is fair, reasonable, and no more than the amount it
would otherwise pay to a third party in an “arms-length” transaction, there can
be no assurance that any transaction will meet these requirements in every
instance.
Confidentiality
agreements with employees and others may not adequately prevent disclosure of
our trade secrets and other proprietary information and may not adequately
protect our intellectual property.
We enter
into confidentiality and intellectual property assignment agreements with our
corporate partners, employees, consultants, and other advisors. These agreements
generally require that the other party keep confidential and not disclose to
third parties all confidential information developed by the party or made known
to the party by us during the course of the party’s relationship with us. These
agreements also generally provide that inventions conceived by the party in the
course of rendering services to us will be our exclusive property. However,
these agreements may not be honored and may not effectively assign intellectual
property rights to us. The enforcement of a claim alleging that a party
illegally obtained and is using our trade secrets is difficult, expensive and
time consuming and the outcome is unpredictable. We cannot assure you that these
agreements will not be breached, that we will be able to do much to protect
ourselves if they are breached, or that our trade secrets will not otherwise
become known or be independently discovered by competitors. If any of these
events occurs, then we run the risk of losing control over valuable company
information, which could negatively affect our competitive
position.
8
Risks
Relating to Ownership of Our Common Stock
There
is no active market for our common stock. One may never develop or if developed,
be sustained and you could lose your investment in our common
stock.
Currently,
there is no active trading market for our common stock. Following the
effectiveness of this registration statement, we intend to request that a
broker-dealer/market maker submit an application to make a market for our common
stock shares on the OTC Bulletin Board. There can be no assurance, however, that
the application will be accepted or that any trading market will ever develop or
be maintained on the OTC Bulletin Board. Any trading market that may develop in
the future for our common stock will most likely be very volatile; and numerous
factors beyond our control may have a significant effect on the market. Only
companies that report their current financial information to the SEC may have
their securities included on the OTC Bulletin Board. Therefore, only upon the
effective date of this registration statement will our common stock become
eligible to be quoted on the OTC Bulletin Board. In the event that we lose our
status as a "reporting issuer," any future quotation of our common stock on the
OTC Bulletin Board may be jeopardized.
Dr.
Gak is our sole director and has the right to designate classes and rights of
our Preferred Stock.
Our
Certificate of Incorporation authorizes the issuance of 10,000,000 shares of
preferred stock, $0.0001 par value, with designations, rights and preferences
determined from time to time by our Board of Directors, Dr. Gak is our sole
director and therefore, is empowered, without stockholder approval, to issue
Preferred Stock with dividend, liquidation, conversion, voting or other rights
that could adversely affect the voting power or other rights of the holders of
our Common Stock. This could adversely affect the value of our common
stock.
Voting Rights
Risk
We have
100 shares of our Series A Preferred Stock outstanding. The outstanding shares
of Series A Preferred Stock votes together with the shares of Common Stock of
the Corporation as a single class and, regardless of the number of shares of
Series A Preferred Stock outstanding and as long as at least one of such shares
of Series A Preferred Stock is outstanding, shall represent eighty percent (80%)
of all votes entitled to be voted at any annual or special meeting of
shareholders of the Corporation or action by written consent of shareholders.
Each outstanding share of the Series A Preferred Stock shall represent its
proportionate share of the 80% which is allocated to the outstanding shares of
Series A Preferred Stock. The 100 shares of Series A Preferred Shares are held
by Dr. Alexander Gak, our President and Chairman. The right of the Series A
Preferred Stock to vote on all matters with the common stock and having 80% of
the vote effectively eliminates the voting power of our common stock and may
suppress the value of our common stock.
Change of Control
Risk
As the
sole holder of our Series A Preferred Stock, Dr. Gak maintains majority voting
power and sole discretion with regards to election of directors, disposition of
major corporate assets, pursuing or rejecting any potential transaction,
including one which would result in a change of control of the Company, even
though such transaction might be beneficial to the stockholders of the Company.
Such right may suppress the value of our common stock, and should be considered
a material risk to investing in our common stock.
The
failure to comply with the internal control evaluation and certification
requirements of Section 404 of Sarbanes-Oxley Act could harm our operations and
our ability to comply with our periodic reporting obligations.
Upon the
effectiveness of this registration statement, our Company will become subject to
the reporting requirements of the Securities Exchange Act of 1934, as amended,
or the Exchange Act. We will be required to comply with the internal control
evaluation and certification requirements of Section 404 of the Sarbanes-Oxley
Act of 2002. We are in the process of determining whether our existing internal
controls over financial reporting systems are compliant with Section 404. This
process may divert internal resources and will take a significant amount of
time, effort and expense to complete. If it is determined that we are not in
compliance with Section 404, we may be required to implement new internal
control procedures and reevaluate our financial reporting. We may experience
higher than anticipated operating expenses as well as outside auditor fees
during the implementation of these changes and thereafter. Further, we may need
to hire additional qualified personnel in order for us to be compliant with
Section 404. If we are unable to implement these changes effectively or
efficiently, it could harm our operations, financial reporting or financial
results and could result in our being unable to obtain an unqualified report on
internal controls from our independent auditors, which could adversely affect
our ability to comply with our periodic reporting obligations under the Exchange
Act and the rules of the Nasdaq Global Market.
9
Our
common stock is subject to the "Penny Stock" rules of the SEC and the trading
market in our securities is limited, which makes transactions in our stock
cumbersome and may reduce the value of an investment in our stock.
The
Securities and Exchange Commission has adopted Rule 15g-9 which establishes the
definition of a "penny stock," for the purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules
require:
|
§
|
that
a broker or dealer approve a person's account for transactions in penny
stocks; and
|
|
§
|
the
broker or dealer receives from the investor a written agreement to the
transaction, setting forth the identity and quantity of the penny stock to
be purchased.
|
In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
|
•
|
obtain
financial information and investment experience objectives of the person;
and
|
|
•
|
make
a reasonable determination that the transactions in penny stocks are
suitable for that person and the person has sufficient knowledge and
experience in financial matters to be capable of evaluating the risks of
transactions in penny stocks.
|
The
broker or dealer must also deliver, prior to any transaction in a penny stock, a
disclosure schedule prescribed by the Commission relating to the penny stock
market, which, in highlight form:
|
·
|
sets
forth the basis on which the broker or dealer made the suitability
determination; and
|
|
·
|
that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
|
Generally,
brokers may be less willing to execute transactions in securities subject to the
"penny stock" rules. This may make it more difficult for investors to dispose of
our common stock and cause a decline in the market value of our
stock.
Disclosure
also has to be made about the risks of investing in penny stocks in both public
offerings and in secondary trading and about the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and the rights and remedies available to an investor in cases of
fraud in penny stock transactions. Finally, monthly statements have to be sent
disclosing recent price information for the penny stock held in the account and
information on the limited market in penny stocks.
The
price of our shares of common stock in the future may be volatile.
If a
market develops for our common stock, the market price of our common stock will
likely be volatile and could fluctuate widely in price in response to various
factors, many of which are beyond our control, including: technological
innovations or new products and services by us or our competitors; additions or
departures of key personnel; sales of our common stock; our ability to integrate
operations, technology, products and services; our ability to execute our
business plan; operating results below expectations; loss of any strategic
relationship; industry developments; economic and other external factors; and
period-to-period fluctuations in our financial results. Because we have a
very limited operating history with limited to no revenues to date, you may
consider any one of these factors to be material. Our stock price may fluctuate
widely as a result of any of the above. In addition, the securities markets
have from time to time experienced significant price and volume fluctuations
that are unrelated to the operating performance of particular companies. These
market fluctuations may also materially and adversely affect the market price of
our common stock.
10
FORWARD
LOOKING STATEMENTS
When used
in this Prospectus, the words or phrases “will likely result,” “we expect,”
“will continue,” “anticipate,” “estimate,” “project,” ”outlook,” “could,”
“would,” “may,” or similar expressions are intended to identify forward-looking
statements. We wish to caution readers not to place undue reliance on any such
forward-looking statements, each of which speaks only as of the date made. Such
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those presently
anticipated or projected. Such risks and uncertainties include, among others,
success in reaching target markets for products in a highly competitive market
and the ability to attract future customers, the size and timing of additional
significant orders and their fulfillment, the success of our business emphasis,
the ability to finance and sustain operations, the ability to raise equity
capital in the future, e and the size and timing of additional significant
orders and their fulfillment. We have no obligation to publicly release the
results of any revisions, which may be made to any forward-looking statements to
reflect anticipated or unanticipated events or circumstances occurring after the
date of such statements.
DESCRIPTION
OF BUSINESS
General
We are
a medical technology company that develops and manufactures advanced products
within the global vital signs monitoring industry. Our flagship product is a
patent-pending pain management and assessment product targeted for the estimated
25 million chronic pain sufferers in the United States. Management successfully
launched the product, called “MyHealthTrends™ For
Pain” (formerly called “MyPainAway™”) and its
interactive customer website during the fourth quarter of 2008.
Generally,
we design and currently have in development several lines of products for the
monitoring, reporting, and recording of pain and other health related products
for the hospital and outpatient, and consumer settings. BAETA’s current line of
products consists of a pain monitoring system known as MyHealthTrends™ For Pain
(this product was formerly named MyPainAway) marketed as a
consumer product. Additionally, the Company is developing MyPillsOntime™, an automatic
medication reminder/dispenser system for consumer market, MyHealthID, a patient
controlled and managed online repository for personal medical records, as well
as a commercial version of MyHealthTrends™ For Pain, for
use in the hospital and healthcare facility market (commercial setting) that we
are working to launch in the fiscal year 2010.
Other
lines of products currently anticipated for future development include MyHealthTrends™ For Weight
Control, intended to assist in weight loss and control, and MyHealthTrends™ For Smoking
Cessation, designed to help persons who smoke end their use of
cigarettes. As of the date of this prospectus, we have not commenced any
significant development with regards to MyHealthTrends™ For Weight
Control or MyHealthTrends™ For Smoking
Cessation.
Organizational
History
Our
Company was incorporated in the State of New Jersey on August 14, 2007. On April
18, 2008, our shareholders approved an amendment to our Certificate of
Incorporation so that, as amended: (a) our authorized capital stock was
increased so that the authorized number of common shares was increased from
1,000 shares to 100,000,000 shares of common stock and 10,000,000 shares of
preferred stock. The amendment also gave our Board of Directors the right to
establish one or more series of preferred stock in such amounts and with such
rights, privileges, and preferences as our Board of Directors may, from to time,
determine.
11
On April
18, 2008, our Board of Directors approved the designation of 100 shares of our
preferred stock as Series A Preferred Stock (the “Series A Preferred Shares”)
and authorized our officers to file a Certificate of Designation for the Series
A Preferred Shares, which occurred on June 23, 2008. The Series A Preferred
Stock vote with our Common Stock as a single class and have 80% of the voting
power of the aggregate number of shares voted. Dr. Gak owns the 100 outstanding
shares of Series A Preferred Stock.
Objectives
Our
Company, BAETA Corp. is a development stage medical technology company. Our
mission is to develop and commercialize products related to our data collection
and reporting proprietary technologies. Currently, the Company focuses on our
product lines relating to pain monitoring, online software (medical record)
repositories, and devices that assist patients to take their correct dosage of
medication on time and correctly. Our flagship product is our patent-pending
consumer pain monitoring system called MyHealthTrends™ For Pain
(formerly called “MyPainAway™”).`
Currently
in the planning stage with no significant development made to date, we intend to
use our proprietary technologies to expand into products relating to weight
loss, smoking cessation, and other related healthcare technologies, of which we
intend to successfully commercialize such technologies by offering several lines
of products for consumers and for hospitals and other healthcare
institutions.
Our
immediate focus is to successfully market our pain monitoring system MyHealthTrends™ For Pain.
Despite increased emphasis on pain management across the board, we believe the
U.S. Health Care System has failed to significantly improve pain management to
date. We believe that pain is still grossly under-treated in the medical
profession and that the main reason for this failure is the fact that patients
still lack effective tools to communicate their pain to health care providers. A
patient's pain is a subjective, individual feeling and cannot be felt to the
same degree by the doctor. Empathy of the doctor is the driving force of the
pain management process today. The doctor assesses the degree of patient’s
distress subjectively, and then implements the minimally effective regimen in
fear of possible side effects.
We intend
to enter the marketplace with a line of products to allow shifting control of
pain management processes from the doctor to the patient.
Through
use of our pain monitoring and recording products, patients become vocal
advocates of their own pain management, voicing their opinion in the form of
hard data that is easy to monitor, store, report, print, and
evaluate.
Business
Development
Our
core business focus is on development and commercialization of vital signs
monitoring technologies. At the present time BAETA is focusing on pain
monitoring technology. The Company plans to expand into other vital sign
monitoring technologies that complement the core business. This list currently
includes pulse oximetry, EKG, blood pressure, cardiac output, carbon dioxide,
and body temperature. The non-core business focuses on adapting core
technologies to the consumer market. Our business includes design, development,
manufacturing, and marketing of consumer products that embody BAETA’s
proprietary technologies.
Since
our inception, we have achieved the following
milestones:
1.
|
August
2007:
|
|
-
|
BAETA
Corp. is incorporated
|
|
-
|
Key
Pain Monitoring Intellectual Property
secured
|
2.
|
September
2007:
|
|
-
|
Development
of proof of concept for MyPainAway™ Pain
Tracking System (later renamed to MyHealthTrends™ For
Pain) commenced
|
12
3.
|
November
2007:
|
|
-
|
Hardware
and software engineering solutions for MyPainAway™ Pain Tracking
System (later renamed to MyHealthTrends™ For
Pain) delivered
|
4.
|
December
2007:
|
-
|
Advertising
solution for MyPainAway™ (later
renamed to MyHealthTrends™ For
Pain) Internet Portal
negotiated
|
5.
|
January
2008:
|
-
|
MyPainAway™ (later
renamed to MyHealthTrends™ For
Pain) Internet Gateway and Windows Application
delivered
|
6.
|
February
2008:
|
-
|
MyPainAway™ (later
renamed to MyHealthTrends™ For
Pain) Internet Portal v1.0
delivered
|
7.
|
March
2008:
|
-
|
Manufacturing
solution for MyPainAway™ (later
renamed to MyHealthTrends™ For
Pain) device
delivered.
|
-
|
Securities
Attorney and Investment Banking services retained for direct registration
of securities
|
8.
|
May
2008:
|
-
|
Intellectual
property secured for Automated Pill Reminding and Dispensing
System.
|
9.
|
June
2008:
|
-
|
Design
and development of MyPillsOnTime™ Pill Reminder
and Dispenser started.
|
Products and
Services
I. MyHealthTrends™ For
Pain:
Product
Overview
MyHealthTrends™ For Pain, a
handheld consumer device, of which we formerly marketed under the name “MyPainAway™ Pain Tracking
System”, allows patients and sufferers of chronic and acute pain, to
track real-time pain onset, breakthrough and therapeutic pain intervention
responses through a handheld device. The data collected by the MyHealthTrends™ For Pain
device is transmitted by the patient, via standard USB connection, to their
personal computer. The patient then sends the data to their medical
practitioner. The online system displays daily graphs and charts that clearly
display the onset and severity of the patient’s pain, as well as the duration of
the sensations of pain, and most importantly, the efficacy of the doctor’s
chosen regimen of therapeutic and/or pharmaceutical intervention. The data
allows medical practitioners to clearly understand the efficacy of chosen
treatment plans, while also helping to quantify and track pain management
protocols. MyHealthTrends™ For
Pain gives both patient and physician a clear visual representation
of the benefit of a given treatment regimen, that can be analyzed and modified,
based upon the patient’s response to various treatments.
We
have developed the final version of its prototype, validated the technology and
its functionality and have contracted with three manufacturers for the
production of the MyHealthTrends™ For Pain
device. We initially anticipated that it would require approximately $100,000 in
additional development capital to manufacture the initial run of MyHealthTrends™ For
Pain devices and initiate market testing of the
product.
We
began marketing and successfully launched the MyHealthTrends™ For Pain
device for sale during the fourth quarter of 2008.We funded the launching of
this product by use of proceeds raised from the sale and issuance of our equity
securities (common stock), as well as from advances made by our President, Dr.
Gak, to the Company.
13
MyHealthTrends™
For Pain Specifications
MyHealthTrends™ For
Pain is an individual pain reporting system designed to produce high
fidelity representation of temporal evolution of patients’ pain. Seeing the
picture of daily pain dynamics allows a physician to identify breakthrough pain
episodes, determine analgesic requirements, and prescribe the appropriate
regimen with confidence. Pain reports serve as hard evidence of a patient's pain
and as helpful aid in doctor’s decision making.
MyHealthTrends™ For
Pain allows a patient to record changes in painful distress through
a hand-held counter, upload the data to the personal computer through a USB
connection, synchronize the data with the Internet Account, view and print Pain
Reports Online or Offline.
Additionally,
MyHealthTrends™ For
Pain allows a health care practitioner to view changes in patients'
painful distress through printed Pain Reports. The practitioner may also
establish an Online Account to create a Census of patients, add multiple
patients to the Census, view and print Pain Reports for selected patients Online
or Offline.
Because
it is a patient-driven service, MyHealthTrends™ For
Pain is offered as a consumer product, not as a medical device. The
product is neither a therapeutic device nor a diagnostic device that measures
physiologic parameters therefore we are of the opinion that it does not require
FDA approval.
Components
MyHealthTrends™ Pain
Button
The
Pain Button is a
hand-held counter capable of acquiring patient data, storing it in
self-contained memory, and uploading it to a personal computer/ Internet through
a USB connection. MyHealthTrends™ Pain Button will be offered
in several ergonomically designed embodiments as well as in combination with a
medication dispensing case.
MyHealthTrends™ For Pain
Stand Alone Windows Application and Internet Gateway
This
component is designed to allow communication between MyHealthTrends™ Pain Button
and the Internet via USB port. It is also designed to support data management,
Report viewing and printing in case Internet is not available.
MyHealthTrends™ For Pain
Internet Portal.
The
Internet Portal consists of two specifically designated areas for Patients and
Practitioners.
“Patient's
Area” supports the following capabilities:
1. Report
Viewing and Printing – patients are able to view and print Daily, Weekly, and
Monthly Pain Reports:
2.
Profile Management. Patients are able to modify access and personal
information:
3. Device
Management.
Patients
are able to view device registration status, battery power, download software
updates.
4. Ask a
Question.
We
intend to develop and offer a service where patients would be able to ask
affiliated doctors questions regarding their pain management. Upon receipt of
the questions, it is contemplated that a doctor on-call would provide medical
advice within 24 hours.
14
Additionally,
the Patient Area of MyHealthTrends™ For Pain
Internet Portal
will provide access to pain resources, the list of registered practitioners, and
community tools.
Practitioner's
Area supports the following capabilities:
|
1.
|
Viewing
and printing Pain Reports.
|
|
2.
|
Creating
a Census.
|
|
3.
|
Addition
of new patients to Census. (In compliance with HIPAA regulations, addition
of new patients to Census requires insertion of the patient's Pain Button
into the practitioner's computer USB port. Such action constitutes Consent
to accessing private information).
|
|
4.
|
Deleting
a patient from Census.
|
Hospital-based
Pain Monitoring System
The
hospital-based pain monitoring system will allow hospital patients to project
the degree of their painful distress to the health care team in real time. It
will alert the health care team to the need of a pain management
intervention.
The
monitoring system will incorporate all technological elements developed for
MyHealthTrends™ For
Pain. Data acquisition device will be a modification of MyHealthTrends™ Pain Button.
Data processing, storage and reporting solutions are already in place as
integral parts of MyHealthTrends™ For Pain
product. Data transmission will be accomplished using existing wireless data
transmission protocols.
Development
of the hospital-based pain monitoring system is projected to start in the Fourth
Quarter of 2010. The Company originally planned to commence development of the
hospital-based pain monitoring system in the Fourth Quarter of 2008, however due
to a lack of cash on hand and a lack of revenues to date, Management has decided
to delay this developmental project until the Fourth Quarter of 2010 so it can
focus on the Company’s current line of products, including the MyHealthTrends™ For Pain
consumer device.
II. MyPillsOnTime™ Automatic
Medication Reminder Dispenser:
The
MyPillsOnTime™ Automatic
Medication Reminder Dispenser system is designed to address the
central problem of oral medication therapy, namely, how to maintain therapeutic
blood level of a prescribed medication. Leveraging the technology developed
for MyHealthTrends™ For Pain
product, the company is able to introduce a portable device that allows
dispensing of multiple medication doses at the pre-programmed times. The system
also allows for communication between the personal computer user interface,
where the drug regimen is programmed, the device docking station, where
medication storage and refill take place, and the portable device, where daily
drug regimen is stored and dispensed.
This
Reminder Dispenser will be offered in three versions targeting major consumer
segments:
MyPillsOnTime LIFESAVER –
entry level model with manual re-fill and automated reminding and dispensing
capabilities. Estimated MSRP $299.00.
MyPillsOnTime MASTER –
mid-level model with automated re-fill and automated reminding and dispensing
capabilities. Estimated MSRP $599.00.
MyPillsOnTime FUTURO –
high-end model with advanced design and elevated user experience.
Estimated
MSRP $799.00.
The
portable device is equipped with audio and visual alarms that prompt the patient
to take an appropriate dose at the appropriate time. Once the daily regimen is
completed, the device is inserted into the docking station for automatic
refill.
15
MyPillsOnTime Internet
Portal
The
Internet Portal supports the following functions:
·
|
Programming
medication regimen:
|
·
|
Requesting
refill prescriptions:
|
·
|
Drug
safety information:
|
Additionally,
patients are able to view compliance reports and share the reports with their
physicians.
III. MyHealthID™ Medical
Records System :
On
September 15, 2008, the BAETA management authorized the exclusive acquisition
and license of MyHealthID™
Medical Records System from Extranome, Inc., a New Jersey corporation
(“Extranome”). At the time of the transaction, BAETA and Extranome were
controlled by Dr. Alexander Gak, our President and Chairman. This Exclusive
Software Agreement is attached to this prospectus as Exhibit 10.1. MyHealthID™ is an innovative
solution that shifts the paradigm for access to medical records from the
doctor's office to a patient-controlled online repository.
Leveraging
the latest electronic document management, security, and online technology,
MyHealthID™ enables
doctors to upload patient-requested medical records into their online portal.
Patients can then provide selective access to individual documents to other
doctors and healthcare practitioners.
MyHealthID™ enables key
patient-driven medical records management. Patients using MyHealthID™ can perform the
following:
|
·
|
Obtain
and manage copies of their medical records - ensuring availability for new
doctors and in emergency medical
situations.
|
|
·
|
Electronically
request their files - eliminating the need for physical visits to the
doctor’s office or written and mailed/faxed
letters.
|
|
·
|
Review
and maintain a centralized repository of all medical records across all
doctors, specialists, and healthcare
providers.
|
|
·
|
Manage
and provide selective access to files to other doctors, healthcare
providers, or family members - speeding information delivery and
healthcare management.
|
Upon
establishing the account, patient’s identity is confirmed through a credit
card-based verification. Once authenticated, the patient is free to request
documents from their healthcare providers.
Patient
requests are electronically initiated from MyHealthID™ directly to the
provider's office. Upon receiving the request, the healthcare provider's
administrative staff uploads the requested documents (images, faxes, .pdf, MS
Word documents, etc.) into the patient’s secure repository. Once received, the
patient is notified, who in turn, can review and optionally provide access to
other healthcare providers.
MyHealthID™ can be used by
anyone who interacts with a healthcare professional - enabling the patient to
maintain their medical history and provide direct access to authorized
healthcare providers.
BAETA
Corp. acquired MyHealthID™ for no cash or
equity consideration, due to the prototypical nature of the system’s current
development. Instead, BAETA intends to commit additional development dollars to
bring the MyHealthID™
Medical records System to economic and commercial viability through further
investment into its development and market roll-out.
16
Under
the terms of the Exclusive Software Agreement with the seller, Extranome, Inc.,
Extranome will receive perpetual royalties of 49% of net advertising revenues
generated by the MyHealthID™
Medical Records System. Although management believes that this royalty is
high, it further believes that the synergy that the software offers with MyPillsOnTime™ and MyHealthTrends™ For Pain is
invaluable. Further, management has established an agreement that does not
dilute its shareholders, nor negatively impacts its cash position, in exchange
for an asset that it believes will significantly enhance BAETA’s overall market
position and terminal value over time.
Management
believes that MyHealthID™ is not only a key
synergistic fit to fully enabling the functionality and value proposition of its
core products and services, but also believes that it can become an integral
component to the Company’s financial plan and future financial success. The
Company believes that the nature of the MyHealthID™ Medical Records
System can generate strong revenues from both consumer and potentially
institutional subscription, but also from corporate advertising applied to the
user interface (UI). The Company intends to seek to exploit the corporate
advertising market at the earliest possible time that functioning prototypes or
“beta” versions of the system become available for presentation, and well in
advance of commercial release. Management hopes to offset the cost of final
development and commercial launch through the sales of corporate advertisements,
but anticipates the possibility that BAETA may need to source capital
specifically for this purpose, if it cannot engage any early adopters to
advertise at any significant level prior to initial launch. If no separate
capital is available for this purpose, and assuming that it is indeed necessary,
BAETA will allocate operating resources and capital, when and if it is available
to achieve its objective and launch the system commercially.
Exclusive
Software Agreement
On
September 16, 2008, Dr. Alexander Gak, our Chairman and President, and
Extranome, Inc., a New Jersey corporation entered into an Exclusive Software
Agreement (the “Agreement”). Pursuant the Agreement, Extranome sold to Baeta
Corp. all commercial rights to its software entitled MyHealthID Medical Records
Systems for a period of twenty-five years, subject to renewal. Pursuant
to the Agreement, the Company agreed to pay Extranome $0.00 upfront, and in
perpetuity approximately forty-nine percent of all net revenues generated from
advertising by MyHealthID. Our President and
Chairman, Dr. Alexander Gak, is the 100% owner of Extranome, Inc., a New Jersey
corporation.
Software
Development Agreement with Extranome, Inc.
On
November 1, 2008, BAETA Corp. entered into a Software Development Contract with
Extranome, Inc. At the time of the transaction, BAETA and Extranome were
controlled by Dr. Alexander Gak, our President and Chairman. This Exclusive
Software Agreement is attached to this prospectus as Exhibit 10.12.
Pursuant
to the Software Development Agreement, Extranome has been providing ongoing
software development and product support services for BAETA since November 01,
2008. The Software Development Agreement is a non-exclusive agreement and is not
related to BAETA’s Exclusive Software Agreement (Exhibit 10.1) regarding
MyHealthID product. In accordance with Section 2 of the Software Development
Agreement, BAETA is to pay Extranome for the contracted work in cash form;
however BAETA currently does not have a sufficient amount of cash on hand.
Therefore, BAETA is paying Extranome 50% in shares of its common stock, and 50%
in cash. Extranome has received 30,000 shares of common stock for each month
since November as non-cash part of compensation for services rendered which
represent approximately 50% of Extranome’s due monthly compensation, and as of
the date of this registration statement, has received 390,000 shares of BAETA
Corp. BAETA will continue to issue company shares to Extranome in the amount of
50% of the monthly compensation for services rendered until it is able to
compensate Extranome fully in cash.
IV. Planned Future
Products:
As
mentioned in this prospectus, we plan to development other lines of products
that utilize our existing proprietary technologies. Planned for development and
based off of our MyHealthTrends™ technology, such new
product lines include MyHealthTrends™ For Weight
Control, intended to assist in weight loss and control, and MyHealthTrends™ For Smoking
Cessation, designed to help persons who smoke end their use of
cigarettes.
17
As of the
date of this prospectus, we have not commenced any significant development with
regards to MyHealthTrends™ For
Weight Control or MyHealthTrends™ For Smoking
Cessation. Our ability to commence development on these concepts is
contingent upon our ability to raise additional financing, as well as the
favorable determination by our management of the viability and commercial
success of our existing product lines. Therefore, we do not anticipate
commencing development on these concepts within the next 12
months.
Cohesive Product
Synergy
Our
consumer products synergize around core values that support a total care value
proposition to patients and practitioners. MyHealthTrends™ For Pain,
MyPillsOnTime™ and
MyHealthID™, although
uniquely delivered, together offer a cohesive care package that starts with
patient-driven data collection via the MyHealthTrends™ For Pain
hand-held monitoring device. Practitioners and patients will work together to
analyze the data collected over time and to develop and modify therapeutic
regiments based upon the historical data collected.
Once the
practitioner selects an appropriate therapeutic regiment, the system and its
software integrated into MyPillsOnTime™ ensures that
the patient is always able to comply with the prescribed therapeutic regiment.
It also allows the medical practitioner the ability to modify the therapeutic
regiment in real-time, as opposed to waiting until a prescription is “used up”
by the patient over a long period of time, and the patient returns to the
practitioner for a follow up. This process can take 3 – 6 months. BAETA’s
solution allows practitioner and patient to modify and address the efficacy a
given therapeutic regiment in real-time. The pill-dispensing unit automates the
therapeutic delivery to avoid confusion and help to ensure patient
compliance.
Finally,
MyHealthID™ captures
ongoing medical records, so there is a reliable, accessible and entirely
portable detailed history of medical care that can be used by primary care
practitioners to properly understand and respond to a patient’s ongoing medical
requirements.
Plan of
Operations
We
anticipate that the Company will require approximately $1,000,000 to $1,500,000
in additional capital to execute its current 12-month plan of operations;
including but not necessarily limited to expenses related to the patents pending
for its developing products and technology, expansion of infrastructure and
physical office space, hiring of key employees and sales and administrative and
executive personnel as well as for the registration of its shares and compliance
with securities regulations. We do not currently have sufficient capital to meet
our needs for the next 12 months, and we are extremely reliant upon future
financings to fund our operations.
During
the next 12 months, we intend to continue to outsource our product research and
development to Ionidea Ukraine of Crimea, Ukraine for technical development and
prototyping and M.B. Turnkey Design, LLC of Manville, New Jersey for physical
product prototyping and production. We anticipate that we will incur costs of
approximately $10,000 to $20,000 per month for ongoing technology development.
We have started the MyHealthTrends™ For Pain device manufacturing process with
M.B. Turnkey Design, LLC of Manville, New Jersey.
We
have also obtained the MyHealthTrends™ For Pain
device manufacturing quotes from Ultraflex, Ronkonkoma, New York, and OCM
Manufacturing, Ontario, Canada. We expect that the cost of production will be
significantly lower than the average sale price of the product and that terms
will be predicated on actual product ordered at any given time. We
anticipate that we will use additional capital to hire sales personnel and
administrative and executive personnel at a level consistent with available
capital, but aggressively to support initial product sales and market
penetration. We further anticipate that our current capital commitments can
be sustained for approximately three to six months with no additional infusion
of capital. We do not believe that we can sustain or execute our plan of
operations, nor bring our proposed products to market without additional capital
of approximately $1,000,000 to $1,500,000.
18
Intellectual
Property
Our
intellectual property consists of the following:
|
1.
|
MyPainAway brand
trademark. Trademark registration filed January
2008.
|
|
2.
|
MyHealthTrends™ For
Pain brand trademark. Trademark registration to be
filed.
|
|
3.
|
MyHealthTrends™ and
MyHealthTrends™ For Pain pain
monitoring system integrated hardware and software
technology.
|
|
4.
|
Patent
pending for “Device, Method and/or System for Monitoring the Condition of
a Subject,” docket No U.S. 1488/07, originally submitted July
2007.
|
|
5.
|
Patent
pending for “Automatic Reminder and Dispensing Device, System and Method
Therefore,” docket No U.S. 1509/08, originally submitted May
2008.
|
We
believe that our patents will be essential in protecting our core technology
from competition, but we do not believe that the granting of any patent will
have a major impact on our ability to execute our plan of operations. We believe
that our market opportunity exists at projected levels regardless of the status
of our patent applications.
Market
Size and Opportunity
Management
believes that, if pain is to be monitored in one hospital patient, it should be
monitored in all hospital patients. Therefore, the market for our pain
monitoring technologies consists of all hospitals accredited by The Joint
Commission on the Accreditation of Healthcare Organizations (“JCAHO”) in the US
(7,000), all freestanding patient care facilities (5,000), all nursing homes
(17,000), and multiple healthcare institutions abroad. With the U.S. population
standing at approximately 303.4 million and the hospital admission rate at
80/1000, management estimates that there are approximately 24.2 million hospital
admissions per year in the US alone. Ultimately, each patient should become the
recipient of a pain monitoring device.
The
Market for MyHealthTrends™ For
Pain is expected to consist of all non-hospital patients concerned
with their pain management. This population includes cancer patients, back pain
patients, patients with postoperative pain, neuropathic pain, osteoarthritis,
fibromyalgia, and refractory migraine.
Because
MyHealthTrends™ For
Pain has been designed to be a precise tool for identification of
breakthrough pain episodes, we believe that it is an ideal Marketing tool for
pharmaceutical companies that compete in what management estimates to be the $2
billion Breakthrough Pain Market.
Business
Growth Strategies
Our
target markets are the worldwide healthcare consumer market and the worldwide
vital signs monitoring market.
Validation. A multi-center,
randomized, controlled study is planned to begin upon roll out of the pain
monitoring system to support wide acceptance of our product through validation
of the pain monitoring technology in a hospital setting.
Advertising. We intend
that a focused
product awareness program will be the cornerstone of our marketing campaign.
Since MyHealthTrends™ For
Pain hand-held counter has been developed to target retailers as a
branded/non-branded product we'll be able to pass the task of product
advertising to retailers. We will leverage retail product advertising with news
and events related to the pain monitoring system development and
validation.
Sales. MyHealthTrends™ For Pain
hand-held counter is expected to be sold through retail and e-retail channels as
well as through “special interest” channels such as pharmaceutical companies
involved in breakthrough pain market and philanthropic organizations engaged in
fighting pain.
19
Strategic Alliances. We place
a major focus on creating and maintaining strategic alliances with industry
leaders.
Sales
& Marketing Strategy
We intend
to sell our products through major retail chains, online healthcare product
companies and similar medical product distribution points. Upon completion of
the pilot production, we intend to start product introduction to the identified
distribution channels. As of this date, we have not obtained any distribution
agreements and have only had minimal discussions with any potential sales
distributors. Further, we intend to engage the services of a qualified medical
product sales development consultant to develop plans of distribution and
marketing, predicated upon the availability of final product specs and
demonstration units, as well as capital for initial production, marketing and
delivery.
Our sales
and marketing strategy and the efforts it has undertaken to market and sell its
products is the result of the efforts conducted solely by the Company and our
management. We have not received any independent evaluation of our strategy and
there can be no assurance that our strategy is an accurate or prudent assessment
of the competitive conditions in the institutional equity services
marketplace.
Competition
We face
competition from various other medical device and medical monitoring system
companies already established in the marketplace. Each of these competitors will
likely continue to maintain a senior position the overall market for the
foreseeable future. In addition, most of its competitors may have substantially
greater financial and managerial resources than the Company. However, management
does not believe there are any current commercial competitors offering the same
or even similar pain management and pain assessment tools for consumers and
healthcare institutions. There are numerous competitors that already sell and
market various medication dispensing products that would compete directly with
our planned MyPillsOnTime medication dispenser. However, management has
developed intellectual property in the form of functionality and design that is
seeking to patent, which it believes is a major improvement in terms of current
technologies that will offer significant advantage in the marketplace to those
already available.
Although
the patient monitoring market in the US is crowded by a large number of great
companies such as GE Healthcare, HP, Philips, Nihon Kohden, Datascope, Spacelabs
and others, we see no competition in the pain monitoring market due to
Intellectual Property ownership of key real time painful distress assessment and
state of distress assignment algorithms. Our US patent application was filed in
July 2007. The International PCT application was filed in May 2008. We believe
that we will sustain our competitive advantage for several years into the future
by securing our intellectual property worldwide and by aggressively persecuting
all identified patent infringement occurrences. Additionally, the company plans
to build on the existing competitive advantage by incorporating new features and
technologies into the developed platform.
We will
compete, in our current and proposed businesses, with other companies, some of
which have far greater marketing and financial resources and experience than we
do. We cannot guarantee that we will be able to penetrate our intended market
and be able to compete profitably, if at all. In addition to established
competitors, there is ease of market entry for other companies that choose to
compete with us. Effective competition could result in price reductions, reduced
margins or have other negative implications, any of which could adversely affect
our business and chances for success. Competition is likely to increase
significantly as new companies enter the market and current competitors expand
their services. Many of these potential competitors are likely to enjoy
substantial competitive advantages, including: larger technical staffs, greater
name recognition, larger customer bases and substantially greater financial,
marketing, technical and other resources. To be competitive, we must respond
promptly and effectively to the challenges of technological change, evolving
standards and competitors' innovations by continuing to enhance our services and
sales and marketing channels. Any pricing pressures, reduced margins or loss of
market share resulting from increased competition, or our failure to compete
effectively, could seriously damage our business and chances for
success.
20
Sources
and availability of raw materials and principle suppliers
We do not
anticipate any potential problems with securing raw materials or product design
at competitive pricing levels at the volume required to execute our plan of
operations.
Required
electronics components are readily available from global components distributors
such as Nu Horizons Electronics and from OEM manufacturers such as Microchip,
Fairchild Semiconductor, Atmel, and Siemens AG.
We are
not aware of any present or anticipated shortages of plastic materials required
for product encasing and packaging.
Dependence
on one or a few major customers
Due to
the broad nature of our products and services, we do not anticipate the reliance
on any one particular customer over any other for sales.
Government
Regulation
Our
products do not currently require any government approval such as FDA 510(k) or
clinical trials prior to selling and marketing its products.
While our
product lines are not currently subject to regulation by the U.S. Food and Drug
Administration (“FDA”), there is no guarantee that our products won’t become
subject to future regulation. Any future regulation by the FDA or other
governmental authority could prove costly, and could potentially have
detrimental effects on our ability to conduct operations.
Effect
of existing or probable governmental regulation on the business; civil lawsuit
risk
Management
is not aware of any current, anticipated or probable governmental regulation
that would impact its ability to market and sell its products, execute its plan
of operations or present risk of any civil lawsuit.
Planned
Strategy of Acquisition
We intend
to seek synergistic acquisitions in the future that management believes add
significant value to the Company. We intend to seek to acquire only companies
with profitable operations that can accrete to our financial results; and
products and technologies that expand its product base in the global vital signs
monitoring market.
