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INVESTMENTS – RELATED PARTIES
 6 Months Ended
Jun. 30, 2025
SEC Schedule, 12-15, Insurance Companies, Summary of Investments, Other than Investments in Related Parties [Abstract]  
INVESTMENTS – RELATED PARTIES

10. INVESTMENTS – RELATED PARTIES

 

Investments in Alzamend Neuro, Inc. (“Alzamend”), Ault & Company, Inc. (“Ault & Company”) and GIGA at June 30, 2025 and December 31, 2024, were comprised of the following:

 

Investment in Promissory Notes, Related Parties – Ault & Company and GIGA

                  
   Interest      June 30,   December 31, 
   Rate   Due Date  2025   2024 
Promissory note and accrued interest receivable, Ault & Company, in default   8%  December 31, 2024  $541,000   $2,468,000 
Promissory note and accrued interest receivable, GIGA   6% - 12%   In bankruptcy   20,320,000    18,499,000 
Other           335,000    335,000 
Allowance for credit losses           (500,000)   (500,000)
Total investment in promissory notes and other, related parties            $20,696,000   $20,802,000 

 

Summary of interest income, related party, recorded within interest and other income on the condensed consolidated statement of operations:

        
   For the Three Months Ended   For the Six Months Ended 
   June 30,   June 30, 
   2025   2024   2025   2024 
Interest income, related party  $570,000   $269,000   $1,148,000   $478,000 

 

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.

 

Investment in Alzamend Series B Convertible Preferred Stock, Warrants and Common Stock, Related Parties – Alzamend

               
   Investments in Common Stock, Related Parties at June 30, 2025 
   Cost   Gross Unrealized Losses   Fair value 
Common shares  $24,331,000   $(24,307,000)  $24,000 
Alzamend series B convertible preferred stock, warrants   2,100,000    -    2,100,000 
   $26,431,000   $(24,307,000)  $2,124,000 

 

   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 

 

The following tables summarize the changes in the Company’s investments in Alzamend common stock during the three months ended June 30, 2025 and 2024:

          
   For the Three Months Ended June 30, 
   2025   2024 
Balance at April 1  $81,000   $768,000 
Investment in common stock of Alzamend   -    3,000 
Sale of Alzamend common stock   (6,000)   - 
Realized loss in common stock of Alzamend   (368,000)   - 
Unrealized gain (loss) in common stock of Alzamend   317,000    (467,000)
Balance at June 30  $24,000   $304,000 

 

The following tables summarize the changes in the Company’s investments in Alzamend common stock during the six months ended June 30, 2025 and 2024:

 

   For the Six Months Ended June 30, 
   2025   2024 
Balance at January 1  $90,000   $679,000 
Investment in common stock of Alzamend   8,000    8,000 
Sale of Alzamend common stock   (6,000)   - 
Realized loss in common stock of Alzamend   (368,000)   - 
Unrealized gain (loss) in common stock of Alzamend   300,000    (383,000)
Balance at June 30  $24,000   $304,000 

 

Ault Lending, LLC (“Ault Lending”) Investment in Alzamend Series B Convertible Preferred Stock and Warrants

          
   June 30,   December 31, 
   2025   2024 
Investment in Alzamend preferred stock  $2,100,000   $2,100,000 
Total investment in other investments securities, related party  $2,100,000   $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 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.