ECO SCIENCE SOLUTIONS, INC. - Quarter Report: 2016 October (Form 10-Q)

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Nevada	46-4199032
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1135 Makawao Avenue, Suite 103-188, Makawao, Hawaii	96768
(Address of principal executive offices)	(Zip Code)
Registrant's telephone number:	(800) 379-0226

Yes [X]  No [  ]

Yes [X] No [  ]

Large accelerated filer	[  ]	Accelerated filer	[  ]
Non-accelerated filer	[  ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	10
Item 4.	Controls and Procedures
		10
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	11
Item 1A.	Risk Factors	11
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	11
Item 3.	Defaults Upon Senior Securities	11
Item 4.	Mine Safety Disclosures	11
Item 5.	Other Information	11
Item 6.	Exhibits	12
	SIGNATURES	13

	Page
Unaudited Balance Sheets as of October 31, 2016 and January 31, 2016	F-1
Unaudited Statements of Operations for the nine months ended October 31, 2016 and 2015	F-2
Unaudited Statement of Cash Flows for the nine months ended October 31, 2016 and 2015	F-3
Notes to the Unaudited Financial Statements	F-4 to F-14

		October 31, 2016 (Unaudited)				January 31, 2016
ASSETS
Current assets
Cash		$	70,191			$	6,706
Prepaid expenses			817				-
Total current assets			71,008				6,706
Property and equipment, net			1,823				-
TOTAL ASSETS		$	72,831			$	6,706
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses		$	116,813			$	67,173
Related party payable			144,635				18,333
Notes payable, short-term, related party			30,000				-
Note payable			244,110				-
Notes payable, convertible			136,350				232,450
Notes payable, short-term, related party, convertible			251,045				251,045
Liabilities for allocated and unissued shares			2,049,865				147,510
Total current liabilities			2,972,818				716,511
Long term liabilities
Notes payable-convertible-related party, net of unamortized discount			52,245				46,710
Total long term liabilities			52,245				46,710
Total liabilities			3,025,063				763,221
Stockholders' deficit
Preferred stock, $.001 par, 50,000,000 shares authorized, none issued and outstanding at October 31, 2016 and January 31, 2016, respectively			-				-
Common stock, $0.00001 par, 650,000,000 shares authorized, 33,731,186 shares issued and 32,731,186 outstanding at October 31, 2016 and 28,226,349 issued and outstanding at January 31, 2016			3,373				2,822
Treasury stock (1,000,000 shares issued at a cost of $0.0075 per share)			(7,500	)			-
Additional paid in capital, common, and deferred compensation			9,593,971				9,133,256
Accumulated deficit			(12,542,076	)			(9,892,593	)
Total stockholders' deficit			(2,952,232	)			(756,515	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	72,831			$	6,706

ECO SCIENCE SOLUTIONS, INC.
INCOME STATEMENT
(Unaudited)
		For the three months ended October 31,								For the nine months ended October 31,
		2016				2015				2016				2015
Revenue		$	-			$	-			$	-			$	-
Cost of revenues			-				-				-				-
Gross profit			-				-				-				-
Depreciation			189								440				-
Legal, accounting and audit fees			16,779				4,000				74,993				13,502
Management and consulting fees			58,985				12,250				206,752				27,050
Research, development, and promotion			112,000				-				286,500				-
Transfer agent and filing fees			1,770				-				4,180				1,746
Office supplies and other general expenses			26,485				4,073				69,687				10,556
Advertising and marketing			605,018				-				1,296,327				-
Amortization of stock options			-				151,250				-				453,750
Net operating loss			821,226				171,573				1,938,879				506,604
Net operating loss			(821,226	)			(171,573	)			(1,938,879	)			(506,604	)
Other income (expenses)
Interest expense			(8,289	)			(7,203	)			(25,856	)			(18,974	)
Impairment loss							(150,000	)							(150,000	)
Loss on shares issued for services and fees			(305,323	)			-				(684,748	)			-
Total other income (expenses)			(313,612	)			(157,203	)			(710,604	)			(168,974	)
Net loss		$	(1,134,838	)		$	(328,776	)		$	(2,649,483	)		$	(675,578	)
Net loss per common share - basic and diluted		$	(0.036	)		$	(0.01	)		$	(0.088	)		$	(0.02	)
Weighted average common shares outstanding - basic and diluted			31,755,088				29,009,486				29,952,573				30,233,538