We do
not currently have any planned acquisition targets, nor have we undertaken as of
yet, any comprehensive search or analysis of the market to identify any such
potential acquisition targets.
Employees
We
currently rely on the services of our President and Chairman, Dr. Alexander Gak,
our Chief Executive Officer, Mr. Leonid Pushkantser, our Chief Financial
Officer, Mr. Jeff Burkland, our Chief Medical Officer, Dr. Leonid Topper, our
Chief Technology Officer, Mr. Eugene Gribov, our Chief Marketing Officer, Mr.
Lee Smith as well as professional service providers and consultants to handle
our day-to-day operations and administration. Dr. Gak, Mr. Burkland, Mr. Gribov,
Mr. Lee and Dr. Topper serve our Company on a part-time basis. Mr. Pushkantser
is currently our only fulltime employee. We currently have no internal sales
staff or internal manufacturing or software development personnel. Management
has established, and intends to rely on for the time being, relationships with
outsourced sales, manufacturing and research & development firms to
effectuate its business plan, until it determines that it is economically
prudent to bring some or all of these functions in-house.
Aside
from our Officers and Chairman, Dr. Gak, to a great extent we will rely on the
following Scientific Advisory Board to assist Dr. Gak and management with
implementing our business strategy and managing our
operations:
21
Scientific
Advisory Board:
The
purpose of the BAETA Corp. Scientific Advisory Board (“SAB”) is to identify
areas of use for BAETA products, such as MyHealthTrends™ For Pain,
within the healthcare system and to establish and document the initial MyHealthTrends™ For Pain
experiences in acute pain patients, chronic pain patients, and the palliative
care patients. Additionally, based on the initial data, the SAB will develop and
guide the validation strategy for MyHealthTrends™ For Pain and
its derivative hospital-based pain monitoring system (to be developed) through
identification of research endpoints for clinical trials and through advising
the Company on the study design and implementation.
Since
March 2009, the members of the SAB have completed the pertinent literature
review and identified studies supporting electronic data acquisition in the
field of Pain Management. All members of the SAB have tested the MyHealthTrends™ For
Pain in their clinical practice. Communication between the SAB
members and the Company occurs via group email, individual debriefings, and
quarterly meetings.
The
members of the SAB are compensated by grants of options to purchase BAETA Corp.
common stock. For their service on the SAB for the year 2009, the members were
compensated as follows:
On
January 29, 2009, the Company granted stock options to Dr. Alex Y. Bekker. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Bekker in consideration for his service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
On
February 7, 2009, the Company granted stock options to Dr. Marco Pappagallo. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Marco Pappagallo in consideration for his service as a Member of the
Company’s Scientific Advisory Board for the year 2009, and the Company relied
upon the exemption from registration requirements of the Securities Act of 1933,
as amended, provided under Section 4(2) promulgated thereunder as the grant of
such options did not involve a public offering of securities.
On
January 25, 2009, the Company granted stock options to Dr. Samyaden Datta. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Samyaden Datta in consideration for his service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
On
February 19, 2009, the Company granted stock options to Dr. Lauren Shaiova. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Shaiova in consideration for her service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
The
Members’ compensation for years subsequent to 2009 shall be determined by the
Board of Directors in their sole discretion.
The
Scientific Advisory Board Members:
Alex Y.
Bekker, M.D., PH.D., joined BAETA’s Scientific Advisory Board on January
29, 2009, and is a Professor of Anesthesiology and Neurosurgery and Vice Chair
for Research at NYU School of Medicine in New York; Attending Anesthesiologist,
New York University Medical Center and Bellevue Hospital in New York. Dr. Bekker
is Chairman of the Scientific Advisory Board for BAETA
Corp.
22
Dr.
Bekker earned his Ph.D. in Biomedical Engineering from the New Jersey Institute
of Technology in Newark and his M.D. from University of Medicine and Dentistry
of New Jersey. Completing his residency in anesthesiology at
Columbia-Presbyterian Medical Center in New York, Dr. Bekker has a longstanding
interest in the perioperative management of geriatric patients. Dr. Bekker has
served as the principal investigator of numerous clinical trials related to
perioperative care of the elderly, treatment of acute pain and postoperative
nausea and vomiting, and clinical pharmacology of new analgesics and sedatives.
The author of more than 50 original papers in peer-reviewed journals, Dr. Bekker
is regularly invited to present lectures and moderate scientific panels at
national and international anesthesiology/pain management meetings. Dr. Bekker
is internationally recognized as an expert in clinical pharmacology,
neuroanesthesia, postoperative pain management and perioperative organ
protection.
Education:
1970-1974
B.S., Chemistry, Tbilisi University, Tbilisi, Georgia
1980-1983
M.S.,Chemical Engineering, New Jersey Institute of Technology,
Newark.
1983-1987
Dr.Eng., Biomedical Engineering, New Jersey Institute of Technology
and
University of Medicine and Dentistry of New Jersey, Department of
Physiology,
Newark, NJ
1987-1991
M.D., University of Medicine and Dentistry of New Jersey -
New
Jersey Medical School, Newark, NJ
Postdoctoral
Training:
1991 –
1992 Intern in Medicine/Pediatrics, St. Joseph's Hospital and
Medical
Center,
Paterson, NJ
1992 -
1995 Resident, Anesthesiology, Columbia-Presbyterian Medical Center,
New
York,
NY
2007-2008
Physician Leadership Development Course, New York University, New
York,
NY
Licensure
& Certification:
1995 New
Jersey State License Registration
1996 New
York State License Registration
1996
American Board of Anesthesiology Certificate
Academic
Appointments:
1996-present
Adjunct Professor of Biomedical Engineering, New Jersey Institute
of
Technology,
Newark, NJ
1995-2001
Assistant Professor of Anesthesiology, New York University Medical
Center,
New York, NY
2001-2008
Associate Professor of Anesthesiology, New York University Medical
Center,
New York, NY
2004-2008
Associate Professor of Neurosurgery, New York University Medical
Center,
New York, NY
2008-present
Professor of Anesthesiology and Neurosurgery, New York University
Medical
Center, New York, NY
Hospital
Appointments:
1995-present
Attending Anesthesiologist, New York University Medical Center, New
York,
NY
1995-present
Attending Anesthesiologist, Bellevue Hospital, New York, NY
Administrative
Responsibilities:
1997-1999
Associate Director of Neuroanesthesia, New York University Medical
Center,
New York, NY
23
1999-present
Chief of Neuroanesthesia, New York University Medical Center, New
York,
NY
2003-present
Coordinator of Operating Rooms Scheduling, New York University
Medical
Center, New York, NY
2004-present
Director of Clinical Research, Department of Anesthesiology, New
York
University
Medical Center, New York, NY
2007-present
Vice-Chair for Strategic Development, Department of Anesthesiology,
New York
University Medical Center, New York, NY
Professional
Positions:
1975-1977
Research Chemist, Iso
1979-1981
Project Engineer, Catalyst Research Corporation, Palisades Park, NJ
1980-1981
Visiting Scholar, Columbia University, Department of Chemical
Engineering,
New York, NY
1981-1986
Research Engineer/Project Manager, Allied-Signal Corporation,
Corporate
Technology Center, Morristown, NJ
Marco
Pappagallo, M.D., joined BAETA’s Scientific Advisory Board on February 7,
2009, and is a Professor, Department of Anesthesiology and Director of Pain
Medicine Research and Development at the Mount Sinai School of Medicine in New
York, New York.
Dr.
Pappagallo is one of the foremost experts in the field of pain medicine. Since
mid-2006, Dr. Pappagallo has served as a Professor in the Department of
Anesthesiology at Mount Sinai School of Medicine in New York City, where he is
also an Director of Pain Medicine Research and Development and Attending
Physician.
In the
past, Dr. Pappagallo held the titles of Director-Division of Chronic Pain and
Attending Physician in the Department of Pain Medicine and Palliative Care at
Beth Israel Medical Center in New York City, and prior to this, Director of the
Comprehensive Pain Treatment Center and Attending Physician in the Department of
Neurology at the Hospital for Joint Diseases, in New York City. He also served
as an Attending Physician in the Department of Neurology and Director, Division
of Pain Medicine (Department of Neurology) at The Johns Hopkins Medical
Institutions in Baltimore. Dr Pappagallo has also served as an Associate
Professor in the departments of Neurology and Anesthesiology at Albert Einstein
College of Medicine and the NYU School of Medicine, both in New
York.
Education:
Nov 1976
- Nov 1982 Medical Doctor Degree "Summa cum Laude"
School of
Medicine, University of Rome
Rome,
Italy
Postdoctoral
Training:
July 1986
– June 1987 Internship, Internal Medicine
Cabrini
Medical Center, New York Medical College
New York,
New York
July 1987
– June 1990 Residency, Neurology
State
University of New York at Stony Brook
Stony
Brook, New York
July 1990
– June 1993 Clinical & Research Fellowship in Pain Medicine
The Johns
Hopkins Pain Treatment Center
Baltimore,
Maryland
Certification:
Nov 1992
ABPN Neurology Board Certification # 36631
Sept 2000
ABMS Pain Management Board Certification #29
Recognized
by the American Boards of Anesthesiology,
Psychiatry
/ Neurology, and Physical Medicine/ Rehabilitation
24
Licensure:
October
20, 1989 New York State Physician License # 180493
Academic
Appointments:
July 1993
– June 1995 Clinical Instructor
Departments
of Neurology, Neurosurgery, Anesthesiology
The Johns
Hopkins University School of Medicine
Baltimore,
Maryland
July 1995
- June 1999 Assistant Professor
Departments
of Neurology, Neurosurgery, and Anesthesiology
The Johns
Hopkins University School of Medicine
Baltimore,
Maryland
July 1999
- June 2003 Associate Professor
Department
of Neurology
NYU
School of Medicine,
New York,
New York
July 2003
– June 2006 Associate Professor
Departments
of Neurology and Anesthesiology
Albert
Einstein College of Medicine
Bronx,
New York
July 2006
– Present Professor,
Department
of Anesthesiology
Director
– Pain Medicine Research and Development
Mount
Sinai School of Medicine
New York,
New York
Hospital
Appointments:
July 1993
- June1999 Director, Division of Pain Medicine, Dept of Neurology
Attending
Physician, Dept of Neurology
The Johns
Hopkins Medical Institutions, Baltimore, Maryland
July 1999
– June 2003 Director - The Comprehensive Pain Treatment Center,
Attending
Physician, Dept. of Neurology
Hospital
for Joint Diseases, (HJD) Orthopedic Institute, Mt.
Sinai/NYU
Health, New York, NY
July 2003
– June 2006 Director - Division of Chronic Pain
Attending
Physician, Dept. of Pain Medicine & Palliative Care
Beth
Israel Medical Center, New York, New York
July 2006
– Present Attending, Department of Anesthesiology
Mount
Sinai Hospital, New York, New York
Samyadev
Datta, M.B., B.S., FRCA., joined BAETA’s Scientific Advisory Board on
January 25, 2009, and is a Director, Center for Pain Management in Hackensack,
New Jersey.
Dr. Datta
earned his medical degree from the Government Medical College in Mysore, India.
Board Certified in anesthesiology from three countries, Dr. Datta conducted his
most recent postdoctoral training in anesthesiology and pain management at
Columbia Presbyterian Medical Center, Memorial Sloan-Kettering Cancer Center,
and Cornell University Medical College, all in New York, New York.
An author
of numerous articles, contributor to multiple books, and frequent guest speaker,
Dr. Datta is a member of the Association of Anesthetists of Great Britain and
Ireland, American Society of Anesthesiology, International Association for the
Study of Pain, International Spinal Intervention Society, and American Society
of Interventional Pain Physicians. As a nationally recognized expert in pain
management, Dr. Datta has served on the Advisory Boards of Faulding Laboratories
and Janssen Pharmaceuticals, among others. He is presently involved in multiple
drug trials.
25
Education:
Kendriya
Vidyalaya April, 1972 H.Sc. Shillong, India.
Government
Medical College April, 1979 M.B.,B.S. Mysore, India.
Post
Doctoral Training:
1978 -
1979 Rotating Internship Krishna Rajendra Hospital
Mysore,
India
1979 -
1980 House Officer, Surgery/Medicine Safdarjung Hospital
New
Delhi, India
1981 -
1982 Resident, Anaesthesia Safdarjung Hospital
New
Delhi, India
Licensed
Physician:
Karnataka
State 1979 Bangalore, India
General
Medical Council 1988 London, UK
Kansas
1995 Topeka, Kansas
New York
1996 Albany, NY
New
Jersey 2000 Trenton, NJ
Board
Certification:
Diploma
in Anesthesia 1982 India
Doctor of
Medicine (Anaesthesia) 1984 India
Diploma
in Anaesthesia 1986 UK
Fellow of
Royal College 1987 UK
Diplomate,
American Board of Anesthesiology 1996 USA
American
Board of Anesthesiology Certificate in 1998 USA
Positions
And Appointments:
1980 -
1981 Research Officer All India Heart Foundation
New
Delhi, India
1992 -
1994 Consultant, Anaesthesia, In charge Armed Forces Hospital
Pain
Service Riyadh, Saudi Arabia
1996 -
1999 Clinical Assistant Anesthesiologist Memorial Hospital for
Cancer
Department
of Anesthesiology and Allied Diseases
and
Critical Care Medicine(Division New York, NY
of
Pain)
1996 -
1999 Clinical Assistant Memorial Sloan-Kettering Cancer Center
(Division
of Pain) New York, NY
1996 -
2000 Instructor in Anesthesiology Weill Medical College of Cornell
University
New York,
NY
1999 -
2000 Assistant Attending Anesthesiologist Memorial Hospital for
Cancer
Department
of Anesthesiology and Allied Diseases
And
Critical Care Medicine(Division New York, NY
of
Pain)
1999 -
2000 Assistant Clinical Member Memorial Sloan-Kettering Cancer
Center
(Division
of Pain) New York, NY
2000 -
2000 Assistant Professor in Anesthesiology Weill Medical College of Cornell
University
New York,
NY
2000 -
2005 Consultant Anesthesiologist Holy Name Hospital, Teaneck, NJ
2002 -
2005 Director, Pain Management Services Holy Name Hospital, Teaneck,
NJ
2005-present
Director, Center for Pain Management Hackensack, NJ
26
Lauren
Shaiova, M.D., B.S., joined BAETA’s Scientific Advisory Board on February
19, 2009, and is a Chief of Palliative Care and Pain Medicine, Metropolitan
Hospital Center in New York, NY.
Dr.
Shaiova earned her medical degree from The Autonomous University of Guadalajara,
the oldest and largest private university in Mexico, and the Medical College in
Valhalla, New York. Dr. Shaiova completed her most recent postdoctoral training
in palliative care, pain management, physical medicine, and rehabilitation at
Memorial Sloan- Kettering Cancer Center and St. Vincent's Hospital in New York,
NY.
A
nationally recognized academic and medical professional, Dr. Shaiova previously
held positions at Memorial Sloan-Kettering Cancer Center, Medical College of
Cornell University, Albert Einstein College, and Beth Israel Medical Center.
Throughout her career, Dr. Shaiova has received numerous international awards
recognizing her work.
Dr.
Shaiova has been extensively involved in multiple research initiatives, is a
scientific reviewer for 15 journals; has authored numerous articles for books
and journals; and has been interviewed for magazine and television stories. Dr.
Shaiova is a member of the American Pain Society, American Academy of Hospice
and Palliative Medicine, and the American Academy of Physical Medicine and
Rehabilitation, among other professional organizations.
Educational
Background:
B.S.
Indiana University July 1975-June 1979
Bloomington,
Indiana
M.D.
Autonomous Univ. of Guadalajara June 1982-July 1986
Guadalajara,
Mexico
5th.
Pathway Program, New York
Medical
College, Valhalla, NY June 1989-July 1990
Postdoctoral
Training:
Internship
in Internal Medicine, Roosevelt Hospital, New
York July
1990-June 1991
Resident
in Physical Medicine and Rehabilitation, Rush Presbyterian Hospital,
New
York.
June 1991-July 1992
Resident
in Physical Medicine and Rehabilitation, St. Vincent’s Hospital,
New York
July 1992-June 1994
Fellowship
in Pain Medicine and Palliative Care
Dept. of
Neurology, Pain and Palliative Care Service
Memorial
Sloan-Kettering Cancer Center
July
1994- February 1996
Academic
Appointments/Hospital Appointments:
Chief of
Department of Pain Medicine and Palliative Care
Metropolitan
Hospital Center
NYC NY
Associate Professor NY Medical College( pending
Review
September 2007 current
Associate
Attending, Pain and Palliative Care Service, Department of
Neurology
Memorial
Sloan-Kettering Cancer Center, New York, New York.
Parallel
Appointment Weill Medical College of Cornell University July 2006 –
June
2007
Director
of Inpatient Palliative Medicine unit Memorial Sloan-Kettering
Cancer
Center
June
2006-June 2007
Assistant
Professor, Department of Anesthesia, Albert Einstein College of
Medicine,
June 2003
to June 2006.
Attending
Physician Department of Pain and Palliative Care, Beth Israel
Medical
Center.
September 1997-June 30, 2006
27
Medical
Director of Pain and Palliative Care Service, Rivington House HIV/AIDS
Center
July 2005
to June 2006.
Director
of Palliative Care, Kessler Institute for Rehabilitation, East Orange,
New
Jersey.
January 1997-August 1997.consultant, Pain and Palliative Medicine in
HIV
Department,
Broadway House, Newark, New Jersey. January 1997-August 1997.
Medical
Director, West Essex Hospice, West Orange, New Jersey, Instructor
University
Medicine
and Dentistry of New Jersey, January 1997-September 1997.
Visiting
Appointments/Professorships:
Visiting
Professor Ben-Gurion Medical University of the Negev, Be’er Sheva,
Israel
January
3, 2008-January 21 2008
Visiting
Faculty Graduate School of Medicine of the University of Tokyo, Tokyo,
Japan
September
4, 2007-September 17 2008
Medical
University Of Zimbabwe, Africa. Visiting Professorship September
1999-
November
1999.
Instructor,
ARC Venture National Medical Board Review, Rush University School
of
Medicine.
September 1987-July 1988.
DESCRIPTION
OF PROPERTIES
From
inception to March 31, 2009, and on a month-to-month basis thereafter until July
1, 2009, our Company leased its office space for its headquarters operation from
its President at a monthly rent of $750. This arrangement terminated as of June
30, 2009.
On
July 1, 2009, the Company began a one-year lease for office space for its
headquarters operation from Regus at a minimum monthly rent of $952 which
expires on June 30, 2010. The minimum full year rental commitment to June 30,
2010 is $11,424. The monthly rental fee typically varies in amount, with $952
being the minimum charged by the landlord Regus, based on the usage of services
and utilities in a given month.
These
executive offices are located at 1 Bridge Plaza, 2nd Floor,
Suite 275, Fort Lee, NJ 07024.
A copy of
the office space agreement with Regus is attached to this registration statement
as Exhibit 10.16.
LEGAL
PROCEEDINGS
We are
not currently a party to any legal proceedings nor do we have knowledge of any
pending or threatened legal claims. .
USE
OF PROCEEDS
We will
not receive any proceeds from the sale of the common stock offered through this
prospectus by the Selling Stockholders.
DETERMINATION
OF OFFERING PRICE
The $1.00
per share offering price of our common stock was determined based on our
internal assessment of what the market would support. There is no relationship
whatsoever between this price and our assets, earnings, book value or any other
objective criteria of value.
We intend
to apply to request a broker-dealer apply to have our common stock quoted on the
OTC Bulletin Board upon our becoming a reporting entity under the Exchange Act.
We intend to file a registration statement under the Exchange Act concurrently
with the effectiveness of the registration statement of which this prospectus is
a part. If our common stock becomes quoted on the OTC Bulletin Board and a
market for the stock develops, the actual price of stock will be determined by
prevailing market prices at the time of sale or by private transactions
negotiated by the Selling Stockholders named in this prospectus. The offering
price would thus be determined by market factors and the independent decisions
of the Selling Stockholders named in this prospectus.
28
DILUTION
The
common stock to be sold by the Selling Stockholders is common stock that is
currently issued and outstanding. Accordingly, there will be no dilution to our
existing stockholders.
SELLING
STOCKHOLDERS
The
Selling Stockholders named in this prospectus are offering an aggregate of 915,400 shares of our common
stock registered in a registration statement of which this prospectus forms a
part. The Selling Stockholders acquired such shares of our common stock under
the exemption from the registration requirements under Regulation D and Section
4(2) promulgated under the Securities Act. To the best of our knowledge, none of
the Selling Stockholders are a broker-dealer, underwriter or affiliate
thereof.
The
following table provides as of the date of this Prospectus, information
regarding the beneficial ownership of our common stock held by each of the
Selling Stockholders, including, the number of shares of our common stock
beneficially owned by each prior to this offering; the total number of shares of
our common stock that are to be offered by each Selling Stockholder; the total
number of shares that will be beneficially owned by each Selling Stockholder
upon completion of the offering; the percentage owned by each upon completion of
the offering.
Beneficial Ownership Before
Offering
|
Number of
|
Beneficial Ownership After
Offering (1)
|
||||||||||||||||||
Name of Selling
Stockholder (1)
|
Number of
Shares (1)
|
Percent (2)
|
Shares Being
Offered
|
Number of
Shares
|
Percent (2)
|
|||||||||||||||
Dr.
Alex Y. Bekker (10)
|
5,000 | 0.02 | % | 5,000 | 0 | 0.00 | % | |||||||||||||
Liza
Rodriguez (8)
|
2,000 | 0.01 | % | 2,000 | 0 | 0.00 | % | |||||||||||||
Anroy
Ottley (8)
|
100,000 | 0.45 | % | 100,000 | 0 | 0.00 | % | |||||||||||||
Diane
M. Ridley (8)
|
4,000 | 0.02 | % | 4,000 | 0 | 0.00 | % | |||||||||||||
Zenaida
B. Deocera (8)
|
2,000 | 0.01 | % | 2,000 | 0 | 0.00 | % | |||||||||||||
Jeff
Smok (8)
|
8,000 | 0.04 | % | 8,000 | 0 | 0.00 | % | |||||||||||||
Valentin
Villaluz (8)
|
20,000 | 0.09 | % | 20,000 | 0 | 0.00 | % | |||||||||||||
Nataliya
Donskaya (8)
|
8,000 | 0.04 | % | 8,000 | 0 | 0.00 | % | |||||||||||||
Michael
Bibawy (8)
|
4,000 | 0.02 | % | 4,000 | 0 | 0.00 | % | |||||||||||||
Keesha
Duncan (8)
|
400 | 0.00 | % | 400 | 0 | 0.00 | % | |||||||||||||
Donna-Vivian
V. DeBelen (8)
|
2,000 | 0.01 | % | 2,000 | 0 | 0.00 | % | |||||||||||||
Paul
Weissman (8)
|
8,000 | 0.04 | % | 8,000 | 0 | 0.00 | % |
29
Beneficial Ownership Before
Offering
|
Number of
|
Beneficial Ownership After
Offering (1)
|
||||||||||||||||||
Name of Selling
Stockholder (1)
|
Number of
Shares (1)
|
Percent (2)
|
Shares Being
Offered
|
Number of
Shares
|
Percent (2)
|
|||||||||||||||
Yulia
Mogilyansky (8)
|
4,000 | 0.02 | % | 4,000 | 0 | 0.00 | % | |||||||||||||
Anatol
Merson (8)
|
400 | 0.00 | % | 400 | 0 | 0.00 | % | |||||||||||||
Leonid
Levsky (8)
|
400 | 0.00 | % | 400 | 0 | 0.00 | % | |||||||||||||
Elsa
Wexler (8)
|
20,000 | 0.09 | % | 20,000 | 0 | 0.00 | % | |||||||||||||
Francis
Asamoah (8)
|
4,000 | 0.02 | % | 4,000 | 0 | 0.00 | % | |||||||||||||
Michael
Dubenko (8)
|
2,000 | 0.01 | % | 2,000 | 0 | 0.00 | % | |||||||||||||
Dmitriy
V. Kolesnik (8)
|
2,000 | 0.01 | % | 2,000 | 0 | 0.00 | % | |||||||||||||
Mikhail
Tsypenyuk (8)
|
66,000 | 0.29 | % | 16,000 | 50,000 | 0.23 | % | |||||||||||||
Sanjay
Lalla (8)
|
16,000 | 0.07 | % | 16,000 | 0 | 0.00 | % | |||||||||||||
Fred
Prendergass (8)
|
400 | 0.00 | % | 400 | 0 | 0.00 | % | |||||||||||||
Mikhail
Gurfinkel (8)
|
8,000 | 0.04 | % | 8,000 | 0 | 0.00 | % | |||||||||||||
Bethany
L. Taylor (8)
|
2,000 | 0.01 | % | 2,000 | 0 | 0.00 | % | |||||||||||||
Reginald
A. Jenkins (8)
|
400 | 0.00 | % | 400 | 0 | 0.00 | % | |||||||||||||
Christopher
Tully (8)
|
20,000 | 0.09 | % | 20,000 | 0 | 0.00 | % | |||||||||||||
Elena
Groisberg & Mikhail Zats (8)
|
30,000 | 0.13 | % | 30,000 | 0 | 0.00 | % | |||||||||||||
Ignatius
Scalia (8)
|
60,000 | 0.27 | % | 50,000 | 10,000 | 0.04 | % | |||||||||||||
Debra
K. Duhart-Ball (8)
|
20,000 | 0.09 | % | 20,000 | 0 | 0.00 | % | |||||||||||||
Oliver
S. Youssef (8)
|
20,000 | 0.09 | % | 20,000 | 0 | 0.00 | % | |||||||||||||
Lorna
Ricafrente – Co (8)
|
6,000 | 0.03 | % | 6,000 | 0 | 0.00 | % | |||||||||||||
Christine
Debenedectis (8)
|
4,400 | 0.02 | % | 4,400 | 0 | 0.00 | % | |||||||||||||
Jose
F. Leyson (8)
|
4,000 | 0.02 | % | 4,000 | 0 | 0.00 | % | |||||||||||||
Tomas
& Barbara Barrios (8)
|
40,000 | 0.18 | % | 40,000 | 0 | 0.00 | % | |||||||||||||
David
E. Tenzer &
Ana
Lazo Tenzer (8)
|
40,000 | 0.18 | % | 40,000 | 0 | 0.00 | % | |||||||||||||
Bruno
Molino (8)
|
60,000 | 0.27 | % | 60,000 | 0 | 0.00 | % | |||||||||||||
Erno
Grunstein (8)
|
8,000 | 0.04 | % | 8,000 | 0 | 0.00 | % |
30
Beneficial Ownership Before
Offering
|
Number of
|
Beneficial Ownership After
Offering (1)
|
||||||||||||||||||
Name of Selling
Stockholder (1)
|
Number of
Shares (1)
|
Percent (2)
|
Shares Being
Offered
|
Number of
Shares
|
Percent (2)
|
|||||||||||||||
Richard
&
Diane
Finkelstein (8)
|
8,000 | 0.04 | % | 8,000 | 0 | 0.00 | % | |||||||||||||
Robert
Farrar (8)
|
8,000 | 0.04 | % | 8,000 | 0 | 0.00 | % | |||||||||||||
George
A. Woroch (8)
|
20,000 | 0.09 | % | 20,000 | 0 | 0.00 | % | |||||||||||||
Jan
S. Youssef (8)
|
20,000 | 0.09 | % | 20,000 | 0 | 0.00 | % | |||||||||||||
Susan
Kaiser (8)
|
4,000 | 0.02 | % | 4,000 | 0 | 0.00 | % | |||||||||||||
Alita
L. Dizon (8)
|
4,000 | 0.02 | % | 4,000 | 0 | 0.00 | % | |||||||||||||
Windows
of Heaven and More, LLC (3) (9)
|
21,000 | 0.09 | % | 1,000 | 20,000 | 0.09 | % | |||||||||||||
Philip
Magri (9)
|
6,000 | 0.03 | % | 1,000 | 5,000 | 0.02 | % | |||||||||||||
Joseph
M. Patricola (9)
|
11,000 | 0.05 | % | 1,000 | 10,000 | 0.05 | % | |||||||||||||
Daniel
Z. Kobrinski (9)
|
1,000 | 0.00 | % | 1,000 | 0 | 0.00 | % | |||||||||||||
Robert
Sturtz (11)
|
1,000 | 0.00 | % | 1,000 | 0 | 0.00 | % | |||||||||||||
Display
Equation, LLC (4) (12)
|
1,000 | 0.00 | % | 1,000 | 0 | 0.00 | % | |||||||||||||
M.B.
Turnkey Design (5) (13)
|
20,000 | 0.09 | % | 20,000 | 0 | 0.00 | % | |||||||||||||
Ultraflex
Int’l, Inc. (6) (14)
|
100,000 | 0.45 | % | 100,000 | 0 | 0.00 | % | |||||||||||||
Mark
Donskoy (15)
|
20,000 | 0.09 | % | 20,000 | 0 | 0.00 | % | |||||||||||||
Douglas
A. Rogers (16)
|
304,000 | 1.36 | % | 152,000 | 152,000 | 0.68 | % | |||||||||||||
Prime
Studio, Inc. (7) (17)
|
11,000 | 0.05 | % | 11,000 | 0 | 0.00 | % | |||||||||||||
Vasyl
Rubyov (18)
|
26,000 | 0.12 | % | 1,000 | 25,000 | 0.11 | % | |||||||||||||
Total
|
1,187,400 | 5.28 | % | 915,400 | 272,000 | 1.21 | % |
Notes:
(1)
|
The
named party beneficially owns and has sole voting and investment power
over all shares or rights to these shares, unless otherwise shown in the
table. The numbers in this table assume that none of the Selling
Stockholders sells shares of common stock not being offered in this
prospectus or purchases additional shares of common stock, and assumes
that all shares offered are sold.
|
31
(2)
|
Applicable
percentage of ownership is based on 22,501,052 shares of common stock
issued and outstanding.
|
(3)
|
Virginia
K. Sourlis has sole voting and dispositive control over Windows of Heaven
and More, LLC.
|
(4)
|
Frank
Christiano has sole voting and dispositive control over Display Equation,
LLC.
|
(5)
|
Mirek
Bogdanowicz has sole voting and dispositive control over M.B. Turnkey
Design.
|
(6)
|
Mario
Metodiev has sole voting and dispositive control over Ultraflex
International, Inc.
|
(7)
|
Stuart
Harvey Lee has sole voting and dispositive control over Prime Studio,
Inc.
|
(8)
|
From
the period of August through September of 2008, the Company conducted an
offering of its common stock to certain qualified investors. The offering
was conducted in accordance with exemptions from registration pursuant to
Section 4(2) and Rule 506 of Regulation D under the Securities Act.
Pursuant to the terms of the offering, the Company offered up to 1,000,000
shares of its Common Stock, par value $0.0001 per share, at a purchase
price of $0.25 per share, to “accredited investors” only as defined in
Rule 501(a) of Regulation D of the Securities. As of the close of the
offering on September 25, 2008, the Company had sold approximately 930,400
shares of its common stock to approximately 44 accredited investors, and
had raised an aggregate of
$232,600.
|
(9)
|
On
June 23, 2008, the Company issued 4,000 shares of its common stock to
members of The Sourlis Law Firm, including Virginia K. Sourlis, Esq.,
Philip Magri, Esq., Joseph M. Patricola, Esq., and Daniel Z. Kobrinski,
Esq. The Company issued the stock in consideration for professional legal
services rendered and upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under
Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of
securities.
|
(10)
|
On
July 17, 2008, the Company issued 5,000 shares of its common stock to Dr.
Alex Y. Bekker. The Company issued the stock in consideration for
scientific consulting services rendered and upon reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the
stock did not involve a public offering of
securities.
|
(11)
|
On
July 17, 2008, the Company issued 1,000 shares of its common stock to
Robert Sturtz. The Company issued the stock in consideration for graphic
design services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the
stock did not involve a public offering of
securities.
|
(12)
|
On
July 17, 2008, the Company issued 1,000 shares of its common stock to
Display Equation, LLC. The Company issued the stock in consideration for
graphic design services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the
stock did not involve a public offering of
securities.
|
(13)
|
On
July 17, 2008, the Company issued 20,000 shares of its common stock to
M.B. Turnkey Design. The Company issued the stock in consideration for
product design services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the
stock did not involve a public offering of
securities.
|
32
(14)
|
On
July 17, 2008, the Company issued 100,000 shares of its common stock to
Ultraflex International, Inc. The Company issued the stock in
consideration for product engineering services rendered and upon reliance
on the exemption from registration requirements of the Securities Act of
1933, as amended, provided under Section 4(2) promulgated thereunder as
the issuance of the stock did not involve a public offering of
securities.
|
(15)
|
On
July 17, 2008, the Company issued 20,000 shares of its common stock to
Mark Donskoy. The Company issued the stock in consideration for internet
security consultation services rendered and upon reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the
stock did not involve a public offering of
securities.
|
(16)
|
On
May 15, 2008, the Company entered into Consulting Agreement with Douglas
Rogers, one of the Selling Stockholders named in the Selling Stockholders
Table, and President of Rogers Consulting Group. Pursuant to the
Consulting Agreement, the Company retained Mr. Rogers to provide the
Company executive advisory consulting services for a term of four months,
from May 15, 2008 to September 15, 2008. In consideration for services
rendered by Mr. Rogers under the Consulting Agreement, Mr. Rogers received
cash compensation in the aggregate amount of $12,000. Pursuant to a verbal
agreement, on July 17, 2008, the Company issued to Mr. Rogers the 152,000
shares of common stock being registered for resale on behalf of Mr. Rogers
due to the fact that Mr. Rogers was spending more time than originally
contemplated by the Company and Mr. Rogers under the Consulting Agreement.
The shares were issued for services already rendered as of September 15,
2008.
|
The
shares were issued upon reliance on the exemption from registration requirements
of the Securities Act of 1933, as amended, provided under Section 4(2)
promulgated thereunder as the issuance of the stock did not involve a public
offering of securities.
(17)
|
On
July 17, 2008, the Company issued 11,000 shares of its common stock to
Prime Studios, Inc. The Company issued the stock in consideration for
graphic design services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the
stock did not involve a public offering of
securities.
|
(18)
|
On
September 2, 2008, the Company issued 1,000 shares of its common stock to
Vasyl Rubyov. The Company issued the stock in consideration for software
engineering services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the
stock did not involve a public offering of
securities.
|
Company
Relationships with Selling Stockholders
Douglas A. Rogers – Rogers
Consulting Group
On May
15, 2008, the Company entered into Consulting Agreement with Douglas Rogers, one
of the Selling Stockholders named in the Selling Stockholders Table, and
President of Rogers Consulting Group. Pursuant to the Agreement, the Company
retained Mr. Rogers to provide the Company executive advisory consulting
services for a term of four months, May 15, 2008 through September 15, 2008. For
these services, Mr. Rogers received cash compensation in the amount of $12,000,
as well as 152,000 shares of the Company’s common stock (issuance date July 17,
2008) pursuant to a verbal modification to the original consulting agreement
between BAETA Corp. and Rogers Consulting Group, attached hereto as Exhibit
10.2.2. This verbal modification took place on or about July 17, 2008 and was
never memorialized in writing. The purpose of the modification to the contract
was to compensate Rogers Consulting for much more time spent working with the
Company than originally anticipated and contracted for in the original
consulting agreement between Rogers Consulting and Baeta Corp., dated May 15,
2008. The 152,000 shares issued to Mr. Rogers on July 17, 2008 pursuant to the
foregoing are being registered for sale in this registration
statement.
33
On August
18, 2008 and October 28, 2008 in two agreement amendments , the Company and
Rogers Consulting Group extended the term of Mr. Rogers’ consulting services to
the Company and amended the aforementioned Consulting Agreement, whereby Mr.
Rogers received additional $20,000 and 152,000 (issuance date October 28, 2008)
shares to perform additional consulting services. This amendment to the
Agreement is attached as Exhibit 10.4. The 152,000 shares issued to Mr. Rogers
on October 28, 2008 pursuant to the foregoing are not being registered for sale
in this registration statement.
Mr.
Rogers is not an affiliate of a broker-dealer.
On
January 29, 2009, the Company and Rogers Consulting Group executed a Settlement
Agreement and Release to effectuate a termination of the aforementioned
Consulting Agreement, as amended. A copy of this Settlement and Release
Agreement is attached to this registration statement as Exhibit 10.7. In
accordance with the Settlement and Release Agreement, Rogers Consulting Group is
no longer providing any type of consulting or other services to the Company,
going forward. Pursuant to the Settlement and Release Agreement, Rogers
Consulting was required to assist the Company in preparing its annual audited
financials, for the fiscal year ended December 31, 2008, with the Company’s
independent auditing firm as well as assist the Company in preparing the
registration on Form S-1 to be filed with the Securities and Exchange
Commission. For these final services, Rogers Consulting was compensated in the
amount of $5,000.
From May
15, 2008 through September 15, 2008, Rogers Consulting Group consulted BAETA
Corp. with respect to the following functions:
|
·
|
Assisting
management with PCAOB Annual Audits & Quarterly Financial
Reporting;
|
|
·
|
Assisting
management with the preparation & maintenance of Financial
Statements;
|
|
·
|
Assisting
management with the preparation & maintenance of supporting
Sub-Ledgers including Equity Ledgers and Additional Paid-In Capital
(“APIC”) Calculations, and Reconciliation & Accounting of all
Financial Sub-Ledgers;
|
|
·
|
Assisting
management with the development of Internal Control over Financial Report
and associated Procedures and
development;
|
|
·
|
Assisting
management with Company Operations, including Budgeting & Pro-Forma
Statements, Inventory Management, Sales Tracking & Reconciliation,
Corporate Filings, Hiring &
Financial Personnel Management, Corporate Governance, and Capital
Formation.
|
For these
consulting services, Rogers Consulting was compensated approximately $12,000, as
well as 152,000 shares of the Company’s common stock.
