Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

v3.19.1
Related Party Transactions
3 Months Ended
Mar. 31, 2019
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 13 – RELATED PARTY TRANSACTIONS

 

Medical Related Consulting Services Revenue from Related Party

 

During the three months ended March 31, 2019 and 2018, medical related consulting services revenue from related parties was as follows:

 

    Three Months Ended
March 31, 2019
    Three Months Ended
March 31,
2018
 
Medical related consulting services provided to:            
Beijing Daopei (1)   $ 14,260     $ -  
    $ 14,260     $ -  

 

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

 

Prepaid Expenses – Related Parties

 

As of March 31, 2019 and December 31, 2018, the Company made prepayment of $0 and $1,897, respectively, to David Jin, its shareholder, chief executive officer, president and board member, for business travel reimbursement, which have been included in prepaid expenses – related parties on the accompanying consolidated balance sheets.

 

As of March 31, 2019 and December 31, 2018, the Company made prepayment of $0 and $32,293, respectively, to Meng Li, its shareholder and chief operating officer, for business travel reimbursement, which have been included in prepaid expenses – related parties on the accompanying consolidated balance sheets.

 

Advance from Customer – Related Party

 

At March 31, 2019 and December 31, 2018, advance from customer – related party amounted to $0 and $14,829, respectively, which represents prepayment received from our related party, Beijing Daopei, for medical related consulting services. When the services are performed, the amount recorded as advance from customer – related party is recognized as revenue.

 

Accrued Liabilities and Other Payables – Related Parties

 

At March 31, 2019 and December 31, 2018, the Company owed David Jin, its shareholder, chief executive officer, president and board member, of $14,424 and $0, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying consolidated balance sheets.

 

At March 31, 2019 and December 31, 2018, the Company owed Yu Zhou, co-chief executive officer of GenExosome, of $5,319 and $0, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying consolidated balance sheets.

 

At March 31, 2019 and December 31, 2018, the Company owed Luisa Ingargiola, its chief financial officer, of $7,253 and $0, respectively, for travel and other miscellaneous reimbursements, which have been included in accrued liabilities and other payables – related parties on the accompanying consolidated balance sheets.

 

At March 31, 2019 and December 31, 2018, the Company owed Epicon of $7,382 and $0, respectively, for expenses paid on behalf of the Company, which have been included in accrued liabilities and other payables – related parties on the accompanying 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 March 31, 2019 and December 31, 2018, the unpaid acquisition consideration of $100,000, 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 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 property management agreement commenced on May 5, 2017 and expired in March 2019. For the three months ended March 31, 2019 and 2018, the management fee related to the property management agreement amounted to $23,334 and $16,251, respectively.

 

Note Payable – Related Party

 

On March 18, 2019, the Company issued Wenzhao Lu, the Company's largest shareholder and chairman of the Board of Directors, a Promissory Note in the principal amount of $1,000,000 ("Promissory Note") in consideration of cash in the amount of $1,000,000. The Promissory Note accrues interest at the rate of 5% per annum and matures March 19, 2022.

 

As of March 31, 2019, the outstanding principal balance of the note and related accrued and unpaid interest for the note was $1,000,000 and $1,944, respectively.

 

Office Space from Related Party

 

Beijing GenExosome uses office space of a related party, free of rent, which is considered immaterial.