Notes Receivable

12 Months Ended

Dec. 31, 2022

Notes Receivable [Abstract]

Notes Receivable

Note 8. Notes Receivable

The following table presents the Company’s notes receivable as of December 31, 2022 and 2021 ($ in thousands):

December 31, 2022

	Maturity Date	Stated Interest Rate			Principal Amount		Interest Receivable		Fair Value
Shor-term convertible notes receivable
Convergent Investment	01/29/2023		8	%	$	2,000	$	307	$	2,307
Short-term notes receivable
Raefan Industries LLC Investment	6/30/2023		8	%	$	4,730	$	437	$	5,167
Total									$	7,474
Long-term notes receivable
American Innovative Robotics Investment	04/01/2027		8	%	$	1,100	$	-	$	1,100

December 31, 2021 

	Maturity Date	Stated Interest Rate			Interest Receivable		Fair Value
Shor-term convertible notes receivable
Slinger Bag Inc Investment	08/06/2022		8	%	$	45	$	1,445
Nano Innovations Inc Investment	12/26/2022		10	%	$	1	$	751
Short-term notes receivable
Raefan Group LLC Investment	10/13/2022		8	%	$	48	$	2,828
Raefan Industries LLC Investment	12/06/2022		8	%	$	11	$	1,961
Long-term convertible note receivable
Convergent Investment	01/29/2023		8	%	$	147	$	2,147

Convergent Therapeutics, Inc. Investment

On January 29, 2021, the Company purchased an 8% convertible promissory note (“Convergent Convertible Note”) issued by Convergent Therapeutics, Inc. (“Convergent”) in the principal amount of $2.0 million pursuant to a Note Purchase Agreement with Convergent. The Company paid a purchase price for the Convergent Convertible Note of $2 million. The Company will receive interest on the Convergent Convertible Note at the rate of 8% per annum payable upon conversion or maturity of the Convergent Convertible Note. The Convergent Convertible Note shall mature on January 29, 2023.

The Company recorded an interest income receivable of approximately $0.2 million and $0.1 million on the Convergent Convertible Note as of December 31, 2022 and 2021, respectively.

Mr. Jeffrey Cooper Investment

On October 13, 2021, the Company purchased an 8% promissory note (“Raefan Group Promissory Note”) issued by Raefan Group, LLC (“Raefan Group”) in the principal amount of approximately $2.8 million pursuant to a Note Purchase Agreement with Raefan Group. The Company will receive interest on the Raefan Group Promissory Note at the rate of 8% per annum payable upon conversion or maturity of the Raefan Group Promissory Note. The Raefan Group Promissory Note shall mature on October 13, 2022.

Raefan Group LLC promissory note was satisfied and replaced with a personal note issued to Mr. Jeffrey Cooper, of Raefan Industries. The Mr. Jeffrey Cooper Promissory Note shall mature on March 11, 2023.

On December 6, 2022, Mr. Jeffrey Cooper agreed to amend the original promissory note. See Raefan Industries LLC Investment described below.

The Company recorded an interest income receivable of approximately $0.2 million on the Mr. Jeffrey Cooper Promissory Note as of December 6, 2022.

The Company recorded an interest income receivable of approximately $48,000 on the Raefan Group Promissory Note as of December 31, 2021.

Raefan Industries LLC Investment

On December 6, 2021, the Company purchased an 8% promissory note (“Raefan Industries Promissory Note”) issued by Raefan Industries, LLC (“Raefan Industries”) in the principal amount of approximately $2.0 million pursuant to a Note Purchase Agreement with Raefan Industries. The Company paid a purchase price for the Raefan Industries Promissory Note of approximately $2.0 million. The Company will receive interest on the Raefan Industries Promissory Note at the rate of 8% per annum payable upon conversion or maturity of the Raefan Industries Promissory Note. The Raefan Industries Promissory Note shall mature on December 6, 2022.

The Company recorded an interest income receivable of approximately $0.1 million on the Raefan Industries Promissory Note as of December 6, 2022.

The Company recorded an interest income receivable of approximately $11,000 on the Raefan Industries Promissory Note as of December 31, 2021.

On December 6, 2022, the Company, Raefan Industries and Mr. Jeffrey Cooper entered into a Consolidated, Amended and Restated Promissory Note agreement (the “Raefan Amended Note Agreement”). Pursuant to the Raefan Amended Note Agreement, Raefan Industries and Mr. Jeffrey Cooper agreed to consolidate, amend, restate and replace (i) Raefan Industries Promissory Note dated December 6, 2021 in the principal amount of approximately $2.0 million and (ii) Mr. Jeffrey Cooper Promissory Note dated March 11, 2022 issued by Mr. Jeffrey Cooper in the principal amount of approximately $2.8 million with Raefan Amended Note in the principal amount of approximately $4.8 million. All accrued and unpaid interest due under the original notes prior to December 6, 2022 remain due and payable accordance with the terms of this Amended Note. The Company will receive interest on the Raefan Amended Note at the rate of 8% per annum payable upon conversion or maturity of the Raefan Amended Note. The Raefan Amended Note shall mature on September 30, 2023.

