Earth Science Tech, Inc 10-Q for FY2026 Q1
Earth Science Tech, Inc. (ETST)
About this 10-Q
Earth Science Tech, Inc filed this 10-Q on August 8, 2025, covering the quarter ended June 30, 2025 (FY2026 Q1).
Headline figures
Quarter ended June 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $8.76M
- up 2.2% from $8.57M a year earlier
- Net income
- $465.04K
- down 56.8% from net income of $1.08M a year earlier
- Diluted EPS
- $0.00
- down 66.7% from $0.00 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission
file number:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (zip code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Over the Counter Bulletin Board |
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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large, accelerated filer | ☐ | Accelerated filer | ☐ | ||
| ☒ | Smaller reporting company | ||||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 5, 2025 there were Common shares issued and outstanding, and 1,000,000 Preferred shares of the registrant’s stock outstanding.
TABLE OF CONTENTS
| Page | ||
| PART I. FINANCIAL INFORMATION | ||
| ITEM 1. | Financial Statements (Unaudited) | F-1 |
| Consolidated Balance Sheets | F-1 | |
| Consolidated Statements of Operations | F-2 | |
| Consolidated Statements of Changes in Shareholders’ Equity | F-3 | |
| Consolidated Statements of Cash Flows | F-4 | |
| Notes to Consolidated Financial Statements | F-5 - F-16 | |
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 3 |
| ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk | 7 |
| ITEM 4. | Controls and Procedures | 7 |
| PART II. OTHER INFORMATION | ||
| ITEM 1. | Legal Proceedings | 9 |
| ITEM 1A. | Risk Factors | 9 |
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 9 |
| ITEM 3. | Defaults Upon Senior Securities | 9 |
| ITEM 4. | Mine Safety Disclosures | 9 |
| ITEM 5. | Other Information | 9 |
| ITEM 6. | Exhibits | 9 |
| SIGNATURES | 10 | |
| 2 |
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EARTH SCIENCE TECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| As
of June 30, 2025 | As
of March 31, 2025 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts Receivable | ||||||||
| Equity Investments at fair value | ||||||||
| Inventory | ||||||||
| Deposits | ||||||||
| Prepaid | ||||||||
| Total current assets | ||||||||
| Non-Current Assets: | ||||||||
| Property and equipment, net | ||||||||
| Right of use asset, net | ||||||||
| Goodwill | ||||||||
| Intangible assets, net | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses and other payable | ||||||||
| Current portion of operating lease obligations | ||||||||
| Current portion of equipment loan | ||||||||
| Short-term business loan | ||||||||
| Total Current Liabilities | ||||||||
| Long-Term Liabilities: | ||||||||
| Lease liability less current maturities | ||||||||
| Equipment loan, non-current | ||||||||
| Total Liabilities | ||||||||
| Commitment and Contingencies (Note 11) | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, par value $ per share, shares authorized; and shares issued and outstanding as of June 30, 2025, and March 31, 2025, respectively | ||||||||
| Common stock, par value $ per share, shares authorized; issued and outstanding, and issued and outstanding as of June 30, 2025, and March 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Treasury Stock, at cost and shares as of June 30, 2025 and March 31, 2025, respectively | ( | ) | ( | ) | ||||
| Non-controlling interest | ||||||||
| Total stockholders’ Equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
See accompanying notes to these unaudited consolidated financial statements.
| F-1 |
EARTH SCIENCE TECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THREE MONTHS ENDED JUNE 30, 2025, AND 2024.
(UNAUDITED)
| 2025 | 2024 | |||||||
| For the Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross Profit | ||||||||
| Expenses: | ||||||||
| Salaries expenses | ||||||||
| General and administrative expense | ||||||||
| Marketing | ||||||||
| Bank charges | ||||||||
| Insurance expense | ||||||||
| Legal and professional fees | ||||||||
| Depreciation and amortization | ||||||||
| Utilities | ||||||||
| Rent | ||||||||
| Total Expenses | ||||||||
| Other Income/Expenses | ||||||||
| Net realized gain on sale of investments | ||||||||
| Dividend income | ||||||||
| Interest earned | ||||||||
| Unrealized gain of fair value changes of investments | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Net Income before taxes | ||||||||
| Income Taxes | ||||||||
| Net Income | $ | $ | ||||||
| Net Loss Attributed to Non-Controlling Interest | ||||||||
| Net Income attributable to stockholders | $ | $ | ||||||
| Earnings per common share-Basic and Diluted | $ | $ | ||||||
| Weighted average number of common shares outstanding basic and diluted | ||||||||
See accompanying notes to these unaudited consolidated financial statements.
| F-2 |
EARTH SCIENCE TECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
For the three months ended June 30, 2025 and 2024
| Description | Shares | Amount | Shares | Amount | Capital | Deficit | NCI | Stock | Total | |||||||||||||||||||||||||||
| Common Stock | Preferred Stock | Additional paid in | Accumulated | Treasury | ||||||||||||||||||||||||||||||||
| Description | Shares | Amount | Shares | Amount | Capital | Deficit | NCI | Stock | Total | |||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | ) | ( | ) | $ | |||||||||||||||||||||||||||
| Repurchase of common stock | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Retirement of Treasury Stock | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Acquisition of subsidiary | - | - | ||||||||||||||||||||||||||||||||||
| Net Income (Loss) | - | - | ( | ) | ||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | ) | ( | ) | $ | ||||||||||||||||||||||||||||
| Description | Shares | Amount | Shares | Amount | Capital | Deficit | Total | |||||||||||||||||||||
| Common Stock | Preferred Stock | Additional paid in | Accumulated | |||||||||||||||||||||||||
| Description | Shares | Amount | Shares | Amount | Capital | Deficit | Total | |||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Balance | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||
| Repurchase of common stock | ( | ) | ( | ) | - | ( | ) | ( | ) | |||||||||||||||||||
| Treasury Stock | - | - | ||||||||||||||||||||||||||
| Net Income | - | - | ||||||||||||||||||||||||||
| Net Income (Loss) | - | - | ||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | ( | ) | $ | ||||||||||||||||||||||||
| Balance | $ | ( | ) | $ | ||||||||||||||||||||||||
See accompanying notes to these unaudited consolidated financial statements.
| F-3 |
EARTH SCIENCE TECH, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOR THREE MONTHS ENDED JUNE 30, 2025, AND 2024.
