form10q.htm
UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
T QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
quarterly period ended March 31, 2008
OR
£ 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 small business issuer as specified in its charter)
Arizona
|
86-1032927
|
(State
or Other Jurisdiction of Incorporation)
|
(I.R.S.
Employer Identification No.)
|
2101
East Broadway Road, Unit 30, Tempe, Arizona 85282
(Address
of principal executive offices)
(480)
966-2020
(Issuer’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, $0.001 par value per share
(Title
of Class)
Indicate
by check mark whether the Registrant (1) has filed all reports required 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 T
No £
Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, or a non–accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b–2 of the Exchange Act. (Check
one):
Large
accelerated filer £
|
Accelerated
filer £
|
Non–Accelerated
filer £
|
Small
Business Issuer T
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b–2 of the Exchange Act). Yes £ No T
Transitional
Small Business Disclosure Format (check
one): Yes £ No T
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 May 7,
2008
|
Common
stock, No par value
|
112,469,839
|
TABLE
OF CONTENTS
|
|
|
Page Numbers
|
|
|
Item 1.
|
|
|
|
|
|
3
|
|
|
|
4
|
|
|
|
5
|
|
|
6
|
Item 2.
|
|
11
|
Item 3
|
|
18
|
Item 4.
|
|
18
|
|
|
Item 1.
|
|
19
|
Item 1A
|
|
19
|
Item 2.
|
|
22
|
Item 3.
|
|
23
|
Item 4.
|
|
23
|
Item 5
|
|
23
|
Item 6.
|
|
23
|
CERTIFICATIONS
Exhibit
31 – Management certification
|
|
|
|
Exhibit
32 – Sarbanes-Oxley Act
|
|
EASTBRIDGE INVESTMENT GROUP CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEET
ASSETS:
|
|
|
|
|
|
|
|
|
March
31,
2008
|
|
|
December
31,
2007
|
|
|
|
(unaudited)
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
Cash
|
|
$ |
65,189 |
|
|
$ |
59,162 |
|
Accounts
receivables - net
|
|
|
226,884 |
|
|
|
295,381 |
|
Prepaid
expenses and other current assets
|
|
|
- |
|
|
|
- |
|
Total
current assets
|
|
|
292,073 |
|
|
|
354,543 |
|
|
|
|
|
|
|
|
|
|
Note
receivable affiliates
|
|
|
41,800 |
|
|
|
8,800 |
|
Investment
in subsidiary
|
|
|
140,000 |
|
|
|
140,000 |
|
TOTAL
ASSETS
|
|
$ |
473,873 |
|
|
$ |
503,343 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIENCY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$ |
277,379 |
|
|
$ |
324,298 |
|
Accrued
expenses and other liabilities
|
|
|
141,246 |
|
|
|
221,108 |
|
Notes
payable
|
|
|
25,000 |
|
|
|
30,219 |
|
Total
current liabilities
|
|
|
443,625 |
|
|
|
575,625 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
443,625 |
|
|
|
575,625 |
|
|
|
|
|
|
|
|
|
|
Minority
interest
|
|
|
2,047 |
|
|
|
1,491 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS
AND CONTINGENCIES
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIENCY:
|
|
|
|
|
|
|
|
|
Common
stock, no par value, 300,000,000 shares authorized, 112,469,839 and
110,092,080 issued and outstanding as
of March 31, 2008 and December 31, 2007,
respectively
|
|
|
3,597,625 |
|
|
|
3,378,125 |
|
Accumulated
deficit
|
|
|
(3,569,424 |
) |
|
|
(3,451,898 |
) |
TOTAL
STOCKHOLDERS' DEFICIENCY
|
|
|
28,201 |
|
|
|
(73,773 |
) |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
|
|
$ |
473,873 |
|
|
$ |
503,343 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
EASTBRIDGE INVESTMENT GROUP CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH
31, 2008 and 2007
|
|
2008
|
|
|
2007
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
REVENUES:
|
|
|
|
|
|
|
Revenue
|
|
|
17,275 |
|
|
|
- |
|
|
|
|
17,275 |
|
|
|
- |
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
General
and administrative expenses
|
|
|
127,426 |
|
|
|
180,482 |
|
Sales
and marketing expenses
|
|
|
25,207 |
|
|
|
- |
|
Total
operating expenses
|
|
|
152,633 |
|
|
|
180,482 |
|
OPERATING
LOSS
|
|
|
(135,358 |
) |
|
|
(180,482 |
) |
|
|
|
|
|
|
|
|
|
OTHER
(INCOME) AND EXPENSES
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
394 |
|
|
|
- |
|
Interest
Income
|
|
|
(50 |
) |
|
|
- |
|
Gain
on extinguishment of debt
|
|
|
(20,878 |
) |
|
|
(18,522 |
) |
Total
other (income) expense
|
|
|
(20,534 |
) |
|
|
(18,522 |
) |
|
|
|
|
|
|
|
|
|
INCOME
(LOSS) BEFORE TAXES, MINORITY INTEREST, DISCONTINUED
OPERATIONS
|
|
|
(114,824 |
) |
|
|
(161,960 |
) |
|
|
|
|
|
|
|
|
|
Minority
interest
|
|
|
2,047 |
|
|
|
- |
|
Income
tax provision
|
|
|
2,253 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
NET
LOSS
|
|
$ |
(119,124 |
) |
|
$ |
(161,960 |
) |
|
|
|
|
|
|
|
|
|
NET
LOSS PER SHARE:
|
|
|
|
|
|
|
|
|
Basic
and diluted:
|
|
$ |
(0.00 |
) |
|
$ |
(0.00 |
) |
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING:
|
|
|
|
|
|
|
|
|
Basic
and diluted:
|
|
|
111,475,359 |
|
|
|
98,364,392 |
|
The
accompanying notes are an integral part of these consolidated financial
statements.
