Stockholders' Equity

9 Months Ended

Sep. 30, 2011

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, 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 September 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 September 30, 2010, the Company had 23,156,644 shares issued and outstanding. As of September 30, 2011, Company has 25,323,696 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.

On July 21, 2011, 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 29, 2011, the Company issued 96,667 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 18, 2011, the Company conducted an offering of its common stock to an accredited investor and issued 55,000 shares to that investor. The investor purchased the shares at $0.18 per share.

On August 31, 2011, the Company issued 80,000 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 September 6, 2011, the Company conducted an offering of its common stock to an accredited investor and issued 55,555 shares to that investor. The investor purchased the shares at $0.18 per share.

On September 23, 2011, the Company conducted an offering of its common stock to an accredited investor and issued 83,333 shares to that investor. The investor purchased the shares at $0.18 per share.

On September 30, 2011, the Company issued 50,000 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.

Stock Options:

As of December 31, 2010, the Company had granted options to purchase 1,660,300 shares. As of September 30, 2011, the Company had granted options to purchase 1,692,400 of which options to purchase 902,400 shares had vested. During the quarter period, the Company awarded option grants to purchase a total of 8,925 shares, which had an average contract life of 10 years until they expire, and options to purchase 382,100 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 34.89, a risk free rate of 1.00% for 10 year options and a resulting total value of $1,481 for those option grants. $56,454 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:

Shares Available for the Grant(s)		Vesting Period (same as Service Period)		Maximum Contractual Life
8.925		Immediate		10 years

Below is information about the options outstanding:

	Number of Shares		Weighted Average Exercise Price		Average Remaining Contractual Life (years)		Value
Outstanding June 30, 2011		1,683,175	$	0.50		6.71	$	353,149
Granted		8.925	$	0.50		10	$	1,481
Exercised		0
Forfeited		0
Expired		0
Outstanding September 30, 2011		1,692,400	$	0.50		6.48	$	354,630
Vested during the Period		382,100	$	0.50		6.59	$	79.256
Total vested at September 30, 2011		902,400	$	0.50		6.85	$	190,316

* All vested options are currently exercisable

Total nonvested awards that are not yet recognized as compensation cost have a value of $131,089 and are expected to be recognized over a weighted-average period of 2.1 years.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

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+ Details

BAETA CORP 10-Q/A