ECO SCIENCE SOLUTIONS, INC. - Annual Report: 2015 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended January 31, 2015

o  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES 

 EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

Commission file number 000-54803

ECO SCIENCE SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

The aggregate market value of Common Stock held by non-affiliates of the Registrant as of July 31, 2014 was $4,076,958 based on a closing price of $0.48 for the Common Stock on July 31, 2014, the closest available date to last business day of the Registrant’s most recently completed second fiscal quarter. For purposes of this computation, all executive officers and directors have been deemed to be affiliates. Such determination should not be deemed to be an admission that such executive officers and directors are, in fact, affiliates of the Registrant.

Indicate the number of shares outstanding of each of the registrant’s

classes of common stock as of the latest practicable date.

30,893,001 Common Shares issued and outstanding as of April 1, 2014

DOCUMENTS INCORPORATED BY REFERENCE: None

1

PART I

This annual report contains forward-looking statements. These statements relate to future events or the Company’s future financial performance, and include statements made by the Company regarding product development and obtaining FDA clearances. 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 United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

The Company’s financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles.

In this annual report, unless otherwise specified, all dollar amounts are expressed in United States Dollars and all references to “common shares” refer to the common shares in the Company’s capital stock.

As used in this annual report, the terms "we", "us", "our" and "ESSI" mean Eco Science Solutions, Inc., unless otherwise indicated.

Corporate Overview

The Company’s principal executive office is located at 3250 NE 1^st Avenue, Suite 305, Miami, FL. The Company’s telephone number is 305-460-2259.   The Company’s website is www.ecosciencesolutions.com.

The Company’s common stock is traded on the OTC Bulletin Board and the OTCQB under the symbol “ESSI”.

Corporate History

Formation and Development

The Company was incorporated in the state of Nevada on December 8, 2009, under the name Pristine Solutions, Inc. The Company’s wholly owned subsidiary, Pristine Solutions Limited, was incorporated under the laws of Jamaica. The Company’s original business plan focused on developing a network of sales points for the sale and service of tankless water heaters in Jamaica, through Pristine Solutions Limited. The Company’s aim was to become the first tankless water heater company specializing in tankless-only products to enter the Jamaican market, and the only company in the Jamaican market offering solar-powered tankless water heater products.  As part of its plan, on December 30, 2009, the Company entered into a distribution agreement with Zhongshan Guangsheng Industry Co., Ltd., of China (“Zhongshan”), the manufacturer of the tankless water heaters.   Zhongshan manufactures the tankless water heaters under the brand Gleamous Electric Appliances. 

On August 22, 2012, Christine Buchanan-McKenzie, the Company’s former President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and a member of the Board of Directors, resigned from all positions with the Company.   The resignation did not involve any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. On the same day, Mr. Michael Borkowski was appointed as President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and the sole member of the Board of Directors of the Company.

On August 23, 2012, the Company and its controlling stockholders entered into a Share Exchange Agreement (the “Share Exchange”) with Eaton Scientific Systems, Ltd., a Nevada corporation (“ESSL”) and the shareholders of ESSL (the “ESSL Shareholders”), whereby the Company acquired 25,000,000 shares of common stock (100%) of ESSL (the “ESSL Stock”) from the ESSL Shareholders.   In exchange for the ESSL Stock, the Company issued 25,000,000 shares of its common stock to the ESSL Shareholders.  In addition, the Company’s Chief Executive Officer, Mr. Michael J. Borkowski, on behalf of the Company, entered into a Common Stock Purchase Agreement with the Company’s controlling shareholder, and former President, Ms. Christine Buchanan-McKenzie, whereby the Company would purchase one hundred percent (100%), or 240,000,000 shares, of the Company’s common shares owned by Mrs. Buchanan-McKenzie, at par value $.0001, and representing approximately 54.1% of the Company’s total issued and outstanding shares.  The Common Stock Purchase Agreement, and subsequent transaction closing, was completed on October 22, 2012.  On October 23, 2012, the Common Stock Purchase Agreement was finalized, and a change in control of the Company took place.

In conjunction with the Share Exchange and Common Stock Purchase Agreement, the total shares held by the ESSL Shareholders are 265,000,000, or approximately 59.8% of the issued and outstanding common stock of the Company as of October 30, 2012.  Certain ESSL shareholders owning a total of 135,779,375 shares of the Company’s common stock, representing approximately 30.64% of the issued and outstanding common stock of the Company, entered into three (3) separate twenty-four (24) month Lock-Up Agreements.  As a result of the Share Exchange and Common Stock Purchase Agreement, (i) there was a change in control of the Registrant; (ii) ESSL became the Company’s wholly owned subsidiary; (iii) the ESSL became the Company’s primary business, and (iv) on November 27, 2012, the Company changed its name to Eaton Scientific Systems, Inc.

In October, 2013, the Company’s Management was introduced to Domenic Marciano (“Marciano”).  Marciano represented that he intended to acquire an exclusive license to a unique automotive product, the EcoFlora Spark Plug (the “EcoFlora Plug”), with a proprietary technology, and that the EcoFlora Plug  has the potential to be uniquely positioned in the automotive parts business in the United States and International automotive parts marketplace.

The Majority Shareholders acknowledge that the Company has not been able to attract investment capital sufficient to execute its business plan because of its Share price.  Further, Management believes that the potential success of the EcoFlora Plug technology could potentially provide value to the Company and its shareholders. As a result, on November 26, 2013, the Company and its Majority Shareholders (the “Majority Stockholders”) entered into an Agreement for the Purchase of Common Stock (the “Stock Purchase Agreement”) with Marciano whereby Marciano acquired 227,370,000 shares of the Company’s common stock from the Majority Stockholders at par value $.0001, representing approximately 51.3% of the Company’s total issued and outstanding shares, in exchange for cash in the amount of $22,737 (the “Cash Proceeds”).  The Stock Purchase Agreement, and subsequent transaction closing, was completed on November 26, 2013, and a change in control of the Company took place.

The Majority Shareholders and the Company’s Management also believe it is in the best interest of the Company’s Shareholders to operate Eaton Scientific Systems, Ltd. (“Eaton Sub”) a Nevada corporation and wholly owned subsidiary of the Company, as a privately held Company, until such time where it is sufficiently capitalized to increase the probability for its Clinical Trials of Homatropine (“Tropine 3”) in oral suspension for the treatment of hot flash symptoms in pre-menopausal, menopausal and post menopausal women, to be in a position to yield results that may provide the opportunity for a potential FDA approval for marketing to consumers in the US.

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In connection with the terms and conditions of the Stock Purchase Agreement and sale of 227,370,000 shares held by the Majority Stockholders:

1.

Marciano appointed two new directors to the Company’s board of directors; and

2.

The “Lock-Up-Leak-Out” Agreements executed in October 2012 were cancelled by mutual agreement between the Board and the Company’s Shareholders who were party to the Agreements.

3.

The Majority Shareholders of the Company have voted to “Spin-out” to its Shareholders, one hundred percent (100%) of the issued and outstanding shares of Eaton Scientific Systems Ltd., its operating subsidiary, as of the record date of November 25, 2013, on a one-for-one basis within sixty-days (60) of the Change of Control of the Company, or by January 25, 2014.  

On January 9, 2014, the Spin-out was complete, and Eaton Scientific Systems, Ltd. was no longer a subsidiary of the Company.

On February 14, 2014, the Company changed its name to Eco Science Solutions, Inc. (OTCQB.ESSI).

NOTE: The following notes and any further reference made to “the Company”, "we", "us", "our" and "ESSI" shall mean Eco Science Solutions, Inc. unless otherwise indicated.

Description of Business  

Headquartered in Miami, Florida, Eco Science Solutions, Inc., a Nevada corporation, is charged with the origination, development and commercialization of innovative aftermarket automotive parts.

On December 4, 2013, the Company (the “Company”) executed an Agreement of the License of Intellectual Property (the “License Agreement”) dated November 4, 2013 with Eco Science Solutions International, Inc., a Canadian corporation (“ESS International”), for the exclusive license to the EcoFlora Plug, recently patented in the US and that has filed for Patent protection in Canada and the International community, based on its "Internal Pre-Combustion Chamber High Efficiency Spark Plug" technology. In connection with the License Agreement, the Company issued ESS International 2,500,000 shares of the Company’s Series “A” Convertible Preferred Stock (“Preferred Stock”), in exchange for the exclusive license of the Patent Applications, in perpetuity.  The Preferred Stock is convertible into common stock at a conversion rate of 10 common shares for each preferred share.

On February 14, 2014, the Company effected a 1000-to-1 reverse stock split.  As a result, the total shares of common stock issued and outstanding was reduced to 443,001 with a par value of $0.10.

On April 4, 2014, the Company received notice from Eco Science Solutions International, Inc. to convert 100% of the Series “A” preferred shares into restricted common shares on a 10 for 1 basis.  As a result, on April 9, 2014, 25,000,000 shares of the Company’s restricted common stock was issued, of which 19,866,668  shares were issued to the Company’s chairman, Domenic Marciano, and 5,133,332 shares were issued to non-related parties.  Subsequent to the conversion, Eco Science Solutions International, Inc. no longer holds any shares of the Company’s capital stock, and Mr. Marciano holds 20,094,038 shares of the Company’s common stock, which represents 62.53% of the total issued and outstanding shares of the Company’s common stock on a fully diluted basis.

On October 7, 2014, the US Patent and Trademark Office (“USPTO”) issued Patent #8,853,925 for the EcoFlora Plug, based on its "Internal Pre-Combustion Chamber High Efficiency Spark Plug" technology, and has patent pending applications both in Canada and worldwide.

The Company is currently in the testing stages, and intends to validate its technology and then and manufacture and sell the technology.

Product and Strategy Overview

The Company is in the process of developing and manufacturing the EcoFlora Plug, a revolutionary technological advancement for the spark plug and the internal combustion engine. The EcoFlora Plug is intended to:

·

improve engine performance

·

increase horsepower

·

reduce fuel consumption

·

improve combustion efficiency

·

prolong engine’s useful life, and

·

reduce/eliminate emission of carbon dioxide (CO₂ ) and other noxious gases

The EcoFlora Plug

The novel design of the EcoFlora Plug not only helps to get an engine closer to its ideal operating condition, but also addresses several vital ecological and fuel conservation issues as well.  The use of the EcoFlora Plugs in any vehicle with an internal combustion engine can reduce airborne pollution as well as reduce consumption of fossil fuels (gasoline, diesel and bio-diesel). For new cars, the use of the EcoFlora Plug technology would result in even better results.

The EcoFlora Plug not only increases an engine’s horsepower, it also reduces fuel consumption. In addition, because the engine burns hotter for a shorter period of time, it extends the life of the engine.

The United States consumes 9.5 million barrels of oil a day, largely burned by the transportation sector.  To illustrate the effects of the EcoFlora Plug technology on the nation’s economy, if, for example, 50% of the nation’s vehicles utilized the EcoFlora Plug in their vehicles, the amount of fuel required by the transportation sector would diminish by 700,000 barrels of oil a day.  This represents a saving of $28 Million a day of $40 a barrel oil, or $105 Million a day of $150 a barrel oil.  Extrapolated over 365 days, this represents an enormous economic savings for the United States.

