UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8-K


CURRENT REPORT


Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (date of earliest event reported):

 May 22, 2012


EASTGATE ACQUISITIONS CORPORATION

(Exact name of registrant as specified in its charter)


                           Nevada

000-52886

           87-0639378  

(State or other jurisdiction

 

 (Commission

  (IRS Employer

      of incorporation)

   File Number)

Identification No.)


2681 East Parleys Way, Suite 204, Salt Lake City, Utah 84109

(Address of principal executive offices)


Registrant's telephone number, including area code: (801) 322-3401


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



[  ]

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


[  ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


[  ]

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

(17 CFR 240.14d-2(b))


[  ]

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

(17 CFR 240.13e-4(c))








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FORM 8-K


Section 1 – Registrant’s Business Operations


Item  1.01   Entry into a Material Definitive Agreement.


See Item 2.01 below.


Section 2 – Financial Information


Item  2.01   Completion of Acquisition or Disposition of Assets.


On January 15, 2012 Eastgate Acquisitions Corporation (“ Eastgate ” or the ” Company ”) announced that it had entered into a Patent Acquisition Agreement (“ Acquisition Agreement ”) to acquire certain products, formulas, processes, proprietary technology and/or patents and patent applications related to pharmaceutical, nutraceutical, food supplements and consumer health products (collectively referred to as the “ Acquired Products ”).  The Acquisition Agreement was finalized and closed on May 22, 2012.


In exchange for the Acquired Products and technology, Eastgate issued at the closing to the seller, Anna Gluskin and/or her assigns, 10 million shares of Eastgate’s authorized, but previously unissued common stock, post-split as discussed below.  The closing of the Acquisition Agreement was initially contingent upon realizing financing of $300,000, which was subsequently reduced to $50,000.


In addition to the 10 million shares of common stock issued to the seller, the Acquisition Agreement provides that Eastgate issue 10 million shares of common stock to certain individuals in consideration for services rendered for and monies advanced to Eastgate. Those shares were issued to TGT Investment Management Inc.  Further, we have named three new directors to the board of directors.  We also anticipate that we will eventually change our corporate name to reflect the development and commercialization of the Acquired Products and our new business endeavors.

 

The Acquisition Agreement contains the typical representations and warranties of the parties. As a result of the closing, the seller will file with the U.S. Patent and Trademark Office and any foreign patent office that is relevant to the Acquired Products, and any other necessary parties and/or agencies, all documents and appropriate assignments to transfer and assign the Acquired Products and all proprietary rights and technology related thereto, to Eastgate. Accordingly, Eastgate will own all rights, title and interests in the Acquired Products, free and clear of all liens, mortgages, pledges, security interests or other encumbrances.  


In anticipation of the closing, on March 6, 2012 we effected a forward stock split of Eastgate’s issued and outstanding shares of common stock on a 7.75 shares for one share basis. Prior to the forward stock split, we had 1.5 million shares of common stock issued and outstanding, which increased to 11,625,000 shares following the split.  All further references herein to our outstanding common stock will be on a post-split basis.


The Company intends to request a market maker to apply to have our common stock quoted on the Over-The-Counter Bulletin Board (“ OTCBB ”) maintained by the Financial Industry Regulatory Authority (“ FINRA ”). There can be no assurance that the market maker will be successful in such application or that our shares will qualify for trading on the OTCBB or any other trading medium.




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As a result of the acquisition of Acquired Products, we have become engaged in developing, formulating and ultimately commercializing innovative pharmaceutical, nutraceutical, food supplements and consumer health products. We intend to apply novel technologies for improvement of efficacy of the Acquired Products, based on natural or well-established compounds.  It is our intention to complete formulation of the Acquired Products and to ultimately market the commercialized products and compounds.

BUSINESS OF EASTGATE ACQUISITIONS CORPORATION


Company Background


Eastgate Acquisitions Corporation, a Nevada corporation organized on September 8, 1999, has been a development stage company engaged in investigating prospective business opportunities with the intent to acquire or merge with one or more businesses.  In March 2002, we changed our corporate name to Talavera’s Fine Furniture in anticipation of making an acquisition.  However, the acquisition was not finalized and in November 2006, we changed our name back to Eastgate Acquisitions.  In October 2007, the name was changed to Eastgate Acquisitions Corporation.  Subsequently, we continued our search for business opportunities.


On May 22, 2012, we finalized the Acquisition Agreement.  Taking into consideration the shares of our common stock issued pursuant to the Acquisition Agreement, we presently have issued and outstanding 31,625,000 shares of common stock.  


Our principal executive offices are presently located at 2681 East Parleys Way, Suite 204, Salt Lake City, Utah 84109 and our telephone number is (801) 322-3401.  


Current Business


We are engaged in the development and ultimate formulation of other novel formulations of natural compounds and OTC products that have limitations in effective use for human consumption. We intend to accomplish this by using a proprietary, self-emulsifying drug delivery systems, predominantly forming nanoemulsions. We anticipate that we will be able to develop patentable formulations of pharmaceutical, nutraceutical food supplements and consumer health products that can be used for treatment of various diseases and symptoms. By using a self-emulsifying drug delivery technology, we believe that the resulting products will enable lower dosing, fewer side effects and alternative dosage forms, as well as commercial advantages, such as extended patent protection and broader use.  


The self-emulsifying drug delivery technology includes two different approaches to improve the effectiveness of poor bioavailable drugs and provide new methods of delivery. These consist of (i) a self-nanoemulsifying vehicle for oral or topical use, and (ii) a delivery systems with improved solubility of incorporated compounds. We believe that our technologies can improve the efficacy of existing products and formulations based on natural or well-established compounds and known biologically active compounds.


In developing our products, we intend to use modern delivery technologies. Some examples are nanoemulsification, polymer-lipid mixed micelles, enhanced sublingual and transmucosal drug transport from various fast dissolving / fast absorbing oral forms, bioavailability improvement of poorly soluble compounds for molecules with known biological activity and well established safety profiles. We believe these methods will significantly decrease requirements for preclinical investigations and clinical testing, accelerate the clinical approval process, shorten the time to market, and simplify all steps of the product development process.



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Our products being developed contain several formulations based on natural compounds in the areas of wellness, health protection, infection control and treatment, skin improvement, weight and blood glucose management.  Many of our products are made of herbal essences and extracts, which have shown excellent efficacy in treatment and prevention of urinary tract infections and cystitis, liver diseases, gastric ulcers, skin papilloma and other disorders. Additionally, some products use nanoemulsions and solubilized systems with enhanced absorption via topical and transmucosal ways. These products are designed to fulfill the demand in treatment of different medical conditions, which are not well addressed with existing pharmaceutical or natural medicines.


Our technologies use carrier components that we believe are safe and approved for human consumption and can be manufactured using common equipment. We believe that these approaches are patentable and suitable for wide variety of active compounds. They can be applied to a variety of components and allow development of products for different applications and different routes of administration.


Glossary of Terms


To better understand the information discussed herein, we are including the following description of some of the terms used herein.


Bioavailability.  A measurement of the rate and extent to which a drug reaches the systemic circulation.


Bioadhesion.    A property of a substance to adhere to biological substrate or body tissues and remain there for an extended period of time.


Chylomicrons.  Chylomicrons are lipoprotein particles that consist of triglycerides, phospholipids, cholesterol and proteins. They transport exogenous lipids to liver, adipose, cardiac, and skeletal muscle tissue, where their triglyceride components are unloaded by the activity of lipoprotein lipase. Chylomicrons are created by the absorptive cells of the small intestine, known as enterocytes. Chylomicrons have a diameter of 75 to 1,200 nanometers (“ nm ”). These Chylomicrons are released by exocytosis from enterocytes into lymphatic vessels in the small intestine, and are then secreted into the bloodstream.


Excipient .  Generally an inert or inactive substance used as a carrier for an active ingredient or drug.


Hydrophobic compounds.  Compounds that are repelled by water and are usually insoluble in water Examples of hydrophobic compounds include the oils, fats, waxes and greasy substances. The word hydrophobic is constructed of two Greek words; hydro – water, and phobe – fear, that is something with a fear of water.


High drug payloads.  Relates to formulations with increased loading of the drug, which is usually poorly soluble and cannot be incorporated into traditional dosage forms. These conventional formulations have low bioavailability and limited efficacy


Homogeneous vehicle of water miscible non-irritating polar solvents and pharmaceutically acceptable surfactants.  Relates to efficient vehicle for enhanced local and transdermal delivery of hydrophobic poorly soluble compounds.




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In situ.  Describes the process happening in the moment of combining of two different phases or components. Nanoemulsion forms “in situ” after combining of SNEDDS and water media without use of any special equipment or application of additional force.


Micelles and polymer-lipid micelles.   A micelle is an aggregate of surfactant molecules, having polar heads and non-polar tails and dispersed in a liquid colloid. A typical micelle in aqueous solution forms an aggregate with the hydrophilic "head" regions in contact with surrounding solvent, sequestering the hydrophobic single tail regions in the micelle center. Micelles are approximately spherical in shape, but other phases, including shapes such as ellipsoids, cylinders, and bilayers, are also possible. Micelles form spontaneously in water. This spontaneous arrangement is due to the amphipatic nature of the molecule. The driving force for this arrangement is the hydrophobic interactions the molecules experience. Combining some surfactants, lipidic components and polymeric molecules leads to formation of polymer-lipid mixed micelles . These mixed micelles demonstrate high drug loading and improved stability


Nanoemulsion.   Nanoemulsions are submicron-sized emulsions that are under extensive investigation as drug carriers for improving the delivery of therapeutic agents. They are the most advanced nanoparticle systems for the systemic delivery of biologically active agents for controlled drug delivery and targeting. Nanoemulsions are the thermodynamically stable colloidal systems where two immiscible liquids (water and oil phases) are mixed to form a biphasic colloid by means of an appropriate surfactants. Nanoemulsion droplet sizes fall typically in the narrow range of 10-200 nm and show narrow size distributions. Nanoemulsions show promise for the future of cosmetics, diagnostics, drug therapies, and biotechnology.


Nanoemulsification and self-nanoemulsifying drug delivery system (SNEDDS).   Isotropic mixtures of natural or synthetic oils, solid or liquid surfactants and, sometimes, one or more pharmaceutical solvents. Upon mild agitation followed by dilution in aqueous media, such as gastrointestinal (GI) fluids, these systems can form “in situ” fine oil-in-water (o/w) emulsions, microemulsions (SMEDDS) or nanoemulsions (SNEDDS). Fine oil droplets would pass rapidly from the stomach and promote wide distribution of the drug throughout the GI tract, thereby minimizing the irritation frequently encountered during extended contact between bulk drug substances and the gut wall. When compared with common emulsions, which are sensitive and less stable dispersed forms, SNEDDS are physically stable formulations that are easy to manufacture. An additional advantage of SNEDDS over simple oily solutions is that they provide a large interfacial area for partitioning of the drug between oil and water. Thus, for lipophilic drugs with dissolution-limited oral absorption, these systems may offer an improvement in the rate and extent of absorption and more reproducible plasma concentration profiles


Product Overview


Our fundamental strategy is to develop patentable, improved formulations of products that can be used for treatment of various diseases and symptoms.  Insoluble biologically active compounds remain a serious problem for the modern drug development, with over one-third of the drugs described as insoluble or poorly soluble in water. Most natural products, herbal extracts and essences are insoluble in water. Further, traditional approaches used to overcome low solubility result in clinical problems ranging from low and erratic bioavailability to serious side effects such as local irritation. The self-emulsifying drug delivery technology is designed to develop products with visible advantages, such as lower dosing, fewer side effects and alternative dosage forms, as well as commercial advantages, such as extended patent protection and broader use.  




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Our self-emulsifying drug delivery technology includes two different approaches that we believe improve the effectiveness of poorly bioavailable drugs and provide new methods of delivery; (i) self-nanoemulsifying vehicle for oral or topical use, and (ii) a delivery systems with improved solubility of incorporated compounds.


Self-Emulsifying vehicle for oral use


Our self-emulsifying vehicle for oral use is a delivery system built with a combination of scientifically selected, physiologically acceptable components in predetermined ratio. It dissolves all active components in the vehicle and provides immediate formation of oil-in-water emulsion after contact with water media, usually with oil droplets smaller than 300 nm. These oil droplets can be as low as 10-30 nm. Biologically active components remain associated with the oil phase of the formed emulsion.


We believe that incorporation of active ingredients into discontinuous phase of the emulsion helps to improve bioavailability, as small oil droplets are absorbed more easily in the gastro-intestinal tract. This delivery vehicle increases drug loading through a unique combination of polarity and hydrophobicity of the carrier components (US Patent pending). It also provides a more pleasant taste masking any pleasant organoleptic properties, enhancing patient compliance with the products based on this technology.


Self-Nanoemulsifying vehicle maximizes oral delivery by:


Increasing the solubility of the active components (essences and herbal extracts) and total loading while preventing precipitation and adhesion to glass and metal surfaces;


  In situ forming extremely small droplets (nanoemulsions) without any application of external force; and


Active transport in gastro-intestinal tract using extracellular pathways by mimicking usual behavior of chylomicrons.


Our new proprietary formulations are built with safe, well-established components.  We believe our products are stable with low irritancy and can be manufactured with readily available industry-standard equipment. We further believe they possess a high efficacy in the systemic delivery of biologically active compounds, natural essences, lipophilic vitamins, such as D, E, A and K, and other compounds.


Oral delivery in self-emulsifying vehicles provides an alternative to other methods of administration and allows selected compounds to be administered more effectively, at lower doses, with fewer adverse events and improved patient compliance.  


Delivery Systems with Improved Solubility of Incorporated Compounds


Our approach for improved delivery of various herbal extracts, essences and hydrophobic compounds is based on use of a self-nanoemulsifying delivery systems, not only for systemic oral administration of hydrophobic (lipophilic) compounds, but also for sublingual (buccal, transmucosal) and topical applications. The major factor to improve bioavailability of included insoluble active compounds is preventing the precipitation of these components after contact with water media, such as saliva, sweat, and blood. This is achieved by incorporation into a proprietary composition that has high solubility containing a combination of excipients, which does not allow immediate drug crystallization and precipitation when wetted.




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The principal excipients used in the proposed formulations are highly biocompatible and approved for use in humans. Different water-insoluble compounds were formulated demonstrating the following:


Lower toxicity and irritation potential;

Controlled absorption with a reduction in variability;

Targeted release of the drug to specific areas;

Absorption irrespective of the feeding state for sublingual formulations;

Improved bioavailability of poorly soluble compounds;

Improved dissolution rate;

Low local irritation;

Bio adhesion to oral mucosa for maximal penetration;

High drug payloads; and

Lower production cost.


Topical products designed with the use of solubility-improved platform have been successfully used for the elimination of papilloma and warts, for delivery of poorly soluble antifungal, and for enhanced efficacy of various hydrophobic herbal extracts.


The self-emulsifying drug delivery technology includes two different approaches to improve the effectiveness of poor bioavailable drugs and provide new methods of delivery. These consist of (i) a self-nanoemulsifying vehicle for oral or topical use, and (ii) a delivery systems with improved solubility of incorporated compounds. We believe that our technologies can improve the efficacy of existing products and formulations based on natural or well-established compounds and known biologically active compounds.

Business Strategy


Our primary business strategy capitalizes on the growing interest in three related areas:


1.

Developing innovative therapeutic products.   Our goal is to discover, develop and commercialize innovative therapeutic products and to improve existing compounds by using our delivery technologies, and combine poorly soluble compounds with known biological activity and well established safety profiles


2.

Prevention of disease. Due to the escalating cost of health care, there is much interest in the prevention of disease. It is generally more efficient and productive to maintain health and prevent disease than it is to treat acute illness. We believe disease prevention is the most effective way to improve health and lower health care costs.


3.

Alternative health care including dietary supplements and nutraceuticals. People are increasingly interested in alternative approaches to health care. A significant number of people seek treatment with alternative forms of health care and global spending on alternative health care has exceeded that of traditional medicine. An important component of alternative health care is the use of nutraceuticals and supplements.


Technology and Products


Our technology


We believe our technological approach allows significant improvement in absorption of poorly soluble drugs.  We further believe this improves the bioavailability of delivered active components and



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increases efficacy of the medicines and may possibly present an alternative delivery route. This technology is based on the formation of nanoemulsion with extremely small droplet size, usually smaller than 100 nm, upon contact of the insoluble drug with body fluids.  Because the process mimics the normal physiological process in a human body, these small droplets containing poorly soluble drug are actively absorbed in the body.


There are variations of our nanoemulsion based delivery platform, depending on the physical state of the medication:


1.

Liquid formulations .  Self-nanoemulsifying delivery system used for lorazepam oral spray, liquid forms of vitamins, nanoemulsion of essential oils (Nano E-drops), and topical nanoemulsions with different biologically active compounds. Nanoemulsions, with oil droplets smaller than 100 nm, can penetrate through oral or other mucosal layers, stomach or intestine lining or non-damaged skin. Incorporation of essential oils into nanoemulsion form provides taste masking. It also eliminates product loss due to adhesion to glass walls or metal surfaces and improves the efficacy of the formulations.

2.

Homogeneous vehicle of water miscible non-irritating polar solvents and pharmaceutically acceptable surfactants . Forms nanoemulsion or micellar solution after contact with water media. This approach allows avoiding drug precipitation and showed notable improvement of transdermal penetration of poorly soluble compounds and also can be effectively combined with film forming additives. Used in topical compositions of antifungal ointments and lacquer and in natural composition of essential oils for treatment of warts and papillomas.

3.

Semi-solid oral formulations (in soft gelatin capsules) .  Self-microemulsifying compositions for incorporation of poorly soluble compounds, including plant extracts and natural components along with different lipids or essential oils. After swallowing, the capsule dissolves and the contents immediately form a fine emulsion with biologically active component organized in small oil droplets, which are effectively absorbed in gastro-intestinal tract by active transport mechanism, similarly to chylomicrons.  This increases bioavailability by up to 400%. Used for enhanced delivery of corosolic acid, poorly soluble active component from Banaba extract, combination of ursolic and corosolic acid/Banaba extract and in formulations with Silymarin, NSAIDs derivatives and other formulations.


Our Products

 

Pharmaceutical prescriptions

Lorazepam nanoemulsion oral spray for epilepsy/acute seizures emergency treatment


Control of acute severe seizures usually requires hospitalization and emergency treatment by means of intravenous anticonvulsant drugs. Lorazepam is usually a drug of choice because of its fewer side effects and low risk of overdose.  Any delay in effective treatment leads to the possibility of increased mortality and morbidity. The use of anticonvulsants by more convenient routes of administration (buccal, nasal) is actively studied, but to date no medications in such form have been approved in North America. Accordingly, we believe there is an unmet need for a convenient, acute, and very rapid treatment of the seizure state, particularly in out-of-hospital settings, which does not require parenteral or oral administration.


The oral spray for transmucosal delivery is based on our waterless self-nanoemulsifying formula, which is designed to prevent a drug’s precipitation after contact with saliva.  We believe the spray provides fast onset of action and is designed to optimize drug administration through the oral mucosa



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lining. Because the drug enters the blood stream directly, it avoids the first pass metabolism in liver and is efficiently and quickly delivered to the brain.


The oral spray formulation of Lorazepam can provide a fast and effective treatment of acute seizures in the hospital, outpatient settings or in the home. This novel form of anticonvulsants is a convenient alternative to injectable (especially intravenous) Lorazepam to efficiently control epilepsy emergencies. This spray formulation can be used either by the patient, if possible, or by any non-trained person even in the time of ongoing seizures.


We believe this product offers the following features:


Easy and fast non-invasive administration;

Onset of action is comparable to intravenous injection;

Suitable for self-administration;

Can be administered in any setting;

Easy and convenient control of delivered doses; and

Can be applied to mucosa of lips or gums even when teeth clenched in a seizure.

 

We further believe the oral spray formulation of Lorazepam has advantages over existing products, including ease and convenience to use. It can be self-administered or administered by a non-trained person, even if the patient is unconscious.  Also, the product can be easily titrated by varying the number of sprays and thus reduce side effects and withdrawal symptoms. Because most epileptic seizures start in a community setting, rapid and effective treatment that can easily be administered by patient himself, family members, caregivers or paramedics if required, is important. The oral spray of Lorazepam can also be used during a seizure, when the patient is clenching his/her mouth, by applying the spray directly to the gum or lip mucosa.


