8-K

Securities and Exchange Commission

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: November 16, 2012

BAY ACQUISITION CORP.

 (Name of Registrant as specified in its charter)

Nevada	000-28099	77-0571784
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(IRS Employer Identification No.)

420 Lexington Avenue

Suite 2320

New York, NY 10170

 (212) 661-6800

(Address and telephone number of principal executive offices)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01  Completion of Acquisition or Disposition of Assets

On  February 13, 2012, we entered into a Stock Purchase Agreement (the “Agreement) with Goozex, Inc., a Maryland corporation (“Goozex”) and the principal stockholders of Goozex (the “Principal Goozex Stockholders”) for the shares of Goozex owned by the Principal Goozex Stockholders.  Subsequently, we also entered into individual agreements with the 15 minority stockholders of Goozex to acquire their shares of Goozex (collectively with the Principal Goozex Stockholders, the “Sellers”).

On or about November 16, 2012, the Company acquired all of the issued and outstanding shares of Goozex from the Sellers in exchange for a total of $150,000 and we will issue to the Sellers a total of 3,513,400 newly issued shares of our common stock.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this Form 8-K that are not historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These include statements about the Registrant’s expectations, beliefs, intentions or strategies for the future, which are indicated by words or phrases such as “anticipate,” “expect,” “intend,” “plan,” “will,” “the Registrant believes,” “management believes” and similar words or phrases. The forward-looking statements are based on the Registrant’s current expectations and are subject to certain risks, uncertainties and assumptions. The Registrant’s actual results could differ materially from results anticipated in these forward-looking statements. All forward-looking statements included in this document are based on information available to the Registrant on the date hereof, and the Registrant assumes no obligation to update any such forward-looking statements.

Goozex’ Business

Goozex.com is a leading online platform for trading used video games. It connects users across the United States and allows them to trade or purchase video games utilizing Goozex Points. Goozex guarantees each trade.  Goozex’s vision is to revolutionize the way used video games are bought and sold by allowing gamers to trade used games quickly, easily, and for a higher value compared with other alternatives.

When launched in July 2006, Goozex.com was the first trading platform for video games based on an automatic point system. Today, Goozex believes it is the sole significant player in this market, and its platform makes available a larger array of video game titles and an active user base.  With a solid community of gamers, Goozex has the potential to offer advertisers access to a valuable demographics to promote and advertise their products and services.

2

The Goozex System

A cornerstone of the Goozex platform is its proprietary point system known as “Goozex Points.” The Goozex system automatically assigns a Goozex Point value to each and every video game based on several factors, including demand and supply. The point value is proportional to the fair market value of each game in the used video game market. Each video game is assigned a specific number of Goozex points (from 100 to 1,000). The point value of each game is determined through a proprietary algorithm that takes into consideration: MSRP, age of the game, supply and demand, and the rating assigned to that game by other Goozex users. The our proprietary point assignment algorithm is trade secret intellectual property of Goozex

Using our internal Goozex Points, we provide a unique trading platform that allows online trading of physical goods among several users.  We deliver the following services:

• Point-based automatic trading platform Community experience, user-driven content Video game reviews and multi-media information on game products.

• The system allows users to trade their video games in exchange for Goozex Points, which can then be used to receive video games from other users. Users do not pay cash for the video games – but instead use the Points and pay only a $1.99 transaction fee to Goozex and shipping costs.

• The Goozex system also provides users the ability to build and develop a video game community through the exchange of messages, the sharing of informal video game information, and the posting of reviews and ratings. This is in addition to allowing users to search an extensive database of video games and develop a personalized list of “requests” and “offers.”

• Because the basis of the Goozex system is a transaction directly between the buyer and the seller, we never take any product into inventory nor do we spend any money to acquire the games being sold.  We act only as a facilitator for each transaction.

Sources of Revenue

Goozex earns revenues from three primary sources:

1. Trading revenues consisting of (i) a transaction fee of $1.99 from the buyer every time there is a transaction and (ii) the sale of Goozex points to buyers who need them to acquire games from sellers.  These fee are paid by the buyer via credit card or Paypal. Goozex received approximately $122,800 from trading revenue in 2011.

2. Goozex also derives revenue from the sale of prepaid shipping labels to sellers. Goozex received approximately $98,300 from these sales in 2011.

3.  Goozex also received approximately $7,945 from advertisements on the Goozex.com Website and affiliate sales in 2011.

3

Value to Users

Goozex offers its users a compelling value proposition and a unique set of features that clearly differentiates its service from competitors and substitutes:

• Fair Market Value: Users maximize the fair market value of their unwanted games and leverage their personal inventory to receive different games.

