Attached files
file | filename |
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EX-5.1 - EX-5.1 - BAETA CORP | v209931_ex5-1.htm |
EX-23.1 - EX-23.1 - BAETA CORP | v209931_ex23-1.htm |
EX-10.25 - EX-10.25 - BAETA CORP | v209931_ex10-25.htm |
EX-10.12.23 - EX-10.12.23 - BAETA CORP | v209931_ex10-12x23.htm |
EX-10.12.27 - EX-10.12.27 - BAETA CORP | v209931_ex10-12x27.htm |
EX-10.12.25 - EX-10.12.25 - BAETA CORP | v209931_ex10-12x25.htm |
EX-10.12.21 - EX-10.12.21 - BAETA CORP | v209931_ex10-12x21.htm |
EX-10.12.26 - EX-10.12.26 - BAETA CORP | v209931_ex10-12x26.htm |
EX-10.12.22 - EX-10.12.22 - BAETA CORP | v209931_ex10-12x22.htm |
EX-10.12.28 - EX-10.12.28 - BAETA CORP | v209931_ex10-12x28.htm |
EX-10.12.24 - EX-10.12.24 - BAETA CORP | v209931_ex10-12x24.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-1
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. ¨
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. ¨
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. ¨
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
|
¨
|
Accelerated
filer
|
¨
|
Non-accelerated
filer
|
¨
|
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 $0.0001per
share
|
7,162,000 | $ | 1.20 | $ | 8,594,400 | $ | 998.00 |
(2)
|
|
(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)
|
The
proposed maximum offering price per share and the proposed maximum
aggregate offering price have been estimated solely for the purpose of
calculating the amount of the registration fee in accordance with Rules
457(c) under the Securities Act of 1933 on the basis of the average of the
high and low prices of the Common Stock on the OTC Bulletin Board on
January 17, 2011, a date within five (5) trading days prior to the date of
the filing of this Registration
Statement.
|
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.
Information
contained herein is subject to completion or amendment. A registration statement
relating to these securities has been filed with the Securities and Exchange
Commission. These securities may not be sold nor may offers to buy be accepted
prior to the time the registration statement becomes effective. This prospectus
shall not constitute an offer to sell or the solicitation of an offer to buy nor
shall there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
SUBJECT
TO COMPLETION, DATED FEBRUARY 4, 2011
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
7,162,000
Shares of Common Stock
BAETA
CORP, INC.
$1.20
per Share
This
prospectus relates to the issuance from time to time of 7,162,000 shares of
common stock, par value $0.0001 of BAETA Corp., a New Jersey corporation
(“BAETA” or the “Company”).
Of the
7,162,000 shares of common stock being offered for sale through this
registration statement, of which this prospectus forms a part, the Company is
offering 6,000,000 shares on self-underwritten, “best-efforts” basis directly
through the sales efforts of our Officers and Directors. The shares will be
offered at a price anticipated to be $1.20 per
share, for a period of 180 days from the date of this prospectus, unless
extended for an additional 90 days at the discretion of our directors. The
Officers and Directors may amend the price per share as needed in order to
consummate sales based on market demand. No commission or other compensation
related to the sale of the shares will be paid to any of our officers or
directors for their sales efforts. The intended methods of communication
include, without limitation, telephone, and personal contact.
Of the
7,162,000 shares of common stock being registered herein, 1,162,000 shares of
common stock are being offered for sale pursuant to a Reserve Equity Financing
Agreement (“Financing Agreement”) entered in to between the Company and AGS
Capital Group, LLC (“AGS” or “Selling Stockholder”).
Pursuant
to the Financing Agreement, which has a total drawdown amount of five million
dollars ($5,000,000), BAETA has the right to sell to AGS at its sole discretion
and AGS has the obligation to purchase through advances to the Company, the
Company’s common stock through Draw-Down Notices issued by the Company. The
number of shares of common stock that AGS shall purchase shall be determined by
dividing the amount of the advance by the purchase price. No fractional shares
will be issued.
The
Selling Stockholder is selling 1,162,000 of the 7,162,000 shares of common stock
offered by this prospectus. It is anticipated that the Selling Stockholder will
sell these shares of common stock from time to time in one or more transactions,
in negotiated transactions or otherwise, at prevailing market prices or at
prices otherwise negotiated (see “Plan of Distribution”). We will not receive
any proceeds from the sale of shares by the Selling Stockholder. However, we
will receive the sale price of any common stock that we sell to AGS under the
Reserve Equity Financing Agreement.
The total
amount of shares of common stock which may be sold pursuant to this prospectus
would constitute approximately 29.9% of our issued and outstanding common stock
as of February 4, 2011, if all of the shares had been sold by as of the date of
this registration statement. For more information, see the section titled “Plan
of Distribution” and “Use of Proceeds” herein.
There are
no underwriting agreements in place to sell any of the stock being registered
through this prospectus.
We have
agreed to pay all the costs and expenses of this registration.
ii
Our
common stock is quoted on the Over-the-Counter Bulletin Board (“OTCBB”) under
the symbol “BAEA” and currently trades with low and sporadic volume. This fact,
in addition to other stated risks disclosed throughout this registration
statement should be considered before making an investment in our
Company.
We may
amend or supplement this prospectus from time to time by filing amendments or
supplements as required. You should read the entire prospectus and any
amendments or supplements carefully before you make your investment
decision.
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 6.
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 _________, 2011
iii
PROSPECTUS
BAETA
CORP.
7,162,000
SHARES COMMON STOCK
$1.20
per Share
TABLE
OF CONTENTS
Item
|
Page
|
|
Summary
|
1
|
|
Risk
Factors
|
6
|
|
Description
of Business
|
16
|
|
Description
of Properties
|
35
|
|
Legal
Proceedings
|
35
|
|
Use
of Proceeds
|
36
|
|
Determination
of Offering Price
|
37
|
|
Dilution
|
37
|
|
Plan
of Distribution
|
38
|
|
Directors,
Executive Officers, Promoters and Control Persons
|
42
|
|
Security
Ownership of Certain Beneficial Owners and Management
|
56
|
|
Executive
Compensation
|
48
|
|
Description
of Securities
|
58
|
|
Interest
of Named Experts and Counsel
|
63
|
|
Experts
|
63
|
|
Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
|
64
|
|
Organization
Within Last Five Years
|
64
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
64
|
|
Certain
Relationships and Related Transactions and Corporate
Governance
|
71
|
|
Market
for Common Equity and Related Stockholder Matters
|
76
|
|
Changes
in and Disagreements with Accountants and Financial
Disclosure
|
77
|
|
Where
You Can Find More Information
|
78
|
|
Financial
Statements
|
79
|
iv
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement we filed with the SEC. You
should rely only on the information provided in this prospectus and incorporated
by reference in this prospectus. We have not authorized anyone to provide you
with information different from that contained in or incorporated by reference
into this prospectus. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities other than the common stock
offered by this prospectus. This prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any common stock in any circumstances in
which such offer or solicitation is unlawful. The Company and Selling
Stockholder is offering to sell, and seeking offers to buy, shares of common
stock only in jurisdictions where offers and sales are permitted.
Neither
the delivery of this prospectus nor any sale made in connection with this
prospectus shall, under any circumstances, create any implication that there has
been no change in our affairs since the date of this prospectus or that the
information contained by reference to this prospectus is correct as of any time
after its date. The information in this prospectus is accurate only as of the
date of this prospectus, regardless of the time of delivery of this prospectus
or of any sale of common stock. The rules of the SEC may require us to update
this prospectus in the future.
SUMMARY
The
following summary highlights selected information contained in this prospectus.
This summary does not contain all the information you should consider before
investing in the securities. Before making an investment decision, you should
read the entire prospectus carefully, including the information set forth under
the headings “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” and the financial statements and
the notes to the financial statements included in this prospectus.
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 issues for the hospital and outpatient/consumer
settings. BAETA’s current line of products consists of monitoring systems known
as MyHealthTrends™ For
Pain, MyHealthTrends™
For Weight
Control, & MyHealthTrends™ For Smoking Cessation,
each marketed as a consumer product. Additionally, we are developing MyPillsOntime™, an automatic
medication reminder/dispenser system for consumer market, and 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. These products are being
developed for market in the fiscal year 2011, contingent upon our ability to
obtain the requisite financing needed to complete such
development.
Organizational
History
Incorporated
in State of New Jersey on August 14, 2007, we are an early 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 launched
this product and its interactive customer website during the fourth quarter
of 2008. Since the launching of MyHealthTrends™ For Pain, we
have marketed related products MyHealthTrends™ For Weight Control, & MyHealthTrends™ For Smoking Cessation,
each marketed as a consumer product. 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
unaudited financial statements of BAETA Corp. for the fiscal quarter ended
September 30, 2010; and
|
|
·
|
The
audited financial statements of BAETA Corp. for the fiscal year ended
December 31, 2009;
|
Balance Sheet
Summary:
At September 30,
2010
|
At December 31, 2009
|
|||||||
(Taken from the
Unaudited
Financial
Statements*)
|
(Taken from the Audited
Financial Statements*)
|
|||||||
Balance
Sheet
|
||||||||
Cash
and Cash Equivalents
|
$ | 35,037 | $ | 3,189 | ||||
Total
Assets
|
$ | 311,662 | $ | 232,037 | ||||
Total
Liabilities
|
$ | 952,922 | $ | 610,366 | ||||
Total
Stockholders’ Deficit
|
$ | (641,260 | ) | $ | (378,328 | ) |
* The
auditors did not audit the contents of this table.
Statement of Operations
Summary:
For the Fiscal Quarter
Ended September 30,
2010
|
For the Fiscal Year
Ended December 31,
2009
|
For the Period
August 14, 2007
(Inception) to
September 30, 2010
|
||||||||||
(Taken from the
Unaudited Financial
Statements*)
|
(Taken from the
Audited Financial
Statements*)
|
(Unaudited)
|
||||||||||
Statement
of Operations:
|
||||||||||||
Revenue
|
0.00 | $ | 9,003 | $ | 9,074 | |||||||
Net
Loss
|
$ | (249,955 | ) | $ | (802,649 | ) | $ | (2,193,432 | ) | |||
Net
Loss Per Share of Common Stock , basic and diluted
|
(0.01 | ) | $ | (0.04 | ) | — |
* The
auditors did not audit the contents of this table.
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.
2
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.
3
OFFERING
SUMMARY
The
Issuer:
|
BAETA
Corp., a New Jersey corporation.
|
|
Securities Being
Offered:
|
7,162,000
shares of common stock are being registered through this registration
statement; of such amount, 1,162,000 shares of common stock are being
registered for sale exclusively to AGS Capital Group, LLC, the sole
Selling Stockholder to this Offering. 6,000,000 shares of common stock are
being registered by the Company for sale to the public through the sales
efforts of our Officers and Directors on a “Best Efforts”
basis.
|
|
Offering
Price:
|
$1.20
per share.
|
|
Minimum
Number of Shares to Be Sold in This
Offering:
|
None.
|
|
Capitalization:
|
Common Stock:
150,000,000 shares authorized; 24,023,152 shares outstanding as of the
date of this prospectus.
|
|
Preferred
Stock: 10,000,000 shares authorized; 100 shares of Series A
Preferred Stock outstanding, 2 shares of Series B Preferred Stock
Outstanding.
|
||
Series
A
|
||
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 (holding 80 Series A), our President and Chairman, and
Mr. Len Pushkantser *holding 20 Series A), our Chief Executive Officer and
Director.
|
||
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”.
|
||
Series
B
|
||
The
outstanding shares of Series B Preferred Stock have no voting rights. Each
share of Series B Convertible Preferred Stock carries with it the
immediate right by its owner to convert such share of Series B Convertible
Preferred Stock into the amount of shares of BAETA Corp. Common Stock
equivalent to one percent (1%) of the total amount of BAETA Corp. Common
Stock then issued and outstanding at the time of the conversion
election.
|
4
Common
Stock Outstanding Before and After the
Offering:
|
24,023,152
shares of our common stock are issued and outstanding as of the date of
this prospectus. Assuming all of the shares being offered for sale
pursuant to this registration statement are sold, there will be 31,185,152
shares of common stock issued and outstanding post
offering.
|
|
Use of
Proceeds:
|
We
intend to use the proceeds to further develop and continue our business
operations and other general working capital and expenses incurred
relating to this registration statement. See “Use of Proceeds” section for
more information.
|
|
Escrow
Account:
|
The
proceeds from the sale of the 6,000,000 shares of common stock in this
offering being offered for sale by our Officers and Directors will be
payable to “Virginia K. Sourlis, Esq. Escrow Agent f/b/o BAETA Corp.” and
will be deposited in a non-interest bearing escrow account and closed upon
from time to time until the Offering is terminated. All subscription
agreements and checks are irrevocable and should be delivered to The
Sourlis Law Firm, Virginia K. Sourlis, Esq., 214 Broad Street, Red Bank,
NJ 07701. Failure to do so will result in checks being returned to the
investor. BAETA Corp.’s escrow agent, The Sourlis Law Firm, acts as
securities and corporate legal counsel for BAETA Corp., and therefore they
are not independent third parties.
|
|
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.
|
5
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
September 30, 2010, we had $23,678 cash on-hand and our stockholder’s deficit
was $641,260, 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
will continue to sustain large 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 assets consist of Intellectual Property, concepts, methods and
strategies related to MyHealthTrends™ tracking
systems, associated online user portals and the MyHealthID and MyPillsOntime pipeline
products. 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.
6
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 and commercially reasonable terms, if at all. Any
inability of us to obtain additional financing 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.
However, 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 and
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:
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payment
of damages, potentially treble damages, if we are found to have willfully
infringed a party’s patent rights;
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injunctive
or other equitable relief that may effectively block our ability to
further develop, commercialize and sell products;
or
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we
or our collaborators having to enter into license arrangements that may
not be available on commercially acceptable terms, if at
all.
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As a
result of the foregoing, we could be prevented from commercializing current or
future products.
7
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:
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1.
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MyPainAway brand
trademark. Trademark registration filed January
2008.
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|
2.
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MyHealthTrends™ brand
trademark. Trademark registration to be
filed.
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3.
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MyHealthTrends™ and
MyHealthTrends™ For Pain monitoring system
integrated hardware and software
technology.
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|
4.
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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.
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5.
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Patent
pending for “Automatic Reminder and Dispensing Device, System and Method
Therefore,” docket No U.S. 1509/08, originally submitted May
2008.
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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
Chairman, and Mr. Leonid Pushkantser, our Chief Executive Officer and
Director.
Our
success depends on the efforts and abilities of Dr. Alexander Gak, our President
and Chairman of the Board, and Mr. Leonid Pushkantser, our CEO and director. The
loss of the services of either Dr. Gak or Mr. Pushkantser 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.
8
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 we believe are currently not subject to FDA regulation.While we are
investigating this matter 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.
In the
event that we are found liable for damage or other losses, we currently do not
maintain any insurance coverage 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.
9
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.
RISKS RELATING TO OWNERSHIP
OF OUR COMMON STOCK
Unless
an active trading market develops for our securities, you may not be able to
sell your shares.
Although,
we are a SEC ’34 Act reporting company and our common shares are quoted on the
OTC Bulletin Board (owned and operated by the Nasdaq Stock Market, Inc.) under
the symbol “BAEA”, there is not currently an active trading market for our
common stock and an active trading market may never develop or, if it does
develop, may not be maintained. Failure to develop or maintain an
active trading market will have a generally negative effect on the price of our
common stock, and you may be unable to sell your common stock or any attempted
sale of such common stock may have the effect of lowering the market price and
therefore your investment could be a partial or complete loss.
10
Since
our common stock is thinly traded it is more susceptible to extreme rises or
declines in price, and you may not be able to sell your shares at or above the
price paid.
Since our
common stock is thinly traded its trading price is likely to be highly volatile
and could be subject to extreme fluctuations in response to various factors,
many of which are beyond our control, including:
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the
trading volume of our shares;
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the
number of securities analysts, market-makers and brokers following our
common stock;
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changes
in, or failure to achieve, financial estimates by securities
analysts;
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new
products or services introduced or announced by us or our
competitors;
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actual
or anticipated variations in quarterly operating
results;
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conditions
or trends in our business
industries;
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announcements
by us of significant contracts, acquisitions, strategic partnerships,
joint ventures or capital
commitments;
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additions
or departures of key personnel;
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sales
of our common stock; and
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general
stock market price and volume fluctuations of publicly-traded, and
particularly microcap, companies.
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You may
have difficulty reselling shares of our common stock, either at or above the
price you paid, or even at fair market value. The stock markets often
experience significant price and volume changes that are not related to the
operating performance of individual companies, and because our common stock is
thinly traded it is particularly susceptible to such changes. These
broad market changes may cause the market price of our common stock to decline
regardless of how well we perform as a company. In addition,
securities class action litigation has often been initiated following periods of
volatility in the market price of a company’s securities. A
securities class action suit against us could result in substantial legal fees,
potential liabilities and the diversion of management’s attention and resources
from our business. Moreover, and as noted below, our shares are
currently traded on the OTC Bulletin Board and, further, are subject to the
penny stock regulations. Price fluctuations in such shares are
particularly volatile and subject to manipulation by market-makers,
short-sellers and option traders.
Trading
in our common stock on the OTC Bulletin Board may be limited thereby making it
more difficult for you to resell any shares you may own.
Our
common stock is quoted on the OTC Bulletin Board (owned and operated by the
Nasdaq Stock Market, Inc.) under the symbol “BAEA”. The OTC Bulletin Board is
not an exchange and, because trading of securities on the OTC Bulletin Board is
often more sporadic than the trading of securities listed on a national exchange
or on the Nasdaq National Market, you may have difficulty reselling any of the
shares of our common stock that you may own.
11
Our
common stock may be considered a “penny stock,” and thereby be subject to
additional sale and trading regulations that may make it more difficult to
sell.
Our
common stock, which is currently and will be quoted for trading on OTCBB, may be
considered to be a “penny stock” if it does not qualify for one of the
exemptions from the definition of “penny stock” under Section 3a51-1 of the
Exchange Act, as amended. Our common stock may be a “penny stock” if it meets
one or more of the following conditions: (i) the stock trades at a price less
than $5.00 per share; (ii) it is NOT traded on a “recognized” national exchange;
(iii) it is not quoted on the Nasdaq Capital Market, or even if so, has a price
less than $5.00 per share; or (iv) is issued by a company that has been in
business less than three years with net tangible assets less than $5 million.
The principal result or effect of being designated a “penny stock” is that
securities broker-dealers participating in sales of our common stock will be
subject to the “penny stock” regulations set forth in SEC Rules 15-2 through
15g-9 promulgated under the Exchange Act. For example, Rule 15g-2 requires
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document at least two business days before
effecting any transaction in a penny stock for the investor’s account. Moreover,
SEC Rule 15g-9 requires broker-dealers in penny stocks to approve the account of
any investor for transactions in such stocks before selling any penny stock to
that investor. This procedure requires the broker-dealer to: (i) obtain from the
investor information concerning his or her financial situation, investment
experience and investment objectives; (ii) reasonably determine, based on that
information, that transactions in penny stocks are suitable for the investor and
that the investor has sufficient knowledge and experience as to be reasonably
capable of evaluating the risks of penny stock transactions; (iii) provide the
investor with a written statement setting forth the basis on which the
broker-dealer made the determination in (ii) above; and (iv) receive a signed
and dated copy of such statement from the investor, confirming that it
accurately reflects the investor’s financial situation, investment experience
and investment objectives. Compliance with these requirements may make it more
difficult and time consuming for holders of our common stock to resell their
shares to third parties or to otherwise dispose of them in the market or
otherwise.
The
limited public trading market may cause volatility in our stock
price.
The
quotation of our common stock on the OTCBB does not assure that a meaningful,
consistent and liquid trading market currently exists, and in recent years such
market has experienced extreme price and volume fluctuations that have
particularly affected the market prices of many smaller companies like us. Our
common stock is thus and will be subject to significant volatility. Sales of
substantial amounts of our common stock, or the perception that such sales might
occur, could adversely affect prevailing market prices of our common
stock.
Shares
eligible for future sale may adversely affect the market price of our common
stock, as the future sale of a substantial amount of outstanding stock in the
public marketplace could reduce the price of our common stock.
We cannot
predict the effect, if any, that market sales of shares of our common stock or
the availability of shares of common stock for sale will have on the market
price prevailing from time to time. Sales of shares of our common stock in the
public market covered under an effective registration statement, or the
perception that those sales may occur, could cause the trading price of our
common stock to decrease or to be lower than it might be in the absence of those
sales or perceptions.
Dr.
Gak is our Chairman of the Board 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 Chairman
and therefore, together with Mr. Pushkantser’s approval, 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 (holding 80 shares), our President and Chairman, and Mr.,
Leonid Pushkantser (holding 20 shares), our Chief Executive Officer and
Director. 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.