Commercialization potential and development


Management estimates the annual incidence of epileptic seizures and acute repetitive seizures in the United States are 150,000 cases and 400,000 patients, respectively. These emergency conditions lead to an estimated 40,000 deaths in the U.S. every year. We believe that the use of Lorazepam spray in out-of-hospital settings may significantly decrease mortality caused by acute seizures.


A feasibility study of transmucosal delivered Lorazepam for seizure treatment was initiated in 2012 in collaboration with Dr. P.  Carlen of the Toronto Western Hospital, University Health Network.  If preclinical investigations in animals and optimization of the formulation of transmucosal Lorazepam are successful, the spray will be manufactured for toxicological, safety and pharmacokinetics investigations. Analytical development, product optimization and stability program for the selected dosage form will be carried out in accordance with GLP/GMP requirements.


Required safety pharmacology and toxicology programs will be conducted using the optimal formulation in final dosage form and packaging in accordance with current regulations. Size and duration of toxicology and safety pharmacology program and clinical development program will be established after meeting with Health Canada.


The estimated duration of product development is 24 to 36 months for pre-clinical studies, including toxicology and safety pharmacology. Clinical trials can start within three years after the start of the project. Because the proposed product is based on a long approved and well-known drug with good



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safety profile, and that we plan to be in the approved dosage range, we believe that an abbreviated clinical development will be sufficient for marketing approval in Canada.


We also believe that oral Lorazepam spray in the U.S. will satisfy abbreviated clinical development program requirements outlined in Section 505(b)(2) of Food and Drug Administration (“ FDA ”) New Drug Application.


 2% Ketoconazole ointment for enhanced delivery of insoluble anti-fungal drug through the skin


Ketoconazole is a synthetic drug used to treat fungal infections. Structurally, Ketoconazole belongs to an Imidazole class of antifungals and works by slowing the growth of fungi that cause infection. Ketoconazole is often used to treat such fungal infections that can spread to different parts of the body through the bloodstream, such as yeast infections of the mouth, skin, urinary tract, and blood, and certain fungal infections that begin on the skin or in the lungs and can further spread through the body. Ketoconazole is also used to treat superficial fungal infections of the skin or nails that cannot be treated with other medications.


Ketoconazole is effective in the treatment of fungal infections, but has been shown to possibly cause liver damage.  Current products on the market are represented by oral preparations (tablets and capsules) and topical formulations (creams, ointments, shampoo, ovules).  As with any oral preparation, the drug is absorbed into the blood stream in the gastrointestinal tract and carried to the site of infection after passing through the liver. Due to these inevitable limitations of the orally administered drug, existing oral Ketoconazole products have warnings about possible liver damage as well as other side effects. Additionally Ketoconazole demonstrates a strong inhibitory activity toward Cytochrome P450 and other important enzymatic pathways in the body and cannot be used simultaneously with some other medications.


Existing topical Ketoconazole preparations do not penetrate into the body in significant amounts and cannot cause any serious systemic adverse effects because concentration in the blood is extremely low. While these products deliver Ketoconazole only on the surface at site of application, the drug penetrates into the skin for only a few microns. Unfortunately, such restricted penetration limits antifungal efficacy of the drug to the upper layer of the skin. In the case when a fungal infection is located below the epidermis, topical application of Ketoconazole is non-effective and the drug needs to be used orally.


We have developed what we believe to be an effective topical formulation of 2% Ketoconazole ointment for enhanced delivery of insoluble anti-fungal drug through the skin. Ketoconazole is a drug with very low solubility, but it completely dissolves in a proprietary vehicle of the water washable ointment.  The use of additives prevents Ketoconazole from immediate precipitation on contact with body tissues and a combination of highly penetratable solvents transport the drug in active dissolved state deep into the skin.  This results in effectively treating fungal infections at site of application. We believe that the antifungal activity of incorporated drugs will increase the cure rate when compared with existing Ketoconazole formulations using traditional cream and ointment bases.


We believe this product offers the following features:


Higher antifungal activity compared to existing products on the market;

No liver toxicity topical application with minimal blood absorption;

No drug interaction with other medications; and

Wider spectrum of indications and treatments.




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Commercialization potential and development


Aqua Pharmaceuticals 2% Ketoconazole gel (Xolegel® 2%) has a retail price of approximately $300 for a 60 gram tube. The efficacy of this alcohol based formulation in treatment of superficial fungal infections is believed to be about 25%. We believe our penetratable formulation of Ketoconazole will demonstrate a higher antifungal activity, up to 80-90% for susceptible topical fungal strains. In addition, we expect an expansion of the current market for Ketoconazole because of additional indications that our preparation can be used for the treatment of onychomycosis, fungal dermatitis of different origin. We believe chances for adverse effects for topically administered Ketoconazole are much lower than for oral dosage forms.


Due to well-known active pharmaceutical ingredient and inactive components used in the formulation, we believe the product can get fast approval in Canada after minimal required small trials. We expect that 2% Ketoconazole ointment in the U.S. will satisfy abbreviated clinical development program requirements outlined in Section 505(b)(2) of FDA New Drug Application.


Pharmaceutical – OTC (over the counter) products

Metformin Low Dose Chewable Tablets (Taste Masked)


Metformin is a popular drug for treatment of type 2 diabetes. It is available in tablets 500 and 800 mg and recommended dose can reach 3000 mg per day.  Such high doses are often associated with stomach disturbances such as diarrhea, bloating and bad feelings. The big tablet is difficult to swallow and the unpleasant taste prevents people from chewing the tablets.


Our chewable composition of Metformin is in relatively low doses of 50, 100, 150 and 200 mg. Such tablets can be chewed or administered sublingually as lozenges. This way of administration improves bioavailability and should decrease undesirable side effects. Additionally, we anticipate that low doses of Metformin in chewable tablets could be approved as an OTC product, subject to negotiations with Health Canada, as a medicine for weight control, appetites suppression and treatment of polycystic ovary syndrome (PCOS). We believe the side effects of chewable low dose Metformin tablets are minimal. The formulation and process are patent pending and can be manufactured using standard pharmaceutical equipment. All ingredients are USP/NF or pharmaceutical grade and listed in FDA Inactive Ingredients Guide and/or Canadian List of Acceptable Non-Medicinal Ingredients.


Natural health products (nutraceuticals)


Nano E-drops – nanoemulsion of essential oils combination for treatment of cystitis and urinary tract infections


Infections of the urinary tract (UTIs) are the second most common type of human infection. Urinary tract infections can hurt either men or women, although, because of anatomical differences, dominantly women.  About half of women will suffer a urinary tract infection or UTI at some point in life. It happens when bacteria infect the system that carries urine out of the body, the kidneys, bladder, and the tubes that connect them. Bladder infections are common and usually not very dangerous if treated promptly. However, if the infection spreads to the kidneys it can cause more serious illness. Most urinary tract infections are caused by Escherichia coli (E. coli), although some other bacteria, viruses, fungi and parasites can also invade the urinary tract. There is also a chance that the infection may enter the bloodstream and spread to other organs and even cause sepsis.




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Acute cystitis and kidney infections can often be treated with oral antibiotics (penicillins, cephalosporins and fluoroquinolones) until symptoms disappear. Severe kidney infections may require hospital care, including a course of intravenous antibiotics. UTIs are more often a problem for older adults who require prolonged hospital stays or who live in long-term care facilities.


Some women are prone to getting UTIs repeatedly. Also, people with diabetes are more vulnerable to UTIs, because their immune systems tend to be weaker and sugar that is present in urine in diabetics encourages the growth of bacteria.  Low estrogen levels can make it easier for bacteria to thrive in the vagina or urethra. For this reason, women may be more susceptible to UTIs after menopause.


Beside antibiotic treatment, only few alternative methods are offered to patients with chronic interstitial cystitis or chronic UTI. Herbal diuretics such as Uva ursi, Cranberry and Juniper berries are somewhat useful, but success rate is not significant. We have found that better results were achieved with D-mannose, which interacts with lectins on the bacterial wall of E. coli. Nevertheless, an effective way of UTI treatment was discovered by Dr. Enes Hasanagic, who invented a mixture of several essential oils, given orally, helped to eliminate UTI infections. Being swallowed, essential oils and their metabolites prevent adhesion of E. coli to the urinary tract epithelium, which in turn decrease bacterial growth and help to wash the pathogenic microorganisms out.  E-drops developed by Dr. Hasanagic have become popular in Central and Eastern Europe.


The primary limitation for wide use of this remedy was strong astringent taste and some stomach irritation resulting is consumer dissatisfaction.  Using new pharmaceutical technology, the required essential oils were incorporated into self-nanoemulsifying composition, which forms nanoemulsion that when added to water results in a more pleasing taste. This also reduces the loss of active components due to adhesion to walls of the cup. Droplet size of the formed emulsion is around 100 to 200 nm and oil absorption in the stomach is fast without signs of irritation. Such small droplets are absorbed immediately in the gastro-intestinal tract and provide a working concentration of active compounds and metabolites in kidneys, urethras and bladder, thus preventing adhesion of dangerous bacteria.  


PURALEN®:   Essential oils combination for treatment of stomach disturbances


PURALEN™ is a combination of essential oils, similar to E-drops with activity focus shift from urinary tract to gastro-intestinal tract. The product demonstrates healing properties toward UTI, effectively fights cystitis and kidney disorders, but the dominating action becomes a gentle colon cleansing. This is caused by action of the oil combinations that helps in stomach disturbances, digesting aid and pronounced carminative action. It stops meteorism and provides relief from flatulence. The initiated bowel movement action is very delicate and does not cause any pain or irritation. No habit formation was observed for treatment courses of reasonable duration.


GluCorrect® :   Banaba extract in soft gelatin capsules with self-emulsifying formulation for blood  sugar control


Recent published statistics show that about 25 million people in the U.S., or approximately 8% of the population, suffer from diabetes. Estimates indicate that this number includes nearly 6 million people who have diabetes and are not aware of it. It is also estimated that another 50 million have “pre-diabetes,” which associates with high risk of developing type 2 diabetes, cardiovascular diseases and stroke.  Diabetes often leads to blindness, blood vessel disease, kidney failure, amputations, and nerve damage. Diabetes and its complications are the seventh highest cause of death in the U.S.




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Type 2 diabetes is characterized by a reduced sensitivity to insulin signaling and decreased glucose transport efficiency, primarily into fat and muscle cells.  A decreased sensitivity to insulin’s actions causes extended glucose circulation in the blood.  As a result, higher levels of insulin are required to normalize blood glucose concentration.  The developed hyperglycemia and hyperinsulinemia lead to a condition called insulin resistance.


Currently, several antidiabetic drugs have been prescribed for lowering blood sugar levels and for delaying further diabetes development. However, various adverse effects such as heart failure, hypoglycemia, kidney failure and weight gain were reported.  Health authorities recently restricted access to the antidiabetic drug Avandia (rosiglitazone) in the U.S. and Europe.


We believe that traditional herbal remedies could be a safe alternative to conventional medicine in maintaining a normal level of blood glucose. Several medicinal plants have been studied for their potential anti-diabetic activity including Lagerstroemia speciosa (Banaba), Eriobotrya japonica (Loquat), Ternstroemia gymnanthera (Japanese Cleyera) and others. The major bioactive substance found in these plants is Corosolic acid, a sterol type molecule. A study reported in 1993 by Japanese researchers showed that Corosolic acid significantly affects glucose transport across cell membranes. Corosolic acid has insulin-like properties and activates glucose passage through membranes, resulting in blood glucose reductions.  A distinctive feature of Corosolic acid is not only the stimulation of glucose transport, but also inhibition of the differentiation of pre-adipocytes into adipocytes (fat cells). That’s why, unlike most other antidiabetic drugs, Corosolic acid reduces blood glucose without increasing adiposity.


Research indicates that Corosolic acid may increase the activity of facilitative glucose transporters, especially GLUT4, located in fat tissue, heart and skeletal muscle.  This carrier-mediated process leads to more efficient utilization of glucose and also induces a slight lowering of blood sugar without causing hypoglycemia.  The need for insulin is thus reduced, since insulin is secreted in response to high blood glucose levels. When blood glucose is used as fuel for the body and brain and is not in excess, it does not get stored in adipose cells. It is likely that glucose and insulin level modulation reduces total caloric intake and encourages moderate weight loss.


Insulin resistance is an impaired response to the body’s own insulin resulting in active muscle cells not metabolizing glucose as easily as they should. It is one risk factors in metabolic syndrome. Existing pharmacotherapeutic agents for the treatment of insulin resistance and hyperinsulinemia can cause significant negative side effects.  Past research indicated that Banaba leaf and its corosolic acid extracts demonstrated a high degree of safety, minimal side effects, and presented a unique therapeutic opportunity.  Recent research demonstrates that high strength corosolic acid (18%) from Banaba may offer significant advantages. It may benefit those trying to overcome insulin resistance by helping to use glucose more effectively. It is our belief that using Banaba leaf extract, containing Corosolic acid, for 30 consecutive days may decrease blood glucose levels.


A serious limitation to wide use of Corosolic acid is low solubility of this extremely hydrophobic component. Incorporation of Banaba extract into oil filled gelatin capsules increases bioavailability, but seriously postpones the onset of action.


We believe that bioavailability drawback was successfully overcome in GluCorrect® chewable tablets. Incorporation of the Corosolic containing extract into proprietary composition for sublingual delivery allows fast and effective absorption of active material and onset of glucose lowering action. The tablet can be taken 15 to 30 minutes before meals to help control blood glucose level.




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Each soft gelatin capsule contains extract of Banaba leaf (Lagerstroemia speciosa), standardized by the active components -  Corosolic acid and pure alpha-lipoic acid in a proprietary lipid based vehicle. This combination forms a nanoemulsion in the stomach when the swallowed capsule dissolves, and releases biologically active compounds, incorporated into arisen tiny droplets, into the gastro-intestinal tract. The small size of the oil globules (less than 100 nm) makes absorbance fast and complete, significantly increasing bioavailability and efficacy of the active components.


We believe Banaba leaf extracts can effectively control blood glucose levels and may assist with overcoming insulin resistance. Insulin resistance in peripheral tissues, together with the impairment of glucose-induced insulin secretion from pancreatic beta cells, is known as one of the major pathogenic factors of type 2 diabetes.


Corosolic acid activates facilitative glucose transporters, thereby decreasing the need for insulin secretion. It also maintains a lowering of blood sugar without causing hypoglycemia, even in healthy subjects with normal blood glucose levels. When blood glucose is used as fuel for the body and brain and is not in excess, it does not get stored in adipose cells. It is probable that glucose and insulin level modulation by Banaba extract can reduces total caloric intake and stabilize body weight and encourages moderate weight loss.


Alpha-Lipoic acid is a potent antioxidant, synthesized in human body in small amounts and found in broccoli or spinach. This organic acid helps the body to use glucose, hence it's potential role in improving blood sugar control. Alpha-Lipoic acid can reduce complications from a high sugar diet. It is readily absorbed from the developed self-nanoemulsifying composition.


Alpha-Lipoic acid has been found to increase glucose transporters translocation to cell membranes and to increase glucose uptake in adipose (fat) and muscle cells. Although Lipoic acid does not appear to bind to the insulin receptors like insulin, it can activate the insulin-signaling cascade in the cells.


A unique combination of Banaba extract, containing corosolic acid and alpha-Lipoic acid in a highly bioavailable formulation, helps to use glucose as an energy source and suppresses undesirable fat formation. GluCorrect™ is potentially valuable for maintaining stable body weight and optimize glucose metabolism.


URBAN POWER® :  Ursolic acid and Banaba extract combination in soft gelatin capsule – for weight control


URBAN POWER™ soft gelatin capsules contain highly bioavailable combination of Banaba extract (18% Corosolic acid), a natural glucose regulating factor, pure Ursolic acid extracted from Sage, helping to transform fat into muscles, and alpha-Lipoic acid, a potent antioxidant that helps to promote glucose metabolism and increases sensitivity to insulin. All these components are poorly soluble and have very low absorption in gastro-intestinal tract. URBAN POWER™ is comprised of scientifically developed self-nanoemulsifying delivery system, which increases solubility and bioavailability of active components.

 

Optimization of glucose metabolism due to improved sensitivity to insulin, caused by alpha-Lipoic acid and Banaba extract, improves energy supply and prevents fat formation from excessive amounts of sugar. Ursolic acid is a natural compound, present in apple peels and many edible plants. Recent studies indicate that Ursolic acid significantly reduced skeletal muscle atrophy, resulting from two important stress inducers, namely, starvation and muscle denervation. It can be used in the treatment and prevention of skeletal muscle atrophy has been discovered. Studies also indicate that Ursolic acid can reduce body



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fat, sugar and lipid levels in blood. Hence, this compound should be valuable due to its role in the treatment of diabetes and obesity.


Use of a self-emulsifying vehicle allows significantly increased bioavailability of the active components that increase their efficacy. Fifty mg of Ursolic acid in this delivery system equal approximately 200 mg of traditional hard gelatin capsule formulation.


Banaba leaf extracts exert antidiabetic and antiobesity effects. Numerous animal and human studies indicate that corosolic acid and corosolic acid standardized Banaba extracts may be beneficial in addressing issues associated with elevated blood sugar levels and obesity. Furthermore, corosolic acid exhibits anti-inflammatory, anti-hyperlipidemic, antiviral and antitumor promoting effects. Standardized Banaba extracts in combination with other ingredients demonstrates hypoglycemic, anti-hyperlipidemic and appetite suppressant activities and may be useful in dealing with symptoms associated with metabolic syndrome.


Alpha-Lipoic acid plays an important role in mitochondria, the energy production centers of our cells.  In recent years, clinical research suggests that alpha-Lipoic acid supplements may have a variety of potential health benefits, including a possible reduction in the risk of cardiovascular disease.  Recent laboratory research has also shown that alpha-Lipoic acid markedly reduce the incidence of obesity in obesity-prone rats.


Synergistic effect of combined Ursolic acid and Banana extract with alpha-Lipoic acid, may help in weight control, suppress appetite, diminish fat accumulation, facilitate muscle growing improve glucose metabolism and energy regulation.


Wartzz®:   liquid topical composition for treatment of warts and papilloma


There is a number of current products on the market that contain essential oils that are designed to kill viruses in warts, papillomas and other skin tags. Because the essential oils are volatile, the products need to be applied on the warts four to six times a day for two to six weeks.


We have developed a proprietary film forming composition containing a synergistic combination of five essential oils that can be used to kill viruses and needs only be applied once every 24 hours. After application on the wart surface, our composition dries and forms an invisible film.  All active ingredients remain in the film and slowly release for 24 hours at the site of application, effectively killing papilloma viruses. The film is transparent, invisible and water insoluble after the film dries. A new application is to be administered the following day. The formulation is viscous and causes no irritation.


Government Regulation - Pharmaceutical products


Our research and development activities and the manufacturing and marketing of our pharmaceutical products are subject to extensive regulation by the FDA in the United States, Health Canada in Canada and comparable designated regulatory authorities in other countries.  Among other things, extensive regulations require us to satisfy numerous conditions before we can bring products to market. These regulations are not unique to us and they apply to all competitors in our industry.  


The following discussion summarizes the principal features of food and drug regulation in the United States and other countries as they affect our business.





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United States


All aspects of our research, development and foreseeable commercial activities relating to pharmaceutical products are subject to extensive regulation by the FDA and other regulatory authorities in the United States. United States federal and state statutes and regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, storage, record keeping, approval, advertising and promotion of pharmaceutical products. The regulatory approval process, including clinical trials, usually takes several years and requires the expenditure of substantial resources.


The steps required before a pharmaceutical product may be marketed in the United States include:


·

Preclinical trials


Preclinical tests include laboratory evaluation of product chemistry and formulation, as well as animal studies to assess the potential safety of the product. Preclinical safety tests must be conducted by laboratories that comply with FDA regulations regarding Good Laboratory Practice, or GLP regulations. We plan to conduct and submit the results of preclinical tests to the FDA as part of our Investigational New Drug Application (“ IND ”) prior to commencing clinical trials. We may be required to conduct extensive toxicology studies concurrently with the clinical trials.


