x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended:
|
|
June 30, 2011
|
|
o |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from: _____________ to _____________
|
Nevada
|
77-0571784
|
|
(State or Other Jurisdiction
|
(I.R.S. Employer
|
|
of Incorporation)
|
Identification No.)
|
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.
|
||||||||
o |
Yes
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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).
|
||||||||
o |
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.
|
||||||||
Large accelerated filer
|
o | o |
Accelerated filer
|
o | ||||
Non-accelerated filer
|
o | o |
Smaller reporting company
|
x
|
||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). | ||||||||
x
|
Yes
|
o |
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 October 19, 2012 there were 23,422,663 shares of common stock outstanding, par value $0.001.
|
Page Number
|
|||||
PART I. Financial Statements
|
|||||
Item 1.
|
Financial Information (Unaudited)
|
3 | |||
Condensed Balance Sheets as of June 30, 2011 and December 31, 2010
|
3 | ||||
Condensed Statements of Operations for the Three and Six Months Ended June 30, 2011 and June 30, 2010
|
4 | ||||
Condensed Statements of Cash Flows for the Three Months and Six Ended June 30, 2011 and June 30, 2010
|
5 | ||||
Notes to Condensed Financial Statements
|
6 | ||||
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
10 | |||
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
12 | |||
Item 4.
|
Controls and Procedures
|
12 | |||
PART II. Other Information
|
|||||
Item 1.
|
Legal Proceedings
|
14 | |||
Item 1A.
|
Risk Factors
|
14 | |||
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
14 | |||
Item 3.
|
Defaults Upon Senior Securities
|
14 | |||
Item 4.
|
Mine Safety Disclosure
|
14 | |||
Item 5.
|
Other Information
|
14 | |||
Item 6.
|
Exhibits
|
15 | |||
Signatures
|
16 |
June 30,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash
|
$ | 18 | $ | 1 | ||||
Loan to shareholder
|
157 | 157 | ||||||
Interest receivable
|
30 | 24 | ||||||
Total current assets
|
205 | 182 | ||||||
Total assets
|
$ | 205 | $ | 182 | ||||
Liabilities and Shareholders' Equity
|
||||||||
Current liabilities:
|
||||||||
Trade payables
|
$ | 52 | $ | 52 | ||||
Convertible Note Payable, net of discount
|
3 | - | ||||||
Total current liabilities
|
55 | 52 | ||||||
Commitments and contingencies
|
||||||||
Shareholders' equity:
|
||||||||
Common stock $0.001 par value; 100,000,000 shares authorized,
|
||||||||
23,422,663 issued and outstanding at June 30, 2011
|
||||||||
and December 31, 2010
|
23 | 23 | ||||||
Additional paid-in capital
|
14,264 | 14,247 | ||||||
Treasury stock (32,899,667 shares)
|
(4,957 | ) | (4,957 | ) | ||||
Accumulated deficit
|
(9,180 | ) | (9,183 | ) | ||||
Accumulated other comprehensive income
|
- | - | ||||||
Total shareholders' equity
|
150 | 130 | ||||||
Total liabilities and shareholders' equity
|
$ | 205 | $ | 182 |
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
June 30,
|
June 30,
|
June 30,
|
June 30,
|
|||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Revenue
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Cost of revenue
|
- | - | - | - | ||||||||||||
Gross profit
|
- | - | - | - | ||||||||||||
General and administrative expenses
|
- | 9 | - | 18 | ||||||||||||
Operating loss
|
- | (9 | ) | - | (18 | ) | ||||||||||
Interest income (expense), net
|
- | 4 | 3 | 6 | ||||||||||||
Income (loss) before income taxes
|
- | (5 | ) | 3 | (12 | ) | ||||||||||
Provision for income taxes
|
- | - | - | - | ||||||||||||
Net income (loss) applicable to common shares
|
$ | - | $ | (5 | ) | $ | 3 | $ | (12 | ) | ||||||
Net income (loss) per share - Basic and Diluted
|
$ | - | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | ||||||
Weighted average shares outstanding Basic and Diluted
|
23,422,663 | 23,422,663 | 23,422,663 | 23,422,663 |
Quarter Ended
|
||||||||
June 30,
|
June 30,
|
|||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$ | 3 | $ | (12 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||
Amortization of debt discount
|
3 | - | ||||||
Increase in interest receivable
|
(6 | ) | (6 | ) | ||||
Increase in accounts payable
|
- | 4 | ||||||
Net cash provided by (used in) operating activities
|
- | (14 | ) | |||||
Cash flows from financing activities:
|
||||||||
Repayment by (loan to) stockholder, net
|
$ | - | $ | 14 | ||||
Proceeds from convertible note payable
|
17 | |||||||
Net cash provided by financing activities
|
17 | 14 | ||||||
Net increase in cash
|
17 | - | ||||||
Cash at beginning of period
|
1 | 4 | ||||||
Cash at end of period
|
$ | 18 | $ | 4 | ||||
Supplemental Cash Flow Information
|
||||||||
During the period, cash was paid for the following:
|
||||||||
Interest
|
$ | - | $ | - | ||||
Income taxes
|
$ | - | $ | - |
6/30/11
|
12/31/10
|
|||||||
Convertible Note Payable
|
$ | 17,000 | $ | - | ||||
Less: Debt Discount
|
(14,000 | ) | - | |||||
$ | 3,000 | $ | - |
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.
