Attached files

file filename
EXCEL - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.Financial_Report.xls
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R4.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R3.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R8.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R7.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R9.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R1.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R2.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R5.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R6.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R13.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R35.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R12.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R14.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R28.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R15.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R34.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R23.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R36.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R24.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R25.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R18.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R10.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R19.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R21.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R32.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R16.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R29.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R30.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R27.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R33.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R17.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R26.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R22.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R11.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R31.htm
EX-31.1 - CERTIFICATION - Cellular Biomedicine Group, Inc.ebig_ex311.htm
EX-32.1 - CERTIFICATION - Cellular Biomedicine Group, Inc.ebig_ex321.htm
EX-31.2 - CERTIFICATION - Cellular Biomedicine Group, Inc.ebig_ex312.htm
EX-32.2 - CERTIFICATION - Cellular Biomedicine Group, Inc.ebig_ex322.htm
XML - IDEA: XBRL DOCUMENT - Cellular Biomedicine Group, Inc.R20.htm


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30, 2012

OR
 
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _______ to ________

Commission File Number: 0-52282

EastBridge Investment Group Corporation
(Exact name of registrant as specified in its charter)

Arizona
 
86-1032927
(State or Other Jurisdiction of
 
(I.R.S. Employer
Incorporation)
 
Identification No.)

8040 E. Morgan Trail, Unit 18, Scottsdale, Arizona 85258
(Address of Principal Executive Offices)

(480) 966-2020
(Registrant’s telephone number)

Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, no par value per share
(Title of Class)
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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  þ     No  ¨
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o
 
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non–accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b–2 of the Exchange Act. (Check one):

Large accelerated filer    o  Accelerated filer    o  Non–Accelerated filer    o  Smaller Reporting Company    þ
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act).  Yes   o    No  þ
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 
Class
 
Outstanding at  November_6, 2012
Common stock, no par value
 
 156,692,041
 


 
 

 
EastBridge Investment Group Corporation

TABLE OF CONTENTS
 
     
Page Numbers
 
PART I - FINANCIAL INFORMATION
     
         
Item 1.
Condensed Consolidated Financial Statements (unaudited)
     
 
Condensed Consolidated Balance Sheets
    3  
 
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
    4  
 
Unaudited Condensed Consolidated Statement of Cash Flows
    5  
 
Notes to Unaudited Condensed Consolidated Financial Statements
    6  
Item 2.
Management’s Discussion & Analysis of Financial Condition & Results of Operations
    15  
Item 3
Quantitative and Qualitative Disclosures About Market Risk
    19  
Item 4.
Controls and Procedures
    19  
         
PART II - OTHER INFORMATION
       
           
Item 1.
Legal Proceedings
    20  
Item1A.
Risk Factors
    20  
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
    20  
Item 3.
Defaults Upon Senior Securities
    20  
Item 4.
Mine Safety Disclosures
    20  
Item 5
Other Information
    20  
Item 6.
Exhibits
    21  
SIGNATURES     22  
 
 
2

 
 
PART I – FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

EASTBRIDGE INVESTMENT GROUP CORPORATION
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
             
   
September 30,
   
December 31,
 
   
2012
   
2011
 
   
(Unaudited)
       
             
 Assets
Cash
  $ -     $ 602,747  
Other assets
    50,000       -  
Total current assets
    50,000       602,747  
                 
Investments
    6,686,816       942,483  
Total assets
  $ 6,736,816     $ 1,545,230  
                 
Liabilities and Stockholders' Equity
                 
Liabilities:
               
Bank overdraft
  $ 41,075     $ -  
Accounts payable
    212,649       189,296  
Disputed accounts payable
    199,150       208,350  
Accrued expenses
    1,165,665       982,003  
Deferred revenue
    2,866,777       376,104  
Advances payable to related party
    35,135       115,133  
Other current liabilities
    33,334       100,000  
Total current liabilities
    4,553,785       1,970,886  
                 
Total liabilities
    4,553,785       1,970,886  
                 
Stockholders' equity:
               
    Preferred stock series A, no par value, 50,000,000 shares
               
    authorized; none issued and outstanding
               
    as of September 30, 2012 and December 31, 2011, respectively
    -       -  
                 
    Preferred stock series B, no par value, 50,000,000 shares
               
    authorized; none issued and outstanding
               
    as of September 30, 2012 and December 31, 2011, respectively
    -       -  
                 
    Common stock, no par value, 300,000,000 shares authorized;
               
    156,692,041 and 154,590,189 issued and outstanding
               
    as of September 30, 2012 and December 31, 2011, respectively
    6,323,813       6,190,051  
                 
    Accumulated deficit
    (4,095,088 )     (6,592,860 )
    Accumulated other comprehensive loss
    (45,694 )     (22,847 )
      Total stockholders' equity
    2,183,031       (425,656 )
                 
Total liabilities and stockholder's equity
  $ 6,736,816     $ 1,545,230  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
 
3

 
 
EASTBRIDGE INVESTMENT GROUP CORPORATION
 
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
 
(Unaudited)
 
                         
   
Three Months Ended
   
Nine Months Ended
 
   
September 30,
   
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
             
                         
Revenues
  $ 5,887,057     $ 3,000     $ 6,053,828     $ 31,000  
                                 
Cost of services
    -       -       -       -  
                                 
Gross profit
    5,887,057       3,000       6,053,828       31,000  
                                 
Operating expenses:
                               