The results of these evaluations and tests are then submitted to the FDA, along with manufacturing information, analytical data, and protocols for clinical studies, in an IND, to receive an approval from the FDA that the clinical studies proposed under the IND are allowed to proceed;


·

Clinical trials


Based on preclinical testing, an IND is filed with the FDA to begin human testing of the drug. The IND becomes effective if not rejected by the FDA within 30 days. The IND must indicate the results of previous experiments, how, where and by whom the new studies will be conducted, the chemical structure of the compound, the method by which it is believed to work in the human body, any toxic effects of the compound found in the animal studies and how the compound is manufactured. All clinical trials must be conducted in accordance with good clinical practice, or GCP, regulations. In addition, an Institutional Review Board, or IRB, generally comprised of physicians at the hospital or clinic where the proposed studies will be conducted, must review and approve the IND. The IRB also continues to monitor the study. We must submit progress reports detailing the results of the clinical trials to the FDA at least annually. In addition, the FDA may, at any time during the 30-day period or at any time thereafter, impose a clinical hold on proposed or ongoing clinical trials. If the FDA imposes a clinical hold, clinical trials cannot commence or recommence without FDA authorization and then only under terms authorized by the FDA. In some instances, the IND application process can result in substantial delay and expense.


Clinical trials involve the administration of a new drug to humans, under the supervision of qualified investigators using the protocol approved by the FDA and IRB, to establish the safety and efficacy of the product candidate for the intended use.  


Clinical trials are typically conducted in three sequential phases (Phase I, Phase II, and Phase III), but the phases may overlap. Phase I clinical trials test the drug on healthy human subjects for safety and other aspects, but usually not effectiveness.  Phase II clinical trials are conducted in a limited patient population to gather evidence about the efficacy of the drug for specific purposes, to determine dosage



16



tolerance and optimal dosages, and to identify possible adverse effects and safety risks. When a compound has shown evidence of efficacy and acceptable safety in Phase II evaluations, Phase III clinical trials are undertaken to evaluate and confirm clinical efficacy and to test for safety in an expanded patient population at clinical trial sites in different geographical locations.  Clinical trials need to be conducted in compliance with the FDA’s Good Clinical Practice (“GCP”) requirements.


After the completion of clinical trials, if there is substantial evidence that the drug is safe and effective, a New Drug Application (“NDA”) is filed with the FDA. The NDA must contain all of the information on the drug gathered to that date, including data from the clinical trials. NDAs are often over 100,000 pages in length.


·

NDA Submission


The results of pre-clinical studies, clinical studies, and adequate data on chemistry, manufacturing and control information to ensure reproducible product quality batch after batch, are submitted to FDA in an NDA to seek approval to market and commercialize the drug product for a specified use. The FDA reviews all submitted NDAs and is governed by the Prescription Drug User Fee Act (“ PDUFA ”) regarding response time to the application, which is generally 12 months (and shorter for a priority application). It may deny a NDA if it believes that applicable regulatory criteria are not satisfied. The FDA also may require additional clarifications on the existing application or even additional testing for safety and efficacy of the drug.  


In such an event, the NDA must be resubmitted with the additional information and, again, is subject to review before filing. Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA. Under the Federal Food, Drug and Cosmetic Act, the FDA has 365 days in which to review the NDA and respond to the applicant. The review process is often significantly extended by FDA requests for additional information or clarification regarding information already provided in the submission. The FDA may refer the application to an appropriate advisory committee, typically a panel of clinicians, for review, evaluation and a recommendation as to whether the application should be approved.


The FDA is not bound by the recommendation of an advisory committee. If FDA evaluations of the NDA and the manufacturing facilities are favorable, the FDA may issue either an approval letter, or an approvable letter that will likely contain a number of conditions that must be met in order to secure final approval of the NDA. When and if those conditions have been met to the FDA’s satisfaction, the FDA will issue an approval letter, authorizing commercial marketing of the drug for certain indications. If the FDA’s evaluation of the NDA submission or manufacturing facilities is not favorable, the FDA may refuse to approve the NDA or issue a not approvable letter.


If the FDA approves the NDA, the drug becomes available for physicians to prescribe. Periodic reports must be submitted to the FDA, including descriptions of any adverse reactions reported. The FDA may request additional post marketing studies, or Phase IV studies, to evaluate long-term effects of the approved drug.


·

Section 505(b)(2)


A 505(b)(2) application offers an appealing regulatory pathway alternative by permitting companies to obtain FDA approval of NDA without conducting the full complement of safety and efficacy trials.  This application can only be used for drugs that are similar or equivalent to the ones already approved by FDA in NDA for another company.  The applicant does not need to get permission from the original filer



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to use their information and it allows the applicant to rely on studies published in the scientific literature to demonstrate the safety and effectiveness of new drug.  The 505(b)(2) application is intended to encourage sponsors to develop innovative medicines using currently available products by significantly reducing the time and money to bring new application of an old drug to market.


 Foreign Countries


Canadian regulatory procedure is substantially similar to that of the United States.  Before we are permitted to market any of our products outside of the United States and Canada, those products will be subject to regulatory approval by foreign government agencies similar to the FDA or Therapeutic Products Directorate in Canada (“ TPD ”).  These requirements vary widely from country to country. Generally, however, no action can be taken to market any drug product in a country until an appropriate application has been submitted by a sponsor and approved by the regulatory authorities in that country. Again, similar to the FDA and TPD, each country will mandate a specific financial consideration for the Marketing Application dossiers being submitted. Although an important consideration, FDA or TPD approval does not assure approval by other regulatory authorities. The current approval process varies from country to country, and the time spent in gaining approval varies from that required for FDA or TPD approval.


Natural Health Products


Manufacturing of natural health products for human consumption requires registration of the composition in Health Canada Natural Health Products Directorate in accordance with current regulations and obtaining of NPN (Natural product number). We have applied for an NPN for all of our nutraceuticals formulations.  Currently we only have NPN number for our nanoemulsion formulation for cystitis treatment, Nano E-drops, but we expect to receive NPNs for our other candidates in the foreseeable future.


For European Union (“ EU ”) countries, Natural Health Products usually can be registered as “food supplements”. Essential oils nanoemulsion for treatment of cystitis and urinary tract infections (Nano E-drops ) was successfully registered as food supplement in Latvia and placed into the EU database of approved food supplements. It simplifies and accelerates registration and approval of the product in any other EU country.  We also have received an import license in Uzbekistan to sell Nano E-Drops in that country.


 Marketing and Distribution


We plan to market our products through collaborative arrangements with companies that have well-established pharmaceutical and nutraceutical health products marketing and distribution capabilities, including expertise in the regulatory approval processes in their respective jurisdictions.


Currently we have NPN in Canada and registration as food supplement in Latvia (EU) for Nano E-Drops as well as import license for Nano E-Drops in Uzbekistan.


Nutraceuticals have become an important part of mainstream health care. We believe the market for nutraceuticals is growing. Although public awareness of nutraceuticals is increasing, only a small percentage of North Americans actually use nutraceuticals on a regular basis. Thus we believe there is a potential new market for these products for the following reasons:




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Increased use of nutraceutical products for the over-50 population segment, whose numbers are increasing;

Increased awareness that nutraceuticals is an important part of mainstream health care; and

Price increases.


Marketing Strategies


We have formulated a strategy that we believe will differentiate us as a company by:


Focusing on science;

Developing unique nutraceuticals and related diagnostics;

Securing a proprietary position for its products;

Advertising aggressively and market through all appropriate distribution channels using all professional means; and

Providing information by a Company website to be developed.


Following this strategy, we believe we can gain access to many revenue generating channels through classic pharmaceuticals and other health care products. We further believe there are greater consumer demands, market growth potential and both real and perceived usefulness. We can increase market share by reducing market share of competitors. This strategy will capitalize on the market development to date and capture a share of markets held by existing nutraceuticals. The key benefit is that the company has carefully chosen products for the pipeline that maximize the therapeutic value of their discoveries and technology. This strategy requires extensive advertising in mainstream media, including infomercial, interactive TV, direct mail, independent sales reps and educational inserts/newsletters.  Product studies will support this marketing strategy. In this context, the company will pursue preliminary inquiries from favored vendors.


Management plans to explore new markets for products through strategic positioning. This strategy involves developing specialty catalogues, placement on retail shelves of health food stores, educational product inserts/newsletters, media appearances discussing product, and independent sales reps.


We also intend to engage multi-level marketing companies. This strategy would likely involve creating private labels for a large customer. A major component of this strategy is the effect of product identity. This channel of distribution usually requires more price mark-up than the product would tolerate.


We further intend to keep capital outlay at a minimum by licensing and/or franchising our products to a brand-name company. This strategy would add value to the product in the form of brand name loyalty, manufacturing strength, and a strong sales/service force already in place.


Marketing Plan


In moving from the start-up stage into the first growth stage, we must identify and match market segments with appropriate distribution channels. Our goal is to expand regionally, both in Canada and the U.S., based on existing markets and consumer profiles. Once we realize regional sales growth and product recognition, we plan to implement a national and international marketing strategy. At such time as we reach this level, management anticipates it will employ a major marketing communications agency.





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Our marketing and sales outline is as follows.


Marketing Function


1.

A complete review and analysis of the proposed product’s market.

2.

Use of groups conducted with the professional community and general consumers to identify professional and consumer preferences.

3.

Based on research results, create a product identity.

4.

From product identity, establish professional and consumer strategic directions, which would affect product design, packaging, advertising, consumer promotion, and product publicity.

5.

Develop and launch a marketing plan with all elements and budget for both professional and consumer.

6.

Actual implementation of the plan to include product design changes, packaging, advertising, consumer promotion, display, and product publicity.

7.

Consider using a sales organization for retail sales and a broker for the remainder of sales.


Manufacturing


We intend to use third party manufacturer for our products.  Currently we have a signed agreement with Nutralab Ltd. (Markham, Ontario) to manufacture several of our products, such as Nano E-Drops, Banaba extract in soft gelatin capsules and URBAN POWER (Ursolic acid + Banaba extract combination) soft gelatin capsules. The initial batch of 9,000 bottles of Nano E-drops was successfully manufactured, packaged and labeled at Nutralab Ltd. in full compliance with GMP requirements.


We have also selected Vesta Pharmaceuticals Ltd. of Indianapolis, Indiana as the manufacturer of chewable tablets, such as GluCorrect® (Banaba extract).


Raw Material Supplies


Excipients used in our formulations are available from numerous sources in sufficient quantities for manufacturing purposes. We believe that they will be available in sufficient quantities for commercial purposes when required.


We also believe future development and marketing partners under licensing and development agreements, if any, will provide, or assist in obtaining, pharmaceutical compounds that are used in products covered under such agreements.  


Components used in the production of our consumer/over-the-counter products are available from a number of potential suppliers. We have not secured commercial supply agreements with any supplier as the components are readily available in the commercial quantities.


We have selected Citrus and Allied Essences Ltd. of Lake Success, New York as a supplier of Natural essential oils, suitable for oral human consumption (FCC and USP/NF grades). American Lecithin will be the supplier of Lecithin.


Compendial high purity oils, acetylated glycerides and pharmaceutically acceptable surfactants are being supplied by Kerry Bio-Science by way of Nealanders International, Inc., Mississauga, Ontario).


Grain alcohol is supplied by Commercial Alcohols Inc., Toronto, Ontario.




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OptiPure (Chemco International/Kenco group), Los Angeles, California and Sabinsa Corp., East Windsor, New Jersey, are suppliers of active ingredients for chewable tablets.


Intellectual Property


Patents are a key determinant of market exclusivity for most branded pharmaceutical products. Protection for individual products or technologies extends for varying periods, in accordance with the expiration dates of patents in the various countries. The protection afforded, which may also vary from country to country, depends upon the type of patent, its scope of coverage and the availability of meaningful legal remedies in the country.


We have one US patent application for nanoemulsion for oral administration of essential oils (application # 61521491 Medicinal Compositions And Method For Treatment Of Urinary Tract Infections ). Several patent applications are in preparation and will be filed in 2012 or 2013 after obtaining of supporting animal experimental data, provided we have sufficient funding.


We also have developed brand names and trademarks for products in all areas. We consider the overall protection of our patent, trademark and other intellectual property rights to be of material value and acts to protect these rights from infringement.


Our long-term success will substantially depend upon our ability to obtain patent protection for our technology and our ability to protect our technology from infringement, misappropriation, discovery and duplication. We cannot be sure that any future patent applications will be granted, or that any patents which we own or obtain in the future will fully protect our position.


Our patent rights and the patent rights of biotechnology and pharmaceutical companies in general, are highly uncertain and include complex legal and factual issues. We believe that our existing technology and the patents that we hold or for which we have applied do not infringe anyone else's patent rights. We believe our patent rights will provide meaningful protection against others duplicating our proprietary technologies. We cannot be sure of this, however, because of the complexity of the legal and scientific issues that could arise in litigation over these issues.


We also rely on technological know-how’s, composition’s trade secrets and other unpatented proprietary information. We seek to protect this information, in part, by confidentiality agreements with our employees, consultants, advisors and collaborators.


Competition


Our future success depends, in part, upon our ability to develop products and achieve market share at the expense of existing and established and future products in the relevant target markets. Existing and future products, therapies, technological approaches or delivery systems will compete directly with our products. Competing products may provide greater therapeutic benefits for a specific indication, or may offer comparable performance at a lower cost.


Developments by competitors may render our products or technologies obsolete or non-competitive. Alternatively, competitors may challenge our patents and prevail in a court of law rendering our products, even if they are successfully developed, tested and approved, unmarketable.






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Lorazepam spray


We believe there are no oral sprays on the market today containing lorazepam or other benzodiazepines that could treat severe epileptic seizures without hospital settings.  


Pfizer/Wyeth markets an injectable drug branded ATIVAN® that is used to treat serious seizures that do not stop (status epilepticus). It is also used before surgeries or procedures to cause drowsiness, decrease anxiety, and cause forgetfulness about the procedure or surgery. This drug may also be used to cause drowsiness in patients who need a tube and machine to help with breathing (intubated), to prevent nausea and vomiting in patients on chemotherapy, and to treat a mental/mood disorder (delirium).


This medication is also available in tablet form and form of oral solution to relieve anxiety and promote sleep.


2% ketoconazole ointment


There are a number of preparations currently on the market containing ketoconazole, including tablets (200 mg), shampoo (1% and 2%), cream (2%), gel (2%) and foam (2%).  We consider our direct competition to be 2% Ketoconazole gel from Barrier Therapeutics, Inc. / Stiefel Laboratories, Inc., marketed under the brand name Xolegel™, 2% Ketoconazole cream from JSJ Pharmaceuticals marketed under the brand name Kuric™, and 2% Ketoconazole foam marketed by Stiefel Laboratories, Inc. under the brand name Extina® Foam.  Ketoconazole tablets are available in generic form and are marketed by a number of generic drug manufacturers.


Topical formulations of Ketoconazole can be used for treatment of seborrheic dermatitis. Topical Ketoconazole is used also for treating ringworm, jock itch, athlete's foot, dandruff, tinea versicolor and other skin fungal infections, susceptible to Ketoconazole.


Research and Development


Prior to closing the Acquisition Agreement, we have not expended any funds on research and development.  It is our goal to commence a research program as soon as we are able to raise the necessary funds.


Employees


At the time of closing the Acquisition Agreement we did not have any employees.  Management is presently in the process of reviewing the near term possibility of engaging qualified personnel to conduct our new business venture.  Initially, we may use non-employee consultants to assist us in formulating a research and development strategy, preparing regulatory submissions, developing protocols for clinical trials, and designing, equipping and staffing future manufacturing facilities. We may also engage non-employee consultants and advisors to assist us in business development. We may find it necessary to periodically hire part-time clerical help on an as-needed basis.


Consultants and advisors usually have the right to terminate their relationships on short notice. Loss of some of these key consultants or advisors could interrupt or delay development of one or more of our products or otherwise adversely affect our business plans.

We expect to continue to need qualified scientific personnel and personnel with experience in clinical testing, government regulation and manufacturing. We may have difficulty in obtaining qualified scientific and technical personnel as there is strong competition for such personnel from other



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pharmaceutical and biotechnology companies, as well as universities and research institutions. Our business could be materially harmed if we are unable to recruit and retain qualified scientific, administrative and executive personnel to support our expanding activities, or if one or more members of our limited scientific and management staff were unable or unwilling to continue their association with us.

   

Properties.


We currently use as our principal place of business the business office of our director, Geoff Williams, in Salt Lake City, Utah. We have no written agreement and currently pay no rent for the use of the facilities.  We are presently in the process of locating commercial office space from which to conduct our business.


Legal Proceedings.


There are no material pending legal proceedings to which the company or any subsidiary is a party, or to which any property is subject and, to the best of our knowledge, no such action against us is contemplated or threatened.


MANAGEMENT


Executive Officers and Directors


Our executive officers and directors are as follows:


Name

 

Age

 

Position Held with Eastgate

 

 

 

 

 

Anna Gluskin

 

60

 

CEO and Director

 

 

 

 

 

Mirjana Hasanagic

 

47

 

President and Director

 

 

 

 

 

Brian Lukian

 

63

 

CFO and Director

 

 

 

 

 

Joseph Schwarz

 

57

 

Chief Scientist

 

 

 

 

 

Michael Weisspapir

 

55

 

Chief Medical Officer

 

 

 

 

 

Geoff Williams

 

42

 

Director

 

 

 

 

 

Nancy Ah Chong

 

44

 

Secretary/Treasurer and Director


All directors hold office until the next annual meeting of stockholders and until their successors have been duly elected and qualified. There are no agreements with respect to the election of directors. We have not compensated directors for service on the board of directors or any committee thereof, but directors are entitled to be reimbursed for expenses incurred for attendance at meetings of the board and any committee thereof. However, directors may defer their expenses and/or take payment in shares of our common stock. As of the date hereof, no director has accrued any expenses or compensation. Officers are appointed annually by the board of directors and each executive officer serves at the discretion of the board. We presently do not have any standing committees.



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No director, officer, affiliate or promoter of our company has, within the past five years, filed any bankruptcy petition, been convicted in or been the subject of any pending criminal proceedings, or is any such person the subject or any order, judgment, or decree involving the violation of any state or federal securities laws.


Directors currently devote only such time to company affairs as needed. The time devoted could amount to as little as 10% of the time they devote to their own business affairs, or if business conditions ultimately warrant, they could possibly elect to devote their full time to our business. Presently, except for our directors and executive officers, there are no other persons whose activities are material to our operations.


Currently, there is no arrangement, agreement or understanding between management and non-management stockholders under which non-management stockholders may directly or indirectly participate in or influence the management of our affairs. Present management openly accepts and appreciates any input or suggestions from stockholders. However, the board of directors is elected by the stockholders and the stockholders have the ultimate say in who represents them on the board. There are no agreements or understandings for any officer or director to resign at the request of another person and none of the current offers or directors of are acting on behalf of, or will act at the direction of any other person.   However, two directors, Geoff Williams and Nancy Ah Chong, have agreed to tender their resignations as directors and officers at such time as the balance of $50,000 due to Williams Investment Company under the Acquisition Agreement is paid.


The business experience of each of the persons listed above during the past five years is as follows:


Anna Gluskin became CEO on May 22, 2012 and has over 30 years’ experience in discovering and developing opportunities in the area of biotechnology pharmaceutical and consumer health products.  While she is currently managing her own investments in a number of consumer health products and drug delivery she has served as the Chief Executive Officer and President of Generex Biotechnology Corporation, a company that has developed a proprietary alternative (non-invasive; non-injectable) drug delivery system.  Ms. Gluskin was a Founder of Generex Biotechnology Corporation and within her role as CEO she was instrumental in raising over $400 million for the company.  Since its inception in 1995 Generex had developed an oral (buccal delivery insulin spray, Oral-lyn) and a platform from which a number of applications have been tested and others identified.  An over-the-counter spray product pipeline was also developed and was marketed in a number of markets around the globe.


Prior to her Executive Management position at Generex Biotechnology, Ms. Gluskin served as a Director of Interlock Consolidated Corporation, a Canadian public company, which was engaged in the sale and fabrication of pharmaceutical manufacturing facilities.  Ms. Gluskin successfully participated in the set-up of pharmaceutical facilities in Russia and other countries in Eastern Europe. In the past her career activities include the financing and marketing of nursing home developments and other related projects. Ms. Gluskin has a number of patents for innovative pharmaceutical drugs in her name.  She holds a Master’s Degree in Microbiology and Genetics from Moscow State University.  She holds an equivalent degree from the University of Toronto.


