UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended March 31, 2010
 OR
 o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
 for the transaction period from to
 Commission File Number 000-19566
 
 EARTH SEARCH SCIENCES, INC.
 (Name of Small Business Issuer in its charter)
 Nevada

870437723(State or other jurisdiction of incorporation)

(I.R.S. Employer Identification No.)306 Stoner Loop Road, #6, Lakeside, Montana

59922(Address of principal executive offices)

(Zip code)
 
 Issuer’s telephone number (406) 751-5200
 Securities registered pursuant to Section 12(b) of the Act:None
 Securities registered pursuant to Section 12(g) of the Act:Common Stock, par value $0.001 per share
 
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes    No
 
 Indicate by check mark if the registrant is not required to file reports pursuant to section 13 and section 15(d) of the Act.
 
 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes      No
 
 Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
 
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
   Large accelerated filer

  Accelerated filer

  Non-accelerated filer

  Smaller reporting company
 
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes     No  
 
 Issuer’s revenues for its most recent fiscal year were $0.
 
 The aggregate market value of the issuer’s voting and non-voting common equity held by non-affiliates (110,659,555 shares) was approximately $5,311,659 based on the average closing bid and ask price of $0.05 for such common equity as of March 31, 2010.
 
 As of July 12, 2010, there were 200,687,890 outstanding shares of the issuer’s Common Stock, par value $0.001.
 
 Transitional Small Business Disclosure Format (check one): Yes     No  
 
  
  
 
 FORWARD LOOKING STATEMENTS
 
 Some of the statements under “Management’s Discussion and Analysis of Financial Condition or Plan of Operations,” and “Description of Business” in this Annual Report on Form 10-KSB are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.
 
 In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “proposed,” “intended,” or “continue” or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this Annual Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Annual Report to conform these statements to actual results.
 
 
  
  
 
 
 TABLE OF CONTENTS
 
 PART I

4Item 1 -
Business
4Item 1A
Risk Factors
5Item 1B
Unresolved Staff Comments
7Item 2 -
Properties
7Item 3 -
Legal Proceedings
7Item 4 -
Submission of Matters to a Vote of Security Holders
7PART II

8Item 5 -
Market for the Registrant's Common Stock Equity and Related Shareholder Matters
8Item 7 -
Management's Discussion and Analysis or Plan of Operations
10Item 8 -
Financial Statements
F-1Item 9 -
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
13Item 9A(T)
Controls and Procedures
13Item 9B -
Other Information
14PART III

15Item 10 -
Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance With Section 16(a) of the Exchange Act
15Item 11 -
Executive Compensation
17Item 12 -
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
19Item 13 -
Certain Relationships and Related Transactions, and Director Independence
19Item 14 -
Principal Accountant Fee and Services
19Item 15 -
Exhibits, Financial Statement Schedules
21SIGNATURES
24
 
 
 
  
  
 
 PART I
 
 ITEM 1. BUSINESS
 Earth Search Sciences, Inc. (ESSI) is a Nevada corporation. We have five wholly-owned subsidiaries: Skywatch Exploration, Inc., Polyspectrum Imaging, Inc., Geoprobe, Inc., STDC, Inc and General Synfuels International (GSI). In addition, there are five majority-owned consolidated subsidiaries: Earth Search Resources, Inc., Eco Probe, Inc., ESSI Probe 1 LC, Petro Probe, Inc. and Terranet, Inc. All subsidiaries except Petro Probe and GSI were inactive during fiscal 2009 and 2010.
 
 Effective December 14, 2009, Luis F. Lugo and Charles G. Bridge resigned as the Chief Executive Officer and Chief Financial Officer of Earth Search Sciences, Inc. (the “Company”) respectively.  Both Mr. Lugo and Mr. Bridge will continue with their positions as President and CEO, and Chief Financial Officer of Earth Search Sciences wholly own subsidiary General Synfuels.
 
 There were no disagreements between Mr. Lugo or Mr. Bridge and any officer or director of the Company.  Upon the resignation of Mr. Lugo, Mr. Larry Vance adopted the role of Chief Executive Officer of the Company effective December 14, 2009.  Mr. Vance, along with The Board of Directors of the company, has initiated immediately the search for Mr. Lugo’s replacement by an individual with experience in the core business of Earth Search Sciences that is Hyperspectral technology as well as mineral discoveries.
 
 Mr. Lugo and Mr. Bridge will focus on the continuous development of General Synfuels as it has increased substantially its business activities and requires full attention of these officers.
 
 We did not generate any revenue during fiscal year 2010, have no current business operations and are currently focused on two potential business ventures.
 
 First, we are working with certain investors to develop and employ technology in the extraction of oil and gas from oil shale. During the third quarter of 2008 ESSI acquired General Synfuels International, Inc, owner of the world-wide proprietary rights, patent, technology, construction plans and materials and operational capability for a gasification process to recover the oil and gas from oil shale.GSI has refined the design and begun development of our first plant. However, the current state of the financial markets has negatively impacted our ability to raise the additional funds necessary to complete our plant. Our current plan is to complete a field test of this technology as early as the fourth quarter of 2010 and subsequent commercial development as early as 2011.  Additionally we have secured oil shale land in both Wyoming and Colorado.
 
 GSI continues to develop additional patents related to our technology and as part of that process we are exploring a tar sands application.  We anticipate the tar sands application to be used internationally.
 
 Second, we are seeking joint venture opportunities with private industry, universities and state and federal agencies to develop, package and deliver, through the application of our hyperspectral remote sensing solutions, applications and associated technologies, superior airborne mapping products and services. Our airborne hyperspectral remote sensing technology is designed to identify specific surface substances and materials by measuring the reflectance of light from their surface. The first spectroscopic instrument, the PROBE 1, was initially developed with the assistance of NASA and used a small aircraft as the instrument platform to obtain data from high altitudes over many different terrains. The information was precise enough to enable detailed analysis of a dynamic environment or object in a manner previously unattainable, and can be used for the discovery of certain natural resources.
 
 Exploitation of Oil and Gas from Oil Shale
 On August 15th of 2008 ESSI acquired all of the outstanding shares of General Synfuels International, Inc. (GSI), an entity controlled by certain management and directors of ESSI. This transaction was accounted for as an asset purchase due to the fact that GSI was dormant, did not have customers or employees and only held certain proprietary rights, patent, technology and construction plans for a gasification process to recover the oil and gas from oil shale. In addition, the asset was recorded at its historical cost due to the fact that this transaction was between entities under common control. Prior to the acquisition, both entities were controlled by certain members of management. The $5,494,700 value in excess of the historical cost of the asset was recorded as compensation expense.
 
 ESSI paid the individual GSI Shareholders $5,500,000: 33,333,333 shares of common stock valued at $3,000,000 based on the closing price of ESSI’s stock on the date of the transaction; and $2,500,000 in the form of promissory notes payable to the GSI shareholders in five equal payments of $500,000. On July 9, 2009, the holders of our $2.5 million convertible promissory notes that were issued in connection with the purchase of GSI agreed to exchange their convertible notes for convertible preferred stock with an equal face value. The preferred stock is convertible at $0.08 per share and the entire $2.5 million is convertible into an aggregate 31,250,000 shares of series C preferred shares.
 
 The Series C Convertible Preferred shares contain dividend participation and voting rights on an as converted basis.  In addition, the Series C Convertible Preferred shareholders have preferential rights over other classes of stock in the event of liquidation. The Series C Convertible Preferred shares contain a mandatory conversion feature which is triggered on the fifth anniversary of the closing date, or July 8, 2014.  These preferred shares are convertible into an aggregate of 31,250,000 common shares.
 
 GSI is currently examining various private oil shale sites in Colorado and Wyoming for a test plant as well as starting the process of applying for a Bureau of Land Management R&D oil shale lease. The first plant is budgeted for approximately $10 million as a first stage development cost. The purpose of this plant is to prove certain operating variables.
 
 During the fiscal year ended March 31, 2010, we held $903,684 in deposits related to the development of a plant related to the oil shale gasification process acquired through GSI.  Once the plant is complete, further investment will be required for commercial production.
 
 Hyperspectral Remote Sensing Solutions
 In the past, we have utilized an aircraft mounted hyperspectral remote sensing instrument to gather precise geological data from the surface of the Earth.  Solar energy is reflected from surface materials and the instrument, called "Probe-1", captures the data in digital form.  The Probe-1 is a "whiskbroom style" instrument that collects data in a cross-track direction by mechanical scanning and in an along-track direction by movement of the airborne platform. The instrument acts as an imaging spectrometer in the reflected solar region of the electromagnetic spectrum (0.4 to 2.5 nm). In the VNIR and SWIR, the at-sensor radiance is dispersed by four spectrographs onto four detector arrays.  Spectral coverage is nearly continuous in these regions with small gaps in the middle of the 1.4 and 1.9 nm atmospheric water bands.  In order to avoid geometric distortions in the recorded imagery, the Probe-1 is mounted on a 3 axis, gyro-stabilized mount.  Geolocation of nadir pixels is assisted by the recording of aircraft GPS positional data and tagging each scan line with a time that is referenced to the UTC time interrupts from the GPS receiver.
 