General and administrative
    301,190       348,032       827,369       977,701  
Selling and marketing
    21,906       13,677       60,137       75,328  
         Total operating expenses
    323,096       361,709       887,506       1,053,029  
Operating income (loss)
    5,563,961       (358,709 )     5,166,322       (1,022,029 )
                                 
Other (income) expense
                               
Interest expense
    501       1,853       (902 )     7,899  
Interest income
    (100 )     -       (100 )     -  
Gain on extinguishment of debt
    -       (52,688 )     (6,128 )     (52,688 )
Other (income) expense
    400,000       (232,852 )     425,883       (232,757 )
        Total other (income) expense
    400,401       (283,687 )     418,753       (277,546 )
Income (loss) before taxes
    5,163,560       (75,022 )     4,747,569       (744,483 )
                                 
Income tax provision
    -       -       109       -  
Net income (loss)
  $ 5,163,560     $ (75,022 )   $ 4,747,460     $ (744,483 )
Other comprehensive income (loss):
                               
Unrecognized gain (loss) on investments
    (22,847 )     (79,965 )     (45,694 )     (34,271 )
Comprehensive net income (loss)
  $ 5,140,713     $ (154,987 )   $ 4,701,766     $ (778,754 )
                                 
Earnings per share:
                               
  Basic and diluted
  $ 0.03     $ -     $ 0.03     $ -  
                                 
Weighted average common shares outstanding:
                               
  Basic and diluted
    156,628,454       152,968,308       155,966,016       151,416,592  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
 
4

 
 
EASTBRIDGE INVESTMENT GROUP CORPORATION
 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Unaudited)
 
             
   
Nine Months Ended September 30,
 
   
2012
   
2011
 
       
CASH FLOWS FROM OPERATING ACTIVITIES:
           
  Net income (loss)
  $ 4,747,460     $ (744,483 )
  Adjustments to reconcile net loss to net cash
               
     used in operating activities:
               
  Common stock issued for services
    43,350       382,363  
  Gain on the extinguishment of debt
    (6,128 )     (52,688 )
  Value of investment stock received for services
    (8,016,868 )     80,591  
  Changes in operating assets and liabilities:
               
Other current assets
    (50,000 )     (12,750 )
Bank overdrafts
    41,075       -  
Accounts payables
    55,793       (157,238 )
Accrued liabilities
    174,462       332,407  
Deferred revenue
    2,490,673       31,198  
Other current liabilities
    (66,666 )     (53,000 )
          Net cash used in operating activities
    (586,849 )     (193,600 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Repayment of line of credit
    -       (18,750 )
Repayment of advances from affiliate
    (46,120 )     -  
Advances from affiliate
    30,222       162,804  
          Net cash provided by (used in) financing activities
    (15,898 )     144,054  
                 
DECREASE IN CASH
    (602,747 )     (49,546 )
CASH, BEGINNING OF PERIOD
    602,747       49,898  
CASH, END OF PERIOD
  $ -     $ 352  
                 
SUPPLEMENTAL CASH FLOW INFORMATION
               
                 
Interest paid
  $ 951     $ 4,560  
Issuance of company stock for accrued liabilities and advances
  $ 32,440     $ 7,071  
Debt extinguished with issuance of company stock
  $ 64,100     $ 152,900  
Distribtuion of investment stock as dividend
  $ 2,249,688     $ -  

The accompanying notes are an integral part of these condensed consolidated financial statements.
 
 
5

 
 
EASTBRIDGE INVESTMENT GROUP CORPORATION
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2012 AND 2011
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – DESCRIPTION OF BUSINESS

EastBridge Investment Group Corporation (formerly ATC Technology Corporation) was incorporated in the State of Arizona on June 25, 2001.  The Company's principal activity through June 30, 2005 was to manufacture mobile entertainment products that provided a means to play video game consoles made by Sony, Microsoft and Nintendo in a customer's car, RV, SUV, van or boat with attachable viewing monitors.  
   
In 2005, EastBridge decided to exit the mobile video game market and dedicate its activities to providing consulting services in Asia and in the United States.  EastBridge is one of a small group of United States companies solely concentrated in marketing consulting services to closely held small to mid-size Asian and American companies that require these services for expansion. EastBridge has ten clients as of the date of this filing, that it is assisting in becoming public companies in the United States and obtaining listings for their stock on a U.S. stock exchange or over-the-counter market.  EastBridge had formed three subsidiaries which have been consolidated with EastBridge from the date of formation as further described below.  As of September 30, 2012 these three subsidiaries were dissolved.

NOTE 2 - BASIS OF PRESENTATION

The accompanying condensed consolidated balance sheet as of December 31, 2011, which has been derived from audited consolidated financial statements, and the accompanying unaudited condensed consolidated financial statements as of September 30, 2012 and for the three and nine months ended September 30, 2012 and September 30, 2011, have been prepared in accordance with generally accepted accounting principles for interim financial information.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for audited financial statements. In the opinion of the Company’s management, the interim information includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods.  The results of operations for the three and nine months ended September 30, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012.  The footnote disclosures related to the interim financial information included herein are also unaudited.  Such financial information should be read in conjunction with the consolidated financial statements and related notes thereto as of December 31, 2011 and for the year then ended included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  Significant estimates and assumptions have been used by management throughout the preparation of the condensed consolidated financial statements including in conjunction with establishing allowances for customer refunds, non-paying customers, dilution and fees, analyzing the recoverability of the carrying amount of intangible assets, estimating forfeitures of stock-based compensation and evaluating the recoverability of deferred tax assets.  Actual results could differ from these estimates.
 
