ACCOUNTS PAYABLE AND ACCRUED EXPENSES

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

11. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Other current liabilities at March 31, 2022 and December 31, 2021 consisted of:

	March 31,		December 31,
	2022		2021
Accounts payable	$	11,448,000	$	6,902,000
Accrued payroll and payroll taxes		4,364,000		5,027,000
Financial instrument liabilities		4,267,000		4,249,000
Accrued legal		1,787,000		2,637,000
Other accrued expenses		5,373,000		3,940,000
	$	27,239,000	$	22,755,000

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 accounted for as a financial instrument 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:

	March 31, 2022			December 31, 2021
Contractually stipulated stock price	$	2.50		$	2.50
Exercise price	$	2.50		$	2.50
Contractually defined remaining term		5.0			5.0
Contractually defined volatility		135	%		135	%
Dividend yield		0	%		0	%
Risk-free interest rate		2.4	%		1.3	%

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 three months ended March 31, 2022 and 2021:

	March 31, 2022		March 31, 2021
Beginning balance	$	4,249,000	$	4,192,000
Change in fair value		18,000		679,000
Ending balance	$	4,267,000	$	4,871,000