x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
New Jersey
|
26-0722186
|
|
(State of Other Jurisdiction of Incorporation or
Organization)
|
(I.R.S. Employer Identification Number)
|
|
1 Bridge Plaza
Second Floor, Suite 275
Fort Lee, NJ
|
07024
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Large accelerated filer
|
¨
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
x
|
Page
|
||
PART I – FINANCIAL INFORMATION
|
3
|
|
Item 1.
|
Financial Statements
|
3
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Plan of Operations
|
16
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
22
|
Item 4T.
|
Controls and Procedures
|
22
|
|
||
PART II – OTHER INFORMATION
|
24 | |
Item 1.
|
Legal Proceedings
|
24
|
Item 1A.
|
Risk Factors
|
24
|
Item 2.
|
Unregistered Sale of Equity Securities and Use of Proceeds
|
24
|
Item 3.
|
Defaults Upon Senior Securities
|
28
|
Item 4.
|
Submission of Matters to a Vote of Security Holders
|
29
|
Item 5.
|
Other Information
|
29
|
Item 6.
|
Exhibits
|
30
|
|
||
SIGNATURES
|
31
|
As of
|
As of
|
|||||||
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash
|
$ | 24,706 | 16,600 | |||||
Accounts Receivable
|
350 | 5,000 | ||||||
Inventory
|
27,730 | 28,058 | ||||||
Total Current Assets
|
52,786 | 49,658 | ||||||
Other Assets
|
||||||||
Software Application
|
303,857 | 265,607 | ||||||
Plant Property & Equipment, net of accumulated depreciation of
|
23,936 | 24,202 | ||||||
Organization, net of accumulated amortization of $ 204
|
76 | 111 | ||||||
Deposit
|
1,904 | 1,904 | ||||||
Total Other Assets
|
329,774 | 291,824 | ||||||
TOTAL ASSETS
|
$ | 382,560 | 341,483 | |||||
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
|
||||||||
Current Liabilities
|
||||||||
Accounts Payable
|
$ | 193,229 | 78,122 | |||||
Accounts Payable Related Party
|
339,000 | 249,000 | ||||||
Line of Credit
|
50,031 | 46,744 | ||||||
Other Current Liabilities
|
61,149 | 57,915 | ||||||
Shareholder Advance — Short Term
|
48,324 | 40,074 | ||||||
Shareholder Note — Short Term
|
70,000 | 70,000 | ||||||
Total Current Liabilities
|
761,733 | 541,855 | ||||||
Long-Term Liabilities
|
||||||||
Convertible Note
|
205,694 | 118,194 | ||||||
Interest Payable, Convertible Note
|
11,667 | 6,667 | ||||||
Shareholder Advance
|
25,500 | 25,500 | ||||||
Shareholder Note
|
372,646 | 360,468 | ||||||
Total Long-Term Liabilities
|
615,507 | 510,829 | ||||||
TOTAL LIABILITIES
|
1,377,239 | 1,052,684 | ||||||
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 2011)
|
0 | 0 | ||||||
Common stock, 100,000,000 shares authorized with a par value of $ 0.0001, issued and outstanding 24,863,141 shares at June 30, 2011
|
2,486 | 2,388 | ||||||
Paid-in capital
|
2,390,434 | 2,052,490 | ||||||
Losses that have accumulated during the development stage
|
(3,387,600 | ) | (2,766,078 | ) | ||||
Total Stockholders' Equity (Deficit)
|
(994,679 | ) | (711,201 | ) | ||||
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
|
$ | 382,560 | 341,483 |
Three-Month Period
Ended
|
Three-Month Period
Ended
|
Six-Month Period
Ended
|
Six-Month Period
Ended
|
Cumulative during
development stage
|
||||||||||||||||
June
|
June
|
June
|
June
|
August, 2007 to
|
||||||||||||||||
2011
|
2010
|
2011
|
2010
|
June 30, 2011
|
||||||||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||||||
Revenues
|
||||||||||||||||||||
Revenue
|
$ | 1,244 | $ | - | $ | 1,862 | $ | - | $ | 10,984 | ||||||||||
Total Revenue
|
1,244 | - | 1,862 | - | 10,984 | |||||||||||||||
Cost of Goods Sold
|
||||||||||||||||||||
Cost of Goods Sold
|
0 | - | 173 | - | 2,802 | |||||||||||||||
Total Cost of Goods Sold
|
0 | - | 173 | - | 2,802 | |||||||||||||||
Gross Profit
|
1,244 | - | 1,689 | - | 8,181 | |||||||||||||||
Operating Expenses
|
||||||||||||||||||||
Amortization
|
150 | 150 | 301 | 301 | 1,600 | |||||||||||||||
Research & Development
|
47,250 | 45,750 | 94,500 | 111,000 | 513,562 | |||||||||||||||