(UNAUDITED)
| 2025 | 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net Income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Unrealized gain on investments | ( | ) | ||||||
| Realized gain on sale of investments | ( | ) | ||||||
| Changes in operating assets and liabilities, net of acquisition: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Deposits | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Inventory | ( | ) | ||||||
| Lease liability, net | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment and intangibles | ( | ) | ( | ) | ||||
| Purchase of investments | ( | ) | ||||||
| Sale of investments | ||||||||
| Cash used for asset acquisitions, net of cash acquired | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on equipment loan | ( | ) | ( | ) | ||||
| Repurchase of common stock | ( | ) | ( | ) | ||||
| Net Cash used in financing activities | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash and cash equivalents at end of the period | $ | $ | ||||||
| Supplemental Disclosure of Cash Flow Information: | ||||||||
| Cash paid for interest | $ | |||||||
Cash paid for income taxes | $ | $ | ||||||
| Non-Cash Transactions | ||||||||
| Initial recognition of right of use asset | $ | $ | ||||||
| Retirement of treasury stock | $ | $ | ||||||
| Common stock issued on conversion of notes payable | $ | $ | ||||||
See accompanying notes to these unaudited consolidated financial statements.
| F-4 |
EARTH SCIENCE TECH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2025
(UNAUDITED)
NOTE 1- ORGANIZATION AND NATURE OF OPERATIONS
Earth Science Tech, Inc. (“ETST”) was incorporated under the laws of the State of Nevada on April 23, 2010, and subsequently redomiciled to the State of Florida on June 27, 2022. As of November 8, 2022, ETST operates as a holding company focused on acquisitions in the health and wellness sector.
The
Company’s current operations include compounding pharmaceuticals, telemedicine and real estate development through its wholly owned
subsidiaries: RxCompoundStore.com, LLC (“RxCompound”), Peaks Curative, LLC (“Peaks”), Avenvi, LLC (“Avenvi”),
Mister Meds, LLC (“Mister Meds”), and Earth Science Foundation, Inc. (“ESF”). The Company acquired
RxCompound, based in Miami, Florida, is a fully licensed compounding pharmacy authorized to fulfill prescriptions in the following states and territories: Arizona, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Maine, Maryland, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, Utah, Wisconsin and Puerto Rico. RxCompound is actively pursuing licensure in the remaining U.S. states.
Peaks is a telemedicine referral platform offering asynchronous consultations for Peaks-branded compounded medications prepared at RxCompound and Mister Meds pharmacies. The platform operates in states where either of these two pharmacies are licensed. Through the development of its own healthcare provider network, MyOnlineConsultation.com, and ongoing licensure expansion for both pharmacies, Peaks aims to offer services nationwide.
Avenvi
is a diversified real estate company engaged in development, asset management, and financing. With a growing portfolio of real estate
holdings, Avenvi provides turnkey solutions from development to end-user financing. It also manages investment activities for ETST and
oversees the Company’s ongoing $
Mister Meds, acquired on October 1, 2024, is in Abilene, Texas. The pharmacy received full compounding licensure in March 2025. It operates out of a 5,000 sq. ft. facility owned by Avenvi and includes advanced sterile compounding capabilities with both positive and negative pressure environments, as well as hazardous drug handling. Mister Meds is currently applying for licensure in states not yet serviced by RxCompound.
ESF, a 501(c)(3) nonprofit organization incorporated on February 11, 2019, is the charitable arm of ETST. ESF accepts grants and donations to assist individuals who need financial support for prescription costs at both RxCompound and Mister Meds. This organization is not part of the financial statements.
Villas is a brick-and-mortar healthcare facility dedicated to the Spanish speaking community. Villas’ expert-led services include advanced sexual health treatments, and customized solutions to enhance physical performance. Villas combines compassionate, personalized care with clear, trustworthy education.
DOC was founded with a mission to modernize the availability and delivery of home-based therapies. DOC provides consultations to develop personalized medication plans tailored to each customer’s health and wellness goals.
MagneChef is a direct-to-consumer retail brand. Utilizing its patents and intellectual properties, the company aims to develop new products that can be marketed and sold online. Currently, the company has developed products for cooking. MagneChef is in the process of expanding its product line for new offerings that incorporate its intellectual property.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Financial Statements
The accompanying unaudited consolidated financial statements include all adjustments (consisting only of its normal recurring adjustments) which management believes necessary for a fair presentation of the statements and have been prepared on a consistent basis using the accounting polices described in the Summary of Significant Accounting Policies included in the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2025, as originally filed with the Securities and Exchange Commission on March 18, 2025 and Amendment No. 1 to the Form 10-K filed on June 27, 2025 (the “2025 Annual Report”). Certain financial information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission, although the Company firmly believes that the accompanying disclosures are adequate to make the information presented not misleading. The financial statements should be read in conjunction with the financial statements and notes thereto included in the 2025 Annual Report. The interim operating results for the three months ending June 30, 2025 may not be indicative of operating results expected for the full year.
Basis of presentation
The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).
| F-5 |
Principles of consolidation
The accompanying consolidated financial statements include all the accounts of the Earth Science Tech, Inc. and its subsidiaries (collectively, the “Company”). All intercompany transactions have been eliminated during consolidation.
Use of estimates and assumptions
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The areas requiring significant estimates are impairment of goodwill, provision for taxation, useful life of depreciable assets, useful life of intangible assets, contingencies, and going concern assessment. The estimates and underlying assumptions are reviewed on an ongoing basis. Actual results could differ from those estimates.
Impairment of Long-Lived Assets
The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is assessed based on the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. If the carrying amount exceeds the asset’s fair value, an impairment loss is recognized in the amount of the excess. No impairment losses were recognized for the three months ended June 30, 2025, and March 31, 2025.
Cash and cash equivalents.