EASTBRIDGE INVESTMENT GROUP CORPORATION
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH
31, 2008 and 2007
|
|
2008
|
|
|
2007
|
|
|
|
(unaudited)
|
|
|
(unaudited)
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$ |
(119,124 |
) |
|
$ |
(161,960 |
) |
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Foreign
exchange rate changes
|
|
|
107 |
|
|
|
|
|
Gain
on extinguishment of debt
|
|
|
(20,878 |
) |
|
|
(18,522 |
) |
Minority
interest
|
|
|
550 |
|
|
|
- |
|
Issurance
of stock as consideration for services
|
|
|
- |
|
|
|
9,000 |
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivables
|
|
|
69,994 |
|
|
|
- |
|
Prepaid
and other current assets
|
|
|
(33,000 |
) |
|
|
- |
|
Accounts
payable
|
|
|
(46,919 |
) |
|
|
7,812 |
|
Accrued
expenses and other liabilities
|
|
|
(49,352 |
) |
|
|
105,000 |
|
Net
cash provided (used) by in operating activities
|
|
|
(198,622 |
) |
|
|
(58,670 |
) |
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Repayment
of affiliates notes
|
|
|
(14,851 |
) |
|
|
|
|
Stock
issed for payment of debt
|
|
|
219,500 |
|
|
|
|
|
Note
payable affiliates
|
|
|
- |
|
|
|
16,567 |
|
Net
cash (used ) provided by financing activities
|
|
|
204,649 |
|
|
|
16,567 |
|
|
|
|
|
|
|
|
|
|
INCREASE
IN CASH
|
|
|
6,027 |
|
|
|
(42,103 |
) |
CASH,
BEGINNING OF YEAR
|
|
|
59,162 |
|
|
|
45,539 |
|
CASH,
END OF YEAR
|
|
$ |
65,189 |
|
|
$ |
3,436 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
Interest
paid
|
|
$ |
394 |
|
|
$ |
- |
|
Taxes
paid
|
|
$ |
- |
|
|
$ |
- |
|
Stock
issued for payment of debt
|
|
$ |
219,500 |
|
|
|
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
EASTBRIDGE INVESTMENT GROUP CORPORATION
(FORMERLY
ATC TECHNOLOGY CORPORATION)
FOR
THE THREE MONTHS ENDED MARCH 31, 2008
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 – DESCRIPTION OF BUSINESS
Overview
EastBridge
Investment Group Corporation (formally ATC Technology Corporation)
(“EastBridge”, “we”, “us”, “our” or the “Company”) was incorporated in the state
of Arizona on June 25, 2001. The Company’s principle activity up through
June 30, 2005 was to manufacture mobile entertainment products that provide a
means to play video game consoles made by Sony, Microsoft and Nintendo, in the
car, RV, SUV, van or boat with attachable viewing monitors.
On August
23, 2002, we entered into an agreement with Providential Holding, Inc.
(“Providential”) to sell all the issued and outstanding shares of EastBridge.
For consideration, Providential agreed to deliver (i) $250,000 in
non-interest bearing promissory notes, payable 270 days after closing, (ii)
$250,000 in non-interest bearing promissory notes, payable 180 days after
closing, (iii) 3,000,000 shares of restricted stock of EastBridge with an option
of additional shares to be issued after 270 days if the stock price does not
reach $0.30 and (iv) 1,000,000 shares of restricted stock of Providential with
an option of additional shares to be issued after one year if the stock price
does not reach $0.30. The transaction between the original stockholders and
Providential was consummated as of October 17, 2003. On June 30, 2005 the
Company and Providential, agreed to a financial and ownership restructuring and
executed a formal agreement to return the majority ownership of EastBridge to
its original stockholders in exchange for a forgiveness of notes and obligations
owed to the Company and its original stockholders. The total amount of the debt
forgiven was $1,932,617 and is recorded as paid-in capital by the majority
original stockholders in the 2005 financial statement. As a result of the
re-structuring, Providential has become a minority stock holder and the original
stockholders of the Company have become the majority stockholders as a
group.
In 2005,
we decided to exit the mobile video game market and dedicate our activities to
providing investment related services in Asia, with a strong focus on the high
GDP growth countries, such as China and India. EastBridge will initially
concentrate on the growing investment opportunities in China (Hong Kong,
mainland China, Macao and Taiwan). Its products will be financial services
that assist small to medium-size companies obtain capital to grow their
business. Our financial services are expected to be in the form of joint
ventures, wholly foreign owned enterprises, guaranteed return ventures,
investment banking, financial advisory services or any other financial services
allowed by the local government and in compliance with the United States
Securities Exchange Commission regulations. In addition, EastBridge will also
provide marketing, sales and strategic planning services for its clients to
assist them to enter the United States market.
EastBridge
is one of the very few United States companies solely concentrated in marketing
financial services to the small to mid-size, but large number, of Asian
companies that require financial services to assist them in expanding in their
local markets. In the business sectors that EastBridge sees a unique
opportunity, EastBridge will form its own foreign subsidiaries with local
partners to capture the opportunity.
In
January, 2007, we formed Fiber One Limited (“Fiber One”) in Hong Kong as a
wholly owned subsidiary of EastBridge to provide calibration and maintenance
services to fiber optic companies in Asia, mainly in China and
Japan. On June 11, 2007, we distributed 5.0% of Fiber One to our
shareholders of record on June 11, 2007. Accordingly, the results of
Fiber One have been consolidated with those of EastBridge’s from the date of
formation of Fiber One. EastBridge has formed other subsidiaries
since the formation of Fiber One – these are noted in the Management Discussion
and Analysis section.
NOTE
2. BASIS OF PRESENTATION
Interim
Financial Statements
The
accompanying interim unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
8 of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In our opinion, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three-month period ended March 31, 2008 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2008. For further information, refer to the financial
statements and footnotes thereto included in our Form 10-KSB Report for the
fiscal year ended December 31, 2007.