In
addition to the above-mentioned functions, from September 15, 2008 through
January 1, 2009, Rogers Consulting Group was engaged to perform the following
additional functions:
|
·
|
Capital
Formation – attempted to act as independent agent to the Company for the
purpose of securing an estimated $500,000 - $3,000,000 of equity, debt or
equivalent form of operating capital from private capital sources. While
contemplated per the October 28, 2008 agreement, this was never actively
pursued.
|
|
·
|
Market
Makers. – assisted management to identify, negotiate, engage and oversee
with Market-Makers to support the Company’s transition to the public
markets.
|
|
·
|
Transfer
Agents – assisted management to identify, negotiate, engage and oversee
with a Transfer Agent to support the Company’s transition to the public
markets.
|
|
·
|
Financial
Public Relations – assisted management to identify, negotiate, engage and
oversee an appropriate Public Relations firm to enhance visibility for the
Company’s products, services and public equity status. While contemplated
per the October 28, 2008 agreement, this was never actively
pursued.
|
For these
consulting services, Rogers Consulting was compensated approximately $20,000, as
well as 152,000 shares of the Company’s common stock.
34
As
mentioned above, Rogers Consulting Group no longer provides consulting services to
the Company, as the Company is transitioning from the use of consultants to the
employment of a management team.
Dr. Alex Y. Bekker,
MD
Upon
inception, Dr. Bekker entered into a verbal consulting contract with the Company
that covered the period of August 17, 2007 through December 31, 2008. A summary
of this verbal consulting agreement is attached hereto as Exhibit 10.8. Pursuant
to the terms of the verbal Agreement, Dr. Bekker was responsible for introducing
Company product to colleagues and industry professionals, as well as for
development and modification of content for healthcare providers relating to the
Company’s products. For his services rendered for the initial month of service,
Dr. Bekker received 5,000 shares of common stock, which are being registered in
the registration statement.
For his
services rendered for the remainder of his consulting contract with the Company,
from the period of September 15, 2007 through December 31, 2008, and for his
role as Member of the BAETA Corp. Scientific Advisory Board, Dr. Bekker received
a stock option to purchase 50,000 shares of BAETA Common Stock at $0.50 per
share, pursuant to the Company’s 2009 Stock Option Plan.
Other the
forgoing, none of the Selling Stockholders:
1.
|
Is
an affiliate of a broker-dealer;
|
2.
|
Has
had a material relationship with us other than as a stockholder at any
time within the past three years;
or
|
3.
|
Has
ever been one of our officers and
directors.
|
PLAN
OF DISTRIBUTION
This
prospectus is part of a registration statement that enables the Selling
Stockholders to sell their shares on a continuous or delayed basis after this
registration statement is declared effective by the Securities and Exchange
Commission. The Selling Stockholders may sell some or all of their common stock
in one or more transactions, including block transactions:
|
·
|
In
public markets as the common stock may be trading from time to
time;
|
|
·
|
In
privately negotiated transactions;
|
|
·
|
Through
the writing of options on the common
stock;
|
|
·
|
In
short sales; or
|
|
·
|
In
any combination of the aforementioned methods of
distributions.
|
The
Selling Stockholders are offering their respective shares of common stock for
sale at the disclosed fixed price of $1.00 per share. This offering price will
be in effect until our common stock is quoted on the OTC Bulletin Board. Once
our common stock is quoted on the OTC Bulletin Board, the selling stockholders’
offering price will be dictated by then prevailing market prices or privately
negotiated prices.
Although
we intend to request a registered broker-dealer apply to have our common stock
quoted on the OTC Bulletin Board, public trading of our common stock may never
materialize or if materialized, be sustained. If our common stock is quoted on
the OTC Bulletin Board, then the sales price to the public will vary according
to the selling decisions of each Selling Stockholder and the market for our
stock at the time of resale. In these circumstances, the sales price to the
public may be:
·
|
the
market price of our common stock prevailing at the time of
sale;
|
35
·
|
a price related to such prevailing market price of
our common stock; or
|
·
|
such other price as the Selling Stockholders
determine from time to
time.
|
The
Selling Stockholders named in this prospectus may also sell their shares
directly to market makers acting as agents in unsolicited brokerage
transactions. Any broker or dealer participating in such transactions as an
agent may receive a commission from the Selling Stockholders, or, if they act as
an agent for the purchaser of such common stock, from such purchaser. The
Selling Stockholders are expected to pay the usual and customary brokerage fees
for such services.
We can
provide no assurance that all or any of the common stock offered will be sold by
the Selling Stockholders named in this prospectus.
The
estimated costs of this offering are $42,116. We are bearing all costs relating
to the registration of the common stock. The Selling Stockholders, however, will
pay any commissions or other fees payable to brokers or dealers in connection
with any sale of the common stock.
The
Selling Stockholders named in this prospectus must comply with the requirements
of the Securities Act and the Exchange Act in the offer and sale of the common
stock. The Selling Stockholders and any broker-dealers who execute sales for the
Selling Stockholders may be deemed to be an “underwriter” within the meaning of
the Securities Act in connection with such sales. In particular, during such
times as the Selling Stockholders may be deemed to be engaged in a distribution
of the common stock, and therefore be considered to be an underwriter, they must
comply with applicable law and be required to, among other things:
·
|
Not engage in any stabilization activities in
connection with our common
stock;
|
·
|
Furnish each broker or dealer through which common
stock may be offered, such copies of this prospectus, as amended from time
to time, as may be required by such broker or dealer;
and
|
·
|
Not
bid for or purchase any of our securities or attempt to induce any person
to purchase any of our securities other than as permitted under the
Exchange Act.
|
If an
underwriter is selected in connection with this offering, an amendment will be
filed to identify the underwriter, disclose the arrangements with the
underwriter, and we will file the underwriting agreement as an exhibit to this
prospectus.
The
Selling Stockholders and any other persons participating in the sale or
distribution of the shares will be subject to applicable provisions of the
Exchange Act and the rules and regulations under such act, including, without
limitation, Regulation M. These provisions may restrict certain activities of,
and limit the timing of purchases and sales of any of the shares by the selling
stockholders or any other such person. In the event that the selling
stockholders are deemed affiliated purchasers or distribution participants
within the meaning of Regulation M, then the selling stockholders will not be
permitted to engage in short sales of common stock. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distributions, subject to specified exceptions or
exemptions. In regards to short sells, the Selling Stockholder can only cover
its short position with the securities they receive from us upon conversion. In
addition, if such short sale is deemed to be a stabilizing activity, then the
Selling Stockholder will not be permitted to engage in a short sale of our
common stock. All of these limitations may affect the marketability of the
shares.
36
DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The
following table sets forth the respective names, ages and positions of our
directors and executive officers as well as the year that each of them commenced
serving as a director with BAETA. The terms of all of the directors, as
identified below, will run until our annual meeting of stockholders in 2009 or
until their successors are elected and qualified.
Person and Position:
|
Age:
|
Held Position Since:
|
||
Dr.
Alexander Gak, M.D.
President
and Chairman of the Board
|
40
|
August
14, 2007
|
||
Mr.
Leonid Pushkantser
Chief
Executive Officer
(Principal
Executive Officer)
|
55
|
May
29, 2009
|
||
Mr.
Jeff Burkland
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
38
|
March
1, 2009
|
||
Eugene
Gribov
Chief
Technology Officer
|
44
|
May
29, 2009
|
||
Lee
Smith
Chief
Marketing Officer
|
45
|
May
29, 2009
|
||
Dr.
Leonid Topper
Chief
Medical Officer
|
|
42
|
|
April
1,
2009
|
Management
and Director Biographies
Each of
the foregoing persons may be deemed a “promoter” of the Company, as that term is
defined in the rules and regulations promulgated under the Securities Act.
Directors are elected to serve until the next annual meeting of stockholders and
until their successors have been elected and have qualified.
Officers
are appointed to serve until the meeting of the Board of Directors following the
next annual meeting of stockholders and until their successors have been elected
and have qualified.
Dr. Alexander
Gak,
M.D., 40, is
Chairman and President of BAETA Corp., and is
currently serving on a part-time basis, dedicating approximately 50% of his time
on matters relating to BAETA. An ABA Board Certified anesthesiologist, Dr.
Gak is an Attending Anesthesiologist at Liberty Anesthesia Associates, LLC
and is responsible for patient care throughout the Jersey City Medical
Center and in various outpatient settings. Dr. Gak has held this position from
2006, through the present time. Prior to his tenure at Jersey City Medical
Center, from 2001 – 2006, Dr. Gak served as an Attending Anesthesiologist
at the Englewood Hospital and Medical Center in Englewood, New
Jersey.
Dedicated
to a career in the medical industry and based upon his ongoing efforts to
improve patient care, Dr. Gak has been the creative force behind Baeta
Corp.’s products and is cited as an inventor on multiple patent
applications. Previously, Dr. Gak served as an Attending Anesthesiologist
at the Englewood Hospital and Medical Center in Englewood, New Jersey,
conducting his Residency at the Mount Sinai School of Medicine in New
York. Dr. Gak obtained his Medical degree from the Stony Brook School of
Medicine in Stony Brook, New York. A member of the Golden Key Honor Society
and the Dean’s List, Dr. Gak graduated Magna Cum Laude from Hunter College,
CUNY with a Bachelor’s degree in Chemistry.
37
Mr. Leonid
Pushkantser, 55, joined
BAETA Corp in May 2009 as the Company’s Chief Executive Officer, and is
currently serving the Company on a fulltime basis. Working in the manufacturing
and medical industries for more than two decades, Mr. Pushkantser has experience
manufacturing and bringing new products to market — both domestically and
internationally. Prior to joining Baeta Corp., Mr. Pushkantser was the Vice
President of Operations for AFC Industries where he was responsible for
engineering, manufacturing, quality assurance, customer service, human
resources, cost accounting and profitability, and compliance with FDA, EPA, and
OSHA standards. Previously, Mr. Pushkantser was also a Director of
Manufacturing, Plant Manager and Processing Manager for an FDA regulated
automated cancer screening test.
Mr.
Pushkantser received a Master's of Science in Business Operations and a
Bachelor's of Science in Mechanical Engineering — both from Polytechnic
University in Kiev, Ukraine.
Below is
a timeline of Mr. Pushkantser’s employment experience since 1992:
2003 to
2009 Vice President of Operations; AFC Industries
2000 to
2003 Director of Manufacturing; Refcon, Inc.
1999 to
2000 Plant Manager; Superior Walls of the Hudson Valley
1992 to
1999 Processing Manager; NeuroMedical Systems, Inc.
Mr. Jeff
Burkland, 38, is Chief Financial Officer of BAETA Corp. and is currently
serving on a part-time basis, dedicating approximately 15% or 6 hours per week
on matters relating to BAETA. Mr. Burkland has over 15 years of business
experience in both strategic and tactical financial roles, building financial
models, performing financial analysis and fund raising as well as in operation
roles, managing and improving operational processes and leading marketing and
product management efforts.
Education and
Certification:
•
|
MBA,
Harvard Business School, First Year
Honors
|
•
|
BS,
Electrical Engineering and Economics, Summa Cum Laude, Duke
University
|
•
|
Oxford
University, International Finance
Studies
|
Since the
beginning of 2008 to the present date, Mr. Burkland has provided independent
consulting to startup and growth companies, performing strategic finance duties,
including:
•
|
Critical
financial modeling and other support for the Series B raise of a SaaS
provider in the Consumer Packaged Goods and retailer
space.
|
•
|
Fund
raising and accounting management at eRealInvestor, a software service
provider for real estate investors.
|
•
|
Cash
management, business model development and organizational planning and
analysis as CFO for CRC Results, an internal audit consulting
company.
|
•
|
Fund
raising as an advisor for firms raising money as well as in the roll of a
potential investor.
|
From 2005
through 2008, Mr. Burkland was co-Principal of CRC Results and, as part of that
role, led Sarbanes-Oxley Section 404 efforts for several large and
small-cap telecommunications and financial services clients.
From
early 2004 to the beginning of 2005, Mr. Burkland provided independent
consulting, assisting companies with their Sarbanes-Oxley Section 404
efforts.
Mr.
Burkland has previously held the role of VP of Finance and Operations for
Synaptex, a software company. As a member of the senior management team,
Mr. Burkland developed the business plan, financial forecasts, industry analysis
and competitive analysis for the company.
Mr.
Burkland’s permanent roles included employment with UTStarcom, a
telecommunications equipment manufacturer, where he was a key member of a small
team responsible for extending the company’s presence outside of
China.
38
At Zhone
Technologies, Mr. Burkland ran tactical segment marketing for the 500-person
telecom equipment manufacturer. He prepared several board-level
market-assessment presentations, developed and executed sales promotions, and
interfaced with research analysts. Prior to Zhone, Mr. Burkland worked in
product management at NorthPoint Communications, a heavily financed DSL service
provider.
Mr.
Burkland began his career at AT&T, where he was selected to the company’s
Fast Track Program.
Mr.
Burkland completed his MBA at Harvard Business School after his tenure with
AT&T.
Mr. Eugene
Gribov, 44, joined
BAETA Corp in May 2009 as the Company’s Chief Technology Officer, and is
currently serving the Company on a part-time basis devoting approximately 25% of
his time on matters relating to BAETA Corp. Mr. Gribov has more than 20 years of
international engineering management, product development, and offshore
manufacturing management experience across a wide array of sectors including the
Information Technology and Medical industries.
Mr.
Gribov is currently the President of Globe Audio Design Inc. which develops
high-power audio solutions. Previously Mr. Gribov designed semiconductor,
integrated circuitry, optoelectronic, and software-based solutions for Kintek
Inc. and Globe Ltd. Further showcasing Mr. Gribov's technical skills, he worked
in a select group of researchers under the direct supervision of Nobel Prize
winner, Zhores Alferov.
Mr.
Gribov graduated with honors from Sankt-Peterburgskij Gosudarstvennyj
Elektrotehniceskij Universitet (LETI) with a Master's of Science in Electrical
Engineering.
Below is
a timeline of Mr. Gribov’s employment history since 1989:
2004 –
Present: Globe Audio Design Inc
2003
–2003 (10 months): Gemini Sound Products Corp
1996
–2002: Kintek Inc
1994
–1996: Globe Ltd
1989
–1993: Physical Technical Institute of Russian Academy of Science
Mr. Lee
Smith, 45, joined
BAETA Corp in May 2009 as the Company’s Chief Marketing Officer, and is
currently serving the Company on a part-time basis devoting approximately 25% of
his time on matters relating to BAETA Corp. With more than 20 years of
experience in the technology, marketing, and advertising industries, Mr. Smith
has a track record of developing new products, defining successful brands,
creating marketplace awareness, and driving sales.
Mr. Smith
is the President and CEO of Persuasive Brands, a marketing services agency
dedicated to branding and sales generation. Previously, Mr. Smith was the
founder, COO, and acting CEO of InsightExpress, a firm he grew to one of the 50
largest market research companies in the United States in six years. Mr. Smith's
innovative ideas and business practices have been recognized via four U.S.
patents.
Mr. Smith
holds an MBA in Marketing and Finance from Carnegie Mellon University's Tepper
Business School and a Bachelor's of Science in Computer Science from The
Pennsylvania State University.
Below is
a timeline of Mr. Smith’s employment experience since 1986:
2005 to
Present: President & CEO; i-Decide and Persuasive Brands
1999 to
2005: Founder, President, COO, and Acting CEO; InsightExpress
1997 to
1999: Vice President, Marketing and Business Development; NFO
1995 to
1997: Product Strategist, Structured Finance; Moody’s Investors Service (a
Dun & Bradstreet Company)
1993 to
1995: Management Executive; Dun & Bradstreet
1991 to
1993: MBA Program; Carnegie Mellon University’s Business
School
39
1986 to
1991: Senior Systems Programmer; Unisys
Dr. Leonid
Topper, M.D.,
42, joined
BAETA Corp in March 2009 as the Company’s Chief Medical Officer, serving the
Company on a part-time basis dedicating approximately 5% if his time on matters
relating to BAETA.
Dr.
Topper is an attending neurologist with Pediatric Neurology Associates since
October 2005. Prior to Pediatric Neurology Associates, Dr. Topper practiced at
the Schneider Children’s Hospital in New York where he served as a pediatric
neurology attending of the Brain Tumor Program and Epilepsy service. As a
neurologist of the Brain Tumor Center, Dr. Topper conducted weekly
multi-specialty clinic for children and adults with various forms of brain
cancer. Along with neuro-oncologists, neurosurgeons, and radiation therapy
doctors, Dr. Topper actively participated in decision making regarding the best
possible care for these children.
Dr.
Topper has extensive experience in the diagnosis and management of children with
seizures and epilepsy. For number of years he was responsible for the reading
and interpretation of in-patient and out-patient video EEG monitoring tests,
averaging about 450 tests a year. He also cared for large number of patients
with headaches, brain infections, stroke, tics and Tourette syndrome, nerve and
muscle conditions, autistic disorders, ADHD, and neonatal brain
problems.
Following
his 5 years of general pediatric training, Dr. Topper completed 3 years of
neurology and pediatric neurology fellowship at the Long Island Jewish Medical
Center in New York. He is board certified in both pediatric and adult neurology.
He serves as an examiner for the oral exams in pediatric neurology conducted by
the American Board of Psychiatry and Neurology. Additionally, Dr. Topper is a
member of the Royal College of Pediatrics and Child Health in the United
Kingdom.
Teaching
and medical publications are areas of his strong interests. Dr. Topper authored
a number of teaching brochures for doctors in training, and composed an
instructional compact disc explaining the techniques of neurological examination
in infants and children. He conducted lecture series for general pediatricians,
neurologists, and psychiatrists on various aspects of neurologic disorders in
children. Dr. Topper has also co-authored articles in Pediatric Neurology and
Headache journals.
Below is
a timeline of Dr. Topper’s employment since 1989:
Pediatric
Neurologist
Advocare
Pediatric Neurology Associates, P.A.
Morristown,
NJ
2005 -
present
Pediatric
Neurology Attending
Schneider
Children’s Hospital
New Hyde
Park, NY
2002 –
2005
Pediatric
Neurology Attending
Chaim
Sheba Medical Center, Israel
2000 –
2002
Pediatric
Neurology fellowship
Long
Island Jewish and Schneider Children’s Hospitals
New Hyde
Park, NY
1997-2000
General
pediatrics residency
Chaim
Sheba Medical Center, Israel
1992 –
1995 and 1996 - 1997
40
Military
physician
Israeli
Defense Forces
1995 –
1996
Internship
Vilnius
Children’s Hospital
Vilnius,
Lithuania
1989 –
1991
Former
Promoters
Ralph Amato – Ventana
Capital Partners, Inc.:
On March
1, 2008, the Company entered into Consulting Agreement with Ventana Capital
partners, Inc. and Ralph Amato, president of Ventana Capital Partners, Inc.
Pursuant to the Agreement, Ventana Capital Partners was retained to provide the
following advisory services and business financing activities to the Company on
an exclusive basis for a term of one year from the date of the Agreement, and on
a non-exclusive basis for an additional one year thereafter:
·
|
Assist
the Company in preparing documentation to be submitted to the Company’s
legal counsel for the preparation of a Registration Statement to be
submitted to the SEC.
|
·
|
Assist
the Company in obtaining and engaging a PCAOB designated audit firm and to
assist the Company with the preparation of financial statements to be
submitted to the Company’s auditors as required for the transaction
described in this Agreement.
|
·
|
Assist
the Company with facilitating a broker dealer to file the Company’s
15-c2-11 with FINRA after the Company’s Registration Statement has deemed
effective by the SEC.
|
·
|
Assist
the Company with determining a valuation that is consistent within its
industry and acceptable to the investment
community.
|
·
|
Assist
the Company with the formation of its capitalization and long term capital
structure
|
·
|
Assist
Company with the negotiations, transaction terms, conditions and structure
of contractual agreements as required by the
Company.
|
·
|
Assist
the Company with all matters concerning the future growth and direction of
the Company.
|
·
|
Assist
the Company with retaining Investor and Public Relations professionals to
represent the Company once it is publicly
traded.
|
·
|
Assist
the Company with the terms, conditions and formation of an initial
offering of equity financing (the “Private Equity Financing”) for the
Company in conjunction with the filing of the Company’s Registration
Statement.
|
·
|
Assist
the Company in obtaining a Market-Maker and Brokerage support to establish
a public market for the common stock following the Company’s approval for
trading on the OTC Bulletin Board.
|
·
|
Introduce
the Company to equity funding sources for a second round of financing (the
proposed “PIPE Funding”) after the company is publicly
traded.
|
·
|
Assist
the Company with retaining a Stock Transfer Agent and the coordination of
stock issuances.
|
41
·
|
Assist
the Company with sourcing a firm to Edgarize all documents as required by
the SEC.
|
For these
services, Ventana Capital Partners received cash compensation in the amount of
$40,000, as well as 2,000,000 of the Company’s outstanding common stock directly
from Dr. Gak. Ventana Capital Partners is not a registered broker–dealer under
Section 15A of the Securities Exchange Act of 1934, as amended, or any similar
state law.
This
consulting agreement was terminated and rescinded pursuant to a Settlement
Agreement and Mutual Release between the parties, executed on November 14, 2008,
and attached hereto as Exhibit 10.6. Pursuant to the Settlement Agreement and
Mutual Release, the 2,000,000 shares issued to Mr. Amato in uncertificated form
were returned. The relationship between the Company and Ventana Capital Partners
and Ralph Amato has been terminated in all capacities.
Involvement
in Certain Legal Proceedings
None of
the director(s) or executive officers of the Company, and to the best of our
knowledge upon reasonable inquiry, no promoters (past or present) of the Company
(i) has been involved as a general partner or executive officer of any business
which has filed a bankruptcy petition; (ii) has been convicted in any criminal
proceeding nor is subject to any pending criminal proceeding; (iii) has been
subjected to any order, judgment or decree of any court permanently or
temporarily enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking activities; and (iv) has been
found by a court, the United States Securities and Exchange Commission or the
Commodities Futures Trading Commission to have violated a federal or state
securities or commodities law.
DIRECTOR
AND OFFICER COMPENSATION
Summary
Compensation Table
The
following table sets forth certain compensation information for: (i) each person
who served as the chief executive officer of our company at any time during the
year ended December 31, 2008, regardless of compensation level, and (ii) each of
our other executive officers, other than the chief executive officer, serving as
an executive officer at any time during 2008. The foregoing persons are
collectively referred to herein as the “Named Executive Officers.” Compensation
information is shown for fiscal years 2008 and 2007.
Name/Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan
Compensation
|
Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation
|
Total
|
|||||||||||||||||||||||||
Dr.
Alexander Gak*
|
||||||||||||||||||||||||||||||||||
President
and Chairman
|
2008
|
$ | 30,000 | $ | 0 | 60,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||
2007
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||||||
Mr.
Jeff Burkland
|
|
|||||||||||||||||||||||||||||||||
Chief
Financial Officer
|
2008
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
2007
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Dr.
Leonid Topper
|
|
|||||||||||||||||||||||||||||||||
Chief
Medical Officer
|
2008
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
2007
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Mr.
Eugene Gribov
|
|
|||||||||||||||||||||||||||||||||
Chief
Tech Officer
|
2008
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
2007
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Mr.
Len Pushkantser
|
|
|||||||||||||||||||||||||||||||||
Chief
Executive Officer
|
2008
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
2007
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||
Mr.
Lee Smith
|
|
|||||||||||||||||||||||||||||||||
Chief
Marketing Officer
|
2008
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||
2007
|
N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
42
*On
November 1, 2008, BAETA Corp. entered into a Software Development Contract with
Extranome, Inc. At the time of the transaction, BAETA and Extranome were
controlled by Dr. Alexander Gak, our President and Chairman. This Exclusive
Software Agreement is attached to this prospectus as Exhibit 10.12.
Pursuant
to the Software Development Agreement, Extranome has been providing ongoing
software development and product support services for BAETA since November 01,
2008. The Software Development Agreement is a non-exclusive agreement and is not
related to BAETA’s Exclusive Software Agreement (Exhibit 10.1) regarding
MyHealthID product. In accordance with Section 2 of the Software Development
Agreement, BAETA is to pay Extranome for the contracted work in cash form;
however BAETA currently does not have a sufficient amount of cash on hand.
Therefore, BAETA is paying Extranome 50% in shares of its common stock, and 50%
in cash. Extranome has received 30,000 for each month since November as non-cash
part of compensation for services rendered which represent approximately 50% of
Extranome’s due monthly compensation, and to date has received 390,000 shares of
BAETA Corp. BAETA will continue to issue company shares to Extranome in the
amount of 50% of the monthly compensation for services rendered until it is able
to compensate Extranome fully in cash.
As of
December 31, 2008, Extranome had received approximately $30,000 in cash and
60,000 shares of Common Stock of BAETA Corp. pursuant to the Software
Development Agreement. As of the most recent quarter ended September 30, 2009,
Extranome had received approximately $115,000 in cash and 300,000 shares of
Common Stock in BAETA Corp. As of September 30, 2009, BAETA owes approximately
$50,000 in cash to Extranome, and $15,000 worth of common stock, which has been
classified as an accounts payable on the Company’s financial statements. As of
the date of this registration statement, BAETA owes approximately $80,000 in
cash and $15,000 worth of common stock. Due to the fact that Dr. Gak owns 100%
of Extranome, the payment arrangement between Extranome and BAETA Corp. is
required to be reported as executive compensation with respect to Dr.
Gak.
Compensation
Aside
from the disclosures in the “Summary Compensation Table” directly above, we have
not paid any salary, bonus or other compensation to our officers and directors
as of our most recent fiscal year end and most recent fiscal quarter ended
September 30, 2009.
Stock
Option Grants
Pursuant
to the Company’s 2009 Stock Option Plan, the aggregate number of shares of
common stock that may be issued pursuant to the exercise of Options granted
under the Plan will not exceed 2,147,668
Shares of Common Stock, par value $0.0001 per share (the “Option Pool”),
provided that such number will be increased by the number of shares of common
stock that the Company subsequently may reacquire through repurchase or
otherwise. Shares of Common Stock that would have been issuable pursuant to
Options, but that are no longer issuable because all or part of those Options
have terminated or expired, will be deemed not to have been issued for purposes
of computing the number of shares of Option Stock remaining in the Option Pool
and available for issuance.
Pursuant
to its 2009 Stock Option Plan, the Company has issued stock options to purchase
an aggregate of 1,623,512 shares of common stock at $0.50 per share, subject to
different vesting schedules. All stock option grants were issued in
2009:
43
On
January 25, 2009, the Company granted stock options to Dr. Samyaden Datta. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Samyaden Datta in consideration for his service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
Sub-Total: 50,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
January 29, 2009, the Company granted stock options to Dr. Alex Y. Bekker. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Bekker in consideration for his service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
Sub-Total: 100,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
February 3, 2009, the Company granted stock options to Leroy Smith. The stock
option agreement is exercisable for 800,000 shares of the Company’s common stock
for a purchase price of $0.50 per share. The stock options were granted to Mr.
Smith in consideration for marketing consultation services rendered, and the
Company relied upon the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the grant of such options did not involve a public offering of
securities.
Sub-Total: 900,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
February 7, 2009, the Company granted stock options to Dr. Marco Pappagallo. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Marco Pappagallo in consideration for his service as a Member of the
Company’s Scientific Advisory Board for the year 2009, and the Company relied
upon the exemption from registration requirements of the Securities Act of 1933,
as amended, provided under Section 4(2) promulgated thereunder as the grant of
such options did not involve a public offering of securities.
Sub-Total: 950,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
February 19, 2009, the Company granted stock options to Dr. Lauren Shaiova. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Shaiova in consideration for her service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
Sub-Total: 1,000,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
February 26, 2009, the Company granted stock options to Mr. Jeff Burkland. The
stock option agreement is exercisable for 100,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Mr. Burkland in consideration for his service as the Company’s Chief Financial
Officer for the year 2009, and the Company relied upon the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the grant of such options did not
involve a public offering of securities.
44
Sub-Total: 1,100,000
shares of Common Stock underlying Options outstanding after this
issuance.
On March
21, 2009, the Company granted stock options to Dr. Leonid Topper. The stock
option agreement is exercisable for 50,000 shares of the Company’s common stock
for a purchase price of $0.50 per share. The stock options were granted to Dr.
Topper in consideration for his service as the Company’s Chief Medical Officer
for the year 2009, and the Company relied upon the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the grant of such options did not involve a
public offering of securities.
Sub-Total: 1,150,000
shares of Common Stock underlying Options outstanding after this
issuance.
On April
21, 2009, the Company granted stock options to Eugene Gribov. The stock option
agreement is exercisable for 50,000 shares of the Company’s common stock for a
purchase price of $0.50 per share. The stock options were granted to Mr. Gribov
in consideration for his service as the Company’s Chief Tech Officer for the
year 2009, and the Company relied upon the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the grant of such options did not involve a
public offering of securities.
Sub-Total: 1,200,000
shares of Common Stock underlying Options outstanding after this
issuance.
On May
29, 2009, the Company granted stock options to Leonid Pushkantser. The stock
option agreement is exercisable for 400,000 shares of the Company’s common stock
for a purchase price of $0.50 per share. The stock options were granted to Mr.
Pushkantser in consideration for his service as the Company’s Chief Executive
Officer for the year 2009, and the Company relied upon the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the grant of such options did not
involve a public offering of securities.
Sub-Total: 1,600,000
shares of Common Stock underlying Options outstanding after this
issuance.
To date,
Mr. Jeff Burkland has received additional stock options with immediate vesting
rights exercisable for 23,512 shares of common stock at a purchase price of
$0.50 per share pursuant to his employment agreement attached to this
registration statement as Exhibit 10.9.1, The stock options (see Exhibit 10.9.2)
were granted to Mr. Burkland in consideration for his service as the Company’s
Chief Financial Officer, and the Company relied upon the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the grant of such options did not
involve a public offering of securities.
Total:
1,623,512
shares of Common Stock underlying Options outstanding after this issuance, and
as of the date of this Registration Statement.
Employment
Agreements
We
currently have employment agreements with all of our named executive officers
and directors. These agreements are attached to this registration statement as
Exhibits.
45
Summary
of Significant Terms of Employment Agreements:
Leonid
Pushkantser
Term:
Commencing
on June 1, 2009 and ending on June 1, 2014.
Position/Services:
To serve
as the Chief Executive Officer of the Company, and will perform the duties
commensurate with such position with a standard of care and diligence that are
required persons in similarly situated positions. Executive will devote the
proper attention and energies on a full-time basis to the above duties, and
Executive will not, during the term of this Agreement, actively engage in any
other for profit business activity, except Executive may, so long as such
activities do not impair Executive's performance of his duties under this
Agreement, (a) serve as a director of up to two entities other than the Company
so long as each company is not in any way, either directly or indirectly, a
competitor of Company or otherwise detrimental to Company’s well-being, as
determined by the Company’s President in his sole discretion, and (b) write,
teach and publish articles and books.
Salary:
▪
First six months of Original Term:
|
$
|
180,000
|
||
▪
Second six months of Original Term:
|
$
|
250,000
|
||
▪
Second year of Original Term:
|
$
|
250,000
|
||
▪
Third year of Original Term:
|
$
|
250,000
|
||
▪
Fourth year of Original Term:
|
$
|
250,000
|
||
▪
Fifth year of Original Term:
|
$
|
250,000
|
On May
29, 2009, the Company approved the grant to Mr. Pushkantser of options to
acquire up to 400,000 shares of the Company's common stock under the Company's
2009 Equity Compensation Plan.
Mr.
Pushkantser Post-Termination Payment Obligations:
Expiration
of Term
If Mr.
Pushkantser elects not to renew his employment for an additional term, the
Company will pay to Mr. Pushkantser the base salary and benefits otherwise
payable to him under his employment agreement, pro rata through the last day of
his actual employment by the Company.
If the
Company elects not to renew Mr. Pushkantser’s employment for any Additional
Term, the Company will pay to Mr. Pushkantser (1) severance equal to 12 months
of base salary then applicable under his employment agreement (2) an amount
equal to the average bonus paid to Mr. Pushkantser for the most recent two years
of the initial term or additional term under his employment agreement, and (3)
for the period that Mr. Pushkantser is receiving severance, an additional amount
equal to the Company's then applicable contribution to Mr. Pushkantser’s
standard full-time health benefits, or, if greater, the amount Mr. Pushkantser
would be required to pay to maintain full-time health benefits under
COBRA.
Termination
for Cause
If the
Company terminates Mr. Pushkantser’s employment for cause under his employment
agreement, the Company will pay to Mr. Pushkantser (1) severance equal to 6
months of base salary then applicable under his employment agreement (2) an
amount equal to the average Bonus paid to Mr. Pushkantser for the most recent
two years of the Initial Term or additional term, and (3) for the period that
Mr. Pushkantser is receiving severance, an additional amount equal to the
Company's then applicable contribution to Mr. Pushkantser’s standard full-time
health benefits, or, if greater, the amount Mr. Pushkantser would be required to
pay to maintain full-time health benefits under COBRA.
46
Termination
Without Cause
(a) If
the Company terminates Mr. Pushkantser’s employment under his employment
agreement for any reason other than for cause at any time during the original
term or any additional term, the Company will pay to Mr. Pushkantser (1)
severance equal to 12 months of base salary then applicable under his employment
agreement (2) an amount equal to the average Bonus paid to Mr. Pushkantser for
the most recent two years of the initial term or additional term, and (3) for
the period that Mr. Pushkantser is receiving severance, an additional amount
equal to the Company's then applicable contribution to Mr. Pushkantser’s
standard full-time health benefits or, if greater, the amount Mr. Pushkantser
would be required to pay to maintain full-time health benefits under
COBRA.
Jeff
Burkland:
Term:
March 1,
2009 through September 1, 2009 (month-to-month thereafter)
Position/Services:
Chief
Financial Officer. CFO Support: Financial Modeling, Accounting, Financial
Statement production, HR advice and support, Fundraising support, Tax return
assistance, Management reports, strategic advice.
Business
Plan Development: Assistance with production of documenting the company’s
business plan to help with fundraising.
Salary:
Hourly
fee of $187.50 plus an immediately vested option to purchase 150 shares of
common stock at an exercise price of $0.50 per share. Any options shall be
exercisable for at least five years and include standard terms for long
expiration options.
Flat fee
of $2,000 per month, beginning March 1, 2009, plus options to purchase 100,000
shares of common stock, as outlined in the separate Stock Option Purchase
Agreement. This work will terminate on September 1, 2009, unless otherwise
extended by mutual agreement of both parties or terminated earlier as provided
for in this agreement.
Lee
Smith:
Term:
Commencing
on June 1, 2009 and ending on June 1, 2014.
Position/Services:
Chief
Marketing Officer of the Company, and will perform the duties commensurate with
such positions and such other duties as the Company's Board of Directors (the
"Board") or the Chairman may assign to Executive consistent with his position.
Executive will devote attention and energies on a part-time basis to the above
duties, and Executive will maintain, during the term of this Agreement, the
ability to actively engage in any other for profit business
activity.
Salary:
Common
stock in the amount of 60,000 shares per year, in twelve monthly installments.
Has received stock options in the amount of 800,000, exercisable at $0.50 per
share subject to a vesting schedule.
47
Eugene
Gribov
Term:
Commencing
on June 1, 2009 and ending on June 1, 2014.
Position/Services:
Chief
Technology Officer of the Company, and will perform the duties commensurate with
such positions and such other duties as the Company's Board of Directors (the
"Board") or the Chairman may assign to Executive consistent with his position.
Executive will devote attention and energies on a part-time basis to the above
duties, and Executive will maintain, during the term of this Agreement, the
ability to actively engage in any other for profit business
activity.
Salary:
Common
stock in the amount of 60,000 shares per year, in twelve monthly installments.
Has received stock options in the amount of 50,000, exercisable at $0.50 per
share subject to a vesting schedule.
Dr.
Leonid Topper:
Term:
Commencing
on April 1, 2009 and ending on April 1, 2014.
Position/Services:
Chief
Medical Officer of the Company, and will perform the duties commensurate with
such positions and such other duties as the Company's Board of Directors (the
"Board") or the Chairman may assign to Executive consistent with his position.
Executive will devote attention and energies on a part-time basis to the above
duties, and Executive will maintain, during the term of this Agreement, the
ability to actively engage in any other for profit business
activity.
Salary:
Common
stock in the amount of 60,000 shares per year, in twelve monthly installments.
Has received stock options in the amount of 50,000, exercisable at $0.50 per
share subject to a vesting schedule.
Significant
Employees
We have
no significant employees other than our executive officers and directors named
in this prospectus. We conduct our business through agreements with consultants
and arms-length third parties.
Committees
of the Board of Directors
Our audit
committee presently consists of our officers and sole director. We do not have a
compensation committee, nominating committee, an executive committee of our
board of directors, stock plan committee or any other committees.
Code
of Ethics
We have
adopted a Code of Ethics and Code of Business Conduct that applies to our
officers and directors, and critical employees. The Code of Ethics and Code of
Business Conduct are attached to this registration statement as Exhibits 14.1
and 14.2, respectively.
48
Term
of Office
Our
director is appointed for a one-year term to hold office until the next annual
general meeting of our stockholders or until removed from office in accordance
with our bylaws.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth information regarding beneficial ownership as of the
date of this Prospectus by (i) each Named Executive Officer, (ii) each member of
our Board of Directors, (iii) each person deemed to be the beneficial owner of
more than five percent (5%) of any class of our common stock, and (iv) all of
our executive officers and directors as a group. Unless otherwise indicated,
each person named in the following table is assumed to have sole voting power
and investment power with respect to all shares of our common stock listed as
owned by such person. Unless otherwise noted, the address for each reporting
person below is c/o Baeta Corp., 1 Bridge Plaza, 2nd Floor,
Suite 275, Fort Lee, NJ 07024.
As of
the date of this Prospectus, we have 22,501,052 shares of common stock issued
and outstanding and 100 shares of the Series A Preferred Stock issued and
outstanding.
Name and Position
|
Shares of
Common Stock(1)
|
Percentage of
Class
(Common)
|
Shares of
Preferred
Stock(1) (2)
|
Percentage of
Class
(Preferred)
|
||||||||||||
Dr.
Alexander Gak
President
and Chairman
|
20,710,000 | 92.04 | % (3) | 100 | 100 | % | ||||||||||
Mr.
Jeff Burkland (4)
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
123,512 | 0.55 | % | 0 | 0.00 | % | ||||||||||
Dr.
Leonid Topper (5)
Chief
Medical Officer
|
62,500 | 0.28 | % | 0 | 0.00 | % | ||||||||||
Mr.
