SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended: December 31, 1998
                           Commission File No. 0-19566

                       EARTH SEARCH SCIENCES, INCORPORATED
             (Exact Name of Registrant as Specified in its Charter)

            Utah                                              87-0437723
(State or other Jurisdiction of                            (IRS Employer ID)
Incorporation or Organization)


                  502 North 3rd Street, #8 McCall, Idaho 83638
          (Address of Principal Executive Offices, Including Zip Code)

Registrant's telephone number, including area code:  (208) 634-7080

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirement for the past 90 days. Yes X No

The number of shares  outstanding of each of the registrant's  classes of common
stock, as of the close of the period, covered by this report 90,395,931 shares.


The registrant has only one class of common stock.


<PAGE>

                           EARTH SEARCH SCIENCES, INC.

                                    FORM 10-Q
                                   (Unaudited)

                         QUARTER ENDED DECEMBER 31, 1998

                                     PART I

                              FINANCIAL INFORMATION

                                TABLE OF CONTENTS

Item 1. Consolidated Financial Statements                        Page

        Consolidated Balance Sheet
          as of December 31, 1998 and March 31, 1998.             3

        Consolidated Statement of Operations for the
          Three Months Ended December 31, 1998 and 1997.          4

        Consolidated Statement of Cash Flows for the
          Three Months Ended December 31, 1998 and 1997.          5

        Selected Notes to Consolidated Financial
          Statements.                                            6-7

Item 2. Management's Discussion and Analysis of
          Financial Condition and Results of Operations          8-9

                                     PART II

                           OTHER INFORMATION REQUIRED

Item 1.  Legal Proceedings                                        9
Item 2.  Changes in Securities                                    9
Item 3.  Defaults Upon Senior Securities                          9
Item 4.  Submission of Matters of a Vote of
           Security Holders                                       9
Item 5.  Other information                                        9
Item 6.  Exhibits and Reports on Form 8-K                         9

<PAGE>

EARTH SEARCH SCIENCES, INC
(A Development Stage Company)
Consolidated Balance Sheet
<TABLE>
<CAPTION>
                                                            December 31,        March 31,
                                                               1998               1998
                                                            ------------        ---------
<S>                                                         <C>                 <C>

Assets
Current assets:
    Cash                                                    $      31,257       $      42,600
    Accounts Receivable                                           214,764                   -
    Prepaid & deposits                                            715,814             675,648
                                                            -------------       -------------
       Total current assets                                       718,248             961,835

Property and equipment                                          3,979,179           3,920,953
Other long-term assets                                            183,225             183,225
                                                            -------------       -------------

Total assets                                                $   5,066,013       $   4,880,652
                                                            =============       =============

Liabilities, Redeemable Common Stock and
Nonredeemable Shareholders' Deficit
Current liabilities:
Notes payable                                               $      78,399       $      89,080
Accounts payable                                                  671,332             674,881
Accrued payroll taxes                                                   -              18,449
Accrued interest                                                  290,667             281,750
Payable to Probe 1 Joint Venture                                  500,000             500,000
Unearned revenue                                                  160,063              40,000
Cash advances and deposits                                        430,000                   -
                                                            -------------       -------------

Total current liabilities                                       2,134,010           1,600,611
                                                                                  

Long-term liabilities:
Shareholder loans                                                 177,350             104,090
Capital lease obligation                                        2,393,379           2,029,410
Deferred officers' compensation                                 1,629,782           1,387,461
Minority interests                                              2,248,000           2,247,000
                                                            -------------       -------------
Total liabilities                                               8,582,521           7,368,572
                                                            -------------       -------------

Redeemable common stock                                           517,845             517,845
                                                            -------------       -------------

Nonredeemable shareholders' equity:
 Series A preferred stock; 200,000 shares
  authorized, issued and outstanding at March 31, 1998          1,000,000           1,000,000
Common stock, $.001 par value;
  200,000,000 shares authorized                                    88,669              84,792
Additional paid-in capital                                     10,452,865           9,827,644
Common stock subscribed                                                 -             165,000
                                                                                         
Deficit accumulated during the development stage              (15,575,887)        (14,083,201)
                                                            -------------       -------------           
                                                               (4,034,353)         (3,005,765)      
                                                            -------------      --------------
Total liabilities, redeemable common stock and
  nonredeemable shareholders' deficit                        $  5,066,013       $   4,880,652
                                                            =============       =============
</TABLE>
<PAGE>

EARTH SEARCH SCIENCES, INC.
(A Development Stage Company)

CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>

                                                  For the Three Months                         For the Nine Months
                                                  Ended December 30,                          Ended December 30,

                                              1998                   1997                 1998                  1997
<S>                                          <C>                  <C>                  <C>                   <C>   

Revenue                                          173,252                    $ -              636,906                   $ -
Cost of Services provided                       (154,895)                     -             (433,527)                    -
                                        -----------------      -----------------    -----------------     -----------------
Gross margin                                      18,357                                     203,379

Expenses:
   Exploration                                         -                 38,210                    -               333,691
   Depreciation                                    6,649                  7,500               19,511                22,500
   General and Administrative                    315,289                456,373            1,030,656             1,655,021
                                        -----------------      -----------------    -----------------     -----------------
                                                 321,938                502,083            1,050,167             2,011,212

Loss from operations                             303,581               (502,083)            (846,788)           (2,011,212)

Interest income
Interest expense                                (161,211)              (254,466)            (513,438)             (597,379)
Other income (expense)                                                 (195,840)             (17,442)             (178,537)
                                        -----------------      -----------------    -----------------     -----------------

Net Loss                                        (464,792)              (952,398)          (1,377,668)           (2,787,128)

Minority Interest in losses of
consolidated subsidiaries                              -                      -                    -                     -
                                        -----------------      -----------------    -----------------     -----------------

Extraordinary item (Debt
  Extinguishment loss)                                 -                      -             (115,023)           (1,000,000)
                                        -----------------                           -----------------     -----------------

Net Loss                                        (464,792)              (952,389)          (1,492,691)           (3,787,128)
                                        =================      =================    =================     =================
</TABLE>
<PAGE>

EARTH SEARCH SCIENCES, INC.
(A Development Stage Company)

CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
                                                                                          For the Nine Months
                                                                                          Ended Demceber 31,

                                                                                   1998                      1997
<S>                                                                             <C>                      <C>  

Cash flows from operating activities:
   Net lncome                                                                      $ (1,492,691)            $ (3,787,128)
   Adjustments to reconcile net loss to net cash
    (used in) operating activities:
   Issuance of common stock for services
     and interest expense                                                               185,592                  256,490
   Extraordinary items                                                                  115,023                1,000,000
   Depreciation                                                                         207,011                   22,500
   Amortization of lease discount                                                       363,970                  283,826
   Changes in assets and liabilities:
     Accounts receivable                                                               (214,764)                       -
     Prepaid assets and deposits                                                        (40,166)                 (30,000)
     Accounts payable                                                                     3,549                  142,850
     Accured liabilities                                                                 (9,532)                       -
     Unearned revenue                                                                   120,063                        -
     Deferred officers compensation                                                     242,321                 (155,500)
                                                                            --------------------      -------------------

  Net cash (used in) provided by operating activities                                  (519,624)              (2,266,962)

Cash flows used for investing activates:
   Capital expenditures                                                                 (47,298)                 (10,704)
   Advance deposits                                                                     430,000                  310,000
                                                                            --------------------      -------------------

   Net cash provided by investing activities                                            382,702                  299,296
                                                                            --------------------      -------------------

Cash flows from financing activities:
  Proceeds from notes payable                                                                 -                  500,000
  Repayment of notes payable                                                            (10,681)                 (40,000)
  Shareholder loans                                                                     191,500                  100,000
  Repayment of shareholder loans                                                       (118,240)                       -
  Issuance of common stock                                                               63,000                  156,000
  Proceeds from Probe 1 joint venture                                                         -                1,200,000
                                                                            --------------------      -------------------

Net cash provided from financing activities                                             125,579                1,916,000
                                                                            --------------------      -------------------

Net increase (decrease) in cash                                                         (11,343)                 (51,666)
Cash at beginning of period                                                              42,600                   51,666
                                                                                                      -------------------
Cash at end of period                                                                  $ 31,257                      $ -
                                                                             ====================      ===================
</TABLE>
<PAGE>



                           EARTH SEARCH SCIENCES, INC.
                           A Development Stage Company

               SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          December 31, 1998 (unaudited)

CONDENSED FINANCIAL STATEMENTS

         The  consolidated  statement of  financial  position as of December 31,
1998, and the consolidated  statements of operations and cash flow for the three
and nine months ended  December 31, 1998,  and 1997,  have been  prepared by the
Company  without audit.  In the opinion of management,  all  adjustments  (which
include only normal recurring  adjustments) have been made that are necessary to
present fairly the financial position,  results of operation,  and cash flows at
December 31, 1998 and 1997.

         Certain  information  and  footnote  disclosures  normally  included in
financial  statements  prepared in accordance with generally accepted accounting
principals have been condensed or omitted.  It is suggested that these financial
statements and notes thereto be read together with the financial  statements and
notes thereto in the Company's  form 10-K for the year ended March 31, 1998. The
results of  operation  for the three  months  ended  December  31,  1998 are not
necessarily  indicative  of the  operating  results to be expected  for the full
fiscal year.

REVENUE

The Company  recognized  $173,252 in revenue during the third quarter for remote
sensing services performed.

--------------------------------------------------------------------------------
     Comparison of Current Quarter's Revenues With Two Previous Quarters
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
   $250,000                           $213,384                     $173,252
    6/30/98                           9/30/98                      12/31/98
--------------------------------------------------------------------------------

NOTES AND ACCOUNTS PAYABLE

         The Company  obtained  interim  working  capital by issuing  promissory
notes with rights of conversion.  The terms of these debt instruments are for an
initial period of ninety days but renewable  every ninety days for one year, and
bear interest at 12.5% to 12.99%. Holders of the notes have the right to convert
the loan amount plus interest  into  restricted  shares of the Company's  common
stock,  subject to the terms in the promissory  notes. The Company  continues to
raise funds to finance its  business  operations.  Accounts  payables  grew from
$671,332 at the beginning of the fiscal year to $674,881 at the end of the third
quarter.

PROBE 1 JOINT VENTURE

         Effective June 3, 1997, the Company formed a new company,  ESSI Probe 1
LC,  to  acquire  the  second  Probe 1  instrument  manufactured  by  Integrated
Spectronics Pty Ltd of Australia.  The new company is a joint venture managed by
Earth  Search  Sciences  and owned 50 percent by Earth  Search  Sciences.  Earth
Search Sciences  contributed certain instrument rights $500,000 and a promise to
pay an additional  $500,000 upon the completion and delivery of the  instrument,
and 50 percent by two shareholders, who contributed $1,000,000 million for their
interest in the company. Under the terms of the joint venture arrangement, Earth
Search  Sciences  will use the Probe 1  instrument  for the  identification  and
exploitation  of  minerals  as  well  as  environmental  remediation  and  other
projects.  The joint  venture  hopes to receive  certain  royalties  on minerals
discovered and exploited  through use of the  instrument,  as well as other fees
paid by third parties for data gathered by the  instrument.  This  instrument is
scheduled  for delivery  during  fiscal 1999. As ESSI controls the joint venture
pursuant to the terms of the joint venture agreement, the joint venture has been
consolidated into the Company's financial statements.

<PAGE>

CAPITAL LEASE OBLIGATIONS

              On June 10, 1997, the Company  completed a sale/leaseback  for its
first airborne  hyperspectral scanner "Probe 1". The instrument was sold for its
cost of  $2,500,000.  The terms of the leaseback are as follows:  1) the Company
will lease Probe 1 for $250,000  per year bearing  interest of prime plus 2% for
three years; 2) at anytime during the above lease period but no later than April
10, 2000,  the Company must  repurchase the instrument for $3,500,000 net of any
lease payments;  3) at anytime prior to the  repurchase,  the lessor may convert
the remaining obligation into shares of Quasar Resources, Inc. common stock at a
conversion  rate of 40% of the  stock's  then fair  market  value.  In the event
Quasar is not the  operator at the time of  exercise  of the option,  the lessee
shall  substitute  comparable  equity  securities  or other  rights  subject  to
reasonable  approval of lessor;  4) the Company  issued to the lessor  1,000,000
unregistered  shares of the  Company's  common stock and warrants to purchase an
additional  1,000,000  unregistered  shares of the Company's  common stock at an
exercise price of $2 per share;  and 5) the lessor will receive  certain royalty
rights to revenues generated from mineral sites identified by the instrument. In
January 1998, the Company settled the $2,200,000  note plus accrued  interest of
$142,000 by issuing  8,076,800  restricted  shares of the Company's common stock
and a warrant to purchase  1,000,000  restricted  shares of the Company's common
stock  at an  exercise  price of $2 per  share.  No value  was  assigned  to the
warrant.

              On January 5, 1998,  1,725,000  restricted shares of the Company's
common  stock were issued in lieu of the first two lease  payments  due on April
10, 1998 and 1999.  As further  consideration,  the  Company  agreed to issue an
additional  1,000,000  restricted shares of the Company's common stock to retire
the warrant issued in conjunction with the sale/leaseback  transaction mentioned
above.  These  shares were not issued as of March 31,  1998;  the value of these
shares  were  shown as  commons  stock  subscribed  in the  Company's  financial
statements  at March 31,  1998 and were  issued in the first  quarter  of fiscal
1999.  The Company  recognized  an  extraordinary  loss of  $165,000  (basis and
diluted loss per share of $0.002) from the debt extinguishment  during the forth
quarter of fiscal 1998 as a result of the settlement of the lease payments.

              During the first  quarter of fiscal 1999,  an  additional  547,727
shares were issued to the lessor in relation to the two years of lease payments.
According  to the  agreement,  the Company was to issue  1,000,000  free trading
shares  however,  in the forth  quarter of fiscal 1998,  the Company  issued the
lessor  restricted  shares in lieu of free trading shares.  It was agreed in the
first  quarter of fiscal  1999 to  compensate  for the  discounted  value of the
restricted shares, the additional 547,727 shares were issued. The value of these
additional  shares issued does not reduce the capital lease obligation  further,
but rather,  represents the costs of extinguishing  the initial two years of the
probe lease commitment.  Accordingly,  the $115,023 value of this transaction is
recorded as an extraordinary item loss of extinguishment of debt.

ISSUANCE OF STOCK

         During the three months ended  December  31, 1998,  the Company  issued
900,233 shares for services rendered.

LOSS PER COMMON SHARE

         The Company experienced a net loss during the third quarter of 
$(464,792), or $(0.0048) per common shares on a fully diluted  basis.  The 
Company has experienced a net loss for the first  three  quarters of this fiscal
year of $(1,492,6910), or $(0..153) per common share. This compares with a loss
of $(3,787,128) for the first three quarters of fiscal 1998.

<PAGE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Material Changes in Financial Condition

         During the quarter  ended  December  31, 1998,  the Company  recognized
$636,906 in revenue, an increase of $173,252. However, the Company's obligations
increased.   The large operating  payables  and  short-txerm  notes  create  a
substantial working capital deficiency.

Results of Operations

         The  Company  has  now  had  three  consecutive   quarters  of  revenue
generation,  with increasing  revenue in each quarter.  However,  because of the
Company's  large  accounts  payable  backlog,  the  Company has not been able to
generate and real cash flow from this revenue stream.

         During the quarter  ending  December 31, 1998,  Earth Search  initiated
work on its EOCAP contract with NASA to map  Yellowstone  National  Park.  Earth
Search is a subcontractor  to Yellowstone  Ecosystems  Studies  (Y.E.S.).  Earth
Search  management  attended a kick-off  meeting  following  contract  award for
purposes of planning the upcoming mission to map riparian habitat. NASA reported
previously that its high altitude mapping in prior years indicated the potential
for utilizing  hyperspectral imagery to distinguish between various tree species
and  vegetation  types  important in the food chain of  Yellowstone's  wildlife.
Earth  Search  will  collect  imagery  at lower  altitudes  which  means  higher
resolution  imagery can be collected.  It is anticipated that with the increased
resolution   obtained  utilizing  the  Earth  Search  Probe  1  technology  that
Yellowstone's  scientists responsible for tracking seasonal variability of plant
species and,  hence,  food supplies will be able to gain increased  insight into
environmental  conditions  affecting  the  health  and well  being of the Park's
wildlife.  The ability of the Probe 1 technology to  differentiate  between tree
and plant species suggests a new and more economical  method for  characterizing
habitat.

         During the quarter ending December 31, 1998, Earth Search increased its
contract  backlog  through the award of government  contracts.  The work will be
assigned to Earth Search as tasks and is projected to provide  contract  backlog
for a period of five years.  While the projected  period of  performance  of the
contracts has been specified,  because of the task order nature of the work, the
precise revenue amounts the company will recognize  cannot be quantified at this
time.  Financial  results will be reported on a quarterly  basis. The awards are
significant in that they  represent a new customer base for Earth Search.  Earth
Search now has commercial and government  work. Earth Search expects to increase
its technical  staffing  level as a result of the awards.  Work to date has been
confined to scooping  studies.  Actual flying is not scheduled to commence until
the April through August time frame when vegetation growing seasons produce more
robust vegetation than currently found among winter habitats.

         Additional  activities  during the  quarter  ending  December  31, 1998
included the  preparation of proposals for mapping three  geographic  regions of
the  globe.  One of these  regions  was flown  during  the  quarter  ending  and
preliminary data were of sufficient  interest to the client to trigger a revisit
to the area(s) of  interest.  The Company  anticipates  that  increased  mapping
workload will be recognized  during March through September 1999. To date, Earth
Search has received client  directives to prepare work plans and budgets for one
of the three new areas in  question.  These  directives  are in  addition to the
ongoing mapping  assignments in South America which are projected to run through
April of 1999. The Company is also awaiting the directive to prepare a work plan
for the  second  geographic  area.  The  third  area for which  Earth  Search is
proposing to map will require  funding from the host country,  and perhaps World
Bank  financing.  The start date for the third  geographical  area is contingent
upon  funding.  There  has  been no  contract  award  to date  and  there  is no
definitive  start date. In regard to area three,  Earth Search  management is in
negotiations  at the  Ministry  level and is  pleased  by the  co-operation  the
Company has received to date from the U.S.  State  Department  which is offering
public domain assistance to U.S. industry seeking to work abroad.

<PAGE>

         Availability  of  capital  continues  to  be  an  issue.  Earth  Search
management  has prepared  strategic  planning  documents  addressing its capital
requirements  both for the  near and long  term.  Earth  Search's  near  term or
short-term  obligations  include  raising of capital to complete the manufacture
and delivery of its second instrument,  Probe 1-2. The Company owes a balance of
$500,000 on the second Probe.  The Company is prepared to  subordinate  contract
mapping  profits,  as necessary to satisfy  short term  borrowing  requirements.
Successful  financing of the short-term  capital  requirements  may  necessitate
collateralization  using  natural  resource  royalties  negotiated  between  the
Company and its major mining client, Noranda.

         During the quarter ended December 31, 1998, Earth Search management has
prepared  strategic  options  for the  long-term  growth of the  Company.  These
options  include  steps   necessary  to  raise  funds  for  both   acquisitions,
construction  of  additional  instruments,  and capital to sustain the Company's
expanding  operations.  Also of paramount  importance to Earth Search management
and its Board of  Directors  are  options  for  improving  the  current  capital
structure of the Company.

         The Company has completed mapping assignments in Australia, Mexico, and
Canada in partial  fulfillment of its contractual  obligations to Noranda to map
for natural  resources on a global  scale.  In addition to the revenues and fees
the Company has  invoiced for these  services,  the Company  references  its SEC
filing of its Noranda  contract in which it was  previously  disclosed  that the
Company may  receive  either net smelter  royalties  or net profits  interest on
properties not previously  owned or controlled by Noranda upon which a discovery
should occur as the result of using the  Company's  Probe 1 technology to locate
the  mineral  resource.  To date,  gigabyte  quantities  of  imagery  have  been
collected by Earth Search.  These data tapes are being processed and the imagery
is  being  examined  for the  presence  of  mineral  properties  exhibiting  the
qualifications   necessary   to  establish   them  for   candidacy  as  "Royalty
Properties".  While no royal  properties  have been  recorded at this time,  the
Company is  operating  on two  continents  targeted  by the mining  industry  as
exhibiting  significant  mineral potential.  A substantial  backlog of collected
imagery from these two continents  exists,  and the evaluation process continues
to move forward. As the Company has moved from point A to point B in fulfillment
of its Noranda  mapping  contract,  it has  enjoyed  during the  quarter,  added
mapping  assignments  from new customers from emerging  growth areas,  including
hydrocarbon exploration, and environmental damage assessments, land use planning
and weed species  identification  from an airborne  platform using  hyperspectal
imagery from its Probe 1 instrument.  These additional revenues have enabled the
Company to recognize improvements over the previous quarter as it emerges from a
development stage company into an emerging growth business entity.

         During  the  second  quarter  of fiscal  1999,  the  Company  collected
hyperspectal  data  and  delivered  a  report  to   NASA/Techlink,   and  Turner
Enterprises.  The  project  completed  was  to  collect  data  specific  to  the
restocking of the West Slope Cutthroat Trout  (endangered  species) and riparian
issues.

         During  the  second  quarter  of fiscal  1999,  the  Company  collected
hyperspectral data for the Geosat Committee. The Geosat Committee is funded from
contributions by major U.S. resource companies. The Committee is operated by the
University  of Texas at El Paso  and the  Director  is Dr.  Rebecca  Dodge.  The
project  completed for the Geosat's  "Hyperspectral  Group Shoot 1998"  provided
Probe 1 hyperspectral imagery to the oil and mineral exploration,  environmental
assessment,  and  agriculture  end-user  community,  for an  evaluation by these
communities of its applications potential.

         The Company  teamed with the University of Idaho on a joint proposal to
the Farm Bureau and won a contract  to overfly  the Snake  River  Basin  (Hell's
Canyon) and during the second  quarter of fiscal  1999,  the  Company  collected
hyperspectral  data for the control and  eradication of noxious weed  intrusion.
The test  results  are being  published.  Initial  results  provide  a  positive
indication that airborne  hyperspectral  imagery is a useful tool for control of
weeds, as well as providing  information  regarding economic  indicators as they
pertain to forecasting crop yield.

<PAGE>

         Several proposals have been developed to partner with private industry,
universities  and state and Federal  agencies  to  develop,  package and deliver
competitive  advanced technology  products and services.  This approach provides
solutions  to  critical  environmental,   agriculture,   forestry,  fisheries  &
ecological issues. Defense and national security issues are also being addressed
in the proposal phase.

         During the fiscal year ended March 31,  1998,  Earth  Search  Sciences,
Inc. signed a funding  agreement with Swancorp Equities Inc. to provide over $15
million in funding.  The funding  agreement  contemplates  Swancorp in assisting
Earth Search in obtaining  $5 million of capital in a direct  private  placement
with a  potential  additional  $5  million  through  the  exercise  of  attached
warrants.  Swancorp is prepared to assist Earth Search  through a combination of
shares and warrants offered in a private placement with varying exercise prices.
To date,  Swancorp has positioned Earth Search in front of ten potential funding
sources. IBK Capital has also been engaged and has introduced Earth Search to an
investment group that the Company is in serious negotiations with at the present
time.  Earth Search  management  has presented  the  Company's  plans for use of
proceeds,  along with the anticipated  returns on investment that can reasonably
be expected from the addition of a second  instrument to the Company's fleet. As
proposed,  Earth Search expects to recognize  additional revenues beginning late
in the third quarter of 1998 as the result of providing additional services with
the second  instrument.  The  Company is  encouraged  by its  bookings  for June
through August and hopes that the trend will continue into the next fiscal year.
As the sun angle  degrades  during  the fall and  winter  months,  the  Canadian
mapping  conditions  degrade and logistics dictate the need to move south to the
United States and South  America in order to take  advantage of better sun angle
and stable weather which are prerequisites for hyperspectral imaging.

Year 2000

     The Company's plan is to address its significant  Year 2000 issues prior to
being affected by them. Should the Company identify significant risks related to
its Year 2000 readiness or its progress deviates from the anticipated  timeline,
the Company will develop contingency plans as deemed necessary at that time. The
Company is also in the process of reviewing and replacing,  where necessary, its
other automated  communications and manufacturing systems. The Company estimates
that it will also  substantially  complete  this phase by the second  quarter of
1999. The Probe is Year 2000 compliant,  and the Company is seeking confirmation
that its material suppliers and vendors are or will be Year 2000 compliant.  The
Company has incurred  $15,000 for Year 2000  compliance  thus far and expects to
incur an additional $10,000 to complete the project.

Outlook

     The Company's outlook contains  forward-looking  statements.  These 
statements are not intended to nor should it be interpreted to constitute a 
prediction of future events

<PAGE>


PART II

                           OTHER INFORMATION REQUIRED

         Item 1.       Legal Proceeding                                None
         Item 2.       Changes in Securities                           None
         Item 3.       Defaults Upon Senior Securities                 None
         Item 4.       Submission of Matters to a Vote
                         of Security Holder                            None
         Item 5.       Other Information                               None
         Item 6.       Exhibits and Reports on Form 8-K                None

                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned.

                           EARTH SEARCH SCIENCES, INC.



Date: February 15, 1999                     /s/ John W. Peel
                                            John W. Peel
                                            Chief Executive Officer