UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended:

September 30, 2009

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

For the transition period from: _____________ to _____________

BAY ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

Delaware	001-15819	13-3883101
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

420 Lexington Avenue, Suite 2320, New York, NY 10170

(Address of Principal Executive Office) (Zip Code)

(212) 661-6800

(Registrant’s telephone number, including area code)

SECURELOGIC CORP.

(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. þ  Yes o 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.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	þ

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

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

As of November 10, 2009 there were 20,283,573 shares of common stock outstanding, par value $0.001.

APPLICABLE ONLY TO REGISTRANTS 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

BAY ACQUISITION CORP.

(FORMERLY: SECURELOGIC CORP.)

(UNAUDITED)

TABLE OF CONTENTS

		Page Number
PART I. Financial Statements		3
Item 1.	Financial Information (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008	3
	Condensed Consolidated Statements of Operations for the Three Months and Nine Months Ended September 30, 2009 and September 30, 2008	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2009 and September 30, 2008	5
	Notes to Condensed Consolidated Financial Statements – September 30, 2009 (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Item 4.	Controls and Procedures	13
Item 4T.	Controls and Procedures	14
PART II. Other Information		15
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Submission of Matters to a Vote of Security Holders	15
Item 5.	Other Information	15
Item 6.	Exhibits	15
Signatures		16

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

BAY ACQUISITION CORP.

(FORMERLY: SECURELOGIC CORP.)

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(U.S. Dollars in thousands, except share data)

	September 30,			December 31,
	2009			2008
Assets
Current assets:
Cash and cash equivalents	$	8		$	215
Note receivable		171			-
Other current assets		8			-
Total current assets		187			215
Total assets	$	187		$	215
Liabilities and Stockholders’ Equity
Current liabilities:
Trade payables	$	23		$	16
Total current liabilities		23			16
Total liabilities		23			16
Commitments and contingencies
Stockholders' equity:
Common stock $0.001 par value; 100,000,000 shares authorized,
20,283,573 issued and outstanding		20			20
Additional paid-in capital		14,250			14,250
Treasury stock (35,663,758 shares)		(4,957	)		(4,957	)
Accumulated deficit		(9,149	)		(9,114	)
Total stockholders' equity		164			199
Total liabilities and stockholders' equity	$	187		$	215

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

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BAY ACQUISITION CORP.

(FORMERLY: SECURELOGIC CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. Dollars in thousands, except share data)

(unaudited)

	Three Months Ended						Nine Months Ended
	September 30,			September 30,			September 30,			September 30,
	2009			2008			2009			2008
Revenue	$	-		$	-		$	-		$	-
Cost of revenue		-			-			-			-
Gross profit		-			-			-			-
General and administrative expenses		12			16			43			16
Loss from continuing operations		(12	)		(16	)		(43	)		(16	)
Interest income		3			-			8			-
Loss from continuing operations before taxes		(9	)		(16	)		(35	)		(16	)
Provision for income taxes		-			-			-			-
Loss from continuing operations		(9	)		(16	)		(35	)		(16	)
Loss from discontinued operations		-			(165	)		-			(251	)
Income tax provision (benefit)		-			-			-			-
Loss from discontinued operations		-			(165	)		-			(251	)
Net loss applicable to common shares	$	(9	)	$	(181	)	$	(35	)	$	(267	)
Net loss per share:
Basic - Continuing Operations	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.01	)
Basic - Discontinued Operations	$	(0.00	)	$	(0.01	)	$	(0.00	)	$	(0.01	)
Weighted average shares outstanding
Basic and Diluted		20,283,573			26,098,315			20,283,573			45,888,321

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

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BAY ACQUISITION CORP.

(FORMERLY: SECURELOGIC CORP.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. Dollars in thousands)

(unaudited)

	Nine Months Ended
	September 30,			September 30,
	2009			2008
Cash flows from operating activities:
Net loss	$	(35	)	$	(16	)
Adjustments to reconcile net loss to net cash used in operating activities:
Increase in other current assets		(8	)		-
Increase in accounts payable		7			16
Net cash used in operating activities		(36	)		-
Discontinued Operations
Loss from discontinued operations		-			(251	)
Adjustments to reconcile net provided by discontinued operations		-			359
Net cash provided by operating activities - discontinued operations		-			108
Cash flows from investing activities:
Discontinued Operations
Adjustments to reconcile net cash used in discontinued operations		-			(119	)
Net cash used in investing activities		-			(119	)
Cash flows from financing activities:
Loan to stockholder		(171	)
Net cash used in financing activities		(171	)		-
Effect of exchange rates changes on cash		-			95
Net increase (decrease) in cash		(207	)		84
Cash at beginning of period		215			154
Cash at end of period	$	8		$	238
Supplemental Cash Flow Information
Cash paid in the period for:
Interest		-			-
Income taxes		-			-

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

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BAY ACQUISITION CORP.