12
Change of Control
Risk
As the
holders of our Series A Preferred Stock, Dr. Gak and Mr. Pushkantser maintain
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.
Compliance
with changing regulation of corporate governance and public disclosure, and our
management’s inexperience with such regulations will result in additional
expenses and creates a risk of non-compliance.
Changing
laws, regulations and standards relating to corporate governance and public
disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC
regulations, have created uncertainty for public companies and significantly
increased the costs and risks associated with accessing the public markets and
public reporting. Our management team will need to invest significant management
time and financial resources to comply with both existing and evolving standards
for public companies, which will lead to increased general and administrative
expenses and a diversion of management time and attention from revenue
generating activities to compliance activities. Management’s inexperience may
cause us to fall out of compliance with applicable regulatory requirements,
which could lead to enforcement action against us and a negative impact on our
stock price.
We may be exposed to potential risks
resulting from new requirements under Section 404 of the Sarbanes-Oxley Act
of 2002.
Pursuant
to Section 404 of the Sarbanes-Oxley Act of 2002, we are required to
include in our annual report on Form 10-K our assessment of the effectiveness of
our internal control over financial reporting as of the end of the fiscal year
ended June 30, 2009 and our independent registered public accounting firm will
in the future be required to report on our management’s report. We will incur
additional expenses and diversion of management’s time as a result of performing
the system and process evaluation, testing and remediation required in order to
comply with the management certification and auditor attestation requirements.
If we fail to achieve and maintain adequate internal controls, as such standards
are modified, supplemented or amended from time to time, we may not be able to
ensure that we can conclude on an ongoing basis that we have effective internal
controls over financial reporting in accordance with Section 404 of the
Sarbanes-Oxley Act. If we cannot provide reliable financial reports or prevent
fraud, our business and operating results could be harmed, investors could lose
confidence in our reported financial information, and the trading price of our
common stock, if a market ever develops, could drop significantly.
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:
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that
a broker or dealer approve a person's account for transactions in penny
stocks; and
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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.
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13
In order
to approve a person's account for transactions in penny stocks, the broker or
dealer must:
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obtain
financial information and investment experience objectives of the person;
and
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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.
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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:
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sets
forth the basis on which the broker or dealer made the suitability
determination; and
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that
the broker or dealer received a signed, written agreement from the
investor prior to the transaction.
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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.
RISK
FACTORS RELATED TO OUR SECURITIES,
THE RESERVE EQUITY LINE OF
FINANCING AND THIS OFFERING
Of
the 7,162,000 shares being registered in this registration statement, we are
registering an aggregate of 1,672,000 shares of common stock to be issued under
the Reserve Equity Financing Agreement with AGS Capital Group, LLC.
We are
registering an aggregate of 1,672,000 shares of common stock under the
registration statement of which this prospectus forms a part for issuance
pursuant to the Reserve Equity Financing Agreement with AGS Capital Group,
LLC. The sale of these shares into the public market by AGS could
depress the market price of our common stock.
14
Existing
stockholders may experience significant dilution from the sale of our common
stock pursuant to the Drawdown Agreement.
The sale
of our common stock to AGS Capital Group, LLC in accordance with the Reserve
Equity Financing Agreement may have a dilutive impact on our shareholders.
As a result, our net income per share could decrease in future periods and
the market price of our common stock could decline. In addition, the lower our
stock price is at the time we exercise our put option, the more shares of our
common stock we will have to issue to AGS Capital Group, LLC. in order to
drawdown on the facility. If our stock price decreases, then our existing
shareholders would experience greater dilution for any given dollar amount
raised through the offering.
The
perceived risk of dilution may cause our stockholders to sell their shares,
which would contribute to a decline in the price of our common stock.
Moreover, the perceived risk of dilution and the resulting downward
pressure on our stock price could encourage investors to engage in short sales
of our common stock. By increasing the number of shares offered for sale,
material amounts of short selling could further contribute to progressive price
declines in our common stock.
AGS
Capital Group, LLC will pay less than the then-prevailing market price of our
common stock which could cause the price of our common stock to
decline.
Our
common stock to be issued under the Reserve Equity Financing
Agreement will be purchased at a five (5%) discount or 95% of the
lowest closing bid price during the five trading days
immediately following our notice to AGS Capital Group, LLC of our election to
exercise our "put" right.
AGS
Capital Group, LLC has a financial incentive to sell our shares immediately
upon receiving the shares to realize the profit between the
discounted price and the market price. If AGS Capital Group, LLC sells our
shares, the price of our common stock may decrease. If our stock price
decreases, AGS may have a further incentive to sell such shares.
Accordingly, the discounted sales price in the Drawdown Agreement may cause the
price of our common stock to decline.
We
May Not Have Access to the Full Amount under the Equity Line.
Currently,
the closing price of our common stock is based on very little and non-meaningful
trading volume, and therefore, bears no relationship to the book value of our
Company. There is no assurance that the market price of our common stock will
substantiate in the near future. The entire commitment under the Reserve
Equity Financing Agreement is $5,000,000, and ability to utilize such amount is
based upon the market for our shares attaining certain trading volume
parameters. Management is of the opinion that it may be difficult to utilize the
entirety of the $5,000,000 commitment from AGS.
15
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” and
its interactive customer website during the fourth quarter of 2008. Since the
launching of MyHealthTrends™
For Pain, we have brought to market related products MyHealthTrends™ For Weight Control, & MyHealthTrends™ For Smoking Cessation,
each marketed as a consumer product. 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.
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 monitoring systems known as MyHealthTrends™ For Pain,
MyHealthTrends™ For
Weight Control,
& MyHealthTrends™ For
Smoking Cessation, each marketed as a
consumer product. Additionally, the Company is developing MyPillsOntime™, an automatic
medication reminder/dispenser system for consumer market, and MyHealthID, a patient
controlled and managed online repository for personal medical records, that we
are working to bring to market.
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.
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. The 100 shares of Series A
Preferred Shares are held by Dr. Alexander Gak (holding 80 shares), our
President and Chairman, and Mr., Leonid Pushkantser (holding 20 shares), our
Chief Executive Officer and Director.
16
On
February 8, 2010, our Board of Directors and majority shareholders approved the
designation of 10 shares of our preferred stock as Series B Preferred Stock (the
“Series B Preferred Shares”) and authorized our officers to file a Certificate
of Designation for the Series B Preferred Shares, which occurred on February 9,
2010. The outstanding shares of Series B Preferred Stock have no voting rights.
Each share of Series B Convertible Preferred Stock carries with it the immediate
right by its owner to convert such share of Series B Convertible Preferred Stock
into the amount of shares of BAETA Corp. Common Stock equivalent to one percent
(1%) of the total amount of BAETA Corp. Common Stock then issued and outstanding
at the time of the conversion election.
On
February 8, 2010, our Board of Directors and majority shareholders approved the
filing of an Amendment to our Certificate of Incorporation with the State of New
Jersey to increase the authorized number of common stock from 100,000,000 to
150,000,000. This Amendment to the Certificate of Incorporation was filed on
February 9, 2010.
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 monitoring system called MyHealthTrends™, of which we
market the products MyHealthTrends™ For Pain,
MyHealthTrends™ For
Weight Control,
& MyHealthTrends™ For
Smoking Cessation.
Our
objective is 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 current
core business focus is on development and commercialization of monitoring
technologies related to pain management and recordation, smoking cessation, and
weight control. 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
|
17
2.
|
September
2007:
|
|
-
|
Development
of proof of concept for MyPainAway™ Pain
Tracking System (later renamed to MyHealthTrends™ For
Pain) commenced
|
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™:
MyHealthTrends™ For
Pain
Product
Overview
MyHealthTrends™ For Pain, a
handheld consumer device, 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
developed the final version of its prototype, validated the technology and its
functionality and have contracted with 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.
18
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.
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.
19
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 2011. 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 2011 so it can
focus on the Company’s current line of products, including each of the MyHealthTrends™ consumer
devices.
MyHealthTrends™ For Weight
Control
Using the
core proprietary technology as stated above for MyHealthTrends™ For Pain, with the click of a
button, MyHealthTrends™ for
Weight Control helps the user "Tame Your Food Crave" by empowering the
user to record and understand hunger and food impulses.
Developed
by Dr. Alexander Gak MD, a licensed physician, the "Crave Button" acts as a
circuit breaker enabling the user to redirect their respective energy, retain
composure, and master food cravings.
Benefits:
The
"Crave Button" enables individuals to:
|
·
|
Immediately
divert energies when the user experiences a food craving by pressing a
single button;
|
|
·
|
Documents
and charts the user’s craving trends—including time of day and how
frequently a crave occurs.
|
The user
can use the charts revealing craving trends to:
|
·
|
Adjust
user’s eating patterns
|
|
·
|
Understand
the impact of dietary changes or
exercise
|
|
·
|
Gain
control over user’s weight
|
Most
importantly, you can share your craving charts with your weight control advisor
or healthcare professional.
20
Users
carry a small yet stylish hand-held device.
·
|
When
a craving is experienced, you press the button once and your craving is
recorded within the device.
|
·
|
When
you avoid eating, you press the button twice so you can learn how to
better control your cravings.
|
Periodically
you plug the device to your computer's USB port where the data is downloaded and
stored within MyHealthTrends secure, remote
database. You can then graphically view your craving history online, print the
charts, or electronically share the results with your weight control advisor,
family members, or healthcare professionals.
Craving
Scores
To enable
users, counselors, and healthcare professionals to quickly understand the
pervasiveness of cravings, MyHealthTrends™ For Weight
Control calculates a Craving
Score, which is the percent of time the user is affected by
cravings.
The
underlying proprietary, patent-pending algorithm employs the concept of
exponential decay to calculate the total time a user senses
cravings. Additionally, compliance rates, or the percent of time you
successfully were able to avoid eating, is also reported.
Craving
Scores are easily compared and trended over time, providing a unique tool to
understand changes in craving levels experienced by the user.
Detailed
Diagnostic Information
Healthcare
professionals can indicate the type of diagnostic information the user is to
provide for each recorded craving. Then, in a single sitting, the user can
quickly and easily enter the information providing greater insights for the
healthcare professional.
End
Users
MyHealthTrends
for Weight Control is ideal for individuals who want to:
|
·
|
Lose
weight
|
|
·
|
Avoid
eating specific types of food
|
|
·
|
Gain
greater insights to your eating
impulses
|
MyHealthTrends
for Weight Control is ideal to help you win control over:
|
·
|
Cake
|
|
·
|
Chocolate
|
|
·
|
Donuts
|
|
·
|
Ice
Cream
|
|
·
|
Hamburgers
and French Fries
|
|
·
|
Potato
Chips
|
|
·
|
Pizza
|
|
·
|
Other
savory foods
|
21
MyHealthTrends™ For Smoking
Cessation
Using the
core proprietary technology as stated above for MyHealthTrends™ For Pain and MyHealthTrends™ for Weight
Control, with
the click of a button, MyHealthTrends™ for Smoking
Cessation helps the user "Tame Their Smoking Crave" by empowering them to
record and understand cigarette and nicotine impulses whenever and wherever they
are, helping to eliminate the habit.
Developed
by Dr. Alexander Gak, MD, a licensed medical doctor, the "Crave Button" acts as
a circuit breaker enabling the user to redirect energy, retain composure, and
master smoking cravings.
Benefits
The
"Crave Button" enables individuals to:
|
·
|
Immediately
divert your energies when you experience a craving to
smoke
|
|
·
|
See
your craving trends—including time of day and how frequently you crave
cigarettes
|
Users can
use the charts revealing craving trends to help adjust smoking, eating, stress,
and behavior patterns, all of which tend to be interrelated.
Most
importantly, user can optionally share craving charts with family members and
healthcare professionals.
Process:
As Easy as 1, 2, 3:
1. Users
carry a small yet stylish hand-held device with them. When a craving is
experienced, you press the button and your craving is recorded within the
device.
2.
Periodically users plug the device to their computer's USB port where the data
is downloaded and stored within the MyHealthTrends™ For Smoking
Cessation secure, remote database.
3. Users
can then graphically view craving history online, print the charts, or
electronically share the results with family members, supporters, or healthcare
professionals.
Craving
Score
To enable
users, counselors, and healthcare professionals to quickly understand the
pervasiveness of cravings, MyHealthTrends™ For Smoking
Cessation calculates a Craving Score, the percent of time the user is
affected by cravings.
The
underlying proprietary, patent-pending algorithm employs the concept of
exponential decay to calculate the total time a user senses
cravings.
Craving
Scores are easily compared and trended over time, providing a unique tool to
understand changes in craving levels experienced by the user.
Users
MyHealthTrends™ For Smoking
Cessation is ideal for individuals who want to finally gain control
of their smoking and defeat the deadly habit.
MyHealthTrends
for Smoking Cessation is ideal to help users win control over:
|
·
|
Cigarettes
|
|
·
|
Cigars
|
|
·
|
"Snuff,"
"Dipping" Tobacco, or Oral
Tobacco
|
22
|
·
|
Other
nicotine products
|
II. MyPillsOnTime™ Automatic
Medication Reminder Dispenser:
We intend
to launch and market this product for sale at a timing that is dependent upon
our ability to raise sufficient capital. 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™ line of
products, 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.
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. 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.
We intend
to launche and market this product for sale in late 2011, dependent upon our
ability to raise sufficient capital. 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.
23
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.
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.
24
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.
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 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 2008 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 780,000 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
January 1, 2011, Extranome had received approximately $149,000 in cash and
750,000 shares of Common Stock of BAETA Corp. pursuant to the Software
Development Agreement. As of February 4, 2011 Extranome had received
approximately $149,000 in cash and 780,000 shares of Common Stock in BAETA Corp.
As of February 4, 2011, BAETA owes approximately $264,000 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. 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.
Cohesive Product
Synergy
Our
consumer products synergize around core values that support a total care value
proposition to patients and practitioners. We believe that the MyHealthTrends™ line of
products, MyPillsOnTime™ and MyHealthID™, although
uniquely delivered, together offer a cohesive care package that starts with
patient-driven data collection via the MyHealthTrends™ 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.
25
Plan of
Operations
We anticipate that the Company will
require approximately $1,000,000 to $1,500,000 in additional capital to execute
our 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 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.
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.
26
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.
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 contracted for sales and
marketing agreements with several sales and marketing consultants. 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.
27
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.
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.
28
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. 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:
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, pursuant to the Company’s 2009 Stock Option Plan, to
purchase BAETA Corp. common stock. To date, the members have received the
following as compensation for their continued service on the
SAB:
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 pursuant to the 2009 Stock Option Plan in consideration for
his continued service as a Member of the Company’s Scientific Advisory Board,
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 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 pursuant to the 2009 Stock Option Plan in consideration for his
continued service as a Member of the Company’s Scientific Advisory Board, 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 pursuant to the 2009 Stock Option Plan in consideration for
his continued service as a Member of the Company’s Scientific Advisory Board,
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.
29
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 pursuant to the 2009 Stock Option Plan in consideration for her
continued service as a Member of the Company’s Scientific Advisory Board, 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 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.
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
30
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
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
31
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
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.
32
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.
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
33
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
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
34
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
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
expired on June 30, 2010..
On March
12, 2010 the Company extended its office space lease for its headquarters
operation from Regus for an additional year, through June 30, 2011, at a minimum
monthly rent of $1,000, starting July 1, 2010. The minimum full year rental
commitment from July 1, 2010 to June 30, 2011 is $12,000.
These
executive offices are located at 1 Bridge Plaza, 2nd Floor,
Suite 275, Fort Lee, NJ 07024.
LEGAL
PROCEEDINGS
We are
not currently a party to any legal proceedings nor do we have knowledge of any
pending or threatened legal claims. .
35
USE
OF PROCEEDS
Selling
all of the shares in the offering will result in approximately $8,594,400 gross
proceeds to BAETA Corp. We expect to disburse the proceeds from this offering in
the priority set forth below within the first 12 months after successful
completion of this offering (assuming the offering becomes fully
subscribed):
BAETA
Corp. intends to use the proceeds from this offering as follows in the event
10%, 50% and 100% of the Shares are sold (minus offering expenses of $42,998,
including SEC registration fees and legal, accounting, and printer and transfer
agent fees):
Application
of Proceeds Assuming 10% of total Offering is attained:
Offering
Proceeds
|
$ | 855,140 | ||
Marketing
& Sales Initiatives
|
$ | 200,000 | ||
Operating
Expenses (1)
|
$ | 200,000 | ||
Salaries
(2)
|
$ | 0.00 | ||
Product
Development
|
$ | 200,000 | ||
Working
Capital
|
$ | 255,140 | ||
Total
Estimated Use of Proceeds
|
$ | 855,140 |
(1)
|
Includes
legal fees, accounting fees, and general
overhead.
|
(2)
|
To
be determined in the sole discretion of the Board of Directors – taken
from Working Capital
|
Application
of Proceeds Assuming 50% of total Offering is attained:
Offering
Proceeds
|
$ | 4,297,200 | ||
Marketing
& Sales Initiatives
|
$ | 1,000,000 | ||
Operating
Expenses (1)
|
$ | 500,000 | ||
Salaries
(2)
|
$ | 0.00 | ||
Product
Development
|
$ | 1,500,000 | ||
Working
Capital
|
$ | 1,297,200 | ||
Total
Estimated Use of Proceeds
|
$ | 4,297,200 |
(1)
|
Includes
legal fees, accounting fees, and general
overhead.
|
(2)
|
To
be determined in the sole discretion of the Board of Directors – taken
from Working Capital
|
36
Application
of Proceeds Assuming 100% of total Offering is attained:
Offering
Proceeds
|
$ | 8,594,400 | ||
Marketing
& Sales Initiatives
|
$ | 2,500,000 | ||
Operating
Expenses (1)
|
$ | 1,000,000 | ||
Salaries
(2)
|
$ | 0.00 | ||
Product
Development
|
$ | 3,000,000 | ||
Working
Capital
|
$ | 2,094,400 | ||
Total
Estimated Use of Proceeds
|
$ | 8,594,400 |
(1)
|
Includes
legal fees, accounting fees, and general
overhead.
|
(2)
|
To
be determined in the sole discretion of the Board of Directors – taken
from Working Capital
|
The above
tables represent our intended uses of proceeds based on our ability to raise
certain amounts of the contemplated offering. The intended uses of proceeds are
subject to change based upon the shifting needs of the Company, and in the sole
discretion of the Company’s management and board of directors.
DETERMINATION
OF OFFERING PRICE
The $1.20
per share offering price of our common stock was determined based on the
currently quoted price of our common stock on the Over-the-Counter Bulletin
Board, based upon very little meaningful trading. Because a full market for our
common stock has not yet developed, the price quoted on the OTCBB bears little
relationship to the valuation of our assets, earnings, book value or any other
objective criteria of value.
DILUTION
Upon
purchasing share in this offering, you will experience immediate and substantial
dilution.
“Dilution”
represents the difference between the offering price of the shares of Common
Stock and the net book value per share of Common Stock immediately after
completion of the offering. “Net Book Value” is the amount that results from
subtracting total liabilities from total assets. Assuming all 7,162,000 shares
offered are sold, and in effect BAETA receives the maximum estimated proceeds of
this offering from shareholders, BAETA’s net book value at the end of December
31, 2010 (unaudited Q4 numbers) will be approximately $7,901,036 or $.26 per
share. Therefore, any new investor will incur an immediate and substantial
dilution of approximately 78% while BAETA’s current stockholders will receive an
increase from ($.03) to $.26 per share in the net tangible book value of the
shares that she holds.
This
table represents a comparison of the prices paid by purchasers of the Common
Stock in this offering and the shareholders who received shares in BAETA Corp.
previously, based on assumptions that the Company sells 10%, 50%, and 100% of
the Offering Shares:
37
If 10% of
|
If 50% of
|
If 100% of
|
||||||||||
Shares Sold
|
Shares Sold
|
Shares Sold
|
||||||||||
Book
value per share before offering
|
$ | (.03 | ) | $ | (.03 | ) | $ | (.03 | ) | |||
Book
value per share after offering
|
$ | .01 | $ | .13 | $ | .26 | ||||||
Decrease
in investment to new shareholders
|
$ | 6,331,566 | $ | 3,707,154 | $ | 851,548 | ||||||
Dilution
to new shareholders
|
99 | % | 89 | % | 78 | % | ||||||
Table
is gross figures, does not account for expenses
|
PLAN
OF DISTRIBUTION
Offering of 6,000,000 Shares
of Common Stock
A
Portion of the Offering will be Sold by Our Officers and Directors
Of the
7,162,000 shares being registered in this offering, 6,000,000 will be sold
directly through the best efforts of our Officers and Directors. This is a
self-underwritten “best-efforts” offering. This Prospectus is part of a
registration statement that permits our Officers and Directors to sell the
Shares directly to the public, with no commission or other remuneration payable
to them for any Shares sold. There are no plans or arrangements to enter into
any contracts or agreements to sell the Shares with a broker or dealer. The
Company’s Officer and Directors will sell the shares and intends to offer them
to friends, family members and personal and professional acquaintances. In
offering the securities on our behalf, our Officers and Directors will rely on
the safe harbor from broker dealer registration set out in Rule 3a4-1 under the
Securities Exchange Act of 1934. In their endeavors to sell this offering, our
Officers and Directors do not intend to use any mass-advertising methods such as
the Internet or print media.
