Hestia Insight (HSTA) swaps $500k debt for Hestia Investments stake with 20% earnings right
Rhea-AI Filing Summary
Hestia Insight Inc. entered into a Strategic Divestiture & Settlement Agreement with Chairman and CEO Edward Lee to settle a $500,000 compensation liability for six years of unpaid executive service. Instead of paying cash or issuing equity, Hestia will transfer 100% of its equity interest in its wholly owned subsidiary, Hestia Investments Inc., to Mr. Lee.
Both parties acknowledge the subsidiary’s fair market value at approximately $500,000, and the agreement is intended to streamline Hestia’s balance sheet and reduce its consolidated operational burn in preparation for merger activities. As additional consideration for stockholders, the subsidiary will pay Hestia an amount equal to 20% of its annual net earnings for two years, with distributions made pro rata to stockholders of record as of April 30, 2026.
Positive
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Insights
Hestia trades a $500k debt for its subsidiary while keeping a short-term earnings interest.
Hestia Insight Inc. is settling a legacy executive compensation liability of $500,000 owed to Edward Lee by transferring 100% of Hestia Investments Inc. to him. The parties agree the subsidiary’s fair market value is approximately $500,000, aligning the asset’s value with the recorded debt.
The agreement also reduces Hestia’s consolidated operational burn, as the subsidiary reportedly needs about $10,000 per month in funding, which Mr. Lee will assume along with future liabilities. For stockholders of record as of April 30, 2026, the company retains a 20% participation in the subsidiary’s net earnings for two years, giving them exposure to potential upside while removing the compensation debt from Hestia’s balance sheet.
8-K Event Classification
Key Figures
Key Terms
Strategic Divestiture & Settlement Agreement financial
Net Earnings participation financial
fair market value financial
operational burn rate financial
Liquidity Event financial
interested director regulatory
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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| Item 1.01(a) | Entry into a Material Definitive Agreement |
On April 25th, 2026 the Board of Directors of the Company executed a Strategic Divestiture & Settlement Agreement with the Director Mr. Edward Lee. The Agreement notes that Mr. Lee has never taken a salary in six years of service, which was equated to $500,000. In lieu of cash or equity, the Company agreed to divest itself of its 100% wholly owned subsidiary Hestia Investments Inc. along with any and all assets which inure to it and grant it to Mr. Lee, eradicating any and all debts owed by the Issuer in full Accord and Satisfaction. Mr. Lee, for his part, shall remit to the company 20% of any annual earnings the subsidiary is able to produce for the next two calendar years. For more details, please see the Agreements Attached hereto as Exhibits.
| Item 9.01 | Financial Statements and Exhibits |
| Exhibit Number | Description | |
|
99.1 |
Unanimous Written Consent of the Board | |
| 99.2 | Divestiture & Settlement Agreement | |
| 99.3 | Shareholder’s Resolution | |
| 104 | Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HESTIA INSIGHT INC. | ||
| Date: April 29, 2026 | By: | /s/ Edward Lee |
| Edward Lee | ||
| Chief Executive Officer | ||
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Exhibit 99.1
UNANIMOUS WRITTEN CONSENT OF TIIE DOA RD OF DIRECTORS OF HESTIA INSIGHT INC. D a t e: Aprll15,2026 The undersigned, being .ill the members or the Uo.ird or Directors or Hestia Insight I n c. (the "Company"), hereby take the following actions: WHER6 A S , Edward Lee has provided six (6) years of d e dicated service lo the Company as Its Chairman .ind President without receiving any cash salary, health bcneOts, or standard executive compensation; WHER6AS, the Company recognizes an outstanding compensation lfablllty ofSS00,000 arising from this six - year period; and WHEREAS , the Board has determined that divesting 100% of the Interest In HestJa Investments lnc.(lhe "Subsidiary") 10 Mr. I.cc Is a fair method to settle this llablllty while preserving Company cash and retaining ruture upside for stockholders. RESOLV6D, that the Strategic Divestiture and Settlement Agreement Is herebyapproved. RESOLVED FURTHER, that the Company shall retain a 20% participation In the Net Earnings of the Subsidiary for two (2) years for the bcneOt of stockholders of record as of April 30, 2026. DIRECTfr - Edward Lee, Chairman o4 - /,.., ೦ >b ೦ otj;;J..f - ..).b ೦ b a ,Independent Director
