RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2019

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

20. RELATED PARTY TRANSACTIONS

a. The Company and AVLP entered into a Loan and Security Agreement (“AVLP Loan Agreement”) with an effective date of August 21, 2017 pursuant to which the Company will provide AVLP a non-revolving credit facility of up to $10,000,000 for a period ending on August 21, 2019, subject to the terms and conditions stated in the Loan Agreement, including that the Company having available funds to grant such credit. At March 31, 2019, the Company has provided loans to AVLP in the principal amount $7,732,660 and, in addition to the 12% convertible promissory notes, AVLP has issued to the Company warrants to purchase 15,465,320 shares of AVLP common stock. Under the terms of the AVLP Loan Agreement, any notes issued by AVLP are secured by the assets of AVLP. As of March 31, 2019, the Company recorded contractual interest receivable attributed to the AVLP Loan Agreement of $1,214,509.

During the three months ended March 31, 2019 and the year ended December 31, 2018, the Company also acquired in the open market 71,000 shares of AVLP common stock for $41,790 and 430,942 shares of AVLP common stock for $417,169, respectively. At March 31, 2019, the Company’s investment in AVLP common stock had an unrealized loss of $102,104.

Philou is AVLP’s controlling shareholder. Mr. Ault is Chairman of AVLP’s Board of Directors and the Chairman of the Company’s Board of Directors. Mr. William B. Horne is the Chief Financial Officer and a director of AVLP and the Company.

In March 2017, the Company was awarded a $50 million purchase order by MTIX to manufacture, install and service the Multiplex Laser Surface Enhancement (“MLSE”) plasma-laser system. At March 31, 2019, the Company had recorded a receivable from MTIX of $3,915,075. The receivable was primarily the result of revenues recognized during the year ended December 31, 2018 and reflected on the financial statements as accounts receivable, related party.

b. During the three months ended March 31, 2019, the Company acquired 117,500 shares of common stock of Alzamend Neuro, Inc. (“Alzamend”) from a third party for $94,000 consisting of the cancellation of principal and interest due the Company of $91,483 and cash of $2,517. AVLP is a party to a management services agreement pursuant to which AVLP provides management, consulting and financial services to Alzamend.