 The spectral data is processed to identify unique spectra in the image.  The captured and processed spectra are compared to a library of known material spectra called "digital fingerprints" and the output allows the identification of mineral, compounds and organic matter and the determination of vegetative conditions.
 
 We are actively seeking funding to engineer and manufacture a third generation Probe instrument, which will be capable of analyzing substantially more data inputs, including chemical, light, pressure, vibration, and acceleration.  The new design will operate at extremely high speed with excellent resolution.  We expect that the combination of substantially improved analysis and higher resolution will open up new markets.
 
 We are currently evaluating hyperspectral imagery collected to date so that we can determine whether this archive of information can be used to locate mineral properties.
 
 Our aircraft was grounded in 2006 for FAA required maintenance and repairs. As a result, our hyperspectral remote sensing operations have ceased until such time that we raise sufficient funding to repair our aircraft or purchase a new aircraft.
 
 Other
 Employees
 As of March 31, 2010, we had two full-time employees and two part time employees.
 
 Available Information
 The Securities and Exchange Commission maintains an internet site at http://www.sec.gov that contains reports and financial information filed by us. We maintain an internet site at http://www.earthsearch.com that contains information about our business, markets and technology. Information on our internet site is not incorporated by reference in this report.
 
 Risk Factors That Could Affect Liquidity, Operating Results And Market Price Of Stock
 
 
 ITEM 1A. RISK FACTORS
 Competitive pressures may adversely affect our operating revenues.  The Company has numerous competitors in the remote sensing services (airborne hyperspectral services) and natural resource development industries (oil shale development).  These companies are also developing new technology improvements and applications that could adversely affect our operating revenues and in turn, our business and financial condition.
 
 The oil shale industry is currently evolving with many large and small competitors developing processes of their own.  The Company may face significant competition from these competitors.  Additionally our technology is very early stage and there is no guarantee that it will produce oil in the quantity at the price we anticipate.  The Company will need to expend significant capital to develop and commercialize our oil shale technology.  The Company may not be able to raise the necessary capital required to move our technology forward due to the current economic environment.
 
 The Company may also need to expend significant capital to keep pace with technological developments in the remote sensing industries.  The remote sensing industry is constantly undergoing development and change and it is likely that new technology, whether embodied in new equipment or techniques, will be introduced in the future.  In order to keep pace with any new developments, the Company is planning to expend significant capital to develop or acquire the next level of developments in new remote sensing equipment and to hire and train employees in the new techniques.
 
 The Company is pursuing financing to develop additional remote sensing instruments; however, we may not be able to raise sufficient funds, and if the Company does so, there is no guaranty that the new instruments will out perform instruments used by our competitors.  In addition, the Company’s ability to raise needed capital may be influenced by general economic conditions and the strength of capital markets.
 
 The Company may incur significant expenses to comply with new or more stringent governmental regulation.  The sale of our imagery is regulated by the Department of Commerce. Although the Company (through its acquisition of STDC) has acquired a Department of Commerce (DOC) Remote Sensing License that permits the Company to market it’s hyperspectral and panchromatic imagery globally, there is no guarantee that the government will not impose restrictions on sales if the quality of our imagery were to substantially increase.  Because our license was the first issued DOC Remote Sensing License, the Company cannot anticipate how the DOC specifically will treat our license or how the airborne remote sensing industry will be regulated in the future.
 
 Risks Related to Our Business
 The Company may not realize our anticipated return on capital commitments made to expand our capabilities in both of our focus industries.  The company has expended capital in the development of our oil shale extraction technology prototype.  If the Company is unable to raise additional capital to complete development of the prototype or testing of the technology and it does not produce the anticipated results, the company may not generate revenues from this endeavor.
 
 The Company purchased an aircraft and an airborne hyperspectral instrument, as well as oil and gas property rights.  The aircraft and airborne hyperspectral instrument were purchased to increase our capacity to conduct airborne surveys.  If the Company does not experience continued demand for our remote sensing services, the Company may incur significant expense without generating corresponding revenues.  The oil and gas property rights were acquired in order to exploit suspected natural resources located within certain properties.  If these properties do not contain sufficient natural resources to warrant exploitation, the Company may incur significant expenses without generating corresponding revenues.  There were no prospects for new oil and gas contracts from existing properties in fiscal 2010.
 
 In addition, from time to time, the Company expects to make significant capital expenditures to implement new processes and to increase both efficiency and capacity.  Some of these projects may require additional training for our employees and not all projects may be implemented as anticipated.  If any of these projects do not achieve the anticipated increase in efficiency or capacity, our returns on these capital expenditures may not be as expected.
 
 Our ability to grow is dependent upon, and may be limited by, among other things, our capital structure, the price of our stock and our existing financing arrangements.  If additional funding sources are needed, the Company may not be able to obtain the additional capital necessary to pursue our internal growth and acquisition strategy or, if the Company can obtain additional financing, the additional financing may not be on financial terms that are satisfactory to us.
 
 The Company’s database of spectral information may not be marketable or may not garner a price, which makes processing or analyzing the data economically reasonable.  The Company has a substantial archive of Probe 1 hyperspectral imagery that was not gathered under contract with a client.  From time to time, the Company continues to gather hyperspectral imagery without having sold the rights to that data.  The collection process requires variable as well as fixed expenditures that must be recouped though marketing the collected data.  Although we do not carry the value of our existing Probe 1 hyperspectral archives as an asset on our balance sheet, the future success of the Company depends to some extent upon our ability to market this archived data.
 
 Cancellations, reductions or delays in customer orders may adversely affect our results of operations.  Our overall operating results are affected by many factors, including the timing of survey contracts from large clients, the timing of capital expenditures to increase our capacity for gathering data in anticipation of future sales of products and services, and the weather which can affect whether or not a customer’s target of interest can be collected at a certain stage of vegetal growth.  Although a large portion of our expenses are fixed; a significant portion of our operational expenses vary with the number of airborne surveys.  Because several of our subsidiaries are new businesses and have not obtained long-term commitments from our clients, we must anticipate the future demand for our services based upon our discussions with clients.  Cancellations, reductions or delays in orders by a client or group of clients could have a material adverse effect on our business, financial condition and results of operations.
 
 The unavailability of skilled personnel may have an adverse effect on our operations.  From time to time, the Company or some of our subsidiaries may experience difficulties in attracting and retaining skilled personnel to process and interpret the substantial volume of imagery data that is already collected or is expected to be collected in the future.  The Company’s ability to operate successfully could be jeopardized if we are unable to attract and retain a sufficient number of skilled personnel to conduct our business.
 
 
 ITEM 1B. UNRESOLVED STAFF COMMENTS
 None
 
 
 ITEM 2. PROPERTIES
 The Company headquarters consist of approximately 1,500 square feet of office space in Lakeside, Montana.
 
 As a 50% member of ESSI Probe I LC, an Idaho limited liability company (“Probe I LC”), the Company owns 50% of the hyper-spectral instrument owned by Probe I LC. The Company shares its ownership with the two other members of ESSI Probe I LC, Arthur W. McClain Trust and Francisco Elmudesi (the “Woodstock members”). Pursuant to an agreement dated June 3, 1997 (the “Equipment Usage Agreement”), the Company had the right to purchase the hyper-spectral instrument until June 3, 2007 for the purchase price of $2,250,000.  The Company continues the process of negotiating an extension to the renewal period.
 
 
 ITEM 3. LEGAL PROCEEDINGS
 On March 23, 2005, we entered into a settlement agreement (2005 Settlement Agreement) with Accuprobe to return an airborne hyperspectral sensor (Probe) and to settle the outstanding obligations under the related capital lease. Under the 2005 Settlement Agreement, we were required to return the Probe on or before August 31, 2005.  Due to continuing disputes over various issues, the probe was not returned until 2007.  As the Probe was not returned by the August 2005 due date, we were subject to a shipping, handling and disposition fee of $250,000. In addition, we were subject to interest charges that began accruing on September 2, 2005 at an annual rate of prime plus 4%; rent on the probe of $250,000 per year beginning April 10, 2000 with interest on any unpaid rent accruing at a rate of prime plus 2% through August 31, 2005.  After August 31, 2005, interest related to the unpaid rent ceased and was replaced with a 5% late fee calculated on the entire balance due at the end of each month.
 
 Because we were unable to reach Accuprobe and make arrangements for the return of the Probe, in January 2007, we shipped the Probe to an acquaintance of Accuprobe with instructions to hold the probe until Accuprobe provided further instructions.  We obtained confirmation in December 2007 that Accuprobe had contacted the acquaintance and instructed them to begin certain repairs and calibrations on the probe.  As a result of this confirmation, we discontinued accruing rent, interest and late fees on the Probe.
 
 The estimated settlement obligation did not increase as of March 31, 2010 compared to the March 31, 2009 balance.
 
 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 None.
 
