Eastgate Biotech (ETBI) 10-Q 19 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 19, 2015
Document and Entity Information:
Entity Registrant Name	EASTGATE BIOTECH CORP
Entity Central Index Key	1,099,574
Trading Symbol	etbi
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		202,700,510
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Current
Cash		$ 286,481
Deposits	$ 6,587
Sales tax recoverable	74,478	$ 53,208
Total current assets	81,065	339,689
Other assets
Property & Equipment, net	124,682	143,246
Total other assets	124,682	143,246
Total assets	205,747	$ 482,935
Current liabilities
Bank indebtedness	6,602
Accounts payable and accrued liabilities	337,258	$ 299,099
Deferred revenue	9,816
Accrued liabilities related party	350,523	$ 388,675
Deferred rent	3,135	4,200
Accrued interest - related parties	232,198	182,845
Notes payable - related parties	1,158,642	1,006,391
Total current liabilities	2,098,174	1,881,210
Total Liabilities	$ 2,098,174	$ 1,881,210
Commitments and Contingencies
Stockholders' equity (deficit)
Authorized: Preferred stock:50,000,000 shares authorized at $0.00001 par value no shares issued at June 30, 2015 and December 31, 2014
Common stock: 450,000,000 shares authorized at $0.00001 par value 202,700,510 and 89,635,234 shares issued and outstanding at June 30, 2015 and December 31, 2014 respectively	$ 2,027	$ 896
Additional paid-in capital	8,087,659	5,957,771
Accumulated other comprehensive income	9,956	15,268
Deficit accumulated	(9,992,069)	(7,372,210)
Total stockholders' equity (deficit)	(1,892,427)	(1,398,275)
Total liabilities and stockholders' equity (deficit)	$ 205,747	$ 482,935

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred stock, shares issued
Common stock, shares authorized	450,000,000	450,000,000
Common stock, par value (in dollars per share)	$ 0.00001	$ 0.00001
Common stock, issued	202,700,510	89,635,234
Common stock, outstanding	202,700,510	89,635,234

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
REVENUES	$ 58,543		$ 58,543
Cost of goods sold	8,430		8,430
Gross profit	50,113		50,113
OPERATING EXPENSES
Professional fees	46,783	$ 53,092	97,203	$ 102,998
Research & development	297,858	267,794	693,978	385,491
General and administrative	455,427	1,519,177	1,509,702	2,328,715
Marketing and selling	50,551	29,844	319,736	34,804
Total Operating Expenses	850,619	1,869,907	2,620,619	2,852,008
LOSS FROM OPERATIONS	(800,506)	(1,869,907)	(2,570,506)	(2,852,008)
Other items
Interest expense	(26,703)	(22,821)	(49,353)	(44,935)
Total other items	(26,703)	(22,821)	(49,353)	(44,935)
LOSS BEFORE INCOME TAXES	$ (827,209)	$ (1,892,728)	$ (2,619,859)	$ (2,896,943)
PROVISION FOR INCOME TAXES
NET LOSS	$ (827,209)	$ (1,892,728)	$ (2,619,859)	$ (2,896,943)
BASIC AND DILUTED LOSS PER SHARE (in dollars per share)	$ (0.01)	$ (0.04)	$ (0.02)	$ (0.07)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED (in shares)	154,771,152	45,118,639	132,514,850	39,119,818
COMPREHENSIVE LOSS A summary of the components of other comprehensive loss for the periods ended as follows:
Net Loss	$ (827,209)	$ (1,892,728)	$ (2,619,859)	$ (2,896,943)
Other Comprehensive Loss - foreign currency translation	(5,224)	12,191	(5,312)	17,146
Comprehensive Loss	$ (832,433)	$ (1,880,537)	$ (2,625,171)	$ (2,879,797)