Our
Officers and Directors will not register as a broker-dealer pursuant to Section
15 of the Securities Exchange Act of 1934, in reliance upon Rule 3a4-1, which
sets forth the conditions under which a person associated with an Issuer, may
participate in the offering of the Issuer's securities and not be deemed to be a
broker-dealer.
|
a.
|
Each of our Officers and
Directors are not subject to a statutory disqualification, as that term is
defined in Section 3(a)(39)of the Act, at the time of his participation;
and
|
|
b.
|
Each of our Officers and
Directors will not be compensated in connection with her participation by
the payment of commissions or other remuneration based either directly or
indirectly on transactions in securities;
and
|
|
c.
|
Each of our Officers and
Directors is not, nor will they be at the time of the participation in the
Offering, an associated person of a broker-dealer;
and
|
|
d.
|
Each of our Officers and
Directors meets the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of
the Exchange Act, in that they (A) primarily perform, or are intended
primarily to perform at the end of the offering, substantial duties for or
on behalf of our Company, other than in connection with transactions in
securities; and (B) is not a broker or dealer, or been associated person
of a broker or dealer, within the preceding twelve months; and (C) has not
participated in selling and offering securities for any Issuer more than
once every twelve months other than in reliance on Paragraphs (a)(4)(i)
(a) (4) (iii).
|
Our
Officers, Directors, Control persons and affiliates of same do not intend to
purchase any shares in this offering.
38
Offering of 1,162,000 Shares
of Common Stock
Reserve
Equity Financing Agreement.
This
registration statement, in part, registers 1,162,000 shares of Common Stock to
be sold exclusively to AGS Capital Group, LLC pursuant to a Reserve Equity
Financing Agreement. On September 28, 2010, we entered into a drawdown Reserve
Equity Financing Agreement (the “Agreement”) with AGS Capital Group, LLC (“AGS”,
the “Selling Stockholder”). In accordance with the Agreement, AGS has committed,
subject to certain conditions, to purchase up to 5 million dollars ($5,000,000)
of the Company’s common stock over a term of up to two years. Although the
Company is not mandated to sell shares under the Agreement, the Agreement gives
the Company the option to sell to AGS shares of common stock at a per share
purchase price of equal to 95% of the lowest closing bid price during the five
trading days following the Company’s delivery of notice to AGS (the
“Notice”).
AGS is
not required to purchase the shares, unless the shares which are subject to the
Notice have been registered for resale and are freely tradable in accordance
with the federal securities laws, including the Securities Act of 1933, as
amended. The Company is obligated to file with the U.S. Securities and Exchange
Commission (the “SEC”) a registration statement on Form S-1, of which this
prospectus forms a part, within 90 days from the date of the Agreements and to
use all commercially reasonable efforts to have such registration statement
declared effective by the SEC within 120 days of filing. There is no origination
fee with respect to the transaction.
During
the five trading days following a drawdown request, we will calculate the
amount of shares we will sell to AGS and the purchase price per share. The
purchase price per share of common stock will be based on the daily volume
weighted average price of our common stock during each of the five trading days
immediately following the drawdown date, less a discount of 5%. AGS’ obligations
under the equity line agreement are not transferrable.
There is
no minimum amount we can draw down at any one time. The maximum amount we
can draw down at any one time is $100,000.
Allen
Silberstein is the natural person and Principal of AGS Capital Group, LLC who
exercises the sole voting and dispositive powers with respect to the shares to
be offered by the Company. Allen Silberstein has had no other material
relationship with the Company and has owned no securities of the Company prior
to the offering.
The
Selling Stockholder and any of its pledgees, donees, assignees and other
successors-in-interest may, from time to time (“selling stockholders”) sell any
or all of their shares of common stock on any stock exchange, market or trading
facility on which the shares are traded or in private transactions. These sales
may be at fixed or negotiated prices. The selling stockholders may use any one
or more of the following methods when selling shares:
|
●
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits the purchaser;
|
|
●
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as
principal;
|
|
●
|
facilitate
the transaction;
|
|
●
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
●
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
●
|
privately-negotiated
transactions;
|
|
●
|
broker-dealers
may agree with the selling stockholders to sell a specified number of such
shares at a stipulated price per
share;
|
|
●
|
through
the writing of options on the
shares;
|
|
●
|
a
combination of any such methods of sale;
and
|
39
|
●
|
any
other method permitted pursuant to applicable
law.
|
The
selling stockholders may also sell shares under Rule 144 of the Securities Act
of 1933, as amended (the “Securities Act”), if available, rather than under this
prospectus. The selling stockholders shall have the sole and absolute discretion
not to accept any purchase offer or make any sale of shares if it deems the
purchase price to be unsatisfactory at any particular time.
The
selling stockholders or their pledgees, donees, transferees or other successors
in interest, may also sell the shares directly to market makers acting as
principals and/or broker-dealers acting as agents for themselves or their
customers. Such broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling stockholders and/or the
purchasers of shares for whom such broker-dealers may act as agents or to whom
they sell as principal or both, which compensation as to a particular
broker-dealer might be in excess of customary commissions. Market makers and
block purchasers purchasing the shares will do so for their own account and at
their own risk. It is possible that a selling stockholders will attempt to sell
shares of common stock in block transactions to market makers or other
purchasers at a price per share which may be below the then existing market
price. We cannot assure that all or any of the shares offered in this prospectus
will be issued to, or sold by, the selling stockholders. The selling
stockholders and any brokers, dealers or agents, upon effecting the sale of any
of the shares offered in this prospectus, may be deemed to be “underwriters” as
that term is defined under the Securities Act, the Securities Exchange Act of
1934, as amended, and the rules and regulations of such acts. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
We are
required to pay all fees and expenses incident to the registration of the
shares, including fees and disbursements of counsel to the Selling Stockholder,
but excluding brokerage commissions or underwriter discounts.
The
selling stockholders, alternatively, may sell all or any part of the shares
offered in this prospectus through an underwriter. The selling stockholders have
not entered into any agreement with a prospective underwriter and there is no
assurance that any such agreement will be entered into.
The
selling stockholders may pledge their shares to their brokers under the margin
provisions of customer agreements. If a selling stockholder defaults on a margin
loan, the broker may, from time to time, offer and sell the pledged shares. 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 any of the selling
stockholders are deemed an affiliated purchaser or distribution participant
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 addition, if a short sale is deemed to be a stabilizing activity,
then the selling stockholders 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.
AGS
Capital Group, LLC, the underwriter herein, may offer for sale up to an
estimated 1,162,000 shares of our common stock which it will originally acquire
pursuant to the terms of the reserve equity financing agreement as more fully
described under "Selling Stockholder.” AGS will be offering such shares for
their own account. We do not know for certain how or when AGS will choose to
sell their shares of common stock. However, it can sell such shares at any time
or through any manner set forth in this plan of distribution at such time as we
have “put” the shares to them. We may request AGS to purchase shares by
delivering a Drawdown Notice to AGS. We have acknowledged that AGS may sell
shares corresponding with a particular Drawdown Notice after the Drawdown Notice
is received by AGS which allows them to short sell the shares. There shall be a
minimum of five (5) Trading Days between each Drawdown Notice
Date.
40
To permit
AGS to resell the shares of common stock issued to it, we agreed to file a
registration statement, of which this prospectus is a part, and all necessary
amendments and supplements with the SEC for the purpose of registering and
maintaining the registration of the shares. We will bear all costs relating to
the registration of the common stock offered by this prospectus. We will keep
the registration statement effective until the date after which all of the
shares of common stock held by AGS that are covered by the registration
statement have been sold by AGS pursuant to such registration
statement.
Terms
of the Offering, Generally
The
Company is registering 7,162,000 shares of it common stock by the filing of this
registration statement with the United States Securities and Exchange
Commission. There is no minimum number of shares required to be purchased. This
offering is being made partly on a best effort basis, and partly on an exclusive
sales agreement with AGS Capital pursuant to a Reserve Equity Financing
Agreement. No commission or other compensation related to the sale of the shares
will be paid to our officers and directors. The intended methods of
communication include, without limitations, telephone, and personal
contact.
The
offering shall terminate on the earlier of (i) the date when the sale of all
7,162,000 shares is completed or (ii) one hundred and eighty (180) days from the
date of this prospectus. The Company may extend the offering period beyond one
hundred and eighty (180) days from the effective date of this
prospectus.
There can
be no assurance that any of the shares will be sold. As of the date of this
Prospectus, the Company has not entered into any agreements or arrangements for
the sale of the shares with any broker/dealer or sales agent. However, if BAETA
were to enter into such arrangements, BAETA will file a post effective amendment
to disclose those arrangements because any broker/dealer participating in the
offering would be acting as an underwriter and would have to be so named in the
prospectus.
In order
to comply with the applicable securities laws of certain states, the securities
may not be offered or sold unless they have been registered or qualified for
sale in such states or an exemption from such registration or qualification
requirement is available and with which the Company has complied. The purchasers
in this offering and in any subsequent trading market must be residents of such
states where the shares have been registered or qualified for sale or an
exemption from such registration or qualification requirement is available. As
of the date of this prospectus, BAETA has not identified the specific states
where the offering will be sold. BAETA will file a pre-effective amendment
indicating which state(s) the securities are to be sold pursuant to this
registration statement.
Deposit
of Offering Proceeds
The
proceeds from the sale of the shares in this offering will be payable to The Sourlis Law Firm, Escrow
Agent f/b/o BAETA Corp. (“Trust Account”) and will be deposited in a
non-interest bearing Attorney Trust bank account. All subscription agreements
and checks are irrevocable and should be delivered to The Sourlis Law Firm,
Virginia K. Sourlis, Esq., 214 Broad St., Red Bank, NJ 07701. Failure to do so
will result in checks being returned to the investor, who submitted the check.
All subscription funds will be held in the Trust Account pending and funds shall
be released to BAETA from time to time as the entire offering is sold or the
Offering is terminated. No fees will be paid to The Sourlis Law Firm for acting
as escrow agent.
Procedures
and Requirements for Subscription
Prior to
the effectiveness of the Registration Statement, the Company has not provided
potential purchasers of the securities being registered herein with a copy of
this prospectus. Investors can purchase Common Stock in this offering by
completing a Subscription Agreement and sending it together with payment in full
to The Sourlis Law Firm, Escrow Agent f/b/o BAETA Corp., 214 Broad St., Red
Bank, NJ 07701. All payments are required in the form of United States currency
either by personal check, bank draft, or by cashier’s check. There is no minimum
subscription requirement. All subscription agreements and checks are
irrevocable. BAETA reserves the right to either accept or reject any
subscription. Any subscription rejected within this 30-day period will be
returned to the subscriber within five business days of the rejection date.
Furthermore, once a subscription agreement is accepted, it will be executed
without reconfirmation to or from the subscriber. Once BAETA accepts a
subscription, the subscriber cannot withdraw it.
41
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 2011 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
|
41
|
August
14, 2007
|
||
Mr.
Leonid Pushkantser
Chief
Executive Officer and Director
(Principal Executive
Officer)
|
56
|
May
29, 2009
|
||
Mr.
Jeff Burkland
Chief Financial
Officer
(Principal Financial and
Accounting Officer)
|
39
|
March
1, 2009
|
||
Eugene
Gribov
Chief
Technology Officer
|
45
|
May
29, 2009
|
||
Lee
Smith
Chief
Marketing Officer
|
46
|
May
29, 2009
|
||
Dr.
Leonid Topper
Chief Medical
Officer
|
|
43
|
|
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.
42
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 in the capacity of Chief Executive Officer and Director. In
January 2010, Mr. Pushkantser was elected to the Board of Directors by majority
shareholder vote. 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.
43
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.
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
44
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
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
45
General pediatrics
residency
Chaim Sheba Medical Center,
Israel
1992 – 1995 and 1996 -
1997
Military physician
Israeli Defense
Forces
1995 – 1996
Internship
Vilnius Children’s
Hospital
Vilnius, Lithuania
1989 – 1991
Our Board of
Directors
Dr. Alexander Gak, President and
Chairman
Board
Appointment: Inception-Present
Mr. Leonid Pushkantser, Chief Executive
Officer and Director
Board
Appointment: January 2010-Present
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.
|
46
·
|
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.
|
·
|
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.
47
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
The
ultimate goal of our named executive officers’ compensation levels is the same
as our goal for operating the Company – to create long-term value for our
stockholders. To this end, we establish compensation levels based on
our named executive officers’ relevant experience and leadership experience and
skills. We also consider the named executive officers’ ability and likelihood of
contributing to our Company’s growth and success. We also take into
account comparable salary ranges at similar companies in order to attract and
retain our named executive officers.
We do not
have a formula or benchmark or necessarily react to short-term changes in
business performance when reviewing our named executive officers’
salaries. We consider their past and ongoing contributions to the
Company, ability to work effectively amongst themselves and with 3rd
parties, and our expectations regarding their future
performance. Executive officers have an active role in our
determination of their compensation levels and we consider such executive
officers’ opinions and expectations.
The table
below summarizes the compensation we have paid our Named Executive Officers in
the last two fiscal years.
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, 2010, 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 2010 and 2009. The foregoing persons are
collectively referred to herein as the “Named Executive Officers.” Compensation
information is shown through September 30, 2010 and full fiscal year
2009.
Name/Principal Position
|
Year
|
Salary
|
Bonus
|
Stock
Awards
|
Option
Awards
(1)
|
Non-Equity
Incentive Plan
Compensation
|
Nonqualified
Deferred
Compensation
Earnings
|
All Other
Compensation
|
Total
|
|||||||||||||||||||||||||
Dr. Alexander
Gak (2)
|
||||||||||||||||||||||||||||||||||
President
and Chairman
|
YTD
Sept
30,
2010
|
$ | 34,000 | $ | 0 | $ | 180,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | |||||||||||||||||
2009
|
$ | 100,000 | $ | 0 | $ | 340,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 440,000 | ||||||||||||||||||
Mr.
Jeff Burkland
|
||||||||||||||||||||||||||||||||||
Chief
Financial Officer (PFO)
|
YTD
Sept
30,
2010
|
$ | 30,422 | N/A | N/A | $ | 5,901 | N/A | N/A | N/A | $ | 36,323 | ||||||||||||||||||||||
2009
|
$ | 39,391 | N/A | N/A | $ | 29,215 | N/A | N/A | N/A | $ | 68,606 | |||||||||||||||||||||||
Dr.
Leonid Topper
|
||||||||||||||||||||||||||||||||||
Chief
Medical Officer
|
YTD
Sept
30,
2010
|
N/A | N/A | $ | 3,750 | $ | 1,295 | N/A | N/A | N/A | $ | 4.045 | ||||||||||||||||||||||
2009
|
N/A | N/A | $ | 31,400 | $ | 1,295 | N/A | N/A | N/A | $ | 32,695 | |||||||||||||||||||||||
Mr.
Eugene Gribov
|
||||||||||||||||||||||||||||||||||
Chief
Tech Officer
|
YTD
Sept
30,
2010
|
$ | 8,461 | N/A | $ | 22,500 | $ | 1,671 | N/A | N/A | N/A | $ | 32,632 | |||||||||||||||||||||
2009
|
N/A | N/A | $ | 17,500 | $ | 1,300 | N/A | N/A | N/A | $ | 18,800 | |||||||||||||||||||||||
Mr.
Len Pushkantser
|
||||||||||||||||||||||||||||||||||
CEO
and Director (PEO)
|
YTD
Sept
30,
2010
|
$ | 131,583 | N/A | $ | 52,502 | $ | 10,356 | N/A | N/A | N/A | $ | 194,441 | |||||||||||||||||||||
2009
|
N/A | N/A | $ | 5,834 | $ | 8,055 | N/A | N/A | N/A | $ | 13,889 | |||||||||||||||||||||||
Mr.
Lee Smith
|
||||||||||||||||||||||||||||||||||
Chief
Marketing Officer
|
YTD
Sept
30,
2010
|
$ | 40,715 | N/A | $ | 60,480 | $ | 33,420 | N/A | N/A | N/A | $ | 134,615 | |||||||||||||||||||||
2009
|
$ | 26,283 | N/A | $ | 32,268 | $ | 40,847 | N/A | N/A | N/A | $ | 73,115 |
48
1. There
have been no forfeitures of any stock options during the years 2010 or 2009.
Valuation assumptions are provided for in Note 4 to the September 30, 2010
financial statements included in this registration statement.
2. 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.
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 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 2008 as non-cash part of compensation for
services rendered which represent approximately 50% of Extranome’s due monthly
compensation, and to date has received 780,000 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
January 1, 2011, Extranome had received approximately $149,000 in cash and
750,000 shares of Common Stock of BAETA Corp. pursuant to the Software
Development Agreement. As of February 4, 2011 Extranome had received
approximately $149,000 in cash and 780,000 shares of Common Stock in BAETA Corp.
As of February 4, 2011, BAETA owes approximately $264,000 in cash to Extranome,
and $15,000 worth of common stock, which has been classified as an accounts
payable on the Company’s financial statements. Due to the fact that Dr. Gak owns
100% of Extranome, the payment arrangement between Extranome and BAETA Corp. is
required to be reported as executive compensation with respect to Dr.
Gak.
Cash
Compensation
Aside
from the disclosures in the “Summary Compensation Table” directly above, due to
very limited cash on hand, we have not paid any salary, bonus or other
compensation to our officers and directors as of our most recent fiscal year end
and most recent fiscal quarter ended December 31, 2010.
There are
no plans that provide for the payment of retirement benefits, or benefits that
will be paid primarily following retirement, including but not limited to
tax-qualified defined benefit plans, supplemental executive retirement plans,
tax-qualified defined contribution plans and nonqualified defined contribution
plans.
Director
Compensation
Our Board
of Directors consists of Dr. Alexander Gak, Chairman, and Mr. Leonid
Pushkantser. For the fiscal year ended December 31, 2010 and 2009, we paid no
salaries to our Board members. We do not foresee compensating our Board for the
foreseeable future.
Outstanding
Equity Awards at Fiscal Year End
The
following table sets forth information regarding outstanding equity awards held
as of December 31, 2009 by our named executive officers.
49
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR END
|
|||||||||||||||||||
OPTION
AWARDS
|
|||||||||||||||||||
Name:
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
|
Option
Exercised
Price ($)
|
Option
Expiration
Date
|
||||||||||||||
Dr. Alexander
Gak
|
0 | 0 | 0 | N/A |
N/A
|
||||||||||||||
Mr.
Leonid Pushkantser
|
100,000 | 0 | 300,000 | 0.50 |
5/28/2015
|
||||||||||||||
Mr.
Jeff Burkland
|
100,000 | 0 | 0 | 0.50 |
2/25/2019
|
||||||||||||||
Mr.
Jeff Burkland
|
787 | 0 | 0 | 0.50 |
3/30/2019
|
||||||||||||||
Mr.
Jeff Burkland
|
9,075 | 0 | 0 | 0.50 |
6/29/2019
|
||||||||||||||
Mr.
Jeff Burkland
|
13,650 | 0 | 0 | 0.50 |
9/29/2019
|
||||||||||||||
Mr.
Jeff Burkland
|
7,613 | 0 | 0 | 0.50 |
12/30/2019
|
||||||||||||||
Mr.
Jeff Burkland
|
11,550 | 0 | 0 | 0.50 |
3/30/2020
|
||||||||||||||
Mr.
Jeff Burkland
|
6,675 | 0 | 0 | 0.50 |
6/29/2020
|
||||||||||||||
Mr.
Jeff Burkland
|
6,113 | 0 | 0 | 0.50 |
9/29/2020
|
||||||||||||||
Mr.
Jeff Burkland
|
4,838 | 0 | 0 | 0.50 |
12/30/2020
|
||||||||||||||
Mr.
Lee Smith
|
200,000 | 0 | 600,000 | 0.50 |
2/2/2019
|
||||||||||||||
Mr.
Leonid Topper
|
10,000 | 0 | 40,000 | 0.50 |
3/20/2015
|
||||||||||||||
Mr.
