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INVESTMENTS – RELATED PARTIES | 6 Months Ended
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Jun. 30, 2024
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] |
INVESTMENTS – RELATED PARTIES | 13. INVESTMENTS – RELATED PARTIES Investments in Alzamend and Ault & Company, Inc. (“Ault & Company”) at June 30, 2024 and December 31, 2023, were comprised of the following: Investment in Promissory Notes, Related Parties – Ault & Company
Schedule of investment |  |  |  |  |  |  |  |  |  |  |  |
|  | Interest |  | Due |  | June 30, |  |  | December 31, |
|  | Rate |  | Date |  | 2024 |  |  | 2023 |
Promissory note, related party |  | 8% |  | Dec. 31, 2024 |  | $ | - |  |  | $ | 2,500,000 |
Accrued interest receivable Ault & Company |  |  |  |  |  |  | - |  |  |  | 568,000 |
Other - Alzamend |  |  |  |  |  |  | - |  |  |  | 900,000 |
Total investment in promissory notes and other, related parties |  |  |  |  |  | $ | - |  |  | $ | 3,968,000 |
Summary of interest income, related party, recorded within interest and other income on the condensed consolidated statement of operations:
Schedule of Interest income, related party |  |  |  |  |  |  |  |  |  |  |  |
|  | For the Three Months Ended |  |  | For the Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Interest income, related party |  | $ | - |  |  | $ | 50,000 |  |  | $ | - |  |  | $ | 100,000 |
During the three months ended March 31, 2024, due to uncertainties surrounding collection, the Company recorded a loan loss reserve of $3.1 million related to the promissory note from Ault & Company, reversed the related accrued receivable and did not record interest income on the note. Investment in Alzamend Series B Convertible Preferred Stock, Warrants and Common Stock, Related Parties – Alzamend
Schedule of investment in common stock |  |  |  |  |  |  |  |  |  |  |  |
|  | Investments in common stock, related parties at June 30, 2024 |
|  | Cost |  |  | Gross unrealized losses |  |  | Fair value |
Common shares |  | $ | 24,697,000 |  |  | $ | (24,393,000 | ) |  | $ | 304,000 |
Alzamend series B convertible preferred stock, warrants |  | $ | 2,100,000 |  |  | $ | - |  |  | $ | 2,100,000 |
|  | Investments in common stock, related parties at December 31, 2023 |
|  | Cost |  |  | Gross unrealized losses |  |  | Fair value |
Common shares |  | $ | 24,688,000 |  |  | $ | (24,009,000 | ) |  | $ | 679,000 |
The following table summarizes the changes in the Company’s investments in Alzamend common stock during the three months ended June 30, 2024 and 2023:
Schedule of investment in warrants and common stock |  |  |  |  |  |  |  |
|  | For the Three Months Ended June 30, |
|  | 2024 |  |  | 2023 |
Balance at April 1 |  | $ | 768,000 |  |  | $ | 4,856,000 |
Investment in common stock of Alzamend |  |  | 3,000 |  |  |  | 10,000 |
Unrealized gain (loss) in common stock of Alzamend |  |  | (467,000 | ) |  |  | 970,000 |
Balance at June 30 |  | $ | 304,000 |  |  | $ | 5,836,000 |
The following table summarizes the changes in the Company’s investments in Alzamend common stock during the six months ended June 30, 2024 and 2023:
|  | For the Six Months Ended June 30, |
|  | 2024 |  |  | 2023 |
Balance at January 1 |  | $ | 679,000 |  |  | $ | 6,449,000 |
Investment in common stock of Alzamend |  |  | 8,000 |  |  |  | 15,000 |
Unrealized gain (loss) in common stock of Alzamend |  |  | (383,000 | ) |  |  | (628,000 | )
Balance at June 30 |  | $ | 304,000 |  |  | $ | 5,836,000 |
Ault Lending, LLC (“Ault Lending”) Investment in Alzamend Series B Convertible Preferred Stock and Warrants
Schedule of investment in warrants and preferred stock |  |  |  |  |  |  |  |
|  | June 30, |  |  | December 31, |
|  | 2024 |  |  | 2023 |
Investment in Alzamend preferred stock |  | $ | 2,100,000 |  |  | $ | - |
Total investment in other investments securities, related party |  | $ | 2,100,000 |  |  | $ | - |
In connection with a securities purchase agreement entered into with Alzamend in January 2024, the Company purchased 2,100 shares of Alzamend Series B Convertible Preferred Stock and warrants to purchase 2.1 million shares of Alzamend common stock with a five-year term and an exercise price of $1.20 per share for a total purchase price of $2.1 million. The Agreement provides that Ault Lending may purchase up to $6 million of Alzamend Series B Convertible Preferred Stock in one or more closings. The Company has elected to account for investment in other investments securities, related party, using a measurement alternative under which they are measured at cost and adjusted for observable price changes and impairments. Messrs. Ault, Horne and Nisser are each paid $50,000 annually by Alzamend.

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- Definition The entire disclosure of information about investment held by insurance company, excluding investment in related party. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name Regulation S-X (SX) -Number 210 -Section 12 -Subsection 15 -Publisher SEC Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 320 -Name Accounting Standards Codification -Section S99 -Paragraph 7 -Subparagraph (SX 210.12-15) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477271/946-320-S99-7 + Details
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