9. Related PARTIES

The Company had sales to a related party, a physician who is the wife of the Executive Chairman. Revenues from this customer were approximately $11,000 and $14,000 for the nine months ended September 30, 2020 and 2019 and $4,000 and $5,000 for the three months ended September 30, 2020 and 2019, respectively. As of September 30, 2020 and December 31, 2019, the receivable balance due from this customer was approximately $1,000 and $2,000, respectively.

The Company is a party to a nonexclusive aircraft dry lease agreement with Kashmir Air, Inc. (“KAI”), which is owned by the Executive Chairman. The Company recorded an expense of approximately $105,000 and $86,000 for the nine month periods ended September 30, 2020 and 2019 and $32,000 for both the three months ended September 30, 2020 and 2019. As of both September 30, 2020 and December 31, 2019, the Company had a liability outstanding to KAI of approximately $1,000, which is included in accrued liability to related party in the condensed consolidated balance sheets. The original aircraft lease expired on March 31, 2019 and was not included in the ROU asset at January 1, 2019. A lease for a different aircraft at the same lease rate was entered into as of April 1, 2019 and has been included in the ROU asset and operating lease liability at December 31, 2019 and September 30, 2020.

The Company leases its corporate offices in New Jersey, its temporary housing for its foreign visitors, a printing and mailing facility and its backup operations center in Bagh, Pakistan, from the Executive Chairman. The related party rent expense for the nine months ended September 30, 2020 and 2019, was approximately $139,000 and $144,000, respectively and for both the three months ended September 30, 2020 and 2019, was $47,000 and is included in direct operating costs and general and administrative expense in the condensed consolidated statements of operations. During the nine months ended September 30, 2020, the Company spent a total of approximately $75,000 to upgrade two of the leased facilities. Current assets-related party in the condensed consolidated balance sheets includes security deposits and prepaid rent related to the leases of the Company’s corporate offices in the amount of approximately $13,000 as of both September 30, 2020 and December 31, 2019.

Included in the ROU asset at September 30, 2020 and December 31, 2019 is approximately $350,000 and $566,000, respectively, applicable to the related party leases. Included in the current and non-current operating lease liability at September 30, 2020 is approximately $239,000 and $121,000, respectively, applicable to the related party leases. At December 31, 2019, the current and non-current operating lease liability applicable to related party leases was approximately $275,000 and $298,000, respectively.

During the first quarter, talkMD Clinicians, PA, a New Jersey corporation was formed to provide telehealth services. This entity is owned by the wife of the Executive Chairman since an entity providing medical services must be owned by a physician. The Company did not have any transactions with this entity during the nine months ended September 30, 2020.