About Emissions ^[1]

Pollution from the internal combustion engine is caused primarily by the incomplete combustion of the fuel inside the cylinder head.  With the conventional spark plug, approximately 80% of the gas/air fuel mixture is burned in each cycle of the ignition.  The remaining 20% is discharged through the catalytic converter and exhaust pipe, resulting in the release of CO₂ and other noxious gases into the atmosphere.

Emissions testing started out as a tool used by manufacturers and engine builders as a means to optimize engine performance. Half a century later, the amount of hydrocarbon, carbon monoxide and nitrogen oxide spewing from vehicle tailpipes remains an indicator of engine efficiency. Spark plugs and ignition systems play an important role in determining exactly how much fuel gets burned.

There are three primary types of emissions: unburned hydrocarbons, carbon monoxide and nitrogen oxide. Unburned hydrocarbons are fuel that passes through an engine without getting burned. High carbon monoxide emissions occur because of incomplete combustion.  Nitrogen oxide emissions occur when the combustion chamber gets too hot. The air is about 80 percent nitrogen by volume. While nitrogen oxide isn't normally involved in the combustion process, temperatures exceeding 2,500 degrees Fahrenheit can cause the nitrogen oxide molecule to break apart, combining with oxygen to form oxides of nitrogen.

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Carbon Monoxide and Nitrogen Oxides

High carbon monoxide levels tend to accompany high hydrocarbon levels, since they're both a result of incomplete combustion. As such, bad or inappropriate spark plugs can have all the same effects on carbon monoxide as hydrocarbon. Replacing stock plugs with a set of high performance plugs can help to reduce both carbon monoxide and hydrocarbon output by encouraging a more complete combustion cycle.  

For excess nitrogen oxide production, common causes include an excessively lean fuel mixture, a defective exhaust gas recirculation system, a bad catalytic converter and consistent engine overheating.

EcoFlora Plug Emissions Solutions

The EcoFlora Plug has also been developed to provide a new level of combustion efficiency, by burning 100% of the gas/air fuel mixture in the cylinder head.  With conventional spark plugs, heat that is produced is wasted on heating engine parts.  With the EcoFlora Plug, this heat is now used more efficiently, by designing it to be utilized for the vehicle’s movement. 

It is estimated that, of the 2 trillion metric tons of CO₂ reportedly released into the atmosphere in 2007, approximately 50% of these emissions were caused by the internal combustion engine of cars, trucks, buses, etc. It is also estimated that, with the implementation of the Company’s EcoFlora Plug technology by even half of the existing vehicles, up to 500 million metric tons of CO₂ per year could be eliminated.

To place the foregoing information in context that is both meaningful and addresses President Obama’s pledge to make America clean and energy independent, bad spark plugs increase hydrocarbon and carbon monoxide emissions. The Company’s ultimate goal, with the support of new car manufacturers, is to have the EcoFlora Plug technology replace existing spark plugs in all cars and trucks, and reduce the carbon footprint of the transportation.   

Pre-Com Chamber

Unlike other solutions utilizing batteries and/or alternative fuels, broad application of the EcoFlora Plug’s Pre-Com Chamber technology doesn’t rely on massive changes to vehicle drive systems or fuel/power infrastructures for its success. The EcoFlora Plug fits directly into all existing vehicle systems and existing fuel delivery infrastructures.  The EcoFlora Plug’s Pre-Com Chamber technology is ready for immediate deployment into existing vehicles (aftermarket) and the vast majority new vehicles being produced around the world (OEM).

^[1] “The Effects of Spark Plugs on Emissions”, Richard Row, www.ehow.com

The Market

Over 1 billion spark plugs are sold each year – with 400 million in the U.S. alone.  Spark plugs are sold to auto manufacturers and to consumers directly. The Spark Plug industry has experienced steady growth since the recession, when downstream demand from automakers plummeted with falling consumer vehicle purchases. Automakers have since ramped up production and increased their demand for spark plugs.

The Spark Plug Manufacturing industry has experienced steady growth since 2010, including a 3.5% revenue increase in 2013. The rapidly increasing tide of low-cost imports has continued to erode industry revenue and reinforce a focus on price-based competition. The sheer level of price-based competition has prevented domestic manufacturers from implementing price increases despite rising production costs. As a result, domestic operators are exiting the industry, and imports are continuously occupying a greater share of domestic demand. Over the five years to 2013, imports are growing at an average annual rate of 6.5% imports have expanded from occupying 46.8% of domestic demand in 2008 to an anticipated 70.3% in 2013.

The several hundred types of spark plugs available cover a variety of internal-combustion engine-driven transportation, work, and pleasure vehicles. Spark plugs are used in automobiles, trucks, buses, tractors, boats (inboard and outboard), aircraft, motorcycles, scooters, industrial and oil field engines, oil burners, power mowers and chain saws. Turbine igniters, a type of spark plug, help power the jet engines in most large commercial aircraft today while glow-plugs are used in diesel engine applications.

Spark Plugs-Defined ^[2]

The purpose of a spark plug is to provide a place for an electric spark that is hot enough to ignite the air/fuel mixture inside the combustion chamber of an internal combustion engine. This is done by a high voltage current arcing across a gap on the spark plug.  A spark plug is composed of a shell, insulator and the central conductor. It passes through the wall of the combustion chamber and therefore must also seal the combustion chamber against high pressures and temperatures.

FIGURE 1: Conventional Spark Plug

The spark plug is connected to the high voltage generated by an ignition coil. As the electrons flow from the coil, a voltage difference develops between the central electrode and side electrode. No current can flow because the fuel and air in the gap is an insulator, but as the voltage rises further, it begins to change the structure of the gases between the electrodes. Once the voltage exceeds the dielectric strength of the gases, the gases become ionized. The ionized gas becomes a conductor and allows electrons to flow across the gap. Spark plugs usually require voltage of 12,000–25,000 volts or more to 'fire' properly, although it can go up to 45,000 volts. They supply higher current during the discharge process resulting in a hotter and longer-duration spark.

As the current of electrons surges across the gap, it raises the temperature of the spark channel to 60,000 K. The intense heat in the spark channel causes the ionized gas to expand very quickly, like a small explosion. This is the 'click' heard when observing a spark, similar to lightning and thunder.

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The heat and pressure force the gases to react with each other, and at the end of the spark event there should be a small ball of fire in the spark gap as the gases burn on their own. The size of this fireball or kernel depends on the exact composition of the mixture between the electrodes and the level of combustion chamber turbulence at the time of the spark. A small kernel will make the engine run as though the ignition timing was retarded, and a large one as though the timing was advanced.

FIGURE 2: Components of a typical, four stroke cycle, DOHC piston engine.

(E) Exhaust camshaft, (I) Intake camshaft,(S) Spark plug, (V) Valves, (P) Piston,

(R) Connecting rod, (C) Crankshaft, (W) Water jacket for coolant flow.

^[2] “How Products are Made: Spark Plug” (2014), www.madehow.com

 Intellectual Property

On October 7, 2014, the US Patent and Trademark Office (“USPTO”) issued Patent #8,853,925 for the EcoFlora Plug, based on its "Internal Pre-Combustion Chamber High Efficiency Spark Plug" technology, which is exclusively licensed by the Company in perpetuity.   The Company has also filed Patent Applications with the Canadian and International Patent offices (the “Patent Applications”).  The Patent and Patent Applications relate to a high efficiency spark plug operative to produce negligible waste materials discharge from the combustion engine with high power output and low fuel consumption.

The following table summarizes the Patent and Patent Application(s) licensed by the Company under the License Agreement for the product known as the “EcoFlora Spark Plug”:

 ^[1] Canadian Patent Application filed with the Canadian Intellectual Property Office with a Priority Date based on Patent Cooperation Treaty (“PCT”) application CA2011/0001339 filed December 1, 2011. The PCT is an international treaty providing standardized filing procedures for foreign patents in the countries that have signed the treaty. For additional information, the reader may go to http://brevets-patents.ic.gc.ca.

The Company is prepared to prosecute under its Patent Applications worldwide in the event any infringement becomes apparent. There can be no assurance that the Company will be granted patents for any of the patent applications it has filed with the CIPO or the USPTO.

Patent Applications Abstracts

Following is the Patent Application Abstract, which provides information on the technology underlying the Company’s pending Patent Application(s):

Abstract to CIPO Patent application 2,786,022 ^[1]

Internal combustion engines employ spark plugs for igniting the air and fuel mixture in the engine cylinder combustion chamber for providing the power to rotate the crank shaft. Heretofore, spark plugs are provided with electrodes located outside the bottom end of the spark plug body to extend into the engine combustion chamber. In operation, the electrodes are exposed to the extremely high heat produced in the combustion chamber, which causes physical erosion of the electrodes. Also, burned particles such as carbon are deposited on the electrodes to result in the loss of effectiveness of the ignition function of the spark plug. Approximately, 80% of the air and fuel mixture is burned in each cycle of the ignition of a conventional spark plug. A large amount of waste materials including noxious gases such as carbon monoxide, carbon dioxide, nitrogen oxides and hydrocarbon and other partially burned or unburned materials are produced in the engine chamber in the ignition. Some of the materials and noxious gases are discharged from the engine to the atmosphere, which cause pollution of the latter. The pollution may be reduced by passing the discharge through a catalytic converter. However, the remaining waste materials in the ignition chamber will mix with the fresh air and fuel mixture subsequently injected into the ignition chamber to form a contaminated and degraded fuel mixture which inherent causes the reduction of the ignition efficiency and the loss of power output from the engine with high consumption of fuel. Furthermore, with the electrodes of the spark plug located in the combustion chamber, ignition would occur in the combustion chamber of the engine so that the component parts in the combustion chamber are subjected directly to the high temperature of the combustion. The high temperature reduces the life of the engine due to heat stress of the components.

Attempts have been made to provide new spark plug constructions with the electrodes located within a hollow pre-ignition chamber formed in the spark plug body or shell surrounding the electrodes in a spaced manner. The central electrode and the grounding electrode are recessed and spaced from the lower opening of the pre-ignition chamber. The grounding electrode may also separate the pre-ignition chamber into a lower chamber between the central electrode and the lower opening of the shell and an upper chamber surrounding the insulated portion of the central electrode. Ignition occurs in the lower chamber so that the flame is injected into the cylinder chamber to ignite the air and fuel mixture therein resulting in less waste materials produced in the ignition and less high temperature exposure to the engine components. However, waste material is still produced in the pre-ignition chamber. The waste materials, again as in the conventional spark plug, would mix with the fresh air and fuel mixture injected into the cylinder chamber to form a concentrated polluted mixture in the pre-ignition chamber to cause unsatisfactory ignition and back fire.

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It is a principal object of the present invention to provide an improved spark plug which operates with negligible amount of pollutant produced in the ignition and in the combustion engine exhaust discharge. It is another object of the present invention to provide an improved spark plug which is operative with high ignition efficiency and low fuel consumption. It is another object of the present invention to provide an improved spark plug construction having three chambers including a lower chamber located below the grounding electrode and the central electrode, a middle chamber surrounding the insulated lower portion of the central electrode and an upper chamber surrounding the upper insulated portion of the insulator to maintain it in an optimum operating temperature. It is yet another object of the present invention to provide an improved spark plug construction to provide maximum power output of the ignition of the air and fuel mixture injected into the cylinder chamber of the internal combustion engine.

