13. 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 $17,000 for the year ended December 31, 2020 and approximately $21,000 for the year ended December 31, 2019. As of both December 31, 2020 and 2019, the accounts receivable balance due from this customer was approximately $2,000 and is included in accounts receivable in the consolidated balance sheets.

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 expense of approximately $120,000 and $137,000, for the years ended December 31, 2020 and 2019, respectively. As of both December 31, 2020 and 2019, the Company had liabilities outstanding to KAI of approximately $1,000, which are included in accrued liability to related party in the 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 liabilities at December 31, 2020 and 2019.

The Company leases its corporate offices in New Jersey, its temporary housing for its foreign visitors, an office/storage facility and its backup operations center in Bagh, Pakistan, from the Executive Chairman. The related party rent expense for the years ended December 31, 2020 and 2019 was approximately $185,000 and $192,000, respectively, and is included in direct operating costs and general and administrative expense in the consolidated statements of operations. During the year ended December 31, 2020, the Company spent approximately $554,000 to upgrade two of the leased facilities. Current assets-related party in the consolidated balance sheets includes security deposits and prepaid rent related to the leases of the Company’s corporate offices in the amount of $13,000 for both the years ended December 31, 2020 and 2019.

Included in the ROU asset at December 31, 2020 is approximately $283,000 applicable to the related party leases. Included in the current and non-current operating lease liability at December 31, 2020 is approximately $202,000 and $92,000, respectively, applicable to the related party leases.

Included in the ROU asset at December 31, 2019 is approximately $566,000 applicable to the related party leases. Included in the current and non-current operating lease liability at December 31, 2019 is approximately $275,000 and $298,000, respectively, applicable to the related party leases.

During the first quarter of 2020, 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 year ended December 31, 2020.