Quarterly report pursuant to Section 13 or 15(d)

Accrued Liabilities

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Accrued Liabilities
 9 Months Ended
Sep. 30, 2024
Payables and Accruals [Abstract]  
Accrued Liabilities Accrued Liabilities
Accrued liabilities consisted of the following:
September 30,
2024		 December 31,
2023
Accrued compensation $ 304,481  $ 618,630 
Accrued severance 1,031,731  1,375,000 
Accrued professional fees 77,850  1,355,721 
Accrued insurance 185,417  876,150 
Accrued sales and property taxes 695,565  885,292 
Accrued royalties 362,500  250,000 
Accrued interest 2,296,243  - 
Debt conversion liability accrual 2,135,480  - 
Accrued AHFS liability -  1,158,609 
Accrued lease termination costs 163,503  657,000 
Other accrued expenses 17,063  162,697 
Total accrued expenses $ 7,269,833  $ 7,339,099 
Under the Convertible Secured Debentures agreement, on conversion of secured debentures, the Company owes the debt holder the difference between the floor price of $3.16 and the conversion price. As of September 30 2024, the amount due is $2,135,480 and is recorded under accrued liabilities on the condensed consolidated balance sheet.
The Hydronaut vessels 2 and 3 are reported as AHFS at December 31, 2023 at an amount based on an offer for sale. The offer for sale contains both cash and non-cash considerations. The AHFS liability of $1,158,609 included the non-cash consideration, which are purchase invoices submitted by the purchaser that will be foregone upon closing of the sale. Hydronaut vessels 2 and 3 were sold on January 22, 2024, and the AHFS current asset of December 31, 2023 was offset with the AHFS liability and cash received.
In December 2023, the Company started negotiations to exit a lease for office space. The negotiations completed in March 2024 with the Company agreeing a settlement figure with the lessor of $657,000 to be paid over 8 months commencing April 2024. See Note 8, "Leases" for further discussion. The accrual is recorded under accrued liabilities on the condensed consolidated balance sheet as of September 30, 2024.
In April 2023, the Company received correspondence from the State of Texas assessing a sale and use tax liability of $575,602. The sales and use tax audit is currently ongoing. The accrual is recorded under accrued liabilities on the condensed consolidated balance sheet as of September 30, 2024.