Eastgate Biotech (ETBI) 10-Q 15 Mar 17 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Mar. 15, 2017
Document and Entity Information:
Entity Registrant Name	EASTGATE BIOTECH CORP
Entity Central Index Key	1,099,574
Trading Symbol	etbi
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding		306,822,175
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current
Cash		$ 19,241
Deposits	251,160	14,595
Sales tax recoverable	98,283	79,681
Total current assets	349,443	113,517
Other assets
Property & Equipment, net	143,746	184,402
Total other assets	493,189	297,919
Total assets	493,189	297,919
Current liabilities
Bank indebtedness	935
Accounts payable and accrued liabilities	367,204	361,094
Deferred revenue		23,847
Accrued liabilities related party	1,949,737	732,125
Deferred rent	1,026	2,064
Capital lease obligation	10,102	8,130
Accrued interest - related parties	395,282	292,769
Notes payable - related parties	1,506,672	1,308,585
Total current liabilities	4,230,958	2,728,614
Long term liabilities
Capital lease obligation long term	41,391	50,386
Total Liabilities	4,272,349	2,779,000
Stockholders' equity (deficit)
Preferred stock:50,000,000 shares authorized at $0.00001 par value no shares issued at September 30, 2016 and December 31, 2015
Common stock: 450,000,000 shares authorized at $0.00001 par value 306,822,175 and 282,872,175 shares issued and outstanding at September 30, 2016 and December 31, 2015 respectively	3,069	2,829
Additional paid-in capital	9,891,004	9,137,764
Accumulated other comprehensive income	23,246	31,846
Deficit accumulated	(13,696,479)	(11,653,520)
Total stockholders' Equity (Deficit)	(3,779,160)	(2,481,081)
Total liabilities and stockholders' equity (deficit)	$ 493,189	$ 297,919

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Stockholders' equity (deficit)
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	0	0
Preferred stock, shares outstanding	0	0
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	306,822,175	282,872,175
Common stock, outstanding	306,822,175	282,872,175

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidated Statements Of Operations And Comprehensive Loss
REVENUES	$ 1,689	$ 73,179	$ 93,525	$ 131,722
Cost of goods sold		11,059	13,963	19,489
Gross (loss) profit	1,689	62,120	79,562	112,233
OPERATING EXPENSES
Professional fees	19,886	26,757	24,191	123,960
Research & development	115,518	257,380	367,070	951,358
General and administrative	435,994	464,756	1,287,603	1,974,458
Marketing and selling	107,454	119,594	327,144	439,330
Total Operating Expenses	678,852	868,487	2,006,008	3,489,106
LOSS FROM OPERATIONS	(677,163)	(806,367)	(1,926,446)	(3,376,873)
Other items
Interest expense	(39,778)	(29,449)	(116,516)	(78,802)
Total other items	(39,778)	(29,449)	(116,516)	(78,802)
LOSS BEFORE INCOME TAXES	(716,941)	(835,816)	(2,042,962)	(3,455,675)
NET LOSS	$ (716,941)	$ (835,816)	$ (2,042,962)	$ (3,455,675)
BASIC AND DILUTED LOSS PER SHARE	$ (0.002)	$ 0	$ (0.007)	$ (0.02)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED	306,732,501	217,302,267	303,779,292	161,087,899
COMPREHENSIVE LOSS
Net Loss	$ (716,941)	$ (835,816)	$ (2,042,962)	$ (3,455,675)
Other Comprehensive Income(Loss) - foreign currency translation	3,213	15,107	(8,600)	9,794
Comprehensive Loss	$ (713,728)	$ (820,709)	$ (2,051,562)	$ (3,445,881)

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period	$ (2,042,962)	$ (3,455,675)
Adjustments to reconcile net loss to net cash used by operating activities:
Expenses paid on the Company's behalf by a related party	(3,145)
Common stock issued for services	753,480	1,413,109
Depreciation	40,656	30,693
Stock options issued	(6)	291,427
Changes in operating assets and liabilities:
Accrued interest	102,513	78,802
Prepaid asset	(236,565)	(55,333)
Accounts payable	(7,403)	67,498
Accounts Receivable		(38,392)
Accrued liabilities related party	1,212,628	1,150,291
Sales tax recoverable	(14,124)	(31,283)
Deferred rent	(1,147)	(1,206)
Deferred revenue	(25,048)
Cash flows from operating activities	(221,124)	(550,069)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
Cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of capital lease obligation	(7,023)	(4,130)
Proceeds from notes payable related party	201,233	280,624
Payments on notes payable related party		(5,536)
Common stock issued for cash		5,000
Cash overdraft		6,345
Cash flows provided by financing activities	194,210	282,303
NET INCREASE (DECREASE) IN CASH	(26,913)	(267,766)
Effect of foreign currency translation adjustments	7,672	(18,715)
Cash, beginning of the period	19,241	286,481
Cash, end of the period
Supplemental disclosures of cash flow information:
Cash paid for income taxes
Cash paid for interest	10,429	1,261
Non Cash Financing activities:
Common stock issued to convert liabilities		1,317,330
Common stock issued - subscription payable
Common stock issued for placement fees		85,401
Employee Advance repaid for reduction of Notes payable Related Party		$ 3,359