Leonid Pushkantser (6)
Chief
Executive Officer
(Principal
Executive Officer)
|
11,667 | 0.05 | % | 0 | 0.00 | % | ||||||||||
Mr.
Eugene Gribov (7)
Chief
Technology Officer
|
35,000 | 0.16 | % | 0 | 0.00 | % | ||||||||||
Mr.
Lee Smith (8)
Chief
Marketing Officer
|
295,815 | (8) | 1.30 | % | 0 | 0.00 | % | |||||||||
Directors
and Officers as a group (6 people)
|
21,238,494 | 93.56 | % (3) | 100 | 100 | % |
Footnotes:
(1)
|
As
of January 11, 2010, we had 22,501,052 shares of our common stock issued
and outstanding and 100 shares of our Series A Preferred Stock (the
“Series A Preferred Shares”) issued and outstanding which together
represents an aggregate of 22,501,152 voting
securities.
|
49
(2)
|
Each
of the Series A Preferred Shares maintains preferential voting rights to
the holder equivalent to 80% of the total votes of common
shares.
|
(3)
|
Dr.
Gak individually owns 20,000,000 shares of the Company’s common stock. His
spouse, Marina Suni individually owns 320,000; Extranome, Inc., a
corporation wholly owned by Dr. Gak currently owns 390,000 shares of the
Company’s common stock (as of January 14, 2010); therefore Dr. Gak
beneficially owns
20,710,000.
|
(4)
|
Mr.
Jeff Burkland was issued stock options to purchase 123,512 shares at a
purchase price of $0.50 per share. Such options are exercisable within a
sixty day period; therefore, they are being reported as beneficial
ownership per the SEC
regulations.
|
(5)
|
Dr.
Leonid Topper was issued stock options to purchase 50,000 shares at a
purchase price of $0.50 per share. Such options are not exercisable within
a sixty day period; therefore, they are not being reported as beneficial
ownership per the SEC
regulations.
|
(6)
|
Mr.
Leonid Pushkantser was issued stock options to purchase 400,000 shares at
a purchase price of $0.50 per share. Such options are not exercisable
within a sixty day period; therefore, they are not being reported as
beneficial ownership per the SEC
regulations.
|
(7)
|
Mr.
Eugene Gribov was issued stock options to purchase 50,000 shares at a
purchase price of $0.50 per share. Such options are not exercisable within
a sixty day period; therefore, they are not being reported as beneficial
ownership per the SEC
regulations.
|
(8)
|
Mr.
Leroy Smith was issued stock options to purchase 800,000 shares at a
purchase price of $0.50 per share. According to the stock option
agreement, 200,000 worth (of the 800,000 issued to Mr. Smith) of options
will vest as of February 3, 2010. Such options are exercisable within a
sixty day period; therefore, they are being reported as beneficial
ownership per the SEC
regulations.
|
DESCRIPTION
OF SECURITIES
General
Under
our Certificate of Incorporation, we are authorized to issue an aggregate of
110,000,000 shares of capital stock, of which 100,000,000 are shares of common
stock, par value $0.0001 per share, or Common Stock and 10,000,000 are preferred
stock, par value $0.0001 per share, or Preferred Stock. As of the date hereof,
22,501,052 shares of our common stock are issued and outstanding, and there are
approximately 77 holders of record of our Common Stock. Currently there are 100
shares of Series A Preferred Stock issued and outstanding with one holder of
record, Dr. Alexander Gak, our President and Chairman of the Board of
Directors.
Common
Stock
Pursuant
to our bylaws, our common stock is entitled to one vote per share on all matters
submitted to a vote of the stockholders, including the election of directors.
Except as otherwise required by law or provided in any resolution adopted by our
board of directors with respect to any series of preferred stock, the holders of
our common stock possess all voting power. Generally, all matters to be voted on
by stockholders must be approved by a majority (or, in the case of election of
directors, by a plurality) of the votes entitled to be cast by all shares of our
common stock that are present in person or represented by proxy, subject to any
voting rights granted to holders of any preferred stock. Holders of our common
stock representing one-percent (1%) of our capital stock issued, outstanding and
entitled to vote, represented in person or by proxy, are necessary to constitute
a quorum at any meeting of our stockholders. A vote by the holders of a majority
of our outstanding shares is required to effectuate certain fundamental
corporate changes such as liquidation, merger or an amendment to our Certificate
of Incorporation. Our Certificate of Incorporation do not provide for cumulative
voting in the election of directors.
Subject
to any preferential rights of any outstanding series of preferred stock created
by our board of directors from time to time, the holders of shares of our common
stock will be entitled to such cash dividends as may be declared from time to
time by our board of directors from funds available therefore.
50
Subject
to any preferential rights of any outstanding series of preferred stock created
from time to time by our board of directors, upon liquidation, dissolution or
winding up of our company, the holders of shares of our common stock will be
entitled to receive, on a pro rata basis, all assets of our company available
for distribution to such holders.
In the
event of any merger or consolidation of our company with or into another company
in connection with which shares of our common stock are converted into or
exchangeable for shares of stock, other securities or property (including cash),
all holders of our common stock will be entitled to receive the same kind and
amount of shares of stock and other securities and property (including cash), on
a pro rata basis.
Holders
of our common stock have no pre-emptive rights, no conversion rights and there
are no redemption provisions applicable to our common stock.
Forward
Stock Split
On May
16, 2008, BAETA filed an amendment to the Company’s Certificate of Incorporation
with the Secretary of State of the State of New Jersey thereby effectuating a
forward stock split of 20,000-to-1, effective 12:01 a.m. on May 16, 2008. The
Company did not amend the par value of the Company’s common stock.
Prior
to the Forward Split, there were 1,000 shares of the Company’s common stock, par
value $0.0001 per share, issued and outstanding, all held by Dr. Alexander Gak,
our President and Director. Upon the effectiveness of the Forward Split as of
May 16, 2008, there became 20,000,000 shares of the Company’s Common Stock
issued and outstanding, all held by Dr. Gak. Currently, there are 22,501,052
shares of the Company’s common stock issued and outstanding to approximately 64
shareholders of record as of the date of this prospectus.
There
is no active market for our common stock.
Currently,
there is no active trading market for our common stock. Following the
effectiveness of this registration statement, we intend to request that a
broker-dealer/market maker submit an application to make a market for our common
stock shares on the OTC Bulletin Board. There can be no assurance, however, that
the application will be accepted or that any trading market will ever develop or
be maintained on the OTC Bulletin Board. Any trading market that may develop in
the future for our common stock will most likely be very volatile and numerous
factors beyond our control may have a significant effect on the market. Only
companies that report their current financial information to the SEC may have
their securities included on the OTC Bulletin Board. Therefore, only upon the
effective date of this registration statement will our common stock become
eligible to be quoted on the OTC Bulletin Board. In the event that we lose our
status as a "reporting issuer," any future quotation of our common stock on the
OTC Bulletin Board may be jeopardized.
Preferred
Stock
Our
Certificate of Incorporation authorizes our board of directors to issue up to
10,000,000 shares of preferred stock in one or more designated series, each of
which shall be so designated as to distinguish the shares of each series of
preferred stock from the shares of all other series and classes. Our board of
directors is authorized, within any limitations prescribed by law and our
Certificate of Incorporation, to fix and determine the designations, rights,
qualifications, preferences, limitations and terms of the shares of any series
of preferred stock including but not limited to the following:
(a)
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the
rate of dividend, the time of payment of dividends, whether dividends are
cumulative, and the date from which any dividends shall
accrue;
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(b)
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whether
shares may be redeemed, and, if so, the redemption price and the terms and
conditions of redemption;
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(c)
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the
amount payable upon shares of preferred stock in the event of voluntary or
involuntary liquidation;
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(d)
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sinking
fund or other provisions, if any, for the redemption or purchase of shares
of preferred stock;
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51
(e)
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the
terms and conditions on which shares of preferred stock may be converted,
if the shares of any series are issued with the privilege of
conversion;
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(f)
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voting
powers, if any, provided that if any of the preferred stock or series
thereof shall have voting rights, such preferred stock or series shall
vote only on a share for share basis with our common stock on any matter,
including but not limited to the election of directors, for which such
preferred stock or series has such rights;
and
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(g)
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subject
to the above, such other terms, qualifications, privileges, limitations,
options, restrictions, and special or relative rights and preferences, if
any, of shares or such series as our board of directors may, at the time
so acting, lawfully fix and determine under the laws of the State of New
Jersey.
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As of the
date of this Registration, we have 100 shares of Series A Preferred Stock issued
and outstanding, which shares are all held by Dr. Alexander Gak, our President
and Chairman. The shares of Series A Preferred Stock vote together with our
shares of common stock as a single class and, regardless of the number of shares
of Series A Preferred Stock outstanding and as long as at least one of such
shares of Series A Preferred Stock is outstanding, shall represent eighty
percent (80%) of all votes entitled to be voted at any of our annual or special
meeting of shareholders or action by written consent of shareholders. Each
outstanding share of the Series A Preferred Stock shall represent its
proportionate share of the 80% which is allocated to the outstanding shares of
Series A Preferred Stock.
Dividend
Policy
We have
never declared or paid any cash dividends on our common stock. We currently
intend to retain future earnings, if any, to finance the expansion of our
business. As a result, we do not anticipate paying any cash dividends in the
foreseeable future.
Share
Purchase Warrants
We have
not issued and do not have outstanding any warrants to purchase shares of our
common stock.
Options
Pursuant
to its 2009 Stock Option Plan, the Company has issued stock options to purchase
1,600,000 shares of common stock at $0.50 per share, subject to different
vesting schedules. All stock option grants were issued in 2009.
On
January 25, 2009, the Company granted stock options to Dr. Samyaden Datta. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Samyaden Datta in consideration for his service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
Sub-Total: 50,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
January 29, 2009, the Company granted stock options to Dr. Alex Y. Bekker. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Bekker in consideration for his service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
52
Sub-Total: 100,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
February 3, 2009, the Company granted stock options to Leroy Smith. The stock
option agreement is exercisable for 800,000 shares of the Company’s common stock
for a purchase price of $0.50 per share. The stock options were granted to Mr.
Smith in consideration for marketing consultation services rendered, and the
Company relied upon the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the grant of such options did not involve a public offering of
securities.
Sub-Total: 900,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
February 7, 2009, the Company granted stock options to Dr. Marco Pappagallo. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Marco Pappagallo in consideration for his service as a Member of the
Company’s Scientific Advisory Board for the year 2009, and the Company relied
upon the exemption from registration requirements of the Securities Act of 1933,
as amended, provided under Section 4(2) promulgated thereunder as the grant of
such options did not involve a public offering of securities.
Sub-Total: 950,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
February 19, 2009, the Company granted stock options to Dr. Lauren Shaiova. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Shaiova in consideration for her service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
Sub-Total: 1,000,000
shares of Common Stock underlying Options outstanding after this
issuance.
On
February 26, 2009, the Company granted stock options to Mr. Jeff Burkland. The
stock option agreement is exercisable for 100,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Mr. Burkland in consideration for his service as the Company’s Chief Financial
Officer for the year 2009, and the Company relied upon the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the grant of such options did not
involve a public offering of securities.
Sub-Total: 1,100,000
shares of Common Stock underlying Options outstanding after this
issuance.
On March
21, 2009, the Company granted stock options to Dr. Leonid Topper. The stock
option agreement is exercisable for 50,000 shares of the Company’s common stock
for a purchase price of $0.50 per share. The stock options were granted to Dr.
Topper in consideration for his service as the Company’s Chief Medical Officer
for the year 2009, and the Company relied upon the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the grant of such options did not involve a
public offering of securities.
Sub-Total: 1,150,000
shares of Common Stock underlying Options outstanding after this
issuance.
On April
21, 2009, the Company granted stock options to Eugene Gribov. The stock option
agreement is exercisable for 50,000 shares of the Company’s common stock for a
purchase price of $0.50 per share. The stock options were granted to Mr. Gribov
in consideration for his service as the Company’s Chief Tech Officer for the
year 2009, and the Company relied upon the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the grant of such options did not involve a
public offering of securities.
53
Sub-Total: 1,200,000
shares of Common Stock underlying Options outstanding after this
issuance.
On May
29, 2009, the Company granted stock options to Leonid Pushkantser. The stock
option agreement is exercisable for 400,000 shares of the Company’s common stock
for a purchase price of $0.50 per share. The stock options were granted to Mr.
Pushkantser in consideration for his service as the Company’s Chief Executive
Officer for the year 2009, and the Company relied upon the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the grant of such options did not
involve a public offering of securities.
Sub-Total:
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1,600,000
shares of Common Stock underlying Options outstanding after this
issuance.
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To date,
Mr. Jeff Burkland has received additional stock options with immediate vesting
rights exercisable for 23,512 shares of common stock at a purchase price of
$0.50 per share pursuant to his employment agreement attached to this
registration statement as Exhibit 10.9.1, The stock options (see Exhibit 10.9.2)
were granted to Mr. Burkland in consideration for his service as the Company’s
Chief Financial Officer, and the Company relied upon the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the grant of such options did not
involve a public offering of securities.
Total:
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1,623,512
shares of Common Stock underlying Options outstanding after this issuance,
and as of the date of this Registration
Statement.
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Convertible
Securities
We have
not issued, and do not have outstanding, any securities convertible into shares
of our common stock or any rights convertible or exchangeable into shares of our
common stock.
INTERESTS
OF NAMED EXPERTS AND COUNSEL
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the common stock was employed on a contingency basis, or had, or
is to receive, in connection with the offering, a substantial interest, direct
or indirect, in our company or any of its parents or subsidiaries. Nor was any
such person connected with our company or any of its parents or subsidiaries as
a promoter, managing or principal underwriter, voting trustee, director,
officer, or employee.
EXPERTS
The
Sourlis Law Firm, Virginia K. Sourlis, Esq. has assisted us in the preparation
of this prospectus and registration statement and will provide counsel with
respect to other legal matters concerning the registration and offering of the
common stock. The Sourlis Law Firm has consented to being named as an expert in
the Company’s registration statement, of which this prospectus forms a part.
This consent has been filed as an exhibit to the registration
statement.
W.T.
Uniack & Co., CPAs, P.C., our certified public accountants, have audited our
financial statements included in this prospectus and registration statement to
the extent and for the periods set forth in their audit reports. W.T. Uniack
& Co., CPAs, P.C. has presented its report with respect to our audited
financial statements. The report of W.T. Uniack & Co., CPAs, P.C. is
included in reliance upon their authority as experts in accounting and auditing.
Their consent to being named as Experts is filed as Exhibit 23.1 to the
Registration Statement of which this Prospectus is a part.
54
DISCLOSURE
OF COMMISSION POSITION OF
INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our
Articles of Incorporation and Bylaws provide no director shall be liable to the
corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except with respect to (1) a breach of the
director’s duty of loyalty to the corporation or its stockholders, (2) acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (3) liability which may be specifically defined by law or (4)
a transaction from which the director derived an improper personal benefit, it
being the intention of the foregoing provision to eliminate the liability of the
corporation’s directors to the corporation or its stockholders to the fullest
extent permitted by law. The corporation shall indemnify to the fullest extent
permitted by law each person that such law grants the corporation the power to
indemnify.
We have
been advised that, in the opinion of the SEC, indemnification for liabilities
arising under the Securities Act is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities is asserted by one of our directors,
officers, or controlling persons in connection with the securities being
registered, we will, unless in the opinion of our legal counsel, submit the
question of whether such indemnification is against public policy to a court of
appropriate jurisdiction.
ORGANIZATION
WITHIN LAST FIVE YEARS
See
“Certain Relationships and Related Transactions.”
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
You
should read the following discussion together with "Selected Historical
Financial Data" and our consolidated financial statements and the related notes
included elsewhere in this prospectus. This discussion contains forward-looking
statements, which involve risks and uncertainties. Our actual results may differ
materially from those we currently anticipate as a result of many factors,
including the factors we describe under "Risk Factors," "Special Note Regarding
Forward-Looking Statements" and elsewhere in this prospectus.
Forward
Looking Statements
Some of
the information in this section contains forward-looking statements that involve
substantial risks and uncertainties. You can identify these statements by
forward-looking words such as "may," "will," "expect," "anticipate," "believe,"
"estimate" and "continue," or similar words. You should read statements that
contain these words carefully because they:
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·
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discuss
our future expectations;
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·
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contain
projections of our future results of operations or of our financial
condition; and
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·
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state
other "forward-looking"
information.
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We
believe it is important to communicate our expectations. However, there may be
events in the future that we are not able to accurately predict or over which we
have no control. Our actual results and the timing of certain events could
differ materially from those anticipated in these forward-looking statements as
a result of certain factors, including those set forth under "Risk Factors,"
"Business" and elsewhere in this prospectus. See "Risk
Factors."
55
Unless
stated otherwise, the words “we,” “us,” “our,” “the Company” or “BAETA” in this
prospectus collectively refers to the Company, Baeta Corp.
Organizational
History
BAETA
Corp. (a development stage company) (“the Company”) was incorporated in the
State of New Jersey on August 14, 2007 as a product-driven medical technology
company that manufactures advanced products for the global vital signs
monitoring industry. The Company has developed a patent-pending pain management
and pain assessment product for the estimated 25 million chronic pain sufferers
in the U.S. alone.
All
activity through September 30, 2009 relates to the Company’s formation and
initial research and development.
The
Company is considered to be a development stage company and as such the
financial statements presented herein are presented in accordance with Statement
of Financial Accounting Standards (“SFAS”) No. 7. “Accounting and Reporting By
Development Stage Enterprises.” The Company is subject to the risks associated
with activities of development stage companies.
Forward
Stock Split
On May
16, 2008, BAETA filed an amendment to the Company’s Certificate of Incorporation
with the Secretary of State of the State of New Jersey thereby effectuating a
forward stock split of 20,000-to-1, effective 12:01 a.m. on May 16, 2008. The
Company did not amend the par value of the Company’s common stock.
Prior
to the Forward Split, there were 1,000 shares of the Company’s common stock, par
value $0.0001 per share, issued and outstanding, all held by Dr. Alexander Gak,
our President and Director. Upon the effectiveness of the Forward Split as of
May 16, 2008, there became 20,000,000 shares of the Company’s Common Stock
issued and outstanding, all held by Dr. Gak. Currently, there are 22,501,052
shares of the Company’s common stock issued and outstanding to approximately 77
shareholders of record as of the date of this prospectus.
Plan
of Operations
We
anticipate that the Company will require approximately $1,000,000 to $1,500,000
in additional capital to execute its current 12-month plan of operations;
including but not necessarily limited to expenses related to the patents pending
for its developing products and technology, expansion of infrastructure and
physical office space, hiring of key employees and sales and administrative and
executive personnel as well as for the registration of its shares and compliance
with securities regulations. We do not currently have sufficient capital to meet
our needs for the next 12 months, and we are extremely reliant upon future
financings to fund our operations. We intend procure this additional capital by
way of private offerings of our common stock, exempt from the registration
requirements of the Federal and state securities laws. We may retain the
services of one or more placement agents to obtain this financing. To date, we
have been in discussions with potential placement agents regarding the
commencement of such private offerings, however, no such private offerings have
yet commenced.
During
the next 12 months, we intend to continue to outsource our product research and
development to Ionidea Ukraine of Crimea, Ukraine for technical development and
prototyping and M.B. Turnkey Design, LLC of Manville, New Jersey for physical
product prototyping and production. We anticipate that we will incur costs of
approximately $10,000 to $20,000 per month for ongoing technology development.
We have started the MyHealthTrends™ For Pain
device manufacturing process with M.B. Turnkey Design, LLC of Manville, New
Jersey.
We
have also obtained MyHealthTrends™ For
Pain device manufacturing quotes from Ultraflex, Ronkonkoma, New
York, and OCM Manufacturing, Ontario, Canada. We expect that the cost of
production will be significantly lower than the average sale price of the
product and that terms will be predicated on actual product ordered at any given
time. We anticipate that we will use additional capital to hire sales
personnel and administrative and executive personnel at a level consistent with
available capital, but aggressively to support initial product sales and market
penetration. We do not believe that we can sustain or execute our plan of
operations, nor bring our proposed products to market without additional capital
of approximately $1,000,000 to $1,500,000.
56
Exclusive
Software Agreement
On
September 16, 2008, Dr. Alexander Gak, our President and Chairman, and
Extranome, Inc., a New Jersey corporation entered into an Exclusive Software
Agreement (the “Agreement”). Pursuant the Agreement, Extranome sold to Baeta
Corp. all commercial rights to its software entitled MyHealthID Medical Records
Systems for a twenty five year term. Pursuant to the Agreement, the Company
agreed to pay Extranome $0.00 upfront, and in perpetuity approximately
forty-nine percent of all net revenues generated from advertising by MyHealthID.
Our President and sole director, Dr. Alexander Gak, is the 100% owner of
Extranome, Inc., a New Jersey corporation.
Software
Development Agreement with Extranome, Inc.
On
November 1, 2008, BAETA Corp. entered into a Software Development Contract with
Extranome, Inc. At the time of the transaction, BAETA and Extranome were
controlled by Dr. Alexander Gak, our President and Chairman. This Exclusive
Software Agreement is attached to this prospectus as Exhibit
10.12.
Pursuant
to the Software Development Agreement, Extranome has been providing ongoing
software development and product support services for BAETA since November 01,
2008. The Software Development Agreement is a non-exclusive agreement and is not
related to BAETA’s Exclusive Software Agreement (Exhibit 10.1) regarding
MyHealthID product. In accordance with Section 2 of the Software Development
Agreement, BAETA is to pay Extranome for the contracted work in cash form;
however BAETA currently does not have a sufficient amount of cash on hand.
Therefore, BAETA is paying Extranome 50% in shares of its common stock, and 50%
in cash. Extranome has received 30,000 for each month since November as non-cash
part of compensation for services rendered which represent approximately 50% of
Extranome’s due monthly compensation, and to date has received
390,000 shares of BAETA Corp. BAETA will continue to issue company shares to
Extranome in the amount of 50% of the monthly compensation for services rendered
until it is able to compensate Extranome fully in cash.
As of
December 31, 2008, Extranome had received approximately $30,000 in cash and
60,000 shares of Common Stock of BAETA Corp. pursuant to the Software
Development Agreement. As of the most recent quarter ended September 30, 2009,
Extranome had received approximately $115,000 in cash and 300,000 shares of
Common Stock in BAETA Corp. As of September 30, 2009, BAETA owes approximately
$50,000 in cash to Extranome, and $15,000 worth of common stock, which has been
classified as an accounts payable on the Company’s financial statements. As of
the date of this registration statement, BAETA owes approximately $80,000 in
cash and $15,000 worth of common stock. Due to the fact that Dr. Gak owns 100%
of Extranome, the payment arrangement between Extranome and BAETA Corp. is
required to be reported as executive compensation with respect to Dr.
Gak.
Going
Concern
The
Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going concern
that contemplates the realization of assets and liquidation of liabilities in
the normal course of business.
The
Company’s accumulated operating loss since inception is ($1,087,193). As of
September 30, 2009, the Company has total liabilities of $499,374 compared to
total assets of $224,894, limited cash on hand in the amount of $1,924, and
stockholders’ deficit of ($274,480).
The
Company will actively pursue its business activities, offer noncash
consideration, secure additional or refinance the debt and/or raise equity as a
means of financing its operations and meet the credit obligations. If the
Company is unable to return to its profitability or obtain necessary financing,
it may substantially curtail or terminate its operations or seek other business
opportunities through strategic alliances, acquisitions or other arrangements
that may dilute the interests of existing stockholders. The company’s management
is currently seeking additional capital to support operations, but has not
received any firm or other commitments from any parties and may or may not, be
successful in obtaining capital sufficient to perpetuate the operations of the
Company.
57
Evolving
Industry Standards; Rapid Technological Changes
The
Company's success in its business will depend in part upon its continued ability
to enhance its existing products and services, to introduce new products and
services quickly and cost effectively to meet evolving customer needs, to
achieve market acceptance for new product and service offerings and to respond
to emerging industry standards and other technological changes. There can be no
assurance that the Company will be able to respond effectively to technological
changes or new industry standards. Moreover, there can be no assurance that
competitors of the Company will not develop competitive products, or that any
such competitive products will not have an adverse effect upon the Company's
operating results.
Moreover,
management intends to continue to implement "best practices" and other
established process improvements in its operations going forward. There can be
no assurance that the Company will be successful in refining, enhancing and
developing its operating strategies and systems going forward, that the costs
associated with refining, enhancing and developing such strategies and systems
will not increase significantly in future periods or that the Company's existing
software and technology will not become obsolete as a result of ongoing
technological developments in the marketplace.
Sufficiency
of Cash Flows
Because
current cash balances and projected cash generation from operations are not
sufficient to meet the Company's cash needs for working capital and capital
expenditures, management intends to seek additional equity or obtain additional
credit facilities. The sale of additional equity could result in additional and
substantial dilution to the Company's shareholders. A portion of the Company's
cash may be used to acquire or invest in complementary businesses or products or
to obtain the right to use complementary technologies. From time to time, in the
ordinary course of business, the Company evaluates potential acquisitions of
such businesses, products or technologies.
Restatement
of 2008 Financial Results
On May
26, 2009, Stan J.H. Lee, CPA, CMA, declined to stand for re-election as auditor
of BAETA Corp. This decision came with approval by BAETA’s sole director, Dr.
Alexander Gak.
Subsequently,
the Company hired W.T. Uniack & Co., CPAs, P.C. as independent public
auditor going forward, as of 6/30/2009. At this time, Management conducted a
review of the December 31, 2008 audited financial statements, and determined
that many material errors were present necessitating a re-audit, and as such,
directed W.T. Uniack & Co., CPAs, P.C. to re-audit the Company financials
for the year ending December 31, 2008. The re-audited and corrected financial
statements for the year ending December 31, 2008, are now provided. The errors
resulted in a change in Net Income Before Tax from ($596,661) to ($547,700) and
Net Income from ($597,193) to ($548,200).
Results of Operations for
the fiscal year ended December 31, 2008 compared to December 31,
2007.
1.
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Assets.
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a.
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Cash. The Company’s cash
increased 42.61% from $10,150 for the fiscal year ended December 31, 2007
to $14,475 as of December 31, 2008.The increase is attributable to
proceeds from the sale of common stock and multiple loans for the
company’s primary shareholder.
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b.
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Total Assets. Total
Assets increased 687.43%, from $10,471 as of December 31, 2007 to $82,452
as of December 31, 2008 as a result of the acquisition of property, the
rescission of previously realized tax assets and various
deposits.
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2.
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Liabilities.
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a.
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Shareholder Advance.
Shareholder Advance increased to $182,600 as of December 31, 2008.
The advances have been made in multiple installments by the Company’s
founder and CEO. Shareholder Advance is accounted for as a long-term
liability, although there are no contractual stated rates or terms for
repayment between the Company and its Founder & CEO at this time. The
Company intends to repay the advances, possibly with reasonable interest,
when funds are available to do so without negatively impacting the overall
financial condition of the
Company.
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58
On August
19, 2009, the Company and Dr. Alexander Gak entered into an agreement to
document the terms of the Shareholder Advance. The agreement converted the
advance into a loan. The material terms are that the Company will owe an
interest rate of 8% per year, beginning on August 19, 2009, for the outstanding
loan amount. The company will begin payment of the principal and accrued
interest only after the Company’s operating checking account exceeds $250,000 in
net cash on hand, at which time the company will pay $5,000 per month. Any
principal and accrued interest not already repaid is due on August 18, 2019. The
Company is allowed to pre-pay the note without penalty, but the debt-holder does
not have the right to demand pre-payment.
3.
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Stockholder’s
Equity.
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a.
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Common Stock. The value
of the Company’s common equity decreased 2,112% from December 31, 2007 to
December 31, 2008, as the Company continued to record operating losses
during its development phase in the form of accumulated deficits of
approximately $559,729 at December 31,
2008.
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b.
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Retained Earnings. The
Company’s Accumulated Deficit increased 5,179.92% from December 31, 2007,
to December 30, 2008. The increase is attributable to the increase in
operating expenditures and development costs of the company’s products
during the development stages of the
Company.
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4.
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Revenue & Sales. The
Company is a development stage company and as of December 31, 2008, did
not generate any substantial revenue from
sales.
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5.
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Amortization Expense.
Amortization Expense increased approximately 744% from December 31, 2007
to December 31, 2008, from $29 to $245, respectively. This change is
attributable to the realization of amortization expense for tangible and
intangible assets acquired and capitalized by the Company during the
period.
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6.
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Software Development Expense.
Software development costs for the period ended December 31, 2008
were $73,412. The Company has expensed approximately $73,412 to date in
the development of proprietary software that supports and integrates with
its commercial products.
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7.
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Other Miscellaneous Operating
Expenses. Other miscellaneous operating expenses for the fiscal
year ended December 31, 2008 were $471,629. Total operating expenses for
the fiscal year ended December 31, 2007 were $2,500. Other miscellaneous
operating increased because of an increase in all elements of the daily
operations of the Company, including increases in consulting fees for
general administration from $2,500 for fiscal year ended December 31, 2007
to $269,475 for fiscal year ended December 31, 2008, marketing from $0 for
fiscal year ended December 31, 2007 to $52,388 for fiscal year ended
December 31, 2008, legal fees from $0 for fiscal year ended December 31,
2007 to $71,857 for fiscal year ended December 31, 2008, accounting fees
from $0 for fiscal year ended December 31, 2007 to $11,680 for fiscal year
ended December 31, 2008, and various other regular operating
expenses.
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8.
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Net Loss. Net loss for
fiscal years ended December 31, 2008 and December 31, 2007 were ($548,200)
and ($11,529), respectively. The Company’s total Net Loss since inception
to December 31, 2008 was
($559,729).
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Liquidity and Capital
Resources; Going Concern
Cash Balance. At December 31,
2008, we had $14,475 cash on-hand and our stockholder’s deficit was ($176,559),
and there is substantial doubt as our ability to continue as a going concern. We
anticipate incurring losses in the near future. We do not have an established
source of revenue sufficient to cover our operating costs
in the next 12 months. Our ability to continue as a going concern is dependent
upon our ability to successfully compete, operate profitably and/or raise
additional capital through other means. If we are unable to reverse our losses,
we will have to discontinue operations.
59
Results of Operations at
September 30, 2009 compared to December 31, 2008
Assets. Our
total assets were $224,894 at September 30, 2009 compared to $82,452 as of
December 31, 2008 primarily as a result of the acquisition of property, the
development of our Software Asset, and reductions in cash and
inventory.
Liabilities. Our total
liabilities were $499,374 at September 30, 2009 compared to $259,001 at December
31, 2008. This increase was primarily due to an increase in Accounts Payable, an
increase in Other Current Liabilities, and an increase in the Shareholder
Note.
Total Stockholders’ Deficit.
Our stockholders’ deficit was $274,480 at September 30, 2009 compared to
$176,559 at December 31, 2008. This increase in deficit was primarily due to
increased losses offset some by additional paid in capital.
Results of Operations for
the three months ended September 30, 2009 compared to the three months ended
September 30, 2008.
Revenues. No
revenue was recorded in either period.
Research & Development
expenses. Research & Development costs were $0 for the
three months ended September 30, 2009, compared to $28,350 for the three months
ended September 30, 2008. The decrease in research & development costs for
this time period is attributed to the elimination of non-capitalized direct
expenses on development.
Sales & Marketing
expenses. Sales & Marketing costs were $40,463 for the
three months ended September 30, 2009, compared to $0 for the three months ended
September 30, 2008. The increase in sales & marketing costs for this time
period is attributed to initial marketing efforts related to company
products.
Other miscellaneous operating
expenses. Other miscellaneous operating expenses include
general and administrative expenses, legal and professional fees. Our total
operating expenses were $177,506 for the three months ended September 30, 2009,
compared to $152,928 for the three months ended September 30, 2008. The increase
in operating expenses for this time period is attributed to an increase in
general expenses, including hiring a full-time CEO.
Net Loss. We had a net loss
of $223,386 for the three months ended September 30, 2009, compared to a net
loss of $181,383 for the three months ended September 30, 2008. This increase in
net loss is due primarily to an increase in Sales & Marketing and Other
Miscellaneous Expenses.
Results of Operations for
the nine months ended September 30, 2009 compared to the nine months ended
September 30, 2008.
Revenues. Our
revenues were $9,003 for the nine months ended September 30, 2009. We did not
have any revenue for the nine months ended September 30, 2008. The increase in
revenue was due to a sale of several units of the My Pain Away beta products to
one customer. The units were delivered upon receipt of payment from
the customer. As stated in the Company’s Revenue Recognition policy,
the Company has no significant post delivery obligations and the customer does
not have any significant refund rights, acceptance terms, discounts, or other
terms that serve to reduce the amount recorded relative to the sales price nor
to delay the timing of recognition of revenue.
Research & Development
expenses. Research & Development costs were $0 for the
nine months ended September 30, 2009, compared to $50,587 for the nine months
ended September 30, 2008. The decrease in research & development costs for
this time period is because development costs began being capitalized after
reaching technological feasibility. The decrease in Research &
Development is attributable to the determination of technological feasibility
being achieved and no further Research & Development expenses have been
incurred, whether amortization of previously capitalized expenditures or new
Research & Development Expenses.
60
Sales & Marketing
expenses. Sales & Marketing costs were $81,825 for the
nine months ended September 30, 2009, compared to $0 for the three months ended
September 30, 2008. The increase in sales & marketing costs for this time
period is attributed to initial marketing efforts related to company
products.
Other miscellaneous operating
expenses. Other miscellaneous operating expenses include
software development fees, general and administrative expenses, legal and
professional fees. Our total operating expenses were $444,266 for the nine
months ended September 30, 2009, compared to $372,184 for the nine months ended
September 30, 2008. The increase in operating expenses for this time period is
attributed to an increase in general expenses, including hiring a full-time
CEO.
Net Loss. We had a net loss
of $527,464 for the nine months ended September 30, 2009, compared to a net loss
of $422,879 for the nine months ended September 30, 2008. This increase in net
loss is due primarily to an increase in Sales & Marketing and Other
Miscellaneous Expenses.
Liquidity and Capital
Resources; Going Concern
Cash Balance. At September
30, 2009, we had $1,924 cash on-hand and our stockholder’s deficit was
($274,480), and there is substantial doubt as our ability to continue as a going
concern. We anticipate incurring losses in the near future. We do not have an
established source of revenue sufficient to cover our operating costs
in the next 12 months. Our ability to continue as a going concern is dependent
upon our ability to successfully compete, operate profitably and/or raise
additional capital through other means. If we are unable to reverse our losses,
we will have to discontinue operations. To date, we have primarily funded our
operations through the sale of our equity securities in private transactions, as
well as advances and a note from our sole Director and President, Dr. Gak which
total $291,583 as of September 30, 2009.
From the
period of August through September of 2008, the Company conducted an offering of
its common stock solely to accredited investors. The offering was conducted in
accordance with exemptions from registration pursuant to Section 4(2) and Rule
506 of Regulation D under the Securities Act. As of the close of the offering on
September 25, 2008, the Company had sold approximately 930,400 shares of its
common stock to approximately 44 accredited investors, and had raised an
aggregate of $232,600. The Company’s President and Director, Dr. Alexander Gak’s
spouse, Marina Suni was a participant to this offering, purchasing 320,000
shares of common stock at the purchase price of $0.25 per share, for an
aggregate purchase price of $80,000. By law, her shares are not being registered
for sale in this registration statement.
Off
–Balance Sheet Operations
The
Company does not have any off-balance sheet operations.
CRITICAL
ACCOUNTING POLICIES
The
Company’s financial statements included herein were prepared in accordance with
United States generally accepted accounting principles. Significant accounting
policies are as follows:
|
a.
|
Use of
Estimates
|
The
preparation of financial statements, in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions, which affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.
|
b.
|
Cash and Cash
Equivalents
|
Cash and
cash equivalents are considered to be all highly liquid investments purchased
with an initial maturity of three (3) months or less.
61
|
c.
|
Income
Taxes
|
The
Company complies with the provisions of SFAS No. 109 “Accounting for Income
Taxes”. Deferred income tax assets and liabilities are computed for differences
between the financial statement and tax bases of assets and liabilities that
will result in future taxable or deductible amounts and are based on enacted tax
laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established, when necessary,
to reduce deferred income tax assets to the amount expected to be
realized.
|
d.
|
Fair Value of
Financial Instruments
|
The
carrying value of cash equivalents, software development costs, and accrued
expenses approximates fair value.
|
e.
|
Revenue
Recognition
|
Revenue
is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue
Recognition in Financial Statements”. The Company recognizes revenue when the
significant risks and rewards of ownership have been transferred to the customer
pursuant to applicable laws and regulations, including factors such as when
there has been evidence of a sales arrangement, delivery has occurred, or
service have been rendered, the price to the buyer is fixed or determinable, and
collectability is reasonably assured.
Evidence
of a sales arrangement and a fixed or determinable price can be provided by a
purchase order from the customer or from the customer paying for and accepting
the product. Unless indicated differently in a contract between the
customer and the Company, the Company assumes delivery to have occurred and
title to have passed upon receipt of the product by the
customer. Because the Company does not have a history with its
customers yet, it assures collectability by recognizing revenue only after
payment for product is received.
The
Company has no significant post delivery obligations and its customers do not
have any significant refund rights, acceptance terms, discounts, or other terms
that serve to reduce the amount recorded relative to the sales price nor to
delay the timing of recognition of revenue.
|
f.
|
Software Development
Costs
|
The
Company complies with the provisions of SFAS No. 86 “Accounting for the Costs of Computer
Software to Be Sold, Leased, or Otherwise Marketed”. The
Software Application Asset is for software that will be used in the company’s
products and began being capitalized after technological feasibility was
established, which as required by SFAS No. 86, was after a working model was
delivered to BAETA Corp and the working model software was tested for
completeness, functionality, and consistency with expected product
design. The testing was performed by the vendor that developed and
delivered the product as well as by BAETA Corp and select potential
customers. Capitalized software costs will begin being amortized when
the software product is available for general release to
customers. The asset is reviewed for impairment at an executive
management meeting quarterly, during the review of the Company’s financial
results. Impairment is reviewed on a product-by-product basis by
comparing the unamortized capitalized costs to the asset’s net realizable
value. The amount by which the unamortized capitalized costs exceed
the net realizable value would be recognized as an impairment
charge.
|
g.
|
Stock
Options
|
The
Company complies with the provisions of SFAS No. 123R “Accounting for Stock-Based
Compensation”. The company uses the Black-Scholes-Merton
closed-form model to value it’s stock options. Using that model, the
Company includes as inputs to the model assumptions for the exercise price of
each option, the expected term of each option, the current price of the
underlying share, the expected volatility in the price of the underlying share
for the expected term of each option, the expected dividends on the underlying
share for the expected term of each option, and the risk free rate for the
expected term of each option.
