Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

Related Party Transactions
9 Months Ended
Sep. 30, 2019
Related Party Transactions [Abstract]  
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 September 30, 2019 and December 31, 2018:


    September 30,
    December 31,
Other receivable from Chien Ming Tseng1   $ 111,111     $ -  
Temporary deposit to Bummy Wu2   $ -     $ 100,067  
Operating lease liability to WWI3   $ 33,478     $ -  
Other payable to:                
Hao Wei Peng4   $ 47,201     $ -  
WWI3     39,179       39,224  
Jeffrey Wun4     12,807       46,236  
Louis Giordimaina4     3,019       6,071  
Yih Lieh (Giretsu) Shih4     -       15,497  
Others4     9,986       66,826  
Total   $ 112,192     $ 173,854  



Represents temporary advances to employees for payments of previously accrued expenses for regular operating activities, to be offset with the Company's accrued expenses pending official receipts.


  2. 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.


  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 nine-month periods ended September 30, 2019 and 2018:


    Three Months Ended
September 30,
    Nine Months Ended
September 30,
    2019     2018     2019     2018  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Consulting expense paid to Louis Giordimaina   $ -     $ -     $ -     $ 222,246  
Legal expense paid to WISD     -       9,387       -       10,779  
Amortization expense of right-of-use asset charged by WWI     11,456       -       34,328       -  
Rental expense charged by WWI     -       14,706       -       17,840  
Interest expense charged by Dmedia     -       -       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 nine-month period ended September 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.