(FORMERLY SECURELOGIC CORP.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL

STATEMENTS (UNAUDITED)

September 30, 2009 and 2008

NOTE 1 – BASIS OF PRESENTATION

The accompanying condensed unaudited interim consolidated financial statements have been prepared by Bay Acquisition Corp. (formerly, SecureLogic Corp.) (the “Company”) in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. These financial statements reflect all adjustments, consisting of normal recurring adjustments and accruals, which are, in the opinion of management, necessary for a fair presentation of the financial position of the Company as of September 30, 2009 and the results of operations and cash flows for the interim periods indicated in conformity with generally accepted accounting principles applicable to interim periods. Accordingly, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company for the year ended December 31, 2008 that is included in the Company’s Form 10-K filed with the Securities and Exchange Commission on May 18, 2009 (the “2008 10-K”).

On July 15, 2008, pursuant to the terms of the Settlement Agreement dated December 28, 2007 and approved by the United States District Court for the Southern District of New York on May 1, 2008, the Company effected a reversal of the May, 2005 acquisition of its SpaceLogic, Ltd. and SecureLogic, Ltd. operating subsidiaries through the transfer of those subsidiaries to a new company formed by certain of its former officers and directors, namely, Gary Koren, Shalom Dolev, Cathal L. Flynn, Iftach Yeffet, Tony Gross and Michael Klein in exchange for the return and cancellation of a total of 35,663,758 shares of the Company’s common stock and certain non-exclusive licenses to the Company’s iScreen software products.  These financial statements reflect the operations of our former subsidiaries only through July 15, 2008.  Since July 15, 2008, the Company has not had any significant operations.  Thus, the results of operations presented are not indicative of the results to be expected for future periods.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 amounts reported and disclosure of contingent assets and liabilities in the financial statements and accompanying notes. Actual results could differ from those estimates.

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PRINCIPLES OF CONSOLIDATION

The condensed consolidated financial statements include the accounts of the Company and its majority owned subsidiary (the “Group”). Intercompany transactions and balances have been eliminated upon consolidation.

CASH AND CASH EQUIVALENTS

Cash equivalents include unrestricted, short-term, highly liquid investments that are readily convertible to cash with maturities of three months or less at the date of acquisition.

CONCENTRATION OF CREDIT RISKS

Financial instruments that potentially subject the Group to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.

The Group maintains cash and cash equivalents and investments with major financial institutions and limits the amount of credit exposure with any institution.

The Group performs ongoing credit evaluations of its customers and to date, has not experienced any unexpected material losses. An allowance for doubtful accounts is determined with respect to specific accounts receivable that the management evaluates to be uncollectible.

DEFERRED TAXES

The Company and its subsidiary account for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS No.109”). This Statement prescribes the use of the liability method whereby deferred tax assets and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company and its subsidiary provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount reported in the balance sheet for cash and cash equivalents, note receivable and trade payables approximated their fair value.

BASIC AND DILUTED NET LOSS PER SHARE

Basic and diluted net loss per share are presented in conformity with SFAS No. 128 "Earnings per Share" for all years presented. Basic and diluted net loss per share have been computed using the weighted-average number of ordinary shares outstanding during the year.

Outstanding share options and shares issued and reserved for outstanding share options have been excluded from the calculation of basic and diluted net loss per share to the extent such securities are anti-dilutive

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RECENT ACCOUNTING STANDARDS

In February 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position No. (FSP) FAS 157-2, “Effective Date of FASB Statement No. 157,” which is effective for specified fair value measures of nonfinancial assets and liabilities for financial statements issued for fiscal years beginning after November 15, 2008. FSP FAS 157-2 was effective for the Company’s first quarter of 2009. The adoption of FSP FAS 157-2 did not have any impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” This pronouncement is effective for interim and annual reporting periods ending after June 15, 2009. FSP FAS 157-4 was effective for the Company’s second quarter of 2009. The adoption of FSP FAS 157-4 did not have any impact on the Company’s consolidated financial statements.

