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Proceeds Investment Agreement Obligation (Tables)

9 Months Ended

Sep. 30, 2020

Proceeds Investment Agreement Obligation

Schedule of Proceeds Investment Obligation

The proceeds investment agreement obligations are comprised of the following:

		September 30, 2020				December 31, 2019
Proceeds investment agreement, at fair value		$	—			$	6,500,000
Less: Current portion			—				—

Proceeds investment agreement, at fair value - Long-term		$	—			$	6,500,000

Schedule of Fair Value of PIA

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 December 31, 2019 to probability weighted present value of expected patent asset proceeds for the litigation involving both Axon and WatchGuard:

		December 31, 2019
Discount rate			3.0% -16.6	%
Expected term to patent asset proceeds payment			0.58 years - 4 years
Probability of success			5.9% -38.5	%
Estimated minimum return payable to BKI			$ 21 million
Negotiation discount			43.3	%

Schedule of Proceeds Investment Agreement Activity

The following represents activity in the PIA during the nine months ended September 30, 2020:

Beginning balance as of December 31, 2019		$	6,500,000
Repayment of obligation			(1,250,000	)
Change in the fair value during the period			(5,250,000	)
Ending balance as of September 30, 2020		$	—