EcoFlora Plug Design Specifications

Following are the design specifications, as filed with the CITO and USPTO:

The spark plug (10) of the EcoFlora Plug has a generally cylindrical metal body or shell (11) similar to a conventional spark plug. Threads are provides on the outer surface of the lower portion of the shell (11) for mounting the spark plug (10) to an internal combustion engine. The central electrode (12) is made of a high temperature resistant noble metal or metal alloy and it is surrounded and imbedded in a ceramic insulator (13) which has an upper portion (13) extending upwards from the top of the shell (11), and an electrical connection terminal (14) is located at the top of the central electrode for conducting the ignition current to the spark plug. The lower portion of the ceramic insulator (13) has a generally frusto-conical lower end portion (15) extending downwardly into a hollow cylindrical cavity (16) located within the lower end portion (17) of the shell (11). Threads are provided on the outer surface of the lower end portion of the shell (11) for mounting the spark plug to the cylinder head of an internal combustion engine.

An annular partition ring (18) is located in a generally horizontal position within the cylindrical cavity (16) and is spaced from the upper end of the latter. The annular partition ring (18) is made of a high temperature resistant noble metal or metal alloy and it has an outer diameter equal to the inner diameter of the cylindrical cavity (16) and a central inner opening (19) having a diameter equal to the outer diameter of a predetermined position of the frusto-conical lower end portion (15) of the ceramic insulator (13) such that when the annular partition ring (18) is inserted into the cylindrical cavity (16) it is retained in the predetermined position horizontally such that an upper chamber (20) is formed at the upper portion of the cylindrical cavity (16) with the inner opening 19 of the annular partition ring (18)  intimately engaged with the conical side wall of the lower end portion of the ceramic insulator (13). A plurality of through openings (21) is formed in the annular partition ring (18), as shown in Figures 4 and 5. The through openings (12) may have various shapes including circular, rectangular, or multi-angular shapes as best shown in Figure 5. The through openings (12) may be all of the same shape or a mixture of the various different shapes.

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A cylindrical sleeve (22) also made of a high temperature noble metal or metal alloy is located within the lower portion of the cylindrical cavity (12) below and abutting the annular partition ring (18). The cylindrical sleeve (22) has an outer diameter equal to the inner diameter of the cylindrical cavity (12) such that it is snugly mounted within the latter. The cylindrical sleeve (22) has an annular shoulder member (23) having an inner opening (24) with a flange extending inwardly and horizontally at a predetermined location from the inner side wall of the cylindrical sleeve (22). The annular shoulder member (23) forms the grounding electrode of the spark plug with the edge of the inner opening (24) located directly spaced from the spark tip (25) of the central electrode (12). The shoulder member (23) separates the inner cavity of the cylindrical sleeve (22) into middle chamber (26) and a lower outer chamber 27 as shown in Figure 3. The middle chamber (26) is located above the grounding electrode and the lower chamber is located below the grounding electrode. The middle chamber (26) communicates with the upper chamber (20) through the through openings (12) in the annular partition ring (18). The spacing between the edge of the inner opening (24) of the grounding electrode and the spark tip (25) of the central electrode (12) provides the spark gap of the spark plug. The center of the inner opening (24) is preferably offset from the vertical longitudinal axis of the central electrode (12) such that the tip (25) is positioned closer to one side edge of the inner opening (24) as best shown in Figures 3, 5 and 6 in order to achieve a more intense spark in operation. The inner opening (24) of the grounding electrode may have various shapes including circular or multi-angular shape as shown in Figures 4 and 5.

The locations of the annular partition ring in the cavity and the grounding electrode in the cylindrical sleeve are determined by the compression ratio of the air and fuel mixture in the combustion chamber of the internal combustion engine in which the spark plug is to be installed, as shown in the following formula:

in which V1 is the volume of the lower chamber (27) V2 is the volume of the middle chamber (26), V3 is the volume of the upper chamber (20), and € is the compression ratio of the air/fuel mixture in the combustion chamber. The rim 28 of the bottom opening of the lower chamber (27) is preferably slanting inwardly and downwardly as shown in Figure 4 to provide a reduced bottom opening which guides and accelerates the ignition flame from the lower chamber (27) into the combustion chamber of the engine.

In operation, initially the air and fuel mixture is injected into the combustion chamber of the combustion engine as well as the lower chamber of the spark plug. The mixture in the lower chamber is ignited by the spark between the central electrode and the ground electrode occurring at the spark gap of the spark plug. Any high temperature unburned materials and/or noxious gases produced in the ignition are mainly confined within the lower chamber of the spark plug. The ignition will cause the air and fuel mixture in the combustion chamber to ignite instantaneously. Subsequent fresh air and fuel mixture injected into the combustion chamber of the engine will force the high temperature waste materials and/or noxious gas, if any, in the lower chamber to rise mainly into the middle chamber and then through the openings of the partition annular ring into the upper chamber of the spark plug. Thus, the components in the combustion chamber of the engine are not subjected to the high temperature of the combustion; and the temperature in the combustion chamber only rises for the short period in the ignition and they are, in fact, cooled by the incoming fresh air and fuel mixture. Thus, it reduces the temperature stress to the engine components. The high temperature waste materials and/or any obnoxious gases are confined within the upper chamber and middle chamber so that they maintain the spark plug at an optimum operating temperature. In this manner, the high temperature is utilized to maintain the optimum temperature of the spark plug to result in a high efficiency in ignition and power output with less fuel consumption and longer engine life.

Since the partition annular ring, the cylindrical sleeve and the central electrode and the grounding electrode are all made of high temperature noble metal or metal alloy, they are not subject to high temperature erosion. Also, cleaning and re-setting of the spark gap are not required.

Only a small amount of the waste materials in the middle chamber and the upper chamber of the spark plug is drawn back into the lower chamber in the subsequent repeated combustion operations and it is being burned and eliminated in the further combustion such that discharge of unburned waste materials from the engine is minimal. Therefore, discharge of pollution to the atmosphere of unburned waste materials from the engine using the present spark plug is negligible.

Product Testing

The Company is currently conducting a multiple of tests in several facilities to validate the EcoFlora Plug technology.  

Results of the initial tests of comparative spark plugs with engine performance at wide-open throttle operation are shown below. Mean results are obtained by analysis of 3 measurements in each point.  

Denso Iridium Power IW20 Standard one-electrode spark plug iridium tipped (diameter 0,4 mm) on the central electrode and with one side electrode (Table 3). The spark gap is formed by central and side electrodes, in the size of 1,1 mm.

Greg1 Experimental multichamber spark plug “Greg1” iridium tipped (diameter 0,4 mm) with the spark gap formed between the central electrode and the housing in section of the nozzle hole of baffle (Table 4). 

Тable 1 – Mean test results of Denso Iridium Power IW20

Тable 2 – Mean test results of Greg1

Тable 3 – Mean test results of Denso Iridium Power IW20

Тable 4 – Mean test results of Greg1

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Table 5: Mean Test Results

During 2014, the Company manufactured prototypes of the EcoFlora Plug, and performed tests to validate their functionality.  These tests were performed in facilities both in the United States and Canada, and were conducted on both a chassis dyno and an engine dyno in a variety of vehicles of different manufacturers.  In addition, EcoFlora Plugs have been installed into several road cars, and successfully driven for long duration in excess of one year. 

Tests were conducted comparing the EcoFlora Plug predominately against traditional spark plug technology.  For optimal performance test results, the proper size, fit and tuning of the EcoFlora Plug is critical. However, in these tests, only one size and specification EcoFlora Plug prototype was used.  As a result, the test results did not allow for maximum results.  However, the EcoFlora Plug still operated without any problems in multiple vehicles tested in various testing locations and conditions, despite the lack of optimal testing conditions.

Tests were also conducted on the EcoFlora Plug for power and emissions.  The results of the power tests varied, from having slightly more to slightly less power vs. conventional spark plugs.  This is considered to be a very positive result, as the EcoFlora Plug prototype used in the test would need to be sized and/or tuned to certain vehicles for optimal results.

Tests were also conducted in a number of vehicles at a facility that specifically tested emissions.  The goals of these tests were to ensure that the EcoFlora plug would operate properly without issue in various types of automobiles and to show improvement in emissions.   These tests were performed in both old and newer model vehicles from various manufacturers including Volvo, Ford, Mitsubishi, Chevy, and Mercedes.  All vehicles ran perfectly when simply removing the stock spark plugs and replacing them with the EcoFlora plugs.  Particularly in slightly older vehicles, such as one that were past their warranty and/or higher mileage, the utilization of the EcoFlora Plugs improved emissions, and resulted in these vehicles “passing” emissions, after previously “failing”.  This is significant, as a large percentage of vehicles are older and/or out of warranty, and must pass annual emissions tests imposed by many governments around the world. 

After these tests were complete, the Company manufactured an improved EcoFlora prototype.  These prototypes will be used in two specific upcoming tests, including one where the EcoFlora Plug will be fine tuned to the specific vehicle to maximize the EcoFlora Plug’s potential.  The Company anticipates that this will produce even better results than have already been seen. The Company also has plans to perform longer duration tests in a fleet of vehicles, to test for longevity and real world mileage results, as well as laboratory results.  Depending on these test results, the Company plans to fund laboratory testing with the EPA and California Air Resource Board to obtain specific fuel mileage ratings and comparisons to competitive standard spark plugs.  

The Company’s goal is to not only prove that the EcoFlora Plug is more environmentally friendly, but that it also increases fuel efficiency and power.  The result of the Company’s research and testing suggests that using the EcoFlora Plugs in a vehicle can increase horsepower when compared to more conventional spark plugs, as well as an increase in fuel efficiency. There is also clear evidence of lower emission with the EcoFlora Plug. The Company’s patented technology outperformed other plug designs, including some premium spark plugs offered by the major manufacturers. In addition, it is estimated that the EcoFlora Plug may offer that "like-new" performance over time, aide in extending engine life, and make vehicles more eco-friendly.

Upon completion of the next set of tests, the Company intends to work with a professional engine developer research and development group to tune and work to optimize the EcoFlora Plug results.  The Company will present the independent laboratories’ confirmation of the EcoFlora Plug claims to state and municipal authorities with the intention of receiving the endorsement of these authorities for the use of the EcoFlora Plug.   

After the Company has commenced commercial production of the EcoFlora Plug, it will have the product tested by independent laboratories to confirm all of the claims of efficiency and long life that the Company espouses.  With the affirmation of these claims by recognized independent laboratories, the Company will approach each of the major players in the wholesale marketplace to participate in a test market roll-out.   If the results and technology prove out, there will be opportunities to sell direct to customers, wholesale to large distribution channels, or be an attractive purchase by another larger automotive electronics company in the space. 

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Competition

The following represents the top four market Brand leaders in the high-efficiency spark plug marketplace:

·

Bosch

·

Denso

·

NGK

·

Champion

The top four companies in the industry generate about 61.0% of revenue. Due to significant offshoring and outsourcing to foreign companies, fewer domestic companies are producing spark plugs. As a result, the Spark Plug Manufacturing industry's market share concentration has been rising. Among individual operators, during the five years to 2013, major company Denso's market share is expected to rise from 29.9% of industry revenue in 2008 to 33.5% in 2013. Similarly, major company NGK's market share is estimated to expand from 10.3% in 2008 to 14.3% in 2013.

Although there are several major spark plug manufacturers that serve the world market, none have undertaken any public testing of a product that resembles the EcoFlora Plug in design or performance.  