Eugene Gribov
|
10,000 | 0 | 40,000 | 0.50 |
4/20/2019
|
Grants
of Plan-Based Awards
GRANTS OF PLAN-BASED AWARDS
|
|||||||||||||||||||||||||||||||
Estimated Future Payouts
Under Equity Incentive Plan
Awards (1)
|
All
Other
Stock
Awards:
Number
of
Shares
of
Stocks
or Units
(#)
|
All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
|
Exercise
or Base
Price of
Option
Awards
($/Sh)
|
Grant
Date
Fair
Value
of
Stock
and
Option
Awards
(1)
|
|||||||||||||||||||||||||||
Name:
|
Grant Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
|||||||||||||||||||||||||||
Dr.
Alexander Gak
|
N/A
|
0 | 0 | 0 | 0 | 0 | N/A | N/A | |||||||||||||||||||||||
Mr.
Leonid Pushkantser
|
5/29/2009
|
69,040 | 69,040 | 69,040 | 0 | 0 | 0.50 | 0.50 | |||||||||||||||||||||||
Mr.
Jeff Burkland
|
2/26/2009
|
22,280 | 22,280 | 22,280 | 0 | 0 | 0.50 | 0.50 | |||||||||||||||||||||||
Mr.
Lee Smith
|
2/3/2009
|
178,240 | 178,240 | 178,240 | 0 | 0 | 0.50 | 0.50 | |||||||||||||||||||||||
Mr.
Leonid Topper
|
3/21/2009
|
8,630 | 8,630 | 8,630 | 0 | 0 | 0.50 | 0.50 | |||||||||||||||||||||||
Mr.
Eugene Gribov
|
4/21/2009
|
11,140 | 11,140 | 11,140 | 0 | 0 | 0.50 | 0.50 |
50
1. There
have been no forfeitures of any stock options during the years 2010, 2009 or
2008. Valuation assumptions are provided for in Note 4 to the financial
statements included in this registration statement.
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 1,660,300 shares of common stock at $0.50 per share, subject to
different vesting schedules. All stock option grants were issued as detailed
below:
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 pursuant to the 2009 Stock Option Plan in consideration for
his continued service as a Member of the Company’s Scientific Advisory Board,
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 pursuant to the 2009 Stock Option Plan in consideration for his
continued service as a Member of the Company’s Scientific Advisory Board, 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 pursuant to the 2009 Stock Option Plan in consideration for his continued
services as the Company’s Chief Marketing 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.
51
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 pursuant to the 2009 Stock Option Plan in consideration for
his continued service as a Member of the Company’s Scientific Advisory Board,
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 pursuant to the 2009 Stock Option Plan in consideration for her
continued service as a Member of the Company’s Scientific Advisory Board, 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 pursuant to the 2009 Stock Option Plan 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.
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 pursuant to the 2009 Stock Option Plan in consideration for his continued
service as the Company’s Chief Medical 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.
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
pursuant to the 2009 Stock Option Plan in consideration for his continued
service as the Company’s Chief Tech 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.
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 pursuant to the 2009 Stock Option Plan in consideration for his
continued service as the Company’s Chief Executive 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.
52
Sub-Total:
|
1,600,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
Through
fiscal year end 2010, Mr. Jeff Burkland has received additional stock options
with immediate vesting rights exercisable for 60,300 shares of common stock at a
purchase price of $0.50 per share pursuant to his employment agreement. The
stock options were granted to Mr. Burkland pursuant to the 2009 Stock Option
Plan in consideration for his continued 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:
|
1,660,300
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.
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:
53
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.
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.
54
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.
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.
55
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 Chairman. 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.
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 24,023,152 shares of common stock issued and
outstanding,100 shares of the Series A Preferred Stock issued and outstanding, 2
shares of the Series B Preferred Stock issued and outstanding, and options for
480,300 shares that are vested and exercisable within 60
days.
56
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 (3)
President
and Chairman
|
17,100,000 | 71.18 | %(3) | 80 | 80 | % | ||||||||||
Mr.
Jeff Burkland (4)
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
160,300 | 0.66 | % | 0 | 0.00 | % | ||||||||||
Dr.
Leonid Topper (5)
Chief
Medical Officer
|
80,000 | 0.33 | % | 0 | 0.00 | % | ||||||||||
Mr.
Leonid Pushkantser (6)
Chief
Executive Officer and Director
(Principal
Executive Officer)
|
4,263,338 | 17.67 | % | 20 | 20 | % | ||||||||||
Mr.
Eugene Gribov (7)
Chief
Technology Officer
|
110,000 | 0.46 | % | 0 | 0.00 | % | ||||||||||
Mr.
Lee Smith (8)
Chief
Marketing Officer
|
431,776 | 1.78 | % | 0 | 0.00 | % | ||||||||||
Directors
and Officers as a group (6 people)
|
22,145,414 | 92.08 | % | 100 | 100 | % |
Footnotes:
(1)
|
As
of February 4, 2011, we had 24,023,152 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, and
options for 480,300 shares that are vested and exercisable within 60 days,
which together represents an aggregate of 24,385,866 voting
securities.
|
(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 16,000,000 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 780,000 shares of the
Company’s common stock (as of February 4, 2011); therefore Dr. Gak
beneficially owns 17,100,000 shares of BAETA common
stock.
|
(4)
|
Mr.
Jeff Burkland was issued stock options to purchase 160,300 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. According to the stock option
agreement, 10,000 worth (of the 50,000 issued to Dr. Topper) of options
have vested as of February 4, 2011. Such options are currently
exercisable; therefore, they are 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. According to the stock option
agreement, 100,000 worth (of the 400,000 issued to Leonid) of options have
vested as of February 4, 2011. Such options are exercisable within a sixty
day period; therefore, they are 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. According to the stock option
agreement, 10,000 worth (of the 50,000 issued to Eugene) of options have
vested as of February 4, 2011. Such options are exercisable within a sixty
day period; therefore, they are 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
have vested as of February 4, 2011. Such options are currently
exercisable; therefore, they are being reported as beneficial ownership
per the SEC
regulations.
|
57
DESCRIPTION
OF SECURITIES
General
Under our
Certificate of Incorporation, we are authorized to issue an aggregate of
160,000,000 shares of capital stock, of which 150,000,000 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,
24,023,152 shares of our common stock are issued and outstanding, and there are
approximately 91 holders of record of our Common Stock. Currently there are 100
shares of Series A Preferred Stock issued and outstanding with two holders of
record. The 100 shares of Series A Preferred Shares are held by Dr. Alexander
Gak (holding 80 shares), our President and Chairman, and Mr., Leonid Pushkantser
(holding 20 shares), our Chief Executive Officer and Director. With regard to
our Series B Preferred Stock, currently there are 2 shares of Series B Preferred
issued and outstanding with one holder of record, MBB Holdings, Inc., a
non-affiliate.
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.
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 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 24,023,152
shares of the Company’s common stock issued and outstanding to approximately 91
shareholders of record as of the date of this prospectus.
58
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)
|
the
rate of dividend, the time of payment of dividends, whether dividends are
cumulative, and the date from which any dividends shall
accrue;
|
(b)
|
whether
shares may be redeemed, and, if so, the redemption price and the terms and
conditions of redemption;
|
(c)
|
the
amount payable upon shares of preferred stock in the event of voluntary or
involuntary liquidation;
|
(d)
|
sinking
fund or other provisions, if any, for the redemption or purchase of shares
of preferred stock;
|
(e)
|
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;
|
(f)
|
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
|
(g)
|
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.
|
Series
A Preferred Stock
As of the
date of this Registration, we have 100 shares of Series A Preferred Stock issued
and outstanding. The 100 shares of Series A Preferred Shares are held by Dr.
Alexander Gak (holding 80 shares), our President and Chairman, and Mr., Leonid
Pushkantser (holding 20 shares), our Chief Executive Officer and Director. 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.
Series
B Preferred Stock
On
February 8, 2010, our Board of Directors and majority shareholders approved the
designation of 10 shares of our preferred stock as Series B Preferred Stock (the
“Series B Preferred Shares”) and authorized our officers to file a Certificate
of Designation for the Series B Preferred Shares, which occurred on February 9,
2010. The outstanding shares of Series B Preferred Stock have no voting rights.
Each share of Series B Convertible Preferred Stock carries with it the immediate
right by its owner to convert such share of Series B Convertible Preferred Stock
into the amount of shares of BAETA Corp. Common Stock equivalent to one percent
(1%) of the total amount of BAETA Corp. Common Stock then issued and outstanding
at the time of the conversion election. All of the outstanding shares of Series
B Preferred Stock (2 outstanding) are held by MBB Holdings, Inc., a
non-affiliate.
59
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 and Promissory Note Outstanding
On April
8, 2010, The Company issued a $100,000 Promissory Note and a 5-year Warrant with
a cashless exercise option to purchase up to 400,000 shares of common stock at
an exercise price of $0.25 per share, to one accredited investor for an
aggregate purchase price of $100,000.00. In accordance with the terms of the
promissory note, and in consideration for the receipt of $100,000 in proceeds
from the investment, the Company promises to pay to the Note holder the
principal sum of One Hundred Thousand Dollars and Zero Cents ($100,000.00),
together with interest on the unpaid principal of the note at the rate of ten
percent (10%) per year (computed on the basis of a 365-day year and the actual
days elapsed) from the date of the Note until paid. All principal and accrued
interest shall be due and payable two (2) calendar years from the date of the
Note’s execution (April 8, 2010), in cash; provided, however, in the event that
the Company receives any financing from any other source all proceeds received
in connection with any such financing shall be paid to the Note holder until
such time that all outstanding principal and accrued interest has been paid to
the Note holder. All payment amounts shall be first applied to interest, if any,
and then to the balance to principal.
At any
time on or prior to the Note’s maturity, in the sole discretion of the Note
holder, any amount of the unpaid principal may be converted into free-trading
and unrestricted shares of Common Stock of the Company equal to the result of
(i) the Conversion Amount, divided by (ii) the Variable Conversion Price (as
defined below):
The
“Variable Conversion Price” shall mean the Applicable Percentage (as defined
herein) multiplied by the Market Price (as defined herein); provided, however,
the Variable Conversion Price shall not be less than $0.25 cents per share.
“Market Price” means the average of the lowest three (3) Trading Prices (as
defined below) for the Common Stock during the five (5) Trading Day period
ending one Trading Day prior to the date the Conversion Notice is sent by the
Holder to the Company via facsimile (the “Conversion Date”). “Trading Price”
means, for any security as of any date, the intraday trading price on the Pink
Sheets or, if the Pink Sheets is not the principal trading market for such
security, the intraday trading price of such security on the principal
securities exchange or trading market where such security is listed or traded
or, if no intraday trading price of such security is available in any of the
foregoing manners, the average of the intraday trading prices of any market
makers for such security that are listed in the Pink Sheets by the National
Quotation Bureau, Inc. “Applicable Percentage” shall mean 50%.
The
issuance of the promissory note and warrant was part of a private offering up to
$1,000,000 by the Company that was made without registration under the
Securities Act of 1933, as amended, made only to “accredited
investors,” (as such term is defined in as defined in the rules to the
Securities Act of 1933, as amended) pursuant to Regulation D, Rule 504 and
Sections 7309(b)(8) of the Delaware Securities Act, and Section 510(a)(1) of
Part E under the Rules and Regulations Pursuant to the Delaware Securities Act.
The Company filed a Form D with the SEC on April 13, 2010 thereby filing Notice
with Commission.
Stock
Options
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.
60
Pursuant
to its 2009 Stock Option Plan, the Company has issued stock options to purchase
an aggregate of 1,660,300 shares of common stock at $0.50 per share, subject to
different vesting schedules. All stock option grants were issued as detailed
below:
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 pursuant to the 2009 Stock Option Plan in consideration for
his continued service as a Member of the Company’s Scientific Advisory Board,
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 pursuant to the 2009 Stock Option Plan in consideration for his
continued service as a Member of the Company’s Scientific Advisory Board, 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 pursuant to the 2009 Stock Option Plan in consideration for his continued
services as the Company’s Chief Marketing 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.
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 pursuant to the 2009 Stock Option Plan in consideration for
his continued service as a Member of the Company’s Scientific Advisory Board,
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 pursuant to the 2009 Stock Option Plan in consideration for her
continued service as a Member of the Company’s Scientific Advisory Board, 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.
61
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 pursuant to the 2009 Stock Option Plan in consideration for his
continued 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.
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 pursuant to the 2009 Stock Option Plan in consideration for his continued
service as the Company’s Chief Medical 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.
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
pursuant to the 2009 Stock Option Plan in consideration for his continued
service as the Company’s Chief Tech 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.
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 pursuant to the 2009 Stock Option Plan in consideration for his
continued service as the Company’s Chief Executive 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.
Sub-Total:
|
1,600,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
Through
fiscal year end 2010, Mr. Jeff Burkland has received additional stock options
with immediate vesting rights exercisable for 60,300 shares of common stock at a
purchase price of $0.50 per share pursuant to his employment agreement. The
stock options were granted to Mr. Burkland pursuant to the 2009 Stock Option
Plan in consideration for his continued 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:
|
1,660,300
shares of Common Stock underlying Options outstanding after this issuance,
and as of the date of this Registration
Statement.
|
62
Convertible
Securities
On April
8, 2010, The Company issued a $100,000 Promissory Note and a 5-year Warrant with
a cashless exercise option to purchase up to 400,000 shares of common stock at
an exercise price of $0.25 per share, to one accredited investor for an
aggregate purchase price of $100,000.00. In accordance with the terms of the
promissory note, and in consideration for the receipt of $100,000 in proceeds
from the investment, the Company promises to pay to the Note holder the
principal sum of One Hundred Thousand Dollars and Zero Cents ($100,000.00),
together with interest on the unpaid principal of the note at the rate of ten
percent (10%) per year (computed on the basis of a 365-day year and the actual
days elapsed) from the date of the Note until paid. All principal and accrued
interest shall be due and payable two (2) calendar years from the date of the
Note’s execution (April 8, 2010), in cash; provided, however, in the event that
the Company receives any financing from any other source all proceeds received
in connection with any such financing shall be paid to the Note holder until
such time that all outstanding principal and accrued interest has been paid to
the Note holder. All payment amounts shall be first applied to interest, if any,
and then to the balance to principal.
At any
time on or prior to the Note’s maturity, in the sole discretion of the Note
holder, any amount of the unpaid principal may be converted into free-trading
and unrestricted shares of Common Stock of the Company equal to the result of
(i) the Conversion Amount, divided by (ii) the Variable Conversion Price (as
defined below):
The
“Variable Conversion Price” shall mean the Applicable Percentage (as defined
herein) multiplied by the Market Price (as defined herein); provided, however,
the Variable Conversion Price shall not be less than $0.25 cents per share.
“Market Price” means the average of the lowest three (3) Trading Prices (as
defined below) for the Common Stock during the five (5) Trading Day period
ending one Trading Day prior to the date the Conversion Notice is sent by the
Holder to the Company via facsimile (the “Conversion Date”). “Trading Price”
means, for any security as of any date, the intraday trading price on the Pink
Sheets or, if the Pink Sheets is not the principal trading market for such
security, the intraday trading price of such security on the principal
securities exchange or trading market where such security is listed or traded
or, if no intraday trading price of such security is available in any of the
foregoing manners, the average of the intraday trading prices of any market
makers for such security that are listed in the Pink Sheets by the National
Quotation Bureau, Inc. “Applicable Percentage” shall mean 50%.
The
issuance of the promissory note and warrant was part of a private offering up to
$1,000,000 by the Company that was made without registration under the
Securities Act of 1933, as amended, made only to “accredited
investors,” (as such term is defined in as defined in the rules to the
Securities Act of 1933, as amended) pursuant to Regulation D, Rule 504 and
Sections 7309(b)(8) of the Delaware Securities Act, and Section 510(a)(1) of
Part E under the Rules and Regulations Pursuant to the Delaware Securities Act.
The Company filed a Form D with the SEC on April 13, 2010 thereby filing Notice
with Commission.
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.
63
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:
|
•
|
discuss
our future expectations;
|
|
•
|
contain
projections of our future results of operations or of our financial
condition; and
|
|
•
|
state
other "forward-looking"
information.
|
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.
Unless
stated otherwise, the words “we,” “us,” “our,” “the Company” or “BAETA Corp” in
this Report
collectively refers to the Company, BAETA Corp.
64
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, 2010 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 FASB
Accounting Standards Codification (“ASC”) 915 “Development Stage Entities.”
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 23,704,932
shares of the Company’s common stock issued and outstanding to approximately 93
shareholders of record as of the date of this filing.
Effectiveness
of S-1 Registration Statement
On May
14, 2010, the Securities and Exchange Commission declared the Company’s
Registration Statement on Form S-1 (File No.: 333-154243) effective. The
Registration Statement registered 915,400 shares of Common Stock, par value
$0.0001 per share of the Company on behalf of the selling stockholders named in
the Registration Statement. The Company will not receive any proceeds from the
sale of those shares.
Plan
of Operations
We
anticipate that the Company will require approximately $500,000 to $1,000,000 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.
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 $500,000 to $1,000,000.
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.
65
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.
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 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 2008 as non-cash part of compensation for
services rendered which represent approximately 50% of Extranome’s due monthly
compensation, and to date has received 780,000 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.
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 $2,193,432. As of
September 30, 2010, the Company has total liabilities of $952,922 compared to
total assets of $311,662 limited cash on hand in the amount of $23,678, and
stockholders’ deficit of ($641,260).
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.
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.
66
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.
Results of Operations at
September 30, 2010 compared to December 31, 2009
Assets. Our total assets were
$311,662 at September 30, 2010 compared to $232,037 as of December 31, 2009
primarily as a result of the acquisition of property, the development of our
Software Asset, addition of some inventory, and a small increase in
cash.
Liabilities. Our total
liabilities were $952,922 at September 30, 2010 compared to $610,366 at December
31, 2009. This increase was primarily due to an increase in Accounts Payable to
Extranome (Related Party), a small decrease in Accounts Payable, an increase in
Shareholder Notes and Advances, and the addition of two Convertible
Notes.
Total Stockholders’ Deficit.
Our stockholders’ deficit was ($641,260) at September 30, 2010 compared to
($378,328) at December 31, 2009. This increase in deficit was primarily due to
continuing losses offset some by additional paid in capital, but primarily
funded by Liabilities.
Results of Operations for
the three months ended September 30, 2010 compared to the three months ended
September 30, 2009
Revenues. Our revenues were
$0 for the three months ended September 30, 2010, compared with $0 for the three
months ended September 30, 2009.
Research & Development
expenses. Research & Development costs were $90,000 for the three
months ended September 30, 2010, compared to $0 for the three months ended
September 30, 2009. The increase in research & development costs for this
time period is attributed to research into two new products, which are
extensions of the My Pain Away product line.
Sales & Marketing
expenses. Sales & Marketing costs were $59,440 for the three months
ended September 30, 2010, compared to $40,463 for the three months ended
September 30, 2009. The increase in sales & marketing costs for this time
period is attributed to increasing marketing efforts related to company
products.
General & Administrative
Personnel expenses. General & Administrative Personnel Expenses were
$108,660 for the three months ended September 30, 2010, compared to $158,403 for
the three months ended September 30, 2009. The decrease in General &
Administrative Personnel Expenses for this time period is attributed to a shift
in resources towards Research & Development.
Professional Service Fees
expenses. Professional Services Fees were $16,755 for the three months
ended September 30, 2010, compared to $10,927 for the three months ended
September 30, 2009. The increase in Professional Service Fees for this time
period is attributed to increased legal costs, offset by slightly decreased
accounting fees.
Other miscellaneous operating
expenses. Other miscellaneous operating expenses were $6,079 for the
three months ended September 30, 2010, compared to $8,176 for the three months
ended September 30, 2009. The decrease in Other miscellaneous operating expenses
for this time period is attributed to a decrease in FDA application fees from
$2,105 to $0.
67
Net Loss. We had a net loss
of ($249,955) for the three months ended September 30, 2010, compared to a net
loss of ($223,386) for the three months ended September 30, 2009. This increase
in net loss is due primarily to an increase in Research & Development and
Sales & Marketing Expenses.
Results of Operations for
the nine months ended September 30, 2010 compared to the nine months ended
September 30, 2009
Revenues. Our revenues were
$0 for the nine months ended September 30, 2010, compared with $9,003 for the
nine months ended September 30, 2009. The decrease is attributable to no
customer purchases placed nor delivered during the nine months ended September
30, 2010.
Research & Development
expenses. Research & Development costs were $201,000 for the nine
months ended September 30, 2010, compared to $0 for the nine months ended
September 30, 2009. The increase in research & development costs for this
time period is attributed to research into two new products, which are
extensions of the My Pain Away product line.