62
The
exercise date of each option is included on the contractual agreements with each
compensated provider. To estimate the expected term of options, the
company used the “simplified” method as allowed in Staff Accounting Bulletin No.
110. The price of the underlying share is valued at the time of option
grant with the most relevant measurement at the time being either current stock
price of the company stock in a recent private placement or equity offering or
vendor invoice/contract that most closely reflects the value of services
performed or product delivered. Volatility is estimated by using the implied
volatility a comparable company that is public, with publicly traded options,
that is in a similar industry, with a similar product set, at a stage of life
and size as close to the Company as possible for the set of similar companies
with publicly traded options. The Company is using implied
volatility, because historic volatility for the Company does not exist and is
not practicable to obtain from comparable companies. There are no
dividends expected to be paid on the underlying shares during the expected term
of any options. And, the risk free rate is obtained from the yield on
a similar term U.S. Treasury.
|
h.
|
Stock
Compensation
|
Stock
issued for services rendered is valued at the time of service with the most
relevant measurement at the time being either current stock price of the company
stock in a recent private placement or equity offering or vendor
invoice/contract that most closely reflects the value of services performed
or product delivered.
Recent
Accounting Pronouncements
In April
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 164, “Not-for-Profit Entities: Mergers and
Acquisitions—Including an amendment of FASB Statement No. 142” (“SFAS
164”). The objective of this Statement is to improve the relevance,
representational faithfulness, and comparability of the information that a
not-for-profit entity provides in its financial reports about a combination with
one or more other not-for-profit entities, businesses, or nonprofit activities.
The Company does not believe that SFAS 164 will have an impact on the financial
statements.
In May
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 165, “Subsequent Events” (“SFAS
165”). The objective of this Statement is to establish general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. In
particular, this Statement sets forth:
1.
|
The
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial
statements
|
2.
|
The
circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its financial
statements
|
3.
|
The
disclosures that an entity should make about events or transactions that
occurred after the balance sheet
date.
|
In
accordance with this Statement, an entity should apply the requirements to
interim or annual financial periods ending after June 15, 2009. The Company does
not believe that SFAS 164 will have a significant impact on the financial
statements.
In June
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 166, “Accounting for Transfers of Financial
Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). The Board’s
objective in issuing this Statement is to improve the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor’s continuing involvement, if any,
in transferred financial assets. The Board undertook this project to address (1)
practices that have developed since the issuance of FASB Statement No. 140,
Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities, that
are not consistent with the original intent and key requirements of that
Statement and (2) concerns of financial statement users that many of the
financial assets (and related obligations) that have been derecognized should
continue to be reported in the financial statements of
transferors.
63
This
Statement must be applied as of the beginning of each reporting entity’s first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period and for interim and annual reporting
periods thereafter. Earlier application is prohibited. This Statement must be
applied to transfers occurring on or after the effective
date.
Additionally,
on and after the effective date, the concept of a qualifying special-purpose
entity is no longer relevant for accounting purposes. Therefore, formerly
qualifying special-purpose entities (as defined under previous accounting
standards) should be evaluated for consolidation by reporting entities on and
after the effective date in accordance with the applicable consolidation
guidance. If the evaluation on the effective date results in consolidation, the
reporting entity should apply the transition guidance provided in the
pronouncement that requires consolidation.
Additionally,
the disclosure provisions of this Statement should be applied to transfers that
occurred both before and after the effective date of this Statement. The Company
has not determined the impact of SFAS 166 on its financial position or results
of operations.
In June
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 167, “Amendments to FASB Interpretation No. 46(R)”
(“SFAS 167”). The Board’s objective in issuing this Statement is to improve
financial reporting by enterprises involved with variable interest entities. The
Board undertook this project to address (1) the effects on certain provisions of
FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest
Entities, as a result of the elimination of the qualifying
special-purpose entity concept in FASB Statement No. 166, Accounting for Transfers of
Financial Assets, and (2) constituent concerns about the application of
certain key provisions of Interpretation 46(R), including those in which the
accounting and disclosures under the Interpretation do not always provide timely
and useful information about an enterprise’s involvement in a variable interest
entity. This Statement shall be effective as of the beginning of each reporting
entity’s first annual reporting period that begins after November 15, 2009, for
interim periods within that first annual reporting period, and for interim and
annual reporting periods thereafter. Earlier application is prohibited. The
Company does not believe that SFAS 164 will have a significant impact on the
financial statements. In April
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 168, “The FASB Accounting Standards
CodificationTM and the
Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB
Statement No. 162” (“SFAS 168”). The FASB Accounting Standards
CodificationTM
(Codification) will become the source of authoritative U.S. generally accepted
accounting principles (GAAP) recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the Securities and
Exchange Commission (SEC) under authority of federal securities laws are also
sources of authoritative GAAP for SEC registrants. On the effective date of this
Statement, the Codification will supersede all then-existing non-SEC accounting
and reporting standards. All other nongrandfathered non-SEC accounting
literature not included in the Codification will become non-authoritative. This
Statement is effective for financial statements issued for interim and annual
periods ending after September 15, 2009.
Following
this Statement, the Board will not issue new standards in the form of
Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts.
Instead, it will issue Accounting Standards Updates. The Board will not consider
Accounting Standards Updates as authoritative in their own right. Accounting
Standards Updates will serve only to update the Codification, provide background
information about the guidance, and provide the bases for conclusions on the
change(s) in the Codification.
64
FASB
Statement No. 162, The
Hierarchy of Generally Accepted Accounting Principles, which became
effective on November 13, 2008, identified the sources of accounting principles
and the framework for selecting the principles used in preparing the financial
statements of nongovernmental entities that are presented in conformity with
GAAP. Statement 162 arranged these sources of GAAP in a hierarchy for users to
apply accordingly. Once the Codification is in effect, all of its content will
carry the same level of authority, effectively superseding Statement 162. In
other words, the GAAP hierarchy will be modified to include only two levels of
GAAP: authoritative and non-authoritative. As a result, this Statement replaces
Statement 162 to indicate this change to the GAAP hierarchy. The Company does
not believe that SFAS 164 will have an impact on the financial statements. The
Company has not determined the impact of SFAS 168 on its financial position or
results of operations.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS AND
CORPORATE GOVERNANCE
Described
below are transactions, since our inception on August 14, 2007, or any currently
proposed transaction, in which we were or are to be a participant and the amount
involved exceeds the lesser of $120,000 or one percent of the average of our
total assets for the last three completed fiscal years, and in which any of our
directors, nominee directors, executive officers, security holders who
beneficially own 5% or more of our voting securities, and any member of the
immediate family of any of the foregoing persons, had, or will have, a direct or
indirect material interest. We believe that terms of each transaction below were
comparable to those obtainable from unaffiliated third parties.
Issuance
of Founders Stock
On August
15, 2007, in connection with the formation of the Company, Dr. Alexander Gak,
the founder of the Company received 1,000 shares of common stock from the
Company for an aggregate of $2,000.
On May
16, 2008, BAETA filed an amendment to the Company’s Certificate of Incorporation
with the Secretary of State of the State of New Jersey thereby effectuating a
forward stock split of 20,000-to-1, effective 12:01 a.m. on May 16, 2008. The
Company did not amend the par value of the Company’s common stock.
Prior to
the Forward Split, there were 1,000 shares of the Company’s common stock, par
value $0.0001 per share, issued and outstanding, all held by Dr. Alexander Gak,
our President and Chairman. Upon the effectiveness of the Forward Split as of
May 16, 2008, there became 20,000,000 shares of the Company’s Common Stock
issued and outstanding, all held by Dr. Gak.
Currently,
there are 22,501,052 shares of the Company’s common stock issued and outstanding
to approximately 77 shareholders of record as of the date of this
prospectus.
Issuance
of Series A Preferred Stock
On April
18, 2008, our Board of Directors approved the designation of 100 shares of our
preferred stock as Series A Preferred Stock (the “Series A Preferred Shares”)
and authorized our officers to file a Certificate of Designation for the Series
A Preferred Shares, which occurred on June 23, 2008. The Series A Preferred
Stock vote with our Common Stock as a single class and have 80% of the voting
power of the aggregate number of shares voted. Dr. Gak was issued the 100 shares
of Series A Preferred Stock on that same day for consideration of $100. The
shares were issued upon reliance on the exemption from registration requirements
of the Securities Act of 1933, as amended, provided under Section 4(2)
promulgated thereunder, as the issuance of the stock did not involve a public
offering of securities.
Private
Offering Participation of Officer Family Member
From the
period of August through September of 2008, the Company conducted an offering of
its common stock to certain qualified investors. The offering was conducted in
accordance with exemptions from registration pursuant to Section 4(2) and Rule
506 of Regulation D under the Securities Act. Pursuant to the terms of the
offering, the Company offered up to 1,000,000 shares of its Common Stock, par
value $0.0001 per share, at a purchase price of $0.25 per share, solely to
“accredited investors” only as defined in Rule 501(a) of Regulation D of the
Securities. As of the close of the offering on September 25, 2008, the Company
had sold approximately 930,400 shares of its common stock to approximately 44
accredited investors, and had raised an aggregate of $232,600.
65
The
Company’s President and Chairman, Dr. Alexander Gak’s spouse, Marina Suni was a
participant to this offering, purchasing 320,000 shares of common stock at the
purchase price of $0.25 per share, for an aggregate purchase price of $80,000.
By law, her shares are not being registered for sale in this registration
statement.
Revolving
line of credit
The
Company is obligated under an unsecured line of credit of $50,000 from Bank of
America under a Platinum Visa Business Credit Card program. The principal
balance of this line of credit was $46,023 at September 30, 2009. At December
31, 2008, the principal balance of this line of credit was $44,161. At December
31, 2007, the principal balance of this line of credit was $0.00. As of the date
of this registration statement, the principal balance of this line of credit is
$45,723.
This Visa
Business Credit is personally guaranteed by our President and sole director, Dr.
Alexander Gak. The balance of this credit card is due in increments
periodically, and the current interest rate on this line of credit is 9.24%,
with no maturity date.
Shareholder
Advance and Shareholder Note:
Dr. Alexander
Gak
On
August 19, 2009, the Company and Dr. Alexander Gak entered into an agreement to
document the terms of the Shareholder Advance of $ 288,850 that had accrued to
that point. The agreement converted the $288,850 advance into a loan of
$288,850. The material terms are that the Company will owe an interest rate of
8% per year, beginning on August 19, 2009, for the outstanding loan amount. The
Company will begin payment of the principal and accrued interest only after the
Company’s operating checking account exceeds $250,000 in net cash on hand, at
which time the company will pay $5,000 per month. Any principal and accrued
interest not already repaid is due on August 18, 2019. The Company is allowed to
pre-pay the note without penalty, but the debt-holder does not have the right to
demand pre-payment. As of the date of this registration statement,
the principal balance of the Shareholder note is $288,850.
At
December 31, 2007, the principal balance of the Shareholder Advance was $0.00.
At December 31, 2008, the principal balance of this particular liability was
$182,600. Shareholder Advance decreased to $2,733 as of September 30, 2009 due
to the conversion of the Shareholder Advance, by written agreement (see Exhibit
10.17), into the form of a loan by and between the Company and Dr. Gak, as
described above plus an addition to the shareholder advance from $2,733 in
accrued interest on the loan.
As of
the date of this registration statement, the Shareholder Advance had increased
to $34,010 from an additional advance from the Company’s founder, Alexander Gak,
in the amount of $25,500 plus additional accrued interest of $5,777 from the
Shareholder Note.
The
advances have been made in multiple installments by the Company’s founder.
Shareholder Advance is accounted for as a long-term liability, although there
are no contractual stated rates or terms for repayment between the Company and
its Founder, because the Company and its Founder have verbally agreed that
repayment shall not occur prior to one year from the point when repayment terms
are documented. In addition, the Company intends to repay the advances with
reasonable interest when funds are available to do so without negatively
impacting the overall financial condition of the Company.
Mr. Leonid
Pushkantser
On
December 29, 2009, Mr. Leonid Pushkantser lent the Company $10,000.00. In
accordance with the promissory note agreement, attached to this registration
statement as Exhibit 10.20, the Company will pay an interest rate of 5% per
year, with the entirety of the principal plus all accrued interest being due six
months from the date of the note. The Company is allowed to pre-pay the note
without penalty, but Mr. Pushkantser does not have the right to demand
pre-payment.
66
Software
Development Agreement with Extranome, Inc.
On
November 1, 2008, BAETA Corp. entered into a Software Development Contract with
Extranome, Inc. At the time of the transaction, BAETA and Extranome were
controlled by Dr. Alexander Gak, our President and Chairman. This Exclusive
Software Agreement is attached to this prospectus as Exhibit 10.12.
Pursuant
to the Software Development Agreement, Extranome has been providing ongoing
software development and product support services for BAETA since November 01,
2008. The Software Development Agreement is a non-exclusive agreement and is not
related to BAETA’s Exclusive Software Agreement (Exhibit 10.1) regarding
MyHealthID product.
In
accordance with Section 2 of the Software Development Agreement, BAETA is to pay
Extranome for the contracted work in cash at a fixed fee of $30,000 per month
for services rendered; however BAETA currently does not have a sufficient amount
of cash on hand. Therefore, BAETA is paying Extranome 50% in shares of its
common stock, and 50% in cash. Extranome has received 30,000 for each month
since November as non-cash part of compensation for services rendered which
represent approximately 50% of Extranome’s due monthly compensation, and to date
has received 390,000 shares of BAETA Corp. BAETA will continue to issue company
shares to Extranome in the amount of 50% of the monthly compensation for
services rendered until it is able to compensate Extranome fully in
cash.
Due to
insufficient cash on hand, on January 23, 2009 and April 24, 2009, BAETA was
unable to pay the cash portion due Extranome in the amount of $15,000 for each
respective month for services rendered by Extranome to BAETA for the months of
December 2008 and March 2009. Therefore, this aggregate amount of $30,000 due
Extranome for services rendered during the months December 2008 and March 2009
has been classified as an Accounts Payable for $30,000 on the Company’s
financial statements.
In
addition, on August 28, 2009 and September 23, 2009, BAETA paid a reduced amount
of $12,500 to Extranome for services rendered by Extranome to BAETA for the
months of July 2009 and August 2009, respectively. The aggregate amount in
arrears due Extranome of $5,000 has been classified as an Accounts Payable for
$5,000 on the Company’s financial statements.
As of
December 31, 2008, Extranome had received approximately $30,000 in cash and
60,000 shares of Common Stock of BAETA Corp. pursuant to the Software
Development Agreement. As of the most recent quarter ended September 30, 2009,
Extranome had received approximately $115,000 in cash and 300,000 shares of
Common Stock in BAETA Corp. As of September 30, 2009, BAETA owes approximately
$50,000 in cash to Extranome, and $15,000 worth of common stock, which has been
classified as an accounts payable on the Company’s financial statements. As of
the date of this registration statement, BAETA owes approximately $80,000 in
cash and $15,000 worth of common stock. Due to the fact that Dr. Gak owns 100%
of Extranome, the payment arrangement between Extranome and BAETA Corp. is
required to be reported as executive compensation with respect to Dr.
Gak.
Please be
advised that Extranome is not assessing BAETA any penalties or interest on the
amount in arrears due Extranome.
From
November 2008 through September 2009, BAETA has made cash payments to Extranome
in the aggregate amount of $115,000. BAETA’s payments to Extranome are outlined
below:
67
MONTH
SERVICES
RENDERED
|
CASH
PAYMENTS
|
EQUITY
PAYMENTS
|
PAYMENT
DATE
|
|||||
November
2008
|
$ | 15,000 |
30,000
shares Common
|
December
12, 2008
|
||||
December
2008
|
* |
30,000
shares Common
|
January
23, 2009
|
|||||
January
2009
|
$ | 15,000 |
30,000
shares Common
|
February
25, 2009
|
||||
February
2009
|
$ | 15,000 |
30,000
shares Common
|
March
25, 2009
|
||||
March
2009
|
* |
30,000
shares Common
|
April
26, 2009
|
|||||
April
2009
|
$ | 15,000 |
30,000
shares Common
|
May
28, 2009
|
||||
May
2009
|
$ | 15,000 |
30,000
shares Common
|
June
29, 2009
|
||||
June
2009
|
$ | 15,000 |
30,000
shares Common
|
July
23, 2009
|
||||
July
2009
|
$ | 12,500 | ** |
30,000
shares Common
|
August
23, 2009
|
|||
August
2009
|
$ | 12,500 | ** |
30,000
shares Common
|
September
29, 2009
|
|||
Totals:
|
$115,000
through 9/2009
|
300,000 Shares
of Common Stock
Through
9/30/2009***
|
—
|
|
*
|
Monthly
cash payment was missed due to shortages in cash on hand. This payment was
classified as an Account Payable in the amount of
$15,000.
|
**
|
Monthly
cash payment was reduced to $12,500 due to shortages in cash on hand. The
balance of $2,500 for this month has been classified as an
Account Payable in the amount of
$2,500.
|
***
|
Extranome
has received 390,000 shares of BAETA Corp. common stock through January
14, 2010.
|
Acquisition
of MyHealthID™ Medical Records System:
On
September 15, 2008, the BAETA management authorized the exclusive acquisition
and license of MyHealthID™ Medical Records System from Extranome, Inc., a New
Jersey corporation (“Extranome”). At the time of the transaction, BAETA and
Extranome were controlled by Dr. Alexander Gak, our President and Chairman. This
Exclusive Software Agreement is attached to this prospectus as Exhibit
10.1.
Pursuant
to the Exclusive Software Agreement, Extranome sold to BAETA all commercial
rights to its software entitled MyHealthID Medical Records Systems. Under the
terms of the Agreement, Baeta agreed to license the MyHealthID™ Medical Records
System from Extranome for a term of 25 years with renewal for an additional 25
years under the same terms, upon mutual acceptance of Extranome and Acquirer.
The Company agreed to pay Extranome $0.00 upfront, and in perpetuity
approximately forty-nine percent of all net revenues generated from advertising
by MyHealthID. This payment can take the form of cash, or Baeta stock with
equivalent value to be determined by Baeta management.
Lease
of Office Space
From
inception to March 31, 2009, and on a month-to-month basis thereafter, our
Company leased its office space for its headquarters operation from its
President at a monthly rent of $750. This arrangement terminated as of June 30,
2009.
Director
Independence
Our
determination of independence of our directors is made using the definition of
“independent director” contained under NASDAQ Marketplace Rule 4200(a)(15), even
though such definitions do not currently apply to us because we are not listed
on NASDAQ. Our sole director, Dr. Alexander Gak, is our President and Chairman,
and therefore is not “independent” under this rule.
68
The OTCBB
on which we intend to have our shares of common stock quoted does not have any
director independence requirements. In determining whether our directors
are independent, we refer to NASDAQ Stock Market Rule 4200(a)(15). Based on
those widely-accepted criteria, we have determined that our Director(s) are not
independent at this time.
No member
of management is currently required by us to work on a full time basis, although
our Chief Executive Officer currently devotes fulltime to us. Accordingly,
certain conflicts of interest may arise between us and our officer(s) and
director(s) in that they may have other business interests in the future to
which they devote their attention, and they may be expected to continue to do so
although management time must also be devoted to our business. As a result,
conflicts of interest may arise that can be resolved only through their exercise
of such judgment as is consistent with each officer's understanding of his/her
fiduciary duties to us.
The
Sarbanes-Oxley Act of 2002, as well as rule changes proposed and enacted by the
SEC, the New York and American Stock Exchanges and the Nasdaq Stock Market, as a
result of Sarbanes-Oxley, require the implementation of various measures
relating to corporate governance. These measures are designed to enhance the
integrity of corporate management and the securities markets and apply to
securities that are listed on those exchanges or the Nasdaq Stock Market.
Because we are not presently required to comply with many of the corporate
governance provisions and because we chose to avoid incurring the substantial
additional costs associated with such compliance any sooner than legally
required, we have not yet adopted these measures.
Because
none of our directors are independent directors, we do not currently have
independent audit or compensation committees. As a result, these directors have
the ability, among other things, to determine their own level of compensation.
Until we comply with such corporate governance measures, regardless of whether
such compliance is required, the absence of such standards of corporate
governance may leave our stockholders without protections against interested
director transactions, conflicts of interest, if any, and similar matters and
investors may be reluctant to provide us with funds necessary to expand our
operations.
We intend
to comply with all corporate governance measures relating to director
independence as and when required. However, we may find it very difficult or be
unable to attract and retain qualified officers, directors and members of board
committees required to provide for our effective management as a result of
Sarbanes-Oxley Act of 2002. The enactment of the Sarbanes-Oxley Act of 2002 has
resulted in a series of rules and regulations by the SEC that increase
responsibilities and liabilities of directors and executive officers. The
perceived increased personal risk associated with these recent changes may make
it more costly or deter qualified individuals from accepting these
roles.
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No
Public Market for Common Stock
There is
presently no public market for our common stock. We intend to request a
registered broker-dealer to apply to have our common stock quoted on the OTC
Bulletin Board upon the effectiveness of the registration statement of which
this prospectus forms a part. However, we can provide no assurance that our
shares will be traded on the OTC Bulletin Board or, if traded, that a public
market will materialize.
69
The
Securities and Exchange Commission has adopted rules that regulate broker-dealer
practices in connection with transactions in penny stocks. Penny stocks are
generally equity securities with a price of less than $5.00, other than
securities registered on certain national securities exchanges or quoted on the
NASDAQ system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or quotation
system. The penny stock rules require a broker-dealer, prior to a transaction in
a penny stock, to deliver a standardized risk disclosure document prepared by
the SEC, that: (a) contains a description of the nature and level of risk in the
market for penny stocks in both public offerings and secondary trading; (b)
contains a description of the broker's or dealer's duties to the customer and of
the rights and remedies available to the customer with respect to a violation to
such duties or other requirements of Securities' laws; (c) contains a brief,
clear, narrative description of a dealer market, including bid and ask prices
for penny stocks and the significance of the spread between the bid and ask
price; (d) contains a toll-free telephone number for inquiries on disciplinary
actions; (e) defines significant terms in the disclosure document or in the
conduct of trading in penny stocks; and (f) contains such other information and
is in such form, including language, type, size and format, as the Securities
and Exchange Commission shall require by rule or regulation. The broker-dealer
also must provide, prior to effecting any transaction in a penny stock, the
customer with: (a) bid and offer quotations for the penny stock; (b) the
compensation of the broker-dealer and its salesperson in the transaction; (c)
the number of shares to which such bid and ask prices apply, or other comparable
information relating to the depth and liquidity of the market for such stock;
and (d) monthly account statements showing the market value of each penny stock
held in the customer's account. In addition, the penny stock rules require that
prior to a transaction in a penny stock not otherwise exempt from those rules;
the broker-dealer must make a special written determination that the penny stock
is a suitable investment for the purchaser and receive the purchaser's written
acknowledgment of the receipt of a risk disclosure statement, a written
agreement to transactions involving penny stocks, and a signed and dated copy of
a suitably written statement.
Holders
of Our Common Stock
As of the
date of this prospectus, we had 74 holders of record of our common
stock.
Forward
Stock Split
On May
16, 2008, BAETA filed an amendment to the Company’s Certificate of Incorporation
with the Secretary of State of the State of New Jersey thereby effectuating a
forward stock split of 20,000-to-1, effective 12:01 a.m. on May 16, 2008. The
Company did not amend the par value of the Company’s common stock.
Prior to
the Forward Split, there were 1,000 shares of the Company’s common stock, par
value $0.0001 per share, issued and outstanding, all held by Dr. Alexander Gak,
our President and Chairman. Upon the effectiveness of the Forward Split as of
May 16, 2008, there became 20,000,000 shares of the Company’s Common Stock
issued and outstanding, all held by Dr. Gak.
Currently,
there are 22,501,052 shares of the Company’s common stock issued and outstanding
to approximately 77 shareholders of record as of the date of this
prospectus.
Dividends
There are no restrictions in our
articles of incorporation or bylaws that prevent us from declaring
dividends. We have
not declared any dividends and we do not plan to declare any dividends in the
foreseeable future.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS AND FINANCIAL DISCLOSURE
On May
26, 2009, Stan J.H. Lee, CPA, CMA, declined to stand for re-election as auditor
of BAETA Corp. This decision came with approval by BAETA’s sole director, Dr.
Alexander Gak.
Since
inception of our Company of which Stan J.H. Lee, CPA, CMA has been the Company’s
independent public auditor, never in its principal accountant's report on the
financial statements has such report contained an adverse opinion or a
disclaimer of opinion, or was qualified or modified as to uncertainty, audit
scope, or accounting principles. There have also been no material disagreements
with Stan J.H. Lee, CPA, CMA on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreement, if not resolved to the satisfaction of Stan J.H. Lee, CPA, CMA,
would have caused it to make reference to the subject matter of the disagreement
in connection with its report.
70
A copy of
Stan J.H. Lee, CPA, and CMA’s declination to stand for re-election is attached
to this registration statement as Exhibit 16.
Subsequently,
the Company hired W.T. Uniack & Co., CPAs, P.C. as independent public
auditor going forward, as of June 30, 2009. Prior to its engagement, neither the
Company nor anyone on its behalf has consulted W.T. Uniack & Co., CPAs,
P.C., regarding (i) either: the application of accounting principles to a
specific completed or contemplated transaction, or the type of audit opinion
that might be rendered on the Company’s financial statements; as such, no
written or oral advice was provided, and none was an important factor considered
by the Company in reaching a decision as to the accounting, auditing or
financial reporting issues; or (ii) any matter that was a subject of a
disagreement or reportable event, as there were none.
Management
conducted a review of the December 31, 2008 audited financial statements, and
determined that many material errors were present necessitating a re-audit, and
as such, directed W.T. Uniack & Co., CPAs, P.C. to re-audit the Company
financials for the year ending December 31, 2008. The re-audited (restated) and
corrected financial statements for the year ending December 31, 2008 are
enclosed with this Prospectus.
WHERE
YOU CAN FIND MORE INFORMATION
We have
filed a registration statement on Form S-1 under the Securities Act with the
Securities and Exchange Commission with respect to the shares of our common
stock offered through this prospectus. This prospectus is filed as a part of
that registration statement, but does not contain all of the information
contained in the registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of the referenced
contracts, agreements or documents of our company. We refer you to our
registration statement and each exhibit attached to it for a more detailed
description of matters involving our company and the statements we have made in
this prospectus are qualified in their entirety by reference to these additional
materials. You may inspect the registration statement, exhibits and schedules
filed with the Securities and Exchange Commission at the SEC's principal office
in Washington, D.C. Copies of all or any part of the registration statement may
be obtained from the Public Reference Section of the SEC, Room 1580, 100 F
Street NE, Washington D.C. 20549. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the operation of the
public reference rooms. The Securities and Exchange Commission also maintains a
website at http://www.sec.gov
that contains reports, proxy statements and information regarding registrants
that file electronically with the SEC. Our registration statement and the
referenced exhibits can also be found on this site.
71
FINANCIAL
INFORMATION
BAETA
CORP.
Restated Audited Financial
Statements for the Period ended December 31, 2008
Item:
|
Page
No.:
|
Auditors’
Report
|
F-2
|
Balance
Sheet
|
F-3
|
Statement
of Operations
|
F-4
|
Statement
of Stockholder Equity (Deficit)
|
F-5
|
Statement
of Cash Flows
|
F-6
|
Notes
|
F-7
|
F-1
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors
Baeta
Corp.
Fort Lee,
New Jersey
We have
audited the accompanying balance sheet of Baeta Corp. (the “Company”) as of
December 31, 2008 and 2007 and the related statements of operations,
stockholders’ deficit, and cash flows for the year ended December 31, 2008 and
for the period from August 14, 2007 (inception of the development stage) through
December 31, 2007. Additionally, we have audited the cumulative data in the
related statement of operations, stockholders’ deficit, and cash flows for the
period from August 14, 2007 (inception of the development stage) through
December 31, 2008. These financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatements. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of the Company as of December 31, 2008
and 2007, and the results of its operations and changes in stockholders’ deficit
and its cash flows for the year ended, and for the period from August 14, 2007
(inception of the development stage) through December 31, 2008, in conformity
with accounting principles generally accepted in the United States of
America.
As
discussed in Note 6 of the notes to the accompanying financial statements, the
financial statements have been prepared assuming that the Company will continue
as a going concern. As discussed in the footnotes, the Company has a working
capital deficit of $57,628. In addition, the Company has an accumulated
operating loss of $559,729 and stockholders’ deficit of $176,559. The Company
does not have any revenue and is dependent upon private placement funds raised
and shareholder loans to pay operating expenses. Those conditions raise
substantial doubt about the Company’s ability to continue as a going concern.
The accompanying financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/s/ W.T.
Uniack & Co., CPAs, P.C.
Alpharetta,
Georgia
July 1,
2009
F-2
Baeta
Corp.
(
a Developmental Stage Company)
Balance
Sheets
As of
|
As of
|
|||||||
December 31,
|
December 31,
|
|||||||
2008 (Restated)
|
2007
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
$ | 14,475 | $ | 10,150 | ||||
Inventory
|
4,308 | - | ||||||
Total
Current Assets
|
18,783 | 10,150 | ||||||
Other
Assets
|
||||||||
Software
Application
|
47,357 | - | ||||||
PP,E
Net of accumulated depreciation of $255
|
16,061 | - | ||||||
Organization,
net of accumulated amortization of $ 99
|
251 | 321 | ||||||
Total
Other Assets
|
$ | 63,669 | 321 | |||||
TOTAL
ASSETS
|
$ | 82,452 | $ | 10,471 | ||||
LIABILITIES
& STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
Current
Liabilities
|
||||||||
Accounts
Payable
|
$ | 2,250 | $ | - | ||||
Accounts
Payable Related Party
|
30,000 | - | ||||||
Line
of Credit
|
44,161 | - | ||||||
Total
Current Liabilities
|
76,411 | - | ||||||
Long-Term
Liabilities
|
||||||||
Shareholder
Advance
|
182,600 | 20,000 | ||||||
Total
Long-Term Liabilities
|
182,600 | 20,000 | ||||||
TOTAL
LIABILITIES
|
259,011 | 20,000 | ||||||
Stockholders'
Equity (Deficit)
|
||||||||
Preferred
stock, 10,000,000 shares authorized with a par value of $ 0.0001. 100
shares of Series A issued or outstanding (100 issued and
outstanding as of, 2008) - in S-1/A
|
- | - | ||||||
Common
stock, 100,000,000 shares authorized with a par value of $ 0.0001 ,issued
and outstanding 21,476,680 shares at
|
2,148 | 2,000 | ||||||
Paid-in
capital
|
381,022 | - | ||||||
Losses
that have accumulated during the development stage
|
(559,729 | ) | (11,529 | ) | ||||
Total
Stockholders' Equity (Deficit)
|
(176,559 | ) | (9,529 | ) | ||||
TOTAL
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | 82,452 | $ | 10,471 |
See
Notes Financial Statements
F-3
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Operations
Cumulative during
|
||||||||||||
development stage
|
||||||||||||
Year Ended
|
Year Ended
|
August 14, 2007 to
|
||||||||||
December 31,
|
December 31,
|
December 31, 2008
|
||||||||||
2008 (Restated)
|
2007
|
(Restated)
|
||||||||||
Revenues
|
||||||||||||
Revenue
|
$ | 71 | $ | - | $ | 71 | ||||||
Net
Revenue
|
71 | - | 71 | |||||||||
Total
Revenue
|
71 | - | 71 | |||||||||
Cost
of Goods Sold
|
||||||||||||
Cost
of Goods Sold
|
17 | - | 17 | |||||||||
Total
Cost of Goods Sold
|
17 | - | 17 | |||||||||
Gross
Income
|
54 | - | 54 | |||||||||
Operating
Expenses
|
||||||||||||
Amortization
|
245 | 29 | 274 | |||||||||
Software
development
|
73,412 | 9,000 | 82,412 | |||||||||
Other
miscellaneous operating expenses
|
471,629 | 2,500 | 474,129 | |||||||||
Total
Operating Expenses
|
545,286 | 11,529 | 556,815 | |||||||||
Loss
From Operations
|
(545,232 | ) | (11,529 | ) | (556,761 | ) | ||||||
Other
income (expense)
|
||||||||||||
Charitable
Donation
|
(2,500 | ) | (2,500 | ) | ||||||||
Interest
expense
|
32 | - | 32 | |||||||||
Net
Loss Before Provision For Income Taxes
|
(547,700 | ) | (11,529 | ) | (559,229 | ) | ||||||
Provision
For Income Taxes
|
500 | - | 500 | |||||||||
Net
Loss
|
$ | (548,200 | ) | $ | (11,529 | ) | $ | (559,729 | ) | |||
Basic
earning (Loss) per share
|
$ | (0.03 | ) | $ | (0.00 | ) | $ | |||||
Weighted
average number of common shares - basic and diluted
|
20,683,456 | 20,000,000 |
See
Notes to Financial Statements
F-4
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Stockholder Equity (Deficit)
Additional
|
Retained
|
|||||||||||||||||||||||||||
Preferred
Shares
|
Common
Stock
|
Paid-in
|
Earnings
|
|||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
(Deficit)
|
Total
|
||||||||||||||||||||||
Balance,
August 14, 2007
|
- | - | - | - | - | |||||||||||||||||||||||
Commn
stock issued,August 14, 2007
|
20,000,000 | 2,000 | - | - | 2,000 | |||||||||||||||||||||||
Loss
for the period beginning Aug 14, 2007 ( inception) to December 31,
2007
|
(11,529 | ) | (11,529 | ) | ||||||||||||||||||||||||
Balance, December
31, 2007
|
20,000,000 | 2,000 | - | (11,529 | ) | (9,529 | ) | |||||||||||||||||||||
Preferred Stock
- Series A
|
100 | - | ||||||||||||||||||||||||||
Stocks
issued for service and consulting
|
536,280 | 54 | 146,016 | 146,070 | ||||||||||||||||||||||||
Private
placements, August 1, 2008
|
930,400 | 93 | 232,507 | 232,600 | ||||||||||||||||||||||||
Charitable
donation, Nov 17, 2008
|
10,000 | 1 | 2,499 | 2,500 | ||||||||||||||||||||||||
Loss
for the year ended Dec 31, 2008
|
(548,200 | ) | (548,200 | ) | ||||||||||||||||||||||||
Balance, December
31, 2008 (Restated)
|
100 | - | 21,476,680 | 2,148 | 381,022 | (559,729 | ) | (176,559 | ) |
See
Notes to Financial Statements
F-5
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Cash Flows
Cumulative during
|
||||||||||||
development stage
|
||||||||||||
Year Ended
|
Year Ended
|
August 14, 2007 to
|
||||||||||
December 31,
|
December 31,
|
December 31, 2008
|
||||||||||
2008 (Restated)
|
2007
|
(Restated)
|
||||||||||
CASH FLOWS FROM OPERATING
ACTIVITIES
|
||||||||||||
Net
income (loss)
|
$ | (548,200 | ) | $ | (11,529 | ) | $ | (559,729 | ) | |||
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||||||
Depreciation
|
175 | 175 | ||||||||||
Amortization
|
70 | 29 | 99 | |||||||||
Increase
in current assets and liabilities;
|
||||||||||||
Increase
in accounts payable
|
2,250 | 2,250 | ||||||||||
Increase
in accounts payable Related Party
|
30,000 | 30,000 | ||||||||||
Increase
in Inventory
|
(4,308 | ) | (4,308 | ) | ||||||||
Increase
stock issued for services, consulting and charity
|
146,070 | 146,070 | ||||||||||
Net
cash used by operating activities
|
(373,943 | ) | (11,500 | ) | (385,443 | ) | ||||||
CASH FLOWS FROM INVESTING
ACTIVITIES
|
||||||||||||
PP&E
|
(16,236 | ) | (16,236 | ) | ||||||||
Expenditure
for organization expense
|
- | (350 | ) | (350 | ) | |||||||
Software
Application
|
(47,357 | ) | (47,357 | ) | ||||||||
Net
cash provided by (used in) investing activities
|
(63,593 | ) | (350 | ) | (63,943 | ) | ||||||
CASH FLOWS FROM FINANCING
ACTIVITIES
|
||||||||||||
Shareholder
Advance
|
162,600 | 20,000 | 182,600 | |||||||||
Line
of Credit
|
44,161 | 44,161 | ||||||||||
Additional
Fianncing Fees
|
0 | |||||||||||
Change
in Comon Stock Value
|
0 | |||||||||||
Proceeds
from stock issuances
|
235,100 | 2,000 | 237,100 | |||||||||
Net
cash provided by (used in) financing activities
|
441,861 | 22,000 | 463,861 | |||||||||
Net
increase (decrease) in cash & cash equivalents
|
4,325 | 10,150 | 14,475 | |||||||||
Cash
at beginning of period
|
10,150 | - | - | |||||||||
Cash
at end of period
|
$ | 14,475 | $ | 10,150 | $ | 14,475 | ||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||
Interest
paid
|
$ | 500 | $ | - | $ | 500 | ||||||
Income
taxes paid
|
$ | 500 | $ | - | $ | 500 | ||||||
NON CASH
TRANSACTIONS:
|
||||||||||||
Common
stocks issued for service
|
$ | 146,070 | $ | - | $ | 146,070 | ||||||
$ | 146,070 | $ | - | $ | 146,070 |
See
Notes to Financial Statements
F-6
Baeta
Corp.
(a
Development Stage Company)
December
31, 2008
Notes
to the Restated Audited Financial Statements
NOTE
1: Summary of Significant Accounting Policies, Nature of Operations and Use of
Estimates:
Nature
of Business and Basis of Presentation
BAETA
Corp. (a development stage company) (“the Company”) was incorporated in the
State of New Jersey on August 14, 2007 as a product-driven medical technology
company that manufactures advanced products for the global vital signs
monitoring industry. The Company has developed a patent-pending pain management
and pain assessment product for the estimated 25 million chronic pain sufferers
in the U.S. alone.
