Quarterly report pursuant to Section 13 or 15(d)

Significant Related Party Transactions

Significant Related Party Transactions

9 Months Ended

Sep. 30, 2022

NOTE 18 - Significant Related Party Transactions

In addition to the information disclosed in other notes, the Company has significant related party transactions as follows:

Name of related parties and relationships with the Company:

Related Party		Relationship
Well Thrive Limited (“WTL”)		Major stockholder
Ejectt Inc. (“Ejectt”)		Stockholder; Albert Hsu, a Director of Aerkomm, is the Chairman
Star Jec Inc. (“Star Jec”)		Albert Hsu, a Director of Aerkomm, is the Chairman
AA Twin Associates Ltd. (“AATWIN”)		Georges Caldironi, COO of Aerkomm, is 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
MEPA Labs Inc. (“MEPA”)		Jeffrey Wun, the Chairman of Aerkomm, is the CEO

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.

As of September 30, 2022 and December 31, 2021:

	September 30, 2022		December 31, 2021
Other receivable from:
Star Jec ¹	$	173,996	$	-
EESquare JP ²		8,293		2,605
Others		-		471
Total	$	182,289	$	3,076

Customer Prepayment from Ejectt ³	$	1,229,154	$	-

Loan from WTL ⁴	$	206,734	$	1,143,259

Other payable to:
AATWIN ⁵	$	104,219	$	294,429
Interest payable to WTL⁴		56,867		54,602
Others ⁷		415,675		345,369
Total	$	576,761	$	694,400

Lease liability to WWI ⁶	$	55,022	$	55,025

1.	On December 14, 2021, Aerkomm Japan and Star Jet, a Taiwan limited liability company, signed a Housing Service Order. Further on January 22, 2022, Aerkomm Japan and Star Jet signed a Satellite Service Order. Under the two orders, Aerkomm Japan agreed to provide satellite services and housing services to Star Jec.

2.	Aircom Japan entered into a sublease agreement with EESquare JP for the period between March 5, 2019 and March 4, 2023. Pursuant to the terms of this lease agreement, EESquare JP pays Aircom Japan a rental fee of approximately $920 per month.

3.	On April 18, 2021, the Company entered into a memorandum of understanding with Ejectt pursuant to which Ejectt will serve as the exclusive service provider to the Company in Asia with respect to the installation and service of the Company’s Aerkomm AirCinema Cube (“ACC”) product and the related software platform (“Rayfin”) on which AAC will operate. In March 2022, Ejectt made prepayment of $361,910 to the Company in order to obtain certain air certificate. Further in June 2022, Ejectt made prepayment of $464,234 to the Company in order to purchase certain satellite equipment.

4.	The Company has loans from WTL due to operational needs under the Loans (Note 1). As of December 20, 2022, the Company borrowed approximately $206,734 (approximately NTD 6,570,000) from WTL under the loans.

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

6.	Aircom Hong Kong has a lease agreement with WWI for the warehouse with a monthly rental cost of HK$1,000. The lease term was from July 1, 2022 to June 30, 2023. Aircom Hong Kong has another lease agreement with WWI for its office space in Hong Kong with a monthly rental cost of HKD 30,000 (approximately $3,823). The lease term is from June 28, 2022 to June 27, 2023.

7.	Represents receivable/payable from/to employees as a result of regular operating activities.

For the three months and nine months periods ended September 30, 2022 and 2021:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)
Purchase from Ejectt ¹	$	-	$	-	$	-	$	1,807,100
Service income from Star Jec ²		2,855		-		6,073		-
Consulting expense charged by AATWIN ³		-		53,284		-		162,353
Interest expense charged by WTL ⁴		-		249		10,155		39,027
Rental expense charged by WWI ⁵		11,833		11,954		35,499		35,919
Sales to Ejectt ⁶		-		-		-		72,000
Rental income from EESqaure JP ⁷		2,149		3,643		7,023		9,206
Other income from MEPA ⁸		11,331		-		17,544		-
Rental income from MEPA ⁸		19,200		-		55,535		-

1.	Represents inventory prepayment paid to Ejectt. On May 11, 2020, the Company entered into a product purchase agreement (PO1) with Ejectt 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 Ejectt 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 the PO1 and received the inventory with aggregate value of $1,807,100. The deposit on PO2 was refunded by Ejectt on June 1, 2021.

2.	On December 14, 2021, Aerkomm Japan and Star Jet, a Taiwan limited liability company, signed a Housing Service Order. Further on January 22, 2022, Aerkomm Japan and Star Jet signed a Satellite Service Order. Under the two orders, Aerkomm Japan agreed to provide satellite services and housing services to Star Jec.

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

4.	The Company has loans from WTL due to operational needs under the Loans (Note 1).

5.	Aircom Hong Kong has a lease agreement with WWI for warehouse space with a monthly rental cost of HK$1,000. The lease term on this property is from July 1, 2022 to June 30, 2023. Aircom Hong Kong has another lease agreement with WWI for its office space in Hong Kong. The original lease term was from June 28, 2020 to June 27, 2022 with a monthly rental cost of HKD 30,000 (approximately $3,829). The Company renewed this lease on June 27, 2020 and the current lease term is from June 28, 2022 to June 27, 2023 with a monthly rental cost of HKD 30,000 (approximately $3,823).

6.	On April 18, 2021, the Company entered into a memorandum of understanding with YuanJiu pursuant to which YuanJiu will serve as the exclusive service provider to the Company in Asia with respect to the installation and service of the Company’s Aerkomm AirCinema Cube (“ACC”) product and the related software platform (“Rayfin”) on which AAC will operate. In 2021, the Company sold ground antenna equipment to YuanJiu for the cooperation purpose.

7.	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.

8.	Aircom Taiwan assisted MEPA in administrative work and charged MEPA for the work performed. Aircom entered into a sublease agreement with MEPA for the period between January 11, 2022 and January 10, 2023. Pursuant to the terms of the lease agreement, MEPA pays Aircom a rental and utility fees of $6,400 per month.