Sales & Marketing
|
80,137 | 61,091 | 154,011 | 112,974 | 578,748 | |||||||||||||||
General & Administrative Personnel Expenses
|
214,539 | 111,615 | 341,171 | 255,902 | 824,895 | |||||||||||||||
Professional Service Fees
|
(72,690 | ) | 27,728 | (43,960 | ) | 48,559 | 279,263 | |||||||||||||
Other miscellaneous operating expenses
|
20,646 | 14,235 | 39,768 | 30,024 | 1,128,192 | |||||||||||||||
Total Operating Expenses
|
290,032 | 260,569 | 585,790 | 558,759 | 3,326,259 | |||||||||||||||
Loss From Operations
|
(288,788 | ) | (260,569 | ) | (584,101 | ) | (558,759 | ) | (3,318,077 | ) | ||||||||||
Other income (expense)
|
0 | |||||||||||||||||||
Gain on Repurchase of Shares
|
51,000 | |||||||||||||||||||
Charitable Donation
|
(7,500 | ) | ||||||||||||||||||
Interest expense
|
(19,561 | ) | (15,218 | ) | (37,071 | ) | (22,340 | ) | (108,814 | ) | ||||||||||
Net Loss Before Provision For Income Taxes
|
(308,349 | ) | (275,787 | ) | (621,172 | ) | (581,099 | ) | (3,383,391 | ) | ||||||||||
Provision For Income Taxes
|
350 | - | 350 | - | 4,208 | |||||||||||||||
Net Loss
|
$ | (308,699 | ) | $ | (275,787 | ) | (621,522 | ) | $ | (581,099 | ) | $ | (3,387,599 | ) | ||||||
Net loss per common share - basic and diluted
|
$ | (0.01 | ) | $ | (0.01 | ) | $ | (0.03 | ) | $ | (0.03 | ) | $ | |||||||
Weighted average number of common shares - basic and diluted
|
24,542,009 | 22,870,918 | 24,274,963 | 22,729,832 |
Six-Months Period
Ended
|
Six-Months Period
Ended
|
Cumulative during
development stage
|
||||||||||
June 30,
|
June 30,
|
August 14, 2007 to
|
||||||||||
2011
|
2010
|
June 30, 2010
|
||||||||||
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|||||||||||
Net income (loss)
|
$ | (621,522 | ) | $ | (581,099 | ) | $ | (3,387,599 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation
|
266 | 266 | 1,325 | |||||||||
Amortization
|
35 | 35 | 274 | |||||||||
Stock Based Compensation
|
227,984 | 264,314 | 1,477,261 | |||||||||
Increase in current assets and liabilities;
|
||||||||||||
Increase (decrease) in accounts payable
|
115,107 | (9,596 | ) | 193,229 | ||||||||
Increase (decrease) in accounts receivable
|
4,650 | 4,650 | ||||||||||
Increase (decrease) in accounts payable related party
|
90,000 | 61,000 | 339,000 | |||||||||
Increase (decrease) in Other Current Liabilities
|
3,234 | 333 | 61,148 | |||||||||
Decrease (Increase) in Inventory
|
328 | (9,646 | ) | (27,730 | ) | |||||||
Decrease (Increase) in Deposit
|
0 | 0 | (1,904 | ) | ||||||||
Net cash provided by (used in) operating activities
|
(179,917 | ) | (274,393 | ) | (1,340,346 | ) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
PP&E
|
(2,691 | ) | (25,262 | ) | ||||||||
Expenditure for organization expense
|
- | - | (350 | ) | ||||||||
Software Application
|
(38,250 | ) | (47,250 | ) | (303,857 | ) | ||||||
Net cash provided by (used in) investing activities
|
(38,250 | ) | (49,941 | ) | (329,469 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Convertible Note
|
87,500 | 155,694 | 255,694 | |||||||||
Interest Payable, Convertible Note
|
5,000 | 1,667 | 11,667 | |||||||||
Shareholder Advance
|
8,250 | 33,026 | 73,824 | |||||||||
S hareholder Note
|
12,177 | 10,000 | 442,646 | |||||||||
Line of Credit
|
3,286 | (725 | ) | 50,031 | ||||||||
Additional Fianncing Fees
|
0 | 0 | 0 | |||||||||
Change in Comon Stock Value
|
99 | 0 | 99 | |||||||||
Common Stock Issued
|
109,961 | 35,000 | 760,562 | |||||||||
Preferred Stock Issued
|
- | 100,000 | 100,000 | |||||||||
Net cash provided by (used in) financing activities
|
226,273 | 334,662 | 1,694,522 | |||||||||
Net increase (decrease) in cash & cash equivalents
|
8,106 | 10,329 | 24,707 | |||||||||
Cash & Cash Equivalents at beginning of period
|
16,600 | 3,189 | - | |||||||||
Cash & Cash Equivalents at end of period
|
$ | 24,706 | $ | 13,517 | $ | 24,706 | ||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