As of
December 31, 2008, the Company had not yet commenced any substantive commercial
operations. All activity through December 31, 2008 relates to the Company’s
formation and initial research and development.
The
Company is considered to be a development stage company and as such the
financial statements presented herein are presented in accordance with Statement
of Financial Accounting Standards (“SFAS”) No. 7. “Accounting and Reporting By
Development Stage Enterprises.” The Company is subject to the risks
associated with activities of development stage companies.
Basis
of Presentation
The
accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and
pursuant to the rules and regulations of the Securities and Exchange Commission
(“SEC”).
The
preparation of the financial statements requires management to make estimates
and assumptions that affect the reported amounts in the financial statements,
including the estimated useful lives of tangible and intangible assets.
Management believes the estimates used in preparing the financial statements are
reasonable and prudent. Actual results could differ from these
estimates.
Revenue
Recognition
Revenue
is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue
Recognition in Financial Statements”. The Company recognizes revenue when the
significant risks and rewards of ownership have been transferred to the customer
pursuant to applicable laws and regulations, including factors such as when
there has been evidence of a sales arrangement, delivery has occurred, or
service have been rendered, the price to the buyer is fixed or determinable, and
collectability is reasonably assured.
Evidence
of a sales arrangement and a fixed or determinable price can be provided by a
purchase order from the customer or from the customer paying for and accepting
the product. Unless indicated differently in a contract between the customer and
the Company, the Company assumes delivery to have occurred and title to have
passed upon receipt of the product by the customer. Because the Company does not
have a history with its customers yet, it assures collectability by recognizing
revenue only after payment for product is received.
The
Company has no significant post delivery obligations and its customers do not
have any significant refund rights, acceptance terms, discounts, or other terms
that serve to reduce the amount recorded relative to the sales price nor to
delay the timing of recognition of revenue.
Use
of Estimates
The
preparation of financial statements, in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions, which affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.
F-7
Cash
and Cash Equivalents:
Cash and
cash equivalents are considered to be all highly liquid investments purchased
with an initial maturity of three (3) months or less.
Software
Application Asset:
The
Company complies with the provisions of SFAS No. 86 “Accounting for the Costs of Computer
Software to Be Sold, Leased, or Otherwise Marketed”. The Software
Application Asset is for software that will be used in the company’s products
and began being capitalized after technological feasibility was established,
which as required by SFAS No. 86, was after a working model was delivered to
BAETA Corp and the working model software was tested for completeness,
functionality, and consistency with expected product design. The testing was
performed by the vendor that developed and delivered the product as well as by
BAETA Corp and select potential customers. Capitalized software costs will begin
being amortized when the software product is available for general release to
customers. The asset is reviewed for impairment at an executive management
meeting quarterly, during the review of the Company’s financial results.
Impairment is reviewed on a product-by-product basis by comparing the
unamortized capitalized costs to the asset’s net realizable value. The amount by
which the unamortized capitalized costs exceed the net realizable value would be
recognized as an impairment charge.
Property,
Plant and Equipment:
Property,
Plant and Equipment is capitalized at historical cost. Property, Plant and
Equipment for the Company currently consists of Computer and Office Equipment
and of Tooling. Computer and Office Equipment is depreciated over the time of
its useful life. Tooling is depreciated in proportion to the units produced by
the related tooling relative to the total number of units the tooling is
expected to be able to produce. Each asset in Property, Plant and Equipment is
reviewed for impairment at an executive management meeting quarterly, during the
review of the Company’s financial results, and an impairment charge would be
recognized if the carrying amount of the asset is not recoverable and exceeds
its fair value. Expenditures incurred that enhances the productivity of the
asset and/or extends the existing asset's life are
capitalized. Expenditures for typical normal wear and tear items are
expensed when incurred.
Stock
Compensation:
Stock
issued for services rendered is valued at the time of service with the most
relevant measurement at the time being either current stock price of the company
stock or vendor invoice/contract that most closely reflects the value of
services performed or product delivered.
Income Taxes:
The
Company complies with the provisions of SFAS No. 109 “Accounting for Income Taxes”.
Deferred income tax assets and liabilities are computed for differences
between the financial statement and tax bases of assets and liabilities that
will result in future taxable or deductible amounts and are based on enacted tax
laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established, when necessary,
to reduce deferred income tax assets to the amount expected, by management in
management’s quarterly financial review and based on available evidence, that is
more likely than not to be realized.
Income
(Loss) Per Share:
In
accordance with SFAS No. 128, “Earnings Per Share”, the
basic net loss per common share is computed by dividing net loss available to
common stockholders by the weighted average number of common shares
outstanding during the period presented. Diluted net loss per common share is
computed similar to basic net loss per common share except that the denominator
is increased to include the number of additional common shares that would have
been outstanding if the potential common shares had been issued and if the
additional common shares were dilutive.
F-8
As at
December 31, 2008, diluted net loss per share is equivalent to basic net loss
per share as there were no dilutive securities outstanding.
Concentration
of Credit Risk
Financial
instruments, which potentially subject the Company to concentrations of credit
risk, consist of cash and cash equivalents and accounts receivables. The Company
places its cash with high quality financial institutions and at times may exceed
the FDIC $250,000 insurance limit. The Company extends credit based on an
evaluation of the customer's financial condition, generally without collateral.
Exposure to losses on receivables is principally dependent on each customer's
financial condition. The Company monitors its exposure for credit losses and
maintains allowances for anticipated losses, as required. Accounts are
“written-off” when deemed uncollectible.
As of
December 31, 2008 the Company has cash balance of $ 14,475 and no accounts
receivable.
Special
– purpose entities
The
Company does not have any off-balance sheet financing activities.
Recent
Accounting Pronouncements
In
December 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 160, “Non-controlling Interests in
Consolidated Financial Statements—an amendment of Accounting Research Bulletin
No. 51” (“SFAS 160”). SFAS 160 establishes new accounting and reporting
standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years
beginning on or after December 15, 2008. The Company does not believe that
SFAS 160 will have a material impact on its financial statements.
In
December 2007, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141 (revised 2007), “Business
Combinations” (“SFAS 141(R)”). SFAS 141(R) will change the accounting for
business combinations. Under SFAS No. 141(R), an acquiring entity will be
required to recognize all the assets acquired and liabilities assumed in a
transaction at the acquisition-date fair value with limited exceptions. SFAS
No. 141(R) will change the accounting treatment and disclosure for certain
specific items in a business combination. SFAS No. 141(R) applies
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
December 15, 2008. SFAS 141(R) will impact the Company in the event of any
future acquisition.
In
March 2008, the FASB issued SFAS No. 161, “Disclosures about
Derivative Instruments and Hedging Activities, an amendment of FASB Statement
No. 133” (“SFAS
161”), which establishes, among other things, the disclosure requirements for
derivative instruments and hedging activities. SFAS 161 requires
qualitative disclosures about objectives and strategies for using derivatives,
quantitative disclosures about fair value amounts of and gains and losses on
derivative instruments, and disclosures about credit-risk-related contingent
features in derivative agreements. SFAS 161 is effective for fiscal periods
and interim periods beginning after November 15, 2008. The Company has not
determined the impact of SFAS 159 on its financial position or results of
operations.
F-9
In
May 2008, the FASB issued SFAS No. 162 “ The Hierarchy of
Generally Accepted Accounting Principles” This Statement identifies the sources
of accounting principles and the framework for selecting the principles to be
used in the preparation of financial statements of nongovernmental entities that
are presented in conformity with generally accepted accounting principles (GAAP)
in the United States (the GAAP hierarchy).The Board is responsible for
identifying the sources of accounting principles and providing entities with a
framework for selecting the principles used in the preparation of financial
statements that are presented in conformity with GAAP. The current GAAP
hierarchy, as set forth in the American Institute of Certified Public
Accountants (AICPA) Statement on Auditing Standards No. 69, The Meaning of Present Fairly
in Conformity With Generally Accepted Accounting Principles, has been criticized
because (1) it is directed to the auditor rather than the entity, (2) it is
complex, and (3) it ranks FASB Statements of Financial Accounting Concepts,
which are subject to the same level of due process as FASB Statements of
Financial Accounting Standards, below industry practices that are widely
recognized as generally accepted but that are not subject to due process.The
Board believes that the GAAP hierarchy should be directed to entities because it
is the entity (not its auditor) that is responsible for selecting accounting
principles for financial statements that are presented in conformity with GAAP.
Accordingly, the Board concluded that the GAAP hierarchy should reside in the
accounting literature established by the FASB and is issuing this Statement to
achieve that result. This Statement is effective 60 days following the SEC’s
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning
of Present
In May
2008, the FASB issued SFAS No. 163 “ Accounting for
Financial Guarantee Insurance Contracts” Diversity exists in
practice in accounting for financial guarantee insurance contracts by insurance
enterprises under FASB Statement No. 60, Accounting and Reporting by
Insurance Enterprises. That diversity results in inconsistencies in the
recognition and measurement of claim liabilities because of differing views
about when a loss has been incurred under FASB Statement No. 5, Accounting for Contingencies.
This Statement requires that an insurance enterprise recognize a claim liability
prior to an event of default (insured event) when there is evidence that credit
deterioration has occurred in an insured financial obligation. This Statement
also clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement to be used to account for
premium revenue and claim liabilities. Those clarifications will increase
comparability in financial reporting of financial guarantee insurance contracts
by insurance enterprises. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements.This Statement is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and all
interim periods within those fiscal years, except for some disclosures about the
insurance enterprise’s risk-management activities. This Statement requires that
disclosures about the risk-management activities of the insurance enterprise be
effective for the first period (including interim periods) beginning after
issuance of this Statement. Except for those disclosures, earlier application is
not permitted. This Statement interprets Statement 60 and amends existing
accounting pronouncements to clarify their application to the financial
guarantee insurance contracts included within the scope of this
Statement
Management
believes that this statement will not have a significant impact on the financial
statements
Fiscal
Year
Company
adopted December 31 for its accounting fiscal year
Control
by Principal Stockholders
The
directors, executive officers and their affiliates or related parties, own
beneficially and in the aggregate, the majority of the voting power of the
outstanding shares of the common stock of the Company. Accordingly, the
directors, executive officers and their affiliates, if they voted their shares
uniformly, would have the ability to control the approval of most corporate
actions, including increasing the authorized capital stock of the Company and
the dissolution, merger or sale of the Company's assets or
business.
NOTE
2: Revolving line of credit
As of
December 31, 2008, the Company is obligated under unsecured line of credit of $
50,000 from a bank and principal balance of such a loan is $ 44,161. The
current interest rate on this line of credit is 9.24%, with no maturity
date. The debt is also guaranteed by a personal liability of an officer and
shareholder.
NOTE
3: Related Party Transactions
On August
15, 2007, in connection with the formation of the Company, the founder of the
Company received 20,000,000 shares of common stock from the Company for an
aggregate of $2,000.
F-10
Shareholder
Advance increased to $182,600 as of December 31, 2008. The advances have been
made in multiple installments by the Company’s founder and CEO. Shareholder
Advance is accounted for as a long-term liability, although there are no
contractual stated rates or terms for repayment between the Company and its
Founder & CEO at this time. The Company intends to repay the advances,
possibly with reasonable interest, when funds are available to do so without
negatively impacting the overall financial condition of the Company, however the
Company and debt holder have agreed that the debt will not be payable prior to
December 31, 2010, nor does the debt holder have the right to demand payment of
the debt prior.
On
September 16, 2008, Dr. Alexander Gak, our Chief Executive Officer and
President, and Extranome, Inc., a New Jersey corporation entered into an
Exclusive Software Agreement (the “Agreement”). Pursuant the Agreement,
Extranome sold to Baeta Corp. all commercial rights to its software entitled
MyHealthID Medical Records Systems for a period of twenty-five years, subject to
renewal. Pursuant to the Agreement, the Company agreed to pay Extranome $0.00
upfront, and in perpetuity approximately forty-nine percent of all net revenues
generated from advertising by MyHealthID. Our CEO and sole director, Dr.
Alexander Gak, is the 100% owner of Extranome, Inc., a New Jersey
corporation.
On
November 1, 2008, BAETA Corp. entered into a Software Development Contract with
Extranome, Inc. At the time of the transaction, BAETA and Extranome were
controlled by Dr. Alexander Gak, our President and CEO. Pursuant to the Software
Development Agreement, Extranome has been providing ongoing software development
and product support services for BAETA since November 01, 2008. The Software
Development Agreement is a non-exclusive agreement and is not related to BAETA’s
Exclusive Software Agreement regarding MyHealthID product. In accordance with
the Software Development Agreement, BAETA is to pay Extranome for the contracted
work in cash form; however BAETA currently does not have a sufficient amount of
cash on hand. Therefore, BAETA is paying Extranome is shares of its common
stock. Extranome has received 30,000 for each month since November as non-cash
part of compensation for services rendered which represent approximately 50% of
Extranome’s due monthly compensation. BAETA will continue to issue company
shares to Extranome in the amount of 50% of the monthly compensation for
services rendered until it is able to compensate Extranome fully in cash.
Through December 31, 2008, BAETA has issued 30,000 shares to
Extranome.
Beginning
April 1, 2008, the Company entered into a lease agreement with Dr. Alexander
Gak, our Chief Executive Officer and President, for office space. The monthly
rent for this space is $750.
NOTE
4: Stockholders’ Equity:
Common
stock
The
Company is authorized to issue 100,000,000 shares of common stock with a par
value of $ 0.0001. As of December 31, 2008, Company has 21,476,680 shares issued
and outstanding.
The
Company was incorporated in the State of New Jersey on August 14, 2007 with
1,000 common shares, no par value.
On August
15, 2007, the Company issued 1,000 to the founder for the service.
On May
15, 2008, the shareholders approved an amendment to the Certificate of
Incorporation so that, as amended: (a) the authorized capital stock was
increased so that the authorized number of common shares was increased from
1,000shares, no par value, to 100,000,000 shares of commons stock, $0.001 par
value, and 10,000,000 shares of preferred stock; and, (b) that the existing
outstanding stock of 1,000 shares would be split forward at a rate of 20,000 to
1. The amendment also gave the Board of Directors the right to establish one or
more series of preferred stock in such amounts and with such rights, privileges
and preferences as the Board of Directors may, from time to time,
determine.
On May
15, 2008, the existing outstanding stock of 1,000 shares were split at 20,000 to
1. The Statement of Stockholder’s Equity is presented as if the Company had
issued 20,000,000 shares at inception.
F-11
As of the
close of the offering on September 25, 2008, the Company had conducted offerings
of its common stock solely to approximately 44 accredited investors and issued a
total of 930,400 shares. The investors purchased the shares at $0.25 per
share.
On June
23, 2008, the Company issued 4,000 shares of its common stock for legal service.
The shares are accounted for at $0.25 per share, based the assumption that the
market price was equal to that used in the private placement that closed on
September 25, 2008, and because the legal bill paid for by the shares was for
$1,000. The recipient of these shares is not a related party to the
Company.
On July
17, 2008 the Board of Directors authorized the issuance of 321,000 common shares
in-lieu-of-cash payments to a number of its service providers and consultants
for services rendered under contract or on invoice. All issuances for services
have been accounted for a per-share rate of $0.25 / share based the
assumption that the market price was equal to that used in the private placement
that closed on September 25, 2008, and because the bills paid for by the shares
were for an amount equal to $0.25 per share compensation. Of the 321,000 shares
issued, 15,000 were issued to related parties, and balance was issued to
non-related parties.
On
September 2, 2008, the Company issued 11,280 shares of its common stock in
consideration for marketing services rendered. The shares are accounted for at
$0.25 per share, based the assumption that the market price was equal to that
used in the private placement that closed on September 25, 2008, and because the
bills paid for by the shares were for an amount equal to $0.25 per share
compensation. The recipient of these shares is an officer of the
Company.
On
October 28, 2008, the Company issued 152,000 shares pursuant to an amendment to
the original consulting agreement. The shares are accounted for at $0.25 per
share, based the assumption that the market price was equal to that used in the
private placement that closed on September 25, 2008, and because the bills paid
for by the shares were for an amount equal to $0.25 per share compensation. The
recipient of these shares is not a related party to the Company.
On
November 17, 2008 the Board of Directors authorized the issuance of 10,000
common shares of its common stock to a charitable organization. The shares are
accounted for at $0.25 per share, based the assumption that the market price was
equal to that used in the private placement that closed on September 25, 2008.
The recipient of these shares is not a related party to the
Company.
On
December 12, 2008, the Company issued 8,000 shares of its common stock to a
consulting company in lieu of payment for service. The shares are accounted for
at $0.50 per share, based on a decision by the board of directors that the per
share valuation had increased to $0.50 per share, and because the bills paid for
by the shares were for an amount equal to $0.50 per share compensation. Further
evidence is provided by subsequent investments in the company by outside
investors in early 2009 at $0.50 per share. The recipient of these shares is not
a related party to the Company.
On
December 12, 2008, the Company issued 10,000 shares of its common stock to
members of a law firm in consideration for legal service. The shares are
accounted for at $0.50 per share, based on a decision by the board of directors
that the per share valuation had increased to $0.50 per share, and because the
bills paid for by the shares were for an amount equal to $0.50 per share
compensation. Further evidence is provided by subsequent investments in the
company by outside investors in early 2009 at $0.50 per share. The recipient of
these shares is not a related party to the Company.
On
December 12, 2008, the Company issued 30,000 shares of common stock pursuant to
the software contract. The shares are accounted for at $0.50 per share, based on
a decision by the board of directors that the per share valuation had increased
to $0.50 per share, and because the bills paid for by the shares were for an
amount equal to $0.50 per share compensation. Further evidence is provided by
subsequent investments in the company by outside investors in early 2009 at
$0.50 per share. The recipient of these shares is a related party to the
Company.
F-12
Preferred
stocks
The
Company is also authorized to issue 10,000,000 shares of preferred stock with a
par value of $ 0.0001.On June 23, 2008, the Board of Directors approved the
designation of 100 shares of preferred stock as Series A Preferred Stock. As of
December 31, 2008, Company has 100 preferred share Series A issued or
outstanding.
NOTE
5: Income Tax
The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires
the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the financial statements and the tax basis of
assets and liabilities, and for the expected future tax benefit to be derived
from tax losses and tax credit carryforwards. SFAS 109 additionally requires the
establishment of a valuation allowance to reflect the likelihood of realization
of deferred tax assets. Realization of deferred tax assets, including those
related to the U.S. net operating loss carryforwards, are dependent upon future
earnings, if any, of which the timing and amount are uncertain. Accordingly, the
net deferred tax asset related to the net operating loss carryforward has been
fully offset by a valuation allowance.
On June
23, 2008, the Company converted from a subchapter S corporation to a C
corporation. As a result, all losses prior to June 23, 2008, flowed through to
the sole shareholder during that time, Dr. Alexander Gak.
Resulting
from activity beginning June 23, 2008, The Company has a net operating loss
carry forward for tax purposes totaling approximately $ 310,085 at December 31,
2008. The net operating loss carries forwards for income taxes, which may be
available to reduce future years' taxable income. These carry forwards will
expire, if not utilize, through 2028 and are subject to the Internal Revenue
Code Section 382, which places a limitation on the amount of taxable income that
can be offset by net operating losses after a change in ownership. Management
believes that the realization of the benefits from these losses appears
uncertain due to the Company's continuing losses for United States income tax
purposes. Accordingly, the Company has provided a 100% valuation allowance on
the deferred tax asset benefit to reduce the asset to zero. Management will
review this valuation allowance periodically and make adjustments as
warranted.
The
table below summarizes the differences between the Company's effective tax rate
and the statutory federal rate as follows for the periods ended December 31,
2008 and 2007:
Year Ended
|
Year Ended
|
|||||||
December 31
|
December 31
|
|||||||
2008
|
2007
|
|||||||
Tax
benefit computed at "expected" statutory rate
|
$ | (108,530 | ) | - | ||||
Other
permanent differences
|
- | - | ||||||
Increase
in valuation allowance
|
108,530 | - | ||||||
Net
income tax benefit
|
$ | - | $ | - |
December 31
|
December 31
|
|||||||
2008
|
2007
|
|||||||
Tax
benefit of net operating loss carryforward
|
$ | 108,530 | - | |||||
Valuation
allowance
|
108,530 | - | ||||||
Net
deferred tax asset recorded
|
$ | - | $ | - |
F-13
NOTE
6: Going Concern
The
Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going concern
that contemplates the realization of assets and liquidation of liabilities in
the normal course of business.
The
Company’s accumulated operating loss since inception was $ 559,729, working
capital deficit of $ 57,628 and stockholders’ equity deficit of $ 176,559 as of
December 31, 2008.
The
Company will actively pursue its business activities, offer noncash
consideration, secure additional or refinance the debt and/or raise equity as a
means of financing its operations and meet the credit obligations. If the
Company is unable to return to its profitability or obtain necessary financing,
it may substantially curtail or terminate its operations or seek other business
opportunities through strategic alliances, acquisitions or other arrangements
that may dilute the interests of existing stockholders. The company’s management
is currently seeking additional capital to support operations, but has not
received any firm or other commitments from any parties and may or may not, be
successful in obtaining capital sufficient to perpetuate the operations of the
Company.
NOTE
7: Commitment and contingencies
Company
leases its office space for its headquarters operation from its CEO at a monthly
rent of $ 750 which expires on March 31, 2009.
Minimum
future monthly rental commitment to March 31, 2009 is $ 2,250.
Exclusive
Software Agreement
On
September 16, 2008, Dr. Alexander Gak, our Chief Executive Officer and
President, and Extranome, Inc., a New Jersey corporation entered into an
exclusive Software Agreement (the “Agreement”). Pursuant the
Agreement, Extranome sold to Baeta Corp. all commercial rights to its software
entitled MyHealthID Medical Records Systems. Pursuant to the Agreement, the
Company agreed to pay Extranome $0.00 upfront, and in perpetuity approximately
forty-nine percent of all net revenues generated from advertising by MyHealthID.
Our sole officer and director, Dr. Alexander Gak, is the 100% owner of
Extranome, Inc., a New Jersey corporation.
NOTE
8: Weighted Average number of common shares
The
weighted average number of common shares presented in the income statement
treats the shares as if the forward stock split occurred from inception. The
weighted average number of common shares if treated as though 19,999,000 new
shares were issued on May 15, 2008, when the forward stock split occurred, would
be 13,286,565 for 2008 and 1,000 for 2007.
NOTE
9: Restatement
Management
conducted a review of the December 31, 2008 audited financial statements, and
determined that many material errors were present necessitating reentry of all
transactions, reperformance of all reconciliations, and a re-audit, and as such,
engaged W.T. Uniack & Co., CPAs, P.C. to re-audit the Company financials for
the year ending December 31, 2008. The re-audited and corrected financial
statements for the year ending December 31, 2008, are now provided. The errors
were primarily due to mis-classification of accounting entries and included many
entries into the accounting system that were incorrectly entered and some that
were incorrectly not entered. The material errors that we noted were the
following:
1.
|
A
$25,000 shareholder advance repayment was incorrectly booked as an
expense. The result of correcting this error was to increase Other
Miscellaneous Operating expenses and to increase Shareholder
Advance.
|
2.
|
Extranome's
work in December resulted in a material, $30,000, expense accrual that was
not booked. The result of correcting this error was to increase Other
Miscellaneous Operating expenses and to increase Accounts
Payable.
|
F-14
3.
|
$47,357
of capitalizable software development was not capitalized and instead
expensed. The result of correcting this error was to increase Software
Asset and to decrease Other Miscellaneous Operating expenses and Software
Development expenses.
|
4.
|
$15,000
of tooling was not capitalized and instead was expensed. The result of
correcting this error was to decrease Other Miscellaneous Operating
expenses and to increase
PP&E.
|
5.
|
No
bank or other transaction could be identified to account for incorrectly
booked $7,750 of Accounts Payable. The result of correcting this error was
to decrease Accounts Payable and increase Paid in
Capital.
|
All other
errors that we discovered were not material individually or in
aggregate.
The
corrections are identified below. Only 2008 was in error:
Financial Statement Line Item
|
Before the Change; full
year 2008
|
Restated; full year 2008
|
Adjustment;
Increase/(Decrease)
|
|||||||||
Revenue
|
$ | 0 | $ | 71 | $ | 71 | ||||||
Cost
of Goods Sold
|
$ | 0 | $ | 17 | $ | 17 | ||||||
Amortization
|
$ | 291 | $ | 245 | $ | 46 | ||||||
Software
Development
|
$ | 88,412 | $ | 73,412 | $ | (15,000 | ) | |||||
Other
Miscellaneous Operating Expenses
|
$ | 507,990 | $ | 471,629 | $ | (36,361 | ) | |||||
Total
Operating Expenses
|
$ | 596,693 | $ | 545,286 | $ | (51,407 | ) | |||||
Loss
from Operations
|
$ | (596,693 | ) | $ | (545,232 | ) | $ | 51,407 | ||||
Charitable
Donation
|
$ | 0 | $ | (2,500 | ) | $ | (2,500 | ) | ||||
Net
Loss before Income Taxes
|
$ | (596,661 | ) | $ | (547,700 | ) | $ | (48,907 | ) | |||
Net
Loss
|
$ | (597,193 | ) | $ | (548,200 | ) | $ | (48,407 | ) | |||
Basic
earnings (Loss) per share
|
$ | (0.06 | ) | $ | (0.03 | ) | $ | 0.03 | ||||
Weighted
average number of common shares – basic and diluted
|
10,571,629 | 20,683,456 | 10,111,827 | |||||||||
Inventory
|
$ | 0 | $ | 4,308 | $ | 4,308 | ||||||
Total
Current Assets
|
$ | 14,475 | $ | 18,783 | $ | 4,308 | ||||||
Deposits
|
$ | 1,000 | $ | 0 | $ | (1,000 | ) | |||||
Software
Application Asset
|
$ | 0 | $ | 47,357 | $ | 47,357 | ||||||
PP&E
|
$ | 1,136 | $ | 16,061 | $ | 14,925 | ||||||
Total
Other Assets
|
$ | 2,387 | $ | 63,669 | $ | 61,282 | ||||||
Total
Assets
|
$ | 16,862 | $ | 82,452 | $ | 65,590 | ||||||
Accounts
Payable
|
$ | 7,750 | $ | 2,250 | $ | (5,500 | ) | |||||
Accounts
Payable Related Party
|
$ | 0 | $ | 30,000 | $ | 30,000 | ||||||
Total
Current Liabilities
|
$ | 51,911 | $ | 76,411 | $ | 24,500 | ||||||
Loans
from a Shareholder
|
$ | 175,769 | $ | 0 | $ | (175,769 | ) | |||||
Shareholder
Advance
|
$ | 0 | $ | 182,600 | $ | 182,600 | ||||||
Total
Long-Term Liabilities
|
$ | 175,769 | $ | 182,600 | $ | 6,831 | ||||||
Total
Liabilities
|
$ | 227,680 | $ | 259,011 | $ | 31,331 | ||||||
Paid-in
Capital
|
$ | 395,756 | $ | 381,022 | $ | (14,734 | ) | |||||
Deficits/Losses
that have accumulated during the development stage
|
$ | (608,722 | ) | $ | (559,729 | ) | $ | 48,993 | ||||
Stockholders’
Equity (Deficit)
|
$ | (210,819 | ) | $ | (176,559 | ) | $ | 34,260 | ||||
Total
Liabilities and Stockholders’ Equity (Deficit)
|
$ | 16,862 | $ | 82,452 | $ | 65,590 |
F-15
NOTE
10: Material Subsequent Events (unaudited)
On June
1, 2009, the Company founder and CEO, Dr. Alexander Gak, moved to become
Chairman of the Board and hired Mr. Leonid Pushkantser as CEO. The significant
compensation for Mr. Pushkantser is described next. Mr. Pushkantser is
compensated with a base salary of $180,000 per year for the first six months and
$250,000 per year after. In addition, Mr. Pushkantser has been granted options
to acquire 400,000 shares, which options vest 25% of the amount for each of four
years.
On July
1, 2009, the Company began a one-year lease for office space for its
headquarters operation from Regus at a minimum monthly rent of $ 952 which
expires on June 30, 2010. The minimum full year rental commitment to June 30,
2010 is $ 11,424.
On August
19, 2009, the Company and Dr. Alexander Gak entered into an agreement to
document the terms of the Shareholder Advance. The agreement converted the
advance into a loan. The material terms are that the Company will owe an
interest rate of 8% per year, beginning on August 19, 2009, for the outstanding
loan amount. The company will begin payment of the principal and accrued
interest only after the Company’s operating checking account exceeds $250,000 in
net cash on hand, at which time the company will pay $5,000 per month. Any
principal and accrued interest not already repaid is due on August 18, 2019. The
Company is allowed to pre-pay the note without penalty, but the debt-holder does
not have the right to demand pre-payment.
F-16
FINANCIAL
INFORMATION
BAETA
CORP.
Unaudited Financial
Statements for the Period ended September 30, 2009
Item:
|
Page No.:
|
|
Balance
Sheet
|
89 | |
Statement
of Operations
|
90 | |
Statement
of Stockholder Equity (Deficit)
|
91 | |
Statement
of Cash Flows
|
92 | |
Notes
|
|
93 |
F-17
Baeta
Corp.
(
a Developmental Stage Company)
Balance
Sheets
As of
|
As of
|
|||||||
September 30,
|
December 31,
|
|||||||
2009
|
2008
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
$ | 1,924 | $ | 14,475 | ||||
Inventory
|
1,713 | 4,308 | ||||||
Total
Current Assets
|
3,637 | 18,783 | ||||||
Other
Assets
|
||||||||
Software
Application
|
182,357 | 47,357 | ||||||
Plant
Property & Equipment, net of accumulated depreciation of
$425
|
36,797 | 16,061 | ||||||
Organization,
net of accumulated amortization of $152
|
198 | 251 | ||||||
Deposit
|
1,904 | |||||||
Total
Other Assets
|
221,257 | 63,669 | ||||||
TOTAL
ASSETS
|
$ | 224,894 | $ | 82,452 | ||||
Current
Liabilities
|
||||||||
Accounts
Payable
|
$ | 39,646 | $ | 2,250 | ||||
Accounts
Payable Related Party
|
65,000 | 30,000 | ||||||
Line
of Credit
|
46,023 | 44,161 | ||||||
Other
Current Liabilities
|
57,122 | |||||||
Total
Current Liabilities
|
207,791 | 76,411 | ||||||
Long-Term
Liabilities
|
||||||||
Shareholder
Advance
|
2,733 | 182,600 | ||||||
Shareholder
Note
|
288,850 | |||||||
Total
Long-Term Liabilities
|
291,583 | 182,600 | ||||||
TOTAL
LIABILITIES
|
499,374 | 259,011 | ||||||
Stockholders'
Equity (Deficit)
|
||||||||
Preferred
stock, 10,000,000 shares authorized with a par value of $ 0.0001. 100
shares of Series A issued or outstanding (100 issued and
outstanding as of 2008)
|
- | - | ||||||
Common
stock, 100,000,000 shares authorized with a par value of $ 0.0001;
22,197,388 shares issued and outstanding at September 30,
2009
|
2,220 | 2,148 | ||||||
Paid-in
capital
|
810,493 | 381,022 | ||||||
Losses
that have accumulated during the development stage
|
(1,087,193 | ) | (559,729 | ) | ||||
Total
Stockholders' Equity (Deficit)
|
(274,480 | ) | (176,559 | ) | ||||
TOTAL
LIABILITIES &
|
||||||||
STOCKHOLDERS'
EQUITY (DEFICIT)
|
$ | 224,894 | $ | 82,452 |
See
Notes to Financial Statements
F-18
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Operations
Three-Months Period
Ended
|
Three-Months Period
Ended
|
Nine-Months Ended
|
Nine-Months Ended
|
Cumulative during
development stage
|
||||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
August 14, 2007 to
|
||||||||||||||||
2009
|
2008
|
2009
|
2008
|
September 30, 2009
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||||
Revenues
|
||||||||||||||||||||
Revenue
|
$ | - | $ | - | $ | 9,003 | $ | - | $ | 9,074 | ||||||||||
Net
Revenue
|
- | - | 9,003 | - | 9,074 | |||||||||||||||
Total
Revenue
|
- | - | 9,003 | - | 9,074 | |||||||||||||||
Cost
of Goods Sold
|
||||||||||||||||||||
Cost
of Goods Sold
|
- | - | 2,595 | - | 2,612 | |||||||||||||||
Total
Cost of Goods Sold
|
- | - | 2,595 | - | 2,612 | |||||||||||||||
Gross
Income
|
- | - | 6,408 | - | 6,462 | |||||||||||||||
Operating
Expenses
|
||||||||||||||||||||
Amortization
|
105 | 105 | 227 | 140 | 501 | |||||||||||||||
Research
& Development
|
28,350 | 50,587 | 82,412 | |||||||||||||||||
Sales
& Marketing
|
40,463 | 81,825 | 81,825 | |||||||||||||||||
Other
miscellaneous operating expenses
|
177,506 | 152,928 | 444,266 | 372,184 | 918,395 | |||||||||||||||
Total
Operating Expenses
|
218,074 | 181,383 | 526,318 | 422,911 | 1,083,133 | |||||||||||||||
Loss
From Operations
|
(218,074 | ) | (181,383 | ) | (519,910 | ) | (422,911 | ) | (1,076,671 | ) | ||||||||||
Other
income (expense)
|
- | - | - | - | ||||||||||||||||
Charitable
Donation
|
- | - | - | - | (2,500 | ) | ||||||||||||||
Interest
expense
|
(3,814 | ) | 0 | (6,056 | ) | 32 | (6,024 | ) | ||||||||||||
Net
Loss Before Provision For Income Taxes
|
(221,888 | ) | (181,383 | ) | (525,966 | ) | (422,879 | ) | (1,085,195 | ) | ||||||||||
Provision
For Income Taxes
|
1,498 | 1,498 | - | 1,998 | ||||||||||||||||
Net
Loss
|
$ | (223,386 | ) | $ | (181,383 | ) | $ | (527,464 | ) | $ | (422,879 | ) | $ | (1,087,193 | ) | |||||
Basic
and fully diluted earnings (loss) per share
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.02 | ) | $ | (0.02 | ) | $ | |||||||
Weighted
average number of
|
||||||||||||||||||||
common
shares - basic and diluted
|
21,995,642 | 20,745,543 | 21,723,583 | 20,372,772 |
See
Notes to Financial Statements
F-19
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Stockholder Equity (Deficit)
Additional
|
Retained
|
|||||||||||||||||||||||||||
Preferred Shares
|
Common Stock
|
Paid-in
|
Earnings
|
|
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
(Deficit)
|
Total
|
||||||||||||||||||||||
Balance,
August 14, 2007
|
- | - | - | - | - | |||||||||||||||||||||||
Commn
stock issued,August 14, 2007
|
20,000,000 | 2,000 | - | - | 2,000 | |||||||||||||||||||||||
Loss
for the period beginning Aug 14, 2007 ( inception) to December 31,
2007
|
(11,529 | ) | (11,529 | ) | ||||||||||||||||||||||||
Balance, December
31, 2007
|
20,000,000 | 2,000 | - | (11,529 | ) | (9,529 | ) | |||||||||||||||||||||
Preferred Stock
- Series A
|
100 | - | ||||||||||||||||||||||||||
Stock
issued for service and consulting
|
536,280 | 54 | 146,016 | 146,070 | ||||||||||||||||||||||||
Private
placements, August 1, 2008
|
930,400 | 93 | 232,507 | 232,600 | ||||||||||||||||||||||||
Charitable
donation, Nov 17, 2008
|
10,000 | 1 | 2,499 | 2,500 | ||||||||||||||||||||||||
Loss
for the year ended Dec 31, 2008
|
(548,200 | ) | (548,200 | ) | ||||||||||||||||||||||||
Balance, December
31, 2008
|
100 | - | 21,476,680 | 2,148 | 381,022 | (559,729 | ) | (176,559 | ) | |||||||||||||||||||
Stocks
issued for service and consulting
|
109,282 | 11 | 54,630 | - | 54,641 | |||||||||||||||||||||||
Option
Holder's Equity
|
12,615 | |||||||||||||||||||||||||||
Private
Placements
|
6,000 | 1 | 2,999 | 3,000 | ||||||||||||||||||||||||
Loss
for the year to date ended March 31, 2009
|
(111,742 | ) | (111,742 | ) | ||||||||||||||||||||||||
Balance, March
31, 2009 - Unaudited
|
100 | - | 21,591,962 | 2,159 | 451,267 | (671,471 | ) | (230,660 | ) | |||||||||||||||||||
Stocks
issued for service and consulting
|
149,496 | 15 | 74,733 | 74,748 | ||||||||||||||||||||||||
Option
Holder's Equity
|
28,298 | |||||||||||||||||||||||||||
Private
Placements
|
- | - | ||||||||||||||||||||||||||
Loss
for the quarter to date ended June 30, 2009
|
(192,336 | ) | (192,336 | ) | ||||||||||||||||||||||||
Balance, June
30, 2009 - Unaudited
|
100 | - | 21,741,458 | 2,174 | 554,298 | (863,807 | ) | (348,248 | ) | |||||||||||||||||||
Stock
issued for service and consulting
|
181,930 | 18 | 90,947 | 90,965 | ||||||||||||||||||||||||
Option
Holder's Equity
|
28,276 | |||||||||||||||||||||||||||
Private
Placements
|
274,000 | 27 | 136,973 | 137,000 | ||||||||||||||||||||||||
Loss
for the quarter to date ended September 30, 2009
|
(223,386 | ) | (223,386 | ) | ||||||||||||||||||||||||
Balance, September
30, 2009 - Unaudited
|
100 | - | 22,197,388 | 2,220 | 810,493 | (1,087,193 | ) | (343,669 | ) |
See
Notes to Financial Statements
F-20
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Cash Flows
Nine-Months
Period Ended
|
Nine-Months
Period Ended
|
Cumulative during
development stage
|
||||||||||
September 30,
|
September 30,
|
August 14, 2007 to
|
||||||||||
2009
|
2008
|
September 30, 2009
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
CASH FLOWS FROM OPERATING
ACTIVITIES
|
||||||||||||
Net
income (loss)
|
$ | (527,464 | ) | $ | (422,879 | ) | $ | (1,087,193 | ) | |||
Adjustments
to reconcile net loss to net cash
|
||||||||||||
provided
by (used in) operating activities:
|
||||||||||||
Depreciation
|
175 | 87 | 350 | |||||||||
Amortization
|
53 | 53 | 152 | |||||||||
Increase
in current assets and liabilities;
|
||||||||||||
Increase
in accounts payable
|
37,396 | - | 39,646 | |||||||||
Increase
in accounts payable related party
|
35,000 | - | 65,000 | |||||||||
Increase
in Other Current Liabilities
|
57,122 | - | 57,122 | |||||||||
Increase
in Inventory
|
2,595 | - | (1,713 | ) | ||||||||
Increase
in Deposit
|
(1,904 | ) | - | (1,904 | ) | |||||||
Stock
Based Compensation
|
289,543 | 84,070 | 435,613 | |||||||||
Net
cash used by operating activities
|
(107,484 | ) | (338,669 | ) | (492,927 | ) | ||||||
CASH FLOWS FROM INVESTING
ACTIVITIES
|
||||||||||||
PP&E
|
(20,911 | ) | (1,311 | ) | (37,147 | ) | ||||||
Expenditure
for organization expense
|
- | - | (350 | ) | ||||||||
Software
Application
|
(135,000 | ) | - | (182,357 | ) | |||||||
Net
cash provided by (used in) investing activities
|
(155,911 | ) | (1,311 | ) | (219,854 | ) | ||||||
CASH FLOWS FROM FINANCING
ACTIVITIES
|
||||||||||||
Shareholder
Advance
|
(179,867 | ) | 160,350 | 2,733 | ||||||||
Shareholder
Note
|
288,850 | 0 | 288,850 | |||||||||
Line
of Credit
|
1,862 | 47,511 | 46,023 | |||||||||
Common
Stock Issued
|
140,000 | 152,125 | 377,100 | |||||||||
Net
cash provided by (used in) financing activities
|
250,845 | 359,986 | 714,706 | |||||||||
Net
increase (decrease) in cash & cash equivalents
|
(12,550 | ) | 20,007 | 1,925 | ||||||||
Cash
at beginning of period
|
14,475 | 10,150 | - | |||||||||
Cash
at end of period
|
$ | 1,924 | $ | 30,157 | $ | 1,924 | ||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW
|
||||||||||||
INFORMATION:
|
||||||||||||
Interest
paid
|
$ | $ | $ | - | ||||||||
Income
taxes paid
|
1,498 | 1,998 | ||||||||||
$ | 1,498 | $ | - | $ | 1,998 |
See
Notes to Financial Statements
F-21
Baeta
Corp.