In May 2009, the FASB issued SFAS 165, “Subsequent Events.” SFAS 165 establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. SFAS 165 was effective for interim or annual financial periods ended after June 15, 2009. The adoption of SFAS 165 did not have any impact on the Company’s consolidated financial statements.

In June 2009, the FASB issued SFAS 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement No. 162” (ASC). The ASC will become the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. On the effective date of SFAS 168, the ASC will supersede all then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the ASC will become nonauthoritative. SFAS 168 is effective for financial statements issued for interim and annual periods ending after September 15, 2009. SFAS 168 is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2009, the FASB issued Accounting Standards Update 2009-05, Fair Value Measurements and Disclosures (Topic 820), Measuring Liabilities at Fair Value (“Update 2009-05”). Update 2009-05 provides clarification that in circumstances in which a quoted price in an active market for the identical liability is not available, a reporting entity is required to measure fair value of such liability using one or more of the techniques prescribed by the update. The adoption of Update 2009-05 is not expected to have a material impact on the Company’s consolidated financial statements.

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In October 2009, the FASB issued Accounting Standards Update 2009-13, Revenue Recognition (Topic 605), Multiple-Deliverable Revenue Arrangements (“Update 2009-13”). Update 2009-13 addresses the accounting for multiple-deliverable arrangements to enable vendors to account for non-software products or services (deliverables) separately based on the value allocated to each element using vendor specific objective evidence, third party evidence, or estimated selling prices determined by management. This standard is effective for financial statements for interim or annual reporting periods ending after June 15, 2010. The adoption of Update 2009-13 is not expected to have a material impact on the Company’s consolidated financial statements.

In October 2009, the FASB issued Accounting Standards Update 2009-14, Software (Topic 985), Certain Revenue Arrangements that Include Software Elements (“Update 2009-14”). Update 2009-14 addresses concerns raised by constituents relating to the accounting for revenue arrangements that contain tangible products and software. This standard is effective for financial statements for interim or annual reporting periods ending after June 15, 2010. The adoption of Update 2009-14 is not expected to have a material impact on the Company’s consolidated financial statements.

INCOME TAXES

The Company reports income for tax purposes on the cash basis. Deferred taxes result from temporary differences and the net operating loss carryforward. An allowance for the full amount of the gross deferred tax asset has been established due to the uncertainty of utilizing the deferred tax asset in the future.

NOTE 3 – REVERSAL OF MAY, 2005 ACQUISTIONS

On July 15, 2008, pursuant to the terms of the Settlement Agreement dated December 28, 2007 and approved by the United States District Court for the Southern District of New York on May 1, 2008, the Company effected a reversal of the May, 2005 acquisition of its SpaceLogic, Ltd. and SecureLogic, Ltd. operating subsidiaries by the transfer of those subsidiaries to a new company formed by certain of its former officers and directors, namely, Gary Koren, Shalom Dolev, Cathal L. Flynn, Iftach Yeffet, Tony Gross and Michael Klein in exchange for the return and cancellation of a total of 35,663,758 shares of the Company’s common stock and certain non-exclusive licenses to the Company’s iScreen software products.

NOTE 4 - RECLASSIFICATION

The Company has reclassified certain accounts in the financial statements for the nine and three months ended September 30, 2008 to reflect the discontinued operations associated with the shareholder settlement requiring the acquisition reversal of its subsidiaries, Space Logic, Ltd. and Secure Logic, Ltd. The statements reflect the reclassification of these operations in accordance with the provisions of SFAS No. 144 “Accounting for Impairment or Disposal of Long Lived Assets”.  There has been no effect on net loss or cash flows for the three or nine months ended September 30, 2008.

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NOTE 5 – GOING CONCERN

As reflected in the accompanying financial statements, the Company’s operations for the nine months ended September 30, 2009, resulted in a net loss of $35,000 and the Company's balance sheet reflects an accumulated deficit of $9,149,000. The Company’s ability to continue operating as a “going concern” is dependent on its ability to raise sufficient additional working capital. Management’s plans in this regard include raising additional cash from current stockholders and potential investors and lenders.

These financial statements do not include adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue its existence.

NOTE 6 – DISPOSAL OF BUSINESS

On July 15, 2008, as described in NOTE 1, the Company ceased operations of its subsidiaries.  The Company’s condensed consolidated financial statements have been reclassified to reflect this sale as discontinued operations, for all periods presented.  The gain on the sale was $6,884,000, which is included in the Additional Paid-in-Capital.  However, the parties involved in the transaction are deemed to be related parties. As such, the gain has been reclassified to Additional Paid-in-Capital on the consolidated balance sheet.

