Eastgate Biotech (ETBI) 10-Q/A 17 Aug 18 2017 Q1 Quarterly report (amended) Financial data

Document and Entity Information

Document and Entity Information - USD ($)	3 Months Ended
	Mar. 31, 2017	Aug. 16, 2018	Jun. 30, 2018
Document and Entity Information:
Entity Registrant Name	Eastgate Biotech Corp
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Trading Symbol	etbi
Amendment Flag	false
Entity Central Index Key	1,099,574
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		974,783,333
Entity Public Float			$ 2,924,882
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	No
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Assets
Cash	$ 9,348
Total current assets	9,348
Total assets	9,348
Liabilities and Stockholders' Deficit
Accounts payable	423,705	$ 312,475
Accrued expenses and other liabilities	2,590,890	2,528,834
Deferred sales	93,326	92,516
Deferred rent	633	627
Capital lease obligation	10,368	10,368
Notes payable - related parties	1,704,785	1,633,222
Current portion of notes payable	70,403
Total current liabilities	4,894,110	4,578,042
Capital lease obligation	40,024	40,024
Total long-term liabilities	40,024	40,024
Total liabilities	4,934,134	4,618,066
Stockholders' deficit:
Common stock, $0.00001 par value, Authorized 450,000,000 shares, 322,872,175 and 309,522,175 shares issued and outstanding at March 31, 2017 and December 31, 2016, repectively	3,262	3,096
Additional paid-in capital	10,626,491	9,970,127
Retained earnings	(15,583,102)	(14,630,991)
Total stockholders' deficit	(4,924,786)	$ (4,618,066)
Total liabilities and stockholders' deficit	$ 9,348

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 21, 2016
Stockholders equity:
Preferred Stock, par value	$ 0.00001	$ 0.00001
Preferred Stock, authorized	50,000,000	50,000,000
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, authorized shares	450,000,000	450,000,000
Common stock, issued shares	322,872,175	309,522,175
Common stock, outstanding shares	322,872,175	309,522,175

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating Expenses
Professional Fees	$ 42,667	$ 2,636
Research and development	175,990	138,641
General and administrative	635,941	1,032,220
Marketing and selling	60,090	70,281
Total Operating Expenses	914,688	1,243,778
(Loss)/Gain from continuing operations	(914,688)	(1,243,778)
Other (Income) Expense
Interest	37,424	35,336
Loss from Impairment of assets		184,402
Total Other (Income) Expense	37,424	219,738
Net Income (loss)	(952,111)	(1,463,516)
Comprehensive Income (Loss) - foreign currency translation	11,139	(15,623)
Comprehensive Income (Loss)	$ (940,972)	$ (1,479,139)
Earnings Per Share
Earnings Per Share, Basic and Diluted	$ 0	$ (0.01)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities:
Net income (loss)	$ (952,111)	$ (1,463,516)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Expenses paid by related party		(611)
Common stock issued for services	191,030	753,480
Stock based compensation	465,500
Loss from impairment of assets		184,402
Increases/decreases in operating assets and liabilities
Reserve for recoverable taxes		(7,382)
Deferred rent	6	(368)
Recognition of Deferred Revenue	810	1,085
Prepaid expenses and other assets		14,595
Accrrued liabilites related party	4,164	398,021
Accrued interest	57,893	31,918
Accounts payable and accrued expenses	111,229	(15,127)
Net cash (used) in/provided by operating activities	(121,479)	(103,503)
Cash flows from financing activities:
Proceeds from (Repayments of) Notes Payable	70,403
Payment of capital lease obligation		(1,973)
Proceeds from (Repayments of) Related Party Debt	71,563	94,077
Net cash (used) in or provided by financing activities	141,966	92,104
Net change in cash	20,487	(11,399)
Effect of foreign currency translation adjustments	(11,139)	2,972
Cash, beginning of period		19,241
Cash, end of period	$ 9,348	10,814
Supplemental disclosure of cash flow information:
Cash paid for interest		$ 3,424

Nature of Business and History

Nature of Business and History of The Company	3 Months Ended
	Mar. 31, 2017
Notes
Nature of Business and History of The Company	1. Organization and Nature of Operations Organization Eastgate Biotech Corp. (The Company) was organized on September 8, 1999, under the laws of the State of Nevada. During the year ended December 31, 2012 the Company acquired Eastgate Pharmaceuticals Inc. (“EPI”), as a wholly-owned subsidiary of the Company, from our CEO, Anna Gluskin, its sole shareholder, officer, and director. EPI is a Province of Ontario, Canada corporation. Nature of Business The Company is engaged in the research and development of drug delivery innovations, development of improved and novel formulations, and forms of alternative dosage delivery of existing biologically active molecules. We are primarily engaged in the development of novel formulations of natural compounds and pharmaceutical products. We intend to accomplish this by developing our proprietary self-emulsifying drug delivery systems, predominantly forming Nano-emulsions. Although we have not finalized any pharmaceuticals products and are in the early stages of research, our goal is to be able to develop patentable and Trade Secret formulations of pharmaceutical, nutraceutical dietary supplements and consumer health products. We recently started marketing and distribution and have limited sales for some of our nutraceuticals products. Some of our proposed products under development are based on existing natural compounds. Many of these proposed products are made of essential oils and plant extracts. Our proposed products comprise excipients listed in the FDA “Inactive Ingredients Guide” that we believe are safe and approved for human consumption. Additionally, we believe that these proposed products can be manufactured using common equipment. We anticipate that we will be able to apply self-emulsifying technologies for development of a variety of pharmaceuticals and natural products for different applications.