 
6

 

NOTE 3 - GOING CONCERN

As indicated in the accompanying financial statements, the Company has incurred cumulative net operating losses of $4,095,088 since inception. So far, most of the working capital has been provided by the Company's management team members and their contacts. They have done so since EastBridge's inception and have indicated their continued support for EastBridge; however, there is no assurance that additional funds will be advanced. These matters raise substantial doubt about the Company’s ability to continue as a going concern.  The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Management plans to successfully achieve milestones in the near future with respect to the Company's client engagements which will provide the Company with some liquidity from payments due on achievement of milestones; however, there is no assurance that the Company will be successful in achieving any milestones under its client agreements.

The Company's ability to meet its obligations and continue as a going concern is dependent upon its ability to obtain additional financing, achievement of profitable operations and/or ability to achieve client listing obligations.  Although the Company plans to pursue additional financing, there can be no assurance that the Company will be able to secure financing when needed or to obtain such financing on terms satisfactory to the Company, if at all.

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America.  Significant accounting policies are as follows:

Principles of Consolidation

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America.

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.  

These estimates and assumptions also affect the reported amounts of revenues, costs and expenses during the reporting period.  Management evaluates these estimates and assumptions on a regular basis.  Actual results could differ from those estimates.
 
 
7

 

Revenue Recognition

The Company utilizes the guidance set forth in the Securities and Exchange Commission's Staff Accounting Bulletin (SAB) No. 104, regarding the recognition, presentation and disclosure of revenue in its financial statements.  The Company engages in listing contracts with its clients which provide for the payment of fees, either in cash or equity, upon the achievement of certain milestones by the client, including the successful completion of a financial statement audit, the successful listing on a national stock exchange or over-the-counter market and the maintenance of ongoing 1934 Act reporting requirements with the Securities and Exchange Commission.  In some instances, payment may be made in advance of performance; however, such payment is often refundable in the event that milestones are not reached.   The Company recognizes revenue on a systematic basis as milestones are reached in accordance with FASB’s Accounting Standards Codification (“ASC”) (“605-28-25”).  Such guidance stipulates that revenue be recognized for individual elements in a multiple deliverable arrangement using the relative selling price method.  The Company relies on internal estimates of the relative selling price of each element as objective third-party evidence is unattainable.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  At September 30, 2012 and December 31, 2011, respectively, cash and cash equivalents include cash on hand and cash in the bank. At times, cash deposits may exceed government-insured limits.

Income Taxes

Income taxes are accounted for using the asset and liability method as prescribed by ASC 740 “Income Taxes”. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which these temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance would be provided for those deferred tax assets for which if it is more likely than not that the related benefit will not be realized.
 
A full valuation allowance has been established against all net deferred tax assets as of September 30, 2012 based on estimates of recoverability.  While the Company has optimistic plans for its business strategy, we determined that such a valuation allowance was necessary given the current and expected near term losses and the uncertainty with respect to our ability to generate sufficient profits from our business model.

Share-Based Compensation

The Company periodically uses stock-based awards, consisting of shares of common stock, to compensate certain officers and consultants.  Shares are expensed on a straight line basis over the requisite service period based on the grant date fair value, net of estimated forfeitures, if any.  Typically, stock awards are fully vested at the date of grant, so forfeitures are not applicable.

Investments

Marketable securities held by the Company are held for an indefinite period of time and thus are classified as available-for-sale securities. Realized investment gains and losses are included in the statement of operations, as are provisions for other than temporary declines in the market value of available for-sale securities. Unrealized gains and unrealized losses deemed to be temporary are excluded from earnings (losses), net of applicable taxes, as a component of other comprehensive income (loss). Factors considered in judging whether an impairment is other than temporary include the financial condition, business prospects and creditworthiness of the issuer, the length of time that fair value has been less than cost, the relative amount of decline, and the Company’s ability and intent to hold the investment until the fair value recovers.
 
 
8

 

Non-marketable securities are carried at cost.  In cases where the Company receives non-marketable securities in exchange for services, the cost is estimated to be the fair value of the services rendered or the securities received, whichever is more readily determinable.

Fair Value
 
Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As required by the Fair Value Measurements and Disclosures Topic of the FASB ASC (“ASC 820-10”), fair value is measured based on a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. When determining fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.

The three levels of inputs that may be used to measure fair value are as follows:
 
Level 1. Quoted prices in active markets for identical assets or liabilities.
 
Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), inputs that are other than quoted prices that are observable for the asset or liability or market corroborated inputs.

Level 3. Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of assets or liabilities, which may include internal data or valuation data received from the security issuer.
 
The Company uses Level 1 inputs in determining its fair value of marketable equity securities and Level 3 inputs in determining the fair value of non-marketable equity securities.  See Note 6.

Basic and Diluted Net Income (Loss) Per Share

Net income (loss) per share was computed by dividing the net loss by the weighted average number of common shares outstanding during the period.  The weighted average number of shares was calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Diluted net loss per share for the Company is the same as basic net loss per share, as has not issued any dilutive securities.

Fair Value of Financial Instruments

The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties other than in a forced sale or liquidation.

The carrying amounts of the Company’s financial instruments, including cash, accounts payable and accrued liabilities, income tax payable and related party payable approximate fair value due to their short maturities.

Reclassification

Certain prior period amounts have been reclassified to conform to current year presentations.