Sales & Marketing
expenses. Sales & Marketing costs were $172,414 for the nine months
ended September 30, 2010, compared to $91,108 for the nine months ended
September 30, 2009. The increase in sales & marketing costs for this time
period is attributed to increasing marketing efforts related to company
products.
General & Administrative
Personnel expenses. General & Administrative Personnel Expenses were
$364,461 for the nine months ended September 30, 2010, compared to $364,122 for
the nine months ended September 30, 2009. General & Administrative Personnel
Expenses for this time period were essentially unchanged.
Professional Service Fees
expenses. Professional Services Fees were $65,313 for the nine months
ended September 30, 2010, compared to $33,036 for the nine months ended
September 30, 2009. The increase in Professional Service Fees for this time
period is attributed to increased legal costs, offset by decreased accounting
fees.
Other miscellaneous operating
expenses. Other miscellaneous operating expenses were $36,203 for the
nine months ended September 30, 2010, compared to $37,825 for the nine months
ended September 30, 2009. The small decrease in Other miscellaneous operating
expenses for this time period is attributed to a decrease in trademark and
patent fees from $22,195 to $2,464, offset by a new Directors & Officers
Insurance policy, filing fees associated with delivering stock certificates, as
well as a slight increase in most other general business expenses.
Net Loss. We had a net loss
of $831,053 for the nine months ended September 30, 2010, compared to a net loss
of $527,464 for the nine months ended September 30, 2009. This increase in net
loss is due primarily to an increase in Research & Development, Sales &
Marketing Expenses, and Professional Service Fees.
Liquidity and Capital
Resources; Going Concern
Cash Balance. At September
30, 2010, we had $23,678 cash on-hand and our stockholder’s deficit was
($641,260), 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.
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:
68
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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.
|
c.
|
Income
Taxes
|
The
Company complies with the provisions of FASB ACS 740 “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.
|
d.
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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 FASB ASC 605, “Revenue Recognition”. 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.
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f.
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Software Development
Costs
|
The
Company complies with the provisions of FASB ACS 985-20 “Costs of Software to Be Sold,
Leased, or 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 FASB ACS 985-20
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.
69
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g.
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Stock
Options
|
The
Company complies with the provisions of FASB ACS 718 “Compensation - Stock 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.
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 SEC Staff Accounting Bulletin:
Codification of Staff Accounting Bulletins Topic 14: “Share-Based Payment”. 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.
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h.
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Stock
Compensation
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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.
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i.
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Inventories
|
Inventories
are stated at the lower of average costs incurred or estimated net realizable
value. Major types of inventories include materials and supplies.
|
j.
|
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 enhance 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.
70
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 24,023,152 shares of the Company’s common stock issued and outstanding
to approximately 91 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. The 100 shares of Series A
Preferred Shares are held by Dr. Alexander Gak (holding 80 shares), our
President and Chairman, and Mr., Leonid Pushkantser (holding 20 shares), our
Chief Executive Officer and Director. 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.
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.
71
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. At September 30,
2010, the principal balance of this line of credit was $45,024. At December 31,
2009, the principal balance of this line of credit was $46,708. As of January
20, 2011, the principal balance of this line of credit is
$46,360.
This Visa
Business Credit is personally guaranteed by our President and Chairman, 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.
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.
72
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 780,000 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, 2010, Extranome had received approximately $149,000 in cash and
750,000 shares of Common Stock of BAETA Corp. pursuant to the Software
Development Agreement. As of February 4, 2011 Extranome had received
approximately $149,000 in cash and 780,000 shares of Common Stock in BAETA Corp.
As of February 4, 2011, BAETA owes approximately $264,000 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. 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 February 4, 2011, BAETA has made cash payments to
Extranome in the aggregate amount of $130,000. BAETA’s payments to Extranome are
outlined below:
73
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
|
|||
September
2009
|
* |
30,000
shares Common
|
October
29, 2009
|
|||||
October
2009
|
* |
30,000
shares Common
|
November
29, 2009
|
|||||
November
2009
|
* |
30,000
shares Common
|
December
29, 2009
|
|||||
December
2009
|
* |
30,000
shares Common
|
January
29, 2010
|
|||||
January
2010
|
$ | 10,000 | **** |
30,000
shares Common
|
February
28, 2010
|
|||
February
2010
|
$ | 5,000 | ***** |
30,000
shares Common
|
March
29, 2010
|
|||
March
2010
|
$ | 7,000 | ****** |
30,000
shares Common
|
April
29, 2010
|
|||
April
2010
|
* |
30,000
shares Common
|
May
29, 2010
|
|||||
May
2010
|
* |
30,000
shares Common
|
June
29, 2010
|
|||||
June
2010
|
* |
30,000
shares Common
|
July
29, 2010
|
|||||
July
2010
|
$ | 12,000 | ******* |
30,000
shares Common
|
August
29, 2010
|
|||
August
2010
|
* |
30,000
shares Common
|
September
29, 2010
|
|||||
September
2010
|
* |
30,000
shares Common
|
October
29, 2010
|
|||||
October
2010
|
* |
30,000
shares Common
|
November
29, 2010
|
|||||
November
2010
|
* |
30,000
shares Common
|
December
29, 2010
|
|||||
December
2010
|
* |
30,000
shares Common
|
January
29, 2011
|
|||||
Totals:
|
780,00
shares of
Common
Stock through
02/01/2011
|
*
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 750,000 shares of BAETA Corp. common stock through February 4,
2011.
****
Monthly cash payment was reduced to $10,000 due to shortages in cash on hand.
The balance of $5,000 for this month has been classified as an Account Payable
in the amount of $5,000.
*****
Monthly cash payment was reduced to $5,000 due to shortages in cash on hand. The
balance of $10,000 for this month has been classified as an Account Payable in
the amount of $10,000.
******
Monthly cash payment was reduced to $7,000 due to shortages in cash on hand. The
balance of $8,000 for this month has been classified as an Account Payable in
the amount of $8,000.
*******
Monthly cash payment was reduced to $12,000 due to shortages in cash on hand.
The balance of $8,000 for this month has been classified as an Account Payable
in the amount of $3,000.
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.
74
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 Board of Directors is currently comprised of two members. Dr.
Alexander Gak, is our President and Chairman, and therefore is not “independent”
under this rule. Mr. Leonid Pushkantser is our Chief Executive Officer and a
Director, and as such, is also not “independent” under this rule.
The OTCBB
on which we 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 Directors 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 and Director 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.
75
MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No
Public Market for Common Stock
Our
common stock is currently quoted on the OTC Bulletin Board under the symbol
“BAEA”. However, we can provide no assurance that our shares will continue to be
traded on the OTC Bulletin Board or, if traded, that a meaningful public market
will materialize.
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 91 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 24,023,152 shares of the Company’s common stock issued and outstanding
to approximately 91 shareholders of record as of the date of this
prospectus.
76
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 and
effectively resigned as auditor of BAETA Corp.
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.
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 16.1.
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.
77
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.
78
FINANCIAL
INFORMATION
BAETA
CORP.
Baeta
Corp.
(
a Developmental Stage Company)
Balance
Sheet
As
of
|
As
of
|
|||||||
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Current
Assets
|
||||||||
Cash
|
$ | 23,678 | $ | 3,189 | ||||
Inventory
|
11,359 | 1,713 | ||||||
Total
Current Assets
|
35,037 | 4,901 | ||||||
Other
Assets
|
||||||||
Software
Application
|
250,607 | 203,357 | ||||||
Plant
Property & Equipment, net of accumulated depreciation of
$794
|
23,985 | 21,694 | ||||||
Organization,
net of accumulated amortization of $ 204
|
128 | 181 | ||||||
Deposit
|
1,904 | 1,904 | ||||||
Total
Other Assets
|
276,625 | 227,136 | ||||||
TOTAL
ASSETS
|
$ | 311,662 | $ | 232,037 | ||||
LIABILITIES
& STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
Current
Liabilities
|
||||||||
Accounts
Payable
|
$ | 54,461 | $ | 69,805 | ||||
Accounts
Payable Related Party
|
204,000 | 110,000 | ||||||
Line
of Credit
|
45,024 | 46,708 | ||||||
Other
Current Liabilities
|
57,436 | 56,492 | ||||||
Shareholder
Advance - Short Term
|
25,699 | - | ||||||
Shareholder
Note - Short Term
|
70,000 | 10,000 | ||||||
Total
Current Liabilities
|
456,620 | 293,006 | ||||||
Long-Term
Liabilities
|
||||||||
Convertible
Note
|
111,944 | - | ||||||
Interest
Payable, Convertible Note
|
4,167 | - | ||||||
Shareholder
Advance
|
51,341 | 28,510 | ||||||
Shareholder
Note
|
328,850 | 288,850 | ||||||
Total
Long-Term Liabilities
|
496,302 | 317,360 | ||||||
TOTAL
LIABILITIES
|
952,922 | 610,366 | ||||||
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); 10 shares of Series B authorized with a par value
of $0.0001 and issued and outstanding 2 shares at September 30,
2010
|
- | - | ||||||
Common
stock, 100,000,000 shares authorized with a par value of $0.0001,issued
and outstanding 23,156,644 shares at September 30, 2010
|
2,316 | 2,250 | ||||||
Paid-in
capital
|
1,549,856 | 981,800 | ||||||
Losses
that have accumulated during the development stage
|
(2,193,432 | ) | (1,362,378 | ) | ||||
Total
Stockholders' Equity (Deficit)
|
(641,260 | ) | (378,328 | ) | ||||
TOTAL
LIABILITIES & STOCKHOLDERS' EQUITY
(DEFICIT)
|
$ | 311,662 | $ | 232,037 |
See
Notes Financial Statements
79
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Operations
Three-Month Period
Ended
|
Three-Month Period
Ended
|
Nine-Months Period
Ended
|
Nine-Months Period
Ended
|
Cumulative during
development stage
|
||||||||||||||||
September 30
|
September 30
|
September 30
|
September 30
|
August 14, 2007 to
|
||||||||||||||||
2010
|
2009
|
2010
|
2009
|
September 30, 2010
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||||
Revenues
|
||||||||||||||||||||
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
Profit
|
- | - | - | 6,408 | 6,462 | |||||||||||||||
Operating
Expenses
|
||||||||||||||||||||
Amortization
|
150 | 105 | 451 | 227 | 1,148 | |||||||||||||||
Research
& Development
|
90,000 | 201,000 | 343,412 | |||||||||||||||||
Sales
& Marketing
|
59,440 | 40,463 | 172,414 | 91,108 | 347,155 | |||||||||||||||
General
& Administrative Personnel Expenses
|
108,660 | 158,403 | 364,461 | 364,122 | 1,131,691 | |||||||||||||||
Professional
Service Fees
|
16,755 | 10,928 | 65,313 | 33,036 | 225,824 | |||||||||||||||
Other
miscellaneous operating expenses
|
6,079 | 8,176 | 36,203 | 37,825 | 137,309 | |||||||||||||||
Total
Operating Expenses
|
281,084 | 218,074 | 839,843 | 526,318 | 2,186,541 | |||||||||||||||
Loss
From Operations
|
(281,084 | ) | (218,074 | ) | (839,843 | ) | (519,910 | ) | (2,180,079 | ) | ||||||||||
Other
income (expense)
|
- | |||||||||||||||||||
Gain
on Repurchase of Shares
|
51,000 | 51,000 | 51,000 | |||||||||||||||||
Charitable
Donation
|
(7,500 | ) | ||||||||||||||||||
Interest
expense
|
(18,688 | ) | (3,814 | ) | (41,028 | ) | (6,056 | ) | (53,541 | ) | ||||||||||
Net
Loss Before Provision For Income Taxes
|
(248,772 | ) | (221,888 | ) | (829,870 | ) | (525,966 | ) | (2,190,121 | ) | ||||||||||
Provision
For Income Taxes
|
1,183 | 1,498 | 1,183 | 1,498 | 3,311 | |||||||||||||||
Net
Loss
|
$ | (249,955 | ) | $ | (223,386 | ) | $ | (831,053 | ) | $ | (527,464 | ) | $ | (2,193,432 | ) | |||||
Net
loss per common share - basic and diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | |||||||
Weighted
average number of common shares - basic and diluted
|
23,044,576 | 21,995,462 | 22,836,332 | 21,723,583 |
See
Notes Financial Statements
80
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Stockholders' Equity (Deficit)
Additional
|
Retained
|
|||||||||||||||||||||||||||||||||||
Preferred Shares A
|
Preferred Shares B
|
Common Stock
|
Paid-in
|
Earnings
|
||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
(Deficit)
|
Total
|
||||||||||||||||||||||||||||
Balance,
August 14, 2007
|
- | - | - | - | - | |||||||||||||||||||||||||||||||
Common
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
Placement Issuances, 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 | ) | |||||||||||||||||||||||||||
Stock
issued for service and consulting
|
627,372 | 63 | 313,623 | 313,686 | ||||||||||||||||||||||||||||||||
Option
Holder's Equity
|
88,694 | 88,694 | ||||||||||||||||||||||||||||||||||
Private
Placement Issuances
|
387,000 | 39 | 193,461 | 193,500 | ||||||||||||||||||||||||||||||||
Charitable
donation
|
10,000 | 1 | 4,999 | 5,000 | ||||||||||||||||||||||||||||||||
Loss
for the year ended Dec 31, 2009
|
(802,649 | ) | (802,649 | ) | ||||||||||||||||||||||||||||||||
Balance, December
31, 2009
|
100 | - | 22,501,052 | 2,250 | 981,800 | (1,362,378 | ) | (378,328 | ) | |||||||||||||||||||||||||||
Preferred Stock
- Series B
|
2 | - | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||
Stock
issued for service and consulting
|
238,150 | 24 | 119,051 | 119,075 | ||||||||||||||||||||||||||||||||
Option
Holder's Equity
|
20,382 | 20,382 | ||||||||||||||||||||||||||||||||||
Private
Placement Issuances
|
10,000 | 1 | 4,999 | 5,000 | ||||||||||||||||||||||||||||||||
Charitable
donation
|
- | - | - | - | ||||||||||||||||||||||||||||||||
Loss
for the quarter ended March 31, 2010
|
(305,312 | ) | (305,312 | ) | ||||||||||||||||||||||||||||||||
Balance, March
31, 2010 - Unaudited
|
100 | - | 2 | - | 22,749,202 | 2,275 | 1,226,232 | (1,667,689 | ) | (439,183 | ) | |||||||||||||||||||||||||
Preferred Stock
- Series B
|
0 | - | - | - | ||||||||||||||||||||||||||||||||
Stock
issued for service and consulting
|
210,623 | 21.06 | 105,290 | 105,312 | ||||||||||||||||||||||||||||||||
Option
Holder's Equity
|
19,545 | 19,545 | ||||||||||||||||||||||||||||||||||
Private
Placement Issuances
|
120,000 | 12.00 | 29,988 | 30,000 | ||||||||||||||||||||||||||||||||
Beneficial
Conversion feature on Convertible Note
|
50,000 | 50,000 | ||||||||||||||||||||||||||||||||||
Charitable
donation
|
- | - | - | - | ||||||||||||||||||||||||||||||||
Loss
for the quarter ended June 30, 2010
|
(275,787 | ) | (275,787 | ) | ||||||||||||||||||||||||||||||||
Balance, June
30, 2010 - Unaudited
|
100 | - | 2 | - | 23,079,825 | 2,308 | 1,431,055 | (1,943,476 | ) | (510,113 | ) | |||||||||||||||||||||||||
Preferred Stock
- Series B
|
0 | - | - | - | ||||||||||||||||||||||||||||||||
Stock
issued for service and consulting
|
(95,181 | ) | -9.52 | 28,419 | 28,410 | |||||||||||||||||||||||||||||||
Option
Holder's Equity
|
19,399 | 19,399 | ||||||||||||||||||||||||||||||||||
Private
Placement Issuances
|
172,000 | 17.20 | 70,983 | 71,000 | ||||||||||||||||||||||||||||||||
Beneficial
Conversion feature on Convertible Note
|
||||||||||||||||||||||||||||||||||||
Charitable
donation
|
- | - | - | - | ||||||||||||||||||||||||||||||||
Loss
for the quarter ended September 30, 2010
|
(249,955 | ) | (249,955 | ) | ||||||||||||||||||||||||||||||||
Balance, Sept
30, 2010 - Unaudited
|
100 | - | 2 | - | 23,156,644 | 2,316 | 1,549,856 | (2,193,431 | ) | (641,259 | ) |
See
Notes Financial Statements
81
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
|
||||||||||
2010
|
2009
|
September 30, 2010
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
||||||||||||
Net
income (loss)
|
$ | (831,053 | ) | $ | (527,464 | ) | $ | (2,193,431 | ) | |||
Adjustments
to reconcile net loss to net cash
|
||||||||||||
provided
by (used in) operating activities:
|
||||||||||||
Depreciation
|
399 | 175 | 927 | |||||||||
Amortization
|
52 | 53 | 222 | |||||||||
Stock
Based Compensation
|
312,122 | 289,543 | 860,572 | |||||||||
Increase
in current assets and liabilities;
|
||||||||||||
Increase
(decrease) in accounts payable
|
(15,344 | ) | 37,396 | 54,461 | ||||||||
Increase
(decrease) in accounts payable related party
|
94,000 | 35,000 | 204,000 | |||||||||
Increase
(decrease) in Other Current Liabilities
|
944 | 57,122 | 57,436 | |||||||||
Decrease
(Increase) in Inventory
|
(9,646 | ) | 2,595 | (11,359 | ) | |||||||
Decrease
(Increase) in Deposit
|
0 | (1,904 | ) | (1,904 | ) | |||||||
Net
cash provided by (used in) operating activities
|
(448,526 | ) | (107,484 | ) | (1,029,076 | ) | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
PP&E
|
(2,691 | ) | (20,911 | ) | (24,912 | ) | ||||||
Expenditure
for organization expense
|
- | - | (350 | ) | ||||||||
Software
Application
|
(47,250 | ) | (135,000 | ) | (250,607 | ) | ||||||
Net
cash provided by (used in) investing activities
|
(49,941 | ) | (155,911 | ) | (275,870 | ) | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Convertible
Note
|
161,944 | 161,944 | ||||||||||
Interest
Payable, Convertible Note
|
4,167 | 4,167 | ||||||||||
Shareholder
Advance
|
48,530 | (179,867 | ) | 77,040 | ||||||||
Shareholder
Note
|
100,000 | 288,850 | 398,850 | |||||||||
Line
of Credit
|
(1,685 | ) | 1,862 | 45,024 | ||||||||
Additional
Fianncing Fees
|
0 | 0 | ||||||||||
Change
in Comon Stock Value
|
0 | 0 | ||||||||||
Common
Stock Issued
|
106,000 | 140,000 | 541,600 | |||||||||
Preferred
Stock Issued
|
100,000 | 535,600 | ||||||||||
Net
cash provided by (used in) financing activities
|
518,956 | 250,845 | 1,764,225 | |||||||||
Net
increase (decrease) in cash & cash equivalents
|
20,490 | (12,550 | ) | 459,278 | ||||||||
Cash
& Cash Equivalents at beginning of period
|
3,189 | 14,475 | - | |||||||||
Cash
& Cash Equivalents at end of period
|
$ | 23,678 | $ | 1,925 | $ | 23,678 | ||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW
INFORMATION:
|
||||||||||||
Income
taxes paid
|
- | 1,498 | 1,998 |
See
Notes Financial Statements
82
BAETA
CORP.
(A
Development Stage Enterprise)
NOTES
TO FINANCIAL STATEMENTS
September
30, 2010
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, 2010, the Company had not yet commenced any substantive commercial
operations. All activity through September 30, 2010 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 FASB
Accounting Standards Codification (“ASC”) 915 “Development Stage Entities.”
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 FASB ASC 605, “Revenue Recognition”. 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 principals
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.
83
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 FASB ACS 985-20 “Costs of Software to Be Sold,
Leased, or 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 FASB ACS 985-20
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.
Inventories:
Inventories
are stated at the lower of average costs incurred or estimated net realizable
value. Major types of inventories include materials and supplies.
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 enhance 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 FASB ACS 718 “Compensation - Stock 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.
84
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 SEC Staff Accounting Bulletin:
Codification of Staff Accounting Bulletins Topic 14: “Share-Based Payment”. 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 FASB ACS 740 “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 FASB ACS 260 “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, 2010, 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, 2010 the Company has cash balance of $23,678 and no accounts
receivable.
Special
– purpose entities
The
Company does not have any off-balance sheet financing activities.
Fiscal
Year
Company
adopted December 31 for its accounting fiscal year.
85
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, 2010, the Company is obligated under unsecured line of credit of
$50,000 from a bank and principal balance of such a loan is $ 45,023. 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
September 16, 2008, Dr. Alexander Gak 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. 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 in shares of its common stock. Extranome
has received 30,000 shares 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, 2010, BAETA had issued to Extranome 660,000
shares.
