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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Earth Search Sciences Inc (CE) | USOTC:ESSE | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0001 | 0.00 | 01:00:00 |
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
|
Nevada
|
870437723
|
|
(State or other jurisdiction of incorporation)
|
(I.R.S. Employer Identification No.)
|
|
306 Stoner Loop Road, #6, Lakeside, Montana
|
59922
|
|
(Address of principal executive offices)
|
(Zip code)
|
o
Large accelerated filer
|
o
Accelerated filer
|
o
Non-accelerated filer
|
þ
Smaller reporting company
|
PART I
|
4
|
|
Item 1 -
|
Business |
4
|
Item 1A
|
Unresolved Staff Comments
|
5
|
Item 2 -
|
Properties
|
5
|
Item 3 -
|
Legal Proceedings
|
5
|
Item 4 -
|
Submission of Matters to a Vote of Security Holders
|
5
|
PART II
|
6
|
|
Item 5 -
|
Market for the Registrant's Common Stock Equity and Related Shareholder Matters
|
6
|
Item 7 -
|
Management's Discussion and Analysis or Plan of Operations
|
8
|
Item 8 -
|
Financial Statements
|
F-1
|
Item 9 -
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
10
|
Item 9A(T)
|
Controls and Procedures
|
10
|
Item 9B -
|
Other Information
|
11
|
PART III
|
12
|
|
Item 10 -
|
Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance With Section 16(a) of the Exchange Act
|
12
|
Item 11 -
|
Executive Compensation
|
13
|
Item 12 -
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
14
|
Item 13 -
|
Certain Relationships and Related Transactions, and Director Independence
|
14
|
Item 14 -
|
Principal Accountant Fee and Services
|
14
|
Item 15 -
|
Exhibits, Financial Statement Schedules
|
15
|
SIGNATURES
|
18
|
(a)
|
Principal Market or Markets. The Company's common stock trades on the OTC Bulletin Board under the symbol “ESSE”. The range of reported high and low bid quotations for the Company’s common stock, as set forth below, reflect interdealer bid prices, without retail markups, markdowns, commissions, or adjustments as reported in on the OTCBB and do not represent actual transactions.
|
(b)
|
Approximate Number of Holders of Common Stock. The number of record owners of the Company's $.001 par value common stock at March 31, 2014 was approximately 1,261. This does not include shareholders that hold stock in their accounts at brokers/dealers.
|
|
(c)
|
Dividends. Holders of the Company’s common stock are entitled to receive such dividends as may be declared by the Company's Board of Directors. No dividends have been paid with respect to the Company's common stock and no dividends are anticipated to be paid in the foreseeable future.
|
|
(d)
|
In the last three years, the Company has made the following sales of unregistered securities, all of which sales were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) or as otherwise indicated:
|
Date
|
Amount of Securities Sold
|
Price per Share ($)
|
Total Cash Proceeds ($)
|
Date
|
Amount of Securities Sold
|
Price per Share ($)
|
Total Cash Proceeds ($)
|
||||||||||
5/9/2008
|
1,694,418
|
$0.08
|
$128,868
|
(6)
|
5/12/2008
|
14,472
|
$0.08
|
$1,101
|
(6)
|
||||||||
5/12/2008
|
582,770
|
$0.05
|
$29,131
|
(1)
|
6/10/2008
|
3,000,000
|
$0.03
|
$95,000
|
(4)
|
||||||||
6/11/2008
|
5,000,000
|
$0.05
|
$250,000
|
(4)
|
6/19/2008
|
2,841,667
|
$0.06
|
$170,500
|
(1)
|
||||||||
7/7/2008
|
7,500,000
|
$0.04
|
$300,000
|
(4)
|
7/7/2008
|
2,000,000
|
$0.06
|
$120,000
|
(1)
|
||||||||
7/14/2008
|
368,228
|
$0.08
|
$27,617
|
(1)
|
7/14/2008
|
1,250,000
|
$0.04
|
$50,000
|
(4)
|
||||||||
7/22/2008
|
350,877
|
$0.05
|
$17,544
|
(6)
|
7/22/2008
|
400,001
|
$0.06
|
$24,800
|
(6)
|
||||||||
7/29/2008
|
6,779,999
|
$0.08