ECO SCIENCE SOLUTIONS, INC.
STATEMENTS OF CASH FLOWS (Unaudited)
		For the nine months ended October 31,
		2016				2015
Cash flows from operating activities:
Net loss		$	(2,649,483	)		$	(675,578	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation			440				-
Loss on shares issued for services and fees			684,748				-
Impairment loss							150,000
Stock based compensation			25,000				453,750
Amortization of debt discount			5,535				615
Liabilities from unissued shares			1,557,774				-
Changes in operating assets and liabilities:
Prepaid expenses			(817	)
Increase (decrease) in accounts payable and accrued expenses			49,640				17,803
Increase (decrease) in related party payables			126,302				(3,250	)
Net cash used in operating activities			(200,862	)			(56,660	)
Cash Flows from Investing Activities:
Purchase equipment			(2,263	)			-
Net cash used in investing activities			(2,263	)			-
Cash flows from financing activities:
Proceeds from related party loans			35,000				50,000
Repayment to related party loans			(5,000	)			-
Subscription received			-				500
Note payable			244,110				-
Repurchase of common shares			(7,500	)			-
Net cash provided by financing activities			266,610				50,500
Net decrease in cash			63,485				(6,160	)
Cash-beginning of period			6,706				13,322
Cash-end of period		$	70,191			$	7,162
NON-CASH ACTIVITIES
Shares issued for services and fees		$	25,750			$	-
SUPPLEMENTAL DISCLOSURES
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Level 1:	Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2:	Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3:	Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

Cost		$	2,262
Accumulated Depreciation			(440	)
Balance, October 31, 2016		$	1,822

(1)

SDOI will not be issued Series A Preferred Stock initially equal to the current total authorized common shares outstanding of 650,000,000;

(2)

Invoices for advertising services billed separately from the $35,000 standard monthly fee will have the same terms as the monthly fee; i.e., the amount invoiced will be paid via the issuance of S-8 shares of ESSI Common Stock (issued at a 30% discount to the market VWAP on the date of payment due or a share price of $0.01, whichever is greater).   On October 1, 2016, monthly standard fee increased to $42,000 from $35,000.

		October 31, 2016				January 31, 2016
Office lease – Security deposits		$	817			$	-
Total prepaid expense		$	817			$	-

		Note 1				Note 2				Note 3				Total
Balance, January 31, 2016		$	232,450			$	-			$	-			$	232,450
Changes:
Converted to shares			(96,100	)			-				-				(96,100	)
Additions			-				229,180				14,930				244,110
Balance, October 31, 2016		$	136,350			$	229,180			$	14,930			$	380,460

NOTE 7: RELATED PARTY TRANSACTIONS

		October 31, 2016				January 31, 2016
Related party payable compensation (2)		$	144,635			$	18,333
Notes payable (4)			30,000				-
Convertible notes payable for cash proceeds received (1)			251,045				251,045
Convertible notes payable for unpaid compensation (3)			59,000				59,000
Less: unamortized discount (3)			(6,755	)			(12,290	)
Total convertible notes payable, net of unamortized discount			303,290				297,755
Total related party loans			333,290				297,755
Total related party transactions		$	477,925			$	316,088

Description		Principal				Interest Rate			Conversion Rate	Maturity Date
Note Payable (1)		$	251,045				5%		FMV	On demand with 90 days written notice
Note Payable (3)		$	59,000				6%		80% of FMV	10/01/2017
Less: unamortized discount (3)			(6,755	)
Note Payable, net of unamortized discount		$	52,245

(1)

As of October 31, 2016 and January 31, 2016, a company controlled by the Company’s former Chairman of the Board was due a principal balance of $251,045 in respect to a demand convertible note payable.   During the nine months ended October 31, 2016 the Company has accrued $9,423 with respect to the aforementioned note payable.

