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EX-31.1 - Bethesda C0801, Inc.v221829_ex31-1.htm
EX-32.1 - Bethesda C0801, Inc.v221829_ex32-1.htm
 
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

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

For the quarterly period ended: March 31, 2011

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

Commission file number: 000-53360
 
 
BETHESDA C0801, INC.
 
 
(Exact name of registrant as specified in its charter)
 

Nevada
 
26-1863101
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

 
2519 McMullen Booth Road, Suite 510-308, Clearwater, FL 33761
 
 
(Address of principal executive offices)
 

 
(727) 365-0327
 
 
(Registrant's telephone number)
 

     
 
(Former name, former address and former
 
 
fiscal year, if changed since last report)
 

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.          x  Yes   ¨ 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  x No

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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer   ¨
 
Accelerated filer     ¨
Non-accelerated filer     ¨  (Do not check if a smaller reporting company)
 
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). xYes ¨No

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. ¨  Yes   ¨  No
 
APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:  At May 10, 2011, there were 1,000,000 shares of common stock outstanding.
 
 
 

 
 
PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

BETHESDA C0801, INC.
 (A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
As of March 31, 2011 and June 30, 2010 (unaudited)
 
   
March 31,
   
June 30,
 
   
2011
   
2010
 
   
(unaudited)
   
(unaudited)
 
ASSETS
           
             
Current Assets
           
Cash and equivalents
  $ 581     $ 56  
Accounts receivable – related party
    169       169  
                 
TOTAL ASSETS
  $ 750     $ 225  
                 
LIABILITIES AND STOCKHOLDERS’ DEFICIT
               
                 
Current Liabilities
               
Accrued expenses
  $ 6,514     $ 7,945  
Loan payable – Related party
    25,685       17,520  
                 
TOTAL LIABILITIES
    32,199       25,465  
                 
Stockholders’ Deficit
               
Preferred Stock – $.0001 par value, 10,000,000 shares authorized, -0- shares issued and outstanding
    0       0  
Common Stock – $.0001 par value, 100,000,000 shares authorized, 1,000,000 shares issued and outstanding
    100       100  
Deficit accumulated during the development stage
    (31,549 )     (25,340 )
Total stockholders’ deficit
    (31,449 )     (25,240 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
  $ 750     $ 225  

See accompanying notes to financial statements.
 
 
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BETHESDA C0801, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (unaudited)
Three months and nine months ended March 31, 2011 and 2010
Period from January 22, 2008 (Inception) to March 31, 2011

   
 
Three
months
ended
March 31,
2011
   
 
Three
months
ended
March 31,
2010
   
 
Nine
months
ended
March 31,
2011
   
 
Nine
months
ended
March 31,
2010
   
Period from
January 22,
2008 (Date
of
Inception)
to March
31, 2011
 
                               
REVENUES
  $ 0     $ 0     $ 0     $ 0     $ 0  
                                         
EXPENSES:
                                       
Professional fees
    950       1,590       4,375       5,340       26,665  
Interest expense
    487       329       1,299       926       3,794  
General and administrative expenses
    (15 )     0       535       0       1,090  
                                         
NET LOSS
  $ (1,422 )   $ (1,919 )   $ (6,209 )   $ (6,266 )   $ (31,549 )
                                         
NET LOSS PER SHARE:
                                       
Basic and diluted
  $ (0.00 )   $ (0.00 )   $ (0.00 )   $ (0.00 )        
                                         
WEIGHTED AVERAGE SHARES OUTSTANDING
                                       
Basic and diluted
    1,000,000       1,000,000       1,000,000       1,000,000          

See accompanying notes to financial statements.
 