|
||||||||||||
Income taxes paid
|
- | - | 3,460 |
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
|
0 | - | 100,000 | 100,000 | ||||||||||||||||||||||||||||||||
Stock issued for service and consulting
|
834,414 | 83.44 | 611,353 | 611,436 | ||||||||||||||||||||||||||||||||
Option Holder's Equity
|
78,393 | 78,393 | ||||||||||||||||||||||||||||||||||
Private Placement Issuances
|
540,000 | 54.00 | 230,924 | 230,978 | ||||||||||||||||||||||||||||||||
Beneficial Conversion feature on Convertible Note
|
50,000 | 50,000 | ||||||||||||||||||||||||||||||||||
Charitable donation
|
- | - | - | - | ||||||||||||||||||||||||||||||||
Loss for the quarter ended December 31, 2010
|
(1,403,700 | ) | (1,403,700 | ) | ||||||||||||||||||||||||||||||||
Balance, Dec. 31, 2010
|
100 | - | 2 | - | 23,875,466 | 2,388 | 2,052,470 | (2,766,078 | ) | (711,220 | ) | |||||||||||||||||||||||||
Preferred Stock - Series B
|
0 | - | - | - | ||||||||||||||||||||||||||||||||
Stock issued for service and consulting
|
250,220 | 25.02 | 125,085 | 125,110 | ||||||||||||||||||||||||||||||||
Option Holder's Equity
|
18,167 | 18,167 | ||||||||||||||||||||||||||||||||||
Private Placement Issuances
|
60,000 | 6.00 | 29,994 | 30,000 | ||||||||||||||||||||||||||||||||
Beneficial Conversion feature on Convertible Note
|
||||||||||||||||||||||||||||||||||||
Charitable donation
|
- | - | - | - | ||||||||||||||||||||||||||||||||
Loss for the quarter ended March 31, 2011
|
(312,822 | ) | (312,822 | ) | ||||||||||||||||||||||||||||||||
Balance, March. 31, 2011 - Unaudited
|
100 | - | 2 | - | 24,185,686 | 2419 | 2,225,716 | (3,078,900 | ) | (850,766 | ) | |||||||||||||||||||||||||
Preferred Stock - Series B
|
0 | - | - | - | ||||||||||||||||||||||||||||||||
Stock issued for service and consulting
|
347,455 | 34.75 | 64,796 | 64,830 | ||||||||||||||||||||||||||||||||
Option Holder's Equity
|
19,936 | 19,936 | ||||||||||||||||||||||||||||||||||
Private Placement Issuances
|
330,000 | 33.00 | 79,967 | 80,000 | ||||||||||||||||||||||||||||||||
Beneficial Conversion feature on Convertible Note
|
||||||||||||||||||||||||||||||||||||
Charitable donation
|
- | - | - | - | ||||||||||||||||||||||||||||||||
Loss for the quarter ended March 31, 2011
|
(308,699 | ) | (308,699 | ) | ||||||||||||||||||||||||||||||||
Balance, June 20, 2011 - Unaudited
|
100 | - | 2 | - | 24,863,141 | 2486 | 2,390,414 | (3,387,599 | ) | (994,698 | ) |
Shares Available for the Grant(s)
|
Vesting Period (same as Service
Period)
|
Maximum Contractual Life
|
||
8,400
|
|
Immediate
|
|
10 years
|
Number of Shares
|
Weighted Average
Exercise Price
|
Average Remaining
Contractual Life
(years)
|
Value
|
|||||||||||||
Outstanding March 31, 2011
|
1,674,775 | $ | 0.50 | 6.95 | $ | 351,995 | ||||||||||
Granted
|
8,400 | $ | 0.50 | 10 | $ | 1,154 | ||||||||||
Exercised
|
0 | |||||||||||||||
Forfeited
|
0 | |||||||||||||||
Expired
|
0 | |||||||||||||||
Outstanding June 30, 2011
|
1,683,175 | $ | 0.50 | 6.71 | $ | 353,149 | ||||||||||
Vested during the Period
|
350,000 | $ | 0.50 | 6.55 | $ | 72,960 | ||||||||||
Total vested at June 30, 2011
|
893,175 | $ | 0.50 | 6.87 | $ | 188,835 |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Tax benefit of net operating loss carryforward
|
$ | 1,079,385 | $ | 861,852 | ||||
Valuation allowance
|
(1,079,385 | ) | (861,852 | ) | ||||
Net deferred tax asset recorded
|
$ | - | $ | - |
|
·
|
discuss our future expectations;
|
|
·
|
contain projections of our future results of operations or of our financial condition; and
|
|
·
|
state other "forward-looking" information.
|
1.
|
Assets.
|
|
a.
|
Cash. The Company’s cash increased 520% from $3,189 for the fiscal year ended December 31, 2009 to $16,600 as of December 31, 2010. The increase is attributable to the sale of common stock and a short-term shareholder advance and loan (see Current Liabilities).
|
|
b.