 
9

 

Recent Accounting Pronouncements

Recent accounting pronouncements that the Company has adopted or that it will be required to adopt in the future are summarized below.

In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements (“ASU 2011-04”) in GAAP and International Financial Reporting Standards (“IFSR”). Under ASU 2011-04, the guidance amends certain accounting and disclosure requirements related to fair value measurements to ensure that fair value has the same meaning in GAAP and IFRS and that their respective fair value measurement and disclosure requirements are the same. ASU 2011-04 is effective for public entities during interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
 
In June 2011, the FASB issued ASU 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”). ASU 2011-05 requires companies to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The provisions of ASU 2011-05 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of ASU 2011-05 did not affect the consolidated financial position, results of operations or cash flows of the Company.

NOTE 5 - OTHER CURRENT ASSETS

Short Term Note
In the first quarter of 2012 the Company provided cash to a client in exchange for a short term note.  The note matures upon demand of the Company, but not less than 6 months.  The note carries a fixed interest amount of $10,000.  The Company plans to call the note in the fourth quarter of 2012.

NOTE 6 - INVESTMENTS

Marketable Equity Securities

Marketable equity securities consist of shares in Alpha Lujo, Inc. and Wonder International Education & Investment Group Corporation (Wonder) received by the Company for services rendered.  The following is a summary of available-for-sale marketable securities as of September 30, 2012 and December 31, 2011:

September 30, 2012
 
Cost
   
Unrealized Gain
   
Unrealized (Losses)
   
Market or Fair Value
 
Equity securities
  $ 5,887,395     $ -     $ (45,694 )   $ 5,841,701  
Total
  $ 5,887,395     $ -     $ (45,694 )   $ 5,841,701  
                                 
December 31, 2011
 
Cost
   
Unrealized Gain
   
Unrealized (Losses)
   
Market or Fair Value
 
Equity securities
  $ 137,082     $ -     $ (22,847 )   $ 114,235  
Total
  $ 137,082     $ -     $ (22,847 )   $ 114,235  
 
 
10

 
 
The following is a summary of the net unrealized gains and losses as presented in Other Comprehensive Income as of September 30, 2012 and December 31, 2011:

         
Unrealized
   
Unrealized
   
Other
 
September 30, 2012
 
Unrealized
   
(Losses)
   
(Losses)
   
Comprehensive
 
   
Gains
   
Short Term
   
Long Term
   
Income (Loss)
 
Equity securities
  $ -     $ (45,694 )   $ -     $ (45,694 )
Total
  $ -     $ (45,694 )   $ -     $ (45,694 )
                                 
           
Unrealized
   
Unrealized
   
Other
 
December 31, 2011
 
Unrealized
   
(Losses)
   
(Losses)
   
Comprehensive
 
   
Gains
   
Short Term
   
Long Term
   
Income (Loss)
 
Equity securities
  $ -     $ (22,847 )   $ -     $ (22,847 )
Total
  $ -     $ (22,847 )   $ -     $ (22,847 )
 
The Company  sold 200,000 shares of Wonder securities during the three and nine months ended September 30, 2012 resulting in a realized loss of $400,000. The Company did not sell any such securities during the year ended December 31, 2011.

In, 2012, the Company did issue 899,875 shares of Wonder as a dividend, with a value of $2,249,688.

Non-marketable Equity Securities

Non-marketable equity securities consist of shares of Tsingda eEDU Corp. received by the Company for services rendered during 2010.  These shares are carried at a cost of $1,477,000 which was estimated to be the value of the securities at the date of receipt.

In 2011, the Company issued 300,018 shares of Tsingda to the shareholders of the Company as a dividend, with a value of $284,074.  The Company also exchanged 26,875 shares of Tsingda for cash, per subscription agreements the Company had entered into with a cost of $19,086.  The Company exchanged 86,603 shares of Tsingda for outstanding liabilities with a cost of $61,504.

In 2012, the Company repurchased one of the subscription agreements for 23,750 shares of Tsingda.  Those shares were recorded at the original carrying value of $16,867.

NOTE 7 – OTHER LIABILITIES

Disputed Accounts Payable

At September 30, 2012 and December 31, 2011, the Company carried balances totaling $199,150 and $208,350, respectively, owed to various vendors relating to EastBridge’s former business called ATC Technology.  The Company currently considers these balances as in dispute with the vendors and continues to work on a resolution.

Other Current Liabilities

Other current liabilities at September 30, 2012 and December 31, 2011 of $33,334 and $100,000, respectively, consisted of deposits received from a combination of individuals and a trust, which all have agreed to purchase from EastBridge a fixed number of shares of common stock in one of EastBridge’s clients. The remaining $33,000 will be earned by EastBridge as part of a fee arrangement once the clients’ shares are publicly registered or otherwise released to EastBridge as permitted under EastBridge's agreement with the client.
 
 
11

 

NOTE 8 – LEASES

Rent expense for the nine months ended September 30, 2012 and 2011 was $20,872 and $65,262, respectively, including events to related parties described in Note 9.

As of September 30, 2012, all leases have expired and are continuing on a month-to-month basis.

NOTE 9 – RELATED PARTY TRANSACTIONS

The Company received advances from its two officers and a shareholder in the ordinary course of business at a rate of 4.5% interest which is the federal long term interest rate. As of September 30, 2012 and December 31, 2011 advances payable to the Company’s two officers and this shareholder were $35,135 and $110,198, respectively.  As of September 30, 2012 and December 31, 2011 the accrued compensation liability to the officers was $1,076,929 and $841,929, respectively.