Cash
and cash equivalents include all highly liquid debt instruments with original maturities of three months or less, As of June 30, 2025,
the Company’s cash balance exceeded federally insured limits by approximately $
Accounts Receivable.
Accounts receivable are carried at their contractual amounts, less an estimated allowance for credit losses. Management estimates the allowance for credit losses using a loss-rate approach based on historical loss information, adjusted for management’s expectations about current and future economic conditions, as the basis to determine expected credit losses. Management exercises significant judgment in determining expected credit losses. Key inputs include macroeconomic factors, industry trends, the creditworthiness of counterparties, historical experience, the financial conditions of the customers, and the amount and age of past due accounts. Management believes that the composition of receivables at year-end is consistent with historical conditions as credit terms and practices and the client base has not changed significantly. Receivables are considered past due if full payment is not received by the contractual due date. Past due accounts are generally written off against the allowance for credit losses only after all collection attempts have been exhausted. As of June 30, 2025, and March 31, 2025, the Company had not recorded an allowance for credit losses, as management determined that no reserve was necessary based on its assessment of the collectability of outstanding balances and the credit quality of its customers.
Revenue recognition
In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, the Company recognizes revenue when it satisfies performance obligations, by transferring promised goods or services to customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for fulfilling those performance obligations. Revenue for product sales is recognized at point of sale or upon shipment, depending on the terms of the arrangement. There are no contract assets or contract liabilities and therefore no unsatisfied performance obligations.
| F-6 |
Equity Investments at fair value
The Company accounts for its equity securities in accordance with ASC 321, Investments – Equity Securities, as amended by ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities. Equity securities with readily determinable fair values are measured at fair value, with changes in fair value recognized in earnings in the period in which they occur.
Disaggregated Revenue
In accordance with ASC 606, the Company disaggregates revenue from contracts with customers by category — core and non-core - as it believes it best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
The Company’s disaggregated revenue by category is as follows:
SCHEDULE OF DISAGGREGATED REVENUE
| 2025 | 2024 | |||||||
| For the three months ending June 30, | ||||||||
| 2025 | 2024 | |||||||
| Core: | ||||||||
| Sale of Pharmaceutical products – RxCompound | $ | $ | ||||||
| Sale of Pharmaceutical products –Peaks | ||||||||
| Sale of products and services –Villas Health | ||||||||
| Sale of Pharmaceutical products –Doconsultations | ||||||||
| Sale of Pharmaceutical products –Mister Meds | ||||||||
| Services MOC Teledoc | ||||||||
| Sale of products- Magnefuse LLC | ||||||||
| Total revenue | $ | $ | ||||||
During
the three months ended June 30, 2025, and 2024, the Company had a net realized gain on sales of investments of $
As
of June 30, 2025, the Company had three significant customers, accounting for approximately
| F-7 |
Inventory
Inventory is stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method. Inventory consists primarily of finished goods.
The Company evaluates inventory for excess and obsolescence based on factors such as current inventory levels, estimated product life cycles, historical and forecasted customer demand, and input from the product development team. When necessary, a reserve is recorded to reduce the carrying value of inventory to its estimated net realizable value. These estimates and assumptions are reviewed at least annually and updated as needed based on the Company’s business plans and market conditions. As of June 30, 2025, and March 31, 2025, the inventory reserves were not material.
Cost of Goods Sold
Components of cost of goods sold include product costs, consumables, shipping costs to customers and any inventory adjustments.
Shipping and Handling
Costs incurred by the Company for shipping and handling are included in costs of goods sold.
Income taxes
The Company accounts for income taxes under ASC 740, Income Taxes. Under ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period, which includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of or all the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The Company follows ASC 260 to account for earnings per share. Basic earnings per common share calculations are determined by dividing net results from operations by the weighted average number of shares of common stock outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Diluted earnings per share is calculated using the weighted average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents, if any, using the treasury stock method.
For the three months ended June 30, 2025, and 2024, basic and diluted earnings per share are the same because the Company had no potentially dilutive securities outstanding during those periods.
| F-8 |
Goodwill
Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination. Goodwill is reviewed for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. In conducting its annual impairment test, the Company first reviews qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If factors indicate that the fair value of the reporting unit is less than its carrying amount, the Company performs a quantitative assessment, and the fair value of the reporting unit is determined by analyzing the expected present value of future cash flows. If the carrying value of the reporting unit continues to exceed its fair value, the fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded.
The Company applies the fair value method of ASC 718, Compensation-Stock Compensation, in accounting for its stock-based compensation. These standards state that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period, if any. The Company uses the Black-Scholes option pricing model to determine the fair value of its stock, stock option and warrant issuance. The determination of the fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price, as well as assumptions regarding a few complex and subjective variables. These variables include the Company’s expected stock price, volatility over the term of the awards, actual employee exercise behaviors, risk-free interest rate and expected dividends. No stock-based commitments were outstanding as of June 30, 2025, and March 31, 2025.
Fair Value
FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:
Level 1 — Quoted market prices for identical assets or liabilities in active markets or observable inputs,
Level 2 — Significant other observable inputs that can be corroborated by observable market data; and
Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data.
The carrying amounts of the Company’s financial instruments, such as cash, accounts receivable, accounts payable and other liabilities, approximate fair value because of the short-term nature of these items.
As of June 30, 2025, all of the Company’s investments were classified as Level 1 and were measured at fair value using quoted market prices in active markets.
The fair value of the Company’s debt approximates its carrying value as of June 30, 2025, and March 31, 2025. Factors that the Company considered when estimating the fair value of its debt included market conditions, liquidity levels in the private placement market, variability in pricing from multiple lenders and terms of debt.
Property and equipment
Property
and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and
betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation
are removed from the respective accounts, and any gain or loss is included in operations. Depreciation on property and equipment is charged
using a straight-line method over the estimated useful life of
| F-9 |
Recently issued accounting pronouncements
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments, as modified by FASB ASU No. 2019-10 and other subsequently issued related ASUs. The amendments in this Update affect loans, debt securities, trade receivables, and any other financial assets that have the contractual right to receive cash. The ASU requires an entity to recognize expected credit losses rather than incurred losses for financial assets. The amendments in this Update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this new guidance effective April 1, 2023, utilizing the modified retrospective transition method. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements but did change how the allowance for credit losses is determined.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose significant segment expenses and other segment items on an interim and annual basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. The ASU does not change how a public entity identifies its operating segments, aggregates them, or applies the quantitative threshold to determine its reportable segments. The new disclosure requirements are also applicable to entities that account and report as a single operating segment entity. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted this guidance April 1, 2024. There was no impact on the Company’s reportable segments identified.
