Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Aerkomm Inc. | |
Entity Central Index Key | 0001590496 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 9,540,891 | |
Entity File Number | 000-55925 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Incorporation State Country Code | NV |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 74,184 | $ 751,329 |
Short-term investment | 121,460 | |
Accounts receivable | 451,130 | |
Inventories, net | 5,030,717 | 3,038,564 |
Prepaid expenses and other current assets | 1,678,486 | 2,976,986 |
Total Current Assets | 6,904,847 | 7,218,009 |
Property and Equipment | ||
Cost | 2,806,068 | 2,777,144 |
Accumulated depreciation | (1,279,468) | (869,747) |
Net | 1,526,600 | 1,907,397 |
Prepayment for land | 35,861,589 | 35,861,589 |
Total Property and Equipment | 37,388,189 | 37,768,986 |
Other Assets | ||
Restricted cash | 41,350 | 225,500 |
Intangible asset, net | 2,516,250 | 2,887,500 |
Goodwill | 1,475,334 | 1,475,334 |
Right-of-use assets, net | 424,119 | 302,602 |
Deposits | 116,775 | 113,660 |
Total Other Assets | 4,573,828 | 5,004,596 |
Total Assets | 48,866,864 | 49,991,591 |
Current Liabilities | ||
Short-term bank loan | 163,200 | |
Short-term loans | 1,314,162 | |
Accounts payable | 1,874,339 | 912,729 |
Accrued expenses and other current liabilities | 4,220,478 | 2,077,220 |
Long-term loan - current | 9,635 | 8,666 |
Lease liability - current | 413,213 | 332,379 |
Total Current Liabilities | 7,995,027 | 3,330,994 |
Long-term Liabilities | ||
Long-term loan - non-current | 30,717 | 36,803 |
Prepayment from customer | 762,000 | 762,000 |
Lease liability - non-current | 256,299 | 45,199 |
Restricted stock deposit liability | 1,000 | 1,000 |
Total Long-Term Liabilities | 1,050,016 | 845,002 |
Total Liabilities | 9,045,043 | 4,175,996 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued and outstanding as of September 30, 2020 and December 31, 2019 | ||
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 September 30, 2020 and December 31, 2019 | 9,392 | 9,392 |
Additional paid in capital | 71,019,515 | 69,560,529 |
Accumulated deficits | (30,129,350) | (23,271,687) |
Accumulated other comprehensive loss | (1,077,736) | (482,639) |
Total Stockholders' Equity | 39,821,821 | 45,815,595 |
Total Liabilities and Stockholders' Equity | $ 48,866,864 | $ 49,991,591 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
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 | 9,391,729 |
Common stock, outstanding | 9,391,729 | 9,391,729 |
Unvested restricted shares | 149,162 | 149,162 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 1,599,864 | |||
Cost of sales | 1,587,222 | |||
Gross profit | 12,642 | |||
Operating expenses | 1,556,729 | 2,733,350 | 6,199,323 | 6,356,161 |
Loss from Operations | (1,556,729) | (2,733,350) | (6,199,323) | (6,343,519) |
Net Non-Operating Loss | (813,222) | (78,433) | (655,065) | (533,459) |
Loss before Income Taxes | (2,369,951) | (2,811,783) | (6,854,388) | (6,876,978) |
Income Tax Expense | 12 | 3,275 | 3,235 | |
Net Loss | (2,369,963) | (2,811,783) | (6,857,663) | (6,880,213) |
Other Comprehensive Income (Loss) | ||||
Change in foreign currency translation adjustments | (367,280) | 59,237 | (595,097) | 524,531 |
Total Comprehensive Loss | $ (2,737,243) | $ (2,752,546) | $ (7,452,760) | $ (6,355,682) |
Net Loss Per Common Share: | ||||
Basic | $ (0.2484) | $ (0.2967) | $ (0.7188) | $ (0.7377) |
Diluted | $ (0.2484) | $ (0.2967) | $ (0.7188) | $ (0.7377) |
Weighted Average Shares Outstanding - Basic | 9,540,891 | 9,475,413 | 9,540,891 | 9,326,382 |
Weighted Average Shares Outstanding - Diluted | 9,540,891 | 9,475,413 | 9,540,891 | 9,326,382 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock | Additional Paid in Capital | Accumulated Deficits | Accumulated Other Comprehensive Income | Total |
Balance at Dec. 31, 2018 | $ 9,098 | $ 56,582,800 | $ (15,292,128) | $ 119,964 | $ 41,419,734 |
Balance, Shares at Dec. 31, 2018 | 9,098,090 | ||||
Stock compensation expense | 313,042 | 313,042 | |||
Revaluation of stock warrant | (68,200) | (68,200) | |||
Other comprehensive loss/income | 343,596 | 343,596 | |||
Net loss for the period | (2,382,992) | (2,382,992) | |||
Balance (Unaudited) at Mar. 31, 2019 | $ 9,098 | 56,827,642 | (17,675,120) | 463,560 | 39,625,180 |
Balance (Unaudited), Shares at Mar. 31, 2019 | 9,098,090 | ||||
Issuance of common stock | $ 152 | 6,047,478 | 6,047,630 | ||
Issuance of common stock, Shares | 152,000 | ||||
Issuance of stock warrant | 5,000 | 5,000 | |||
Stock compensation expense | 346,549 | 346,549 | |||
Revaluation of stock warrant | (268,367) | (268,367) | |||
Other comprehensive loss/income | 121,698 | 121,698 | |||
Net loss for the period | (1,685,438) | (1,685,438) | |||
Balance (Unaudited) at Jun. 30, 2019 | $ 9,250 | 62,958,302 | (19,360,558) | 585,258 | 44,192,252 |
Balance (Unaudited), Shares at Jun. 30, 2019 | 9,250,090 | ||||
Issuance of common stock | $ 142 | 4,762,916 | 4,763,058 | ||
Issuance of common stock, Shares | 141,619 | ||||
Stock compensation expense | 735,078 | 735,078 | |||
Revaluation of stock warrant | 415,800 | 415,800 | |||
Other comprehensive loss/income | 59,237 | 59,237 | |||
Net loss for the period | (2,811,783) | (2,811,783) | |||
Balance (Unaudited) at Sep. 30, 2019 | $ 9,392 | 68,872,096 | (22,172,341) | 644,495 | 47,353,642 |
Balance (Unaudited), Shares at Sep. 30, 2019 | 9,391,709 | ||||
Balance at Dec. 31, 2019 | $ 9,392 | 69,560,529 | (23,271,687) | (482,639) | 45,815,595 |
Balance, Shares at Dec. 31, 2019 | 9,391,729 | ||||
Stock compensation expense | 464,827 | 464,827 | |||
Revaluation of stock warrant | (66,200) | (66,200) | |||
Other comprehensive loss/income | 343,775 | 343,775 | |||
Net loss for the period | (2,366,494) | (2,366,494) | |||
Balance (Unaudited) at Mar. 31, 2020 | $ 9,392 | 69,959,156 | (25,638,181) | (138,864) | 44,191,503 |
Balance (Unaudited), Shares at Mar. 31, 2020 | 9,391,729 | ||||
Stock compensation expense | 448,987 | 448,987 | |||
Revaluation of stock warrant | 455,500 | 455,500 | |||
Other comprehensive loss/income | (571,592) | (571,592) | |||
Net loss for the period | (2,121,206) | (2,121,206) | |||
Balance (Unaudited) at Jun. 30, 2020 | $ 9,392 | 70,863,643 | (27,759,387) | (710,456) | 42,403,192 |
Balance (Unaudited), Shares at Jun. 30, 2020 | 9,391,729 | ||||
Stock compensation expense | 282,572 | 282,572 | |||
Revaluation of stock warrant | (126,700) | (126,700) | |||
Other comprehensive loss/income | (367,280) | (367,280) | |||
Net loss for the period | (2,369,963) | (2,369,963) | |||
Balance (Unaudited) at Sep. 30, 2020 | $ 9,392 | $ 71,019,515 | $ (30,129,350) | $ (1,077,736) | $ 39,821,821 |
Balance (Unaudited), Shares at Sep. 30, 2020 | 9,391,729 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities | ||
Net loss | $ (6,857,663) | $ (6,880,213) |
Adjustments to reconcile net loss to net cash used for operating activities: | ||
Depreciation and amortization | 780,971 | 781,007 |
Stock-based compensation expense | 1,196,386 | 1,394,669 |
R&D expenses transferred from inventory and construction in progress | 416,231 | |
Consulting expense adjustment from change in fair value of warrants | 262,600 | 84,233 |
Unrealized losses on trading security | 68,911 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 451,130 | 1,095,061 |
Inventories | (1,992,153) | (1,485,350) |
Prepaid expenses and other current assets | 1,292,279 | (985,849) |
Deposits | (3,115) | (252) |
Accounts payable | 961,610 | (840,092) |
Accrued expenses and other current liabilities | 2,143,258 | (1,650,867) |
Operating lease liability | 179,372 | 41,069 |
Net Cash Used for Operating Activities | (1,516,414) | (8,030,353) |
Cash Flows from Investing Activities | ||
Purchase of trading security | (184,150) | |
Purchase of property and equipment | (28,924) | (6,455) |
Prepayment on land and satellite equipment | (624,462) | |
Net Cash Used for Investing Activities | (213,074) | (630,917) |
Cash Flows from Financing Activities | ||
Proceeds from short-term bank loan | 163,200 | |
Proceeds from short-term loans | 1,314,162 | |
Proceeds from long-term loan | 45,765 | |
Proceeds from issuance of common stock | 10,810,688 | |
Payment on loan-term loan | (5,117) | |
Payment on finance lease liability | (8,955) | |
Net Cash Provided by Financing Activities | 1,463,290 | 10,856,453 |
Net Increase (Decrease) in Cash and Restricted Cash | (266,198) | 2,195,183 |
Cash and Restricted Cash, Beginning of Period | 976,829 | 88,309 |
Foreign Currency Translation Effect on Cash | (595,097) | 524,531 |
Cash and Restricted Cash, End of Period | 115,534 | 2,808,023 |
Supplemental disclosures of cash flow information: | ||
Cash paid during the period for income taxes | 3,275 | |
Cash paid during the period for interest | $ 4,593 | $ 338 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2020 | |
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 its products over the internet in the United States, operating in the infant and toddler products business market. 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 a public offering, 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 down outstanding payables to the Company's vendors. On April 16, 2020, the Company signed a loan agreement with one of its business partners, EESquare Superstore Corp. ("EESquare") for a working capital loan of up to $1.5 million (unaudited), with an interest rate at 3.25%. On July 29, 2020, the Company filed an amendment to the Registration Statement on Form S-1, originally filed on April 30, 2020, with the Securities and Exchange Commission, or the SEC, pursuant to Section 5 of the Securities Act of 1933 to issue and sell up to 1,951,219 shares (approximately $47,276,000) (unaudited) of the Company's common stock, at a per share price of €20.50 (approximately $24.23). The Form S-1 was subsequently amended on July 29, 2020, October 21, 2020 and November 5, 2020, and was declared effective on November 6, 2020. With the $20 million in Loans committed by the Lenders, the working capital loan from EESquare and expected future capital raising efforts, including the filing for upcoming registered public offering, the Company believes its working capital will be adequate to sustain its operations for the next twelve months. 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 14). 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. The Company'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 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - Summary of Significant Accounting Policies Unaudited Interim Financial Information The accompanying condensed consolidated balance sheet as of September 30, 2020, and the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019 and of changes in stockholders' equity and cash flows for the nine months ended September 30, 2020 and 2019 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position as of September 30, 2020 and the results of its operations for the three and nine months ended September 30, 2020 and 2019 and of its cash flows for the nine months ended September 30, 2020 and 2019. The financial data and other information disclosed in these notes to the condensed consolidated financial statements related to these three-month and nine-month periods are unaudited. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other interim period or other future year. 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. 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 September 30, 2020 and December 31, 2019, the total balance of cash in bank exceeding the amount insured by the Federal Deposit Insurance Corporation (FDIC) for the Company was approximately $0 (unaudited) and $233,000, respectively. The balance of cash deposited in foreign financial institutions exceeding the amount insured by local insurance is approximately $0 and $37,000 as of September 30, 2020 and December 31, 2019, 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. Short-term investment The Company's short-term investment securities are classified as trading security. The securities are stated at fair value within current assets on the Company's condensed balance sheets. Fair value is calculated based on publicly available market information or other estimates determined by the Company. Changes in fair value are recorded in current income. 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 nine-month period ended September 30, 2020 and 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 leases with 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 loans, accrued expense and other payable 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 September 30, 2020. 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 revenue for the nine months ended September 30, 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 Contracts 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 the Company's comparative financial statements as presented. Research and Development Costs Research and development costs are charged to operating expenses as incurred. For the nine-month periods ended September 30, 2020 and 2019, the Company incurred $0 (unaudited) and $416,231 (unaudited) 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 November 7, 2020, the date on which these consolidated financial statements were available to be issued. All subsequent events requiring recognition as of September 30, 2020 have been included in these consolidated financial statements. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [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 its consolidated 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 ASU 2016-13 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 | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 4 - Inventories As of September 30, 2020 and December 31, 2019, inventories consisted of the following: September 30, December 31, (Unaudited) Satellite equipment for sale under construction $ 4,669,297 $ 3,038,564 Supplies 5,284 5,230 4,674,581 3,043,794 Allowance for inventory loss (5,284 ) (5,230 ) Net 4,669,297 3,038,564 Prepayment for inventory 361,420 - Total $ 5,030,717 $ 3,038,564 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 5 - Property and Equipment As of September 30, 2020 and December 31, 2019, the balances of property and equipment were as follows: September 30, December 31, (Unaudited) Ground station equipment $ 1,854,027 $ 1,854,027 Computer software and equipment 335,709 328,863 Satellite equipment 275,410 275,410 Vehicle 220,819 198,741 Leasehold improvement 83,721 83,721 Furniture and fixture 36,382 36,382 2,806,068 2,777,144 Accumulated depreciation (1,279,468 ) (869,747 ) Net 1,526,600 1,907,397 Prepayments - land 35,861,589 35,861,589 Net $ 37,388,189 $ 37,768,986 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 prepayments of $33,850,000 as of December 31, 2018. On July 2, 2019, the Company paid the remaining purchase price balance of $624,462. Under the terms of the real estate sales contract, these purchase price payments are no longer refundable as of September 30, 2020. The Company is currently negotiating with the Seller to allow for a refund of the full purchase price if licenses and approvals needed to transfer land title to Aerkomm Taiwan are not granted by a certain date. There can be no assurances, however, that it will be successful in these negotiations or that the required licenses and approvals will be granted by a certain date, if at all. As of September 30, 2020 and December 31, 2019, 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 no later than December 31, 2021. Depreciation expense was $136,095 (unaudited) and $136,449 (unaudited) for the three-month periods ended September 30, 2020 and 2019, respectively, and $409,721 (unaudited) and $409,757 (unaudited) for the nine-month periods ended September 30, 2020 and 2019, respectively. |
Intangible Asset, Net
Intangible Asset, Net | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Asset, Net | NOTE 6 - Intangible Asset, Net As of September 30, 2020 and December 31, 2019, the cost and accumulated amortization for intangible asset were as follows: September 30, December 31, (Unaudited) Satellite system software $ 4,950,000 $ 4,950,000 Accumulated amortization (2,433,750 ) (2,062,500 ) Net $ 2,516,250 $ 2,887,500 Amortization expense was $123,750 (unaudited) and $123,750 (unaudited) for the three-month periods ended September 30, 2020 and 2019, respectively, and $371,250 (unaudited) and $371,250 (unaudited) for the nine-month periods ended September 30, 2020 and 2019, respectively. |
Short-Term Investment and Restr
Short-Term Investment and Restricted Cash | 9 Months Ended |
Sep. 30, 2020 | |
Short-Term Investment and Restricted Cash [Abstract] | |
Short-term Investment and Restricted Cash | NOTE 7 - Short-term Investment and 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 the Company’s 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) into the account. The transaction was 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 be renewed automatically unless otherwise terminated by either party. As of September 30, 2020, the Company purchased 7,732 shares (unaudited) of its common stock with the fair value of $121,460 (unaudited). The securities were recorded as short-term investment with unrealized loss of $68,911 (unaudited). The remaining cash balance was $41,350 (€35,290) (unaudited). |
Operating and Finance Leases
Operating and Finance Leases | 9 Months Ended |
Sep. 30, 2020 | |
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: Unaudited Weighted-average remaining lease term Operating lease 2.08 Years Finance lease 4.10 Years Weighted-average discount rate Operating lease 6.00 % Finance lease 3.82 % B. The balances of the operating and finance leases are presented as follows within the balance sheets as of September 30, 2020 and December 31, 2019: Operating Leases September 30, December 31, (Unaudited) Right-of-use assets $ 424,119 $ 302,602 Lease liability - current $ 402,636 $ 322,430 Lease liability – non-current $ 217,571 $ - Finance Leases September 30, December 31, (Unaudited) Property and equipment, at cost $ 56,770 $ 56,770 Accumulated depreciation (10,398 ) (1,569 ) Property and equipment, net $ 46,372 $ 55,201 Lease liability - current $ 10,577 $ 9,949 Lease liability – non-current 38,728 45,199 Total finance lease liabilities $ 49,305 $ 55,148 The components of lease expense are as follows within the condensed consolidated statements of operations and comprehensive loss for the three-month and nine-month periods ended September 30, 2020 and 2019: Operating Leases Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Lease expense $ 126,396 $ 101,088 $ 346,741 $ 345,083 Sublease rental income (2,827 ) - (8,372 ) - Net lease expense $ 123,569 $ 101,088 $ 338,369 $ 345,083 Finance Leases Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Amortization of right-of-use asset $ 2,897 $ - $ 8,829 $ - Interest on lease liabilities 481 - 1,493 - Total finance lease cost $ 3,378 $ - $ 10,322 $ - Supplemental cash flow information related to leases for the nine-month periods ended September 30, 2020 and 2019 is as follows: September 30, September 30, (Unaudited) (Unaudited) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 151,360 $ 304,014 Operating cash outflows from finance lease $ 7,462 $ - Financing cash outflows from finance lease $ 1,493 $ - Leased assets obtained in exchange for lease liabilities: Operating leases $ 453,049 $ 722,423 Maturity of lease liabilities: Operating Leases (Unaudited) October 1, 2020 – September 30, 2021 $ 421,637 October 1, 2021 – September 30, 2022 167,555 October 1, 2022 – September 30, 2023 59,504 Total lease payments 648,696 Less: Imputed interest (28,489 ) Present value of lease liabilities 620,207 Current portion (402,636 ) Non-current portion $ 217,571 Finance Leases (Unaudited) October 1, 2020 – September 30, 2021 $ 12,277 October 1, 2021 – September 30, 2022 12,277 October 1, 2022 – September 30, 2023 12,277 October 1, 2023 – September 30, 2024 12,277 October 1, 2024 – September 30, 2025 4,478 Total lease payments 53,586 Less: Imputed interest (4,281 ) Present value of lease liabilities 49,305 Current portion (10,577 ) Non-current portion $ 38,728 |
Short-term Bank Loan
Short-term Bank Loan | 9 Months Ended |
Sep. 30, 2020 | |
Short Term Bank Loan [Abstract] | |
Short-term Bank Loan | NOTE 9 - Short-term Bank Loan On April 16, 2020, the Company received loan proceeds in the amount of $163,200 under the Paycheck Protection Program ("PPP"). The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. According to PPP, borrowers may be eligible for loan forgiveness if the funds were used for eligible payroll costs, payments on business mortgage interest payments, rent, or utilities during either the 8- or 24-week period after disbursement. A borrower can apply for forgiveness once it has used all loan proceeds for which the borrower is requesting forgiveness. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred. The Company has applied for the forgiveness of the loan within the maturity date and is waiting for the approval. |
Short-term Loan
Short-term Loan | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Short-term Loan | NOTE 10 - Short-term Loan On April 16, 2020, the Company signed a loan agreement with one of its business partners, EESquare Superstore Corp. (“EESquare”) for a working capital loan of up to $1.5 million (unaudited), with an interest rate at 3.25% (unaudited). The agreement will expire on April 15, 2022. Each advance shall be due and payable in full no later than one year from the date of such advance or the termination of the agreement, whichever comes first. As of September 30, 2020, the Company has drawn down $1,100,000 (unaudited) under this loan agreement. |
Long-Term Loan
Long-Term Loan | 9 Months Ended |
Sep. 30, 2020 | |
Long-term Loan [Abstract] | |
Long-term Loan | NOTE 11 - 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 21st of each month. Future installment payments as of September 30, 2020 are as follows: (Unaudited) Twelve months ending September 30, 2021 $ 13,119 2022 13,119 2023 13,119 2024 8,746 Total installment payments 48,103 Less: Imputed interest (7,751 ) Present value of long-term loan 40,352 Current portion (9,635 ) Non-current portion $ 30,717 |
Prepayment from Customer
Prepayment from Customer | 9 Months Ended |
Sep. 30, 2020 | |
Prepayment from Customer [Abstract] | |
Prepayment from Customer | NOTE 12 - 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 September 30, 2020 and December 31, 2019, the Company received $762,000 from Klingon in milestone payments towards the equipment purchase price. As of November 7, 2020, the project is still ongoing. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 13 - Income Taxes Income tax expense for the three-month and nine-month periods ended September 30, 2020 and 2019 consisted of the following: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Current: (Unaudited) (Unaudited) (Unaudited) (Unaudited) Federal $ - $ - $ - $ - State - - 1,600 1,600 Foreign 12 - 1,675 1,635 Total $ 12 $ - $ 3,275 $ 3,235 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 three-month and nine-month periods ended September 30, 2020 and 2019. Three Months Ended Nine Months Ended 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Tax benefit at statutory rate $ (240,895 ) $ (688,749 ) $ (1,244,715 ) $ (1,703,699 ) Valuation allowance on net operating loss carryforwards 183,521 531,909 752,812 1,136,489 Unrealized investment losses (gains) (8,487 ) 107,200 89,803 290,900 Stock-based compensation expense 59,300 154,400 251,200 292,900 Amortization and depreciation expense (22,013 ) 58,700 3,320 33,100 Accrued payroll 98,900 900 174,800 (40,900 ) Unrealized exchange losses (gains) (76,526 ) 11,653 (104,720 ) 98,920 Accrued consulting expense - (122,300 ) - (122,300 ) Others 6,212 (53,713 ) 80,775 17,825 Tax expense at effective tax rate $ 12 $ - $ 3,275 $ 3,235 Deferred tax assets (liabilities) as of September 30, 2020 and December 31, 2019 consist approximately of: September 30, December 31, 2019 (Unaudited) Net operating loss carryforwards (NOLs) $ 7,688,000 $ 6,388,000 Stock-based compensation expense 1,884,000 1,549,000 Accrued expenses and unpaid expense payable 312,000 53,000 Tax credit carryforwards 68,000 68,000 Excess of tax amortization over book amortization (587,000 ) (619,000 ) Unrealized exchange gain (230,000 ) (106,000 ) Others (151,000 ) (104,000 ) Gross 8,984,000 7,229,000 Valuation allowance (8,984,000 ) (7,229,000 ) 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 $ 1,755,000 (unaudited) for the nine months ended September 30, 2020. As of September 30, 2020 and December 31, 2019, 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 $ 14,514,000 (unaudited) and $11,314,000, respectively, were generated and will be carried forward indefinitely to reduce future federal taxable income. As of September 30, 2020 and December 31, 2019, the Company had State NOLs of approximately $ 25,144,000 (unaudited) and $21,117,000 respectively, available to reduce future state taxable income, expiring in 2040 and 2039, respectively. As of September 30, 2020 and December 31, 2019, the Company has Japan NOLs of approximately $367,000 (unaudited) and $350,000, respectively, available to reduce future Japan taxable income, expiring through 2031. As of September 30, 2020 and December 31, 2019, the Company has Taiwan NOLs of approximately $2,701,000 (unaudited) and $1,898,000, respectively, available to reduce future Taiwan taxable income, expiring in 2030 and 2029, respectively. As of September 30, 2020 and December 31, 2019, the Company had approximately $37,000 (unaudited) and $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 September 30, 2020 and December 31, 2019, the Company had approximately $39,000 (unaudited) and $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 | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Capital Stock | NOTE 14 - 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 September 30, 2020, 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 September 30, 2020 and December 31, 2019, the restricted shares consisted of the following: September 30, December 31, (Unaudited) 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. 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 nine-month periods ended September 30, 2020 and 2019, Aerkomm has not issued additional stock warrants to the service provider as payment for additional services. As of September 28, 2019, these warrants are equivalent to 4,891 shares of the Company's common stock. On September 29, 2019, the Company settled with the service provider to cancel all these warrants 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 Securities, LLC, or 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, the Company issued total warrants to Boustead to purchase 77,680 shares of the Company's stock. For the nine-month periods ended September 30, 2020 and 2019, the Company recorded an increase of $262,600 and $84,233, respectively, in additional paid-in capital as adjustment for the issuance costs of these stock warrants. |
Significant Related Party Trans
Significant Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Significant Related Party Transactions | NOTE 15 - Significant Related Party Transactions A. Name of related parties and relationships with the Company: Related Party Relationship Dmedia Holding LP ("Dmedia") Major stockholder Well Thrive Limited ("WTL") Major stockholder; Sheng-Chun Chang is the President Yuan Jiu Inc. ("Yuan Jiu") Stockholder; Albert Hsu, a Director of Aerkomm, is the Chairman AA Twin Associates Ltd. ("AATWIN") Georges Caldironi, COO of Aerkomm, is sole owner 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 September 30, 2020 and December 31, 2019: September 30, 2020 December 31, (Unaudited) Inventory prepayment to: Yuan Jiu 1 $ 361,420 $ - Loans from WTL 2 $ 214,162 $ - Interest payable to WTL 2 $ 12,326 $ - Other payable to: AATWIN 3 $ 150,777 $ - Others 4 196,322 30,971 Total $ 347,099 $ 30,971 1. Represents inventory prepayment paid to Yuan Jiu. On May 11, 2020, the Company entered into a product purchase agreement with Yuan Jiu to purchase 100 sets of the AirCinema Cube to be installed on aircraft of commercial airline customers. The total purchase amount under this agreement was $1,807,100 (unaudited) and the Company paid 10% of the total amount as an initial deposit of $180,710 (unaudited). On July 15, 2020, the Company signed a second product purchase agreement of $1,807,100 (unaudited) with Yuan Jiu for an additional 100 sets of the AirCinema Cube for the same purchase amount and paid a 10% initial deposit of $180,710 (unaudited) on this agreement as well. 2. The Company has a short-term loan from WTL due to operational needs under the Loans (note 1). The loan amount was up to $172,712 (NTD 5,000,000). The loan agreement, bears an interest rate of 5% per annum, will terminate on December 31, 2020. The Company has drawn down $158,895 (NTD 4,600,000) (unaudited) and has repaid $82,902 (NTD 2,400,000) (unaudited) of the outstanding loan as of September 30, 2020. As of November 7, 2020, the Company borrowed additional $138,169 (NTD 4,000,000) (unaudited) from WTL. The Company has another loan from WTL due to operational needs under the Loans (note 1). The original loan amount was approximately $2.64M (NTD 80,000,000). The loan agreement, bears an interest rate of 5% per annum, will terminate on December 31, 2021. The Company has repaid $2.53M (NTD 76,000,000) of the outstanding loan amount as of September 30, 2020. As of November 7, 2020, the Company borrowed additional $37,997 (NTD 1,100,000) (unaudited) from WTL under this loan. As of September 30, 2020, the total outstanding loan balance from WTL was $214,162 (NTD 6,200,000) (unaudited). 3. Represents payable to AATWIN due to consulting agreement on January 1, 2019. The monthly consulting fee is €15,120 (approximately $17,000) and will be expired December 31, 2021. 4. Represents payable to employees as a result of regular operating activities. b. For the three-month and nine-month periods ended September 30, 2020 and 2019: Three Months Ended Nine Months Ended 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Consulting expense charged by AATWIN $ 53,669 $ - $ 153,890 $ - Interest expense charged by WTL 2,921 - 11,988 - Interest expense charged by Dmedia - 1,446 - 1,744 Aerkomm had short-term loans from Dmedia with an annual interest rate of 3% during the nine-month period ended September 30, 2019. The Company repaid the short-term loan in full on July 1, 2019. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
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. On September 17, 2020, the Board of Directors approved to issue options for in the amount of 4,000 shares under the Aerkomm 2017 Plan to one of the Company's independent directors. These options shall vest at the date of 1/12th each month for the next 12 months on the same day of September 2020. 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 $1,196,386 and $1,394,670 for the nine-month periods ended September 30, 2020 and 2019, 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 nine-month period ended September 30, 2020 and year ended December 31, 2019 under the Plans as follows: Assumptions Expected term 5-10 years Expected volatility 45.81 – 72.22 % Expected dividends 0 % Risk-free interest rate 0.69 - 2.99 % Forfeiture rate 0 - 5 % Aircom 2014 Plan Activities related to options for the Aircom 2014 Plan for the nine months ended September 30, 2020 and the year ended December 31, 2019 are as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Average Options outstanding at January 1, 2019 932,262 $ 0.4081 $ 0.1282 Granted - - - Exercised - - - Forfeited/Cancelled - - - Options outstanding at December 31, 2019 932,262 0.4081 0.1282 Granted - - - Exercised - - - Forfeited/Cancelled - - - Options outstanding at September 30, 2020 (unaudited) 932,262 0.4081 0.1282 Activities related to unvested stock awards under Aircom 2014 Plan for the nine-month period ended September 30, 2020 and the year ended December 31, 2019 are as follows: Number of Shares Weighted Per Share Options unvested at January 1, 2019 85,975 $ 0.4963 Granted - - Vested (85,975 ) 0.4963 Forfeited/Cancelled - - Options unvested at December 31, 2019 - - Granted - - Vested - - Forfeited/Cancelled - - Options unvested at September 30, 2020 (unaudited) - - Of the shares covered by options outstanding as of September 30, 2020, 932,262 shares of stock option under 2014 Plan are now exercisable. Information related to stock options outstanding and exercisable at September 30, 2020, is as follows: Options Outstanding (Unaudited) Options Exercisable (Unaudited) Range of Exercise Shares Weighted Weighted Shares Weighted Weighted $ 0.0067 820,391 4.42 $ 0.0067 820,391 4.42 $ 0.0067 $ 3.3521 111,871 5.75 3.3521 111,871 5.75 3.3521 932,262 4.58 0.4081 932,262 4.58 0.4081 As of September 30, 2020, there was no unrecognized stock-based compensation expense for the Aircom 2014 Plan. No option was exercised during the nine-month periods ended September 30, 2020 and 2019. Aerkomm 2017 Plan Activities related to options outstanding under Aerkomm 2017 Plan for the nine months ended September 30, 2020 and the year ended December 31, 2019 are as follows: Number of Shares Weighted Average Exercise Price Per Share Weighted Options outstanding at January 1, 2019 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 Granted 6,000 12.7267 9.3328 Exercised - - - Forfeited/Cancelled (18,000 ) 11.8067 7.3457 Options outstanding at September 30, 2020 (unaudited) 707,400 14.5422 9.2921 Activities related to unvested stock awards under Aerkomm 2017 Plan for the nine-month period ended September 30, 2020 and the year ended December 31, 2019 are as follows: Number of Shares Weighted Per Share Options unvested at January 1, 2019 171,411 $ 17.5341 Granted 436,400 3.8452 Vested (267,683 ) 7.5460 Forfeited/Cancelled - - Options unvested at December 31, 2019 340,128 7.8313 Granted 6,000 9.3328 Vested (160,859 ) 9.5923 Forfeited/Cancelled (6,625 ) 4.0800 Options unvested at September 30, 2020 (unaudited) 178,644 6.4352 Of the shares covered by options outstanding under the Aircom 2017 Plan as of September 30, 2020, 528,756 shares are now exercisable; 127,944 shares will be exercisable for the twelve-month period ending September 30, 2021; 29,350 shares will be exercisable for the twelve-month period ending September 30, 2022; and 21,350 shares will be exercisable for the twelve-month period ending September 30, 2023. Information related to stock options outstanding and exercisable at September 30, 2020, is as follows: Options Outstanding Options Exercisable Range of Shares Weighted Average Remaining Contractual Life (years) Weighted Shares Weighted Weighted $ 3.96 327,000 8.76 $ 3.9600 242,250 8.76 $ 3.9600 $ 9.00 12,000 9.25 9.0000 9,000 9.25 9.0000 $ 11.00 – 14.20 103,400 8.97 11.4426 35,506 8.78 12.1816 $ 20.50 – 27.50 141,000 7.16 24.3638 115,000 7.05 25.2374 $ 30.00 – 35.00 124,000 6.75 34.4012 124,000 6.75 34.4012 707,400 8.12 14.5422 528,756 7.92 16.3644 As of September 30, 2020, total unrecognized stock-based compensation expense related to stock options was approximately $800,000, which is expected to be recognized on a straight-line basis over a weighted average period of approximately 1.47 years. No option was exercised during the nine-month period ended September 30, 2020 and the year ended December 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 17 – Commitments and Contingencies As of September 30, 2020, the Company's significant commitment is summarized as follows: Airbus SAS Agreement Hong Kong Airlines Agreement: Republic Engineers Complaint: Shenzhen Yihe The COVID – 19 Pandemic: In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in 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. The company in the process of evaluating if the pandemic will have a material impact on its operations. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying condensed consolidated balance sheet as of September 30, 2020, and the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020 and 2019 and of changes in stockholders' equity and cash flows for the nine months ended September 30, 2020 and 2019 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's financial position as of September 30, 2020 and the results of its operations for the three and nine months ended September 30, 2020 and 2019 and of its cash flows for the nine months ended September 30, 2020 and 2019. The financial data and other information disclosed in these notes to the condensed consolidated financial statements related to these three-month and nine-month periods are unaudited. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other interim period or other future year. |
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. |
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 September 30, 2020 and December 31, 2019, the total balance of cash in bank exceeding the amount insured by the Federal Deposit Insurance Corporation (FDIC) for the Company was approximately $0 (unaudited) and $233,000, respectively. The balance of cash deposited in foreign financial institutions exceeding the amount insured by local insurance is approximately $0 and $37,000 as of September 30, 2020 and December 31, 2019, 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. |
Short-term investment | Short-term investment The Company's short-term investment securities are classified as trading security. The securities are stated at fair value within current assets on the Company's condensed balance sheets. Fair value is calculated based on publicly available market information or other estimates determined by the Company. Changes in fair value are recorded in current income. |
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 nine-month period ended September 30, 2020 and 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 leases with 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 loans, accrued expense and other payable 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 September 30, 2020. |
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 revenue for the nine months ended September 30, 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 Contracts 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 the Company's 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 nine-month periods ended September 30, 2020 and 2019, the Company incurred $0 (unaudited) and $416,231 (unaudited) 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 November 7, 2020, the date on which these consolidated financial statements were available to be issued. All subsequent events requiring recognition as of September 30, 2020 have been included in these consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | September 30, December 31, (Unaudited) Satellite equipment for sale under construction $ 4,669,297 $ 3,038,564 Supplies 5,284 5,230 4,674,581 3,043,794 Allowance for inventory loss (5,284 ) (5,230 ) Net 4,669,297 3,038,564 Prepayment for inventory 361,420 - Total $ 5,030,717 $ 3,038,564 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | September 30, December 31, (Unaudited) Ground station equipment $ 1,854,027 $ 1,854,027 Computer software and equipment 335,709 328,863 Satellite equipment 275,410 275,410 Vehicle 220,819 198,741 Leasehold improvement 83,721 83,721 Furniture and fixture 36,382 36,382 2,806,068 2,777,144 Accumulated depreciation (1,279,468 ) (869,747 ) Net 1,526,600 1,907,397 Prepayments - land 35,861,589 35,861,589 Net $ 37,388,189 $ 37,768,986 |
Intangible Asset, Net (Tables)
Intangible Asset, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of cost and accumulated amortization for intangible asset | September 30, December 31, (Unaudited) Satellite system software $ 4,950,000 $ 4,950,000 Accumulated amortization (2,433,750 ) (2,062,500 ) Net $ 2,516,250 $ 2,887,500 |
Operating and Finance Leases (T
Operating and Finance Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Lease Liability [Abstract] | |
Schedule of lease term and discount rate | Unaudited Weighted-average remaining lease term Operating lease 2.08 Years Finance lease 4.10 Years Weighted-average discount rate Operating lease 6.00 % Finance lease 3.82 % |
Schedule of operating and finance leases | Operating Leases September 30, December 31, (Unaudited) Right-of-use assets $ 424,119 $ 302,602 Lease liability - current $ 402,636 $ 322,430 Lease liability – non-current $ 217,571 $ - Finance Leases September 30, December 31, (Unaudited) Property and equipment, at cost $ 56,770 $ 56,770 Accumulated depreciation (10,398 ) (1,569 ) Property and equipment, net $ 46,372 $ 55,201 Lease liability - current $ 10,577 $ 9,949 Lease liability – non-current 38,728 45,199 Total finance lease liabilities $ 49,305 $ 55,148 |
Schedule of lease expense | Operating Leases Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Lease expense $ 126,396 $ 101,088 $ 346,741 $ 345,083 Sublease rental income (2,827 ) - (8,372 ) - Net lease expense $ 123,569 $ 101,088 $ 338,369 $ 345,083 Finance Leases Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Amortization of right-of-use asset $ 2,897 $ - $ 8,829 $ - Interest on lease liabilities 481 - 1,493 - Total finance lease cost $ 3,378 $ - $ 10,322 $ - |
Schedule of supplemental cash flow information related to leases | September 30, September 30, (Unaudited) (Unaudited) Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows from operating leases $ 151,360 $ 304,014 Operating cash outflows from finance lease $ 7,462 $ - Financing cash outflows from finance lease $ 1,493 $ - Leased assets obtained in exchange for lease liabilities: Operating leases $ 453,049 $ 722,423 |
Schedule of maturity of lease liabilities | Operating Leases (Unaudited) October 1, 2020 – September 30, 2021 $ 421,637 October 1, 2021 – September 30, 2022 167,555 October 1, 2022 – September 30, 2023 59,504 Total lease payments 648,696 Less: Imputed interest (28,489 ) Present value of lease liabilities 620,207 Current portion (402,636 ) Non-current portion $ 217,571 Finance Leases (Unaudited) October 1, 2020 – September 30, 2021 $ 12,277 October 1, 2021 – September 30, 2022 12,277 October 1, 2022 – September 30, 2023 12,277 October 1, 2023 – September 30, 2024 12,277 October 1, 2024 – September 30, 2025 4,478 Total lease payments 53,586 Less: Imputed interest (4,281 ) Present value of lease liabilities 49,305 Current portion (10,577 ) Non-current portion $ 38,728 |
Long-Term Loan (Tables)
Long-Term Loan (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Long-term Loan [Abstract] | |
Schedule of future installment payments of long term loan | (Unaudited) Twelve months ending September 30, 2021 $ 13,119 2022 13,119 2023 13,119 2024 8,746 Total installment payments 48,103 Less: Imputed interest (7,751 ) Present value of long-term loan 40,352 Current portion (9,635 ) Non-current portion $ 30,717 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense | Three Months Ended Nine Months Ended 2020 2019 2020 2019 Current: (Unaudited) (Unaudited) (Unaudited) (Unaudited) Federal $ - $ - $ - $ - State - - 1,600 1,600 Foreign 12 - 1,675 1,635 Total $ 12 $ - $ 3,275 $ 3,235 |
Schedule of reconciliation of the income tax at statutory tax rate | Three Months Ended Nine Months Ended 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Tax benefit at statutory rate $ (240,895 ) $ (688,749 ) $ (1,244,715 ) $ (1,703,699 ) Valuation allowance on net operating loss carryforwards 183,521 531,909 752,812 1,136,489 Unrealized investment losses (gains) (8,487 ) 107,200 89,803 290,900 Stock-based compensation expense 59,300 154,400 251,200 292,900 Amortization and depreciation expense (22,013 ) 58,700 3,320 33,100 Accrued payroll 98,900 900 174,800 (40,900 ) Unrealized exchange losses (gains) (76,526 ) 11,653 (104,720 ) 98,920 Accrued consulting expense - (122,300 ) - (122,300 ) Others 6,212 (53,713 ) 80,775 17,825 Tax expense at effective tax rate $ 12 $ - $ 3,275 $ 3,235 |
Schedule of deferred tax assets (liabilities) | September 30, December 31, 2019 (Unaudited) Net operating loss carryforwards (NOLs) $ 7,688,000 $ 6,388,000 Stock-based compensation expense 1,884,000 1,549,000 Accrued expenses and unpaid expense payable 312,000 53,000 Tax credit carryforwards 68,000 68,000 Excess of tax amortization over book amortization (587,000 ) (619,000 ) Unrealized exchange gain (230,000 ) (106,000 ) Others (151,000 ) (104,000 ) Gross 8,984,000 7,229,000 Valuation allowance (8,984,000 ) (7,229,000 ) Net $ - $ - |
Capital Stock (Tables)
Capital Stock (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of restricted shares | September 30, December 31, (Unaudited) 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 |
Significant Related Party Tra_2
Significant Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of name of related parties and relationships | Related Party Relationship Dmedia Holding LP ("Dmedia") Major stockholder Well Thrive Limited ("WTL") Major stockholder; Sheng-Chun Chang is the President Yuan Jiu Inc. ("Yuan Jiu") Stockholder; Albert Hsu, a Director of Aerkomm, is the Chairman AA Twin Associates Ltd. ("AATWIN") Georges Caldironi, COO of Aerkomm, is sole owner |
Schedule of significant related party transactions | September 30, 2020 December 31, (Unaudited) Inventory prepayment to: Yuan Jiu 1 $ 361,420 $ - Loans from WTL 2 $ 214,162 $ - Interest payable to WTL 2 $ 12,326 $ - Other payable to: AATWIN 3 $ 150,777 $ - Others 4 196,322 30,971 Total $ 347,099 $ 30,971 1. Represents inventory prepayment paid to Yuan Jiu. On May 11, 2020, the Company entered into a product purchase agreement with Yuan Jiu to purchase 100 sets of the AirCinema Cube to be installed on aircraft of commercial airline customers. The total purchase amount under this agreement was $1,807,100 (unaudited) and the Company paid 10% of the total amount as an initial deposit of $180,710 (unaudited). On July 15, 2020, the Company signed a second product purchase agreement of $1,807,100 (unaudited) with Yuan Jiu for an additional 100 sets of the AirCinema Cube for the same purchase amount and paid a 10% initial deposit of $180,710 (unaudited) on this agreement as well. 2. The Company has a short-term loan from WTL due to operational needs under the Loans (note 1). The loan amount was up to $172,712 (NTD 5,000,000). The loan agreement, bears an interest rate of 5% per annum, will terminate on December 31, 2020. The Company has drawn down $158,895 (NTD 4,600,000) (unaudited) and has repaid $82,902 (NTD 2,400,000) (unaudited) of the outstanding loan as of September 30, 2020. As of November 7, 2020, the Company borrowed additional $138,169 (NTD 4,000,000) (unaudited) from WTL. The Company has another loan from WTL due to operational needs under the Loans (note 1). The original loan amount was approximately $2.64M (NTD 80,000,000). The loan agreement, bears an interest rate of 5% per annum, will terminate on December 31, 2021. The Company has repaid $2.53M (NTD 76,000,000) of the outstanding loan amount as of September 30, 2020. As of November 7, 2020, the Company borrowed additional $37,997 (NTD 1,100,000) (unaudited) from WTL under this loan. As of September 30, 2020, the total outstanding loan balance from WTL was $214,162 (NTD 6,200,000) (unaudited). 3. Represents payable to AATWIN due to consulting agreement on January 1, 2019. The monthly consulting fee is €15,120 (approximately $17,000) and will be expired December 31, 2021. 4. Represents payable to employees as a result of regular operating activities. |
Schedule of expenses paid by related party | Three Months Ended Nine Months Ended 2020 2019 2020 2019 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Consulting expense charged by AATWIN $ 53,669 $ - $ 153,890 $ - Interest expense charged by WTL 2,921 - 11,988 - Interest expense charged by Dmedia - 1,446 - 1,744 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of estimating the fair value of options granted | Assumptions Expected term 5-10 years Expected volatility 45.81 – 72.22 % Expected dividends 0 % Risk-free interest rate 0.69 - 2.99 % Forfeiture rate 0 - 5 % |
Schedule of stock options outstanding and exercisable | Options Outstanding (Unaudited) Options Exercisable (Unaudited) Range of Exercise Shares Weighted Weighted Shares Weighted Weighted $ 0.0067 820,391 4.42 $ 0.0067 820,391 4.42 $ 0.0067 $ 3.3521 111,871 5.75 3.3521 111,871 5.75 3.3521 932,262 4.58 0.4081 932,262 4.58 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 Shares Weighted Average Remaining Contractual Life (years) Weighted Shares Weighted Weighted $ 3.96 327,000 8.76 $ 3.9600 242,250 8.76 $ 3.9600 $ 9.00 12,000 9.25 9.0000 9,000 9.25 9.0000 $ 11.00 – 14.20 103,400 8.97 11.4426 35,506 8.78 12.1816 $ 20.50 – 27.50 141,000 7.16 24.3638 115,000 7.05 25.2374 $ 30.00 – 35.00 124,000 6.75 34.4012 124,000 6.75 34.4012 707,400 8.12 14.5422 528,756 7.92 16.3644 |
Aircom 2014 Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of outstanding options | Number of Shares Weighted Average Exercise Price Per Share Weighted Average Options outstanding at January 1, 2019 932,262 $ 0.4081 $ 0.1282 Granted - - - Exercised - - - Forfeited/Cancelled - - - Options outstanding at December 31, 2019 932,262 0.4081 0.1282 Granted - - - Exercised - - - Forfeited/Cancelled - - - Options outstanding at September 30, 2020 (unaudited) 932,262 0.4081 0.1282 |
Schedule of unvested options | Number of Shares Weighted Per Share Options unvested at January 1, 2019 85,975 $ 0.4963 Granted - - Vested (85,975 ) 0.4963 Forfeited/Cancelled - - Options unvested at December 31, 2019 - - Granted - - Vested - - Forfeited/Cancelled - - Options unvested at September 30, 2020 (unaudited) - - |
Aerkomm 2017 Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of outstanding options | Number of Shares Weighted Average Exercise Price Per Share Weighted Options outstanding at January 1, 2019 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 Granted 6,000 12.7267 9.3328 Exercised - - - Forfeited/Cancelled (18,000 ) 11.8067 7.3457 Options outstanding at September 30, 2020 (unaudited) 707,400 14.5422 9.2921 |
Schedule of unvested options | Number of Shares Weighted Per Share Options unvested at January 1, 2019 171,411 $ 17.5341 Granted 436,400 3.8452 Vested (267,683 ) 7.5460 Forfeited/Cancelled - - Options unvested at December 31, 2019 340,128 7.8313 Granted 6,000 9.3328 Vested (160,859 ) 9.5923 Forfeited/Cancelled (6,625 ) 4.0800 Options unvested at September 30, 2020 (unaudited) 178,644 6.4352 |
Organization (Details)
Organization (Details) | Jan. 16, 2019 | Feb. 13, 2017 | Dec. 28, 2016 | Sep. 30, 2020 |
Organization (Textual) | ||||
Common stock shares | 99.70% | 86.30% | ||
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 a public offering, 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 down outstanding payables to the Company's vendors. On April 16, 2020, the Company signed a loan agreement with one of its business partners, EESquare Superstore Corp. ("EESquare") for a working capital loan of up to $1.5 million (unaudited), with an interest rate at 3.25%. On July 29, 2020, the Company filed an amendment to the Registration Statement on Form S-1, originally filed on April 30, 2020, with the Securities and Exchange Commission, or the SEC, pursuant to Section 5 of the Securities Act of 1933 to issue and sell up to 1,951,219 shares (approximately $47,276,000) (unaudited) of the Company's common stock, at a per share price of €20.50 (approximately $24.23). The Form S-1 was subsequently amended on July 29, 2020, October 21, 2020 and November 5, 2020, and was declared effective on November 6, 2020. With the $20 million in Loans committed by the Lenders, the working capital loan from EESquare and expected future capital raising efforts, including the filing for upcoming registered public offering, the Company believes its working capital will be adequate to sustain its operations for the next twelve months. | ||
Common stock shares | 100.00% | |||
Reverse split | 1-for-5 | |||
Reverse split, description | The Company completed a 1-for-5 reverse split of the Company's authorized, issued and outstanding shares of common stock, which was completed by the filing of a Certificate of Change Pursuant to NRS 78.209 with the Nevada Secretary of State on December 26, 2018 (see Note 14). All of the references in these financial statements to authorized common stock and issued and outstanding common stock have been adjusted to reflect this reverse split. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
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 (unaudited) | $ 0 | $ 416,231 | |
Total balance of cash in bank exceeding the amount insured by federal deposit insurance corporation (FDIC) | 0 | $ 233,000 | |
Total balance of cash in foreign bank exceeding deposit insurance | $ 0 | $ 37,000 | |
Ground Station Equipment [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 | ||
Vehicles [Member] | |||
Summary of Significant Accounting Policies (Textual) | |||
Property and equipment, useful life | 5 years |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Satellite equipment for sale under construction | $ 4,669,297 | $ 3,038,564 |
Supplies | 5,284 | 5,230 |
Gross | 4,674,581 | 3,043,794 |
Allowance for inventory loss | (5,284) | (5,230) |
Net | 4,669,297 | 3,038,564 |
Prepayment for inventory | 361,420 | |
Total | $ 5,030,717 | $ 3,038,564 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment cost | $ 2,806,068 | $ 2,777,144 |
Accumulated depreciation | (1,279,468) | (869,747) |
Net | 1,526,600 | 1,907,397 |
Prepayments - land | 35,861,589 | 35,861,589 |
Net | 37,388,189 | 37,768,986 |
Ground station equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment cost | 1,854,027 | 1,854,027 |
Computer software and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment cost | 335,709 | 328,863 |
Satellite equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment cost | 275,410 | 275,410 |
Vehicle [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment cost | 220,819 | 198,741 |
Leasehold improvement [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment cost | 83,721 | 83,721 |
Furniture and fixture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment cost | $ 36,382 | $ 36,382 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
May 01, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property and Equipment (Textual) | |||||
Depreciation expense (unaudited) | $ 136,095 | $ 136,449 | $ 409,721 | $ 409,757 | |
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 prepayments of $33,850,000 as of December 31, 2018. On July 2, 2019, the Company paid the remaining purchase price balance of $624,462. Under the terms of the real estate sales contract, these purchase price payments are no longer refundable as of September 30, 2020. The Company is currently negotiating with the Seller to allow for a refund of the full purchase price if licenses and approvals needed to transfer land title to Aerkomm Taiwan are not granted by a certain date. There can be no assurances, however, that it will be successful in these negotiations or that the required licenses and approvals will be granted by a certain date, if at all. As of September 30, 2020 and December 31, 2019, the estimated commission payable for the land purchase in the amount of $1,387,127 was recorded to the cost of land and the payment to be paid no later than December 31, 2021. |
Intangible Asset, Net (Details)
Intangible Asset, Net (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Intangible Asset Net [Abstract] | ||
Satellite system software | $ 4,950,000 | $ 4,950,000 |
Accumulated amortization | (2,433,750) | (2,062,500) |
Net | $ 2,516,250 | $ 2,887,500 |
Intangible Asset, Net (Details
Intangible Asset, Net (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Intangible Asset, Net (Textual) | ||||
Amortization expense | $ 123,750 | $ 123,750 | $ 371,250 | $ 371,250 |
Short-Term Investment and Res_2
Short-Term Investment and Restricted Cash (Details) | Sep. 09, 2019EUR (€) | Sep. 30, 2020USD ($)shares | Sep. 30, 2020EUR (€)shares | Dec. 31, 2019USD ($) | Sep. 09, 2019USD ($) | Sep. 09, 2019EUR (€) |
Short-Term Investment and Restricted Cash (Textual) | ||||||
Restricted cash | $ 41,350 | $ 225,500 | $ 225,500 | |||
Liquidity agreement term | 1 year | |||||
Purchase of common stock | shares | 7,732 | 7,732 | ||||
Fair value amount | $ 121,460 | |||||
Short-term investment unrealized loss | 68,911 | |||||
Remaining cash balance | $ 41,350 | |||||
Euro [Member] | ||||||
Short-Term Investment and Restricted Cash (Textual) | ||||||
Restricted cash | € | € 200,000 | |||||
Compensation paid in advance | € | € 20,000 | |||||
Remaining cash balance | € | € 35,290 |
Operating and Finance Leases (D
Operating and Finance Leases (Details) | Sep. 30, 2020 |
Weighted-average remaining lease term | |
Operating lease | 2 years 29 days |
Finance lease | 4 years 1 month 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 ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Operating Leases | ||
Right-of-use assets | $ 424,119 | $ 302,602 |
Lease liability - current | 402,636 | 322,430 |
Lease liability – non-current | 217,571 | |
Finance Leases | ||
Property and equipment, at cost | 56,770 | 56,770 |
Accumulated depreciation | (10,398) | (1,569) |
Property and equipment, net | 46,372 | 55,201 |
Lease liability - current | 10,577 | 9,949 |
Lease liability - non-current | 38,728 | 45,199 |
Total finance lease liabilities | $ 49,305 | $ 55,148 |
Operating and Finance Leases _3
Operating and Finance Leases (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Leases | ||||
Lease expense | $ 126,396 | $ 101,088 | $ 346,741 | $ 345,083 |
Sublease rental income | (2,827) | (8,372) | ||
Net lease expense | 123,569 | 101,088 | 338,369 | 345,083 |
Finance Leases | ||||
Amortization of right-of-use asset | 2,897 | 8,829 | ||
Interest on lease liabilities | 481 | 1,493 | ||
Total finance lease cost | $ 3,378 | $ 10,322 |
Operating and Finance Leases _4
Operating and Finance Leases (Details 3) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflows from operating leases | $ 151,360 | $ 304,014 |
Operating cash outflows from finance lease | 7,462 | |
Financing cash outflows from finance lease | 1,493 | |
Leased assets obtained in exchange for lease liabilities: | ||
Operating leases | $ 453,049 | $ 722,423 |
Operating and Finance Leases _5
Operating and Finance Leases (Details 4) | Sep. 30, 2020USD ($) |
Operating Leases | |
October 1, 2020 – September 30, 2021 | $ 421,637 |
October 1, 2021 – September 30, 2022 | 167,555 |
October 1, 2022 – September 30, 2023 | 59,504 |
Total lease payments | 648,696 |
Less: Imputed interest | (28,489) |
Present value of lease liabilities | 620,207 |
Current portion | (402,636) |
Non-current portion | 217,571 |
Finance Leases | |
October 1, 2020 – September 30, 2021 | 12,277 |
October 1, 2021 – September 30, 2022 | 12,277 |
October 1, 2022 – September 30, 2023 | 12,277 |
October 1, 2023 – September 30, 2024 | 12,277 |
October 1, 2024 – September 30, 2025 | 4,478 |
Total lease payments | 53,586 |
Less: Imputed interest | (4,281) |
Present value of lease liabilities | 49,305 |
Current portion | (10,577) |
Non-current portion | $ 38,728 |
Short-Term Bank Loan (Details)
Short-Term Bank Loan (Details) | 1 Months Ended |
Apr. 16, 2020USD ($) | |
Short Term Bank Loan [Abstract] | |
Loan proceeds amount | $ 163,200 |
Paycheck protection program loan, description | The PPP, established as part of the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), provides for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses of the qualifying business. |
Short-Term Loan (Details)
Short-Term Loan (Details) - USD ($) | 1 Months Ended | |
Apr. 16, 2020 | Sep. 30, 2020 | |
Debt Disclosure [Abstract] | ||
Working capital loan | $ 1,500,000 | |
Interest rate | 3.25% | |
Loan withdrawn | $ 1,100,000 | |
Agreement expire | Apr. 15, 2022 |
Long-Term Loan (Details)
Long-Term Loan (Details) | Sep. 30, 2020USD ($) |
Twelve months ending September 30, | |
2021 | $ 13,119 |
2022 | 13,119 |
2023 | 13,119 |
2024 | 8,746 |
Total installment payments | 48,103 |
Less: Imputed interest | (7,751) |
Present value of long-term loan | 40,352 |
Current portion | (9,635) |
Non-current portion | $ 30,717 |
Long-Term Loan (Details Textual
Long-Term Loan (Details Textual) - 9 months ended Sep. 30, 2020 | 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 | Sep. 30, 2020 | Dec. 31, 2019 |
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 ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Current: | |||||
State | $ 1,600 | $ 1,600 | |||
Foreign | 12 | 1,675 | 1,635 | ||
Total | $ 12 | $ 3,275 | $ 3,235 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Tax benefit at statutory rate | $ (240,895) | $ (688,749) | $ (1,244,715) | $ (1,703,699) |
Valuation allowance on net operating loss carryforwards | 183,521 | 531,909 | 752,812 | 1,136,489 |
Unrealized investment losses (gains) | (8,487) | 107,200 | 89,803 | 290,900 |
Stock-based compensation expense | 59,300 | 154,400 | 251,200 | 292,900 |
Amortization and depreciation expense | (22,013) | 58,700 | 3,320 | 33,100 |
Accrued payroll | 98,900 | 900 | 174,800 | (40,900) |
Unrealized exchange losses (gains) | (76,526) | 11,653 | (104,720) | 98,920 |
Accrued consulting expense | (122,300) | (122,300) | ||
Others | 6,212 | (53,713) | 80,775 | 17,825 |
Tax expense at effective tax rate | $ 12 | $ 3,275 | $ 3,235 |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards (NOLs) | $ 7,688,000 | $ 6,388,000 |
Stock-based compensation expense | 1,884,000 | 1,549,000 |
Accrued expenses and unpaid expense payable | 312,000 | 53,000 |
Tax credit carryforwards | 68,000 | 68,000 |
Excess of tax amortization over book amortization | (587,000) | (619,000) |
Unrealized exchange gain | (230,000) | (106,000) |
Others | (151,000) | (104,000) |
Gross | 8,984,000 | 7,229,000 |
Valuation allowance | (8,984,000) | (7,229,000) |
Net |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Income Taxes (Textual) | ||
Change in deferred tax assets valuation allowance | $ 1,755,000 | |
Japan [Member] | ||
Income Taxes (Textual) | ||
Net operating loss | $ 367,000 | $ 350,000 |
Expiring date, description | expiring through 2031. | expiring through 2031. |
Taiwan [Member] | ||
Income Taxes (Textual) | ||
Net operating loss | $ 2,701,000 | $ 1,898,000 |
Expiring date, description | expiring in 2030 | expiring in 2029 |
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 | $ 14,514,000 | $ 11,314,000 |
State [Member] | ||
Income Taxes (Textual) | ||
Net operating loss | $ 25,144,000 | $ 21,117,000 |
Expiring date, description | expiring in 2040 | expiring in 2039 |
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. | 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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
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) - $ / shares | Jan. 16, 2019 | Sep. 29, 2019 | Sep. 28, 2019 | Feb. 13, 2017 | Sep. 30, 2020 | Dec. 31, 2019 |
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). | |||||
Reverse split | 1 for 5 | |||||
Stock 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. | |||||
Equivalent number of shares issued to service provider | 4,891 | |||||
Warrant installment payment, description | The Company settled with the service provider to cancel all these warrants with $75,000 in three installments payable on July 3, August 1, and September 1, 2019 and all three installments were paid on schedule. | |||||
Stock Warrant [Member] | Boustead Securities, LLC [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, the Company issued total warrants to Boustead to purchase 77,680 shares of the Company's stock. For the nine-month periods ended September 30, 2020 and 2019, the Company recorded an increase of $262,600 and $84,233, respectively, in additional paid-in capital as adjustment for the issuance costs of these stock warrants. |
Significant Related Party Tra_3
Significant Related Party Transactions (Details) | 9 Months Ended |
Sep. 30, 2020 | |
Dmedia Holding LP (“Dmedia”) [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Major stockholder |
Well Thrive Limited (“WTL”) [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Major stockholder; Sheng-Chun Chang is the President |
Yuan Jiu Inc. (“Yuan Jiu”) [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Stockholder; Albert Hsu, a Director of Aerkomm, is the Chairman |
AA Twin Associates Ltd. (“AATWIN”) [Member] | |
Related Party Transaction [Line Items] | |
Relationship | Georges Caldironi, COO of Aerkomm, is the sole owner |
Significant Related Party Tra_4
Significant Related Party Transactions (Details 1) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||
Other payable to: | $ 347,099 | $ 30,971 | |
Yuan Jiu [Member] | |||
Related Party Transaction [Line Items] | |||
Inventory prepayment to | [1] | 361,420 | |
WTL [Member] | |||
Related Party Transaction [Line Items] | |||
Loans from WTL2 | [2] | 214,162 | |
Interest payable to WTL2 | [2] | 12,326 | |
AATWIN [Member] | |||
Related Party Transaction [Line Items] | |||
Other payable to: | [3] | 150,777 | |
Others [Member] | |||
Related Party Transaction [Line Items] | |||
Other payable to: | [4] | $ 196,322 | $ 30,971 |
[1] | Represents inventory prepayment paid to Yuan Jiu. On May 11, 2020, the Company entered into a product purchase agreement with Yuan Jiu to purchase 100 sets of the AirCinema Cube to be installed on aircraft of commercial airline customers.The total purchase amount under this agreement was $1,807,100 (unaudited) and the Company paid 10% of the total amount as an initial deposit of $180,710 (unaudited).On July 15, 2020, the Company signed a second product purchase agreement of $1,807,100 (unaudited) with Yuan Jiu for an additional 100 sets of the AirCinema Cube for the same purchase amount and paid a 10% initial deposit of $180,710 (unaudited) on this agreement as well. | ||
[2] | The Company has a short-term loan from WTL due to operational needs under the Loans (note 1). The loan amount was up to $172,712 (NTD 5,000,000). The loan agreement, bears an interest rate of 5% per annum, will terminate on December 31, 2020. The Company has drawn down $158,895 (NTD 4,600,000) (unaudited) and has repaid $82,902 (NTD 2,400,000) (unaudited) of the outstanding loan as of September 30, 2020. As of November 7, 2020, the Company borrowed additional $138,169 (NTD 4,000,000) (unaudited) from WTL. The Company has another loan from WTL due to operational needs under the Loans (note 1). The original loan amount was approximately $2.64M (NTD 80,000,000). The loan agreement, bears an interest rate of 5% per annum, will terminate on December 31, 2021. The Company has repaid $2.53M (NTD 76,000,000) of the outstanding loan amount as of September 30, 2020. As of November 7, 2020, the Company borrowed additional $37,997 (NTD 1,100,000) (unaudited) from WTL under this loan. As of September 30, 2020, the total outstanding loan balance from WTL was $214,162 (NTD 6,200,000) (unaudited). | ||
[3] | Represents payable to AATWIN due to consulting agreement on January 1, 2019. The monthly consulting fee is 15,120 (approximately $17,000) and will be expired December 31, 2021. | ||
[4] | Represents payable to employees as a result of regular operating activities. |
Significant Related Party Tra_5
Significant Related Party Transactions (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Related Party Transactions [Abstract] | ||||
Consulting expense charged by AATWIN | $ 53,669 | $ 153,890 | ||
Interest expense charged by WTL | 2,921 | 11,988 | ||
Interest expense charged by Dmedia | $ 1,446 | $ 1,744 |
Significant Related Party Tra_6
Significant Related Party Transactions (Details Textual) | 1 Months Ended | 9 Months Ended |
May 11, 2020 | Sep. 30, 2020 | |
Significant Related Party Transactions (Textual) | ||
Consulting agreement. description | The Company entered into a product purchase agreement with Yuan Jiu to purchase 100 sets of the AirCinema Cube to be installed on aircraft of commercial airline customers. The total purchase amount under this agreement was $1,807,100 (unaudited) and the Company paid 10% of the total amount as an initial deposit of $180,710 (unaudited). On July 15, 2020, the Company signed a second product purchase agreement of $1,807,100 (unaudited) with Yuan Jiu for an additional 100 sets of the AirCinema Cube for the same purchase amount and paid a 10% initial deposit of $180,710 (unaudited) on this agreement as well. | |
WTL [Member] | ||
Significant Related Party Transactions (Textual) | ||
Short-term loan, description | The loan amount was up to $172,712 (NTD 5,000,000). The loan agreement, bears an interest rate of 5% per annum, will terminate on December 31, 2020. The Company has drawn down $158,895 (NTD 4,600,000) (unaudited) and has repaid $82,902 (NTD 2,400,000) (unaudited) of the outstanding loan as of September 30, 2020. As of November 7, 2020, the Company borrowed additional $138,169 (NTD 4,000,000) (unaudited) from WTL. | |
long-term loan, description | The original loan amount was approximately $2.64M (NTD 80,000,000). The loan agreement, bears an interest rate of 5% per annum, will terminate on December 31, 2021. The Company has repaid $2.53M (NTD 76,000,000) of the outstanding loan amount as of September 30, 2020. As of November 7, 2020, the Company borrowed additional $37,997 (NTD 1,100,000) (unaudited) from WTL under this loan. | |
Expired date | Dec. 31, 2021 | |
AATWIN [Member] | ||
Significant Related Party Transactions (Textual) | ||
Related party transactions, description | Represents payable to AATWIN due to consulting agreement on January 1, 2019. The monthly consulting fee is €15,120 (approximately $17,000) and will be expired December 31, 2021. | |
Dmedia [Member] | ||
Significant Related Party Transactions (Textual) | ||
Related party transactions, description | Aerkomm had short-term loans from Dmedia with an annual interest rate of 3% during the nine-month period ended September 30, 2019. The Company repaid the short-term loan in full on July 1, 2019. |
Stock Based Compensation (Detai
Stock Based Compensation (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
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 | 0.69% | 0.69% |
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 | 72.22% | 72.22% |
Risk-free interest rate | 2.99% | 2.99% |
Forfeiture rate | 5.00% | 5.00% |
Stock Based Compensation (Det_2
Stock Based Compensation (Details 1) - Aircom 2014 Plan [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
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 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Number of Shares | ||
Options unvested, Beginning | 85,975 | |
Granted | ||
Vested | (85,975) | |
Forfeited/Cancelled | ||
Options unvested, Ending | ||
Weighted Average Fair Value Per Share | ||
Options unvested, Beginning | $ 0.4963 | |
Granted | ||
Vested | 0.4963 | |
Forfeited/Cancelled | ||
Options unvested, Ending |
Stock Based Compensation (Det_4
Stock Based Compensation (Details 3) | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
0.0067 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 9/30/2020 | shares | 820,391 |
Weighted Average Remaining Contractual Life | 4 years 5 months 1 day |
Weighted Average Exercise Price | $ / shares | $ 0.0067 |
Shares Exercisable at 9/30/2020 | shares | 820,391 |
Weighted Average Remaining Contractual Life | 4 years 5 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 9/30/2020 | shares | 111,871 |
Weighted Average Remaining Contractual Life | 5 years 9 months |
Weighted Average Exercise Price | $ / shares | $ 3.3521 |
Shares Exercisable at 9/30/2020 | shares | 111,871 |
Weighted Average Remaining Contractual Life | 5 years 9 months |
Weighted Average Exercise Price | $ / shares | $ 3.3521 |
Total [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding at 9/30/2020 | shares | 932,262 |
Weighted Average Remaining Contractual Life | 4 years 6 months 29 days |
Weighted Average Exercise Price | $ / shares | $ 0.4081 |
Shares Exercisable at 9/30/2020 | shares | 932,262 |
Weighted Average Remaining Contractual Life | 4 years 6 months 29 days |
Weighted Average Exercise Price | $ / shares | $ 0.4081 |
Stock Based Compensation (Det_5
Stock Based Compensation (Details 4) - Aerkomm 2017 [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Number of Shares | ||
Options outstanding, Beginning | 719,400 | 283,000 |
Granted | 6,000 | 436,400 |
Exercised | ||
Forfeited/Cancelled | (18,000) | |
Options outstanding, Ending | 707,400 | 719,400 |
Weighted Average Exercise Price Per Share | ||
Options outstanding, Beginning | $ 14.4889 | $ 28.3867 |
Granted | 12.7267 | 5.4763 |
Exercised | ||
Forfeited/Cancelled | 11.8067 | |
Options outstanding, Ending | 14.5422 | 14.4889 |
Weighted Average Fair Value Per Share | ||
Options outstanding, Beginning | 9.2431 | 17.5668 |
Granted | 9.3328 | 3.8452 |
Exercised | ||
Forfeited/Cancelled | 7.3457 | |
Options outstanding, Ending | $ 9.2921 | $ 9.2431 |
Stock Based Compensation (Det_6
Stock Based Compensation (Details 5) - Nonvested Shares [Member] - Aerkomm 2017 Plan [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Number of Shares | ||
Options unvested, Beginning | 340,128 | 171,411 |
Granted | 6,000 | 436,400 |
Vested | (160,859) | (267,683) |
Forfeited/Cancelled | (6,625) | |
Options unvested, Ending | 178,644 | 340,128 |
Weighted Average Fair Value Per Share | ||
Options unvested, Beginning | $ 7.8313 | $ 17.5341 |
Granted | 9.3328 | 3.8452 |
Vested | 9.5923 | 7.5460 |
Forfeited/Cancelled | 4.0800 | |
Options unvested, Ending | $ 6.4352 | $ 7.8313 |
Stock Based Compensation (Det_7
Stock Based Compensation (Details 6) - Equity Option [Member] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
3.96 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding | shares | 327,000 |
Weighted Average Remaining Contractual Life | 8 years 9 months 3 days |
Weighted Average Exercise Price | $ / shares | $ 3.9600 |
Shares Exercisable | shares | 242,250 |
Weighted Average Remaining Contractual Life | 8 years 9 months 3 days |
Weighted Average Exercise Price | $ / shares | $ 3.9600 |
9.00 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding | shares | 12,000 |
Weighted Average Remaining Contractual Life | 9 years 2 months 30 days |
Weighted Average Exercise Price | $ / shares | $ 9 |
Shares Exercisable | shares | 9,000 |
Weighted Average Remaining Contractual Life | 9 years 2 months 30 days |
Weighted Average Exercise Price | $ / shares | $ 9 |
11.00 - 14.20 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding | shares | 103,400 |
Weighted Average Remaining Contractual Life | 8 years 11 months 19 days |
Weighted Average Exercise Price | $ / shares | $ 11.4426 |
Shares Exercisable | shares | 35,506 |
Weighted Average Remaining Contractual Life | 8 years 9 months 11 days |
Weighted Average Exercise Price | $ / shares | $ 12.1816 |
20.50 – 27.50 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding | shares | 141,000 |
Weighted Average Remaining Contractual Life | 7 years 1 month 27 days |
Weighted Average Exercise Price | $ / shares | $ 24.3638 |
Shares Exercisable | shares | 115,000 |
Weighted Average Remaining Contractual Life | 7 years 18 days |
Weighted Average Exercise Price | $ / shares | $ 25.2374 |
30.00 – 35.00 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding | shares | 124,000 |
Weighted Average Remaining Contractual Life | 6 years 9 months |
Weighted Average Exercise Price | $ / shares | $ 34.4012 |
Shares Exercisable | shares | 124,000 |
Weighted Average Remaining Contractual Life | 6 years 9 months |
Weighted Average Exercise Price | $ / shares | $ 34.4012 |
Total [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Outstanding | shares | 707,400 |
Weighted Average Remaining Contractual Life | 8 years 1 month 13 days |
Weighted Average Exercise Price | $ / shares | $ 14.5422 |
Shares Exercisable | shares | 528,756 |
Weighted Average Remaining Contractual Life | 7 years 11 months 1 day |
Weighted Average Exercise Price | $ / shares | $ 16.3644 |
Stock Based Compensation (Det_8
Stock Based Compensation (Details Textual) - USD ($) | Oct. 04, 2019 | Sep. 17, 2020 | Dec. 29, 2019 | Jul. 02, 2019 | Dec. 29, 2018 | Jun. 19, 2018 | Dec. 29, 2017 | Jul. 31, 2017 | Jun. 23, 2017 | Feb. 13, 2017 | Sep. 30, 2020 | Sep. 30, 2019 | May 05, 2017 |
Stock Based Compensation (Textual) | |||||||||||||
Stock-based compensation | $ 1,196,386 | $ 1,394,670 | |||||||||||
Unrecognized compensation cost | $ 800,000 | ||||||||||||
Stock option weighted average period | 1 year 5 months 20 days | ||||||||||||
Aerkomm 2014 Plan [Member] | |||||||||||||
Stock Based Compensation (Textual) | |||||||||||||
Stock option aggregate shares | 1,088,882 | ||||||||||||
Aerkomm 2017 Plan [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 2017 Plan [Member] | |||||||||||||
Stock Based Compensation (Textual) | |||||||||||||
Description of plan agreements | The shares covered by options outstanding under the Aircom 2017 Plan as of September 30, 2020, 528,756 shares are now exercisable; 127,944 shares will be exercisable for the twelve-month period ending September 30, 2021; 29,350 shares will be exercisable for the twelve-month period ending September 30, 2022; and 21,350 shares will be exercisable for the twelve-month period ending September 30, 2023. | ||||||||||||
Equity Option [Member] | Aerkomm 2014 Plan [Member] | |||||||||||||
Stock Based Compensation (Textual) | |||||||||||||
Shares exercisable | 932,262 | ||||||||||||
Board of Directors [Member] | Aerkomm 2017 Plan [Member] | |||||||||||||
Stock Based Compensation (Textual) | |||||||||||||
Stock option aggregate shares | 85,400 | 12,000 | 339,000 | 12,000 | 12,000 | 109,000 | |||||||
Shares of common stock reserved for issuance | 2,000,000 | 1,000,000 | |||||||||||
Aggregate shares issued | 291,000 | ||||||||||||
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. | 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 Plan [Member] | Minimum [Member] | |||||||||||||
Stock Based Compensation (Textual) | |||||||||||||
Stock option aggregate shares | 30,000 | ||||||||||||
Board of Directors [Member] | Aerkomm 2017 Plan [Member] | Maximum [Member] | |||||||||||||
Stock Based Compensation (Textual) | |||||||||||||
Stock option aggregate shares | 32,000 | ||||||||||||
Director [Member] | Aerkomm 2017 Plan [Member] | |||||||||||||
Stock Based Compensation (Textual) | |||||||||||||
Stock option aggregate shares | 4,000 | 4,000 | 4,000 | 4,000 | |||||||||
Description of plan agreements | The Aerkomm 2017 Plan to one of the Company's independent directors. These options shall vest at the date of 1/12th each month for the next 12 months on the same day of September 2020. |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Oct. 16, 2020 | Jan. 30, 2020 | Jul. 19, 2019 | Nov. 30, 2018 | Oct. 15, 2018 | Dec. 31, 2019 | |
Commitments and Contingencies (Textual) | ||||||
COVID – 19 pandemic, description | In December 2019, a novel strain of coronavirus (COVID-19) surfaced. The spread of COVID-19 around the world in 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. The company in the process of evaluating if the pandemic will have a material impact on its operations. | |||||
Republic Engineers Complaint [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Aggregate purchase price | $ 10,000,000 | |||||
Airbus SAS Agreement [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Commitments, description | 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. | |||||
Hong Kong Airlines Agreement [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Commitments, description | On January 30, 2020, Aircom signed an agreement with Hong Kong Airlines Ltd. (HKA) to provide to Hong Kong Airlines both of its Aerkomm AirCinema and AERKOMM K++ IFEC solutions. Under the terms of this new agreement, Aircom will provide HKA its Ka-band AERKOMM K++ IFEC system and its AERKOMM AirCinema system. HKA will become the first commercial airliner launch customer for Aircom. | |||||
Yihe Culture Media Agreement [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Compensation | $ 1,200,000 | |||||
Yihe Culture Media Agreement [Member] | RMB [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Compensation | $ 8,000,000 | |||||
Yihe Culture Media Agreement [Member] | Subsequent Event [Member] | ||||||
Commitments and Contingencies (Textual) | ||||||
Subsequent event, description | In accordance with the provisions of the agreement with Yihe, as supplemented, the Company filed an arbitration action with the Shenzhen International Arbitration Court, or the Arbitration Court, claiming that Yihe failed to perform under the terms of the supplemented agreement and seeking a complete refund of our RMB 8 million payment to Yihe. The Company received notice from the Arbitration Court on October 16, 2020 of receipt of our arbitration filing and the requirement to pay the Arbitration Court RMB 190,000 in fees relating to the arbitration and the fees were paid on October 28, 2020. The Company intend to aggressively pursue this matter. As of September 30, 2020, the Company reclassified this prepayment to Other Receivable and provided an allowance for the full amount of $1,155,623 (unaudited) against non-operating loss. |