Note 7 – Accrued Expenses

Accrued expenses at December 31, 2022 and 2021 consisted of the following:

 Schedule of Accrued Expenses

Payroll and related liabilities at December 31, 2022 and 2021 included approximately $3.0 million and $2.3 million, respectively, for penalties associated with approximately $4.0 million and $3.9 million of accrued past due payroll taxes as of December 31, 2022 and 2021, respectively. This liability account at December 31, 2022 and 2021 is net of employee retention credits totaling $1.5 million and $1.5 million, respectively. Employee retention credits are also discussed in Note 2.

As of December 31, 2022 and 2021, the Company has accrued approximately $0.6 million and $0.9 million, respectively, of HHS Provider Relief Funds. These funds are more fully discussed in Notes 1 and 14.

Accrued interest at December 31, 2022 and 2021 included accrued interest of $0 and $0.3 million, respectively, on loans made to the Company by Christopher Diamantis, a former member of the Company’s Board of Directors. The loans from Mr. Diamantis are more fully discussed in Note 8.

During the fourth quarter of 2022, the Company’s Big South Fork Medical Center received a communication that its final Medicare cost report for the six months ending December 31, 2021 was accepted and that it reflected a retroactive adjustment of $1.6 million as a result of an overpayment. Accordingly, the Company has reflected the $1.6 million cost report adjustment as a liability at December 31, 2022. Furthermore, the Company recognized an additional $0.5 million as a liability (net of recoupments) at December 31, 2022 based on further correspondence with its fiscal intermediary and likely overpayments by Medicare for fiscal 2022.