|
Total Assets. Total Assets increased 147%, from $232,037 as of December 31, 2009 to $341,483 as of December 31, 2010 primarily as a result of an increase in inventory and the development of our Software Asset.
|
2.
|
Liabilities.
|
|
a.
|
Current Liabilities. Current liabilities increased 185% from $293,006 as of December 31, 2009 to $541,855 as of December 31, 2010. The increase is attributable primarily to an increase in Accounts Payable to a related party and an increase in a short-term Shareholder Advance and Shareholder Note provided by the Company’s CEO, Leonid Pushkantser.
|
|
b.
|
Long-Term Liabilities. Long-Term Liabilities increased 72% from $610,366 as of December 31, 2009 to $1,052,684 as of December 31, 2010. The increase is attributable to a convertible note from an individual and advances from the Company’s CEO, Leonid Pushkantser and accrued interest on same.
|
3.
|
Stockholder’s Equity.
|
|
a.
|
Common Stock. Total Stockholder’s Deficit decreased 188% from ($378,328) at December 31, 2009 to ($711,201) at December 31, 2010, as the Company continued to record operating losses during its development phase.
|
|
b.
|
Retained Earnings. The Company’s Accumulated Losses increased 143% from $1,362,378 on December 31, 2009, to $2,766,078 on December 30, 2010. The increase is attributable to the increase in operating expenditures and development costs of the company’s products during the development stages of the Company.
|
4.
|
Revenue & Sales. Our revenues were $47 for the year ended December 31, 2010, compared with $9,003 in revenue for the year ending December 31, 2009. The difference was due to a decrease in sales. As stated in the Company’s Revenue Recognition policy, the Company has no significant post delivery obligations and the customer does not have any significant refund rights, acceptance terms, discounts, or other terms that serve to reduce the amount recorded relative to the sales price nor to delay the timing of recognition of revenue.
|
5.
|
Amortization Expense. Amortization Expense increased approximately 33% from December 31, 2009 to December 31, 2010, from $423 to $602, respectively. This change is attributable to the realization of amortization expense for tangible and intangible assets acquired and capitalized by the Company during the period.
|
6.
|
Research & Development. Research & Development costs for the period ended December 31, 2010 were $276,650. That compares with $60,000 for the period ended December 31, 2009. The Company has expensed approximately $419,062 to date in the development of proprietary software that supports and integrates with its commercial products.
|
7.
|
Sales & Marketing expenses. Sales & Marketing costs were $259,278 for the period ended December 31, 2010, compared to $113,071 for the year ended December 31, 2009. The increase in sales & marketing costs for this time period is attributed to launch efforts related to company products.
|
8.
|
General & Administrative Personnel Expenses. These were $483,724 for fiscal 2010 and $0 for fiscal 2009 as a result of reclassifying these expenses from Other Miscellaneous Operating Expenses. Were these expenses broken out for 2009 they would have been $495,255.
|
9.
|
Professional Service Fees. These were $323,323 for fiscal 2010 and $0 for fiscal 2009 as a result of reclassifying these expenses from Other Miscellaneous Operating Expenses. Were these expenses broken out for 2009 they would have been $41,906. The increase is due largely to a stock based compensation expense for a reserve equity agreement as well as increase in general legal fees.
|
10.
|
Other Miscellaneous Operating Expenses. Other miscellaneous operating expenses for the fiscal year ended December 31, 2010 were $50,294. Total operating expenses for the fiscal year ended December 31, 2009 were $616,389. Other miscellaneous operating decreased significantly because they were reclassified as noted above.
|
11.
|
Net Loss. Net loss for fiscal years ended December 31, 2010 and December 31, 2009 were ($1,403,700) and ($802,649), respectively. The Company’s total Net Loss since inception to December 31, 2010 was ($2,766,078).
|
|
a.
|
Use of Estimates
|
|
b.
|
Cash and Cash Equivalents
|
|
c.
|
Income Taxes
|
|
d.
|
Fair Value of Financial Instruments
|
|
e.
|
Revenue Recognition
|
|
f.
|
Software Development Costs
|
|
g.
|
Stock Options
|
|
h.
|
Stock Compensation
|
|
i.
|
Inventories
|
|
·
|
We were unable to maintain any segregation of duties within our financial operations due to our reliance on limited personnel in the finance function. While this control deficiency did not result in any audit adjustments to our 2007 through 2011 interim or annual financial statements, it could have resulted in a material misstatement that might have been prevented or detected by a segregation of duties.
|
|
·
|
The Company’s current accounting staff is relatively small and the Company’s resources are limited given its size;
|
|
·
|
The Company lacks sufficient resources to perform the internal audit function and does not have an Audit Committee;
|
|
·
|
We do not have an independent Board of Directors, nor do we have a board member designated as an independent financial expert for the Company. The Board of Directors is comprised of two members of management. As a result, there may be lack of independent oversight of the management team, lack of independent review of our operating and financial results, and lack of independent review of disclosures made by the Company; and
|
|
·
|
Documentation of all proper accounting procedures is not yet complete.