Government Regulations

The spark plug industry, and thus the Company’s business, is subject to federal, state, local and foreign regulation. Some of the pertinent laws have not been definitively interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of subjective interpretations. In addition, these laws and their interpretations are subject to change.

The Company must also comply with numerous other federal, state, and local laws relating to such matters as safe working conditions, environmental protection, industrial safety, and hazardous substance disposal. The Company may incur significant costs to comply with such laws and regulations in the future, and lack of compliance could have material adverse effects on the Company’s operations.

Distribution

As the Company has not yet commenced commercial operations, it has yet to develop methods of distribution for its products beyond the business plan stage.

Facilities

The Company’s corporate headquarters are located at 3250 NE 1^st Avenue, Suite 305, Miami, FL 33137.

Employees

As of January 31, 2015, the Company had no employees, excluding its directors and executive officers.

The Company currently has no employees, excluding its directors and executive officers.

Research and Development

The Company has incurred $34,406 relating to the research and development of its EcoFlora Plug testing of the product during the fiscal years ended January 31, 2015 and no expenditures during the fiscal year ended January 31, 2014.

Reports to Security Holders

The Company is not required to deliver an annual report to its stockholders, but will voluntarily send an annual report, together with the Company’s annual audited financial statements upon request. The Company is required to file annual, quarterly and current reports, proxy statements, and other information with the Securities and Exchange Commission. The Company’s Securities and Exchange Commission filings are available to the public over the Internet at the SEC's website at www.sec.gov.

The public may read and copy any materials filed by the Company with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Company is an electronic filer. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Internet address of the site is www.sec.gov.

The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.

None.

The Company’s corporate headquarters are located at 3250 NE 1^st Avenue, Suite 305, Miami, FL 33137.

The Company currently rents the Miami, FL space for approximately $500 a month.  Currently, this space is sufficient to meet the Company’s needs.  However, once the Company expands its business to a significant degree, it will require additional space. The Company does not currently own any real estate.

The Company knows of no material, existing or pending legal proceedings against it, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which its director, officer or any affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to its interest.

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PART II

The Company’s Common Stock is quoted on the OTC Bulletin Board “OTCBB – U.S. Registered” under the trading symbol “ESSI”, which was issued to the Company on January 3, 2013. Because the Company is quoted on the OTCQB, its securities may be less liquid, receive less coverage by security analysts and news media, and generate lower prices than might otherwise be obtained if they were listed on a national securities exchange.

The high and low prices of the Company’s common shares, as adjusted for stock splits, for the periods indicated below are as follows:

The Company’s common stock is subject to rules adopted by the Commission regulating broker dealer practices in connection with transactions in “penny stocks.” Those disclosure rules applicable to “penny stocks” require a broker dealer, prior to a transaction in a “penny stock” not otherwise exempt from the rules, to deliver a standardized list disclosure document prepared by the Securities and Exchange Commission. That disclosure document advises an investor that investment in “penny stocks” can be very risky and that the investor’s salesperson or broker is not an impartial advisor but rather paid to sell the shares. The disclosure contains further warnings for the investor to exercise caution in connection with an investment in “penny stocks,” to independently investigate the security, as well as the salesperson with whom the investor is working and to understand the risky nature of an investment in this security. The broker dealer must also provide the customer with certain other information and must make a special written determination that the “penny stock” is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. Further, the rules require that, following the proposed transaction, the broker provide the customer with monthly account statements containing market information about the prices of the securities.

These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for its common stock. Many brokers may be unwilling to engage in transactions in its common stock because of the added disclosure requirements, thereby making it more difficult for stockholders to dispose of their shares.

Record Holders

The Company’s common shares are issued in registered form. Empire Stock Transfer Inc., 1859 Whitney Mesa Drive, Henderson, NV 89014, (702) 818-5898, is the registrar and transfer agent for the Company’s common shares.

As of January 31, 2015, the Empire Stock Transfer Inc. shareholders' list of the Company’s common shares showed 96 registered shareholders and 30,643,001 shares outstanding, all of which have been recorded by the Company.

Re-Purchase of Equity Securities

None.

Dividends

The Company has not declared any dividends on its common stock since the Company’s inception. There is no restriction in the Company’s Articles of Incorporation and Bylaws that will limit its ability to pay dividends on its common stock. However, the Company does not anticipate declaring and paying dividends to its shareholders in the near future. 

Equity Compensation Plan Information

On September 1, 2012, the board of directors of the Company adopted the 2012 Employee Stock Option Plan (the “2012 Plan”).  Under the 2012 Plan, 25,000,000 restricted shares of common stock have been reserved for issuance upon exercise of options granted from time to time under the stock option plan. The 2012 Plan is intended to assist the Company in securing and retaining key employees, directors and consultants by allowing them to participate in the Company’s ownership and growth through the grant of incentive and non-qualified options. Under the 2012 Plan, the Company may grant incentive stock options only to key employees and employee directors, or the Company may grant non-qualified options to employees, officers, directors and consultants. Subject to the provisions of the 2012 Plan, the board of directors will determine who shall receive options, and the number of shares of common stock that may be purchased under the options.  

On September 1, 2012, the Company, under its 2012 Plan, granted qualified stock options to purchase 6,500,000 shares of its common stock.  Of the total options granted, 5,000,000 were granted to the President of the Company (the “Executive”) at $0.10 per share, and 1,500,000 were granted to a consultant at $0.25 per share.  The options are exercisable for a period of five years, vest quarterly over a period of two years, and were valued using the Black-Scholes valuation method at $0.41 per share, or $2,665,000, which is being amortized over a 36-month period.

Due to the change in control of the Company that took place on November 26, 2013, the 5,000,000 Executive options became fully exercisable, in accordance with the accelerated vesting clause contained within the Executive’s Employment Agreement.  As a result, 100% of the remaining deferred compensation related to the Executive options in the amount of $1,879,167 was expensed in the year ended January 31, 2014.

As of January 31, 2015, the Company has granted a total of 6,500,000 options to purchase common stock shares. In connection with the options granted, a total of $2,665,000 has been recorded as deferred compensation, of which $205,000 and $2,084,167 has been expensed during the years ended January 31, 2015 and 2014, respectively. There remains $153,750 of deferred compensation to be amortized over the next 9 months.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

The Company did not purchase any shares of its common stock or other securities during the years ended January 31, 2015 or 2014.

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Recent Sales of Unregistered Securities

The following reflects the common stock transactions as adjusted for the change in par value, and the effects of the 1000-to-1 reverse stock-split that occurred on February 14, 2014.

On February 15, 2014, in accordance with his 2013 Employment Agreement, the Company issued 100,000 shares of restricted common stock to its President for cash in the amount of $100.

On March 15, 2014, in accordance with his 2013 Employment Agreement, the Company issued 100,000 shares of restricted common stock to its President for cash in the amount of $100.

On April 4, 2014, the Company received notice from Eco Science Solutions International, Inc. to convert 100% of the Series “A” preferred shares into restricted common shares on a 10 for 1 basis.  As a result, on April 9, 2014, 25,000,000 shares of the Company’s restricted common stock was issued, of which 19,866,668  shares were issued to the Company’s chairman, Domenic Marciano, and 5,133,332 shares were issued to non-related parties.

On April 29, 2014, the Company received notice from the holder of a Convertible Note Payable to convert principal in the amount of $3,000 into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 1,000,000 unrestricted shares of the Company’s common stock were issued to the non-related party.

On April 29, 2014, the Company received notice from the holder of a $3,450 Convertible Note Payable to convert 100% of the principal into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 1,150,000 unrestricted shares of the Company’s common stock were issued to the note holder.

On June 27, 2014, the Company received notice from the holder of a $3,000 Convertible Note Payable to convert 100% of the principal into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 1,000,000 unrestricted shares of the Company’s common stock were issued to the note holder.

On July 15, 2014, in accordance with his 2013 Employment Agreement, the Company issued 100,000 shares of restricted common stock to its President for cash in the amount of $100.

On September 11, 2014, the Company received notice from the holder of a $1,200 Convertible Note Payable to convert 100% of principal into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 400,000 unrestricted shares of the Company’s common stock, with a par value of $40,000, were issued to the note holder.

On October 6, 2014, the Company received notice from the holder of a $3,000 Convertible Note Payable to convert 100% of principal into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 1,000,000 unrestricted shares of the Company’s common stock, with a par value of $100,000, were issued to the note holder.

On November 15, 2014, in accordance with his 2013 and 2014 Employment Agreements, the Company issued 350,000 shares of restricted common stock to its President for cash in the amount of $350.

Exemption From Registration. The shares of Common Stock referenced herein were issued in reliance upon an exemption from registration afforded either under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering, or Regulation D promulgated thereunder, or Regulation S for offers and sales of securities outside the U.S.

As a “smaller reporting company”, the Company is not required to provide the information required by this Item.

The following discussion should be read in conjunction with the Company’s audited consolidated financial statements and the related notes for the year ended January 31, 2015, and 2014, that appear elsewhere in this annual report. 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 annual report.

The Company’s consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Overview

The Company was incorporated in the state of Nevada on December 8, 2009, under the name Pristine Solutions, Inc. The Company’s wholly owned subsidiary, Pristine Solutions Limited, was incorporated under the laws of Jamaica. The Company’s original business plan focused on developing a network of sales points for the sale and service of tankless water heaters in Jamaica, through Pristine Solutions Limited. The Company’s aim was to become the first tankless water heater company specializing in tankless-only products to enter the Jamaican market, and the only company in the Jamaican market offering solar-powered tankless water heater products.  As part of its plan, on December 30, 2009, the Company entered into a distribution agreement with Zhongshan Guangsheng Industry Co., Ltd., of China (“Zhongshan”), the manufacturer of the tankless water heaters.   Zhongshan manufactures the tankless water heaters under the brand Gleamous Electric Appliances. 

On August 22, 2012, Christine Buchanan-McKenzie , the Company’s former President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and a member of the Board of Directors, resigned from all positions with the Company.  The resignation did not involve any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. On the same day, Mr. Michael Borkowski was appointed as President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and the sole member of the Board of Directors of the Company.

On August 23, 2012, the Company and its controlling stockholders entered into a Share Exchange Agreement (the “Share Exchange”) with Eaton Scientific Systems, Ltd., a Nevada corporation (“ESSL”) and the shareholders of ESSL (the “ESSL Shareholders”), whereby the Company acquired 25,000,000 shares of common stock (100%) of ESSL (the “ESSL Stock”) from the ESSL Shareholders.   In exchange for the ESSL Stock, the Company issued 25,000,000 shares of its common stock to the ESSL Shareholders.  In addition, the Company’s Chief Executive Officer, Mr. Michael J. Borkowski, on behalf of the Company, entered into a Common Stock Purchase Agreement with the Company’s controlling shareholder, and former President, Ms. Christine Buchanan-McKenzie, whereby the Company would purchase one hundred percent (100%), or 240,000,000 shares, of the Company’s common shares owned by Mrs. Buchanan-McKenzie, at par value $.0001, and representing approximately 54.1% of the Company’s total issued and outstanding shares.  The Common Stock Purchase Agreement, and subsequent transaction closing, was completed on October 22, 2012.  On October 23, 2012, the Common Stock Purchase Agreement was finalized, and a change in control of the Company took place.