 
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BETHESDA C0801, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS’ DEFICIT (unaudited)
Period from January 22, 2008 (Date of Inception) to March 31, 2011

   
 
 
Common stock
   
 
Additional
paid-in
   
Deficit
accumulated
during the
development
       
   
Shares
   
Amount
   
capital
   
stage
   
Total
 
                               
Issuance of common stock
    1,000,000     $ 100     $ -     $ -     $ 100  
                                         
Net loss for the period ended June 30, 2008
    -       -       -       (9,337 )     (9,337 )
                                         
Balance, June 30, 2008
    1,000,000       100       -       (9,337 )     (9,237 )
                                         
Net loss for the year ended June 30, 2009
    -       -       -       (7,187 )     (7,187 )
                                         
Balance, June 30, 2009
    1,000,000       100       -       (16,524 )     (16,424 )
                                         
Net loss for the year ended June 30, 2010
    -       -       -       (8,816 )     (8,816 )
                                         
Balance, June 30, 2010
    1,000,000       100       -       (25,340 )     (25,240 )
                                         
Net loss for the nine months ended March 31, 2011
    -       -       -       (6,209 )     (6,209 )
                                         
Balance, March 31, 2011
    1,000,000     $ 100     $ -     $ (31,549 )   $ (31,449 )

See accompanying notes to financial statements.
 
 
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BETHESDA C0801, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (unaudited)
Nine months ended March 31, 2011 and 2010
Period from January 22, 2008 (Date of Inception) to March 31, 2011

   
Nine months
ended March
31, 2011
   
Nine months
ended March
31, 2010
   
Period from
January 22, 2008
(Date of
Inception) to
March 31, 2011
 
CASH FLOWS FROM OPERATING ACTIVITIES
                 
Net loss for the period
  $ (6,209 )   $ (6,266 )   $ (31,549 )
Change in non-cash working capital items:
                       
(Increase) in accounts receivable – related party
    0       0       (169 )
Increase (decrease) in accrued expenses
    (1,431 )     2,626       6,514  
CASH FLOWS USED BY OPERATING ACTIVITIES
    (7,640 )     (3,640 )     (25,204 )
                         
CASH FLOWS FROM FINANCING ACTIVITIES
                       
Sale of common stock
    0       0       100  
Note payable from related party
    8,165       2,670       25,685  
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
    8,165       2,670       25,785  
                         
NET INCREASE (DECREASE) IN CASH
    525       (970 )     581  
                         
Cash, beginning of period
    56       1,976       -  
Cash, end of period
  $ 581     $ 1,006     $ 581  
                         
SUPPLEMENTAL CASH FLOW INFORMATION
                       
Interest paid
  $ 0     $ 0     $ 0  
Income taxes paid
  $ 0     $ 0     $ 0  

See accompanying notes to financial statements.
 
 
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BETHESDA C0801, INC.
 (A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
March 31, 2011

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business
Bethesda C0801, Inc. (“Bethesda” and the “Company”) was organized under the laws of the State of Nevada on January 22, 2008 as a corporation.  The Company’s objective is to acquire or merge with a target business or company in a business combination.

Development Stage Company
The accompanying financial statements have been prepared in accordance with generally accepted accounting principles related to development stage companies. A development-stage company is one in which planned principal operations have not commenced or if its operations have commenced, there has been no significant revenues there from.

Cash and Cash Equivalents
Bethesda considers all highly liquid investments with maturities of three months or less to be cash equivalents.  At March 31, 2011 and June 30, 2010, the Company had $581 and $56 of unrestricted cash to be used for future business operations.

Fair Value of Financial Instruments
Bethesda’s financial instruments consist of cash, accrued expenses, and a note payable.  The carrying amount of these financial instruments approximates fair value due to either length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Income Taxes
Income taxes are computed using the asset and liability method.  Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws.  A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized.

Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date the financial statements and the reported amount of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Comprehensive Income (Loss)
The Company has established standards for the reporting and display of comprehensive income and its components in the financial statements.  There were no items of comprehensive income (loss) applicable to the Company during the period covered in these financial statements.