(2)

Effective December 17, 2015, Mr. Jeffery Taylor was appointed to serve as Chief Executive Officer of the Company and Mr. Don Lee Taylor was appointed to serve as Chief Financial Officer of the Company. On December 21, 2015 the Company entered into employment agreements with Mr. Jeffery Taylor and Mr. Don Lee Taylor for a period of 24 months, where after the contract may be renewed in one year terms at the election of both parties.  Jeffery Taylor shall receive an annual gross salary of $115,000 and Don Lee Taylor shall receive an annual gross salary of $105,000 payable in equal installments on the last day of each calendar month and which may be accrued until such time as the Company has sufficient cash flow to settle amounts payable.  Further under the terms of the respective agreements all inventions, innovations, improvements, know-how, plans, development, methods, designs, analyses, specifications, software, drawings, reports and all similar or related information (whether or not patentable or reduced to practice) which relate to any of the Company’s actual or proposed business activities and which are created, designed or conceived, developed or made by the Executive during the Executive’s past or future employment by the Company or any Affiliates, or any predecessor thereof (“Work Product”), belong to the Company, or its Affiliates, as applicable.   During the nine months ended October 31, 2016 the Company accrued management fees in the amount of $86,250 to Mr. Jeffery Taylor and $78,750 to Mr. Don Lee Taylor.   During the nine months ended October 31, 2016 the Company reimbursed a total of $17,857 to Mr. Jeffery Taylor and $29,290 to Mr. Don Lee Taylor.   During the nine months ended October 31, 2016 the Company paid $40,179 to Mr. Jeffery Taylor and $45,895 to Mr. Don Lee Taylor.   As of October 31, 2016, there remained a total of $144,406 on the balance sheets as related party accounts payable ($18,333 – January 31, 2016).

NOTE 7: RELATED PARTY TRANSACTIONS (cont’d)

(3)

On October 1, 2015 the Company issued its former President a convertible promissory note in the principal amount of $59,000 for unpaid compensation.  The note bears interest at a rate of 6% per annum, matures on October 1, 2017, and contains a repayment provision which permits the holder to convert the debt into the Company's common stock at a rate of 80% of the fair market value of the common stock on the date of conversion.  The conversion discount of 20% of FMV results in a beneficial conversion feature.  As a result, the difference between the conversion rate and the market rate of $14,750 on the date of the transaction has been classified as a discount on the note.  As of October 31, 2016, the Company expensed $5,535 as amortization of the debt discount which is included as interest expense.  As of October 31, 2016, $6,755 of unamortized discount remains, and will be amortized over the next 14 months.

(4)

On February 17, 2016 the Company issued promissory notes to Mr. Jeffery Taylor, CEO, in the amount of $17,500 and to Mr. Don Lee Taylor, CFO, in the amount of $17,500, respectively. The notes bear interest at a rate of 1% per annum, maturing on August 17, 2016. During the nine months ended October 31, 2016, the company repaid $2,500 to Mr. Jeffery Taylor and $2,500 to Mr. Don Lee Taylor.   As of October 31, 2016, the Company has accrued $229 as interest with respect to the above notes.

Options Activity						Weighted
		Number				Average
		of Shares				Exercise Price
Outstanding at January 31, 2016			6,500,000			$	0.20
Issued			-				-
Exercised			-				-
Expired / Cancelled			(6,500,000)				0.20
Outstanding at October 31, 2016			-			$	-

 

 

		For the three months ended October 31,
		2016				2015
Depreciation		$	189			$	-
General and administrative expenses			216,019				20,323
Advertising and marketing			605,018				-
Amortization of stock options			-				151,250
Net operating loss			(812,226	)			(171,573	)
Other income (expenses)
Interest expense			(8,289	)			(7,203	)
Impairment loss							(150,000	)
Loss on shares issued for services and fees			(305,323	)			-
Total other income (expenses)			(313,612	)			(157,203	)
Net loss		$	(1,134,838	)			(328,776	)

		For the three months ended October 31,
		2016				2015				Variances
Legal, accounting and audit fees		$	16,779			$	4,000			$	12,779
Management and consulting fees			58,985				12,250				46,735
Research, development, and promotion			112,000				-				112,000
Transfer agent and filing fees			1,770				-				1,770
Office supplies and other general expenses			26,485				4,073				22,412
Total general and administrative expenses		$	216,019			$	20,323			$	195,696