(a
Development Stage Company)
September
30, 2009
Notes
to the Unaudited Financial Statements
NOTE
1: Summary of Significant Accounting Policies, Nature of Operations and Use of
Estimates:
Nature
of Business and Basis of Presentation
BAETA
Corp. (a development stage company) (“the Company”) was incorporated in the
State of New Jersey on August 14, 2007 as a product-driven medical technology
company that manufactures advanced products for the global vital signs
monitoring industry. The Company has developed a patent-pending pain management
and pain assessment product for the estimated 25 million chronic pain sufferers
in the U.S. alone.
As of
September 30, 2009, the Company had not yet commenced any substantive commercial
operations. All activity through September 30, 2009 relates to the Company’s
formation and initial research and development.
The
Company is considered to be a development stage company and as such the
financial statements presented herein are presented in accordance with Statement
of Financial Accounting Standards (“SFAS”) No. 7. “Accounting and Reporting By
Development Stage Enterprises.” The Company is subject to the risks
associated with activities of development stage companies.
Basis
of Presentation
The
accompanying financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America and
pursuant to the rules and regulations of the Securities and Exchange Commission
(“SEC”).
The
preparation of the financial statements requires management to make estimates
and assumptions that affect the reported amounts in the financial statements,
including the estimated useful lives of tangible and intangible assets.
Management believes the estimates used in preparing the financial statements are
reasonable and prudent. Actual results could differ from these
estimates.
The
interim financial statements include all adjustments that, in the opinion of
management, are necessary in order to make the financial statements not
misleading.
Revenue
Recognition
Revenue
is recognized in accordance with SEC Staff Accounting Bulletin No. 101, “Revenue
Recognition in Financial Statements”. The Company recognizes revenue when the
significant risks and rewards of ownership have been transferred to the customer
pursuant to applicable laws and regulations, including factors such as when
there has been evidence of a sales arrangement, delivery has occurred, or
service have been rendered, the price to the buyer is fixed or determinable, and
collectability is reasonably assured.
Evidence
of a sales arrangement and a fixed or determinable price can be provided by a
purchase order from the customer or from the customer paying for and accepting
the product. Unless indicated differently in a contract between the customer and
the Company, the Company assumes delivery to have occurred and title to have
passed upon receipt of the product by the customer. Because the Company does not
have a history with its customers yet, it assures collectability by recognizing
revenue only after payment for product is received.
The
Company has no significant post delivery obligations and its customers do not
have any significant refund rights, acceptance terms, discounts, or other terms
that serve to reduce the amount recorded relative to the sales price nor to
delay the timing of recognition of revenue.
F-22
Use
of Estimates
The
preparation of financial statements, in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions, which affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.
Cash
and Cash Equivalents:
Cash and
cash equivalents are considered to be all highly liquid investments purchased
with an initial maturity of three (3) months or less.
Software
Application Asset:
The
Company complies with the provisions of SFAS No. 86 “Accounting for the Costs of Computer
Software to Be Sold, Leased, or Otherwise Marketed”. The Software
Application Asset is for software that will be used in the company’s products
and began being capitalized after technological feasibility was established,
which as required by SFAS No. 86, was after a working model was delivered to
BAETA Corp and the working model software was tested for completeness,
functionality, and consistency with expected product design. The testing was
performed by the vendor that developed and delivered the product as well as by
BAETA Corp and select potential customers. Capitalized software costs will begin
being amortized when the software product is available for general release to
customers. The asset is reviewed for impairment at an executive management
meeting quarterly, during the review of the Company’s financial results.
Impairment is reviewed on a product-by-product basis by comparing the
unamortized capitalized costs to the asset’s net realizable value. The amount by
which the unamortized capitalized costs exceed the net realizable value would be
recognized as an impairment charge.
Property,
Plant and Equipment:
Property,
Plant and Equipment is capitalized at historical cost. Property, Plant and
Equipment for the Company currently consists of Computer and Office Equipment
and of Tooling. Computer and Office Equipment is depreciated over the time of
its useful life. Tooling is depreciated in proportion to the units produced by
the related tooling relative to the total number of units the tooling is
expected to be able to produce. Each asset in Property, Plant and Equipment is
reviewed for impairment at an executive management meeting quarterly, during the
review of the Company’s financial results, and an impairment charge would be
recognized if the carrying amount of the asset is not recoverable and exceeds
its fair value. Expenditures incurred that enhances the productivity of the
asset and/or extends the existing asset's life are
capitalized. Expenditures for typical normal wear and tear items are
expensed when incurred.
Stock
Compensation:
Stock
issued for services rendered is valued at the time of service with the most
relevant measurement at the time being either current stock price of the company
stock in a recent private placement or equity offering or vendor
invoice/contract that most closely reflects the value of services performed
or product delivered..
Stock
Options Issued for Services Rendered:
The
Company complies with the provisions of SFAS No. 123R “Accounting for Stock-Based
Compensation”. The company uses the Black-Scholes-Merton closed-form
model to value its stock options. Using that model, the Company includes as
inputs to the model assumptions for the exercise price of each option, the
expected term of each option, the current price of the underlying share, the
expected volatility in the price of the underlying share for the expected term
of each option, the expected dividends on the underlying share for the expected
term of each option, and the risk free rate for the expected term of each
option.
F-23
The
exercise date of each option is included on the contractual agreements with each
compensated provider. To estimate the expected term of options, the company used
the “simplified” method as allowed in Staff Accounting Bulletin No. 110. The
price of the underlying share is valued at the time of option grant with
the most relevant measurement at the time being either current stock price of
the company stock in a recent private placement or equity offering or vendor
invoice/contract that most closely reflects the value of services performed
or product delivered.. Volatility is estimated by using the implied volatility a
comparable company that is public, with publicly traded options, that is in a
similar industry, with a similar product set, at a stage of life and size as
close to the Company as possible for the set of similar companies with publicly
traded options. The Company is using implied volatility, because historic
volatility for the Company does not exist and is not practicable to obtain from
comparable companies. There are no dividends expected to be paid on the
underlying shares during the expected term of any options. And, the risk free
rate is obtained from the yield on a similar term U.S. Treasury.
Income Taxes:
The
Company complies with the provisions of SFAS No. 109 “Accounting for Income Taxes”.
Deferred income tax assets and liabilities are computed for differences
between the financial statement and tax bases of assets and liabilities that
will result in future taxable or deductible amounts and are based on enacted tax
laws and rates applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established, when necessary,
to reduce deferred income tax assets to the amount expected, by management in
management’s quarterly financial review and based on available evidence, that is
more likely than not to be realized.
Income
(Loss) Per Share:
In
accordance with SFAS No. 128, “Earnings Per Share”, the basic net loss per
common share is computed by dividing net loss available to common stockholders
by the weighted average number of common shares outstanding during the
period presented. Diluted net loss per common share is computed similar to basic
net loss per common share except that the denominator is increased to include
the number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive. As at September 30, 2009, diluted net loss per share is equivalent to
basic net loss per share as there were no dilutive securities
outstanding.
Concentration
of Credit Risk
Financial
instruments, which potentially subject the Company to concentrations of credit
risk, consist of cash and cash equivalents and accounts receivables. The Company
places its cash with high quality financial institutions and at times may exceed
the FDIC $250,000 insurance limit. The Company extends credit based on an
evaluation of the customer's financial condition, generally without collateral.
Exposure to losses on receivables is principally dependent on each customer's
financial condition. The Company monitors its exposure for credit losses and
maintains allowances for anticipated losses, as required. Accounts are
“written-off” when deemed uncollectible.
As of
September 30, 2009 the Company has cash balance of $1,924 and no accounts
receivable.
Special
– purpose entities
The
Company does not have any off-balance sheet financing activities.
Recent
Accounting Pronouncements
In April
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 164, “Not-for-Profit Entities: Mergers and
Acquisitions—Including an amendment of FASB Statement No. 142” (“SFAS
164”). The objective of this Statement is to improve the relevance,
representational faithfulness, and comparability of the information that a
not-for-profit entity provides in its financial reports about a combination with
one or more other not-for-profit entities, businesses, or nonprofit activities.
The Company does not believe that SFAS 164 will have an impact on the financial
statements.
In May
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 165, “Subsequent Events” (“SFAS
165”). The objective of this Statement is to establish general standards of
accounting for and disclosure of events that occur after the balance sheet date
but before financial statements are issued or are available to be issued. In
particular, this Statement sets forth:
F-24
1.
|
The
period after the balance sheet date during which management of a reporting
entity should evaluate events or transactions that may occur for potential
recognition or disclosure in the financial
statements
|
2.
|
The
circumstances under which an entity should recognize events or
transactions occurring after the balance sheet date in its financial
statements
|
3.
|
The
disclosures that an entity should make about events or transactions that
occurred after the balance sheet
date.
|
In
accordance with this Statement, an entity should apply the requirements to
interim or annual financial periods ending after June 15, 2009. The Company does
not believe that SFAS 164 will have a significant impact on the financial
statements.
In June
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 166, “Accounting for Transfers of Financial
Assets—an amendment of FASB Statement No. 140” (“SFAS 166”). The Board’s
objective in issuing this Statement is to improve the relevance,
representational faithfulness, and comparability of the information that a
reporting entity provides in its financial statements about a transfer of
financial assets; the effects of a transfer on its financial position, financial
performance, and cash flows; and a transferor’s continuing involvement, if any,
in transferred financial assets. The Board undertook this project to
address (1) practices that have developed since the issuance of FASB Statement
No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, that are not consistent with the original intent and key
requirements of that Statement and (2) concerns of financial statement users
that many of the financial assets (and related obligations) that have been
derecognized should continue to be reported in the financial statements of
transferors.
This
Statement must be applied as of the beginning of each reporting entity’s first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period and for interim and annual reporting
periods thereafter. Earlier application is prohibited. This Statement
must be applied to transfers occurring on or after the effective
date.
Additionally,
on and after the effective date, the concept of a qualifying special-purpose
entity is no longer relevant for accounting purposes. Therefore,
formerly qualifying special-purpose entities (as defined under previous
accounting standards) should be evaluated for consolidation by reporting
entities on and after the effective date in accordance with the applicable
consolidation guidance. If the evaluation on the effective date
results in consolidation, the reporting entity should apply the transition
guidance provided in the pronouncement that requires
consolidation.
Additionally,
the disclosure provisions of this Statement should be applied to transfers that
occurred both before and after the effective date of this Statement. The Company
has not determined the impact of SFAS 166 on its financial position or results
of operations.
In June
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 167, “Amendments to FASB Interpretation No. 46(R)”
(“SFAS 167”). The Board’s objective in issuing this Statement is to improve
financial reporting by enterprises involved with variable interest entities. The
Board undertook this project to address (1) the effects on certain provisions of
FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest
Entities, as a result of the elimination of the qualifying
special-purpose entity concept in FASB Statement No. 166, Accounting for Transfers of
Financial Assets, and (2) constituent concerns about the application of
certain key provisions of Interpretation 46(R), including those in which the
accounting and disclosures under the Interpretation do not always provide timely
and useful information about an enterprise’s involvement in a variable interest
entity. This Statement shall be effective as of the beginning of each
reporting entity’s first annual reporting period that begins after November 15,
2009, for interim periods within that first annual reporting period, and for
interim and annual reporting periods thereafter. Earlier application is
prohibited. The Company does not believe that SFAS 164 will have a significant
impact on the financial statements. In April
2009, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 168, “The FASB Accounting Standards
CodificationTM and the
Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB
Statement No. 162” (“SFAS 168”). The FASB Accounting Standards
CodificationTM
(Codification) will become the source of authoritative U.S. generally accepted
accounting principles (GAAP) recognized by the FASB to be applied by
nongovernmental entities. Rules and interpretive releases of the Securities and
Exchange Commission (SEC) under authority of federal securities laws are also
sources of authoritative GAAP for SEC registrants. On the effective date of this
Statement, the Codification will supersede all then-existing non-SEC accounting
and reporting standards. All other nongrandfathered non-SEC accounting
literature not included in the Codification will become
nonauthoritative. This Statement is effective for financial
statements issued for interim and annual periods ending after September 15,
2009.
F-25
Following
this Statement, the Board will not issue new standards in the form of
Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts.
Instead, it will issue Accounting Standards Updates. The Board will not consider
Accounting Standards Updates as authoritative in their own right. Accounting
Standards Updates will serve only to update the Codification, provide background
information about the guidance, and provide the bases for conclusions on the
change(s) in the Codification.
FASB
Statement No. 162, The
Hierarchy of Generally Accepted Accounting Principles, which became
effective on November 13, 2008, identified the sources of accounting principles
and the framework for selecting the principles used in preparing the financial
statements of nongovernmental entities that are presented in conformity with
GAAP. Statement 162 arranged these sources of GAAP in a hierarchy for users to
apply accordingly. Once the Codification is in effect, all of its content will
carry the same level of authority, effectively superseding Statement 162. In
other words, the GAAP hierarchy will be modified to include only two levels of
GAAP: authoritative and nonauthoritative. As a result, this Statement replaces
Statement 162 to indicate this change to the GAAP hierarchy. The Company does
not believe that SFAS 164 will have an impact on the financial statements. The
Company has not determined the impact of SFAS 168 on its financial position or
results of operations.
Fiscal
Year
Company
adopted December 31 for its accounting fiscal year
Control
by Principal Stockholders
The
directors, executive officers and their affiliates or related parties, own
beneficially and in the aggregate, the majority of the voting power of the
outstanding shares of the common stock of the Company. Accordingly, the
directors, executive officers and their affiliates, if they voted their shares
uniformly, would have the ability to control the approval of most corporate
actions, including increasing the authorized capital stock of the Company and
the dissolution, merger or sale of the Company's assets or
business.
NOTE
2: Revolving line of credit
As of
September 30, 2009, the Company is obligated under unsecured line of credit of $
50,000 from a bank and principal balance of such a loan is $ 46,023. The current
interest rate on this line of credit is 9.24%, with no maturity date. The
debt is also guaranteed by a personal liability of an officer and
shareholder.
NOTE
3: Related Party Transactions
On August
19, 2009, the Company and Dr. Alexander Gak entered into an agreement to
document the terms of the Shareholder Advance of $ 288,850 that had accrued to
that point. The agreement converted the advance into a loan. The material terms
are that the Company will owe an interest rate of 8% per year, beginning on
August 19, 2009, for the outstanding loan amount. The company will begin payment
of the principal and accrued interest only after the Company’s operating
checking account exceeds $250,000 in net cash on hand, at which time the company
will pay $5,000 per month. Any principal and accrued interest not already repaid
is due on August 18, 2019. The Company is allowed to pre-pay the note without
penalty, but the debt-holder does not have the right to demand
pre-payment.
Shareholder
Advance decreased to $2,733 as of September 30, 2009. The advance relates to
accrued interest from the Shareholder Loan and is due to Dr. Alexander
Gak.
F-26
On
September 16, 2008, Dr. Alexander Gak, our Chief Executive Officer and
President, and Extranome, Inc., a New Jersey corporation entered into an
Exclusive Software Agreement (the “Agreement”). Pursuant the Agreement,
Extranome sold to Baeta Corp. all commercial rights to its software entitled
MyHealthID Medical Records Systems for a period of twenty-five years, subject to
renewal. Pursuant to the Agreement, the Company agreed to pay Extranome $0.00
upfront, and in perpetuity approximately forty-nine percent of all net revenues
generated from advertising by MyHealthID. Our CEO and sole director, Dr.
Alexander Gak, is the 100% owner of Extranome, Inc., a New Jersey
corporation.
On
November 1, 2008, BAETA Corp. entered into a Software Development Contract with
Extranome, Inc. At the time of the transaction, BAETA and Extranome were
controlled by Dr. Alexander Gak, our President and CEO. Pursuant to the Software
Development Agreement, Extranome has been providing ongoing software development
and product support services for BAETA since November 01, 2008. The Software
Development Agreement is a non-exclusive agreement and is not related to BAETA’s
Exclusive Software Agreement regarding MyHealthID product. In accordance with
the Software Development Agreement, BAETA is to pay Extranome for the contracted
work in cash form; however BAETA currently does not have a sufficient amount of
cash on hand. Therefore, BAETA is paying Extranome is shares of its common
stock. Extranome has received 30,000 for each month since November as non-cash
part of compensation for services rendered which represent approximately 50% of
Extranome’s due monthly compensation. BAETA will continue to issue company
shares to Extranome in the amount of 50% of the monthly compensation for
services rendered until it is able to compensate Extranome fully in cash.
Through September 30, 2009, BAETA has issued 300,000 shares to
Extranome.
NOTE
4: Stockholders’ Equity:
Common
stock
The
Company is authorized to issue 100,000,000 shares of common stock with a par
value of $ 0.0001. As of December 31, 2008, the Company had 21,476,680 shares
issued and outstanding. As of September 30, 2009, the Company has 22,197,388
shares issued and outstanding.
On
January 14, 2009, the Company conducted an offering of its common stock to an
accredited investor and issued 6,000 shares to that investor. The investor
purchased the shares at $0.50 per share. The recipient of these shares is not a
related party to the Company.
On
January 23, 2009, the Company issued 39,282 shares of its common stock for
marketing and software services. The shares are accounted for at $0.50 per
share, based the assumption that the market price was equal to that used in the
private placement that closed on January 14, 2009, and because the bills paid
for by the shares were for an amount equal to $0.50 per share compensation. The
recipient of these shares is now an officer of the Company.
On
February 25, 2009, the Company issued 40,000 shares of its common stock for
software services. The shares are accounted for at $0.50 per share, based the
assumption that the market price was equal to that used in the private placement
that closed on January 14, 2009, and because the bills paid for by the shares
were for an amount equal to $0.50 per share compensation. 10,000 of the issued
shares were issued to a non-related party of the Company. 30,000 of the issued
shares were issued to a related party of the Company.
On March
25, 2009, the Company issued 30,000 shares of its common stock for software
services. The shares are accounted for at $0.50 per share, based the assumption
that the market price was equal to that used in the private placement that
closed on January 14, 2009, and because the bills paid for by the shares were
for an amount equal to $0.50 per share compensation. The recipient of these
shares is a related party to the Company.
On April
26, 2009, the Company issued 44,496 shares of its common stock for services. The
shares are accounted for at $0.50 per share, based the assumption that the
market price was equal to that used in the private placement that closed on
January 14, 2009, and because the bills paid for by the shares were for an
amount equal to $0.50 per share compensation. Each of the recipients are related
parties to the Company.
F-27
On May
28, 2009, the Company issued 60,000 shares of its common stock for services. The
shares are accounted for at $0.50 per share, based the assumption that the
market price was equal to that used in the private placement that closed on
January 14, 2009, and because the bills paid for by the shares were for an
amount equal to $0.50 per share compensation. 25,000 shares were issued to
service providers. 35,000 shares were issued to related parties of the
Company.
On June
29, 2009, the Company issued 45,000 shares of its common stock for services. The
shares are accounted for at $0.50 per share, based the assumption that the
market price was equal to that used in the private placement that closed on
January 14, 2009, and because the bills paid for by the shares were for an
amount equal to $0.50 per share compensation. All of the recipients of the
shares are related parties of the Company.
On July
1, 2009, the Company conducted an offering of its common stock to an accredited
investor and issued 50,000 shares to that investor. The investor purchased the
shares at $0.50 per share. The recipient of these shares is not a related party
to the Company.
On July
2, 2009, the Company conducted an offering of its common stock to an accredited
investor and issued 84,000 shares to that investor. The investor purchased the
shares at $0.50 per share. The recipient of these shares is not a related party
to the Company.
On July
23, 2009, the Company issued 45,000 shares of its common stock for services. The
shares are accounted for at $0.50 per share, based the assumption that the
market price was equal to that used in the private placement that closed on July
2, 2009, and because the bills paid for by the shares were for an amount equal
to $0.50 per share compensation. All of the recipients of the shares are related
parties of the Company.
On August
10, 2009, the Company conducted an offering of its common stock to an accredited
investor and issued 20,000 shares to that investor. The investor purchased the
shares at $0.50 per share. The recipient of these shares is not a related party
to the Company.
On August
16, 2009, the Company conducted an offering of its common stock to an accredited
investor and issued 40,000 shares to that investor. The investor purchased the
shares at $0.50 per share. The recipient of these shares is not a related party
to the Company.
On August
18, 2009, the Company conducted an offering of its common stock to an accredited
investor and issued 10,000 shares to that investor. The investor purchased the
shares at $0.50 per share. The recipient of these shares is not a related party
to the Company.
On August
23, 2009, the Company issued 70,334 shares of its common stock for services. The
shares are accounted for at $0.50 per share, based the assumption that the
market price was equal to that used in the private placement that closed on
August 18, 2009, and because the bills paid for by the shares were for an amount
equal to $0.50 per share compensation. Of the 70,334 shares issued, 53,334 were
issued to related parties, and 17,000 were issued to non-related parties of the
Company.
On
September 1, 2009, the Company conducted an offering of its common stock to an
accredited investor and issued 30,000 shares to that investor. The investor
purchased the shares at $0.50 per share. The recipient of these shares is not a
related party to the Company.
On
September 2, 2009, the Company conducted an offering of its common stock to an
accredited investor and issued 40,000 shares to that investor. The investor
purchased the shares at $0.50 per share. The recipient of these shares is not a
related party to the Company.
On
September 29, 2009, the Company issued 66,596 shares of its common stock for
services. The shares are accounted for at $0.50 per share, based the assumption
that the market price was equal to that used in the private placement that
closed on September 2, 2009, and because the bills paid for by the shares were
for an amount equal to $0.50 per share compensation. Each of the recipients are
related parties of the Company.
F-28
Stock
Options
As of
December 31, 2008, the Company had granted options to purchase 0 shares. As of
September 30, 2009, the Company had granted options to purchase 1,623,512
shares, of which options to purchase 123,512 shares had vested. During the
period, the Company awarded option grants to purchase a total of 1,623,512
shares, which had an average contract life of 8.89 years until they expire, and
options to purchase 123,512 shares vested. For those grants during the period,
the company used the valuation method described in the Significant Accounting
Policies (Footnote 1 “Stock Options Issued for Services Rendered” section) and
used the options with the closest expiration date available for the similar
entity, with the closest strike price to the current share price because all of
the Company’s option grants are issued at a strike price equal to the current
share price at the time, which resulted in an implied volatility, from the
average of the bid and ask implied volatilities, of 45.4, a risk free rate of
3.72%, and a resulting total value of $339,128 for those option grants. Of that
value, $55,094 was expensed as compensation costs and $0 was on the balance
sheet.
During
the six-month period, the following aggregate option grants were
made:
Shares Available for the Grant(s)
|
Vesting Period (same as Service
Period)
|
Maximum Contractual Life
|
||
100,000
|
6
months
|
10
years
|
||
9,862
|
Immediate
|
10
years
|
||
800,000
|
4
years
|
10
years
|
||
450,000
|
5
years
|
6
years
|
||
250,000
|
5
years
|
10
years
|
Below is
information about the options outstanding:
Number of
Shares
|
Weighted Average
Exercise Price
|
Average Remaining
Contractual Life
(years)
|
Value
|
|||||||||||||
Outstanding
December 31, 2008
|
0 | N/A | N/A | N/A | ||||||||||||
Granted
|
1,623,512 | $ | 0.50 | 8.89 | $ | 339,128 | ||||||||||
Exercised
|
0 | |||||||||||||||
Forfeited
|
0 | |||||||||||||||
Expired
|
0 | |||||||||||||||
Outstanding
September 30, 2009
|
1,623,512 | $ | 0.50 | 8.89 | $ | 339,128 | ||||||||||
Vested
during the Period
|
123,512 | $ | 0.50 | 10 | $ | 27,518 | ||||||||||
Total
vested at September 30, 2009
|
123,512 | $ | 0.50 | 10 | $ | 27,518 |
* All
vested options are currently exercisable
Total
nonvested awards that are not yet recognized as compensation cost have a value
of $269,939 and are expected to be recognized over a weighted-average period of
3.9 years.
Preferred
stocks
The
Company is also authorized to issue 10,000,000 shares of preferred stock with a
par value of $ 0.0001. As of December 31, 2008, Company had 100 preferred share
Series A issued and outstanding. As of September 30, 2009, the Company has 100
preferred share Series A issued and outstanding.
F-29
NOTE
5: Income Tax
The
Company accounts for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires
the recognition of deferred tax assets and liabilities for both the expected
impact of differences between the financial statements and the tax basis of
assets and liabilities, and for the expected future tax benefit to be derived
from tax losses and tax credit carryforwards. SFAS 109 additionally requires the
establishment of a valuation allowance to reflect the likelihood of realization
of deferred tax assets. Realization of deferred tax assets, including those
related to the U.S. net operating loss carryforwards, are dependent upon future
earnings, if any, of which the timing and amount are uncertain. Accordingly, the
net deferred tax asset related to the net operating loss carryforward has been
fully offset by a valuation allowance.
The
Company has a net operating loss carry forward for tax purposes totaling
approximately $ 837,549 at September 30, 2009. The net operating loss carries
forward for income taxes, which may be available to reduce future years' taxable
income. These carry forwards will expire, if not utilized, through 2028 and are
subject to the Internal Revenue Code Section 382, which places a limitation on
the amount of taxable income that can be offset by net operating losses after a
change in ownership. Management believes that the realization of the benefits
from these losses appears uncertain due to the Company's continuing losses for
United States income tax purposes. Accordingly, the Company has provided a 100%
valuation allowance on the deferred tax asset benefit to reduce the asset to
zero. Management will review this valuation allowance periodically and make
adjustments as warranted.
September 30
|
December 31
|
|||||||
2009
|
2008
|
|||||||
Tax
benefit of net operating loss carryforward
|
$ | 293,142 | $ | 108,530 | ||||
Valuation
allowance
|
(293,142 | ) | (108,530 | ) | ||||
Net
deferred tax asset recorded
|
$ | - | $ | - |
NOTE
6: Going Concern
The
Company's financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going concern
that contemplates the realization of assets and liquidation of liabilities in
the normal course of business.
The
Company accumulated operating loss since inception was $ 1,087,193, a working
capital deficit of $ 204,154 and stockholders’ equity deficit of $ 274,480 as of
September 30, 2009.
The
Company will actively pursue its business activities, offer noncash
consideration, secure additional or refinance the debt and/or raise equity as a
means of financing its operations and meet the credit obligations. If the
Company is unable to return to its profitability or obtain necessary financing,
it may substantially curtail or terminate its operations or seek other business
opportunities through strategic alliances, acquisitions or other arrangements
that may dilute the interests of existing stockholders. The company’s management
is currently seeking additional capital to support operations, but has not
received any firm or other commitments from any parties and may, or may not, be
successful in obtaining capital sufficient to perpetuate the operations of the
Company.
NOTE 7: Commitment and
contingencies
Exclusive
Software Agreement
On
September 16, 2008, Dr. Alexander Gak, our Chief Executive Officer and
President, and Extranome, Inc., a New Jersey corporation entered into an
exclusive Software Agreement (the “Agreement”). Pursuant the
Agreement, Extranome sold to Baeta Corp. all commercial rights to its software
entitled MyHealthID Medical Records Systems. Pursuant to the Agreement, the
Company agreed to pay Extranome $0.00 upfront, and in perpetuity approximately
forty-nine percent of all net revenues generated from advertising by MyHealthID.
Our sole officer and director, Dr. Alexander Gak, is the 100% owner of
Extranome, Inc., a New Jersey corporation.
F-30
NOTE
8: Interest Expense
Interest
Expense on the Income Statement is for interest paid on the Line of
Credit.
NOTE
9: Material Subsequent Events
Subsequent
events were evaluated through January 11, 2010.
On
December 29, 2009, Leonid Pushkantser lent the Company $10,000.00. The material
terms are that the Company will pay an interest rate of 5% per year and that the
principal plus interest is due six months from the date of the note. The Company
is allowed to pre-pay the note without penalty, but the debt-holder does not
have the right to demand pre-payment.
NOTE
10: Restatement of 2008 Financial Results
Management
conducted a review of the December 31, 2008 audited financial statements, and
determined that many material errors were present necessitating a re-audit, and
as such, engaged W.T. Uniack & Co., CPAs, P.C. to re-audit the Company
financials for the year ending December 31, 2008. The re-audited and corrected
financial statements for the year ending December 31, 2008, are now provided.
The errors resulted in a change in Net Income Before Tax from ($596,661) to
($547,700) and Net Income from ($597,193) to ($548,200).
F-31
[OUTSIDE BACK COVER OF
PROSPECTUS]
BAETA
CORP.
915,400
SHARES COMMON STOCK
TABLE
OF CONTENTS
Item
|
Page
|
Until
ninety days after the date this registration statement is declared
effective, all dealers that effect transactions in these securities
whether or not participating in this offering, may be required to deliver
a prospectus. This is in addition to the dealer's obligation to deliver a
prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
|
||
Summary
|
1
|
|||
Risk
Factors
|
4
|
|||
Description
of Business
|
11
|
|||
Description
of Properties
|
28
|
|||
Legal
Proceedings
|
28
|
|||
Use
of Proceeds
|
28
|
|||
Determination
of Offering Price
|
28
|
|||
Dilution
|
29
|
|||
Selling
Stockholders
|
29
|
|||
Plan
of Distribution
|
35
|
|||
Directors,
Executive Officers, Promoters and Control Persons
|
37
|
|||
Security
Ownership of Certain Beneficial Owners and Management
|
49
|
|||
Description
of Securities
|
50
|
|||
Interest
of Named Experts and Counsel
|
54
|
|||
Experts
|
54
|
|||
Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
|
55
|
|||
Organization
Within the Last Five Years
|
55
|
|||
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
55
|
|||
Certain
Relationships and Related Transactions and Corporate
Governance
|
65
|
|||
Market
for Common Equity and Related Stockholder Matters
|
69
|
|||
Changes
in and Disagreements with Accountants and Financial
Disclosure
|
70
|
|||
Where
You Can Find More Information
|
71
|
|||
Financial
Statements
|
72
|
F-32
PART
II
INFORMATION NOT REQUIRED IN THE
PROSPECTUS
Item
13.
|
Other
Expenses of Issuance and
Distribution.
|
The
estimated costs of this offering are as follows:
Expenses(1)
|
Amount
US ($)
|
|||
SEC
Registration Fee
|
$
|
116.00
|
||
Transfer
Agent Fees
|
$
|
2,000.00
|
||
Accounting
Fees and Expenses
|
$
|
10,000
|
||
Legal
Fees and Expenses
|
$
|
25,000
|
||
Printers
|
$
|
5,000
|
||
Total
|
$
|
$42,116
|
We are
paying all expenses of the offering listed above. No portion of these expenses
will be borne by the selling stockholders. The selling stockholders, however,
will pay any other expenses incurred in selling their common stock, including
any brokerage commissions or costs of sale.
Item 14.
|
Indemnification of Directors
and Officers
|
We are
incorporated in the State of New Jersey. The New Jersey Business Corporation Act
and our certificate of incorporation and bylaws contain provisions for
indemnification of our officers and directors, and under certain circumstances,
our employees and other persons. The bylaws require us to indemnify such persons
to the fullest extent permitted by New Jersey law. Each such person will be
indemnified in any proceeding if such person acted in good faith and in a manner
that such person reasonably believed to be in, or not opposed to, our best
interests. The indemnification would cover expenses, including attorney's fees,
judgments, fines and amounts paid in settlement. Our bylaws also provide that we
may purchase and maintain insurance on behalf of any of our present or past
directors or officers insuring against any liability asserted against such
person incurred in their capacity as a director or officer or arising out of such status, whether or not we would have the power
to indemnify such person.
We have
no other indemnification provisions in our Certificate of Incorporation, Bylaws
or otherwise specifically providing for indemnification of directors, officers
and controlling persons against liability under the Securities Act.
Item 15.
|
Recent Sales of Unregistered
Securities
|
On August
15, 2007, in connection with the formation of the Company, Dr. Alexander Gak,
the founder of the Company received 1,000 shares of common stock from the
Company for an aggregate of $2,000. By Amendment to the Articles of
Incorporation, the Company subsequently conducted a forward stock split of
20,000 to 1, whereby Dr. Gak currently owns 20,560,000 shares of the Company’s
common stock. The shares were issued upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder, as the issuance of the stock did not
involve a public offering of securities.
72
Sub-Total:
20,000,000 shares of Common Stock outstanding after this issuance.
On April
18, 2008, our Board of Directors approved the designation of 100 shares of our
preferred stock as Series A Preferred Stock (the “Series A Preferred Shares”)
and authorized our officers to file a Certificate of Designation for the Series
A Preferred Shares, which occurred on June 23, 2008. The Series A Preferred
Stock vote with our Common Stock as a single class and have 80% of the voting
power of the aggregate number of shares voted. Dr. Gak was issued the 100 shares
of Series A Preferred Stock on that same day for consideration of $100. The
shares were issued upon reliance on the exemption from registration requirements
of the Securities Act of 1933, as amended, provided under Section 4(2)
promulgated thereunder, as the issuance of the stock did not involve a public
offering of securities.
Sub-Total:
100 shares of Preferred Stock outstanding after this issuance.
From the
period of August through September of 2008, the Company conducted an offering of
its common stock solely to accredited investors. The offering was conducted in
accordance with exemptions from registration pursuant to Section 4(2) and Rule
506 of Regulation D under the Securities Act. As of the close of the offering on
September 25, 2008, the Company had sold approximately 930,400 shares of its
common stock to approximately 44 accredited investors, and had raised an
aggregate of $232,600. The Company’s President and Chairman, Dr. Alexander Gak’s
spouse, Marina Suni was a participant to this offering, purchasing 320,000
shares of common stock at the purchase price of $0.25 per share, for an
aggregate purchase price of $80,000. By law, her shares are not being registered
for sale in this registration statement.
Sub-Total: 20,930,400
shares of Common Stock outstanding after this issuance.
On June
23, 2008, the Company issued 4,000 shares of its common stock to members of The
Sourlis Law Firm. The Company issued the stock in consideration for professional
legal services rendered and upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total: 20,934,400
shares of Common Stock outstanding after this issuance.
On July
17, 2008, the Company issued 5,000 shares of its common stock to Dr. Alex Y.
Bekker. The Company issued the stock in consideration for scientific consulting
services rendered and upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total: 20,939,400
shares of Common Stock outstanding after this issuance.
On July
17, 2008, the Company issued 1,000 shares of its common stock to Robert Sturtz.
The Company issued the stock in consideration for graphic design services
rendered and upon reliance on the exemption from registration requirements of
the Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the issuance of the stock did not involve a public offering of
securities.
Sub-Total: 20,940,400
shares of Common Stock outstanding after this issuance.
On July
17, 2008, the Company issued 1,000 shares of its common stock to Display
Equation, LLC. The Company issued the stock in consideration for graphic design
services rendered and upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
73
Sub-Total:
|
20,941,400
shares of Common Stock outstanding after this
issuance.
|
On July
17, 2008, the Company issued 20,000 shares of its common stock to M.B. Turnkey
Design. The Company issued the stock in consideration for product design
services rendered and upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total:
|
20,961,400
shares of Common Stock outstanding after this
issuance.
|
On July
17, 2008, the Company issued 100,000 shares of its common stock to Ultraflex
International, Inc. The Company issued the stock in consideration for product
engineering services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,061,400
shares of Common Stock outstanding after this
issuance.
|
On July
17, 2008 and September 2, 2008, the Company issued 10,000 and 11,280 (for an
aggregate of 21,280) shares respectively of its common stock to Leroy and Lisbet
Smith. The Company issued the stock in consideration for marketing consultation
services rendered and upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total:
|
21,082,680
shares of Common Stock outstanding after this
issuance.
|
On July
17, 2008, the Company issued 20,000 shares of its common stock to Mark Donskoy.