Recent Accounting Pronouncements
Bethesda does not expect the adoption of recently issued accounting pronouncements to have a significant impact on the Company’s results of operations, financial position or cash flow.

NOTE 2 – LOAN PAYABLE – RELATED PARTY

Bethesda received an unsecured loan in the amount of $10,000 on February 12, 2008 from Bethesda Financial Group, which was used to fund its corporate bank account.  The loan accrues interest at a rate of 8% annually with principal and interest due and payable on demand by the holder.  During the years ended June 30, 2010 and 2009, respectively, additional funds totaling $2,670 and $4,850 were loaned at the same terms.  During the nine month period ended March 31, 2011, an additional $8,165 was loaned to the Company.  On March 31, 2011 the loan payable and accrued interest totaled $25,685 and $3,794, respectively.  Bethesda Marketing Group, LLC dba Bethesda Financial Group is a shareholder of the Company, and its member is President and a board member of the Company.
 
 
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BETHESDA C0801, INC.
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO FINANCIAL STATEMENTS
March 31, 2011

NOTE 3 – SUBSEQUENT EVENTS

The Company has analyzed its operations subsequent to March 31, 2011 through the date these financial statements were submitted to the Securities and Exchange Commission, and has determined that it does not have any material subsequent events to disclose in these financial statements.

NOTE 4 – INCOME TAXES

For the periods ended March 31, 2011, Bethesda has incurred net losses and, therefore, has no tax liability.  The net deferred tax asset generated by the loss carry-forward has been fully reserved.  The cumulative net operating loss carry-forward is approximately $31,550 at March 31, 2011, and will begin to expire in the year 2028.

The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:
   
2011
 
Deferred tax asset attributable to:
     
Net operating loss carryover
  $ 10,725  
Valuation allowance
    (10,725 )
Net deferred tax asset
  $ -  

NOTE 5 – LIQUIDITY AND GOING CONCERN
 
Bethesda has not generated any revenues, has negative working capital and has suffered a loss from operations.  These factors create substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustment that might be necessary if the Company is unable to continue as a going concern.
 
The ability of Bethesda to continue as a going concern is dependent on the Company generating cash from the sale of its common stock and/or obtaining debt financing and attaining future profitable operations or acquiring or merging with a profitable company.  Management’s plans include selling its equity securities and obtaining debt financing to fund its capital requirements until it is able to enter into a business combination with another company; however, there can be no assurance the Company will be successful in these efforts.

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

Forward Looking Statements

Statements, other than historical facts, contained in this Quarterly Report on Form 10-Q, including statements of potential acquisitions and our strategies, plans and objectives, are "forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Although we believe that our forward looking statements are based on reasonable assumptions, we caution that such statements are subject to a wide range of risks, trends and uncertainties that could cause actual results to differ materially from those projected.  Among those risks, trends and uncertainties are important factors that could cause actual results to differ materially from the forward looking statements, including, but not limited to; the time management devotes to identifying a target business; management’s ability to consummate a business combination; the financial condition of the target company with which we may enter a business combination; the effect of existing and future laws; governmental regulations; the political and economic climate of the United States; and conditions in the capital markets.  We undertake no duty to update or revise these forward-looking statements.

When used in this Form 10-Q, the words, "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.  Because these forward-looking statements involve risks and uncertainties, actual results could differ materially from those expressed or implied by these forward-looking statements for a number of important reasons.

Overview

Bethesda C0801, Inc. (“we,” “us” or the “Company”) was incorporated in the State of Nevada on January 22, 2008.  We are a developmental stage company and have not generated any revenues to date.  We were organized to serve as a vehicle for a business combination through a capital stock exchange, merger, reverse acquisition, asset acquisition or other similar business combination (a “Business Combination”) with an operating or development stage business (a “Target”) which desires to utilize our status as a reporting company under the Exchange Act.

