INVESTMENT IN UNCONSOLIDATED ENTITY

3 Months Ended

Mar. 31, 2022

Investment In Unconsolidated Entity

INVESTMENT IN UNCONSOLIDATED ENTITY

9. INVESTMENT IN UNCONSOLIDATED ENTITY – Avalanche International Corp. (“AVLP”)

Equity Investments in Unconsolidated Entity – AVLP

Equity investments in an unconsolidated entity, AVLP, at March 31, 2022 and December 31, 2021, were comprised of the following:

Investment in Promissory Notes

	Interest			Due		March 31,			December 31,
	Rate			Date		2022			2021
Investment in convertible promissory note		12	%		2022-2026	$	18,499,000		$	17,799,000
Investment in promissory note – Alpha Fund		8	%		June 30, 2022		3,600,000			3,600,000
Accrued interest receivable							2,092,000			2,092,000
Other							106,000			600,000
Total investment in promissory notes, gross							24,297,000			24,091,000
Less: provision for loan losses							(2,000,000	)		(2,000,000	)
Total investment in promissory note						$	22,297,000		$	22,091,000

* During the three months ended March 31, 2022 and 2021, no interest income was recognized from the Company’s investment in AVLP.

AVLP Convertible Promissory Note Maturities

The contractual maturities of AVLP’s convertible promissory notes as of March 31, 2022 were:

Year
2022	$	4,124,000
2023		2,820,000
2024		2,651,000
2025		1,674,000
2026		6,530,000
2027		700,000
Total	$	18,499,000

The following table summarizes the changes in the Company’s equity investments in an unconsolidated entity, AVLP, during the year ended December 31, 2021 and the three months ended March 31, 2022:

	Investment in			Investment in
	warrants and			promissory notes			Total
	common stock			and advances			investment
Balance at January 1, 2021	$	5,486,000		$	10,471,000		$	15,957,000
Investment in convertible promissory notes		-			7,344,000			7,344,000
Fair value of warrants		2,786,000			-			2,786,000
Unrealized loss in warrants		(7,772,000	)		-			(7,772,000	)
Unrealized gain in common stock		(150,000	)		-			(150,000	)
Loss from equity investment		(311,000	)		-			(311,000	)
Accretion of discount		-			4,210,000			4,210,000
Accrued interest		-			66,000			66,000
Balance at January 1, 2022		39,000			22,091,000			22,130,000
Investment in convertible promissory notes		-			700,000			700,000
Loss from equity investment		(39,000	)		(494,000	)		(533,000	)
Balance at March 31, 2022	$	-		$	22,297,000		$	22,297,000