{"url_path":"/sec/essi/10-q/2026/item-1","section_key":"item-1","section_title":"Item 1 LEGAL PROCEEDINGS**","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-06-23","source_url":"https://www.sec.gov/Archives/edgar/data/1490873/0001477932-26-003954-index.html","accession_number":"0001477932-26-003954","cik":"0001490873","ticker":"ESSI","issuer_name":"ECO SCIENCE SOLUTIONS, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1490873/0001477932-26-003954-index.html","primary_entity_key":"0001490873","primary_entity_name":"ECO SCIENCE SOLUTIONS, INC."},"word_count":1063,"has_tables":true,"body_markdown":"**ITEM 1. LEGAL PROCEEDINGS**\n\n \n\nOn October 20, 2017, a purported shareholder of the Company, Mr. Ian Bell, filed a verified stockholder derivative complaint against the Individual Defendants in the United States District Court for the District of Hawaii (the “First Hawaii Complaint”). On January 11, 2018, a purported shareholder of the Company, Mr. Marc D'Annunzio, filed a verified stockholder derivative complaint against the Individual Defendants in the United States District Court for the District of Hawaii (the “Second Hawaii Complaint”). On February 9, 2018, the Hawaii federal court consolidated the First Hawaii Complaint and the Second Hawaii Complaint (the “Consolidated Hawaii Action”). On December 10, 2018, plaintiffs in the Consolidated Hawaii Action filed their amended complaint (the “Amended Hawaii Complaint”). The Company is identified as a nominal defendant, against which no claims are plead. The Amended Hawaii Complaint arises out of alleged materially false and misleading statements or omissions from SEC filings and/or public statements by or on behalf of the Company. The Amended Hawaii Complaint asserts claims on behalf of the Company for breach of fiduciary duty, aiding and abetting breaches of fiduciary duties, waste of corporate assets, and unjust enrichment against the Individual Defendants, and seeks damages, restitution and disgorgement, and an order directing the Company and all individual defendants to take all necessary actions to reform and improve the Company's corporate governance.\n\n \n\nOn September 21, 2020, the United States District Court for the District of Hawaii issued an order in the action captioned In re Eco Science Solutions, Inc. Shareholder Derivative Litigation, Lead Civil No. 1:17-cv-00530-LEW-WRP (D. Haw.), preliminarily approving a proposed settlement (the “Settlement”) as set forth in a Stipulation of Settlement dated September 21, 2020 (the “Stipulation”), by and among (i) plaintiffs Mr. Ian Bell and Mr. Marc D'Annunzio, individually and derivatively on behalf of Eco Science Solutions, Inc.; (ii) certain of the Company's current and former officers, directors and consultants; and (iii) the Company. Pursuant to the Court's Preliminary Approval Order, a hearing was held on November 17, 2020, and the Court approved the terms of the Settlement in an Order issued December 3, 2020, including the following:\n\n \n\n(1) The resignation of Jeffery Taylor as Chairman of the Board, and Don Taylor as Chief Financial Officer and a member of the Board of Directors;\n\n \n\n(2) Appointment of Carl Mudd, or such individual with similar background and qualifications, to serve as Ombudsman and as Chairman of the Board;\n\n \n\n(3) The return by certain shareholders of a cumulative total of 3,500,000 shares of the Company's common stock to treasury for cancellation: (a) Gannon Giguiere – 1,500,000 shares; (b) Jeffery Taylor – 750,000 shares; (c) Don Taylor – 750,000 shares; (d) L John Lewis – 250,000 shares; and (e) S Randall Oveson – 250,000 shares;\n\n \n\n \n\n9\n\n*Table of Contents*\n\n \n\n(4) The issuance by the Company of 1,400,000 restricted common shares to the law firm of Robbins LLP as consideration for attorney fees;\n\n \n\n(5) The entry by the Company into a Promissory Note with the law firm of Robbins LLP in the amount of Three Hundred Fifty Thousand Dollars ($350,000) with respect to legal fees incurred, bearing interest at a rate of six percent (6%) per annum calculated monthly, with all interest and principal due and payable no later than three (3) years from the date of final Settlement approval; and\n\n \n\n(6) The immediate forgiveness and cancellation of debt in the amount of One Million Five Hundred Thousand Dollars ($1,500,000) held by Phenix Ventures LLC, a company controlled by Gannon Giguiere.\n\n \n\nAdditionally, the Settlement called for 15% of the Company's revenue and/or any financing raised by the Company to be dedicated toward achieving the objectives, implementation and maintenance of the Governance Reforms.\n\n \n\nAll of the above-listed items in the Order issued by the Court have been implemented except setting aside 15% of the Company's revenue and/or financing, as the Company has not yet generated any revenue of substance, nor has it secured any financing to date. Mr. Rountree continues to fund the Company with his personal funds, and once the Company begins generating revenue or secures financing, 15% will be put aside. In addition to the foregoing, the following Governance Reforms were set forth:\n\n \n\n1. The purchase of Directors' and Officers' Insurance;\n\n2. Appointment of two new, independent Directors;\n\n3. Creation of a board-level Governance Committee;\n\n4. Adoption of Written Corporate Governance Guidelines and Code of Ethics;\n\n5. Creation of an Audit Committee;\n\n6. Enhanced Board Independence;\n\n7. Termination of existing compensation plans;\n\n8. Immediate cessation of current and future business dealings with third party stock promoters;\n\n9. Maintenance of the Company's website;\n\n10. Creation of an Investor Relations Officer;\n\n11. Engagement of In-House and General Counsel;\n\n12. Appointment of a Chief Accounting Officer;\n\n13. Creation of a written Whistleblower Policy;\n\n14. Adoption of a Clawback Policy;\n\n15. Adoption of enhanced conflicts policies and practices;\n\n16. Establishment of documentation of Policies and a Financial Reporting Checklist;\n\n17. Annual assessment of the adequacy of the Company's internal controls;\n\n18. Provision of continuing director education and employee compliance training; and\n\n19. Establishment of board oversight of the Company's expenditures.\n\n \n\nEach of the reforms is subject to the judgment of the Ombudsman, Mr. A Carl Mudd, and/or the reconstituted Board, and based on the availability of funding. The agreement calls for the above to be completed within four years; however, the implementation of each remains at the discretion, and subject to the judgment, of Mr. Mudd. To date, certain of the reforms remain to be implemented, as the Company has not generated revenue of substance and currently has one employee. Of the foregoing reforms, one new independent Director has been appointed, an Audit Committee has been appointed consisting solely of Mr. Mudd, the existing compensation plans have been terminated, all dealings with third party stock promoters have ceased, the Company's website is being maintained, and counsel has been engaged. The remaining reforms will be implemented and adopted as funding becomes available and the Company begins generating revenue.\n\n \n\nOther than as set out above, the Company knows of no material existing or pending legal proceedings against it, nor is the Company involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of its directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to the Company's interest."}