ASU 2024-03 – Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40) requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses, such as the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, included in each relevant expense caption; disclosure of a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and disclosure of the total amounts of selling expenses. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of this ASU on its consolidated financial statement disclosures.
Intangible assets
Intangible
assets consist of the Peaks telemedicine platform, the Holding Company’s web domains, patents, and Mister Meds LLC’s software
and domain. These intangible assets are considered to have finite useful lives and are amortized on a straight-line basis over an estimated
useful life of
The Company reviews intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If such indicators exist, the Company compares the carrying amount of the asset to the expected undiscounted future cash flows. An impairment loss is recognized if the carrying amount exceeds the asset’s fair value. No impairment losses were recognized for the three months ended June 30, 2025, and 2024.
NOTE 3- INVENTORY
SCHEDULE OF INVENTORIES
| June 30, 2025 | March 31, 2025 | |||||||
| As of | ||||||||
| June 30, 2025 | March 31, 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Finished goods | ||||||||
| Inventory | $ | $ | ||||||
| F-10 |
NOTE 4 – PROPERTY AND EQUIPMENT, NET
SCHEDULE OF PROPERTY AND EQUIPMENT
| June 30, 2025 | March 31, 2025 | |||||||
| As of | ||||||||
| June 30, 2025 | March 31, 2025 | |||||||
| Land | $ | $ | ||||||
| Building | ||||||||
| Land Improvements | ||||||||
| Furniture and Equipment | ||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||
| Property and Equipment, Net | $ | $ | ||||||
Depreciation
expense for the three months ended June 30, 2025, and June 30, 2024, were $
NOTE 5- LEASES
The Company treats a contract as a lease when the contract conveys the right to use a physically distinct asset for a period in exchange for consideration, or the Company directs the use of the asset and obtains substantially all the economic benefits of the asset. These leases are recorded as right-of-use (“ROU”) assets and lease obligation liabilities for leases with terms greater than 12 months. ROU assets represent the Company’s right to use an underlying asset for the entirety of the lease term. Lease liabilities represent the Company’s obligation to make payments over the life of the lease. A ROU asset and a lease liability are recognized at commencement of the lease based on the present value of the lease payments over the life of the lease. Initial direct costs are included as part of the ROU asset upon commencement of the lease. Since the interest rate implicit in a lease is generally not readily determinable for the operating leases, the Company uses an incremental borrowing rate to determine the present value of the lease payments. The incremental borrowing rate represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar lease term to obtain an asset of similar value.
The Company reviews the impairment of ROU assets consistent with the approach applied to the Company’s other long-lived assets, assessing recoverability when events or changes in circumstances indicate the carrying value may not be recoverable. The Company elected the practical expedient to exclude short-term leases (leases with original terms of 12 months or less) from ROU asset and lease liability accounts. The Company has elected not to apply the other transition practical expedients available under ASC 842.
The Company’s leases are classified as operating leases. Lease expense for operating leases is recognized on a straight-line basis over the lease term.
| F-11 |
Supplemental balance sheet information related to leases were as follows:
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES
| June 30, 2025 | March 31, 2025 | |||||||
| As of | ||||||||
| June 30, 2025 | March 31, 2025 | |||||||
| Assets | ||||||||
| Right of use asset, net | $ | $ | ||||||
| Operating lease liabilities | ||||||||
| Current | ||||||||
| Non-current | ||||||||
| Total Lease Liabilities | $ | $ | ||||||
The components of lease cost were as follows:
SCHEDULE OF LEASE COST
| 2025 | 2024 | |||||||
| For the three months ending June 30, | ||||||||
| 2025 | 2024 | |||||||
| Operating lease cost | $ | $ | ||||||
| Variable lease cost | ||||||||
| Sublease income | ||||||||
| Total lease cost | $ | $ | ||||||
Lease term and discount rate were as follows:
SCHEDULE LEASE TERM AND DISCOUNT RATE
| As of | ||||||||
| June 30, 2025 | March, 2025 | |||||||
| Weighted average remaining lease term - Operating leases | ||||||||
| Weighted average discount rate - Operating leases | % | % | ||||||
The following table presents the future minimum lease payments under non-cancelable operating leases as of March 31, 2025:
SCHEDULE OF MATURITY UNDISCOUNTED MINIMUM LEASE PAYMENTS
| As of June 30, 2025 | Operating Leases | |||
| 2026 | $ | |||
| 2027 | ||||
| Total | ||||
| Less: imputed interest | ( | ) | ||
| Present value of lease payment | $ | |||
| F-12 |
NOTE 6 - INTANGIBLE ASSETS
Intangible assets consisted of the following:
SCHEDULE OF INTANGIBLE ASSETS
| June 30, 2025 | March 31, 2025 | |||||||
| As of | ||||||||
| June 30, 2025 | March 31, 2025 | |||||||
| Telemedicine Platform | $ | $ | ||||||
| Web Domain | ||||||||
| Software | ||||||||
| Patents | ||||||||
| Gross Balance | ||||||||
| Accumulated Amortization | ( | ) | ( | ) | ||||
| Net Balance | $ | $ | ||||||
For
the three months ended June 30, 2025, and 2024, amortization expense was $
NOTE 7- GOODWILL
Goodwill
was recorded in connection with the acquisition of RxCompoundStore.com, LLC , Peaks Curative, LLC , Magnefuse LLC, Las Villas Health
and Doconsultations LLC. On November 08, 2022, the Company acquired
NOTE 8- ACCRUED EXPENSES AND OTHER PAYABLES
Accrued expenses and other payables consisted of the following:
SCHEDULE OF ACCRUED EXPENSES AND OTHER PAYABLES
| June 30, 2025 | March 31, 2025 | |||||||
| As of | ||||||||
| June 30, 2025 | March 31, 2025 | |||||||
| Officer compensation | ||||||||
| Merchant fees | ||||||||
| Payroll accrual | ||||||||
| Credit card payable | ||||||||
| Insurance Payable | ||||||||
| Income-tax payable | ||||||||
| Total Accrued Expenses | $ | $ | ||||||
| F-13 |
NOTE 9 – DEBT
Equipment loan:
Equipment
loan consists of an equipment loan bearing interest at
Short-term business loan
Short
term business loan represents a margin loan from Charles Schwab bearing interest of
NOTE 10 – ACQUISITION AND RELATED TRANSACTIONS
Las
Villas Health, LLC and Doconsultations, LLC were acquired for total cash consideration of $
On
April 1, 2025, the Company also completed the acquisition of
The following table summarizes the aggregate fair values of the assets acquired and liabilities assumued for acquisitions completed during the quarter ended June 30, 2025. No individual acquisition was material on a standalone basis.