In conjunction with the Share Exchange and Common Stock Purchase Agreement, the total shares held by the ESSL Shareholders are 265,000,000, or approximately 59.8% of the issued and outstanding common stock of the Company as of October 30, 2012.  Certain ESSL shareholders owning a total of 135,779,375 shares of the Company’s common stock, representing approximately 30.64% of the issued and outstanding common stock of the Company, entered into three (3) separate twenty-four (24) month Lock-Up Agreements.

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As a result of the Share Exchange and Common Stock Purchase Agreement, (i) there was a change in control of the Registrant; (ii) ESSL became the Company’s wholly owned subsidiary; and (iii) the ESSL operations will continue as the Company’s primary business. In addition, on November 27, 2012, the Company changed its name to Eaton Scientific Systems, Inc.

In October, 2013, the Company’s Management was introduced to Domenic Marciano (“Marciano”).  Marciano represented that he intended to acquire an exclusive license to a unique automotive product, the EcoFlora Spark Plug, with a proprietary technology, and that the EcoFlora Plug has the potential to be uniquely positioned in the automotive parts business in the United States and International automotive parts marketplace.

The Majority Shareholders acknowledge that the Company has not been able to attract investment capital sufficient to execute its business plan because of its Share price.  Further, Management believes that the potential success of the EcoFlora Plug technology could potentially provide value to the Company and its shareholders. As a result, on November 26, 2013, the Company and its Majority Shareholders (the “Majority Stockholders”) entered into an Agreement for the Purchase of Common Stock (the “Stock Purchase Agreement”) with Marciano whereby Marciano acquired 227,370,000 shares of the Company’s common stock from the Majority Stockholders at par value $.0001, representing approximately 51.3% of the Company’s total issued and outstanding shares, in exchange for cash in the amount of $22,737 (the “Cash Proceeds”).  The Stock Purchase Agreement, and subsequent transaction closing, was completed on November 26, 2013, and a change in control of the Company took place.

The Majority Shareholders and the Company’s Management also believe it is in the best interest of the Company’s Shareholders to operate Eaton Scientific Systems, Ltd. (“Eaton Sub”) a Nevada corporation and wholly owned subsidiary of the Company, as a privately held Company, until such time where it is sufficiently capitalized to increase the probability for its Clinical Trials of Homatropine (“Tropine 3”) in oral suspension for the treatment of hot flash symptoms in pre-menopausal, menopausal and post menopausal women, to be in a position to yield results that may provide the opportunity for a potential FDA approval for marketing to consumers in the US.

In connection with the terms and conditions of the Stock Purchase Agreement and sale of 227,370,000 shares held by the Majority Stockholders:

1.

Marciano appointed two new directors to the Company’s board of directors; and

2.

The “Lock-Up-Leak-Out” Agreements executed in October 2012 were cancelled by mutual agreement between the Board and the Company’s Shareholders who were party to the Agreements.

3.

The Majority Shareholders of the Company have voted to “Spin-out” to its Shareholders, one hundred percent (100%) of the issued and outstanding shares of Eaton Scientific Systems Ltd., its operating subsidiary, as of the record date of November 25, 2013, on a one-for-one basis within sixty-days (60) of the Change of Control of the Company, or by January 25, 2014.  

On January 9, 2014, the Spin-out was complete, and Eaton Scientific Systems, Ltd. was no longer a subsidiary of the Company.

On February 14, 2014, the Company changed its name to Eco Science Solutions, Inc. (OTCQB.ESSI).

NOTE: The following notes and any further reference made to “the Company”, "we", "us", "our" and "ESSI" shall mean Eco Science Solutions, Inc., unless otherwise indicated.

Description of Business 

Headquartered in Miami, Florida, Eco Science Solutions, Inc., a Nevada corporation, is charged with the origination, development and commercialization of innovative aftermarket automotive parts.

On December 4, 2013, the Company (the “Company”) executed an Agreement of the License of Intellectual Property (the “License Agreement”) dated November 4, 2013 with Eco Science Solutions International, Inc., a Canadian corporation (“ESS International”), for the exclusive license to the EcoFlora Spark Plug, recently patented in the US and that has filed for Patent protection in Canada and the International community, based on its "Internal Pre-Combustion Chamber High Efficiency Spark Plug" technology. In connection with the License Agreement, the Company issued ESS International 2,500,000 shares of the Company’s Series “A” Convertible Preferred Stock (“Preferred Stock”), in exchange for the exclusive license of the Patent Applications, in perpetuity.  The Preferred Stock is convertible into common stock at a conversion rate of 10 common shares for each preferred share.

On February 14, 2014, the Company effected a 1000-to-1 reverse stock split.  As a result, the total shares of common stock issued and outstanding was adjusted to 443,001 shares with a par value of $0.10.

On April 4, 2014, the Company received notice from Eco Science Solutions International, Inc. to convert 100% of the Series “A” preferred shares into restricted common shares on a 10 for 1 basis.  As a result, on April 9, 2014, 25,000,000 shares of the Company’s restricted common stock was issued, of which 19,866,668  shares were issued to the Company’s chairman, Domenic Marciano, and 5,133,332 shares were issued to non-related parties.  Subsequent to the conversion, Eco Science Solutions International, Inc. no longer holds any shares of the Company’s capital stock, and Mr. Marciano holds 20,094,038 shares of the Company’s common stock, which represents 62.13% of the total issued and outstanding shares of the Company’s common stock on a fully diluted basis.

On October 7, 2014, the US Patent and Trademark Office (“USPTO”) issued Patent #8,853,925 for the EcoFlora Plug, based on its "Internal Pre-Combustion Chamber High Efficiency Spark Plug" technology, and has patent pending applications both in Canada and worldwide.

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Results of Operations

The following summary of the Company’s results of operations should be read in conjunction with the Company’s audited consolidated financial statements for the years ended January 31, 2015 and 2014, which are included herein. The financial information provided includes the continuing operations of the Company and the discontinued operations of its former wholly owned subsidiary, Eaton Scientific Systems, Ltd. (“ESSL”).

.

Revenue

The Company has not yet launched its major business activity, which is automotive spark plug manufacturing, distribution, and/or licensing of its patented technology.

Cost of sales

The Company has not yet launched its major business activity, which is automotive spark plug manufacturing, distribution, and/or licensing of its patented technology.

General and Administrative Expenses

General and administrative expenses from continuing operations in the amount of $126,782 for the year ended January 31, 2015, were comprised of $39,449 of legal and accounting fees, $22,300 of management and consulting fees, $45,534 of research, development and promotion, $3,620 in transfer agent and filing fees, and $15,879 of office, overhead and other general and administrative expenses.

General and administrative expenses from continuing operations in the amount of $88,753 for the year ended January 31, 2014, were comprised of $16,554 of legal and accounting fees, $60,750 of management and consulting fees, $360 of research, development and promotion, $7,995 in transfer agent and filing fees, and $3,094 of office, overhead and other general and administrative expenses.

General and administrative expenses from continuing operations for the year ended January 31, 2015, were $126,782 as compared to $88,753 for the year ended January 31, 2014, which resulted in an increasein general and administrative expenses for the current period of $38,029.

Significant changes in general and administrative expenses from continuing operations of $38,029, from the year ended January 31, 2015, compared to the year ended January 31, 2014, were attributable to the following items:

·

an increase in legal, accounting and audit fees of $22,895, due to an increase in legal fees of $14,928; and an increase in accounting fees of $7,967 for accounting and tax preparation fees resulting from a full year of expense during the current year, compared to only 3 months of expense in the prior year;

·

a decrease in management fees of $38,450, due to a reduction in annual executive compensation pursuant to executive employment agreements;

·

an increase in research, development and promotion of $45,174, due to prototype development and testing of $34,406 in the current year, compared to none in the prior year; and an increase of $10,768 in product brochure costs resulting from $11,128 in costs during the current year, compared to $360 for the prior year;

·

a decrease in transfer agent and filing fees of $4,375, due to additional costs incurred in the prior year resulting from the Company’s corporate actions, compared to no such expense in the current year;

·

an increase in office supplies and other general expenses of $12,785, resulting from an increase in rent expense of $3,842, an increase in travel expenses of $7,083, a decrease in repairs and maintenance of $2,258, and an increase in other general office expenses of $4,118.

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General and administrative expenses from continuing operations for the years ended January 31, 2015 and 2014, were incurred primarily for the purpose of advancing the Company closer to its goal of the manufacturing and distribution of its high-efficiency spark plug product.

Net Loss

During the year ended January 31, 2015, the Company incurred a net loss from continuing operations of $1,090,336 compared with a net loss from continuing operation of $7,452,402 for the year ended January 31, 2014. The decrease in net loss of $6,362,066 is attributable to an increase in general and administrative expenses of $38,029; a decrease in foreign currency gain of $783 resulting from the transfer of funds from Canada to US in the prior year; a decrease in impairment loss resulting from  $5,265,000 incurred in the prior year related to the Company’s patent; an increase in interest expense of $3,289 resulting from an increase in notes payable; and a decrease in amortization of deferred stock compensation of $1,139,167, resulting from a decrease of $1,879,167  for fully amortized options in the prior year, and an increase of $740,000 for stock awards granted in the current year.

Liquidity and Capital Resources

As at January 31, 2015, the Company had cash in the amount of $13,322, compared to $5,684 as of January 31, 2014.

The Company had a working capital deficit of $274,099 as of January 31, 2015, compared to a working capital deficit of $90,422 as of January 31, 2014. The increase in working capital deficit of $183,677 is primarily attributable to an increase in cash of $7,638; an increase in accounts payable and accrued expenses of $5,270; and an increase in related party notes payable of $186,045, of which $114,881 was held as a long-term liability in the prior year.

Cash flows from operating activities-continuing operations

During the year ended January 31, 2015, the Company used $140,066 of cash flow for operating activities, compared with $14,524 for the year ended January 31, 2014. The increase in cash used for operating activities of $125,542 is primarily attributable to a decrease in the net loss from operations of $6,362,066, a decrease in deferred stock compensation amortization of $1,139,167, a decrease in impairment loss of $5,265,000 related to the Company’s patent, a decrease in accounts payable and accrued expenses of $35,232, and a decrease in related party payables of $48,209.

Cash flows from investing activities-continuing operations

During the years ended January 31, 2015 and 2014, the Company used no funds for investing activities.

Cash flows from financing activities-continuing operations

During the year ended January 31, 2015, the Company was provided with $147,054 of cash flow from financing activities compared with $38,991 during the year ended January 31, 2014. The increase in cash flows provided from financing activities of $108,713 is attributable to an increase in proceeds from related party loans of $108,063, and proceeds from the issuance of common stock of $650.

Future Financings

The Company will require additional financing in order to proceed with its plan of operations, including approximately $1,000,000 over the next 12 months to pay for its ongoing expenses. These cash requirements include working capital, general and administrative expenses, the development of the Company’s product line, and the pursuit of acquisitions. These cash requirements are in excess of the Company’s current cash and working capital resources. Accordingly, the Company will require additional financing in order to continue operations and to repay its liabilities. There is no assurance that any party will advance additional funds to the Company in order to enable the Company to sustain its plan of operations or to repay its liabilities. There can be no assurance that raising the desired amount of financing will enable the Company successfully to complete its plan of operations.