  
  
 
 PART II
 
 ITEM 5. MARKET FOR THE REGISTRANT’S COMMON STOCK EQUITY AND RELATED STOCKHOLDER MATTERS
 
 (a)
Principal Market or Markets. The Company's common stock trades on the OTC Bulletin Board under the symbol “ESSE”. The range of reported high and low bid quotations for the Company’s common stock, as set forth below, reflect interdealer bid prices, without retail markups, markdowns, commissions, or adjustments as reported in on the OTCBB and do not represent actual transactions.
 
 Quarter Ended
High
LowJune 30, 2008
.09
.04September 30, 2008
.13
.05December 31, 2008
.07
.01March 31, 2009
.02
.00June 30, 2009
.01
.00September 30, 2009
.03
.00December 31, 2009
.03
.00March 31, 2010
.05
.00
 
 (b)
Approximate Number of Holders of Common Stock. The number of record owners of the Company's $.001 par value common stock at March 31, 2010 was approximately 1,255. This does not include shareholders that hold stock in their accounts at brokers/dealers.(c)
Dividends. Holders of the Company’s common stock are entitled to receive such dividends as may be declared by the Company's Board of Directors. No dividends have been paid with respect to the Company's common stock and no dividends are anticipated to be paid in the foreseeable future.(d)
In the last three years, the Company has made the following sales of unregistered securities, all of which sales were exempt from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(2) or as otherwise indicated:
 
  
  
 Recent Sales of Unregistered Securities
 
 Date

Amount of Securities Sold

Price per Share ($)

Total Cash Proceeds ($)



Date

Amount of Securities Sold

Price per Share ($)

Total Cash Proceeds ($)3/13/2007

11,400,000

$0.10

$1,140,000

(1)

3/15/2007

250,000

$0.10

$25,000
(1)3/16/2007

90,750

$0.10

$9,075

(1)

3/28/2007

2,500,000

$0.10

$250,000
(2)3/31/2007

800,000





(3)

4/18/2007

65,000

$0.40

$26,000
(2)4/27/2007

265,451

$0.11

$29,350

(1)

6/19/2007

34,386

$0.29

$10,000
(1)7/18/2007

377,130

$0.22

$82,968

(1)

8/10/2007

98,012

$0.24

$23,523
(1)9/14/2007

58,824

$0.19

$11,177

(1)

10/16/2007

141,763

$0.11

$15,594
(1)11/13/2007

500,000

$0.05

$25,000

(4)

11/30/2007

557,143

$0.06

$35,000
(4)12/17/2007

4,285,714

$0.07

$300,000

(4)

1/18/2008

1,865,000

$0.06

$111,900
(1)2/13/2008

1,893,387

$0.06

$113,603

(1)

3/1/2008

500,000

$0.05

$25,000
(4)4/14/2008

1,000,000

$0.06

$62,000

(1)

5/9/2008

392,736

$0.06

$2
(1)5/9/2008

1,694,418

$0.08

$128,868

(6)

5/12/2008

14,472

$0.08

$1,101
(6)5/12/2008

582,770

$0.05

$29,131

(1)

6/10/2008

3,000,000

$0.03

$95,000
(4)6/11/2008

5,000,000

$0.05

$250,000

(4)

6/19/2008

2,841,667

$0.06

$170,500
(1)7/7/2008

7,500,000

$0.04

$300,000

(4)

7/7/2008

2,000,000

$0.06

$120,000
(1)7/14/2008

368,228

$0.08

$27,617

(1)

7/14/2008

1,250,000

$0.04

$50,000
(4)7/22/2008

350,877

$0.05

$17,544

(6)

7/22/2008

400,001

$0.06

$24,800
(6)7/29/2008

6,779,999

$0.08

$508,500

(4)

8/8/2008

625,000

$0.09

$56,250
(1)8/8/2008

1,200,000

$0.05

$60,000

(4)

8/15/2008

34,753,788

$0.09

$3,127,841
(5)9/26/2008

229,906

$0.06

$14,254

(6)

9/26/2008

2,463,672

$0.07

$172,457
(1)10/6/2008

1,397,773

$0.06

$83,866

(1)

11/5/2008

2,608,844

$0.03

$78,265
(1)12/10/2008

2,160,087

$0.02

$45,362

(1)

12/10/20088

312,504

$0.06

$19,375
(6)12/10/2008

759,230

$0.05

$34,925

(6)

2/10/2009

6,000,000

$0.01

$72,000
(1)9/30/2009

350,000

$0.02

$7,000

(1)

8/24/2009

350,000

$0.02

$7,000
(1)11/5/2009

4,482,188

$0.02

$89,644
(1)
 
 (1) Consideration paid for the shares was employee and/or consulting services.
 (2) Shares issued for debt consideration.
 (3) Consideration paid for Directorship.
 (4) Consideration received in a private placement.
 (5) Shares issued in connection with the acquisition of assets from the shareholders of General Synfuels International.
 (6) Shares issued for stock payable.
 
 Securities authorized for issuance under Equity Compensation Plans
 The following table sets forth certain information on the Company’s Equity Compensation Plans as of March 31, 2010 See Note 10 to the Notes to Consolidated Financial Statements for additional information on equity compensation including material terms of options granted that have not been approved by security holders.
 
 Number of securities to be issued upon exercise of outstanding options, warrants and rights

Weighted-average exercise price of outstanding options, warrants and rights

Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)Plan category

(a)

(b)

(c)Equity compensation plans approved by security holders

-

-

-Equity compensation plans not approved by security holders

-

-

9,244,555Total

-

-

9,244,555
 
 
 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 The following discussion should be read in conjunction with other sections of this Form 10-KSB including Part 1, “Item 1: Business” and Part II, “Item 7: Financial Statements.” Various sections of management’s discussion and analysis (“MD&A”) contain statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially due to factors discussed in this report, as well as factors not within our control. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in our expectations.
 
 Our MD&A is provided as a supplement to our audited financial statements to help provide an understanding of our financial condition, changes in financial condition and results of operations.
 
 Results of Operations
 Our aircraft was grounded in 2006 for required FAA repairs and maintenance and remained grounded through the issuance of this report.  As a result, we have not generated any revenue from our Hyperspectral remote sensing in fiscal year 2009 and 2008.
 
 General and administrative costs were $1,410,485 in fiscal year 2010 compared with $7,737,533 in 2009. This decrease was primarily due to the $5,494,700 of expense recorded in 2009 in connection  with the acquisition of General Synfuels International, Inc. (GSI). The $5,494,700 expense relates to the value given for GSI in excess of the historical cost of the asset received and was recorded as compensation expense. This expense was recorded due to the fact that an entity controlled by certain management and directors of ESSI during year ended March 31, 2010.  This transaction was accounted for as an asset purchase due to the fact GSI was dormant.
 
 Interest expense was $521,083 in fiscal year 2010 compared to $654,867 in 2009. Our interest expense primarily consists of interest from our notes payable and related party debt. We also recorded $15,039 of interest related to the amortization of the debt discount associated with the GSI notes.
 
 Late fees related to settlement agreement were zero in fiscal year 2010 and 2009.  On March 23, 2005, we entered into a settlement agreement (2005 Settlement Agreement) with Accuprobe to return an airborne hyperspectral sensor (Probe) and to settle the outstanding obligations under the related capital lease. Under the 2005 Settlement Agreement, we were required to return the Probe on or before August 31, 2005. Due to continuing disputes over various issues, the Probe was not returned until 2007.  As the Probe was not returned by the August 2005 due date, we were subject to a shipping, handling and disposition fee of $250,000. In addition, we were subject to interest charges that began accruing on September 2, 2005 at an annual rate of prime plus 4%; rent on the Probe of $250,000 per year beginning April 10, 2000 with interest on any unpaid rent accruing at a rate of prime plus 2% through August 31, 2005.  After August 31, 2005, interest related to the unpaid rent ceased and was replaced with a 5% late fee calculated on the entire balance due at the end of each month.
 
 Because we were unable to reach Accuprobe and make arrangements for the return of the probe, in January 2007, we shipped the Probe to an acquaintance of Accuprobe with instructions to hold the Probe until Accuprobe provided further instructions.  We obtained confirmation in December 2007 that Accuprobe had contacted the acquaintance and instructed them to begin certain repairs and calibrations on the probe.  As a result of this confirmation, we discontinued accruing rent, interest and late fees on the Probe.
 
 We recognized a net loss of $1,267,675 in fiscal year 2010 compared with a net loss of $8,496,248 in 2009.  This significant change in income was due primarily to the acquisition cost of $5,494,700 for GSI in fiscal 2009, discussed in Liquidity and Capital Resources and the gain of $781,250 recognized for conversion of debt during fiscal 2010.
 
 On July 9, 2009, we issued 31,250,000 shares of Series C Convertible Preferred Stock in exchange for $2,500,000 of convertible debt outstanding at that time. Each preferred share is convertible into one share of common at the holder’s option until July 9, 2014, at which time the preferred shares are automatically converted to common stock provided that the company is in compliance with certain terms. Holders of preferred shares have voting rights equal to the equivalent number of common shares and participate in any cash dividends declared by the Board of Directors. In addition, holders of the preferred shares have a preferential right over other classes of stock in the event of liquidation. Based on its characteristics, the preferred shares are reported as equity.
 
