Baeta 10Q/A 2011 Q3 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

_______

FORM 10-Q/A

(Amendment No. 1)

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

¨	TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________________ to ___________________________

Commission file number: 000-54350

BAETA CORP.

(Exact Name of Registrant as Specified in Its Charter)

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)

(201) 471-0988

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, If Changed Since Last Report)

Copies to:

The Sourlis Law Firm

Joseph M. Patricola, Esq.

The Courts of Red Bank

130 Maple Avenue, Suite 9B2

Red Bank, New Jersey 07701

Direct: (732) 618-2843

Office: (732) 530-9007

Fax: (732) 530-9008

JoePatricola@SourlisLaw.com

www.SourlisLaw.com

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ___

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” "non-accelerated filer" and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ No x

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

As of November 22, 2011, there were approximately 25,323,696 shares of Common Stock outstanding, 100 shares of Series A Preferred Stock outstanding and 2 Shares of Series B Convertible Preferred Stock outstanding.

Explanatory Note

We are filing this Amendment No. 1 ("Form 10-Q/A") to our Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2011, originally filed with the Securities and Exchange Commission (the "SEC") on November 23, 2011 (the "Form 10-Q") in order to 1) file the interactive data files in XBRL format required by Rule 405 of Regulation S-T and Item 601 of Regulation S-K, and 2) make a non-material financial statement revision to an item contained in the Statement of Stockholders Equity, in particular revise the figure in the row Stock Issued for Service and Consulting (adjustment) (December 2010), column Additional Paid-In Capital, from $15.00 to $15.68.

In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended, each item of the Form 10-Q that is amended by this Form 10-Q/A is restated in its entirety, and this Form 10-Q/A is accompanied by currently dated certifications on Exhibits 31.1, 31.2, and 32.1 and 32.2 by our Principal Executive Officer and Principal Financial Officer.

Except as expressly set forth in this Form 10-Q/A, we are not amending any other part of the Form 10-Q. This Form 10-Q/A does not reflect events occurring after the filing of the Form 10-Q or modify or update any related or other disclosures, including forward-looking statements, unless expressly noted otherwise. Accordingly, this Form 10-Q/A should be read in conjunction with the Form 10-Q and with our other filings made with the SEC subsequent to the filing of the Form 10-Q, including any amendments to those filings.

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Plan of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4T.	Controls and Procedures	23

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Submission of Matters to a Vote of Security Holders	25
Item 5.	Other Information	25
Item 6.	Exhibits	24

SIGNATURES		23

PART I

Item 1. Financial Statements.

Baeta Corp.

( a Developmental Stage Company)

Balance Sheets

	As of			As of
	Sept 30,			December 31,
	2011			2010
	(Unaudited)			(Audited)

ASSETS

Current Assets
Cash	$	18,836		$	16,600
Accounts Receivable		350			5,000
Inventory		27,367			28,058

Total Current Assets		46,553			49,658

Other Assets
Software Application		322,982			265,607
Reserve for Impairment		(182,357	)		0
Plant Property & Equipment, net of accumulated depreciation of		23,803			24,202
Organization, net of accumulated amortization of $ 204		59			111
Deposit		1,904			1,904
Total Other Assets		166,391			291,824

TOTAL ASSETS	$	212,944		$	341,483

LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
Accounts Payable	$	210,613		$	78,122
Accounts Payable Related Party		384,000			249,000
Line of Credit		49,128			46,744
Other Current Liabilities		128,636			57,915
Convertible Note Payable		54,580			0
Shareholder Advance -- Short Term		70,999			40,074
Shareholder Note -- Short Term		70,000			70,000
Total Current Liabilities		967,956			541,855

Long-Term Liabilities
Convertible Note		146,944			118,194
Interest Payable, Convertible Note		14,167			6,667
Shareholder Advance		25,500			25,500
Shareholder Note		377,299			360,468
Total Long-Term Liabilities		563,910			510,829

TOTAL LIABILITIES		1,531,866			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 Sept. 30 2011)		0			0
Common stock, 100,000,000 shares authorized with a par value of $ 0.0001, issued and outstanding 25,323,696 shares at Sept. 30, 2011		2,532			2,388
Paid-in capital		2,578,349			2,052,490
Losses that have accumulated during the development stage		(3,899,802	)		(2,766,078	)
Total Stockholders' Equity (Deficit)		(1,318,921	)		(711,201	)

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)	$	212,944		$	341,483

See Notes Financial Statements

Baeta Corp.

