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, 1997
                           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: 75,455,075 shares.
The registrant has only one class of common stock.

<PAGE>




                           EARTH SEARCH SCIENCES, INC.

                                    FORM 10-Q
                                   (Unaudited)

                         QUARTER ENDED DECEMBER 31, 1997

                                     PART I

                              FINANCIAL INFORMATION

                                TABLE OF CONTENTS

Item 1. Consolidated Financial Statements                                Page

         Consolidated Balance Sheet
           as of December 31, 1997 and March 31, 1997.                    3

         Consolidated Statement of Operations for the
           Three and Nine Months Ended December 31, 1997 and 1996.        4

         Consolidated Statement of Cash Flows for the
           Nine Months Ended December 31, 1997 and 1996.                  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                                                10
Item 2.  Changes in Securities                                            10
Item 3.  Defaults Upon Senior Securities                                  10
Item 4.  Submission of Matters of a Vote of
           Security Holders                                               10
Item 5.  Other information                                                10
Item 6.  Exhibits and Reports on Form 8-K                                 10

<PAGE>

EARTH SEARCH SCIENCES, INC.
(A Development Stage Company)
Consolidated Balance Sheet
                                                   December 31,       March 31,
                                                      1997              1997
                                                      ----              ----
                                                   (unaudited)
<TABLE>
<S>                                               <C>                 <C>
                                            
Assets
Current Assets:
    Cash                                          $           -        $    51,666
    Accounts Receivable                                  55,000                  -
    Deposit                                              30,000                  -
                                                    -----------          ---------

Total Current Assets                                     85,000             51,666

Property and Equipment                                4,238,664          3,840,460
Other long-term assets (Note 4 & 7)                     715,288             59,788
                                                    -----------         ----------

Total Assets                                       $  5,038,952        $ 3,951,914
                                                    ===========         ==========

Liabilities and Shareholders' Deficit
Current liabilities:
    Notes payable (Note 2)                        $  2,874,576         $   203,250
    Capital lease obligation-current (Note 3)          250,000                   -
    Payable to Probe 1 joint venture (Note 4)          500,000                   -
    Accounts payable                                 1,300,616           1,764,836
    Accrued payroll taxes                               73,903              64,733
    Accrued interest                                   645,220             406,273
    Advance deposit                                     10,125           3,082,125
                                                   -----------         -----------

Total current liabilities                            5,654,440           5,521,217

Long-term liabilities
    Shareholder loans (Note 5)                          37,090              37,090
    Capital lease obligation-long term (Note 3)      1,958,826                   -
    Deferred officers' compensation                  1,062,719             779,818
    Minority interest                                1,300,000              56,554
                                                   -----------         -----------

Total liabilities                                   10,013,075           6,394,679
                                                   -----------         -----------

Redeemable common stock, $.001 par value,
   1,725,914 shares Issued and outstanding 
   at December 31, 1997 and March 31, 1997             517,845             517,845
                                                   -----------         -----------

Nonredeemable shareholders' deficit:
  Common stock $.001 par value; 200,000,000
  shares Authorized 75,455,075 and 68,530,779
  shares, respectively, Issued (excluding 
  redeemable common stock)                              73,596              68,531
Additional paid-in capital                           6,399,776           5,204,061
Deficit accumulated during the development stage   (11,965,340)         (8,233,202)
                                                   ------------        ------------
                                                    (5,491,968)         (2,960,610)
                                                   ------------        ------------
Total liabilities, redeemable common stock and
   Nonredeemable shareholders' deficit            $  5,038,952        $  3,951,914
                                                   ===========         ===========

</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 31,               Ended December 31,
<S>                                               <C>                 <C>            <C>                 <C>    
                                                      1997                1996             1997               1996
                                                      ----                ----             ----               ----

Revenue:                                          $    55,000         $         -    $    55,000         $         -
 
Expenses:
   Exploration                                         38,210               1,749        333,691             122,914
   Depreciation and Amortization                        7,500               7,000         22,500              19,000 
   General and Administrative                         456,373             358,158      1,655,021           1,298,805
   Debt extinguishment loss                                 -                   -      1,000,000                   -
                                                   ----------          ----------     ----------          ----------
                                       
Loss from operations                                 (447,083)           (366,907)    (2,956,212)         (1,440,719)

Interest expense                                     (254,466)            (19,946)      (597,379)            (60,482)

Other income (expense)                               (195,840)                  -       (178,537)                  -
                                                   ----------          ----------     ----------          ---------- 
Net Loss applicable to both basic
  and diluted earnings per share                  $  (897,398)        $  (386,853)   $(3,732,128)        $(1,501,201)
                                                   ==========          ==========     ==========          ==========
     
Shares applicable to basic loss
  per share                                        75,111,460          68,004,720     73,685,199          67,909,244

Basic loss per share                              $     (0.01)        $     (0.01)   $     (0.05)        $     (0.02)
                                                   ==========          ==========     ==========          ==========
                                                        
Shares applicable to diluted loss
  per share                                        80,945,456          74,181,799     79,784,379          74,781,197

Diluted loss per share                            $     (0.01)        $     (0.01)   $    (0.05)         $     (0.02)
                                                   ==========          ==========     =========           ==========
                                                   
</TABLE>
<PAGE>

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

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

                                                                                       1997                1996
                                                                                       ----                ----
<S>                                                                             <C>                 <C>

Cash flows used in operating activities:
   Net Loss                                                                     $ (3,732,128)        $(1,501,201)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
   Issuance of common stock for services
     and interest expense                                                             524,830             105,724
   Amortization of lease discount                                                     283,826                   -
   Depreciation and amortization                                                       22,500              19,000
   Debt extinguishment loss                                                         1,000,000                   -
   Change in accounts receivable                                                     (55,000)                   -
   Change in deposits                                                                (30,000)                   -
   Change in long term other assets                                                 (155,500)              27,038
   Change in accounts payable and accrued liabilities                                 284,510           2,214,019
                                                                                 ------------        ------------


  Net cash used in operating activities                                           (1,856,962)             864,580
                                                                                 -----------         ------------

Cash flows used in investing activities:
   Capital expenditures                                                             (420,704)         (1,548,062)
   Advance deposits                                                                   310,000                  -
                                                                                 ------------        -----------

   Net cash used in investing activities                                            (110,704)         (1,548,062)
                                                                                 -----------         -----------
 Cash flows provided by financing activities:
   Proceeds from notes payable                                                        500,000                   -
   Repayment of notes payable                                                        (40,000)                   -
   Proceeds from issuance of shareholder notes payable                                100,000              60,000
   Repayment of shareholder loans                                                           -            (56,929)
   Proceeds from issuance of common stock                                              56,000                   -
   Proceeds for issuance of subsidiary's common stock                                 100,000             155,995
   Proceeds from establishment of joint venture                                     1,200,000                   -
                                                                                 ------------        ------------
                                                                                                    
 Net cash provided by financing activities                                          1,916,000             159,006
                                                                                 ------------        ------------

 Net decrease in cash and cash equivalents                                           (51,666)           (524,416)

Cash and cash equivalents at beginning of year                                         51,666             670,325
                                                                                 ------------        ------------

Cash and cash equivalents at end the nine month period                          $           -       $     145,909
                                                                                 ------------        ============
</TABLE>
<PAGE>

                                                              

                           EARTH SEARCH SCIENCES, INC
                           A Development Stage Company

               SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          December 31, 1997 (unaudited)

Note 1 - CONDENSED FINANCIAL STATEMENTS

         The  consolidated  balance sheet as of December 31, 1997, and
the  consolidated  statements of operations and cash flow for the three and nine
months  ended  December 31, 1997,  and 1996,  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, 1997 and 1996.

         Certain  information  and  footnote  disclosures  normally  included in
financial  statements  prepared in accordance with generally accepted accounting
principals  have  been  condensed  or  omitted.   These  consolidated  financial
statements should be read in conjunction with the audited  financial  statements
and notes thereto  included in the Company's form 10-K for the fiscal year ended
March 31,  1997.  The results of  operation  for the three and nine months ended
December 31, 1997 are not necessarily  indicative of the operating results to be
expected for the full fiscal year.

Note 2 - NOTES PAYABLE

         The Company  obtained  interim  working  capital by issuing  promissory
notes with rights of conversion. The terms of these debts 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 Companys  common
stock,  subject to the terms in the promissory  notes. In addition,  the Company
signed a promissory note for $2,200,000 to settle  obligations for cash advances
of $1,200,000 received as deposits for a hyperspectral scanner. The note was due
on October 31, 1997 and bears interest at prime plus 2%. The Company  recognized
a debt extinguishment loss of $1,000,000 during the first quarter of fiscal 1998
as a result of the  settlement.  Subsequent  to December 31,  1997,  the Company
entered into an agreement with certain  debtholders  whereby the $2,200,000 note
plus  accrued   interest   through  the  settlement  date  were  converted  into
approximately  8,000,000  shares of restricted  ESSI common stock.  In addition,
725,000 shares of common stock were issued in lieu of future interest  payments.
Further,  one million shares of the Company's common stock were issued to retire
certain  warrants  held by the  debtholder.  The  debtholder  also  received one
million  shares  of  preferred  warrants  with an  exercise  price of $2.00  per
warrant.

Note 3 - CAPITAL LEASE OBLIGATIONS

     On June 10, 1997, the Company  completed a  sales/leaseback  transaction of
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.
Accordingly,  the Company has recorded a capital lease  obligation of $2,125,000
(net of a debt discount of  $1,375,000)  and $375,000 in  shareholders'  deficit
related to the shares of common stock and stock  purchase or warrants  issued in
conjunction with the above transaction.

<PAGE>

Note 4 - PROBE 1 JOINT VENTURE

     In the first quarter of 1998, the Company formed a new company,  ESSI Probe
1 LC, to  acquire  the  third  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% by Earth Search  Sciences,  who contributed
certain  instrument  rights,   $500,000,  and  is  obligated  to  contribute  an
additional  $500,000 and 50% by two  shareholders,  who  contributed  $1,200,000
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 in early 1998.  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.

Note 5 - ADVANCE FROM SHAREHOLDERS

         The company has continued in existence through the use of advances from
shareholders,  primarily  an officer and  director of the Company and  Universal
Search Technology owned by that same officer and director.

Note 6 - ISSUANCE OF COMMON STOCK

         During the three months ended  December  31, 1997,  the Company  issued
608,471  shares of common stock for Notes Payable and issued  150,000  shares of
common stock for services .

         In addition,  the Company has  repurchased  435,199  shares of Skywatch
Exploration,  Inc.  common stock  outstanding  by issuing  435,199 shares of the
Company's  common  stock.  As a result,  the  Company  now owns 100% of Skywatch
Exploration,  Inc. No value is attributed to the assets acquired and as such are
reflected in other expense on the Consolidated Statement of Operations.

Note 7 - OTHER LONG-TERM ASSETS

         In the second quarter of fiscal year 1998, the Company through a series
of transactions,  paid $105,000 for license rights for geological exploration of
gold, silver, and associated metals in Kazakstan.

Note 8 - CHANGE IN ACCOUNTING PRINICPLES-LOSS PER SHARE

         Effective  December  15,  1997,  the  Company  adopted  SFAS  No.  128,
"EARNINGS  PER SHARE".  The  statement  establishes  standards for computing and
presenting  earnings per share (EPS) and applies to entities  with publicly held
common stock or potential  common stock.  This statement  modifies the standards
for  computing  earnings  per share  previously  found in APB  Opinion  No.  15,
"EARNINGS PER SHARE," and makes them comparable to international  EPS standards.
It replaces the presentation of primary EPS with a presentation of basic EPS. It
also  requires  dual  presentation  of basic and  diluted EPS on the face of the
income statement for all entities with complex capital structures and requires a
reconciliation  of the numerator and denominator of the basic EPS computation to
the numerator and denominator of the diluted EPS computation.  In addition,  EPS
figures for prior periods must by restated.

         The difference between the denominator used to calculate basic loss per
share and  diluted  loss per share  reflects  options  and  warrants to purchase
13,300,000  shares of the Company's  common stock at prices  ranging form $0.105
per share to $0.21 per share. Options and warrants to purchase 27,500,000 shares
of common  stock at prices  ranging from $0.50 per share to $2.50 per share were
outstanding  throughout  the nine months ended  December 31, 1997,  but were not
included in the computation of diluted loss per share because the exercise price
was greater than the average market price of common shares.

<PAGE>

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

Material Changes in Financial Condition

         During the quarter ended  December 31, 1997,  the Company  received its
first commercial order for mapping services using the Company's  initial Probe 1
hyperspectral imaging spectrometer.  The Company rendered an invoice for $55,000
for mapping  services  performed under that order prior to the expiration of the
quarter, thus providing the Company with its initial operating revenues.

         With the commencement of commercial operations, the Company experienced
even  greater  than  usual  operating  expenses.  In  addition,   the  Company's
obligations  increased.  Loss for operations increased by approximately  $80,000
for the quarter ended December 31, 1997 over the comparable  prior year quarter.
The Company's large operating payables and short-term notes create a substantial
working capital deficiency. Results of Operations

         During the quarter  ended  December  31,  1997,  the Company  completed
testing of its first Probe 1 hyperspectral  imaging  spectrometer  and commenced
commercial operations. The final testing of the Probe 1 instrument involved data
collection  over  Cuprite,  Nevada,  the  "proving  ground"  for remote  sensing
instruments,  and several  other sites in the western  United  States.  Based on
feedback from  scientists  reviewing the data, the Company  continues to believe
that Probe 1 has great commercial potential.

         The  Company's  initial  Probe 1  instrument  was  delivered in time to
participate  in the Department of Energy's  mission to Kazakstan.  The mission's
data  acquisition  stage has been  completed,  and the data is  currently  being
evaluated. The Company continues to fund expenditures related to its interest in
SEMTECH, a Kazakstan joint stock company, and is seeking funding to complete the
acquisition  of  complex  mineral  licenses  and  to  fund  initial  exploration
expenditures.  Subject to the availability of capital, the Company has committed
to its  Kazakstani  partners  that it will  commence  exploration  activities in
Kazakstan in the Spring and Summer of 1998.  There can be no assurance  that the
Company will be successful in raising the required  funds,  and failure to do so
could result in loss of the Company's Kazakstan concessions,  which could have a
material adverse affect on the prospects of the Company.

         The  Company  also  formed ESSI Probe 1 LC to acquire the third Probe 1
instrument,  which is scheduled for delivery in early 1998. Two  shareholders of
the Company contributed  $1,200,000 for a 50% interest in the new company, which
contributed  significantly to the funding of the costs of the third  instrument.
The terms of the agreement with those shareholders is described in Note 4.

         The Company  continues to explore funding  alternatives to complete the
acquisition of the first three Probe 1's, to continue  research and  development
efforts on future  generations  of the  instrument  and to finance  the  working
capital  necessary to develop the commercial and  governmental  applications for
the Probe  1's,  which will  result in  conversion  of the  Company to a revenue
producing  company.  The Company also desires to obtain  capital  sufficient  to
conduct  exploration  activities in other parts of the world, so as to diversify
its exploration  activities.  There can be no assurance that the Company will be
successful in raising the required capital, and failure to do so could result in
loss of the  instruments,  which  could  have a material  adverse  effect on the
prospects of the Company.

         The Company  settled its lawsuit with the Idaho  Department  of Finance
during the quarter ended December 31, 1997. As a result of the  settlement,  the
Company has agreed to proceed with an offering of  rescission  to certain  Idaho
investors.  In  addition,  the Company has agreed not to rely on any  exemptions
under  the  Idaho  Securities  Act for a  period  of five  years  without  first
obtaining the permission of the  Department of Finance.  Neither the Company nor
its Chairman was required to pay a fine or any of the State's costs.

         During the quarter ended December 31, 1997,  the Company  completed the
acquisition  of all  outstanding  stock of Quasar  Resources,  Inc. and Skywatch
Exploration,  Inc. These acquisitions were accomplished  through the swapping of
Quasar and Skywatch shares for shares of the Company's common stock.

<PAGE>

OUTLOOK

         Subsequent  to the end of the quarter  ended  December  31,  1997,  the
Company  completed the  negotiation and execution of a series of agreements with
Noranda Mining and Exploration,  Inc. and its affiliates including  Falconbridge
Limited  (collectively,  the  "Noranda  Group").  These  agreements  provide the
Noranda  Group with an  exclusive  license  to use the Probe 1's for  commercial
mining  exploration,  as long as the Noranda Group  continues to purchase remote
sensing  services from the Company in certain  specified  quantities.  Under the
arrangement,  the Company  maintains  its right to use the Probe 1's for its own
exploration  activities in Kazakstan and elsewhere,  and the Company is entitled
to receive fees for services  and net smelter  royalties or net profit  interest
royalties from certain discoveries by the Noranda Group using the Probe 1's.

         In  addition,  the  Noranda  Group  converted  its  $500,000  note into
convertible  preferred stock of the Company and invested an additional  $500,000
in shares of the Company's  convertible  preferred stock. The preferred stock is
convertible on a 1 to 5 basis into shares of the Company's  common stock and the
Noranda Group also has warrants to purchase up to 1,000,000 additional shares of
the Company's common stock at an exercise price of $2.00 per share.

         Also  subsequent to December 31, 1997, the Company and the owner of the
first Probe 1, Accuprobe, Inc., restructured certain of their arrangements. As a
result of the restructuring, the Company and Accuprobe agreed to retire the $2.2
million  note that was  originally  due October 31,  1997,  to deem  warrants to
purchase  Company  common  stock  fully paid and to  eliminate  rental  payments
otherwise due under the sale-leaseback of the Probe 1 for a period of two years,
in exchange for the Company  delivering  to Accuprobe  approximately  11 million
shares of the Company's common stock. In addition,  certain other  modifications
were made to the sale-leaseback documentation and the Company agreed to issue to
Accuprobe  warrants to purchase  one million  shares of  preferred  stock of the
Company at an exercise price of $2.00 per share.

         With the closing of the Noranda Group transaction and the restructuring
of the Accuprobe  transaction now completed,  the Company can turn its attention
to completing the  acquisition of the two remaining  Probe 1's and to fulfilling
its business  plans.  The Company has recently  announced  the  additions to its
staff  of  Bob  Stuart,   Vice   President--Geology   and  Ken   Danchuk,   Vice
President--Investor  Relations.  As revenues commence,  the Company  anticipates
hiring  other  personnel to establish a fully  integrated  professional  team to
chart the Company's future course.  Although capital continues to remain scarce,
management of the Company is very enthusiastic about the Company's prospects.

PART II
                           OTHER INFORMATION REQUIRED

         Item 1.                    Legal Proceeding

         The Company and the Idaho  Department of Finance agreed on December 17,
1997, to settlement of the outstanding  litigation by the Department of Finance,
styled State of Idaho Department of Finance v. Earth Search  Sciences,  Inc. and
Larry F. Vance,  Civil No. CV OC 9700155D,  in the District  Court of the Fourth
Judicial Circuit of the State of Idaho, In and For the County of Ada. As part of
the settlement,  the Company agreed to make an offering of rescission to certain
Idaho  residents  who lent  money to the  Company  or  purchased  stock from the
Company  during the period from November 1, 1992 through  December 15, 1997. The
Company also agreed to issuance of a permanent  injunction  precluding violation
of the Idaho  Securities  Act and to refraining  for a period of five years from
claiming the  availability  of an exemption  from  registration  under the Idaho
Securities  Act  without  the  prior  written  consent  of the  Director  of the
Department  of Finance.  As part of the  settlement,  all parties  agreed to pay
their own costs and no fines were imposed on the Company or Mr. Vance.

         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
                      Filed a Form 8-K on 12-19-97


<PAGE>

                                    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 13, 1998                 /s/ Larry F. Vance
                                        Larry F. Vance
                                        Chairman and Director