• Competitive Pricing: A competitive price of $1.99 per transaction when compared to existing alternatives for used video games such as brick-and-mortar stores and online auctioneers.

• Community: An exciting user experience provided by an intuitive, simple, yet powerful user interface promotes interaction between users.

• Fast Service: Speed and ease-of-use delivered by a proprietary back-end system that automatically manages supply and carries out user transactions in real-time.

Goozex offers advertisers a target approach for advertising:

• Valuable demographic segment: Goozex offers access to males 18 – 35 years old.

• Targeted advertising: Goozex’s users, by definition, have a strong interest in video games, which is information that advertisers and use to precisely target advertisements.

• Product recommendation: Individual products and accessories can be tied to each game detail page, providing very specific purchase recommendations to users. (For example, if a user browses for one of the games in the Microsoft “Halo” series for the Xbox, he/she may see an advertisement for the Xbox Live Halo Edition Headset or a Halo faceplate for the Xbox 360).

How Goozex.com works

• Users accumulate Goozex points by trading away video games they own in exchange for Points, or by purchasing them from the system.

• Membership is free and access to the system is immediate upon sign-up.

• Users then browse the site database and create two lists:

• “My Library”: video games they own and are willing to trade;

• “My Requests”: video games they wish to receive from other users.

• Goozex automatically matches requests and offers between different users, and creates a connection between users. Upon finding a match the system notifies the seller via email and requests confirmation of the item’s availability for trading. The seller then confirms the intent to trade, puts the game into a mailing envelope, and ships the original video game to the buyer.

• Upon confirmation of shipment, the system transfers the requisite number of Goozex points from the buyer’s account to the seller’s. The buyer pays a transaction fee of $1.99 to Goozex and in many cases also purchases from us a prepaid shipping label.

4

• To complete the trade, when the buyer receives the game, he/she will provide feedback about the transaction. Each seller is assigned a quality profile based on the feedback received from their buyers.

• All trades are 100% guaranteed: if a game is lost, broken or counterfeited, the buyer is refunded all Points spent plus the trading credit. The feedback system insures unreliable sellers are quickly weeded out of the system.

Target Market

Goozex participates in a youthful, growing market. The video game industry has seen explosive growth worldwide over the last ten years and is now one of the fastest growing areas of entertainment across the globe. According to the Entertainment Software Association, the market for video games approximately reached $16 billion in both 2009 and 2010.  CNBC estimates that the used video games market in the US in 2010 was from $2 to $3 billion.

According to the Web research firm, Alexa.com, compared with internet averages, Goozex.com appeals more to users who are under the age of 35; its audience also tends to consist of childless men browsing from home who have no postgraduate education and have incomes between $30,000 and $100,000.

While the market has increased Goozex’s revenues declined. The Company believes it can reverse this trend with increased marketing.

Goozex caters to gamers at all levels – from “hardcore” gamers who want to maximize the number of games they play, to “casual gamers” who want to update their limited collections of games. Both groups have a finite budget and a desire to play more games, which makes them an ideal target for the Goozex service.

Goozex’ target market is men and women between the ages of 18 – 35, who have available income to buy video games, have access to the internet and are tech-savvy enough to embrace this new service. In particular, Goozex has focused on attracting hard-core gamers who are influencers among their friends and family and post their opinions online at one or more of the important gamer community websites.

Competition

Goozex is currently the only significant online trading platform in the US for used video games.  Thus, for customers seeking to trade games online, Goozex is the only credible option.  For customers desiring to buy used video games, our main online competitors are Amazon and eBay and our main bricks and mortal competitors are major retailers such as GameStop and BestBuy.

5

Infrastructure

Goozex does not own or maintain any infrastructure related to its Website.  All of Goozex’ Web servers and other infrastructure is outsourced to third parties.

Offices

Goozex is currently located in Web incubator office space at the University of Maryland.  After closing, the Company’s offices will be moved to New York City office space provided by one of the Company’s primary shareholders.  The Company will not be obligated to pay any rent for a period of six months and thereafter, will negotiate a fair market rent for its office space.

Employees

As of the Closing of the Goozex acquisition, we will have only one (1) employee our President.   While we plan on hiring additional staff, we will be relying upon the former principals of Goozex to provide us with assistance on a consulting basis and other third party consultants until we can hire any additional employees which we deem necessary to operate our business.