|
|
·
|
Considering the engagement of consultants to assist in ensuring that accounting policies and procedures are consistent across the organization and that we have adequate control over financial statement disclosures;
|
|
·
|
Hiring additional qualified financial personnel on a full-time basis;
|
|
·
|
Expanding our current board of directors to include additional individuals willing to perform directorial functions; and
|
|
·
|
Increasing our workforce in preparation for exiting the exploration stage and commencing revenue producing operations.
|
Sub-Total:
|
24,215,686 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,220,686 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,232,353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,262,353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,267,353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,277,353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,282,353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,287,353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,487,353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,567,353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,787,353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,792, 353 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,804,020 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,834,020 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,839,020 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,844,020 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,849,020 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,854,020 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,904,020 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,700,474 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,701,474 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,706,474 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,718,141 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,748,141 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,753,141 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,758,141 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,763,141 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,768,141 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,803,141 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,808,141 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,819,808 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,849,808 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,854,808 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,859,808 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,864,808 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,904,808 shares of Common Stock outstanding after this issuance.
|
Sub-Total:
|
24,939,808 shares of Common Stock outstanding after this issuance.
|
Total:
|
24,969,808 shares of Common Stock outstanding after this issuance and as of the date of this Report.
|
Exhibit No.
|
|
Description
|
31.1
|
|
Certification by Leonid Pushkantser, the Principal Executive Officer of BAETA Corp., pursuant to SEC Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
Certification by Jeff Burkland, the Principal Financial Officer and Principal Accounting Officer of BAETA Corp., pursuant to SEC Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
32.1
|
|
Certification by Leonid Pushkantser, the Principal Executive Officer of BAETA Corp., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification by Jeff Burkland, the Principal Financial Officer and Principal Accounting Officer of BAETA Corp., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
BAETA Corp.
|
||
/s/ LEONID PUSHKANTSER
|
||
Leonid Pushkantser
|
||
Chief Executive Officer and Director
|
||
(Principal Executive Officer)
|
||
/s/ JEFF BURKLAND
|
||
Jeff Burkland
|
||
Chief Financial Officer
|
||
(Principal Financial Officer and
|
||
Principal Accounting Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 of BAETA Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a)
|
designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
|
b)
|
designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Date: August 12, 2011
|
||
By: /s/ LEONID PUSHKANTSER
|
||
|
|
Name: Leonid Pushkantser
|
Title: Chief Executive Officer and Director
|
||
(Principal Executive Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 of BAETA Corp.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
|
|
a)
|
designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
|
|
b)
|
designed such internal controls over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
c)
|
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d)
|
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.
|
Date: August 12, 2011
|
||
By:/s/ JEFF BURKLAND
|
||
|
Name: JEFF BURKLAND
|
|
Title: Chief Financial Officer
|
||
(Principal Financial Officer and
|
||
Principal Accounting Officer)
|
Date: August 12, 2011
|
|
|
By:/s/ LEONID PUSHKANTSER
|
||
|
|
Name: Leonid Pushkantser
|
Title: Chief Executive Officer and Director
|
||
(Principal Executive Officer)
|
Date: August 12, 2011
|
|
|
By: /s/ JEFF BURKLAND
|
||
|
|
Name: Jeff Burkland
|
Title: Chief Financial Officer
|
||
(Principal Financial Officer and
|
||
Principal Accounting Officer)
|
Balance Sheets (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Organization, accumulated amortization | $ 204 | Â |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, issued | 24,863,141 | Â |
Common stock, outstanding | 24,863,141 | Â |
Preferred Stock - Series A
|
 |  |
Preferred stock, series A shares issued | 100 | Â |
Preferred stock, series A shares outstanding | 100 | Â |
Statement of Operations (USD $)
|
3 Months Ended | 6 Months Ended | 47 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
|
Revenues | Â | Â | Â | Â | Â |
Revenue | $ 1,244 | Â | $ 1,862 | Â | $ 10,984 |
Total Revenue | 1,244 | Â | 1,862 | Â | 10,984 |
Cost of Goods Sold | Â | Â | Â | Â | Â |
Cost of Goods Sold | 0 | Â | 173 | Â | 2,802 |
Total Cost of Goods Sold | 0 | Â | 173 | Â | 2,802 |
Gross Profit | 1,244 | Â | 1,689 | Â | 8,181 |