|
$508,500
|
(4)
|
8/8/2008
|
625,000
|
$0.09
|
$56,250
|
(1)
|
||||||||
8/8/2008
|
1,200,000
|
$0.05
|
$60,000
|
(4)
|
8/15/2008
|
34,753,788
|
$0.09
|
$3,127,841
|
(5)
|
||||||||
9/26/2008
|
229,906
|
$0.06
|
$14,254
|
(6)
|
9/26/2008
|
2,463,672
|
$0.07
|
$172,457
|
(1)
|
||||||||
10/6/2008
|
1,397,773
|
$0.06
|
$83,866
|
(1)
|
11/5/2008
|
2,608,844
|
$0.03
|
$78,265
|
(1)
|
||||||||
12/10/2008
|
2,160,087
|
$0.02
|
$45,362
|
(1)
|
12/10/20088
|
312,504
|
$0.06
|
$19,375
|
(6)
|
||||||||
12/10/2008
|
759,230
|
$0.05
|
$34,925
|
(6)
|
2/10/2009
|
6,000,000
|
$0.01
|
$72,000
|
(1)
|
||||||||
9/30/2009
|
350,000
|
$0.02
|
$7,000
|
(1)
|
8/24/2009
|
350,000
|
$0.02
|
$7,000
|
(1)
|
||||||||
11/5/2009
|
4,482,188
|
$0.02
|
$89,644
|
(1)
|
4/7/2010
|
1,200,000
|
$0.05
|
$54,000
|
(3)
|
||||||||
5/26/2011
|
500,000
|
$0.04
|
$20,000
|
(1)
|
5/26/2011
|
500,000
|
$0.04
|
$20,000
|
(1)
|
||||||||
3/27/2012
|
250,000
|
$0.02
|
$5,000
|
(1)
|
3/27/2012
|
10,000,000
|
$0.02
|
$200,000
|
(2)
|
||||||||
3/27/2012
|
400,000
|
$0.02
|
$8,000
|
(3)
|
3/27/2012
|
400,000
|
$0.02
|
$8,000
|
(3)
|
||||||||
4/9/2012
|
416,667
|
$0.06
|
$25,000
|
(4)
|
8/1/2012
|
250,000
|
$0.06
|
$15,000
|
(4)
|
||||||||
12/30/2012
|
500,000
|
$0.06
|
$30,000
|
(4)
|
8/15/13
|
3,000,000
|
$0.01
|
$40,000
|
(4)
|
||||||||
9/26/2013
|
10,000,000
|
$0.00
|
$40,000
|
(1)
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
|
||||
Plan category
|
(a)
|
(b)
|
(c)
|
|||
Equity compensation plans approved by security holders
|
-
|
-
|
-
|
|||
Equity compensation plans not approved by security holders
|
-
|
-
|
9,244,555
|
|||
Total
|
-
|
-
|
9,244,555
|
Consolidated Balance Sheets as of March 31, 2014 and 2013
|
F-2
|
Consolidated Statements of Operations for the years ended March 31, 2014 and 2013
|
F-3
|
Consolidated Statement of Changes in Stockholders’ Deficit for the years ended March 31, 2014 and 2014
|
F-4
|
Consolidated Statements of Cash Flows for the years ended March 31, 2014 and 2013
|
F-5
|
Notes to consolidated financial statements
|
F-6 – F-11
|
March 31,
|
||||||||
2014
|
2013
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash
|
$ | 224,785 | $ | 22,588 | ||||
Investments
|
- | - | ||||||
Prepaid expenses
|
- | 6,667 | ||||||
Loan costs, net of accumulated amortization of $269,056 and $266,691, respectively
|
- | 2,365 | ||||||
Total current assets
|
224,785 | 31,620 | ||||||
Intangible asset – patents
|
- | - | ||||||
TOTAL ASSETS
|
$ | 224,785 | $ | 31,620 | ||||
LIABILITIES
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,234,535 | $ | 1,318,894 | ||||
Accounts payable – related parties
|
410,511 | 410,511 | ||||||
Accrued expenses
|
6,846,758 | 6,637,877 | ||||||
Current portion of notes payable
|
2,253,440 | 1,628,440 | ||||||
Current portion of convertible notes payable, net of discount of $0 and $5,613 respectively
|
2,688,000 | 2,682,387 | ||||||
Settlement obligation
|
8,686,824 | 8,686,824 | ||||||
Derivative liability
|
- | 34,200 | ||||||
Current portion of notes payable – related parties
|
836,947 | 836,947 | ||||||
Total current liabilities
|
22,957,014 | 22,236,080 | ||||||
Convertible notes payable, net of discount of $0 and $123,437 respectively
|
65,000 | - | ||||||
Total liabilities
|
$ | 23,022,014 | $ | 22,236,080 | ||||
Commitments and contingencies
|
- | - | ||||||
STOCKHOLDERS’ DEFICIT
|
||||||||
Preferred stock, 300,000,000 shares authorized; $.001 par value, 31,250,000 issued and outstanding, respectively
|
31,250 | 31,250 | ||||||
Common stock, $.001 par value; 300,000,000 shares authorized; 226,907,393 and 213,907,393 shares issued and outstanding, respectively
|
226,907 | 213,907 | ||||||
