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INVESTMENTS – RELATED PARTIES | 12 Months Ended
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Dec. 31, 2024
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract] |
INVESTMENTS – RELATED PARTIES | 14. INVESTMENTS – RELATED PARTIES Investments in Alzamend, Ault & Company, Inc. (“Ault & Company”) and GIGA at December 31, 2024 and 2023, were comprised of the following: Investment in Promissory Notes, Related Parties – Ault & Company and GIGA
Schedule of investment |  |  |  |  |  |  |  |  |  |  |  |
|  | Interest |  |  |  | December 31, |  |  | December 31, |
|  | Rate |  | Due Date |  | 2024 |  |  | 2023 |
Promissory note and accrued interest receivable, Ault & Company |  | 8% |  | December 31, 2024 |  | $ | 2,468,000 |  |  | $ | 3,068,000 |
Promissory note and accrued interest receivable, GIGA |  | 6% - 12% |  | In bankruptcy |  |  | 18,499,000 |  |  |  | - |
Other |  |  |  |  |  |  | 335,000 |  |  |  | 900,000 |
Allowance for credit losses |  |  |  |  |  |  | (500,000 | ) |  |  | - |
Total investment in promissory notes and other, related parties |  |  |  |  |  | $ | 20,802,000 |  |  | $ | 3,968,000 |
Amounts above are recorded in “Investment in promissory notes and other, related party” on the consolidated balance sheets. Summary of interest income, related party, recorded within interest and other income on the consolidated statement of operations:
Schedule of Interest income, related party |  |  |  |  |  |
|  | For the Year Ended |
|  | December 31, |
|  | 2024 |  |  | 2023 |
Interest income, related party |  | $ | 1,694,000 |  |  | $ | 1,308,000 |
At each reporting date, the Company applies its judgment to evaluate the collectability of the note receivable and makes a provision based on the assessed amount of expected credit loss. This judgment is based on parameters such as interest rates, market conditions and creditworthiness of the creditor. The Company determined that the collectability of certain notes receivables is doubtful based on information available. Upon the deconsolidation of GIGA, the Company established an allowance for credit losses of $2.6 million related to notes receivable from GIGA included in net gain (loss) from discontinued operations. As of December 31, 2024, the Company performed an analysis of the allowance for credit losses of the GIGA notes receivable resulting in a $2.1 million reduction in the allowance, which was recorded within cost of revenue from lending and trading activities. 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 December 31, 2024 |
|  | Cost |  |  | Gross unrealized losses |  |  | Fair value |
Common shares |  | $ | 24,697,000 |  |  | $ | (24,607,000 | ) |  | $ | 90,000 |
Alzamend series B convertible preferred stock, warrants |  |  | 2,100,000 |  |  |  | - |  |  |  | 2,100,000 |
|  | $ | 26,797,000 |  |  | $ | (24,607,000 | ) |  | $ | 2,190,000 |
|  | 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 |
Amounts above are recorded in “Investments in common stock and equity securities, related party” on the consolidated balance sheets. The following tables summarize the changes in the Company’s investments in Alzamend common stock during the years ended December 31, 2024 and 2023:
Schedule of investment in warrants and common stock |  |  |  |  |  |  |  |
|  | For the Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Balance at January 1 |  | $ | 679,000 |  |  | $ | 6,449,000 |
Investment in common stock of Alzamend |  |  | 9,000 |  |  |  | 15,000 |
Unrealized loss in common stock of Alzamend |  |  | (598,000 | ) |  |  | (5,785,000 | )
Balance at December 31 |  | $ | 90,000 |  |  | $ | 679,000 |
Ault Lending Investment in Alzamend Series B Convertible Preferred Stock and Warrants
Schedule of investment in warrants and preferred stock |  |  |  |  |  |
|  | December 31, |  |  | 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, Ault Lending purchased 2,100 shares of Alzamend Series B Convertible Preferred Stock and warrants to purchase 0.2 million shares of Alzamend common stock with a five-year term and an exercise price of $12.00 per share for a total purchase price of $2.1 million. The agreement provided that Ault Lending may purchase up to $6 million of Alzamend Series B Convertible Preferred Stock in one or more closings. There have been not been additional closings subsequent to January 2024 and the agreement terminated by its own terms on March 31, 2025. 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. VIE Considerations for Ault Lending’s Investments in Alzamend Alzamend is considered a VIE based on the Ault Lending’s investment in Alzamend common stock, Series B convertible preferred stock and warrants. However, Ault Lending is not deemed to be the primary beneficiary of Alzamend and therefore does not consolidate Alzamend in its financial statements. Ault Lending’s maximum exposure to loss as a result of its involvement with Alzamend is limited to the $2.2 million carrying value of its investments.

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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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