CONDENSED FINANCIAL STATEMENTS

CONDENSED FINANCIAL STATEMENTS	9 Months Ended
	Sep. 30, 2016
Condensed Financial Statements
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 September 30, 2016, 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, 2015 audited financial statements. The results of operations for the periods ended September 30, 2016 and 2015 are not necessarily indicative of the operating results for the full years.

GOING CONCERN

GOING CONCERN	9 Months Ended
	Sep. 30, 2016
Condensed Financial Statements
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 $13,696,479 as of September 30, 2016. The Company currently has limited liquidity, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time, raising substantial doubt about its ability to continue as a going concern. 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	9 Months Ended
	Sep. 30, 2016
Condensed Financial Statements
SUMMARY OF 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 six months or less to be cash equivalents to the extent the funds are not being held for investment purposes. Revenue Recognition The Company recognizes revenue when it is realized or realizable and earned. We consider revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collection is reasonably assured. 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 In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as "Development Stage Entities" (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard and will not report inception to date financial information. 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	9 Months Ended
	Sep. 30, 2016
Condensed Financial Statements
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.

SALES TAX RECOVERABLE

SALES TAX RECOVERABLE	9 Months Ended
	Sep. 30, 2016
Condensed Financial Statements
Sales tax recoverable	Sales tax receivable The Company recovers sales tax paid, for which returns are filed on annual basis. At September 30, 2016, $98,283 was claimed as recoverable compared to the December 31, 2015 balance of $79,681. Sales tax recoverable is a result of sales tax paid on eligible expenses.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	9 Months Ended
	Sep. 30, 2016
Condensed Financial Statements
STOCKHOLDERS' EQUITY	On February 1 st On July 16, 2016, 550, 251 warrants were exercised by their holders using cashless exercise provision at the price of $0.00001 per share. This resulted in 550,000 common shares being issued to these holders. The following table summarizes the stock options that are issued, outstanding and exercisable Stock Options Issued & Outstanding Exercise Expiration September 30 December 31 Price Date 2016 2015 $ 0.286 February 12, 2020 10,375,000 10,375,000 As of September 30, 2016, the Company had 41,164,901 warrants to purchase common stock. All outstanding warrants have a weighted average price of $0.07 per share and have a weighted average remaining life of 2.81 years. The following table summarizes warrants that are issued, outstanding and exercisable Warrants Issued & Outstanding Exercise Expiration September 30 December 31 Price Date 2016 2015 $ 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 8,146,225 0.04 August 19, 2020 125,000 125,000 0.00001 October 6, 2020 15,621,376 16,171,627 41,164,901 41,715,152

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2016
Condensed Financial Statements
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:

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
	Sep. 30, 2016
Summary Of Significant Accounting Policies 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 six months or less to be cash equivalents to the extent the funds are not being held for investment purposes.
Revenue Recognition	The Company recognizes revenue when it is realized or realizable and earned. We consider revenue realized or realizable and earned when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) the product has been shipped or the services have been rendered to the customer, (iii) the sales price is fixed or determinable, and (iv) collection is reasonably assured.
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	In June 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies previously identified as "Development Stage Entities" (Topic 915). The amendments in this ASU simplify accounting guidance by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present inception-to-date information in the statements of income, cash flows, and shareholder equity. Early application of each of the amendments is permitted for any annual reporting period or interim period for which the entity's financial statements have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will no longer present or disclose any information required by Topic 915. The Company has adopted this standard and will not report inception to date financial information. 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)	9 Months Ended
	Sep. 30, 2016
Stockholders Equity Tables
Summarizes the stock options issued, outstanding and exercisable	The following table summarizes the stock options that are issued, outstanding and exercisable Stock Options Issued & Outstanding Exercise Expiration September 30 December 31 Price Date 2016 2015 $ 0.286 February 12, 2020 10,375,000 10,375,000
Summarizes warrants that are issued, outstanding and exercisable	The following table summarizes warrants that are issued, outstanding and exercisable Warrants Issued & Outstanding Exercise Expiration September 30 December 31 Price Date 2016 2015 $ 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 8,146,225 0.04 August 19, 2020 125,000 125,000 0.00001 October 6, 2020 15,621,376 16,171,627 41,164,901 41,715,152

