ACCOUNTS PAYABLE AND ACCRUED EXPENSES

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

21. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Other current liabilities at December 31, 2021 and 2020 consisted of:

	December 31,
	2021		2020
Accounts payable	$	6,902,000	$	7,043,000
Accrued payroll and payroll taxes		5,027,000		1,412,000
Financial instruments		4,249,000		4,192,000
Accrued legal		2,637,000		1,777,000
Other accrued expenses		3,887,000		2,590,000
Total		$22,702,000		$17,014,000

Financial Instruments

Under authoritative guidance used by the FASB on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments that do not have fixed settlement provisions are deemed to be derivative instruments. In prior years, the Company granted certain warrants that resulted in these warrants being accounted for as a financial instrument in accordance with ASC 815 and being re-measured every reporting period with the change in value reported in the statement of operations.

The financial instruments were valued using a variety of pricing models with the following valuation assumptions:

	December 31, 2021			December 31, 2020
Stock price	$	2.50		$	2.28
Exercise price	$	2.50		$	2.28
Contractually defined remaining term		5.0			5.0
Contractually defined volatility		135	%		135	%
Dividend yield		0	%		0	%
Risk-free interest rate		1.270	%		0.381	%

Per the terms of the warrant agreements underlying the financial instruments, the value to the warrant holders is defined within the agreement based on a stock price, contractual term, volatility factor and dividend rate as defined in the warrant agreement, and not indexed to the company’s stock, resulting in the financial instrument accounting. The risk-free interest rate was based on rates established by the Federal Reserve Bank.

The following table sets forth a summary of the changes in the estimated fair value of the financial instruments during the years ended December 31, 2021 and 2020:

	December 31,
	2021			2020
Beginning balance	$	4,192,000		$	9,000
Recognition of financial instruments		4,239,000			4,958,000
Change in fair value		542,000			49,000
Extinguishment		(4,724,000	)		(824,000	)
Ending balance	$	4,249,000		$	4,192,000