The Company anticipates continuing to rely on equity sales of its common stock in order to continue to fund its business operations. Issuances of additional shares will result in dilution to the Company’s existing stockholders. There is no assurance that the Company will achieve any additional sales of its equity securities or arrange for debt or other financing to fund its planned business activities.

Personnel

As of January 31, 2015, and as of the date of this filing, the Company had no employees, excluding its executive officers and directors.

Contractual Obligations

As a “smaller reporting company”, the Company is not required to provide tabular disclosure obligations.

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Going Concern

These 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 as a going concern 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 January 31, 2015, the Company had a working capital deficit from continuing operations of $274,099, and an accumulated deficit of $8,982,877. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

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 discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s consolidated audited financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. The Company believes that understanding the basis and nature of the estimates and assumptions involved with the following aspects of the Company’s financial statements is critical to an understanding of its consolidated financial statements.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States and 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. The Company regularly evaluates estimates and assumptions, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 605, Revenue Recognition. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is reasonably assured.  As of January 31, 2015, no revenue has been recognized, as the Company has not commenced operations.

Stock-Based Compensation

The Company records stock-based compensation in accordance with ASC 718, Share-Based Payments, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Impairment of Long-Lived Assets

The Company’s long-lived assets, including intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset.

Due to the Company’s recurring losses, the costs related to its patents were evaluated for impairment and it was determined that there were no sufficient estimated future cash flows for the recoverability of the asset.  As a result, an impairment loss of $5,265,000 has been recorded for the year ended January 31, 2014.

Discontinued Operations

In accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations, the Company reported the results of its former subsidiary, Eaton Scientific Solutions, Ltd. (“Eaton Sub”), as a discontinued operation.

Recently Adopted Accounting Standards: 

The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the US Securities and Exchange Commission (“SEC”), and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company. The Company has recently adopted the following new accounting standards:

Adopted:

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive (ASU 2013-02). This guidance is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012. The adoption of this update did not have a material impact on its consolidated financial statements.

In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. The adoption of this update did not have a material impact on its consolidated financial statements.

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In July 2013, the FASB issued ASU No 2013-11, Presentation of an Unrecognized Tax Benefit When Net Operating Loss Carryforward Exists.  The objective of ASU 2013-11 is to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits, and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and interim reporting periods therein. Early adoption is permitted. The adoption of this update did not have a material impact on its consolidated financial statements.

In June 2014, the FASB issued ASU No, 2014-10, Elimination of Certain Financial Reporting Requirements for Development Stage Entities.  The objective of ASU 2014-10 is to reduce the cost and complexity associated with the incremental reporting requirements for development stage entities.  This Update removes all incremental financial reporting requirements, and eliminates an exception provided to development stage entities in Topic 810.  The amendments in this standard are effective retrospectively for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted.

Not Yet Adopted:

In April 2014, the FASB issued ASU No. 2014-08 Presentation of Financial Statements (Top 205): Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity.  The objective of ASU No. 2014-08 is to clarify the criteria for determining which disposals can be presented as discontinued operations and also modifies related disclosure requirements. The standard is required to be adopted by public business entities in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods.  Early adoption is permitted for new disposals beginning in the first quarter of 2014, provided financial statements have not been issued before the release of this standard. The Company is evaluating the effect, if any, adoption of ASU No. 2014-08 will have on its consolidated financial statements.

In August 2014, the FASB issued ASU No 2014-15 Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The objective of ASU 2014-15 is to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.  The Company is evaluating the effect, if any, adoption of ASU No. 2014-15 will have on its consolidated financial statements.

In November 2014, the FASB issued ASU No. 2014-17 Business Combinations (Topic 805): Pushdown Accounting. The objective of ASU 2014-17 is to provide guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The Company is evaluating the effect, if any, adoption of ASU No. 2014-17 will have on its consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01 Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This Update eliminates from GAAP the concept of extraordinary items. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities. The Company is evaluating the effect, if any, adoption of ASU No. 2015-01 will have on its consolidated financial statements.

Recently Issued Accounting Standards Updates: 

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

As a “smaller reporting company”, the Company is not required to provide the information required by this Item.

The Company’s consolidated audited financial statements are stated in United States dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following consolidated audited financial statements are filed as part of this annual report:

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PCAOB Registered Auditors – www.sealebeers.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Eco Science Solutions, Inc.

We have audited the accompanying consolidated balance sheets of Eco Science Solutions, Inc. as of January 31, 2014 and 2015, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended January 31, 2015. Eco Science Solutions, Inc.’s management is responsible for these financial statements. 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 audit 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 audit 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 Eco Science Solutions, Inc. as of January 31, 2014 and 2015, and the results of its operations and its cash flows for each of the years in the two-year period ended January 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the financial statements, the Company has no revenues, has negative working capital at January 31, 2015, has incurred recurring losses and recurring negative cash flow from operating activities, and has an accumulated deficit which raises substantial doubt about its ability to continue as a going concern.  Management’s plans concerning these matters are also described in Note 1.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Seale and Beers, CPAs

Seale and Beers, CPAs

Las Vegas, Nevada

April 29, 2015

8250 W. Charleston Blvd., Suite 100 - Las Vegas, NV 89117 Phone: (888)727-8251 Fax: (888)782-2351

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The accompanying notes are an integral part of these financial statements

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The accompanying notes are an integral part of these financial statements

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The accompanying notes are an integral part of these financial statements

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The accompanying notes are an integral part of these financial statements

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ECO SCIENCE SOLUTIONS, INC.

NOTES TO THE FINANCIAL STATEMENTS

JANUARY 31, 2015

NOTE 1: NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS

The Company was incorporated in the state of Nevada on December 8, 2009 under the name Pristine Solutions, Inc. The Company’s wholly owned subsidiary, Pristine Solutions Limited, was incorporated under the laws of Jamaica. The Company’s original business plan focused on developing a network of sales points for the sale and service of tankless water heaters in Jamaica, through Pristine Solutions Limited. 

On August 22, 2012, Christine Buchanan-McKenzie, the Company’s former President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and a member of the Board of Directors, resigned from all positions with the Company.  The resignation did not involve any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. On the same day, Mr. Michael Borkowski was appointed as President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer, and a member of the Board of Directors of the Company.

On August 23, 2012, the Company and its controlling stockholders entered into a Share Exchange Agreement (the “Share Exchange”) with Eaton Scientific Systems, Ltd., a Nevada corporation (“ESSL”) and the shareholders of ESSL (the “ESSL Shareholders”), whereby the Company acquired 25,000,000 shares of common stock (100%) of ESSL (the “ESSL Stock”) from the ESSL Shareholders.  In exchange for the ESSL Stock, the Company issued 25,000,000 shares of its common stock to the ESSL Shareholders (the “Share Exchange”). In addition, the Company’s Chief Executive Officer, Mr. Michael J. Borkowski, on behalf of the Company, entered into a Common Stock Purchase Agreement with the Company’s controlling shareholder, and former President, Ms. Christine Buchanan-McKenzie, whereby the Company would purchase one hundred percent (100%), or 240,000,000 shares, of the Company’s common shares owned by Mrs. Buchanan-McKenzie, at par value $.0001, and representing approximately 54.1% of the Company’s total issued and outstanding shares.  The Common Stock Purchase Agreement, and subsequent transaction closing, was completed on October 22, 2012.  On October 23, 2012, the Common Stock Purchase Agreement was finalized, and a change in control of the Company took place. 

In conjunction with the Share Exchange and Common Stock Purchase Agreement, the total shares held by the ESSL Shareholders are 265,000,000, or approximately 59.8% of the issued and outstanding common stock of the Company as of October 30, 2012.  In addition, certain ESSL shareholders owning a total of 135,779,375 shares of the Company’s common stock, representing approximately 30.64% of the issued and outstanding common stock of the Company, entered into three (3) separate twenty-four (24) month Lock-Up Agreements.

As a result of the Share Exchange and Common Stock Purchase Agreement, (i) there was a change in control of the Company; (ii) ESSL became the Company’s wholly owned subsidiary; and (iii) the ESSL operations continued as its primary business.  In addition, on November 27, 2012, the Company changed its name to Eaton Scientific Systems, Inc.

In October, 2013, the Company’s Management was introduced to Domenic Marciano (“Marciano”).  Marciano represented that he intended to acquire an exclusive license to a unique automotive product, the EcoFlora Spark Plug, (the “EcoFlora Plug”) with a proprietary technology, and that the EcoFlora Plug has the potential to be uniquely positioned in the automotive parts business in the United States and International automotive parts marketplace.

The Majority Shareholders acknowledge that the Company has not been able to attract investment capital sufficient to execute its business plan because of its Share price.  Further, Management believes that the potential success of the EcoFlora Plug technology could potentially provide value to the Company and its shareholders. As a result, on November 26, 2013, the Company and its Majority Shareholders (the “Majority Stockholders”) entered into an Agreement for the Purchase of Common Stock (the “Stock Purchase Agreement”) with Marciano whereby Marciano acquired 227,370,000 shares of the Company’s common stock from the Majority Stockholders at par value $.0001, representing approximately 51.3% of the Company’s total issued and outstanding shares, in exchange for cash in the amount of $22,737 (the “Cash Proceeds”).  The Stock Purchase Agreement, and subsequent transaction closing, was completed on November 26, 2013, and a change in control of the Company took place.

The Majority Shareholders and the Company’s Management also believe it is in the best interest of the Company’s Shareholders to operate Eaton Scientific Systems, Ltd. (“Eaton Sub”) a Nevada corporation and wholly owned subsidiary of the Company, as a privately held Company, until such time where it is sufficiently capitalized to increase the probability for its Clinical Trials of Homatropine (“Tropine 3”) in oral suspension for the treatment of hot flash symptoms in pre-menopausal, menopausal and post menopausal women, to be in a position to yield results that may provide the opportunity for a potential FDA approval for marketing to consumers in the US.

In connection with the terms and conditions of the Stock Purchase Agreement and sale of 227,370,000 shares held by the Majority Stockholders:

1.

Marciano appointed two new directors to the Company’s board of directors; and

2.

The “Lock-Up-Leak-Out” Agreements executed in October 2012 were cancelled by mutual agreement between the Board and the Company’s Shareholders who were party to the Agreements.

3.

The Majority Shareholders of the Company have voted to “Spin-out” to its Shareholders, one hundred percent (100%) of the issued and outstanding shares of Eaton Scientific Systems Ltd., its operating subsidiary, as of the record date of November 25, 2013, on a one-for-one basis within sixty-days (60) of the Change of Control of the Company, or by January 25, 2014.  

On January 9, 2014, the Spin-out was complete, and Eaton Scientific Systems, Ltd. was no longer a subsidiary of the Company.

On February 14, 2014, the Company changed its name to Eco Science Solutions, Inc. (OTCQB.ESSI).

NOTE: The following notes and any further reference made to “the Company”, "we", "us", "our" and "ESSI" shall mean Eco Science Solutions, Inc., unless otherwise indicated.

Headquartered in Miami, Florida, Eco Science Solutions, Inc., a Nevada corporation, is charged with the origination, development and commercialization of innovative aftermarket automotive parts.