Mirjana Hasanagic became President on May 22, 2012 and has over 20 years of managerial experience including supervision of all day-to-day activities of the business, including: marketing efforts, budgeting and accounting, purchasing and inventory control and staff supervision.  She has held executive positions with pharmaceuticals and healthcare industries including President of Nano



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Essentials, Inc., a Toronto company developing products containing nano-sized delivery vectors (2009-2012).


Prior to this appointment, she was president of Go Laser Inc. (2000-2008), a Waterloo based company where she was using her knowledge and education in herbalism and alternative medicine to treat infections, skin ailments and viral diseases. Her interest and experience in natural health products and diagnostics has led her to develop formulations that provide better absorption and delivery with the goal of attaining long term recovery and/prevention.


Ms. Hasanagic holds Medical Doctor (Alternative Medicine), Herbalism degree from Indian Board of Alternative Medicine and B.A., Philosophy, Linguistics & Literature from University of Sarajevo, Bosnia.


Brian Lukian became CFO May 22, 2012 and has Over 30 years’ of financial, strategic and business leadership contributing to the growth and turnaround of corporations in various industries and countries.


Since January 2007, he has been providing consulting services in regards to mergers and acquisitions, turnarounds, financings as well as business and industry analysis.  From 2000 through 2006, he was employed as Chief Financial Officer and Chief Operating Officer for several public companies in United States and Canada for which he was responsible for all public company reporting requirements with the SEC in the USA and all jurisdictions in Canada.  Included in these was a start up in the biotechnology industry for which Mr. Lukian was also a member of the Board of Directors.


Mr. Lukian acquired a great deal of international experience having lived and worked outside of North America for more than 15 years.  He has lived and worked on infrastructure projects in Papua New Guinea, Malaysia, and the Philippines.  During these ventures Mr. Lukian has performed all the classical management functions associated with a start up including negotiating with various government departments such as customs, immigration and the department of finance and taxation as well as setting up the infrastructure to accomplish these projects.


In addition to these ventures Mr. Lukian has also provided contract services to infrastructure projects in New Zealand, Cambodia, Myanmar, Australia, and Thailand.


Mr. Lukian earned his certificate as Chartered Accountant, McGill University, while employed by Ernst & Young, Montreal, Canada and is a member of the Order of Chartered Accountants of Quebec. Mr. Lukian also has a United States Investment Bankers license, Series Seven. He received a Bachelor of Commerce from Loyola College, Montreal, Canada.


Geoff Williams . Mr. Williams has served as a director and President and C.E.O. of our company since its inception in September 1999.  He resigned as President and C.E.O. on May 22, 2012. From 1994 to the present, Mr. Williams has been a representative of Williams Investments Company, a Salt Lake City, Utah financial consulting firm involved in facilitating mergers, acquisitions, business consolidations and financings.  Mr. Williams attended the University of Utah and California Institute of the Arts.  Mr. Williams also serves as our principal financial officer and principal accounting officer.


Mr. Williams is currently a director, President and C.E.O. of Westgate Acquisitions Corp. and, until he resigned in February 2010, he was a director, President and C.E.O. of Greyhound Commissary, Inc., now known as Tanke Biosciences Corp. Mr. Williams also became a director of U.S. Rare Earths, Inc. on



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November 29, 2011 and President and a director of Protect Pharmaceutical Corporation on February 14, 2012.


Nancy Ah Chong . Ms. Ah Chong became a director and Secretary / Treasurer of our company in September 2006.  From August 2004 to the present, she has been an office manager for Williams Investment Company, a Salt Lake City, Utah financial consulting firm involved in facilitating mergers, acquisitions, business consolidations and financings.  Previously, Mrs. Ah Chong was an administrative assistant for Forsgren Associates in Salt Lake City from March 2004 to August 2004.  She has also worked as a customer service representative for Overstock.com from November 2003 to January 2004 and O’Currance from February 2001 to November 2003, and as a marketing and travel coordinator for MGIS from February 2000 to August 2001.  From August 1991 to December 1999, Mrs. Ah Chong was with Barrick Goldstrike Mines, Inc. in Elko, Nevada, first as an exploration draftsperson and then an administrative assistant.  Mrs. Ah Chong attended and graduated from the Omaha Institute of Art and Design in Omaha, Nebraska.


Ms. Ah Chong is currently a director and Secretary / Treasurer of Westgate Acquisitions Corp. and, until she resigned in February 2010, she was a director and Secretary / Treasurer of Greyhound Commissary, Inc., now known as Tanke Biosciences Corp.  Ms. Ah Chong also became a director and Secretary of Protect Pharmaceutical Corporation on February 14, 2012.


Joseph Schwarz became Chief Scientist on May 22, 2012 and a has graduate degree in Polymer Chemistry from Moscow State University, and a PhD in Organic Chemistry from Zelinsky Organic Chemistry Institute (Academy of Science, Moscow), Laboratory of polynitrocompounds. He has more than 40 publications 8 issued US patents and about 20 US patent applications. He has more than 20 years in pharmaceutical R&D Experience.  Mr. Schwarz is a pharmaceutical technology and formulation expert in sustained release formulations for oral, topical, transmucosal, ophthalmic and parenteral application; biodegradable nano- and micro particles for controlled drug delivery of small molecules, peptides and proteins; colloidal drug delivery systems – nanoemulsions, micelles, hybrid nanoparticles; development and manufacturing of generic and brand pharmaceutical and cosmetic products.


Michael Weisspapir became Chief Medical Officer on May 22, 2012 and has over 25 years’ experience in pharmacology and drug development.  His extensive knowledge spans all stages of drug development including pharmacology, toxicology, pharmaceutical science and neuroscience. His knowledge extends to an array of indication including immunomodulators, anti-inflammatory drugs, anticonvulsant, anticancer agents as well as different methods of administration including parenteral, oral, transdermal and topical applications.   


Mr. Weisspapir’s has extensive experience with new drug evaluation for efficacy and safety (immunomodulators, chemotherapeutic agents, NSAID, anticonvulsants, antioxidants). This includes design and implementation of animal models of different indications, implementation of in vivo and in vitro experimental protocols as well as with controlled drug delivery systems, submicron emulsion, nanoemulsions, biodegradable nanoparticulate systems (NSAID, SAID, tranquilizers, anticonvulsants, peptides, antibiotics).  His most recent past work experience includes Chief Medical Scientist position (CMS) at AlphaRx Canada (2004 -2011).


Mr. Weisspapir currently holds 3 patents, has 20 patent applications and was published in over 20 pharmacological and toxicological journals.




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Mr. Weisspapir holds a Medical Doctor degree and Ph.D. degree in Pharmacology- both from Chelyabinsk State Medical Institute, Russia


Compliance With Section 16(a) of the Exchange Act


Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and other equity securities. We believe that these reports were not filed during the fiscal year 2011.


Code of Ethics


We currently do not have a code of ethics. During the current fiscal year, we do intend to adopt a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions


Executive Compensation


We have not had a bonus, profit sharing, or deferred compensation plan for the benefit of employees, officers or directors. We have not paid any salaries or other compensation to officers, directors or employees for the years ended December 31, 2011 and 2010. Further, we have not entered into an employment agreement with any of our officers, directors or any other persons and no such agreements are anticipated in the immediate future. We expect that directors will defer any compensation until such time as an acquisition or merger can be accomplished and will strive to have the business opportunity provide their remuneration. As of the date hereof, no person has accrued any compensation.


Certain Relationships and Related Transactions


There have been no material transactions during the past two fiscal years between our Company and any officer, director, nominee for election as director, or any stockholder owning greater than five percent (5%) of our outstanding shares, nor any member of the above referenced individuals' immediate families.


MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS


The following information should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report


We are a development stage company and, prior to the closing of the Acquisition Agreement, we had no assets and capital and limited operations.  Ongoing expenses, including the costs associated with the preparation of reports and filing with the SEC, have been paid for by advances from stockholders, which are evidenced on our financial statements as payable-related party.  Historically, we required only minimal capital to maintain our corporate viability, although the following the completion of the Acquisition Agreement our financial requirements will increase significantly.  Our current immediate financial needs will most likely be provided by officers and directors, although there is no agreement related to future funds and there is no assurance such funds will be available.






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Results of Operations


We have not recorded any revenues since inception.  During the three month period ended March 31, 2012 (“ first quarter ”), we incurred a net loss of $4,462, a 39% decrease compared to a $7,259 loss during the comparable first quarter of 2011.  We have reported a cumulative net loss of $128,625 since inception through March 31, 2012.  The decreased loss for the first quarter of 2012 is attributed to the 50% decrease in general and administrative expenses from $5,920 for the first quarter of 2011 period to $2975 for the 2012 first quarter.  The decrease in general and administrative expenses during the first quarter of 2012 was primarily due to decreased legal and accounting costs related to our requisite SEC filings.  Also, interest expense of $1,487 for the first quarter of 2012 increased 11% from $1,339 for the first quarter of 2011, attributed to an increase in loans from stockholders during the quarter.


We incurred a net loss of $29,920 for the year ended December 31, 2011, compared to a loss of $24,354 for the year ended December 31, 2010.  Our cumulative net loss since inception through December 31, 2011 was $121,388.  The increase in net loss for 2011 is attributed primarily to additional professional expenses for accounting and legal fees.  Interest expense increased to $5,977 for 2011 from $5,434 for 2010, representing the increased amount of interest on payables to related parties.


Liquidity and Capital Resources


During the year ended December 31, 2011 and the first quarter of 2012, a principal stockholder paid our ongoing expenses. At March 31, 2012, we had current liabilities of $94,925 compared to $89,188 at December 31, 2011.  The increased liabilities at March 31, 2012 is partially due to the increase in the note payable - related party of to $60,590, compared to $59,590 at December 31, 2011, representing additional expenses paid by stockholders during the first three months of 2012.  Accrued interest – related party at March 31, 2012 was $18,677 compared to $17,170 at December 31, 2011, which reflects the added interest on the payable – related party.  Also, accounts payable increased from $12,408 at December 31, 2011 to $12,883 at March 31, 2012, reflecting an increase in unpaid obligations.  Because we have no cash reserves or current revenue source, we expect to continue to rely on the stockholder to pay expenses until such time as we can secure funding from outside sources, either debt or equity.


At March 31, 2012, we had a stockholders’ deficit of $92,150 compared to a stockholders' deficit of $89,188 at December 31, 2011.  The increase in stockholders' deficit is primarily attributed to ongoing general and administrative expenses, principally legal and accounting costs.


At December 31, 2011, we had current liabilities of $89,188 compared to $65,268 at December 31, 2010.  The increase at December 31, 2011 is primarily attributed to the $11,388 increase in accounts payable, from $1,020 in 2010 to $12,408 in 2011.  Also contributing to the increase in current liabilities in 2011 was the $6,555 increase in the payable - related party, from $53,035 in 2010 to $59,590 in 2011 due to the increase in payment of expenses by stockholders.  This increase also attributed to the $5,977 increase in accrued interest-related party from  $11,213 in 2010 to $17,190 in 2011.


In the opinion of management, inflation has not and will not have a material effect on our operations until such time as we successfully complete an acquisition or merger.  At that time, management will evaluate the possible effects of inflation related to our business and operations following a successful acquisition or merger.






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Plan of Operation


Following the closing of the Acquisition Agreement we have become engaged in the development and ultimate formulation of other novel formulations of natural compounds and OTC products that have limitations in effective use for human consumption.  We believe our self-emulsifying drug delivery technology can improve the efficacy of existing products and formulations based on natural or well-established compounds and known biologically active compounds. We intend to conduct our research and development through collaborative programs. We anticipate relying on arrangements with third party drug developers such as contract research organizations and clinical research sites for a significant portion of our product development efforts.


The Acquisition Agreement enabled us to acquire certain products, formulas, processes, proprietary technology and/or patents and patent applications related to pharmaceutical, nutraceutical, food supplements and consumer health products. We have not formulated any final products or received receive approvals from any regulatory agencies or generated any revenues from product sales. We have not been profitable since our inception through the current date.


We expect to incur significant operating losses for the next several years and until we are able to formulate a commercially viable product.  We also expect to continue to incur significant operating and capital expenditures and anticipate that our expenses will increase substantially in the foreseeable future as we:


Continue to undertake formulation of novel products and subsequent preclinical and clinical trials for our product candidates;


Seek regulatory approvals for our product candidates;


Develop, formulate, manufacture and commercialize our products;


Implement additional internal systems and develop new infrastructure;

Acquire or in-license additional products or technologies, or expand the use of our technology;


Maintain, defend and expand the scope of our intellectual property; and


Hire qualified personnel.


Future product revenue will depend on our ability to develops, receive regulatory approvals for, and successfully market, our product candidates. In the event that our development efforts result in regulatory approval and successful commercialization of our product candidates, we will generate revenue from direct sales of our products and/or, if we license our products to future collaborators, from the receipt of license fees and royalties from licensed products.


Management estimates that our research and development expenses for the next 12 months will be approximately $4 million, primarily for research and pilot studies.  We also estimate that other expenses, including personnel, general and administrative and miscellaneous expenses could be as much as $1 million during the same time period.  Because we currently have no revenues, most likely the only source of funding these expenses will be through the private sale of our securities, either equity or debt.  We are currently exploring possible funding sources, but we have not entered into any arrangements or agreements for funding as of this time.  If we are unable to raise the necessary funding, our research and



29



development plans will be delayed indefinitely.  There can be no assurance that we will be able to raise the funds necessary to carry out our business plan on terms favorable to the company, or at all.


Net Operating Loss


We have accumulated a net operating loss carryforward of approximately $54,312 as of December 31, 2011.  This loss carry forward may be offset against future taxable income through the year 2031.  The use of these losses to reduce future income taxes will depend on the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards.  In the event of certain changes in control, there will be an annual limitation on the amount of net operating loss carryforwards that can be used.  No tax benefit has been reported in the financial statements for the year ended December 31, 2011 because it has been fully offset by a valuation reserve.  The use of future tax benefit is undeterminable because we presently have no operations.


Recent Accounting Pronouncements


The company has evaluated recent accounting pronouncements and their adoption has not had nor is not expected to have a material impact on the company’s financial position or statements.


Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The following table sets forth information, to the best of our knowledge, as of May 29, 2012, with respect to each person known by us to own beneficially more than 5% of the outstanding common stock, each director and all directors and officers as a group.


Name of Beneficial Owner

 

Number of

Shares

 

Percent of

Class (1)

 

 

 

 

 

 

 

Directors and Officers

 

 

 

 

 

 

 

 

 

 

 

Anna Gluskin*

 

3,500,000

 

 

11.1%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

Mirjana Hasanagic*

 

2,000,000

 

 

6.3%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

Brian Lukian*

 

500,000

 

 

2%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

Joseph Schwarz*

 

2,000,000

 

 

6.3%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

Michael Weisspapir *

 

2,000,000

 

 

6.3%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

Geoff Williams*

 

4,635,000

 

 

14.7%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

Nancy Ah Chong *

 

 

0

 

0%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

5% Stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

TGT Investment Management Inc. (2)

 

10,000,000

 

 

31.6%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

Edward F. Cowle*

 

4,635,000

 

 

14.7%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

H. Deworth Williams

 

2,195,445

 

 

6.9%

 

2681 East Parleys Way, Suite 204

 

 

 

 

 

 

Salt Lake City, Utah 84109

 

 

 

 

 

 

 

 

 

 

 

 

 

All Directors and Officers as a group (7 persons)

 

14,635,000

 

 

46%

 


* Director and/or executive officer

 

Note: Unless otherwise indicated, we have been advised that each person above has sole voting power over the shares indicated above.  


(1) Based upon 31,625,000 shares of common stock outstanding on May, 29, 2012.


(2)

TGT Investment Management Inc. is privately held investment holding company, of which investment and holding control is held by Rose Perri.

  

DESCRIPTION OF SECURITIES


Common Stock


We have authorized 100 million shares of common stock, par value $0.00001 per share.  All shares of common stock have equal rights and privileges with respect to voting, liquidation and dividend rights.  Each share of common stock entitles the holder thereof:



31




to one non-cumulative vote for each share held of record on all matters submitted to a vote of the stockholders;


to participate equally and to receive any and all such dividends as may be declared by the board of directors; and


to participate pro rata in any distribution of assets available for distribution upon liquidation.  


Holders of our common stock have no preemptive rights to acquire additional shares of common stock or any other securities.  Our common stock is not subject to redemption and carries no subscription or conversion rights.


MARKET PRICE OF, AND DIVIDENDS ON, OUR COMMON EQUITY

AND OTHER STOCKHOLDER MATTERS


There is currently no public trading market for our common stock.  We intend to engage a broker-dealer to make an initial application to FINRA to have our shares quoted on the OTC Bulletin Board.  The application will consist of current corporate information, financial statements and other documents as required by Rule 15c2-11 of the Securities Exchange Act of 1934.  As of the date hereof, there are approximately 45 stockholders of record of our common stock.


Inclusion on the OTCBB will permit price quotations for our shares to be published by that service. Although we intend to request that an application to the OTCBB be submitted, we do not anticipate a public trading market in our shares in the immediate future. Any future secondary trading of our shares may be subject to certain state imposed restrictions.  Except for the application to the OTCBB, there are no plans, proposals, arrangements or understandings with any person concerning the development of a trading market in any of our securities. There can be no assurance that our shares will be accepted for trading on the OTCBB or any other recognized trading market. Also, there can be no assurance that a public trading market will develop following acceptance by the OTCBB or at any other time in the future or, that if such a market does develop, that it can be sustained.


The ability of individual stockholders to trade their shares in a particular state may be subject to various rules and regulations of that state. A number of states require that an issuer's securities be registered in their state or appropriately exempted from registration before the securities are permitted to trade in that state. Presently, we have no plans to register our securities in any particular state.


Penny Stock Rule


It is unlikely that our securities will be listed on any national or regional exchange or The Nasdaq Stock Market in the foreseeable future.  Therefore our shares most likely will be subject to the provisions of Section 15(g) and Rule 15g-9 of the Exchange Act, commonly referred to as the "penny stock" rule.  Section 15(g) sets forth certain requirements for broker-dealer 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 SEC generally defines a 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 a penny stock unless that security is:


registered and traded on a national securities exchange meeting specified criteria set by the SEC;



32




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 issuer's net tangible assets; or


exempted from the definition by the SEC.


A broker-dealer who sells penny stocks to a person other than an established customer or accredited investor is subject to additional sales practice requirements.  An accredited investor is generally defined as a person with assets in excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together with their spouse.


For transactions covered by these rules, a broker-dealer must make a special suitability determination for the purchase of such securities and must receive the purchaser's written consent to the transaction prior to the purchase.  Additionally, for any transaction involving a penny stock, unless exempt, the rules require the delivery, prior to the first transaction, of a risk disclosure document relating to the penny stock market.  A broker-dealer also must disclose the commissions payable to both the broker-dealer and the registered representative and current quotations for the securities.  Finally, a monthly statement must be sent to the client disclosing recent price information for the penny stocks held in the account and information on the limited market in penny stocks.  Consequently, these rules may restrict the ability of broker-dealers to trade and/or maintain a market in our common stock and may affect the ability of stockholders to sell their shares.


These requirements may be considered cumbersome by broker-dealers and could impact the willingness of a particular broker-dealer to make a market in our shares, or they could affect the value at which our shares trade. Classification of the shares as penny stocks increases the risk of an investment in our shares.


Rule 144


Rule 144, promulgated under the Securities Act of 1933, is the common means for stockholders to resell restricted securities and for affiliates, to sell their securities, either restricted on non restricted (control) shares.  Rule 144 was amended by the SEC on February 15, 2008.  Some of our current outstanding common shares are deemed restricted securities.


Under the amended Rule 144, an affiliate of a company filing reports under the Exchange Act who has held their shares for more than six months, may sell in any three-month period an amount of shares that does not exceed the greater of:


the average weekly trading volume in the common stock, as reported through the automated quotation system of a registered securities association, during the four calendar weeks preceding such sale, or


1% of the shares then outstanding.


Sales by affiliates under Rule 144 are also subject to certain requirements as to the manner of sale, filing appropriate notice and the availability of current public information about the issuer.  



33




A non-affiliate stockholder of a reporting company who has held their shares for more than six months, may make unlimited resales under Rule 144, provided only that the issuer has available current public information about itself.  After a one-year holding period, a non-affiliate may make unlimited sales with no other requirements or limitations.  


An important exception to the above described availability of the amended Rule 144 is that Rule 144 is not available for either a reporting or non-reporting shell company, unless the company:


has ceased to be a shell company;


is subject to the Exchange Act reporting obligations;


has filed all required Exchange Act reports during the preceding twelve months; and


at least one year has elapsed from the time the company filed with the SEC current Form 10 type information reflecting its status as an entity that is not a shell company.  


Because prior to closing the Acquisition Agreement we were classified as a “shell” company, our stockholders who currently hold restricted shares of common stock, will not be able to rely on Rule 144 until one year after we cease to be a shell company and have filed with the SEC adequate information that we are no longer a shell company.  The information included in this Form 8-K is intended to be adequate information and, accordingly, our stockholders, both affiliates and non affiliates, will be eligible to use Rule 144 after one year from the filing of this report.


We cannot predict the effect any future sales under Rule 144 may have on the market price of our common stock, if a market for our shares develops, but such sales may have a substantial depressing effect on such market price.


Dividends Policy


We have never declared cash dividends on our common stock, nor do we anticipate paying any dividends on our common stock in the foreseeable future.


Recent Sales of Unregistered Securities


Upon closing the Acquisition Agreement we issued 10 million shares of our common stock (valued at $0.50  per share) to the seller, Anna Gluskin and/or her assigns, in exchange for the assignment of the acquired products and technology.  We also issued 10 million shares of common stock to TGT Investment Management Inc. in consideration for services rendered for and monies advanced to Eastgate.  The following persons received shares pursuant to the Acquisition Agreement.


Anna Gluskin

3,500,000 Shares

Mirjana Hasanagic

2,000,000 Shares

Joseph Schwarz

2,000,000 Shares

Michael Weisspapir

       2,000,000 Shares

Brian Lukian

   500,000 Shares

TGT Investment Management Inc.

     10,000,000 Shares




34



All of the above referenced shares were issued in a private transaction to informed persons pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933.


INDEMNIFICATION OF DIRECTORS AND OFFICERS


Our officers and directors are indemnified as provided by the Nevada Revised Statutes (the “NRS”) and our bylaws.  Under the NRS, director immunity from liability to a company or its stockholders for monetary liabilities applies automatically, unless it is specifically limited by a company's articles of    incorporation, which is not the case with our articles of incorporation.


Excepted from that immunity are:


(1)

a willful failure to deal fairly with our Company or our stockholders in connection with a matter in which the director has a material conflict of interest;


(2)

a violation of criminal law, unless the director had reasonable cause to believe that his or her conduct was lawful or no reasonable cause to believe that his or her conduct was unlawful;


(3)

a transaction from which the director derived an improper personal profit; and


(4)

willful misconduct.


Our bylaws provide that we will advance all expenses incurred by any director who was, or is a party, or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding.  This applies to civil, criminal, administrative or investigative proceedings, by reason of the fact that person is, or was our director or officer, or is or was serving at our request as a director or executive officer of another company, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request. This advancement of expenses is to be made upon receipt of an undertaking by or on behalf of such person to repay said amounts should it be ultimately determined that the person was not entitled to be indemnified under our bylaws or otherwise. The board of directors may authorize the corporation to indemnify and advance expense to any officer, employee, or agent of the corporation who is not a director to the extent permitted by law.


If a claim for indemnification against such liabilities, other than payment by us of expenses incurred or paid by one of our directors, officers, or controlling persons in the successful defense of any action, suit or proceeding, is asserted by one of our directors, officers, or controlling persons in connection with the securities being registered, we will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification is against public policy as expressed in the Securities Act, and we will be governed by the final adjudication of such issue.


Section 5 – Corporate Governance and Management


Item 5.01 Change in Control of Registrant


As a result of the Acquisition Agreement that closed on May 22, 2012, there has been a change in the voting control of our company and in the board of directors by way of appointing three new directors to our board of directors, which were designated by the seller of the products and technology. Under the terms of the Acquisition Agreement, we issued 10 million shares to Anna Gluskin, of which she assigned



35



6.5 million shares to four persons, each of whom became an officer and/or director of the Company.  The recipient of those shares were:


Mirjana Hasanagic  (Director and President)

2,000,000 Shares

Joseph Schwarz  (Chief Scientist)

2,000,000 Shares

Michael Weisspapir (Chief Medical Officer)

       2,000,000 Shares

Brian Lukian  (Director and Chief Financial Officer)

   500,000 Shares


Additionally, the Acquisition Agreement provided that 10 million shares were to be issued in connection with the acquisition of products in consideration for services rendered and monies advanced.  Those shares were issued to TGT Investment Management Inc.  Accordingly, the 20 million shares issued pursuant to the Acquisition Agreement now represent 63.2% of our issued and outstanding shares of common stock.


Item 5.02  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers


On May 22, 2011 in connection with the closing of the Acquisition Agreement, our board of directors appointed three new directors to the Board, who also became executive officers.  The new directors were Anna G. Gluskin (CEO), Mirjana Hasanagic (President) and Brian Lukian (CFO).  Information concerning the new directors and executive officers is included under the “Executive Officers and Directors” heading of Item 2.01 above. Our two incumbent directors, Geoff Williams and Nancy Ah Chong, will remain on the Board as directors, although Mr. Williams has resigned as President and CEO.


Item 5.06 Change in Shell Company Status


As explained more fully in Item 2.01 of this Current Report on Form 8-K, the Company was a “shell company” (as such term defined in Rule 12b-2 under the Exchange Act) immediately before the closing of the definitive Acquisition Agreement on May 22, 2012.  As a result of the Acquisition Agreement and the acquisition of certain products and technology, we have become engaged in the business of developing, formulating and commercializing innovative pharmaceutical, nutraceutical, food supplements and consumer health products..  Detailed information of the Acquisition Agreement and business of the Company is set forth under the “Business of Eastgate Acquisitions Corporation” heading of Item 2.01 above.


Cautionary Note About Forward-looking Statements


Statements contained in this current report which are not historical facts, may be considered "forward-looking statements," which term is defined by the Private Securities Litigation Reform Act of 1995.  Any “safe harbor under this Act does not apply to a “penny stock” issuer, which definition would include the Company.  Forward-looking statements are based on current expectations and the current economic environment.  We caution readers that such forward-looking statements are not guarantees of future performance. Unknown risks and uncertainties as well as other uncontrollable or unknown factors could cause actual results to materially differ from the results, performance or expectations expressed or implied by such forward-looking statements.



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Section 9 – Financial Statements and Exhibits


Item 9.01

Financial Statements and Exhibits.


(d)

Exhibits


Exhibit No.

Description


10.1

Patent Acquisition Agreement

10.2

First Addendum to Patent Acquisition Agreement

99.1

Financial statements for Eastgate Acquisitions Corporation for the fiscal year ended December 31, 2011

99.2

Financial statements for Eastgate Acquisitions Corporation for the quarterly period ended March 31, 2012

99.3

Pro forma financial information





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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 hereunto duly authorized.



Eastgate Acquisitions Corporation




Date:  May 29, 2012

By:     S/ ANNA GLUSKIN

Chief Executive Officer



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PATENT ACQUISITION AGREEMENT


THIS PATENT ACQUISITION AGREEMENT (the “ Agreement ”) is made and effective as of the 9 th day of January 2012, by and between EASTGATE ACQUISITIONS CORPORATION , a Nevada corporation (hereinafter referred to as “ Purchaser ”); and ANNA GLUSKIN , an individual residing in Toronto, Canada (hereinafter referred to as “ Seller ”).  


WITNESSETH


WHEREAS , Seller owns certain products, formulas, processes, proprietary technology and/or patents and patent applications (the “ Products ”);


WHEREAS , Seller desires to sell to Purchaser and Purchaser desires to purchase from Seller all of Seller’s rights, title and interest in and to the Products and any and all other rights, assets and property related thereto;


WHEREAS, in consideration for selling the Products to Purchaser, Purchaser will issue to Seller and/or its assigns and designees, shares of the Purchaser’s common stock;


WHEREAS , each Party to this Agreement desires to and will make certain representations, warranties and commitments in connection with the transactions contemplated herein and also to prescribe various conditions thereto.


NOW , THEREFORE , in consideration of the foregoing, the mutual promises, conditions and covenants herein contained, and other good and valuable considerations, the receipt of which is hereby acknowledged, it is agreed as follows:


Section 1.   Purchase of Products .   Based upon the foregoing and subject to the terms and conditions of this Agreement, Seller hereby sells, assigns and transfers to Purchaser all of Seller’s rights, title and interest in and to all of the Products, comprised of certain products, formulas, processes, proprietary technology and/or patents and patent applications, which are more definitively described in Attachment No. 1, annexed hereto and by this reference made a part hereof, and any and all other rights, assets and properties related thereto.  Seller agrees that prior to the closing of this Agreement, as defined in Section 4 below, Seller will deliver to Purchaser all documents and other evidences of ownership to establish the outright ownership of the Products by Seller.


Section 2.   Assignment of Products .  


(a)

At the Closing of this Agreement, Seller hereby agrees to sell, transfer and assign its entire right, title and interest in the Products to Assignee, free and clear of all liens, mortgages, pledges, security interests, prior assignments and encumbrances of any kind or nature whatsoever.   At the Closing, Seller shall execute and have notarized the appropriate documents, including all assignments to be filed with the U.S. Patent and Trademark Office (the “ USPTO ”) and any foreign patent office that is relevant to the Products.  Seller shall have sole responsibility and authority to prosecute any pending patent application included in the  Products and Purchaser shall assume responsibility for all fees and expenses associated with the Products, including, without limitation, all maintenance, annuity and prosecution-related fees and expenses.

 



(b)

Prior to the Closing, Seller will procure and deliver to Purchaser, certifications and other requisite documents evidencing the assignment of the Products, or any component thereof, to the Seller, whereby Seller (i) certifies that it has full right to convey such Products or components, (ii) that it has no knowledge of any mis-joinder or non-joinder of inventorship in the Products, and (iii) that it has assigned all of their ownership interests in the Products or components thereto to Seller.


(c)

At any time and from time to time after the Closing at Purchaser’s reasonable request and expense, Seller shall promptly execute and deliver, in a form reasonably acceptable to Purchaser, such instruments of sale, transfer, conveyance, assignment and confirmation as may reasonably be required, and shall take such other action as Purchaser may reasonably request, to more effectively transfer, convey and assign to Purchaser all of Seller’s right, title and interest in the Products and to confirm such sale, transfer, conveyance and assignment by Seller to Purchaser.  In the event that a party becomes aware of any existing patent or pending patent application that is covered by any component of the Products, but which is not currently listed on Attachment No. 1, such patent or patent application shall automatically be added to Attachment No. 1 and shall be deemed to constitute an assignment of patents for all purposes hereunder.  


(d)

Seller shall retain all rights, titles and interest in and to all patents and patent applications currently owned by Seller and not otherwise included in the Products included in Attachment No. 1, or to be acquired in the future.


Section 3.   Consideration .  In consideration for Seller’s sale and transfer of the Products, Purchaser agrees to pay at the Closing to Seller and/or its assigns and designees, 10,000,000 shares of Purchasers authorized, but previously unissued common stock, post-split to reflect the 7.75 shares for one share forward stock split described in Section 5(a) below.  At the Closing, Purchaser will direct its transfer agent to record and, as soon as practicable after the Closing, certificate and issue the 10,000,000 post-split shares of Purchaser’s common stock to Seller and/or its assigns and designees.  Purchaser’s shares to be issued to Seller hereunder will not be registered under the Securities Act of 1933, as amended (the “ Securities Act ”), and will be issued pursuant to an exemption or exemptions therefrom and considered “restricted securities” within the meaning of Rule 144 promulgated under the Securities Act.  All certificates aforementioned shares will bear an appropriate restrictive legend in form and substance satisfactory to Purchaser and its counsel.


Section 4.   Closing .  The Closing of this Agreement will take place at the location and on such date as mutually determined by the parties hereto (the “ Closing ” or “ Closing Date ”), but no later than five (5) days after all contingencies and conditions precedent have been satisfied or waived and all required documents having been delivered.


Section 5.   Additional Actions .  


(a)

Prior to the Closing, Purchaser will take all necessary and requisite actions to effect a forward split of its issued and outstanding shares of common stock on a 7.75 shares for 1 share basis.  All references to shares of Purchasers common stock herein shall be in post-split numbers unless otherwise specifically noted.






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(b)

At the Closing, Purchaser will take all necessary and requisite actions to authorize and cause to be issued up to 10,000,000 shares (post-split) of its authorized, but previously unissued common stock to The Great Tao, Inc., in consideration for services rendered for and/or monies advanced in connection with the facilitation of this Agreement and the transactions contemplated hereby.


(c)

Prior to the Closing, Seller agrees to secure and cause to be raised financing of a minimum of $300,000, to be used by Purchaser for its business endeavors subsequent to the Closing.  Of the minimum amount of financing to be raised by Seller,  $50,000 will be paid at the Closing to Williams Investment Company and/or its assigns and designees for services rendered in connection with the execution of the Agreement and the transactions contemplated hereby.  Following the Closing, Seller agrees to raise additional financing for the benefit of Purchaser and an additional $50,000 will be paid to Williams Investment Company and/or its assigns from the first funds to be raised following the Closing.


(d)

Contemporaneous with the Closing, the Purchasers Board of Directors will nominate and elect Anna Gluskin and Brian Lukian as directors, effective  immediately following the Closing.  Additional directors may be added to the Board of Directors following the Closing at the discretion of the current Board of Directors.


(e)

Within four (4) business days following the execution of this Agreement, Purchaser will prepare and file with the Securities and Exchange Commission (“ SEC ”) a Current Notice on Form 8-K pursuant to the Securities Exchange Act of 1934 (the “ Securities Exchange Act ”), disclosing the execution of the Agreement and describing the terms of the transaction as required by such Form 8-K.  Purchaser will amend the Form 8-K as necessary within four (4) days from the Closing to include, if necessary, requisite audited financial statements and pro forma financial statements as may be required under the Securities Exchange Act.


(f)

If, at any time after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement and the transactions contemplated hereunder, the officers and directors of Purchaser are hereby fully authorized to take, and will take, all such lawful and necessary action.


Section 6.   Representations of Seller .  Seller hereby makes, as of the date hereof and as of the Closing, the following representations and warranties:


(a)

Seller is an individual residing in Toronto, Canada and has the requisite power and authority to enter into this Agreement, together with such other agreements and documents requisite to this Agreement (the “ Transaction Documents ”) to which it is a party and to perform its obligations hereunder and thereunder. The execution of this Agreement and other Transaction Documents does not materially violate or breach any material agreement or contract to which Seller is a party or will, by the Closing be a party and, to the extent required, Seller has or will have by Closing, obtained all necessary approvals or consents required by any agreement to which it is a party.


(b)

Seller is only selling the Products to the Purchaser and not any ongoing business or enterprise.  There are no financial statements concerning the products and none are contemplated to be prepared.





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(c)

Seller is the sole and exclusive owner of the Products and all underlying products, formulas, processes, proprietary technology and/or patents and patent applications, and it has the unencumbered right to sell and transfer its entire right, title and interest in the Products, including, but not limited to all patents and patent applications, to Purchaser as contemplated hereby.  All Products are free and clear of all liens, mortgages, pledges, security interests, prior assignments or encumbrances, and any restrictions on transfer.


(d)

Seller shall provide to Purchaser all existing files and records relating to all of the Products.


(e)

Seller has not granted any license or right under any of the Products to any third party.


(f)

All maintenance fees required to be paid as of the Closing Date with respect to all Products described in Schedule No. 1 hereto, including all patents and patent applications, have been or shall be paid by Seller.

 

(g)

All issued patents included in the Products are existing and in full force and effect.  At the Closing, Seller will assign its entire right, title and interest in the patents included in the Products to Purchaser.  The execution of this Agreement will not result in the loss or impairment of the right, title and interest in any patents that Seller will convey to Purchaser at Closing.


(h)

To the best of Seller’s knowledge, there are no actions, suits, investigations, claims or proceedings threatened, pending or in progress relating to the Products.  To the best of Seller’s knowledge, none of the patents included in the Products have been or are currently involved in any reexamination, reissue, interference proceeding or any similar proceeding and no such proceedings are pending or threatened.  No settlement agreements, consents, judgments, orders, forbearance to sue or similar obligations limit or restrict Seller’s rights in and to any of the patents.  Seller has not asserted any claim against any third party relating to infringement of any patents that are part of the Products.


(i)

To the best of Seller’s knowledge, Seller has made no public disclosures of any non-public portion of the claimed subject matter contained in the patents underlying the Products prior to filing with the USPTO a U.S. patent application pertaining to any such non-public portion.


(j)

Except as may be otherwise disclosed in writing to Purchaser and set forth in an attachment annexed hereto, there have not been any material adverse changes in the viability or status of the Products set forth in Attachment No. 1 that would materially and adversely affect the Products or the business or financial position of the Purchaser.


 (k)

To the best of Seller’s knowledge, all material documents and information regarding Seller, which have been delivered by it to Purchaser for use in connection with this Agreement were, at the time provided, true and accurate in all material respects.


(l)

To the best of Seller’s knowledge, no representation or warranty by Seller contained in this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary in order to make the statements therein not misleading.  Except as specifically indicated elsewhere in this Agreement, all documents delivered by Seller in connection herewith, have been and will be complete originals, or duplicate copies thereof.



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(m)

Seller acknowledges that the shares of Purchaser’s common stock that Seller will receive hereunder in consideration for the Products, are deemed “restricted securities” within the meaning of Rule 144 promulgated under the Securities Act of 1933, and are being issued pursuant to an exemption or exemptions from such Act.  Seller further acknowledges that it may not sell or otherwise transfer the subject shares except pursuant to a registration statement or in reliance upon an exemption to registration under the Securities Act.


  Section 7.   Representations of Purchaser .  Purchaser hereby makes, as of the date hereof and as of the Closing, the following representations and warranties:


(a)

Purchaser is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and has full corporate power and has authority to carry on its business as now conducted.


(b)

Purchaser has the requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been or will, prior to the Closing, be duly authorized by Purchaser’s Boards of Directors.  The execution and performance of this Agreement will not constitute a material breach of any agreement, indenture, mortgage, license or other instrument or document to which Purchaser is a party or to which it is otherwise subject and will not violate any judgment, decree, order, writ, law, rule, statute, or regulation applicable to Purchaser or its properties or to which Purchaser will, by Closing, be a party and, to the extent required, Purchaser has, or will have by Closing, obtained all necessary approvals or consents required by any agreement to which it is a party.  The execution and performance of this Agreement will not violate or conflict with any provision of the Purchaser’s Certificates of Incorporation or Bylaws.


(c)

Purchaser has delivered to Seller, or will deliver prior to the Closing, a true and complete copy of its audited financial statements for the fiscal years ended December 31, 2010, and 2009 and its unaudited financial statements for the nine-month period ended September 30, 2011 (the “ Purchaser Financial Statements ”).  The Purchaser Financial Statements are complete, accurate and fairly present the financial condition of Purchaser as of the dates thereof and the results of its operations for the periods then ended.  There are no material liabilities or obligations, either fixed or contingent, not reflected therein.  The Purchaser Financial Statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis (except as may be indicated therein or in the notes thereto) and fairly present the financial position of Purchaser as of the dates thereof and the results of its operations and changes in financial position for the periods then ended.


(d)

Except as otherwise disclosed in writing to Seller, since September 30, 2011, there have not been any material adverse changes in the financial position of Purchaser except changes arising in the ordinary course of business, which changes will not materially and adversely affect the financial position, business or operations of Purchaser.


(e)

Except as and to the extent as may be set forth in an attachment annexed hereto, Purchaser is not a party to any material pending litigation or, to the knowledge of its executive officers, any governmental investigation or proceeding, not reflected in the



5



Purchaser Financial Statements and no litigation, claims, assessments or any governmental proceedings are threatened in writing against Purchaser.