SCEDULE OF ASSETS AND LIABILITIES ACQUIRED CONSIDERATION BETWEEN THE TWO ENTITIES
| Cash | $ | |||
| Inventory | ||||
| Property and equipment | ||||
| Intangibles assets | ||||
| Total assets acquired | ||||
| Accounts payable | ( | ) | ||
| Net Assets | $ | |||
| Non Controlling Interest | ( | ) | ||
| Goodwill | $ | |||
| Purchase price | $ |
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Commitments and contingencies
The Company accounts for contingencies in accordance with ASC 450, Contingencies. A liability is recorded when it is probable that a loss has been incurred and the amount can be reasonably estimated. If a loss is reasonably possible but not probable, or if the amount cannot be estimated, the nature of the contingency and an estimate of the possible loss, if determinable, is disclosed. Remote contingencies are generally not disclosed unless related to guarantees.
| F-14 |
Legal Matters:
From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. As of June 30, 2025 and March 31, 2025, there were no pending or threatened legal actions that, in management’s opinion, are expected to have a material adverse effect on the Company’s financial position, results of operations, or cash flows.
Employment and Consulting Agreements:
NOTE 12 – EQUITY
Common stock:
The Company has authorized shares of $ par value common stock. As of June 30, 2025, and March 31, 2025, the Company had and shares, respectively, of common stock issued and and outstanding.
During
the three months ended June 30, 2025, the Company did
During
the three months ended June 30, 2025, the Company repurchased shares of its common stock for $
NOTE 13 – RELATED PARTY TRANSACTIONS
The Company follows the guidance of ASC 850, Related Party Disclosures, in identifying and disclosing transactions with related parties.
Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party in making financial and operating decisions. Transactions with related parties have been disclosed in debt, acquisition, and officer’s compensation notes.
The Company pays compensation for Giorgio R. Saumat and Mario Tabraue to their respective solely owned LLCs, Point96 Consulting, LLC and Tabraue Consulting, LLC. These entities are considered related parties under ASC 850 due to their ownership and control relationships with the individuals providing services to the Company.
| F-15 |
NOTE 14 – INCOME TAXES
The
income tax provisions for the three months ended June 30, 2025, and 2024 was $ and $
Although the Company reported pre-tax book income for the three months ended June 30, 2025, income tax provision was recorded as some book income, such as unrealized investment gains, is not currently taxable, and due to temporary differences such as tax depreciation exceeding book depreciation, resulting in no current taxable income.
The
Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the
statement of operations. As of April 1, 2025, the Company had
With few exceptions, the U.S. and state income tax returns filed for the tax years ending on March 31, 2022, and thereafter are subject to examination by the relevant taxing authorities.
NOTE 15 – SEGMENT REPORTING
The Company operates as a single reportable segment. As the Chief Operating Decision Maker (“CODM”), the Chief Executive Officer (“CEO”), evaluates the business on a consolidated basis and does not receive discrete financial information for multiple business units.
Measure of Segment Profit or Loss
The CODM assesses the Company’s financial performance based on operating income, which aligns with the amount reported in the statement of operations.
SCHEDULE OF FINANCIAL PERFORMANCE BASED ON OPERATING INCOME
| 2025 | 2024 | |||||||
| For the Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross Profit | ||||||||
| Expenses: | ||||||||
| Salaries expenses | ||||||||
| General and administrative expense | ||||||||
| Marketing | ||||||||
| Bank charges | ||||||||
| Insurance expense | ||||||||
| Legal and professional fees | ||||||||
| Depreciation and amortization | ||||||||
| Utilities | ||||||||
| Rent | ||||||||
| Total Expenses | ||||||||
| Other Income/Expenses | ||||||||
| Net realized gain on sale of investments | ||||||||
| Dividend income | ||||||||
| Interest earned | ||||||||
| Unrealized loss of fair value changes of investments | ||||||||
| Interest expense | ( | ) | ( | |||||
| Net Income before taxes | ||||||||
| Income Taxes | ||||||||
| Net Income | $ | $ | ||||||
| Net Loss Attributed to Non- Controlling Interest | ||||||||
| Net Income Attributed to Stockholders | $ | $ | ||||||
NOTE 16 – SUBSEQUENT EVENTS
On July 2, 2025, subsequent to the end of the reporting period, Congress enacted the Taxpayer Fairness and Growth Act of 2025, which includes significant amendments to the Internal Revenue Code. Key provisions include:
| ● | ||
| ● | Limitations on the deductibility of certain interest and R&D expenses; | |
| ● | Modifications to the the foreign-derived intangible income (“FDII “) and global intangible low-taxed income (“GILTI”) regimes. |
The Company is currently evaluating the impact of the legislation on its consolidated financial statements, including deferred tax assets and liabilities. Because the enactment occurred after the end of the reporting period and before issuance of these financial statements, the effects have not been recognized in the accompanying condensed consolidated financial statements as of and for the period ended June 30, 2025, consistent with ASC 740 and ASC 855.