On December 4, 2013, the Company (the “Company”) executed an Agreement of the License of Intellectual Property (the “License Agreement”) dated November 4, 2013 with Eco Science Solutions International, Inc., a Canadian corporation (“ESS International”), for the exclusive license to the EcoFlora Spark Plug, recently patented in the US and that has filed for Patent protection in Canada and the International community, based on its "Internal Pre-Combustion Chamber High Efficiency Spark Plug" technology. In connection with the License Agreement, the Company issued ESS International 2,500,000 shares of the Company’s Series “A” Convertible Preferred Stock (“Preferred Stock”), in exchange for the exclusive license of the Patent Applications, in perpetuity.  The Preferred Stock is convertible into common stock at a conversion rate of 10common shares for each preferred share.

On February 14, 2014, the Company effected a 1000-to-1 reverse stock split.  As a result, the total shares of common stock issued and outstanding was adjusted to 443,001 shares with a par value of $0.10.

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On April 4, 2014, the Company received notice from Eco Science Solutions International, Inc. to convert 100% of the Series “A” preferred shares into restricted common shares on a 10 for 1 basis.  As a result, on April 9, 2014, 25,000,000 shares of the Company’s restricted common stock was issued, of which 19,866,668 shares were issued to the Company’s chairman, Domenic Marciano, and 5,133,332 shares were issued to non-related parties.  Subsequent to the conversion, Eco Science Solutions International, Inc. no longer holds any shares of the Company’s capital stock, and Mr. Marciano holds 20,094,038 shares of the Company’s common stock, which represents 62.13% of the total issued and outstanding shares of the Company’s common stock on a fully diluted basis.

On October 7, 2014, the US Patent and Trademark Office (“USPTO”) issued Patent #8,853,925 for the EcoFlora Plug, based on its "Internal Pre-Combustion Chamber High Efficiency Spark Plug" technology, and has patent pending applications both in Canada and worldwide.

The Company is currently in the testing stages, and intends to validate its technology and then and manufacture and sell the technology.

Going Concern

These 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 January 31, 2015, the Company had a working capital deficit from continuing operations of $274,099, and an accumulated deficit of $8,982,877. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations from the Company's future business. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

The 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.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of significant accounting policies is presented to assist in understanding the Company’s financial statements.  These accounting policies conform to accounting principles, generally accepted in the United States of America, and have been consistently applied in the preparation of the financial statements.

Basis of Presentation

These consolidated financial statements and related notes are prepared in accordance with generally accepted accounting principles in the United States and are expressed in US dollars. The Company’s fiscal year end is January 31.

Use of Estimates

The preparation of consolidated financial statements in conformity with United States 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to long-lived assets and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of purchase to be cash equivalents. As of January 31, 2015 and 2014, respectively, the Company had no cash equivalents.

Intangible Assets

Intangible assets consist of licensing and other direct costs incurred in connection with the license rights of pending patents, and are capitalized and amortized over the shorter of the economic or legal life of the patent.  During the year ended January 31, 2015 and 2014, respectively, $0 and $5,265,000 were capitalized to patent costs.

Impairment of Long-Lived Assets

The Company’s long-lived assets, including intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the historical-cost carrying value of an asset may no longer be appropriate. The Company assesses recoverability of the asset by comparing the undiscounted future net cash flows expected to result from the asset to its carrying value. If the carrying value exceeds the undiscounted future net cash flows of the asset, an impairment loss is measured and recognized. An impairment loss is measured as the difference between the net book value and the fair value of the long-lived asset.

Due to the Company’s recurring losses, the costs related to its patents were evaluated for impairment and it was determined that there were no sufficient estimated future cash flows for the recoverability of the asset.  As a result, an impairment loss of $5,265,000 was recorded for the year ended January 31, 2014.

Fair Value Measurements

Pursuant to ASC 820, Fair Value Measurements and Disclosures and ASC 825, Financial Instruments, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 and 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 and 825 prioritizes the inputs into three levels that may be used to measure fair value:

The Company’s financial instruments consist principally of cash, accounts payable, and accrued liabilities. Pursuant to ASC 820 and 825, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

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Revenue Recognition

The Company recognizes revenue in accordance with ASC 605, Revenue Recognition. Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is reasonably assured.  As of January 31, 2015, no revenue has been recognized, as the Company has not commenced operations.

Stock-Based Compensation

The Company records stock-based compensation in accordance with ASC 718, Share-Based Payments, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

Basic and Diluted Net Income (Loss) Per Share

The Company computes net income (loss) per share in accordance with ASC 260, Earning per Share.  ASC 260 requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing Diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

Discontinued Operations

In accordance with ASC 205-20 and ASU 2014-08, Presentation of Financial Statements - Discontinued Operations, the Company reported the results of its former subsidiary, Eaton Scientific Solutions, Ltd. (“Eaton Sub”), as a discontinued operation in the Company’s annual financial statements for the year ended January 31, 2014. The application of ASC 205-20 and the adoption of ASU 2014-08 are discussed therein.

Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at January 31, 2015, the Company has no items that represent comprehensive loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

Recently Adopted Accounting Standards: 

The Company evaluates the pronouncements of various authoritative accounting organizations, primarily the Financial Accounting Standards Board (“FASB”), the US Securities and Exchange Commission (“SEC”), and the Emerging Issues Task Force (“EITF”), to determine the impact of new pronouncements on US GAAP and the impact on the Company. The Company has recently adopted the following new accounting standards:

Adopted:

In February 2013, the FASB issued ASU No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive (ASU 2013-02). This guidance is the culmination of the FASB’s deliberation on reporting reclassification adjustments from accumulated other comprehensive income (AOCI). The amendments in ASU 2013-02 do not change the current requirements for reporting net income or other comprehensive income. However, the amendments require disclosure of amounts reclassified out of AOCI in its entirety, by component, on the face of the statement of operations or in the notes thereto. Amounts that are not required to be reclassified in their entirety to net income must be cross-referenced to other disclosures that provide additional detail. This standard is effective prospectively for annual and interim reporting periods beginning after December 15, 2012. The adoption of this update did not have a material impact on its consolidated financial statements.

In April 2013, the FASB issued ASU No. 2013-07, Presentation of Financial Statements (Top 205): Liquidation Basis of Accounting. The objective of ASU No. 2013-07 is to clarify when an entity should apply the liquidation basis of accounting and to provide principles for the measurement of assets and liabilities under the liquidation basis of accounting, as well as any required disclosures. The amendments in this standard is effective prospectively for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. The adoption of this update did not have a material impact on its consolidated financial statements.

In July 2013, the FASB issued ASU No 2013-11, Presentation of an Unrecognized Tax Benefit When Net Operating Loss Carryforward Exists.  The objective of ASU 2013-11 is to reduce diversity in practice by providing guidance on the presentation of unrecognized tax benefits, and will better reflect the manner in which an entity would settle at the reporting date any additional income taxes that would result from the disallowance of a tax position when net operating loss carryforwards, similar tax losses, or tax credit carryforwards exist. The amendments in this Update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, and interim reporting periods therein. Early adoption is permitted. The adoption of this update did not have a material impact on its consolidated financial statements.

In June 2014, the FASB issued ASU No, 2014-10, Elimination of Certain Financial Reporting Requirements for Development Stage Entities.  The objective of ASU 2014-10 is to reduce the cost and complexity associated with the incremental reporting requirements for development stage entities.  This Update removes all incremental financial reporting requirements, and eliminates an exception provided to development stage entities in Topic 810.  The amendments in this standard are effective retrospectively for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted.

Not Yet Adopted:

In April 2014, the FASB issued ASU No. 2014-08 Presentation of Financial Statements (Top 205): Reporting Discontinued Operations and Disclosure of Disposals of Components of an Entity.  The objective of ASU No. 2014-08 is to clarify the criteria for determining which disposals can be presented as discontinued operations and also modifies related disclosure requirements. The standard is required to be adopted by public business entities in annual periods beginning on or after December 15, 2014, and interim periods within those annual periods.  Early adoption is permitted for new disposals beginning in the first quarter of 2014, provided financial statements have not been issued before the release of this standard. The Company is evaluating the effect, if any, adoption of ASU No. 2014-08 will have on its consolidated financial statements.

In August 2014, the FASB issued ASU No 2014-15 Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The objective of ASU 2014-15 is to provide guidance in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.  The Company is evaluating the effect, if any, adoption of ASU No. 2014-15 will have on its consolidated financial statements.

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In November 2014, the FASB issued ASU No. 2014-17 Business Combinations (Topic 805): Pushdown Accounting. The objective of ASU 2014-17 is to provide guidance on whether and at what threshold an acquired entity that is a business or nonprofit activity can apply pushdown accounting in its separate financial statements. The amendments in this Update are effective on November 18, 2014. After the effective date, an acquired entity can make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. However, if the financial statements for the period in which the most recent change-in-control event occurred already have been issued or made available to be issued, the application of this guidance would be a change in accounting principle. The Company is evaluating the effect, if any, adoption of ASU No. 2014-17 will have on its consolidated financial statements.

In January 2015, the FASB issued ASU 2015-01 Income Statement—Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items. This Update eliminates from GAAP the concept of extraordinary items. The amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The effective date is the same for both public business entities and all other entities. The Company is evaluating the effect, if any, adoption of ASU No. 2015-01 will have on its consolidated financial statements.

Recently Issued Accounting Standards Updates: 

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries. None of the updates are expected to a have a material impact on the Company's consolidated financial position, results of operations or cash flows.

NOTE 3: NOTES PAYABLE

On January 7, 2013, the Company issued a Convertible Promissory Note in the amount of $250,000 to a non-related party (the “Convertible Note”).  The Convertible Note and accrued interest was subsequently purchased and assigned to another non-related party as part of a Convertible Note Assignment and Purchase Agreement (the “Assignment”) dated August 18, 2013.  The Convertible Note, extended by modification, is payable within two(2) years, or by January 7, 2017, accrues interest at a rate of 6% per annum, and is convertible into the Company’s common stock at a rate of $0.003 per share. In accordance with certain Assignment of Debt agreements dated between April 16, 2014 and  October 6, 2014, total principal in the amount of $13,650 was assigned to five non-related parties (the “Assignees”), transferring all the rights of the original Convertible Note. As a result, the principal balance of the Convertible Note was reduced to $236,350.  Interest in the amount of $30,499 and $15,986 has been accrued as of January 31, 2015 and 2014, respectively, and is included as an accrued expense on the accompanying balance sheets.

On April 29, 2014, the Company received notice from two Assignees to convert 100% of the $6,450 note into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 2,150,000 unrestricted shares of the Company’s common stock were issued to the Assignees.

On June 27, 2014, the Company received notice from an Assignee to convert 100% of the Assignee’s $3,000 note into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 1,000,000 unrestricted shares of the Company’s common stock were issued to the Assignee.

On September 11, 2014, the Company received notice from an Assignee to convert 100% of the Assignee’s $1,200 note into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 400,000 unrestricted shares of the Company’s common stock were issued to the Assignee.

On October 6, 2014, the Company received notice from an Assignee to convert 100% of the Assignee’s $3,000 note into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 1,000,000 unrestricted shares of the Company’s common stock were issued to the Assignee.

As of January 31, 2015 and 2014, respectively, the Company has accrued $30,499 and $15,986 in interest on notes and loans payable.

NOTE 4: RELATED PARTY TRANSACTIONS

As of January 31, 2015, and 2014, respectively, related parties are due a total of $244,295 and $97,241, which is comprised of $186,045 and $38,991, respectively, in cash loans to the Company, and $58,250 and $58,250, respectively, in accrued compensation.

