10-Q: Eco Science Solutions Reports Continued Losses in Q3 2025, Cites Going Concern Uncertainty

Eco Science Solutions reports ongoing losses and a significant working capital deficit in its Q3 2025 filing, raising concerns about its ability to continue as a going concern.

Summary

• Eco Science Solutions, Inc. reported its financial results for the quarterly period ended October 31, 2024.
• The company has not generated significant revenues to date and has never paid any dividends.
• As of October 31, 2024, the company had a working capital deficit of approximately $16 million and an accumulated deficit of approximately $78 million.
• The company's continuation as a going concern is dependent upon continued financial support from its shareholders, the ability to raise equity or debt financing, and the attainment of profitable operations.
• For the three months ended October 31, 2024, the company reported a net loss of $275,311, compared to a net loss of $294,491 for the same period in 2023.
• For the nine months ended October 31, 2024, the company reported a net loss of $819,019, compared to a net loss of $962,593 for the same period in 2023.
• The company is actively seeking users for its Herbo ERP and HerboPay financial software and pursuing opportunities with state legislatures in states where cannabis is legal.
• The company's common stock symbol ESSI was revoked on October 6, 2022, due to delinquent SEC filings, and the company is in the process of filing a Form 15c2-11 to resume trading on the OTCMarkets site.

Sentiment

Score: 2

Explanation: The document presents a negative outlook due to continued losses, a significant working capital deficit, and concerns about the company's ability to continue as a going concern. The reliance on related party loans and the revocation of the company's stock symbol further contribute to the negative sentiment.

Positives

• The net loss for the three and nine months ended October 31, 2024 decreased compared to the same periods in 2023.
• The company is actively seeking users for its software and pursuing opportunities in the cannabis industry.
• The company is taking steps to resume trading of its stock on the OTCMarkets site.

Negatives

• The company has not generated significant revenues to date and has never paid any dividends.
• The company has a significant working capital deficit and accumulated deficit.
• The company's ability to continue as a going concern is uncertain.
• The company's common stock symbol was revoked due to delinquent SEC filings.
• The company is heavily reliant on loans from related parties.

Risks

• The company's ability to raise equity or debt financing is uncertain.
• The company may face challenges in achieving profitable operations.
• Future funding could result in dilutive issuances of equity securities or the incurrence of debt.
• The company's reliance on related party loans may not be sustainable.
• The current economic downturn may make it difficult to find new capital sources.
• The company's failure to generate income or secure financing could lead to its failure.

Future Outlook

The company intends to continue developing and operating as a technology solutions provider servicing businesses that have complex financial accounting, inventory management, and sales tracking in both regulated and non-regulated verticals and expects to continue to incur costs to expand and develop its Herbo software suite of offerings.

Management Comments

• Mr. Rountree is pursuing opportunities with state legislature in states where cannabis is legal.
• Mr. Rountree is actively searching out businesses that would benefit from using the Herbo ERP and HerboPay financial software.

Industry Context

The company is targeting regulated, cash-intensive industries such as cannabis, gaming, and firearms, as well as complex industries like oil and gas, with its Herbo ERP and HerboPay platforms.

Comparison to Industry Standards

• It is difficult to compare Eco Science Solutions to industry standards due to its lack of revenue and unique business model.
• Companies like Akerna and Greenbits offer similar software solutions for the cannabis industry, but their financial performance and market capitalization are significantly different.
• The company's reliance on related party loans and its going concern uncertainty are significant concerns compared to more established industry players.

Legal Proceedings

• A shareholder derivative complaint was filed in 2017, and a settlement was reached, resulting in changes to the board and governance reforms.
• The company is required to dedicate 15% of its revenue or financing towards governance reforms, but has not yet done so due to a lack of revenue and financing.

Related Party Transactions

• As of October 31, 2024, related parties and former related parties are due a total of $7,205,048.
• The company has employment agreements with Michael Rountree, Jeffery Taylor, Don Lee Taylor and L. John Lewis.
• The company has issued promissory notes to Rountree Consulting, a company controlled by Mr. Rountree.
• The company has consulting agreements with Jennifer Taylor and Meredith Rountree.

Stakeholder Impact

• Shareholders face the risk of dilution from future equity issuances.
• Employees face uncertainty due to the company's going concern issues.
• Creditors face the risk of non-payment due to the company's financial difficulties.

Next Steps

• The company intends to continue developing and operating as a technology solutions provider.
• The company is in the process of filing a Form 15c2-11 to resume trading on the OTCMarkets site.
• The company will implement the remaining Governance Reforms as funding becomes available and the Company begins generating revenue.

Key Dates

Keywords

financial results, going concern, net loss, working capital deficit, accumulated deficit, revenue, Herbo, software, cannabis, ESSI