( a Developmental Stage Company)

Statement of Operations

	Three-Month Period Ended September 30 2011			Three-Month Period Ended September 30 2010			Nine-Months Period Ended September 30 2011			Nine-Months Period Ended September 30 2010			Cumulative during development stage August 14, 2007 to September 30, 2011
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenues
Revenue	$	1,244		$	-		$	3,106		$	-		$	12,227
Total Revenue		1,244			-			3,106			-			12,227

Cost of Goods Sold
Cost of Goods Sold		-			-			173			-			2,802
Total Cost of Goods Sold		-			-			173			-			2,802

Gross Profit		1,244			-			2,933			-			9,425

Operating Expenses

Amortization		150			150			451			451			1,750
Research & Development		47,250			90,000			141,750			201,000			560,812
Sales & Marketing		34,003			59,440			188,014			172,414			612,751
General & Administrative Personnel Expenses		136,303			108,660			477,474			364,461			961,197
Professional Service Fees		30,170			16,755			(13,791	)		65,313			309,433
Other miscellaneous operating expenses		65,533			6,079			105,301			36,203			1,193,725
Total Operating Expenses		313,410			281,084			899,200			839,843			3,639,668

Loss From Operations		(312,166	)		(281,084	)		(896,266	)		(839,843	)		(3,630,243	)

Other income (expense)		(182,357	)					(182,357	)					(182,357	)
Gain on Repurchase of Shares					51,000						51,000			51,000
Charitable Donation														(7,500	)
Interest expense		(17,680	)		(18,688	)		(54,751	)		(41,028	)		(126,494	)

Net Loss Before Provision For Income Taxes		(512,203	)		(248,772	)		(1,133,374	)		(829,870	)		(3,895,594	)

Provision For Income Taxes					1,183			350			1,183			4,208

Net Loss	$	(512,203	)	$	(249,955	)	$	(1,133,724	)	$	(831,053	)	$	(3,899,802	)

Net loss per common share - basic and diluted	$	(0.02	)	$	(0.01	)	$	(0.05	)	$	(0.04	)	$

Weighted average number of common shares - basic and diluted		25,031,488			23,044,576			24,529,844			22,836,332

See Notes Financial Statements

Baeta Corp.

( a Developmental Stage Company)

Statement of Stockholders' Equity (Deficit)

													Additional		Retained
	Preferred Shares A				Preferred Shares B				Common Stock				Paid-in		Earnings
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		(Deficit)			Total

Balance, August 14, 2007										-		-		-		-			-

Common stock issued,August 14, 2007										20,000,000		2,000		-		-			2,000
Loss for the period beginning Aug 14, 2007 ( inception) to December 31, 2007																(11,529	)		(11,529	)

Balance, December 31, 2007										20,000,000		2,000		-		(11,529	)		(9,529	)

Preferred Stock - Series A		100		-
Stock issued for service and consulting										536,280		54		146,016					146,070
Private Placement Issuances, August 1, 2008										930,400		93		232,507					232,600
Charitable donation, Nov 17, 2008										10,000		1		2,499					2,500
Loss for the year ended Dec 31, 2008																(548,200	)		(548,200	)

Balance, December 31, 2008		100		-						21,476,680		2,148		381,022		(559,729	)		(176,559	)

Stock issued for service and consulting										627,372		63		313,623					313,686
Option Holder's Equity														88,694					88,694
Private Placement Issuances										387,000		39		193,461					193,500
Charitable donation										10,000		1		4,999					5,000
Loss for the year ended Dec 31, 2009																(802,649	)		(802,649	)

