Related party transactions and balances | 6. Related party transactions and balances a) Related party transactions Years Ended December 31, 2020 2019 Loan from a shareholder $ 54,784 $ 92,102 Interest expense to a shareholder 40,888 32,827 Fee for professional services provided by related parties 114,000 114,000 License fee expense to a related party $ 50,000 $ 50,000 b) Related party payables December 31, December 31, Loan from a shareholder $ 430,606 $ 375,822 Interest payable to a shareholder 88,711 47,823 Payable to a related party for license fee 187,500 137,500 Professional fee payable to related parties 323,000 209,000 Due from a related party $ 2,196,500 $ 2,196,500 On May 1, 2018, PBG Water Solutions and the Company entered into a Credit Loan Agreement with a 28.29% shareholder of the Company (the "Lender"). The Lender had provided operating capital to PBG Water Solutions since its inception, and to the Company since the consummation of PBG SEA. Pursuant to the Credit Loan Agreement, the Lender will provide a loan of $500,000 to the Company for 2 years with 10% annual interest which shall be applied from the date of the Credit Loan Agreement. In compensation for the loan, the Company issued to the Lender a 3-year cashless warrant, which entitles the Lender to purchase 50 million (50,000,000) shares of the Company's common stock at an exercise price of $0.01. The warrant cannot be exercised before June 1, 2019, and shall be void and non-exercisable if the Company (i) raises more than $20 million in equity or (ii) has revenue in excess of $100 million in any fiscal year. The Credit Loan Agreement was extended for 2 years during the year ended December 31, 2020. As of December 31, 2020 and 2019, the Lender has provided $430,606 and $375,822 to the Company, respectively. During the years ended December 31, 2020 and 2019 the Lender provided $54,784 and $92,102 to the Company, respectively. During the years ended December 31, 2020 and 2019, the Company recorded $40,888 and $32,827 interest expense incurred from the loan, respectively. In February 2018, PBG Water Solutions entered into a financial advisory agreement with Rebus Capital Group (the "Rebus"), an entity affiliated with a shareholder of the Company, pursuant to which PBG Water Solutions will pay Rebus $30,000 per quarter. The agreement has a term of five years from March 2018 but is cancellable by either party on sixty days' notice. The service fee for the first 3 months was waived by Rebus. Professional service expense related to this agreement was $114,000 and $114,000 for the years ended December 31, 2020 and 2019, respectively. In April 2017, PBG Water Solutions entered into a License and Supply Agreement with an individual shareholder who owned 50% of PBG Water Solutions' common stock and the shareholder's majority owned company Beijing QHY Environment S & T Co., Ltd. ("Beijing QHY"). Pursuant to the License and Supply Agreement and its Amendment entered into in June 2017, the individual shareholder and Beijing QHY (the "Licensor") granted PBG the exclusive use of 21 patents in any area outside the People's Republic of China (the "PRC") for 20 years. A one-time fee of $1 million shall be paid before December 31, 2021, and royalties of 1% of the net revenue received by PBG from the sale, license or other distribution of the licensed products shall be paid annually. In addition, the Licensor shall supply PBG Water Solutions licensed products at prices agreed upon from time to time by the Licensor and PBG Water Solutions. The Company, QHY Water Solutions and PBG Water Solutions didn't generate any net revenue from the licensed equipment or products during the year ended December 31, 2020 and 2019. The Company recorded a $50,000 and $50,000 license fee expense for the years ended December 31, 2020 and 2019, respectively, and made no payment of license fees as of December 31, 2020. The shareholder/licensor owned 41.6% of the Company's common stock after giving effect to the PBG SEA and owns 47.15% of the Company's common stock as of December 31, 2020. In December 2018, the Company issued 6,655,750 shares of the Company's common stock for aggregate consideration of $2,196,500. Beijing QHY collected the subscription on behalf of the Company in RMB. The monies are considered held by Beijing QHY for the benefit of the Company as of December 31, 2020. |