The Company entered into an agreement with BORQS Technologies Inc. (“Borqs”) (Nasdaq: BRQS) in February 2021 under which the Company agreed to purchase Senior Secured Convertible Promissory Notes (“Notes”) of Borqs up to an aggregate principal amount of $5 million. The Company’s purchase of the Notes was a part of a larger transaction in which an aggregate of $20 million in Notes were sold by Borqs in a private transaction to several institutional and individual investors, including the Company. The Notes become due in February 2023, have an annual interest rate of 8%, are convertible into ordinary shares of Borqs at a 10% discount from the market price, and have 90% warrant coverage (with the warrants exercisable at 110% of the conversion price. The Company received 2,922,078 warrants which had a nominal value on the grant date. One-third of the Notes ($1,666,667) were funded by the Company at the execution of definitive agreements for the transaction, and two-thirds of the Notes ($3,333,333) were purchased and funded upon the satisfaction of certain conditions, including effectiveness of a registration statement that was deemed effective on May 3, 2021 and the Company completed this funding on May 6, 2021. In June 2021, the Company exercised a cashless exercise of the Borqs warrants and received 5,956,544 common shares of Borqs. The Company subsequently sold those Borqs common shares in June 2021 and recognized $8.5 million in proceeds, all of which was recognized as a realized gain on securities in 2021.

During the year ended December 31, 2021, the Company converted $4,100,000 of the Borqs convertible note plus accrued interest of $131,758 into 5,960,829 shares. The Company sold 1,064,935 shares in the year ending December 31, 2021 and classified the remaining 4,895,894 shares as marketable securities. The remaining 4,895,894 shares were sold during the first quarter of 2022 which resulted in a realized loss of $395 thousand which is included in "Realized gain on securities" in the consolidated statements of operations within the years ended December 31, 2022.

The remaining Borqs convertible note plus accrued interest ($947,342) were convertible into common shares at a conversion price of $0.6534 per share or 1,449,866 shares, subject to future conversion price resets based on equity offering activity of Borqs. The fair value of the convertible note plus accrued interest was classified as trading securities and as such are reported at fair value. As of December 31, 2021 the Company considered the fair value of the Borqs convertible note to be equal to the fair value of the stock on December 31, 2021 or $0.372 per share times the number of shares that it could be converted into based on a conversion price of $0.6534 or 1,449,866 shares which had a fair value of $539,351. As of December 31, 2021, our re-measurement resulted in an unrealized loss of approximately $408,000 and is included within “Unrealized loss on convertible debt security” in the consolidated statements of operations.

During the year ended December 31, 2022, the remaining principal amount of the Notes plus accrued interest through the date of conversion ($965,800) was converted into common shares of Borqs at a reset conversion price of $0.25 per share or 3,863,200 shares. A gain of $287,778 was recognized on the conversion of the convertible debt to common shares and is included within “Realized gain on convertible debt securities” in the consolidated statements of operations for the year ended December 31, 2022. Subsequent to the conversion, the 3,863,200 shares were sold which resulted in a realized gain of $45 thousand which is included within "Realized gain on securities" in the consolidated statements of operations for the years ended December 31, 2022.


	December 31, 2022			December 31, 2021

Convertible note	$	-		$	539,351
End of period	$	-		$	539,351

	December 31, 2022			December 31, 2021

Beginning of year	$	539,351		$	-
Investment in convertible debt security		-			5,000,000
Accrued interest income on convertible debt security		17,753			179,101
Convertible debt and interest converted into marketable shares		(844,882	)		(4,231,758	)
Unrealized gain (loss) on convertible debt security		287,778			(407,992	)
End of period	$	-		$	539,351

In December 2020, the Company entered into a Loan Agreement (the “Investor Loan Agreement”) with a private investor (“Investor”) pursuant to which the Investor agreed to provide consulting services and make one or more non-recourse loans to the Company in a principal amount of up to the purchase price of the Borqs loan receivables purchased by the Company. The Investor Loan Agreement does not provide a fixed rate of interest, and the Company and Investor agreed to split the net proceeds from the Company sales of the settlement shares, with the Company receiving one-third of the net proceeds after a return of Investor’s principal and the Investor receiving return of principal plus two-thirds of the net proceeds thereafter.

As part of that transaction, in which funding began in January 2021, the Company acquired $18.2 million of Borqs debt for $15.5 million and converted the debt into Borqs common stock, subsequently selling such shares for $32.6 million, provided $11.3 million to the Investor and realized a $5.7 million gain. The gain was recognized within "Realized gain on securities" in the consolidated statements of operations for the year ended December 31, 2021.