NOTE
3. GOING CONCERN
As
indicated in the accompanying financial statements, the Company has incurred
cumulative net operating losses of $3,569,424 since inception. There
is no assurance that additional funds will be advanced by an investor or
investor interest will be developed to provide this level of funding. These
matters raise substantial doubt about the Company’s ability to continue as a
going concern. However, 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.
NOTE
4 - RECENT PRONOUNCEMENTS
Disclosure
about Derivative Instruments and Hedging Activities
In March
2008, the FASB issued SFAS No. 161, “Disclosure about Derivative
Instruments and Hedging Activities,” an amendment of FASB
Statement No. 133, (SFAS 161). This statement requires that objectives for using
derivative instruments be disclosed in terms of underlying risk and accounting
designation. The Company is required to adopt SFAS 161 on January 1, 2009. The
Company is currently evaluating the potential impact of SFAS No. 161 on the
Company’s consolidated financial statements.
Determination
of the Useful Life of Intangible Assets
In April
2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of
Intangible Assets,”, which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets under FASB 142 “Goodwill and Other Intangible
Assets”. The intent of this FSP is to improve the consistency between the
useful life of a recognized intangible asset under SFAS 142 and the period of
the expected cash flows used to measure the fair value of the asset under FASB
141 (revised 2007) “Business Combinations” and other U.S. generally accepted
accounting principles. The Company is currently evaluating the
potential impact of FSP FAS 142-3 on its consolidated financial
statements.
The
Fair Value Option for Financial Assets and Financial Liabilities
In
February 2007, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standard (“SFAS”) No. 159, “The Fair
Value Option for Financial Assets and Financial Liabilities, including an
amendment of FASB Statement No. 115”. SFAS 159 permits entities to choose
to measure many financial instruments and certain other items at fair value at
specified election dates. This Statement applies to all entities, including
not-for-profit organizations. SFAS 159 is effective as of the beginning of an
entity’s first fiscal year that begins after November 15, 2007. As such,
the Company is required to adopt these provisions at the beginning of the fiscal
year ended December 31, 2008. The Company is currently evaluating the
impact of SFAS 159 on its consolidated financial statements.
NOTE
5 – RELATED PARTY TRANSACTIONS
Due
to officers
The
Company received advances from officers of the Company amounting to $25,000, as
of September 30, 2007. These advances are interest free and payable on
demand.
Amonics
and Man Wai Sing
During
February 2007 (as amended August 2007), Fiber One entered into an employment
agreement with Man Wai Sing, who is also the President of Amonics Limited
(“Amonics”). The employment agreement calls for annual compensation
of 38,800 Hong Kong dollars per year, for two years, payable in February of
2009. Revenues recognized in these financial statements reflect
calibration services performed for Amonics by Fiber
One. Additionally, during the second quarter of 2007, Amonics
advanced Fiber One 2,000 Hong Kong dollars that is interest free and payable on
demand.
NOTE
6 – EQUITY
As
of March 31, 2008,
EastBridge has 112,469,839 shares of no par common stock issued and outstanding
with 300,000,000 shares authorized. During the first three months of 2008,
2,378,333 common shares were issued to consultants and officers for services
rendered as well as payment of debt. The shares were valued between the
values of $.07 - $.09 shares based on the market value of the common shares at
the time the services were rendered, which approximates the value of the
services rendered. These amounts were expensed.
NOTE
7 – GAIN ON THE SETTLEMENT OF DEBT
During
the three months 2008, the Company recorded a $20,878 gain on the settlement of
debt. The gains are reflected in “other income” on the accompanying
Statements of Operations.
NOTE
8 – SEGMENT INFORMATION
We have
determined our operating and reporting segments pursuant to the requirements of
SFAS No. 131, “Disclosures about Segments of an Enterprise and Related
Information” (“SFAS 131”). In making this determination, we considered our
organization/reporting structure and the information used by our chief operating
decision makers to make decisions about resource allocation and performance
assessment. The segments also help focus strategic planning efforts on key
objectives and initiatives across our businesses. Due to our integrated business
structure, operating costs included in one segment may benefit other segments.
Therefore, these segments are not designed to measure operating income or loss
that is directly related to the products included in each segment. We operate in
two segments – Financial Services, through EastBridge, and Calibration Services,
through our 95% owned subsidiary, Fiber One. Presented below our
Three months ended March 31, 2008:
Financial Services
segment is a strategic business development of our company that has sought out
new acquisitions and assists those companies in developing marketing
strategies
|
|
2008
|
|
|
2007
|
|
|
Net Change
|
|
Revenue
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
Operating
Loss
|
|
$ |
(148,561 |
) |
|
$ |
(180,482 |
) |
|
$ |
(31,921 |
) |
Calibration Services
segment is a business segment that provides internet and fiber services in Hong
Kong to a limited customer base.
|
|
2008
|
|
|
2007
|
|
|
Net Change
|
|
Revenue
|
|
$ |
17,275 |
|
|
$ |
- |
|
|
$ |
17,275 |
|
Operating
Income
|
|
$ |
13,203 |
|
|
$ |
- |
|
|
$ |
13,203 |
|
During
three months ended March 31, 2007, we operated only in the financial services
segment.
Corporate-Level
Expenses
|
2008
|
|
2007
|
|
Net Change
|
|
Corporate
Level Income
|
|
$ |
16,234 |
|
|
$ |
18,522 |
|
|
$ |
24,323 |
|
Certain
corporate-level expenses are not allocated to our segments. Those expenses
primarily include corporate operations related to broad-based sales and
marketing, product support services, human resources, legal, finance,
information technology, corporate development and procurement activities,
research and development and other costs, settlement of debt, and stock and
warrants issued for compensation.
NOTE
8 – INCOME TAXES
We
recognize a provision for foreign taxes on our income from Fiber One, however,
due to the lack of taxable income relative to our U.S. operations and history of
recurring losses, we have provided a valuation allowance for our net operating
loss carry-forwards generated in the U.S.
