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Related Party Transactions and Balance | 12 Months Ended
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Dec. 31, 2019
Related Party Transactions [Abstract] |
RELATED PARTY TRANSACTIONS AND BALANCE |
19. | RELATED PARTY TRANSACTIONS AND BALANCE
In addition to the transactions and balances disclosed elsewhere in these financial statements, the Company had the following material related party transactions:
| (1) | During the years ended December 31, 2019, 2018 and 2017, the Company purchased from Hangzhou Lianluo, its controlling shareholder, and subsidiary of $42,000, $204 and $3,760, respectively. As of December 31, 2019, the Company reported $42,000 payable to Hangzhou Lianluo and subsidiary.
| (2) | During the years ended December 31, 2019, 2018 and 2017, the Company sold equipment of $9,588, $nil and $nil to a related party company in which its previous CEO Mr. Ping Chen holds 51% ownership in, respectively. As of December 31, 2019, the Company reported an outstanding receivable of $10,708 due from the related party company
| (3) | On July 1, 2018, the Company leased office premises from Hangzhou Lianluo for a period of 1 year, with an annual rental of $84,447 (RMB580,788). Rental payments charged as expenses in 2019 and 2018 were $35,892 and $39,942, respectively. As of December 31, 2019, the Company reported an outstanding rental payable of $75,834 to Hangzhou Lianluo.
| (4) | Short-term borrowing from related party companies:
i) Borrowings from Hangzhou Lianluo As of December 31, 2019, the loan balance consists of the following from Hangzhou Lianluo:
No. |  | Principal (USD) |  |  | From |  | To
1 |  |  | 57,320 |  |  | February 2, 2019 |  | February 1, 2020
2 |  |  | 24,361 |  |  | March 7, 2019 |  | March 6, 2020
3 |  |  | 85,980 |  |  | April 8, 2019 |  | April 7, 2020
4 |  |  | 57,320 |  |  | June 27, 2019 |  | June 26, 2020
5 |  |  | 56,942 |  |  | July 19, 2019 |  | July 18, 2020
6 |  |  | 12,154 |  |  | July 22, 2019 |  | July 21, 2020
7 |  |  | 145,854 |  |  | August 6, 2019 |  | August 6, 2020
8 |  |  | 71,650 |  |  | May 20, 2019 |  | May 19, 2020
9 |  |  | 419,869 |  |  | May 21, 2019 |  | May 20, 2020
Total |  |  | 931,450 |  |  |  |  |
During 2019, the Company borrowed $942,500 from Hangzhou Lianluo, repaid $0; the loans are non-interest bearing. In addition, the above loans due at February 1, 2020, March 6 and April 7, 2020 has been extended, interest-free and without specific repayment date, which is based upon both parties' agreement as of the date of this report. As of December 31, 2018, the loan balance was zero. During 2018, the Company borrowed $3,682,592 carrying an annual interest rate of 5%-8% and was fully settled through debt offset agreement among the Company, Hangzhou Lianluo and DGHKT. Debt offset agreements refer to below iv) Borrowings to DGHKT. ii) Borrowings from DGHKT As of December 31, 2019, the loan balance consists of the following from DGHKT, an affiliate of Hangzhou Lianluo:
No. |  | Principal (USD) |  |  | From |  | To
1 |  |  | 5,000 |  |  | May 20, 2019 |  | May 19, 2020
2 |  |  | 17,000 |  |  | November 28, 2019 |  | November 27, 2020
3 |  |  | 6,000 |  |  | December 5, 2019 |  | December 4, 2020
4 |  |  | 5,000 |  |  | December 24, 2019 |  | December 23, 2020
Total |  |  | 33,000 |  |  |  |  |
During 2019, the Company borrowed $33,000 interest free, and repaid $0 in principal. iii) Borrowings from Mr. Ping Chen: During 2019, the Company borrowed from Mr. Ping Chen, its previous CEO, free of interest to fund its operation. During 2019, 2018 and 2017, the borrowings were $387,182, nil and nil, and Mr. Ping Chen forgave a debt of $143,301 d in 2019. The balances were $243,881, nil and nil as of December 31, 2019, 2018 and 2017, respectively. iv) Borrowings to DGHKT On March 15, 2018, the Company entered into a $6 million loan agreement with DGHKT (an affiliate of Hanghzou Lianzhou) for a term of 12 months. The Company also borrowed RMB34.3 million (equivalently $5.20 million) from Hangzhou Lianluo, its principal shareholder. Pursuant to an agreement dated December 27, 2018, the Company, DGHKT, Hangzhou Lianluo agreed that the outstanding amount owed by DGHKT to us of RMB35.6 million be repaid by Hangzhou Lianluo on behalf of DGHKT, to the Company. This repayment is agreed to be settled in the form of offset against the amount owed by the Company to Hangzhou Lianluo of RMB35.6 million (equivalent to $5.2 million). As a result, the Company no longer owed or were owed by Hangzhou Lianluo or DGHKT any amount as of December 31, 2018.

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- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 850 -URI http://asc.fasb.org/topic&trid=2122745 + Details
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