(f)

Purchaser has filed all federal, state, county and local income, excise, property and other tax, governmental and/or other returns, forms, filings, or reports, which are due or required to be filed by it prior to the date hereof and have paid or made adequate provision in the Purchaser Financial Statements for the payment of all taxes, fees, or assessments which have or may become due pursuant to such returns, filings or reports or pursuant to any assessments received.  Purchaser is not delinquent or obligated for any tax, penalty, interest, delinquency or charge and there are no tax liens or encumbrances applicable to it.


(g)

As of the date of this Agreement, Purchaser’s authorized capital stock consists of one hundred million (100,000,000) shares of common stock, $0.00001 par value, of which one million five hundred thousand (1,500,000) shares are presently issued and outstanding, which does not reflect the 7.75 shares for one share forward stock split described in Section 5(a) above to be effective prior to the Closing.  All outstanding shares of Purchaser common stock are, and will be at the Closing, duly authorized, validly issued, fully paid and nonassessable. There are no existing options, calls, claims, warrants, preemptive rights, registration rights or commitments of any character relating to the issued or unissued capital stock or other securities of Purchaser.


(h)

As of the date hereof and at the Closing, the shares of Purchaser’s common stock to be issued and delivered to Seller in consideration for the Products will, when so issued and delivered, constitute duly authorized, validly and legally issued, fully-paid and nonassessable shares of Purchaser common stock, free and clear of all liens, claims and encumbrances.


(i)

Prior to the Closing, Purchaser will make available for inspection by Seller or its authorized representative, from time to time as requested by Seller, copies of Purchaser’s financial records, minute books, and related documents.  All documents and information regarding Purchaser that have been or will be provided to Seller by Purchaser, or set forth in any document or other communication disseminated to any former, existing or potential stockholders of Purchaser, to the public or filed with the SEC, FINRA, or any federal or state securities and/or financial regulators or authorities, are true, complete, accurate in all material respects, not misleading, and were and are in full compliance with all securities laws and regulations


(j)

Purchaser is and has been in material compliance with, and has conducted any business owned or operated by it in compliance with all applicable laws, orders, rules and regulations of all governmental bodies and agencies, including, without limitation, all applicable securities and/or financial regulatory laws and regulations, including, but not limited to, the Sarbanes-Oxley Act of 2002 and environmental laws and regulations, except where such noncompliance has and will have, in the aggregate, no material adverse affect on the business, financial condition, operations or assets of Purchaser.  Purchaser has not received notice of any noncompliance with the foregoing, nor is it aware of any claims or threatened claims in connection therewith.  As of the date of this Agreement, Purchaser is, and as of the Closing, Purchaser will be, current in its periodic reporting obligations to the SEC pursuant to the Securities Exchange Act.






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(k)

Except as and to the extent specifically disclosed in this Agreement and as may be specifically disclosed or reserved against as to amount in the latest balance sheet contained in the Purchaser Financial Statements provided to Seller, there is no basis for any assertion against Purchaser of any material liabilities or obligations of any nature, whether absolute, accrued, contingent or otherwise and whether due or to become due including, without limitation, any liability for taxes, including e-commerce sales or other taxes, interest, penalties and other charges payable with respect thereto.  Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will;


(i)

Result in any payment, whether severance pay, unemployment compensation or otherwise, becoming due from Purchaser to any person or entity, including without limitation, any employee, director, officer;


(ii)

Increase any benefits otherwise payable to any person or entity, including without limitation, any employee, director, officer or affiliate; or


(iii)

 Result in the acceleration of the time of payment or vesting of any such benefits.


(l)

No aspect of Purchaser’s business, operations or assets is of such a character as would restrict or otherwise hinder or impair Purchaser from carrying on its business as presently being conducted and as anticipated following consummation of this Agreement.


(m)

All shares of Purchaser’s outstanding common stock have been issued pursuant to an appropriate exemption from registration under the Securities Act and all applicable state securities laws.  There are no outstanding, pending or threatened stop orders or other actions or investigations relating thereto involving federal and state securities laws.


(o)

No representation or warranty by Purchaser contained in this Agreement and no statement contained in any certificate, schedule or other communication furnished pursuant to or in connection with the provisions hereof, contains or will contain any untrue statement of a material fact, or omits to state a material fact necessary in order to make the statements therein not misleading.  Except as specifically indicated elsewhere in this Agreement, all documents delivered by Purchaser in connection herewith, have been and will be complete originals, or duplicate copies thereof.


SECTION 8   Actions Prior to Closing .


(a)

Prior to Closing, each party to this Agreement will be entitled to conduct the appropriate due diligence investigation related to the other party.  The representations and warranties contained in this Agreement will not be affected or deemed waived by reason of the fact that any Party hereto discovered, or should have discovered, that any representation or warranty is or might be inaccurate in any respect.  Until the Closing, the Parties hereto and their respective affiliates will keep strictly confidential and will not use in any manner inconsistent with the transactions contemplated by this Agreement, any information or documents obtained from the other party.


(b)

Prior to the Closing, no written news releases or public disclosure (each, a “ Disclosure ”) shall be permitted by any party unless previously agreed to by all Parties hereto, except that Purchaser will be permitted to file with the SEC the appropriate Form 8-K within four (4) business days after the execution of this Agreement. After Closing, any proposed Disclosure



7



by a party hereto pertaining to this Agreement or the transactions contemplated hereby, will be submitted to the other party for its review and approval prior to such release or disclosure, provided, however, that such approval will not be unreasonably withheld.


(c)

Contemporaneous with or prior to the Closing, Purchaser’s Board of Directors will take all necessary and requisite corporate and other actions to nominate and appoint to the Board of Directors Anna Gluskin and Brian Lukian, to be effective immediately upon the Closing.


(d) Except as contemplated by this Agreement, there will be no stock dividend, stock split, recapitalization, or exchange of shares with respect to, or rights issued in respect of Purchaser common stock after the date of the execution of this Agreement and prior to the Closing, and there will be no dividends or other distributions paid on Purchaser’s common stock after the date hereof, in each case through and including the Closing.  


(e)

Purchaser, acting through its Board of Directors, will authorize and take all requisite and necessary actions to prepare and file the requisite reports and/or filings with the SEC or any other federal, state or local governmental agency or instrumentality having jurisdiction over the transactions contemplated by this Agreement and make whatever other reports and/or filings that may be required pursuant to applicable law, rule or regulation.


(f)

Seller will provide to Purchaser any documents and information in Seller’s possession or control requested by Purchaser as being necessary for inclusion in the requite reports and/or filings to be made by Purchaser with the SEC or other agency concerning the Agreement and the transactions contemplated hereby.  Seller agrees to promptly correct any information provided by for use in the reports and/or filings if, and to the extent that, such information will have become false or misleading in any material respect, and Purchaser further agrees to take all necessary steps to cause the reports and/or filings, as so corrected if necessary, to be prepared and delivered to the appropriate party to the extent required by applicable state and federal securities and financial reporting laws.


(g)

Except as required by court order or applicable law, Seller will not voluntarily take any action that would, or that is reasonably likely to, result in any of the conditions to this Agreement not being satisfied.  Without limiting the generality of the foregoing neither Seller nor Purchaser will intentionally take any action that would result in;


(i)

Any of its representations and warranties set forth in this Agreement that are qualified as to materiality becoming untrue; or


(ii)

Any of such representations and warranties that are not so qualified becoming untrue in any material respect.


(h)

The Closing is contingent upon the successful completion of the $300,000 financing depicted in Section 5(c) above.  All shares of Purchaser’s common stock to be issued hereunder are to be held in escrow with Leonard E. Neilson, Attorney at Law, until the $300,000 financing is completed, at which time, provided all other terms of Closing are satisfied, the Closing will be effected and the shares of common stock will be released from escrow and the $50,000 will be delivered to Williams Investment Company as per the terms of this Agreement.




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SECTION 9   Conditions Precedent to the Obligations of Seller .  All obligations of Seller under this Agreement contemplated hereby are subject to the fulfillment, prior to or as of the Closing, as indicated below, of each of the following conditions:


(a)

The representations and warranties by or on behalf of Purchaser contained in this Agreement, or in any certificate or document delivered pursuant to the provisions hereof or in connection herewith, will be true and correct at and as of the date of Closing as though such representations and warranties were made at and as of such time.


(b)

Purchaser will have performed and complied with, in all material respects, all covenants, agreements, and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing.


(c) No preliminary or permanent injunction or other order, decree or ruling issued by a court or other governmental authority of competent jurisdiction nor any statute, rule, regulation or executive order promulgated or enacted by any governmental authority of competent jurisdiction will be in effect which would have the effect of (i) making the consummation of the Agreement or any of the transactions contemplated by this Agreement illegal, or (ii) otherwise prohibiting the consummation of the Agreement or any of the transactions contemplated hereby.


(d)

On or before the Closing, the Purchaser’s Board of Directors will have approved, in accordance with applicable provisions of state corporation law and any other applicable law, the execution and delivery of this Agreement and the consummation of the transactions contemplated herein and will have submitted same to the Purchaser stockholders, if applicable, for approval and shall have obtained all applicable shareholder approvals, in accordance with such state corporation law and any other applicable law.


(e)

On or before the Closing, Purchaser shall have effected the 7.75 share for one share of common stock forward stock split contemplated by this Agreement.


(f)

On or before the Closing, Purchaser will have delivered to Seller certified copies of resolutions of the Purchaser Board of Directors and, if shareholder approval is required, the shareholders of Purchaser, approving and authorizing;


(i)

The execution, delivery and performance of this Agreement and all necessary and proper actions to enable Purchaser to comply with the terms of this Agreement;


(ii)

The appointment of Anna Gluskin and Brian Lukian to the Purchaser Board of Directors; and


(iii) All other matters set forth or contemplated herein.


(g)

The capitalization of Purchaser will be the same as described in Section 7(g) above.


(h)

The Purchaser’s shares of common stock to be issued and delivered to Seller at the Closing will have been duly authorized and, when issued, will be deemed validly issued, nonassessable and fully paid under the provisions of applicable federal and state law, to be issued in a private, nonpublic offering in compliance with all federal, state and applicable securities laws.



9



(i)

Seller will have completed its financial and legal due diligence investigation of Purchaser with results thereof satisfactory to it in its sole and exclusive discretion.


(j) All appropriate and necessary governmental and regulatory filings of Purchaser in connection with this Agreement and the transactions contemplated hereby will be made by Purchaser and all necessary governmental and regulatory consents to this Agreement and the transactions contemplated hereby required to be obtained by Purchaser will have been received.


SECTION 10

Conditions Precedent to the Obligations of Purchaser.   All obligations of Purchaser under this Agreement contemplated hereby, are subject to the fulfillment, prior to or at the Closing as indicated below, of each of the following conditions:


(a)

The representations and warranties by Seller contained in this Agreement or in any certificate or document delivered pursuant to the provisions hereof or in connection herewith, will be true and correct at and as of the date of the Closing as though such representations and warranties were made at and as of such times;


(b)

Seller will have performed and complied with, in all material respects, all covenants, agreements, and conditions required by this Agreement to be performed or complied with by them;


(c)

On or before the Closing, Seller will have delivered to Purchaser evidence of ownership and its right to sell and transfer the Products and all products, formulas, processes, proprietary technology and/or patents and patent applications underlying products;


(d)

This Agreement and the transactions contemplated hereby will be permitted by applicable federal and state law;


(e)

Prior to the Closing, Seller will have arranged for and caused to be raised financing of a minimum of $300,000, to be used by Purchaser for its business endeavors subsequent to the Closing, and that of the minimum amount of financing to be raised by Seller, $50,000 will be paid at the Closing to Williams Investment Company and/or its assigns and designees for services rendered in connection with the execution of the Agreement and the transactions contemplated hereby; and


(f)

Prior to or at the Closing, Purchaser must receive from Seller and/or its assigns an “investment letter” or other equivalent document providing representations that the shares of common stock to be issued pursuant to this Agreement are, among other things;


(i)

Being acquired for investment purposes and not with a view to public resale;


(ii)

Being acquired for the investor’s own account; and


(iii)

 Are restricted and may not be resold except pursuant to a registration statement or in reliance upon an exemption to registration under the Securities Act.


SECTION 11

Survival .  The representations and warranties contained in this Agreement and any other document or certificate relating hereto will survive and continue in full force and effect for a period of six (6) months after the Closing of the Agreement.



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SECTION 12   Indemnification.


(a)

From and after the Closing of this Agreement, Purchaser agrees to indemnify, defend and hold harmless Seller against any costs or expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, demands, liabilities, damages and deficiencies, including interest and penalties, incurred or suffered in connection with any claim action, suit, proceeding or investigation, whether civil, criminal or administrative, arising out of matters existing or occurring prior to the Closing, whether asserted or claimed prior to, at or after the Closing, including, without limitation, all losses, claims, damages, costs, expenses, liabilities, judgments or settlement amounts based in whole or in part on, or arising in whole or in part out of, or pertaining to this Agreement or the transactions contemplated hereby to the fullest extent that Seller could have been permitted under applicable state laws and its certificate of incorporation, bylaws and other agreements in effect on the date hereof to indemnify such individual.


(b)

From and after the Closing of this Agreement, Seller agrees to indemnify, defend and hold harmless Purchaser and each person who is now, or has been at any time prior to the date of this Agreement, or who becomes prior to the Closing a director or executive officer of Purchaser, against any costs or expenses (including reasonable attorneys' fees), judgments, fines, losses, claims, demands, liabilities, damages and deficiencies, including interest and penalties, incurred or suffered in connection with any claim action, suit, proceeding or investigation, whether civil, criminal or administrative, arising out of matters existing or occurring prior to the Closing, whether asserted or claimed prior to, at or after the Closing, which is based in whole or in part on, or arising in whole or in part out of the fact that such person is a party to this Agreement or is or was a director or officer of Purchaser including, without limitation, all losses, claims, damages, costs, expenses, liabilities, judgments or settlement amounts based in whole or in part on, or arising in whole or in part out of, or pertaining to this Agreement or the transactions contemplated hereby to the fullest extent that Purchaser could have been permitted under applicable state laws and its certificate of incorporation, bylaws and other agreements in effect on the date hereof, to indemnify such individual.


(c)

Any indemnified party wishing to claim indemnification under subsection (a) or (b) of this Section 12, upon learning of any such claim, action, suit, proceeding or investigation, will promptly notify Purchaser if under subsection (a), or Seller if under subsection (b).  However, failure to so notify the appropriate party will not relieve the indemnifying party from any liability which it may have under this Section 12, except to the extent such failure materially prejudices such party.  In the event of any such claim, action, suit, proceeding or investigation, (i) the indemnifying party will have the right to assume the defense thereof and will not be liable to any such indemnified party in connection with the defense thereof; (ii) the indemnified party will cooperate in all respects as requested by the indemnifying party in the defense of any such matter; and (iii) the indemnifying party will not be liable for any settlement effected without its prior written consent, which consent will not be unreasonably withheld; provided, however, that the indemnifying party will not have any obligation hereunder to any indemnified party if and when a court will ultimately determine, and such determination will have become final, that the indemnification of such indemnified party in the manner contemplated hereby is prohibited by law.






11



SECTION  13

Nature of Representations .   All of the parties hereto are executing and carrying out the provisions of this Agreement in reliance solely on the representations, warranties, covenants and agreements contained in this Agreement and the other Transaction Documents delivered at the Closing and not upon any representation, warranty, agreement, promise or information, written or oral, made by the other party or any other person other than as specifically set forth herein.


SECTION  14

Documents at Closing .   At the Closing, the following documents will be delivered:


(a)

Seller will deliver, or will cause to be delivered, to Purchaser the following;


(i)

All requisite and necessary documents evidencing Seller’s sole and exclusive ownership of the Products and all underlying products, formulas, processes, proprietary technology and/or patents and patent applications, free and clear of all liens, mortgages, pledges, security interests, prior assignments or encumbrances, and any restrictions on transfer, and that it has the unencumbered right to sell and transfer its entire right, title and interest in the Products, including, but not limited to all patents and patent applications, to Purchaser as contemplated hereby;


(ii) All requisite and necessary documents to transfer the ownership and all rights, title and interest in the Products to Purchaser including, but not limited to all requisite and notarized Patent Assignments related to the patents and patent applications underlying the Products, for filing by Purchaser with the USPTO and any foreign patent office that is relevant;


(iii)

 Such other instruments, documents and certificates, if any, as are required to be delivered pursuant to the provisions of this Agreement; and


(iv) All other items, the delivery of which is a condition precedent to the obligations of Purchaser, as set forth in Section 10 above.


(b)

Purchaser will deliver or cause to be delivered to Seller;


(i)

Stock certificates representing those securities of Seller and or its assignees, to be issued to Seller as per Section 3 hereof;


(ii)

Certified copies of resolutions adopted by Purchaser’s Boards of Directors approving this Agreement and the transactions contemplated hereunder;


(iii) Such other instruments and documents as are required to be delivered pursuant to the provisions of this Agreement; and


(iv) All other items, the delivery of which is a condition precedent to the obligations of Seller as set forth in Section 9 hereof.


SECTION  15

Finder’s Fees .   Purchaser represents and warrants to Seller, and Seller represents and warrants to Purchaser, that except as otherwise set forth herein or by separate agreement, none of them, or any party acting on their behalf, has incurred any liabilities, either



12



express or implied, to any “broker” or “finder” or similar person in connection with this Agreement or any of the transactions contemplated hereby.


SECTION  16

Termination .   This Agreement may be terminated prior to the Effective Date as set forth below:


(a)

By mutual written consent of all the parties hereto;


(b)

By Purchaser or Seller if the Closing will not have occurred on or before February 29, 2012. (the “ Termination Date ”); provided, however, that the right to terminate this Agreement under this Section 16(b) will not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of or resulted in, the failure of the Closing to occur on or before the Termination Date;


(c)

By Purchaser or  Seller if any governmental entity;


(i)

Will have issued an order, decree or ruling or taken any other action (which the parties will use their reasonable best efforts to resist, resolve or lift, as applicable) permanently restraining, enjoining or otherwise prohibiting the transaction contemplated by this Agreement and such order, decree, ruling or other action will have become final and nonappealable; or


(ii)

Will have failed to issue an order, decree or ruling or to take any other action and such denial of a request to issue such order, decree, ruling or take such other action will have become final and nonappealable (which order, decree, ruling or other action the parties will have used their reasonable best efforts to obtain); if such action under (i) and/or (ii) is necessary to fulfill the conditions set forth in Sections 9 and 10, as applicable;


(d)

By Purchaser or Seller if one of the other parties will have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, such that the conditions set forth in either Section 9 or Section 10 are not capable of being satisfied on or before the Termination Date.


SECTION  17

Effect of Termination .   In the event of termination of this Agreement by any of the parties hereto as provided in Section 16 (other than Section 16(d)), this Agreement will forthwith become void and there will be no liability or obligation on the part of any of the parties or their respective officers or directors.


SECTION  18

Miscellaneous .   


(a)

Further Assurances .   At any time and from time-to-time after the Closing, each party will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to any property transferred hereunder or otherwise to carry out the intent and purposes of this Agreement.


(b)

Waiver .   Any failure on the part of any party hereto to comply with any of its obligations, agreements or conditions hereunder may be waived in writing by the party (in its sole discretion) to whom such compliance is owed.




13



(c)

Amendment .   This Agreement may be amended only in writing as agreed to by all parties hereto.


(d)

Notices .   All notices and other communications to any party hereto will be in writing and deemed to have been given if delivered in person or sent by prepaid first class registered or certified mail, return receipt requested, by Federal Express, facsimile or e-mail to other party.


(e)

Headings .  The section and subsection headings in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement.


(f)

Counterparts .   This Agreement may be executed simultaneously in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.  The delivery by facsimile, e-mail or other electronic medium of an executed counterpart of this Agreement will be deemed to be an original and will have the full force and effect of an original executed copy.


(g)

Binding Effect .   This Agreement will be binding upon the parties hereto and inure to the benefit of the parties, their respective heirs, administrators, executors, successors and assigns.


(h)

Entire Agreement .   This Agreement and the Attachments and exhibits annexed hereto, constitute the entire agreement of the parties covering everything agreed upon or understood in the transaction. There are no oral promises, conditions, representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof.


(i)

Severabilit y .   If any part of this Agreement is deemed to be unenforceable, the balance of the Agreement will remain in full force and effect.