Additional paid-in capital
|
56,484,847 | 56,417,847 | ||||||
Non controlling interests
|
10,022 | 14,223 | ||||||
Treasury stock
|
(200,000 | ) | (200,000 | ) | ||||
Accumulated deficit
|
(79,350,256 | ) | (78,681,687 | ) | ||||
Total stockholders’ deficit
|
(22,797,229 | ) | (22,204,460 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$ | 224,785 | $ | 31,620 |
Years Ended March 31,
|
||||||||
2014
|
2013
|
|||||||
Operating expenses
|
||||||||
General and administrative
|
$ | 685,362 | $ | 745,673 | ||||
Impairment loss
|
- | - | ||||||
Total expenses
|
(685,362 | ) | (745,673 | ) | ||||
Other income (expense)
|
||||||||
Gain on change in market value of embedded derivative
|
34,200 | 108,441 | ||||||
Gain on write off of liabilities
|
401,687 | - | ||||||
Interest expense
|
(423,191 | ) | (442,441 | ) | ||||
Total other income (expense)
|
12,696 | (334,000 | ) | |||||
Net Loss
|
$ | (672,769 | ) | $ | (1,079,673 | ) | ||
Loss Attributable to Non-controlling interest
|
4,200 | 1,712 | ||||||
Net loss attributable to parent company
|
(668,569 | ) | (1,077,961 | ) | ||||
Basic and diluted:
|
||||||||
Loss per share
|
$ | (0.00 | ) | $ | (0.01 | ) | ||
Weighted average common shares outstanding
|
226,904,558 | 213,404,558 |
Preferred
Stock
|
Stock
Amount
|
Common
Shares
|
Stock
Amount
|
Additional
Paid-in
Capital
|
Treasury
Stock
|
Non Controlling Interests
|
Accumulated
Deficit
|
Total
|
||||||||||||||||||||||||||||
Balances at March 31, 2012
|
31,250,000 | $ | 31,250 | 212,737,893 | $ | 212,737 | $ | 56,349,017 | (200,000 | ) | 14,223 | (77,602,014 | ) | (21,194,787 | ) | |||||||||||||||||||||
Issuance of common stock for cash
|
1,169,500 | 1,170 | 68,830 | 70,000 | ||||||||||||||||||||||||||||||||
Net loss
|
(1,712 | ) | (1,077,961 | ) | (1,079,673 | ) | ||||||||||||||||||||||||||||||
Balances at March 31, 2013
|
31,250,000 | $ | 31,250 | 213,907,393 | $ | 213,907 | $ | 56,417,847 | (200,000 | ) | 14,223 | (78,681,687 | ) | (22,204,460 | ) | |||||||||||||||||||||
Issuance of common stock for cash
|
13,000,000 | 13,000 | 67,000 | 80,000 | ||||||||||||||||||||||||||||||||
Net loss
|
(4,200 | ) | (668,569 | ) | (672,666 | ) | ||||||||||||||||||||||||||||||
Balances at March 31, 2014
|
31,250,000 | $ | 31,250 | 226,907,393 | $ | 226,907 | $ | 56,349,017 | (200,000 | ) | 10.023 | (79,350,256 | ) | (22,797,229 | ) |
2014
|
2013
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$ | (668,569 | ) | $ | (1,079,673 | ) | ||
Adjustments to reconcile net loss to cash used in operating activities:
|
||||||||
Depreciation and amortization
|
- | - | ||||||
Amortization of deferred finance costs
|
2,171 | 2,171 | ||||||
Imputed interest
|
||||||||
Amortization of debt discount
|
5,613 | 213,502 | ||||||
Change in fair value of embedded derivative
|
(34,200 | ) | (108,441 | ) | ||||
Common stock issued for services
|
80,000 | 70,000 | ||||||
Unrealized (gain) loss on investment
|
- | - | ||||||
Impairment Loss
|
(401,687 | ) | - | |||||
Changes in assets and liabilities:
|
||||||||
Accrued interest – related party
|
87,175 | 87,175 | ||||||
Accounts payable and accrued expenses
|
434,833 | 697,967 | ||||||
Accounts payable – related party
|
- | - | ||||||
Prepaid and other current assets
|
6,861 | - | ||||||
NET CASH USED IN OPERATING ACTIVITIES
|
(487,804 | ) | (117,299 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchase of investment
|
- | - | ||||||
NET CASH USED IN INVESTING ACTIVITIES
|
- | - | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Payment on stockholder loans
|
- | (7,501 | ) | |||||
Proceeds from issuance of convertible notes of General Synfuels International, Inc.
