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UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION -----------------------------
Washington, D.C. 20549 OMB Number: 3235-0058
Expires: May 31, 1997
Estimated average burden
FORM 12b-25 hours per response ..... 2.50
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NOTIFICATION OF LATE FILING SEC FILE NUMBER
0-19566
(Check One): -----------------------------
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|X| Form 10-K |_| Form 20-F |_| Form 11-K |_| Form 10-Q |_| Form N-SAR CUSIP NUMBER
270313 10 9
For Period Ended: __March 31, 1997________________________________________ -----------------------------
[ ] Transition Report on Form 10-K
[ ] Transition Report on Form 20-F
[ ] Transition Report on Form 11-K
[ ] Transition Report on Form 10-Q
[ ] Transition Report on Form N-SAR
For the Transition Period Ended: _______________________________________________________________________
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Read Instruction (on back page) Before Preparing Form. Please Print or Type.
Nothing in this form shall be construed to imply that the Commission has verified any information contained herein.
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If the notification relates to a portion of the filing checked above, identify the Item(s) to which the notification relates:
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PART I -- REGISTRANT INFORMATION
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Full Name of Registrant
EARTH SEARCH SCIENCES, INC.
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Former Name if Applicable
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Address of Principal Executive Office (Street and Number)
502 NORTH 3RD STREET, #8
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City, State and Zip Code
MCCALL, IDAHO 83638
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or expense and the registrant seeks relief pursuant to Rule
12b-25(b), the following should be completed. (Check box if appropriate)
| (a) The reasons described in reasonable detail in Part III of this form could not be eliminated without unreasonable
| effort or expense;
|
|_| | (b) The subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, Form 11-K or Form N-SAR,
| or portion thereof, will be filed on or before the fifteenth calendar day following the prescribed due date; or the
| subject quarterly report of transition report on Form 10-Q, or portion thereof will be filed on or before the fifth
| calendar day following the prescribed due date; and
|
| (c) The accountant's statement or other exhibit required by Rule 12b-25(c) has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail the reasons why Forms 10-K, 20-F, 11-K, 10-Q, N-SAR, or the transition report or portion thereof,
could not be filed within the prescribed time period.
|X| | portion thereof, will be filed on or before the fifteenth calendar day following the prescribed due date.
The Company recently finalizalied material agreements, which management and accountants, Price Waterhouse, feel should be
incorporated in the filing and therefore more time is required to inform the shareholders of current events.
SEC 1344 (6/94)
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PART IV--OTHER INFORMATION
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(1) Name and telephone number of person to contact in regard to this notification
_______TAMI STORY___________________________ ___________208_________________ ____________634-7080_____________________________
(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the Securities Exchange Act of
1934 or Section 30 of the Investment Company Act of 1940 during the preceding 12 months or for such
shorter period that the registrant was required to file such report(s) been filed? If answer is no,
identify report(s). |_| Yes |_| No
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(3) Is it anticipated that any significant change in results of operations from the corresponding period
for the last fiscal year will be reflected by the earnings statements to be included in the subject
report or portion thereof? |_| Yes |_| No
If so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if appropriate, state the
reasons why a reasonable estimate of the results cannot be made.
====================================================================================================================================
EARTH SEARCH SCIENCES, INC.
(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned hereunto duly authorized.
Date _June 30, 1997________________________ By /s/ Tami Story, Corporate Secretary
INSTRUCTION: The form may be signed by an executive officer of the registrant or by any other duly authorized representative. The
name and title of the person signing the form shall be typed or printed beneath the signature. If the statement is signed on behalf
of the registrant by an authorized representative (other than an executive officer), evidence of the representative's authority to
sign on behalf of the registrant shall be filed with the form.
- - ----------------------------------------------------------- ATTENTION --------------------------------------------------------------
Intentional misstatements or omissions of fact constitute Federal Criminal Violations (See 18 U.S.C. 1001).
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GENERAL INSTRUCTIONS
1. This form is required by Rule 12b-25 (17 CFR 240.12b-25) of the General Rules and Regulations under the Securities Exchange Act
of 1934.
2. One signed original and four conformed copies of this form and amendments thereto must be completed and filed with the
Securities and Exchange Commission, Washington, D.C. 20549, in accordance with Rule 0-3 of the General Rules and Regulations
under the Act. The information contained in or filed with the form will be made a matter of public record in the Commission
files.
3. A manually signed copy of the form and amendments thereto shall be filed with each national securities exchange on which any
class of securities of the registrant is registered.
4. Amendments to the notifications must also be filed on form 12b-25 but need not restate information that has been correctly
furnished. The form shall be clearly identified as an amended notification.
5. Electronic Filers. This form shall not be used by electronic filers unable to timely file a report solely due to electronic
difficulties. Filers unable to submit a report within the time period prescribed due to difficulties in electronic filing should
comply with either Rule 201 or Rule 202 of Regulation S-T (ss.232.201 or ss.232.202 of this chapter) or apply for an adjustment
in filing date pursuant to Rule 13(b) of Regulation S-T (ss.232.13(b) of this chapter).
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the fiscal year ended March 31, 1997 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
exchange Act of 1934 For the transition period from __________ to
_________
Commission file number 0-19566
EARTH SEARCH SCIENCES, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0437723
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
502 North 3rd Street, #8
McCall, Idaho 83638
Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (208) 634-7080
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
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 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 requirements for the past 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
Aggregate market value of Common Stock held by nonaffiliated of the
Registrant at March 31, 1997 $27,470,367. For purposes of this calculation,
officers and directors are considered affiliates.
Number of shares of Common Stock outstanding at March 31, 1997: 70,256,693
This Form 10-K consists of ____ pages. Exhibits are indexed at page ____.
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TABLE OF CONTENTS
Item of Form 10-K Page
PART I ............................................................. 3
Item 1 - Business .......................................... 3
Item 2 - Properties ......................................... 7
Item 3 - Legal Proceedings .................................. 7
Item 4 - Submission of Matters to a Vote of
Security Holders .................................... 7
Item 4(a) Executive Officers of the Registrant.................. 7
PART II. ............................................................. 8
Item 5 - Market for the Registrant's Common
Equity and Related Shareholder Matters .......... 8
Item 6 - Selected Financial Data ............................ 8
Item 7 - Management's Discussion and Analysis of Financial Condition
and Results of Operations........................... 9
Item 8 - Financial Statements and Supplementary Data .......... 12
Item 9 - Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure ........ 12
PART III ............................................................. 13
Item 10 - Directors and Executive Officers of the Registrant ... 13
Item 11 - Executive Compensation ............................ 13
Item 12 - Security Ownership of Certain Beneficial Owners and
Management .................................... 13
Item 13 - Certain Relationships and Related Transactions ....... 13
PART IV ............................................................. 14
Item 14 - Exhibits, Financial Statement Schedules, and Reports
on Form 8-K .................................. 14
SIGNATURES .................................................... 15
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PART I
ITEM 1. BUSINESS
General
Earth Search Sciences, Inc. (formerly Turnabout Corporation) (the
"Registrant" or the "Company") was incorporated as a Utah corporation on May 15,
1984. The Company, up until 1985, had limited activity except for expenditures
for exploration and acquisition of mining claims in Alaska. On December 5, 1985,
the Registrant acquired all of the outstanding common stock of Earth Search
Sciences, Inc. ("ESSI"), in exchange for 13,639,600 shares of its previously
authorized, unissued $.001 par value common stock. On August 11, 1987, the
Registrant changed its name to Earth Search Sciences, Inc. and on November 19,
1987, the former subsidiary was dissolved.
The Company has been in a research and development posture since its
inception, and has recently reported immaterial revenues. The Company and its
chairman, Larry Vance, have spent the last ten years developing an airborne
remote sensing capability that can be economically configured into both
governmental and commercial projects. The Company initially sought to utilize
United States Government proprietary airborne remote sensing technology to
identify sites with potential economically recoverable mineral deposits. The
Company intended to use the remote sensing data as a means of limiting the
universe of available mining sites in a given region. The Company anticipated
doing further investigative work on the identified sites, taking a land or
mineral interest in promising sites and thereafter either developing the sites
into mines independently or seeking a joint venture partner or mining entity to
develop the site.
The Company has developed a two-prong strategy to convert from a
research and development company to an operating company. With the experience of
Dr. John Peel, the Company's CEO, the Company has a strong base from which to
develop remote sensing business aimed at the United States Government sector of
customers, principally with respect to the use of remote sensing in identifying
environmental exposures and aiding the Government in designing economical
remediation programs. Unfortunately, the funding uncertainties at most
Governmental agencies and defense contracting firms has hampered development of
this prong of the Company's strategy.