Intellectual Property

The Company’s success will depend, at least in part, on our ability to protect our core technology and intellectual property particularly its proprietary point assignment algorithm which is a trade secret of Goozex. We have no patent protection for our technology.  We rely on employee and third party nondisclosure agreements, to protect our proprietary rights in our technology. Goozex also has registered trademarks and copyrights covering its trade names and logos.

Government Regulation

Goozex is subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet, many of which are still evolving and could be interpreted in ways that could harm its business.  In the U.S. and abroad, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted, or the content provided by users.  Any court ruling or other governmental action that imposes liability on providers of online services for the activities of their users and other third parties could harm Goozex’ business.

In the area of information security and data protection, many states have passed laws requiring notification to users when there is a security breach for personal data, such as the 2002 amendment to California’s Information Practices Act, or requiring the adoption of minimum information security standards that are often vaguely defined and difficult to practically implement.  The costs of compliance with these laws may increase in the future as a result of changes in interpretation.  Furthermore, any failure on Goozex’ part to comply with these laws may subject us to significant liabilities.

6

Goozex is also subject to federal, state and foreign laws regarding privacy and protection of member data. Goozex posts on Goozex.com its privacy policy and user agreement which describe practices concerning the use, transmission and disclosure of member data.  Any failure by Goozex to comply with its posted privacy policy or privacy related laws and regulations could result in proceedings against Goozex by governmental authorities or others, which could harm Goozex business.  In addition, the interpretation of data protection laws, and their application to the Internet is unclear and in a state of flux.  There is a risk that these laws may be interpreted and applied in conflicting ways from state to state, country to country, or region to region, and in a manner that is not consistent with Goozex’ data protection practices.  Complying with these varying international requirements could cause Goozex to incur additional costs and change its business practices.  Further, any failure by Goozex to adequately protect its members’ privacy and data could result in a loss of member confidence in Goozex’ services and ultimately in a loss of members and customers, which could adversely affect Goozex’ business.

Legal Proceedings

We are not aware of any pending or threatened legal proceedings involving our company or its assets.

Item 3.02  Unregistered Sales of Equity Securities

On  February 13, 2012, we entered into a Stock Purchase Agreement (the “Agreement) with Goozex, Inc., a Maryland corporation (“Goozex”) and the principal stockholders of Goozex (the “Principal Goozex Stockholders”) for the shares of Goozex owned by the Principal Goozex Stockholders.  Subsequently, we also entered into individual agreements with the 15 minority stockholders of Goozex to acquire their shares of Goozex (collectively with the Principal Goozex Stockholders, the “Sellers”).  In consideration for the purchase all of the shares of Goozex from the Sellers, we are obligated to issue to the Sellers a total of 3,513,400 newly issued shares of our common stock.  The securities were offered and sold to investors in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act, and Rule 506 promulgated thereunder. Each of the persons and/or entities receiving our securities qualified as an accredited investor (as defined by Rule 501 under the Securities Act). These securities were issued as restricted securities and the certificates were stamped with restrictive legends to prevent any resale without registration under the Act or in compliance with an exemption. There was no prior relationship between the Company and any of the Principal Goozex Stockholders.

In addition, on November 16, 2012, the Company closed on a private placement financing in the amount of $517,000 with eight investors who will receive a total of 1,551,00 newly issued shares of our common stock.  The investors each paid $0.33 per share.  The securities were offered and sold to investors in reliance upon exemptions from registration pursuant to Section 4(2) under the Securities Act, and Rule 506 promulgated thereunder. Each of the persons and/or entities receiving our securities qualified as an accredited investor (as defined by Rule 501 under the Securities Act). These securities were issued as restricted securities and the certificates were stamped with restrictive legends to prevent any resale without registration under the Act or in compliance with an exemption. There was no prior relationship between the Company and any of the investors.

7

Item 5.06  Change in Shell Company Status.

Prior to the closing of the reverse acquisition, the Company was a “shell company” as defined in Rule 405 of the Securities Act and Rule 12b-2 of the Exchange Act. As described in Item 2.01 above, which is incorporated by reference into this Item 5.06, the Company ceased being a shell company upon acquisition Goozex on November 16, 2012.

Item  9.01  Financial Statements and Exhibits

Exhibit	Description
10.1	Stock Purchase Agreement (attached as Exhibit 10.1 to the Form 8-K filed on March 15, 2012).
99.1	Auditor’s Report and audited financial statements of Goozex for the period from January 1, 2010 through December 31, 2011 and financial statements of Goozex for the period from January 1, 2012 through June 30, 2012.