**********
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MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS
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Management’s
Discussion and Analysis contains various “forward looking statements” within the
meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
regarding future events or the future financial performance of the Company that
involve risks and uncertainties. Certain statements included in this Form 10-Q,
including, without limitation, statements related to anticipated cash flow
sources and uses, and words including but not limited to “anticipates”,
“believes”, “plans”, “expects”, “future” and similar statements or expressions,
identify forward looking statements. Any forward-looking statements herein are
subject to certain risks and uncertainties in the Company’s business, including
but not limited to, reliance on key customers and competition in its markets,
market demand, product performance, technological developments, maintenance of
relationships with key suppliers, difficulties of hiring or retaining key
personnel and any changes in current accounting rules, all of which may be
beyond the control of the Company. The Company adopted at management’s
discretion, the most conservative recognition of revenue based on the most
astringent guidelines of the SEC in terms of recognition of software licenses
and recurring revenue. Management will elect additional changes to revenue
recognition to comply with the most conservative SEC recognition on a forward
going accrual basis as the model is replicated with other similar markets (i.e.
SBDC). The Company’s actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth therein.
Forward-looking
statements involve risks, uncertainties and other factors, which may cause our
actual results, performance or achievements to be materially different from
those expressed or implied by such forward-looking statements. Factors and risks
that could affect our results and achievements and cause them to materially
differ from those contained in the forward-looking statements include those
identified in the section titled “Risk Factors” in the Company’s Annual Report
on Form 10-KSB for the year ended December 31, 2007, as well as other factors
that we are currently unable to identify or quantify, but that may exist in the
future.
In
addition, the foregoing factors may affect generally our business, results of
operations and financial position. Forward-looking statements speak only as of
the date the statement was made. We do not undertake and specifically decline
any obligation to update any forward-looking statements.
Overview
EastBridge
provides financial services including public offering guidance, joint venture,
and merchant banking services, to the small to medium-size businesses in China,
India and other Asian countries. Our target clients are mostly in
China, Hong Kong, and Australia. We focus on short-term investment
opportunities where the expected return is within a one to two year period and
the potential gain is substantial for both parties. We generally seek
transactions where we can assist in uncovering hidden value after our
participation. Keith Wong (President and Chief Executive Officer of EastBridge)
and Norman Klein (Chief Financial Officer of EastBridge) each have over twenty
years of experience in the industrial, sales and financial industries. Our
management can understand our prospective client's business quickly and are able
to take fast and decisive actions to achieve business opportunities for our
client. We plan China, Australia and Hong Kong to be our immediate focus and
become our revenue centers in 2008. We plan to expand into India and other Asian
countries in 2009.
Recent Developments and
Current Projects
EastBridge
currently has nine (9) clients that it is assisting with the process to register
them with the Securities and Exchange Commission as public reporting companies
in the United States and help them to begin trading their stock on a United
States stock exchange. Management anticipates that several of these
clients will go public in the United States and begin trading their stock in
2008. EastBridge currently has formed five (5)
subsidiaries. Arem Wines, Ltd. has already merged with these
subsidiaries as noted below. We expect Amonics to merge with one of
our subsidiaries in the near future. We also expect Wenda to also merge with a
U.S. based subsidiary of EastBridge. After the mergers are completed,
then EastBridge will begin the process to take these companies public and to
begin trading their stock on a U.S. stock exchange. EastBridge may
also choose to take some of the clients public directly without merging them
with a subsidiary. Below is a summary of our clients and our
subsidiaries. Management expects, but cannot guarantee, that
EastBridge’s financials should also improve significantly in 2008 once
EastBridge’s clients complete registration process with the Securities and
Exchange Commission as public reporting companies. Once a client is
registered as a public company and its stock begins trading in a U.S. stock
market, then EastBridge will record the value of its stock in that client as
revenue for that quarter and also record the value as an asset on its balance
sheet. EastBridge typically receives a 10 to 30% equity position in a
client as consideration for its services.
Amonics
On
November 23, 2006, we entered into a listing agreement with Amonics Limited
("Amonics"), a company registered in Hong Kong. Under the agreement, EastBridge
agreed to assist Amonics to become listed as a reporting company in the United
States within eighteen months from the execution date of the contract. The
Company agrees to pay for certain legal, auditing, IR/PR, and advisory costs in
conjunction with the listing process. Amonics issued 15% of its outstanding
common stock to the Company as consideration for its services on the execution
date of the contract. The shares are restricted stock. If we fail to list the
client as a reporting company within the contract term, then the Company agrees
to sell all the shares back to the client for a nominal cost, unless the parties
mutually agree to an extension.
Tianjin
Heavy Steel
On
December 3, 2006, we entered into a listing agreement with Tianjin Hui Hong
Heavy Steel Construction Co., Ltd ("Tianjin"), a company registered in China.
Under the agreement, EastBridge agreed to assist Tianjin to become listed as a
reporting company in the United States within eighteen months from the execution
date of the contract. The Company agreed to pay for certain legal, auditing,
IR/PR, and advisory costs in conjunction with the listing process. Tianjin
issued 15% of its outstanding common stock to the Company as consideration for
its services on the date of execution of the contract. The shares are restricted
stock. If we fail to list the client as a reporting company within the contract
term, then the Company agrees to sell all the shares to the client for a nominal
cost, unless the parties mutually agree to an extension.
Ning
Guo
On
January 6, 2007, we entered into a listing agreement with Ning Guo Shunchang
Machinery Co., Ltd. ("Ning Guo"), a company registered in China. Under the
agreement, EastBridge agreed to assist Ning Guo to become listed as a reporting
company in the United States. The Company agreed to pay for certain legal,
auditing, IR/PR, and advisory costs in conjunction with the listing process.
Ning Guo issued 20% of their company’s common stock to the Company as
consideration for its services on the date of execution of the contract. The
shares are restricted stock. If EastBridge fails to list the client as a
reporting company within the contract term, then the Company agrees to sell all
the shares to the client for a nominal cost, unless the parties mutually agree
to an extension.