The second prong of the Company's strategy involves development of
commercial opportunities involve remote sensing, particularly in the mining
area. To better focus the Company's commercial plans, the Company formed a
wholly owned subsidiary, Earth Search Resources, Inc. ("ESR") and on June 1,
1996, hired Brian C. Savage, formerly director of the investment banking mining
group of Nesbitt Burns Securities, Inc., in New York, as president of ESR and
Vice President-Resource Development of the Company. Mr. Savage's experience in
the mining industry and his investment banking background should provide the
Company with significant assistance in developing the commercial side of the
business. The Company has further consolidated and strengthened its natural
resources exploration and production capabilities with the April 9, 1997
appointment of Mr. Savage as President of Earth Search Sciences. Mr. Savage has
over 17 years of experience in all aspects of the mining industry including mine
operations, management, engineering, mining software specialist, and corporate
finance specialist including equity financing, project financing, gold loans,
production payments, public debt financing, financial advisory, general
corporate banking and investment banking. Mr. Savage has been involved in more
than $10 billion of debt and equity financing for the mining companies. While
with Nesbitt Burns Securities in New York Mr. Savage held the position of
director investment banking mining group. Mr. Savage's experience also includes
serving in the position of director, mining and metals for Bank of Montreal
where his responsibilities included business development in the United States.
Mr. Savage earned a bachelor of science degree in mining engineering and a
master of science degree in mineral economics from the Colorado school of mines.
Mr. Vance remains chairman, and Dr. Peel remains CEO.
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Imagery Database
In the summer of 1987, the Company obtained airborne multi-spectral
scanner imagery over sites in Oregon, Arizona and Nevada. The imagery, gathered
by an airplane using a thematic mapper scanner, was recorded on high density
digital tape and later decompressed into computer compatible data. The Company's
cost basis in this database includes imagery produced in photographic form (hard
copy) as well as the data on digital tape. This information was then interpreted
by a geologist having expertise in the ATM method. The initial interpretation
was complete by June, 1988 and produced approximately 500 anomalies that will
require exploration work to determine mineralization. In addition to
identification of potential mineralization, the database can be used for oil and
gas exploration, environmental exposure identification and other purposes for
which geology is a major consideration. The Company has fully depreciated the
cost of acquiring this database but still intends as financial resources become
available to use the data base to focus ESR on promising target properties for
further remote sensing and exploration.
In 1991, the Company was invited to participate in the Visiting
Investigator Program (VIP) sponsored by the National Aeronautics and Space
Administration ("NASA"). In the VIP program, the Company sought to compare the
benefits of using an Airborne Visible and Infra-Red Imaging Spectrometer
("AVIRIS" instrument) in locating geologic areas of interest in a test area in
Nevada with other less advanced instruments. The results of that program were
published in January 1993 in a study entitled "Developing the use of AVIRIS,
TIMS and TM Data to evaluate Hydrothermal alteration types as related to
geologic structures in the Cuprite, Nevada Region," Series VIP-002-93, Stennis
Space Center, Remote Sensing Technologies. As a result of participation in the
program the Company acquired a large amount of unprocessed data. The useful life
of this information is expected to be in the range of five to ten years.
The Company's data collected in 1987 and 1991 has been stored and can
be used many times interactively to determine the fine detail that go with the
use of remote sensing as an exploration tool for locating mineral prospects.
That same data can be used for other applications such as environmental issues,
resource management issues and corridor development.
The Company intends to structure its relationship with ESR so Earth
Search Sciences receives licensing fees for access to data and technology
available to the Company and overriding royalties on minerals ultimately
exploited by ESR or any of its customers. ESR is presently preparing with a
joint venture mining company partner to develop data packages based on the
imagery data the Company has acquired. The Company anticipates that the mining
partner will provide the capital necessary to exploit this very valuable asset.
As with ESR, the Company anticipates structuring its relationship with
its strategic alliance partners for the Government sector in a manner that
provides the Company with licensing fees for exclusive use of the seven meter
imagery on government programs, including but not limited to the U.S. Forest
Service, Bureau of Land Management, Environmental Protection Agency, Department
of Energy, Department of Agriculture, and Department of Defense. The Company
will reserve the rights to this imagery for the perpetual duration of the
licensing contract.
Original Business Plan
Based on the imagery database accumulated by the Company in 1987 and
1991, the Company procured mining patents and land leases and sought partners to
develop several prospective mining properties. The Company in fact entered into
several arrangements with mining entities for the development of some of the
Company's properties, but none of those arrangements resulted in development of
operating mines. Due to lack of capital to fund advance royalties and due
diligence requirements on the Company's mining properties and to changes in
mining laws which required increased and more timely due diligence expenditures,
the Company opted to release virtually all of its mining properties between 1991
and 1994. The new mining laws imposed a financial burden on the Company by
requiring a payment in advance of a flat fee per claim plus filing costs instead
of the prior arrangement under which the Company could perform general
assessment work prior to making a significant financial commitment.
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As an adjunct to the business of developing mineral properties, the
Company recognized the need to refine the technology of remote sensing with the
ultimate goal of commercializing the technology. To achieve that goal, the
Company believes that a miniaturized hyperspectral remote sensing instrument
must be developed so that more economical aircraft can be utilized for the
airborne sensing. The Landsat sensor is configured with 11 channels of data in
comparison with a hyperspectral instrument that has 224 channels of data. The
difference is achieved by splitting the light spectrum 213 times more than the
Landsat sensor and by providing better resolution. The resulting improvement in
resolution enables the Company to be able to read the chemistry of the spectra
giving us more substantial information. The comparison between the two
instruments enables the user to identify what is there instead of merely
learning that something is there.
On April 12, 1991, the Company commenced entering into semiannual
agreements with NASA to participate in the VIP program to utilize the
specialized resources and sensing technology of NASA to the goal of
commercialization. The agreements allowed the Company access to NASA's
sophisticated facilities that are capable of a full range of remote sensing
activities. Pursuant to the agreement NASA supplied administrative and technical
support and the Company was responsible for the expenses and costs of the
project .The Company has gained several years experience in the hyperspectral
field under this agreement. The mission of JPL/NASA is to conduct high risk,
proof of principle investigations and release the findings to the general public
through programs such as the VIP and Space Act Agreement. Industry participants
must submit a scientific project of merit for evaluation by NASA. The non
proprietary , non exclusive data resulting from NASA's investigations can be
utilized by private industry in their own decision making process regarding the
development of commercial hyperspectral imaging technologies. Earth Search
Sciences, in its early stages of development utilized cost shared hyperspectral
image collections from the NASA/ JPL AVIRIS instrument to provide proof of
principle images to its managers and directors during the decision making
process over the issue of whether or not to proceed with the development of the
company's own proprietary, privately funded instrument, Probe 1.
In July, 1993, the Company flew an EPA superfund site at Summitville,
Colorado, jointly with the EPA, USGS, Colorado DEQ, JPL and NASA to characterize
the extent of the environmental exposure at the site and to prove the Company's
remote sensing capabilities. The final report has been completed by the Company
and Analytical Imaging and Geophysics and the findings will be used for
environmental and mineral purposes. The Summitville flight provided the Company
with the opportunity to prove the value of remote sensing in a commercial and
governmental setting, and ultimately led to the development of the Company's
current business plan.
Current Business Plan
The Company believes that hyperspectral remote sensing technology, if
economical, can play a central role in a multitude of settings, and has
application both in the United States and abroad. The Company has identified
applications in such diverse markets as watershed analysis, pollution detection,
pipeline easement mapping and routing, plume analysis, vegetation stress
analysis, agriculture, disaster assessment, mineral exploration, forestry,
fisheries, heat loss detection, wetlands delineations, stormwater management,
emergency planning and evacuation route assessment, land use, prescription
farming and unexploded ordnance detection.
The key to accessing these market opportunities remains the
miniaturization of the remote sensing technology and usage of the technology on
an economical basis. The Company plans to continue its efforts to miniaturize
and downsize the technology with continued economic improvements in the
operation and maintenance of the sensor the ultimate objective.
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Earth Search Sciences, Inc. and Integrated Spectronics Pty Ltd. have
jointly developed a remote sensing instrument, the ESSI Probe 1, that spectrally
measures the reflectance of the sun from the earth and is considered one of the
most advanced hyperspectral instruments in the world. The Company and Integrated
Spectronics have signed a series of agreements to engineer, develop and
manufacture sensors as needed for each market that the Company contemplates
entering.
Earth Search Sciences has developed a financial strategy, and through
that strategy has begun to acquire the necessary capital for the purchase of its
own miniaturized hyperspectral remote measurement instrument, ESSI Probe 1. The
financial strategy is centered around the direct funding of the manufacture of
ESSI's own sensor design by existing qualified Earth Search Sciences
shareholders familiar with the company's business strategy. The manufacture of
the Probe1 sensor is to be accomplished through the strategic alliance that the
Company has been developing since 1994 between Integrated Spectronics Pty. Ltd.
ESSI believes it can offer territorial concessions to qualified
shareholders who fund the acquisition of Probe 1s. The terms of these
concessions include ownership in a subsidiary that is licensed by the Company to
use the Probe 1 in a specified location utilizing services provided by the
Company or ESR (data collection, processing, interpretation, technical data
packages, and management and marketing).
On June 1, 1997,the company took delivery of one of three Probe 1
instruments currently on order . This instrument has been installed in a Naval
research Laboratory P-3 aircraft as part of a deployment to Kazakstan in Central
Asia for a U.S. Government/ Earth Search Sciences cost shared scientific mission
sponsored by the U.S. Department of Energy, Battelle Pacific Northwest National
Laboratory (PNNL), The Remote Sensing Laboratory-Las Vegas, Nevada, and Sandia
National Laboratory. Economic development issues, including natural resources
mapping and environmental surveillance are being addressed as part of the
mission.