Operating Expenses | Â | Â | Â | Â | Â |
Amortization | 150 | 150 | 301 | 301 | 1,600 |
Research & Development | 47,250 | 45,750 | 94,500 | 111,000 | 513,562 |
Sales & Marketing | 80,137 | 61,091 | 154,011 | 112,974 | 578,748 |
General & Administrative Personnel Expenses | 214,539 | 111,615 | 341,171 | 255,902 | 824,895 |
Professional Service Fees | (72,690) | 27,728 | (43,960) | 48,559 | 279,263 |
Other miscellaneous operating expenses | 20,646 | 14,235 | 39,768 | 30,024 | 1,128,192 |
Total Operating Expenses | 290,032 | 260,569 | 585,790 | 558,759 | 3,326,259 |
Loss From Operations | (288,788) | (260,569) | (584,101) | (558,759) | (3,318,077) |
Other income (expense) | Â | Â | Â | Â | Â |
Gain on Repurchase of Shares | Â | Â | Â | Â | 51,000 |
Charitable Donation | Â | Â | Â | Â | (7,500) |
Interest expense | (19,561) | (15,218) | (37,071) | (22,340) | (108,814) |
Net Loss Before Provision For Income Taxes | (308,349) | (275,787) | (621,172) | (581,099) | (3,383,391) |
Provision For Income Taxes | 350 | Â | 350 | Â | 4,208 |
Net Loss | $ (308,699) | $ (275,787) | $ (621,522) | $ (581,099) | $ (3,387,599) |
Net loss per common share - basic and diluted | $ (0.01) | $ (0.01) | $ (0.03) | $ (0.03) | Â |
Weighted average number of common shares - basic and diluted | 24,542,009 | 22,870,918 | 24,274,963 | 22,729,832 | Â |
Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Aug. 11, 2011
|
|
Document Type | 10-Q | Â |
Amendment Flag | false | Â |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | Â |
Document Fiscal Period Focus | Q2 | Â |
Trading Symbol | BAEA | Â |
Entity Registrant Name | BAETA CORP | Â |
Entity Central Index Key | 0001439636 | Â |
Current Fiscal Year End Date | --12-31 | Â |
Entity Filer Category | Smaller Reporting Company | Â |
Entity Common Stock, Shares Outstanding | Â | 24,969,808 |
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Income Tax
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax |
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 $3,083,956 at June 30, 2011. 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.
|
Material Subsequent Events
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Material Subsequent Events |
NOTE 10: Material Subsequent Events
None.
|
Summary of Significant Accounting Policies, Nature of Operations and Use of Estimates:
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Summary of Significant Accounting Policies, Nature of Operations and Use of Estimates: |
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 June 30, 2011, the Company had not yet commenced any substantive
commercial operations. All activity through June 30, 2011 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 sales arrangement, delivery has occurred, or service has 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.
In
the case of product sale, 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.
Concurrent
with sale of the product, the customer often purchases access to
our web portal for a specified term, often one year. If
the customer pays for that access in advance, which is often the
case, then the revenue is recognized equally during the period of
access purchased.
Other
than the web portal access, if applicable, 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.
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.
The
company is currently evaluating the capitalization of the Software
Application Asset with regard to its level as it relates to
anticipated revenue through the balance of the fiscal year as
described above. The asset may be adjusted based
on the outcome of that evaluation with any adjustment, based
upon such, reflected beginning within the third quarter 2011
operating results.
Inventories:
Inventories
are stated at the lower of average costs incurred or estimated net
realizable value. Major types of inventories include
materials and supplies.
During
the quarter there were no sales of MyHealth Trends for Weight
Control or MyHealth Trends for Pain nor were any units given out
for marketing demonstration purposes. Therefore finished
goods inventory remains at 74 units of the Weight Control product
and 90 units of the Pain product.
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.
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 of June 30, 2011, 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 June 30, 2011 the Company has a cash balance of $24,706 and $350
of 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.
|
Commitment and contingencies
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Commitment and contingencies |
NOTE 7: Commitment and contingencies
On
March 18, 2011 the Company extended its office space lease for its
headquarters operation from Regus for an additional year, through
June 30, 2012, at a minimum monthly rent of $ 1,080, starting July
1, 2011. The minimum full year rental commitment from
July 1, 2011 to June 30, 2012 is $ 12,960.
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.
|
Convertible Notes
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Convertible Notes |
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.
On
March 17, 2011, the Company issued a convertible note of $37,500 to
an accredited investor. The material terms are that the
note will accrue an interest rate of 8% 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 58% of the average of the
lowest five trading prices for the prior ten days. The Company is
allowed to pre-pay the note, but the debt-holder does not have the
right to demand pre-payment.
On
June 20, 2011, the Company issued a convertible note of 27,500 to
an accredited investor. The material terms are that the
note will accrue an interest rate of 8% 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 ten days. The Company is
allowed to pre-pay the note, but the debt-holder does not have the
right to demand pre-payment.
|
Going Concern
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Going Concern |
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
$3,387,599, working capital deficit of $708,947 and
stockholders’ equity deficit of $994,679 as of June 30,
2011.