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$ (2,619,859)	$ (2,896,943)
Adjustments to reconcile net loss to net cash used by operating activities:
Expenses paid on Company's behalf by a related party		(2,637)
Common stock issued for services	1,077,743	1,161,250
Depreciation	18,564	$ 9,637
Stock options issued	291,427
Changes in operating assets and liabilities:
Accrued interest	49,353	$ 23,994
Prepaid asset	(6,597)
Accounts payable	49,242	$ (91,882)
Accrued liabilities related party	725,452	1,014,500
Sales tax recoverable	(24,436)	$ (28,827)
Deferred rent	(820)
Deferred revenue	9,831
Cash flows used in operating activities	$ (430,100)	$ (810,908)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(63,298)
Cash flows used in investing activities		(63,298)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of capital lease obligation		(20,810)
Proceeds from notes payable related party	$ 159,750	65,808
Payments on notes payable related party	$ (5,536)	(19,590)
Common stock issued for cash		$ 1,206,500
Cash overdraft, net	$ 6,611
Cash flows provided by financing activities	160,825	$ 1,231,908
NET INCREASE (DECREASE) IN CASH	(269,275)	357,702
Effect of foreign currency translation adjustments	(17,206)	17,146
Cash, beginning of the period	$ 286,481	458
Cash, end of the period		$ 375,306
Supplemental disclosures of cash flow information:
Cash paid for income taxes
Cash paid for interest		$ 20,151
Non Cash Financing activities:
Common stock issued to convert liabilities	$ 761,849	1,928,507
Common stock issued - subscription payable		$ 2,000
Common stock issued for placement fees

CONDENSED FINANCIAL STATEMENTS

CONDENSED FINANCIAL STATEMENTS	6 Months Ended
	Jun. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
CONDENSED FINANCIAL STATEMENTS	NOTE 1 - CONDENSED FINANCIAL STATEMENTS The accompanying financial statements have been prepared by the Eastgate Biotech Corp without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at June 30, 2015, and for all periods presented herein have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2014 audited financial statements. The results of operations for the periods ended June 30, 2015 and 2014 are not necessarily indicative of the operating results for the full years.

GOING CONCERN

GOING CONCERN	6 Months Ended
	Jun. 30, 2015
Going Concern [Abstract]
GOING CONCERN	NOTE 2 - GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, the Company has accumulated deficit of $9,992,069 Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management's efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Eastgate Biotech Corp. and its wholly-owned subsidiary Eastgate Pharmaceuticals Inc. All intercompany accounts and transactions have been eliminated in consolidation. 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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Research and Development Costs The Company expenses research and development costs to operations as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including employee-related expenses; laboratory supplies and other direct expenses; third-party contractual costs relating to nonclinical studies and related contract manufacturing expenses, development of manufacturing processes and regulatory registration. Foreign Currency Translation Foreign denominated assets and liabilities of the Company are translated into U.S. dollars at the prevailing exchange rates in effect at the end of the reporting period. Income statement accounts are translated at a weighted average of exchange rates which were in effect during the period. Translation adjustments that arise from translating the foreign subsidiary's financial statements from local currency to U.S. currency are recorded in the other comprehensive loss component of stockholders' equity. Recent Accounting Pronouncements The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company's financial position or statements.

RELATED-PARTY TRANSACTIONS

RELATED-PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2015
Related Party Transactions [Abstract]
RELATED-PARTY TRANSACTIONS	NOTE 4 –RELATED-PARTY TRANSACTIONS Notes payable – related parties The Company has recorded loans from shareholders, amounts due to shareholders for expenses paid on its behalf by shareholders as Notes payable - related parties on the balance sheet. The amounts comprising Notes payable – related parties bear interest ranging from 5 percent per annum to 10 percent per annum, are unsecured and are due and payable upon demand. 962