The Company also believes that the recent appointment of Brian Savage
as President of Earth Search will strengthen the Company's ability to develop
the commercial side of the business and enhance the Company's ability to access
funds to fulfill the business plan. Mr. Savage has been representing Earth
Search's interests in Central Asia and is currently participating in the joint
scientific mission to Kazakstan sponsored by the Department of Energy with
Battelle Pacific Northwest National Laboratories, The Remote Sensing Laboratory
(RSL)-Las Vegas, Nevada, and Sandia National Laboratory, and the Naval Research
Laboratory. The mission is scheduled from June 19, 1997 to July 5, 1997. Earth
Search will collect imagery with its Probe-1 instrument that is currently flying
aboard the Naval Research Laboratory's P-3 aircraft. The imagery will be
utilized by Earth Search and its Kazakstani partner, SEMTECH for natural
resources mapping. This represents the first deployment of the Probe 1
instrument for commercial purposes.
Falconbridge, Limited (approximately $2.5 billion Canadian annual
revenue mining company) has signed a memorandum of agreement to explore and
develop the base metals on the Polygon (Kazakstan). Falconbridge has provided
assistance to Earth Search in meeting the terms and conditions of the new
Kazakstan mining laws that require that a major mining company be part of any
team that seeks to develop Kazakstan's mineral resources.
Falconbridge, Limited and Earth Search have also signed a letter of
intent to form a new company whose mission is exploration and development of
resource opportunities. The relationship continues to develop within the stated
conditions of the letter.
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During the fiscal year ended March 31, 1996, the Company negotiated a
concession license to develop hydrocarbons and minerals and formed a team for a
mission to Kazakstan in 1996. The team includes the Company and contractors:
Battelle/PNNL and the Department of Energy's AMPS program. A letter from the
Kazakhstan Ministry of Science and New Technologies has been received by the
U.S. State Department addressed to the Secretary of Energy. This letter invites
Earth Search Sciences, its contractors and Department of Energy to perform the
mission. In addition to the concession the Company has acquired a twenty percent
(20%) ownership from Scientech and commenced the acquisition of a complex mining
license. The Company is negotiating with a large mining company that has
international holdings. Prior to March 31, 1997, John Peel, CEO of Earth Search
Sciences, Brian Savage, President of Earth Search Sciences and Bill Farrand,
senior remote sensing geologist from Applied Signal and Image Technology visited
prospective (candidate) sites for field exploration. Mineralization was found
and ore samples were collected for laboratory examination. The extent of
mineralization is unknown at this time. Ground truthing of seven acres was
performed in support of the contemplated AMPS flyover.
Earth Search Sciences engaged Behre Dolbear & Company, Inc. to
undertake property examination of the Polygon in September 1996. Behre Dolbear's
commission was among other things to (I) conduct a site visit, visit and sample
mineral properties occurring within the Polygon; (ii) determine their economic
potential; and (iii) develop an exploration program which would bring the
properties to a prefeasibility level of confidence. The site visit was made
during the period of September 20 through September 28, 1996. Behre Dolbear
submitted its findings in a report titled "Review of the Mineral Potential of
the former Semipalatinsk Test Site Eastern Kazakstan" dated November 1996. While
this report remains "Company Confidential", based upon its visit to 15
prospects, Behre Dolbear believes that the Polygon represents a remarkable
concentration of potentially viable precious and base metal properties. The true
economic potential of the Polygon remains unknown pending exploration of the
area. There are no known bodies of commercial ore on any of the above referenced
mineral exploration properties and the activities of ESRL will constitute an
exploratory search for ore. Any exploration or development activities are
contingent upon the receipt of licenses in proper form.
Earth Search through its Kazakstani Joint Stock Company, Semtech,
submitted a license application covering the entire area of the Polygon in
November 1996. Semtech was formed to assist in the transfer of peaceful nuclear
technology, provide remote sensing expertise, and to develop mineral deposits on
the former Semipalatinsk following the break-up of the Soviet Union, control of
all operations on the territory of the former Semipalatinsk Nuclear Test Site
known as the Polygon was given to the National Nuclear Center of the Republic of
Kazakstan (NNC). "Decree of the Cabinet Ministers of the Republic of Kazakstan
No. 44" dated January 7, 1994 granted the NNC certain priority rights including
the right to utilize and manage the mineral rights within the Polygon. The NNC
subsequently transferred certain exclusive rights through Semtech, a joint stock
company organized under the laws of Kazakstan, to Earth Search, who owns 20% of
Semtech including (I) Access to the data available to the NNC regarding the
Polygon connected with commercial development of minerals, oil, gas and coal
except for objects already found or currently being exploited; and (ii) The
rights of the NNC to explore, develop and mine mineral resources within the
borders of the Polygon, except objects already found or currently being
exploited. The only exclusions are a producing coal mine and an exploration and
developmental license that is believed to be for Molybdenum. At the same time
Earth Search Sciences submitted its license application, it was made known that
several licenses were granted on the Polygon territory. These licenses were
granted without the approval of the NNC. Semtech submitted its license
application on December 4, 1996 exercising the NNC's priority rights to mineral
exploration on the Polygon. Earth Search Sciences and Semtech determined that
attempting to negotiate mutually satisfactory agreements was a better
alternative than taking legal action. During January and February 1997, the
Company, through Semtech negotiated letter of intent agreements with three of
the four licensees and submitted an application for the Balykshy area, which is
outside the Polygon area. Two of the agreements resulted in the intent to form
joint ventures and the third agreement resulted in the intent to acquire four
(4) individual licenses held by the same company.
<PAGE>
During the fiscal year ended March 31, 1996, the Company has signed a
Co-operative Research and Development Agreement (CRADA) with the Department of
Energy's Pacific Northwest National Laboratories and the Battelle Corporation.
The Agreement allows the Company a very strong research and development partner
who also provides capital for sensor research and development and technology
transfer. This cost sharing philosophy keeps with the ESSI strategy to minimize
our research and development costs. To date, Earth Search has paid all costs
associated with its cost share obligations as they pertain to supporting the
June 1997 mission to Kazakstan.
The Company is in the process of forming Earth Search Resources Ltd.
(ESRL), an Ontario, Canada mineral exploration company who, through its
subsidiaries and affiliates, will engage in locating, evaluating, acquiring,
exploring, and if warranted, developing mineral properties in Kazakstan. Upon
completion of the formation of ESRL, ESRL through Semtech, will register 3
mineral exploration and development joint ventures ("Joint Ventures") that will
hold 7 mineral exploration licenses and 1 mineral exploration and development
license. Semtech is also in the process of negotiating with Botamoynak, a
Kazakstani company that holds a mineral exploration license covering a large
portion of the Polygon. The 3 Joint Venture Companies that will be submitted to
the Ministry of Justice for Registration are Polygon Resources, LLP; Besshoky,
LLP; and SemGeo, LLP. Semtech will be the licensee for 6 of the 8 mineral
exploration licenses that are awaiting final ratification by the Government of
the Republic of Kazakstan (the "Government"). The other 2 licenses have already
been ratified by the Government and are currently held separately by 2
Kazakstani companies. Each of these licenses will be transferred to its
respective Joint Venture Company upon the completion of the legal registration
of each company.
The Company intends for ESRL to fund the Company's commitments of
approximately $20,000,000 over the next several years relating to the Kazakstan
venture. The Company anticipates that most of this funding will come from a
mining company or companies and from a private placement of securities of ESRL.
There can be no assurance that the Company will succeed in raising the required
capital.
The Company has taken steps to develop its infrastructure and expertise
independently or obtain access to it through teaming agreements or strategic
alliances.
On January 16, 1997, the Company signed an agreement with California
Microwave Inc. (CMI) and Applied Signal and Image Technology Inc. (ASIT).
California Microwave is a leader in wireless and satellite communications. CMI
Airborne Systems Integration Division will provide a dedicated aircraft for the
joint project, ASIT will provide the software and hardware for the processing of
all data and ESSI will provide the Probe 1 sensor. The first mission will be to
display the aircraft, software and hardware and the sensor the Third
International Airborne Remote Sensing Conference and Exhibition in Copenhagen,
Denmark, July 7-10, 1997.
The Company also believes that a merger with or acquisition of one or
more companies may be the most expeditious and cost-effective way to achieve the
goals of commercializing the remote sensing technology and converting the
Company to an operating, revenue-producing entity. A merger or acquisition would
provide the Company with a revenue base and with more immediate access to
prospective users of remote sensing technology. The Company would not rule out
the creation of a joint venture or "newco" as part of this strategy.
The Company had attempted to acquire a revenue producing entity that
could enhance the Company's remote sensing business prospects, and in fact
signed a definitive agreement on June 30, 1995 to acquire all of the capital
stock of Lamb Associates, Inc. ("LAI"), an established engineering and technical
services company with a strong U.S. Government contracting practice. The
definitive agreement was contingent on, among other things, receipt by the
Company of financing or equity capital to fund the acquisition. At one point in
time, the Company and William Lamb believed they had closed the transaction in a
restructured format. However, the restructured format proved fragile and
ultimately, on July 11, 1996, the Company and the LAI Shareholders broke off
discussions concerning the restructuring of the definitive agreement. There were
three principle reasons for this decision. First, the needs of the LAI
shareholders to receive cash were incompatible with the Company's inability to
raise funding to acquire LAI, second, the profitability of LAI declined somewhat
due to the present uncertainty surrounding Government contracting, and third the
personal requirements of Mr. Lamb for free trading shares were unacceptable.
