{"url_path":"/sec/essi/10-k/2026/item-13","section_key":"item-13","section_title":"Item 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-09","source_url":"https://www.sec.gov/Archives/edgar/data/1490873/0001477932-26-003725-index.html","accession_number":"0001477932-26-003725","cik":"0001490873","ticker":"ESSI","issuer_name":"ECO SCIENCE SOLUTIONS, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1490873/0001477932-26-003725-index.html","primary_entity_key":"0001490873","primary_entity_name":"ECO SCIENCE SOLUTIONS, INC."},"word_count":1414,"has_tables":true,"body_markdown":"**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**\n\n \n\n**Review and Approval of Related Party Transactions**\n\n \n\nIn general, the Company’s policy is to submit material related party transactions to the Board of Directors for review and approval. The Board reviews related party transactions to determine whether such transactions are on terms that are fair to the Company and comparable to those that could be obtained in arm’s length transactions with unrelated third parties. Related party transactions may involve directors, executive officers, greater than 5% stockholders, or affiliates of such persons.\n\n \n\n**Related Party Transactions during Fiscal 2026**\n\n \n\n*Related Party Transaction Threshold*\n\n \n\nAs a smaller reporting company, the Company is required, pursuant to Item 404(d) of Regulation S-K, to disclose related party transactions in which the amount involved exceeded or will exceed the lesser of $120,000 or one percent (1%) of the average of the Company’s total assets at year-end for the last two completed fiscal years. The Company’s average total assets at year-end for the fiscal years ended January 31, 2026 and January 31, 2025 were approximately $139,048, of which 1% was approximately $1,390. Accordingly, the lower threshold of $1,390 governs related party transaction disclosure for the fiscal year ended January 31, 2026. The transactions described below include all related party transactions known to the Company that exceeded the foregoing threshold.\n\n \n\n \n\n27\n\n*Table of Contents*\n\n \n\n*Rountree Compensation Settlement*\n\n \n\nOn January 31, 2026, the Company settled approximately $1,690,000 of accrued and unpaid base salary owing to Mr. Rountree, the Company’s Chief Executive Officer and Chief Financial Officer, by issuing approximately 2,414,286 shares of restricted common stock (after giving effect to the May 4, 2026 reverse stock split). The shares were issued at an adjusted stated issuance price of $0.70 per share. The settled compensation had been expensed in prior fiscal years under Mr. Rountree’s Executive Employment Agreement.\n\n \n\n*Rountree Advances Settlement*\n\n \n\nOn January 31, 2026, the Company settled approximately $337,480 of unpaid advances by Mr. Rountree on behalf of the Company by issuing approximately 482,114 shares of restricted common stock at the same adjusted stated issuance price of $0.70 per share. The advances had been previously recorded as amounts owing to Mr. Rountree in the Company’s consolidated balance sheets. See Note 7 to the accompanying audited consolidated financial statements.\n\n \n\nRountree Licensing Settlement\n\n \n\nOn January 31, 2026, the Company settled approximately $12,794 of amounts due to Mr. Rountree relating to licensing arrangements by issuing 18,277 shares of restricted common stock (after giving effect to the May 4, 2026 reverse stock split) at the adjusted stated issuance price of $0.70 per share. The licensing arrangements had been previously recorded in the Company's consolidated balance sheets. See Note 8 to the accompanying audited consolidated financial statements.\n\n \n\n*Mudd Advisory Fees Settlement*\n\n \n\nOn January 31, 2026, the Company settled approximately $610,000 of accrued advisory fees owing to Mr. Mudd, the Company’s Chairman of the Board and Ombudsman, by issuing approximately 871,429 shares of restricted common stock (after giving effect to the May 4, 2026 reverse stock split) at an adjusted stated issuance price of $0.70 per share. The settled fees had been accrued under Mr. Mudd’s Board Advisory Agreement at the rate of $10,000 per month and had been expensed in the periods to which they related. Mr. Mudd’s aggregate beneficial ownership reported in Item 12 includes these 871,429 settlement shares and the 100,000 shares of restricted common stock initially issued to Mr. Mudd in connection with his December 23, 2020 appointment.\n\n \n\n*Rountree Consulting, Inc.