The Company expects the corporate rate reduction to have a favorable impact on its effective tax rate beginning in fiscal 2026. However, remeasurement of deferred tax balances and the application of new limitations may result in non-cash tax charges in future periods. The Company will continue evaluating the impact and recognize any required adjustments in the period of enactment.
| F-16 |
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
The following section, Management’s Discussion and Analysis, should be read in conjunction with Earth Science Tech, Inc.’s financial statements and the related notes thereto and contains forward-looking statements that involve risks and uncertainties, such as statements of the Company’s plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Report on Form 10-Q. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of many factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Report filed on Form 10-Q.
The following discussion should be read in conjunction with the company’s unaudited consolidated financial statements and related notes and other financial data included elsewhere in this report. See also the notes to the Company’s consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in the Company’s Registration Statement filed on Form 10-12g and the Company’s Annual Report filed on Form 10-K for the fiscal year ended March 31, 2025, as well as the Company’s Quarterly report filed on Form 10-Q for the fiscal quarter ended June 30, 2025.
OVERVIEW
The Company operates as a strategic holding company, focused on value creation through the acquisition, operational optimization, and management of its operating businesses. The company executes this strategy via its wholly-owned subsidiaries: RxCompoundStore.com, LLC (RxCompound”), MisterMeds, LLC (“MisterMeds”), Peaks Curative, LLC (“Peaks”), Avenvi, LLC (“Avenvi”), Las Villas Health Care, Inc. (“Villas”), DOConsultations, LLC (“DOC”), an 80% interest in MagneChef (“Magne”), and Earth Science Foundation, Inc. (“EST”).
RxCompound, based in Miami, Florida, is a fully licensed compounding pharmacy authorized to fulfill prescriptions in the following states and territories: Arizona, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Maine, Maryland, Minnesota, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, Utah, Wisconsin and Puerto Rico. RxCompound is actively pursuing licensure in the remaining U.S. states.
Peaks is a telemedicine referral platform offering asynchronous consultations for Peaks-branded compounded medications prepared at RxCompound and Mister Meds. The platform operates in states where either pharmacy is licensed. Through the development of its own healthcare provider network, MyOnlineConsultation.com, and ongoing licensure expansion for both pharmacies, Peaks aims to offer services nationwide. In addition, the company has recently expanded into the veterinary market through the acquisition of Zoolzy.com.
Avenvi is a diversified real estate company engaged in development, asset management, and financing. With a growing portfolio of real estate holdings, Avenvi provides turnkey solutions from development to end-user financing. It also manages investment activities for ETST and oversees the Company’s ongoing $5 million share repurchase program.
Mister Meds, acquired on October 1, 2024, is in Abilene, Texas. The pharmacy received full compounding licensure in March 2025. It operates out of a 5,000 sq. ft. facility owned by Avenvi and includes advanced sterile compounding capabilities with both positive and negative pressure environments, as well as hazardous drug handling. Mister Meds is currently applying for licensure in states not yet serviced by RxCompound.
ESF, a 501(c)(3) nonprofit organization incorporated on February 11, 2019, is the charitable arm of ETST. ESF accepts grants and donations to assist individuals who need financial support for prescription costs at both RxCompound and Mister Meds.
Villas is a brick-and-mortar healthcare facility dedicated to the Spanish speaking community. Our expert-led services include advanced sexual health treatments, and customized solutions to enhance physical performance. We combine compassionate, personalized care with clear, trustworthy education—empowering you to take control of your health with confidence.
| 3 |
DOC was born with a passion to modernize the availability and delivery of home therapies. DOConsultations providers tailor a medication plan around your health and wellness goals and follow up with our patients to ensure results, while our partner pharmacies conveniently ship directly to your door.
Magne is a direct-to-consumer retail brand. Utilizing its patents and intellectual properties, the company aims to develop new products that can be marketed and sold online. Currently, the company has developed products for cooking. Magne is in the process of expanding its product line for new offerings that incorporate its intellectual property.
EST is a 501(c)(3) non-profit organization and a favored entity of ETST. Incorporated on February 11, 2019, the Foundation is established to receive grants and donations to support individuals in need of financial assistance for prescription costs at both RxCompoundStore.com and Mister Meds.
Results of Operations
The following tables set forth summarized cost of revenue information for the three months ended June 30, 2025, and 2024:
| For the Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | 8,760,190 | $ | 8,568,918 | ||||
| Cost of Goods Sold | 2,669,415 | 2,158,484 | ||||||
| Gross Profit | $ | 6,090,775 | $ | 6,410,434 | ||||
We had product sales of $8,760,190 and a gross profit of $6,090,775 representing a gross margin of 69% in the three months ended June 30, 2025, compared with product sales of $8,568,918 and a gross profit of $6,410,434 representing a gross margin of 74% during the three months ended June 30, 2024.
Operating Expenses
For the three months ended June 30, | ||||||||||||||||
| 2025 | 2024 | change | % change | |||||||||||||
| Salaries Expense | $ | 3,801,116 | $ | 3,335,130 | $ | 465,986 | 14 | % | ||||||||
| General and Administrative Expenses | 979,171 | 60,596 | 919,575 | 1,518 | % | |||||||||||
| Marketing | 633,926 | 211,446 | 422,480 | 200 | % | |||||||||||
| Bank charges | 255,342 | 288,845 | (33,503 | ) | -12 | % | ||||||||||
| Insurance expense | 73,119 | 35,805 | 37,314 | 51 | % | |||||||||||
| Legal and professional fees | 44,293 | 1,336,560 | (1,292,267 | ) | -2,918 | % | ||||||||||
| Depreciation and amortization | 34,563 | 30,232 | 4,331 | 12 | % | |||||||||||
| Utilities | 26,614 | 4,528 | 22,086 | 488 | % | |||||||||||
| Rent Expense | - | 42,274 | (42,274 | ) | -100 | |||||||||||
| Total Expenses | 5,849,144 | 5,345,416 | 503,728 | 9 | % | |||||||||||
| Other Income/Expenses | ||||||||||||||||
| Dividend Income | 2,453 | - | 2,453 | 100 | % | |||||||||||
| Interest earned | - | 13,200 | (13,197 | ) | -99 | % | ||||||||||
| Net realized gain on sale of investments | 81,586 | - | 81,586 | 100 | % | |||||||||||
| Unrealized loss of fair value changes in investments | 135,316 | - | 135,316 | 100 | % | |||||||||||
| Interest Expense | (4,272 | ) | (1,964 | ) | (2,308 | ) | 118 | % | ||||||||
| Net Income before taxes | 456,714 | 1,076,254 | (619,540 | ) | -58 | % | ||||||||||
| Income Taxes | - | 13,003 | (13,003 | ) | -100 | % | ||||||||||
| Net Income | $ | 456,714 | $ | 1,063,251 | (631,367 | ) | -59 | % | ||||||||
| Net Loss from NCI | 8,325 | - | 8,325 | 100 | % | |||||||||||
| Net Income Attributed to Stockholders | $ | 465,039 | $ | - | 465,039 | 100 | % | |||||||||
| 4 |
For the three months ended June 30, 2025, salaries expense increased to $3,801,116, this is in preparation for the new businesses the Company is expanding.
