| Related Party Transactions |
NOTE 14 - Related Party Transactions
| |
A. |
Name of related parties and relationships with the Company: |
| Related Party |
|
Relationship |
| Dmedia Holding LP (“Dmedia”) |
|
Major stockholder |
| Bummy Wu |
|
Shareholder |
| Jeffrey Wun |
|
Shareholder and CEO of Aerkomm and Aircom |
| Yih Lieh (Giretsu) Shih |
|
President of Aircom Japan |
| Chien Ming Tseng |
|
President of Aircom Taiwan |
| Hao Wei Peng |
|
Employee of Aircom Taiwan and founding owner of Aircom Taiwan prior to 12/19/2017 |
| Louis Giordimaina |
|
COO - Aviation of Aircom |
| Wealth Wide Int’l Ltd. (“WWI”) |
|
Bummy Wu, a shareholder, is the Chairman |
| WISD Intellectual Property Agency, Ltd. (“WISD”) |
|
Patrick Li, Director of Aircom, is the Chairman; Chih-Ming (Albert) Hsu, Director of the Company, is a Director |
| |
B. |
Significant related party transactions: |
The Company has extensive transactions
with its related parties. It is possible that the terms of these transactions are not the same as those which would result from
transactions among wholly unrelated parties.
| |
a. |
As of June 30, 2019 and December 31, 2018: |
| |
|
June 30,
2019 |
|
|
December 31,
2018 |
|
| |
|
(Unaudited) |
|
|
|
|
| Temporary deposit to Bummy Wu1 |
|
$ |
- |
|
|
$ |
100,067 |
|
| Loan from Dmedia2 |
|
$ |
194,600 |
|
|
$ |
- |
|
| Operating lease liability to WWI3 |
|
$ |
44,494 |
|
|
$ |
- |
|
| Other payable to: |
|
|
|
|
|
|
|
|
| Yih Lieh (Giretsu) Shih4 |
|
$ |
204,006 |
|
|
$ |
15,497 |
|
| Jeffrey Wun4 |
|
|
74,044 |
|
|
|
46,236 |
|
| Chien Ming Tseng4 |
|
|
66,108 |
|
|
|
- |
|
| Hao Wei Peng4 |
|
|
47,262 |
|
|
|
- |
|
| Louis Giordimaina4
|
|
|
40,803 |
|
|
|
6,071 |
|
| WWI3 |
|
|
39,318 |
|
|
|
39,224 |
|
| Others4 |
|
|
59,666 |
|
|
|
66,826 |
|
| Total |
|
$ |
531,207 |
|
|
$ |
173,854 |
|
| |
1. |
In November 2018, Aircom HK’s bank account was temporarily frozen by its local bank in Hong Kong (the “HK bank”) due to Aircom HK’s failure to timely submit to the HK bank corporate documentation relating to the corporate organization and goodstanding of Aircom HK’s parent company, Aircom, and Aircom’s parent company, Aerkomm. To avoid a potential cash flow issue resulting from this temporary account freeze, Aircom HK withdrew $100,067 in cash from the HK bank and temporarily deposited it in an existing related party’s bank account at a different bank for safe keeping. The Aircom HK’s bank account with the HK bank was reactivated by the HK bank subsequently and the cash that was transferred to the related party’s account was redeposited into Aircom HK’s bank account at the HK bank in February 2019. |
| |
2. |
Represents short-term loan from Dmedia. This short-term loan has an expiration date of January
30, 2020 and an annual interest rate of 3%. The Company repaid the loan in full on July 1. 2019. |
| |
3. |
Represents rent for a warehouse in Hong Kong to store the Company’s hardware, which ended in May 2018,
and rent for another Hong Kong office starting June 28, 2018. |
| |
4. |
Represents payable to employees as a result of regular operating activities. |
| |
b. |
For the three-month and six-month periods ended June 30, 2019 and 2018: |
| |
|
Three Months Ended
June 30, |
|
|
Six Months Ended
June 30, |
|
| |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
| |
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
|
(Unaudited) |
|
| Consulting expense paid to Louis Giordimaina |
|
$ |
- |
|
|
$ |
87,275 |
|
|
$ |
- |
|
|
$ |
222,246 |
|
| Legal expense paid to WISD |
|
|
- |
|
|
|
1,392 |
|
|
|
- |
|
|
|
1,392 |
|
| Amortization expense of right-of-use asset charged by WWI |
|
|
11,440 |
|
|
|
- |
|
|
|
22,872 |
|
|
|
- |
|
| Rental expense charged by WWI |
|
|
- |
|
|
|
1,334 |
|
|
|
- |
|
|
|
2,684 |
|
| Interest expense charged by Dmedia |
|
|
1,446 |
|
|
|
1,915 |
|
|
|
1,744 |
|
|
|
3,116 |
|
On May 25, 2018, Mr. Louis Giordimaina
was converted from a consultant to a full-time employee and was appointed as Chief Operating Officer – Aviation. The consulting
expense paid for the six-month period ended June 30, 2018 in the amount of $222,246 represents the consulting services provided
prior to the conversion.
Aircom engaged WISD to handle
its filing of patent and trademark applications.
The Company had a lease agreement
with WWI with a monthly rental cost of $450 that expired on May 31, 2018 and was not renewed. The Company has another lease agreement
with WWI for its office space in Hong Kong with a monthly rental cost of HKD 30,000. The lease term is from June 28, 2018 to June
27, 2020. Effective January 1, 2019, the Company adopted ASU2016-02, “Leases” (Topic 842) (“ASU 2016-02”),
and accounted for these leases under amortization of the lease payment under Note 9, Lease Liabilities.
|