The Company entered into an employment agreement with the CEO on June 1, 2005. Under the terms of the agreement the CEO receives compensation in the amount of $240,000 annually. The Company entered into an employment agreement with its CFO on June 1, 2005. Under the terms of the agreement the CFO received $84,000 in compensation annually from the inception of the agreement through January 1, 2007 at which point the compensation increased to $180,000.

In 2010, the Company entered into a lease agreement with the spouse of the Company’s CEO for housing in Beijing.  This lease is intended for the employees of the Company while in Beijing and expired December 2011.  Per the lease agreement the rent is to be paid in shares of the Company’s stock.  For the nine months ended September 30, 2012 and 2011, the expense of this lease included in the rent expense in Note 8 was $- and $38,250, respectively.

NOTE 10 – EQUITY

As of September 30, 2012, EastBridge had 156,692,041 shares of no par common stock issued and outstanding with 300,000,000 common shares authorized.  

During the three and nine months ended September 30, 2012, the Company issued 150,000 and 1,191,766,  shares of common stock, respectively, to consultants for services rendered.  The Company expensed $7,750 and $74,156, respectively, in connection with these issuances based on the quoted market prices on the dates of issuance.

During the three and nine months ended September 30, 2012, the Company issued zero and 910,086, shares of common stock, respectively, to individuals for $- and $64,100, respectively, of debt owed by the Company.  The Company recognized a gain of $9,495 in connection with these issuances based on the quoted market prices on the date of grant.

During the three and nine months ended September 30, 2012, the company issued a dividend of investments as discussed in Note 6, with a value of $2,249,688

During the three and nine months ended September 30, 2011, the Company issued zero and 1,185,145 shares of common stock, respectively, to consultants for services rendered.  The Company expensed $- and $108,734 in connection with these issuances based on the quoted market prices on the dates of issuance.
 
 
12

 

During the three and nine months ended September 30, 2011, the Company issued zero and 971,429 shares of common stock, respectively, to the CEO’s spouse per the lease agreement described in Note 9.  The Company expensed $- and $106,857, respectively, in connection with these issuances based on the quoted market prices on the dates of issuance.

NOTE 11 – DEFERRED REVENUE

The following table represents the balance of deferred revenue that has not yet been recognized under the Company’s revenue recognition policies:
 
   
September 30,
   
September 30,
 
   
2012
   
2011
 
             
Jinkuizi Science & Technology Company
    -       (45,000 )
                 
Alpha Green Energy Company
    -       (112,212 )
                 
Kaida Road Construction Company
    (73,000 )     (73,000 )
                 
Huang Wei Pharmaceutical Company
    -       (9,559 )
                 
AREM Pacific Corporation
    (92,985 )     (50,485 )
                 
Dwarf Technologies
    (75,814 )     (75,813 )
                 
LongWen
    (10,035 )     -  
                 
Wonder International
    (2,614,943 )     -  
                 
Deferred Revenue
    (2,866,777 )     (366,069 )
 
NOTE 12 – COMMITMENTS AND CONTINGENCIES

Employment Agreements

On June 1, 2005, we entered into an employment agreement with Keith Wong, our President and Chief Executive Officer. The agreement provides for annual compensation in the amount of $240,000, effective June 1, 2005.  Mr. Wong’s agreement contains confidentiality, non-compete, and good faith cooperation covenants. The agreement may not be terminated by either party except with cause on the part of the Company, upon the occurrence of Mr. Wong's death, disability, bankruptcy or incompetency, lack of performance, officer integrity, or with the mutual consent of both parties.

On June 1, 2005, we entered into an employment agreement with Norm Klein, our Chief Financial Officer, Chief Operating Officer and Investor Relations Officer. The agreement provides for annual compensation in the amount of $84,000, effective on June 1, 2005, and was increased to an annual compensation of $180,000, effective January 1, 2007.  Mr. Klein’s agreement contains confidentiality, non-compete and good faith cooperation covenants. The agreement may not be terminated by either party except with cause on the part of the Company, upon the occurrence of Mr. Klein's death, disability, bankruptcy or incompetency, lack of performance, officer integrity, or with the mutual consent of both parties.
 
 
13

 

NOTE 13 – STOCK BASED COMPENSATION
 
2009 Stock Option Plan
During the first quarter of 2009, the Company's Board of Directors approved and adopted the 2009 Stock Option Plan (the "Plan") and designated 10,000,000 of our no par common stock for issuance under the Plan to employees, directors or consultants for EastBridge through either the issuance of shares or stock option grants.  Under the terms of the Plan, stock option grants shall be made with exercise prices not less than 100% of the fair market value of the shares of Common Stock on the grant date.  Since adoption, the Company issued an aggregate of approximately 9.5 million shares of Common Stock under the plan.  These grants were not stock options but instead represent fully vested shares at the date of grant. For the three and nine months ended September 30, 2012, the Company issued 25,000 and 220,014 shares of common stock under the 2009 Incentive Plan.

2011 Incentive Stock Option Plan
During the first quarter of 2012, the Company's Board of Directors approved and adopted the 2011 Incentive Stock Option Plan (the "2011 Incentive Plan") and designated 30,000,000 of our no par common stock for issuance under the 2011 Incentive Plan to employees, directors or consultants for EastBridge through either the issuance of shares or stock option grants.  Under the terms of the 2011 Incentive Plan, stock option grants shall be made with exercise prices not less than 100% of the fair market value of the shares of common stock on the grant date.  For the three and nine months ended September 30, 2012, the Company issued zero, and 336,752, respectively, shares of common stock under the 2011 Incentive Plan.  All shares were issued to a single vendor in exchange for payable owed.