The Company voluntarily filed a registration statement on Form 10 with the U.S. Securities and Exchange Commission (the “SEC”) on August 1, 2008, and since its effectiveness, the Company has focused its efforts on identifying a possible Target for a Business Combination.  We are not presently engaged in, and will not engage in, any substantive commercial business operations unless and until we consummate a Business Combination.  Our fiscal year ends on June 30.

Based on our business activities, the Company is a “blank check” company.  The SEC defines those companies as “any development stage company that is issuing a penny stock, within the meaning of Section 3(a)(51) of  the Exchange Act and that has no specific business plan or purpose, or has indicated that its business plan is to merge with an unidentified company or companies.   Many states have enacted statutes, rules and regulations limiting the sale of securities of “blank check” companies in their respective jurisdictions.   In addition, under Rule 12b-2 of the Exchange Act, the Company also is a “shell company” which is defined, as a company which has (i) no or nominal operations; and (ii) either (x) no or nominal assets; (y) assets consisting solely of cash and cash equivalents; or (z) assets consisting of any amount of cash and cash equivalents and nominal other assets.  Because we are a “shell” company, the Business Combination we enter into with a Target will be deemed to be a "reverse acquisition" or “reverse merger.”

Our management has broad discretion with respect to identifying and selecting a prospective Target Business.  We have not established any specific attributes or criteria (financial or otherwise) for a prospective Target and may enter into a Business Combination with a development stage company, distressed company or a foreign company engaged in any industry.  Our sole officer and director has never served as an officer or director of a development stage public company that has consummated a Business Combination such as that contemplated by our Company.  Accordingly, he may not successfully identify a Target Business or conclude a Business Combination.  In addition, our management engages in other business activities and is not obligated to devote any specific number of hours to our matters.  Management intends to devote only as much time as it deems necessary to our affairs.
 
 
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We cannot assure you that we will be successful in concluding a Business Combination.  We will not realize any revenues or generate any income unless and until we successfully merge with or acquire an operating business that is generating revenues and otherwise is operating profitably.  Moreover, we can offer no guarantee that the Company will achieve long-term or immediate short-term earnings from any Business Combination.

Any entity with which we enter into a Business Combination will be subject to numerous risks in connection with its operations.  To the extent we affect a Business Combination with a financially unstable company or an entity in its early stage of development or growth, including entities without established records of sales or earnings, we may be affected by numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies.  If we consummate a Business Combination with a foreign entity, we will be subject to all of the risks attendant to foreign operations.  Although our management will endeavor to evaluate the risks inherent in a particular Target Business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

We expect that in connection with any Business Combination, we will issue a significant number of shares of our common stock (equal to at least 80% of the total number of shares outstanding after giving effect to the transaction and likely, a significantly higher percentage) in order to ensure that the Business Combination qualifies as a “tax free” transaction under federal tax laws.  The issuance of additional shares of our capital stock will:

 
·
significantly reduce the equity interest of our stockholders prior to the transaction; and

 
·
cause a change in control in our Company and likely result in the resignation or removal of our officer and director as of the date of the transaction.

Our management anticipates that our Company likely will affect only one Business Combination, due primarily to our limited financial resources and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a Target Business in order to achieve a tax-free reorganization.  This lack of diversification should be considered a substantial risk in investing in us because it will not permit us to offset potential losses from one venture against potential gains from another.

The Company currently does not engage in any business activities that provide cash flow.  During the next twelve months we anticipate incurring costs related to filing Exchange Act reports, investigating and analyzing Targets and consummating a Business Combination.  We believe we will be able to meet these costs through use of funds in our treasury and from cash which may be loaned to or invested in us by our stockholders, management or other investors.  As of March 31, 2011, the Company had $581 in its treasury.  There are no assurances that the Company will be able to secure additional funding as needed.  Our ability to continue as a going concern is dependent upon our ability to generate cash from the sale of our common stock and/or obtain debt financing and attain future profitable operations by acquiring or merging with a profitable company.