General and administrative expenses increased from $60,596 for the three months ended June 30, 2024, to $ 979,171 for the three months ended June 30, 2025. This increase is mainly attributable to the area managers expense reclassification from Professional fees to general and administrative expenses.
Marketing expenses totaled $633,926 for the three months ended June 30, 2025, and $211,446 for three months ended on June 30, 2024, this increase had been contemplated by management as part of the strategic plan to increase sales.
Bank charges for the three months ended June 30, 2025, totaled $255,342, this is directly related to credit card processing fees.
Legal and professional fees totaled $73,119 for the three months ended June 30, 2025, and $1,336,560 for the three months ended June 30, 2024. This decrease is mainly attributable to the area managers expense reclassification from Professional fees to general and administrative expenses.
We are a smaller reporting company, as defined by 17 CFR § 229.10(f)(1). We do not consider the impact of inflation and changing prices as having a material effect on our net sales and revenues and on income from our operations for the previous two years or from continuing operations going forward.
Interest Expense
Interest expense for the three months ended June 30, 2025, was $4,272 vs $1,964 in the three months ended June 30, 2024. This 118% increase is attributable to the company signing new leases.
We use Adjusted EBITDA internally to evaluate our performance and make financial and operational decisions that are presented in a manner that adjusts from their equivalent GAAP measures or that supplements the information provided by our GAAP measures. Adjusted EBITDA is defined by us as EBITDA (net income (loss) plus depreciation expense, amortization expense, interest and income tax expense, minus income tax benefit), further adjusted to exclude certain non-cash expenses and other adjustments as set forth below. We use Adjusted EBITDA because we believe it more clearly highlights trends in our business that may not otherwise be apparent when relying solely on GAAP financial measures, since Adjusted EBITDA eliminates from our results specific financial items that have less bearing on our core operating performance.
We use Adjusted EBITDA in communicating certain aspects of our results and performance, including in this Quarterly Report, and believe that Adjusted EBITDA, when viewed in conjunction with our GAAP results and the accompanying reconciliation, can provide investors with greater transparency and a greater understanding of factors affecting our financial condition and results of operations than GAAP measures alone. In addition, we believe the presentation of Adjusted EBITDA is useful to investors in making period-to-period comparison of results because the adjustments to GAAP are not reflective of our core business performance.
Adjusted EBITDA is not presented in accordance with, or as an alternative to, GAAP financial measures and may be different from non-GAAP measures used by other companies. We encourage investors to review the GAAP financial measures included in this Annual Report, including our consolidated financial statements, to aid in their analysis and understanding of our performance and in making comparisons.
| 5 |
Assets, Liabilities and Stockholders’ Equity
| As
of June 30, 2025 | As
of March 31, 2025 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 877,585 | $ | 1,473,228 | ||||
| Accounts Receivable | 341,644 | 129,064 | ||||||
| Equity Investments at fair value | 887,071 | 645,438 | ||||||
| Inventory | 811,859 | 503,938 | ||||||
| Deposits | 52,229 | 338,108 | ||||||
| Prepaid | 111,009 | 20,730 | ||||||
| Total current assets | 3,081,397 | 3,110,505 | ||||||
| Non-Current Assets: | ||||||||
| Property and equipment, net | 1,638,337 | 1,384,110 | ||||||
| Right of use asset, net | 226,092 | 172,429 | ||||||
| Goodwill | 2,648,789 | 2,302,792 | ||||||
| Intangible assets, net | 184,838 | 2,302,792 | ||||||
| Total Assets | $ | 7,779,453 | $ | 7,066,721 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Accounts payable | $ | 960,062 | $ | 492,352 | ||||
| Accrued expenses and other payable | 2,246,522 | 2,322,022 | ||||||
| Current portion of operating lease obligations | 159,644 | 121,851 | ||||||
| Current portion of loans and obligations | - | 30,592 | ||||||
| Short-term business loan | - | 179,488 | ||||||
| Total Current Liabilities | 3,396,820 | 3,146,305 | ||||||
| Long-Term Liabilities: | ||||||||
| Lease liability less current maturities | 70,571 | 37,878 | ||||||
| Equipment loans and obligations non-current | 24,786 | 31,427 | ||||||
| Total Liabilities | 3,492,177 | 3,215,610 | ||||||
| Commitment and Contingencies (Note 11) | ||||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock, par value $0.001 per share, 1,000,000 shares authorized; 1,000,000 and 0 shares issued and outstanding as of June 30, 2025, and March 31, 2025, respectively | 1,000 | 1,000 | ||||||
| Common stock, par value $0.001 per share, 350,000,000 shares authorized; 294,297,607 issued and outstanding, and 295,347,903 issued and outstanding as of June 30, 2025, and March 31, 2025, respectively | 294,297 | 295,348 | ||||||
| Additional paid-in capital | 31,294,135 | 31,480,143 | ||||||
| Accumulated deficit | (27,273,936 | ) | (27,738,975 | ) | ||||
| Treasury Stock | (80,020 | ) | (186,404 | ) | ||||
| Non controlling interest | 51,800 | - | ||||||
| Total stockholders’ Equity | 4,287,276 | 3,851,111 | ||||||
| Total Liabilities and Equity | $ | 7,779,453 | $ | 7,066,721 | ||||
| 6 |
The Company had $877,585 cash as of June 30, 2025, compared to $1,473,228 as of March 31, 2025.