  
 
Total shares
reserved
under the
plan
   
Remaining
shares available for issuance
under the
plan
 
2009 Stock Option Plan
   
10,000,000
     
459,276
 
2011 Incentive Stock Option Plan
   
30,000,000
     
29,663,248
 
 
NOTE 14 – SEGMENT INFORMATION
 
The Company operates only one reporting segment.  Substantially all assets are contained in the United States.  Although the Company’s business is providing consulting services to foreign companies seeking access to the U.S. capital markets, substantially all revenue generating activities are conducted in the United States.

NOTE 15 – SUBSEQUENT EVENTS

The Company evaluated subsequent events through November 09, 2012 which is the date the financial statements were issued.  There were no subsequent events that required recognition or disclosure.
 
 
14

 
 
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this Quarterly Report on Form 10-Q, “Company,” "EastBridge," “our company,” “us,” and “our” refer to EastBridge Investment Group Corporation and its subsidiaries unless the context requires otherwise.

The Company's Form 10-K, this and any other Form 10-Q or any Form 8-K of the Company or any other written or oral statements made by or on behalf of the Company may contain forward-looking statements which reflect the Company's current views with respect to future events and financial performance. The words "believe," "expect," "anticipate," "intends," "estimate," "forecast," "project," and similar expressions identify forward-looking statements.  All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services, developments or industry rankings; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.  Such "forward-looking statements" are subject to risks and uncertainties set forth from time to time in the Company's SEC reports and include, among others, the Risk Factors set forth under Item 1A below and in the Company's Form 10-K for its fiscal year ended December 31, 2011.

The risks included herein are not exhaustive. The Company's annual report on Form 10-K, this and other quarterly reports on Form 10-Q, current reports on Form 8-K and other documents filed with the SEC include additional factors which could impact EastBridge Investment Group Corporation's business and financial performance. Moreover, EastBridge Investment Group Corporation operates in a rapidly changing and competitive environment. New risk factors emerge from time to time and it is not possible for management to predict all such risk factors. Further, it is not possible to assess the impact of all risk factors on EastBridge Investment Group Corporation's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.

Readers are cautioned not to place undue reliance on such forward-looking statements as they speak only of the Company's views as of the date the statement was made.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We provide investment related services in Asia and in the United States, with a strong focus on the high GDP growth countries, such as China, Australia and the U.S. In China, we are focusing most of our efforts in mainland China.  We provide consulting services to provide viable corporate infrastructure necessary for small to medium-size companies to access capital markets.  EastBridge also assists its clients in structuring joint ventures, wholly owned foreign enterprises, or guaranteed return ventures, and assists in locating investment banking, financial advisory and other financial services as allowed by the local government. EastBridge locates consultants which assist with marketing, sales and strategic planning services for its clients to prepare them to enter the United States market.

EastBridge is one of a small group of United States companies solely concentrated in marketing business consulting services to closely held, small to mid-size Asian and American companies that require these services for expansion. In business sectors where EastBridge sees a unique opportunity for growth, EastBridge may form its own foreign subsidiaries with local partners to capture the opportunity.

As of the date of this filing, EastBridge was providing consulting services to ten clients to facilitate the auditing and legal processes to become public companies in the United States and become listed on a U.S. stock exchange.  Eastbridge is also assisting International Air Medical Services, Inc. with locating potential joint venture business partners in China.  To learn more about our clients, review the Company’s Form 10-K (filed with the SEC on March 30, 2012).
 
 
15

 

On March 12, 2012, the Company entered into two Listing Agreements.  The first agreement is with American C&D Logistics, LLC, a Pennsylvania construction material recycling company, pursuant to which agreement the Company will assist American C&D with its growth plans.  The second agreement was with Photofunds, Inc. a New Jersey photography company, pursuant to which agreement the Company will assist Photofunds with its growth plans.

On June 25, 2012, the Company entered into a Listing Agreement with QualityCall Connections, Inc. (“QualityCall”), an Arizona company, pursuant to which agreement the Company will assist QualityCall in with its growth plans.

On July 6, 2012, the Company executed a Listing Agreement with Golden Gate Enterprises (“GGE”), a digital advertising company headquartered in Minneapolis, Minnesota, pursuant to which agreement the Company will assist GGE with its growth plans.

As of March 28, 2012, Chris Klein, an independent contractor of EastBridge, entered into a registered representative agreement with Intellivest Securities, Inc. ("Intellivest").  Intellivest may act as placement agent for private capital financings for our client companies.  This agreement expired on September 30, 2012.
 
EastBridge had formed three subsidiaries which have been consolidated with EastBridge from the date of formation.  As of September 30, 2012 these three subsidiaries have been dissolved.

Results of Operations

Revenues
 
   
Net Revenues
 
   
2012
   
2011
   
Change
   
Percent
 
                         
Three months ended September 30,
  $ 5,887,057     $ 3,000     $ 5,884,057       196135 %
Nine months ended September 30,
  $ 6,053,828     $ 31,000     $ 6,022,828       19428 %

During the third quarter of 2012 we recorded revenue related to stock payments received from listing agreements with Wonder becoming earned as the client was successfully listed.  These payments totaled $5,885,057 for the three and nine months ended September 30, 2012.  Additionally, we recorded revenue related to cash payments received from listing agreements becoming non-refundable as the clients terminated the agreements.  These payments totaled $0 and $166,771 for the three and nine months ended September 30, 2012.

