Item 1.01 Entry into a Material Agreement.

Purchase Agreement (Related Party Transaction)

On October 05, 2018, Quest Solution, Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with Walefar Investments, Ltd. (“Walefar”), and Campbeltown Consulting, Ltd., (“Campbeltown”), (Walefar and Campbeltown are collectively referred to as the “Sellers”). Pursuant to the Agreement, the Company purchased 100% of the capital stock of HTS Image Processing, Inc., a Delaware company (“HTS”) from the Sellers. As consideration, the Company (i) issued to the Sellers 22,452,954 shares of the Company’s common stock (“Common Stock”), having a value of $5,298,897 based on the average closing price of the common stock for the 20 days’ preceding the Purchase Agreement (the “Per Share Value”), (ii) cash in the amount of $300,000, and (iii) a 12 month convertible promissory note with a principal amount of $700,000 and an interest rate of six percent (6%) per annum (the “Note”). The Note also provides the Sellers the right to convert all or any portion of the then outstanding and unpaid principal amount and interest into fully paid and non-assessable shares of the Company’s common stock at a conversion price of $0.236.

The Purchase Agreement constitutes a “related party transaction” as defined by Item 404 of Regulation S-K (§229.404) because of Company director Shai Lustgarten’s position as Chief Executive Officer of HTS and stock ownership in HTS. Additionally, Campbeltown is a “related party” because Carlos Jaime Nissenson, a beneficial owner of Campbeltown, is a consultant to the Company, a principal stockholder of the Company, and father of Company director Niv Nissenson. Carlos Jaime Nissenson is also a stockholder and director of HTS. Pursuant to the Purchase Agreement, Shai Lustgarten shall receive 11,226,477 shares of the Company’s Common Stock and Carlos Jaime Nissenson shall receive 11,226,477 shares of the Company’s Common Stock.

Because of the related party nature of the Purchase Agreement, the Board formed a special committee consisting of Andrew MacMillan, an “independent director” of the Company as defined by Item 407 of Regulation S-K (§229.407) (the “Special Independent Director”) who had no financial interest in HTS. The Special Independent Director was responsible for negotiating the terms of the Purchase Agreement. The Special Independent Director was also given the power to work with the Company’s counsel on the Purchase Agreement and coordinate with the Company’s financial advisor. The Board received an analysis of what it believed was a fair valuation range for the purchase of HTS (the “Valuation Analysis”). Each of the Board members participated in a presentation of the HTS’ artificial intelligence (“AI”) technology and how that AI technology can complement the Company’s business and opportunities. Based on the Valuation Analysis, the Company’s vision of a combined company and the recommendation of the Special Independent Director, the Company made an offer to the shareholders of HTS (the “Offer”). Additionally, the Board received a fairness opinion with respect to the Offer. Following further deliberation and the recommendation of the Special Independent Director, the Purchase Agreement was unanimously approved by the independent directors of the Company. Shai Lustgarten and Niv Nissenson abstained from the vote because of their aforementioned related party interest in the Purchase Agreement.

The foregoing description of the Purchase Agreement is qualified in their entirety by the full text of such agreements, which are incorporated herein by reference and filed as exhibits hereto.