GinKo
On July
24, 2007, we entered into a listing agreement with Hefe GinKo Real Estate
Company, Ltd. (“GinKo”), a company registered in Anhui, China. Under the
agreement, EastBridge agreed to assist GinKo to become listed as a reporting
company in the United States. The Company agreed to pay for certain legal,
auditing, IR/PR, and advisory costs in conjunction with the listing process.
GinKo issued 18% of their company’s common stock to the Company as
consideration for its services on the date of execution of the contract. The
shares are restricted stock. If EastBridge fails to list the client as a
reporting company within the contract term, then the Company agrees to sell all
the shares to the client for a nominal cost, unless the parties mutually agree
to an extension.
AREM
Wines
During
September, 2007, we signed a definitive agreement to acquire 15% of AREM Wines
Pty, Ltd, (“Arem”) an Australian wine company in Melbourne, Australia. Under the
terms of the agreement, EastBridge gave Arem Pacific Corporation, the investment
company that owns AREM Wines Pty, Ltd., 8,000,000 of our restricted common
shares, plus options to purchase EastBridge common shares, in exchange for the
15% equity position in AREM. In subsequent events, the Company issued
only 2,000,000 of the restricted shares as part of 8,000,000 shares to be issued
in accordance with the agreement. The September, 2007 agreement
replaces all other stock exchange agreements between EastBridge and
Arem. In addition to the restricted stock agreement, EastBridge and
Arem signed a second agreement. EastBridge will assist Arem to become
listed on a U.S. stock exchange. EastBridge will be paid $700,000 in cash, of
which $400,000 was due at signing and $100,000 will be paid when the proper
application is filed with the Securities and Exchange Commission and the
remaining $200,000 following the listing and trading of AREM’s stock on a U.S.
stock exchange. Arem will also issue 5% of its stock to EastBridge
stockholders.
Rino
Two Horns
EastBridge
signed an agreement to acquire a 15% stake in Rhino Two Horns (Malaysia) Sdn.
Bhd., (“Rino”) an energy sports drink company. As of March 31, 2008,
Rhino Two Horns has terminated their contract with EastBridge.
Fiber
One Ltd
During
July 2007, EastBridge organized Fiber One, Ltd. a Hong Kong based subsidiary of
EastBridge. Fiber One is wholly owned by EastBridge. Fiber
One provides services to the fiber optics industry in China and other Far East
countries. Fiber One is currently providing calibration service to
Amonics of Hong Kong. Fiber One is an active subsidiary of EastBridge
and receiving revenue from Amonics.
Nanotec,
Inc.
During
July 2007, we organized Nanotec, Inc., (“Nanotec”) a wholly owned subsidiary of
EastBridge, to provide electronic and chemical products and services to
companies in Asia, especially those in China and Japan. On July 11,
2007 we distributed 5% of Nanotec to our shareholders of record on that
date. As of November 8, 2007, Arem Wines merged with Nanotec,
Inc. Under the terms of the merger, the new stock ownership structure
is as follows: 15% owned by EastBridge, 5% owned by EastBridge
shareholders, and 80% owned by Arem Wines’ beneficiaries.
General
Farms Corporation
On
November 27, 2007, we organized General Farms Corporation (“General Farms”) a
wholly owned subsidiary of EastBridge. A stock dividend of 5% of General Farm's
common stock, or 10,000,000 shares, will be distributed to EastBridge's
shareholders of record as of Nov 16, 2007. Under the terms of the share exchange
agreement, the new stock ownership structure is: 85% owned by EastBridge and 5%
owned by EastBridge's shareholders of record as of Nov 16, 2007. On of December
5, 2007, Rhino Two Horns merged with General Farms
Corporation. However, during this quarter, Rhino Two Horns terminated
their contract with EastBridge which dissolves the merger.
Energy
Corporation
On
November 27, 2007, we organized Energy Corporation (“Energy”) a wholly owned
subsidiary of EastBridge. A stock dividend of 5% of Energy
Corporation’s common stock of 10 million shares, on a pro-rata basis and with no
considerations will be distributed to EastBridge’s shareholders of record on
December 28, 2007. The Company has not distributed the stock dividend
as of December 31, 2007. Energy Corporation, a wholly owned
subsidiary of EastBridge, focuses on energy equipment manufacturers and the
energy distribution business in Asia. The eligible shareholders will
automatically receive the stock certificates or electronic deposits into their
accounts when the Energy Corporation's stock is listed and begins
trading. Energy Corporation is presently an inactive
subsidiary.
China
Properties Corporation
On
November 27, 2007, we organized China Properties Corporation (“China
Properties”) a wholly owned subsidiary of EastBridge. A stock
dividend of 5% of China Properties’ common stock of 10,000,000 shares, on a
pro-rata basis and without considerations to its shareholders of record on
Friday, November 30, 2007. China Properties Corporation, a wholly owned
subsidiary of EastBridge, focuses on real estate development and construction
business in Asia. The eligible shareholders will automatically receive the stock
certificates or electronic deposits into their accounts when the China
Properties' stock is listed and begins trading. China Properties is
presently an inactive subsidiary.
Beijing
Power Plant Equipment Company
EastBridge
has entered into an agreement to provide listing services to ZZH, a major coal
fired ignition equipment manufacturer for electricity power plants. ZZH will be
listed on the U.S. stock market as soon as practicable. ZZH sells energy saving
ignition equipment to control coal consumption in power plants and has been
granted several critical patents for its core technology. ZZH currently provides
equipment to save fuel and lower pollution to numerous major Chinese power
plants, including the one providing power to Beijing-Da Tang Electricity
Company. Coal is the main source of electricity generation in China and a major
source in the U.S. EastBridge will receive restricted stock of ZZH as
consideration for its services.