8

SIGNATURES

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

	Bay Acquisition Corp.
Dated: December 11, 2012	By:	/s/ Paul Goodman
		Paul Goodman, President

9

EX-99.1

Exhibit 99.1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Goozex, Inc.

We have audited the accompanying balance sheets of Goozex, Inc. (the “Company”) as of December 31, 2011 and 2010, and the related statements of operations, changes in stockholders’ equity, and cash flows for the years ended December 31, 2011 and 2010. The Company’s management is responsible for these financial statements.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Goozex, Inc. as of December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America.

/s/ Friedman LLP

East Hanover, New Jersey

June 15, 2012, except for Note 1 and 6, as to which the date is December 11, 2012

1

GOOZEX, INC.

BALANCE SHEETS

	December 31,
	2011			2010
ASSETS
Current assets
Cash and cash equivalents	$	15,049		$	10,678
Accounts receivable, net of allowance for doubtful
accounts of $7,350 in 2011 and 2010		2,391			4,152
Other		-			10,000
Total current assets		17,440			24,830
Property and equipment, at cost, less accumulated
depreciation and amortization		125,819			163,994
	$	143,259		$	188,824
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses	$	4,750		$	36,675
Deferred revenues		108			943
Total current liabilities		4,858			37,618
Commitments and contingencies
Stockholders' equity
Common stock, $0.10 par value, 100,000 shares authorized;
34,546 and 34,165 shared issued and outstanding		3,455			3,417
Additional paid in capital		243,072			228,710
Accumulated deficit		(108,126	)		(80,921	)
Total Stockholders' Equity		138,401			151,206
Total Liabilities and Stockholders' Equity	$	143,259		$	188,824

See notes to financial statements

2

GOOZEX, INC.

STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2011			2010
Revenues
Trading revenues	$	122,942		$	378,223
Shipping label revenues		98,283			170,187
Advertising revenues		7,945			14,954
Affiliate sales		3,294			35,574
		232,464			598,938
Cost of Revenues		89,256			160,410
Gross profit		143,208			438,528
Operating expenses
Depreciation		38,175			34,832
Selling, general and administrative expenses		157,243			438,188
		195,418			473,020
Operating loss		(52,210	)		(34,492	)
Other income
Option to purchase expiration income		25,000			-
Interest income		5			510
		25,005			510
Net loss	$	(27,205	)	$	(33,982	)
Basic and diluted net loss per common share	$	(0.80	)	$	(1.01	)
Weighted Average Number of Common Shares Outstanding - basic and diluted		34,166			33,731

See notes to financial statements

3

GOOZEX, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 2011 AND 2010

	Common Stock				Additional Paid In					Total Stockholders'
	Shares		Amount		Capital		Accumulated Deficit			Equity
Balance, December 31, 2009		33,670	$	3,367	$	208,157	$	(46,939	)	$	164,585
Stock based compensation		495		50		20,553		-			20,603
Net Loss		-		-		-		(33,982	)		(33,982	)
Balance, December 31, 2010		34,165		3,417		228,710		(80,921	)		151,206
Stock based compensation		381		38		14,362		-			14,400
Net loss		-		-		-		(27,205	)		(27,205	)
Balance, December 31, 2011		34,546	$	3,455	$	243,072	$	(108,126	)	$	138,401

See notes to financial statements

4

GOOZEX, INC.

STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2011			2010
Cash flows from operating activities
Net loss	$	(27,205	)	$	(33,982	)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities
Allowance for doubtful accounts		-			7,350
Depreciation and amortization		38,175			34,832
Stock based compensation		14,400			20,603
Option to purchase expiration		(25,000	)		-
Changes in assets and liabilities
Accounts receivable		1,762			16,800
Other receivable		10,000			-
Accounts payable and accrued expenses		(31,925	)		16,635
Deferred revenues		(836	)		2,980
Net cash (used in) provided by operating activities		(20,629	)		65,218
Cash flows from investing activities
Purchases of property and equipment		-			(70,770	)
Cash flows from financing activities
Proceeds from option to purchase expiration		25,000			-
Net increase (decrease) in cash and cash equivalents		4,371			(5,552	)
Cash and cash equivalents, beginning of year		10,678			16,230
Cash and cash equivalents, end of year		15,049			10,678

See notes to financial statements

5

GOOZEX, INC.