Balance, December 31, 2009		100		-						22,501,052		2,250		981,800		(1,362,378	)		(378,328	)

Preferred Stock - Series B						0		-						100,000					100,000
Stock issued for service and consulting										834,414		83.44		611,353					611,436
Stock issued for service and consulting (adjustment)												4.00		15.68					20
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		2,052,485		(2,766,078	)		(711,201	)

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		2,225,731		(3,078,900	)		(850,746	)

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 June 30, 2011																(308,699	)		(308,699	)

Balance, June 30, 2011 - Unaudited		100		-		2		-		24,863,141		2486		2,390,430		(3,387,599	)		(994,679	)

Preferred Stock - Series B						0		-						-					-
Stock issued for service and consulting										196,667		19.67		98,314					98,334
Option Holder's Equity														19,307					19,307
Private Placement Issuances										263,888		26.39		59,873					59,900
Beneficial Conversion feature on Convertible Note														10,420					10,420
Charitable donation										-		-		-					-
Loss for the quarter ended September 30, 2011																(512,203	)		(512,203	)

Balance, Sept. 30, 2011 - Unaudited		100		-		2		-		25,323,696		2532		2,578,344		(3,899,802	)		(1,318,921	)

See Notes Financial Statements

Baeta Corp.

( a Developmental Stage Company)

Statement of Cash Flows

	Nine-Months Period Ended September 30, 2011			Nine-Months Period Ended September 30, 2010			Cumulative during development stage August 14, 2007 to September 30, 2011
	(Unaudited)			(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)	$	(1,133,724	)	$	(831,053	)	$	(3,899,802	)

Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation		399			399			1,458
Amortization		52			52			291
Stock Based Compensation		356,024			312,122			1,605,302
Increase in current assets and liabilities;
Increase (decrease) in accounts payable		132,491			(15,344	)		210,613
Increase (decrease) in accounts receivable		4,650						4,650
Increase (decrease) in accounts payable related party		135,000			94,000			384,000
Increase (decrease) in Other Current Liabilities		70,722			944			128,636
Decrease (Increase) in Inventory		691			(9,646	)		(27,367	)
Decrease (Increase) in Deposit		0			0			(1,904	)
Net cash provided by (used in) operating activities		(433,695	)		(448,526	)		(1,594,123	)

CASH FLOWS FROM INVESTING ACTIVITIES
PP&E					(2,691	)		(25,262	)
Expenditure for organization expense					-			(350	)
Software Application		(57,375	)		(47,250	)		(322,982	)
Reserve for Impairment		182,357			-			0
Net cash provided by (used in) investing activities		124,982			(49,941	)		(348,594	)

CASH FLOWS FROM FINANCING ACTIVITIES

Convertible Note		28,750			161,944			196,944
Interest Payable, Convertible Note		7,500			4,167			14,167
Shareholder Advance		30,925			48,530			96,499
Shareholder Note		16,831			100,000			447,299
Convertible Note (Short Term)		54,580
Line of Credit		2,383			(1,685	)		49,128
Additional Fianncing Fees		0			0			0
Change in Comon Stock Value		145			0			145
Common Stock Issued		169,834			106,000			820,435
Preferred Stock Issued		-			100,000			100,000
Net cash provided by (used in) financing activities		310,949			518,956			1,724,617

Net increase (decrease) in cash & cash equivalents		2,236			20,490			(218,100	)

Cash & Cash Equivalents at beginning of period		16,600			3,189			-
Cash & Cash Equivalents at end of period	$	18,836		$	23,679		$	18,836

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Income taxes paid		-			1,498			1,998

See Notes Financial Statements

BAETA CORP.

(A Development Stage Enterprise)

NOTES TO FINANCIAL STATEMENTS

September 30, 2011

NOTE 1: Summary of Significant Accounting Policies, Nature of Operations and Use of Estimates:

Nature of Business and Basis of Presentation:

BAETA Corp. (a development stage company) (“the Company”) was incorporated in the State of New Jersey on August 14, 2007 as a product-driven medical technology company that manufactures advanced products for the global vital signs monitoring industry. The Company has developed a patent-pending pain management and pain assessment product for the estimated 25 million chronic pain sufferers in the U.S. alone.

