Note 14 - Related Party Transactions

On January 12, 2011, the Company entered into a consulting agreement with Nicolette Consulting Group Limited (NCG) for a period of three years for the services of Mr. Thomas A. Nicolette as President and Chief Executive Officer of the Company. The consulting agreement was extended through February 11, 2014 on December 23, 2013 and extended through March 31, 2014 on March 15, 2014. Mr. Nicolette resigned from the Company effective March 28, 2014.

On June 19, 2012, the Company entered into a 3 year exclusive License & Supply Agreement with Chubeworkx Guernsey Limited (as successor to SONO International Limited) (“Chubeworkx”) for the purchase and distribution of ABI’s proprietary breathalyzers outside North America. Chubeworkx paid a licensing fee of $1,000,000 which was recognized over the term of the agreement through June 30, 2015 (Note 10).

On June 13, 2013, the Company announced an expansion of the License and Supply Agreement with Chubeworkx to include worldwide marketing and distribution of the “Be CHUBE” program using the Company’s breathalyzer.

On August 5, 2013, the Board of Directors appointed Gary M. Rauch, the principal of DataSys Solutions, LLC (DS), as the Corporate Treasurer. The Company entered into a consulting agreement with DS on January 1, 2011, with a term of three years, under which the Company agreed to pay $5,625 per month for Mr. Rauch’s services as Controller of the Company. On March 18, 2014, the Board of Directors approved the appointment of Mr. Rauch as Vice President of Finance, retroactive to February 2, 2014, and he became an employee of the Company.

On December 23, 2013, the Company entered into a short-term bridge loan with Nicolette Consulting Group for $307,500, payable on January 15, 2014 with a 5% per annum interest rate. The transaction was recorded as a Short-Term Notes Payable – Related Party. The loan, with interest amounting to $969, was paid in full on January 15, 2014.

On June 30, 2014, the Company recorded a sale of $864,000 to 36S (Note 4). Mr. Gavin Moran, a member of the Company’s Board of Directors at the time of the sale, has beneficial ownership in 36S.

Trade receivables – related party as of September 30, 2015 and December 31, 2014 are $- and $864,000. The amount due is non-interest bearing, unsecured and has a term of 360 days which was due June 30, 2015.

As of June 30, 2015, the Company established an allowance for doubtful accounts of $864,000 which is reported as administrative expenses – related parties in the condensed consolidated statement of operations and comprehensive income for the nine months ended September 30, 2015 (Note 4).

Product revenue – related parties for the three and nine months ended September 30, 2015 were $- and for the three and nine months ended September 30, 2014 were $- and $1,630,379.

Administrative expenses – related parties for the three and nine months were ended September 30, 2015 were $- and $864,000 (Note 4) and for the three and nine months ended September 30, 2014 were $- and $195,002.