NOTES TO FINANCIAL STATEMENTS

1 -   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Background and Nature of Operations

Goozex, Inc. (the “Company”) is a Maryland based corporation headquartered in College Park, near Washington, D.C. Founded in 2006, the Company operates a peer-to-multi-peer network that connects people across North America to trade video games and movies.

The Company manages thousands of trades per day between users on a safe, secure, and legal network.  Members trade their products to other members and receive credit in the form of “Points”.  Members use their “Points” to order other products from other members.  All items are assigned a specific value in Points by Goozex, and a transaction fee, “Token”, is charged to the recipient member in each trade.

Goozex, Inc. offers its members printable shipping labels to use when shipping their items to other members in a trade.  The Company charges members the cost of shipping and an additional fee for the shipping labels.  The Company also generates revenue from advertising on its website and from referral fees paid by other online retailers.

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 that 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.  Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company’s cash balances are maintained at one bank.  Balances are insured by the Federal Deposit Insurance Corporation subject to certain limitations.  For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount management expects to collect from outstanding balances.  The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments.  This allowance is based on specific customer account reviews and historical collections experience.  If the financial condition of the Company’s funding parties or customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional allowance may be required.

The Company performs ongoing credit evaluations of its customers and does not require collateral.

6

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, generally five to seven years.  Property and equipment are carried at cost less accumulated depreciation and amortization.  Maintenance and repairs are expensed as incurred, while betterments and major remodeling costs are capitalized. Cost incurred in developing the trading network infrastructure are capitalized and included in property and equipment.  These costs are amortized over their estimated useful lives from the date the network developments become operational.

Impairment of Long-Lived Assets

Long-lived assets to be held and used are reviewed for impairment whenever events or circumstances indicate that the carrying value of such assets may not be recoverable.  Determination of recoverability is generally based on an estimate of undiscounted cash flows resulting from the use of the asset and its eventual disposition.  If the evaluation indicates that the carrying amount of an asset is not recoverable from our undiscounted cash flows, then an impairment loss is measured by comparing the carrying amount of the asset to its fair value.  No impairments have occurred to date.

Revenue Recognition

The Company recognizes revenue from transactions fees, “Tokens”, and shipping label revenues, at the time of sale.  In addition to “Points” earned in trades, members can also purchase “Points” from the Company in order to make trades.  Revenue from the sales of “Points” is recognized at the time of sale.  “Tokens” and “Points” are non-refundable per the Terms of Use.  Advertising revenues are recorded upon the advertisement being displayed on the Company’s website.  Gift cards sold to customers are recognized as a liability on the balance sheet until redeemed.  Revenue from affiliate sales consists of referral fees paid by online retailers.  Revenue is recognized on these transactions as earned.

Deferred Revenues

The Company establishes a liability upon the sale of gift cards.  Revenue is subsequently recognized when the gift cards are redeemed.  In addition, income is recognized on unused customer liabilities to the extent that Management believes the likelihood of redemption by the customer is remote, based on historical redemption patterns.

Advertising

The Company expenses advertising costs as incurred.  Advertising expense for the years ended December 31, 2011 and 2010 was $7,077 and $29,183, respectively.

7

Guarantees

The Company provides its customers a guarantee against the loss or damage of products during shipping.  Customers will be refunded the transaction fee and any points used to purchase an undelivered or damaged item upon providing proof that the item was shipped but not delivered.  Management considers the potential liability associated with the guarantee to be minimal and therefore no liability is reflected in these financial statements.

Stock Based Compensation

The Company expenses all share-based payments, including stock options, to be based on their value over the required award service period.  The Company uses the straight line method to recognize compensation expense related to share-based payments.  For the Company’s non-employees, share-based expense is recorded in accordance with FASB ASC subtopic 505-50, “Equity-Based Payments to Non-Employees”.

Net Income per Common Share

Basic net income per common share is computed by dividing the net income available to common stockholders by the weighted average number of shares outstanding during the period.

Subsequent Events

These financial statements were approved by management and available for issuance on December 11, 2012.  Management has evaluated subsequent events through this date.

2 -   PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of December 31, 2011 and 2010:

	2011		2010
IT infrastructure	$	265,500	$	265,500
Furniture and equipment		1,234		1,234
		266,734		266,734
Less - Accumulated depreciation and amortization		140,915		102,740
	$	125,819	$	163,994

3 -   INCOME TAXES

The net operating loss carryforward at December 31, 2011 and 2010 attributable to the Company is approximately $108,000 and $81,000 respectively.  These net operating loss carryforwards are expected to expire between 2026 and 2031.  An allowance has been established for the full amount of the gross deferred tax asset due to the uncertainty of utilizing the deferred taxes in the future.