We received recordable revenue in the three and nine months ending September 30, 2011 of which $20,000 was from client agreements, $8,000 from a month to month arrangement with a client and $3,000 from a onetime assistance service.
 
 
16

 

General and Administrative Expenses

   
General & Administrative Expenses
 
   
2012
   
2011
   
Change
   
Percent
 
                         
Three months ended September 30,
  $ 301,190     $ 348,032     $ (46,842 )     (13 )%
Nine months ended September 30,
  $ 827,369     $ 977,701     $ (150,332 )     (15 )%
 
General and administrative expenses decreased in the three months ended September 30, 2012 as compared to the three months ended September 30, 2011 due to the following:  a decrease in consulting expense of approximately $55,000, rent expense of approximately $14,000 and other expense of approximately $14,000, partially offset by an increase in fees paid to legal, professional and audit services of approximately $19,000 and payroll expense of approximately $18,000.

General and administrative expenses decreased in the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011 due to the following: a decrease in consulting expense of approximately $195,000, rent expense of approximately $44,000, and payroll expense of approximately $10,000, partially offset by an increase in fees paid to legal, professional and audit services of approximately $108,000.

Sales and Marketing Expenses

   
Sales & Marketing Expenses
 
   
2012
   
2011
   
Change
   
Percent
 
                         
Three months ended September 30,
  $ 21,906     $ 13,677     $ 8,229       60 %
Nine months ended September 30,
  $ 60,137     $ 75,328     $ (15,191 )     (20 )%

Sales and marketing expenses decreased in the three months ended September 30, 2012 as compared to the three months ended September 30, 2011 due to an increase in market research and travel of $7,000, and investor relations expenses of approximately $31,000.

Sales and marketing expenses decreased in the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011 due to a decrease in investor relations expenses of approximately $32,000, partially offset by an increase in market research and travel of $17,000.

Operating Income (Loss)

   
Operating Income (Loss)
 
   
2012
   
2011
   
Change
   
Percent
 
                         
Three months ended September 30,
  $ 5,563,961     $ (358,709 )   $ 5,922,670       (1651 )%
Nine months ended September 30,
  $ 5,166,322     $ (1,022,029 )   $ 6,188,351       (605 )%

The increase in our operating income for the three and nine months ended September 30, 2012 as compared to the three and nine months ended September 30, 2011 is primarily due to the increase in revenue and the decreases in general and administrative expenses and sales and marketing expenses, each of which is described above.

Total Other Income (Expense)
 
   
Total Other Income (Expense)
   
2012
   
2011
   
Change
   
Percent
 
                         
Three months ended September 30,
  $ (400,401 )   $ 283,687     $ (684,088 )     (241 )%
Nine months ended September 30,
  $ (418,753 )   $ 277,546     $ (696,299 )     (251 )%

In the three months ended September 30, 2012, the decrease was due to a loss on the exchange of investment of approximately $400,000 and decreased interest expense of approximately $1,500. In the three months ended September 30, 2011, we had a gain on exchange of investments of approximately $232,000, and gain on the extinguishment of debt of approximately $52,700.

In the nine months ended September 30, 2012, the decrease in expense was due to a loss on the exchange of investments of approximately $400,000, the buyback of the stock subscription of approximately $25,800, and the gain on extinguishment of debt of approximately $47,000 partially offset by decreases in interest expense of approximately $9,000 and the gain on extinguishment of debt of approximately $6,000. In the nine months ended September 30, 2011, we had a gain on the exchange of investments of approximately $232,000.

Income Tax Provision (Benefit)
 
   
Income Tax Provision (Benefit)
   
2012
   
2011
   
Change
   
Percent
 
                         
Three months ended September 30,
  $ -     $ -     $ -       0 %
Nine months ended September 30,
  $ 109     $ -     $ 109       0 %
 
While we have optimistic plans for our business strategy, we determined that a valuation allowance was necessary given the prior losses and the uncertainty with respect to our ability to generate sufficient profits from our business model.  Therefore, we established a valuation allowance for all deferred tax assets.

 
 
17

 
 
 
Net Income (Loss)
 
   
Net Income (Loss)
 
   
2012
   
2011
   
Change
   
Percent
 
                         
Three months ended September 30,
  $ 5,163,560     $ (75,022 )   $ 5,238,582       (6983 )%
Nine months ended September 30,
  $ 4,747,460     $ (744,483 )   $ 5,491,943       (738 )%
 
Changes in net income are primarily attributable to changes in operating loss and other income (expense), each of which is described above.

Comprehensive Net Income (Loss)
 
   
Comprehensive Net Income (Loss)
   
2012
   
2011
   
Change
   
Percent
 
                         
Three months ended September 30,
  $ 5,140,713     $ (154,987 )   $ 5,295,700       (3417 )%
Nine months ended September 30,
  $ 4,701,766     $ (778,754 )   $ 5,480,520       (704 )%

For the three months ended September 30, 2012, we recorded an unrecognized loss on investments of $22,847.  For the three months ended September 30, 2011, we recorded an unrecognized loss on investments of approximately $80,000.
 
