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: June 30, 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: 73,380,693 shares.
The registrant has only one class of common stock.

<PAGE>

                           EARTH SEARCH SCIENCES, INC.

                                    FORM 10-Q
                                   (Unaudited)

                           QUARTER ENDED JUNE 30, 1997

                                     PART I

                              FINANCIAL INFORMATION

                                TABLE OF CONTENTS

Item 1.  Financial Statements                                             Page

                  Consolidated Balance Sheet
                    as of June 30, 1997 and March 31, 1997.                3

                  Consolidated Statement of Operations for the
                    Three Months Ended June 30, 1997 and 1996.             4

                  Consolidated Statement of Cash Flows for the
                    Three Months Ended June 30, 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

                                     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>
                                                               June 30,          March 31,
                                                                1997               1997
                                  (unauditied)
<S>                                                         <C>                 <C>
Assets
Current Assets:
    Cash                                                    $   364,775         $    51,666
    Equipment sale receiveable                                  400,000                   -
                                                             ----------          ----------



Total Current Assets                                            764,775              51,666

Property and Equipment                                        3,832,960           3,840,460
Other long-term assets                                          609,788              59,788
                                                             ----------          ----------

Total Assets                                                $ 5,207,523         $ 3,951,914
                                                            ===========          ==========

Liabilities and Shareholders' Deficit
Current liabilities:
    Notes payable (Note 2)                                  $ 2,403,250         $   203,250
    Capital lease obligation-current (Note 3)                   250,000                   -
    Payable to Probe 1 Joint Venture (Note 4)                   500,000                   -
    Accounts payable                                          1,067,123           1,764,836
    Accrued payroll taxes                                        73,903              64,733
    Accrued interest (Note 5 and 6)                             506,017             406,273
    Advance deposit (Note 3)                                     10,125           3,082,125
                                                            -----------          ----------

Total current liabilities                                     4,810,418           5,521,217

Long-term liabilities
    Shareholder loans (Note 6)                                   37,090              37,090
    Capital lease obligation-long term                        1,875,000                   -
    Deferred officers' compensation (Note 3)                    871,515             779,818
    Minority interest (Note 4)                                1,200,000              56,554
                                                             ----------          ----------

Total liabilities                                             8,794,123           6,394,679
                                                             ----------          ----------

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

Nonredeemable shareholders' deficit:
  Common stock $.001 par value; 200,000 shares
  authorized 71,654,779 and 68,530,779 shares, respectively,
  issued (excluding redeemable common stock)                     71,655              68,531
Additional paid-in capital                                    5,852,211           5,204,061
Deficit accumulated during the development stage            (10,028,211)         (8,233,202)
                                                            -----------          ----------
                                                             (4,104,345)         (2,960,610)
                                                            -----------          ----------
Total liabilities, redeemable common stock and
   nonredeemable shareholders' deficit                      $ 5,207,523         $ 3,951,914
                                                             ==========          ==========
</TABLE>
<PAGE>

EARTH SEARCH SCIENCES, INC.
(A Development Stage Company

CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>

                                                    For the Three Months
                                                       Ended June 30,

                                                  1997              1996
                                              ----------         ---------
<S>                                          <C>                 <C>
Revenue:                                     $         -         $       -

Expenses:
   Exploration                                   140,481            30,030
   Depreciation and Amortization                   7,500             5,000
   General and Administrative                    546,513           517,381
   Debt extinguishment loss                    1,000,000                 -
                                               ---------         ---------


Loss from operations                          (1,694,494)         (552,411)

Interest expense                                (100,515)          (18,934)
                                              ----------         ---------

Net Loss                                     $(1,795,009)        $(571,345)
                                              ==========          ========

Loss Per Common Share                        $     (0.03)        $   (0.01)
                                              ==========          ========

</TABLE>
<PAGE>

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

CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>

                                                                      For the Three Months
                                                                         Ended June 30,
                                                                     1997                1996
                                                                 -----------          ----------
<S>                                                              <C>                 <C>
Cash flows from operating activities:
   Net loss                                                      $(1,795,009)        $ (571,345)
   Adjustments to reconcile net loss to net cash
    used in operating activities:
   Issuance of common stock for services
     and interest expense                                             60,720             88,097
   Depreciation and amortization                                       7,500              5,000
   Debt extinguishment loss                                        1,000,000                  -
   Change in long term other assets                                  (50,000)            52,051
   Change in accounts payable and accrued liabilities               (588,799)            46,112
   Deferred officers compensation                                     91,697            (63,071)
                                                                  ----------          ---------