SALES TAX RECOVERABLE

SALES TAX RECOVERABLE	6 Months Ended
	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Sales tax recoverable	NOTE 5 –SALES TAX RECOVERABLE Sales tax receivable The Company recovers sales tax paid, for which returns are filed on annual basis. At June 30, 2015, $74,478 was claimed as recoverable compared to the December 31, 2014 balance of $53,208. Sales tax recoverable is a result of sales tax paid on eligible expenses.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2015
Equity [Abstract]
STOCKHOLDERS' EQUITY	NOTE 6 – STOCKHOLDERS' EQUITY On January 5, 2015, the Company issued 8,146,225 Units of its securities in satisfaction of accrued liabilities comprised of $325,849 of compensation owed to eight directors and members of management at the price of $0.04 per share. Each Unit consisted of one share of common stock and a five year warrant to purchase one share of common stock at an exercise price of $0.04 per share. As a result of this transaction, the Company issued 8,146,225 shares of common stock and 8,146,225 warrants to purchase our common stock. In January 2015, the Company issued a total of 3,700,000 shares of common stock to consultants for services rendered at the price of $0.035 per share. On February 12, 2015, the Company issued a total of 15,250,000 shares of common stock to employees and consultants for services rendered at the price of $0.0286 per share. In March 2015, the Company issued a total of 8,683,333 shares of common stock to consultants for services rendered at the price of $0.033 per share. During the quarter ended March 31, 2015, the Company issued a total of 977,233 shares of common stock to consultants for services rendered at the price ranging from $0.06 to $0.50 per share. During the quarter ended March 31, 2015, the Company issued 1,770,346 shares of common stock to two officers and an employee as part of their compensation at the price of $0.055 per share. On May 22, 2015, the Company issued 62,285,718 shares of common stock in satisfaction of accrued liabilities comprised of $436,000 of compensation owed to the eight who are directors, officers and members of management at the market price of $0.007 per share. On June 19, 2015, the Company issued 15,000,000 shares of common stock to a director and two officers in recognition of the progress made in the development platform being used in various pharmaceutical and natural products. The shares were issued at the price of $0.0149 per shares. As of March 31, 2015, the Company had 25,418,525 warrants to purchase common stock. All outstanding warrants have a weighted average price of $0.11 per share and have a weighted average remaining life of 4.25 years. The following table summarizes warrants that are issued, outstanding and exercisable Warrants Issued & Outstanding Exercise Expiration June 30 December 31 Price Date 2015 2014 $ 0.25 March 14, 2019 3,495,000 3,495,000 $ 0.25 March 21, 2019 3,480,000 3,480,000 $ 0.25 June 6, 2019 2,022,300 2,022,300 $ 0.05 October 16, 2019 150,000 150,000 $ 0.04 December 31, 2019 8,125,000 8,125,000 $ 0.04 January 5, 2020 8,146,225 - 25,418,525 17,272,300 Stock Options On February 12, 2015, the Company issued a total of 10,375,000 options to purchase shares of common stock to employees and consultants as compensation at the exercise price of $0.0286 per share. The total fair value of the options at the date of the grant was $291,427. The options vested immediately and a charge of $291,427 was recorded as of grant date. The fair value was estimated using the Black-Scholes option pricing model, taking into account the grant date exercise price of $0.0286, an expected life of the option of 2.5 years, an expected volatility of 211.1%, expected dividends on the stock of 0 and the risk-free interest rate for the term of the option of 1.02%. The following table summarizes the stock options that are issued, outstanding and exercisable Stock Options Issued & Outstanding Exercise Expiration June 30 December 31 Price Date 2015 2014 $ 0.286 February 12, 2020 10 -

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 7– SUBSEQUENT EVENTS In accordance with ASC 855 Company management reviewed all material events through the date of this report and determined that there are no material subsequent events to report except as described below:

SIGNIFICANT ACCOUNTING POLICI13

SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2015
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of Eastgate Biotech Corp. and its wholly-owned subsidiary Eastgate Pharmaceuticals Inc. All intercompany accounts and transactions have been eliminated in consolidation.
Use of Estimates	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 at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents	Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Research and Development Costs	Research and Development Costs The Company expenses research and development costs to operations as incurred. Research and development expenses are comprised of costs incurred in performing research and development activities, including employee-related expenses; laboratory supplies and other direct expenses; third-party contractual costs relating to nonclinical studies and related contract manufacturing expenses, development of manufacturing processes and regulatory registration.
Foreign Currency Translation	Foreign Currency Translation Foreign denominated assets and liabilities of the Company are translated into U.S. dollars at the prevailing exchange rates in effect at the end of the reporting period. Income statement accounts are translated at a weighted average of exchange rates which were in effect during the period. Translation adjustments that arise from translating the foreign subsidiary's financial statements from local currency to U.S. currency are recorded in the other comprehensive loss component of stockholders' equity.
Recent Accounting Pronouncements	Recent Accounting Pronouncements The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company's financial position or statements.

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	6 Months Ended
	Jun. 30, 2015
Equity [Abstract]
Schedule of summarizes warrants that are issued, outstanding and exercisable	Warrants Issued & Outstanding Exercise Expiration June 30 December 31 Price Date 2015 2014 $ 0.25 March 14, 2019 3,495,000 3,495,000 $ 0.25 March 21, 2019 3,480,000 3,480,000 $ 0.25 June 6, 2019 2,022,300 2,022,300 $ 0.05 October 16, 2019 150,000 150,000 $ 0.04 December 31, 2019 8,125,000 8,125,000 $ 0.04 January 5, 2020 8,146,225 - 25,418,525 17,272,300
Schedule of stock options that are issued, outstanding and exercisable	Stock Options Issued & Outstanding Exercise Expiration June 30 December 31 Price Date 2015 2014 $ 0.286 February 12, 2020 10 -

GOING CONCERN (Detail Textuals)

GOING CONCERN (Detail Textuals) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Going Concern [Abstract]
Accumulated deficit	$ (9,992,069)	$ (7,372,210)

RELATED-PARTY TRANSACTIONS (Det

RELATED-PARTY TRANSACTIONS (Detail Textuals) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Related Party Transaction [Line Items]
Accrued interest to related parties	$ 232,198	$ 182,845
Notes payable - related parties
Related Party Transaction [Line Items]
Notes payable - related parties interest bearing percentage, minimum	5.00%
Notes payable - related parties interest bearing percentage, maximum	10.00%
Advanced cash received by related party shareholder	$ 159,750	190,880
Expenses paid by company on behalf of related party	1,962	4,938
Repayment of related party loans	5,536
Accrued interest to related parties	232,198	182,845
Interest expense	$ 49,353	$ 88,879

SALES TAX RECOVERABLE (Detail T

SALES TAX RECOVERABLE (Detail Textuals) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Sales tax recoverable	$ 74,478	$ 53,208

STOCKHOLDERS' EQUITY - Summariz

STOCKHOLDERS' EQUITY - Summarizes warrants that are issued, outstanding and exercisable (Details) - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014	Mar. 31, 2015
Class of Warrant or Right [Line Items]
Exercise Price			$ 0.11
Warrants Issued & Outstanding	25,418,525	17,272,300
March 14, 2019
Class of Warrant or Right [Line Items]
Exercise Price	$ 0.25	$ 0.25
Expiration Date	Mar. 14, 2019	Mar. 14, 2019
Warrants Issued & Outstanding	3,495,000	3,495,000
March 21, 2019
Class of Warrant or Right [Line Items]
Exercise Price	$ 0.25	$ 0.25
Expiration Date	Mar. 21, 2019	Mar. 21, 2019
Warrants Issued & Outstanding	3,480,000	3,480,000
June 6, 2019
Class of Warrant or Right [Line Items]
Exercise Price	$ 0.25	$ 0.25
Expiration Date	Jun. 6, 2019	Jun. 6, 2019
Warrants Issued & Outstanding	2,022,300	2,022,300
October 16, 2019
Class of Warrant or Right [Line Items]
Exercise Price	$ 0.05	$ 0.05
Expiration Date	Oct. 16, 2019	Oct. 16, 2019
Warrants Issued & Outstanding	150,000	150,000
December 31, 2019
Class of Warrant or Right [Line Items]
Exercise Price	$ 0.04	$ 0.04
Expiration Date	Dec. 31, 2019	Dec. 31, 2019
Warrants Issued & Outstanding	8,125,000	8,125,000
January 5, 2020
Class of Warrant or Right [Line Items]
Exercise Price	$ 0.04	$ 0.04
Expiration Date	Jan. 5, 2020	Jan. 5, 2020
Warrants Issued & Outstanding	8,146,225

