Quarterly report pursuant to Section 13 or 15(d)

Significant Related Party Transactions

v3.20.2
Significant Related Party Transactions
6 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
Significant Related Party Transactions

NOTE 15 - Significant Related Party Transactions

 

  A. Name of related parties and relationships with the Company:

 

Related Party   Relationship
Dmedia Holding LP (“Dmedia”)   Major shareholder
Well Thrive Limited (“WTL”)  

Major shareholder; Sheng-Chun Chang is the President

Yuan Jiu Inc. (“Yuan Jiu”)  

Shareholder; Albert Hsu, a Director of Aerkomm, is the Chairman

AA Twin Associates Ltd. (“AATWIN”)   Georges Caldironi, COO of Aerkomm, is sole owner

 

  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, 2020 and December 31, 2019:

 

   

June 30,

2020

    December 31,
2019
 
    (Unaudited)        
Inventory prepayment to:            
Yuan Jiu1   $ 180,710     $ -  
                 
Short-term loan from WTL2   $ 272,211     $ -  
Other payable to:                
AATWIN3   $ 90,430     $ -  
Others4     63,299       30,971  
Total   $ 153,729     $ 30,971  

 

1. Represents inventory prepayment paid to Yuan Jiu. On May 11, 2020, the Company entered into a product purchase agreement with Yuan Jiu to purchase 100 sets of the AirCinema Cube to be installed on aircraft of commercial airline customers.  The total purchase amount under this agreement was $1,807,100 and the Company paid 10% of the total amount as an initial deposit.  On July 15, 2020, the Company signed a second product purchase agreement with Yuan Jiu for an additional 100 sets of the AirCinema Cube for the same purchase amount and paid a 10% initial deposit ($180,710) on this agreement as well.

 

2. Represents short-term loan from WTL due to operational needs. The original loan amount was approximately $2.64M (NTD 80,000,000). The loan agreement will terminate on December 31, 2021. The Company has repaid $2.53M (NTD 76,000,000) of the outstanding loan amount as of August 17, 2020.

 

3. Represents payable to AATWIN due to consulting agreement on January 1, 2019. The monthly consulting fee is EUR 15,120 (approximately $17,000) and will be expired December 31, 2021.

 

4. Represents payable to employees as a result of regular operating activities.

  

  b. For the three-month and six-month periods ended June 30, 2020 and 2019:

 

    Three Months Ended
June 30,
    Six Months Ended
June 30,
 
    2020     2019     2020     2019  
    (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)  
Consulting expense charged by AATWIN   $ 50,110     $ -     $ 100,221     $ -  
Interest expense charged by WTL     9,067       -       9,067       -  
Interest expense charged by Dmedia     -       1,446               1,744  

 

Aerkomm had short-term loans from Dmedia with an annual interest rate of 3% during the six-month period ended June 30, 2019. The Company repaid the short-term loan in full on July 1, 2019.