Wednesday, June 29, 2022

Eco Science Solutions Inc (OTCMKTS:ESSI) Goes Bear Hunting

Eco Science Solutions Inc (OTCMKTS:ESSI) is a stock we covered twice in recent weeks noting its resilience on the bid side of the tape. The company would seem to be ripe as a short given most everything easily available: high and growing debt, no revenues, very sparse product offerings with no signs of clear traction, and a five-figure cash drawer with a market cap that’s nearly 90% of the way to nine figures.

However, the market is tossing support its way. We know there was a major and aggressive promotional campaign from Money Street that claimed to have a “weekly advertising budget ranging from approximately $25,000 to $150,000 to cover the costs associated with creating, publishing and distribution of advertisements.” The attached message on ESSI was “The Next Big Stock For 2016.” However, we don’t know if that is still active. One alternative hypothesis is some emerging traction, or speculation thereon, between ESSI and the network of nodes on the company’s Herbo app, which we will discuss below.

Eco Science Solutions Inc (OTCMKTS:ESSI) is “a technology-focused company that provides solutions for the health and wellness industry. From enterprise software solutions, entertaining and useful content generation for mass distribution to consumer apps for daily use, the Company develops technical solutions that empower enthusiasts in their pursuit and enjoyment of building eco-friendly businesses and living healthy lifestyles.

Eco Science’s core services span business location, localized communications between consumers and business operators, social networking, educational content, e-commerce, and delivery.

The Company’s licensed e-commerce platform enables health-and-wellness enthusiasts to easily locate, access, and connect with health-and-wellness businesses and like-minded enthusiasts, and to facilitate the research of and purchasing of eco-friendly products … anytime, anywhere.”

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We noted in our last two updates that we had become constructive on this stock based on its behavior. Since our latest piece, the stock has moved 40.3% higher on strengthening volume. We suspect there is a lot of fuel being spent here that is made of the towel-tossing and lamentation of shorts in this stock. As we pointed out, it’s an extremely easy argument from that side of the tape.

That said, with California moving toward full recreational legalization of marijuana following its November 8 vote, a door is open for tools to capture accessory market share in that new multi-billion-dollar frontier.

In any case, the company’s principal claims to fame are its Herbo and Herbo Wallet app offerings. Very little else that we have looked into appears to be of value or seems even to be a serious effort. But the Herbo offerings may have a chance of hitting some form of paydirt, particularly in California. Herbo is a mapping app with every location selling anything that has anything to do with weed or paraphernalia or vaping or anything vaguely even tangential to the discerning stoner’s needs at a given time. It’s nicely color-coded and clearly useful. In addition, Eco Science Solutions Inc has a version of the Herbo app called the Herbo Gift Card Wallet.

It is not a crypto-currency exchange mechanism. It is simply a gift card wallet. You can make purchases with it in the same manner that you can make purchases with anything else.

We’ve witnessed 72% tacked on to share pricing for the listing in the past month. Market participants may want to continue to pay attention to this stock as shorts are on the run.

Furthermore, the stock has benefitted from a jump in recent trading volume to the tune of about 170% above the average volume levels in play in this stock over the longer term. This is particularly important with the stock trading on a float that is tight at just 10.74M shares. As savvy traders are well aware, a mechanically driven price squeeze can result from this type of mix of small float and ramping attention from traders, which is what we have been seeing of late in the stock.

Now commanding a market cap of $87.7M, Eco Science Solutions has very little cash on the books, which must be weighed relative to an appreciable load ($713.75k) of total accumulated debt.

The company has no means of clear monetization, but may have a market share pin coming into place if management is able to pull off the execution puzzle. However, we would also be on the lookout for new Silicon Valley talent to assemble and pair with VC cash for a frontal assault on that market share now that the pot market is legal. It will be right on the doorstep. For now, though, ESSI is riding high. We will update the story again soon as further details emerge. For continuing coverage on shares of $ESSI stock and other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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