ECO SCIENCE SOLUTIONS, INC. Forward Looking Statements
This quarterly report contains forward-looking statements. These statements relate to future events or the Company's future financial performance. In some cases, forward-looking statements can be identified by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors" that may cause the Company's or its industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, it cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of
The Company's unaudited financial statements are stated in
The following discussion contains forward-looking statements that reflect the Company's plans, estimates and beliefs. The Company's actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to those discussed below and elsewhere in this quarterly report. All adjustments necessary for a fair statement of the results for the interim periods have been made, and all adjustments are of a normal recurring nature.
In this quarterly report, unless otherwise specified, all dollar amounts are
expressed in
As used in this quarterly report, the terms "we", "us", "our" and "ESSI" mean
Description of Business
The Company was incorporated in the state of
With headquarters in
Cultivators, Processors, Manufacturers, Labs, Distributors, Transporters, Dispensaries, Retailers and Regulators, from seed-to-CPA are all target users of Herbo.
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Headquartered in
Current business overview
Our business operations commenced generating modest revenues subsequent to our
fiscal year ended
During fiscal 2020 the Company and
Results of Operations
Comparison of the three months ended
The following summary of the Company's results of operations should be read in
conjunction with the Company's unaudited consolidated financial statements for
the three months ended
For the Three Months
Ended October 31,
2020 2019
Revenue $ 12,732 $ 9,194
Revenue, related parties 2,697 4,197
Total revenue 15,429 13,391
Operating expenses:
Cost of revenue 12,625 17,754
Depreciation 193 1,106
Legal, accounting and audit fees 42,784 69,139
Management and consulting fees 214,122 75,541
Research, development, and promotion 36,892 66,468
Office supplies and other general expenses 7,692 19,655
Advertising and marketing 1,810 10,599
Total operating expenses 316,118 260,262
Net operating loss (300,689 ) (246,871 )
Other income (expenses)
Interest income - 3,000
Interest expense (64,723 ) (63,204 )
Other expense (506,502 ) (127,833 )
Total other income (expense) (571,225 ) (434,908 )
Net loss $ (871,914 ) $ (434,908 )
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Revenue
During the three months ended
Cost of Revenue
Costs of revenue consist of the direct expenses incurred to generate revenue,
including fees and commissions payable. Such costs are recorded as incurred.
During the three months ended
General and Administrative Expenses
For the three Months
Ended October 31,
2020 2019 Variances
Operating expenses:
Cost of revenue $ 12,625 $ 17,754 $ (5,129 )
Depreciation 193 1,106 (913 )
Legal, accounting and audit fees 42,784 69,139 (26,355 )
Management and consulting fees 214,122 75,541 138,581
Research, development, and promotion 36,892 66,468 (29,576 )
Office supplies and other general expenses 7,692 19,655 (11,963 )
Advertising and marketing 1,810 10,599 (8,789 )
Total operating expenses $ 316,118 $ 260,262 $ 55,856 General and administrative expenses during the three-month period ended
Legal, accounting and audit fees incurred in the three-month period ended
The Company increased its operating expenses by
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The Company recorded interest expense of
The Company recorded other expenses during the three month period ended
The net loss in the comparative three-month periods ended
Comparison of the nine months ended
The following summary of the Company's results of operations should be read in
conjunction with the Company's unaudited consolidated financial statements for
the nine months ended
For the Nine Months
Ended October 31,
2020 2019
Revenue $ 44,991 $ 9,194
Revenue, related parties 8,091 4,197
Total revenue 53,082 13,391
Operating expenses:
Cost of revenue 39,269 17,754
Depreciation 1,741 3,317
Legal, accounting and audit fees 108,021 207,089
Management and consulting fees 372,123 643,541
Research, development, and promotion 108,413 86,232
Office supplies and other general expenses 23,864 81,611
Advertising and marketing 5,050 38,502
Total operating expenses 658,481 1,078,046
Net operating loss (605,399 ) (1,064,655 )
Other income (expenses)
Interest income - 9,000
Interest expense (191,926 ) (186,308 )
Total other income (expense) (506,502 ) (127,833 )
Total other incomes (expense) (698,428 ) (305,141 )
Net loss $ (1,303,827 ) $ (1,369,796 )
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Revenue
During the nine months ended
Cost of Revenue
Costs of revenue consist of the direct expenses incurred to generate revenue,
including fees and commissions payable. Such costs are recorded as incurred.
