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Sunday, October 25, 2020

Eco Science Solutions Inc (OTCMKTS:ESSI) Highs and Lows

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Eco Science Solutions Inc (OTCMKTS:ESSI) is a penny stock in the “health and wellness” space that’s minted a lot of big winners and big losers among traders in the past few trading sessions. The stock has been at $0.87/share and $2/share and $1.07/share, in recent sessions. From lows to highs in recent action, we see as much as 400% in upward movement in the past month. But if you look at press releases, all you see is a really bad financial report filed earlier this week, and that was filed late. So, what’s going on here?

At a quick glance, here’s what you have in ESSI: It’s sort of a poor man’s app studio that calls itself a “wellness” company. It’s run by a couple of brothers who maintain a public executive presence in the “breezy birkenstock stoner” genre on Maui. The Company has an amorphous business model, $837 in assets, $2M in debt, and losses of nearly a million bucks per quarter. And yet, one assumes there must clearly be more to it, right? Let’s explore this a bit further. The next three paragraphs represent ESSI’s public conception of itself:

Eco Science Solutions Inc. (OTCMKTS:ESSI) is “a technology-focused company that provides solutions for the health and wellness industry. From enterprise software solutions, entertaining and useful content generation for mass distribution to consumer apps for daily use, the Company develops technical solutions that empower enthusiasts in their pursuit and enjoyment of building eco-friendly businesses and living healthy lifestyles.

Eco Science’s core services span business location, localized communications between consumers and business operators, social networking, educational content, e-commerce, and delivery.

The Company’s licensed e-commerce platform enables health-and-wellness enthusiasts to easily locate, access, and connect with health-and-wellness businesses and like-minded enthusiasts, and to facilitate the research of and purchasing of eco-friendly products … anytime, anywhere.”

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We did a lot of digging on this one, and here’s what we found: In reality, the company has produced and “shipped” two apps: the Fitrix app and the Herbo app. It also advertises something called “Phion” on its web page. But with a little digging, we found that Phion is wholly owned as an LLC by a few folks in Arizona, and ESSI shareholders do not benefit from sales of Phion other than through branding association in a basic sense.

So, it’s really the apps that represent tangible value. Specifically, it’s the Herbo app.

The Fitrix app isn’t a material factor. It’s an actual app. We downloaded it. It is not the result of a genuine effort to add value in the fitness space. For example, one of the main features is a button called “Goals”. If you tap it, you get a digital pad of paper onto which, presumably, you are to type in your goals.

But the Herbo app is of value. It’s a mapping app with every location selling anything that has anything to do with weed or paraphernalia or vaping or anything vaguely even tangential to the discerning stoner’s needs at a given time. It’s nicely color-coded and clearly useful.

However, there are other apps already out there that can get you the exact same information (ie, WeedMaps, etc).

It’s a little hard to find anything else associated with this business that offers any tangible clue to its ultimate value proposition to either consumers or shareholders. Certainly, vaguely worded overtures on the value of “naturopathic wellness solutions” and other such tripe isn’t going to mop up that quickly growing couple million in debt.

The bull argument seems to be some tie to marijuana, some confusion over the business model, some nice graphics on the website, and a very small float. If there’s something we’re missing (other than the promotion going on by The Money Street), please offer your thoughts in the comments section. We don’t claim to be perfect. So, it’s possible.

The one vaguely interesting detail is that ESSI has thousands of weed-related data points logged on its mapping service (“Herbo”) in the state of California, and Californians are just about to go to the ballot box in 6 weeks and probably vote to legalize recreational marijuana in the state.

Now commanding a market cap of $55.2M, ESSI has virtually no cash on the books and total reported assets of $2k (yes, two thousand dollars), which stands against an appreciable load of total accumulated debt over $2 mln. The stock trades on a tiny 5M share float and has two apps actually out in app stores. But it’s losing money quickly, and doesn’t have any money to lose. This might be a fun one to track in the future, and you know we plan to be there every step of the way. For continuing coverage on ESSI and our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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