The
Company will actively pursue its business activities, offer noncash
consideration, secure additional capital 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.
|
Statement of Stockholders' Equity (Deficit) (USD $)
|
Total
USD ($)
|
Preferred Shares A
USD ($)
|
Preferred Shares B
USD ($)
|
Common Stock
USD ($)
|
Additional Paid-in Capital
USD ($)
|
Retained Earnings (Deficit)
USD ($)
|
Common stock issued
USD ($)
|
Common stock issued
Common Stock
USD ($)
|
Preferred Stock -Series A
Preferred Shares A
|
Service and consulting
USD ($)
|
Service and consulting
Common Stock
USD ($)
|
Service and consulting
Additional Paid-in Capital
USD ($)
|
Private Placement
USD ($)
|
Private Placement
Common Stock
USD ($)
|
Private Placement
Additional Paid-in Capital
USD ($)
|
Charitable donation
USD ($)
|
Charitable donation
Common Stock
USD ($)
|
Charitable donation
Additional Paid-in Capital
USD ($)
|
Preferred Stock -Series B
USD ($)
|
Preferred Stock -Series B
Preferred Shares B
|
Preferred Stock -Series B
Additional Paid-in Capital
USD ($)
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning Balance at Aug. 13, 2007 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | ||
Loss for the period | (11,529) | Â | Â | Â | Â | (11,529) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock issued (in shares) | Â | Â | Â | Â | Â | Â | Â | 20,000,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock issued | Â | Â | Â | Â | Â | Â | 2,000 | 2,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Ending Balance at Dec. 31, 2007 | (9,529) | Â | Â | 2,000 | Â | (11,529) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Ending Balance (in shares) at Dec. 31, 2007 | Â | Â | Â | 20,000,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Loss for the period | (548,200) | Â | Â | Â | Â | (548,200) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock issued (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | 100 | Â | 536,280 | Â | Â | 930,400 | Â | Â | 10,000 | Â | Â | Â | Â |
Stock issued | Â | Â | Â | Â | Â | Â | Â | Â | Â | 146,070 | 54 | 146,016 | 232,600 | 93 | 232,507 | 2,500 | 1 | 2,499 | Â | Â | Â |
Ending Balance at Dec. 31, 2008 | (176,559) | Â | Â | 2,148 | 381,022 | (559,729) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Ending Balance (in shares) at Dec. 31, 2008 | Â | 100 | Â | 21,476,680 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Option Holder's Equity | 88,694 | Â | Â | Â | 88,694 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Loss for the period | (802,649) | Â | Â | Â | Â | (802,649) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock issued (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 627,372 | Â | Â | 387,000 | Â | Â | 10,000 | Â | Â | Â | Â |
Stock issued | Â | Â | Â | Â | Â | Â | Â | Â | Â | 313,686 | 63 | 313,623 | 193,500 | 39 | 193,461 | 5,000 | 1 | 4,999 | Â | Â | Â |
Ending Balance at Dec. 31, 2009 | (378,328) | Â | Â | 2,250 | 981,800 | (1,362,378) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Ending Balance (in shares) at Dec. 31, 2009 | Â | 100 | Â | 22,501,052 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Option Holder's Equity | 78,393 | Â | Â | Â | 78,393 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Beneficial Conversion feature on Convertible Note | 50,000 | Â | Â | Â | 50,000 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Loss for the period | (1,403,700) | Â | Â | Â | Â | (1,403,700) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock issued (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 834,414.00 | Â | Â | 540,000.00 | Â | Â | Â | Â | Â | 0 | Â |
Stock issued | Â | Â | Â | Â | Â | Â | Â | Â | Â | 611,436.00 | 83.44 | 611,353.00 | 230,978.00 | 54.00 | 230,924.00 | Â | Â | Â | 100,000 | Â | 100,000 |
Ending Balance at Dec. 31, 2010 | (711,201) | Â | Â | 2,388 | 2,052,470 | (2,766,078) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Ending Balance (in shares) at Dec. 31, 2010 | Â | 100 | 2 | 23,875,466 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Option Holder's Equity | 18,167 | Â | Â | Â | 18,167 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Loss for the period | (312,822) | Â | Â | Â | Â | (312,822) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock issued (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 250,220.00 | Â | Â | 60,000.00 | Â | Â | Â | Â | Â | 0 | Â |
Stock issued | Â | Â | Â | Â | Â | Â | Â | Â | Â | 125,110.00 | 25.02 | 125,085.00 | 30,000.00 | 6.00 | 29,994.00 | Â | Â | Â | Â | Â | Â |
Ending Balance at Mar. 31, 2011 | (850,766) | Â | Â | 2,419 | 2,225,716 | (3,078,900) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Ending Balance (in shares) at Mar. 31, 2011 | Â | 100 | 2 | 24,185,686 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Option Holder's Equity | 19,936 | Â | Â | Â | 19,936 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Loss for the period | (308,699) | Â | Â | Â | Â | (308,699) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Stock issued (in shares) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | 347,455.00 | Â | Â | 330,000.00 | Â | Â | Â | Â | Â | 0 | Â |
Stock issued | Â | Â | Â | Â | Â | Â | Â | Â | Â | 64,830.00 | 34.75 | 64,796.00 | 80,000.00 | 33.00 | 79,967.00 | Â | Â | Â | Â | Â | Â |
Ending Balance at Jun. 20, 2011 | $ (994,698) | Â | Â | $ 2,486 | $ 2,390,414 | $ (3,387,599) | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Ending Balance (in shares) at Jun. 20, 2011 | Â | 100 | 2 | 24,863,141 | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â | Â |
Revolving line of credit
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Revolving line of credit |
NOTE 2: Revolving line of credit
As
of June 30, 2011, the Company is obligated under unsecured line of
credit of $50,000 from a bank and principal balance of such a loan
is $45,576. The current interest rate on this line of
credit is 9.24%, with no maturity date. An additional
line of credit for $14,200 was opened during the quarter with a
principal balance of $4,454 at the end of the
quarter. The debt is also guaranteed by a personal
liability of an officer and shareholder.