 Liquidity and Capital Resources
 At March 31, 2010, we had $89,789 of cash and cash equivalents and a working capital deficit of $18,796,916.  During fiscal year 2010, we used $655,793 in operating activities, resulting primarily from payments for salaries, services.  Net cash used in operating activities was $832,476 in 2009
 
 On August 15th of 2008 ESSI acquired all of the outstanding shares of General Synfuels International, Inc. (GSI), an entity controlled by certain management and directors of ESSI.  This transaction was accounted for as an asset purchase due to the fact that GSI was dormant, did not have customers or employees and only held certain proprietary rights, patent, technology and construction plans for a gasification process to recover the oil and gas from oil shale.  In addition, the asset was recorded at its historical cost due to the fact that this transaction was between entities under common control.  Prior to the acquisition, both entities were controlled by certain members of management, who were also shareholders and/or Directors.  The $5,494,700 value in excess of the historical cost of the asset was recorded as compensation expense.
 
 ESSI paid the individual GSI Shareholders $5,500,000: 33,333,333 shares of common stock valued at $3,000,000 based on the closing price of ESSI’s stock on the date of the transaction; and $2,500,000 in the form of promissory notes payable to the GSI shareholders in five equal payments of $500,000.  ESSI is currently negotiating a restructuring of terms.  At ESSI’s election, each promissory note payable can be converted into ESSI common stock at a 40% discount to the average trading price of ESSI common stock 5 days prior to the emission of payment.  Because this transaction was between related parties, the patent asset was recorded at its historical cost of $5,300 and the remaining value of $5,494,700 was recorded as compensation expense for the period ended September 30, 2008, as the shareholders didn’t contribute any additional assets, tangible or intangible of value.
 
 In addition, ESSI evaluated the conversion option of the promissory note under ASC 815-15 and determined that the feature has characteristics of an embedded derivative. The embedded derivative was bifurcated and recorded as a derivative liability and debt discount. At March 31, 2010, the derivative liability was valued at $30,924 using the Black-Scholes Option Pricing Model.
 
 On July 9, 2009, the holders of our $2.5 million convertible promissory notes that were issued in connection with the purchase of GSI agreed to exchange their convertible notes for convertible preferred stock with an equal face value. The preferred stock is convertible at $0.08 cents per share and the entire $2.5 million is convertible into an aggregate 31,250,000 shares of series C preferred shares.
 
 The Series C Convertible Preferred shares contain dividend participation and voting rights on an as converted basis.  In addition, the Series C Convertible Preferred shareholders have preferential rights over other classes of stock in the event of liquidation. The Series C Convertible Preferred shares contain a mandatory conversion feature which is triggered on the fifth anniversary of the closing date, or July 8, 2014.  These preferred shares are convertible into an aggregate of 31,250,000 common shares.
 
 Net cash used by investing activities was $130,000 in 2010 as compared to $770,000 in 2009, the increase in cash used in investing is primarily due to our inability to secure additional investment for our oil shale recovery prototype.
 
 Net cash provided by financing activities was $804,964 in 2010 as compared to $1,664,273 in 2009 with the decrease due to our inability to raise additional funds from the sale of common stock.  $913,000 came from the proceeds from convertible notes and we paid $112,136 in stockholder loans.
 
 We do not intend to pay cash dividends to the holders of its common stock and intends to retain future earnings to finance the expansion and development of its business.
 
 As shown in the accompanying financial statements, we incurred losses from operations of $1,511,957 and $7,841,381 for the years ended March 31, 2010 and 2009, respectively and we have an accumulated deficit of $73,074,775 and negative working capital of $18,796,916 as of March 31, 2010.  These conditions raise substantial doubt as to our ability to continue as a going concern. Management is trying to raise additional capital through sales of stock.  The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
 
 There can be no assurance that additional capital beyond the amounts currently forecasted will be required or that any such required additional capital will be available on reasonable terms, at such time or times as required by the Company.
 
 Critical Accounting Policies
 Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  We evaluate long-lived assets to determine potential impairment by comparing the carrying amount to the undiscounted estimated future cash flows of the related assets.
 
 We issue stock as compensation to employees and outside consultants for services provided to the company.  Employee share-based awards are accounted for in accordance with ASC 718, which requires us to measure the cost of employee services received based on the grant-date fair value of the award.  We account for non-employee share-based awards in accordance with ASC 505-50, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquisition, or in Conjunction with Selling, Goods or Services.”
 
 Instruments are reviewed and evaluated for embedded derivatives in accordance with ASC Topic 815. When applicable, the embedded feature is bifurcated from the host instrument and recorded as a derivative liability at its fair market value. Changes in fair value of the derivative liabilities is recorded as a component of income for each reporting period.
 
 
 Off Balance Sheet Arrangements
 None.
 
  
  
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
 INDEX TO FINANCIAL STATEMENTS
 
 Report of Registered Independent Public Accounting Firm
F-2Consolidated Balance Sheets as of March 31, 2008
F-3Consolidated Statements of Operations for the years ended March 31, 2008 and 2007
F-4Consolidated Statements of Cash Flows for the years ended March 31, 2008 and 2007
F-5Consolidated Statement of Changes in Stockholders’ Deficit for the years ended March 31, 2008 and 2007
F-6Notes to consolidated financial statements
F-7 – F-12
 
 
  
  
 
 Report of Independent Registered Public Accounting Firm
 
 To the Board of Directors
 Earth Search Sciences, Inc.
 Lakeside, Montana
 
 
 We have audited the accompanying consolidated balance sheets of Earth Search Sciences, Inc. as of March 31, 2010 and 2009, and the related consolidated statements of operations, stockholders' deficit, and cash flows for each of the years then ended. These financial statements are the responsibility of Earth Search's management. Our responsibility is to express an opinion on these financial statements based on our audits.
 
 We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Earth Search Sciences Inc. as of March 31, 2010 and 2009, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.
 
 The accompanying financial statements have been prepared assuming that Earth Search will continue as a going concern. Earth Search incurred losses from operations for fiscal 2010 and 2009 and has a working capital deficit as of March 31, 2010. These factors raise substantial doubt about Earth Search's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
 
 
 /s/MaloneBailey, LLP
 Houston, Texas
 www.malone-bailey.com
 July 12, 2010
 
 
 
  
  
 EARTH SEARCH SCIENCES, INC.
 CONSOLIDATED BALANCE SHEETS
  March 31,2010



2009ASSETSCurrent assets:Cash

$
89,789


$
70,618Prepaid expenses


13,000



13,448Loan costs, net of accumulated amortization of $262,347 and $258,003, respectively


13,223



17,567Total current assets


116,012



101,633Property and equipment, net accumulated depreciation of $1,141,652 and $1,040,180 respectively


775



102,247Intangible asset – patents


25,300



25,300Deposits


903,684



914,516TOTAL ASSETS

$
1,045,771


$
1,143,696LIABILITIESCurrent liabilities:Accounts payable

$
1,416,298


$
1,513,631Accounts payable – related parties


408,656



389,968Accrued expenses


4,410,788



3,395,875Current portion of notes payable


2,291,440



2,128,440Settlement obligation


8,686,824



8,686,824Derivative liability


30,924



-Current portion of notes payable – related parties


1,698,922



2,557,258Total current liabilities


18,943,852



18,671,996Long term portion of notes payable


-



500,000Long term portion of notes payable – related party


-



500,000Total liabilities

$
18,943,852


$
19,671,996Commitments and contingencies


-



-STOCKHOLDERS’ DEFICITPreferred stock, 300,000,000 shares authorized; $.001 par value, 31,250,000 and 0 issued and outstanding, respectively


31,250



-Common stock, $.001 par value; 300,000,000 shares authorized;199,487,893 and 194,655,705 shares issued and outstanding, respectively


199,487



194,654Additional paid-in capital


55,176,881



53,315,070Treasury stock


(200,000
)


(200,000
)Accumulated deficit


(73,105,699
)


(71,838,024
)Total stockholders’ deficit


(17,898,081
)


(18,528,300
)TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT

$
1,045,771


$
1,143,696
 
 See accompanying summary of accounting policies   and notes to financial statements.
 
  
  EARTH SEARCH SCIENCES, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 
 Years Ended March 31,2010


2009Operating expensesDepreciation and amortization

$
101,472


$
103,848General and administrative


1,410,485



7,737,533Total expenses


1,511,957



7,841,381Loss from operations


(1,511,957
)


(7,841,381
)Other income (expense)Gain on conversion of debt


781,250



-Loss on change in market value of embedded derivative


(15,885
)


-Interest expense


(521,083
)


(654,867
)Net Loss

$
(1,267,675)


$
(8,496,248
)Basic and diluted:Loss per share

$
(0.01
)

$
(0.05
)Weighted average common shares outstanding


196,658,580



161,287,904
 
 See accompanying summary of accounting policies and notes to financial statements.
 