Exhibit 99.2
STRATEGIC DIVESTITURE & SETTLEMENT AGREEMENT EFFECTIVE DATE: April 25, 2026 ,, PARTIES: 1. HESTIA INSIGHT INC ., a Nevada corporation ("Parent" Oi th ೦ . Comp_anr'). 2. EDWARD LEE , an individual and Chairman/President of the Company( Executive). RECITALS WH E REAS , Executive has provided six (6) years of dedicated service to P ೦ ent as Chairman and President (2020 - 2026) without receiving cash salary, health insurance, or standard executive benefits; WHEREAS, Parent recognizes an outstanding compensation liability and accrued debt of $500,000 (the "Debt") owed to Executive for said services; WHEREAS , Parent owns 100% of the membership interest in Hestia Investments In c . (the "Subsidiary"); WHEREAS, Parent and Executive desire to settle the Debt through the transfer of the Subsidiary to Executive, thereby streamlining Parent's balance sheet and reducing its consolidated operational burn rate in preparation for upcoming merger activities . SECTION 1: THE EXCHANGE & VALUATION 1. Transfer oflnterest: Parent hereby assigns, transfers, and conveys 100% of its equity and membership interest in the Subsidiary to Executive. 2. Satisfaction of Debt : In full consideration for the transfer of the Subsidiary, Executive hereby cancels, waives, and releases Parent from the $500,000 Debt 3. Mutual Acknowledgment of Value: Both parties agree that the fair market value of the Subsidiary is approximately $500,000. This valuation is based on an assessment of the Subsidiary's assets and the immediate relief of Parent's obligation to fund the Subsidiary's ongoing operational deficits. SECTION 2: SHAREHOLDER EARNINGS PARTICIPATION 1. Participation Right: As additional consideration for the benefit of Parent's minority stockholders, theSubsidiary shall pay to Parent an amount equal to 20% of its annual Net Earnings. 2. Duration: This participation obligation shall remain in effect for a period of two (2) years following the Closing Date. 3. Record Date: All payments received by Parent under this Section shall be distributed pro - rata to Parent's stockholders of record as of April 30, 2026. SECTION 3: TAX TREATMENT & DEFERRED REALIZATION 1. Tax - Neutral Intent : The parties intend for this transaction to be treated as a "value - for - value" exchange of a debt instrument for property of equal value . ೦ - 2 Non - Recognition oflmmediate Gain : The parties acknowledge that Executive's gain i f any, shall b ೦ realized only upon a future "Liquidity Event" or the sale of the Subsidiary's' assets to a third party, and not upon the initial execution of this transfer .
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3.3 Consistent Reporting: All corporate and personal tax filings and regulatory disclosures shall be prepared in a manner consistent with the $500,000 valuation established herein. SECTION 4: ASSUMPTION OF LIABILITIES 1. Operational Burn: Effective upon the C lo sing Date, Executive assumes all responsibility for the Subsidiary's future operational costs, liabilities, and funding requirements, indemnifying Parent against any such costs occurring after the transfer . SECTION 5: GOVERNANCE & EFFECTIVENESS 1. Majority Approval: This Agreement has been ratified by the holders of 67% of the voting power of Parent pursuant to NRS 78.320. 2. Effective Date: Pursuant to SEC Rule 14c - 2, the final transfer of ೦ terest shall be effective twenty (20) calendar days after the mailing of a Definitive Information Statement to Parent's stockholders. SIGNATURES FOR HESTIA INSIGHT INC. (By Independent Director) Name:Eugene Cha Title: lndependent Director -- 4 - ---- , Cl/ - /,. - , - ; ೦ ,_(, Edward Lee Chairman & President EXECUTIVE