The Company’s tax returns for fiscal years 2007 through 2011 are currently open to audit by the tax authorities under the statue limitations for relevant federal and state jurisdictions.

8

4 -   RELATED PARTY TRANSACTIONS

The Company’s trading network infrastructure was developed and operated by i3 S.r.l.  An employee of i3 S.r.l is a founder and 18% shareholder of the Company.  i3 S.r.l charges Goozex a monthly fee for management and support of the Company’s network.

During the years ended December 31, 2011 and 2010, the amount of fees charged for these services totaled $13,600 and $24,000, respectively.  At December 31, 2011 and 2010, $0 and $18,000, respectively, remains payable and is included in accounts payable.

On May 1, 2008, the Company entered into an agreement with MTECH (a technology incubator at the University of Maryland) for the use of office space owned by the University and other services provided by MTECH.  The agreement had an initial term of two years, with an option to extend for up to two one-year periods.  The Company has extended for both of the additional periods.  In return for an annual stock installment, MTECH provides office space and other services at a very low monthly cost.  Under the terms of the agreement, the Company is obligated to provide stock consideration each year on the anniversary date equal to 1% of the fully diluted equity in the Company.

At December 31, 2011 and 2010, MTECH was a 4% and 3% shareholder, respectively.  During the years ended December 31, 2011 and 2010, $2,182 and $1,897 was paid to MTECH and 381 and 377 shares of common stock, respectively were issued for rent and other services.  Management has estimated the fair value of the office rent at $14,400 for the years ended 2011 and 2010, which has been recorded as an expense and additional paid capital in both years.

5 -   OPTION TO PURCHASE EXPIRATION

On August 30, 2011, the Company entered into a Letter of Intent agreement with a potential purchaser of the Company.  Under the terms of the agreement, the purchaser was to acquire Goozex by the end of October 2011.  A break-up fee in the amount of $25,000 was to be paid in the event that the agreement was not closed by October 31, 2011.  The agreement did not close on time and in November, 2011 the purchaser withdrew.  The $25,000 break-up fee was retained by the Company and is recorded in these financials as “Option to purchase expiration income”.

6 -   SUBSEQUENT EVENTS

On November 15, 2012, the Company was acquired by Bay Acquisition Corp (“Bay”).  Bay’s common stock trades on over the counter under the symbol “SLGI”.  As a result of this transaction, the Company believes that Bay can provide sufficient liquidity to fund the company’s operation through December 31, 2013.

9

GOOZEX, INC.

BALANCE SHEETS

(UNAUDITED)

	June 30,			December 31,
	2012			2011
ASSETS
Current assets
Cash and cash equivalents	$	5,973		$	15,049
Accounts receivable, net of allowance for doubtful
accounts of $0 and $7,350 in 2011 and 2010, respectively		2,327			2,391
Total current assets		8,300			17,440
Property and equipment, at cost, less accumulated
depreciation and amortization		106,731			125,819
	$	115,031		$	143,259
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses	$	14,325		$	4,750
Deferred revenues		108			108
Total current liabilities		14,433			4,858
Commitments and contingencies
Stockholders' equity
Common stock, $0.10 par value, 100,000 shares authorized;
34,546 and 34,546 shared issued and outstanding		3,455			3,455
Additional paid in capital		243,072			243,072
Accumulated deficit		(145,929	)		(108,126	)
Total Stockholders' Equity		100,598			138,401
Total Liabilities and Stockholders' Equity	$	115,031		$	143,259

See notes to financial statements

10

GOOZEX, INC.

STATEMENTS OF OPERATIONS

(UNAUDITED)

	Six Months Ended June 30,
	2012			2011
Revenues
Trading revenues	$	42,408		$	68,138
Shipping label revenues		36,359			54,372
Advertising revenues		3,080			3,990
Affiliate sales		869			2,014
		82,716			128,514
Cost of Revenues		32,660			49,726
Gross profit		50,056			78,788
Operating expenses
Depreciation		19,088			19,087
Selling, general and administrative expenses		68,771			85,493
		87,859			104,580
Net loss	$	(37,803	)	$	(25,792	)
Basic and diluted net loss per common share	$	(1.09	)	$	(0.75	)
Weighted Average Number of Common Shares Outstanding - basic and diluted		34,546			34,292

