In connection with the purchase of Marquis Industries, Inc., the Company entered into a mezzanine loan in the amount of up to $7,000,000 with ICF, a private lender whose managing member is Jon Isaac, the Chief Executive Officer of the Company. The ICF mezzanine loan bears interest at a rate of 12.5% per annum with payment obligations of interest each month and all principal due in January 2021. As of December 31, 2017 and September 30, 2017, respectively, there was $2,000,000 outstanding on this mezzanine loan. During the three months ended December 31, 2017 and 2016, the Company recognized total interest expense of $63,889 and $63,889, respectively, associated with the ICF notes.

Customer Connexx LLC, a wholly-owned subsidiary of Appliance Recycling Centers of America, Inc. (“ARCA”), rents approximately 9,879 square feet of office space from the Company at its Las Vegas office which totals 11,100 square feet. ARCA paid the Company $45,388 in rent and other common area reimbursed expenses for the three months ended December 31, 2017. Tony Isaac, a member of the Board of Directors of the Company and Virland Johnson, Chief Financial Officer of the Company are Chief Executive Officer and Board of Directors member and Chief Financial Officer of ARCA, respectively.

Warrants for 10,914 and 12,383 shares of Series B Convertible Preferred Stock expired on September 10, 2017 and December 11, 2017, respectively. On January 16, 2018, the Company agreed to extend the expiration date on all warrants outstanding if not exercised prior to expiration date by an additional two years, including the September 10, 2017 and December 11, 2017 expired warrants. Warrants outstanding and exercisable as of December 31, 2017 and September 30, 2017 reflect the additional extension of time by two years for the 10,914 and 12,383 warrants previously expired.

On December 30, 2017, ASH, a wholly owned subsidiary of the Company, entered into a Stock Purchase Agreement (the “Agreement”) with ARCA and ApplianceSmart, a subsidiary of ARCA.  Pursuant to the Agreement, the Purchaser purchased from ARCA all of the issued and outstanding shares of capital stock (the “Stock”) of ApplianceSmart in exchange for $6,500,000 (the “Purchase Price”). The shares of Stock were delivered into escrow and will be released to the Purchaser upon Purchaser’s receipt of third-party financing in an amount sufficient to fund the Purchase Price, and the subsequent delivery of such funds to certain third-party lenders of ARCA and ApplianceSmart, all of which the parties expect to occur prior to March 31, 2018.

In connection with the acquisition of Vintage Stock on November 3, 2016, Rodney Spriggs, President of Vintage Stock holds a 41.134752% interest in the $10,000,000 Seller Subordinated Acquisition Note payable by VSAH. The terms of payment are interest only, payable monthly on the 1^st of each month, until maturity 5 years and 6 months from the date of the note – November 3, 2016. Interest paid to Mr. Spriggs for the three months ended December 31, 2017 and 2016, was $83,184 and $24,681, respectively. Interest unpaid and accrued as of December 31, 2017 and September 30, 2017 is $28,337 and $27,423, respectively.

Also see Note 5, 8, 9, 10 and 11.