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Thursday, October 22, 2020

A Closer Look at Eco Science Solutions Inc (OTCMKTS:ESSI)

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Eco Science Solutions Inc (OTCMKTS:ESSI) is a micro-cap momentum player that is tangentially related to the cannabis space. The stock has been pumped higher by aggressive promotional activity over the past year, and has benefitted from an extremely tight trading float. However, as we have noted in the past, there is very little to this story that is substantive, and the company has done nothing but lose money over time without a single dollar in sales.

In a recent press release, the company reiterated its recent financing deal and put out an extensive “execution framework” that is clearly meant to continue with the pretense developed as a narrative for this company during its promotion through The Money Street, which was compensated many tens of thousands of dollars to help pump ESSI shares. We would strongly caution investors about this stock now that it has squeezed the dickens out of the shorts. This type of thing generally does not end with smiles.

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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The company is run by a pair of brothers who live on Maui. One of them recently commented on affairs at ESSI:

“2017 is setting-up to be a solid year for Eco Science Solutions and its shareholders, as our targeted sectors in the health, wellness and alternative medicine industry are on the cusp of main-stream revolution,” stated Jeff Taylor, Chief Executive Officer of Eco Science Solutions, Inc. Mr. Taylor continued with, “We are pleased with the foundational work accomplished last year in both product research & development, as well as early releases of our technology platforms. We believe the financing secured will provide the working capital to fully execute to our business plan in 2017 and beyond.”

In light of this language, it should be emphasized that this company doesn’t really have any products that seem to have a true route to monetization any time soon.

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. And the Fitrix app is not a genuine product with a viable path to any end market. Download it and see for yourself.

But the Herbo app could conceivably be of value. It’s a mapping app for marijuana consumption. It’s nicely color-coded and clearly could be useful. In addition, the company has a version of the Herbo app called the Herbo Gift Card Wallet. It is not a crypto-currency exchange mechanism. It is simply a gift card wallet. You can make purchases with it in the same manner that you can make purchases with anything else.

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” aren’t going to mop up that quickly growing pile of debt. Neither is the newly adopted jargon of corporate maturity.

We’ve witnessed 80% piled on for shareholders of the name during the trailing month. Moreover, the stock has witnessed a pop in interest, as transaction volume levels have recently pushed exceeding 120% over what the stock has registered over the longer term. This is particularly important given the stock’s tiny trading float of 5M shares. It’s something the veterans know to key on: a jump in average daily transaction volume in a stock with a restricted float can unleash fireworks as supply is squeezed, which is what we have been seeing here.

Currently trading at a market capitalization of $138.1M, ESSI has virtually no cash on the books, which stands against about $662K in total current liabilities. One should also note that debt has been growing over recent quarters. The company is pre-revenue at this point. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $ESSI stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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