 
  
  
 EARTH SEARCH SCIENCES, INC.
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
 Years Ended March 31, 2010 and 2009
 
  Preferred

Stock

Stock

Amount

Common

Shares

Stock

Amount

Additional

Paid-in

Capital

Treasury

Stock


Accumulated

Deficit


TotalBalances at March  31, 2008


$


106,969,733
$
106,970
$
47,494,900
$
(200,000
)
$
(63,341,776
)
$
(15,939,906))Issuance of common stock payable





1,708,890

1,708

128,261







129,969Issuance of common stock for services





25,913,750

25,914

1,153,844







1,179,758Issuance of common stock for cash





26,729,999

26,729

1,336,771







1,363,500Issuance of common stock for GSI





33,333,333

33,333

2,966,667







3,000,000Imputed interest









234,627







234,627Net loss














(8,496,248
)

(8,496,248)Balances at March 31, 2009


$


194,655,705
$
194,654
$
53,315,070
$
(200,000
)
$
(71,838,024
)
$
(18,528,300)Issuance of common stock for services





4,832,188

4,833

91,811







96,644Issuance of Preferred stock for GSI

31,250,000

31,250





1,687,500







1,718,750Imputed interest









82,500







82,500Net loss














(1,267,675)


(1,267,675)Balances at March 31, 2010

31,250,000
$
31,250

199,487,893
$
199,487
$
55,176,881

(200,000
)

(73,105,699)


(17,898,081)
 
 See accompanying summary of accounting policies and notes to financial statements.
 
 
  
  
 EARTH SEARCH SCIENCES, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Years Ended March 31, 2010 and 2009
 
 2010


2009CASH FLOWS FROM OPERATING ACTIVITIESNet loss

$
(1,267,675)

$
(8,496,248)Adjustments to reconcile net loss to cash used in operating activities:Depreciation and amortization


101,472


103,848Amortization of deferred finance costs


4,344


28,016Imputed interest


82,500


234,627Amortization of debt discount


15,039


-Change in fair value of embedded derivative


15,885


-Gain on conversion of debt


(781,250)


-Common stock issued for services


96,644


1,179,758Common stock issued for services related to the purchase of asset – General Synfuels Int.


-


2,994,700Payable issued for services related to the purchase of asset – General Synfuels Int.


-


2,500,000Changes in assets and liabilities:Accrued interest – related party


196,738


118,584Accounts payable and accrued expenses


861,374


511,231Accounts payable – related party


18,688


8,512Prepaid and other current assets


448


(15,504)NET CASH USED IN OPERATING ACTIVITIES


(655,793)


(832,476)CASH FLOWS FROM INVESTING ACTIVITIESPatent costs


-


(20,000)Cash paid for prototype


(130,000)


(750,000)NET CASH USED IN INVESTING ACTIVITIES


(130,000)


(770,000)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from stockholder loans


4,100


103,000Payment on stockholder loans


(112,136)


(88,541)Proceeds from issuance of common stock


-


1,363,500Proceeds from issuance of convertible notes


913,000


390,000Payment on short-term debt


-


(103,686)Payment on long-term debt


-


-NET CASH PROVIDED BY FINANCING ACTIVITIES


804,964


1,664,273NET INCREASE IN CASH


19,171


61,797CASH AT BEGINNING OF PERIOD


70,618


8,821CASH AT END OF PERIOD

$
89,789

$
70,618SUPPLEMENTAL CASH FLOW INFORMATION:Interest paid

$
76

$
215,157Taxes paid


-


-Non-cash financing and investing activities:Preferred stock issued for convertible related party debt

$
1,718,750

$
-Common stock for GSI – non compensation piece


-


5,300Capitalized prototype cost in accounts payable

$
10,832


162,460Stock issued for vendor payable

$
-


129,969
 See accompanying summary of accounting policies and notes to financial statements.
  
  
 EARTH SEARCH SCIENCES, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE 1 - SUMMARY OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES
 Earth Search Sciences, Inc. (“ESSI”) ceased all revenue generating activity during 2007.
 
 We have five wholly-owned subsidiaries: Skywatch Exploration, Inc., Polyspectrum Imaging, Inc., Geoprobe, Inc., STDC, Inc., and General Synfuels International.  In addition, there are five majority-owned consolidated subsidiaries (these subs have been dormant for several years): Earth Search Resources, Inc., Eco Probe, Inc., ESSI Probe 1 LC, Petro Probe, Inc. and Terranet, Inc.  All of these subsidiaries except General Synfuels International are inactive.
 
 We did not generate any revenue during fiscal year 2010 and 2009, and have no current business operations.
 
 RECLASSIFICATION
 Certain prior year amounts have been reclassified to conform with the current year presentation.
 
 USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
 The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 
 CASH AND CASH EQUIVALENTS
 We consider all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents.
 
 FAIR MARKET VALUE OF FINANCIAL INSTRUMENTS
 The estimated fair value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other liabilities approximate their carrying amounts in the financial statements.
 
 PROPERTY AND EQUIPMENT
 Property and equipment are stated at cost, less accumulated depreciation.  Depreciation on our property and equipment is recognized using the straight-line method over estimated useful lives ranging from five years for computers and software, vehicles and equipment to ten years for the Airplane and hyperspectral sensors.
 
 IMPAIRMENT OF LONG-LIVED ASSETS
 Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  We evaluate long-lived assets to determine potential impairment by comparing the carrying amount to the undiscounted estimated future cash flows of the related assets.
 
 INCOME TAXES
 We recognize deferred tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities using the enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered. We provide a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.
 
 NET LOSS PER COMMON SHARE
 Net loss per common share has been computed based on the weighted average number of common shares outstanding. Common stock equivalents have not been considered in the diluted net loss per share calculation because their effect on net loss per share is anti-dilutive.
 
 STOCK-BASED COMPENSATION
 We issue stock as compensation to employees and outside consultants for services provided to the company. Employee share-based awards are accounted for in accordance with ASC 718, which requires us to measure the cost of employee services received based on the grant-date fair value of the award. We account for non-employee share-based awards in accordance with EITF No. 96-18, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquisition, or in Conjunction with Selling, Goods or Services.”
 
 For the years ended March 31, 2010 and 2009, ESSI had no stock option issuances.
 
 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 We do not expect the adoption of any recently issued accounting pronouncements to have a significant impact on its financial position, results of operations or cash flows.
 
 
 NOTE 2 - GOING CONCERN
 As shown in the accompanying financial statements, we incurred losses from operations of $1,511,957 and $7,841,381 for the years ended March 31, 2010 and 2009, respectively and we have an accumulated deficit of $73,074,775 and negative working capital of $18,796,916 as of March 31, 2010.  These conditions raise substantial doubt as to our ability to continue as a going concern. Management is trying to raise additional capital through sales of stock.  The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
 
 
 NOTE 3 - Debt
 Notes payable consists of the following:
 
 2010

2009Installment note payable, secured by our assets, interest at 15% - in default

$
687,533
$
687,533Installment note payable, no security, interest at 15% - in default


298,907

298,907GSI acquisition installment note payable, no stated interest rate


-

2,500,000GSI promissory notes, no security, interest at 10%, - in default


640,000

479,000Advance


663,000

-Other


2,000

2,000Total

$
2,291,440
$
3,967,440
 
 
 As of March 31, 2010 ESSI had two outstanding installment notes with a 15% interest rate. Both notes were in default.
 
 Advances represent borrowings from an individual during the period. The terms of the loans were negotiated and finalized in April 2010. During the period through March 31, 2010, interest was accrued at a rate of 5%. (see Note 11, Subsequent Events)
 
 As of March 31, 2010 our subsidiary General Synfuels International issued 10% promissory notes in the amount of $729,000 of which $89,000 is due from the company to CEO Luis Lugo.  These one year notes carry an automatic conversion into equity of GSI equity, at a price equal to 70% of the purchase price per share paid by equity investors, upon an equity financing in GSI of at least $3,000,000.  If GSI is sold before conversion occurs an amount of 1.5 times the principal amount becomes due and payable.
 
 In addition, ESSI evaluated the conversion option of the promissory note under ASC 815-15 and determined that the feature has characteristics of an embedded derivative. The embedded derivative was bifurcated and recorded as a derivative liability. At March 31, 2010, the derivative liability was valued at $30,924 using the Black-Scholes Option Pricing Model. During the year, we recognized additional interest expense of $15,039 related to the amortization of the related debt discount and additional loss of $15,885 on the change in fair value of the derivative instrument.
 
 For the year ending March 31, 2010 and 2009, we recorded interest expense of $521,083 and $654,867, respectively.
 
 
 NOTE 4 – RELATED PARTIES
 We have financed our operations in part by funds received from shareholders. These advances are in the form of unsecured promissory notes and bear interest at rates ranging from 8% to 10%.  Stockholder loans totaled $1,609,922 and $1,718,258 and accrued interest of $1,028,178 and $831,342 for 2010 and 2009, respectively. The principal balance is included in notes to related parties, along with $89,000 of convertible notes issued to related parties.
 