The Company recorded an interest income receivable of approximately $26,000 on the with Raefan Amended Note as of December 31, 2022.

Slinger Bag Inc. (a.k.a, Connexa Sports Technologies Inc.) Investment

On August 6, 2021, the Company entered into a securities purchase agreement (the “Slinger Bag Securities Purchase Agreement”) with Slinger Bag Inc., (“Slinger Bag”). Under the Slinger Bag Securities Purchase Agreement, the Company purchased an 8% convertible promissory note (“Slinger Bag Convertible Note”) in the principal amount of $1.4 million and a common stock purchase warrant to purchase up to 933,333 shares of common stock of Slinger Bag. The Company paid a purchase price of $1.4 million for the Slinger Bag Convertible Note and the common stock purchase warrant. The Company will receive interest on the Slinger Bag Convertible Note at the rate of 8% per annum payable upon conversion or maturity of the Slinger Bag Convertible Note. The Slinger Bag Convertible Note shall mature on August 6, 2022.

The Company recorded an interest income receivable of approximately $45,000 on the Slinger Bag Convertible Note as of December 31, 2021.

The Company recorded an interest income receivable of approximately $63,000 on the Slinger Bag Convertible Note as of June 17, 2022. On June 17, 2022, the Company received 558,659 shares of common stock of Connexa Sports Technologies Inc. as a result of conversion of principal and accrued interest on the Slinger Bag Convertible Note. All the 558,659 shares of common stock of Connexa Sports received were transferred to marketable securities account.

Nano Innovations Inc. Investment

On December 26, 2021, the Company entered into a securities purchase agreement (the “Nano Securities Purchase Agreement”) with Nano Innovations Inc., (“Nano”). Under the Nano Securities Purchase Agreement, the Company purchased a 10% senior secured convertible promissory note (“Nano Convertible Note”) in the principal amount of $750,000 and warrants permitting the Company to purchase an amount of Nano’s common voting shares equal to 50% of the number of common shares issuable upon the conversion of Nano Convertible Note. The Company paid a purchase price of $750,000 for the Nano Convertible Note and the common stock purchase warrants. The Company will receive interest on the Nano Convertible Note at the rate of 10% per annum payable upon conversion or maturity of the Nano Convertible Note. The Nano Convertible Note shall mature on December 26, 2022.

During the fourth quarter of 2022, the Company identified indicators of impairment for the Nano investment as a result of adverse changes in Nano’s business operations, including liquidity concerns. As a result, the Company recorded an impairment charge in the fourth quarter of 2022 of $750,000, which represents an impairment loss on the total investment held. The investment in Nano was valued at $0 as of December 31, 2022. The Company recorded an interest income receivable of approximately $0 and $1,000 on the Nano Convertible Note as of December 31, 2022, and 2021, respectively.

Kaya Now Inc. Investment

On April 5, 2022, the Company purchased an 8% promissory note (“Kaya Now Promissory Note”) issued by Kaya Now Inc. (“Kaya”) in the principal amount of $0.5 million pursuant to a Note Purchase Agreement with Kaya Now. The Company paid a purchase price for the Kaya Now Promissory Note of $0.5 million. The Company will receive interest on the Kaya Now Promissory Note at the rate of 8% per annum payable upon conversion or maturity of the Kaya Now Promissory Note. The Kaya Now Promissory Note shall mature on February 1, 2023.

On July 21, 2022, the Company and Kaya executed an amendment of the Kaya Now Promissory Note (“Kaya Amendment”) such that the Kaya Now Promissory Note shall mature on February 1, 2023. In consideration of the Kaya Amendment, Kaya has agreed to issue to the Company 1,000,000 additional shares at $0.2 per share of Kaya’s common stock. Under the Kaya Amendment, interest on the Note during the extended term shall be paid on October 1, 2022 and January 1, 2023 at the rate of 8% per annum.

During the fourth quarter of 2022, the Company identified indicators of impairment for the Kaya investment as a result of adverse changes in Kaya’s business operations, including liquidity concerns. As a result, the Company recorded an impairment charge of $0.5 million in the fourth quarter of 2022. The impairment charge represents an impairment loss of the total investment held as a promissory note resulting in a $0 balance for the Kaya Now Promissory Note as of December 31, 2022.

The Company recorded interest income related to the Kaya Now Promissory Note of approximately $20,000 for the year ending December 31, 2022.

American Innovative Robotics, LLC Investment

On April 1, 2022, the Company purchased an 8% promissory note (“Robotics Promissory Note”) issued by American Innovative Robotics, LLC (“Robotics”) in the principal amount of $1.1 million pursuant to a Note Purchase Agreement with Robotics. The Company paid a purchase price for the Robotics Promissory Note of $1.1 million. The Company will receive interest on the Robotics Promissory Note at the rate of 8% per annum payable every three months starting from July 1, 2022. The Robotics Promissory Note shall mature on April 1, 2027.

The Company recorded an interest income of approximately $67,000 on the Robotics Promissory Note as of December 31, 2022.