As of September 30, 2011, the Company had not yet commenced any substantive commercial operations. All activity through September 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.

During the 2011 third quarter executive management determined that development costs more than two years old had become impaired and a reserve was created during the quarter. This amounted to $182,357.

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. Eleven units of the Weight products and ten units of the pain product were given out for sales and marketing purposes. Therefore finished goods inventory at the end of the quarter were 63 units of the Weight Control product and 80 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 September 30, 2011 the Company has a cash balance of $18,836.48 and $350 of accounts receivable.

Special – purpose entities:

The Company does not have any off-balance sheet financing activities.

Fiscal Year:

Company adopted December 31st for its accounting fiscal year.

Control by Principal Stockholders:

The directors, executive officers and their affiliates or related parties, own beneficially and in the aggregate, the majority of the voting power of the outstanding shares of the common stock of the Company. Accordingly, the directors, executive officers and their affiliates, if they voted their shares uniformly, would have the ability to control the approval of most corporate actions, including increasing the authorized capital stock of the Company and the dissolution, merger or sale of the Company's assets or business.

NOTE 2: Revolving line of credit:

As of September 30, 2011, the Company is obligated under unsecured line of credit of $47,200 from a bank and principal balance of such a loan is $46,798. 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 $2,329 at the end of the quarter. The debt is also guaranteed by a personal liability of an officer and shareholder.

NOTE 3: Related Party Transactions:

On September 16, 2008, Dr. Alexander Gak and Extranome, Inc., a New Jersey corporation entered into an Exclusive Software Agreement (the “Agreement”). Pursuant the Agreement, Extranome sold to Baeta Corp. all commercial rights to its software entitled MyHealthID Medical Records Systems for a period of twenty-five years, subject to renewal. Pursuant to the Agreement, the Company agreed to pay Extranome $0.00 upfront, and in perpetuity approximately forty-nine percent of all net revenues generated from advertising by MyHealthID. Our CEO and sole director, Dr. Alexander Gak, is the 100% owner of Extranome, Inc., a New Jersey corporation.

On November 1, 2008, BAETA Corp. entered into a Software Development Contract with Extranome, Inc. At the time of the transaction, BAETA and Extranome were controlled by Dr. Alexander Gak. Pursuant to the Software Development Agreement, Extranome has been providing ongoing software development and product support services for BAETA since November 01, 2008. The Software Development Agreement is a non-exclusive agreement and is not related to BAETA’s Exclusive Software Agreement regarding MyHealthID product. In accordance with the Software Development Agreement, BAETA is to pay Extranome for the contracted work in cash form; however BAETA currently does not have a sufficient amount of cash on hand. Therefore, BAETA is paying Extranome in shares of its common stock. Extranome has received 30,000 shares for each month since November as non-cash part of compensation for services rendered which represent approximately 50% of Extranome’s 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 September 30, 2011, BAETA had issued to Extranome 1,020,000 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 1,050,000 total shares owned by Extranome as of September 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.

Mr. Pushkantser’s compensation agreement calls for his base salary to increase to $250,000 per year effective December 1, 2009. From December 1, 2009 to July 31, 2011 Mr. Pushkantser received that compensation in the form of Common Stock, receiving 11,667 shares of stock based on a price of $.50 per shares. Effective August 1, 2011 the Company began accruing $5,833.33 per month as deferred compensation.

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.

On July 13, 2011 Dr. Alexander Gak entered into a short-term loan with the Company for $500 at a 0% interest rate.

On July 25, 2011 Dr. Alexander Gak entered into a short-term loan with the Company for $2,500 at a 0% interest rate.

On August 5, 2011 Dr. Alexander Gak entered into a short-term loan with the Company for $8,000 at a 0% interest rate.