*\n\n \n\nRountree Consulting, Inc. has from time to time advanced funds to the Company and provided licensing and consulting services. During the fiscal year ended January 31, 2026, Rountree Consulting, Inc. provided advances and licensing arrangements to the Company in the aggregate amount of approximately $4,333,229. Outstanding obligations to Rountree Consulting, Inc. totaling approximately $4,333,229 were settled in connection with the Company’s January 31, 2026 debt settlement transactions through the issuance of approximately 6,190,326 shares of restricted common stock to Mr. Rountree, in satisfaction of obligations owed by the Company to Rountree Consulting, Inc., at the adjusted stated issuance price of $0.70 per share. Rountree Consulting, Inc. is an affiliate of Mr. Rountree. Mr. Rountree’s aggregate beneficial ownership reported in Item 12 (9,390,066 shares) reflects (i) Mr. Rountree’s pre-existing direct holdings of approximately 285,063 shares (after giving effect to the May 4, 2026 reverse stock split, or 7,126,575 shares prior to the reverse stock split), (ii) 2,914,677 shares issued directly to Mr. Rountree in connection with the salary, advances, and licensing settlements described above, and (iii) 6,190,326 shares issued to Mr. Rountree in satisfaction of obligations owed by the Company to Rountree Consulting, Inc.\n\n \n\n*Charity of Christ Ministry Trust — Ga-Du Dissolution Settlement*\n\n \n\nIn connection with the April 2025 dissolution of Ga-Du Corporation, the Company assumed certain liabilities of Ga-Du, including approximately $240,000 of obligations owing to S. Randall Oveson and issued to the Charity of Christ Ministry Trust, for which Mr. S. Randall Oveson, a director of the Company, serves as Trustee. On January 31, 2026, in connection with the Company’s broader debt settlement transactions, the Company issued 342,857 shares of restricted common stock (after giving effect to the May 4, 2026 reverse stock split) to Charity of Christ Ministry Trust at the adjusted stated issuance price of $0.70 per share in satisfaction of these assumed obligations. Mr. Oveson disclaims beneficial ownership of the shares held by Charity of Christ Ministry Trust except to the extent of any pecuniary interest therein. See Note 8 to the accompanying audited consolidated financial statements and Item 12.\n\n \n\n \n\n28\n\n*Table of Contents*\n\n \n\n*Redwood Blind Trust — Settlement of Notes Payable and Convertible Note*\n\n \n\nDuring the fiscal year ended January 31, 2026, the Company settled outstanding indebtedness held by Redwood Blind Trust, of which Ian Subel serves as Trustee and Mr. Gannon Giguiere is the beneficiary, through the issuance of restricted common stock. The settled obligations consisted of (i) notes payable with an aggregate carrying value of approximately $2,225,500 (see Note 6 to the accompanying audited consolidated financial statements); (ii) the principal balance of a convertible note payable of approximately $1,407,781 (see Notes 5 and 7 to the accompanying audited consolidated financial statements); and (iii) approximately $117,862 of accrued interest on the convertible note (see Notes 5 and 7 to the accompanying audited consolidated financial statements). The aggregate obligations of approximately $3,751,143 were settled on January 31, 2026 through the issuance of an aggregate of 5,358,776 shares of restricted common stock (after giving effect to the May 4, 2026 reverse stock split) at the adjusted stated issuance price of $0.70 per share, allocated as approximately 3,179,286 shares against the notes payable, 2,011,115 shares against the convertible note principal, and 168,375 shares against the accrued interest. Neither Mr. Subel nor Mr. Giguiere is a director, officer, or employee of the Company. As a result of these settlement issuances, together with 6,538 shares of common stock (after giving effect to the May 4, 2026 reverse stock split) held directly by Mr. Giguiere prior to the fiscal year ended January 31, 2026, Mr. Giguiere, the Redwood Blind Trust, and Mr. Subel as Trustee thereof became the beneficial owners, in the aggregate, of approximately 21.50% of the Company's outstanding common stock as of January 31, 2026 (see Item 12).\n\n \n\n*Indemnification Agreements*\n\n \n\nThe Company has entered into indemnification agreements with each of Mr. Rountree, Mr. Mudd, and Mr. Oveson, pursuant to which the Company has agreed to indemnify such individuals to the fullest extent permitted by applicable law against expenses, judgments, fines, and amounts paid in settlement actually and reasonably incurred by them in any action or proceeding to which any of them is or is threatened to be made a party by reason of his service as an officer or director of the Company.\n\n \n\n*Office Space*\n\n \n\nThe Company’s principal executive office space is provided by Mr. Rountree at no cost to the Company. See Item 2 — Properties.\n\n \n\n**Additional Detail**\n\n \n\nAdditional information regarding related party transactions is included in Note 7 (Related Party Transactions), Note 6 (Notes Payable and Convertible Notes Payable), and Note 8 (Subsequent and Settlement-Related Transactions) to the accompanying consolidated financial statements included elsewhere in this Annual Report on Form 10-K.\n\n \n\n**Director Independence**\n\n \n\nFor a discussion of director independence, see Item 10 — Directors, Executive Officers and Corporate Governance — Director Independence. The Board of Directors has determined that both A. Carl Mudd and S. Randall Oveson qualify as independent directors under the independence standards set forth in Nasdaq Listing Rule 5605(a)(2)."}