		For the nine months ended
		October 31, 2016				October 31, 2015
Depreciation		$	440			$	-
General and administrative expenses			642,112				52,854
Advertising and marketing			1,296,327				-
Amortization of stock options			-				453,750
Net operating loss			(1,938,879	)			(506,604	)
Other income (expenses)
Interest expense			(25,856	)			(18,974	)
Impairment loss			-				(150,000	)
Loss on shares issued for services and fees			(684,748	)			-
Total other income (expenses)			(710,604	)			(168,974	)
Net loss		$	(2,649,483	)		$	(675,578	)

		For the nine months ended October 31,
		2016				2015				Variances
Legal, accounting and audit fees		$	74,993			$	13,502			$	61,491
Management and consulting fees			206,752				27,050				179,702
Research, development, and promotion			286,500				-				286,500
Transfer agent and filing fees			4,180				1,746				2,434
Office supplies and other general expenses			69,687				10,556				59,131
Total general and administrative expenses		$	642,112			$	52,854			$	589,258

Exhibit Number	Exhibit Description	Filed Previously	Filed herewith
3.1	Articles of Incorporation of Pristine Solutions Inc. (incorporated by reference to the Registrant’s registration statement on Form S-1 filed on May 4, 2010)	*
3.2	Certificate of Amendment filed with the Nevada Secretary of State on January 29, 2010. (incorporated by reference to the Registrant’s registration statement on Form S-1 filed on May 4, 2010)	*
3.3	Bylaws of Pristine Solutions Inc. (incorporated by reference to the Registrant’s registration statement on Form S-1 filed on May 4, 2010)	*
3.4	Amended Articles of Incorporation/Certificate of Amendment filed with the Nevada Secretary of State on March 7, 2012 (incorporated by reference to the Registrant’s Annual Report on Form 10-K for the year ended January 31, 2012 filed July 31, 2012)	*
3.5	Articles of Exchange filed with the Nevada Secretary of State on October 31, 2012 (incorporated by reference to the Registrant’s Current Report on Form 8-K filed November 13, 2012)	*
3.6	Certificate to accompany Restated Articles or Amended and Restated Articles  (incorporated by reference to the Registrant’s Current Report on Form 8-K filed January 3, 2013)	*
3.7	Certificate of Amendment to Articles of Incorporation for Nevada Profit Corporations (incorporated by reference to the Registrant’s Current Report on Form 8-K filed February 18, 2014)	*
3.8	Designation of Series A Voting Preferred shares filed with the Nevada Secretary of State on January 12, 2016	*
10.1	Employment Agreement between the Company and Mike Borkowski dated November 1, 2015	*
10.2	December 21, 2015 employment agreement between the Company and Jeffery Taylor	*
10.3	December 21, 2015 employment agreement between the Company and Don Lee Taylor	*
10.4	Technology licensing and marketing support agreement between Separation Degrees – One, Inc. (“SDOI”) and the Company dated January 1, 2016	*
10.5	Asset purchase agreement between the Company and Separation Degrees – One, Inc. (“SDOI”) dated January 4, 2016	*
10.6	Amendment No. 1 to the Technology licensing and marketing support agreement between Separation Degrees – One, Inc. (“SDOI”)	*
10.7	Amendment No. 2 to the Technology licensing and marketing support agreement between Separation Degrees – One, Inc. (“SDOI”)	*
10.8	Amendment No. 3 to the Technology licensing and marketing support agreement between Separation Degrees – One, Inc. (“SDOI”)		*
(31)	Rule 13a-14(a)/15d-14(a) Certifications
31.1	Certification of our Chief Executive Officer pursuant to Rule 13(a)-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended		*
31.2	Certification of our Chief Financial Officer pursuant to Rule 13(a)-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended		*
(32)	Section 1350 Certifications
32.1	Certification of our Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002		*
32.2	Certification of our Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002		*
(101)	Interactive Data Files
101.INS	XBRL Instance Document		*
101.SCH	XBRL Taxonomy Extension Schema Document		*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document		*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document		*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document		*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document		*

	ECO SCIENCE SOLUTIONS, INC.
Dated: December 2, 2016	/s/ Jeffery Taylor
	Jeffery Taylor
	President, Chief Executive Officer, Secretary and Director