(j)

Responsibility and Costs .   Whether the Closing of this Agreement occurs or not and, except as otherwise set forth below, all fees, expenses and out-of-pocket costs including, but not limited to, fees and disbursements of counsel, financial advisors and accountants and expenses associated with fulfillment of the obligations set forth herein, that are incurred by the parties hereto will be borne solely and entirely by the party that has incurred such costs and expenses, unless the failure to consummate the Agreement constitutes a breach of the terms hereof, in which event the breaching party will be responsible for all costs of all parties hereto.  


(k)

Legal Representation .  The parties hereto acknowledge and agree that each respective party is represented by the same legal counsel, Leonard E. Neilson, Attorney at Law, and that each party hereby waives any existing or potential conflict of interest that may exist or occur by such common legal representation.


(l)

Governing Law .   This Agreement will be governed and construed in accordance with the laws of the State of Utah without regard to principles of conflicts of law.




[Signatures on Following Page]



14



IN WITNESS WHEREOF , the parties hereto have hereunder set their hands, the day, month and year first hereinabove written, and they hereby acknowledge that this Patent Acquisition Agreement fully and completed sets forth their entire agreement.


“Purchaser :

“Seller” :


Eastgate Acquisitions Corporation




By:

/S/ Geoff Williams

By:

/S/ Anna Gluskin

        GEOFF WILLIAMS ,   President

       

ANNA GLUSKIN




15



ATTACHMENT  NO.  1


PRODUCTS TO BE ACQUIRED


NanoEssentials, Inc. is a new company, working in development of innovative remedies, where proven safety and efficacy of traditional well-known natural compounds amalgamated with cutting edge modern biopharmaceutical technologies for enhanced delivery and improved activity of these medicines.

Recently the company successfully developed several prominent nutraceutical products for health support and treatment of some difficult-to-treat conditions. The challenging task – combination of several essential oils in a formulation, suitable for oral consumption without activity losses and with suppressed irritation of GIT along with efficient taste masking – was effectively resolved using proprietary self-nanoemulsifying platform.  Incorporation of vitamin D into another nanoemulsion vehicle allowed greatly improve efficacy and convenience of use. Importantly, the product has a very pleasant taste and can be easily dispensed in any conditions.


Nanoessentials’ products

Name

Active components

Description

Indications / Use

Patent status

Nano E-drops

Essential oils combination in self- nanoemulsifying vehicle

Concentrated solution of essential oils in alcohol with some pharmaceutical additives.

After dilution with water forms nanoemulsion with good taste and excellent absorption.

Cystitis treatment efficacy > 80% success rate

For treatment of cystitis, urinary tract infections (UTI) and bladder problems, caused by E.coli.  

Add 10-40 drops to 20-50 mL water; take 3 times a day 15 minutes before meal for 7-21 days.

Patent pending
(patent application was submitted in Aug. 2011)

Nano E2-drops

Essential oils combination in self-nanoemulsifying vehicle

Solution of essential oils in alcohol. After dilution with water forms nanoemulsion

Supporting treatment / prophylactics

To prevent recurrence of the disease after treatment with Nano E-drops. Use 5-10 drops with water 1-2 times a day

Patent pending
(patent application was submitted in Aug. 2011)

Ladies’ douche after Nano E-drops

Grapefruit seed extract with essential oil

Composition with strong antibacterial and antifungal action.

To treat the vaginal irritation and fungal infections during Nano E-drops use. Dilute 5-10 drops in one glass of water and use for vaginal irrigation once a day for 7-14 days.

Know-how for composition

Essential D  (Vitamin D3 nanoemulsion)

Nanoemulsion with vitamin D3 (Cholecalciferol) 10,000 IU/mL

Vitamin D3 in oil-in-water nanoemulsion for oral consumption. Highly bioavailable product with fast absorption and pleasant taste, fast and complete absorption directly in oral cavity.

Vitamin D deficiency, osteoporosis prevention, winter depression prophylactics.

4-20 drops per day orally.

Patent pending (app. preparation in process)

Wart and papilloma treatment

Essential oils combination in proprietary vehicle.

Concentrated solution of essential oils in volatile vehicle. Forms film after application providing extended local release of active components.

To treat warts and papilloma.

Apply small amount topically once a day.


Know-how for composition and manufacturing process

Ketoconazole lacquer

Ketoconazole 10%  in proprietary deeply penetrating vehicle.

Nail lacquer for application on damaged nails. Highly effective  

Onychomicosis. Apply on the damaged nail as usual nail polish once a week.

Know-how for composition and manufacturing process

Dandruff lotion

Grapefruit seed extract, essential oils

Lotion for dandruff treatment

Dandruff.

Apply small amount on the scalp 2-3 times a week for 10-30 minutes, and wash out.


Know-how for composition  

Nano L-drops

Essential oils in self-nanoemulsifying vehicle in soft gelatin capsules

Liver health support

Restore liver health.

1 soft gelatin capsule 3 times a day 15 minutes before meal

Patent pending (app. preparation in process)

Nano U-drops

Essential oils in self-nanoemulsifying vehicle

Stomach ulcers and other gastro-intestinal infections

Stomach and duodenal ulcers; H. pylori  caused gastro-intestinal infections.

Add 10-40 drops to 20-50 mL water; take 3 times a day 15 minutes before meal


Know-how for composition  

RadioGuard

Complex of membranotropic antioxidants in chewable tablet

Protects cells and cell membranes from radiation damage

Ionizing radiation, x-ray tests, radiotherapy, frequent air flights


Know-how for composition  

Oral rinse

Long acting bioadhesive nanoemulsion

Highly effective bioadhesive nanoemulsion with extended antibacterial action , not staining for teeth

Periodontitis, Gingivitis, bad breath.

Rinse oral cavity 1-4 times a day with 5-10 mL of the composition


Know-how for composition and manufacturing process

Natural oil based cream for arthritis  and muscle pain

Essential oil anti-inflammatory combination in nanoemulsion cream

Excellent product for joint and muscle pain management

Arthritis, muscle pain, rheumatic pain, sport injuries


Patentable (TBD)


Other products

Patentable (TBD)

Patentable (TBD)

Patentable (TBD)

Patentable (TBD)

Patentable (TBD)

Skin cream

Concentrated vitamin D 3 cream

Skin repairing and conditioning soft cream   

Cracked damaged skin,  psoriasis, eczema

Know-how for composition and manufacturing process

Chewable tablet for prophylactics of heart diseases

Acetylsalicylic acid + succinic acid + Coenzyme Q10

Convenient drug combination for heart protection

Heart diseases, ischemia, high blood pressure

Patentable (TBD)

Glucose control natural extract

Banaba extract with corosolic acid in formulation with improved bioavailability

Sublingual chewable tablet and soft gelatin capsules for glucose metabolism control and weight maintenance

Pre-diabetes, Diabetes


Patent pending (app. preparation in process)

Anticonvulsant oral spray

Benzodiazepine derivative in proprietary vehicle for treatment of acute seizures and epilepsy.

Oral spray

Emergency treatment of acute seizures and epilepsy instead of intravenous intervention


Patent pending (app. preparation in process)






17



FIRST ADDENDUM TO

PATENT ACQUISITION AGREEMENT


THIS FIRST ADDENDUM TO PATENT ACQUISITION AGREEMENT (hereinafter referred to as the “ First Addendum ”) relates to that certain Patent Acquisition Agreement dated January 9, 2012 (the “ Patent Acquisition Agreement ”), by and between ANNA GLUSKIN , an individual residing in Toronto, Canada (“ Assignor ”), and EASTGATE ACQUISITIONS CORPORATION , a Nevada corporation (“ Purchaser ”), and is made and entered into as of the 13 th day of April 2012.  This First Addendum is intended, by all parties to the Patent Acquisition Agreement, to amend that Patent Acquisition Agreement as further described herein.


RECITALS


WHEREAS , the parties hereto desire to amend the Patent Acquisition Agreement to add and/or revise the terms and condition contained therein; and


WHEREAS , the parties hereto desire that all other terms and conditions of the Patent Acquisition Agreement not specifically amended hereby will remain in full force and effect.


NOW THEREFORE , in consideration of the premises herein contained, the parties hereby agreed as follows:


1

The parties hereto agree that the Patent Acquisition Agreement shall be amended by adding a new Section 5(c) as follows:


“5(c)   Prior to the Closing, Seller agrees to secure and cause to be raised financing of a minimum of $50,000, to be used by Purchaser for its business endeavors subsequent to the Closing.  Of the minimum amount of financing to be raised by Seller,  $50,000 will be paid at the Closing to Williams Investment Company and/or its assigns and designees for services rendered in connection with the execution of the Agreement and the transactions contemplated hereby.  Following the Closing, Seller agrees to raise additional financing for the benefit of Purchaser and an additional $50,000 will be paid to Williams Investment Company and/or its assigns from the additional financing at such time as a minimum of $300,000 is realized by the Company from the additional financing to be raised following the Closing.”


2

All other provisions, terms, and conditions of the Patent Acquisition Agreement will remain in full force and effect and will not be altered or amended except as otherwise provided herein.


3

All capitalized terms used, but not otherwise defined herein, will have the respective meanings ascribed to them in the Patent Acquisition Agreement.




4

This First Addendum will be governed by, and construed in accordance with, the laws of the State of Utah without regard to its conflicts of laws principles.


5

This First Addendum may be executed in one or more counterparts, each such counterpart to be deemed an original instrument, but all of which such counterparts together will constitute but one agreement.


6

This First Addendum may not be modified or amended, nor any provision hereof waived, by any party, except by a writing executed by each of the parties hereto.



IN WITNESS WHEREOF , the parties hereto have executed and delivered this First Addendum to the Patent Acquisition Agreement dated April 13, 2012 in a manner legally binding upon them as of the date first written above.



“Assignor”

Purchaser”

ANNA GLUSKIN

EASTGATE ACQUISITIONS CORPORATION




/S/ Anna Gluskin

By:

/S/ Geoff Williams

Its

President



2














Audited Financial Statements


For the Years Ended


December 31, 2011 & 2010




S ADLER , G IBB & A SSOCIATES, LLC


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Board of Directors

Eastgate Acquisitions Corporation


We have audited the accompanying balance sheets of Eastgate Acquisitions Corporation (the Company) as of December 31, 2011 and 2010, and the related statements of operations, stockholders deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company s management. Our responsibility is to express an opinion on these financial statements based on our audits.  


We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.


In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of Eastgate Acquisitions Corporation as of December 31, 2011 and 2010, and the results of their operations and their cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.


The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company had net losses of $29,920 and $24,354 for the years ended December 31, 2011 and 2010, respectively, and accumulated losses of $121,388 as of December 31, 2011, which raises substantial doubt about its ability to continue as a going concern. Management s plans concerning these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




/s/ Sadler, Gibb & Associates, LLC


Sadler, Gibb & Associates, LLC

Salt Lake City, UT

April 10, 2012


EASTGATE ACQUISITIONS CORPORATION

 

(A Development Stage Company)

 

Balance Sheets

 










 










 

ASSETS

 










 





December 31,


December 31,

 





2011


2010

 





 


 

 










 

CURRENT ASSETS






 










 


Cash


$

                 -


$

                 -

 










 



Total Current Assets

 

                 -


 

                 -

 










 



TOTAL ASSETS

$

                 -


$

                 -

 










 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 










 










 

CURRENT LIABILITIES






 










 


Accounts payable

$

        12,408


$

1,020

 


Accrued interest - related party


        17,190



11,213

 


Note payable - related party

 

59,590


 

53,035

 










 



Total Current Liabilities

 

        89,188


 

65,268

 










 

STOCKHOLDERS' DEFICIT






 










 


Common stock; 20,000,000 shares authorized,






 


  at $0.00001 par value, 11,625,000 shares issued






 


  and outstanding


116



116

 


Additional paid-in capital


32,084



26,084

 


Deficit accumulated during the development stage

 

(121,388)


 

(91,468)










 










 



Total Stockholders' Deficit

 

(89,188)


 

(65,268)

 










 



TOTAL LIABILITIES AND STOCKHOLDERS'

 



 


 



  DEFICIT

$

                 -


$

                 -

 










 

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

 



EASTGATE ACQUISITIONS CORPORATION

(A Development Stage Company)

Statements of Operations

 






















From











Inception on



 








September 8,





For the Years Ended


1999 Through





December 31,


December 31,





2011


2010


2011













REVENUES


$

                 -


$

                 -


$

                 -













OPERATING EXPENSES










 













General and  











  administrative


 

        23,943


 

        18,920


 

      104,198















Total Operating Expenses


 

        23,943


 

        18,920


 

      104,198













LOSS FROM OPERATIONS


 

       (23,943)


 

       (18,920)


 

     (104,198)













OTHER EXPENSES























Interest expense


 

         (5,977)


 

         (5,434)


 

       (17,190)















Total Other Expenses


 

         (5,977)

 

 

         (5,434)


 

       (17,190)













LOSS BEFORE INCOME TAXES



       (29,920)



       (24,354)



(121,388)

PROVISION FOR INCOME TAXES


 

                 -


 

                 -


 

                 -













NET LOSS


$

       (29,920)

 

$

       (24,354)


$

     (121,388)

























BASIC AND DILUTED LOSS PER SHARE


$

(0.00)


$

(0.00)
















BASIC AND DILUTED WEIGHTED AVERAGE









  NUMBER OF COMMON SHARES










  OUTSTANDING


 

11,625,000


 

11,625,000
















The accompanying notes are an integral part of these financial statements



EASTGATE ACQUISITIONS CORPORATION

(A Development Stage Company)

Statements of Stockholders' Deficit
























Deficit












Accumulated


Total







Additional


During the


Stockholders'


Common Stock


Paid-In


Development


Equity


Shares


Amount


Capital


Stage


(Deficit)















Balance at inception on September 8, 1999

                 -


$

                 -


$

                 -


$

                 -


$

                 -















Common stock issued for cash on














  September 8, 1999 at $0.00001 per share

11,625,000



116



            384



                 -



            500















Net loss from inception on September 8, 1999














  through December 31, 1999

                 -


 

                 -


 

                 -


 

                 -


 

                 -















Balance, December 31, 1999

11,625,000



116



            384



                 -



            500















Net loss for the period from














  January 1, 2000 through














  December 31, 2004

                 -


 

                 -


 

                 -


 

         (3,320)


 

 (3,320)















Balance, December 31, 2004

11,625,000



116



            384



(3,320)



(2,820)















Services contributed by shareholders

                 -



                 -



500


 

                 -


 

            500















Net loss for the year ended














  December 31, 2005

                 -


 

                 -


 

                 -


 

           (600)


 

           (600)















Balance, December 31, 2005

11,625,000

 

 

116

 

 

884

 

 

(3,920)

 

 

(2,920)















Services contributed by shareholders

                 -



                 -



1,700



                 -



          1,700















Net loss for the year ended














  December 31, 2006

                 -


 

                 -


 

                 -


 

(5,555)


 

 (5,555)















Balance, December 31, 2006

11,625,000

 

 

116

 

 

2,584

 

 

(9,475)

 

 

(6,775)















Services contributed by shareholders

                 -



                 -



5,500



                 -



          5,500















Net loss for the year ended














  December 31, 2007

                 -


 

                 -


 

                 -


 

(9,681)


 

 (9,681)















Balance December 31, 2007

11,625,000



116



8,084



(19,156)



(10,956)















Services contributed by shareholders

                 -



                 -



          6,000



                 -



          6,000















Net loss for the year ended














  December 31, 2008

                 -


 

                 -


 

                 -


 

       (24,309)


 

 (24,309)















Balance, December 31, 2008

11,625,000

 


116

 


14,084

 


(43,465)

 


(29,265)















Services contributed by shareholders

                 -



                 -



          6,000



                 -



          6,000















Net loss for the year ended














  December 31, 2009

                 -


 

                 -


 

                 -


 

       (23,649)


 

       (23,649)















Balance, December 31, 2009

11,625,000



116



20,084



(67,114)



(46,914)















Services contributed by shareholders

                 -



                 -



          6,000



                 -



          6,000















Net loss for the year ended














  December 31, 2010

                 -


 

                 -


 

                 -


 

       (24,354)


 

 (24,354)















Balance, December 31, 2010

11,625,000


$

116


$

26,084


$

(91,468)


$

(65,268)















Services contributed by shareholders

                 -



                 -



          6,000



                 -



          6,000















Net loss for the year ended














 December 31, 2011

                 -


 

                 -


 

                 -


 

       (29,920)


 

 (29,920)















Balance, December 31, 2011

  11,625,000


$

            116


$

        32,084


$

     (121,388)


$

 (89,188)















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



EASTGATE ACQUISITIONS CORPORATION

 

(A Development Stage Company)

 

Statements of Cash Flows

 














 












From

 












Inception on

 






 


September 8,






For the Years Ended


1999 Through






December 31,


December 31,






2011


2010


2011

OPERATING ACTIVITIES























Net loss


$

       (29,920)

 

$

       (24,354)


$

     (121,388)


Adjustments to reconcile net loss to net cash










  used by operating activities:











Expenses paid on the Company's behalf











  by a related party


          6,555



        14,900



        59,590



Services contributed by shareholders


          6,000



          6,000



        31,700


Changes in operating assets and liabilities:











Accrued interest - related party


          5,977



          5,434



        17,190



Accounts payable

 

        11,388


 

         (1,980)


 

        12,408

















Net Cash Used in Operating Activities

 

                 -


 

                 -


 

           (500)














INVESTING ACTIVITIES

 

                 -


 

                 -


 

                 -














FINANCING ACTIVITIES
























Common stock issued for cash

 

 -


 

                 -


 

            500

















Net Cash Provided by Financing Activities

 

                 -


 

                 -


 

            500




 












NET DECREASE IN CASH


                 -

   

   

                 -

   

   

                 -
















CASH AT BEGINNING OF PERIOD

 

                 -


   

                 -


 

                 -
















CASH AT END OF PERIOD

$

                 -


$

                 -


$

                 -














SUPPLEMENTAL DISCLOSURES OF









 

CASH FLOW INFORMATION























CASH PAID FOR:
























Interest


$

                 -


$

                 -


$

                 -



Income Taxes

$

                 -


$

                 -


$

                 -














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

 





NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Nature of Business

Eastgate Acquisitions Corporation (The Company) was organized on September 8, 1999, under the laws of the State of Delaware. The Company is a development stage company and has not commenced principle operations as of the balance sheet date.


Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.


Basic Loss per Common Share

Basic loss per share is calculated by dividing the Company s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are no such common stock equivalents outstanding as of December 31, 2011 and 2010.


 

 

For the

Year Ended

December 31,

2011

 

 

For the

Year Ended

December 31,

2010

 

Loss (numerator)

 

$

(29,920

)

 

$

(24,354

)

 

Shares (denominator)

 

 

11,625,000

 

 

 

11,625,000

 

 

Per share amount

 

$

(0.00

)

 

$

(0.00

)

 


Dividends

The Company has not adopted any policy regarding payment of dividends. No dividends have been paid during any of the periods shown.


Comprehensive Income

The Company has no component of other comprehensive income. Accordingly, net income equals comprehensive income for the period ended December 31, 2011 and 2010.


Advertising Costs

The Company s policy regarding advertising is to expense advertising when incurred. The Company had not incurred any advertising expense as of December 31, 2011 and 2010.


Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.



NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Income Taxes

The Company provides for income taxes under ASC 740, Accounting for Income Taxes. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. The Company s predecessor operated as entity exempt from



Federal and State income taxes.


ASC 740 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.


The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 39% to net the loss before provision for income taxes for the following reasons:


 

 

December 31, 2011

 

 

December 31, 2010

 

Income tax expense at statutory rate

 

$

(11,668

)

 

$

(9,498

)

Contributed services

 

 

2,340


 

 

2,340


Valuation allowance

 

 

9,328


 

 

7,158


Income tax expense per books

 

$

-


 

$

-



Net deferred tax assets consist of the following components as of:


 

 

December 31, 2011

 

 

December 31, 2010

 

NOL carryover

 

$

37,530

 

 

$

28,202


Valuation allowance

 

 

(37,530

)

 

 

(28,202

)

Net deferred tax asset

 

$

-


 

$

-



Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards of $54,312 for federal income tax reporting purposes are subject to annual limitations. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years.


Impairment of Long-Lived Assets

The Company continually monitors events and changes in circumstances that could indicate carrying amounts of long-lived assets may not be recoverable. When such events or changes in circumstances are present, the Company assesses the recoverability of long-lived assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, the Company recognizes an impairment loss based on the excess of the carrying amount over the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.


