XML 66 R23.htm IDEA: XBRL DOCUMENT v3.20.1
Debt Obligations (Tables)
 3 Months Ended
Mar. 31, 2020
Summary of Secured Convertible Debentures and Proceeds Investment Agreement

Debt obligations is comprised of the following:

 

    March 31,
2020		     December 31, 2019  
2019 Secured convertible notes, at fair value   $ —     $ 1,593,809  
2018 Proceeds investment agreement, at fair value     6,193,000       6,500,000  
Unsecured promissory notes payable, less unamortized discount of $-0- and $66,061 at March 31, 2020 and December 31, 2019, respectively     300,000       233,939  
Unsecured promissory notes payable – Related party     289,000       —  
Debt obligations   $ 6,782,000     $ 8,327,748  
2019 Secured Convertible Notes [Member]  
Schedule of Fair Value of Embedded Derivatives and Warrants

The following represents the resulting fair value as determined on August 5, 2019, the date of origination:

 

Secured convertible notes   $ 1,845,512  
Common stock issued as Commitment Shares     118,749  
Common stock purchase warrants     535,739  
         
Gross cash proceeds   $ 2,500,000  
Summary of Fair Value and Adjusted Carrying Value of Secured Convertible Notes

Following is an analysis of the activity in the secured convertible notes during the three months ended March 31, 2020:

 

    Amount  
Balance at December 31, 2019   $ 1,593,809  
Principal repaid during the period by issuance of common stock     (1,259,074 )
Principal repaid during the period by payment of cash     (747,180 )
Change in fair value of secured convertible note during the period     412,445  
         
Balance at March 31, 2020   $ —  
Schedule of Certain Estimates and Assumptions of Fair Value of Secured Convertible Notes

Following is a range of certain estimates and assumptions utilized as of December 31, 2019 to determine the fair value of secured convertible notes:

 

    December 31, 2019  
    Assumptions  
Volatility – range     115 %
Risk-free rate     1.60 %
Contractual term     0.6 years  
Calibrated stock price   $ 1.06  
Debt yield     123.6 %
2018 Proceeds Investment Agreement [Member]  
Schedule of Fair Value of Embedded Derivatives and Warrants

The Company elected to account for the PIA on the fair value basis. Therefore, the Company determined the fair value of the PIA and PIA Warrants which yielded estimated fair values of the PIA including their embedded derivatives and the detachable PIA Warrants as follows:

 

Proceeds investment agreement   $ 9,067,513  
Common stock purchase warrants     932,487  
         
Gross cash proceeds   $ 10,000,000  
Schedule of Certain Estimates and Assumptions of Weighted Patent Asset

Following is a range of certain estimates and assumptions utilized as of March 31, 2020 and December 31, 2019 to probability weighted present value of expected patent asset proceeds for the litigation involving both Axon and WatchGuard:

 

      March 31, 2020       December 31, 2019  
Discount rate     3.6% - 21.3 %     3.0% - 16.6 %
Expected term to patent asset proceeds payment     0.33 years – 3.75 years       0.58 years - 4 years  
Probability of success     5.9% - 38.5 %     5.9% - 38.5 %
Estimated minimum return payable to BKI   $ 21 million     $ 21 million  
Negotiation discount     43.3 %     43.3 %
Schedule of Fair Value of Debentures Activity

The following represents activity in the PIA during the three months ended March 31, 2020:

 

Beginning balance as of December 31, 2019   $ 6,500,000  
Repayment of obligation     —  
Change in the fair value during the period     (307,000 )
Ending balance as of March 31, 2020   $ 6,193,000