Wenda
Professional College
EastBridge
has entered into and agreement to provide listing services to Wenda, a major
regional professional college located just west of Shanghai,
China. Wenda offers professional and vocational educational programs
to train post high school students to improve their skills for higher paying
jobs. Wenda offers programs mainly in the computer related IT sectors such as
network design, hardware technology, computer graphics, CAD, animation, network
database and network security. EastBridge will receive restricted
stock in Wenda as consideration for its services.
Huang
Wei Pharmaceutical Company
EastBridge
has entered into an agreement to provide listing services to Huang Wei, a well
know Chinese pharmaceutical company located approximately two hours from
Beijing, China. EastBridge intends to list Huang Wei in a United
States stock market within the next 12 to 18 months. Huang Wei has
recently added over thirty drug approvals from the Chinese FDA. Its
products range from the special anti-inflammatory to blood pressure-lowering
drugs. EastBridge will receive restricted stock of Huang Wei as
consideration for its services.
YEWO
Group Corporation
EastBridge
has entered into and agreement to provide listing
services to YEWO Group Corporation, Zhejiang, China. YEWO Group is a property
development company that operates shopping centers in China and is expanding
their business rapidly. YEWO Group is developing a new mega resort property in
Jiangsu province. EastBridge will assist YEWO Group in completing the necessary
SEC audit and legal requirements. YEWO Group is a stable and profitable company
that has been in business for approximately ten years.
RESULTS
OF OPERATIONS
Revenue
– Related Party
Related
party revenue was $17,275 and $0.00 for the three months ended March 31, 2008
and 2007, respectively. Revenues recognized in these financial
statements reflect calibration services performed for Amonics by Fiber One and
consulting agreement with Arem Wines.
General
and Administrative
General
and Administrative were $127,426 and $180,482 for the three months ended March
31, 2008 and 2007, respectively. The decrease in general and
administrative expenses for the periods in 2008 compared to 2007 relates to the
reduction in consulting and legal services. Many of the expenses in
2007 were related to the filing of our Form 10SB. We did not incur
such expenses in 2008. Most of our current expenses focus on finding
new clients for our company. We are beginning to incur expenses to
take our clients public in the United States and begin trading on a US stock
exchange. Both activities will help to improve the financials of the
company.
Sales
and Marketing Services
Sales and
Marketing was $25,207 and $nil for the three months ended March 31, 2008 and
2007, respectively. The increase in sales and marketing services for
the periods in 2008 compared to 2007 relates to increased costs of being a
public reporting company, including costs associated with our filings with the \
Securities and Exchange Commission. Also cost associated with hiring
investor relations firms, marketing firms, and stock related
services.
LIQUIDITY
AND CAPITAL RESOURCES
The
Company has cash and cash equivalents of $65,189 and a working capital deficit
of $151,552 as of March 31, 2008.
The
Company's operating activities used ($198,622) in the three months ended March
31, 2008 and ($58,670) the three months ended March 31, 2007. The
difference is mainly attributable to the increase in revenues in the current
year.
Cash
provided by financing activities was $204,649 and $16,567 for the three months
ended March 31, 2008 and 2007, respectively. The decrease is due to repayment of
advances from officers.
The
Company’s operations are currently financed through various loans from senior
management and principal shareholders as it has been the case for the past
several years. However, there are no assurances that they will
continue to do so. Management is in the process of taking action to
strengthen our working capital position and generate sufficient cash to meet our
operating needs. In addition, we also anticipate generating revenue
through our proposed financial services that we provide to our clients. No
assurances can be made that management will be successful in achieving its plan,
or that additional capital will be available on a timely basis or at acceptable
terms.
Critical
Accounting Policies
Stock Based
Compensation
In
December 2004, the FASB issued a revision of SFAS No. 123 ("SFAS No. 123(R)")
that requires compensation costs related to share-based payment transactions to
be recognized in the statement of operations. With limited exceptions, the
amount of compensation cost will be measured based on the grant-date fair value
of the equity or liability instruments issued. In addition, liability awards
will be re-measured each reporting period. Compensation cost will be recognized
over the period that an employee provides service in exchange for the award.
SFAS No. 123(R) replaces SFAS No. 123 and is effective as of the beginning of
January 1, 2006. Based on the number of shares and awards outstanding as of
December 31, 2005 (and without giving effect to any awards which may be granted
in 2006), we do not expect our adoption of SFAS No. 123(R) in January 2006 to
have a material impact on the financial statements.
FSP FAS
123(R)-5 was issued on October 10, 2006. The FSP provides that instruments that
were originally issued as employee compensation and then modified, and that
modification is made to the terms of the instrument solely to reflect an equity
restructuring that occurs when the holders are no longer employees, then no
change in the recognition or the measurement (due to a change in classification)
of those instruments will result if both of the following conditions are met:
(a). There is no increase in fair value of the award (or the ratio of intrinsic
value to the exercise price of the award is preserved, that is, the holder is
made whole), or the antidilution provision is not added to the terms of the
award in contemplation of an equity restructuring; and (b). All holders of the
same class of equity instruments (for example, stock options) are treated in the
same manner. The provisions in this FSP shall be applied in the first reporting
period beginning after the date the FSP is posted to the FASB website. The
Company has adopted SP FAS 123(R)-5 but it did not have a material impact on its
consolidated results of operations and financial condition.
Accounting Policies and
Estimates
The
preparation of our financial statements in conformity with accounting principles
generally accepted in the United States of America requires our management to
make certain estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Our management periodically
evaluates the estimates and judgments made. Management bases its estimates and
judgments on historical experience and on various factors that are believed to
be reasonable under the circumstances. Actual results may differ from these
estimates as a result of different assumptions or conditions.
As such,
in accordance with the use of accounting principles generally accepted in the
United States of America, our actual realized results may differ from
management’s initial estimates as reported. A summary of significant
accounting policies are detailed in notes to the financial statements which are
an integral component of this filing.