 
 NOTE 5 - ACCRUED OFFICERS' COMPENSATION
 Accrued compensation consists of the cumulative unpaid compensation due to two corporate officers (Chairman &Chief Executive Officer and Secretary) and two former corporate officers (Chief Executive Officer and Chief Financial Officer).  We recorded officer compensation of $683,832 and $572,083 during fiscal 2010 and 2009, respectively, and included these amounts in general and administrative expenses. Accrued officers’ compensation, including accrued interest and taxes, totaled $2,420,024 and $1,824,235 for 2010 and 2009 respectively and is included in accrued expenses.
 
 
 NOTE 6 - INCOME TAXES
 ESSI recorded no provision for income taxes in fiscal 2010 and 2009 due to the operating losses incurred from inception to date.
 
 The tax effect of temporary differences between financial reporting and the tax bases of assets and liabilities relate to the following:
 
 At March 31, 2009, deferred tax assets consisted of the following:
 
 Deferred tax assets:Net operating losses

$
9,064,882Less: valuation allowance


(9,064,882
)Net deferred tax asset

$
-
 
 
 At March 31, 2010, deferred tax assets consisted of the following:
 
 Deferred tax assets:Net operating losses

$
9,434,983Less: valuation allowance


(9,434,983
)Net deferred tax asset

$
-
 
 The cumulative net operating loss carry-forward is approximately $26,661,419 at March 31, 2010, and will expire in the years 2016 through 2030. The deferred tax asset has been fully reserved because we are unable to anticipate future taxable income to realize the potential benefits of the gross deferred tax asset.
 
 The annual amount of tax loss carryforward, which can be utilized, may be limited due to the substantial changes in the company's ownership as defined by section 382 of the Internal Revenue Code. Such limitations could result in the expiration of a part or all of the loss carryforwards before their utilization.
 
 
 NOTE 7 – STOCK TRANSACTIONS
 
 COMMON STOCK:
 During fiscal 2010, we issued:
 ·
4,832,188 shares of stock for services valued at $96,644 using the grant-date quoted price of the stock.  The 4,832,188 shares vest immediately and therefore $96,644 was expensed during the period.
 
 During fiscal 2009, we issued:
 ·
25,913,750 shares of stock for services valued at $1,179,758 using the grant-date quoted price of the stock.  21,416,213 shares vest immediately and therefore $892,255 was expensed during the period.·
26,729,999 shares of stock for cash of $1,363,500.·
1,708,890 shares of stock valued at $129,969 for s stock payable pursuant to a consulting agreement.·
33,333,333 shares of stock valued at $3,000,000 in connection with the acquisition of assets from the shareholders of General Synfuels International.
 
 We issue stock as compensation to employees and outside consultants for services provided to the company. Employee share-based awards are accounted for in accordance with ASC 718, which requires us to measure the cost of employee services received based on the grant-date fair value of the award. We account for non-employee share-based awards in accordance with ASC 505-50, “Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquisition, or in Conjunction with Selling, Goods or Services.”
 
 
 NOTE 8 – SETTLEMENT AGREEMENT
 On March 23, 2005, we entered into a settlement agreement with Accuprobe to return an airborne hyperspectral sensor (Probe) and to settle the outstanding obligations under the related capital lease.  Under this agreement, we were required to return the Probe on or before August 31, 2005.  Due to continuing disputes over various issues, the probe was not returned until 2007.  As the Probe was not returned by the August 2005 due date, we were subject to a shipping, handling and disposition fee of $250,000. In addition, we were subject to interest charges that began accruing on September 2, 2005 at an annual rate of prime plus 4%; rent on the probe of $250,000 per year beginning April 10, 2000 with interest on any unpaid rent accruing at a rate of prime plus 2% through August 31, 2005.  After August 31, 2005, interest related to the unpaid rent ceased and was replaced with a 5% late fee calculated on the entire balance due at the end of each month.
 
 Because we were unable to reach Accuprobe and make arrangements for the return of the probe, in January 2007, we shipped the probe to an acquaintance of Accuprobe with instructions to hold the probe until Accuprobe provided further instructions.  We obtained confirmation in December 2007 that Accuprobe had contacted the acquaintance and instructed them to begin certain repairs and calibrations on the probe.  As a result of this confirmation, we discontinued accruing rent, interest and late fees on the probe.
 
 The estimated settlement obligation as of March 31, 2010 and 2009 was $8,686,824.
 
 
 NOTE 9 – DEPOSITS
 During fiscal year 2009, we recorded $903,684 in deposits related to the development of a prototype related to the oil shale gasification process acquired through GSI.  Of this amount, $130,000 was paid during fiscal 2010, with the balance of $21,628 recorded as accounts payable, which represent a legal liability for work performed related to the prototype.
 
 
 NOTE 10 – CONVERSION OF DEBT TO PREFERRED STOCK
 On July 9, 2009, we issued 31,250,000 shares of Series C Convertible Preferred Stock in exchange for $2,500,000 of convertible debt outstanding at that time. Each preferred share is convertible into one share of common at the holder’s option until July 9, 2014, at which time the preferred shares are automatically converted to common stock provided that the company is in compliance with certain terms. Holders of preferred shares have voting rights equal to the equivalent number of common shares and participate in any cash dividends declared by the Board of Directors. In addition, holders of the preferred shares have a preferential right over other classes of stock in the event of liquidation. Based on its characteristics, the preferred shares are reported as equity.
 
 We evaluated the notes conversion features under FASB ASC 470 and determined that the convertible notes is settled with preferred stock and meet the criteria for troubled debt restructuring.
 
 The preferred stock is convertible at $0.08 cents per share and the entire $2.5 million is convertible into an aggregate 31,250,000 shares of series C preferred shares. The transaction resulted an gain on conversion of debt $781,250.
 
 The Series C Convertible Preferred shares contain dividend participation and voting rights on an as converted basis.  In addition, the Series C Convertible Preferred shareholders have preferential rights over other classes of stock in the event of liquidation. The Series C Convertible Preferred shares contain a mandatory conversion feature which is triggered on the fifth anniversary of the closing date, or July 8, 2014.  These preferred shares are convertible into an aggregate of 31,250,000 common shares. The conversion feature was evaluated under FASB ASC 815 to determine whether it should be bifurcated and recorded as a derivative liability. Based on this evaluation, the embedded feature is clearly and closely related to the host contract and is therefore not bifurcated under the appropriate accounting guidance. As a result, there is no derivative liability.
 
 
 NOTE 11 - SUBSEQUENT EVENTS
 On April 22, 2010, the terms related to advances totaling $663,000 were finalized and memorialized into a convertible note instrument. Prior to that date, interest was accrued at a rate of 5% per annum. Pursuant to the final terms of the agreement, the convertible note carries a 5% annual interest rate and matures on April 22, 2012. The note may be converted by the holder at any time at a rate of $0.08. In the event that the company completes an equity raise, totaling an aggregate of $1 million or more over a consecutive 12-month period, the holder may convert the note at a rate equal to 80% of the purchase price paid by the new investors.
 
 We evaluated the embedded conversion feature for derivative treatment and determined that the conversion feature is not considered indexed in ESSI’s own stock pursuant to ASC 815-40-55. As a result, the embedded conversion feature must be bifurcated from the host instrument and recorded as a derivative liability. The derivative liability was valued at approximately $362,000 on the date of the agreement using the Black-Scholes Option Pricing Model. The variables used in the pricing model include the following: 1) quoted stock price of $0.035; 2) term of 2 years; 3) zero dividends; 4) volatility of 300%; and 5) discount rate of 1.07%. This amount was recorded as a discount to the debt and a derivative liability on April 22, 2010. The discount is amortized over the two year term of the note using the effective interest rate. The derivative liability is marked-to-market each reporting period, with the gain or loss recorded in the income statement.
 
 In April 2010 we issued 400,000 shares each to Larry Vance, Tami Story and Luis Lugo as compensation for services as a Director of the firm.
 
 In April and May of 2010, Earth Search issued 5% convertible promissory notes in the amount of $30,000 and $235,000 respectively.
 
  
  ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
 None.
 
 ITEM 9A.(T) CONTROLS AND PROCEDURES
 
 Evaluation of Disclosure Controls and Procedures
 Our management, principally our chief financial officer and chief executive officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our management concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective such that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i.) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding disclosure. In particular, we have identified the following material weakness of our internal controls:
 
 -
There is an over-reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transactions.-
There is a lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.
 
 Management’s Annual Report on Internal Control over Financial Reporting
 Our management is responsible for establishing and maintaining disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended) for the company.
 
 In order to ensure whether our internal control over financial reporting is effective, management has assessed such controls for its financial reporting as of March 31, 2010. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
 
 In performing this assessment, management has identified the following material weaknesses:
 
 There is an absence of adequate segregation of duties relating to oversight and management of our systems. This resulted primarily from the fact that certain parts of the work of our chief financial officer are not monitored or reviewed. The absence of adequate segregation of duties may have an effect on the systems which we use in the evaluating and processing of certain accounts and areas and in the posting and recording of journal entries into certain accounts, as described below:
 
 o
Financial statements closing process – There was a material weakness in the process of closing and consolidating our financial statements which resulted from the fact that the work of processing the trial balance, evaluating and implementing accounting policies and practices, and drafting the consolidated financial statements and related footnotes is performed by consultants and not reviewed by qualified accountant within our company.
 
 As a result of these material weaknesses in our internal control over financial reporting, our management concluded that our internal control over financial reporting as of March 31, 2010, was not effective based on the criteria set forth by COSO in Internal Control – Integrated Framework. A material weakness in internal control over financial reporting is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.
 
 Management’s Plan for Remediation of Material Weaknesses
 Based on our financial condition, there are limitations to the level of remediation possible. If we restart our operations, management will implement the following plan intended to remediate our ineffectiveness and to strengthen our internal controls over financial reporting:
 
 o
Hire a qualified accounting staff to manage, review and verify the day-to-day accounting and the financial statement close process.o
Improving the control and oversight of the duties relating to the systems we use in the evaluation and processing of certain accounts and areas in the posting and recording of journal entries into certain accounts. This improvement should include reviews by management of the accounting processes as well as a reorganization of some of the accounting functions.o
The segregation of duties relating to the processing of accounts and the recording of journal entries into certain accounts.
 
 This annual report does not include an attestation report of our public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.
 
 
 ITEM 9B. OTHER INFORMATION
 None.
 
  
  
 PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSON AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
 
 COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
 Section 16(a) of the Securities Exchange Act of 1934 requires our officers, directors and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC and Nasdaq. Officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely on our review of copies of the Section 16(a) reports filed for the fiscal year ended March 31, 2008, we believe that all filing requirements applicable to its officers, directors, and greater than 10% beneficial owners were complied with.
 
 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
 The following table sets forth certain information with respect to the executive officers of the Company for fiscal 2010 to the present.
 
 Name
PositionLarry F. Vance
Chairman & Chief Executive OfficerTami J Story
Director Secretary/Treasurer/Director
 
 (1)
Effective December, 2009, Mr. Larry Vance became Chief Executive Officer of the Company.(3)
Effective April, 1993, Ms. Story was appointed as Secretary and Treasurer of the Company.
 
 Certain additional information concerning the individuals named above is set forth below. This information is based on information furnished to us by each individual noted.
 
 Larry F. Vance served as Chief Executive Officer of the Company from April 1985 to July 2008 and resumed the CEO position on December 14, 2009. Since April 8, 1995, Mr. Vance has served as Chairman of the Company. Mr. Vance is also a director of the Company and has been a full-time employee of the Company since 1985. Mr. Vance’s training is in business and marketing. He served in a management capacity for the 3M companies, IBM, and Computer Usage Corporation prior to founding the Company.
 
 Tami J. Story, Secretary, Treasurer and Director. Tami J. Story served in an administrative support capacity for the Company from 1991 until April 1993. Since April 1993, Ms. Story has served as Secretary and Treasurer of the Company. Ms. Story also serves as a director of the Company. Ms. Story holds a degree with a major in Nursing and a minor in Business Administration.
 
 Family Relationships
 There are no family relationships between or among the directors, executive officers or persons nominated or charged by us to become directors or executive officers.
 
 Involvement In Legal Proceedings
 To the best of our knowledge, during the past five years, none of the following occurred with respect to a present or former director or executive officer of the Company: (1) any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (2) any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) being subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of any competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (4) being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.
 
 Code of Ethics
 The Company has adopted a code of ethics. The Company will provide to any person without charge, upon request, a copy of its code of ethics upon written request to our corporate headquarters or request emailed to earthsrch@aol.com.
 
 Board of Directors Meetings and Subcommittees
 
 Meetings
 
 Our Board of Directors held several meetings during the fiscal year ended March 31, 2009. All board actions were completed through unanimous written consents.
 
 Audit Committee and Financial Expert
 
 Our Board of Directors does not have a separate audit committee. The Board has determined that it does not have a member of its Board that qualifies as an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-B.
 
 To strengthen our controls, during a portion of fiscal year 2009 retained the services of an outside consultant, HF Services LLC to assist with quarterly and annual reviews of our accounting data.
 
 Compensation Committee
 As all our executive officers are currently under employment agreements, we do not have a separate compensation committee. At this point, we do not intend to establish a separate compensation committee as this function will be performed by our full Board of Directors.
 
 Nominating Committee
 We do not currently have a separate nominating committee as this function is performed by our full Board of Directors.
 
 Shareholder Communication
 We communicate regularly with shareholders through press releases, as well as annual and quarterly reports. Our Chief Executive Officer addresses investor concerns on an on-going basis.
 
 Interested parties, including shareholders and other security holders, may communicate directly with our Board of Directors or with individual directors by writing to our Chief Executive Officer at 306 Stoner Loop Road, #6, Lakeside, Montana 59922.
 
 Securities Authorized for Issuance under Equity Compensation Plans
 For information regarding securities authorized for issuance under Equity Compensation Plans, and the equity compensation plan information table see Part II, “Item 5: Market for Common Equity and Related Stockholder Matters.”
 
 
 ITEM 11. EXECUTIVE COMPENSATION
 The following table sets forth, for the years indicated, all compensation awarded to, paid to or earned by the following type of executive officers for the fiscal years ended March 31, 2010 and 2009: (i)individuals who served as, or acted in the capacity of, our principal executive officer and principal financial officer for the years ended March 31, 2010 and 2009; and (ii) our two other most highly compensated executive officers, who together with the principal executive officer are our most highly compensated officers whose salary and bonus exceeded $100,000 with respect to the years ended March 31, 2010 and 2009 and who were employed by us at March 31, 2009.
 SUMMARY COMPENSATION TABLE
 
 Name and Principal Position

Year

Salary

($)

Bonus

($)

Stock

Awards

($) (5)

Total Compensation ($)Larry Vance

Chief Executive Officer

2010

2009

200,000(1)

176,666 (1)

0

0

0

12,000

200,000

188,666Luis Lugo

2010

203,687 (2)

0

0

203,687Chief Executive Officer

2009

180,000 (2)

120,000 (2)

0

300,000Charles Bridge

2010

155,146(3)

0

0

155,146Chief Financial Officer

2009

116,667 (3)

33,750 (3)

0

150,417Tami J. Story

Secretary Treasurer

2010

2009

125,000(4)

98,750 (4)

0

0

0

12,000

125,000

110,750
 
 (1)
The entire amount of Mr. Vance’s salary was accrued during the fiscal years 2010 and 2009.(2)
The entire amount of Mr. Lugo’s salary was accrued during the fiscal years 2009 and 2010.   Mr. Lugo’s 2009 bonus was paid in stock.(3)
The entire amount of Mr. Bridge’s salary was accrued during the fiscal years 2010 and $50,332 of Mr. Bridge’s salary was accrued during the fiscal years 2009.   Mr. Bridge’s 2009 bonus was paid in stock.(4)
The entire amount of Ms. Story’s salary was accrued during the fiscal years 2010 and 2009. During the 2010 fiscal year, Ms. Story was paid $29,500 in accrued salaries earned in prior periods.(5)
In fiscal year 2009, each of Mr. Vance and Ms. Story received 200,000 shares of our common stock valued at $0.06 per share as compensation for serving as a director of the Company.
 
 Outstanding Equity Awards at Fiscal Year End
 There were no outstanding equity awards held by our officers at March 31, 2009.
 
 Director Compensation
 The Company does not currently have any non-employee directors; in fiscal year 2009, each of Mr. Vance and Ms. Story received 200,000 shares of our common stock valued at $0.06 per share as compensation for serving as a director of the Company.
 
 Employment Contracts
 On January 1, 2009, the Company entered into an employment agreement with Mr. Larry Vance. Pursuant to the agreement, the Company will pay Mr. Vance an annual salary of $200,000. In the event of termination of Mr. Vance without cause or due to a change in control, the Company will pay Mr. Vance two years of annual salary. Mr. Vance’s options and vesting criteria are described above and in Note 8 to the attached consolidated financial statements. The term of this agreement is four years.
 
 On January 1, 2009, the Company entered into an employment agreement with Ms. Tami Story. Pursuant to the agreement, the Company will pay Ms. Story an annual salary of $125,000. In the event of termination of Ms. Story without cause or due to a change in control, the Company will pay Ms. Story two years of annual salary. Ms. Story’s options and vesting criteria are described above and in Note 8 to the attached consolidated financial statements. The term of this agreement is four years.
 
 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 The following table sets forth certain information regarding ownership of the Company’s Common Stock as of March 31, 2010 by each person known by the Company to own beneficially more than five percent of the Common Stock and by all directors and officers and as a group:
 
 Name and address of beneficial owner

Amount and nature of beneficial ownership (1)

Percent of classLarry Vance

65,075,302 (2)

73 %P.O. Box 763Lakeside, MT 59922Tami Story

17,312,922

20%P.O. Box 763Lakeside, MT 59901Luis Lugo

6,250,000

7%45B Water StreetNatick, MA 01760All directors and officers

88,638,224

100%
 
 ___________________________
 (1)           Pursuant to the rules and regulations of the Securities and Exchange Commission, shares of common stock that an individual or group has a right to acquire within 60 days pursuant to the exercise of options or warrants are deemed to be outstanding for the purposes of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purposes of computing the percentage ownership of any other person shown in the table. All shares are held directly with sole voting and investment power unless otherwise indicated.
 
 (2)           Includes 4,439 shares held by Universal Search Technology, a private company owned by Mr. Vance.
 
 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
 In February 2007, Larry Vance and Tami Story, officers of the Company, together agreed to loan the Company $500,000. $170,000 of the net loan proceeds were received in March 2007 and the balance was received April 2007. The loan, along with accrued interest, is due February 26, 2008 and carries a 15% annual interest rate, compounded monthly. The loan is secured by 10,000,000 shares of the Company's common stock.
 
 None of our directors are independent, as determined under the rules of Nasdaq.
 
 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
 The following table presents fees, including reimbursements for expenses, for professional audit services rendered by Malone & Bailey for the audits of our annual financial statements and interim reviews of our quarterly financial statements for the years ended March 31, 2010 and March 31, 2009 and fees billed for other services rendered by Malone & Bailey during those periods.
 
 Fiscal 2010


Fiscal 2009Audit Fees (1)

$
29,800


$
61,769Audit Related Fees

$
-


$
-Tax Fees

$
-


$
-All Other Fees

$
-


$
-Total

$
29,800


$
61,769
 
 
 Policy Related to Board of Directors Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Accounting Firm
 
 As we do not currently have an audit committee, our Board of Directors has a policy of pre-approving all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services, and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Board of Directors regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The Board of Directors may also pre-approve particular services on a case-by-case basis.
 
 
  
  
 ITEM 15.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 (a)(1) and (2)
 
 Consolidated Balance Sheets as of March 31, 2009
F-3Consolidated Statements of Operations for the years ended March 31, 2009 and 2008
F-4Consolidated Statements of Cash Flows for the years ended March 31, 2009 and 2008
F-5Consolidated Statement of Changes in Stockholders’ Deficit for the years ended March 31, 2009 and 2008
F-6Notes to consolidated financial statements
F-7 – F-12
 
 (a)(3)
 
 2.1
Agreement and Plan of Merger by and among Earth Search Sciences, Inc., ESS Acquisition Corp., Space Technology Development Corporation and the shareholders of Space Technology Development Corporation, dated December 21, 1999 (Incorporated by reference to Exhibit 2.1 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).3.1
Articles of Incorporation, as amended (Incorporated by reference to Exhibit 3.1 to the Registrant's Forms 10-K for the fiscal years ended March 31, 1995 and March 31, 1996).3.2
Bylaws (Incorporated by reference to Exhibit 3.2 to the Registrants’ Form 10-K for the fiscal year ended March 31, 1995).4.1
2007 Stock Compensation Plan (Incorporated by reference to Exhibit 4.1 to the Registrants’ Form S-8 Registration No. 333-146798 filed on October 18, 2007 ).10.1
Memorandum of Understanding between the Registrant and Applied Signal and Imaging Technology, Inc. dated May 27, 1996 (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-K for fiscal year ended March 31, 1996).10.2
Contract of Sale and Leaseback dated June 10, 1997 between Registrant and Accuprobe, Inc. (Incorporated by reference to Exhibit 10.2 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).10.3
Operating Agreement of ESSI Probe 1 LC, dated June 3, 1997 (Incorporated by reference to Exhibit 10.3 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).10.4
Hyperspectral Technology License Agreement between Earth Search Sciences, Inc. and Noranda Mining and Exploration, Inc. made as of December 16, 1997 (Incorporated by reference to the Registrant’s for 8-K filed on February 6, 1998).10.5
Agreement between the Office of Naval Research and Space Technology Development Corporation Agreement for NAVY EARTHMAP OBSERVER (NEMO) dated December 10, 1997 (Incorporated by reference to Exhibit 10.5 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).10.6
Sales Contract between Science Applications International Corp. and Space Technology Development Corp. Dated: 30 March 1998, Contract No.: STDC-98-NEMO-0003 (Incorporated by reference to Exhibit 10.6 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).10.7
Sales Contract between Science Applications International Corp. and Space Technology Development Corp. Dated: 30 March 1998, Contract No.: STDC-98-NEMO-004 (Incorporated by reference to Exhibit 10.7 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).10.8
Sales Contract between Space Systems/Loral (SS/L) and Space Technology Development Corporation (STDC). Dated 21 January 1999, Contract Number: STDC-98-NEMO-0001 (Incorporated by reference to Exhibit 10.8 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).10.9
Sales Contract between Litton Systems, Inc., Amecom Division (Litton Amecom) and Space Technology Development Corp. (STDC). Date 29 October 1998, Contract Number: STDC-98-NEMO-0009 (Incorporated by reference to Exhibit 10.9 to the Registrant's Form 10-K for fiscal year ended March 31, 2000).10.10
Common Stock Purchase Agreement between Alpha Venture Capital, Inc. and Earth Search Sciences, Inc.. Dated May 23, 2001. (Incorporated by reference to Exhibit 10.10 to the Registrant's Form 10-K for fiscal year ended March 31, 2001).10.11
Registration Rights Agreement between Alpha Venture Capital, Inc. and Earth Search Sciences, Inc.. Dated May 23, 2001. (Incorporated by reference to Exhibit 10.11 to the Registrant's Form 10-K for fiscal year ended March 31, 2001).10.12
Common Stock Purchase Warrant A between Alpha Venture Capital, Inc. and Earth Search Sciences, Inc. Dated May 23, 2001. (Incorporated by reference to Exhibit 10.12 to the Registrant's Form 10-K for fiscal year ended March 31, 2001).10.13
Common Stock Purchase Warrant B between Alpha Venture Capital, Inc. and Earth Search Sciences, Inc. Dated May 23, 2001. (Incorporated by reference to Exhibit 10.13 to the Registrant's Form 10-K for fiscal year ended March 31, 2001).10.14
Larry F. Vance employment agreement (Incorporated by reference to Exhibit 10.1 to the Registrant's Form 10-Q for fiscal quarter ended December 31, 2000).10.15
John W. Peel employment agreement (Incorporated by reference to Exhibit 10.2 to the Registrant's Form 10-Q for fiscal quarter ended December 31, 2000).10.16
Rory J. Stevens employment agreement (Incorporated by reference to Exhibit 10.3 to the Registrant's Form 10-Q for fiscal quarter ended December 31, 2000).10.17
Tami J. Story employment agreement (Incorporated by reference to Exhibit 10.4 to the Registrant's Form 10-Q for fiscal quarter ended December 31, 2000).10.18
John J. Sciuto employment agreement (Incorporated by reference to Exhibit 10.18 to the Registrant's Form 10-K for fiscal year ended March 31, 2001).10.19
Unrestricted License Agreement for Recovery of Products from Oil Shale bgetween GENERAL SYNSFUELS INTERNATIONAL and PETRO PROBE, INC. (Incorporated by reference to Exhibit 10.19 to the Registrant’s Form 10KSB for the fiscal year ended March 31, 2007).10.20
Multi-platform HyperSpectral imaging "Micro Sectrometer" Development Proposal Number 05080901. (Incorporated by reference to Exhibit 10.19 to the Registrant’s Form 10KSB for the fiscal year ended March 31, 2007).10.21
Promissory Note due February 2008, dated February 2007. (Incorporated by reference to Exhibit 10.19 to the Registrant’s Form 10KSB for the fiscal year ended March 31, 2007).10.22
Equipment Usage Agreement dated June 3, 1997, filed herewith.16.1
Consent of Independent accountants re Registration Statement on Form No. S-1 (No. 333-66100). (Incorporated by reference to Exhibit 16.1 to the Registrant’s form 10-K for fiscal year ended March 31, 2004).16.2
Statement under oath of Principal Executive Officer and Principal Financial Officer regarding facts and circumstances relating to exchange act filings. (Incorporated by reference to Exhibit 16.2 to the Registrant’s form 10-K for fiscal year ended March 31, 2004).21.1.1
List of Subsidiaries (Incorporated by reference to Exhibit 21.1.1 to the Registrant's Form 10-K for fiscal year ended March 31, 2000)23.1
Consent of Malone & Bailey, filed herewith31.1
Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, filed herewith31.2
Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, filed herewith32.1
Certification of Chief Executive Officer Pursuant to 18 U.S.C Section 1350, filed herewith32.2
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, filed herewith
 
  
  
 SIGNATURES
 
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 EARTH SEARCH SCIENCES, INC.By: /s/Larry VanceLarry VanceChief Executive OfficerDate: July 13, 2009
 
 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
 
 Signature
Title/s/Larry Vance
Chief Executive Officer and DirectorLarry Vance
(Principal Executive Officer)Date:  July 13, 2009/s/Tami Story
Secretary TreasurerTami Story
(Principal Financial Officer)Date:  July 13, 2009