NOTE 7 – LOAN TO STOCKHOLDER

On February 11, 2009, the Company made a short term bridge loan to a stockholder of the Company in the amount of $171,000. The loan bears interest at a rate of 8% per annum and is due and payable on December 31, 2009. The loan is classified as “Note receivable” on the accompanying condensed consolidated balance sheet of the Company.

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

The following discussion of our financial condition and results of operations should be read together with the financial statements and related notes included in this Report.  This discussion contains forward-looking statements that involve risks and uncertainties.  Our actual results may differ materially from those anticipated in those forward-looking statements as a result of certain factors, including, but not limited to, those contained in the discussion on forward-looking statements that follows this section.

OVERVIEW

Prior to the reversal of the acquisition of our SpaceLogic, Ltd. and SecureLogic, Ltd subsidiaries (the “Subsidiaries”) on or about July 15, 2008 through the transfer of those Subsidiaries to the former owners of the Subsidiaries (the “Acquisition Reversal”), the Company was engaged in the business of developing and marketing systems that manage the movement of people and baggage through airports.  Subsequent to the Acquisition Reversal, the Company is engaged in reconstituting its business plan to re-enter the homeland security marketplace through a combination of organic development, the acquisition of products and/or the acquisition of companies.

On August 3, 2009, the Company entered into an agreement to acquire Zhejiang Ledi Electronic Technology Co., LTD. ("LeDi"), a copper processing enterprise located in China, which produces electrical copper wires in the wire and cable industries. The transaction is structured as an acquisition of LeDi’s Samoan-based holding company. As consideration for the purchase of LeDi, the Company will issue a total of 228,887 newly issued shares of a new series of the Company’s preferred stock, to be known as “Series A Preferred Stock”.  Each share of Series A Preferred Stock will be entitled to vote together with shareholders of the Company’s common stock on all matters and will have the equivalent voting rights of 1,000 shares of common Stock.  Further, each share of Series A Preferred Stock shall be convertible, at the option of the holder, into 1,000 shares of Company’s Common Stock.

Consummation of the acquisition is subject to numerous conditions, including satisfactory due diligence review of both companies and a private placement by LeDi’s holding company of at least $5 million prior to the closing. The Company continues to seek the financing required for the LeDi acquisition, which is a condition to the closing of the transaction. Thus, there can be no assurance that the transaction will be consummated.

In reading Management’s Discussion and Analysis of Financial Condition and Results of Operations, the reader should keep in mind that the Company’s financial statements reflect the treatment of the transfer of the Subsidiaries in the Acquisition Reversal as a discontinued operation and therefore, does not reflect the business of the Company after July 15, 2008 through the date of this Report.

Results of Operations

Total revenues for the three and nine month periods ended September 30, 2009 and 2008 were $0 which reflects the discontinued operations of our Israeli subsidiary as a result of the Acquisition Reversal which occurred on July 15, 2008.

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Gross profit for the three and nine month periods ended September 30, 2009 and 2008 were both $0 which reflects the discontinued operations of our Israeli subsidiary as a result of the Acquisition Reversal which occurred on July 15, 2008.

Expenses 

Our total expenses for the three months ended September 30, 2009 were $12,000 and for the nine months ended September 30, 2009 were $43,000 which reflects professional fees and expenses related to maintaining the Company’s compliance with its obligations under the Securities Exchange Act of 1934, as amended. Our total expenses for the three months and nine months ended September 30, 2008 were $16,000, which reflects professional fees and expenses after the Acquisition Reversal which occurred on July 15, 2008.

Interest Income

During the three months ended September 30, 2009, we recorded $3,000 of interest income and during the nine months ended September 30, 2009 we recorded $8,000 of interest income in connection with the short term bridge loan we made on February 11, 2009 to a stockholder of the Company in the amount of $171,000. The loan bears interest at a rate of 8% per annum and is due and payable on December 31, 2009.

Profit (Loss)

Our loss for the three months ended September 30, 2009 was $9,000 and for the nine month period ended September 30, 2009 was $35,000 which reflects the items shown above.  During the same respective periods in 2008, we had a net loss of $181,000 and $267,000, both primarily related to the discontinued operations of our Israeli subsidiary as a result of the Acquisition Reversal which occurred on July 15, 2008.