On August 30, 2011 Dr. Alexander Gak entered into a short-term loan with the Company for $10,000 at a 0% interest rate.

On August 30, 2011 Dr. Alexander Gak entered into a short-term loan with the Company for $12,400 at a 0% interest rate.

On August 30, 2011 the Company repaid a short-term loan to Dr. Alexander Gak for $12,100 at a 0% interest rate.

On September 6, 2011 Dr. Alexander Gak entered into a short-term loan with the Company for $10,000 at a 0% interest rate.

On September 6, 2011 the Company repaid a short-term loan to Dr. Alexander Gak for $10,000 at a 0% interest rate.

Shareholder Advance increased to $144,948 as of September 30, 2011. The advance relates to accrued interest from the Shareholder Loans plus an additional $21,300 advance from Dr. Alexander Gak during Q3 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.

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 carry-forwards. 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 carry-forwards, 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 carry-forward has been fully offset by a valuation allowance.

The Company has a net operating loss carry forward for tax purposes totaling approximately $3,596,159 at September 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.

	September 30,			December 31,
	2011			2010
Tax benefit of net operating loss carryforward	$	1,258,655		$	861,852

Valuation allowance		(1,258,655	)		(861,852	)

Net deferred tax asset recorded	$	-		$	-

NOTE 6: Going Concern

The Company's financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business.

The Company’s accumulated operating loss since inception was $3,899,802, working capital deficit of $921,403 and stockholders’ equity deficit of $1,318,921 as of September 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.

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.

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 December 21, 2011. 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 March 22, 2012. 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.

During the 2011 third quarter it was determined that a beneficial conversion expense of $54,580 had been created by the March 17, 2011 and June 20, 2011 notes. Concurrently, a $10,420 discount on the two respective notes had also been created using the Black-Scholes method for valuing options.

NOTE 9: Interest Expense

Interest Expense on the Income Statement is for interest paid on the Line of Credit, the Shareholder Notes, and the Convertible Notes.

NOTE 10: Material Subsequent Events (unaudited)

At the time of this filing Company is in conversation with a convertible note holder to provide an additional convertible note to Company as well as the possible renegotiating of the terms of a prior convertible note.

Company is also considering executive management changes and believes some changes are likely as well as being in discussion with other companies with regard to the possible merger and acquisition of one or more companies.

Departure of Directors or Certain Officers

Mr. Leonid Pushkantser, Chief Executive Officer, Director

Effective November 14, 2011, Mr. Leonid Pushkantser, Chief Executive Officer and one of the members of the Board of Directors of the Company resigned from his position as an Officer and Director. His resignation did not result from any disagreement with the Company or its management, but was due to the Company’s inability to pay his salary.

Mr. Lee Smith, Chief Marketing Officer

Effective November 1, 2011, Mr. Lee Smith, Chief Marketing Officer resigned from his position. His resignation did not result from any disagreement with the Company or its management, but was due to the Company’s inability to pay his salary.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

You should read the following discussion together with "Selected Historical Financial Data" and our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ materially from those we currently anticipate as a result of many factors, including the factors we describe under "Risk Factors," "Special Note Regarding Forward-Looking Statements" and elsewhere in this prospectus.

Forward Looking Statements

Some of the information in this section contains forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as "may," "will," "expect," "anticipate," "believe," "estimate" and "continue," or similar words. You should read statements that contain these words carefully because they:

discuss our future expectations;

contain projections of our future results of operations or of our financial condition; and

state other "forward-looking" information.

We believe it is important to communicate our expectations. However, there may be events in the future that we are not able to accurately predict or over which we have no control. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors," "Business" and elsewhere in this prospectus. See "Risk Factors."

Unless stated otherwise, the words “we,” “us,” “our,” “the Company” or “BAETA” in this prospectus collectively refers to the Company, BAETA Corp.

Organizational History

All activity through September 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 Statement of Financial Accounting Standards (“SFAS”) No. 7. “Accounting and Reporting By Development Stage Enterprises.” The Company is subject to the risks associated with activities of development stage companies.

Forward Stock Split

On May 16, 2008, BAETA filed an amendment to the Company’s Certificate of Incorporation with the Secretary of State of the State of New Jersey thereby effectuating a forward stock split of 20,000-to-1, effective 12:01 a.m. on May 16, 2008. The Company did not amend the par value of the Company’s common stock.

Prior to the Forward Split, there were 1,000 shares of the Company’s common stock, par value $0.0001 per share, issued and outstanding, all held by Dr. Alexander Gak, our President and Director. Upon the effectiveness of the Forward Split as of May 16, 2008, there became 20,000,000 shares of the Company’s Common Stock issued and outstanding, all held by Dr. Gak. As of September 30, 2011, there are 25,323,696 shares of the Company’s common stock issued and outstanding to approximately 98 shareholders of record.

Plan of Operations

We anticipate that the Company will require approximately $500,000 to $1,000,000 in additional capital to execute its current 12-month plan of operations; including but not necessarily limited to expenses related to the patents pending for its developing products and technology, expansion of infrastructure and physical office space, hiring of key employees and sales and administrative and executive personnel as well as for the registration of its shares and compliance with securities regulations. We do not currently have sufficient capital to meet our needs for the next 12 months, and we are extremely reliant upon future financings to fund our operations. We intend to procure this additional capital by way of public and private offerings of our common stock.

We anticipate that we will use additional capital to retain and hire sales personnel and administrative and executive personnel at a level consistent with available capital, but aggressively to support initial product sales and market penetration. We do not believe that we can sustain or execute our plan of operations, nor bring our proposed products to market without additional capital of approximately $500,000 to $1,000,000.

Exclusive Software Agreement

On September 16, 2008, Dr. Alexander Gak, our President and Chairman, and Extranome, Inc., a New Jersey corporation entered into an Exclusive Software Agreement (the “Agreement”). Pursuant the Agreement, Extranome sold to Baeta Corp. all commercial rights to its software entitled MyHealthID Medical Records Systems for a twenty five year term. Pursuant to the Agreement, the Company agreed to pay Extranome $0.00 upfront, and in perpetuity approximately forty-nine percent of all net revenues generated from advertising by MyHealthID. Our President and sole director, Dr. Alexander Gak, is the 100% owner of Extranome, Inc., a New Jersey corporation.

Software Development Agreement with Extranome, Inc.

Pursuant to the Software Development Agreement, Extranome has been providing ongoing software development and product support services for BAETA since November 01, 2008. In accordance with Section 2 of the Software Development Agreement, BAETA is to pay Extranome for the contracted work in cash form; however BAETA currently does not have a sufficient amount of cash on hand. Therefore, BAETA is paying Extranome 50% in shares of its common stock, and 50% in cash. Extranome has received 30,000 shares for each month since December 1, 2008 as non-cash part of compensation for services rendered which represent approximately 50% of Extranome’s due monthly compensation, and through September 30, 2011 has received 1,020,000 shares of BAETA Corp. BAETA will continue to issue company shares to Extranome in the amount of 50% of the monthly compensation for services rendered until it is able to compensate Extranome fully in cash.

Going Concern

The Company’s accumulated operating loss since inception is ($3,899,802). As of September 30, 2011, the Company has total liabilities of $1,531,866 compared to total assets of $212,944, limited cash on hand in the amount of $18,836, and stockholders’ deficit of ($1,318,921).

The Company will actively pursue its business activities, offer noncash consideration, secure additional or refinance the debt and/or raise equity as a means of financing its operations and meet the credit obligations. If the Company is unable to return to its profitability or obtain necessary financing, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders. The company’s management is currently seeking additional capital to support operations, but has not received any firm or other commitments from any parties and may or may not, be successful in obtaining capital sufficient to perpetuate the operations of the Company.