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 as follows: Mr. Pushkantser is compensated
with a base salary of $180,000 per year for the first six months and $250,000
per year thereafter. 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 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.
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.
On
January 6, 2010, shareholder Daniel Lundin 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.
86
On July
14, 2010, Leonid Pushkantser entered into an agreement to lend the Company
$100,000.00. The material terms are that the Company will pay an interest rate
of 5% per year beginning July 14, 2010 on the unpaid balance. Repayment of the
note is to begin August 1, 2010 with $5,000/month plus interest payments.
Additional payments are to be made on the first day of each month thereafter.
The accrued interest on this loan to date is $1,066.22 within Other Current
Liabilities.
On July
14, 2010 Leonid Pushkantser entered into an agreement with Dr. Alexander Gak
whereby Pushkantser bought 4,000,000 shares of Common Stock, par value of
$0.0001 from Gak. Pushkantser also acquired from Gak, twenty (20) Shares of
Series A Preferred Stock in the transaction. The twenty (20) Series A Preferred
Shares constitute 20% of the amount of Series A Preferred Stock currently issued
and outstanding. Additionally 20% of all shares of Series A Preferred
Stock acquired by Gak in the future will be transferred to Pushkantser, such
that Pushkantser maintains a 20% ownership of the Series A Preferred
Stock.
On July
27, 2010, the loan of $10,000 on January 6, 2010 from Daniel Lundin to the
Company was converted to 20,000 shares of common stock. The effective price of
this conversion was $0.50 per share.
Shareholder
Advance increased to $70,036 as of September 30, 2010. The advance relates to
accrued interest from the Shareholder Loans plus an additional $49,450 advance
from Dr. Alexander Gak.
NOTE
4: Stockholders’ Equity:
Preferred
stock
The
Company is also authorized to issue 10,000,000 shares of Series A 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 September 30, 2010, Company has 100 preferred shares Series A
issued or outstanding.
The
Company is also authorized to issue 10 shares of Series B preferred stock with a
par value of $0.0001. On February 8, 2010, the Board of Directors approved the
designation of 2 shares of preferred stock as Series B Preferred Stock. As of
September 30, 2010, Company has 2 preferred shares Series B issued or
outstanding.
On
February 8, 2010, our Board of Directors and majority shareholders approved the
designation of 10 shares of our preferred stock as Series B Preferred Stock (the
“Series B Preferred Shares”) and authorized our officers to file a Certificate
of Designation for the Series B Preferred Shares, which occurred on February 9,
2010. The outstanding shares of Series B Preferred Stock have no voting rights.
Each share of Series B Convertible Preferred Stock carries with it the immediate
right by its owner to convert such share of Series B Convertible Preferred Stock
into the amount of shares of BAETA Corp. Common Stock equivalent to one percent
(1%) of the total amount of BAETA Corp. Common Stock then issued and outstanding
at the time of the conversion election. All of the outstanding shares of Series
B Preferred Stock (2 outstanding) are held by MBB Holdings, Inc., a
non-affiliate.
On
February 9, 2010, the Company issued its 2 shares of Series B Preferred Stock to
MBB Holdings, Inc., a New York corporation. The shares are beneficially held by
Mr. Shmyer Breuer, 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 shares of the Series B Preferred, par value $0.0001 per
share, at a purchase price of $50,000 per share, to MBB Holdings, Inc. for an
aggregate purchase price of $100,000.
Common
stock
The
Company is authorized to issue 150,000,000 shares of common stock with a par
value of $ 0.0001. As of December 31, 2009, the Company had 22,501,052 shares
issued and outstanding. As of September 30, 2010, the Company has 23,156,644
shares issued and outstanding. As of the date of this report, the Company has
23,704,932 shares of Common Stock issued and outstanding.
87
On
January 8, 2010, 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.
On
January 29, 2010, the Company issued 65,464 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 8, 2009, and because the bills paid for
by the shares were for an amount equal to $0.50 per share
compensation.
On
February 28, 2010, the Company issued 100,185 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 8, 2009, and because the bills paid for by the shares
were for an amount equal to $0.50 per share compensation.
On March
25, 2010, the Company issued 72,501 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 8, 2009, and because the bills paid for by the shares were for
an amount equal to $0.50 per share compensation.
On April
29, 2010, the Company issued 67,501 shares of its common stock for marketing and
software services. The shares are accounted for at $0.50 per share, because the
bills paid for by the shares were for an amount equal to $0.50 per share
compensation.
On May
17, 2010, the Company conducted an offering of its common stock to an accredited
investor and issued 100,000 shares to that investor. The investor purchased the
shares at $0.25 per share.
On May
29, 2010, the Company issued 71,561 shares of its common stock for marketing and
software services. The shares are accounted for at $0.50 per share, because the
bills paid for by the shares were for an amount equal to $0.50 per share
compensation.
On June
22, 2010, 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 $0.25 per share.
On June
29, 2010, the Company issued 71,561 shares of its common stock for marketing and
software services. The shares are accounted for at $0.50 per share, because the
bills paid for by the shares were for an amount equal to $0.50 per share
compensation.
On July
12, 2010, 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 $0.25 per share.
On July
12, 2010, 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 $0.25 per share.
On July
14, 2010, 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.
On July
19, 2010, the Company repurchased 304,000 shares from previous service provider.
The shares were purchased for $25,000.00. These shares had previously been
issued to the service provider for $0.25 per share ($76,000.00) on July 18,
2008. A gain on the transaction of $51,000 was recorded by the
Company.
On July
22, 2010, 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.
88
On July
29, 2010, the Company issued 77,101 shares of its common stock for marketing and
software services. The shares are accounted for at $0.50 per share, because the
bills paid for by the shares were for an amount equal to $0.50 per share
compensation.
On August
29, 2010, the Company issued 70,026 shares of its common stock for marketing and
software services. The shares are accounted for at $0.50 per share, because the
bills paid for by the shares were for an amount equal to $0.50 per share
compensation.
On
September, 13, 2010, in connection with the preparation of the Financing
Agreement (see Note 10), the Company paid AGS Capital Group a due diligence
document and preparation fee of 22,000 shares of restricted common
stock.
On
September 28, 2010, the Company issued 61,692 shares of its common stock for
marketing and software services. The shares are accounted for at $0.50 per
share, because the bills paid for by the shares were for an amount equal to
$0.50 per share compensation.
Stock
Options
As of
December 31, 2009, the Company had granted options to purchase 1,631,125 shares.
As of September 30, 2010, the Company had granted options to purchase 1,655,462
shares, of which options to purchase 515,462 shares had vested. During the
period, the Company awarded option grants to purchase a total of 24,338 shares,
which had an average contract life of 10 years until they expire, and options to
purchase 384,338 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 57.45, a risk free rate of 3.19%, and a
resulting total value of $1,590 for those option grants. $59,326 worth of
options was expensed as compensation costs during the period.
During
the nine-month period, the following aggregate option grants were
made:
Shares Available for the Grant(s)
|
Vesting Period (same as Service
Period)
|
Maximum Contractual Life
|
||
24,338
|
|
Immediate
|
|
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, 2009
|
1,631,125 | $ | 0.50 | 8.9 | $ | 340,825 | ||||||||||
Granted
|
24,338 | $ | 0.50 | 10 | $ | 5,901 | ||||||||||
Exercised
|
0 | |||||||||||||||
Forfeited
|
0 | |||||||||||||||
Expired
|
0 | |||||||||||||||
Outstanding
September 30, 2010
|
1,655,462 | $ | 0.50 | 7.38 | $ | 346,725 | ||||||||||
Vested
during the Period
|
384,338 | $ | 0.50 | 7.38 | $ | 80,587 | ||||||||||
Total
vested at September 30, 2010
|
515,462 | $ | 0.50 | 7.67 | $ | 109,801 |
* All
vested options are currently exercisable
Total
nonvested awards that are not yet recognized as compensation cost have a value
of $198,705 and are expected to be recognized over a weighted-average period of
2.9 years.
89
NOTE
5: Income Tax
The
Company accounts for income taxes under FASB ACS 740, "Income Taxes" ("ACS 740").
ACS 740 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. ACS 740 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 $ 1,889,788 at September 30, 2010. 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
|
|||||||
2010
|
2009
|
|||||||
Tax
benefit of net operating loss carryforward
|
$ | 661,426 | $ | 389,457 | ||||
Valuation
allowance
|
(661,426 | ) | (389,457 | ) | ||||
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’s accumulated operating loss since inception was $2,193,432, working
capital deficit of $421,583 and stockholders’ equity deficit of $ 641,260 as of
September 30, 2010.
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
On March
12, 2010 the Company extended its office space lease for its headquarters
operation from Regus for an additional year, through June 30, 2011, at a minimum
monthly rent of $ 1,000, starting July 1, 2010. The minimum full year rental
commitment from July 1, 2010 to June 30, 2011 is $ 12,000.
90
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: Convertible Notes
On April
8, 2010, the Company issued a convertible note of $100,000 to an accredited
investor. The material terms are that the note will accrue an interest rate of
10% per year and that the principal plus interest is due two years from the date
of the note. At any time during the term of the note, the holder may convert
principal plus accrued interest into common stock in the Company at a value
equal to 50% of the average of the lowest three trading prices for the prior
five days, but not less than $0.25 per share. The Company is allowed to pre-pay
the note without penalty, but the debt-holder does not have the right to demand
pre-payment.
On May
19, 2010, the Company issued a convertible note of $50,000 to an accredited
investor. The material terms are that the note will accrue an interest rate of
10% per year and that the principal plus interest is due two years from the date
of the note. At any time during the term of the note, the holder may convert
principal plus accrued interest into common stock in the Company at a value
equal $0.50 per share. 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
9: Interest Expense
Interest
Expense on the Income Statement is for interest paid on the Line of Credit, the
Shareholder Notes, and the Convertible Notes.
NOTE
10: Reserve Equity Financing Agreement
On
September 28, 2010 the Company entered into a Reserve Equity Financing Agreement
(the “Financing Agreement”) with AGS Capital Group, LLC a New York based limited
liability company (the “Investor”). Pursuant to the Financing Agreement, the
Investor committed to purchase, subject to certain restrictions and conditions,
up to $5,000,000 of the Company’s common stock, over a period of 36 months
commencing on the first trading day following the effectiveness of the
registration statement on Form S-1, registering the resale of shares purchased
by the Investor pursuant to the Financing Agreement (the “Equity
Line”).
In
connection with the preparation of the Financing Agreement, the Company paid
Investor a due diligence document and preparation fee of 22,000 shares of
restricted common stock on September 13, 2010.
NOTE
11: Material Subsequent Events (unaudited)
On
October 20, 2010 the Company issued 241,546 shares of Common Stock as payment
for committing to the Reserve Equity Financing Agreement.
91
Audited Financial Statements
for the Period ended December 31, 2009
Item:
|
Page No.:
|
|
Auditors’
Report
|
93
|
|
Balance
Sheet
|
94
|
|
Statement
of Operations
|
95
|
|
Statement
of Stockholder Equity (Deficit)
|
96
|
|
Statement
of Cash Flows
|
97
|
|
Notes
|
|
98
|
92
Report
of Independent Registered Public Accounting Firm
Board of
Directors
BAETA
Corp.
We have
audited the accompanying balance sheet of BAETA Corp. (the “Company”), a
development stage company, as of December 31, 2009, 2008 and 2007 and the
related statements of operations, stockholders’ deficit, and cash flows for the
years ended December 31, 2009, 2008 and 2007 and the period of August 14, 2007
(inception) to December 31, 2009. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these 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 misstatement. The Company is not required to
have, nor were we engaged to perform an audit of its internal control over
financial reporting. Our audit included consideration of internal over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstance, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, 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,
2009, 2008 and 2007 and the results of its operations and changes in
stockholders’ equity and its cash flows for the year ended December 31, 2009,
2008 and 2007 and the period from August 14, 2007 (inception) to December 31,
2009, 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 noted within, the Company’s management is currently
seeking additional capital to support operations, but has not received any firm
commitment(s) to do so. 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. CPA’s, P.C.
Alpharetta,
Georgia
March 25,
2010
93
Baeta
Corp.
(
a Developmental Stage Company)
Balance
Sheets
As of
|
As of
|
As of
|
||||||||||
December 31,
|
December 31,
|
December 31,
|
||||||||||
2009
|
2008
|
2007
|
||||||||||
ASSETS
|
||||||||||||
Current
Assets
|
||||||||||||
Cash
|
$ | 3,189 | $ | 14,475 | $ | 10,150 | ||||||
Inventory
|
1,713 | 4,308 | - | |||||||||
Total
Current Assets
|
4,901 | 18,783 | 10,150 | |||||||||
Other
Assets
|
||||||||||||
Software
Application
|
203,357 | 47,357 | - | |||||||||
Plant
Property & Equipment, net of accumulated depreciation of
$528
|
21,694 | 16,061 | - | |||||||||
Organization,
net of accumulated amortization of $ 169
|
181 | 251 | 321 | |||||||||
Deposit
|
1,904 | - | - | |||||||||
Total
Other Assets
|
227,136 | $ | 63,669 | 321 | ||||||||
TOTAL
ASSETS
|
$ | 232,037 | $ | 82,452 | $ | 10,471 | ||||||
LIABILITIES
& STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||||||
Current
Liabilities
|
||||||||||||
Accounts
Payable
|
$ | 69,805 | $ | 2,250 | $ | - | ||||||
Accounts
Payable Related Party
|
110,000 | 30,000 | - | |||||||||
Line
of Credit
|
46,708 | 44,161 | - | |||||||||
Other
Current Liabilities
|
56,492 | - | - | |||||||||
Shareholder
Note
|
10,000 | - | - | |||||||||
Total
Current Liabilities
|
293,006 | 76,411 | - | |||||||||
Long-Term
Liabilities
|
||||||||||||
Shareholder
Advance
|
28,510 | 182,600 | 20,000 | |||||||||
Shareholder
Note
|
288,850 | - | - | |||||||||
Total
Long-Term Liabilities
|
317,360 | 182,600 | 20,000 | |||||||||
TOTAL
LIABILITIES
|
610,366 | 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)
|
- | - | - | |||||||||
Common
stock, 100,000,000 shares authorized with a par value of $ 0.0001 ,issued
and outstanding 22,501,052 shares at December 31, 2009
|
2,250 | 2,148 | 2,000 | |||||||||
Paid-in
capital
|
981,800 | 381,022 | - | |||||||||
Losses
that have accumulated during the development stage
|
(1,362,378 | ) | (559,729 | ) | (11,529 | ) | ||||||
Total
Stockholders' Equity (Deficit)
|
(378,328 | ) | (176,559 | ) | (9,529 | ) | ||||||
TOTAL
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | 232,037 | $ | 82,452 | $ | 10,471 |
See
Notes Financial Statements
94
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Operations
Cumulative during
|
||||||||||||||||
Year Ended
|
Year Ended
|
Year Ended
|
development stage
|
|||||||||||||
December 31,
|
December 31,
|
December 31,
|
August 14, 2007 to
|
|||||||||||||
2009
|
2008
|
2007
|
December 31, 2009
|
|||||||||||||
Revenues
|
||||||||||||||||
Revenue
|
$ | 9,003 | $ | 71 | $ | - | $ | 9,074 | ||||||||
Net
Revenue
|
9,003 | 71 | - | 9,074 | ||||||||||||
Total
Revenue
|
9,003 | 71 | - | 9,074 | ||||||||||||
Cost
of Goods Sold
|
||||||||||||||||
Cost
of Goods Sold
|
2,595 | 17 | - | 2,612 | ||||||||||||
Total
Cost of Goods Sold
|
2,595 | 17 | - | 2,612 | ||||||||||||
Gross
Income
|
6,408 | 54 | - | 6,462 | ||||||||||||
Operating
Expenses
|
||||||||||||||||
Amortization
|
423 | 245 | 29 | 697 | ||||||||||||
Research
& Development
|
60,000 | 73,412 | 9,000 | 142,412 | ||||||||||||
Sales
& Marketing
|
113,071 | 52,388 | - | 165,459 | ||||||||||||
Other
miscellaneous operating expenses
|
616,389 | 419,241 | 2,500 | 1,038,130 | ||||||||||||
Total
Operating Expenses
|
789,883 | 545,286 | 11,529 | 1,346,698 | ||||||||||||
Loss
From Operations
|
(783,475 | ) | (545,232 | ) | (11,529 | ) | (1,340,236 | ) | ||||||||
Other
income (expense)
|
||||||||||||||||
Charitable
Donation
|
(5,000 | ) | (2,500 | ) | (7,500 | ) | ||||||||||
Interest
expense
|
(12,546 | ) | 32 | - | (12,514 | ) | ||||||||||
Net
Loss Before Provision For Income Taxes
|
(801,021 | ) | (547,700 | ) | (11,529 | ) | (1,360,250 | ) | ||||||||
Provision
For Income Taxes
|
1,628 | 500 | - | 2,128 | ||||||||||||
Net
Loss
|
$ | (802,649 | ) | $ | (548,200 | ) | $ | (11,529 | ) | $ | (1,362,378 | ) | ||||
Basic
earning (Loss) per share
|
$ | (0.04 | ) | $ | (0.03 | ) | $ | (0.00 | ) | $ | ||||||
Weighted
average number of common shares - basic and diluted
|
21,873,711 | 20,683,456 | 20,000,000 |
See
Notes to Financial Statements
95
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
|
100 | - | 21,476,680 | 2,148 | 381,022 | (559,729 | ) | (176,559 | ) | |||||||||||||||||||
Stocks
issued for service and consulting
|
627,372 | 63 | 313,623 | 313,686 | ||||||||||||||||||||||||
Option
Holder's Equity
|
88,694 | 88,694 | ||||||||||||||||||||||||||
Private
Placements
|
387,000 | 39 | 193,461 | 193,500 | ||||||||||||||||||||||||
Charitable
donation
|
10,000 | 1 | 4,999 | 5,000 | ||||||||||||||||||||||||
Loss
for the year ended Dec 31, 2009
|
(802,649 | ) | (802,649 | ) | ||||||||||||||||||||||||
Balance, December
31, 2009
|
100 | - | 22,501,052 | 2,250 | 981,800 | (1,362,378 | ) | (378,328 | ) |
See
Notes to Financial Statements
96
Baeta
Corp.
(
a Developmental Stage Company)
Statement
of Cash Flows
Year Ended
|
Year Ended
|
Year Ended
|
Cumulative during
development stage
|
|||||||||||||
December 31,
|
December 31,
|
December 31,
|
August 14, 2007 to
|
|||||||||||||
2009
|
2008
|
2007
|
December 31, 2009
|
|||||||||||||
CASH
FLOWS FROM OPERATING
ACTIVITIES
|
||||||||||||||||
Net
income (loss)
|
$ | (802,649 | ) | $ | (548,200 | ) | $ | (11,529 | ) | $ | (1,362,378 | ) | ||||
Adjustments
to reconcile net loss to net cash provided by (used in) operating
activities:
|
||||||||||||||||
Depreciation
|
353 | 175 | 528 | |||||||||||||
Amortization
|
70 | 70 | 29 | 169 | ||||||||||||
Increase
in current assets and liabilities;
|
||||||||||||||||
Increase
in accounts payable
|
67,555 | 2,250 | 69,805 | |||||||||||||
Increase
in accounts payable related party
|
80,000 | 30,000 | 110,000 | |||||||||||||
Increase
in Other Current Liabilities
|
56,492 | 56,492 | ||||||||||||||
Increase
in Inventory
|
2,595 | (4,308 | ) | (1,713 | ) | |||||||||||
Increase
in Deposit
|
(1,904 | ) | (1,904 | ) | ||||||||||||
Stock
Based Compensation
|
402,380 | 146,070 | 548,450 | |||||||||||||
Net
cash used by operating activities
|
(195,107 | ) | (373,943 | ) | (11,500 | ) | (580,550 | ) | ||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||||||
PP&E
|
(5,986 | ) | (16,236 | ) | (22,222 | ) | ||||||||||
Expenditure
for organization expense
|
- | - | (350 | ) | (350 | ) | ||||||||||
Software
Application
|
(156,000 | ) | (47,357 | ) | (203,357 | ) | ||||||||||
Net
cash provided by (used in) investing activities
|
(161,986 | ) | (63,593 | ) | (350 | ) | (225,929 | ) | ||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||||||
Shareholder
Advance
|
(154,090 | ) | 162,600 | 20,000 | 28,510 | |||||||||||
Shareholder
Note
|
298,850 | 0 | 298,850 | |||||||||||||
Line
of Credit
|
2,547 | 44,161 | 46,708 | |||||||||||||
Additional
Fianncing Fees
|
||||||||||||||||
Change
in Comon Stock Value
|
||||||||||||||||
Common
Stock Issued
|
198,500 | 235,100 | 2,000 | 435,600 | ||||||||||||
Net
cash provided by (used in) financing activities
|
345,808 | 441,861 | 22,000 | 809,669 | ||||||||||||
Net
increase (decrease) in cash & cash equivalents
|
(11,286 | ) | 4,325 | 10,150 | 3,189 | |||||||||||
Cash
at beginning of period
|
14,475 | 10,150 | - | - | ||||||||||||
Cash
at end of period
|
$ | 3,189 | $ | 14,475 | $ | 10,150 | $ | 3,189 | ||||||||
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||||||
Income
taxes paid
|
1,498 | 500 | - | 1,998 |
See
Notes to Financial Statements
97
Baeta
Corp.