Liquidity and Capital Resources

At March 31, 2011, we had total assets of $750, including cash on hand of $581.  This compares with total assets of $225, including cash on hand of $56 at June 30, 2010, our fiscal year end.  At March 31, 2011, the Company had current liabilities of $32,199 compared with current liabilities of $25,465 at June 30, 2010, comprised exclusively of accrued expenses and amounts owed to stockholders.

Our existing cash reserves will not be sufficient to cover our operating costs and expenses over the next twelve months.

To date, we have funded our operations through loans from our stockholders.  Our stockholders have advised management that they presently expect to fund additional costs and expenses we may incur through loans or further investment in the Company, as and when necessary.  However, our stockholders are under no obligation to provide such funding.
 
 
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The following is a summary of the Company's cash flows provided by (used in) operating, investing, and financing activities:

               
For the Cumulative
 
   
Nine Months
   
Nine Months
   
Period from
 
   
Ended
   
Ended
   
January 22, 2008
 
   
March 31,
   
March 31,
   
(Inception) to
 
   
2011
   
2010
   
March 31, 2011
 
Net Cash Used in Operating Activities
  $ 7,640     $ 3,640     $ 25,204  
Net Cash Provided by Financing Activities
  $ 8,165     $ 2,670     $ 25,785  
Net Increase (Decrease) in Cash and Cash Equivalents
  $ 525     $ (970 )   $ 581  

We do not expect to engage in any substantive activities unless and until such time as we enter into a Business Combination with a Target, if ever.  We cannot provide investors with any assurance that we will have sufficient capital resources to fund our operations and realize our business objectives.

Results of Operations

Since our inception, we have not we have not engaged in any substantive operations, other than seeking to identify a Target, nor generated any revenues.  We reported a net loss for the three and nine months ended March 31, 2011 of $1,422 and $6,209, respectively, compared to a net loss of $1,919 and $6,266 for the comparable 2010 periods, and have suffered a net loss since inception of $31,549.  At March 31, 2011, we had a working capital deficit of $31,449 compared to $25,240 at June 30, 2010.  Since our inception, our operating expenses have principally comprised professional fees and expenses incurred in connection with the filing of reports under the Exchange Act, as well as interest accrued on loans from our stockholders.

We do not expect to engage in any activities, other than seeking to identify a Target Business, unless and until such time as we enter into a Business Combination with a Target Business, if ever.  We cannot provide investors with any assessment as to the nature of a Target Business’s operations or speculate as to the status of its products or operations, whether at the time of the Business Combination it will be generating revenues or its future prospects.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 4(T). Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of March 31, 2011, the Company’s management carried out an evaluation, under the supervision and with the participation of the Company’s Chief Executive Officer, who is the Company’s principal executive officer and principal financial officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Exchange Act), pursuant to Exchange Act Rule 13a-15. Based on such evaluation, the Company’s Chief Executive Officer has concluded that the Company's disclosure controls and procedures were effective. 
 
Changes in Internal Controls

There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15 and 15d-15 under the Exchange Act) during the three months ended March 31, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. 
 
 
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PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

There are presently no material pending legal proceedings to which the Company, any of its subsidiaries, any executive officer, any owner of record or beneficially of more than five percent of any class of voting securities is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.

Item 1A. Risk Factors.

Smaller reporting companies are not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. (Reserved).

Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit 
Description
   
31.1
Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011.
   
32.1*
Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

*  Pursuant to Commission Release No. 33-8238, this certification will be treated as “accompanying” this Quarterly Report on Form 10-Q and not “filed” as part of such report for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of Section 18 of the Securities Exchange Act of 1934, as amended, and this certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

 
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused the Report to be signed on its behalf by the undersigned thereunto duly authorized.

   
BETHESDA C0801, INC.
     
Dated: May 10, 2011
By:
/s/ David M. McNamee
 
Name:
David M. McNamee
 
Title:
President, Principal Executive Officer
and Principal Financial Officer

 
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