Evolving Industry Standards; Rapid Technological Changes

The Company's success in its business will depend in part upon its continued ability to enhance its existing products and services, to introduce new products and services quickly and cost effectively to meet evolving customer needs, to achieve market acceptance for new product and service offerings and to respond to emerging industry standards and other technological changes. There can be no assurance that the Company will be able to respond effectively to technological changes or new industry standards. Moreover, there can be no assurance that competitors of the Company will not develop competitive products, or that any such competitive products will not have an adverse effect upon the Company's operating results.

Moreover, management intends to continue to implement "best practices" and other established process improvements in its operations going forward. There can be no assurance that the Company will be successful in refining, enhancing and developing its operating strategies and systems going forward, that the costs associated with refining, enhancing and developing such strategies and systems will not increase significantly in future periods or that the Company's existing software and technology will not become obsolete as a result of ongoing technological developments in the marketplace.

Sufficiency of Cash Flows

Because current cash balances and projected cash generation from operations are not sufficient to meet the Company's cash needs for working capital and capital expenditures, management intends to seek additional equity or obtain additional credit facilities. The sale of additional equity could result in additional and substantial dilution to the Company's shareholders. A portion of the Company's cash may be used to acquire or invest in complementary businesses or products or to obtain the right to use complementary technologies. From time to time, in the ordinary course of business, the Company evaluates potential acquisitions of such businesses, products or technologies.

Results of Operations for the fiscal year ended December 31, 2010 compared to December 31, 2009.

Assets.

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).

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.

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.

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.

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.

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.

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.

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.

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 Personel 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.

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).

Results of Operations at September 30, 2011 compared to December 31, 2010

Assets. Our total assets were $212,944 at September 30, 2011 compared to $341,483 as of December 31, 2010 primarily as a result of a reserve for the impairment of our Software Asset.

Liabilities. Our total liabilities were $1,531,866 at September 30, 2011 compared to $1,052,684 at December 31, 2010. This increase was primarily due to an increase in Accounts Payable in general, Accounts Payable to Extranome (Related Party), and an increase in Convertible Notes and Shareholder Notes.

Total Stockholders’ Deficit. Our stockholders’ deficit was $1,318,921 at September 30, 2011 compared to $711,201 at December 31, 2010. This increase in deficit was primarily due to increased losses offset some by additional paid in capital.

Results of Operations for the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010.

Revenues. Our revenues were $1,244 for the nine months ended September 30, 2011, compared with $0 for the nine months ended September 30, 2010. The revenue for the quarter ended September 30, 2011 was due to the recognition of subscription revenue from customers.

Research & Development expenses. Research & Development costs were $141,750 for the nine months ended September 30, 2011, compared to $201,000 for the nine months ended September 30, 2010 reflecting a decrease in expenditures in this aspect of the business.

Sales & Marketing expenses. Sales & Marketing costs were $188,014 for the nine months ended September 30, 2011, compared to $172,414 for the nine months ended September 30, 2010. The slight increase in sales & marketing costs for this time period is attributed to marketing efforts related to company products.

General & Administrative Personnel Expenses: General & Administrative Personnel Expenses were $477,474 for the nine months ended September 30, 2011, compared to $364,461 for the nine months ended September 30, 2010. The increase in general and administrative personnel expenses for this time period is attributed to an increase in stock based compensation.

Professional Service Fees: Professional Service Fees were ($13,791) for the nine months ended September 30, 2011, compared to $65,313 for the nine months ended September 30, 2010. The decrease in professional service fees for this time period is attributed to a reversal of stock based compensation previously made in December, 2010 for the preparation of a financing agreement which was later withdrawn during the period.

Other miscellaneous operating expenses: Other miscellaneous operating expenses were $105,301 for the nine months ended September 30, 2011, compared to $36,203 for the nine months ended September 30, 2010. The increase in other miscellaneous operating expenses for this time period is primarily attributed to the creation of a beneficial conversion expense related to two convertible notes as well as an increase in insurance costs.

Net Loss. We had a net loss of $1,133,724 for the nine months ended September 30, 2011, compared to a net loss of $831,053 for the nine months ended September 31, 2010. This increase in net loss is due to the factors described above as well as creating a reserve for software impairment and an increase in interest expense.