Related party transactions consist of the following:

On November 15, 2013, the Company entered into an Employment Agreement with Mr. Michael J. Borkowski (the “2013 Employment Agreement”) to serve as the Company’s President, CEO, and Director. The Employment Agreement, which replaces a 2012 Employment Agreement, is for a term of one (1) year, and includes compensation in the amount of $18,000 per year, compensation for certain travel expenses, and grants to purchase 400,000 shares of the Company’s common stock at par, which vest periodically beginning February 15, 2014, at 100,000 shares per vesting period through November 15, 2014 (the “2013 Stock Award”). In connection with the Stock Award, $640,000 has been recorded as deferred compensation, which has been fully expensed in the current year. The 2013 Employment Agreement expired on November 15, 2014.

On November 15, 2014, the Company entered into a new Employment Agreement with Mr. Borkowski (the “2014 Employment Agreement”). The Employment Agreement is for a term of one (1) year, and includes compensation in the amount of $18,000 per year, compensation for certain travel expenses, and grants to purchase 1,000,000 shares of the Company’s common stock at par, which vest periodically beginning November 15, 2014, at 250,000 shares per vesting period through November 15, 2015 (the “2014 Stock Award”). In connection with the 2014 Stock Award, $400,000 has been recorded as deferred compensation, of which $100,000 has been expensed in the current year. There remains $300,000 in deferred compensation to be amortized over the next 10 months.

As of January 31, 2015 and 2014, $750 has been recorded as prepaid related party compensation under the 2013 Employment Agreement, and $59,000 has been recorded as unpaid compensation under the 2012 Employment Agreement.

On November 4, 2013, the Company issued a Promissory Note (the “Note”) in the amount of $22,000 to Eco Science Solutions International, Inc., a company controlled by Domenic Marciano, the Company’s chairman, for cash loans made to the Company.  The Note bears interest at a rate of 5% per annum and is due within ninety (90) days of written demand. As of January 31, 2015, the Note remains unpaid, and no demand has been made. Interest in the amount of $1,365 and $265 has been accrued as of January 31, 2015 and 2014, respectively, and is included as an accrued expense on the accompanying balance sheets.

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On January 31, 2014, the Company issued a Convertible Promissory Note (the “Convertible Note”) in the amount of $16,991 to Eco Science Solutions International, Inc., for cash loans made to the Company.  Modifications to the Convertible Note have been made through January 31, 2015, to increase the principal by $147,054, representing additional cash loans made to the Company for overhead advances. The Convertible Note bears interest at a rate of 5% per annum, matures in one (1) year, or January 31, 2016, and is convertible into the Company’s common stock at a rate equal to the fair market value on the date of conversion. As of January 31, 2015, the Note remains unpaid, and no demand has been made. Interest in the amount of $2,941 and $0 has been accrued as of January 31, 2015 and 2014, respectively, and is included as an accrued expense on the accompanying balance sheets.

On April 9, 2014, in connection with the conversion of certain preferred stock, Domenic Marciano, the Company’s chairman, was issued 19,866,668 of the Company’s common stock (Note 6).

As of January 31, 2015 and 2014, respectively, the Company has accrued $4,306 and $265 in interest on related party loans.

NOTE 5: COMMITMENTS AND CONTINGENCIES

On December 4, 2013, the Company (the “Company,” the “Licensee”) executed an Agreement of the License of Intellectual Property (“License Agreement”) dated November 4, 2013 with Eco Science Solutions International, Inc., a Canadian corporation (“Licensor”), for the license of certain US and Canadian Patent Pending Applications in perpetuity.  In connection with the terms and conditions of the License Agreement, the Company will pay Licensor a royalty equal to three percent (3%) of Gross Revenues (the “Gross Revenues”) earned in connection with the Patent License, payable on a quarterly basis.  As of January 31, 2015, no Gross Revenues have been earned.

NOTE 6: PREFERRED STOCK

The total number of authorized shares of preferred stock that may be issued by the Company is 50,000,000 shares with a par value of $0.001.

On December 4, 2013, in connection with the Agreement of the License of Intellectual Property dated November, 4, 3013, the Company issued 2,500,000 shares of Series “A” Convertible Preferred Stock to Eco Science Solutions International, Inc., a company controlled by Domenic Marciano, the Company’s chairman, valued at $5,265,000. As a result, $5,262,500 was recorded as preferred additional paid in capital.  The Preferred Stock is convertible into the Company’s common stock at a rate of 10 shares of common stock for each share of Preferred Stock.

On April 4, 2014, the Company received notice from Eco Science Solutions International, Inc. to convert 100% of the Series “A” preferred shares into restricted common shares on a 10 for 1 basis.  As a result, on April 9, 2014, 25,000,000 shares of the Company’s restricted common stock were issued, and preferred additional paid in capital was reduced by $5,262,500.

As of January 31, 2015 and 2014, respectively, no shares and 2,500,000 shares of the Company’s preferred stock were issued and outstanding.

NOTE 7: COMMON STOCK

The following reflects the common stock transactions as adjusted for the change in par value, and the effects of the 1000-to-1 reverse stock-split that occurred on February 14, 2014.

The total number of authorized shares of common stock that may be issued by the Company is 650,000,000 shares with a par value of $0.10.

On February 14, 2014, the Company effected a 1000-to-1 reverse stock split.  As a result, the total shares of common stock issued and outstanding was reduced to 443,001 common shares with a par value of $0.10.

On February 15, 2014, in accordance with his 2013 Employment Agreement, the Company issued 100,000 shares of restricted common stock, valued at $160,000, to its President for cash in the amount of $100. As a result, deferred compensation was reduced by $160,000, and additional paid in capital was reduced by $9,900.

On March 15, 2014, in accordance with his 2013 Employment Agreement, the Company issued 100,000 shares of restricted common stock, valued at $160,000, to its President for cash in the amount of $100. As a result, deferred compensation was reduced by $160,000, and additional paid in capital was reduced by $9,900.

On April 4, 2014, the Company received notice from Eco Science Solutions International, Inc. to convert 100% of the Series “A” preferred shares into restricted common shares on a 10 for 1 basis.  As a result, on April 9, 2014, 25,000,000 shares of the Company’s restricted common stock was issued, and $2,765,000 was recorded as additional paid in capital.

On April 29, 2014, the Company received notice from two holders of a Convertible Note Payable to convert principal in the amount of $6,450 into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 2,150,000 unrestricted shares of the Company’s common stock, with a par value of $215,000, were issued to the note holder, and additional paid in capital was reduced by $208,550.

On June 27, 2014, the Company received notice from the holder of a $3,000 Convertible Note Payable to convert 100% of principal into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 1,000,000 unrestricted shares of the Company’s common stock, with a par value of $100,000, were issued to the note holder, and additional paid in capital was reduced by $97,000.

On July 15, 2014, in accordance with his 2013 Employment Agreement, the Company issued 100,000 shares of restricted common stock, valued at $160,000, to its President for cash in the amount of $100. As a result, additional paid in capital was reduced by $9,900.

On September 11, 2014, the Company received notice from the holder of a $1,200 Convertible Note Payable to convert 100% of principal into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 400,000 unrestricted shares of the Company’s common stock, with a par value of $40,000, were issued to the note holder, and additional paid in capital was reduced by $38,800.

On October 6, 2014, the Company received notice from the holder of a $3,000 Convertible Note Payable to convert 100% of principal into the Company’s common stock at the conversion rate of $0.003 per share.  As a result, 1,000,000 unrestricted shares of the Company’s common stock, with a par value of $100,000, were issued to the note holder, and additional paid in capital was reduced by $97,000.

On November 15, 2014, in accordance with his 2013 Employment Agreement, the Company issued 100,000 shares of restricted common stock, valued at $160,000, to its President for cash in the amount of $100. As a result, deferred compensation was reduced by $160,000, and additional paid in capital was reduced by $9,900.

On November 15, 2014, in accordance with his 2014 Employment Agreement, the Company issued 250,000 shares of restricted common stock, valued at $100,000, to its President for cash in the amount of $250. As a result, additional paid in capital was reduced by $24,750.

During the years ended January 31, 2015 and 2014, respectively, a total of $945,000 and $2,084,167 in deferred compensation has been expensed. There remains $453,750 and $358,750, respectively, in deferred compensation as of January 31, 2015 and 2014, to be expensed over the next 10 months.

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As of January 31, 2015 and 2014, respectively, 30,643,001 and 443,001 shares of the Company’s common stock were issued and outstanding.

NOTE 8: WARRANTS AND OPTIONS

The following table represents the number of options currently granted under the 2012 Employee Stock Option Plan:

As of January 31, 2015 and 2014, the Company has granted a total of 6,500,000 options to purchase common stock shares. In connection with the options granted, a total of $2,665,000 has been recorded as deferred compensation, of which $205,000 and $2,084,617 has been expensed during the years ended January 31, 2015 and 2014, respectively. There remains $153,750 and $358,750 of deferred compensation as of January 31, 2015 and 2014, respectively.

NOTE 9: RESTRICTED STOCK AWARDS

On February 15, 2014, in connection with a certain Employment Agreement dated November 15, 2013, its President was awarded the right to purchase 400,000 shares of the Company’s restricted common stock (the “Restricted Stock Units”, “RSUs”) at a per share price of $0.001 (the “2013 Stock Award”).  The 2013 Stock Award, valued at $640,000, vested periodically over the period beginning February 15, 2014 through November 15, 2014, at 100,000 RSUs per vesting period.  During the year ended January 31, 2015, the Company recorded deferred compensation in the amount of $640,000, which has been fully expensed in the current year for the 400,000 RSUs vested through January 31, 2015.  

On November 15, 2014, in connection with a certain Employment Agreement dated November 15, 2014, its President was awarded the right to purchase 1,000,000 shares of the Company’s restricted common stock  at a per share price of $0.001 (the “2014 Stock Award”).  The 2014 Stock Award, valued at $400,000, vests periodically over the period beginning November 15, 2014 through November 15, 2015, at 250,000 RSUs per vesting period. During the year ended January 31, 2015, the Company recorded deferred compensation in the amount of $400,000, of which $100,000 has been expensed in the current year for the 250,000 RSUs vested through November 31, 2014.  There remains $300,000 in deferred compensation to be amortized over the next 10 months.

As of January 31, 2015, the Company has awarded a total of 1,400,000 Restricted Stock Units. In connection with the Stock Awards, a total of $1,040,000 has been recorded as deferred compensation, of which $740,000 has been expensed during the year ended January 31, 2015. There remains $300,000 of deferred compensation as of January 31, 2015, to be amortized over the next 10 months.

NOTE 10: DISCONTINUED OPERATIONS

On January 9, 2014, the Company completed the spin-off of its subsidiary, Eaton Scientific Systems, Ltd (the “Eaton Sub”).

As consideration for the sale of the Eaton Sub, the Company’s shareholders of record on November 25, 2013, received shares in the Eaton Sub on a one-for-one basis at the completion of the spin off.

As a result of the spin off, the net assets of the Eaton Sub were written off during the year ended January 31, 2014.  The results of operations for the year ended January 31, 2014, reflect activity of the Eaton Sub up to the finalization of the spin-off on January 9, 2014 [1].

A summary of the results of the discontinued operations of the Eaton Sub is as follows:

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A summary of the assets and liabilities of the discontinued operations of the Eaton Sub is as follows: