Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2019 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | Aerkomm Inc. |
Entity Central Index Key | 0001590496 |
Amendment Flag | false |
Document Type | S-1 |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Entity Incorporation State Country Code | NV |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash | $ 751,329 | $ 88,309 |
Accounts receivable | 451,130 | 1,745,000 |
Inventories | 3,038,564 | 895,014 |
Prepaid expenses | 2,968,912 | 1,533,748 |
Other receivable - related party | 920 | |
Other receivable - others | 1,446 | 2,616 |
Temporary deposit - related party | 100,067 | |
Other current assets | 5,708 | 11,336 |
Total Current Assets | 7,218,009 | 4,376,090 |
Property and Equipment | ||
Cost | 2,777,144 | 2,709,543 |
Accumulated depreciation | (869,747) | (322,049) |
Property and equipment | 1,907,397 | 2,387,494 |
Prepayment for land | 35,861,589 | 35,237,127 |
Construction in progress | 416,231 | |
Net Property and Equipment | 37,768,986 | 38,040,852 |
Other Assets | ||
Restricted cash | 225,500 | |
Intangible asset, net | 2,887,500 | 3,382,500 |
Goodwill | 1,475,334 | 1,475,334 |
Right-of-use assets, net | 302,602 | |
Deposits | 113,660 | 107,909 |
Total Other Assets | 5,004,596 | 4,965,743 |
Total Assets | 49,991,591 | 47,382,685 |
Current Liabilities | ||
Accounts payable | 912,729 | 2,032,974 |
Accrued expenses | 245,140 | 412,165 |
Other payable - related parties | 30,971 | 173,854 |
Other payable - others | 1,801,109 | 2,580,958 |
Long-term loan - current | 8,666 | |
Lease liability - current - related parties | 22,632 | |
Lease liability - current - others | 309,747 | |
Total Current Liabilities | 3,330,994 | 5,199,951 |
Long-term Liabilities | ||
Long-term loan - non-current | 36,803 | |
Prepayments from customer | 762,000 | 762,000 |
Lease liability - non-current | 45,199 | |
Restricted stock deposit liability | 1,000 | 1,000 |
Total Long-term Liabilities | 845,002 | 763,000 |
Total Liabilities | 4,175,996 | 5,962,951 |
Commitments | ||
Stockholders' Equity | ||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding as of December 31, 2019 and 2018 | ||
Common stock, $0.001 par value, 90,000,000 shares authorized, 9,391,729 shares (excluding 149,162 unvested restricted shares) issued and outstanding as of December 31, 2019; 9,098,110 shares (excluding 149,162 unvested restricted shares) issued and outstanding as of December 31, 2018 | 9,392 | 9,098 |
Additional paid in capital | 69,560,529 | 56,582,800 |
Accumulated deficits | (23,271,687) | (15,292,128) |
Accumulated other comprehensive income (loss) | (482,639) | 119,964 |
Total Stockholders' Equity | 45,815,595 | 41,419,734 |
Total Liabilities and Stockholders' Equity | $ 49,991,591 | $ 47,382,685 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' Equity | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 50,000,000 | 50,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 90,000,000 | 90,000,000 |
Common stock, issued | 9,391,729 | 9,098,110 |
Common stock, outstanding | 9,391,729 | 9,098,110 |
Unvested restricted shares | 149,162 | 149,162 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | ||
Net sales | $ 1,599,864 | $ 1,730,000 |
Service income | 15,000 | |
Total Revenue | 1,599,864 | 1,745,000 |
Cost and Expenses | ||
Cost of sales | 1,587,222 | 1,661,849 |
Operating expenses | 8,569,231 | 8,096,033 |
Total Cost and Expenses | 10,156,453 | 9,757,882 |
Loss from Operations | (8,556,589) | (8,012,882) |
Non-Operating Income (Loss) | ||
Foreign currency exchange gain (loss) | 586,040 | (128,362) |
Other loss, net | (5,759) | (2,973) |
Net Non-Operating Income (Loss) | 580,281 | (131,335) |
Loss Before Income Taxes | (7,976,308) | (8,144,217) |
Income Tax Expense | 3,251 | 4,123 |
Net Loss | (7,979,559) | (8,148,340) |
Other Comprehensive Income (Loss) | ||
Foreign currency translation adjustments | (602,603) | 123,428 |
Total Comprehensive Loss | $ (8,582,162) | $ (8,024,912) |
Net Loss Per Common Share: | ||
Basic | $ (0.8507) | $ (0.9205) |
Diluted | $ (0.8507) | $ (0.9205) |
Weighted Average Shares Outstanding - Basic | 9,380,450 | 8,852,094 |
Weighted Average Shares Outstanding - Diluted | 9,380,450 | 8,852,094 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid in Capital | Subscribed Capital | Accumulated Deficits | Accumulated Other Comprehensive Income (Loss) | Total |
Beginning Balance at Dec. 31, 2017 | $ 8,284 | $ 13,517,991 | $ 75,040 | $ (7,143,788) | $ (3,464) | $ 6,454,063 |
Beginning Balance, Shares at Dec. 31, 2017 | 8,283,733 | |||||
Issuance of common stock | $ 1,060 | 41,392,879 | (75,040) | 41,318,899 | ||
Issuance of common stock, Shares | 1,059,666 | |||||
Issuance of stock warrant | 250,367 | 250,367 | ||||
Restricted stock vested and transferred to common stock | $ 8 | 48 | 56 | |||
Restricted stock vested and transferred to common stock, Shares | 8,286 | |||||
Common stock transferred back to unvested restricted stock | $ (254) | (1,446) | (1,700) | |||
Common stock transferred back to unvested restricted stock, Shares | (253,575) | |||||
Stock compensation expense | 1,422,961 | 1,422,961 | ||||
Net loss for the year | (8,148,340) | (8,148,340) | ||||
Other comprehensive income (loss) | 123,428 | 123,428 | ||||
Ending Balance at Dec. 31, 2018 | $ 9,098 | 56,582,800 | (15,292,128) | 119,964 | 41,419,734 | |
Ending Balance, Shares at Dec. 31, 2018 | 9,098,110 | |||||
Issuance of common stock | $ 294 | 10,810,394 | 10,810,688 | |||
Issuance of common stock, Shares | 293,619 | |||||
Issuance of stock warrant | 1,200 | 1,200 | ||||
Cancellation of stock warrant | (176,667) | (176,667) | ||||
Stock compensation expense | 2,342,802 | 2,342,802 | ||||
Net loss for the year | (7,979,559) | (7,979,559) | ||||
Other comprehensive income (loss) | (602,603) | (602,603) | ||||
Ending Balance at Dec. 31, 2019 | $ 9,392 | $ 69,560,529 | $ (23,271,687) | $ (482,639) | $ 45,815,595 | |
Ending Balance, Shares at Dec. 31, 2019 | 9,391,729 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (7,979,559) | $ (8,148,340) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 1,042,698 | 716,481 |
Stock-based compensation | 2,342,802 | 1,422,961 |
R&D expenses transferred from construction in progress | 416,231 | 732,828 |
Reversal of consulting expense and interest expense on warrants | (121,733) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,293,870 | (1,745,000) |
Inventories | (2,143,550) | |
Prepaid expenses | (1,435,164) | (1,171,356) |
Other receivable - related party | (920) | 46,743 |
Other receivable - others | 1,170 | 409,774 |
Temporary deposit - related party | 100,067 | (100,067) |
Other current assets | 5,628 | (4,745) |
Deposits | (5,751) | 35,760 |
Accounts payable | (1,120,245) | 2,032,974 |
Accrued expenses | (167,025) | (225,510) |
Other payable - related parties | (142,883) | (146,541) |
Other payable - others | (834,783) | (887,956) |
Operating lease liability | 19,828 | |
Net Cash Used for Operating Activities | (8,729,319) | (7,031,994) |
Cash Flows from Investing Activities | ||
Prepayment on land and satellite equipment | (624,462) | (33,850,000) |
Purchase of property and equipment | (10,831) | (708,397) |
Acquisitions of goodwill | (24,798) | |
Net Cash Used for Investing Activities | (635,293) | (34,583,195) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 10,810,688 | 41,318,899 |
Proceeds from long-term loan | 45,469 | |
Payment on finance lease liability | (1,622) | |
Issuance of stock warrant | 1,200 | 250,367 |
Repayment of short-term bank loan | (10,000) | |
Payment on repurchase of restricted stock | (700) | |
Net Cash Provided by Financing Activities | 10,855,735 | 41,558,566 |
Net Increase (Decrease) in Cash | 1,491,123 | (56,623) |
Cash and Restricted Cash, Beginning of Year | 88,309 | 21,504 |
Foreign Currency Translation Effect on Cash | (602,603) | 123,428 |
Cash and Restricted Cash, End of Year | 976,829 | 88,309 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the year for income taxes | 4,061 | |
Cash paid during the year for interest | 5,791 | 2,121 |
Non-cash Operating and Financing Activities: | ||
Restricted stock deposit liability transferred back from common stock | (1,644) | |
Net payment for acquisition of subsidiary during the year ended | ||
Cash | 14,527 | |
Prepaid expenses | 4,317 | |
Other receivable - related party | 43,448 | |
Goodwill | 24,798 | |
Total payment for acquisition of subsidiary | $ 87,090 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | NOTE 1 - Organization Aerkomm Inc. (formerly Maple Tree Kids Inc.) ("Aerkomm") was incorporated on August 14, 2013 in the State of Nevada. Aerkomm was a retail distribution company selling all of its products over the internet in the United States, operating in the infant and toddler products business market. Aerkomm's common stock is quoted for trading on the OTC Markets Group Inc. OTCQX Best Market under the symbol "AKOM." On July 17, 2019, the French Autorité des Marchés Financiers On December 28, 2016, Aircom Pacific Inc. ("Aircom") purchased approximately 86.3% of Aerkomm's issued and outstanding common stock as of the closing date of purchase. As a result of the transaction, Aircom became the controlling shareholder of Aerkomm. Aircom was incorporated on September 29, 2014 under the laws of the State of California. On February 13, 2017, Aerkomm entered into a share exchange agreement ("Exchange Agreement") with Aircom and its shareholders, pursuant to which Aerkomm acquired 100% of the issued and outstanding capital stock of Aircom in exchange for approximately 99.7% of the issued and outstanding capital stock of Aerkomm. As a result of the share exchange, Aircom became a wholly-owned subsidiary of Aerkomm, and the former shareholders of Aircom became the holders of approximately 99.7% of Aerkomm's issued and outstanding capital stock. On December 31, 2014, Aircom acquired a newly incorporated subsidiary, Aircom Pacific Ltd. ("Aircom Seychelles"), a corporation formed under the laws of the Republic of Seychelles. Aircom Seychelles was formed to facilitate Aircom's global corporate structure for both business operations and tax planning. Presently, Aircom Seychelles has no operations. Aircom is working with corporate and tax advisers in finalizing its global corporate structure and has not yet concluded its final plan. On October 17, 2016, Aircom acquired a wholly owned subsidiary, Aircom Pacific Inc. Limited ("Aircom HK"), a corporation formed under the laws of Hong Kong. The purpose of Aircom HK is to conduct Aircom's business and operations in Hong Kong. Presently, its primary function is business development, both with respect to airlines as well as content providers and advertisement partners based in Hong Kong. Aircom HK is also actively seeking strategic partnerships whom Aircom may leverage in order to provide more and better services to its customers. Aircom also plans to provide local supports to Hong Kong-based airlines via Aircom HK and teleports located in Hong Kong. On December 15, 2016, Aircom acquired a wholly owned subsidiary, Aircom Japan, Inc. ("Aircom Japan"), a corporation formed under the laws of Japan. The purpose of Aircom Japan is to conduct business development and operations located within Japan. Aircom Japan is in the process of applying for, and will be the holder of, Satellite Communication Blanket License in Japan, which is necessary for Aircom to provide services within Japan. Aircom Japan will also provide local supports to airlines operating within the territory of Japan. Aircom Telecom LLC ("Aircom Taiwan"), which became a wholly owned subsidiary of Aircom in December 2017, was organized under the laws of Taiwan on June 29, 2016. Aircom Taiwan is responsible for Aircom's business development efforts and general operations within Taiwan. On June 13, 2018, Aerkomm established a new wholly owned subsidiary, Aerkomm Taiwan Inc. ("Aerkomm Taiwan"), a corporation formed under the laws of Taiwan. The purpose of Aerkomm Taiwan is to purchase a parcel of land and raise sufficient fund for ground station building and operate the ground station for data processing (although that cannot be guaranteed). On November 15, 2018, Aircom Taiwan acquired a wholly owned subsidiary, Beijing Yatai Communication Co., Ltd. ("Aircom Beijing"), a corporation formed under the laws of China. The purpose of Aircom Beijing is to conduct Aircom's business and operations in China. Presently, its primary function is business development, both with respect to airlines as well as content providers and advertisement partners based in China as most business conducted in China requires a local registered company. Aircom Beijing is also actively seeking strategic partnerships whom Aircom may leverage in order to provide more and better services to its customers. Aircom also plans to provide local supports to China-based airlines via Aircom Beijing and teleports located in China. On October 31, 2019, Aircom Seychelles established a new a wholly owned subsidiary, Aerkomm Pacific Limited ("Aerkomm Malta"), a corporation formed under the laws of Malta. The purpose of Aerkomm Malta is to conduct Aircom's business and operations and to engage with suppliers and potential airlines customers in the European Union. Aerkomm and its subsidiaries (the "Company") are full-service, development stage providers of in-flight entertainment and connectivity solutions with their initial market in the Asian Pacific region. The Company has not generated significant revenues, excluding non-recurring revenues in 2018 and 2019, and will incur additional expenses as a result of being a public reporting company. Currently, the Company has taken measures that management believes will improve its financial position by financing activities, including through ongoing public offerings, short-term borrowings and equity contributions. Two of the Company's current stockholders (the "Lenders") each committed to provide to the Company a $10 million bridge loan (together, the "Loans") for an aggregate principal amount of $20 million, to bridge the Company's cash flow needs prior to its obtaining a mortgage loan to be secured by a parcel of land (the "Land") the Company purchased in Taiwan. The Lenders also agreed to an earlier closing of up to 25% of the principal amounts of the Loans upon the Company's request prior to the time that title to the Land is vested in the Company's subsidiary, Aerkomm Taiwan, to pay the outstanding payable to the Company's vendors. With the $20 million in Loans committed by the Lenders and future capital raising, the Company believes its working capital will be adequate to sustain its operations for the next twelve months by the committed Loans from its stockholders. On March 20, 2020, the Company borrowed approximately $2.64 million (NT$80,000,000) under the Loans from one of the Lenders. On January 16, 2019, the Company completed a 1-for-5 reverse split of the Company's authorized, issued and outstanding shares of common stock, which was completed by the filing of a Certificate of Change Pursuant to NRS 78.209 with the Nevada Secretary of State on December 26, 2018 (see Note 12). All of the references in these financial statements to authorized common stock and issued and outstanding common stock have been adjusted to reflect this reverse split. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - Summary of Significant Accounting Policies Changes in Fiscal Year On March 18, 2018, the Company's Board of Directors approved a change in the Company's fiscal year end from December 31 to March 31. On February 12, 2019, the Company's Board of Directors approved a change in the Company's fiscal year end from March 31 to December 31. Year-over-year financial data continue to be comparative to prior year as the twelve months that comprise in the new fiscal year are the same as those in the Company's historical financial statements. Principle of Consolidation Aerkomm consolidates the accounts of its subsidiaries, Aircom, Aircom Seychelles, Aircom HK, Aircom Japan, Aircom Taiwan, Aerkomm Taiwan Aircom Beijing and Aerkomm Malta. All significant intercompany accounts and transactions have been eliminated in consolidation. Reclassifications of Prior Period Presentation Certain prior period balance sheet and income statement amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash in banks. As of December 31, 2019 and 2018, the total balance of cash in bank exceeding the amount insured by the Federal Deposit Insurance Corporation (FDIC) for the Company was approximately $233,000 and $0, respectively. The balance of cash deposited in foreign financial institutions exceeding the amount insured by local insurance is approximately $37,000 and $0 as of December 31, 2019 and December 31, 2018, respectively. The Company performs ongoing credit evaluation of its customers and requires no collateral. An allowance for doubtful accounts is provided based on a review of the collectability of accounts receivable. The Company determines the amount of allowance for doubtful accounts by examining its historical collection experience and current trends in the credit quality of its customers as well as its internal credit policies. Actual credit losses may differ from management's estimates. Inventories Inventories are recorded at the lower of weighted-average cost or net realizable value. The Company assesses the impact of changing technology on its inventory on hand and writes off inventories that are considered obsolete. Estimated losses on scrap and slow-moving items are recognized in the allowance for losses. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. When value impairment is determined, the related assets are stated at the lower of fair value or book value. Significant additions, renewals and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed by using the straight-line and double declining methods over the following estimated service lives: ground station equipment – 5 years, computer equipment - 3 to 5 years, furniture and fixtures - 5 years, satellite equipment – 5 years, vehicles – 5 years and lease improvement – 5 years. Upon sale or disposal of property and equipment, the related cost and accumulated depreciation are removed from the corresponding accounts, with any gain or loss credited or charged to income in the period of sale or disposal. The Company reviews the carrying amount of property and equipment for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. It determined that there was no impairment loss for the year ended December 31, 2019. Right-of-Use Asset and Lease Liability In February 2016, the FASB issued ASU No. 2016-02, "Leases" (Topic 842) ("ASU 2016-02"), which modifies lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases and finance leases under previous accounting standards and disclosing key information about leasing arrangements. A lessee should recognize the lease liability to make lease payments and the right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases and finance leases, a right-of-use asset and a lease liability are initially measured at the present value of the lease payments by discount rates. The Company's lease discount rates are generally based on its incremental borrowing rate, as the discount rates implicit in the Company's leases is readily determinable. Operating leases are included in operating lease right-of-use assets and lease liabilities in the consolidated balance sheets. Finance leases are included in property and equipment and lease liability in our consolidated balance sheets. Lease expense for operating expense payments is recognized on a straight-line basis over the lease term. Interest and amortization expenses are recognized for finance leases on a straight-line basis over the lease term. For the lease within a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The Company adopted ASU 2016-02 effective January 1, 2019. Goodwill and Purchased Intangible Assets The Company's goodwill represents the amount by which the total purchase price paid exceeded the estimated fair value of net assets acquired from acquisition of subsidiaries. The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. Purchased intangible assets with finite life are amortized on the straight-line basis over the estimated useful lives of respective assets. Purchased intangible assets with indefinite life are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Purchased intangible asset consists of satellite system software and is amortized over 10 years. Fair Value of Financial Instruments The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following: Level 1 - Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. Level 3 - Inputs to the valuation methodology are unobservable inputs based upon management's best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions. The carrying amounts of the Company's cash, accounts receivable, other receivable, accounts payable, short-term loan, other payable and long-term loan approximated their fair value due to the short-term nature of these financial instruments. The Company's long-term loan and lease payable approximated the carrying amount as its interest rate is considered as approximate to the current rate for comparable loans and leases, respectively. There were no outstanding derivative financial instruments as of December 31, 2019. Revenue Recognition The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs upon the transfer of control in accordance with the contractual terms and conditions of the sale. The Company's major revenue for the year ended December 31, 2018 was the development of a small cell server terminal which will be utilized in the construction of a satellite-based ground communication system networks. The Company also had minor revenue from providing installation and testing services of a satellite-based ground connectivity system. The Company's revenue for the year ended December 31, 2019 was the sales of compact adaptor for smartphone that allows users to turn their smartphone into a satellite smartphone to provide reliable connectivity beyond the coverage of traditional networks. The majority of the Company's revenue is recognized at a point in time when product is shipped or service is provided to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimates for variable consideration. During 2019, the Company adopted the provisions of ASU 2014-09 Revenue from Contract with Customers (Topic 606) and the principal versus agent guidance within the new revenue standard. The application of Topic 606 (versus prior U.S. GAAP) did not have a significant impact on our comparative financial statements as presented. Research and Development Costs Research and development costs are charged to operating expenses as incurred. For the years ended December 31, 2019 and 2018, the Company incurred $416,231 and $1,541,952 of research and development costs, respectively. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Adjustments to prior period's income tax liabilities are added to or deducted from the current period's tax provision. The Company follows FASB guidance on uncertain tax positions and has analyzed its filing positions in all the federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in those jurisdictions. The Company files income tax returns in the US federal, state and foreign jurisdictions where it conducts business. It is not subject to income tax examinations by US federal, state and local tax authorities for years before 2015. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on its consolidated financial position, results of operations, or cash flows. Therefore, no reserves for uncertain tax positions have been recorded. The Company does not expect its unrecognized tax benefits to change significantly over the next twelve months. The Company's policy for recording interest and penalties associated with any uncertain tax positions is to record such items as a component of income before taxes. Penalties and interest paid or received, if any, are recorded as part of other operating expenses in the consolidated statement of operations. Foreign Currency Transactions Foreign currency transactions are recorded in U.S. dollars at the exchange rates in effect when the transactions occur. Exchange gains or losses derived from foreign currency transactions or monetary assets and liabilities denominated in foreign currencies are recognized in current income. At the end of each period, assets and liabilities denominated in foreign currencies are revalued at the prevailing exchange rates with the resulting gains or losses recognized in income for the period. Translation Adjustments If a foreign subsidiary's functional currency is the local currency, translation adjustments will result from the process of translating the subsidiary's financial statements into the reporting currency of the Company. Such adjustments are accumulated and reported under other comprehensive income (loss) as a separate component of stockholders' equity. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include stock warrants and outstanding stock options, shares to be purchased by employees under the Company's employee stock purchase plan. Subsequent Events The Company has evaluated events and transactions after the reported period up to March 27, 2020, the date on which these consolidated financial statements were available to be issued. All subsequent events requiring recognition as of December 31, 2019 have been included in these consolidated financial statements. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | NOTE 3 - Recent Accounting Pronouncements Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12 to simplify the accounting in ASC 740, Income Taxes. This guidance removes certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. This guidance also clarifies and simplifies other areas of ASC 740. This ASU will be effective beginning in the first quarter of the Company’s fiscal year 2021. Early adoption is permitted. Certain amendments in this update must be applied on a prospective basis, certain amendments must be applied on a retrospective basis, and certain amendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings/(deficit) in the period of adoption. The Company is currently evaluating the impact this ASU will have on the financial statements and related disclosures, as well as the timing of adoption. Financial Instruments In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which modifies the measurement of expected credit losses of certain financial instruments. In February 2020, the FASB issued ASU 2020-02 and delayed the effective date of Topic 326 until fiscal year beginning after December 15, 2022. The Company is currently evaluating the impact of adopting ASU 2016-13 on its consolidated financial statements. Intangibles In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other” (Topic 350): Simplifying the Test for Goodwill Impairment, which goodwill shall be tested at least annually for impairment at a level of reporting referred to as a reporting unit. ASU 2017-04 will be effective for annual periods beginning after December 15, 2019. The Company is currently evaluating the impact of ASU 2017-04 on its consolidated financial statements. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 4 - Inventories As of December 31, 2019 and 2018, inventories consisted of the following: 2019 2018 Satellite equipment for sale under construction $ 3,038,564 $ 895,014 Supplies 5,230 5,273 3,043,794 900,287 Allowance for inventory loss (5,230 ) (5,273 ) Net $ 3,038,564 $ 895,014 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 5 - Property and Equipment For the years ended December 31, 2019 and 2018, the changes in cost of property and equipment were as follows: Computer Furniture and Fixture Satellite Ground Station Equipment Vehicle Leasehold Improvement Total January 1, 2018 $ 119,903 $ 10,006 $ 275,410 $ - $ - $ - $ 405,319 Addition 201,167 23,338 - 1,854,027 141,971 83,721 2,304,224 December 31, 2018 321,070 33,344 275,410 1,854,027 141,971 83,721 2,709,543 Addition 7,793 3,038 - - 56,770 - 67,601 December 31, 2019 $ 328,863 $ 36,382 $ 275,410 $ 1,854,027 $ 198,741 $ 83,721 $ 2,777,144 For the years ended December 31, 2019 and 2018, the changes in accumulated depreciation for property and equipment were as follows: Computer Furniture and Fixture Satellite Ground Station Equipment Vehicle Leasehold Improvement Total January 1, 2018 $ 56,763 $ 6,218 $ 37,611 $ - $ - $ - $ 100,592 Addition 44,366 3,153 53,749 92,701 21,980 5,508 221,457 December 31, 2018 101,129 9,371 91,360 92,701 21,980 5,508 322,049 Addition 64,266 6,366 55,082 370,806 33,305 17,873 547,698 December 31, 2019 $ 165,395 $ 15,737 $ 146,442 $ 463,507 $ 55,285 $ 23,381 $ 869,747 Depreciation expense was $547,698 and $221,457 for the years ended December 31, 2019 and 2018, respectively. As of January 1, 2018, construction in progress of $3,250,000 was the payment for the construction of ground station equipment relating to satellite communication system and in-flight system for the Company's internal use. As of December 31, 2018, the balance of construction in progress was $416,231 after the Company incurred additional $637,071 in construction in progress, while transferred construction in progress in the amount of $721,799 to R&D expenses, $895,014 to inventories and $1,854,027 to ground station equipment. As of December 31, 2019, the balance of construction in progress was $0 after the Company transferred $416,231 to R&D expenses. On May 1, 2018, the Company and Aerkomm Taiwan entered into a binding memorandum of understanding with Tsai Ming-Yin (the "Seller") with respect to the acquisition by Aerkomm Taiwan of a parcel of land located in Taiwan. The land is expected to be used to build a satellite ground station and data center. On July 10, 2018, the Company, Aerkomm Taiwan and the Seller entered into a certain real estate sales contract regarding this acquisition. Pursuant to the terms of the contract, and subsequent amendments on July 30, 2018, September 4, 2018, November 2, 2018 and January 3, 2019, the Company paid to the seller in installments refundable prepayment of $33,850,000 as of December 31, 2018. On July 2, 2019, the Company paid the remaining purchase price of $624,462. As of December 31, 2019 and 2018, the estimated commission payable for the land purchase in the amount of $1,387,127 was recorded to the cost of land and the payment to be paid after the full payment of the Land acquisition price until no later than May 31, 2021. |
Intangible Asset, Net
Intangible Asset, Net | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset, Net | NOTE 6 - Intangible Asset, Net For the years ended December 31, 2019 and 2018, the changes in cost and accumulated amortization for intangible asset were as follows: Satellite System Software Accumulated Amortization Net Cost January 1, 2018 $ 4,950,000 $ (1,072,500 ) $ 3,877,500 Addition - (495,000 ) (495,000 ) December 31, 2018 4,950,000 (1,567,500 ) 3,382,500 Addition - (495,000 ) (495,000 ) December 31, 2019 $ 4,950,000 $ (2,062,500 ) $ 2,887,500 Amortization expense was $495,000 for each of the years ended December 31, 2019 and 2018. |
Restricted Cash
Restricted Cash | 12 Months Ended |
Dec. 31, 2019 | |
Restricted Cash [Abstract] | |
Restricted Cash | NOTE 7 - Restricted Cash On September 9, 2019, the Company entered into a liquidity agreement with a security company ("the Liquidity Provider") in France, which is consistent with customary practice in the French securities market. The liquidity agreement complies with applicable laws and regulations in France and authorizes the Liquidity Provider to carry out market purchases and sales of shares of our common stock on the Euronext Paris market. To enable the Liquidity Provider to carry out the interventions provided for in the contract, the Company contributed approximately $225,500 (200,000 euros) into the account. The transaction will be initiated from the beginning of 2020, and the Company will pay the compensation of 20,000 euros in advance by semi-annual installments at the beginning of the semi-annual period of the agreement. The liquidity agreement has a term of one year and will renew automatically unless otherwise terminated by either party. |
Operating and Finance Leases
Operating and Finance Leases | 12 Months Ended |
Dec. 31, 2019 | |
Lease Liability [Abstract] | |
Operating and Finance Leases | NOTE 8 - Operating and Finance Leases A. Lease term and discount rate: The weighted-average remaining lease term (in years) and discount rate related to the leases were as follows: Weighted-average remaining lease term Operating lease 0.64 Year Finance lease 4.85 Years Weighted-average discount rate Operating lease 6.00 % Finance lease 3.82 % B. The balances for the operating and finance leases presented as follows within the balance sheet as of December 31, 2019: Operating Leases Right-of-use assets $ 302,602 Lease liability - current $ 322,430 Finance Leases Property and equipment, at cost $ 56,770 Accumulated depreciation (1,569 ) Property and equipment, net $ 55,201 Lease liability - current $ 9,949 Lease liability – non-current 45,199 Total finance lease liabilities $ 55,148 The components of lease expense are as follows within the statement of operations and comprehensive loss for the year ended December 31, 2019: Operating Leases Lease expense $ 479,389 Sublease rental income (9,173 ) Net lease expense $ 470,217 Finance Leases Amortization of property and equipment $ 1,569 Interest on lease liabilities 348 Total finance lease cost $ 1,917 Supplemental cash flow information related to leases for the year ended December 31, 2019 is as follows: Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 439,271 Operating cash outflows from finance lease $ 348 Financing cash outflows from finance lease $ 1,622 Leased assets obtained in exchange for lease liabilities: Operating leases $ 722,423 Finance lease $ 56,770 Maturity of lease liabilities: Operating Leases Related Party Others Total January 1, 2020 – December 31, 2020 $ 23,029 $ 307,028 $ 330,057 Total lease payments $ 23,029 $ 307,028 $ 330,057 Less: Imputed interest (397 ) (7,230 ) (7,627 ) Present value of lease liabilities $ 22,632 $ 299,798 $ 322,430 Current portion 22,632 299,798 322,430 Non-current portion $ - $ - $ - Finance Leases Related Party Others Total January 1, 2020 – December 31, 2020 $ - $ 11,883 $ 11,883 January 1, 2021 – December 31, 2021 - 11,883 11,883 January 1, 2022 – December 31, 2022 - 11,883 11,883 January 1, 2023 – December 31, 2023 - 11,883 11,883 January 1, 2024 – December 31, 2024 - 13,246 13,246 Total lease payments $ - $ 60,778 $ 60,778 Less: Imputed interest - (5,630 ) (5,630 ) Present value of lease liabilities $ - $ 55,148 $ 55,148 Current portion - (9,949 ) (9,949 ) Non-current portion $ - $ 45,199 $ 45,199 |
Long-Term Loan
Long-Term Loan | 12 Months Ended |
Dec. 31, 2019 | |
Long-term Loan [Abstract] | |
Long-term Loan | NOTE 9 - Long-term Loan The Company has a car loan credit line of NT$1,500,000 (approximately US$48,371), which matures on May 21, 2024, from a Taiwan financing company with annual interest rate of 9.7%. The installment payment plan is 60 months to pay off the balance on the 21 st Year ending December 31, 2020 $ 12,698 2021 12,698 2022 12,698 2023 12,698 2024 5,292 Total installment payments 56,084 Less: Imputed interest (10,615 ) Present value of long-term loan 45,469 Current portion (8,666 ) Non-current portion $ 36,803 |
Prepayment from Customer
Prepayment from Customer | 12 Months Ended |
Dec. 31, 2019 | |
Prepayment from Customer [Abstract] | |
Prepayment from Customer | NOTE 10 - Prepayment from Customer On March 9, 2015, the Company entered into a 10-year purchase agreement with Klingon Aerospace, Inc. ("Klingon"), which was formerly named as Luxe Electronic Co., Ltd. In accordance with the terms of this agreement, Klingon agreed to purchase from the Company an initial order of onboard equipment comprising an onboard system for a purchase price of $909,000, with payments to be made in accordance with a specific milestones schedule. As of December 31, 2019 and 2018, the Company received $762,000 from Klingon in milestone payments towards the equipment purchase price. As of December 31, 2019, the project is still ongoing. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 - Income Taxes Income tax expense for the years ended December 31, 2019 and 2018 consisted of the following: 2019 2018 Current: Federal $ - $ 61 State 1,600 2,400 Foreign 1,651 1,662 Total $ 3,251 $ 4,123 The following table presents a reconciliation of the Company's income tax at statutory tax rate and income tax at effective tax rate for the years ended December 31, 2019 and 2018. 2019 2018 Tax benefit at statutory rate $ (1,764,624 ) $ (1,710,626 ) Net operating loss carryforwards (NOLs) 1,361,542 1,483,725 Stock-based compensation expense 492,000 298,819 Foreign investment losses 127,388 140,000 Amortization and depreciation expense 52,130 (40,100 ) Accrued consulting expense (138,000 ) - Unrealized exchange gain (97,373 ) - Accrued payroll (35,400 ) (6,500 ) Accrued R&D expense - (168,000 ) Others 5,588 6,805 Tax expense at effective tax rate $ 3,251 $ 4,123 Deferred tax assets (liability) as of December 31, 2019 and 2018 consist approximately of: 2019 2018 Net operating loss carryforwards (NOLs) $ 6,388,000 $ 5,632,000 Stock-based compensation expense 1,549,000 893,000 Accrued expenses and unpaid expense payable 53,000 184,000 Tax credit carryforwards 68,000 68,000 Excess of tax amortization over book amortization (619,000 ) (818,000 ) Unrealized/realized exchange gain (106,000 ) - Others (104,000 ) 131,000 Gross 7,229,000 6,090,000 Valuation allowance (7,229,000 ) (6,090,000 ) Net $ - $ - Management does not believe the deferred tax assets will be utilized in the near future; therefore, a full valuation allowance is provided. The net change in deferred tax assets valuation allowance was an increase of approximately $1,139,000 and $3,691,000 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, and December 31, 2018, the Company had federal NOLs of approximately $8,243,000 available to reduce future federal taxable income, expiring in 2037, and additional federal NOLs of approximately $11,314,000 and $5,743,000, respectively, were generated and will be carried forward indefinitely to reduce future federal taxable income. As of December 31, 2019 and 2018, the Company had State NOLs of approximately $21,117,000 and, $15,486,000, respectively, available to reduce future state taxable income, expiring in 2039. As of December 31, 2019 and 2018, the Company has Japan NOLs of approximately $350,000 and $319,000 available to reduce future Japan taxable income, expiring in 2029. As of December 31, 2019 and 2018, the Company has Taiwan NOLs of approximately $1,898,000 and $879,000 available to reduce future Taiwan taxable income, expiring in 2029. As of December 31, 2019 and 2018, the Company had approximately $37,000 of federal research and development tax credit, available to offset future federal income tax. The credit begins to expire in 2034 if not utilized. As of December 31, 2019 and 2018, the Company had approximately $39,000 of California state research and development tax credit available to offset future California state income tax. The credit can be carried forward indefinitely. The Company's ability to utilize its federal and state NOLs to offset future income taxes is subject to restrictions resulting from its prior change in ownership as defined by Internal Revenue Code Section 382. The Company does not expect to incur the limitation on NOLs utilization in future annual usage. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock | NOTE 12 - Capital Stock 1) Preferred Stock: The Company is authorized to issue 50,000,000 shares of preferred stock, with par value of $0.001. As of December 31, 2019, there were no preferred stock shares outstanding. The Board of Directors has the authority to issue preferred stock in one or more series, and in connection with the creation of any such series, by resolutions providing for the issuance of the shares thereof, to determine dividends, voting rights, conversion rights, redemption privileges and liquidation preferences. 2) Common Stock: The Company is authorized to issue 90,000,000 shares of common stock, reflecting a reverse split in the ratio of 1 for 5 effective January 16, 2019, with par value of $0.001. On February 13, 2017, all of Aircom's 5,513,334 restricted shares were converted to 2,055,947 shares of Aerkomm's restricted stock at the ratio of 2.681651 to 1, pursuant to the Exchange Agreement (see Note 1). As of December 31, 2019 and 2018, the restricted shares consisted of the following: December 31, December 31, Restricted stock - vested 1,802,373 1,802,373 Restricted stock - unvested 149,162 149,162 Total restricted stock 1,951,535 1,951,535 The unvested shares of restricted stock were recorded under a deposit liability account awaiting future conversion to common stock when they become vested. On December 21, 2018, the Company repurchased and cancelled an aggregate of 104,413 unvested shares of restricted common stock for a purchase price of $0.0067 per share. On June 30, 2018, the Company issued 8,000 and 2,000 shares of its common stock for the aggregate amount of $199,500 to Integra Consulting Group LLC ("Integra") and Anthony D. Altavilla, principal of Integra, respectively, according to the Consulting Agreement signed on November 15, 2017 between the Company and Integra. As of March 31, 2018, the Company completed its private placement offering of 24,666 shares of its common stock at a price of $28.00 per share for the aggregate amount of $690,648 and the subscribed capital of $75,040 were transferred to common shares subsequently in April and May 2018. On May 14, 2018, the Company entered into an underwriting agreement (the "Underwriting Agreement") with Boustead Securities, LLC ("Boustead") in connection with the public offering, issuance and sale of up to 1,411,782 shares of the Company's common stock on a best efforts basis, with a minimum requirement of 117,647 shares, at the public offering price of $42.50 (originally $8.5 per share before 1 to 5 reverse split) per share, less underwriting discounts, for minimum gross proceeds of $5,000,000 and up to a maximum of $60,000,000. As of December 31, 2018, pursuant to the Underwriting Agreement, the Company had issued an aggregate of 1,025,000 shares of common stock (including 19 shares that were added as a result of rounding in connection with the one-for-five reverse split concluded on January 16, 2019) for gross proceeds of $43,560,894, or net proceeds of $40,503,791. On July 2, 2019, the board of directors approved a supplement to the engagement agreement with one of the Company's service providers pursuant to which the Company agreed to issue to the service provider 23,972 shares of the Company's common stock in consideration of that service provider's agreement to defer the receipt of payment of certain accrued fees amounted to $94,930 due to the service provider. 3) Stock Warrant: The Company has entered into a service agreement which provides for the issuance of warrants to purchase shares of its common stock to a service provider as payment for services. The warrants allow the service provider to purchase a number of shares of Aerkomm common stock equal to the service fee value divided by 85% of the share price paid by investors for Aerkomm's common stock in the first subsequent qualifying equity financing event, at an exercise price of $0.05 per share. For the year ended December 31, 2019 and 2018, Aerkomm has issued additional stock warrants exercisable for $0 and $56,667, respectively, in value of Aerkomm common stock to the service provider as payment for additional services. As of June 28, 2019, these warrants are equivalent to 4,891 shares of the Company's common stock. On June 29, 2019, the Company settled with the service provider to cancel all warrants amounting to $176,667 with $75,000 in three installments payable on July 3, August 1, and September 1, 2019 and all three installments were paid on schedule. In connection with the Underwriting Agreement with Boustead, the Company agreed to issue to Boustead warrants to purchase a number of the Company's shares equal to 6% of the gross proceeds of the public offering, which shall be exercisable, in whole or in part, commencing on April 13, 2018 and expiring on the five-year anniversary at an initial exercise price of $53.125 per share, which is equal to 125% of the offering price paid by investors. As of December 31, 2019 and 2018, the Company issued warrants to Boustead to purchase 77,680 and 61,498 shares, respectively, of the Company's stock and the total warrant value is $194,900 and $193,700, respectively. For the year ended December 31, 2019, the Company recorded $1,200 of increase in the additional paid-in capital as the adjustment for the issuance costs of these stock warrants. |
Major Customer
Major Customer | 12 Months Ended |
Dec. 31, 2019 | |
Major Customer [Abstract] | |
Major Customer | NOTE 13 - Major Customer The Company has one major customer, which represents 10% or more of the total sales of the Company. Sales to and account receivable from the customer for the year ended and as of December 31, 2019 were $1,599,864 and $451,130, respectively. Sales to and account receivable from the customer for the year ended and as of December 31, 2018 were $1,730,000. |
Major Vendors
Major Vendors | 12 Months Ended |
Dec. 31, 2019 | |
Major Vendor [Abstract] | |
Major Vendor | NOTE 14 - Major Vendors The Company has two major vendors, each of which represents 10% or more of the total purchases of the Company for 2019 and 2018. Purchase from and accounts payable balance to vendors for the years ended and as of December 31, 2019 and 2018 were approximately as follows: Purchase Accounts Payable Vendor 2019 2018 2019 2018 A $ 2,143,550 $ 895,014 $ 658,200 $ 382,974 B 1,587,222 1,650,000 254,529 1,650,000 Total $ 3,730,772 $ 2,545,014 $ 912,729 $ 2,032,974 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 15 - Related Party Transactions A. Name of related parties and relationships with the Company: Related Party Relationship Dmedia Holding LP ("Dmedia") 23.45% stockholder Jeffrey Wun Shareholder and CEO of Aerkomm and Aircom Y. Tristan Kuo CFO of Aerkomm and Aircom Louis Giordimaina COO - Aviation of Aircom Yih Lieh (Giretsu) Shih President of Aircom Japan Chien Ming Tseng President of Aircom Taiwan Hao Wei Peng Employee of Aircom Taiwan and founding owner of Aircom Taiwan prior to 12/19/2017 EE Square Japan ("EESQUARE") Yih Lieh (Giretsu) Shih is the Director Bummy Wu Shareholder Wealth Wide Int'l Ltd. ("WWI") Bunny Wu, a shareholder, is the Chairman WISD Intellectual Property Agency, Ltd. ("WISD") Patrick Li, Director of Aircom, is the Chairman; Chih-Ming (Albert) Hsu, Director of the Company, is a Director 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 December 31 2019 2018 Other receivable from EESQAURE 1 $ 920 $ - Temporary deposit to Bummy Wu 2 $ - $ 100,067 Lease liability - current to WWI 3 $ 22,632 $ - Other payable to: Y. Tristan Kuo 4 $ 4,799 $ 3,787 Jeffrey Wun 4 7,510 46,236 Louis Giordimaina 4 3,366 6,071 WWI 3 - 39,224 Chien Ming Tseng 4 - 47,880 Yih Lieh (Giretsu) Shih 4 - 15,497 Others 5 15,296 15,159 Total $ 30,971 $ 173,854 1. Represents receivable from EESQAURE due to Japan office sublease agreement on March 1, 2019. The monthly rent is ¥100,000 (approximately $920) and will be expired March 4, 2021. 2. In November 2018, Aircom HK's bank account was temporarily frozen by its local bank in Hong Kong (the "HK bank") due to Aircom HK's failure to timely submit to the HK bank corporate documentation relating to the corporate organization and good standing of Aircom HK's parent company, Aircom, and Aircom's parent company, Aerkomm. To avoid a potential cash flow issue resulting from this temporary account freeze, Aircom HK withdrew $100,067 in cash from the HK bank and temporarily deposited it in an existing related party's bank account at a different bank for safe keeping. The Aircom HK's bank account with the HK bank was reactivated by the HK bank subsequently and the cash that was transferred to the related party's account was redeposited into Aircom HK's bank account at the HK bank in February 2019. 3. Represents rent for a warehouse in Hong Kong to store the Company's hardware and another rent for the Hong Kong office starting June 28, 2018. 4. Represents payable to employees as a result of regular operating activities. b. For the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Rental income charged from EESQAURE $ 9,173 $ - Rental expense charged by WWI 45,790 28,836 Interest expense charged by Dmedia 1,744 3,116 Consulting fee paid to Louis Giordimaina - 222,246 Legal fee paid to WISD - 10,779 Aircom Japan entered into a sublease agreement with EESQUARE for the period between March 5, 2019 and March 4, 2021. Pursuant to the terms of this lease agreement, EESQAURE pays Aircom Japan a rental fee of approximately $920 per month. Aircom Hong Kong has a lease agreement with WWI with monthly rental cost of $450. The lease term was from June 1, 2017 to May 31, 2018 and the lease was not renewed. Aircom Hong Kong has another lease agreement with WWI for its office space in Hong Kong with monthly rental cost of HKD 30,000 ($3,829). The lease term is from June 28, 2018 to June 27, 2020. Aerkomm had short-term loans from Dmedia with an annual interest rate of 3% and 4.75% for the years ended December 31, 2019 and 2018. The Company repaid the short-term loan in full on July 1, 2019 and June 14, 2018. On May 25, 2018, Mr. Louis Giordimaina was converted from a consultant to a full-time employee and was appointed as Chief Operating Officer – Aviation. The consulting fee paid for the year ended December 31, 2018 in the amount of $222,246 represents the consulting services provided prior to the conversion. Aircom engaged WISD to handle its filing of patent and trademark applications in 2018. No transaction is to be disclosed in 2019. |
Stock Based Compensation
Stock Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | NOTE 16 - Stock Based Compensation In March 2014, Aircom's Board of Directors adopted the 2014 Stock Option Plan (the "Aircom 2014 Plan"). The Aircom 2014 Plan provided for the granting of incentive stock options and non-statutory stock options to employees, consultants and outside directors of Aircom. On February 13, 2017, pursuant to the Exchange Agreement, Aerkomm assumed the options of Aircom 2014 Plan and agreed to issue options for an aggregate of 1,088,882 shares to Aircom's stock option holders. One-third of stock option shares will be vested as of the first anniversary of the time the option shares are granted or the employee's acceptance to serve the Company, and 1/36th of the shares will be vested each month thereafter. Option price is determined by the Board of Directors. The Aircom 2014 Plan became effective upon its adoption by the Board and shall continue in effect for a term of 10 years unless sooner terminated under the terms of Aircom 2014 Plan. On May 5, 2017, the Board of Directors of Aerkomm adopted the Aerkomm Inc. 2017 Equity Incentive Plan (the "Aerkomm 2017 Plan" and together with the Aircom 2015 Plan, the "Plans")) and the reservation of 1,000,000 shares of common stock for issuance under the Aerkomm 2017 Plan. On June 23, 2017, the Board of Directors voted to increase the number of shares of common stock reserved for issuance under the Aerkomm 2017 Plan to 2,000,000 shares. The Aerkomm 2017 Plan provides for the granting of incentive stock options and non-statutory stock options to employees, consultants and outside directors of the Company, as determined by the Compensation Committee of the Board of Directors (or, prior to the establishment of the Compensation Committee on January 23, 2018, the Board of Directors). On June 23, 2017, the Board of Directors agreed to issue options for an aggregate of 291,000 shares under the Aerkomm 2017 Plan to certain officers and directors of the Company. The option agreements are classified into three types of vesting schedule, which includes, 1) 1/6 of the shares subject to the option shall vest commencing on the vesting start date and the remaining shares shall vest at the rate of 1/60 for the next 60 months on the same day of the month as the vesting start date; 2) 1/4 of the shares subject to the option shall vest commencing on the vesting start date and the remaining shares shall vest at the rate of 1/36 for the next 36 months on the same day of the month as the vesting start date; 3) 1/3 of the shares subject to the option shall vest commencing on the first anniversary of vesting start date and the remaining shares shall vest at the rate of 50% each year for the next two years on the same day of the month as the vesting start date. On July 31, 2017, the Board of Directors approved to issue options for an aggregate of 109,000 shares under the Aerkomm 2017 Plan to 11 of its employees. 1/3 of these shares subject to the option shall vest commencing on the first anniversary of vesting start date and the remaining shares shall vest at the rate of 50% each year for the next two years on the same day of the month as the vesting start date. On December 29, 2017, the Board of Directors approved to issue options for an aggregate of 12,000 shares under the Aerkomm 2017 Plan to three of the Company's independent directors, 4,000 shares each. All of these options were vested immediately upon issuance. On June 19, 2018, the Compensation Committee approved to issue options for 32,000 and 30,000 shares under the Aerkomm 2017 Plan to two of the Company executives. One-fourth of the 32,000 shares subject to the option shall vest on May 1, 2019, 2020, 2021 and 2022, respectively. One-third of the 30,000 shares subject to the option shall vest on May 29, 2019, 2020 and 2021, respectively. On December 29, 2018, the Compensation Committee approved to issue options for an aggregate of 12,000 shares under the Aerkomm 2017 Plan to three of the Company's independent directors, 4,000 shares each. All of these options were vested immediately upon issuance. On July 2, 2019, the Board of Directors approved the grant of options to purchase an aggregate of 339,000 shares under the Aerkomm 2017 Plan to 22 of its directors, officers and employees. 25% of the shares vested on the grant date, 25% of the shares vested on July 17, 2019, 25% of the shares will vest on the first anniversary of the grant date, and 25% of the shares will vest upon the second anniversary of the grant date. On October 4, 2019, the Board of Directors approved the grant of options to purchase an aggregate of 85,400 shares under the Aerkomm 2017 Plan to three (3) of its employees. 25% of the shares vested on the grant date, and 25% of the shares will vest on each of October 4, 2020, October 4, 2021 and October 4, 2022, respectively. On December 29, 2019, the Board of Directors approved to issue options for an aggregate of 12,000 shares under the Aerkomm 2017 Plan to three of the Company's independent directors, 4,000 shares each. All of these options shall vest at the date of 1/12th each month for the next 12 months on the same day of December 2019. Option price is determined by the Compensation Committee. The Aerkomm 2017 Plan has been adopted by the Board and shall continue in effect for a term of 10 years unless sooner terminated under the terms of Aerkomm 2017 Plan. The Aerkomm 2017 Plan was approved by the Company's stockholders on March 28, 2018. Valuation and Expense Information Measurement and recognition of compensation expense based on estimated fair values is required for all share-based payment awards made to its employees and directors including employee stock options. The Company recognized compensation expense of $2,342,802 and $1,422,961 for the years ended December 31, 2019 and 2018, respectively, related to such employee stock options. Determining Fair Value Valuation and amortization method The Company uses the Black-Scholes option-pricing-model to estimate the fair value of stock options granted on the date of grant or modification and amortizes the fair value of stock-based compensation at the date of grant on a straight-line basis for recognizing stock compensation expense over the vesting period of the option. Expected term The expected term is the period of time that granted options are expected to be outstanding. The Company uses the SEC's simplified method for determining the option expected term based on the Company's historical data to estimate employee termination and options exercised. Expected dividends The Company does not plan to pay cash dividends before the options are expired. Therefore, the expected dividend yield used in the Black-Scholes option valuation model is zero. Expected volatility Since the Company has no historical volatility, it used the calculated value method which substitutes the historical volatility of a public company in the same industry to estimate the expected volatility of the Company's share price to measure the fair value of options granted under the Plans. Risk-free interest rate The Company based the risk-free interest rate used in the Black-Scholes option valuation model on the market yield in effect at the time of option grant provided in the Federal Reserve Board's Statistical Releases and historical publications on the Treasury constant maturities rates for the equivalent remaining terms for the Plans. Forfeitures The Company is required to estimate forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company uses historical data to estimate option forfeitures and records share-based compensation expense only for those awards that are expected to vest. The Company used the following assumptions to estimate the fair value of options granted in 2019 and 2018 under the Plans as follows: Assumptions Expected term 5-10 years Expected volatility 45.81% - 62.26 % Expected dividends 0 % Risk-free interest rate 1.52% - 2.99 % Forfeiture rate 0% - 5 % Aircom 2014 Plan Activities related to options outstanding for the years ended December 31, 2019 and 2018 were as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Fair Value Per Share Options outstanding at January 1, 2018 932,262 $ 0.4081 $ 0.1282 Granted - - - Exercised - - - Forfeited/Cancelled - - - Options outstanding at December 31, 2018 932,262 0.4081 0.1282 Granted - - - Exercised - - - Forfeited/Cancelled - - - Options outstanding at December 31, 2019 932,262 0.4081 0.1282 Activities related to stock awards under the 2014 incentive compensation plan for the years ended December 31, 2019 and 2018 were as follows: Number of Shares Weighted Average Fair Value Per Share Options unvested at January 1, 2018 302,467 $ 0.2614 Granted - - Vested (216,492 ) 0.5349 Forfeited - - Options unvested at December 31, 2018 85,975 0.4963 Granted - - Vested (85,975 ) 0.4963 Forfeited - - Options unvested at December 31, 2019 - $ - Of the shares covered by options outstanding at the end of 2019, 932,262 are now exercisable. Information related to stock options outstanding and exercisable at December 31, 2019, is as follows: Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding at 12/31/2019 Weighted Weighted Shares Exercisable at 12/31/2019 Weighted Weighted $ 0.0067 820,391 5.17 $ 0.0067 820,391 5.17 $ 0.0067 $ 3.3521 111,871 6.50 3.3521 111,871 6.50 3.3521 932,262 5.33 0.4081 932,262 5.33 0.4081 As of December 31, 2019, there was no unrecognized stock-based compensation expense. No option was exercised during 2019 and 2018. Aerkomm 2017 Plan Activities related to options outstanding for the years ended December 31, 2019 and 2018 were as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Fair Value Per Share Options outstanding at January 1, 2018 253,000 $ 30.8824 $ 18.4796 Granted 78,000 19.7462 13.9258 Exercised - - - Forfeited/Cancelled (48,000 ) 27.5000 16.4610 Options outstanding at December 31, 2018 283,000 28.3867 17.5668 Granted 436,400 5.4763 3.8452 Exercised - - - Forfeited/Cancelled - - - Options outstanding at December 31, 2019 719,400 14.4889 9.2431 Activities related to stock awards under the 2017 incentive compensation plan for the years ended December 31, 2019 and 2018 were as follows: Number of Shares Average Granted-Date Fair Value Options unvested at January 1, 2018 168,250 $ 19.2235 Granted 78,000 13.9258 Vested (74,839 ) 17.5714 Forfeited - - Options unvested at December 31, 2018 171,411 17.5341 Granted 436,400 3.8452 Vested (267,683 ) 7.5460 Forfeited - - Options unvested at December 31, 2019 340,128 $ 7.8313 Of the shares covered by options outstanding at the end of 2019, 379,272 are now exercisable; 186,678 will be exercisable in 2020; 124,100 will be exercisable in 2021; and 29,350 will be exercisable in 2022. Information related to stock options outstanding and exercisable at December 31, 2019, is as follows: Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding at 12/31/2019 Weighted Average Remaining Contractual Life (years) Weighted Shares Exercisable at 12/31/2019 Weighted Weighted $ 3.96 339,000 9.50 $ 3.9600 169,500 9.50 $ 3.9600 $ 9.00 12,000 10.00 9.0000 - - - $ 11.00 – 13.95 97,400 9.67 11.3634 33,350 9.49 12.0615 $ 20.50 – 27.50 147,000 7.89 24.4918 89,750 7.71 26.0047 $ 30.00 – 35.00 124,000 7.50 34.4012 86,672 7.52 34.1981 719,400 8.86 14.4889 379,272 8.62 16.7991 As of December 31, 2019, total unrecognized stock-based compensation expense related to stock options was $1,882,000, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 1.61 years. No option was exercised during 2019 and 2018. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | NOTE 17 - Commitments As of December 31, 2019, the Company's significant commitments with unrelated parties and contingency are summarized as follows: Yihe Culture Media Agreement Airbus SAS Agreement Hong Kong Airlines Agreement: Yuan Jiu Inc. MOU: |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | NOTE 18 - Subsequent Event In December 2019, a novel strain of coronavirus (COVID-19) surfaced. Subsequent to December 31, 2019, the spread of COVID-19 around the world in the first quarter of 2020 has caused significant volatility in U.S. and international markets. There is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the U.S. and international economies and, as such, the Company is unable to determine if it will have a material impact on its operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Changes in Fiscal Year | Changes in Fiscal Year On March 18, 2018, the Company's Board of Directors approved a change in the Company's fiscal year end from December 31 to March 31. On February 12, 2019, the Company's Board of Directors approved a change in the Company's fiscal year end from March 31 to December 31. Year-over-year financial data continue to be comparative to prior year as the twelve months that comprise in the new fiscal year are the same as those in the Company's historical financial statements. |
Principle of Consolidation | Principle of Consolidation Aerkomm consolidates the accounts of its subsidiaries, Aircom, Aircom Seychelles, Aircom HK, Aircom Japan, Aircom Taiwan, Aerkomm Taiwan Aircom Beijing and Aerkomm Malta. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications of Prior Period Presentation | Reclassifications of Prior Period Presentation Certain prior period balance sheet and income statement amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash in banks. As of December 31, 2019 and 2018, the total balance of cash in bank exceeding the amount insured by the Federal Deposit Insurance Corporation (FDIC) for the Company was approximately $233,000 and $0, respectively. The balance of cash deposited in foreign financial institutions exceeding the amount insured by local insurance is approximately $37,000 and $0 as of December 31, 2019 and December 31, 2018, respectively. The Company performs ongoing credit evaluation of its customers and requires no collateral. An allowance for doubtful accounts is provided based on a review of the collectability of accounts receivable. The Company determines the amount of allowance for doubtful accounts by examining its historical collection experience and current trends in the credit quality of its customers as well as its internal credit policies. Actual credit losses may differ from management's estimates. |
Inventories | Inventories Inventories are recorded at the lower of weighted-average cost or net realizable value. The Company assesses the impact of changing technology on its inventory on hand and writes off inventories that are considered obsolete. Estimated losses on scrap and slow-moving items are recognized in the allowance for losses. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. When value impairment is determined, the related assets are stated at the lower of fair value or book value. Significant additions, renewals and betterments are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed by using the straight-line and double declining methods over the following estimated service lives: ground station equipment – 5 years, computer equipment - 3 to 5 years, furniture and fixtures - 5 years, satellite equipment – 5 years, vehicles – 5 years and lease improvement – 5 years. Upon sale or disposal of property and equipment, the related cost and accumulated depreciation are removed from the corresponding accounts, with any gain or loss credited or charged to income in the period of sale or disposal. The Company reviews the carrying amount of property and equipment for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. It determined that there was no impairment loss for the year ended December 31, 2019. |
Right-of-Use Asset and Lease Liability | Right-of-Use Asset and Lease Liability In February 2016, the FASB issued ASU No. 2016-02, "Leases" (Topic 842) ("ASU 2016-02"), which modifies lease accounting for both lessees and lessors to increase transparency and comparability by recognizing lease assets and lease liabilities by lessees for those leases classified as operating leases and finance leases under previous accounting standards and disclosing key information about leasing arrangements. A lessee should recognize the lease liability to make lease payments and the right-of-use asset representing its right to use the underlying asset for the lease term. For operating leases and finance leases, a right-of-use asset and a lease liability are initially measured at the present value of the lease payments by discount rates. The Company's lease discount rates are generally based on its incremental borrowing rate, as the discount rates implicit in the Company's leases is readily determinable. Operating leases are included in operating lease right-of-use assets and lease liabilities in the consolidated balance sheets. Finance leases are included in property and equipment and lease liability in our consolidated balance sheets. Lease expense for operating expense payments is recognized on a straight-line basis over the lease term. Interest and amortization expenses are recognized for finance leases on a straight-line basis over the lease term. For the lease within a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The Company adopted ASU 2016-02 effective January 1, 2019. |
Goodwill and Purchased Intangible Assets | Goodwill and Purchased Intangible Assets The Company's goodwill represents the amount by which the total purchase price paid exceeded the estimated fair value of net assets acquired from acquisition of subsidiaries. The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. Purchased intangible assets with finite life are amortized on the straight-line basis over the estimated useful lives of respective assets. Purchased intangible assets with indefinite life are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Purchased intangible asset consists of satellite system software and is amortized over 10 years. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company utilizes the three-level valuation hierarchy for the recognition and disclosure of fair value measurements. The categorization of assets and liabilities within this hierarchy is based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy consist of the following: Level 1 - Inputs to the valuation methodology are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Inputs to the valuation methodology are quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active or inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the instrument. Level 3 - Inputs to the valuation methodology are unobservable inputs based upon management's best estimate of inputs market participants could use in pricing the asset or liability at the measurement date, including assumptions. The carrying amounts of the Company's cash, accounts receivable, other receivable, accounts payable, short-term loan, other payable and long-term loan approximated their fair value due to the short-term nature of these financial instruments. The Company's long-term loan and lease payable approximated the carrying amount as its interest rate is considered as approximate to the current rate for comparable loans and leases, respectively. There were no outstanding derivative financial instruments as of December 31, 2019. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when performance obligations identified under the terms of contracts with its customers are satisfied, which generally occurs upon the transfer of control in accordance with the contractual terms and conditions of the sale. The Company's major revenue for the year ended December 31, 2018 was the development of a small cell server terminal which will be utilized in the construction of a satellite-based ground communication system networks. The Company also had minor revenue from providing installation and testing services of a satellite-based ground connectivity system. The Company's revenue for the year ended December 31, 2019 was the sales of compact adaptor for smartphone that allows users to turn their smartphone into a satellite smartphone to provide reliable connectivity beyond the coverage of traditional networks. The majority of the Company's revenue is recognized at a point in time when product is shipped or service is provided to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods, which includes estimates for variable consideration. During 2019, the Company adopted the provisions of ASU 2014-09 Revenue from Contract with Customers (Topic 606) and the principal versus agent guidance within the new revenue standard. The application of Topic 606 (versus prior U.S. GAAP) did not have a significant impact on our comparative financial statements as presented. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to operating expenses as incurred. For the years ended December 31, 2019 and 2018, the Company incurred $416,231 and $1,541,952 of research and development costs, respectively. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. Adjustments to prior period's income tax liabilities are added to or deducted from the current period's tax provision. The Company follows FASB guidance on uncertain tax positions and has analyzed its filing positions in all the federal, state and foreign jurisdictions where it is required to file income tax returns, as well as all open tax years in those jurisdictions. The Company files income tax returns in the US federal, state and foreign jurisdictions where it conducts business. It is not subject to income tax examinations by US federal, state and local tax authorities for years before 2015. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material adverse effect on its consolidated financial position, results of operations, or cash flows. Therefore, no reserves for uncertain tax positions have been recorded. The Company does not expect its unrecognized tax benefits to change significantly over the next twelve months. The Company's policy for recording interest and penalties associated with any uncertain tax positions is to record such items as a component of income before taxes. Penalties and interest paid or received, if any, are recorded as part of other operating expenses in the consolidated statement of operations. |
Foreign Currency Transactions | Foreign Currency Transactions Foreign currency transactions are recorded in U.S. dollars at the exchange rates in effect when the transactions occur. Exchange gains or losses derived from foreign currency transactions or monetary assets and liabilities denominated in foreign currencies are recognized in current income. At the end of each period, assets and liabilities denominated in foreign currencies are revalued at the prevailing exchange rates with the resulting gains or losses recognized in income for the period. |
Translation Adjustments | Translation Adjustments If a foreign subsidiary's functional currency is the local currency, translation adjustments will result from the process of translating the subsidiary's financial statements into the reporting currency of the Company. Such adjustments are accumulated and reported under other comprehensive income (loss) as a separate component of stockholders' equity. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include stock warrants and outstanding stock options, shares to be purchased by employees under the Company's employee stock purchase plan. |
Subsequent Events | Subsequent Events The Company has evaluated events and transactions after the reported period up to March 27, 2020, the date on which these consolidated financial statements were available to be issued. All subsequent events requiring recognition as of December 31, 2019 have been included in these consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | 2019 2018 Satellite equipment for sale under construction $ 3,038,564 $ 895,014 Supplies 5,230 5,273 3,043,794 900,287 Allowance for inventory loss (5,230 ) (5,273 ) Net $ 3,038,564 $ 895,014 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Computer Furniture and Fixture Satellite Ground Station Equipment Vehicle Leasehold Improvement Total January 1, 2018 $ 119,903 $ 10,006 $ 275,410 $ - $ - $ - $ 405,319 Addition 201,167 23,338 - 1,854,027 141,971 83,721 2,304,224 December 31, 2018 321,070 33,344 275,410 1,854,027 141,971 83,721 2,709,543 Addition 7,793 3,038 - - 56,770 - 67,601 December 31, 2019 $ 328,863 $ 36,382 $ 275,410 $ 1,854,027 $ 198,741 $ 83,721 $ 2,777,144 |
Schedule of changes in accumulated depreciation for property and equipment | Computer Furniture and Fixture Satellite Ground Station Equipment Vehicle Leasehold Improvement Total January 1, 2018 $ 56,763 $ 6,218 $ 37,611 $ - $ - $ - $ 100,592 Addition 44,366 3,153 53,749 92,701 21,980 5,508 221,457 December 31, 2018 101,129 9,371 91,360 92,701 21,980 5,508 322,049 Addition 64,266 6,366 55,082 370,806 33,305 17,873 547,698 December 31, 2019 $ 165,395 $ 15,737 $ 146,442 $ 463,507 $ 55,285 $ 23,381 $ 869,747 |
Intangible Asset, Net (Tables)
Intangible Asset, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of cost and accumulated amortization for intangible asset | Satellite System Software Accumulated Amortization Net Cost January 1, 2018 $ 4,950,000 $ (1,072,500 ) $ 3,877,500 Addition - (495,000 ) (495,000 ) December 31, 2018 4,950,000 (1,567,500 ) 3,382,500 Addition - (495,000 ) (495,000 ) December 31, 2019 $ 4,950,000 $ (2,062,500 ) $ 2,887,500 |
Operating and Finance Leases (T
Operating and Finance Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Lease Liability [Abstract] | |
Schedule of lease term and discount rate | Weighted-average remaining lease term Operating lease 0.64 Year Finance lease 4.85 Years Weighted-average discount rate Operating lease 6.00 % Finance lease 3.82 % |
Schedule of operating and finance leases | Operating Leases Right-of-use assets $ 302,602 Lease liability - current $ 322,430 Finance Leases Property and equipment, at cost $ 56,770 Accumulated depreciation (1,569 ) Property and equipment, net $ 55,201 Lease liability - current $ 9,949 Lease liability – non-current 45,199 Total finance lease liabilities $ 55,148 |
Schedule of lease expense | Operating Leases Lease expense $ 479,389 Sublease rental income (9,173 ) Net lease expense $ 470,217 Finance Leases Amortization of property and equipment $ 1,569 Interest on lease liabilities 348 Total finance lease cost $ 1,917 |
Schedule of supplemental cash flow information related to leases | Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 439,271 Operating cash outflows from finance lease $ 348 Financing cash outflows from finance lease $ 1,622 Leased assets obtained in exchange for lease liabilities: Operating leases $ 722,423 Finance lease $ 56,770 |
Schedule of maturity of lease liabilities | Operating Leases Related Party Others Total January 1, 2020 – December 31, 2020 $ 23,029 $ 307,028 $ 330,057 Total lease payments $ 23,029 $ 307,028 $ 330,057 Less: Imputed interest (397 ) (7,230 ) (7,627 ) Present value of lease liabilities $ 22,632 $ 299,798 $ 322,430 Current portion 22,632 299,798 322,430 Non-current portion $ - $ - $ - Finance Leases Related Party Others Total January 1, 2020 – December 31, 2020 $ - $ 11,883 $ 11,883 January 1, 2021 – December 31, 2021 - 11,883 11,883 January 1, 2022 – December 31, 2022 - 11,883 11,883 January 1, 2023 – December 31, 2023 - 11,883 11,883 January 1, 2024 – December 31, 2024 - 13,246 13,246 Total lease payments $ - $ 60,778 $ 60,778 Less: Imputed interest - (5,630 ) (5,630 ) Present value of lease liabilities $ - $ 55,148 $ 55,148 Current portion - (9,949 ) (9,949 ) Non-current portion $ - $ 45,199 $ 45,199 |
Long-Term Loan (Tables)
Long-Term Loan (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Long-term Loan [Abstract] | |
Schedule of future installment payments of long term loan | Year ending December 31, 2020 $ 12,698 2021 12,698 2022 12,698 2023 12,698 2024 5,292 Total installment payments 56,084 Less: Imputed interest (10,615 ) Present value of long-term loan 45,469 Current portion (8,666 ) Non-current portion $ 36,803 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense | 2019 2018 Current: Federal $ - $ 61 State 1,600 2,400 Foreign 1,651 1,662 Total $ 3,251 $ 4,123 |
Schedule of reconciliation of the income tax at statutory tax rate | 2019 2018 Tax benefit at statutory rate $ (1,764,624 ) $ (1,710,626 ) Net operating loss carryforwards (NOLs) 1,361,542 1,483,725 Stock-based compensation expense 492,000 298,819 Foreign investment losses 127,388 140,000 Amortization and depreciation expense 52,130 (40,100 ) Accrued consulting expense (138,000 ) - Unrealized exchange gain (97,373 ) - Accrued payroll (35,400 ) (6,500 ) Accrued R&D expense - (168,000 ) Others 5,588 6,805 Tax expense at effective tax rate $ 3,251 $ 4,123 |
Schedule of deferred tax assets (liability) | 2019 2018 Net operating loss carryforwards (NOLs) $ 6,388,000 $ 5,632,000 Stock-based compensation expense 1,549,000 893,000 Accrued expenses and unpaid expense payable 53,000 184,000 Tax credit carryforwards 68,000 68,000 Excess of tax amortization over book amortization (619,000 ) (818,000 ) Unrealized/realized exchange gain (106,000 ) - Others (104,000 ) 131,000 Gross 7,229,000 6,090,000 Valuation allowance (7,229,000 ) (6,090,000 ) Net $ - $ - |
Capital Stock (Tables)
Capital Stock (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of restricted shares | December 31, December 31, Restricted stock - vested 1,802,373 1,802,373 Restricted stock - unvested 149,162 149,162 Total restricted stock 1,951,535 1,951,535 |
Major Vendors (Tables)
Major Vendors (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Major Vendors | |
Schedule of purchase from and accounts payable | Purchase Accounts Payable Vendor 2019 2018 2019 2018 A $ 2,143,550 $ 895,014 $ 658,200 $ 382,974 B 1,587,222 1,650,000 254,529 1,650,000 Total $ 3,730,772 $ 2,545,014 $ 912,729 $ 2,032,974 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of name of related parties and relationships | Related Party Relationship Dmedia Holding LP ("Dmedia") 23.45% stockholder Jeffrey Wun Shareholder and CEO of Aerkomm and Aircom Y. Tristan Kuo CFO of Aerkomm and Aircom Louis Giordimaina COO - Aviation of Aircom Yih Lieh (Giretsu) Shih President of Aircom Japan Chien Ming Tseng President of Aircom Taiwan Hao Wei Peng Employee of Aircom Taiwan and founding owner of Aircom Taiwan prior to 12/19/2017 EE Square Japan ("EESQUARE") Yih Lieh (Giretsu) Shih is the Director Bummy Wu Shareholder Wealth Wide Int'l Ltd. ("WWI") Bunny Wu, a shareholder, is the Chairman WISD Intellectual Property Agency, Ltd. ("WISD") Patrick Li, Director of Aircom, is the Chairman; Chih-Ming (Albert) Hsu, Director of the Company, is a Director |
Schedule of significant related party transactions | 2019 2018 Other receivable from EESQAURE 1 $ 920 $ - Temporary deposit to Bummy Wu 2 $ - $ 100,067 Lease liability - current to WWI 3 $ 22,632 $ - Other payable to: Y. Tristan Kuo 4 $ 4,799 $ 3,787 Jeffrey Wun 4 7,510 46,236 Louis Giordimaina 4 3,366 6,071 WWI 3 - 39,224 Chien Ming Tseng 4 - 47,880 Yih Lieh (Giretsu) Shih 4 - 15,497 Others 5 15,296 15,159 Total $ 30,971 $ 173,854 1. Represents receivable from EESQAURE due to Japan office sublease agreement on March 1, 2019. The monthly rent is ¥100,000 (approximately $920) and will be expired March 4, 2021. 2. In November 2018, Aircom HK's bank account was temporarily frozen by its local bank in Hong Kong (the "HK bank") due to Aircom HK's failure to timely submit to the HK bank corporate documentation relating to the corporate organization and good standing of Aircom HK's parent company, Aircom, and Aircom's parent company, Aerkomm. To avoid a potential cash flow issue resulting from this temporary account freeze, Aircom HK withdrew $100,067 in cash from the HK bank and temporarily deposited it in an existing related party's bank account at a different bank for safe keeping. The Aircom HK's bank account with the HK bank was reactivated by the HK bank subsequently and the cash that was transferred to the related party's account was redeposited into Aircom HK's bank account at the HK bank in February 2019. 3. Represents rent for a warehouse in Hong Kong to store the Company's hardware and another rent for the Hong Kong office starting June 28, 2018. 4. Represents payable to employees as a result of regular operating activities. |
Schedule of expenses paid by related party | b. For the years ended December 31, 2019 and 2018: Year Ended December 31, 2019 2018 Rental income charged from EESQAURE $ 9,173 $ - Rental expense charged by WWI 45,790 28,836 Interest expense charged by Dmedia 1,744 3,116 Consulting fee paid to Louis Giordimaina - 222,246 Legal fee paid to WISD - 10,779 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of estimate the fair value of options granted | Assumptions Expected term 5-10 years Expected volatility 45.81% - 62.26 % Expected dividends 0 % Risk-free interest rate 1.52% - 2.99 % Forfeiture rate 0% - 5 % |
Schedule of stock options outstanding and exercisable | Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding at 12/31/2019 Weighted Weighted Shares Exercisable at 12/31/2019 Weighted Weighted $ 0.0067 820,391 5.17 $ 0.0067 820,391 5.17 $ 0.0067 $ 3.3521 111,871 6.50 3.3521 111,871 6.50 3.3521 932,262 5.33 0.4081 932,262 5.33 0.4081 |
Equity Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock options outstanding and exercisable | Options Outstanding Options Exercisable Range of Exercise Prices Shares Outstanding at 12/31/2019 Weighted Average Remaining Contractual Life (years) Weighted Shares Exercisable at 12/31/2019 Weighted Weighted $ 3.96 339,000 9.50 $ 3.9600 169,500 9.50 $ 3.9600 $ 9.00 12,000 10.00 9.0000 - - - $ 11.00 – 13.95 97,400 9.67 11.3634 33,350 9.49 12.0615 $ 20.50 – 27.50 147,000 7.89 24.4918 89,750 7.71 26.0047 $ 30.00 – 35.00 124,000 7.50 34.4012 86,672 7.52 34.1981 719,400 8.86 14.4889 379,272 8.62 16.7991 |
Aircom 2014 Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of weighted average exercise price and estimated fair value of options | Number of Shares Weighted Average Exercise Price Per Share Weighted Average Fair Value Per Share Options outstanding at January 1, 2018 932,262 $ 0.4081 $ 0.1282 Granted - - - Exercised - - - Forfeited/Cancelled - - - Options outstanding at December 31, 2018 932,262 0.4081 0.1282 Granted - - - Exercised - - - Forfeited/Cancelled - - - Options outstanding at December 31, 2019 932,262 0.4081 0.1282 |
Schedule of compensation plan | Number of Shares Weighted Average Fair Value Per Share Options unvested at January 1, 2018 302,467 $ 0.2614 Granted - - Vested (216,492 ) 0.5349 Forfeited - - Options unvested at December 31, 2018 85,975 0.4963 Granted - - Vested (85,975 ) 0.4963 Forfeited - - Options unvested at December 31, 2019 - $ - |
Aerkomm 2017 Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of nonvested shares | Number of Shares Average Granted-Date Fair Value Options unvested at January 1, 2018 168,250 $ 19.2235 Granted 78,000 13.9258 Vested (74,839 ) 17.5714 Forfeited - - Options unvested at December 31, 2018 171,411 17.5341 Granted 436,400 3.8452 Vested (267,683 ) 7.5460 Forfeited - - Options unvested at December 31, 2019 340,128 $ 7.8313 |
Schedule of stock options outstanding and exercisable | Number of Shares Weighted Average Exercise Price Per Share Weighted Average Fair Value Per Share Options outstanding at January 1, 2018 253,000 $ 30.8824 $ 18.4796 Granted 78,000 19.7462 13.9258 Exercised - - - Forfeited/Cancelled (48,000 ) 27.5000 16.4610 Options outstanding at December 31, 2018 283,000 28.3867 17.5668 Granted 436,400 5.4763 3.8452 Exercised - - - Forfeited/Cancelled - - - Options outstanding at December 31, 2019 719,400 14.4889 9.2431 |
Organization (Details)
Organization (Details) | Jan. 16, 2019 | May 14, 2018 | Feb. 13, 2017 | Dec. 28, 2016 | Dec. 31, 2019 |
Organization (Textual) | |||||
Common stock shares | 99.70% | 86.30% | |||
Reverse split | 1-for-5 | 1-for-5 | |||
Aircom [Member] | |||||
Organization (Textual) | |||||
Common stock shares | 99.70% | ||||
Aerkomm [Member] | |||||
Organization (Textual) | |||||
Acquisition, description | On February 13, 2017, Aerkomm entered into a share exchange agreement (“Exchange Agreement”) with Aircom and its shareholders, pursuant to which Aerkomm acquired 100% of the issued and outstanding capital stock of Aircom in exchange for approximately 99.7% of the issued and outstanding capital stock of Aerkomm. As a result of the share exchange, Aircom became a wholly-owned subsidiary of Aerkomm, and the former shareholders of Aircom became the holders of approximately 99.7% of Aerkomm’s issued and outstanding capital stock. | The Company has taken measures that management believes will improve its financial position by financing activities, including through ongoing public offerings, short-term borrowings and equity contributions. Two of the Company's current shareholders (the "Lenders") each committed to provide to the Company a $10 million bridge loan (together, the "Loans") for an aggregate principal amount of $20 million, to bridge the Company's cash flow needs prior to its obtaining a mortgage loan to be secured by a parcel of land (the "Land") the Company purchased in Taiwan. The Lenders also agreed to an earlier closing of up to 25% of the principal amounts of the Loans upon the Company's request prior to the time that title to the Land is vested in the Company's subsidiary, Aerkomm Taiwan, to pay the outstanding payable to the Company's vendors. With the $20 million in Loans committed by the Lenders and future capital raising, the Company believes its working capital will be adequate to sustain its operations for the next twelve months by the committed Loans from its shareholders. On March 20, 2020, the Company borrowed approximately $2.64 million (NT$80,000,000) under the Loans from one of the Lenders. | |||
Common stock shares | 100.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies (Textual) | ||
Purchased intangible asset consists of satellite system software and is amortized, useful life | 10 years | |
Research and development costs | $ 416,231 | $ 1,541,952 |
Total balance of cash in bank exceeding the amount insured by Federal Deposit Insurance Corporation (FDIC) | 233,000 | 0 |
Total balance of cash in foreign bank exceeding deposit insurance | $ 37,000 | $ 0 |
Vehicles [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful life | 5 years | |
Computer Equipment [Member] | Minimum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful life | 3 years | |
Computer Equipment [Member] | Maximum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful life | 5 years | |
Furniture and Fixtures [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful life | 5 years | |
Satellite Equipment [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful life | 5 years | |
Lease Improvements [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful life | 5 years | |
Ground Station Equipment [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Property and equipment, useful life | 5 years |
Inventories (Details)
Inventories (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Satellite equipment for sale under construction | $ 3,038,564 | $ 895,014 |
Supplies | 5,230 | 5,273 |
Gross | 3,043,794 | 900,287 |
Allowance for inventory loss | (5,230) | (5,273) |
Net | $ 3,038,564 | $ 895,014 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Beginning balance | $ 2,709,543 | $ 405,319 |
Addition | 67,601 | 2,304,224 |
Ending balance | 2,777,144 | 2,709,543 |
Computer Software and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 321,070 | 119,903 |
Addition | 7,793 | 201,167 |
Ending balance | 328,863 | 321,070 |
Furniture and Fixture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 33,344 | 10,006 |
Addition | 3,038 | 23,338 |
Ending balance | 36,382 | 33,344 |
Satellite Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 275,410 | 275,410 |
Addition | ||
Ending balance | 275,410 | 275,410 |
Ground Station Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 1,854,027 | |
Addition | 1,854,027 | |
Ending balance | 1,854,027 | 1,854,027 |
Vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 141,971 | |
Addition | 56,770 | 141,971 |
Ending balance | 198,741 | 141,971 |
Leasehold improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 83,721 | |
Addition | 83,721 | |
Ending balance | $ 83,721 | $ 83,721 |
Property and Equipment (Detai_2
Property and Equipment (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Beginning balance | $ 322,049 | $ 100,592 |
Addition | 547,698 | 221,457 |
Ending balance | 869,747 | 322,049 |
Computer Software and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 101,129 | 56,763 |
Addition | 64,266 | 44,366 |
Ending balance | 165,395 | 101,129 |
Furniture and Fixture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 9,371 | 6,218 |
Addition | 6,366 | 3,153 |
Ending balance | 15,737 | 9,371 |
Satellite Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 91,360 | 37,611 |
Addition | 55,082 | 53,749 |
Ending balance | 146,442 | 91,360 |
Ground Station Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 92,701 | |
Addition | 370,806 | 92,701 |
Ending balance | 463,507 | 92,701 |
Vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 21,980 | |
Addition | 33,305 | 21,980 |
Ending balance | 55,285 | 21,980 |
Leasehold Improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Beginning balance | 5,508 | |
Addition | 17,873 | 5,508 |
Ending balance | $ 23,381 | $ 5,508 |
Property and Equipment (Detai_3
Property and Equipment (Details Textual) - USD ($) | 1 Months Ended | 12 Months Ended | ||
May 01, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 02, 2018 | |
Property and Equipment (Textual) | ||||
Transferred construction in progress amount to R&D expenses | $ 416,231 | $ 721,799 | ||
Construction in progress | 416,231 | $ 3,250,000 | ||
Property plant and equipment cost | 2,777,144 | 2,709,543 | ||
Transferred construction amount to inventories | 895,014 | |||
Transferred construction in progress amount to ground station equipment | 1,854,027 | |||
Depreciation expense | $ 547,698 | 221,457 | ||
Additional construction in progress | $ 637,071 | |||
Tsai Ming-Yin [Member] | ||||
Property and Equipment (Textual) | ||||
Acquisition, description | The land is expected to be used to build a satellite ground station and data center. On July 10, 2018, the Company, Aerkomm Taiwan and the Seller entered into a certain real estate sales contract regarding this acquisition. Pursuant to the terms of the contract, and subsequent amendments on July 30, 2018, September 4, 2018, November 2, 2018 and January 3, 2019, the Company paid to the seller in installments refundable prepayment of $33,850,000 as of December 31, 2018. On July 2, 2019, the Company paid the remaining purchase price of $624,462. As of December 31, 2019 and 2018, the estimated commission payable for the land purchase in the amount of $1,387,127 was recorded to the cost of land and the payment to be paid after the full payment of the Land acquisition price until no later than May 31, 2021. |
Intangible Asset, Net (Details)
Intangible Asset, Net (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible Asset Net [Line Items] | ||
Beginning balance | $ 3,382,500 | $ 3,877,500 |
Addition | (495,000) | (495,000) |
Ending balance | 2,887,500 | 3,382,500 |
Satellite System Software [Member] | ||
Intangible Asset Net [Line Items] | ||
Beginning balance | 4,950,000 | 4,950,000 |
Addition | ||
Ending balance | 4,950,000 | 4,950,000 |
Accumulated Amortization [Member] | ||
Intangible Asset Net [Line Items] | ||
Beginning balance | (1,567,500) | (1,072,500) |
Addition | (495,000) | (495,000) |
Ending balance | $ (2,062,500) | $ (1,567,500) |
Intangible Asset, Net (Details
Intangible Asset, Net (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Intangible Asset, Net (Textual) | ||
Amortization expense | $ 495,000 | $ 495,000 |
Restricted Cash (Details)
Restricted Cash (Details) | Sep. 09, 2019EUR (€) | Dec. 31, 2019USD ($) | Sep. 09, 2019USD ($) | Sep. 09, 2019EUR (€) | Dec. 31, 2018USD ($) |
Restricted Cash (Textual) | |||||
Restricted cash | $ | $ 225,500 | $ 225,500 | |||
Liquidity agreement term | 1 year | ||||
Euro [Member] | |||||
Restricted Cash (Textual) | |||||
Restricted cash | € 200,000 | ||||
Compensation paid in advance | € 20,000 |
Operating and Finance Leases (D
Operating and Finance Leases (Details) | Dec. 31, 2019 |
Weighted-average remaining lease term | |
Operating lease | 7 months 21 days |
Finance lease | 4 years 10 months 6 days |
Weighted-average discount rate | |
Operating lease | 6.00% |
Finance lease | 3.82% |
Operating and Finance Leases _2
Operating and Finance Leases (Details 1) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Operating Leases | ||
Right-of-use asset | $ 302,602 | |
Lease liability - current | 322,430 | |
Finance Leases | ||
Property and equipment, at cost | 56,770 | |
Accumulated depreciation | (1,569) | |
Property and equipment, net | 55,201 | |
Lease liability - current | 9,949 | |
Lease liability - non-current | 45,199 | |
Total finance lease liabilities | $ 55,148 |
Operating and Finance Leases _3
Operating and Finance Leases (Details 2) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Operating Leases | |
Lease expense | $ 479,389 |
Sublease rental income | (9,173) |
Net lease expense | 470,217 |
Finance Leases | |
Amortization of property and equipment | 1,569 |
Interest on lease liabilities | 348 |
Total finance lease cost | $ 1,917 |
Operating and Finance Leases _4
Operating and Finance Leases (Details 3) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash outflows from operating leases | $ 439,271 |
Operating cash outflows from finance lease | 348 |
Financing cash outflows from finance lease | 1,622 |
Leased assets obtained in exchange for lease liabilities: | |
Operating leases | 722,423 |
Finance lease | $ 56,770 |
Operating and Finance Leases _5
Operating and Finance Leases (Details 4) | Dec. 31, 2019USD ($) |
Operating Leases | |
January 1, 2020 - December 31, 2020 | $ 330,057 |
Total lease payments | 330,057 |
Less: Imputed interest | (7,627) |
Present value of lease liabilities | 322,430 |
Current portion | 322,430 |
Non-current portion | |
Finance Leases | |
January 1, 2020 - December 31, 2020 | 11,883 |
January 1, 2021 - December 31, 2021 | 11,883 |
January 1, 2022 - December 31, 2022 | 11,883 |
January 1, 2023 - December 31, 2023 | 11,883 |
January 1, 2024 - December 31, 2024 | 13,246 |
Total lease payments | 60,778 |
Less: Imputed interest | (5,630) |
Present value of lease liabilities | 55,148 |
Current portion | (9,949) |
Non-current portion | 45,199 |
Related Party [Member] | |
Operating Leases | |
January 1, 2020 - December 31, 2020 | 23,029 |
Total lease payments | 23,029 |
Less: Imputed interest | (397) |
Present value of lease liabilities | 22,632 |
Current portion | 22,632 |
Non-current portion | |
Finance Leases | |
January 1, 2020 - December 31, 2020 | |
January 1, 2021 - December 31, 2021 | |
January 1, 2022 - December 31, 2022 | |
January 1, 2023 - December 31, 2023 | |
January 1, 2024 - December 31, 2024 | |
Total lease payments | |
Less: Imputed interest | |
Present value of lease liabilities | |
Current portion | |
Non-current portion | |
Others [Member] | |
Operating Leases | |
January 1, 2020 - December 31, 2020 | 307,028 |
Total lease payments | 307,028 |
Less: Imputed interest | (7,230) |
Present value of lease liabilities | 299,798 |
Current portion | 299,798 |
Non-current portion | |
Finance Leases | |
January 1, 2020 - December 31, 2020 | 11,883 |
January 1, 2021 - December 31, 2021 | 11,883 |
January 1, 2022 - December 31, 2022 | 11,883 |
January 1, 2023 - December 31, 2023 | 11,883 |
January 1, 2024 - December 31, 2024 | 13,246 |
Total lease payments | 60,778 |
Less: Imputed interest | (5,630) |
Present value of lease liabilities | 55,148 |
Current portion | (9,949) |
Non-current portion | $ 45,199 |
Long-Term Loan (Details)
Long-Term Loan (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Long-term Loan [Abstract] | ||
2020 | $ 12,698 | |
2021 | 12,698 | |
2022 | 12,698 | |
2023 | 12,698 | |
2024 | 5,292 | |
Total installment payments | 56,084 | |
Less: Imputed interest | (10,615) | |
Present value of long-term loan | 45,469 | |
Current portion | 8,666 | |
Non-current portion | $ 36,803 |
Long-Term Loan (Details Textual
Long-Term Loan (Details Textual) - 12 months ended Dec. 31, 2019 | USD ($) | TWD ($) |
Long-term Loan (Textual) | ||
Maturity date | May 21, 2024 | May 21, 2024 |
Amount of loan credit line | $ 48,371 | |
Annual interest rate | 9.70% | 9.70% |
Installment payment, description | The installment payment plan is 60 months to pay off the balance on the 21st of each month. | |
NTD [Member] | ||
Long-term Loan (Textual) | ||
Amount of loan credit line | $ 1,500,000 |
Prepayment from Customer (Detai
Prepayment from Customer (Details) - Klingon Aerospace, Inc. [Member] - USD ($) | Mar. 09, 2015 | Dec. 31, 2019 | Dec. 31, 2018 |
Prepayment from Customer (Textual) | |||
Purchase agreement terms | 10 years | ||
Purchase price of equipment | $ 909,000 | $ 762,000 | $ 762,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | ||
Federal | $ 61 | |
State | 1,600 | 2,400 |
Foreign | 1,651 | 1,662 |
Total | $ 3,251 | $ 4,123 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at statutory rate | $ (1,764,624) | $ (1,710,626) |
Net operating loss carryforwards (NOLs) | 1,361,542 | 1,483,725 |
Stock-based compensation expense | 492,000 | 298,819 |
Foreign investment losses | 127,388 | 140,000 |
Amortization and depreciation expense | 52,130 | (40,100) |
Accrued consulting expense | (138,000) | |
Unrealized exchange gain | (97,373) | |
Accrued payroll | (35,400) | (6,500) |
Accrued R&D expense | (168,000) | |
Others | 5,588 | 6,805 |
Tax expense at effective tax rate | $ 3,251 | $ 4,123 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards (NOLs) | $ 6,388,000 | $ 5,632,000 |
Stock-based compensation expense | 1,549,000 | 893,000 |
Accrued expenses and unpaid expense payable | 53,000 | 184,000 |
Tax credit carryforwards | 68,000 | 68,000 |
Excess of tax amortization over book amortization | (619,000) | (818,000) |
Unrealized/realized exchange gain | (106,000) | |
Others | (104,000) | 131,000 |
Gross | 7,229,000 | 6,090,000 |
Valuation allowance | (7,229,000) | (6,090,000) |
Net |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Taxes (Textual) | ||
Change in deferred tax assets valuation allowance | $ 1,139,000 | $ 3,691,000 |
Federal [Member] | ||
Income Taxes (Textual) | ||
Net operating loss | $ 8,243,000 | $ 8,243,000 |
Expiring date, description | expiring in 2037 | expiring in 2037 |
Additional federal NOLs | $ 11,314,000 | $ 5,743,000 |
State [Member] | ||
Income Taxes (Textual) | ||
Net operating loss | $ 21,117,000 | $ 15,486,000 |
Expiring date, description | expiring in 2039. | expiring in 2039. |
Japan [Member] | ||
Income Taxes (Textual) | ||
Net operating loss | $ 350,000 | $ 319,000 |
Expiring date, description | expiring in 2029. | expiring in 2029. |
Taiwan [Member] | ||
Income Taxes (Textual) | ||
Net operating loss | $ 1,898,000 | $ 879,000 |
Expiring date, description | expiring in 2029. | expiring in 2029. |
Federal Research and Development Tax Credit [Member] | ||
Income Taxes (Textual) | ||
Research and development tax credit | $ 37,000 | $ 37,000 |
Expiring date, description | The credit begins to expire in 2034 if not utilized. | |
California State Research and Development Tax Credit [Member] | ||
Income Taxes (Textual) | ||
Research and development tax credit | $ 39,000 | $ 39,000 |
Capital Stock (Details)
Capital Stock (Details) - Restricted Stock [Member] - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted stock - vested | 1,802,373 | 1,802,373 |
Restricted stock - unvested | 149,162 | 149,162 |
Total restricted stock | 1,951,535 | 1,951,535 |
Capital Stock (Details Textual)
Capital Stock (Details Textual) - USD ($) | Jun. 29, 2019 | Jan. 16, 2019 | May 14, 2018 | Jul. 02, 2019 | Jun. 28, 2019 | Dec. 21, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Feb. 13, 2017 | Dec. 31, 2019 | Dec. 31, 2018 |
Capital Stock (Textual) | |||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, authorized | 50,000,000 | 50,000,000 | |||||||||
Preferred stock, outstanding | |||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||||
Common stock, authorized | 90,000,000 | 90,000,000 | |||||||||
Conversion of restricted stock, description | All of Aircom's 5,513,334 restricted shares were converted to 2,055,947 shares of Aerkomm's restricted stock at the ratio of 2.681651 to 1, pursuant to the Exchange Agreement (see Note 1). | ||||||||||
Issuance of common shares | 23,972 | ||||||||||
Common stock for net proceeds | $ 10,810,688 | $ 41,318,899 | |||||||||
Common stock price per shares | $ 8.5 | ||||||||||
Warrant installment payment, description | The Company settled with the service provider to cancel all warrants amounting to $176,667 with $75,000 in three installments payable on July 3, August 1, and September 1, 2019 and all three installments were paid on schedule. | ||||||||||
Reverse split | 1-for-5 | 1-for-5 | |||||||||
Warrant [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Conversion of restricted stock, description | The warrants allow the service provider to purchase a number of shares of Aerkomm common stock equal to the service fee value divided by 85% of the share price paid by investors for Aerkomm's common stock in the first subsequent qualifying equity financing event, at an exercise price of $0.05 per share. | ||||||||||
Minimum shares to be issued under public offering | 4,891 | ||||||||||
Additional stock warrants exercisable | $ 0 | $ 56,667 | |||||||||
Common stock [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Unvested per shares of restricted stock repurchased and cancelled | $ 0.0067 | ||||||||||
Issuance of common shares | 293,619 | 1,059,666 | |||||||||
Common stock for net proceeds | $ 294 | $ 1,060 | |||||||||
Stock warrants, description | The Company issued 8,000 and 2,000 shares of its common stock for the aggregate amount of $199,500 to Integra Consulting Group LLC ("Integra") and Anthony D. Altavilla, principal of Integra, respectively, according to the Consulting Agreement signed on November 15, 2017 between the Company and Integra. | ||||||||||
Unvested shares of restricted stock adjustment | 104,413 | ||||||||||
Boustead Securities, LLC [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Minimum shares to be issued under public offering | 117,647 | ||||||||||
Maximum shares to be sold under public offering | 1,411,782 | ||||||||||
Boustead Securities, LLC [Member] | Warrant [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Stock warrants, description | The Company agreed to issue to Boustead warrants to purchase a number of the Company's shares equal to 6% of the gross proceeds of the public offering, which shall be exercisable, in whole or in part, commencing on April 13, 2018 and expiring on the five-year anniversary at an initial exercise price of $53.125 per share, which is equal to 125% of the offering price paid by investors. As of December 31, 2019 and 2018, the Company issued warrants to Boustead to purchase 77,680 and 61,498 shares, respectively, of the Company's stock and the total warrant value is $194,900 and $193,700, respectively. For the year ended December 31, 2019, the Company recorded $1,200 of increase in the additional paid-in capital as the adjustment for the issuance costs of these stock warrants. | ||||||||||
Private Placement [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Issuance of common shares | 24,666 | ||||||||||
Common stock price per shares | $ 28 | ||||||||||
Subscribed capital | $ 75,040 | ||||||||||
Share aggregate value | $ 690,648 | ||||||||||
IPO [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Issuance of common shares | 1,025,000 | ||||||||||
Common stock for gross proceeds | $ 43,560,894 | ||||||||||
Common stock for net proceeds | $ 40,503,791 | ||||||||||
Common stock price per shares | $ 42.50 | ||||||||||
IPO [Member] | Minimum [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Underwriting discounts for minimum gross proceeds | $ 5,000,000 | ||||||||||
IPO [Member] | Maximum [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Underwriting discounts for minimum gross proceeds | $ 60,000,000 |
Major Customer (Details)
Major Customer (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Major Customer (Textual) | ||
Net sales | $ 1,599,864 | $ 1,730,000 |
Account receivable | $ 451,130 | $ 1,745,000 |
Major customer one [Member] | ||
Major Customer (Textual) | ||
Percentage of total sales | 10.00% |
Major Vendors (Details)
Major Vendors (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Purchase | $ 3,730,772 | $ 2,545,014 |
Accounts payable | 912,729 | 2,032,974 |
Vendor A [Member] | ||
Purchase | 2,143,550 | 895,014 |
Accounts payable | 658,200 | 382,974 |
Vendor B [Member] | ||
Purchase | 1,587,222 | 1,650,000 |
Accounts payable | $ 254,529 | $ 1,650,000 |
Major Vendors (Details Textual)
Major Vendors (Details Textual) | 12 Months Ended |
Dec. 31, 2019 | |
One Major Vendor [Member] | |
Major Vendor (Textual) | |
Percentage of total purchases | 10.00% |
Related Party Transactions (Det
Related Party Transactions (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Dmedia Holding LP ("Dmedia") [Member] | |
Related Party Transaction [Line Items] | |
Relationship | 23.45% stockholder |
Jeffrey Wun [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Shareholder and CEO of Aerkomm and Aircom |
Y. Tristan Kuo [Member] | |
Related Party Transaction [Line Items] | |
Relationship | CFO of Aerkomm and Aircom |
Louis Giordimaina [Member] | |
Related Party Transaction [Line Items] | |
Relationship | COO - Aviation of Aircom |
Yih Lieh (Giretsu) Shih [Member] | |
Related Party Transaction [Line Items] | |
Relationship | President of Aircom Japan |
Chien Ming Tseng [Member] | |
Related Party Transaction [Line Items] | |
Relationship | President of Aircom Taiwan |
Hao Wei Peng [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Employee of Aircom Taiwan and founding owner of Aircom Taiwan prior to 12/19/2017 |
EE Square Japan ("EESQUARE") [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Yih Lieh (Giretsu) Shih is the Director |
Bummy Wu [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Shareholder |
Wealth Wide Int’l Ltd. (“WWI”) [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Bummy Wu, a shareholder, is the Chairman |
WISD Intellectual Property Agency, Ltd. (“WISD”) [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Patrick Li, Director of Aircom, is the Chairman; Chih-Ming (Albert) Hsu, Director of the Company, is a Director |
Related Party Transactions (D_2
Related Party Transactions (Details 1) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Other receivable | $ 920 | ||
EESQAURE [Member] | |||
Related Party Transaction [Line Items] | |||
Other receivable | [1] | 920 | |
Bummy Wu [Member] | |||
Related Party Transaction [Line Items] | |||
Temporary deposit | [2] | 100,067 | |
Y. Tristan Kuo [Member] | |||
Related Party Transaction [Line Items] | |||
Other payable to: | [3] | 4,799 | 3,787 |
WWI [Member] | |||
Related Party Transaction [Line Items] | |||
Lease liability - current | [4] | 22,632 | |
Other payable to: | [4] | 39,224 | |
Jeffrey Wun [Member] | |||
Related Party Transaction [Line Items] | |||
Other payable to: | [3] | 7,510 | 46,236 |
Louis Giordimaina [Member] | |||
Related Party Transaction [Line Items] | |||
Other payable to: | [3] | 3,366 | 6,071 |
Chien Ming Tseng [Member] | |||
Related Party Transaction [Line Items] | |||
Other payable to: | [3] | 47,880 | |
Yih Lieh (Giretsu) Shih [Member] | |||
Related Party Transaction [Line Items] | |||
Other payable to: | [3] | 15,497 | |
Others [Member] | |||
Related Party Transaction [Line Items] | |||
Other payable to: | 15,296 | 15,159 | |
Consolidated Related Party [Member] | |||
Related Party Transaction [Line Items] | |||
Other payable to: | $ 30,971 | $ 173,854 | |
[1] | Represents receivable from EESQAURE due to Japan office sublease agreement on March 1, 2019. The monthly rent is ¥100,000 (approximately $920) and will be expired March 4, 2021. | ||
[2] | In November 2018, Aircom HK's bank account was temporarily frozen by its local bank in Hong Kong (the "HK bank") due to Aircom HK's failure to timely submit to the HK bank corporate documentation relating to the corporate organization and good standing of Aircom HK's parent company, Aircom, and Aircom's parent company, Aerkomm. To avoid a potential cash flow issue resulting from this temporary account freeze, Aircom HK withdrew $100,067 in cash from the HK bank and temporarily deposited it in an existing related party's bank account at a different bank for safe keeping. The Aircom HK's bank account with the HK bank was reactivated by the HK bank subsequently and the cash that was transferred to the related party's account was redeposited into Aircom HK's bank account at the HK bank in February 2019. | ||
[3] | Represents payable to employees as a result of regular operating activities. | ||
[4] | Represents rent for a warehouse in Hong Kong to store the Company's hardware and another rent for the Hong Kong office starting June 28, 2018. |
Related Party Transactions (D_3
Related Party Transactions (Details 2) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | ||
Rental income charged from EESQAURE | $ 9,173 | |
Rental expense charged by WWI | 45,790 | 28,836 |
Interest expense charged by Dmedia | 1,744 | 3,116 |
Consulting fee paid to Louis Giordimaina | 222,246 | |
Legal fee paid to WISD | $ 10,779 |
Related Party Transactions (D_4
Related Party Transactions (Details Textual) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019JPY (¥) | Dec. 31, 2018USD ($) | |
Related Party Transactions (Textual) | ||||
Interest rate | 3.00% | 3.00% | 4.75% | |
Consulting services | $ 222,246 | |||
Cash withdrew from HK bank | $ 100,067 | |||
EE Square Japan (("EESQUARE") [Member] | ||||
Related Party Transactions (Textual) | ||||
Rental fee, per month | $ 920 | |||
Maturity date | Mar. 4, 2021 | Mar. 4, 2021 | ||
EE Square Japan (("EESQUARE") [Member] | JAPAN [Member] | ||||
Related Party Transactions (Textual) | ||||
Rental fee, per month | ¥ | ¥ 100,000 | |||
WWI [Member] | ||||
Related Party Transactions (Textual) | ||||
Rental fee, per month | $ 450 | |||
Lease agreement, description | Aircom Hong Kong has a lease agreement with WWI with monthly rental cost of $450. The lease term was from June 1, 2017 to May 31, 2018 and the lease was not renewed. Aircom Hong Kong has another lease agreement with WWI for its office space in Hong Kong with monthly rental cost of HKD 30,000 ($3,829). The lease term is from June 28, 2018 to June 27, 2020. | Aircom Hong Kong has a lease agreement with WWI with monthly rental cost of $450. The lease term was from June 1, 2017 to May 31, 2018 and the lease was not renewed. Aircom Hong Kong has another lease agreement with WWI for its office space in Hong Kong with monthly rental cost of HKD 30,000 ($3,829). The lease term is from June 28, 2018 to June 27, 2020. |
Stock Based Compensation (Detai
Stock Based Compensation (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividends | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 5 years | 5 years |
Expected volatility | 45.81% | 45.81% |
Risk-free interest rate | 1.52% | 1.52% |
Forfeiture rate | 0.00% | 0.00% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term | 10 years | 10 years |
Expected volatility | 62.26% | 62.26% |
Risk-free interest rate | 2.99% | 2.99% |
Forfeiture rate | 5.00% | 5.00% |
Stock Based Compensation (Det_2
Stock Based Compensation (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Exercisable, Ending | 1,311,534 | |
Aircom 2014 Plan [Member] | ||
Number of Shares | ||
Options outstanding, Beginning | 932,262 | 932,262 |
Granted | ||
Exercised | ||
Forfeited/Cancelled | ||
Options outstanding, Ending | 932,262 | 932,262 |
Weighted Average Exercise Price Per Share | ||
Options outstanding, Beginning | $ 0.4081 | $ 0.4081 |
Granted | ||
Exercised | ||
Forfeited/Cancelled | ||
Options outstanding, Ending | 0.4081 | 0.4081 |
Weighted Average Fair Value Per Share | ||
Options outstanding, Beginning | 0.1282 | 0.1282 |
Granted | ||
Exercised | ||
Forfeited/Cancelled | ||
Options outstanding, Ending | $ 0.1282 | $ 0.1282 |
Stock Based Compensation (Det_3
Stock Based Compensation (Details 2) - Nonvested Shares [Member] - Aircom 2014 [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Outstanding, Beginning | 85,975 | 302,467 |
Granted | ||
Vested | (85,975) | (216,492) |
Forfeited | ||
Outstanding, Ending | 85,975 | |
Weighted Average Exercise Price Per Share | ||
Options outstanding, Beginning | $ 0.4963 | $ 0.2614 |
Granted | ||
Vested | 0.4963 | 0.5349 |
Forfeited | ||
Options outstanding, Ending | $ 0.4963 |
Stock Based Compensation (Det_4
Stock Based Compensation (Details 3) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Exercisable at 12/31/2019 | 1,311,534 |
0.0067 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 12/31/2019 | 820,391 |
Weighted Average Remaining Contractual Life | 5 years 2 months 1 day |
Weighted Average Exercise Price | $ / shares | $ 0.0067 |
Shares Exercisable at 12/31/2019 | 820,391 |
Weighted Average Remaining Contractual Life | 5 years 2 months 1 day |
Weighted Average Exercise Price | $ / shares | $ 0.0067 |
3.3521 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 12/31/2019 | 111,871 |
Weighted Average Remaining Contractual Life | 6 years 6 months |
Weighted Average Exercise Price | $ / shares | $ 3.3521 |
Shares Exercisable at 12/31/2019 | 111,871 |
Weighted Average Remaining Contractual Life | 6 years 6 months |
Weighted Average Exercise Price | $ / shares | $ 3.3521 |
Total [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 12/31/2019 | 932,262 |
Weighted Average Remaining Contractual Life | 5 years 3 months 29 days |
Weighted Average Exercise Price | $ / shares | $ 0.4081 |
Shares Exercisable at 12/31/2019 | 932,262 |
Weighted Average Remaining Contractual Life | 5 years 3 months 29 days |
Weighted Average Exercise Price | $ / shares | $ 0.4081 |
Stock Based Compensation (Det_5
Stock Based Compensation (Details 4) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Exercisable, Ending | 1,311,534 | |
Aerkomm 2017 [Member] | ||
Number of Shares | ||
Outstanding, Beginning | 283,000 | 253,000 |
Granted | 436,400 | 78,000 |
Exercised | ||
Forfeited/Cancelled | (48,000) | |
Outstanding, Ending | 719,400 | 283,000 |
Weighted Average Exercise Price Per Share | ||
Options outstanding, Beginning | $ 28.3867 | $ 30.8824 |
Granted | 5.4763 | 19.7462 |
Exercised | ||
Forfeited/Cancelled | 27.5000 | |
Options outstanding, Ending | 14.4889 | 28.3867 |
Weighted Average Fair Value Per Share | ||
Options outstanding, Beginning | 17.5668 | 18.4796 |
Granted | 3.8452 | 13.9258 |
Exercised | ||
Forfeited/Cancelled | 16.4610 | |
Options outstanding, Ending | $ 9.2431 | $ 17.5668 |
Stock Based Compensation (Det_6
Stock Based Compensation (Details 5) - Nonvested Shares [Member] - Aerkomm 2017 [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | ||
Outstanding, Beginning | 171,411 | 168,250 |
Granted | 436,400 | 78,000 |
Vested | (267,683) | (74,839) |
Forfeited | ||
Outstanding, Ending | 340,128 | 171,411 |
Average Granted-Date Fair Value | ||
Options outstanding, Beginning | $ 17.5341 | $ 19.2235 |
Granted | 3.8452 | 13.9258 |
Vested | 7.5460 | 17.5714 |
Forfeited | ||
Options outstanding, Ending | $ 7.8313 | $ 17.5341 |
Stock Based Compensation (Det_7
Stock Based Compensation (Details 6) - Equity Option [Member] | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
3.96 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 12/31/2019 | shares | 339,000 |
Weighted Average Remaining Contractual Life | 9 years 6 months |
Weighted Average Exercise Price | $ / shares | $ 3.9600 |
Shares Exercisable at 12/31/2019 | shares | 169,500 |
Weighted Average Remaining Contractual Life | 9 years 6 months |
Weighted Average Exercise Price | $ / shares | $ 3.9600 |
9.00 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 12/31/2019 | shares | 12,000 |
Weighted Average Remaining Contractual Life | 10 years |
Weighted Average Exercise Price | $ / shares | $ 9 |
Shares Exercisable at 12/31/2019 | shares | |
Weighted Average Remaining Contractual Life | 0 years |
Weighted Average Exercise Price | $ / shares | |
11.00 – 13.95 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 12/31/2019 | shares | 97,400 |
Weighted Average Remaining Contractual Life | 9 years 8 months 2 days |
Weighted Average Exercise Price | $ / shares | $ 11.3634 |
Shares Exercisable at 12/31/2019 | shares | 33,350 |
Weighted Average Remaining Contractual Life | 9 years 5 months 27 days |
Weighted Average Exercise Price | $ / shares | $ 12.0615 |
20.50 – 27.50 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 12/31/2019 | shares | 147,000 |
Weighted Average Remaining Contractual Life | 7 years 10 months 21 days |
Weighted Average Exercise Price | $ / shares | $ 24.4918 |
Shares Exercisable at 12/31/2019 | shares | 89,750 |
Weighted Average Remaining Contractual Life | 7 years 8 months 16 days |
Weighted Average Exercise Price | $ / shares | $ 26.0047 |
30.00 – 35.00 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 12/31/2019 | shares | 124,000 |
Weighted Average Remaining Contractual Life | 7 years 6 months |
Weighted Average Exercise Price | $ / shares | $ 34.4012 |
Shares Exercisable at 12/31/2019 | shares | 86,672 |
Weighted Average Remaining Contractual Life | 7 years 6 months 7 days |
Weighted Average Exercise Price | $ / shares | $ 34.1981 |
Total [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 12/31/2019 | shares | 719,400 |
Weighted Average Remaining Contractual Life | 8 years 10 months 10 days |
Weighted Average Exercise Price | $ / shares | $ 14.4889 |
Shares Exercisable at 12/31/2019 | shares | 379,272 |
Weighted Average Remaining Contractual Life | 8 years 7 months 13 days |
Weighted Average Exercise Price | $ / shares | $ 16.7991 |
Stock Based Compensation (Det_8
Stock Based Compensation (Details Textual) - USD ($) | Oct. 04, 2019 | Dec. 29, 2019 | Jul. 02, 2019 | Dec. 29, 2018 | Jun. 19, 2018 | Dec. 29, 2017 | Jul. 31, 2017 | Jun. 23, 2017 | Feb. 13, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | May 05, 2017 |
Stock Based Compensation (Textual) | ||||||||||||
Stock option aggregate shares | 1,088,882 | |||||||||||
Share-based Compensation | $ 2,342,802 | $ 1,422,961 | ||||||||||
Unrecognized compensation cost | $ 1,882,000 | |||||||||||
Shares exercisable | 1,311,534 | |||||||||||
Stock option weighted average period | 1 year 7 months 10 days | |||||||||||
Aerkomm 2017 [Member] | ||||||||||||
Stock Based Compensation (Textual) | ||||||||||||
Description of plan agreements | Which includes, 1) 1/6 of the shares subject to the option shall vest commencing on the vesting start date and the remaining shares shall vest at the rate of 1/60 for the next 60 months on the same day of the month as the vesting start date; 2) 1/4 of the shares subject to the option shall vest commencing on the vesting start date and the remaining shares shall vest at the rate of 1/36 for the next 36 months on the same day of the month as the vesting start date; 3) 1/3 of the shares subject to the option shall vest commencing on the first anniversary of vesting start date and the remaining shares shall vest at the rate of 50% each year for the next two years on the same day of the month as the vesting start date. | |||||||||||
Equity Option [Member] | Aerkomm 2014 Plan [Member] | ||||||||||||
Stock Based Compensation (Textual) | ||||||||||||
Description of plan agreements | The shares covered by options outstanding at the end of 2019, 379,272 are now exercisable; 186,678 will be exercisable in 2020; 124,100 will be exercisable in 2021; and 29,350 will be exercisable in 2022. | |||||||||||
Shares exercisable | 932,262 | |||||||||||
Equity Option [Member] | Aerkomm 2017 [Member] | ||||||||||||
Stock Based Compensation (Textual) | ||||||||||||
Shares exercisable | 379,272 | |||||||||||
Board of Directors [Member] | ||||||||||||
Stock Based Compensation (Textual) | ||||||||||||
Stock option aggregate shares | 85,400 | 12,000 | 339,000 | 12,000 | 12,000 | |||||||
Description of plan agreements | Aerkomm 2017 Plan to three (3) of its employees. 25% of the shares vested on the grant date, and 25% of the shares will vest on each of October 4, 2020, October 4, 2021 and October 4, 2022, respectively. | Aerkomm 2017 Plan to 22 of its directors, officers and employees. 25% of the shares vested on the grant date, 25% of the shares vested on July 17, 2019, 25% of the shares will vest on the first anniversary of the grant date, and 25% of the shares will vest upon the second anniversary of the grant date. | ||||||||||
Board of Directors [Member] | Aerkomm 2017 [Member] | ||||||||||||
Stock Based Compensation (Textual) | ||||||||||||
Stock option aggregate shares | 109,000 | |||||||||||
Issuance shares of common stock | 2,000,000 | 1,000,000 | ||||||||||
Aggregate shares issued | 291,000 | |||||||||||
Description of plan agreements | The Aerkomm 2017 Plan to two of the Company executives. One-fourth of the 32,000 shares subject to the option shall vest on May 1, 2019, 2020, 2021 and 2022, respectively. One-third of the 30,000 shares subject to the option shall vest on May 29, 2019, 2020 and 2021, respectively. | The Aerkomm 2017 Plan to 11 of its employees. 1/3 of these shares subject to the option shall vest commencing on the first anniversary of vesting start date and the remaining shares shall vest at the rate of 50% each year for the next two years on the same day of the month as the vesting start date. | ||||||||||
Board of Directors [Member] | Aerkomm 2017 [Member] | Minimum [Member] | ||||||||||||
Stock Based Compensation (Textual) | ||||||||||||
Stock option aggregate shares | 30,000 | |||||||||||
Board of Directors [Member] | Aerkomm 2017 [Member] | Maximum [Member] | ||||||||||||
Stock Based Compensation (Textual) | ||||||||||||
Stock option aggregate shares | 32,000 | |||||||||||
Director [Member] | Aerkomm 2017 [Member] | ||||||||||||
Stock Based Compensation (Textual) | ||||||||||||
Stock option aggregate shares | 4,000 | 4,000 | 4,000 |
Commitments (Details)
Commitments (Details) | Aug. 12, 2019CNY (¥) | Aug. 15, 2018USD ($) | Aug. 15, 2018CNY (¥) | Jun. 29, 2018USD ($) | Jun. 29, 2018CNY (¥) | Jun. 20, 2018USD ($) | Jun. 20, 2018CNY (¥) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Commitments (Textual) | |||||||||
Commitments, description | Yihe Culture Media Agreement: On June 20, 2018, the Company entered into a Cooperation Framework Agreement with Shenzhen Yihe Culture Media Co., Ltd. (“Yihe”), the authorized agent of Guangdong Tengnan Internet, pursuant to which Yihe will promote the development of strategic cooperation between the Company and Guangdong Tengnan Internet. Specifically, Yihe agreed to assist the Company with public relations and advertising, such as market and brand promotion, as well as brand recognition in China (excluding Hong Kong, Macao and Taiwan), including but not limited to news dissemination, creative planning and support of campaigns, financial public relations and internet advertising. More specifically, Yihe will help the Company develop a working application of the WeChat Pay payment solution as well as WeChat applets applicable for Chinese users and relating to cell phone and WiFi connectivity on airplanes, and Yihe will assist the Company in integrating other Tencent internet-based original product offerings. As compensation, the Company agreed to pay Yihe RMB 8 million (approximately US$1.2 million), with RMB 2,000,000 (approximately US$309,000) paid on June 29, 2018 and the remaining RMB 6,000,000 (approximately US$927,000) to be paid by August 15, 2018. On July 19, 2019, Yihe and the Company agreed to extend the expiration date of the agreement to June 20, 2022. The Company had paid the remaining RMB 6,000,000 on August 12, 2019. Airbus SAS Agreement: On November 30, 2018, in furtherance of a memorandum of understanding signed in March 2018, the Company entered into an agreement with Airbus SAS (“Airbus”), pursuant to which Airbus will develop and certify a complete solution allowing the installation of our “AERKOMM K++” system on Airbus’ single aisle aircraft family including the Airbus A319/320/321, for both Current Engine Option (CEO) and New Engine Option (NEO) models. Airbus will also apply for and obtain on our behalf a Supplemental Type Certificate (STC) from the European Aviation Safety Agency, or EASA, as well as from the U.S. Federal Aviation Administration or FAA, for the retrofit system. It is anticipated that the Bilateral Aviation Safety Agreement between EASA and the Civil Aviation Administration of China, or CAAC, will be finalized and go into effect in 2019. Pursuant to the terms of our Airbus agreement, The Company agreed to pay the service fees that Airbus provides the Company with the retrofit solution which will include the Service Bulletin and the material kits including the update of technical and operating manuals pertaining to the aircraft and provision of aircraft configuration control. The timeframe for the completion and testing of this retrofit solution, including the certification, is approximately 16 months from the purchase order issued in August 2018, although there is no guarantee that the project will be successfully completed in the projected timeframe. | Yihe Culture Media Agreement: On June 20, 2018, the Company entered into a Cooperation Framework Agreement with Shenzhen Yihe Culture Media Co., Ltd. (“Yihe”), the authorized agent of Guangdong Tengnan Internet, pursuant to which Yihe will promote the development of strategic cooperation between the Company and Guangdong Tengnan Internet. Specifically, Yihe agreed to assist the Company with public relations and advertising, such as market and brand promotion, as well as brand recognition in China (excluding Hong Kong, Macao and Taiwan), including but not limited to news dissemination, creative planning and support of campaigns, financial public relations and internet advertising. More specifically, Yihe will help the Company develop a working application of the WeChat Pay payment solution as well as WeChat applets applicable for Chinese users and relating to cell phone and WiFi connectivity on airplanes, and Yihe will assist the Company in integrating other Tencent internet-based original product offerings. As compensation, the Company agreed to pay Yihe RMB 8 million (approximately US$1.2 million), with RMB 2,000,000 (approximately US$309,000) paid on June 29, 2018 and the remaining RMB 6,000,000 (approximately US$927,000) to be paid by August 15, 2018. On July 19, 2019, Yihe and the Company agreed to extend the expiration date of the agreement to June 20, 2022. The Company had paid the remaining RMB 6,000,000 on August 12, 2019. Airbus SAS Agreement: On November 30, 2018, in furtherance of a memorandum of understanding signed in March 2018, the Company entered into an agreement with Airbus SAS (“Airbus”), pursuant to which Airbus will develop and certify a complete solution allowing the installation of our “AERKOMM K++” system on Airbus’ single aisle aircraft family including the Airbus A319/320/321, for both Current Engine Option (CEO) and New Engine Option (NEO) models. Airbus will also apply for and obtain on our behalf a Supplemental Type Certificate (STC) from the European Aviation Safety Agency, or EASA, as well as from the U.S. Federal Aviation Administration or FAA, for the retrofit system. It is anticipated that the Bilateral Aviation Safety Agreement between EASA and the Civil Aviation Administration of China, or CAAC, will be finalized and go into effect in 2019. Pursuant to the terms of our Airbus agreement, The Company agreed to pay the service fees that Airbus provides the Company with the retrofit solution which will include the Service Bulletin and the material kits including the update of technical and operating manuals pertaining to the aircraft and provision of aircraft configuration control. The timeframe for the completion and testing of this retrofit solution, including the certification, is approximately 16 months from the purchase order issued in August 2018, although there is no guarantee that the project will be successfully completed in the projected timeframe. | |||||||
Compensation | $ 222,246 | ||||||||
Shenzhen Yihe Culture Media Co., Ltd [Member] | |||||||||
Commitments (Textual) | |||||||||
Compensation | $ 927,000 | $ 309,000 | $ 1,200,000 | ||||||
Agreement Expiry Date | Jun. 20, 2022 | ||||||||
RMB | Shenzhen Yihe Culture Media Co., Ltd [Member] | |||||||||
Commitments (Textual) | |||||||||
Compensation | ¥ | ¥ 6,000,000 | ¥ 6,000,000 | ¥ 2,000,000 | ¥ 8,000,000 |