|
625,000 | - | ||||||
Proceeds from issuance of convertible notes
|
65,000 | - | ||||||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
690,000 | (7,501 | ) | |||||
NET CHANGE IN CASH
|
202,197 | (124,801 | ) | |||||
CASH AT BEGINNING OF PERIOD
|
22,588 | 147,389 | ||||||
CASH AT END OF PERIOD
|
$ | 224,785 | $ | 22,588 | ||||
SUPPLEMENTAL CASH FLOW INFORMATION:
|
||||||||
Interest paid
|
$ | 138,600 | $ | - | ||||
Taxes paid
|
- | - | ||||||
Non-cash financing and investing activities:
|
||||||||
Related party debt and accrued interest converted to common stock
|
$ | - | $ | - | ||||
Related party debt paid by Silver coins
|
$ | - | $ | - | ||||
Discount on notes payable from derivative liabilities
|
$ | - | $ | - |
2014
|
2013
|
|||||
Installment note payable, secured by our assets, interest at 15% - in default
|
$ | 687,533 | $ | 687,533 | ||
Installment note payable, no security, interest at 15% - in default
|
298,907 | 298,907 | ||||
GSI promissory notes, no security, interest at 10%, - in default
|
1,354,000 | 640,000 | ||||
Advance
|
- | - | ||||
Other
|
2,000 | 2,000 | ||||
Total
|
$ | 2,342,440 | $ | 1,628,440 |
2014
|
2013
|
|||||||
Current portion of convertible notes payable, net of discount of $0 and $5,613 respectively
|
$ | 2,753,000 | $ | 2,747,387 | ||||
Total
|
$ | 2,753,000 | $ | 2,747,387 |
Deferred tax assets:
|
||||
Net operating losses
|
$
|
10,030,525
|
||
Less: valuation allowance
|
(10,030,525
|
)
|
||
Net deferred tax asset
|
$
|
-
|
Deferred tax assets:
|
||||
Net operating losses
|
$
|
10,555,255
|
||
Less: valuation allowance
|
(10,555,255
|
)
|
||
Net deferred tax asset
|
$
|
-
|
·
|
The Company received cash from the issuance of common stock. The Company issued 3,000,000 shares of common stock at $0.01 per share for a total of $40,000.
|
|
10,000,000 shares of stock for services valued at $40,000 using the grant-date quoted price of the stock. The 10,000,000 shares vest immediately and therefore $40,000 was expensed during the period.
|
·
|
The Company received cash from the issuance of common stock. The Company issued 1,169,500 shares of common stock at $0.06 per share for a total of $70,000.
|
Liabilities Measured at Fair Value on a Recurring Basis | March 31, 2014 | |||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||
Derivative liabilities
|
$ | 0 | $ | 0 | ||||||
March 31, 2013
|
||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||
Derivative liabilities
|
$ | 34,200 | $ | 34,200 | ||||||
-
|
There is an over-reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transactions.
|
|
-
|
There is a lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.
|
o
|
Financial statements closing process – There was a material weakness in the process of closing and consolidating our financial statements which resulted from the fact that the work of processing the trial balance, evaluating and implementing accounting policies and practices, and drafting the consolidated financial statements and related footnotes is performed by consultants and not reviewed by qualified accountant within our company.
|
o
|
Hire a qualified accounting staff to manage, review and verify the day-to-day accounting and the financial statement close process.
|
|
o
|
Improving the control and oversight of the duties relating to the systems we use in the evaluation and processing of certain accounts and areas in the posting and recording of journal entries into certain accounts. This improvement should include reviews by management of the accounting processes as well as a reorganization of some of the accounting functions.
|
o
|
The segregation of duties relating to the processing of accounts and the recording of journal entries into certain accounts.
|
Name
|
Position
|
Larry F. Vance
|
Chairman & Chief Executive Officer/Director
|
(1)
|
Effective December, 2009, Mr. Larry Vance became Chief Executive Officer of the Company.