GOING CONCERN (Detail Textuals)

GOING CONCERN (Detail Textuals) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Going Concern Detail Textuals
Accumulated deficit	$ 13,696,479	$ 11,653,520

RELATED-PARTY TRANSACTIONS (Det

RELATED-PARTY TRANSACTIONS (Detail Textuals) - USD ($)	9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Related Party Transaction [Line Items]
Proceeds from notes payable related party	$ 201,233	$ 280,624
Expenses paid on the Company's behalf by a related party	3,145
Repayment of related party loan		$ 5,536
Accrued interest to related parties	395,282		$ 292,769
Interest expense	$ 102,483
Minimum [Member]
Related Party Transaction [Line Items]
Annual interest rate	5.00%
Maximum [Member]
Related Party Transaction [Line Items]
Annual interest rate	10.00%
Notes Payable To Related Party [Member]
Related Party Transaction [Line Items]
Proceeds from notes payable related party			310,825
Expenses paid on the Company's behalf by a related party			2,337
Repayment of related party loan			5,536
Reimbursment of expense			5,432
Increase in notes payable			302,194
Interest expense			$ 109,954

SALES TAX RECOVERABLE (Detail T

SALES TAX RECOVERABLE (Detail Textuals) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Sales Tax Recoverable Detail Textuals
Sales tax recoverable	$ 98,283	$ 79,681

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Class of Warrant or Right [Line Items]
Exercise Price	$ 0.07
Stock options Issued & Outstanding	41,164,901	41,715,152
Option Expiration Date 12 February 2020 [Member]
Class of Warrant or Right [Line Items]
Exercise Price	$ 0.286	$ 0.286
Stock options Issued & Outstanding	10,375,000	10,375,000

STOCKHOLDERS' EQUITY (Detail 1)

STOCKHOLDERS' EQUITY (Detail 1) - $ / shares	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015
Class of Warrant or Right [Line Items]
Exercise Price		$ 0.07
Warrants Issued & Outstanding		41,164,901	41,715,152
Warrants Expiration Date 14 March 2019 [Member]
Class of Warrant or Right [Line Items]
Exercise Price		$ 0.25	$ 0.25
Warrants Issued & Outstanding		3,495,000	3,495,000
Warrants Expiration Date 21 March 2019 [Member]
Class of Warrant or Right [Line Items]
Exercise Price		$ 0.25	$ 0.25
Warrants Issued & Outstanding		3,480,000	3,480,000
Warrants Expiration Date 6 June 2019 [Member]
Class of Warrant or Right [Line Items]
Exercise Price		$ 0.25	$ 0.25
Warrants Issued & Outstanding		2,022,300	2,022,300
Warrants Expiration Date 16 October 2019 [Member]
Class of Warrant or Right [Line Items]
Exercise Price	$ 0.05	$ 0.05
Warrants Issued & Outstanding	150,000	150,000
Warrants Expiration Date 31 December 2019 [Member]
Class of Warrant or Right [Line Items]
Exercise Price		$ 0.04	$ 0.04
Warrants Issued & Outstanding		8,125,000	8,125,000
Warrants Expiration Date 5 January 2020 [Member]
Class of Warrant or Right [Line Items]
Exercise Price		$ 0.04	$ 0.04
Warrants Issued & Outstanding		8,146,225	8,146,225
Warrants Expiration Date 19 August 2020 [Member]
Class of Warrant or Right [Line Items]
Exercise Price		$ 0.04	$ 0.04
Warrants Issued & Outstanding		125,000	125,000
Warrants Expiration Date 6 October 2020 [Member]
Class of Warrant or Right [Line Items]
Exercise Price		$ 0.00001	$ 0.00001
Warrants Issued & Outstanding		15,621,376	16,171,627

STOCKHOLDERS' EQUITY (Details T

STOCKHOLDERS' EQUITY (Details Textuals) - $ / shares	1 Months Ended		9 Months Ended
	Jul. 16, 2016	Feb. 01, 2016	Sep. 30, 2016	Dec. 31, 2015
Stockholders Equity Note [Line Items]
Weighted average price			$ 0.07
Weighted average life			2 years 9 months 22 days
Number of warrants to purchase common stock			41,164,901	41,715,152
Exercisable warrant	550,251
Investment Warrants, Exercise Price	$ 0.00001
Common stock, issued	550,000		306,822,175	282,872,175
Consultants [Member]
Stockholders Equity Note [Line Items]
Shares issued for services rendered (in shares)		23,400,000
Price per share		$ 0.0322