Quarterly report pursuant to Section 13 or 15(d)

RELATED PARTY TRANSACTIONS

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RELATED PARTY TRANSACTIONS
9 Months Ended
Sep. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 13 – RELATED PARTY TRANSACTIONS

 

Medical Related Consulting Services Revenue from Related Parties and Accounts Receivable – Related Party

 

During the three and nine months ended September 30, 2018 and 2017, medical related consulting services revenue from related parties was as follows:

 

    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
      2018       2017       2018       2017  
Medical related consulting services provided to:                                
  Beijing Daopei (1)   $ 71,398     $     $ 213,394     $  
  Shanghai Daopei (2)                       66,286  
  Beijing Nanshan (3)           2,166             154,663  
    $ 71,398     $ 2,166     $ 213,394     $ 220,949  

 

  (1) Beijing Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company.

 

  (2) Shanghai Daopei is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company.

 

  (3) Beijing Nanshan is a subsidiary of an entity whose chairman is Wenzhao Lu, the largest shareholder of the Company.

 

Accounts receivable – related party, net of allowance for doubtful accounts, at September 30, 2018 and December 31, 2017 amounted to $214,665 and $0, respectively, and no allowance for doubtful accounts is deemed to be required on accounts receivable – related party at September 30, 2018 and December 31, 2017.

 

Security Deposit – Related Party

 

In the third quarter of 2018, the Company signed a development agreement with a company whose chairman is Wenzhao Lu, the largest shareholder of the Company. In accordance with the development agreement, the Company was required to make a security deposit. At September 30, 2018, the security deposit – related party amounted to $291,163, which was refunded in full in October 2018 as the development agreement was cancelled in September 2018.

 

Accrued Liabilities and Other Payables – Related Parties

 

At September 30, 2018 and December 31, 2017, the Company owed David Jin, its shareholder, chief executive officer, president and board member, of $0 and $15,387, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying condensed consolidated balance sheets.

  

At September 30, 2018 and December 31, 2017, the Company owed Yu Zhou, co-chief executive officer of GenExosome, of $2,684 and $24,540, respectively, for accrued payroll, travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying condensed consolidated balance sheets.

 

At September 30, 2018 and December 31, 2017, the Company owed Meng Li, its shareholder and chief operating officer, of $1,189 and $0, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying condensed consolidated balance sheets.

 

Due to Related Party

 

In connection with the acquisition discussed elsewhere in this report, the Company acquired Beijing GenExosome in cash payment of $450,000. On October 25, 2017, Dr. Yu Zhou, the former sole shareholder of Beijing GenExosome, was appointed to the board of directors of GenExosome and served as co-chief executive officer of GenExosome. As of September 30, 2018 and December 31, 2017, the unpaid acquisition consideration of $250,000 and $450,000, respectively, was payable to Dr. Yu Zhou, co-chief executive officer and board member of GenExosome, and reflected as due to related party on the accompanying condensed consolidated balance sheets.

 

Real Property Management Agreement

 

The Company pays a company, which is controlled by Wenzhao Lu, the Company’s largest shareholder and chairman of the Board of Directors, for the management of its commercial real property located in New Jersey. The monthly property management fee is $5,417. The term of the property management agreement is two years commencing on May 5, 2017 and will expire on May 4, 2019. For the three months ended September 30, 2018 and 2017, the management fee related to the property management agreement amounted to $16,251 and $16,251, respectively. For the nine months ended September 30, 2018 and 2017, the management fee related to the property management agreement amounted to $48,753 and $27,085, respectively.