Accounts Payable and Accrued Expenses

On April 1, 2017, the Company executed a Separation Agreement and release effective with the Company’s former Chief Executive Officer (CEO). As part of the agreement, the Company agreed to pay the former CEO $580,000 in severance, payable in equal installment over 24 months. In addition, the Company also agreed to continue paying certain expenses for the CEO for 24 months with an estimated cost of $44,000. As a result, the Company accrued the entire $624,000 as of March 31, 2017 which was also reported as part of operating expenses in the 2017 consolidated statements of operations. As of September 30, 2018 and December 31, 2017, $357,000 and $390,000, respectively, was due to our former CEO which was reported as part of accrued expenses and accounts payable in the accompanying consolidated balance sheet. The Company began deferring payments under the Separation Agreement in January 2018. The Company resumed making payments of $10,000 per month in August 2018 but remains currently in arrears.

Accrued Expenses – Related Parties

Accrued expense – related parties consists of accrued salaries due to officers and fees due to members of the Board of Directors. As of September 30, 2018, and December 31, 2017, accrued expenses and accounts payable to related parties amounted to $49,000 and $31,000, respectively.