|
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.
|
Exhibit
Number
|
Description | |
31 | CEO and CFO certifications required under Section 302 of the Sarbanes-Oxley Act of 2002 | |
32 | CEO and CFO certifications required under 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
|
|
BAY ACQUISITION CORP.
|
||
Date: October 23, 2012 |
By:
|
/s/ Paul Goodman
|
|
Paul Goodman
|
|||
President and Chief Financial Officer
|
Date: October 23, 2012
|
By:
|
/s/ Paul Goodman | |
Paul Goodman
Chief Executive Officer
and Principal Financial Accounting Officer
|
Date: October 23, 2012
|
By:
|
/s/ Paul Goodman | |
Paul Goodman
Chief Executive Officer
and Principal Financial Accounting Officer
|
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CONVERTIBLE NOTE PAYABLE
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||
Convertible Note Payable | |||||||||||||||||||||||||||||||||||||
Note 4. CONVERTIBLE NOTE PAYABLE | On April 18, 2011, the Company received a loan from Heriot Holdings Limited in the amount of $17,000 (2011 Note). The loan bears interest at a rate of 10% per annum and is due and payable on April 18, 2012. The loan is classified as Convertible Note Payable on the accompanying consolidated balance sheet of the Company. As of the date of these financials the loan is in default and has not been converted. The Company is currently negotiating an extension. The 2011 Note is convertible at $0.05.
Under U.S. GAAP, a beneficial conversion feature is required to be recognized on the date that a convertible instrument becomes convertible into equity shares and the fair market value of those equity shares exceeds the conversion price under the convertible instrument. These amounts are recorded as a reduction in the face value of the issued convertible or debt instrument with an offset going to additional paid-in-capital. This reduction will accrete through the profit and loss statement as interest expense using the interest rate method over the life of the convertible or debt instrument. In accordance with U.S. GAAP we recognized approximately $17,000 as a reduction to the face value of the Note Payable as a discount at issuance. For the six months ended June 30, 2011 we amortized approximately $3,000 of the discount as non-cash interest expense in the accompanying financial statements in Interest and other income, net..
Convertible Note Payable obligations as of June 30, 2011 and December 31, 2010 are as follows:
|
LOAN TO SHAREHOLDER
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Loan To Shareholder | |
Note 3. LOAN TO SHAREHOLDER | On February 11, 2009, the Company made a loan to a shareholder of the Company in the amount of $171,000. The loan bears interest at a rate of 8% per annum and was due and payable on May 15, 2010. In May 2010, a partial payment of $14,000 was received. On October 3, 2012 the Company extended the due date to December 31, 2012. |
BALANCE SHEETS (Unaudited) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Current assets: | ||
Cash | $ 18 | $ 1 |
Loan to shareholder | 157 | 157 |
Interest receivable | 30 | 24 |
Total current assets | 205 | 182 |
Total assets | 205 | 182 |
Current liabilities: | ||
Trade payables | 52 | 52 |
Convertible Note Payable, net of discount | 3 | |
Total current liabilities | 55 | 52 |
Shareholders' equity: | ||
Common stock $0.001 par value; 100,000,000 shares authorized, 23,422,663 issued and outstanding at June 30, 2011 and December 31, 2010 | 23 | 23 |
Additional paid-in capital | 14,264 | 14,247 |
Treasury stock (32,899,667 shares) | (4,957) | (4,957) |
Accumulated deficit | (9,180) | (9,183) |
Accumulated other comprehensive income | ||
Total shareholders' equity | 150 | 130 |
Total liabilities and shareholders' equity | $ 205 | $ 182 |
ORGANIZATION AND BASIS OF PRESENTATION
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Organization And Basis Of Presentation | |
Note 1. ORGANIZATION AND BASIS OF PRESENTATION | The accompanying condensed unaudited interim financial statements have been prepared by Bay Acquisition 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 8 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 June 30, 2011 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, 2010 that is included in the Companys Form 10-K filed with the Securities and Exchange Commission (the 2010 10-K).
The Company is defined as a shell entity and is actively seeking to merge, invest in or acquire other companies to generate revenues and profits. |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Summary Of Significant Accounting Policies | |
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | GOING CONCERN
As reflected in the accompanying financial statements, the Companys operations for the three and six months ended June 30, 2011, resulted in net income of $0 and $3,000, respectively, and the Company's balance sheet reflects an accumulated deficit of $9,180,000. The Companys ability to continue operating as a going concern is dependent on its ability to raise sufficient additional working capital. Managements plans in this regard include raising additional cash from current shareholders and potential investors and lenders. As such, these factors raise substantial doubt as to the company's ability to continue as a going concern.
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.
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.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company had no cash equivalents at June 30, 2011 and December 31, 2010.
