Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment

v3.20.2
Property and Equipment
6 Months Ended
Jun. 30, 2020
Property, Plant and Equipment [Abstract]  
Property and Equipment

NOTE 5 - Property and Equipment

 

As of June 30, 2020 and December 31, 2019, the balances of property and equipment were as follows:

 

    June 30,
2020
    December 31,
2019
 
    (Unaudited)        
Ground station equipment   $ 1,854,027     $ 1,854,027  
Computer software and equipment     335,709       328,863  
Satellite equipment     275,410       275,410  
Vehicle     220,819       198,741  
Leasehold improvement     83,721       83,721  
Furniture and fixture     36,382       36,382  
      2,806,068       2,777,144  
Accumulated depreciation     (1,143,373 )     (869,747 )
Net     1,662,695       1,907,397  
Prepayments - land     35,861,589       35,861,589  
Net   $ 37,524,284     $ 37,768,986  

  

On May 1, 2018, the Company and Aerkomm Taiwan entered into a binding memorandum of understanding with Tsai Ming-Yin (the "Seller") with respect to the acquisition by Aerkomm Taiwan of a parcel of land located in Taiwan. The land is expected to be used to build a satellite ground station and data center. On July 10, 2018, the Company, Aerkomm Taiwan and the Seller entered into a certain real estate sales contract regarding this acquisition. Pursuant to the terms of the contract, and subsequent amendments on July 30, 2018, September 4, 2018, November 2, 2018 and January 3, 2019, the Company paid to the seller in installments refundable prepayments of $33,850,000 million as of December 31, 2018. On July 2, 2019, the Company paid the remaining purchase price balance of $624,462. As of June 30, 2020 and December 31, 2019, the estimated commission payable for the land purchase in the amount of $1,387,127 was recorded to the cost of land and the payment to be paid after the full payment of the Land acquisition price no later than December 31, 2021.

 

Depreciation expense was $136,587 (unaudited) and $135,622 (unaudited) for the three-month periods ended June 30, 2020 and 2019, respectively, and $273,626 (unaudited) and $273,308 (unaudited) for the six-month periods ended June 30, 2020 and 2019, respectively.