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Nature of Business and Continuance of Operations
9 Months Ended
Oct. 31, 2019
Description of Business and Basis of Presentation [Abstract]  
NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS

NOTE 1: NATURE OF BUSINESS AND CONTINUANCE OF OPERATIONS

 

Organization and nature of business

 

The Company was incorporated in the state of Nevada on December 8, 2009 under the name Pristine Solutions, Inc. On January 8, 2014, the Company changed its name from Pristine Solutions, Inc. to Eco Science Solutions, Inc.  

 

During fiscal 2016 the Company changed its business focus and on January 1, 2016, the Company entered into a technology licensing and marketing support agreement with Separation Degrees – One, Inc. ("SDOI") that was focused on the development, licensing and management of on-going technology solutions and marketing campaigns for ESSI's initiatives. Additionally, the Company entered into an Asset Purchase Agreement with SDOI wherein the Company acquired a proprietary messaging and customer relationship management software platform from SDOI.

 

On January 11, 2016, the Company's Board of Directors (the "Board") authorized the creation of 1,000 shares of Series A Voting Preferred Stock. The holder of the shares of the Series A Voting Preferred Stock has the right to vote those shares of the Series A Voting Preferred Stock regarding any matter or action that is required to be submitted to the shareholders of the Company for approval. The vote of each share of the Series A Voting Preferred Stock is equal to and counted as 10 times the votes of all of the shares of the Company's (i) common stock, and (ii) other voting preferred stock issued and outstanding on the date of each and every vote or consent of the shareholders of the Company regarding each and every matter submitted to the shareholders of the Company for approval. The Agreement with SDOI was revised so that SDOI received 500,000 shares of Common Stock rather than Preferred Shares; no Preferred Shares were issued to SDOI.  In addition to the issuance of the 500,000 shares of common stock as consideration for the Asset Purchase Agreement with SDOI, the Company agreed further to settle all invoices received for services rendered by SDOI, as well as advertising fees incurred, by way of issuance of common stock at a 30% discount to market as S-8 shares.

 

On January 10, 2017, the Company entered into a Cancellation and Release Agreement with SDOI wherein the Company agreed to issue 4,000,000 common shares to SDOI (or its designee) in exchange for the cancellation of the $1,920,424 worth of remaining outstanding invoices and fees owed to SDOI.

 

On June 21, 2017, Eco Science Solutions, Inc. (ESSI) entered into a Stock Purchase Agreement ("SPA") with the shareholders of Ga-Du Corporation, a Nevada corporation ("Ga-Du", "Sellers"), wherein, ESSI agreed to purchase, and Sellers agreed to sell 100% of the shares of capital stock of Ga-Du to ESSI, in exchange for fifteen million (15,000,000) shares of ESSI Common Stock, to be issued to Sellers, pursuant to the SPA.  In addition, the SPA called for the issuance of an additional 15,000,000 shares of the Company's common stock to the Ga-Du Founders when they brought a bank equity interest to the Company.  Subsequently, effective July 30, 2017 the Company and the stockholders of Ga-Du entered into certain amendments to the original June 21, 2017, SPA cancelling the term regarding the issuance of an additional 15,000,000 Shares.

 

Additionally, on September 22, 2017, and in order to avoid diluting the holdings of existing ESSI Shareholders, Jeffery and Don Taylor, CEO and CFO of ESSI, agreed to return 8,000,000 Shares each of ESSI's Common Stock of their own to the Company for cancellation, effective September 22, 2017.

 

Following the closing of the SPA, Ga-Du is a wholly owned subsidiary of ESSI, bringing to ESSI a Financial Services Platform, and Inventory Control and Advisory Software Platforms, thus completing the ESSI product suite to benefit both consumer and professional customers of the Company.

 

On July 26, 2017, all of the Shares of an Uruguayan entity, Holway Sociedad Anonima ("Holway", "Holway SA") were purchased by certain former shareholders of Ga-Du who thereafter became the sole shareholders of Holway.  Holway's objective is to perform business in the Free-trade zone in Uruguay in accordance with the laws of the Free-trade zone; in every kind of industrial, commercial or other activity relating to its business of providing financial services.  On September 19, 2017, the Holway shareholders transferred all of their shares of Holway to Ga- Du, and will hereafter conduct business pursuant to the Holway Uruguayan registration as Ga-Du; Doing Business As (DBA).

 

Additionally, Holway has applied for a financial advisory services charter to perform its financial services through Ga-Du, and under the regulatory laws of the Uruguayan Central Bank. As of the date of this report, the process to secure the financial advisory charter remains in suspense until such time as ESSI secures additional financing.

 

Once the application for the Financial Advisory Services Charter is approved, Ga-Du, through its Financial Advisory Services Charter, and in conjunction with the Alliance Financial Network system, intends to provide foreign jurisdictions with legalized cannabis, a banking mechanism to conduct business relative to the cannabis industry, and within the laws governing cannabis industry in those foreign jurisdictions doing business with the United States, and in compliance with US and foreign laws relative to the cannabis industry.

