10-Q 1 ebig_10q.htm QUARTERLY REPORT ebig_10q.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 March 31, 2011

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   Noþ
 
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 12, 2011
Common stock, no par value
 
 150,946,416
 
 


 
 

 
EastBridge Investment Group Corporation

TABLE OF CONTENTS

         
     
Page Numbers
 
PART I - FINANCIAL INFORMATION
     
         
Item 1.
Condensed Consolidated Financial Statements (unaudited)
    2  
 
Condensed Consolidated Balance Sheets
    2  
 
Condensed Consolidated Statements of Operations
    3  
 
Condensed Consolidated Statement of Cash Flows
    4  
 
Notes to Condensed Consolidated Financial Statements
    5  
Item 2.
Management’s Discussion & Analysis of Financial Condition & Results of Operations
    14  
Item 3
Quantitative and Qualitative Disclosures About Market Risk
    18  
Item 4.
Controls and Procedures
    18  
         
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.
[Removed and Reserved]
    20  
Item 5
Other Information
    20  
Item 6.
Exhibits
    21  
SIGNATURES     22  
 
 
1

 

PART I – FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS
 
 
EASTBRIDGE INVESTMENT GROUP CORPORATION
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
               
     
March 31,
   
December 31,
 
     
2011
   
2010
 
     
(unaudited)
       
               
Assets
             
Cash
  $ 40,343     $ 49,898  
 
Total current assets
    40,343       49,898  
                   
Investments
    1,762,588       1,614,082  
 
Total assets
  $ 1,802,931     $ 1,663,980  
                   
Liabilities and Stockholders' Deficit
               
Liabilities:
               
Accounts payable
    286,307       298,278  
Disputed accounts payable
    213,799       213,799  
Accrued expenses
    536,635       542,119  
Line of credit
    7,500       18,750  
Deferred revenue
    334,871       334,871  
Advances payable to related party
    158,700       44,300  
Other current liabilities
    143,000       153,000  
 
Total current liabilities
    1,680,812       1,605,117  
                   
                   
 
Total liabilities
    1,680,812       1,605,117  
                   
Commitments and contingencies
               
                   
Stockholders' equity:
               
    Preferred stock series A, no par value, 50,000,000 shares
               
    authorized; none issued and outstanding
               
    as of March 31, 2011 and December 31, 2010, respectively
    -       -  
                   
    Preferred stock series B, no par value, 50,000,000 shares
               
    authorized; none issued and outstanding
               
    as of March 31, 2011 and December 31, 2010, respectively
    -       -  
                   
    Common stock, no par value, 300,000,000 shares authorized;
               
    150,781,416 and 148,653,865 issued and outstanding
               
    as of March 31, 2011 and December 31, 2010, respectively
    5,915,272       5,672,241  
                   
    Accumulated deficit
    (5,941,659 )     (5,613,378 )
    Accumulated other comprehensive income
    148,506       -  
 
Total stockholders' equity
    122,119       58,863  
                   
 
Total liabilities and stockholders' equity
  $ 1,802,931     $ 1,663,980  

The accompanying notes are an integral part of these condensed consolidated financial statements.
 
 
2

 
 
EASTBRIDGE INVESTMENT GROUP CORPORATION
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
 
             
             
   
Three Months Ended
       
   
March 31,
       
   
2011
   
2010
 
             
             
 Revenues
  $ -     $ -  
                 
Cost of services
    -       -  
                 
Gross profit
    -       -  
                 
Operating expenses:
               
General and administrative
    311,322       469,954  
Selling and marketing
    12,867       40,284  
         Total operating expenses
    324,189       510,238  
Operating loss
    (324,189 )     (510,238 )
                 
Other income (expense):
               
Interest expense
    3,997       479,237  
Other expense
    95       -  
        Total other (income) expense
    4,092       479,237  
                 
Loss before taxes
  $ (328,281 )   $ (989,475 )
                 
Income tax provision
    -       -  
                 
Net loss
  $ (328,281 )   $ (989,475 )
                 
Other comprehensive income:
               
Unrecognized gain on investments
    148,506       -  
        Total other comprehensive income
    148,506       -  
                 
Comprehensive net loss
  $ (179,775 )   $ (989,475 )
                 
Earnings per share:
               
  Basic and diluted:
  $ (0.00 )   $ (0.01 )
                 
Weighted average common shares outstanding:
               
  Basic and diluted:
    150,097,675       141,828,925  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
 
3

 
 
EASTBRIDGE INVESTMENT GROUP CORPORATION
 
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
             
             
   
Three Months Ended March 31,
       
   
2011
   
2010
 
             
CASH FLOWS FROM OPERATING ACTIVITIES:
           
  Net loss
  $ (328,281 )   $ (989,475 )
  Adjustments to reconcile net loss to net cash
               
     used in operating activities:
               
  Common stock issued for services
    243,031       294,161  
  Changes in operating assets and liabilities:
               
Accounts payables
    (11,971 )     20,047  
Accrued liabilities
    (5,484 )     69,370  
Deferred revenue
    -       49,960  
Other current liabilities
    (10,000 )     -  
          Net cash used in operating activities
    (112,705 )     (555,937 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Stock issued from payment of debt
    -       527,000  
Repayment of line of credit
    (11,250 )     (11,250 )
Repayment of advances from affiliate
    -       (50,040 )
Advances from affiliate
    114,400       38,000  
          Net cash provided by financing activities
    103,150       503,710  
                 
(DECREASE) INCREASE IN CASH
    (9,555 )     (52,227 )
CASH, BEGINNING OF PERIOD
    49,898       162,609  
CASH, END OF PERIOD
  $ 40,343     $ 110,382  
                 
SUPPLEMENTAL CASH FLOW INFORMATION
               
                 
Interest paid
  $ 1,790     $ 2,277  
Issuance of company stock for accrued liabilities     -       71,840  
Debt extinguished with issuance of company stock
  $ -     $ 50,040  
 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
 
4

 
 
EASTBRIDGE INVESTMENT GROUP CORPORATION
FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010
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.  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 companies that require these services for expansion. EastBridge had eleven clients as of the date of this filing, that it is assisting in becoming public companies, reporting pursuant to the Securities Exchange Act of 1934, as amended, in the United States and obtaining listings for their stock on a U.S. stock exchange or over-the-counter market.  All clients are located in Asia-Pacifica.
 
EastBridge has formed three subsidiaries which have been consolidated with EastBridge from the date of formation as further described below.  These subsidiaries are inactive.
 
NOTE 2 BASIS OF PRESENTATION

The accompanying condensed consolidated balance sheet as of December 31, 2010, which has been derived from audited consolidated financial statements, and the accompanying unaudited condensed consolidated financial statements as of March 31, 2011 and for the three months ended March 31, 2011 and March 31, 2010, 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 months ended March 31, 2011 are not necessarily indicative of the results to be expected for the year ending December 31, 2011.  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, 2010 and for the year then ended included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

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.
 
 
5

 

NOTE 3 – GOING CONCERN

As indicated in the accompanying financial statements, the Company has incurred cumulative net operating losses of $5,941,659 since inception. We place no assurance on the on going operations of our subsidiaries, which were all inactive as of March 31, 2011.  So far, most of the working capital has been provided by the Company's management team members. 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.
 
 
6

 

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 “Revenue Recognition” Update No. 2009-13.  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 March 31, 2011 and December 31, 2010, 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 March 31, 2011 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.
 
 
7

 
 
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.

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 5.

Basic and Diluted Net Loss Per Share

Net 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 the inclusion of common stock equivalents would be anti-dilutive.
 
 
8

 

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.

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 January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06, “Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements” (“ASU 2010-06”). A majority of this update was effective for the Company for all interim and annual reporting periods beginning after December 15, 2009.  However, the guidance also required that the disclosures on any Level 3 assets present separately information about purchases, sales, issuances and settlements.  This portion of the guidance is effective for fiscal years beginning after December 15, 2010, and is effective for us on October 1, 2011.  We do not believe that the full adoption of ASU 2010-06, with respect to the Level 3 measurements, will have a material impact on our fair value measurement disclosures.

NOTE 5  – INVESTMENTS

Marketable Equity Securities

Marketable equity securities consist of shares in Alpha Lujo, Inc. received by the Company for services rendered.  The following is a summary of available-for-sale marketable securities as of March 31, 2011:

   
Cost
   
Unrealized Gain
   
Unrealized (Losses)
   
Market or Fair Value
 
Equity Securities
  $ 137,082     $ 148,506     $ -     $ 285,588  
Total
  $ 137,082     $ 148,506     $ -     $ 285,588  
 
There were no available-for-sale marketable securities held by the Company at December 31, 2010.

The following is a summary of the net unrealized gains and losses as presented in Other Comprehensive Income as of March 31, 2011:
 
           
Unrealized
   
Unrealized
   
Other
 
   
Unrealized
   
(Losses)
   
(Losses)
   
Comprehensive
 
Description
 
Gains
   
Short Term
   
Long Term
   
Income (Loss)
 
Equity Securities
  $ 148,506     $ -     $ -     $ 148,506  
Total
  $ 148,506     $ -     $ -     $ 148,506  

 
 
9

 
 
The Company held no available-for-sale marketable securities during the three months ended March 31, 2010.

The Company did not sell any such securities during the three months ended March 31, 2011.

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.
 
NOTE 6 – OTHER LIABILITIES
 
Disputed Accounts Payable
 
At March 31, 2011, the Company carried balances totaling $213,799 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 is working on a resolution.
 
Other Current Liabilities
 
Other current liabilities at March 31, 2011 consisted of a $143,000 deposit 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. This $143,000 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.
 
NOTE 7 – LINE OF CREDIT / NOTES PAYABLE
 
In May 2009, the Company converted its line of credit with Goldwater Bank into a two year unsecured promissory note with a variable interest rate of Wall Street Journal Prime plus 4.0%.  The interest rate cannot be less than 8% which was the rate as of March 31, 2011.  The balance of this promissory note as of March 31, 2011 and December 31, 2010 was $7,500 and $18,750, respectively.
 
NOTE 8 – LEASES

The Company is leasing office space in Scottsdale, Arizona, under a non-cancelable operating lease agreement, which expires in August 2011.  In 2010, the Company entered into a lease agreement for housing in Beijing with a family member of an officer.  This lease is intended for the employees of the Company while in Beijing and expires December 2011.  Rent expense for the periods ended March 31, 2011 and 2010 was $24,902 and $7,514, respectively.

As of March 31, 2011, future minimum lease payments due under the foregoing lease agreement are as follows:

       
Future Payments
 
Amount
 
 Year ending December 31, 2011     41,570  
    $ 41,570  
 
 
10

 
 
NOTE 9 – RELATED PARTY TRANSACTIONS

The Company received advances from its two officers and a shareholder during the course of business at a rate of 4.5% interest which is the federal long term interest rate. As of March 31, 2011 and 2010 advances payable to the Company’s two officers and this shareholder were $158,700 and $59,800, respectively.  As of March 31, 2011 and 2010 the accrued compensation liability to the officers was $526,929 and $292,026, 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 expires December 2011.  Per the lease agreement the rent is to be paid in shares of the Company’s stock.  For the three months ended March 31, 2011 and 2010, the expense of this lease included in the rent expense in Note 8 was $12,750 and $0, respectively.

NOTE 10 – EQUITY

As of March 31, 2011, EastBridge had 150,781,416 shares of no par common stock issued and outstanding with 300,000,000 common shares authorized.  

During the three months ended March 31, 2011, the Company issued 1,156,122 shares of common stock to consultants for services rendered.  The Company expensed $136,173 in connection with these issuances based on the quoted market prices on the dates of issuance.

During the three months ended March 31, 2011, the Company issued 971,429 shares of common stock to the CEO’s spouse per the lease agreement described in Note 9.  The Company expensed $106,857 in connection with these issuances based on the quoted market prices on the dates of issuance.

During the three months ended March 31, 2010, the Company issued 2,386,015 shares of common stock to consultants for services rendered.  The Company expensed $294,161 in connection with these issuances based on the quoted market prices on the dates of grant.

During the three months ended March 31, 2010, the Company issued 3,100,000 shares of common stock to individuals in exchange for the $50,040 of debt owed by the Company.  The Company expensed $476,961 in connection with these issuances based on the quoted market prices on the date of grant.
 
 
11

 

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:
 
   
March 31,
   
March 31,
 
   
2011
   
2010
 
             
Jinkuizi Science & Technology Company
    (45,000 )     (45,000 )
                 
Alpha Green Energy Company
    (112,212 )     (75,712 )
                 
Kaida Road Construction Company
    (73,000 )     (73,000 )
                 
Huang Wei Pharmaceutical Company
    (9,559 )     (9,559 )
                 
Tsingda Education Company
    -       (49,960 )
                 
AREM Pacific Corporation
    (50,485 )     -  
                 
Dwarf Technologies
    (44,615 )     -  
                 
Deferred Revenue
    (334,871 )     (253,231 )
 
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.
 
 
12

 
 
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 8.4 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.
 
   
Total shares
reserved
under the
plan
   
Remaining
shares available for issuance
under the
plan
 
2009 Stock Option Plan
    10,000,000       1,584,852  
 
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

On April 12, 2011, the Company entered into a Listing Agreement with China Golden Eagle Automobile Sales Co., Ltd (“Golden Eagle”) a China registered company. Pursuant to the Listing Agreement, the Company has agreed to provide consulting services to Golden Eagle to assist Golden Eagle with obtaining a listing for its stock and the stock of a to-be-formed subsidiary on a U.S. stock exchange or over-the-counter market. The Listing Agreement may be terminated upon 30 days notice by Golden Eagle that it does not wish to proceed with seeking a listing for its and its subsidiary's stock. Golden Eagle has agreed to make a cash payment to the Company and issue equity in its to-be-formed subsidiary as compensation for the Company’s consulting services.
 
 
 
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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, 2010.
 
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
 
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 investment related services in Asia, with a strong focus on the high GDP growth countries, such as China and India. EastBridge is initially concentrating its efforts in China (Hong Kong, mainland China, Macao and Taiwan).  We provide consulting services to provide viable corporate infrastructure necessary for small to medium-size companies to obtain capital to grow their business.  EastBridge 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 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.
 
 
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As of March 31, 2011, EastBridge was providing consulting services to eleven clients to assist them with the auditing and legal processes to become public companies in the United States and become listed on a U.S. stock exchange.  To learn more about our clients, review the Company’s Form 10-K (filed with the SEC on April 14, 2011) and the subsequent Form 8-K (files with the SEC on May 16, 2011).
 
EastBridge has formed three subsidiaries which have been consolidated with EastBridge from the date of formation.  These subsidiaries are inactive.
 

Results of Operations

Revenues
 
Three Months Ended March 31,
 
 
Revenues
   
Change from
Prior Year
   
Percent Change
from Prior Year
 
                   
2011
  $ -     $ -       0.0 %
2010
  $ -                  
 
The Company did not have any recordable revenue in the three months ending March 31, 2011 or 2010.
 
General and Administrative Expenses
 
Three Months Ended March 31,
 
General &
Administrative
Expenses
   
Change from
Prior Year
   
Percent Change
from Prior Year
 
                   
2011
  $ 311,322     $ (158,632 )     (33.8 )%
2010
  $ 469,954                  
 
General and administrative expenses decreased in the three months ending March 31, 2011 as compared to the three months ending March 31, 2010 due to the following:  a decrease in consulting, legal and accounting services of approximately $194,000, partially offset by increases in rent and other expenses of approximately $35,000.
 
Sales and Marketing Expenses
 
Three Months Ended March 31,
 
Sales &
Marketing
Expenses
   
Change from
Prior Year
   
Percent Change
from Prior Year
 
                   
2011
  $ 12,867     $ (27,417 )     (68.1 )%
2010
  $ 40,284                  
 
Sales and marketing expenses decreased in the three months ended March 31, 2011 as compared to the three months ended March 31, 2010 due to decreased travel of approximately $29,000, partially offset by increased other marketing related expenses of approximately $2,000.
 
 
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Operating Loss
 
Three Months Ended March 31,
 
Operating
Loss
   
Change from
Prior Year
   
Percent Change
from Prior Year
 
                   
2011
  $ (324,189 )   $ 186,049       (36.5 )%
2010
  $ (510,238 )                
 
The decrease in our operating loss for the three months ended March 31, 2011 as compared to the three months ended March 31, 2010 is primarily due to the decreases in general and administrative expenses and sales & marketing expenses, each of which is described above.
 