Revenues
The
Company has adopted the Securities and Exchange Commission’s Staff Accounting
Bulletin SAB No. 104, which provides guidance on the recognition, presentation
and disclosure of revenue in financial statements.
Segment
Reporting
Statement
of Financial Accounting Standards No. 131 ("SFAS 131"), "Disclosure About
Segments of an Enterprise and Related Information" requires use of the
"management approach" model for segment reporting. The management approach model
is based on the way a company's management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments
are based on products and services, geography, legal structure, management
structure, or any other manner in which management disaggregates a company. SFAS
No. 131 has no effect on the Company's financial statements as substantially all
of the Company's operations are conducted in one industry segment.
Income
Taxes
In
assessing the realizability of deferred tax assets, management assesses the
likelihood that deferred tax assets will be recovered from future taxable
income, and to the extent that recovery is not likely a valuation allowance is
established. We adjust the valuation allowance in the period management
determines it is more likely than not that deferred tax assets will or will not
be realized. To date, we have fully reserved for our deferred tax assets based
primarily on our history of recurring losses.
Additional
Information
EastBridge
files reports and other materials with the Securities and Exchange
Commission. These documents may be inspected and copied at the
Commission’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.,
20549. You can obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. You can
also get copies of documents that the Company files with the Commission through
the Commission’s Internet site at www.sec.gov.
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QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
We do not
hold any derivative instruments and do not engage in any hedging activities.
Most of our activity is providing listing and financial services to companies in
Asia and Taiwan. At present, the Company is providing these services
to nine companies.
(a)
Evaluation of Disclosure Controls and Procedures. Our management, with the
participation of our President, evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this report.
Based on that evaluation, our President concluded that our disclosure controls
and procedures as of the end of the period covered by this report were effective
such that the information required to be disclosed by us in reports filed under
the Securities Exchange Act of 1934 is (i) recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and
forms and (ii) accumulated and communicated
to our management, including our President, as appropriate to allow timely
decisions regarding disclosure. A controls system cannot provide absolute
assurance, however, that the objectives of the controls system are met, and no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within a company have been
detected.
Management’s
Report on Internal Control over Financial Reporting. Our management is 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.
Our
management, with the participation of the Chief Executive Officer, evaluated the
effectiveness of the Company’s internal control over financial reporting as of
March 31, 2008. In making this assessment, our management used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control — Integrated Framework. Based
on this evaluation, our management, with the participation of the President,
concluded that, as of March 31, 2008, our internal control over financial
reporting was effective.
(b)
Changes in Internal
Control over Financial Reporting. There were no changes in our
internal control over financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act, during our most recently completed fiscal
quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
The
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.
We have
updated the risk factors previously disclosed in Part I, Item 1A of our
Amended Form 10–SB, which was filed with the Securities and Exchange
Commission on February 27, 2007.
You
should carefully consider the following risk factors before making an investment
decision. If any of the following risks actually occur, our business, financial
condition or results of operations could be materially adversely affected. In
such cases, the trading price of our common stock could decline and you may lose
all or a part of your investment.
I. Risk Factors That May
Affect Our Results of Operations and Financial Condition
Our
Common Stock Is Subject To Penny Stock Regulation
Our
shares are subject to the provisions of Section 15(g) and Rule 15g-9 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly
referred to as the "penny stock" rule. Section 15(g) sets forth certain
requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.
The Commission generally defines penny stock to be any equity security that has
a market price less than $5.00 per share, subject to certain exceptions. Rule
3a51-1 provides that any equity security is considered to be penny stock unless
that security is: registered and traded on a national securities exchange
meeting specified criteria set by the Commission; authorized for quotation on
the NASDAQ Stock Market; issued by a registered investment company; excluded
from the definition on the basis of price (at least $5.00 per share) or the
registrant's net tangible assets; or exempted from the definition by the
Commission. Since our shares are deemed to be "penny stock", trading in the
shares will be subject to additional sales practice requirements on
broker/dealers who sell penny stock to persons other than established customers
and accredited investors.
The
Liquidity Of Our Common Stock Is Seriously Limited And There Is A Limited Market
For Our Common Stock
Our stock
is currently being traded on the NASDAQ Over-The-Counter Bulletin Board, and the
liquidity of our common stock is limited. The Bulletin Board is a limited market
and subject to substantial restrictions and limitations in comparison to the
NASDAQ system. Any broker/dealer that makes a market in our stock or other
person that buys or sells our stock could have a significant influence over its
price at any given time.
II. Risks
Associated with Our Current Stage of Business
Management
May Not Run the Company in a Profitable Manner and If It Does Not You May Lose
Your Entire Investment:
Two
members of our executive management team founded the company and it is presently
not profitable.
We
May Not Have Access to Sufficient Capital to Pursue Further Development of the
BioAuthorize Business and Technology and Therefore Would Be Unable to Achieve
Our Planned Future Growth:
We intend
to pursue a growth strategy that includes development of the EastBridge
business. Currently we have limited capital which is insufficient to
pursue our plans for development and growth. Our ability to implement
our growth plans will depend primarily on our ability to obtain additional
private or public equity or debt financing. We are currently seeking
additional capital. Such financing may not be available at all, or we
may be unable to locate and secure additional capital on terms and conditions
that are acceptable to us. Our failure to obtain additional capital
will have a material adverse effect on our business.
Our
Lack of Diversification In Our Business Subjects Investors to a Greater Risk of
Losses:
Since the
effective stage of EastBridge, all of our efforts are focused on the development
and growth of that business in an unproven area. Although the patent
litigation is substantial, we can make no assurances that the marketplace will
accept the corporate financial services.
III. Risks
Associated with the Peoples republic of China (“PRC”)
There
could be changes in the policies of the PRC government that may adversely affect
our business.