Accounting Basis

The basis is accounting principles generally accepted in the United States of America.  The Company has adopted a December 31 fiscal year end.



NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)


Stock-Based Compensation.

As of December 31, 2011, the Company has not issued any share-based payments to its employees.


The Company adopted ASC 718 effective January 1, 2006 using the modified prospective method. Under this transition method, stock compensation expense includes compensation expense for all stock-based compensation awards granted on or after January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of ASC 718.


Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had nor is not expected to have a material impact on the Company s financial position or statements.




Revenue Recognition

The Company recognizes revenue when products are fully delivered or services have been provided and collection is reasonably assured.


NOTE 2 -  GOING CONCERN


The accompanying financial statements have been prepared in conformity with generally accepted accounting principle, which contemplate continuation of the Company as a going concern.  However, the Company has accumulated deficit of $121,072 as of December 31, 2011.  The Company currently has limited liquidity, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time.


Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.

 

 NOTE 3 - NOTE PAYABLE-RELATED PARTY


Through December 31, 2009, the Company had a note payable to a shareholder of $38,135 for various services provided and expenses paid by a shareholder on behalf of the Company. During 2011 and 2010, the same shareholder paid for additional expenses of $6,555 and $14,990, respectively, which have been accrued in note payable to related party at December 31, 2011 and 2010. The note payable is unsecured, accrues interest at 10% per annum and is due upon demand. As of December 31, 2011 and 2010, the Company owes $17,190 and $11,213 of accrued interest to the related party, respectively.


NOTE 4 - CONTRIBUTED SERVICES


During the years ended December 31, 2011 and 2010, a related-party has contributed various administrative services to the Company. These services include basic management and accounting services, and utilization of office space and equipment. These services have been valued at $6,000 for each of the years ended December 31, 2011 and 2010.





NOTE 5 - SUBSEQUENT EVENTS


On March 19, 2012, the Company effected a forward stock split of all issued and outstanding common stock on a seven and three-quarters (7.75) shares for one (1) basis. The Company s stock was increased from 1.5 million shares of common stock issued and outstanding to approximately 11.625 million shares following the split. In accordance with ASC 505, the effect of the forward stock split has been retroactively applied to these financial statements.


On January 15, 2012, the Company entered into a Patent Acquisition Agreement to acquire certain products, formulas, processes, proprietary technology and/or patents and patent applications related to pharmaceutical, nutraceutical , food supplements and consumer health products. In exchange for the acquired products and technology, the Company has agreed to issue at the closing to the seller 10 million shares of the Company s authorized, but previously unissued common stock, post-split as discussed below.  The closing of the agreement is contingent upon realizing initial financing of $50,000.  The Company has not entered into any agreement or arrangement to secure the aforementioned funding and there can be no assurance that the Company w ill be able to raise the funds.













Financial Statements


For the Quarter Ended


March 31, 2012



EASTGATE ACQUISITIONS CORPORATION

(A Development Stage Company)

Balance Sheets










ASSETS












March 31,


December 31,





2012


2011





(unaudited)


 










CURRENT ASSETS
















Cash


$

-


$

                 -












Total Current Assets

 

-


 

                 -












TOTAL ASSETS

$

-


$

                 -










LIABILITIES AND STOCKHOLDERS' DEFICIT










CURRENT LIABILITIES
















Accounts payable

$

15,658


$

        12,408


Accrued interest - related party


18,677



        17,190


Note payable - related party

 

60,590


 

59,590












Total Current Liabilities

 

94,925


 

89,188










STOCKHOLDERS' DEFICIT
















Common stock; 20,000,000 shares authorized,







  at $0.00001 par value, 11,625,000 shares issued







  and outstanding


116



116


Additional paid-in capital


33,584



32,084


Deficit accumulated during the development stage

 

(128,625)


 

(121,388)












Total Stockholders' Deficit

 

(94,925)


 

(89,188)












TOTAL LIABILITIES AND STOCKHOLDERS'

 



 




  DEFICIT

$

-


$

                 -










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



EASTGATE ACQUISITIONS CORPORATION

(A Development Stage Company)

Statements of Operations

(unaudited)

 






















From











Inception on



 








September 8,





For the Three Months Ended


1999 Through





March 31,


March 31,





2012


2011


2012













REVENUES


$

                 -


$

                 -


$

                 -













OPERATING EXPENSES










 













General and  











  administrative


 

          5,750


 

          5,920


 

      109,948















Total Operating Expenses


 

          5,750


 

          5,920


 

      109,948













LOSS FROM OPERATIONS


 

         (5,750)


 

         (5,920)


 

     (109,948)













OTHER EXPENSES























Interest expense


 

         (1,487)


 

         (1,339)


 

       (18,677)















Total Other Expenses


 

         (1,487)

 

 

         (1,339)


 

       (18,677)













LOSS BEFORE INCOME TAXES



         (7,237)



         (7,259)



(128,625)

PROVISION FOR INCOME TAXES


 

                 -


 

                 -


 

                 -













NET LOSS


$

         (7,237)

 

$

         (7,259)


$

     (128,625)













BASIC AND DILUTED LOSS PER SHARE


$

(0.00)


$

(0.00)
















BASIC AND DILUTED WEIGHTED AVERAGE









  NUMBER OF COMMON SHARES










  OUTSTANDING


 

11,625,000


 

11,625,000
















The accompanying notes are an integral part of these financial statements




EASTGATE ACQUISITIONS CORPORATION

(A Development Stage Company)

Statements of Cash Flows

(unaudited)












From












Inception on






 


September 8,






For the Three Months Ended


1999 Through






March 31,


March 31,






2012


2011


2012

OPERATING ACTIVITIES










Net loss


$

         (7,237)

 

$

 (7,259)


$

 (128,625)


Adjustments to reconcile net loss to net cash










  used by operating activities:











Expenses paid on the Company's behalf











  by a related party


          1,000



          1,020



60,590



Services contributed by shareholders


          1,500



          1,500



33,200


Changes in operating assets and liabilities:











Accrued interest - related party


          1,487



          1,339



18,677



Accounts payable

 

          3,250


 

          3,400


 

15,658

















Net Cash Used in












  Operating Activities

 

                 -


 

                 -


 

 (500)














INVESTING ACTIVITIES

 

                 -


 

                 -


 

                 -














FINANCING ACTIVITIES











Common stock issued for cash

 

 -


 

                 -


 

            500

















Net Cash Provided by












  Financing Activities

 

                 -


 

                 -


 

            500




 












NET DECREASE IN CASH


                 -

   

   

                 -

   

   

                 -
















CASH AT BEGINNING OF PERIOD

 

                 -


   

                 -


 

                 -
















CASH AT END OF PERIOD

$

                 -


$

                 -


$

                 -














SUPPLEMENTAL DISCLOSURES OF









 

CASH FLOW INFORMATION























CASH PAID FOR:











Interest


$

                 -


$

                 -


$

                 -



Income Taxes

$

                 -


$

                 -


$

                 -


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





NOTE 1 - CONDENSED FINANCIAL STATEMENTS


The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2012, and for all periods presented herein have been made.


Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2011 audited financial statements.  The results of operations for the periods ended March 31, 2012 and 2011 are not necessarily indicative of the operating results for the full years.


NOTE 2 - GOING CONCERN


The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.


In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.


The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.


         NOTE 3 SIGNIFICANT ACCOUNTING POLICIES


Use of Estimates


The preparation of financial statements in conformity with generally accepted accounting principles 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 and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.


Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company s financial position or statements.


       NOTE 4 - NOTES PAYABLE RELATED PARTY




The Company has recorded expenses paid on its behalf by shareholders as a related party payable. The note bears interest at 10 percent, is unsecured and is due and payable upon demand. The balance of this payable totaled $60,590 and $59,590 at March 31, 2012 and December 31, 2011, respectively.  The balance in interest accrued on the note totaled $18,677 and $17,190 as at March 31, 2012 and December 31, 2011, respectively.


During the three months ended March 31, 2012, Company shareholders performed services valued at $1,500 which have been recorded as a contribution to capital.


         NOTE 5 SIGNIFICANT EVENTS


The Company on January 15, 2012 it entered into a Patent Acquisition Agreement to acquire certain products, formulas, processes, proprietary technology and/or patents and patent applications related to pharmaceutical, nutraceutical, food supplements and consumer health products (collectively referred to as the  Products ).  In exchange for the acquired products and technology, the Company has agreed to issue at the closing to the seller, Anna Gluskin and/or her assigns, 10 million shares of the Company s authorized, but previously unissued common stock, post-split as discussed below.  The closing of the agreement is contingent upon realizing initial financing of $300,000.  The Company has not entered into any agreement or arrangement to secure the aforementioned funding and there can be no assurance that we will be able to raise the funds.


At the closing of the agreement, the seller will assign to the Company all rights, title and interests in the Products, free and clear of all liens, mortgages, pledges, security interests or other encumbrances.  Also as a condition to the closing, the seller will cause to be filed with the U.S. Patent and Trademark Office and any foreign patent office that is relevant to the Products, all documents and appropriate assignments to transfer and assign the Products and all proprietary rights and technology to the Company.


As a condition of the closing, the Company effected a forward stock split of its issued and outstanding shares of common stock on a 7.75 shares for one share basis.  Which  increased the outstanding shares 11,625,000 shares following the split.  All further references to outstanding common stock reflect the stock split on a retro-active basis.


In addition to the 10 million shares of common stock to be issued to the seller, the agreement provides that at the closing, the Company will issue 10 million shares of common stock to certain individuals in consideration for services rendered for and monies advanced to the Company.  Further, following the closing of the agreement, the Company will name at least two new directors to its board of directors, to be designated by the seller and the Company s current management.  It is also anticipated that the Company s name will be


NOTE 5 SIGNIFICANT EVENTS   (CONTINUED)


changed to a name selected by the board, which name will be intended to reflect the acquisition of Products and the anticipated new business endeavors. The agreement is subject to completion of due diligence and certain other usual conditions.  


         NOTE6 SUBSEQUENT EVENTS


In accordance with ASC 855 Company management reviewed all material events through the date of this report and determined that there are no material subsequent events to report.













Pro-forma Financial Statements


For the Years Ended December 31, 2011 & 2010


&


For the Quarter Ended


March 31, 2012






Notes to Unaudited Pro Forma Consolidated Financial Statements


On January 15, 2012, Eastgate Acquisitions Corporation, a Nevada corporation ( Eastgate ); and Anna Gluskin, who is the owner of certain patents, executed a Patent Acquisition Agreement (the Agreement ) by which Eastgate acquired certain products, formulas, processes, proprietary technology and/or patents and patent applications related to pharmaceutical, nutraceutical, food supplements and consumer health products (collectively referred to as the Products ).  In exchange for the acquired products and technology, Eastgate has agreed to issue at the closing to the seller, Anna Gluskin and/or her assigns, 10 million shares of Eastgate s authorized, but previously unissued common stock, post-split as discussed below.  The closing of the agreement is contingent upon realizing initial financing of $300,000.  


In addition to the 10 million shares of common stock to be issued to the seller, the agreement provides that at the closing, Eastgate will issue 10 million shares of common stock to certain individuals in consideration for services rendered for and monies advanced to Eastgate.  Further, following the closing of the agreement, Eastgate will name at least two new directors to its board of directors, to be designated by the seller and Eastgate s current management.  It is also anticipated that our corporate name will be changed to a name selected by the board, which name will be intended to reflect the acquisition of Products and our anticipated new business endeavors. The agreement is subject to completion of due diligence and certain other usual conditions.  


Pro forma adjustment [1] reflects the issuance of 10,000,000 shares of Eastgate common stock in exchange for the Products recorded at predecessor cost of $-0-.  Pro forma adjustment [2] reflects the issuance of 10,000,000 shares of Eastgate common stock in settlement of the liabilities of Eastgate.








EASTGATE ACQUISITIONS CORPORATION

Proforma Consolidated Balance Sheet

 December 31, 2011

 




Eastgate


 



 





Adjusted





Acquisitions


 


Combined


Pro Forma


Pro Forma





Corporation


 Patents


Totals


Adjustments


Totals

ASSETS
















CURRENT ASSETS

















Cash


$

                 -


$

                 -


$

                   -


$

                  -


$

                   -


Prepaid expenses



                 -



                 -



                   -



                  -



                   -


Inventory


 

                 -


 

                 -


 

                   -


 

                  -


 

                   -



Total Current Assets


 

                 -


 

                 -


 

                   -


 

                  -


 

                   -












   






   

OTHER ASSETS

















Patents



                 -



                 -



                   -



                  -



                   -



Total Other Assets


 

                 -


 

                 -


 

                   -


 

                  -


 

                   -

 


TOTAL ASSETS


$

                 -


$

                 -

 

$

                   -

 

$

                  -


$

                   -












   







LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)






   







CURRENT LIABILITIES









   








Accounts payable and accrued expenses


$

        12,408


$

                 -


$

          12,408


$

                  -


$

          12,408


Related party payable


 

        76,780


 

                 -


 

          76,780


 

         (76,780)


 

                   -



Total Current Liabilities


 

        89,188


 

                 -


 

          89,188


 

         (76,780)


 

          12,408



















LONG TERM LIABILITIES

















Loans and notes payable


 

                 -


 

                 -


 

                   -


 

                  -


 

                   -



Long term liabilities


 

                 -


 

                 -


 

                   -


 

                  -


 

                   -



TOTAL LIABILITIES


 

        89,188


 

                 -


 

          89,188

 

 

         (76,780)


 

          12,408












   







STOCKHOLDERS' EQUITY (DEFICIT)



   



   



   








Preferred stock



                 -



                 -



                   -



                  -



                   -


Common stock



             116



                 -



               116



              100



              316


Additional paid-in capital



        32,084



                 -



          32,084



             (100)



        108,664


Retained earnings (deficit)



     (121,388)



                 -



        (121,388)



                  -



       (121,388)



Total Stockholders' Equity (Deficit)


 

       (89,188)


 

                 -


 

         (89,188)


 

          76,780


 

         (12,408)



TOTAL LIABILITIES AND


















STOCKHOLDERS' EQUITY (DEFICIT)


$

                 -


$

                 -


$

                   -


$

                  -


$

                   -


EASTGATE ACQUISITIONS CORPORATION

Proforma Consolidated Statements of Operations

 December 31, 2011

















Pro-Forma





Eastgate


 








Adjusted





Acquisitions


 


Combined


Pro Forma


Combined





Corporation


Patents


Totals


Adjustments


Totals

REVENUES


$

                 -


$

                 -


$

                    -


$

                 -


$

                   -

COST OF SALES



                 -



                 -



                    -



                 -



                   -





 

 


 

 


 

   


 

 


 

   

GROSS PROFIT


 

                 -


 

                 -


 

                    -


 

                 -


 

                   -












   






   

OPERATING EXPENSES









   






   












   






   


General and administrative



23,943



                 -



23,943



                 -



23,943





 

 


 

 


 

   


 

 


 

   



Total Costs and Expenses


 

23,943


 

                 -


 

23,943


 

                 -


 

23,943












   






   



OPERATING LOSS


 

 (23,943)


 

                 -


 

 (23,943)


 

                 -


 

 (23,943)












   






    

OTHER INCOME (EXPENSE)









   






   












   






   


Interest expense


 

 (5,977)


 

                 -


 

 (5,977)


 

                 -


 

 (5,977)












   






   



Total Other Income (Expense)


 

 (5,977)


 

                 -


 

 (5,977)


 

                 -


 

 (5,977)





















LOSS BEFORE INCOME TAXES



 (29,920)



                 -



 (29,920)



                 -



 (29,920)



PROVISION FOR INCOME TAXES


 

                 -


 

                 -


 

                    -


 

                 -


 

                   -



















 


NET LOSS


$

 (29,920)


$

                 -


$

 (29,920)


$

                 -


$

 (29,920)



















BASIC AND DILUTED LOSS PER SHARE


$

(0.00)


$

0.00








$

(0.00)



















WEIGHTED AVERAGE SHARES OUTSTANDING


 

11,625,000


 

10,000,000





 

10,000,000


 

31,625,000




EASTGATE ACQUISITIONS CORPORATION

Proforma Consolidated Balance Sheet

March 31, 2012

 




Eastgate


 



 





Adjusted





Acquisitions


 


Combined


Pro Forma


Pro Forma





Corporation


Patents


Totals


Adjustments


Totals

ASSETS
















CURRENT ASSETS

















Cash


$

                  -


$

                 -


$

                   -


$

                  -


$

                 -


Inventory


 

                  -


 

                 -


 

                   -


 

                  -


 

                 -



Total Current Assets


 

                  -


 

                 -


 

                   -


 

                  -


 

                 -












   






   

OTHER ASSETS

















Patents



                  -



                 -



                   -



                  -



                 -



Total Other Assets


 

                  -


 

                 -


 

                   -


 

                  -


 

                 -

 


TOTAL ASSETS


$

                  -


$

                 -

 

$

                   -

 

$

                  -


$

                 -












   







LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)






   







CURRENT LIABILITIES









   








Accounts payable and accrued expenses


$

         15,658


$

                 -


$

          15,658


$

                  -


$

        15,658


Related party payable


 

         79,267


 

                 -


 

          79,267


 

         (79,267)


 

                 -



Total Current Liabilities


 

         94,925


 

                 -


 

          94,925


 

         (79,267)


 

        15,658



















LONG TERM LIABILITIES

















Loans and notes payable


 

                  -


 

                 -


 

                   -


 

                  -


 

                 -



Long term liabilities


 

                  -


 

                 -


 

                   -


 

                  -


 

                 -



TOTAL LIABILITIES


 

         94,925

 

 

                 -


 

          94,925

 

 

         (79,267)


 

        15,658












   







STOCKHOLDERS' EQUITY (DEFICIT)



   



   



   








Preferred stock



                  -



                 -



                   -



                  -



                 -


Common stock



              116



                 -



               116



              100



             316


Additional paid-in capital



         33,584



                 -



          33,584



             (100)



        33,484


Retained earnings (deficit)



      (128,625)



                 -



        (128,625)



                  -



      (128,625)



Total Stockholders' Equity (Deficit)


 

        (94,925)

 

 

                 -


 

         (94,925)


 

          79,267


 

       (15,658)







 





   









TOTAL LIABILITIES AND


















STOCKHOLDERS' EQUITY (DEFICIT)


$

                  -

 

$

                 -


$

                   -


$

                  -


$

                 -


EASTGATE ACQUISITIONS CORPORATION

Proforma Consolidated Statements of Operations

March 31, 2012

 

















Pro-Forma





Eastgate


 








Adjusted





Acquisitions


 


Combined


Pro Forma


Combined





Corporation


Patents


Totals


Adjustments


Totals

REVENUES


$

                 -


$

                 -


$

                 -


$

                 -


$

                 -

COST OF SALES



                 -



                 -



                 -



                 -



                 -





 

 


 

 


 

   


 

 


 

   

GROSS PROFIT


 

                 -


 

                 -


 

                 -


 

                 -


 

                 -












   






   

OPERATING EXPENSES









   






   












   






   


General and administrative



          5,750



                 -



          5,750



                 -



          5,750





 

 


 

 


 

   


 

 


 

   



Total Costs and Expenses


 

          5,750


 

                 -


 

          5,750


 

                 -


 

          5,750












   






   



OPERATING LOSS


 

 (5,750)


 

                 -


 

 (5,750)


 

                 -


 

 (5,750)












   






    

OTHER INCOME (EXPENSE)









   






   












   






   


Interest expense


 

 (1,487)


 

                 -


 

 (1,487)


 

                 -


 

 (1,487)












   






   



Total Other Income (Expense)


 

 (1,487)


 

                 -


 

 (1,487)


 

                 -


 

 (1,487)





















LOSS BEFORE INCOME TAXES



 (7,237)



                 -



 (7,237)



                 -



 (7,237)



PROVISION FOR INCOME TAXES


 

                 -


 

                 -


 

                 -


 

                 -


 

                 -



















 


NET LOSS


$

 (7,237)


$

                 -


$

 (7,237)


$

                 -


$

 (7,237)



















BASIC AND DILUTED LOSS PER SHARE


$

(0.00)


$

0.00








$

(0.00)



















WEIGHTED AVERAGE SHARES OUTSTANDING


 

11,625,000


 

10,000,000





 

10,000,000


 

31,625,000