<PAGE>
The Company intends over the next year to continue pursuing (a)
acquisitions that aid in the commercialization of hyperspectral remote sensing
technology, (b) contracts that produce revenues from the application of remote
sensing to the existing markets in environmental remediation and mineral
identification and to undeveloped markets for other appropriate projects
involving a multitude of applications of the technology, (c) financing to fund
the development of miniaturized remote sensing instruments, and (d) development
of promising potential mineral properties in which the Company has an interest
or acquires an interest as a result of its existing database of geological
information.
The Company is not aware of any present commercial competition in the
field of hyperspectral spectroscopy. The only knowledge the Company has of any
other use of hyperspectral data today is in academic and federal research.
The Company is not aware of any environmental concerns associated with
remote sensing technology.
Employees
As of March 31, 1997, the Company had 3 full-time employees: Larry F.
Vance, Chairman and John W. Peel, III, Chief Executive Officer, and Brian
Savage, President. Also the Company retains Tami J. Story, Company Secretary,
as a full-time administrative and support person on an independent contractor
basis.
ITEM 2. PROPERTIES
The Company leases its corporate headquarters and all of the
furnishings from an unrelated third party, and has approximately 2,000 square
feet of office space in McCall, Idaho. The Company believes its offices are
adequate to meet its needs for the foreseeable future. The Company anticipates
that ESR will require office space later this year. The Company intends that ESR
will lease office space in a site conducive to conducting mineral related
business, and Mr. Savage has indicated that perhaps ESR should locate its
headquarters in Denver, Colorado. The Company also anticipates that future
subsidiaries set up to develop data packages in other countries, including
perhaps Quasar and Bear Creek, may be set up as foreign entities and may require
leased space in their locality.
As part of the Company's commitment in Kazakstan, the Company has
acquired office space in the Kazakstan city of Kurchatov in March of 1997,
consisting of two buildings for $1,700 in cash. Kurchatov is located near the
Polygon and is linked to the capital city of Almaty by air through Kazakstan
Airlines which offers scheduled air service between Semipalatinsk and Almaty
three times per week. The buildings are directly across from each other.
Building number one is 30 meters by 60 meters or 1800 sq. meters. Building
number two is 60 meters by 90 meters or 5400 sq. meters. Both buildings are in
need of remodeling and new construction to bring them into local code
compliance. Conversion of the facility to the Kazakstan headquarters of Earth
Search is expected to cost $150,000. Work will commence as funding becomes
available to the Company. Since the cessation of the existence of the USSR and
the curtailment of nuclear testing, facilities in Kurchatov have significantly
deteriorated. Once a city of 50,000 in population, Kurchatov now hosts
approximately 10,000 residents; most underemployed or unemployed. Skilled
technical workers are available in both Kurchatov and Semipalatinsk. These
professionals will be of great assistance in any mineral development activities.
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
On January 10, 1997 , the State of Idaho Department of Finance sued
earth Search Sciences, Inc. and Larry F. Vance for alleged violations of the
Idaho Securities Act. The lawsuit is pending in the District Court for the
Fourth Judicial District of the State of Idaho, Ada County, CV OC 9700155D. In
the lawsuit, the State contends that ESSI and Mr. Vance violated Idaho law by
making sales of unregistered securities without a license and with no applicable
exemption. In addition, the State contends that ESSI and Mr. Vance violated the
antifraud provision of the Idaho Securities Act by making untrue statements of
material facts. The alleged untrue statements include (I) misrepresentations
regarding the lack of compensation paid to certain officers; (ii)
misrepresentations regarding the ownership by ESSI of remote sensing equipment;
(iii) misrepresentations regarding revenue producing contracts that did not
materialize or produce revenues; (iv) misrepresentations regarding the rights of
investors to convert promissory notes to stock; (v) misrepresentations regarding
the nature of ESSI's interest in the mineral concession in Kazakstan; and (vii)
misrepresentations regarding the acquisition by ESSI of Lamb Associates Inc.
when in fact such acquisition never closed. The State also alleges that press
releases and other written literature released by ESSI were advertisements
regarding ESSI securities that should have been filed with the State.
The State requests injunctive relief, including an order requiring ESSI
to offer all investors who acquired securities from ESSI recission of their
investment in ESSI. The State also requests a penalty of US $ 10,000 per
violation and reimbursement for the State's attorney's fees and costs.
ESSI and Mr. Vance are vigorously defending the lawsuit, and believe
all of the fraud claims are without merit. ESSI and Mr. Vance believe they may
have misunderstood certain rules regarding sales of unregistered securities, and
have announced their intention to offer recission to certain residents of Idaho
who purchased convertible debt and equity securities from ESSI during the period
from 1994 to present. To make that offer, ESSI needs to secure funding of
approximately US $143,545 and will need to make certain filings with the SEC and
the State. ESSI is not yet in a position to fund the offer or to make the
requisite filings, but is hopeful that it will be able to do so within the next
several months. There can be no assurance of the outcome of this litigation, and
an adverse result would be material and might affect ESSI's ability to survive
as an ongoing enterprise. Unfortunately, the State's tactics in investigating
and pursuing its claims against the Company and Mr. Vance has made certain key
people with whom the Company does business nervous. The Company's efforts to
fulfill its business plan have been hampered and by this nervousness and the
need to reassure the people of the Company legitimacy. The Company believes that
it has successfully overcome most of these issues but the costs have been high
and the delays have been untimely.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable
<PAGE>
ITEM 4(a). EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to the
executive officers of the Company as of June 29, 1997.
Name Age Position
Larry Vance 62 Chairman
John W. Peel 51 Chief Executive Officer
Brian C. Savage 37 President
Tami J. Story 34 Secretary/Treasurer
Larry F. Vance served as Chief Executive Officer of the Company from
1985 until April 8, 1995. Since April 8, 1995, Mr. Vance has served as Chairman
of the Company. Mr. Vance is a director of the Company. Mr. Vance is a
full-time employee of the Company and has been since 1985.
John W. Peel, III joined the Company as Chief Executive Officer in
April 1995. Prior to joining the Company, Dr. Peel served for the past six
and-one-half years as Senior Vice President of Tetra Tech, Inc., a major
publicly held environmental remediation consulting firm. Dr. Peel holds a
Bachelor of Sciences in Biology from Millsaps College, a Master of Sciences in
Parasitology and Invertebrate Zoology from the University of Mississippi and a
Ph.D. in Environmental Health/Health Physics from Purdue University. Dr. Peel
is a full-time employee of the Company and has been since 1995.
Brian C. Savage joined the Company as Vice President-Resource
Development and President of the Company's wholly owned subsidiary, Earth Search
Resources, Inc. in June 1996. Mr. Savage was appointed President of Earth Search
Sciences on April 9, 1997. Mr. Savage, for the past four years, was formerly
director of the Investment Banking Mining Group of Nesbitt Burns Securities
Inc., in New York. Savage holds a bachelor's degree in mining engineering and a
master's in resources economics from the Colorado School of Mines.
Tami J. Story joined the Company as Secretary and Treasurer in 1993.
Ms. Story has been with the Company for 6 years in an administrative support
capacity as an independent contractor. Ms. Story also serves as a director of
the Company. Ms. Story holds a degree with a major in Nursing and a minor in
Business Administration.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK EQUITY AND
RELATED STOCKHOLDER MATTERS
(a) Principal Market or Markets. The Company's Common Stock has in
the past traded in the over-the-counter market, based on inter dealer bid
prices, without markups, markdowns, commissions, or adjustments (which do not
represent actual transactions) as reported in the "pink sheets."
Quarter Ended High Low
June 30, 1994 $0.10 $0.07
September 30, 1994 $0.10 $0.08
December 31, 1994 $0.20 $0.10
March 31, 1995 $0.20 $0.16
June 30, 1995 $0.28 $0.24
September 30, 1995 $0.35 $0.30
December 31, 1995 $0.41 $0.38
March 28, 1996 $0.84 $0.81
June 30, 1996 $0.75 $0.68
September 30, 1996 $0.37 $0.34
December 31, 1996 $0.20 $0.17
March 28, 1997 $0.41 $0.38
(b) Approximate Number of Holders of Common Stock. The number of record
owners of the Company's $.001 par value common stock at March 31, 1997, was
approximately 735. This does not include shareholders that hold stock in their
accounts at brokers/dealers.
<PAGE>
(c) Dividends. Holders of common stock are entitled to receive such
dividends as may be declared by the Company's Board of Directors. No dividends
have been paid with respect to the Company's common stock and no dividends are
anticipated to be paid in the foreseeable future.
ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth certain selected financial data for each
of the last five fiscal years with respect to the Company and is qualified in
its entirety by reference to the Company's audited financial statements and
notes thereto.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Cumulative
Amounts
During the
Development As of or for the fiscal year ended
Stage 1997 1996 1995 1994 1993
Operating
Revenue 21,323 $ -0- $6,332 $ -0- $ -0- $ -0-
Net Loss (8,233,202) (2,549,823) (2,408,292) (1,122,541) (340,004) (333,657)
Net Loss per
Common Share n/a (0.04) (0.05) (0.02) (0.01) (0.01)
Total Assets 3,951,460 3,951,460 922,377 95,861 49,598 139,669
Long-term
Obligations 873,462 873,462 736,209 1,231,217 300,052 443,227
Stockholders'
Deficit (2,960,610) (2,960,610) (1,295,908) (1,899,435) (843,440) (829,081)
Cash Dividends
Declared 0 0 0 0 0 0
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial comparisons will be made between the years ended March 31,
1997 and 1996 and 1995.
LIQUIDITY AND CAPITAL RESOURCES
During the fiscal year ended March 31, 1995, the Company had no
operating revenues. The Company was required to obtain working capital through
the sale of its unissued common stock and the issuance of short-term notes.
Aggregate amounts received are approximately $113,325 from stock sales and
$460,810 from the issuance of notes. In addition, the Company's operating
payables and accrued liabilities increased approximately $34,675. The large
operating payables and short-term notes create a substantial working capital
deficiency.
During the fiscal year ended March 31, 1996, the Company had limited
operating revenues of $6,332 that derived from two consulting agreements for
time and materials with Lockheed Martin Group. The Company was required to
obtain working capital through the sale of its unissued common stock and the
issuance of short-term notes. Aggregate amount received are approximately
$192,400 for stock sales and $570,574 from the issuance of notes. In addition,
the Company's operating payables and accrued liabilities increased approximately
$178,832. The large operating payables and short-term notes create a substantial
working capital deficiency. If the Company cannot continue to raise working
capital from private placements of stock and/or notes, the Company will
experience a substantial hardship in continuing to operate.
<PAGE>
During the fiscal year ended March 31, 1996, the Company experienced a
large increase in general and administrative expense from $952,500 for the year
ended March 31, 1995, to $2,143,013. Approximately $240,320 of that increase
relates to deferred compensation to the three principal officers of the Company
at March 31, 1996. The balance of the increase in general and administrative
expense relates to the recording by the Company of $1,150,000 in compensation
expense in the fiscal year ended March 31, 1996, relating to the difference
between the exercise price for stock options granted to officers of the Company
in their employment agreements, and the market price of the Company's stock on
the date the options were granted. The remainder of the general and
administrative expense resulted mostly from significant research and development
and financing related activities undertaken by the Company utilizing consulting
services. The Company paid for many of such consulting services by issuing
shares of its common stock to the consultants.
During the fiscal year ended March 31, 1997, the Company had limited
operating revenues. This does not reflect the working capital held back per the
ESSI agreement with ISPL discussed below in the section on Accuprobe, Inc. These
funds are accounted for separately in the financial section of this report
because of the equipment leasing category this falls under for accounting
purposes. 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.
Subsequent to March 31, 1997, the Company formed a new company, ESSI
Probe 1 LC, to acquire a 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
$500,000 and certain rights to its proprietary technology and 50% by two
shareholders, who contributed $1 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 slated for delivery between the third and
fourth quarters of 1997.
The Company restructured the commitment from Accuprobe, Inc. to fund
two (2) sensors, in June 1997, by agreeing to sell to Accuprobe, Inc. one Probe1
under a sale-leaseback arrangement with in option to repurchase the instrument
outright and by agreeing to a loan from Accuprobe, Inc. for a portion of the
proceeds to fund a second Probe1 secured by a pledge of the contract with
Integrated Spectronics Pty Ltd related to the manufacture of such second Probe1.
The Company must repay this loan of $2,200,000 upon delivery of the second
Probe1, which is presently scheduled for Fall 1997. The Company and Accuprobe
continue to seek ways to renegotiate the agreements to provide Accuprobe with
more long term upside in exchange for relieving the Company from short-term cash
flow stresses. There can be no assurance that the Company and Accuprobe will be
successful in restructuring their agreements. If the Company defaults in its
obligations to Accuprobe, the Company could lose the instruments that
collateralize those obligations. This would have potentially material adverse
competitive consequences to the Company.
In 1996, the Company set up subsidiaries to develop mining
opportunities in the following markets: Canada, Brazil and the United States.
The Canadian market is controlled through Quasar Resources, Inc.; and Brazil is
controlled by Bear Creek Exploration, Inc. Earth Search currently controls the
exploration activities associated with the United States. The Company recently
acquired all the stock in Quasar Resources, Inc. and Bear Creek and is
determining their future use.
<PAGE>
The Company has also signed an agreement with Applied Signal and
Imaging Technology Inc. ("ASIT"), pursuant to which ASIT will work with the
Company to develop a system to provide real time translation of remote sensing
data into usable information. The Company expects that this technical
advancement will significantly enhance the value of air-borne remote sensing in
a large variety of contexts, where the present delay in receiving usable
information of several months has been an impediment to the use of remote
sensing technology.
The financial statements reflect consolidation of the Company's results
with the financial statements of the Company's subsidiaries. One of the
Company's subsidiaries, Quasar Resources, Inc., a Wyoming corporation, completed
a private placement to certain qualified individuals of 30% of its outstanding
capital stock. Quasar received $157,100 in net proceeds from the private
placement. ESR received its 70% interest in Quasar for nominal consideration and
certain agreements relating to technology. Accordingly, the Company has recorded
a minority interest of $47,130 relating to the shares purchased by the
unaffiliated Quasar shareholders and has recorded $109,970 as additional paid-in
capital. Subsequent to March 31, 1997, the Company and the outside shareholders
of Quasar agreed to swap shares of the Company's common stock for shares of
Quasar on a 2-to-1 basis. As a result to Company now owns all of the outstanding
stock of Quasar Resources, Inc.
During the fiscal year ended March 31, 1996, the Company had entered
into an agreement to acquire all outstanding shares of LAI, an engineering and
professional service company, which provides technical services primarily to the
environmental industry. As of July 11, 1996, the Company and LAI could not reach
an agreement on a restructuring of the transaction. As a result, the Company
intends to take a charge in fiscal year 1997 for its expenses relating to the
transaction, which will be approximately $130,000.
RESULTS OF OPERATIONS
The Company has continued to pursue strategic alliances with several
substantial companies and Federal laboratories.
The Company has also collected hyperspectral data and performed ground
truthing on a target using the AVIRIS instruments and NASA's UER-2 aircraft. The
target was a Superfund site at Summitville, Colorado, allowing the Company to
characterize the site for environmental purposes. The final report has been
completed by the Company and Analytical Imaging and Geophysics and the findings
will be used for environmental and mineral purposes.
During the fiscal year ended March 31, 1996, the Company has continued
working with NASA's research and development department, to assist in continual
efforts to commercialize remote sensing. In addition, the Company will endeavor
to secure additional capital necessary to continue the Company's efforts to
commercialize remote sensing.
JOINT VENTURE AND OPERATING ENTITY RELATIONSHIP
During the fiscal year ended March 31, 1996, the Company signed a
Memorandum of Agreement (MOA) and a Teaming Agreement with Hughes Santa Barbara
Research facilities. The Agreements will provide certain Hughes instruments,
manufacturing and Hughes support for the ESSI Kazakhstan mission in August 1996,
which will include the Department of Energy, Navy Research Laboratory, Sandia
National Laboratory, Lawrence Livermore Laboratory, Pacific Northwest National
Laboratory and Battelle. As reported in subsequent SEC 10-Q filings, the August
1996 mission to Kazakstan was delayed until the spring of 1997 and Hughes
withdrew from participating in the mission because of prior commitments
conflicting with the schedule change. Earth Search is not conducting any new
business with Hughes at this time.
<PAGE>
In October 1994, the Company obtained JPL support to retrofit the
AVIRIS instrument to the NASA C-130 aircraft. This will enable the AVIRIS
instrument to collect 5 x 5 meter pixel data flying at 5,000 meter AGL, which is
a 16-fold increase in spatial resolution over the resolution available currently
with the ER-2 aircraft. Although a contract was issued to Earth Search to
retrofit a C-130 aircraft , utilizing funds to be provided by Earth Search,
negotiations were suspended with NASA over this issue in the fourth quarter of
1996 because of programmatic uncertainties contributed by Federal budget cuts
and the elimination of a key aircraft from the NASA fleet which would have been
a candidate for conversion to a test platform. While Earth Search recognizes
that NASA's not for profit status precludes the agency from endorsing any
commercial product or instrument, Earth Search intends to contract with NASA/JPL
to evaluate the Probe 1 instrument against AVIRIS.
Earth Search and a private Canadian group are in the final stages of
the formation of a company whose mission is to raise capital and manage the
development of remote sensing opportunities in the Canadian territory.
Dr. Larry Lass, University of Idaho teamed with Earth Search Sciences
on a joint proposal to the Farm Bureau and won a contract to overfly the Snake
River Basin (Hell's Canyon) to prove the use of hyperspectral imagery for
control and eradication of noxious week intrusion. The results of which will
enable Earth Search to determine the applicability of Probe1 technology to this
potentially lucrative agricultural market.