(a
Development Stage Company)
December
31, 2009
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, 2009, the Company had not yet commenced any substantive commercial
operations. All activity through December 31, 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.
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.
98
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 enhance 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 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.
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.
99
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 December 31, 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
December 31, 2009 the Company has cash balance of $ 3,189 and no accounts
receivable.
Special
– purpose entities
The
Company does not have any off-balance sheet financing activities.
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.
100
NOTE
2: Revolving line of credit
As of
December 31, 2009, the Company is obligated under unsecured line of credit of $
50,000 from a bank and principal balance of such a loan is $ 46,708. 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.
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.
Shareholder
Advance decreased to $28,510 as of September 30, 2009. The advance relates to
accrued interest from the Shareholder Loan plus an additional $20,000 advance
and is due to Dr. Alexander Gak.
On
September 16, 2008, Dr. Alexander Gak 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. 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 in 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, 2009, BAETA had issued to Extranome 390,000
shares.
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 as follows: 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.
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 December 31, 2009, Company has 22,501,052 shares
issued and outstanding.
101
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
102
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.
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.
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.
On
October 22, 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.
On
October 29, 2009, the Company issued 63,714 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 October 22, 2009, and because the bills paid for by the shares were
for an amount equal to $0.50 per share compensation.
On
November 6, 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.
On
November 13, 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.
On
November 19, 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.
On
November 29, 2009, the Company issued 62,949 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 November 19, 2009, and because the bills paid for by the shares were
for an amount equal to $0.50 per share compensation.
On
December 2, 2009, the Company conducted an offering of its common stock to two
accredited investors and issued 17,000 shares to that investor. The investor
purchased the shares at $0.50 per share.
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.
On
December 29, 2009, the Company issued 80,001 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.
103
Stock
Options
As of
December 31, 2008, the Company had granted options to purchase 0 shares. As of
December 31, 2009, the Company had granted options to purchase 1,631,125 shares,
of which options to purchase 131,125 shares had vested. During the period, the
Company awarded option grants to purchase a total of 1,631,125 shares, which had
an average contract life of 8.9 years until they expire, and options to purchase
131,125 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 $340,825 for those option grants. Of that value, $88,694 was
expensed as compensation costs and $0 was on the balance sheet.
During
the one-year 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
|
||
31,125
|
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
|
1,631,125 | $ | 0.50 | 8.9 | $ | 340,825 | ||||||||||
Exercised
|
0 | |||||||||||||||
Forfeited
|
0 | |||||||||||||||
Expired
|
0 | |||||||||||||||
Outstanding
December 31, 2009
|
1,631,125 | $ | 0.50 | 8.9 | $ | 340,825 | ||||||||||
Vested
during the Period
|
131,125 | $ | 0.50 | 10 | $ | 29,215 | ||||||||||
Total
vested at December 31, 2009
|
131,125 | $ | 0.50 | 10 | $ | 29,215 |
* All
vested options are currently exercisable
Total
nonvested awards that are not yet recognized as compensation cost have a value
of $252,131 and are expected to be recognized over a weighted-average period of
3.6 years.
Preferred
stock
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, 2009, 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.
104
The
Company has a net operating loss carry forward for tax purposes totaling
approximately $ 1,112,734 at December 31, 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.
December
31
|
December
31
|
|||||||
2009
|
2008
|
|||||||
Tax
benefit of net operating loss carryforward
|
$ | 389,457 | $ | 108,530 | ||||
Valuation
allowance
|
(389,457 | ) | (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’s accumulated operating loss since inception was $ 1,362,378, working
capital deficit of $ 288,104 and stockholders’ equity deficit of $ 378,328 as of
December 31, 2009.
The
Company will actively purse 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
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.
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: Interest Expense
Interest
Expense on the Income Statement is for interest paid on the Line of
Credit.
105
NOTE
9: Material Subsequent Events (unaudited)
On
February 8, 2010, our Board of Directors and majority shareholders approved the
designation of 10 shares of our preferred stock as Series B Preferred Stock (the
“Series B Preferred Shares”) and authorized our officers to file a Certificate
of Designation for the Series B Preferred Shares, which occurred on February 9,
2010. The outstanding shares of Series B Preferred Stock have no voting rights.
Each share of Series B Convertible Preferred Stock carries with it the immediate
right by its owner to convert such share of Series B Convertible Preferred Stock
into the amount of shares of BAETA Corp. Common Stock equivalent to one percent
(1%) of the total amount of BAETA Corp. Common Stock then issued and outstanding
at the time of the conversion election. All of the outstanding shares of Series
B Preferred Stock (2 outstanding) are held by MBB Holdings, Inc., a
non-affiliate.
On
February 9, 2010, the Company issued its 2 shares of Series B Preferred Stock to
MBB Holdings, Inc., a New York corporation. The shares are beneficially held by
Mr. Shmyer Breuer, 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 shares of the Series B Preferred, par value $0.0001 per
share, at a purchase price of $50,000 per share, to MBB Holdings, Inc. for an
aggregate purchase price of $100,000.
On March
12, 2010 the Company extended its office space lease for its headquarters
operation from Regus for an additional year, through June 30, 2011, at a minimum
monthly rent of $ 1,000, starting July 1, 2010. The minimum full year rental
commitment from July 1, 2010 to June 30, 2011 is $ 12,000.
106
[OUTSIDE
BACK COVER OF PROSPECTUS]
BAETA
CORP.
|
7,162,000
SHARES COMMON STOCK
|
TABLE
OF
CONTENTS
|
Item
|
Page
|
|
Summary
|
1
|
|
Risk
Factors
|
6
|
|
Description
of Business
|
16
|
|
Description
of Properties
|
35
|
|
Legal
Proceedings
|
35
|
|
Use
of Proceeds
|
36
|
|
Determination
of Offering Price
|
37
|
|
Dilution
|
37
|
|
Plan
of Distribution
|
38
|
|
Directors,
Executive Officers, Promoters and Control Persons
|
42
|
|
Security
Ownership of Certain Beneficial Owners and Management
|
56
|
|
Description
of Securities
|
58
|
|
Interest
of Named Experts and Counsel
|
63
|
|
Experts
|
63
|
|
Disclosure
of Commission Position of Indemnification for Securities Act
Liabilities
|
64
|
|
Organization
Within the Last Five Years
|
64
|
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
64
|
|
Certain
Relationships and Related Transactions and Corporate
Governance
|
71
|
|
Market
for Common Equity and Related Stockholder Matters
|
76
|
|
Changes
in and Disagreements with Accountants and Financial
Disclosure
|
77
|
|
Where
You Can Find More Information
|
78
|
|
Financial
Statements
|
|
79
|
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.
107
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
|
$
|
998.00
|
||
Transfer
Agent Fees
|
$
|
2,000.00
|
||
Accounting
Fees and Expenses
|
$
|
10,000
|
||
Legal
Fees and Expenses
|
$
|
25,000
|
||
Printers
|
$
|
5,000
|
||
Total
|
$
|
$42,998
|
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 owned 20,000,000 shares of common stock immediately
following the forward split. 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.
108
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. On July 14, 2010 Leonid Pushkantser entered into an
agreement with Dr. Alexander Gak whereby Pushkantser bought 4,000,000 shares of
Common Stock, par value of $0.0001 from Gak. Pushkantser also acquired from Gak,
twenty (20) Shares of Series A Preferred Stock in the transaction. The twenty
(20) Series A Preferred Shares constitute 20% of the amount of Series A
Preferred Stock currently issued and outstanding. Additionally 20% of
all shares of Series A Preferred Stock acquired by Gak in the future will be
transferred to Pushkantser, such that Pushkantser maintains a 20% ownership of
the Series A Preferred Stock.
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.
|
109
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.
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.
110
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.
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 Chairman, 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.
|
111
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.
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 Chairman, 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 Chairman, 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 Chairman, 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 Chairman, 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.
112
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.
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 Chairman, 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 Chairman, 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.
113
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.
114
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 Chairman, 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.
Sub-Total:
|
21,995,458 shares of Common
Stock outstanding after this
issuance.
|
115
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 Chairman, 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.
|
116
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.
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 Chairman, 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.
|
117
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.
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 22, 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 Chairman, 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.
|
118
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.
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 Chairman, 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.
|
119
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.
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 Mr. Cusack 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.
|
120
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.
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 Chairman, 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:
|
22,489,385 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.
Sub-Total:
|
22,501,052
shares of Common Stock outstanding after this
issuance.
|
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).
|
121
On
January 8, 2010, the Company issued its common stock to Abraham Finer, 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. Finer for an aggregate of $5,000.
Sub-Total:
|
22,511,052
shares of Common Stock outstanding after this
issuance.
|
On
January 29, 2010, 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 Chairman, 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:
|
22,541,052 shares of Common Stock
outstanding after this
issuance.
|
On
January 29, 2010, the Company issued 5,463 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:
|
22,546,515 shares of Common Stock
outstanding after this
issuance.
|
On
January 29, 2010, 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:
|
22,554,849 shares of Common Stock
outstanding after this
issuance.
|
On
January 29, 2010, 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:
|
22,559,849 shares of Common Stock
outstanding after this
issuance.
|
On
January 29, 2010, 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.
Sub-Total:
|
22,571,516 shares of Common
Stock outstanding after this issuance.
|
On
January 29, 2010, the Company issued 5,000 shares of its common stock to Joseph
Cusack. The Company issued the stock in consideration for consulting services
rendered as the Company’s Product Sales Services consultant pursuant to an
Agreement executed between BAETA Corp. and Mr. Cusack on January 1, 2010 (See
Exhibit 10.21), 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.
122
Sub-Total:
|
22,576,516
shares of Common Stock outstanding after this issuance, and as of the date
of this Registration Statement.
|
On
February 9, 2010, the Company issued its 2 shares of Series B Preferred Stock to
MBB Holdings, Inc., a New York corporation. The shares are beneficially held by
Mr. Shmyer Breuer, 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 shares of the Series B Preferred, par value $0.0001 per
share, at a purchase price of $50,000 per share, to MBB Holdings, Inc. for an
aggregate purchase price of $100,000.
Total:
|
2
Shares of Series B Preferred Stock issued and outstanding after this
issuance and as of the date of this Registration
Statement.
|
On
February 28, 2010, the Company issued 30,184 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:
|
22,606,700 shares of Common Stock
outstanding after this
issuance.
|
On
February 28, 2010, 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 Chairman, 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:
|
22,636,700 shares of Common Stock
outstanding after this
issuance.
|
On
February 28, 2010, 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:
|
22,645,034 shares of Common Stock
outstanding after this
issuance.
|
On
February 28, 2010, 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:
|
22,650,034 shares of Common Stock
outstanding after this
issuance.
|
On
February 28, 2010, 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.
123
Sub-Total:
|
22,661,701 shares of Common
Stock outstanding after this issuance.
|
On
February 28, 2010, the Company issued 5,000 shares of its common stock to Joseph
Cusack. The Company issued the stock in consideration for consulting services
rendered as the Company’s Product Sales Services consultant pursuant to an
Agreement executed between BAETA Corp. and Mr. Cusack on January 1, 2010 (See
Exhibit 10.21), 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:
|
22,666,701
shares of Common Stock outstanding after this
issuance.
|
On
February 28, 2010, the Company issued 10,000 shares of its common stock to
Kimberly Stempien. The Company issued the stock in consideration for consulting
services rendered as the Company’s Investor Relations consultant pursuant to an
Agreement executed between BAETA Corp. and Ms. Stempien on January 1, 2010 (See
Exhibit 10.22), 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:
|
22,676,701
shares of Common Stock outstanding after this
issuance.
|
On March
29, 2010, 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:
|
22,681,701 shares of Common Stock
outstanding after this
issuance.
|
On March
29, 2010, 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 Chairman, 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:
|
22,711,701 shares of Common Stock
outstanding after this
issuance.
|
On March
29, 2010, the Company issued 7,500 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:
|
22,719,201
shares of Common Stock outstanding after this
issuance.
|
On March
29, 2010, 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.
124
Sub-Total:
|
22,727,535 shares of Common Stock
outstanding after this
issuance.
|
On March
29, 2010, 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:
|
22,732,535 shares of Common Stock
outstanding after this
issuance.
|
On March
29, 2010, 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.
Sub-Total:
|
22,744,202 shares of Common
Stock outstanding after this issuance.
|
On March
29, 2010, the Company issued 5,000 shares of its common stock to Joseph Cusack.
The Company issued the stock in consideration for consulting services rendered
as the Company’s Product Sales Services consultant pursuant to an Agreement
executed between BAETA Corp. and Mr. Cusack on January 1, 2010 (See Exhibit
10.21), 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:
|
22,749,202
shares of Common Stock outstanding after this
issuance.
|
Quarter Ended
3/31/2010:
|
22,749,202 shares of Common
Stock outstanding as of the Quarterly Period ended 3/31/2010
(1st Quarter
end).
|
On April
29, 2010, the Company issued 7,500 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:
|
22,756,702 shares of Common Stock
outstanding after this
issuance.
|
On April
29, 2010, 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 Chairman, 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:
|
22,786,702 shares of Common Stock
outstanding after this
issuance.
|
On April
29, 2010, 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:
|
22,795,036 shares of Common Stock
outstanding after this
issuance.
|
On April
29, 2010, 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.
125
Sub-Total:
|
22,800,036 shares of Common Stock
outstanding after this
issuance.
|
On April
29, 2010, 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.
Sub-Total:
|
22,811,703 shares of Common
Stock outstanding after this issuance.
|
On April
29, 2010, the Company issued 5,000 shares of its common stock to Joseph Cusack.
The Company issued the stock in consideration for consulting services rendered
as the Company’s Product Sales Services consultant pursuant to an Agreement
executed between BAETA Corp. and Mr. Cusack on January 1, 2010 (See Exhibit
10.21), 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:
|
24,023,152
shares of Common Stock outstanding after this
issuance.
|
On May
17, 2010, the Company issued 100,000 shares of its Common Stock to Dr. Anroy
Ottley, 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 100,000 shares of Common Stock, par value $0.0001 per share, at a
purchase price of $0.25 per share, to Dr. Ottley for an aggregate purchase price
of $25,000.
Sub-Total:
|
22,916,703
shares of Common Stock outstanding after this
issuance.
|
On May
29, 2010, the Company issued 11,560 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:
|
22,928,263 shares of Common Stock
outstanding after this
issuance.
|
On May
29, 2010, 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 Chairman, 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:
|
22,958,263 shares of Common Stock
outstanding after this
issuance.
|
On May
29, 2010, 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.
126
Sub-Total:
|
22,966,597 shares of Common Stock
outstanding after this
issuance.
|
On May
29, 2010, 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:
|
22,971,597 shares of Common Stock
outstanding after this
issuance.
|
On May
29, 2010, 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.
Sub-Total:
|
22,983,264 shares of Common
Stock outstanding after this issuance.
|
On May
29, 2010, the Company issued 5,000 shares of its common stock to Joseph Cusack.
The Company issued the stock in consideration for consulting services rendered
as the Company’s Product Sales Services consultant pursuant to an Agreement
executed between BAETA Corp. and Mr. Cusack on January 1, 2010 (See Exhibit
10.21), 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:
|
22,988,264
shares of Common Stock outstanding after this
issuance.
|
On June
22, 2010, 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 20,000 shares
of its Common Stock, par value $0.0001 per share, at a purchase price of $0.25
per share, to Ignatius for an aggregate of $5,000.
Sub-Total:
|
23,008,264 shares of Common
Stock outstanding after this
issuance.
|
On June
29, 2010, the Company issued 11,560 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:
|
23,019,824 shares of Common Stock
outstanding after this
issuance.
|
On June
29, 2010, 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 Chairman, 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:
|
23,049,824 shares of Common Stock
outstanding after this
issuance.
|
On June
29, 2010, 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, 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.
127
Sub-Total:
|
23,058,158 shares of Common Stock
outstanding after this
issuance.
|
On June
29, 2010, 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:
|
23,063,158 shares of Common Stock
outstanding after this
issuance.
|
On June
29, 2010, 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.
Sub-Total:
|
23,074,825
shares of Common Stock outstanding after this issuance.
|
On June
29, 2010, the Company issued 5,000 shares of its common stock to Joseph Cusack.
The Company issued the stock in consideration for consulting services rendered
as the Company’s Product Sales Services consultant pursuant to an Agreement
executed between BAETA Corp. and Mr. Cusack on January 1, 2010, 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:
|
23,079,825
shares of Common Stock outstanding after this
issuance.
|
On June
29, 2010, the Company purchased 304,000 shares of its outstanding common stock
from Douglas A. Rogers. The entirety of the 304,000 shares were then designated
as treasury stock, and subsequently retired. Upon retirement, 304,000 of these
shares were applied back to the Company’s authorized but unissued common
stock.
Sub-Total:
|
22,775,
825 shares of Common Stock outstanding after this
transaction.
|
Quarter Ended
6/30/2010:
|
22,775, 825 shares of Common
Stock outstanding as of the Quarterly Period ended 6/30/2010
(2nd Quarter
end).
|
On July
12, 2010, the Company issued its common stock to Paul Weissman, 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 $0.25 per
share, to Paul for an aggregate of $10,000.
Sub-Total:
|
22,815,825 shares of Common
Stock outstanding after this
issuance.
|
On July
12, 2010, the Company issued its common stock to Alita Dizon, 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 $0.25 per
share, to Alita for an aggregate of $5,000.
Sub-Total:
|
22,835,825 shares of Common
Stock outstanding after this
issuance.
|
On July
14, 2010, the Company issued its common stock to Civil Gennady, 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 50,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Civil for an aggregate of $25,000.
128
Sub-Total:
|
22,885,825 shares of Common
Stock outstanding after this
issuance.
|
On July
22, 2010, the Company issued its common stock to Vadim Siganevich, 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 Vadim for an aggregate of $10,000.
Sub-Total:
|
22,905,825 shares of Common
Stock outstanding after this
issuance.
|
On July
27, 2010, 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 Daniel for an aggregate of $10,000.
Sub-Total:
|
22,925,825 shares of Common
Stock outstanding after this
issuance.
|
On July
29, 2010, the Company issued 14,100 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:
|
22,939,925 shares of Common Stock
outstanding after this
issuance.
|
On July
29, 2010, 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 Chairman, 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:
|
22,969,925 shares of Common Stock
outstanding after this
issuance.
|
On July
29, 2010, 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, 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:
|
22,978,259 shares of Common Stock
outstanding after this
issuance.
|
On July
29, 2010, 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:
|
22,983,259 shares of Common Stock
outstanding after this
issuance.
|
On June
29, 2010, 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.
129
Sub-Total:
|
22,994,926 shares of Common
Stock outstanding after this issuance.
|
On July
29, 2010, the Company issued 5,000 shares of its common stock to Joseph Cusack.
The Company issued the stock in consideration for consulting services rendered
as the Company’s Product Sales Services consultant pursuant to an Agreement
executed between BAETA Corp. and Mr. Cusack on January 1, 2010, 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:
|
22,999,926
shares of Common Stock outstanding after this
issuance.
|
On July
29, 2010, the Company issued 3,000 shares of its common stock to Vesta Caldwell.
The Company issued the stock in consideration for sales consulting services
rendered as the Company’s Product Sales consultant pursuant to an Agreement
executed between BAETA Corp. and Ms. Caldwell on August 16, 2010, 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:
|
23,002,926
shares of Common Stock outstanding after this
issuance.
|
On August
9, 2010, pursuant to an Agreement dated July 14, 2010, Dr. Alexander Gak and Mr.
Leonid Pushkantser entered into a Private Securities Purchase Agreement, whereby
Dr. Gak sold 4,000,000 shares of his personal holdings and ownership in BAETA
Corp., and 20 Shares of his personal holdings and ownership of Series A
Preferred Stock, to Mr. Pushkantser in consideration of one dollar ($1.00). The
Company was not a party to this transaction, and therefore did not issue any
securities in connection with this transaction. (Transfer Agent) Please reflect
this transaction on the certified shareholders list of the Company.
