|6 Months Ended|
Jun. 30, 2022
|Related Party Transactions [Abstract]|
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 $9,000 for the six months ended June 30, 2022 and 2021, respectively and $6,000 and $5,000 for the three months ended June 30, 2022 and 2021, respectively. As of June 30, 2022, and December 31, 2021, the receivable balance due from this customer was approximately $8,000 and $3,000, respectively.
The Company was a party to a nonexclusive aircraft dry lease agreement with Kashmir Air, Inc. (“KAI”), which was owned by the Executive Chairman. The Company recorded an expense of approximately $30,000 and $60,000 for the three and six months ended June 30, 2021, respectively. The lease for the aircraft was renewed as of April 1, 2021 and terminated on August 31, 2021. As of June 30, 2022, there was no liability outstanding to KAI.
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 and an apartment for temporary housing in Dubai, the UAE, from the Executive Chairman. The related party rent expense for the six months ended June 30, 2022 and 2021 was approximately $101,000 and $94,000, respectively, and was approximately $50,000 and $49,000 for the three months ended June 30, 2022 and 2021, respectively, and is included in direct operating costs and general and administrative expense in the consolidated statements of operations. During the six months ended June 30, 2022 and 2021, the Company spent approximately $432,000 and $807,000 to upgrade the related party leased facilities. Current assets-related party in the consolidated balance sheets includes security deposits related to the leases of the Company’s corporate offices in the amount of approximately $16,000 and $13,000 as of June 30, 2022 and December 31, 2021, respectively.
Included in the ROU asset at June 30, 2022 is approximately $388,000 applicable to the related party leases. Included in the current and non-current operating lease liability at June 30, 2022 is approximately $168,000 and $215,000, respectively, applicable to the related party leases.
Included in the ROU asset at December 31, 2021 is approximately $483,000 applicable to the related party leases. Included in the current and non-current operating lease liability at December 31, 2021 is approximately $174,000 and $305,000, respectively, applicable to the related party leases.
During 2020, a New Jersey corporation, talkMD Clinicians, PA (“talkMD”), was formed by the wife of the Executive Chairman, who is a licensed physician, to provide telehealth services. talkMD was determined to be a variable interest entity (“VIE”) for financial reporting purposes because the entity will be controlled by the Company. As of June 30, 2022, talkMD had not yet commenced operations.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef