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: September 30, 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 89,495,698 shares.
The registrant has only one class of common stock.

<PAGE>

                           EARTH SEARCH SCIENCES, INC.

                                    FORM 10-Q
                                   (Unaudited)

                        QUARTER ENDED SEPTEMBER 30, 1998

                                     PART I

                              FINANCIAL INFORMATION

                                TABLE OF CONTENTS

Item 1. Consolidated Financial Statements                        Page

        Consolidated Balance Sheet
          as of September 30, 1998 and March 31, 1998.             3

        Consolidated Statement of Operations for the
          Three Months Ended September 30, 1998 and 1997.          4

        Consolidated Statement of Cash Flows for the
          Three Months Ended September 30, 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
                                                  September 31,    March 31,
                                                       1998          1998
                                                  -----------    ------------
Assets
Current assets:          
    Cash                                          $    74,696    $    42,600
    Accounts Receivable                                95,803        675,648
    Prepaid expenses & other assets                   665,814              -
                                                   ----------    -----------
       Total current assets                           836,313        718,248

    Property and equipment                          3,990,102      3,979,179
    Other long-term assets                            183,225        183,225 
                                                  -----------    -----------

Total assets                                      $ 5,009,640    $ 4,880,652
                                                  ===========    ===========

Liabilities, Redeemable Common Stock and
Nonredeemable Shareholders' Deficit
Current liabilities:
Notes payable                                     $    78,399    $    89,080
Accounts payable                                      685,401        671,332
Accrued payroll taxes                                       -         18,449
Accrued interest                                      282,041        281,750
Payable to Probe 1 Joint Venture                      500,000        500,000
Unearned revenue                                       15,063         40,000
Cash advances and deposits                            280,000              -
                                                  -----------    -----------
Total current liabilities                           1,840,904      1,600,611

Long-term liabilities:
Shareholder loans                                     202,350        104,090
Capital lease obligation                            2,272,056      2,029,410
Deferred officers' compensation                     1,560,845      1,387,461
Minority interests                                  2,248,000      2,247,000
                                                  -----------    -----------
Total liabilities                                   8,124,155      7,368,572
                                                  -----------    -----------

Commitments and contingencies

Redeemable common stock, $.001 par value,
  1,725,914 shares issued and outstanding
  at March 31, 1998 and 1997                          517,845        517,845
                                                  -----------    -----------

Nonredeemable shareholders' deficit:
  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; 89,495,698 and 84,792,576
  shares, respectively, issued and outstanding         87,769         84,792
Additional paid-in capital                         10,391,060      9,827,644
Common stock subscribed                                     -        165,000
Deficit accumulated during the development 
  stage                                           (15,111,189)   (14,083,201)
                                                  ------------   ------------
                                                   (3,632,360)    (3,005,765)
                                                  ------------   ------------
Total liabilities, redeemable common stock
  and nonredeemable shareholders' deficit         $ 5,009,640    $  4,880,652
                                                  ===========    ============

<PAGE>

EARTH SEARCH SCIENCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                                                 For the Three Months                 For the Six Months
                                                  Ended September 30,                 Ended September 30,
                                                1998            1997                1998               1997
                                             ----------     ------------        -------------     -------------
<S>                                          <C>            <C>                 <C>               <C> 
Revenue:                                     $  213,384     $          -        $     463,654     $           -
Cost of services provided                      (137,184)               -             (278,632)                -
                                             ----------     ------------        -------------     -------------
Gross margin                                     76,200                -              185,022                 -

Expenses:
   Exploration                                        -          155,000                   -            295,481
   Depreciation and amortization                  6,431            7,500              12,862             15,000
   General and administrative                   345,149          652,135             715,367          1,198,648
                                             ----------     ------------        ------------      -------------
                                                351,580          814,635             728,229          1,509,129

Loss from operations                           (275,380)        (814,635)           (543,207)        (1,509,129)

Interest income                                       -                -                   -                  -
Interest expense                               (174,631)        (225,095)           (352,227)          (325,610)
Other income (expense)                                                 -             (17,442)                 -
                                             ----------     ------------        ------------      -------------

Loss before minority interest                  (450,011)      (1,039,730)           (912,876)        (1,834,739)

Minority interest in losses of
   consolidated subsidiaries                          -                -                   -                  -
                                             ----------     ------------        ------------      -------------

Loss before extraordinary items                (450,011)      (1,039,730)           (912,876)        (1,834,739)

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

Net Loss                                     $ (450,011)    $ (1,039,730)       $ (1,027,899)     $  (2,834,739)
                                             ==========     ============        ============      =============

Shares applicable to basic loss per
   shares and diluted loss per share         88,470,125       74,261,405          89,495,698         68,531,779

Basic and diluted loss per share              $ (0.01)         $ (0.01)            $ (0.01)           $ (0.04)

</TABLE>
<PAGE>

EARTH SEARCH SCIENCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS                  
(Unaudited)
                                                        For the Six Months
                                                        Ended September 30,
                                                       1998           1997
                                                  ------------   ------------

Cash flows from operating activities:
   Net Income                                     $ (1,027,899)  $ (2,834,739)
   Adjustments to reconcile net loss to net 
     cash used in operating activities:
   Issuance of common stock for services
     and interest expense                              122,887        215,990
   Extraordinary items                                 115,023      1,000,000
   Depreciation                                        137,862         15,000
   Amortization of lease discount                      242,647        185,296
   Changes in assets and liabilities:
      Accounts receivable                              (95,803)             -
      Prepaid assets and deposits                        9,834        (30,000)
      Accounts payable                                  14,069       (493,810)
      Accrued liabilities                              (18,158)       132,129
      Unearned revenue                                 (24,937)             -
      Deferred officers compensation                   173,384       (155,500)
                                                  ------------   ------------

  Net cash provided by operating activities           (351,091)    (1,965,634)
                                                  ------------   ------------

Cash flows from investing activities:
   Capital expenditures                                (47,392)             -
   Advance deposits                                    280,000        310,000
                                                  ------------   ------------

Net cash used by investing activities                  232,608        310,000
                                                  ------------   ------------

Cash flows from financing activities:
  Proceeds from notes payable                                         500,000
  Repayment of notes payable                           (10,681)       (40,000)
  Proceeds from shareholder loans                      191,500              -
  Repayments of shareholder loans                      (93,240)             -
  Issuance of common stock                              63,000         56,000
  Proceeds from Probe 1 joint venture                        -      1,200,000
                                                  ------------   ------------

Net cash provided from financing activities            150,579      1,716,000
                                                  ------------   ------------

Net increase (decrease) in cash                         32,096         60,366
Cash at beginning of period                             42,600         51,666
                                                  ------------   ------------
                                                                 
Cash at end of period                             $     74,696   $    112,032
                                                  ============   ============

<PAGE>
                           EARTH SEARCH SCIENCES, INC.
                           A Development Stage Company

               SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                         September 30, 1998 (unaudited)

Note 1 - CONDENSED FINANCIAL STATEMENTS

         The  consolidated  statement of financial  position as of September 30,
1998, and the consolidated  statements of operations and cash flow for the three
months ended  September  30, 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 September
30, 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 in the Company's form 10-K for March 31, 1998. The
results of  operation  for the three  months  ended  September  30, 1998 are not
necessarily  indicative  of the  operating  results to be expected  for the full
fiscal year.

Note 2 - REVENUE AND ACCOUNTS RECEIVABLE

The Company recognized $463,654 in revenue during the second quarter for remote
sensing services performed.  

--------------------------------------------------------------------------------
     Comparison of Current Quarter's Revenues With Two Previous Quarters
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
    $50,000                        $250,000                         $463,654
    12/31/98                        3/31/98                          6/30/98
--------------------------------------------------------------------------------

Note 3 - 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 Company's  common
stock, subject to the terms in the promissory notes.

Note 4 - 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,  which  contributed
certain  instrument rights and a promise to pay $500,000,  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.

Note 5 - ADVANCE FROM SHAREHOLDERS

         The company has continued in existence through the use of advances from
shareholders,  The Company obtained  $280,000 in shareholder  loans this quarter
for use as working capital.
<PAGE>
Note 7 - 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 the 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.

Note 7 - LOSS PER COMMON SHARE

         During the three months ended  September 30, 1998,  the Company  issued
161,429 shares.

<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Material Changes in Financial Condition

        During the quarter ended September 30, 1999, the Company recognized
$463,654 in revenue, an increase of $213,654 (see Note 2, above).  However, the
Company's  obligations increased. The large operating payables and short-term
notes create a substantial working capital deficiency.

Results of Operations

         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.

         During the quarter  ended  September  30, 1998,  the Company has mapped
several prospects including four significant prospects, one located in U.S., one
in Mexico,  one in Canada and the other in South America.  A contract vehicle is
currently in place  between  Earth Search and the customer to receive  funds for
mapping these sites.  The contract  allows for a negotiated  advance against the
work plan which  contributes  favorably  toward covering the Company's cash flow
requirements  during the period of time between initiation of work and submittal
of invoices  for payment.  The contract  also  provides for  invoicing  progress
payments, further enhancing cash flow.

         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 quarter  ended  September  30, 1998,  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 quarter  ended  September  30,  1998 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 quarter ended  September 30, 1998, 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.

         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.

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.

Outlook

     The Company's outlook contain 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: November 6, 1998                      /s/ Larry F. Vance   
                                            -----------------------
                                            Larry F. Vance
                                            Chairman and Director