Sub-Total:
|
23,002,926
shares of Common Stock outstanding after this
issuance.
|
On August
29, 2010, the Company issued 8,925 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:
|
23,011,851 shares of Common Stock
outstanding after this
issuance.
|
On August
29, 2010, the Company issued 30,000 shares of Common Stock due to Extranome
pursuant to the Software Development Contract between BAETA Corp. and Extranome,
Inc. As noted above, our President and Chairman, 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:
|
23,041,851 shares of Common Stock
outstanding after this
issuance.
|
On August
29, 2010, 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, 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:
|
23,050,185 shares of Common Stock
outstanding after this
issuance.
|
On August
29, 2010, 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.
130
Sub-Total:
|
23,055,185 shares of Common Stock
outstanding after this
issuance.
|
On August
29, 2010, 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.
Sub-Total:
|
23,066,852 shares of Common
Stock outstanding after this issuance.
|
On August
29, 2010, the Company issued 5,000 shares of its common stock to Joseph Cusack.
The Company issued the stock in consideration for consulting services rendered
as the Company’s Product Sales Services consultant pursuant to an Agreement
executed between BAETA Corp. and Mr. Cusack on January 1, 2010, 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:
|
23,071,852
shares of Common Stock outstanding after this
issuance.
|
On August
29, 2010, the Company issued 1,100 shares of its common stock to Vesta Caldwell.
The Company issued the stock in consideration for sales consulting services
rendered as the Company’s Product Sales consultant pursuant to an Agreement
executed between BAETA Corp. and Ms. Caldwell on August 16, 2010, 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:
|
23,072,952
shares of Common Stock outstanding after this
issuance.
|
On
September 13, 2010, the Company issued 22,000 shares of its common stock to AGS
Capital Group, LLC. The Company issued the stock in consideration for due
diligence and document preparation fees in connection with that certain Reserve
Equity Financing Agreement dated September 28, 2010, between the Company and AGS
Capital Group, LLC, 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:
|
23,094,952
shares of Common Stock outstanding after this
issuance.
|
On
September 28, 2010, the Company issued 8,925 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:
|
23,103,877 shares of Common Stock
outstanding after this
issuance.
|
On
September 28, 2010, 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 Chairman, 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.
131
Sub-Total:
|
23,133,877 shares of Common Stock
outstanding after this
issuance.
|
On
September 28, 2010, 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:
|
23,138,877 shares of Common Stock
outstanding after this
issuance.
|
On
September 28, 2010, 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.
Sub-Total:
|
23,150,544 shares of Common
Stock outstanding after this issuance.
|
On
September 28, 2010, the Company issued 5,000 shares of its common stock to
Joseph Cusack. The Company issued the stock in consideration for consulting
services rendered as the Company’s Product Sales Services consultant pursuant to
an Agreement executed between BAETA Corp. and Mr. Cusack on January 1, 2010, 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:
|
23,155,544
shares of Common Stock outstanding after this
issuance.
|
On
September 28, 2010, the Company issued 1,100 shares of its common stock to Vesta
Caldwell. The Company issued the stock in consideration for sales consulting
services rendered as the Company’s Product Sales consultant pursuant to an
Agreement executed between BAETA Corp. and Ms. Caldwell on August 16, 2010, 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:
|
23,156,644
shares of Common Stock outstanding after this
issuance.
|
Quarter Ended
9/30/2010:
|
23,156,644 shares of Common
Stock outstanding as of the Quarterly Period ended 9/30/2010
(3rd Quarter
end).
|
On
October 28, 2010, the Company issued its common stock to Jaleel Durani, 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 $0.25 per share, to Mr. Durani for an aggregate of
$5,000.
Sub-Total:
|
23,176,644 shares of Common
Stock outstanding after this
issuance.
|
On
October 29, 2010, the Company issued 9,950 shares of its common stock to Dr.
Anroy Ottley. The Company issued the stock in consideration for consulting
services rendered to the Company for clinical research 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:
|
23,186,594
shares of Common Stock outstanding after this
issuance.
|
On
October 29, 2010, the Company issued 7,825 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.
132
Sub-Total:
|
23,194,419 shares of Common Stock
outstanding after this
issuance.
|
On
October 29, 2010, 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 Chairman, 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:
|
23,224,419 shares of Common Stock
outstanding after this
issuance.
|
On
October 29, 2010, 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:
|
23,229,419 shares of Common Stock
outstanding after this
issuance.
|
On
October 29, 2010, the Company issued 5,000 shares of its common stock to Joseph
Cusack. The Company issued the stock in consideration for consulting services
rendered as the Company’s Product Sales Services consultant pursuant to an
Agreement executed between BAETA Corp. and Mr. Cusack on January 1, 2010, 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:
|
23,234,419 shares of Common
Stock outstanding after this
issuance.
|
On
October 29, 2010, 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.
Sub-Total:
|
23,246,086 shares of Common
Stock outstanding after this issuance.
|
On
October 29, 2010, the Company issued 1,100 shares of its common stock to Vesta
Caldwell. The Company issued the stock in consideration for sales consulting
services rendered as the Company’s Product Sales consultant pursuant to an
Agreement executed between BAETA Corp. and Ms. Caldwell on August 16, 2010, 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:
|
23,247,186
shares of Common Stock outstanding after this
issuance.
|
On
October 29, 2010, the Company issued 3,300 shares of its common stock to Joel
Shu. The Company issued the stock in consideration for consulting services
rendered to the Company for clinical research 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.
133
Sub-Total:
|
23,250,486
shares of Common Stock outstanding after this
issuance.
|
On
October 29, 2010, the Company issued 2,900 shares of its common stock to Arthur
Chester Stowe. The Company issued the stock in consideration for consulting
services rendered to the Company for clinical research 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:
|
23,253,386
shares of Common Stock outstanding after this
issuance.
|
On
October 29, 2010, 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:
|
23,263,386 shares of Common
Stock outstanding after this
issuance.
|
On
November 2, 2010, the Company issued 241,546 shares of its common stock to AGS
Capital Group, LLC. The Company issued the stock pursuant to Section 12.4 of the
Reserve Equity Financing Agreement dated September 28, 2010, between the Company
and AGS Capital Group, LLC, 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:
|
23,504,932
shares of Common Stock outstanding after this
issuance.
|
On
November 4, 2010, the Company issued its common stock to Adelina Kogut, 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
200,000 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
$100,000.
Sub-Total:
|
23,704,932
shares of Common Stock outstanding after this
issuance.
|
On
November 30, 2010, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract between BAETA Corp. and
Extranome, Inc. As noted above, our President and Chairman, 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:
|
23,734,932 shares of Common Stock
outstanding after this
issuance.
|
On
November 30, 2010, 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:
|
23,739,932 shares of Common Stock
outstanding after this
issuance.
|
On
November 30, 2010, the Company issued 5,000 shares of its common stock to Joseph
Cusack. The Company issued the stock in consideration for consulting services
rendered as the Company’s Product Sales Services consultant pursuant to an
Agreement executed between BAETA Corp. and Mr. Cusack on January 1, 2010, 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:
|
23,744,932 shares of Common
Stock outstanding after this
issuance.
|
On
November 30, 2010, 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.
134
Sub-Total:
|
23,756,599 shares of Common
Stock outstanding after this issuance.
|
On
November 30, 2010, the Company issued 1,100 shares of its common stock to Vesta
Caldwell. The Company issued the stock in consideration for sales consulting
services rendered as the Company’s Product Sales consultant pursuant to an
Agreement executed between BAETA Corp. and Ms. Caldwell on August 16, 2010, 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:
|
23,757,699
shares of Common Stock outstanding after this
issuance.
|
On
December 20, 2010, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract between BAETA Corp. and
Extranome, Inc. As noted above, our President and Chairman, 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:
|
23,787,699 shares of Common Stock
outstanding after this
issuance.
|
On
December 20, 2010, 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:
|
23,792,699 shares of Common Stock
outstanding after this
issuance.
|
On
December 20, 2010, the Company issued 5,000 shares of its common stock to Joseph
Cusack. The Company issued the stock in consideration for consulting services
rendered as the Company’s Product Sales Services consultant pursuant to an
Agreement executed between BAETA Corp. and Mr. Cusack on January 1, 2010, 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:
|
23,797,699 shares of Common
Stock outstanding after this
issuance.
|
On
December 20, 2010, 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.
Sub-Total:
|
23,809,366 shares of Common
Stock outstanding after this issuance.
|
On
December 20, 2010, the Company issued 1,100 shares of its common stock to Vesta
Caldwell. The Company issued the stock in consideration for sales consulting
services rendered as the Company’s Product Sales consultant pursuant to an
Agreement executed between BAETA Corp. and Ms. Caldwell on August 16, 2010, 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:
|
23,810,466
shares of Common Stock outstanding after this
issuance.
|
On
December 20, 2010, the Company issued its common stock to Christopher Legatt, 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 20,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Mr. Legatt, for an aggregate of $10,000.
135
Sub-Total:
|
23,830,466
shares of Common Stock outstanding after this
issuance.
|
On
December 20, 2010, the Company issued its common stock to Keith Palatz, 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 35,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Mr. Palatz, for an aggregate of $17,500.
Sub-Total:
|
23,865,466
shares of Common Stock outstanding after this
issuance.
|
On
December 20, 2010, the Company issued its common stock to Dr. Ignatius Scalia, 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 10,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Dr. Scalia, for an aggregate of $5,000.
Sub-Total:
|
23,875,466
shares of Common Stock outstanding after this
issuance.
|
Fiscal
Year Ended 12/31/2010:
|
23,875,466
shares of Common Stock outstanding as of the period ended 12/31/2009
(Fiscal Year End).
|
On
January 20, 2011, the Company issued its common stock to Dr. Robert
Lichtenstein, 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
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.
Sub-Total:
|
23,895,466 shares of Common
Stock outstanding after this
issuance.
|
On
January 20, 2011, the Company issued 10,000 shares of its common stock to
Heritage Corporate Services. The Company issued the stock in consideration for
marketing consulting services rendered as the Company’s IRPR consultant pursuant
to an Agreement executed between BAETA Corp. and Heritage Corporate Services on
January 12, 2011, 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:
|
23,905,466
shares of Common Stock outstanding after this
issuance.
|
On
January 24, 2011, the Company issued its common stock to Kirill Sobolev, 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 20,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Mr. Sobolev, for an aggregate of $10,000.
Sub-Total:
|
23,925,466 shares of Common
Stock outstanding after this
issuance.
|
On
January 25, 2011, the Company issued its common stock to Vadim Siganevich, 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 20,000 shares of
its Common Stock, par value $0.0001 per share, at a purchase price of $0.50 per
share, to Mr. Siganevich, for an aggregate of $10,000.
136
Sub-Total:
|
23,945,466 shares of Common
Stock outstanding after this
issuance.
|
On
January 31, 2011, the Company issued 30,000 shares of Common Stock due to
Extranome pursuant to the Software Development Contract between BAETA Corp. and
Extranome, Inc. As noted above, our President and Chairman, 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:
|
23,975,466 shares of Common Stock
outstanding after this
issuance.
|
On
January 31, 2011, 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:
|
23,980,466 shares of Common Stock
outstanding after this
issuance.
|
On
January 31, 2011, the Company issued 5,000 shares of its common stock to Joseph
Cusack. The Company issued the stock in consideration for consulting services
rendered as the Company’s Product Sales Services consultant pursuant to an
Agreement executed between BAETA Corp. and Mr. Cusack on January 1, 2010, 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:
|
23,985,466
shares of Common Stock outstanding after this
issuance.
|
On
January 31, 2011, 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.
Sub-Total:
|
23,997,133
shares of Common Stock outstanding after this issuance.
|
On
January 31, 2011, the Company issued 1,100 shares of its common stock to Vesta
Caldwell. The Company issued the stock in consideration for sales consulting
services rendered as the Company’s Product Sales consultant pursuant to an
Agreement executed between BAETA Corp. and Ms. Caldwell on August 16, 2010, 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:
|
23,998,233
shares of Common Stock outstanding after this
issuance.
|
On
January 31, 2011, the Company issued 24,919 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.
Total:
|
24,023,152
shares of Common Stock outstanding after this issuance, and as of the date
of this registration
statement.
|
137
Issuance
of Promissory Note and Warrant
On April
8, 2010, The Company issued a $100,000 Promissory Note and a 5-year Warrant with
a cashless exercise option to purchase up to 400,000 shares of common stock at
an exercise price of $0.25 per share, to one accredited investor for an
aggregate purchase price of $100,000.00. In accordance with the terms of the
promissory note, and in consideration for the receipt of $100,000 in proceeds
from the investment, the Company promises to pay to the Note holder the
principal sum of One Hundred Thousand Dollars and Zero Cents ($100,000.00),
together with interest on the unpaid principal of the note at the rate of ten
percent (10%) per year (computed on the basis of a 365-day year and the actual
days elapsed) from the date of the Note until paid. All principal and accrued
interest shall be due and payable two (2) calendar years from the date of the
Note’s execution (April 8, 2010), in cash; provided, however, in the event that
the Company receives any financing from any other source all proceeds received
in connection with any such financing shall be paid to the Note holder until
such time that all outstanding principal and accrued interest has been paid to
the Note holder. All payment amounts shall be first applied to interest, if any,
and then to the balance to principal.
At any
time on or prior to the Note’s maturity, in the sole discretion of the Note
holder, any amount of the unpaid principal may be converted into free-trading
and unrestricted shares of Common Stock of the Company equal to the result of
(i) the Conversion Amount, divided by (ii) the Variable Conversion Price (as
defined below):
The
“Variable Conversion Price” shall mean the Applicable Percentage (as defined
herein) multiplied by the Market Price (as defined herein); provided, however,
the Variable Conversion Price shall not be less than $0.25 cents per share.
“Market Price” means the average of the lowest three (3) Trading Prices (as
defined below) for the Common Stock during the five (5) Trading Day period
ending one Trading Day prior to the date the Conversion Notice is sent by the
Holder to the Company via facsimile (the “Conversion Date”). “Trading Price”
means, for any security as of any date, the intraday trading price on the Pink
Sheets or, if the Pink Sheets is not the principal trading market for such
security, the intraday trading price of such security on the principal
securities exchange or trading market where such security is listed or traded
or, if no intraday trading price of such security is available in any of the
foregoing manners, the average of the intraday trading prices of any market
makers for such security that are listed in the Pink Sheets by the National
Quotation Bureau, Inc. “Applicable Percentage” shall mean 50%.
The
issuance of the promissory note and warrant was part of a private offering up to
$1,000,000 by the Company that was made without registration under the
Securities Act of 1933, as amended, made only to “accredited
investors,” (as such term is defined in as defined in the rules to the
Securities Act of 1933, as amended) pursuant to Regulation D, Rule 504 and
Sections 7309(b)(8) of the Delaware Securities Act, and Section 510(a)(1) of
Part E under the Rules and Regulations Pursuant to the Delaware Securities Act.
The Company filed a Form D with the SEC on April 13, 2010 thereby filing Notice
with Commission.
Issuance
of Stock Options
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 1,631,125 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 pursuant to the 2009 Stock Option Plan in consideration for
his continued service as a Member of the Company’s Scientific Advisory Board,
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.
138
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 pursuant to the 2009 Stock Option Plan in consideration for his
continued service as a Member of the Company’s Scientific Advisory Board, 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 pursuant to the 2009 Stock Option Plan in consideration for his continued
services as the Company’s Chief Marketing 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.
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 pursuant to the 2009 Stock Option Plan in consideration for
his continued service as a Member of the Company’s Scientific Advisory Board,
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 pursuant to the 2009 Stock Option Plan in consideration for her
continued service as a Member of the Company’s Scientific Advisory Board, 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 pursuant to the 2009 Stock Option Plan 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.
139
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 pursuant to the 2009 Stock Option Plan in consideration for his continued
service as the Company’s Chief Medical 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.
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
pursuant to the 2009 Stock Option Plan in consideration for his continued
service as the Company’s Chief Tech 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.
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 pursuant to the 2009 Stock Option Plan in consideration for his
continued service as the Company’s Chief Executive 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.
Sub-Total:
|
1,600,000
shares of Common Stock underlying Options outstanding after this
issuance.
|
Through
year end 2009, Mr. Jeff Burkland had received additional stock options with
immediate vesting rights exercisable for 31,125 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 pursuant to the 2009 Stock Option Plan in
consideration for his continued 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:
|
1,631,125
shares of Common Stock underlying Options outstanding after this issuance,
and as of the date of this Registration
Statement.
|
140
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)
|
|
3.1.2
|
Amended
Articles of Incorporation of BAETA Corp. (12)
|
|
3.2
|
Bylaws
(1)
|
|
4.1
|
Form
of Common Stock Purchase Warrant granted to Charter Capital Resources,
Inc. (14)
|
|
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)
|
141
10.12.4
|
Statement
of Work dated 01-01-2009 (7)
|
|
10.12.5
|
Statement
of Work dated 02-01-2009 (7)
|
|
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 (11)
|
|
10.12.17
|
Statement
of Work dated 02-01-2010 (12)
|
|
10.12.18
|
Statement
of Work dated 03-01-2010 (13)
|
|
10.12.19
|
Statement
of Work dated 04-01-2010 (14)
|
|
10.12.20
|
Statement
of Work dated 05-01-2010 (14)
|
|
10.12.21
|
Statement
of Work dated 06-01-2010
|
|
10.12.22
|
Statement
of Work dated 07-01-2010
|
|
10.12.23
|
Statement
of Work dated 08-01-2010
|
|
10.12.24
|
Statement
of Work dated 09-01-2010
|
|
10.12.25
|
Statement
of Work dated 10-01-2010
|
|
10.12.26
|
Statement
of Work dated 11-01-2010
|
|
10.12.27
|
Statement
of Work dated 12-01-2010
|
|
10.12.28
|
Statement
of Work dated 01-01-2011
|
|
10.13
|
Employment
Agreement with Mr. Leonid Pushkantser, BAETA Chief Executive Officer
(6)
|
142
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 (11)
|
|
10.20
|
Promissory
Note Agreement between CEO Leonid Pushkantser and Baeta Corp.
(11)
|
|
10.21
|
Product
Sales Consulting Agreement between BAETA Corp. and Joseph T. Cusack dated
January 1, 2010. (13)
|
|
10.22
|
Investor
Relations Consulting Agreement between BAETA Corp. and Kimberly Stempien
dated January 1, 2010. (14)
|
|
10.23
|
Sales
Consulting Agreement between BAETA Corp. and Ms. Vesta Caldwell dated
April 12, 2010. (14)
|
|
10.24
|
Promissory
Note between BAETA Corp. and Charter Capital Resources, Inc.
(14)
|
|
10.25
|
Sales
& Marketing Consulting Agreement between BAETA Corp. and Heritage
Corporate Services dated January 10, 2011.
|
|
10.26
|
Reserve
Equity Financing Agreement between BAETA Corp. and AGS Capital Group, LLC
dated September 28, 2010 (15)
|
|
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) (13)
|
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.
|
(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.
|
143
(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)
|
This
exhibit has been revised to incorporate certain disclosures as required by
the Securities and Exchange
Commission.
|
(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.
|
(11)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 8 (SEC File No.: 333-154243) filed on January 14,
2010.
|
(12)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 9 (SEC File No.: 333-154243) filed on February 12,
2010.
|
(13)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 10 (SEC File No.: 333-154243) filed on March 31,
2010.
|
(14)
|
Incorporated
by reference from the Company’s Registration Statement on Form
S-1/Amendment No. 11 (SEC File No.: 333-154243) filed on May 6,
2010.
|
(15)
|
Incorporated
by reference from the Company’s Current Report on Form 8-K (SEC File No.:
333-154243) filed on October 5,
2010.
|
144
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.
145
SIGNATURES
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 February 4, 2011.
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 of the Board
|
February
4, 2011
|
||
Dr.
Alexander Gak
|
||||
/s/ LEONID PUSHKANTSER
|
Chief
Executive Officer and Director
|
February
4, 2011
|
||
Leonid
Pushkantser
|
(Principal
Executive Officer)
|
|||
/s/ JEFF BURKLAND
|
Chief
Financial Officer
|
February
4, 2011
|
||
Jeff
Burkland
|
(Principal
Financial Officer, Accounting Officer and Controller)
|
|||
/s/ DR. LEONID TOPPER
|
Chief
Medical Officer
|
February
4, 2011
|
||
Dr.
Leonid Topper
|
||||
/s/ EUGENE GRIBOV
|
Chief
Technology Officer
|
February
4, 2011
|
||
Mr.
Eugene Gribov
|
||||
/s/ LEE SMITH
|
Chief
Marketing Officer
|
February
4, 2011
|
||
Mr.
Lee Smith
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146