[BAY NATIONAL CORPORATION LOGO OMITTED]
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB/A
(Amendment No. 1)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended December 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 333-87781
Bay National Corporation
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(Name of small business issuer in its charter)
Maryland 52-2176710
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2328 West Joppa Road, Lutherville, Maryland 21093
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 410-494-2580
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Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: None
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No __
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in
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definitive proxy or information statements incorporated by reference in Part III
of this Form 10-KSB or any amendment to this Form 10-KSB. [x]
The issuer's revenues for its most recent fiscal year were $4,204,032.
The aggregate market value of the common equity held by non-affiliates
was $8,407,980 as of March 24, 2003, based on a sales price of $9.00 per share
of Common Stock, which is the sales price at which shares of Common Stock were
last sold in over the counter trading on March 24, 2003.
The number of shares outstanding of the issuer's Common Stock was
1,242,020 as of March 24, 2003.
Transitional Small Business Disclosure Format (check one):
Yes __ No X
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Explanatory Note
This Amendment No. 1 to the Annual Report on Form 10-KSB/A (this
"Amendment") amends the Annual Report on Form 10-KSB for the year ended December
31, 2002 filed on March 31, 2003 (the "Original Filing"). Bay National
Corporation has filed this Amendment to add additional disclosure to Item 9 of
the Original Filing. Pursuant to Rule 12b-15 under the Securities Exchange Act
of 1934, as amended, the complete text of Items 9 as amended is set forth below.
The remainder of the Form 10-KSB is unchanged and is not reproduced in this
Amendment. The certifications required by Section 302 of the Sarbanes-Oxley Act
are also included with this Amendment.
This Amendment speaks as of the original filing date of the Form 10-KSB
and reflects only the changes described above. No other information included in
the Original Filing, including the consolidated financial statements and the
footnotes thereto, has been modified or updated in any way.
This Amendment should be read together with other documents that Bay
National Corporation has filed with the Securities and Exchange Commission
subsequent to the filing of the Original Filing. Information in such reports and
documents updates and supersedes certain information contained in this
Amendment. The filing of this Amendment shall not be deemed an admission that
our Original Filing, when made, included any known, untrue statement of material
fact or knowingly omitted to state a material fact necessary to make a statement
not misleading.
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Item 12. Certain Relationships and Related Transactions
Prior to Bay National Corporation's initial public offering, the
organizers of Bay National Corporation and Bay National Bank and certain other
investors purchased an aggregate of 112,500 shares of Bay National Corporation's
common stock at a purchase price of $10.00 per share. The primary purpose of
this "organizational offering" was to provide Bay National Corporation and Bay
National Bank with the capital necessary to fund some of the initial
organizational and prepaid operating expenses.
In recognition of the financial and organizational risk undertaken by
the purchasers in the organizational offering, on September 10, 1999, the
purchasers in the organizational offering received, for no additional
consideration, a warrant to purchase one share of common stock at $10.00 per
share for every two shares that they purchased in the organizational offering.
As a result, Bay National Corporation issued warrants to purchase an aggregate
of 56,250 shares of common stock to the purchasers in the organizational
offering.
The warrants became exercisable on April 30, 2001 and are exercisable
in whole or in part until November 16, 2004. The warrants and the shares of
common stock issuable upon the exercise of the warrants are transferable subject
to compliance with applicable securities laws. Among other requirements, if the
OCC issues a capital directive or other order requiring Bay National Bank to
obtain additional capital, the warrants are forfeited if not immediately
exercised.
Lucy Mohler, the spouse of Hugh W. Mohler, serves as Bay National
Corporation's and Bay National Bank's Vice President of Marketing and Investor
Relations. Ms. Mohler earned an aggregate compensation of $61,531 plus benefits
valued at $2,767 during 2002 from Bay National Bank.
Director John R. Lerch owns a 100% interest in the property being
leased for Bay National Bank's Salisbury, Maryland branch office. Pursuant to
that lease, which is for a five-year term and commenced as of September 1, 1999,
Bay National Corporation agreed to pay Mr. Lerch monthly rent of approximately
$1,980 plus all real estate taxes and utilities. Bay National Corporation
believes that the lease rate is at fair market value, based, in part, on an
evaluation of the lease terms by William E. Martin of ERA Martin Associates, a
Salisbury-based real estate brokerage firm. Bay National Corporation engaged Mr.
Martin to review the lease terms for the purpose of determining whether the
terms were consistent with the lease terms for similar properties in the
downtown Salisbury area.
Some of Bay National Bank's directors and officers and the business and
professional organizations with which they are associated have banking
transactions with Bay National Bank in the ordinary course of business. It is
Bay National Bank's policy that any loans and loan commitments will be made in
accordance with applicable laws and on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with other persons of comparable credit standing. Loans to
directors and officers must comply with Bay National Bank's lending policies and
statutory lending limits, and directors with a personal interest in any loan
application will be excluded from considering any such loan application.
The officers and directors of Bay National Corporation and Bay National
Bank have loans due to Bay National Bank of $4,972,128 at December 31, 2002. All
loans were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
unaffiliated third parties and do not involve more than the normal risk of
repayment or present other unfavorable features.
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Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are filed with or incorporated by
reference into this report.
Exhibit
No. Description of Exhibit
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31.1 Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
BAY NATIONAL CORPORATION
Date: January 31, 2005 By: /s/ Hugh W. Mohler
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Hugh W. Mohler, President
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EXHIBIT INDEX
Exhibit
No. Description of Exhibit
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31.1 Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002
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