During the fiscal year ended March 31, 1995, the Company signed a
multi-year Space Act Agreement with JPL, California Institute of Technology
(CALTECH) and NASA's high altitude missions branch. JPL is to provide the AVIRIS
hyperspectral instrument to collect data and process the same and NASA is to
provide the airborne platform and UER-2 aircraft to fly the instrument over
targets of interests generated by (1) the Company, (2) major mineral/petroleum
companies and (3) environmental/engineering targets. Under this Agreement, NASA
has flown Summitville, Colorado, an EPA superfund project, the San Jacinto River
oil spill (pipeline break), the Coeur d'Alene mining district and the Payette
National Forest. The Company is currently developing data packages for each of
such flights for interpretation.
During the fiscal year ended March 31, 1996, 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 restoration and waste management problems, while furthering
national business and technology goals.
FUTURE OPERATIONS
The Company continues to increase its involvement in the mineral
exploration and environmental areas, using the results of its research and
development over the last five years in remote sensing. By attempting to obtain
equity funding, the Company anticipates developing instruments to include
hand-held, airborne and satellite spectrometers and to acquire revenue-producing
companies in the natural resources and environmental monitoring field.
Through teaming with other firms, the Company will identify possible
technology applications for remote sensing. Management intends to pursue
additional markets for its imagery databases, which would generate operating
revenues and adequate cash flows.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary data required by this item
are included on pages F-1 to F-16 of this report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to directors of the Company will be included
under "Election of Directors" in the Company's definitive proxy statement for
its 1997 annual meeting of shareholders to be filed not later than 120 days
after the end of the fiscal year covered by this Report and is incorporated
herein by reference. Information with respect to executive officers of the
Company is included under Item 4(a) of Part I of this Report.
Based solely on a review of copies of reports received by the Company
from persons required to file reports of ownership and changes on ownership
pursuant to Section 16(a) of the Securities Exchange Act of 1934, the Company
believes that all of its executive officers and directors complied with
applicable filing requirements for the fiscal year ended March 31, 1997.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to executive compensation will be included
under "Executive Compensation" in the Company's definitive proxy statement for
its 1997 annual meeting of shareholders to be filed not later than 120 days
after the end of the fiscal year covered by this Report and is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information with respect to security ownership of certain beneficial
owners and management will be included under "Security Ownership of Certain
Beneficial Owners and Management" in the Company's definitive proxy statement
for its 1997 annual meeting of shareholders filed or to be filed not later than
120 days after the end of the fiscal year covered by this Report and is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to certain relationships and related
transactions with management will be included under "Certain Transactions" in
the Company's definitive proxy statement for its 1997 annual meeting of
shareholders to be filed not later than 120 days after the end of the fiscal
year covered by this Report and is incorporated herein by reference.
<PAGE>
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
<TABLE>
<CAPTION>
<S> <C>
(a)(1) Financial Statements Page in this Report
Reports of Independent Accountants F-1
Balance Sheet at March 31, 1997 and 1996 F-2
Statement of Loss for the Years
Ended March 31, 1997, 1996 and 1995 F-3
Statement of Changes in Shareholders'
Equity (Deficit) for the Years Ended
March 31, 1997, 1996 and 1995 F-4/F-5/F-6
Statement of Cash Flows for the Years
Ended March 31, 1997, 1996 and 1995 F-7
Notes to Financial Statements F-8
(a)(2) Financial Data Schedules F-23
(a)(3) Exhibits F-24
3.1 Articles of Incorporation; incorporated by reference to Exhibit 3.1 to
the Registrant's Form 10-K for the fiscal year ended March 31, 1995
(Amendment authorizing additional shares is attached hereto)
3.2 Bylaws; incorporated by reference to Exhibit 3.2 to the Registrant's
Form 10-K for the fiscal year ended March 31, 1995
4.1 See Exhibit 3.1 and Exhibit 3.2
10.1 NASA Agreement; incorporated by reference to Exhibit 3a to the
Registrant's Amended Form 10-K for the fiscal year ended March 31, 1993
10.2 Space Act Agreement between NASA and the Registrant dated June 30,
1994; incorporated by reference to exhibit 10.4 to the Registrant's
Form 10-K for fiscal year ended March 31, 1995
10.3 Settlement Agreement and Release dated November 7, 1994; incorporated
by reference to exhibit 10.5 to the Registrant's Form 10-K for fiscal
year ended March 31, 1995
10.4 Agreement dated February 16, 1995 between Graham, Hamilton & Dwyer,
Inc. and the Registrant; incorporated by reference to exhibit 10.6 to
the Registrant's Form 10-K for fiscal year ended March 31, 1995
10.5 Agreement dated September 11, 1995 between Registrant and Integrated
Spectronics Pty Ltd.; incorporated by reference to exhibit 10.5 to the
Registrant's Form 10-K for fiscal year ended March 31, 1996
10.6 Memorandum of Understanding between the Registrant and Applied Signal
and Imaging Technology, Inc. dated May 27, 1996; incorporated by
reference to exhibit 10.6 to the Registrant's Form 10-K for fiscal
year ended March 31, 1996
10.7 Agreement dated September 11, 1995 between Registrant and Integrated
Spectronics Pty. Ltd. for $2 million
10.8 Agreement dated September 11, 1995 between Registrant and Integrated
Spectronics Pty. Ltd. for $1.9 million
10.9 Agreement dated June 10, 1997 between Registrant and Accuprobe, Inc.
10.10 Operating Agreement of ESSI Probe1 LC, dated June 3, 1997
16.1 Letter re: change in certifying accountant; incorporated by reference
to exhibit 16.1 to the Registrant's Form 10-K for fiscal years ended
March 31, 1995 and March 31, 1996
21.1 Earth Search Resources, Inc., Wyoming Quasar Resource Inc., Wyoming and
Bear Creek Exploration, Inc., Nevada; incorporated by reference to
exhibit 21.1 to the Registrant's Form 10-K for fiscal year ended March
31, 1996
(b) Reports on Form 8-K.
Form 8-K--December 6, 1996
Form 8-K--January 15, 1997
Form 8-K--March 25, 1997
Form 8-K--April 9, 1997
Form 8-K--June 19, 1997
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
EARTH SEARCH SCIENCES, INC.
By /s/ Larry F. Vance
Larry F. Vance
Chairman and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the registrant and in the following capacities on June 29, 1996.
<TABLE>
<CAPTION>
<S> <C>
Signature Title
/s/ Larry F Vance Chairman and Chief Financial
Larry F. Vance Officer (Principal Executive and Financial Officer)
/s/ John W. Peel, III Chief Executive Officer
John W. Peel, III (Principal Executive Officer)
/s/ Brian C. Savage Director
Brian C. Savage
/s/ Tami Story Director
Tami J. Story
/s/ Rory J. Stevens Director
Rory J. Stevens
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
<S> <C> <C>
Exhibit Sequential
No. Description Page No.
27. Financial Data Schedules --
3.1 Articles of Incorporation --
3.2 Bylaws --
4.1 See Exhibit 3.1 and Exhibit 3.2 --
10.1 NASA Agreement; incorporated by reference to Exhibit 3a to the Registrant's
Amended Form 10-K for the fiscal year ended March 31, 1993 --
10.2 UURI Agreement; incorporated by reference to Exhibit 3b to the Registrant's
Amended Form 10-K for the fiscal year ended March 31, 1993 --
10.3 Agreement dated January 25, 1994 among the Registrant, Emerald Operating
Company and Spectral International; incorporated by reference to exhibit
10.3 to registrant for 10-K for fiscal year ended March 31, 1995 --
10.4 Space Act Agreement between NASA and the Registrant dated June 30, 1994;
incorporated by reference to exhibit 10.4 to registrant for 10-K for
fiscal year ended March 31, 1995 --
10.5 Settlement Agreement and Release dated November 7, 1994; incorporated by
reference to exhibit 10.5 to registrant for 10-K for fiscal year ended
March 31, 1995 --
10.6 Agreement dated February 16, 1995 between Graham, Hamilton & Dwyer, Inc.
and the Registrant; incorporated by reference to exhibit 10.6 to
registrant for 10-K for fiscal year ended March 31, 1995 --
10.7 Agreement dated September 11, 1995 between Registrant and Integrated
Spectronics Pty. Ltd. for $2 million Filed
10.8 Agreement dated September 11, 1995 between Registrant and Integrated
Spectronics Pty. Ltd. for $1.9 million Filed
10.9 Agreement dated June 10, 1997 between Registrant and Accuprobe, Inc. Filed
10.10 Operating Agreement of ESSI Probe1 LC, dated June 3, 1997 Filed
16.1 Letter re: change in certifying accountant --
</TABLE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
EARTH SEARCH SCIENCES, INC.
(Exact name of registrant as specified in its charter
State of Utah 0-19566 87-0437723
(State of Incorporation) (Commission (I.R.S. Employer
File No.) Identification No.)
502 North 3rd Street, Suite #8, McCall, Idaho 83638
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(208) 634-7080
No Change
(Former Name or Former Address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
MINING EXPLOITATION FIRM'S KAZAKSTAN GROUND WORK INDICATES "REMARKABLE"
CONCENTRATION OF METAL RESOURCES.
Larry Vance, chairman of the board of Earth Search Sciences, today
disclosed that the company has received findings of an independent consultant
that indicate a "remarkable" concentration of potentially viable precious and
base metals properties inside Earth Search's mineral concession in Kazakstan.