Liquidity and Capital Resources; Going Concern

Cash Balance. At September 30, 2011, we had $18,836 cash on-hand and our stockholder’s deficit was ($1,318,921), and there is substantial doubt as our ability to continue as a going concern. We anticipate incurring losses in the near future. We do not have an established source of revenue sufficient to cover our operating costs in the next 12 months. Our ability to continue as a going concern is dependent upon our ability to successfully compete, operate profitably and/or raise additional capital through other means. If we are unable to reverse our losses, we will have to discontinue operations.

Off –Balance Sheet Operations

The Company does not have any off-balance sheet operations.

CRITICAL ACCOUNTING POLICIES

The Company’s financial statements included herein were prepared in accordance with United States generally accepted accounting principles. Significant accounting policies are as follows:

Use of Estimates

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.

Income Taxes

The Company complies with the provisions of SFAS No. 109 “Accounting for Income Taxes”. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts and are based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized.

Fair Value of Financial Instruments

The carrying value of cash equivalents, software development costs, and accrued expenses approximates fair value.

Revenue Recognition

Revenue is recognized in accordance with FASB ASC 605, “Revenue Recognition”. The Company recognizes revenue when the significant risks and rewards of ownership have been transferred to the customer pursuant to applicable laws and regulations, including factors such as when there has been evidence of a sale 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

Software Development Costs

The Company complies with the provisions of SFAS No. 86 “Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise Marketed”. The Software Application Asset is for software that will be used in the company’s products and began being capitalized after technological feasibility was established, which as required by SFAS No. 86, was after a working model was delivered to BAETA Corp and the working model software was tested for completeness, functionality, and consistency with expected product design. The testing was performed by the vendor that developed and delivered the product as well as by BAETA Corp and select potential customers. Capitalized software costs will begin being amortized when the software product is available for general release to customers. The asset is reviewed for impairment at an executive management meeting quarterly, during the review of the Company’s financial results. Impairment is reviewed on a product-by-product basis by comparing the unamortized capitalized costs to the asset’s net realizable value. The amount by which the unamortized capitalized costs exceed the net realizable value would be recognized as an impairment charge.

Stock Options

The Company complies with the provisions of SFAS No. 123R “Accounting for Stock-Based Compensation”. The company uses the Black-Scholes-Merton closed-form model to value 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 Staff Accounting Bulletin No. 110. The price of the underlying share is valued at the time of option grant with the most relevant measurement at the time being either current stock price of the company stock in a recent private placement or equity offering or vendor invoice/contract that most closely reflects the value of services performed or product delivered.. Volatility is estimated by using the implied volatility a comparable company that is public, with publicly traded options, that is in a similar industry, with a similar product set, at a stage of life and size as close to the Company as possible for the set of similar companies with publicly traded options. The Company is using implied volatility, because historic volatility for the Company does not exist and is not practicable to obtain from comparable companies. There are no dividends expected to be paid on the underlying shares during the expected term of any options. And, the risk free rate is obtained from the yield on a similar term U.S. Treasury.

Stock Compensation

Inventories

Inventories are stated at the lower of average costs incurred or estimated net realizable value. Major types of inventories include materials and supplies.

Item 6. Exhibits.

Exhibit No.		Description


31.1		Certification by Alexander Gak, 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 Alexander Gak, 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.

101.INS **		XBRL Instance Document

101.SCH **		XBRL Taxonomy Extension Schema Document

101.CAL **		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF **		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB **		XBRL Taxonomy Extension Label Linkbase Document

101.PRE **		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, there unto duly authorized.

Dated: November 28, 2011

	BAETA Corp.

	/s/ ALEXANDER GAK
	Alexander Gak MD
	President Chief Executive Officer and Chairman
	(Principal Executive Officer)

	/s/ JEFF BURKLAND
	Jeff Burkland
	Chief Financial Officer
	(Principal Financial Officer and
	Principal Accounting Officer)

Baeta Inactive 10-Q/A2011 Q3 Quarterly report (amended)