The Company maintains cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (FDIC) up to federally insured limits. At times balances may exceed FDIC insured limits.
The Company has not experienced any losses in such accounts.
CONCENTRATION OF CREDIT RISKS
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents.
INCOME TAXES
The Company accounts for income taxes using the asset and liability method described in FASB Accounting Standards Codification (ASC) 740-10, which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income taxes and liabilities are computed annually for differences between the financial statement and the tax basis of assets and liabilities that will result in taxable or deductible amounts in the future 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 tax assets to the amount expected to be realized.
Also, in accordance with the provisions of ASC 740-10, the Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company does not believe it has any unrecognized tax benefits and there was no effect on its financial condition or results of operations as a result of implementing ASC 740-10.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company estimates that the fair value of all financial instruments at June 30, 2011 and December 31, 2010, as defined in ASC 825-10, does not differ materially from the aggregate carrying values of its financial instruments recorded in the accompanying condensed balance sheets. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is required in interpreting market data to develop the estimates of fair value, and accordingly, the estimates are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
BENEFICIAL CONVERSION FEATURE AND ACCRETIVE INTEREST EXPENSE
Under U.S. GAAP, a beneficial conversion feature is required to be recognized on the date that a convertible instrument becomes convertible into equity shares and the fair market value of those equity shares exceeds the conversion price under the convertible instrument. These amounts are recorded as a reduction in the face value of the issued convertible or debt instrument with an offset going to additional paid-in-capital. This reduction will accrete through the profit and loss statement as interest expense using the interest rate method over the life of the convertible or debt instrument. In accordance with U.S. GAAP we recognized approximately $17,000 as a reduction to the face value of the Note Payable as a discount at issuance, as disclosed in Note 4. For the three and six months ended June 30, 2011 we amortized approximately $3,000 of the discount as non-cash interest expense in the accompanying financial statements in Interest and other income, net..
INCOME (LOSS) PER COMMON SHARE
ASC 260-10 requires the presentation of basic earnings (loss) per share ("basic EPS") and diluted earnings (loss) per share ("diluted EPS").
The Companys basic loss per common share is based on net loss for the relevant period, divided by the weighted average number of common shares outstanding during the period. Diluted loss per common share is based on net loss, divided by the weighted average number of common shares outstanding during the period, including common share equivalents, such as outstanding stock options and beneficial conversion of related party accounts.
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 |
BALANCE SHEETS (Unaudited) (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized shares | 100,000,000 | 100,000,000 |
Common stock, issued shares | 23,422,663 | 23,422,663 |
Common stock, outstanding shares | 23,422,663 | 23,422,663 |
Treasury stock | 32,899,667 | 32,899,667 |
Document and Entity Information (USD $)
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Oct. 19, 2012
|
|
Document And Entity Information | ||
Entity Registrant Name | BAY ACQUISITION CORP. | |
Entity Central Index Key | 0001098875 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2011 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Public Float | $ 23,422 | |
Entity Common Stock, Shares Outstanding | 23,422,663 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2011 |
STATEMENTS OF OPERATIONS (Unaudited) (USD $)
|
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Income Statement [Abstract] | ||||
Revenue | ||||
Cost of revenue | ||||
Gross profit | ||||
General and administrative expenses | 9 | 18 | ||
Operating loss | (9) | (18) | ||
Interest income (expense), net | 4 | 3 | 6 | |
Income (loss) before income taxes | (5) | 3 | (12) | |
Provision for income taxes | ||||
Net income (loss) applicable to common shares | $ (5) | $ 3 | $ (12) | |
Net income (loss) per share - Basic and Diluted | $ 0.00 | $ 0.00 | $ 0.00 | |
Weighted average shares outstanding Basic and Diluted | 23,422,663 | 23,422,663 | 23,422,663 | 23,422,663 |
SUBSEQUENT EVENTS
|
6 Months Ended |
---|---|
Jun. 30, 2011
|
|
Subsequent Events [Abstract] | |
Note 5. SUBSEQUENT EVENTS | On April 13, 2012, the Company received an additional convertible note payable (2012 Note) from Heriot Holdings Limited in the amount of $20,000. The loan bears interest at a rate of 10% per annum and is due and payable on October 13, 2012. The 2012 Note is convertible at $0.05.
On February 13, 2012, the Company entered into a Stock Purchase Agreement with Goozex, Inc., a Maryland corporation (Goozex) and the principal stockholders of Goozex for the acquisition of all of the outstanding and issued shares of Goozex (the Goozex Shares) by the Company.
In consideration for the sale of the Goozex Shares, the stockholders of Goozex, at the closing, will receive (a) $150,000 in cash and (b) such number of newly issued shares of the Companys common stock which shall represent 15% of the issued and outstanding shares of the Company after taking into account the Private Placement, described below.
On May 11, 2012, the Company entered into an Engagement Agreement with a registered broker-dealer (the Broker-Dealer) pursuant to which the Broker-Dealer agreed to act as the Companys placement agent for a private placement of units of the Companys common stock and warrants in any amount of up to $2,000,000. |