The proprietary mineralization review was performed for Earth Search
Sciences by Behre Dolbear & Co. Inc. of Denver, a global consultant on mineral
development to major financial institutions and energy concerns. The Kazakstan
field work also included a team from Falconbridge Limited, a $2-billion-a-year
mining company based in Toronto, which has signed an agreement with Earth Search
Sciences to evaluate certain mineral exploration opportunities. Earth Search
Sciences holds a majority equity interest in the mineral concession in a region
of Kazakstan known as the "Polygon," a vast and highly mineralized area in
northeastern Kazakstan along the country's border with Russia.
"What this consultant's ground work has done is validate our own belief
that our work in Kazakstan has the potential to be the defining moment in the
emergence of Earth Search Sciences from its development stage into a significant
revenue-generating business," Vance said.
"We look forward to continuing our process of identifying the sites of
greatest potential when our breakthrough airborne sensing instrument joins in
the Department of Energy's mission to Kazakstan in the first half of 1997."
Earth Search's first airborne sensing instrument, Probe 1, is scheduled to
be delivered in the first half of 1997. Probe 1's hyperspectral imaging creates
ultra high-resolution images of the Earth's surface. Analysis of these images
using Earth Search Science's proprietary instruments and software can determine
the presence of a target molecule in a geologic formation or in live vegetation,
multiplying the probability of identifying commercially viable mineral deposits.
Earth Search Sciences engaged Behre Dolbear & Co. to undertake a
proprietary examination of the Polygon. The consulting firm studied 15 separate
properties.
"Based upon its site visit to 15 prospects, Behre Dolbear believes that the
Polygon represents a remarkable concentration of potentially viable precious and
base metal properties," the report said. "Initial field surveys indicate the
potential for hosting entire districts of different classes of mineral
deposits."
Among the significant mineral concentrations found in the Polygon:
* Gold
* Copper
* Zinc
* Tungsten
* Coal
Behre Dolbear's professional leading the Kazakstan field study included
Bernard J. Guarnera, a professional engineer who is the president and chief
operating officer of the company, and Edward I. Erlich, Ph.D., an economic
geologist who formerly was a high-level geologist in the U.S.S.R.'s Ministry of
Geology.
"The hyperspectral data collected will prove invaluable in identifying
additional mineral targets, determining the extent of mineralization of known
prospects, and providing detailed lithologic maps," the Behre Dolbear report
said, indicating the value of the Probe 1 overflights of 1997.
The U.S. Department of Energy originally scheduled its hyperspectral
imaging mission of Kazakstan for September 1996 but at the request of the
Kazakstani government agreed to postpone the plans. The Department has since
informed Earth Search Sciences that the mission, which will include the Probe 1
instrument, will be carried out in June 1997.
<PAGE>
In August, Energy Secretary Hazel O'Leary and the Kazakstani Ambassador to
the United States, Bolat Nurgaliev, signed a memorandum of cooperation to use
Earth Search Sciences' hyperspectral imaging technology and other methods to
identify and quantify mineral reserves in Kazakstan.
Earth Search Sciences has secured commercial use of the government's
hyperspectral imaging process through a Space Act technology transfer agreement.
Earth Search has miniaturized the technology so that hyperspectral imaging
equipment can be mounted on remote platforms such as civilian aircraft.
Demonstration of this technology is at the heart of the mission to
Kazakstan. There, Earth Search Sciences will team with the U.S. government and
several private subcontractors from the aerospace and electronics industries to
determine the extent of commercially viable resources in the vast and mineral
rich Polygon.
As part of that agreement, Earth Search Sciences holds a major equity
interest in the mineral reserves of the Polygon.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
EARTH SEARCH SCIENCES, INC.
(Registrant)
By /s/ Larry F. Vance
Larry F. Vance
Chairman and Director
December 5, 1996
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
JANUARY 15, 1997
EARTH SEARCH SCIENCES, INC.
(Exact name of registrant as specified in its charter)
State of Utah 0-19566 87-0437723
(State of Incorporation) (Commission (I.R.S. Employer
File No.) Identification No.)
502 North 3rd Street, Suite #8, McCall, Idaho 83638
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(208) 634-7080
No Change
(Former Name or Former Address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
On January 10, 1997, the Company filed a declaratory relief action
against the Idaho Department of Finance in the District court of the Fourth
Judicial District of the State of Idaho, in and for the County of Valley, Civil
No.CV-97-000C. The Company's declaratory relief action seeks a declaration from
the court that the Company did not violate the Idaho Securities Act with regard
to certain transactions taking place subsequent to April 1, 1994. The Company's
declaratory relief action was filed in response to repeated threats by the
Department that it would file suit against the Company.
On January 10, 1997, the Department of Finance filed suit against the
Company and its Chairman, Larry Vance, in the District Court of the Fourth
Judicial District of the State of Idaho, in and for the County of Ada, Civil No.
CV OC 9700155D. The Department's complaint set forth five counts, alleging that
the Company and Mr. Vance (1) sold unregistered securities to Idaho and
non-Idaho residents in violation of Idaho law, (2) acted as broker-dealer or
securities salesmen without having registered as such, (3) made untrue
statements of material facts in violation of the Idaho antifraud law, (4) by
making said untrue statements of material facts, engaged in a practice which
operates as a deceit upon persons, and (5) distributed press releases and other
written literature without filing same with the Director of the Idaho Department
of Finance in violation of the Department's rules.
The Department's complaint seeks the following relief: (A) a
declaration that the Company and Mr. Vance have violated Idaho law, (B) entry of
a permanent injunction enjoining the Company and Mr. Vance from violating Idaho
law, (C) entry of a permanent injunction prohibiting the Company and Mr. Vance
from claiming the availability of, using or offering or selling securities,
under any exemptions under Idaho law without seeking the prior written consent
of the Director of the Department, (D) an order requiring the Company and Mr.
Vance to make an offer of rescission to all persons who purchased or received
securities sold by the Company or Mr. Vance in violation of Idaho law, (E) an
order requiring the Company and Mr. Vance to pay a penalty of $10,000 for each
violation of Idaho law, and (F) an award to the State of its attorneys fees and
costs.
With respect to sales of securities violation of the registration
requirements of Idaho law, the Company believes it may have misunderstood
certain state regulations in completing transactions with a limited number of
Idaho-based investors. The Company is preparing to offer approximately 19 Idaho
residents offers of rescission which, if accepted by all offerees, would costs
the Company an aggregate of $143,540. The Company does not believe it violated
the laws of any other state or any federal laws and regulations, and vehemently
denies all other allegations made in the Department's complaint.
The Company in particular intends to vigorously oppose the Department
on the issue of whether the Company has made any untrue statements of material
facts. The Department included seven specific allegations of untrue statements
in its complaint. The Department's allegation and the Company's response are set
forth below:
<TABLE>
<CAPTION>
DEPARTMENT ALLEGATION COMPANY RESPONSE
<S> <C>
A. Defendants represented to offeree The Company has never denied that it pays
and/or investors that principal corporate compensation to Dr. Peel and it has accrued
officers did not receive compensation for compensation for Mr. Vance that will be
services rendered, when it fact, paid only when the Company generates
compensation was received by principal revenues. All information regarding officer
corporate officers. compensation has been properly disclosed
in the Company's SEC filings and in the
Company's audited financial statements.
<PAGE>
B. Defendants represented to certain The Company's 10-K's, 10-Q's,
offeree and/or investors that ESSI owned shareholder letters and press releases
certain remote sensing equipment, when in accurately reflect that state of development
fact, ESSI owned no such equipment. and the Company's ownership interest in
the ESSI Probe 1 instrument. In fact, the
Company has filed a copy of its contract with
Integrated Spectronics for the manufacture and
acquisition of ESSI Probe as an exhibit to its Form
10-K for the year ended March 31, 1996.
C. Defendants represented to offeree The Company has properly disclosed the
and/or investors that they had contracts existence and nature of all of its material
with major well-known corporations and contracts, and has never misrepresented the
suggested that such contracts would be revenue potential of these contracts. The
revenue producing, when in fact, such Company's financial statements and filings
contracts were not revenue producing. with the SEC accurately reflect the only
revenues received by the Company to date
(from one of such contracts).
D. Defendants represented to offeree In response to their allegation, the Company
and/or investors that they would have the only converted promissory notes with the
right to convert promissory notes into prior consent or knowledge of investor. In
stock, when in fact, promissory notes were fact, the Company has signed authorization
automatically converted to stock without the for all conversions. Earth Search has asked
prior consent or knowledge of investors. the Department of Finance to justify the
basis of this allegation. The Department
of Finance has failed to provide any evidence
which supports its allegation.
E. Defendants represented to offeree The Company does not understand the
and/or investors that ESSI owned subsidiary Department's allegation regarding
companies, however, no disclosures subsidiaries. The Company's financial
regarding said companies were in financial statements and SEC filings properly disclose
documents or SEC filings. all material subsidiaries and their respective
business activities, if any.