Liquidity and Capital Resources 

As of September 30, 2009, total current assets were $187,000 and total current liabilities were $23,000.  As of September 30, 2009, the Company had a cash balance of $8,000.

We believe that our existing cash, the repayment of the short term bridge loan made to our stockholder, together with potential revenue from the licenses received in the Acquisition Reversal will be sufficient to support our operations through the end of 2009; provided that, in the event that that Company shall acquire additional products or subsidiaries, we may require significant amounts of additional capital sooner than the end of 2009. In such a case, we may seek to sell additional equity or debt securities or obtain a credit facility. Obtaining financing in the amount of $5,000,000 is a condition to the closing of the LeDi acquisition.  The sale of additional equity or convertible debt securities could result in additional dilution to our stockholders. Incurring indebtedness would result in an increase in our fixed obligations and could result in borrowing covenants that would restrict our operations. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. If financing is not available when required or is not available on acceptable terms, we may be unable to develop or enhance our products or services, or, we may potentially not be able to continue business activities. Any of these events could have a material and adverse effect on our business, results of operations and financial condition.

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Critical Accounting Policies and Estimates

Our discussion and analysis of its financial condition and results of operations are based upon its financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.  On an on-going basis, we evaluate our estimates, including those related to bad debts, income taxes and contingencies and litigation.  We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet arrangements as defined in Item 303(c)(2) of Regulation S-K.

Forward-Looking Statements

The statement made above relating to the adequacy of our working capital is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. The statements that express the “belief,” “anticipation,” “plans,” “expectations,” “will” and similar expressions are intended to identify forward-looking statements.

The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include matters relating to the business and financial condition of any company we acquire. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

Item 3.        Quantitative and Qualitative Disclosure about Market Risk

Not required for Smaller Reporting Companies

Item 4.        Controls and Procedures

Not required for Smaller Reporting Companies

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Item 4T.     Controls and Procedures

Evaluation of Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation required by Rule 13a-15(b) of the Securities Exchange Act of 1934 under the supervision and with the participation of our chief executive officer and chief financial officer of the effectiveness of the design and operation of our “disclosure controls and procedures” as of the end of the period covered by this Report.

Disclosure controls and procedures are designed with the objective of ensuring that (i) information required to be disclosed in an issuer’s reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) information is accumulated and communicated to management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

The evaluation of our disclosure controls and procedures included a review of our objectives and processes and effect on the information generated for use in this Report. This type of evaluation will be done quarterly so that the conclusions concerning the effectiveness of these controls can be reported in our periodic reports filed with the SEC. We intend to maintain these controls as processes that may be appropriately modified as circumstances warrant.

Based on their evaluation, our chief executive officer and chief financial officer has concluded that our disclosure controls and procedures are not effective in timely alerting him to material information relating to Bay Acquisition Corp. required to be included in our periodic reports filed with the SEC as of the end of the period covered by this Report. There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Management necessarily applied its judgment in assessing the benefits of controls relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Because of the inherent limitations in a control system, misstatements due to error or fraud may occur and may not be detected. Our internal control over financial reporting was not effective for the following reasons:

a. The deficiency was identified as the Company’s limited segregation of duties amongst the Company’s employees with respect to the Company’s control activities. This deficiency is the result of the Company’s limited number of employees. This deficiency may affect management’s ability to determine if errors or inappropriate actions have taken place.  Management is required to apply its judgment in evaluating the cost-benefit relationship of possible changes in our disclosure controls and procedures.

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b. The deficiency was identified with respect to the Company’s Board of Directors.  This deficiency is the result of the Company’s limited number of external board members.  This deficiency may give the impression to the investors that the board is not independent from management.  Management and the Board of Directors are required to apply their judgment in evaluating the cost-benefit relationship of possible changes in the organization of the Board of Directors.

 Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f)) during the three months ended September 30, 2009, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

Not Applicable.

Item 1A. Risk Factors.

Not Applicable.

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

Not Applicable.

Item 3. Defaults Upon Senior Securities.

Not Applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

Not Applicable.

Item 5. Other Information.

Not Applicable.

Item 6. Exhibits.

Exhibit
Number	Description
31	PEO and PFO certifications required under Section 302 of the Sarbanes-Oxley Act of 2002
32	PEO and PFO certifications required under Section 906 of the Sarbanes-Oxley Act of 2002

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: November 20, 2009

BAY ACQUISITION CORP.
By:	/s/ Paul Goodman
	Paul Goodman
	President and Chief Financial Officer

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