See notes to financial statements

11

GOOZEX, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

YEAR ENDED JUNE 30, 2012

(UNAUDITED)

	Common Stock				Additional Paid In					Total Stockholders'
	Shares		Amount		Capital		Accumulated Deficit			Equity
Balance, December 31, 2011		34,546	$	3,455	$	243,072	$	(108,126	)		138,401
Stock based compensation		-		-		7,200		-			7,200
Net Loss		-		-		-		(45,002	)		(45,002	)
Balance, December 31, 2012		34,546	$	3,455	$	250,272	$	(153,128	)		100,599

See notes to financial statements

12

GOOZEX, INC.

STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended June 30,
	2012			2011
Cash flows from operating activities
Net loss	$	(37,803	)	$	(25,792	)
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities
Allowance for doubtful accounts		(7,350	)		(7,350	)
Depreciation and amortization		19,088			19,087
Stock based compensation		-			7,200
Changes in assets and liabilities
Accounts receivable		7,414			8,394
Other receivable		-			10,000
Accounts payable and accrued expenses		9,575			(10,505	)
Deferred revenues		-			(838	)
Net cash (used in) provided by operating activities		(9,076	)		196
Net (decrease) increase in cash and cash equivalents		(9,076	)		196
Cash and cash equivalents, beginning of period		15,049			10,678
Cash and cash equivalents, end of period	$	5,973		$	10,874

See notes to financial statements

13

GOOZEX, INC.

NOTES TO FINANCIAL STATEMENTS

1 -   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Background and Nature of Operations

Goozex, Inc. (the “Company”) is a Maryland based corporation headquartered in College Park, near Washington, D.C. Founded in 2006, the Company operates a peer-to-multi-peer network that connects people across North America to trade video games and movies.

The Company manages thousands of trades per day between users on a safe, secure, and legal network.  Members trade their products to other members and receive credit in the form of “Points”.  Members use their “Points” to order other products from other members.  All items are assigned a specific value in Points by Goozex, and a transaction fee, “Token”, is charged to the recipient member in each trade.

Goozex, Inc. offers its members printable shipping labels to use when shipping their items to other members in a trade.  The Company charges members the cost of shipping and an additional fee for the shipping labels.  The Company also generates revenue from advertising on its website and from referral fees paid by other online retailers.

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 that 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.  Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company’s cash balances are maintained at one bank.  Balances are insured by the Federal Deposit Insurance Corporation subject to certain limitations.  For purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount management expects to collect from outstanding balances.  The Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments.  This allowance is based on specific customer account reviews and historical collections experience.  If the financial condition of the Company’s funding parties or customers were to deteriorate, resulting in an impairment of their ability to make payments, an additional allowance may be required.

The Company performs ongoing credit evaluations of its customers and does not require collateral.

14

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the related assets, generally five to seven years.  Property and equipment are carried at cost less accumulated depreciation and amortization.  Maintenance and repairs are expensed as incurred, while betterments and major remodeling costs are capitalized. Cost incurred in developing the trading network infrastructure are capitalized and included in property and equipment.  These costs are amortized over their estimated useful lives from the date the network developments become operational.

Impairment of Long-Lived Assets

Long-lived assets to be held and used are reviewed for impairment whenever events or circumstances indicate that the carrying value of such assets may not be recoverable.  Determination of recoverability is generally based on an estimate of undiscounted cash flows resulting from the use of the asset and its eventual disposition.  If the evaluation indicates that the carrying amount of an asset is not recoverable from our undiscounted cash flows, then an impairment loss is measured by comparing the carrying amount of the asset to its fair value.  No impairments have occurred to date.

Revenue Recognition

The Company recognizes revenue from transactions fees, “Tokens”, and shipping label revenues, at the time of sale.  In addition to “Points” earned in trades, members can also purchase “Points” from the Company in order to make trades.  Revenue from the sales of “Points” is recognized at the time of sale.  “Tokens” and “Points” are non-refundable per the Terms of Use.  Advertising revenues are recorded upon the advertisement being displayed on the Company’s website.  Gift cards sold to customers are recognized as a liability on the balance sheet until redeemed.  Revenue from affiliate sales consists of referral fees paid by online retailers.  Revenue is recognized on these transactions as earned.

Deferred Revenues

The Company establishes a liability upon the sale of gift cards.  Revenue is subsequently recognized when the gift cards are redeemed.  In addition, income is recognized on unused customer liabilities to the extent that Management believes the likelihood of redemption by the customer is remote, based on historical redemption patterns.