  Net cash provided by operating activities                       (1,273,891)          (443,156)
                                                                  ----------          ---------
Cash flows used for investing activates:
   Capital expenditures                                                    -           (507,912)
   Advance deposits                                                  341,000            500,000
                                                                  ----------          ---------

   Net cash provided by investing activities                         341,000             (7,912)
                                                                  ----------          ---------

Cash flows provided (used in) financing activities:
  Repayment of shareholder loans                                           -            (56,929)
  Proceeds from issuance of common stock                              46,000                  0
  Proceeds for issuance of subsidiary's common stock                       -            125,995
  Proceeds from Probe1 joint venture                               1,200,000                  -
                                                                  ----------          ---------

Net cash provided from financing activities                        1,246,000             69,066
                                                                  ----------          ---------

Net increase (decrease) in cash and cash equivalents                 313,109           (382,002)

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

Cash and cash equivalents at end the three month period          $   364,775         $  288,323
                                                                  ==========          =========
</TABLE>
<PAGE>

                           EARTH SEARCH SCIENCES, INC
                           A Development Stage Company

               SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            June 30, 1997 (unaudited)

Note 1 - CONDENSED FINANCIAL STATEMENTS

         The consolidated  statement of financial  position as of June 30, 1997,
and the consolidated statements of operations and cash flow for the three months
ended June 30, 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 June 30, 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.  It is suggested that these financial
statements  and notes thereto in the Company's form 10-K for March 31, 1997. The
results  of  operation  for  the  three  months  ended  June  30,  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 is 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.

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  between the third and fourth  quarters of
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 - LOSS PER COMMON SHARES

         Loss per common share is based on the weighted average number of shares
outstanding  during each period.  For period  ended June 30, 1997 and 1996,  the
weighted   average  number  of  these  shares   outstanding  is  71,818,693  and
67,744,061, shares, respectively.

Note 6 - 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 7 - ISSUANCE OF COMMON STOCK

         During the three months  ended June 30, 1997,  the Company sold 199,999
shares of common stock for $46,000 and issued 305,000 shares of common stock for
services.

         In addition,  the Company  repurchased the remaining  626,190 shares of
Quasar common stock  outstanding  by issuing  1,252,380  shares of the Company's
common  stock,  which  resulted in a $56,554  decrease in minority  interest and
increase in nonredeemable  shareholders'  deficit.  As a result, the Company now
owns all of the outstanding stock of Quasar Resources, Inc.

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

Material Changes in Financial Condition

         During the quarter  ended June 30,  1997,  the Company had no operating
revenues. In addition,  the Company's operating payables and accrued liabilities
increased.   The  large  operating   payables  and  short-term  notes  create  a
substantial working capital deficiency.

Results of Operations

         During the  quarter  ended June 30,  1997,  the Company  completed  the
acquisition  of its first Probe1  hyperspectral  imaging  scanner and closed the
related sale-leaseback transaction. Note 3 to the Company's financial statements
for the  three  month  period  ended  June 30,  1997  describes  the term of the
sale-leaseback.

         The 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. 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.

<PAGE>
      
        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 to the
Company's financial statements for the three month period ended June 30, 1997.

         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. 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.

         Raising  the  required  capital  has been  made more  difficult  by the
allegations  made by the State of Idaho in its ongoing lawsuit with the Company.
The Company  continues to defend itself  vigorously in the  litigation,  but the
existence of the litigation has damaged the Company's fund raising efforts.  The
Company is hopeful of achieving a reasonable  settlement of the State's lawsuit,
but there can be no assurance that the State will be willing,  now or at anytime
prior to trial, the settle on terms acceptable to the Company.

Outlook

         The Company has negotiated a non-binding  letter of intent with a major
Canadian  mining  company  which,  when final  documentation  is executed,  will
provide the Company with an  expectation  of revenue  from use of the  Company's
Probe 1 instruments for commercial mining purposes.  As part of the transaction,
the Company will receive an equity  investment from the mining company that will
help the  Company  fund its  ongoing  commitments  with  respect  to the Probe 1
instruments.

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
                         Filed a Form 8-K on 4/9/97
                         Filed a Form 8-K on 6/9/97


                                    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.


                                        /s/ Larry F. Vance
Date: August 14, 1997                   Larry F. Vance

<PAGE>