Note 9 – Related Party Transactions

In addition to the transactions discussed in Notes 8, 11 and 12, the Company had the following related party activity during the years ended December 31, 2023 and 2022:

Alcimede Limited

Pursuant to a consulting agreement, Alcimede Limited billed $0.5 million and $0.4 million for the years ended December 31, 2023 and 2022, respectively. Seamus Lagan, the Company’s President and Chief Executive Officer, is the Managing Director of Alcimede Limited.

InnovaQor, Inc.

In addition to the investment in InnovaQor’s Series B-1 Preferred Stock (see Note 11), at December 31, 2023 and 2022, the Company had a notes receivable resulting from working capital advances to InnovaQor of approximately $2.7 million and $1.5 million, respectively. During the years ended December 31, 2023 and 2022, the Company advanced $1.2 million and $1.5 million, respectively, to InnovaQor to finance its working capital requirements. The balances at December 31, 2023 and 2022 were due under notes receivable as discussed below.

As of July 1, 2022, the Company had an outstanding related party receivable from InnovaQor of $803,416. InnovaQor signed a promissory note, dated July 1, 2022, in favor of the Company that provided that InnovaQor repay the Company $883,757 on December 31, 2022 (inclusive of a 10% original issue discount). Effective December 31, 2022, the Company and InnovaQor agreed to restructure the promissory note receivable in favor of the Company in the amount of $883,757 and additional monies owed in the amount of $441,018 for a new promissory note receivable with a principal amount of $1,457,253 (inclusive of a 10% original issue discount, or $132,478) and an original maturity date of June 30, 2023 except that InnovaQor would pay 25% of any capital it received from new capital secured prior to the maturity date. The note receivable, in the event of default, bears interest at 18% per annum. During the year ended December 31, 2022, the Company recognized original issue discounts totaling $0.2 million as interest income. On August 9, 2023, the Company and InnovaQor mutually agreed to modify the promissory note receivable to extend the maturity date from June 30, 2023 to December 31, 2023 and to provide for additional interest in the form of 5% of the principal amount or $0.1 million which the Company recognized as interest income in 2023.

Effective December 31, 2023, the Company and InnovaQor agreed to restructure the promissory note receivable in favor of the Company in the amount of $1,530,116 and additional monies owed in the amount of $1,198,191 for a new promissory note receivable with a principal amount of $3,000,000 (inclusive of a 10% original issue discount, or $271,693) and a maturity date of December 31, 2024 except that InnovaQor will pay 25% of any capital it receives from new capital secured prior to the maturity date. The note receivable, in the event of default, bears interest at 18% per annum. The Company will recognize the original issue discount of $271,694 as interest income in 2024.

During the years ended December 31, 2023 and 2022, the Company contracted with InnovaQor to provide ongoing health information technology-related services totaling approximately $0.4 million and $0.2 million, respectively. In addition, InnovaQor currently subleases office space from the Company at a cost of approximately $10,400 per month for rent and utilities.

Between January 1, 2024 and December 31, 2024, the Company advanced $0.3 million to InnovaQor to finance its working capital requirements.

Staff Accountant Loan

During 2020, the Company’s staff accountant, Ms. Kristi Dymond, received approximately $82,500 as a loan after she purchased certain land and buildings at auction in Jellico, Tennessee, related to the Company’s business there. The loan was secured by the properties and as long as the loan remained outstanding the Company was permitted the use of the assets and the assets remained security for the loan. The loan was reflected on the balance sheets as an other current asset. On December 28, 2023, the Company acquired the aforementioned land and buildings from Ms. Dymond for forgiveness of the loan.

The terms of the foregoing activities, and those discussed in Notes 8, 11 and 12 are not necessarily indicative of those that would have been agreed to with unrelated parties for similar transactions.