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2017
Notes
Basis of Presentation	1. Basis of Presentation The financial statements of the Company have been prepared in accordance with US GAAP and are expressed in U.S. dollars. All inter-company accounts and transactions have been eliminated. The Company’s fiscal year end is December 31.

Basis of Consolidation

Basis of Consolidation	3 Months Ended
	Mar. 31, 2017
Notes
Basis of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary Eastgate Pharmaceuticals, Inc. All significant inter-company transactions are eliminated.

Cash and Cash Equivalents

Cash and Cash Equivalents	3 Months Ended
	Mar. 31, 2017
Notes
Cash and Cash Equivalents	Cash and Cash Equivalents For purposes of the statement of cash flows, cash includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents.

Accounts Receivable and Allowan

Accounts Receivable and Allowance For Doubtful Accounts	3 Months Ended
	Mar. 31, 2017
Notes
Accounts Receivable and Allowance For Doubtful Accounts	Accounts receivable and concentration of credit risk The Company carries no accounts receivable for the periods reported herein. This has currently eliminated the risk of default in the collection of accounts receivable. In addition, our concentration risk, which is evaluated on a quarterly basis is currently, virtually nil. Allowance for doubtful accounts The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts and the aging of the accounts receivable. The Company regularly reviews the adequacy of the Company’s allowance for doubtful accounts through identification of specific receivables where it is expected that payments will not be received. The Company also establishes an unallocated reserve that is applied to all amounts that are not specifically identified. In determining specific receivables where collections may not have been received, the Company reviews past due receivables and gives consideration to prior collection history and changes in the customer’s overall business condition. The allowance for doubtful accounts reflects the Company’s best estimate as of the reporting dates. At March 31, 2017 and December 31, 2016, the Company had an allowance for bad debts in the amount of $0 and $0, respectively.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2017
Notes
Revenue Recognition	Revenue Recognition The Company recognizes revenue in accordance with ASC-605, “Revenue Recognition,” which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or title has passed; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Revenues are recognized (a) for larger construction type projects based on the percentage of completion method; or (b) for direct sales of products, upon shipment, provided that a signed purchase order has been received, the price is fixed, title has transferred, collection of resulting receivables is reasonably assured, and there are no remaining significant obligations. Reserves for sales returns and allowances, based on historical levels of returns and discounts, current economic trends and changes in customer demand. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. The Company will defer any revenue for which the product has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.

Use of Estimates

Use of Estimates	3 Months Ended
	Mar. 31, 2017
Notes
Use of Estimates	Use of Estimates The preparation of unaudited consolidated financial statements in conformity with US GAAP 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. The Company regularly evaluates estimates and assumptions related to the deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Earnings (loss) Per Common Shar

Earnings (loss) Per Common Share	3 Months Ended
	Mar. 31, 2017
Notes
Earnings (loss) Per Common Share	Basic and Diluted Net Loss per Share The Company computes net loss per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential shares of common stock outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Mar. 31, 2017
Notes
Fair Value of Financial Instruments	Financial Instruments Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value: Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The Company did not have any Level 2 or Level 3 assets or liabilities as of September 30, 2017, with the exception of its notes payable. The carrying amounts of these liabilities at September 30, 2017 approximate their respective fair value based on the Company’s incremental borrowing rate. Cash is considered to be highly liquid and easily tradable as of March 31, 2017 and therefore classified as Level 1 within our fair value hierarchy. In addition, FASB ASC 825-10-25 Fair Value Option, or ASC 825-10-25, was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items at fair value. The Company did not elect the fair value options for any of its qualifying financial instruments.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2017
Notes
Subsequent Events	1. Subsequent Events We have evaluated subsequent events through the date of issuance of the unaudited consolidated financial statements, and below are the material recognizable subsequent events. · · · · · · · ·

Legal Matters

Legal Matters	3 Months Ended
	Mar. 31, 2017
Notes
Legal Matters	1. Commitments and Contingencies Litigation The Company may, from time to time, become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. The Company is currently not aware of any such legal proceedings that it believes will have, individually or in the aggregate, a material adverse effect on its business.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2017
Notes
Income Taxes	Income Taxes Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company has adopted ASC 740 “Accounting for Income Taxes” as of its inception. Pursuant to ASC 740, the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in this financial statement because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.

Equity

Equity	3 Months Ended
	Mar. 31, 2017
Equity:
Stockholders' Equity Note Disclosure	1. Stockholders’ Equity a) Authorized Authorized capital stock consists of: · · b) Share Issuances During the period ended March 31, 2017, the Company issued the following common shares: · · · ·

Related Party Disclosures

Related Party Disclosures	3 Months Ended
	Mar. 31, 2017
Related Party Disclosures:
Related Party Transactions Disclosure	1. Related Party Transactions The Company owes accrued compensation totaling $799,270 and $733,333 to two officers at March 31, 2017 and December 31, 2016, respectively. During the three months ended March 31, 2017 and 2016, the Company made repayments of accrued compensation of $2,156 and $0, respectively. As of December 31, 2016, $107,069 of the Company’s accounts payable are owed to two formerly related parties.

Notes Payable

Notes Payable	3 Months Ended
	Mar. 31, 2017
Notes
Notes Payable	1. Notes Payable Notes Payable to Related Parties : The Company owed $2,177,621 and $2,066,165 in notes and accrued interest to an officer and director at March 31, 2017 and December 31, 2016, respectively. During the three months ended March 31, 2017 and 2016, the Company made no repayments of notes or accrued interest. Notes Payable, others: The company has notes due to unrelated parties totaling $70,403 and $0 at March 31, 2017 and December 31, 2016, respectively. At March 31, 2017 and December 31, 2016, the Company has accrued interest of $18,000 and $0, respectively.