Industry
and services in the PRC is subject to policies implemented by the PRC
government. The PRC government may, for instance, impose control over aspects of
our business such as distribution of raw materials, product pricing, services,
education, and sales. On the other hand, the PRC government may also make
available subsidies or preferential treatment, which could be in the form of tax
benefits or favorable financing arrangements.
Separately,
our business and operating results also could be adversely affected by changes
in policies of the Chinese government such as: changes in laws, regulations or
the interpretation thereof; confiscatory taxation; restrictions on currency
conversion, imports on sources of supplies; or the expropriation or
nationalization of private enterprises. Although the Chinese government has been
pursuing economic reform policies for approximately two decades to liberalize
the economy and introduce free market aspects, there is no assurance that the
government will continue to pursue such policies or that such policies may not
be significantly altered, especially in the event of a change in leadership,
social or political disruption, or other circumstances affecting China’s
political, economic and social life.
Certain
political and economic considerations relating to PRC could adversely affect our
company.
The PRC
is passing from a planned economy to a market economy. The Chinese government
has confirmed that economic development will follow a model of market economy
under socialism. While the PRC government has pursued economic reforms since its
adoption of the open-door policy in 1978, a large portion of the PRC economy is
still operating under five-year plans and annual state plans adopted by the
government that set down national economic development goals. Through these
plans and other economic measures, such as control on foreign exchange, taxation
and restrictions on foreign participation in the domestic market of various
industries, the PRC government exerts considerable direct and indirect influence
on the economy. Many of the economic reforms are unprecedented or experimental
for the PRC government, and are expected to be refined and improved. Other
political, economic and social factors can also lead to further readjustment of
such reforms. This refining and readjustment process may not necessarily have a
positive effect on our operations or future business development. Our operating
results may be adversely affected by changes in the PRC’s economic and social
conditions as well as by changes in the policies of the PRC government, which we
may not be able to foresee, such as changes in laws and regulations (or the
official interpretation thereof), measures which may be introduced to control
inflation, changes in the rate or method of taxation, and imposition of
additional restrictions on currency conversion.
The
recent nature and uncertain application of many PRC laws applicable to us create
an uncertain environment for business operations and they could have a negative
effect on us.
The PRC
legal system is a civil law system. Unlike the common law system, such as the
legal system used in the United States, the civil law system is based on written
statutes in which decided legal cases have little value as precedents. In 1979,
the PRC began to promulgate a comprehensive system of laws and has since
introduced many laws and regulations to provide general guidance on economic and
business practices in the PRC and to regulate foreign investment. Progress has
been made in the promulgation of laws and regulations dealing with economic
matters such as corporate organization and governance, foreign investment,
commerce, taxation and trade. The promulgation of new laws, changes of existing
laws and the abrogation of local regulations by national laws could have a
negative impact on our business and business prospects. In addition, as these
laws, regulations and legal requirements are relatively recent, their
interpretation and enforcement involve significant uncertainty.
If
relations between the United States and China worsen, our stock price may
decrease and we may have difficulty accessing the U.S. capital
markets.
At
various times during recent years, the United States and China have had
disagreements over political and economic issues. Controversies may arise in the
future between these two countries. Any political or trade controversies between
the United States and China could adversely affect the market price of our
common stock and our ability to access U.S. capital markets.
Governmental
control of currency conversion may affect the value of your
investment.
The PRC
government imposes controls on the convertibility of Renminbi into foreign
currencies and, in certain cases, the remittance of currency out of the PRC.
Currently, the Renminbi is not a freely convertible currency. Shortages in the
availability of foreign currency may restrict our ability to remit sufficient
foreign currency to satisfy foreign currency denominated obligations. Under
existing PRC foreign exchange regulations, payments of current account items,
including profit distributions, interest payments and expenditures from the
transaction, can be made in foreign currencies without prior approval from the
PRC State Administration of Foreign Exchange by complying with certain
procedural requirements. However, approval from appropriate governmental
authorities is required where Renminbi is to be converted into foreign currency
and remitted out of China to pay capital expenses such as the repayment of loans
and corporate debt obligations denominated in foreign currencies.
The PRC
government may also at its discretion restrict access in the future to foreign
currencies for current account transactions. If the foreign exchange control
system prevents us from obtaining sufficient foreign currency to satisfy our
currency demands, we may not be able to pay certain of our expenses as they come
due.
The
fluctuation of the Renminbi may materially and adversely affect your
investment.
The value
of the Renminbi against the U.S. dollar and other currencies may fluctuate and
is affected by, among other things, changes in the PRC’s political and economic
conditions. Any significant revaluation of the Renminbi may materially and
adversely affect our cash flows, revenues and financial condition.
Since
1994 the PRC has pegged the value of the Renminbi to the U.S. dollar. We do not
believe that this policy has had a material effect on our business. There can be
no assurance that Renminbi will not be subject to devaluation. We may not be
able to hedge effectively against Renminbi devaluation, so there can be no
assurance that future movements in the exchange rate of Renminbi and other
currencies will not have an adverse effect on our financial
condition.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS SECURITIES
There
were no changes in securities and small business issuer purchase of equity
securities during the period ended March 31, 2008 other than the issuance of
2,378,500 common shares to consultants. The issuance of such shares
of our common stock were effected in reliance on the exemptions for sales of
securities not involving a public offering, as set forth in Rule 506 promulgated
under the Securities Act and in Section 4(2) of the Securities Act. A
legend was placed on the certificates representing each such security stating
that it was restricted and could only be transferred if subsequent registered
under the Securities Act or transferred in a transaction exempt from
registration under the Securities Act.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
There
were no defaults upon senior securities during the period ended March 31,
2008.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS
There
were no matters submitted to the vote of securities holders during the period
ended March 31, 2008.
None
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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 and Chief Financial Officer Pursuant to Section
906 of the Sarbanes-Oxley Act.
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SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) 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.
/s/ Keith
Wong
Keith
Wong,
Chief
Executive Officer
/s/ Norman
Klein
Norman
Klein
Chief
Financial Officer
Date: May
15, 2008