Accounts receivable as of June 30, 2025, were $341,644, and 100% is expected to be collected within term.
The Company has made a $52,229 lease security deposit, which is fully refundable at the end of the lease period.
The Company has prepaid its liability insurance for the year totaling $111,009.
The Company’s subsidiaries have made additional capital expenditures as of June 30, 2025, and have a total net balance of $1,638,337 as of June 30, 2025, in property and equipment, versus $1,384,110 as of March 31, 2025.
As of June 30, 2025, the Company had $811,859 in inventory vs $503,938 as of March 31, 2025.
The Company had a balance of $960,062 in Accounts Payable as of June 30, 2025, compared to $492,352 as of March 31, 2025.
Accrued expenses totaled $2,246,522 as of June 30, 2025, and $2,322,022 as of March 31, 2025.
The Stockholders’ Equity as of June 30, 2025, was $4,287,276, compared to $3,851,111 of Stockholders Equity as of March 31, 2025.
Statement of cash flows
For the three months ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Net cash provided by operating activities | $ | 339,376 | $ | 951,185 | ||||
| Net cash used in investing activities | (668,216 | ) | (99,725 | ) | ||||
| Net cash used in financing activities | (266,803 | ) | (164,774 | ) | ||||
| Net increase(decrease) in cash and cash equivalents | (595,643 | ) | 686,686 | |||||
| Cash and cash equivalents at beginning of the period | 1,473,228 | 697,721 | ||||||
| Cash and cash equivalents at end of the period | $ | 877,585 | $ | 1,384,407 | ||||
Cash Flow from Operating Activities
Net cash provided by operating activities for the three months ended June 30, 2025, was $339,376, compared to $951,185 provided by operating activities for the prior year period.
Cash Flow from Investing Activities
Net cash used in investing activities during the three months ended June 30, 2025, was $(668,216).
Cash Flows from Financing Activities
Net cash used in financing activities during the three months ended June 30, 2025, was $(266,803).
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
| 7 |
We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired control objectives. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
The Company’s management, including the Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of the Company’s design and operations of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that review and evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this Quarterly Report, the Company’s disclosure controls and procedures were effective as of June 30, 2025.
Management’s Report on Internal Control Over Financial Reporting
Our disclosure controls and procedures contain components of our internal controls over financial reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and financial officer and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company.
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of the Evaluation Date. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) Internal Control-Integrated Framework (2013). The COSO framework is based upon five integrated components of control: control environment, risk assessment, control activities, information and communications and ongoing monitoring.
Based on an evaluation under the supervision of and with the participation of, the Company’s management, including the Chief Executive Officer and Chief Financial Officer, Company management has concluded that the Company’s internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act was reasonably effective as of the Evaluation Date, and will continue to improve, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control and Financial Reporting
During the quarter ended June 30, 2025, the company has continued to make process improvement changes in the internal control over financial reporting which are reasonably likely to significantly improve the internal control over financial reporting. The impact of these changes made is still under evaluation as of the quarter ended June 30, 2025.
| 8 |
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief. The amount of the ultimate liability, if any, from such claims cannot be determined. As of the date hereof, there are no legal claims currently pending or, to our knowledge, threatened against us or any of our officers or directors in their capacity as such or against any of our properties that, in the opinion of our management, would be likely to have a material adverse effect on our financial position, results of operations or cash flows.
ITEM 1A. RISK FACTORS
The Company is a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and is not required to provide the information under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the three months ended June 30, 2025, the Company issued 0 shares of its common stock for $0, in transactions that were exempt from registration under the Securities Act of 1933, as amended pursuant to Section 4(2) and/or Rule 506 promulgate under Regulation D. No gain or loss was recognized on the issuances.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. MINE SAFETY DISCLOSURES
None
ITEM 5. OTHER INFORMATION
ISSUER REPURCHASES OF EQUITY SECURITIES
During the three months ended June 30, 2025, the Company repurchased 1,050,296 shares of its common stock for $187,057 in private a transaction through Stock Purchase Agreement with certain shareholder. On April 15, 2025, the Company repurchased 1,050,296 shares from an investor at $0.1781 per share in cash.
ITEM 6. EXHIBITS
| 9 |
SIGNATURES
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 hereunto duly authorized.
| EARTH SCIENCE TECH, INC. | ||
| Dated: August 8, 2025 | By: | /s/ Giorgio R. Saumat |
| Giorgio R. Saumat | ||
| Its: | CEO and Chairman of the Board | |
| Dated: August 8, 2025 | By: | /s/ Ernesto Flores |
| Ernesto Flores, | ||
| Its: | CFO and Board of Director | |
| 10 |
Exhibit 31.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14
I, Giorgio R. Saumat, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Earth Science Tech, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under the Company’s supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report the Company’s conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on the Company’s most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| EARTH SCIENCE TECH, INC. | ||
| Dated: August 8, 2025 | By: | /s/ Giorgio R. Saumat |
| Giorgio R. Saumat | ||
| Its: | CEO and Chairman of the Board | |
Exhibit 31.2
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14
I, Ernesto Flores, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Earth Science Tech, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under the Company’s supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report the company’s conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on the Company’s most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| EARTH SCIENCE TECH, INC. | ||
| Dated: August 8, 2025 | By: | /s/ Ernesto Flores |
| Ernesto Flores, | ||
| Its: | CFO and Board of Director | |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Earth Science Tech, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ending June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Giorgio R. Saumat, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| EARTH SCIENCE TECH, INC. | ||
| Dated: August 8, 2025 | By: | /s/ Giorgio R. Saumat |
| Giorgio R. Saumat | ||
| Its: | CEO and Chairman of the Board | |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Earth Science Tech, Inc. (the “Company”) on Form 10-Q for the fiscal quarter ending June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ernesto Flores, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| EARTH SCIENCE TECH, INC. | ||
| Dated: August 8, 2025 | By: | Ernesto Flores |
| Ernesto Flores | ||
| Its: | CFO and Board of Director | |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.