STOCKHOLDERS' EQUITY - Summar19

STOCKHOLDERS' EQUITY - Summarizes stock options that are issued, outstanding and exercisable (Details 1) - Employee Stock Option - $ / shares	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise Price	$ 0.286	$ 0.286
Expiration Date	Feb. 12, 2020	Feb. 12, 2020
Stock Options Issued & Outstanding (in shares)	10,375,000

STOCKHOLDERS' EQUITY (Detail Te

STOCKHOLDERS' EQUITY (Detail Textuals)	Feb. 12, 2015USD ($)$ / sharesshares	Jan. 05, 2015USD ($)Director$ / CommonStock_Warrantshares	Jun. 19, 2015Officer$ / sharesshares	May. 22, 2015USD ($)Director$ / sharesshares	Mar. 31, 2015Officer$ / sharesshares	Jan. 31, 2015$ / sharesshares	Mar. 31, 2015Officer$ / sharesshares	Jun. 30, 2015shares	Dec. 31, 2014shares
Stockholders Equity Note [Line Items]
Weighted average life							4 years 3 months
Number of warrants to purchase common stock					25,418,525		25,418,525
Exercise price | $ / shares					$ 0.11		$ 0.11
Employee Stock Option
Stockholders Equity Note [Line Items]
Options issue to purchase shares of common stock								10,375,000
Employee and Consultant
Stockholders Equity Note [Line Items]
Shares issued for services rendered (in shares)	15,250,000
Price per share | $ / shares	$ 0.0286
Employee and Consultant | Employee Stock Option
Stockholders Equity Note [Line Items]
Options issue to purchase shares of common stock	10,375,000
Total fair value of options at the date of the grant | $	$ 291,427
Pricing model	Black-Scholes option pricing model
Exercise price | $ / shares	$ 0.0286
Expected life of option	2 years 6 months
Expected volatility	211.10%
Expected dividends | $	$ 0
Risk-free interest rate	1.02%
Consultant
Stockholders Equity Note [Line Items]
Shares issued for services rendered (in shares)					8,683,333	3,700,000	977,233
Price per share | $ / shares					$ 0.033	$ 0.035	$ 0.033
Consultant | Minimum
Stockholders Equity Note [Line Items]
Price per share | $ / shares					0.06		0.06
Consultant | Maximum
Stockholders Equity Note [Line Items]
Price per share | $ / shares					0.50		$ 0.50
Officer
Stockholders Equity Note [Line Items]
Shares issued for services rendered (in shares)							1,770,346
Price per share | $ / shares					$ 0.055		$ 0.055
Entity Number of Employees | Officer					2		2
Common stock and warrant unit
Stockholders Equity Note [Line Items]
Number of units issued		8,146,225
Proceeds from issuance of warrants | $		$ 325,849
Number of directors and members | Director		8
Units issue price | $ / CommonStock_Warrant		0.04
Number of common stock in each unit		1
Weighted average life		5 years
Issued shares of common stock		8,146,225
Number of warrants to purchase common stock		8,146,225
Common stock
Stockholders Equity Note [Line Items]
Proceeds from issuance of warrants | $				$ 436,000
Number of directors and members | Director				8
Shares issued for services rendered (in shares)			15,000,000	62,285,718
Price per share | $ / shares			$ 0.0149	$ 0.007
Entity Number of Employees | Officer			2