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Eco Science Solutions Inc (OTCMKTS:ESSI) Heading To Zero

Written by

Jarrod Wesson

Published on

April 24, 2017

Today, we are bringing our investors another piece about the highly promoted stock Eco Science Solutions Inc (OTCMKTS:ESSI). Our subscribers have already obtained interesting information in the following articles:

We encourage new readers to check these pieces, since this article will only try to add more information to support our initial thesis: this share price should be zero.First of all, have a look at the recent share price collapse. Isn't it scary?:SourceRecent developmentsSince our second article on this name in January, the company released several new pieces of information that the market priced reducing the worth of the common stock. Have investors started to realized that the Eco Science's communications are only smoke? Let's see the nature of the new information.On January 26, 2017, the company announced that it had entered into an Equity Purchase Agreement:

"it has entered into an Equity Purchase Agreement, that at current pricing would net the Company greater than $30 million for working capital and strategic acquisitions. Additionally, Company Management is providing a summary business execution framework for parties that are interested in the following along with execution of the Eco Science Solutions business plan." Source

Honestly, in the press release, which the company communicated to retail investors, and Yahoo Finance showed, the relevant information was limited. Thus, we went to check the S-1 document that the company had to sign. This is the document that lawyers need to submit to the SEC. The information contained in this document shows the way the company is selling a substantial amount of shares to an unrelated party:

up to 10,000,000 shares of common stock to be sold by PHENIX VENTURES, LLC
up to 4,000,000 shares issued to an unrelated party in exchange for cancellation of unpaid fees owed to that party.

In the same document, we can find the dilution created by this agreement:

"If issued presently, the 10,000,000 shares of common stock registered for resale by PVLLC would represent approximately 22% of our existing issued and outstanding shares of common stock as of January 24, 2017 which totals 45,331,186, and 18% of the fully diluted outstanding share capital, including issuance of the 10,000,000 shares.""The 4,000,000 Shares represent 8.8% of the current issued and outstanding shares of common stock as of January 24, 2017, and 7.2% of the fully diluted outstanding share capital, including the issuance of the 10,000,000 Shares to PVLLC." Source

So, what is the deal? We believe that the company is trying to sell as many shares as they can. The only thing that the company owns is the market capitalization, since the assets inside are very small; about $70,190 in cash and a lot of promises. Therefore, the company has signed an agreement with these traders to sell shares. How it will work? These traders owning close to 22% of the market capitalization of the firm may move the share price in a way that novice traders will buy shares.

"We will not receive any proceeds from the sale of the shares of our common stock by PVLLC; however, we will receive proceeds from our initial sale of shares to PVLLC pursuant to the Equity Purchase Agreement. We will sell shares to PVLLC up to an aggregate purchase price of Thirty-Five Million Dollars ($35,000,000). The Company may, from time to time, deliver a request for an investment (“Put Request,” “Put”) to PVLLC up to an aggregate amount of $35,000,000." Source

SourceIn addition to this press release, the company informed about other major events, but they were not taken seriously by investors. Among this news, we found the appointment of Eric Logan as its Director of Business Development, which was announced on February 13 ,2017 and an agreement to become the Presenting Partner Sponsor for Kaya Fest's inaugural event. Finally, on February 22, 2017, it was announced that the company had been verified to trade on the OTCQB Venture Market. In our opinion, these press releases did not contain significant information about the new developments of the company and were not really priced by investors. We believe that such press releases are used to make novice investors buy shares of the company before the market pushes down the share price to zero.ConclusionEco Science Solutions keeps sending very alarming signs to savvy traders. The company signed an agreement with a third party, which now controls close to 22% of the total outstanding shares, to resell shares. We checked the share price and saw that after the agreement, these traders could sell shares above the price level at which they have to buy. In our opinion, this is quite unfair.In addition, the company is sending information to the market and market participants seem to have forgotten the company, as the share price does not react any more to new information. To sum up, buyer beware as maybe in a few months, the share price starts to fall as nobody wants to hear any more about ESSI and the market finally realizes that fair value is zero.We will be updating our subscribers as soon as we know more. For the latest updates on ESSI, sign up below!Disclosure: We have no position in ESSI and have not been compensated for this article.