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VALUATION SUMMARY TO: The Board of Directors, Hestia Insight Inc. FROM: Accountant - Hestia Insight Inc. DATE: April 23, 2026 RE: Valuation Analysis of HESTIA INVESTMENT INC in Connection with Debt Settlement 1. Purpose of Analysis Thi s summary has been prepared to assist the Board of Directors in determining the fair market value of 100 % of the membership interests of HESTIA INVESTMENT (the "Subsidiary") in connection with its transfer to Edward Lee to satisfy a $ 500 , 000 legacy compen $ ation liability . 2. Valuation Methodology Due to the Subsidiary's status as a non - publicly traded entity with limited historical revenue, we have utilized a Cost - to - Create and Asset - Based Approach, adjusted for current operational liabilities . 3. Key Valuation Findings • Legacy Service Value : We have reviewed the record of service for Edward Lee and find that six ( 6 ) years of executive service without pay or benefits carries a fair market value exceeding $ 500 , 000 based on standard industry benchmarks for public company executives . • Subsidiary Fair Market Value (FMV) : Based on the book value of assets and the current market potential of [mention core asset, e . g . , the l mpact - O Al engine], the FMV is estimated at approximately $ 500 , 000 . • Operational Burn Adjustment : We have noted that the Subsidiary currently requires approximate l y $ 10 , 000 per month in funding . The relief of this financial burden represents an immediate cash - flow benefit to Hestia Insight Inc . 4. Inclusion of Shareholder Upside (The "Fairness Kicker") Critically, this valuation acknowledges that Hestia Insight Inc . is retaining a 20 % participation in the Net Earnings of the Subsidiary for two ( 2 ) years post - closing . This provision serves as a "Fairness Adjustment," ensuring that if the Subsidiary's value exceeds the $ 500 , 000 estimate through future profitability, the stockholders of record as of April 30 , 2026 , will directly benefit . 5. Conclusion Participation ore going, it is my professional opinion that the exchange of a $500,000 liquid debt for the illiquid equity of the Subsidiary combiped with the retention of 20% profit participation represents a transaction that is fair and equitable to Hestia Insight Inc. and its stockholders. Signed, ೦ ATTAR RAZA ACCOUNTANT
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Exhibit 99.3
Stockholder Action by Written WRITTEN CONSENT OF THE STOCKHOLDERS (NRS 78.320) The undersigned, holding at least 67% of the voting power of Hestia Insight Inc., hereby approve the following: 1. RATIFICATION: Approval of the transfer of Hestia Investments Inc.to Edward Lee to satisfy $500,000 in debt for six years of unpaid service. 2. SHAREHOLDER UPSIDE: Approval of the 20% Net Earnings participation for all stockholders of record as of April 30, 2026 , for a period of two years. 3. CONFLICT WAIVER: The stockholders acknowledge Mr. Lee is an "interested director" and hereby waive any conflict of interest, finding the transaction fair and b eneficial to the Company's restructuring goals. SHAREHOLDER NAME : Ed ,,,?, - . ೦ - - - SIGNATURE: DATE: April ೦ 2026 SHAREHOLDER NAM ೦ Capi ೦ rs Corp SIGNATURE:....., - ೦ = - .. _ ; DATE: April2£ 2026 SHAREHOLDER NA SIGNATURE: ---- :: - 0 - ೦ ೦೦ ..c:::::7 - _ DATE: April ೦ 2 6 SHAREHOLDER NAME: SIGNATURE: DATE : April , 2026
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Stockholder Action by Written WRITTEN CONSENT OF THE STOC IOI OLDE R S (NRS 78.320) T h e undersigned, holding at l east 67% of the voting power of Hestia In s i g ht Inc., hereby approve the following : 1. RA T IF I C A TIO N : / \ pprov a l of the transfer of Ilestla Inv est m ents In c .to F,dwflrd Lee to satisfy $500,000 in debt for six years of unpaid se r v ice . 2. S H A R E H O LD E R UPSIDE: Approval of the 20% Net Earnings participation for all stockholders of record as of April 30, 20 2 6 , for a period of two years. 3. CONFLICT WAIVER: The stockholders acknowledge Mr. Lee is .in " interested director" and hereby waive any conflict of interest, finding the transaction fair a n d beneficial to the Company's restructuring goals. SHAREHOLDER NAME: E d ward Lee SIGNATURE: DATE: April , 2026 SHAREHOLDER NAME: ECL Capital Partners Corp SIGNATURE: _ DATE : April , 2026 SHAREHOLDER NAME: Sherry Lee SIGNATURE: DATE : Apr il _, 2026 SHAREHOLDER NAME: Tao Deng SIGNATURE: Jt1,t, De 01 DATE: April ?:i: 2026
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