| Significant Related Party Transactions |
NOTE 17 - Significant Related Party Transactions
In addition to the information
disclosed in other notes, the Company has significant related party transactions as follows:
| |
A. |
Name of related parties and relationships with the Company: |
| Related Party |
|
Relationship |
| Well Thrive Limited ("WTL") |
|
Major stockholder |
| Yuan Jiu Inc. ("Yuan Jiu") |
|
Stockholder; Albert Hsu, a Director of Aerkomm, is the Chairman |
| AA Twin Associates Ltd. ("AATWIN") |
|
Georges Caldironi, COO of Aerkomm, is the sole owner |
| EESquare Japan ("EESquare JP") |
|
Yih Lieh (Giretsu) Shih, President Aircom Japan, is the Director |
| Wealth Wide Int'l Ltd. ("WWI") |
|
Bummy Wu, a stockholder, is the Chairman |
| |
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 March 31, 2021 and December 31, 2020: |
| |
|
March 31,
2021 |
|
|
December 31,
2020 |
|
| |
|
(Unaudited) |
|
|
|
|
| Inventory prepayment to Yuan Jiu1 |
|
$ |
180,710 |
|
|
$ |
542,130 |
|
| |
|
|
|
|
|
|
|
|
| Loan from WTL2 |
|
$ |
2,444,695 |
|
|
$ |
527,066 |
|
| Other payable to: |
|
|
|
|
|
|
|
|
| AATWIN3 |
|
$ |
201,061 |
|
|
$ |
146,673 |
|
| Interest payable to WTL2 |
|
|
25,225 |
|
|
|
7,623 |
|
| Others4 |
|
|
355,103 |
|
|
|
296,890 |
|
| Total |
|
$ |
581,389 |
|
|
$ |
451,186 |
|
| Lease liability to WWI5 |
|
$ |
57,484 |
|
|
$ |
68,661 |
|
| |
1. |
Represents inventory prepayment
paid to Yuan Jiu. On May 11, 2020, the Company entered into a product purchase agreement (PO1) 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 20% of the total amount, or $361,420, as an initial deposit. On July 15, 2020, the Company
signed a second product purchase agreement (PO2) of $1,807,100 with Yuan Jiu for an additional 100 sets of the AirCinema Cube for
the same purchase amount and paid a 10% initial deposit of $180,710 on this agreement as well. In February 2021, the Company paid
the remaining balance of PO1 and received the inventory with aggregate value of $1,807,100. |
| |
2. |
The Company has loans from WTL due to operational needs under the Loans (Note
1). The original loan amount was approximately $2.64M (NTD 80,000,000). The loan agreement, with an interest rate of 5% per annum, will
terminate on December 31, 2021. The Company has repaid approximately $0.24M (NTD 10,375,000) of the outstanding loan amount as of March
31, 2021. As of May 20, 2021, the Company borrowed approximately additional $1.5M (unaudited) (NTD 41,984,000) (unaudited) from WTL under
the loans. |
| |
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. |
| |
5. |
Aircom
Hong Kong has a lease agreement with WWI for the warehouse with a monthly rental cost of $450. The lease term was from July 1, 2020
to June 30, 2022. Aircom Hong Kong has another lease agreement with WWI for its office space in Hong Kong. The original lease term
was from June 28, 2018 to June 27, 2020 with a monthly rental cost of HKD 29,897 (approximately $3,847). The Company renewed the
lease on June 27, 2020 and the current lease term is from June 28, 2020 to June 27, 2022 with a monthly rental cost of HKD 30,000
(approximately $3,829). |
| |
b. |
For the three-month
periods ended March 31, 2021 and 2020: |
| |
|
Three Months Ended
March 31, |
|
| |
|
2021 |
|
|
2020 |
|
| |
|
(Unaudited) |
|
|
(Unaudited) |
|
| Purchase from Yuan Jiu1 |
|
$ |
1,807,100 |
|
|
$ |
- |
|
| Consulting expense charged by AATWIN3 |
|
|
54,388 |
|
|
|
50,111 |
|
| Interest expense charged by WTL2 |
|
|
17,951 |
|
|
|
3,987 |
|
| Rental expense charged by WWI5 |
|
|
11,988 |
|
|
|
11,542 |
|
| Rental income from EESqaure JP6 |
|
|
(2,826 |
) |
|
|
(2,754 |
) |
| |
6. |
Aircom Japan entered into
a sublease agreement with EESquare JP for the period between March 5, 2019 and March 4, 2021. Pursuant to the terms of this lease
agreement, EESquare JP pays Aircom Japan a rental fee of approximately $920 per month. |
|