 

Furthermore, Ga-Du will work closely with representatives of the South American MasterCard/Visa Card services, allowing Ga-Du to process merchant services through the Uruguayan entity, Holway, for transactions relative to the Cannabis industry, in countries and states where Cannabis is legalized. Presently the Company is awaiting approval of the charter prior to conducting operations under this entity.

 

Further, on September 22, 2017, Ga-Du Corporation entered into an Assignment Agreement with G&L Enterprises, wherein G&L Enterprises assigned, to Ga-Du Corporation, all of its rights, interest in, and obligations under a License and Master Marketing Agreement (LMMA) it entered into with Alliance Financial Network, Inc. ("AFN", "Alliance") on September 6, 2017 (ref: Note 6). Alliance is registered with FinCEN (MSB Registration Number: 31000094744769) as a "non-bank financial institution", compliant with the AML/BSA guidelines of FinCEN, and is regulated by the Internal Revenue Service.  Alliance operates a mobile application known as the eXPO™ electronic eXchange Portal ("eXPOTM") and provides financial and marketing services to businesses and individuals which are challenged in the traditional banking systems, and require more intensive compliance then banks are willing, or able to perform. 

 

On March 5, 2018, an Addendum to the LMMA was entered into and agreed upon, wherein the LMMA was amended to reflect the right of Ga-Du to receive revenue from Colorado businesses; the LMMA originally excluded existing Colorado business as any revenue generating businesses. In addition, the revenue split under the LMMA was also revised.  Among other things, in exchange for the split, where under Ga-Du is to receive 50% of all revenues, Ga-Du agreed to pay to Alliance $405,000 in two tranches, for operational expenses and business development in the State of Colorado as well as in other states. As a result, Ga-Du is entitled to receive 10% of all of Alliance's net revenue earned from Colorado revenues from October 15, 2017 forward.

 

A final payment to Alliance was made on April 24, 2018, as agreed upon in the Addendum to the LMMA, making the Addendum Effective.  As part of the agreed final payment $170,000 was advanced in cash by Mr. Lewis, the CEO of Ga-Du, as a loan to the Company, and Mr. Rountree, our COO, assumed the remaining $35,000 in the form of a debt assignment between a third party and Alliance.  As a result, the Company was notified of its first revenues from beta testing under the LMMA totaling $28,431 (10% of net revenue generated by Colorado Business), as at October 31, 2018.  Thereafter revenue generating operations under the terms of the LMMA with Alliance were suspended pending expansion of a banking relationship by eXPOTM in order to allow next stage transactional volume growth. Banking relationships were secured during the most recently competed quarter ended October 31, 2019, and the Company expects revenue generating operations under the terms of the LMMA to resume immediately.  The Company intends to record revenues from the aforementioned beta testing of the eXPOTM platform as of the date funds are received into our accounts. 

 

Subsequent to the period ended October 30, 2018, the Company and Alliance determined the $35K in amounts payable to a third party assumed by Mr. Rountree would be paid in cash, and the note assignment canceled. During July and August 2018, Mr. Rountree remitted the final $35,000 in payments for the benefit of Alliance, which amount has been included in related party payables.

 

With the acquisition of Ga-Du, ESSI's product suite represent is now an enclosed ecosystem for business location, localized communications between consumers and business operators, on-topic social networking, inventory management / selection, payment facilitation and delivery arrangement. The Company's holistic commerce and content platform enables health, wellness and alternative medicine enthusiasts to easily locate, access, and connect with others to facilitate the research of and purchasing of eco-science friendly products.

 

As Alliance continues its efforts to expand its eXPOTM banking relationships to support next phase operations, the Company is currently focusing on rolling out its Herbo Enterprise Software and building that user base.  The Herbo software provides a point of sale, bookkeeping and banking functions, inventory management and tracking, compliance and reporting, tax and accounting, payroll and HR, ecommerce and payment gateway services and CRM and customer loyalty functions all under one software suite. During the most recent quarter ended October 31, 2019, the Company entered into various licensing contracts for the Herbo Enterprise Software and has commenced generating revenue from this segment of its operations.

 

Financial Statements Presented

 

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments considered necessary for a fair presentation have been included.  All such adjustments are of a normal recurring nature.  Operating results for the nine months ended October 31, 2019, are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2020.  For further information, refer to the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2019 as filed with the Securities and Exchange Commission on June 28, 2019.

 

Principals of Consolidation

 

The consolidated financial statements include the accounts of Eco Science Solutions, Inc. and its wholly-owned subsidiary, Ga-Du Corporation. All significant intercompany balances and transactions have been eliminated.

 

Going Concern

 

These unaudited condensed consolidated 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 October 31, 2019, the Company had a working capital deficit of $10,751,994 and an accumulated deficit of $72,551,248. 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 unaudited consolidated 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.