|
Name and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Total Compensation ($)
|
|||||
Larry Vance
Chief Executive Officer
|
2014
2013
|
200,000(1)
200,000(1)
|
0
0
|
0
0
|
200,000
200,000
|
(1)
|
The entire amount of Mr. Vance’s salary was accrued during the fiscal years 2014 and 2013.
|
Name and address of beneficial owner
|
Amount and nature of beneficial ownership (1)
|
Percent of class
|
||
Larry Vance
|
65,870,863 (2)
|
100 %
|
||
P.O. Box 763
|
||||
Lakeside, MT 59922
|
||||
All directors and officers
|
65,870,863
|
100%
|
Fiscal 2014
|
Fiscal 2013
|
|||||||
Audit Fees (1)
|
$
|
0
|
$
|
7,500
|
||||
Audit Related Fees
|
$
|
-
|
$
|
-
|
||||
Tax Fees
|
$
|
-
|
$
|
-
|
||||
All Other Fees
|
$
|
-
|
$
|
-
|
||||
Total
|
$
|
0
|
$
|
7,500
|
Consolidated Balance Sheets as of March 31, 2014 and 2013
|
F-3
|
Consolidated Statements of Operations for the years ended March 31, 2014 and 2013
|
F-4
|
Consolidated Statement of Changes in Stockholders’ Deficit for the years ended March 31, 2014 and 2013
|
F-5
|
Consolidated Statements of Cash Flows for the years ended March 31, 2014 and 2013
|
F-6
|
Notes to consolidated financial statements
|
F-7 – F-12
|
2.1
|
Agreement and Plan of Merger by and among Earth Search Sciences, Inc., ESS Acquisition Corp., Space Technology Development Corporation and the shareholders of Space Technology Development Corporation, dated December 21, 1999 (Incorporated by reference to Exhibit 2.1 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).
|
3.1
|
Articles of Incorporation, as amended (Incorporated by reference to Exhibit 3.1 to the Registrant's Forms 10-K for the fiscal years ended March 31, 1995 and March 31, 1996).
|
3.2
|
Bylaws (Incorporated by reference to Exhibit 3.2 to the Registrants’ Form 10-K for the fiscal year ended March 31, 1995).
|
4.1
|
2007 Stock Compensation Plan (Incorporated by reference to Exhibit 4.1 to the Registrants’ Form S-8 Registration No. 333-146798 filed on October 18, 2007 ).
|
10.1
|
Memorandum of Understanding between the Registrant and Applied Signal and Imaging Technology, Inc. dated May 27, 1996 (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-K for fiscal year ended March 31, 1996).
|
10.2
|
Contract of Sale and Leaseback dated June 10, 1997 between Registrant and Accuprobe, Inc. (Incorporated by reference to Exhibit 10.2 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).
|
10.3
|
Operating Agreement of ESSI Probe 1 LC, dated June 3, 1997 (Incorporated by reference to Exhibit 10.3 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).
|
10.4
|
Hyperspectral Technology License Agreement between Earth Search Sciences, Inc. and Noranda Mining and Exploration, Inc. made as of December 16, 1997 (Incorporated by reference to the Registrant’s for 8-K filed on February 6, 1998).
|
10.5
|
Agreement between the Office of Naval Research and Space Technology Development Corporation Agreement for NAVY EARTHMAP OBSERVER (NEMO) dated December 10, 1997 (Incorporated by reference to Exhibit 10.5 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).
|
10.6
|
Sales Contract between Science Applications International Corp. and Space Technology Development Corp. Dated: 30 March 1998, Contract No.: STDC-98-NEMO-0003 (Incorporated by reference to Exhibit 10.6 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).
|
10.7
|
Sales Contract between Science Applications International Corp. and Space Technology Development Corp. Dated: 30 March 1998, Contract No.: STDC-98-NEMO-004 (Incorporated by reference to Exhibit 10.7 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).
|
31.1
|
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, filed herewith
|
32.1
|
Certification of Chief Executive Officer Pursuant to 18 U.S.C Section 1350, filed herewith
|
EARTH SEARCH SCIENCES, INC.
|
|
By: /s/
Larry Vance
|
|
Larry Vance
|
|
Chief Executive Officer
|
|
Date: July 16, 2014
|
Signature
|
Title
|
/s/
Larry Vance
|
Chief Executive Officer and Director
|
Larry Vance
|
(Principal Executive Officer)
|
Date: July 16, 2014
|
1 Year Earth Search Sciences (CE) Chart |
1 Month Earth Search Sciences (CE) Chart |
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