|
Related Party Transactions
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Related Party Transactions |
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 monthly compensation due. 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 June 30,
2011, BAETA had issued to Extranome 930,000 shares for these
services. On April 8, 2011 Extranome also invested
$15,000 in Baeta Corp at a price of $.50 share therefore receiving
an additional 30,000 shares. Therefore there are
960,000 total shares owned by Extranome as of June 30,
2011.
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.
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.
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
$4,816.25 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.
On
February 17, 2011 Dr. Alexander Gak entered into a short-term loan
with the Company for $2,500 at a 0% interest rate.
On
April 8, 2011, the Company conducted an offering of its common
stock to Extranome and issued 30,000 shares to that
company. Extranome purchased the shares at $0.50 per
share.
Shareholder
Advance increased to $117,620 as of June 30, 2011. The
advance relates to accrued interest from the Shareholder Loans plus
an additional $3,000 advance from Dr. Alexander Gak during Q2
2011.
|
Stockholders' Equity
|
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Stockholders' Equity |
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 June
30, 2011, 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 June 30, 2011,
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 100,000,000 shares of common stock
with a par value of $ 0.0001. As of June 30, 2010, the
Company had 23,079,825 shares issued and outstanding. As
of June 30, 2011, Company has 24,863,141 shares issued and
outstanding.
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.
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.
On
October 4, 2010, the Company conducted an offering of its common
stock to an accredited investor and issued 200,000 shares to that
investor. The investor purchased the shares at $0.50 per
share.
On
October 28, 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
October 29, 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
October 29, 2010, the Company issued 76,742 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
November 30, 2010, the Company issued 52,767 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
December 20, 2010, the Company issued 87,767 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
December 20, 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
December 20, 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.
On
January 20, 2011, 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
January 20, 2011, the Company issued 10,000 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
January 24, 2011, 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
January 25, 2011, 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
January 31, 2011, the Company issued 87,686 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
February 28, 2011, the Company issued 67,767 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
March 29, 2011, the Company issued 84,767 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
April 8, 2011, the Company conducted an offering of its common
stock to Extranome and issued 30,000 shares to that
company. Extranome purchased the shares at $0.50 per
share.
On
April 29, 2011, the Company issued 200,000 shares of its common
stock for legal services. The shares are accounted for at $0.50 per
share, because the services paid for by the shares were for an
amount equal to $0.50 per share compensation. The
company was paid $.00001/share for the shares issued.
On
April 29, 2011, the Company in exchange for the forgiveness of a
$10,000 loan from Boris Mordkovich issued 80,000 shares to
Mordkovich. The shares were exchanged at $0.125 per
share.
On
April 29, 2011, the Company issued 71,767 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 9, 2011, the Company conducted an offering of its common stock
to an accredited investor and issued 220,000 shares to that
investor. The investor purchased the shares at $0.25 per
share.
On
May 19, 2011, the Company received back 203,546 shares previously
issued to AGS Capital Group. The shares were part of
issuance of 241,546 shares on November 2, 2010 for services
performed by AGS in preparation of a Reserve Equity Financing
Agreement. With the cancellation of the Agreement,
203,546 shares were returned to the Company. The shares
returned at $1.035 per share, which is the same as the price at
issuance.
On
May 31, 2011, the Company issued 177,767 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 30, 2011, the Company issued 101,767 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, 2010, the Company had granted options to purchase
1,660,300 shares. As of June 30, 2011, the Company had
granted options to purchase 1,683,175 of which options to purchase
893,175 shares had vested. During the period, the
Company awarded option grants to purchase a total of 8,400 shares,
which had an average contract life of 10 years until they expire
and options to purchase 350,000 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 23.70, a risk
free rate of 3.15% for 10 year options and a resulting
total value of $1,154 for those option grants. $37,147
of options were expensed as compensation costs during the period
and $0 was on the balance sheet.
During
the three-month period, the following aggregate option grants were
made:
Below
is information about the options outstanding:
*
All vested options are currently exercisable
Total
nonvested awards that are not yet recognized as compensation cost
have a value of $148,915 and are expected to be recognized over a
weighted-average period of 2.3 years.
|
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