The Company issued the stock in consideration for internet security consultation
services rendered and upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total:
|
21,102,680
shares of Common Stock outstanding after this
issuance.
|
On July
17, 2008, the Company issued 152,000 shares of its common stock to Douglas A.
Rogers. The Company issued the stock in consideration for executive and
financial consulting services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,254,680
shares of Common Stock outstanding after this
issuance.
|
On July
17, 2008, the Company issued 11,000 shares of its common stock to Prime Studios,
Inc. The Company issued the stock in consideration for graphic design services
rendered and upon reliance on the exemption from registration requirements of
the Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the issuance of the stock did not involve a public offering of
securities.
Sub-Total:
|
21,265,680
shares of Common Stock outstanding after this
issuance.
|
On
September 2, 2008, the Company issued 1,000 shares of its common stock to Vasyl
Rubyov. The Company issued the stock in consideration for software engineering
services rendered and upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
74
Sub-Total:
|
21,266,680
shares of Common Stock outstanding after this
issuance.
|
On
October 28, 2008, the Company issued an additional 152,000 shares of its common
stock to Douglas A. Rogers pursuant to an Amendment to the original consulting
agreement between Rogers Consulting and Baeta Corp. The Company issued the stock
in consideration for executive and financial consulting services rendered and
upon reliance on the exemption from registration requirements of the Securities
Act of 1933, as amended, provided under Section 4(2) promulgated thereunder as
the issuance of the stock did not involve a public offering of
securities.
Sub-Total:
|
21,418,680
shares of Common Stock outstanding after this
issuance.
|
On
November 17, 2008, the Company issued 10,000 shares of its common stock to
Chabad of Fort Lee as a charitable donation to a religious organization, upon
reliance on the exemption from registration requirements of the Securities Act
of 1933, as amended, provided under Section 4(2) promulgated thereunder as the
issuance of the stock did not involve a public offering of
securities.
Sub-Total:
|
21,428,680
shares of Common Stock outstanding after this
issuance.
|
On
December 12, 2008, the Company issued 8,000 shares of its common stock to
Cutting Edge Consulting, Inc. The Company issued the stock in consideration for
marketing consulting services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,436,680
shares of Common Stock outstanding after this
issuance.
|
On
December 12, 2008, the Company issued 10,000 shares of its common stock to
members of The Sourlis Law Firm, including Philip Magri, Esq. and Joseph M.
Patricola, Esq. Mr. Magri and Mr. Patricola each received 5,000 shares. The
Company issued the stock in consideration for professional legal services
rendered and upon reliance on the exemption from registration requirements of
the Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the issuance of the stock did not involve a public offering of
securities.
Sub-Total:
|
21,446,680
shares of Common Stock outstanding after this
issuance.
|
On
December 12, 2008, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract (Exhibit 10.12) between
BAETA Corp. and Extranome, Inc. As noted above, our President and sole director,
Dr. Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
21,476,680
shares of Common Stock outstanding after this
issuance.
|
Year ended
12/31/2008: 21,476,680
shares of Common Stock outstanding at the 2008 fiscal year
end.
On
January 14, 2009, the Company issued its common stock to Yevgeny Litvak, a
qualified and accredited investor as defined in Rule 501(a) of Regulation D of
the Securities Act. The sale was made in accordance with the exemption from
registration pursuant to Section 4(2) under the Securities Act, as it did not
constitute a public offering of securities. The Company sold 6,000 shares of its
Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Mr. Litvak, for an aggregate of $3,000.
75
Sub-Total:
|
21,482,680
shares of Common Stock outstanding after this
issuance.
|
On
January 23, 2009, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract (Exhibit 10.12) between
BAETA Corp. and Extranome, Inc. As noted above, our President and sole director,
Dr. Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
21,512,680
shares of Common Stock outstanding after this
issuance.
|
On
January 23, 2009, the Company issued 9,282 shares of its common stock to Leroy
and Lisbet Smith. The Company issued the stock in consideration for marketing
consultation services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,521,962
shares of Common Stock outstanding after this
issuance.
|
On
February 25, 2009, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract (Exhibit 10.12) between
BAETA Corp. and Extranome, Inc. As noted above, our President and sole director,
Dr. Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
21,551,962
shares of Common Stock outstanding after this
issuance.
|
On
February 25, 2009, the Company issued 10,000 shares of Common Stock to Vasyl
Rubyov of IonIdea, Inc. of Ukraine. The Company issued the stock in
consideration for software development services rendered and upon reliance on
the exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the issuance of
the stock did not involve a public offering of securities.
Sub-Total:
|
21,561,962
shares of Common Stock outstanding after this
issuance.
|
On March
25, 2009, the Company issued 30,000 shares of Common Stock due to Extranome
pursuant to the Software Development Contract (Exhibit 10.12) between BAETA
Corp. and Extranome, Inc. As noted above, our President and sole director, Dr.
Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
21,591,962
shares of Common Stock outstanding after this
issuance.
|
Quarter Ended
3/31/2009: 21,591,962
shares of Common Stock outstanding as of the Quarterly Period ended 3/31/2009
(1st
Quarter ended).
On April
26, 2009, the Company issued 30,000 shares of Common Stock due to Extranome
pursuant to the Software Development Contract (Exhibit 10.12) between BAETA
Corp. and Extranome, Inc. As noted above, our President and sole director, Dr.
Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
21,621,962
shares of Common Stock outstanding after this
issuance.
|
On April
26, 2009, the Company issued 5,000 shares of Common Stock to Dr. Leonid Topper.
The Company issued the stock in consideration for services rendered as the
Company’s Chief Medical Officer and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
76
Sub-Total:
|
21,626,962
shares of Common Stock outstanding after this
issuance.
|
On April
26, 2009, the Company issued 9,496 shares of its common stock to Leroy and
Lisbet Smith. The Company issued the stock in consideration for marketing
consultation services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,636,458
shares of Common Stock outstanding after this
issuance.
|
On May
28, 2009, the Company issued 25,000 shares of its common stock to members of The
Sourlis Law Firm, including Windows of Heaven and More LLC FBO Virginia K.
Sourlis, Esq., and Joseph M. Patricola, Esq. Ms. Sourlis received 20,000 to her
LLC and Mr. Patricola received 5,000 shares. The Company issued the stock in
consideration for professional legal services rendered and upon reliance on the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the issuance of
the stock did not involve a public offering of securities.
Sub-Total:
|
21,661,458
shares of Common Stock outstanding after this
issuance.
|
On May
28, 2009, the Company issued 30,000 shares of Common Stock due to Extranome
pursuant to the Software Development Contract (Exhibit 10.12) between BAETA
Corp. and Extranome, Inc. As noted above, our President and sole director, Dr.
Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
21,691,458
shares of Common Stock outstanding after this
issuance.
|
On May
28, 2009, the Company issued 5,000 shares of Common Stock to Dr. Leonid Topper.
The Company issued the stock in consideration for services rendered as the
Company’s Chief Medical Officer and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,696,458
shares of Common Stock outstanding after this
issuance.
|
On June
29, 2009, the Company issued 5,000 shares of its common stock to Eugene Gribov.
The Company issued the stock in consideration for technology services rendered
as the Company’s Chief Tech Officer and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,701,458
shares of Common Stock outstanding after this
issuance.
|
On June
29, 2009, the Company issued 30,000 shares of Common Stock due to Extranome
pursuant to the Software Development Contract (Exhibit 10.12) between BAETA
Corp. and Extranome, Inc. As noted above, our President and sole director, Dr.
Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
77
Sub-Total:
|
21,731,458
shares of Common Stock outstanding after this
issuance.
|
On June
29, 2009, the Company issued 5,000 shares of its common stock to Leroy and
Lisbet Smith. The Company issued the stock in consideration for marketing
consultation services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,736,458
shares of Common Stock outstanding after this
issuance.
|
On June
29, 2009, the Company issued 5,000 shares of Common Stock to Dr. Leonid Topper.
The Company issued the stock in consideration for services rendered as the
Company’s Chief Medical Officer and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,741,458
shares of Common Stock outstanding after this
issuance.
|
Quarter Ended
6/30/2009: 21,741,458
shares of Common Stock outstanding as of the Quarterly Period ended 6/30/2009
(2nd
Quarter end).
On July
1, 2009, the Company issued its common stock to Mikhail Tsypenyuk, a qualified
and accredited investor as defined in Rule 501(a) of Regulation D of the
Securities Act. The sale was made in accordance with the exemption from
registration pursuant to Section 4(2) under the Securities Act, as it did not
constitute a public offering of securities. The Company sold 50,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Mr. Tsypenyuk, for an aggregate of $25,000.
Sub-Total:
|
21,791,458
shares of Common Stock outstanding after this
issuance.
|
On July
2, 2009, the Company issued its common stock to Boris Mordkovich, a qualified
and accredited investor as defined in Rule 501(a) of Regulation D of the
Securities Act. The sale was made in accordance with the exemption from
registration pursuant to Section 4(2) under the Securities Act, as it did not
constitute a public offering of securities. The Company sold 84,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Mr. Mordkovich, for an aggregate of $42,000.
Sub-Total:
|
21,875,458
shares of Common Stock outstanding after this
issuance.
|
On July
23, 2009, the Company issued 5,000 shares of its common stock to Eugene Gribov.
The Company issued the stock in consideration for technology services rendered
as the Company’s Chief Tech Officer and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,880,458
shares of Common Stock outstanding after this
issuance.
|
On July
23, 2009, the Company issued 5,000 shares of its common stock to Leroy and
Lisbet Smith. The Company issued the stock in consideration for marketing
consultation services rendered as the Company’s Chief Marketing Officer and upon
reliance on the exemption from registration requirements of the Securities Act
of 1933, as amended, provided under Section 4(2) promulgated thereunder as the
issuance of the stock did not involve a public offering of
securities.
78
Sub-Total:
|
21,885,458
shares of Common Stock outstanding after this
issuance.
|
On July
23, 2009, the Company issued 5,000 shares of Common Stock to Dr. Leonid Topper.
The Company issued the stock in consideration for services rendered as the
Company’s Chief Medical Officer and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
21,890,458
shares of Common Stock outstanding after this
issuance.
|
On July
23, 2009, the Company issued 30,000 shares of Common Stock due to Extranome
pursuant to the Software Development Contract (Exhibit 10.12) between BAETA
Corp. and Extranome, Inc. As noted above, our President and sole director, Dr.
Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
21,920,458
shares of Common Stock outstanding after this
issuance.
|
On August
10, 2009, the Company issued its common stock to Daniel Lundin, a qualified and
sophisticated investor. The sale was made in accordance with the exemption from
registration pursuant to Section 4(2) under the Securities Act, as it did not
constitute a public offering of securities. The Company sold 20,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Mr. Lundin, for an aggregate of $10,000.
Sub-Total:
|
21,940,458 shares of Common
Stock outstanding after this
issuance.
|
On August
16, 2009, the Company issued its common stock to Aleksander Fridman, a qualified
and sophisticated investor. The sale was made in accordance with the exemption
from registration pursuant to Section 4(2) under the Securities Act, as it did
not constitute a public offering of securities. The Company sold 40,000 shares
of its Common Stock, par value $0.0001 per share, at a purchase price of $0.50
per share, to Mr. Fridman, for an aggregate of $20,000.
Sub-Total:
|
21,980,458 shares of Common
Stock outstanding after this
issuance.
|
On August
18, 2009, the Company issued its common stock to Yakov Burman, a qualified and
sophisticated investor. The sale was made in accordance with the exemption from
registration pursuant to Section 4(2) under the Securities Act, as it did not
constitute a public offering of securities. The Company sold 10,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Mr. Burman, for an aggregate of $5,000.
Sub-Total:
|
21,990,458 shares of Common
Stock outstanding after this
issuance.
|
On August
23, 2009, the Company issued 5,000 shares of its common stock to Leroy and
Lisbet Smith. The Company issued the stock in consideration for marketing
consultation services rendered as the Company’s Chief Marketing Officer and upon
reliance on the exemption from registration requirements of the Securities Act
of 1933, as amended, provided under Section 4(2) promulgated thereunder as the
issuance of the stock did not involve a public offering of
securities.
79
Sub-Total:
|
21,995,458 shares of Common
Stock outstanding after this
issuance.
|
On August
23, 2009, the Company issued 5,000 shares of Common Stock to Dr. Leonid Topper.
The Company issued the stock in consideration for services rendered as the
Company’s Chief Medical Officer and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
22,000,458 shares of Common
Stock outstanding after this
issuance.
|
On August
23, 2009, the Company issued 30,000 shares of Common Stock due to Extranome
pursuant to the Software Development Contract (Exhibit 10.12) between BAETA
Corp. and Extranome, Inc. As noted above, our President and sole director, Dr.
Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
22,030,458 shares of Common
Stock outstanding after this
issuance.
|
On August
23, 2009, the Company issued 5,000 shares of its common stock to Eugene Gribov.
The Company issued the stock in consideration for technology services rendered
as the Company’s Chief Tech Officer and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
22,035,458 shares of Common
Stock outstanding after this
issuance.
|
On August
23, 2009, the Company issued 8,334 shares of Common Stock to Boris Mordkovich
MD. The Company issued the stock in consideration for product development
services, in accordance with the August 2009 consulting agreement between BAETA
Corp. and Boris Mordkovich MD, attached to this registration as Exhibit 10.18,
and issued upon reliance on the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the issuance of the stock did not involve a public offering of
securities.
Sub-Total:
|
22,043,792 shares of Common
Stock outstanding after this
issuance
|
On August
23, 2009, the Company issued its common stock to Richard Kline, a qualified and
sophisticated investor. The sale was made in accordance with the exemption from
registration pursuant to Section 4(2) under the Securities Act, as it did not
constitute a public offering of securities. The Company sold 2,000 shares of its
Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Richard for an aggregate of $1,000.
Sub-Total:
|
22,045,792 shares of Common
Stock outstanding after this
issuance.
|
On August
23, 2009, the Company issued 15,000 shares of Common Stock to Vasyl Rubyov of
IonIdea, Inc. of Ukraine. The Company issued the stock in consideration for
software development services rendered and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
22,060,792
shares of Common Stock outstanding after this issuance, and as of the date
of this registration statement.
|
On
September 1, 2009, the Company issued its common stock to ServiTek
Communications, Inc., an entity owned by Daniel Fiegmann, a qualified and
sophisticated investor. The sale was made in accordance with the exemption from
registration pursuant to Section 4(2) under the Securities Act, as it did not
constitute a public offering of securities. The Company sold 30,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to ServiTek for an aggregate of $15,000.
80
Sub-Total:
|
22,090,792 shares of Common
Stock outstanding after this
issuance.
|
On
September 2, 2009, the Company issued its common stock to S4 Engineering, P.C.,
an entity owned by Henry Schwartzburg, a qualified and sophisticated investor.
The sale was made in accordance with the exemption from registration pursuant to
Section 4(2) under the Securities Act, as it did not constitute a public
offering of securities. The Company sold 40,000 shares of its Common Stock, par
value $0.0001 per share, at a purchase price of $0.50 per share, to S4 for an
aggregate of $20,000.
Sub-Total:
|
22,130,792 shares of Common
Stock outstanding after this
issuance.
|
On
September 29, 2009, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract (Exhibit 10.12) between
BAETA Corp. and Extranome, Inc. As noted above, our President and sole director,
Dr. Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
22,160,792 shares of Common Stock
outstanding after this
issuance.
|
On
September 29, 2009, the Company issued 10,762 shares of its common stock to
Leroy and Lisbet Smith. The Company issued the stock in consideration for
marketing consultation services rendered by Mr. Smith as the Company’s Chief
Marketing Officer and upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total:
|
22,171,554 shares of Common Stock
outstanding after this
issuance.
|
On
September 29, 2009, the Company issued 12,500 shares of Common Stock to Dr.
Leonid Topper. The Company issued the stock in consideration for services
rendered as the Company’s Chief Medical Officer and upon reliance on the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the issuance of
the stock did not involve a public offering of securities.
Sub-Total:
|
22,184,054 shares of Common Stock
outstanding after this
issuance.
|
On
September 29, 2009, the Company issued 8,334 shares of Common Stock to Boris
Mordkovich MD. The Company issued the stock in consideration for product
development services, in accordance with the August 2009 consulting agreement
between BAETA Corp. and Boris Mordkovich MD, attached to this registration as
Exhibit 10.18, and issued upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total:
|
22,192,388 shares of Common Stock
outstanding after this
issuance.
|
On
September 29, 2009, the Company issued 5,000 shares of its common stock to
Eugene Gribov. The Company issued the stock in consideration for technology
services rendered as the Company’s Chief Tech Officer and upon reliance on the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the issuance of
the stock did not involve a public offering of securities.
81
Sub-Total:
|
22,197,388 shares of Common Stock
outstanding after this
issuance.
|
Quarter Ended
9/30/2009: 22,197,388
shares of Common Stock outstanding as of the Quarterly Period ended 9/30/2009
(3nd
Quarter end).
On
October 16, 2009, the Company issued its common stock to Kristruga, Inc., a
corporation beneficially owned by Denis Chistruga, a qualified and sophisticated
investor. The sale was made in accordance with the exemption from registration
pursuant to Section 4(2) under the Securities Act, as it did not constitute a
public offering of securities. The Company sold 30,000 shares of its Common
Stock, par value $0.0001 per share, at a purchase price of $0.50 per share, to
Denis Chistruga for an aggregate of $15,000.
Sub-Total:
|
22,227,388 shares of Common Stock
outstanding after this
issuance.
|
On
October 29, 2009, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract (Exhibit 10.12) between
BAETA Corp. and Extranome, Inc. As noted above, our President and sole director,
Dr. Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
22,257,388 shares of Common Stock
outstanding after this
issuance.
|
On
October 29, 2009, the Company issued 7,880 shares of its common stock to Leroy
and Lisbet Smith. The Company issued the stock in consideration for marketing
consultation services rendered by Mr. Smith as the Company’s Chief Marketing
Officer and upon reliance on the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the issuance of the stock did not involve a public offering of
securities.
Sub-Total:
|
22,265,268 shares of Common Stock
outstanding after this
issuance.
|
On
October 29, 2009, the Company issued 12,500 shares of Common Stock to Dr. Leonid
Topper. The Company issued the stock in consideration for services rendered as
the Company’s Chief Medical Officer and upon reliance on the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the issuance of the stock did not
involve a public offering of securities.
Sub-Total:
|
22,277,768 shares of Common Stock
outstanding after this
issuance.
|
On
October 29, 2009, the Company issued 8,334 shares of Common Stock to Boris
Mordkovich MD. The Company issued the stock in consideration for product
development services, in accordance with the August 2009 consulting agreement
between BAETA Corp. and Boris Mordkovich MD, attached to this registration as
Exhibit 10.18, and issued upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total:
|
22,286,102 shares of Common Stock
outstanding after this
issuance.
|
On
October 29, 2009, the Company issued 5,000 shares of its common stock to Eugene
Gribov. The Company issued the stock in consideration for technology services
rendered as the Company’s Chief Tech Officer and upon reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the stock
did not involve a public offering of securities.
82
Sub-Total:
|
22,291,102
shares of Common Stock outstanding after this issuance.
|
On
November 6, 2009, the Company issued its common stock to Kirill Sobolev, a
qualified and sophisticated investor. The sale was made in accordance with the
exemption from registration pursuant to Section 4(2) under the Securities Act,
as it did not constitute a public offering of securities. The Company sold
20,000 shares of its Common Stock, par value $0.0001 per share, at a purchase
price of $0.50 per share, to Kirill for an aggregate of
$10,000.
Sub-Total:
|
22,311,102 shares of Common
Stock outstanding after this
issuance.
|
On
November 13, 2009, the Company issued its common stock to Ignatius Scalia, a
qualified and sophisticated investor. The sale was made in accordance with the
exemption from registration pursuant to Section 4(2) under the Securities Act,
as it did not constitute a public offering of securities. The Company sold
10,000 shares of its Common Stock, par value $0.0001 per share, at a purchase
price of $0.50 per share, to Ignatius for an aggregate of
$5,000.
Sub-Total:
|
22,321,102 shares of Common
Stock outstanding after this
issuance.
|
On
November 19, 2009, the Company issued its common stock to Kristruga, Inc., a
corporation beneficially owned by Denis Chistruga, a qualified and sophisticated
investor. The sale was made in accordance with the exemption from registration
pursuant to Section 4(2) under the Securities Act, as it did not constitute a
public offering of securities. The Company sold 10,000 shares of its Common
Stock, par value $0.0001 per share, at a purchase price of $0.50 per share, to
Kristruga for an aggregate of $5,000.
Sub-Total:
|
22,331,102 shares of Common
Stock outstanding after this issuance.
|
On
November 29, 2009, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract (Exhibit 10.12) between
BAETA Corp. and Extranome, Inc. As noted above, our President and sole director,
Dr. Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
22,361,102 shares of Common Stock
outstanding after this
issuance.
|
On
November 29, 2009, the Company issued 7,115 shares of its common stock to Leroy
and Lisbet Smith. The Company issued the stock in consideration for marketing
consultation services rendered by Mr. Smith as the Company’s Chief Marketing
Officer and upon reliance on the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the issuance of the stock did not involve a public offering of
securities.
Sub-Total:
|
22,368,217 shares of Common Stock
outstanding after this
issuance.
|
On
November 29, 2009, the Company issued 12,500 shares of Common Stock to Dr.
Leonid Topper. The Company issued the stock in consideration for services
rendered as the Company’s Chief Medical Officer and upon reliance on the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the issuance of
the stock did not involve a public offering of securities.
83
Sub-Total:
|
22,380,717 shares of Common Stock
outstanding after this
issuance.
|
On
November 29, 2009, the Company issued 8,334 shares of Common Stock to Boris
Mordkovich MD. The Company issued the stock in consideration for product
development services, in accordance with the August 2009 consulting agreement
between BAETA Corp. and Boris Mordkovich MD, attached to this registration as
Exhibit 10.18, and issued upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total:
|
22,389,051 shares of Common Stock
outstanding after this
issuance.
|
On
November 29, 2009, the Company issued 5,000 shares of its common stock to Eugene
Gribov. The Company issued the stock in consideration for technology services
rendered as the Company’s Chief Tech Officer and upon reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the stock
did not involve a public offering of securities.
Sub-Total:
|
22,394,051 shares of Common Stock
outstanding after this
issuance.
|
On
December 2, 2009, the Company issued its common stock to Nancy Herbst, a
qualified and sophisticated investor. The sale was made in accordance with the
exemption from registration pursuant to Section 4(2) under the Securities Act,
as it did not constitute a public offering of securities. The Company sold
10,000 shares of its Common Stock, par value $0.0001 per share, at a purchase
price of $0.50 per share, to Nancy for an aggregate of $5,000.
Sub-Total:
|
22,404,051 shares of Common
Stock outstanding after this
issuance.
|
On
December 2, 2009, the Company issued its common stock to Joseph T. Cusack, a
qualified and sophisticated investor. The sale was made in accordance with the
exemption from registration pursuant to Section 4(2) under the Securities Act,
as it did not constitute a public offering of securities. The Company sold 7,000
shares of its Common Stock, par value $0.0001 per share, at a purchase price of
$0.50 per share, to Ignatius for an aggregate of $3,500.
Sub-Total:
|
22,411,051
shares of Common Stock outstanding after this
issuance.
|
On
December 7, 2009, the Company issued 10,000 shares of its common stock to the
Conservative Synagogue Adath Israel of Riverdale as a charitable donation to a
religious organization, upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total:
|
22,421,051
shares of Common Stock outstanding after this
issuance.
|
On
December 29, 2009, the Company issued its common stock to Dr. Robert
Lichtenstein, a qualified and sophisticated investor. The sale was made in
accordance with the exemption from registration pursuant to Section 4(2) under
the Securities Act, as it did not constitute a public offering of securities.
The Company sold 20,000 shares of its Common Stock, par value $0.0001 per share,
at a purchase price of $0.50 per share, to Dr. Lichtenstein for an aggregate of
$10,000.
84
Sub-Total:
|
22,441,051
shares of Common Stock outstanding after this
issuance.
|
On
December 29, 2009, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract (Exhibit 10.12) between
BAETA Corp. and Extranome, Inc. As noted above, our President and sole director,
Dr. Alexander Gak, is the 100% owner of Extranome. Therefore he is deemed to
beneficially own these 30,000 shares as he maintains voting and dispositive
control over Extranome.
Sub-Total:
|
22,471,051 shares of Common Stock
outstanding after this
issuance.
|
On
December 29, 2009, the Company issued 5,000 shares of its common stock to Leroy
and Lisbet Smith. The Company issued the stock in consideration for marketing
consultation services rendered by Mr. Smith as the Company’s Chief Marketing
Officer and upon reliance on the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the issuance of the stock did not involve a public offering of
securities.
Sub-Total:
|
22,476,051 shares of Common Stock
outstanding after this
issuance.
|
On
December 29, 2009, the Company issued 8,334 shares of Common Stock to Boris
Mordkovich MD. The Company issued the stock in consideration for product
development services, in accordance with the August 2009 consulting agreement
between BAETA Corp. and Boris Mordkovich MD, attached to this registration as
Exhibit 10.18, and issued upon reliance on the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the issuance of the stock did not involve a
public offering of securities.
Sub-Total:
|
22,484,385 shares of Common Stock
outstanding after this
issuance.
|
On
December 29, 2009, the Company issued 5,000 shares of its common stock to Eugene
Gribov. The Company issued the stock in consideration for technology services
rendered as the Company’s Chief Tech Officer and upon reliance on the exemption
from registration requirements of the Securities Act of 1933, as amended,
provided under Section 4(2) promulgated thereunder as the issuance of the stock
did not involve a public offering of securities.
Sub-Total:
|
22,489,285 shares of Common Stock
outstanding after this
issuance.
|
On
December 29, 2009, the Company issued 11,667 shares of its common stock to
Leonid Pushkantser. The Company issued the stock in consideration for executive
services rendered as the Company’s Chief Executive Officer and upon reliance on
the exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the issuance of
the stock did not involve a public offering of securities.
Total:
|
22,501,052
shares of Common Stock outstanding after this issuance, and as of the date
of this amended registration
statement.
|
Fiscal
Year Ended 12/31/2009: 22,501,052 shares of Common Stock
outstanding as of the period ended 12/31/2009 (Fiscal Year
End).
Issuance
of Stock Options
On
January 25, 2009, the Company granted stock options to Dr. Samyaden Datta. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Samyaden Datta in consideration for his service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
85
Sub-Total:
|
50,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
On
January 29, 2009, the Company granted stock options to Dr. Alex Y. Bekker. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Bekker in consideration for his service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
Sub-Total:
|
100,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
On
February 3, 2009, the Company granted stock options to Leroy Smith. The stock
option agreement is exercisable for 800,000 shares of the Company’s common stock
for a purchase price of $0.50 per share. The stock options were granted to Mr.
Smith in consideration for marketing consultation services rendered, and the
Company relied upon the exemption from registration requirements of the
Securities Act of 1933, as amended, provided under Section 4(2) promulgated
thereunder as the grant of such options did not involve a public offering of
securities.
Sub-Total:
|
900,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
On
February 7, 2009, the Company granted stock options to Dr. Marco Pappagallo. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Marco Pappagallo in consideration for his service as a Member of the
Company’s Scientific Advisory Board for the year 2009, and the Company relied
upon the exemption from registration requirements of the Securities Act of 1933,
as amended, provided under Section 4(2) promulgated thereunder as the grant of
such options did not involve a public offering of securities.
Sub-Total:
|
950,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
On
February 19, 2009, the Company granted stock options to Dr. Lauren Shaiova. The
stock option agreement is exercisable for 50,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Dr. Shaiova in consideration for her service as a Member of the Company’s
Scientific Advisory Board for the year 2009, and the Company relied upon the
exemption from registration requirements of the Securities Act of 1933, as
amended, provided under Section 4(2) promulgated thereunder as the grant of such
options did not involve a public offering of securities.
Sub-Total:
|
1,000,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
On
February 26, 2009, the Company granted stock options to Mr. Jeff Burkland. The
stock option agreement is exercisable for 100,000 shares of the Company’s common
stock for a purchase price of $0.50 per share. The stock options were granted to
Mr. Burkland in consideration for his service as the Company’s Chief Financial
Officer for the year 2009, and the Company relied upon the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the grant of such options did not
involve a public offering of securities.
Sub-Total:
|
1,100,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
On March
21, 2009, the Company granted stock options to Dr. Leonid Topper. The stock
option agreement is exercisable for 50,000 shares of the Company’s common stock
for a purchase price of $0.50 per share. The stock options were granted to Dr.
Topper in consideration for his service as the Company’s Chief Medical Officer
for the year 2009, and the Company relied upon the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the grant of such options did not involve a
public offering of securities.
86
Sub-Total:
|
1,150,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
On April
21, 2009, the Company granted stock options to Eugene Gribov. The stock option
agreement is exercisable for 50,000 shares of the Company’s common stock for a
purchase price of $0.50 per share. The stock options were granted to Mr. Gribov
in consideration for his service as the Company’s Chief Tech Officer for the
year 2009, and the Company relied upon the exemption from registration
requirements of the Securities Act of 1933, as amended, provided under Section
4(2) promulgated thereunder as the grant of such options did not involve a
public offering of securities.
Sub-Total:
|
1,200,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
On May
29, 2009, the Company granted stock options to Leonid Pushkantser. The stock
option agreement is exercisable for 400,000 shares of the Company’s common stock
for a purchase price of $0.50 per share. The stock options were granted to Mr.
Pushkantser in consideration for his service as the Company’s Chief Executive
Officer for the year 2009, and the Company relied upon the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the grant of such options did not
involve a public offering of securities.
Sub-Total:
|
1,600,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
To date,
Mr. Jeff Burkland has received additional stock options with immediate vesting
rights exercisable for 23,512 shares of common stock at a purchase price of
$0.50 per share pursuant to his employment agreement attached to this
registration statement as Exhibit 10.9.1, The stock options (see Exhibit 10.9.2)
were granted to Mr. Burkland in consideration for his service as the Company’s
Chief Financial Officer, and the Company relied upon the exemption from
registration requirements of the Securities Act of 1933, as amended, provided
under Section 4(2) promulgated thereunder as the grant of such options did not
involve a public offering of securities.
Total:
|
1,623,512
shares of Common Stock underlying Options outstanding after this issuance,
and as of the date of this Registration
Statement.
|
87
Item
16. Exhibits
Exhibit
Number
|
Description of Exhibits
|
|
3.1
|
Articles
of Incorporation of BAETA Corp. (1)
|
|
3.1.1
|
Amended
Articles of Incorporation of BAETA Corp. (1)
|
|
3.2
|
Bylaws
(1)
|
|
5.1
|
Legal
Opinion of The Sourlis Law Firm
|
|
10.1
|
Exclusive
Software Agreement between Extranome, Inc. and BAETA Corp.
(1)
|
|
10.2.1
|
Consulting
Agreement with Douglas A. Rogers dated May 15, 2008 (2)
|
|
10.2.2
|
Summary
of Verbal Modification to Consulting Agreement with Douglas A. Rogers
dated May 15, 2008 (7)
|
|
10.3
|
Amended
Consulting Agreement with Douglas A. Rogers dated August 18, 2008
(2)
|
|
10.4
|
Amended
Consulting Agreement with Douglas A. Rogers dated October 28, 2008
(6)
|
|
10.5
|
Consulting
Agreement with Ventana Capital Partners dated March 1, 2008
(3)
|
|
10.6
|
Settlement
and Release with Ventana Capital Partners dated November 14, 2008
(4)
|
|
10.7
|
Settlement
and Release with Rogers Consulting Group dated January 29, 2009
(4)
|
|
10.8
|
Summary
of verbal Consulting Agreement with Dr. Alex Y. Bekker
(4)
|
|
10.9.1
|
Employment
Agreement with Jeff Burkland, BAETA Chief Financial
Officer (9)
|
|
10.9.2
|
Jeff
Burkland Stock Option Agreement (9)
|
|
10.10
|
Employment
Agreement with Dr. Leonid Topper, BAETA Chief Medical Officer
(7)
|
|
10.11
|
BAETA
2009 Stock Option Plan and Agreement (4)
|
|
10.12.1
|
Software
Development Contract with Extranome, Inc. (5)
|
|
10.12.2
|
Statement
of Work dated 11-01-2008 (7)
|
|
10.12.3
|
Statement
of Work dated 12-01-2008 (7)
|
|
10.12.4
|
Statement
of Work dated 01-01-2009 (7)
|
|
10.12.5
|
Statement
of Work dated 02-01-2009
(7)
|
88
10.12.6
|
Statement
of Work dated 03-01-2009 (7)
|
10.12.7
|
Statement
of Work dated 04-01-2009 (7)
|
10.12.8
|
Statement
of Work dated 05-01-2009 (7)
|
10.12.9
|
Statement
of Work dated 06-01-2009 (7)
|
10.12.10
|
Statement
of Work dated 07-01-2009 (7)
|
10.12.11
|
Statement
of Work dated 08-01-2009 (7)
|
10.12.12
|
Statement
of Work dated 09-01-2009 (7)
|
10.12.13
|
Statement
of Work dated 10-01-2009 (9)
|
10.12.14
|
Statement
of Work dated 11-01-2009 (9)
|
10.12.15
|
Statement
of Work dated 12-01-2009 (10)
|
10.12.16
|
Statement
of Work dated 01-01-2010
|
10.13
|
Employment
Agreement with Mr. Leonid Pushkantser, BAETA Chief Executive Officer
(6)
|
10.14
|
Employment
Agreement with Mr. Eugene Gribov, BAETA Chief Technology Officer
(6)
|
10.15
|
Employment
Agreement with Mr. Leroy Smith, BAETA Chief Marketing Officer
(6)
|
10.16
|
Office
Service Agreement with Regus for BAETA’s Executive Offices at 1 Bridge
Plaza, Fort Lee NJ (7)
|
10.17
|
Shareholder
Advance Agreement (7)
|
10.18
|
Consulting
Agreement between BAETA Corp. and Boris Mordkovich MD.
(7)
|
10.19
|
Lee
Smith Stock Option Agreement
|
10.20
|
Promissory
Note Agreement between CEO Leonid Pushkantser and Baeta
Corp.
|
14.1
|
BAETA
Corp. Code of Ethics (1)
|
14.1
|
BAETA
Corp. Code of Business Conduct (1)
|
16.1
|
Stan
J.H. Lee, CPA, CMA’s Resignation and Declination Letter to stand for
re-election as Company auditor (8)
|
23.1
|
Consent
of W.T. Uniack & Co., CPAs, P.C.
|
23.2
|
Consent
of The Sourlis Law Firm (included in Exhibit
5.1)
|
(1)
|
Incorporated
by reference from the Company’s Registration Statement on Form S-1 (SEC
File No.: 333-154243) filed on October 14,
2008.
|
89
(2)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 1 (SEC File No.: 333-154243) filed on December 22,
2008.
|
(3)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 2 (SEC File No.: 333-154243) filed on February 10,
2009.
|
(4)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 3 (SEC File No.: 333-154243) filed on April 9,
2009.
|
(5)
|
Incorporated
by reference and filed as Exhibit 10.12 in the Company’s Registration
Statement on Form S-1/Amendment No. 3 (SEC File No.: 333-154243) filed on
April 9, 2009.
|
(6)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 4 (SEC File No.: 333-154243) filed on July 28,
2009.
|
(7)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 5 (SEC File No.: 333-154243) filed on September 29,
2009.
|
(8)
|
Stan
J.H. Lee, CPA, CMA has not yet furnished a resignation letter containing
the disclosures required pursuant to SEC regulations. BAETA Corp. will
file this letter with the SEC for public disclosure upon its
receipt.
|
(9)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 6 (SEC File No.: 333-154243) filed on November 12,
2009.
|
(10)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 7 (SEC File No.: 333-154243) filed on December 15,
2009.
|
90
Item
17.
Undertakings
(a) Rule 415 Offering. The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To
include any prospectus required by section 10(a)(3) of the Securities Act of
1933;
(ii) To
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereto) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the effective
registration statement; and
(iii) To
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material changes to
such information in the registration statement.
(2) That
for the purpose of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) That
for the purpose of determining liability under the Securities Act of 1933 (the
“Act”) to any purchaser, if the registrant is subject to Rule 430C under the
Act, each prospectus filed pursuant to Rule 424(b) as part of a registration
statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be
deemed to be part of and included in the registration statement as of the date
it is first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed incorporated
by reference in the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract or sale
prior to such first use, supersede or modify any statement that was made in the
registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such date of first
use.
(5) That
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the securities, the
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
(i) Any
preliminary prospectus or prospectus of the undersigned registrant relating to
the offering required to be filed pursuant to Rule 424;
(ii) Any
free writing prospectus relating to the offering prepared by or on behalf of the
undersigned registrant or used or referred to by the undersigned
registrant;
(iii) The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned registrant or its securities provided
by or on behalf of the undersigned registrant; and
(iv) Any
other communication that is an offer in the offering made by the undersigned
registrant to the purchaser.
(d)
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the “Act”) may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
91
Pursuant
to the requirements of the Securities Act of 1933, the Registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Fort Lee, State of New
Jersey, on January 14, 2010.
BAETA
CORP.
|
||
By:
|
/s/ LEONID PUSHKANTSER
|
|
Leonid
Pushkantser
Chief
Executive Officer
(Principal
Executive Officer)
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
Signature
|
Title
|
Date
|
||
/s/ DR. ALEXANDER
GAK
|
President
and Chairman
|
January
14, 2010
|
||
Dr.
Alexander Gak
|
||||
/s/ LEONID
PUSHKANTSER
|
Chief
Executive Officer
|
January
14, 2010
|
||
Leonid
Pushkantser
|
(Principal
Executive Officer)
|
|||
/s/ JEFF BURKLAND
|
Chief
Financial Officer
|
January
14, 2010
|
||
Jeff
Burkland
|
(Principal
Financial Officer, Accounting Officer
and
Controller)
|
|||
/s/ DR. LEONID
TOPPER
|
Chief
Medical Officer
|
January
14, 2010
|
||
Dr.
Leonid Topper
|
||||
/s/ EUGENE GRIBOV
|
Chief
Technology Officer
|
January
14, 2010
|
||
Mr.
Eugene Gribov
|
||||
/s/ LEE SMITH
|
Chief
Marketing Officer
|
January
14, 2010
|
||
Mr.
Lee Smith
|
92