During the nine months ended
General and Administrative Expenses
For the Nine Months
Ended October 31,
2020 2019 Variances
Operating expenses:
Cost of revenue $ 39,269 $ 17,754 $ 21,515
Depreciation 1,741 3,317 (1,576 )
Legal, accounting and audit fees 108,021 207,089 (99,068 )
Management and consulting fees 372,123 643,541 (271,418 )
Research, development, and promotion 108,413 86,232 22,181
Office supplies and other general expenses 23,864 81,611 (57,747 )
Advertising and marketing 5,050 38,502 (33,452 )
Total operating expenses $ 658,481 $ 1,078,046 $ (419,565 ) General and administrative expenses during the nine-month period ended
The Company reduced its operating expenses by
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The Company recorded interest expense of
The Company recorded other expenses during the three month period ended
The net loss in the comparative nine-month periods ended
Plan of Operation
The Company changed the focus of its business at the close of fiscal 2016 to
operate in the ecofriendly technology sector using social media sites and
offering apps to generate advertising revenues and download fees. During fiscal
2017 the Company laid the groundwork for income generation from these services
by investing in ongoing development of its applications, websites and visibility
in both the local and global market. The Company has invested heavily in
advertising and research and development to allow its applications and ecommerce
website visibility on a global stage. During fiscal 2018 we further added to our
business portfolio with the acquisition of Ga-Du corporation and the entry into
a licensing and marketing agreement that should see the Company generating
revenues in fiscal 2019. During fiscal 2019, the Company licensed the
Future funding could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect the Company's business, results of operations and financial condition. Any future funding might require the Company to obtain additional equity or debt financing, which might not be available on terms favorable to the Company, or at all, and such financing, if available, might be dilutive.
Going Concern
These unaudited condensed consolidated financial statements have been prepared
on a going concern basis, which implies that the Company will continue to
realize its assets and discharge its liabilities in the normal course of
business. The Company has not generated significant revenues to date and has
never paid any dividends and is unlikely to pay dividends or generate
significant earnings in the immediate or foreseeable future. As at
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The recent COVID-19 pandemic could have an adverse impact on the Company going forward. COVID-19 has caused significant disruptions to the global financial markets, which may severely impact the Company's ability to raise additional capital and to pursue certain planned business activities. The Company may be required to cease operations if it is unable to finance its' operations. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report and is highly uncertain and subject to change. Management is actively monitoring the situation but given the daily evolution of the COVID-19 outbreak, the Company is not able to estimate the effects of the COVID-19 outbreak on its operations or financial condition in the next 12 months. There are no assurances that the Company will be able to meet its obligations, raise funds or continue to implement its planned business objectives to obtain profitable operations.
The unaudited consolidated financial statements reflect all adjustments consisting of normal recurring adjustments, which, in the opinion of management, are necessary for a fair presentation of the results for the periods shown. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Liquidity and Capital Resources
As of
Cash flows from operating activities
During the nine months ended
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Cash flows from investing activities
During the three months ended
Cash flows from financing activities
During the nine months ended
Future Financings
We anticipate continuing to rely on related party and third-party loans and equity sales of our common shares and/or shares for services rendered in order to continue to fund our business operations in the event of ongoing operational shortfalls. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any of additional sales of our equity securities or arrange for debt or other financing to fund our research and development activities.
Contractual Obligations
The Company is a smaller reporting Company as defined by Rule 12b-2 of the Securities Act of 1934 and we are not required to provide the information under this item.
Off-Balance Sheet Arrangements
The Company has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.
Critical Accounting Policies
The preparation of our condensed consolidated financial statements and notes
thereto requires management to make estimates and assumptions that affect the
amounts and disclosures reported within those financial statements. On an
ongoing basis, management evaluates its estimates, including those related to
revenue recognition, contingencies, litigation and income taxes. Management
bases its estimates and judgments on historical experiences and on various other
factors believed to be reasonable under the circumstances. Actual results under
circumstances and conditions different than those assumed could result in
differences from the estimated amounts in the financial statements. There have
been no material changes to these policies during the nine months ended
Recently issued accounting pronouncements
The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements will have a material impact on its financial condition or the results of its operations.
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