F. Defendants represented to offeree The Company has properly disclosed its
and/or investors that ESSI "holds a majority interest in the Kazakstan joint stock
equity interest in the mineral concession in company SEMTECH and SEMTECH's possession
a region of Kazakstan" where Defendants of a mineral concession for the Polygon
claim there is a "remarkable concentration region of Kazakstan. The Company quoted
of potentially viable precious and base from a report prepared by Behre Dolbear &
metals properties," when in fact, ESSI does Company, independent consultants, regarding
not have any binding agreement giving it a the potential quality of the mineral
majority equity interest in a mineral deposits in the Polygon region, and has
concession in Kazakstan. made no representation to anyone concerning
the presence or nature of mineral reserves in the
Polygon region. The Company recognizes that
doing business in Kazakstan entails a
higher degree of unpredictability and risk
than doing business in the United States or
other, more developed nations. The Company has
disclosed its concerns about the risk profile
most recently in its Form 10-Q for the quarter
ended September 30, 1996.
<PAGE>
G. Defendants represented to offeree The Company never represented in any of
and/or investors that ESSI acquired Lamb its SEC filings that it closed the acquisition
Associates, Inc., an engineering and of Lamb Associates, Inc. The Company had a
technical services firm, when in fact, binding agreement to purchase Lamb Associates,
ESSI did not acquire Lamb Associates, Inc. Inc., but never obtained the financing
necessary to close the transaction. All of this
was fully disclosed in the Company's SEC
filings, including most recently in the Company's
Form 10-K for the year ended March 31, 1996. In
January 1996, the Company and William Lamb
renegotiated the transaction documents to
accommodate a closing without financing. Mr.
Lamb issued a press release at the time of
the renegotiation indicating that the
transaction would be closing. The Company
withdrew its offer to close the transaction
when it learned that Lamb Associates' revenues and
earnings were less that had been projected by
Lamb Associates. The Company never
misrepresented the nature of the Lamb Associates
transaction.
</TABLE>
The Company is very disappointed that the Department has chosen to file its
complaint. The Company requires financing to complete the development and
implementation of its business plan. There can be no assurance given the
existence of the complaint that the Company will obtain the required financing.
The Department had offered to settle the complaint on terms that would
have required the Company to admit that it had unmade untrue statements of
material facts. The Board of Directors of the Company considered the offer of
settlement but rejected it because the admission would have potentially
undermined the Company's credibility. During the pendency of the Department's
lawsuit, the Company intends to defend its credibility vigorously, and to try
its hardest to conduct business as though the complaint does not exist.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned duly authorized.
EARTH SEARCH SCIENCES, INC.
By /s/ Larry F. Vance
Larry F. Vance
Chairman and Director
February 14, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
MARCH 25, 1997
EARTH SEARCH SCIENCES, INC.
(Exact name of registrant as specified in its charter)
State of Utah 0-19566 87-0437723
(State of Incorporation) (Commission (I.R.S. Employer
File No.) Identification No.)
502 North 3rd Street, Suite #8, McCall, Idaho 83638
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(208) 634-7080
No Change
(Former Name or Former Address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
ESSI PROBE 1 HYPERSPECTRAL IMAGING SENSOR TO BE FLOWN ABOARD
CMI AIRCRAFT WITH DATA PROCESSING BY ASIT
California Microwave, Inc. (CMI) announced that it has selected Earth Search
Sciences, Inc. (ESSI) to provide a Probe 1 Hyperspectral imaging sensor
to be flown on-board a CMI Airborne Systems Integration Division aircraft.
Applied Signal and Image Technology, Inc. (ASIT) of Millersville, Maryland will
be responsible for the reduction and analysis of data obtained from the Probe 1.
ASIT is strategically aligned with CMI, ESSI, and the instrument manufacturer
Integrated Spectronics Pty Ltd. of Australia. At present, it is anticipated
that the Probe 1 will be delivered to ESSI in May of this year.
Hyperspectral imaging systems are important because they offer a potential
increase in classification accuracy over multispectral systems like LANDSAT.
Tailored processing of hyperspectral data allows for the unambiguous
identification of many materials via their reflectance signatures, a capability
that existing multispectral systems (which under-sample the spectrum) do not
offer.
The superior capability provided by hyperspectral for material
identification has applications in many areas including defense, environmental,
agriculture, urban planning, global change assessment, and others.
The Probe 1 is designed to collect hyperspectral imaging which fully samples the
fully visible and near infrared wavelength region of the electromagnetic
spectrum through the acquisition of 128 spectrally contiguous image channels. A
complete visible and near infrared reflectance spectrum can be extracted from
any spatial element of a hyperspectral data set allowing a trained analyst to
determine the identity of land cover units based on their unique reflectance
characteristics.
Automatic processing of the data can be accomplished through application of
proprietary algorithms developed by ASIT. These algorithms are hosted in the
ASPECT and SENTINEL software packages as well as the PROSPECTRE near
real-time adaptive spectral processing and analysis system. The PROSPECTRE
system is being adapted specifically to the Probe 1 by ESSI and ASIT to
ultimately provide real-time spectral processing of Probe 1 data that
automatically determine major scene constituents and map those constituent
materials.
The end result can be either abundance images wherein the brightness of each
picture element is related to the abundance of the target material or
classification images wherein each picture element is grouped into one of
several classes determined a priori from the data itself.
Dr. John Peel, CEO of Earth Search Sciences said, "We are excited and welcome
this strategic alliance. It is a milestone in ESSI's continuing development".
Dr. Joseph Harsanyi, President of ASIT stated, "Our adaptive spectral processing
and analysis systems significantly reduce the time taken to extract useful
information from these large, complex data sets. This is of key commercial
importance when clients require fast post-mission delivery of results."
Dr. Terry Cocks of Integrated Spectronics has been working with ESSI to bring
into operation a series of advanced airborne hyperspectral scanners capable of
surveying the earth's surface at rates up to 1500 square km per hour. "We are
very excited about the Probe 1 scanners in that they will provide a quantum leap
in mineral exploration capabilities".
"The Probe 1 scanners are far superior to any other commercially available
system in such critical performance parameters as signal to noise ratio,
spectral resolution and spectral coverage. ESSI is unique in its vision
of having airborne imaging spectroscopy as a core technology in its
mineral exploration programs", Cocks said.
California Microwave Inc. is a leader in wireless and satellite communications.
Founded in 1968, the company operates facilities in seven states and sells into
more than 11 countries. California Microwave is the number one supplier of
microwave radios and telecommunications satellite earth stations used in
wireless communications. Its strategy calls for significant expansion in the
wireless area.
In fiscal 1996, its sales were approximately 460 million dollars. California
Microwave's commercial wireless and satellite communications facilities are
certified to the ISO 9001 quality standard.
The CMI Airborne Systems Integration Division has announced that it will provide
a dedicated aircraft obtained from their partner AGES, Inc. of Boca Raton,
Florida to act as the airborne platform for the Probe 1. Sensor integration will
be completed by the end of the second quarter of 1997 with data acquisitions to
begin soon thereafter. The CMI aircraft with the ESSI Probe 1 will be on display
at the Third International Airborne Remote Sensing Conference and Exhibition in
Copenhagen, Denmark, 7-10 July, 1997.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned duly authorized.
EARTH SEARCH SCIENCES, INC.
(Registrant)
By /s/ Larry F. Vance
Larry F. Vance
Chairman and Director
March 25, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
APRIL 9, 1997
EARTH SEARCH SCIENCES, INC.
(Exact name of registrant as specified in its charter
State of Utah 0-19566 87-0437723
(State of Incorporation) (Commission (I.R.S. Employer
File No.) Identification No.)
502 North 3rd Street, Suite #8, McCall, Idaho 83638
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(208) 634-7080
No Change
(Former Name or Former Address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
BRIAN C. SAVAGE ELECTED PRESIDENCY BY THE
BOARD OF DIRECTORS OF EARTH SEARCH SCIENCES, INC.
Mr. Savage joined Earth Search Sciences in June 1996 as Vice President of
Resource Development and has recently been named its President. He has over 17
years experience in all aspects of the mining industry including mine
operations, management, engineering, mining software specialist, and corporate
finance specialist including equity financing, project financing, gold loans,
production payments, public debt financing, financial advisory, general
corporate banking and investment banking. Mr. Savage has been involved in more
than $10 billion of debt and equity financing for the mining companies.
Mr. Savage was most recently with Nesbitt Burns Securities in New York where he
held the position of Director Investment Banking Mining Group and was Director,
Mining and Metals for Bank of Montreal responsible for business development in
the United States. Mr. Savage earned a Bachelor of Science degree in Mining
Engineering and a Master of Science degree in Mineral Economics both from the
Colorado School of Mines.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized.
EARTH SEARCH SCIENCES, INC.
(Registrant)
By /s/ Larry F. Vance
Larry F. Vance
Chairman and Director
April 9, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
JUNE 19, 1997
EARTH SEARCH SCIENCES, INC.
(Exact name of registrant as specified in its charter)
State of Utah 0-19566 87-0437723
(State of Incorporation) (Commission (I.R.S. Employer
File No.) Identification No.)
502 North 3rd Street, Suite #8, McCall, Idaho 83638
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code:
(208) 634-7080
No Change
(Former Name or Former Address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned duly authorized.
EARTH SEARCH SCIENCES, INC.
By /s/ Larry F. Vance
Larry F. Vance
Chairman and Director
June 19, 1997