For the nine months ended September 30, 2012, we recorded an unrecognized loss on investments of approximately $22,847. For the nine months ended September 30, 2011, we recorded an unrecognized gain on investments of approximately $34,000.
 
LIQUIDITY AND CAPITAL RESOURCES
 
Net cash used in operating activities was $586,849 and $193,600 for the nine months ended September 30, 2012 and 2011, respectively.  The increase is mainly attributable to decreases in stock issued for services of approximately $8,390,000, partially offset by the increase in our net income of approximately $5,492,000, and increases in working capital and other current assets of approximately $2,504,000.
 
Our primary source of cash inflows has historically been from our clients.  Since late 2009, we received advance payments in shares of client companies whose listings are expected to be completed in 2012 and 2013.  As of September 30, 2012 and 2011, no single client accounted for greater than 10% of accounts receivable as part of the agreements require deposits in advance rather than billing after the fact.

Cash provided by (used in) financing activities was $(15,898) and $144,054 for the nine months ended September 30, 2012 and 2011, respectively. During the nine months ended September 30, 2012, we repaid affiliates $46,120 partially offset by $30,222 that was advanced from affiliates.  During the nine months ended September 30, 2011, we made repayments of $18,750 on our line of credit, offset by $162,804 of amounts advanced from affiliates.

We had working capital of $(4,503,785) as of September 30, 2012 compared to $(1,368,139) as of December 31, 2011.  Our cash position decreased to $0 at September 30, 2012 compared to $602,747 at December 31, 2011, as we had a decrease in cash flows from operations, and by financing activities.   We have also decreased our accounts payable since December 31, 2011.

Our monthly cash requirement is approximately $40,000, and as of September 30, 2012, cash on hand would not fund operations.  Subsequently, we have received additional cash to continue funding operations for several months.  For the nine months ended September 30, 2012, we have increased deferred revenue by approximately $2,500,000 as compared to the nine months ended September 30, 2011, as a result of revenue recognition of investment stock received in payment of approximately $2,615,000 and $42,501 of additional cash deposits on listing agreements, partially offset by recognition of previous cash deposits of $166,771.

In the past, we have received cash through loans extended by our management to the Company and through sales of shares of common stock to individual investors.  As we are a consulting company with no proprietary technology it is doubtful we will obtain capital from institutional or other sources and will need to rely on our officers for cash infusions, which they are under no obligation to provide.  As much of our revenue will come through sales of equity in our clients it may be several months until we obtain positive cash flows as this will occur only if and when our clients have registration statements cleared by the SEC which include client shares of common stock owned by the Company and these clients become listed on U.S. stock exchanges or over-the-counter markets. Currently, we have had a successful listing and will be able to generate cash from our investment shares subject to certain limitations on the volume of shares.

 
18

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
As a smaller reporting company, the Company is not required to provide Part I, Item 3 disclosure.

ITEM 4.  CONTROLS AND PROCEDURES
 
a) Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective.  The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.  However, management believes that our system of disclosure controls and procedures is designed to provide a reasonable level of assurance that the objectives of the system will be met.

b) Changes in Internal Control over Financial Reporting.

During the quarter ended September 30, 2012, there was no change in our internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Our Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives. Furthermore, smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult to properly segregate duties. Often, one or two individuals control every aspect of the Company's operation and are in a position to override any system of internal control. Additionally, smaller reporting companies tend to utilize general accounting software packages that lack a rigorous set of software controls.
 
LACK OF INDEPENDENT BOARD OF DIRECTORS AND AUDIT COMMITTEE

Management is aware that an audit committee composed of the requisite number of independent members along with a qualified financial expert has not yet been established.  Considering the costs associated with procuring and providing the infrastructure to support an independent audit committee and the limited number of transactions, management has concluded that the risks associated with the lack of an independent audit committee are not justified.  Management will periodically reevaluate this situation.
 
LACK OF SEGREGATION OF DUTIES

Management is aware that there is a lack of segregation of duties at the Company due to the small number of employees dealing with general administrative and financial matters. However, at this time management has decided that considering the abilities of the employees now involved and the control procedures in place, the risks associated with such lack of segregation are low and the potential benefits of adding employees to clearly segregate duties do not justify the substantial expenses associated with such increases.  Management will periodically reevaluate this situation.
 
 
19

 
 
PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Neither our Company nor any of its officers or directors is a party to any material legal proceeding or litigation and such persons know of no material legal proceeding or litigation contemplated or threatened. There are no judgments against the Company or its officers or directors. None of the officers or directors has been convicted of a felony or misdemeanor relating to securities or performance in corporate office.

ITEM 1A - RISK FACTORS

There have been no material changes for the risk factors disclosed in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2011.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the nine months ended September 30, 2012, we did not issue any securities not registered under the Securities Act by reason of the exemption afforded under Section 4(2) of the Securities Act of 1933. No underwriting discounts or commissions were paid with respect to any transactions.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.  MINE SAFETY DISCLOSUERS

N/A

ITEM 5.  OTHER INFORMATION

None

 
20

 

ITEM 6.  EXHIBITS
 
 
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
 
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
 
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
 
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

 
21

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
  EastBridge Investment Group Corporation  
       
Dated:  November 9, 2012
By:
/s/ Keith Wong  
    Keith Wong  
    Chief Executive Officer
(Principal Executive Officer)
 
       
Dated:  November 9, 2012
By:
/s/ Norman Klein  
    Norman Klein  
    Chief Financial Officer
(Principal Financial and Accounting Officer)
 


22