Total Other Income (Expense)

Three Months Ended March 31,
 
Total Other Income (Expense)
   
Change from
Prior Year
   
Percent Change
from Prior Year
 
                   
2011
  $ (4,092 )   $ 475,145       (99.1 )%
2010
  $ (479,237 )                
 
In the three months ended March 31, 2011, we incurred additional interest expense of approximately $800 as compared to the three months ended March 31, 2010, due to credit card interest charges.  In the three months ended March 31, 2010, we incurred extinguishment of debt expense of approximately $476,000.
 
Income Tax Provision (Benefit)

Three Months Ended March 31,
 
Income Tax
Provision (Benefit)
   
Change from
Prior Year
   
Percent Change
from Prior Year
 
                   
2011
  $ -     $ -       0.0 %
2010
  $ -                  
 
While we have optimistic plans for our business strategy, we determined that 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.  Therefore, we established a valuation allowance for all deferred tax assets.
 
 
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Net Loss

Three Months Ended March 31,
 
Net Loss
   
Change from
Prior Year
   
Percent Change
from Prior Year
 
                   
2011
  $ (328,281 )   $ 661,194       (66.8 )%
2010
  $ (989,475 )                

Changes in net loss are primarily attributable to changes in operating loss and other income (expense), each of which is described above.
 
Comprehensive Net Loss

Three Months Ended March 31,
 
Comprehensive Net Loss
   
Change from
Prior Year
   
Percent Change
from Prior Year
 
                   
2011
  $ (179,775 )   $ 809,700       (81.8 )%
2010
  $ (989,475 )                
 
For the three months ended March 31, 2011, we recorded an unrecognized gain on investments of approximately $149,000.  For the three months ended March 31, 2010, we did not have such investments.
 
LIQUIDITY AND CAPITAL RESOURCES
 
Net cash used in operating activities was $112,705 and $555,937 for the three months ended March 31, 2011 and 2010, respectively.  The decrease is mainly attributable to the decrease in our net loss and offset by the increases in stock issued for services of approximately $51,000, while changes in working capital and other current assets caused increases.
 
 
Our primary source of cash inflows has historically been from listing agreement customers.  In late 2009 and in 2010, we received advance payments for shares of client companies whose listings are expected to be completed in 2011 and 2012.  As of March 31, 2011 and 2010, no single customer 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 $103,150 and $503,710 for the three months ended March 31, 2011 and 2010, respectively. During the three months ended March 31, 2011, we made repayments of $11,250 on our line of credit, offset by $114,400 of amounts advanced from affiliates.  During the three months ended March 31, 2010, we benefited from the payment of debt with common stock.
 
 
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We had working capital of $(1,640,469) as of March 31, 2011 compared to $(1,555,219) as of December 31, 2010.  Our cash position decreased to $40,343 at March 31, 2011 compared to $49,898 at December 31, 2010, as we had a decrease in cash flows from operations, offset by cash provided by investing activities.

Our monthly cash requirement amount is approximately $15,000, and as of March 31, 2011, cash on hand would fund operations for approximately two months.  For the three months ended March 31, 2011, we have increased deferred revenue by approximately $82,000 as compared to the three months ended March 31, 2010, as a result of cash deposits on listing agreements.

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.

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 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 the Chief Executive Officer and Chief Financial Officer, 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.
 
 
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b) Changes in Internal Control over Financial Reporting.

During the quarter ended March 31, 2011, 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.

 
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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, 2010.

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

During the three months ended March 31, 2011, the Company issued 450,000 restricted shares of common stock to a consultant for services rendered, issued at $.13 per share (the trading value of the stock on the date of issuance) and 971,429 restricted shares of common stock to the spouse of our CEO for rent, issued at $.11 per share (the trading value of the stock on the date of issuance).  We have issued the above securities not registered under the Securities Act by reason of the exemption afforded under Section 4(2) of the Securities Act of 1933, within the last quarter. No underwriting discounts or commissions were paid with respect to any of the transactions.
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.  [REMOVED AND RESERVED]

N/A

ITEM 5.  OTHER INFORMATION

None
 
 
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ITEM 6.  EXHIBITS
 
31.1
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
   
31.2
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act
   
32.1
Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.
   
32.2
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act.

 
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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 - May 13, 2011
By:
/s/ Keith Wong  
    Keith Wong,  
    Chief Executive Officer  
    (Principal Executive Officer)  
 
By:
/s/ Norman Klein  
    Norman Klein  
    Chief Financial Officer  
    (Principal Financial and Accounting Officer)  
 
 
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