Advertising

The Company expenses advertising costs as incurred.  Advertising expense for the six months ended June 30, 2012 and 2011 was approximately $2,300 and $4,600, respectively.

Guarantees

The Company provides its customers a guarantee against the loss or damage of products during shipping.  Customers will be refunded the transaction fee and any points used to purchase an undelivered or damaged item upon providing proof that the item was shipped but not delivered.  Management considers the potential liability associated with the guarantee to be minimal and therefore no liability is reflected in these financial statements.

15

Stock Based Compensation

The Company expenses all share-based payments, including stock options, to be based on their value over the required award service period.  The Company uses the straight line method to recognize compensation expense related to share-based payments.  For the Company’s non-employees, share-based expense is recorded in accordance with FASB ASC subtopic 505-50, “Equity-Based Payments to Non-Employees”.

Net Income per Common Share

Basic net income per common share is computed by dividing the net income available to common stockholders by the weighted average number of shares outstanding during the period.

Subsequent Events

These financial statements were approved by management and available for issuance on December 11, 2012. Management has evaluated subsequent events through this date.

2 -   PROPERTY AND EQUIPMENT

Property and equipment consists of the following as of June 30, 2012 and December 31, 2011:

	June 30,		December 31,
	2012		2011
IT infrastructure	$	265,500	$	265,500
Furniture and equipment		1,234		1,234
		160,003		266,734
Less - Accumulated depreciation and amortization		160,003		140,915
	$	106,731	$	125,819

3 -   INCOME TAXES

The net operating loss carryforward at June 30, 2012 and December 31, 2011 attributable to the Company is approximately $145,000 and $108,000, respectively.  These net operating loss carryforwards are expected to expire between 2026 and 2032.  An allowance has been established for the full amount of the gross deferred tax asset due to the uncertainty of utilizing the deferred taxes in the future.

The Company’s tax returns for fiscal years 2007 through 2011 are currently open to audit by the tax authorities under the statue limitations for relevant federal and state jurisdictions.

16

4 -   RELATED PARTY TRANSACTIONS

The Company’s trading network infrastructure was developed and operated by i3 S.r.l.  An employee of i3 S.r.l is a founder and 18% shareholder of the Company.  i3 S.r.l charges Goozex a monthly fee for management and support of the Company’s network.

During the six months ended June 30, 2012 and 2011, the amount of fees charged for these services totaled $4,900 and $0, respectively.  At June 30, 2012 and December 31, 2011, $4,900 and $0, respectively, remains payable and is included in accounts payable.

On May 1, 2008, the Company entered into an agreement with MTECH (a technology incubator at the University of Maryland) for the use of office space owned by the University and other services provided by MTECH.  The agreement had an initial term of two years, with an option to extend for up to two one-year periods.  The Company extended for both of the additional periods, with the agreement terminating in May 2012.  In return for an annual stock installment, MTECH provided office space and other services at a very low monthly cost.  Under the terms of the agreement, the Company was obligated to provide stock consideration each year on the anniversary date equal to 1% of the fully diluted equity in the Company.

At June 30, 2012 and December 31, 2011, MTECH was a 5% and 4% shareholder, respectively.  During the six months ended June 30, 2012 and 2011, $760 and $1,041 was paid to MTECH and 385 and 381 shares of common stock, respectively were issued for rent and other services.  Management has estimated the fair value of the office rent at $4,800 and $7,200 for the six months ended June 30, 2012 and 2011, respectively, which has been recorded as an expense and additional paid capital in both years.

5 -   OPTION TO PURCHASE EXPIRATION

On August 30, 2011, the Company entered into a Letter of Intent agreement with a potential purchaser of the Company.  Under the terms of the agreement, the purchaser was to acquire Goozex by the end of October 2011.  A break-up fee in the amount of $25,000 was to be paid in the event that the agreement was not closed by October 31, 2011.  The agreement did not close on time and in November, 2011 the purchaser withdrew.  The $25,000 break-up fee was retained by the Company and is recorded in these financials as “Option to purchase expiration income”.

6 -   SUBSEQUENT EVENTS

On November 15, 2012, the Company was acquired by Bay Acquisition Corp (“Bay”).  Bay’s common stock trades on over the counter under the symbol “SLGI”.  As a result of this transaction, the Company believes that Bay can provide sufficient liquidity to fund the company’s operation through December 31, 2013.

17