| BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES Basis of Financial Information The accounting and financial
reporting policies of the Company conform to generally accepted accounting principles (“GAAP”) in the United States
and the preparation of the consolidated financial statements is in conformity with GAAP which requires management to make estimates
and assumptions that affect reported amounts and disclosures. Reclassification Certain prior year amounts
have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported
results of operations. Principles of Consolidation The accompanying consolidated
financial statements include financial information related to the Company and its wholly-owned subsidiaries and those variable
interest entities (“VIEs”) where the Company is the primary beneficiary (“PB”). In preparing the consolidated
financial statements, all significant inter-company accounts and transactions have been eliminated. Assets held in an agency or
fiduciary capacity are not included in the consolidated financial statements. VIE Agreements with HiTek Due to PRC legal restrictions of foreign ownership in certain
sectors, neither we nor our subsidiaries own any equity interest in HiTek. Instead, WFOE, HiTek and HiTek’s shareholders
entered into a series of contractual arrangements (“VIE Agreements”) on March 31, 2018. The VIE agreements are designed
to provide WFOE with the power, rights and obligations equivalent in all material respects to those it would possess as the sole
equity holder of HiTek, including absolute control rights and the rights to the assets, property and net income of HiTek. Accordingly,
the Company is considered the primary beneficiary of VIE and has consolidated the VIE and the VIE’s subsidiaries’ assets,
liabilities, results of operations, and cash flows in the accompanying consolidated financial statements. Each of the VIE Agreements is described in detail below: Exclusive Technical Consulting and Service Agreement Pursuant to the Exclusive Technical Consulting and Service Agreement
between HiTek and WFOE, WFOE provides HiTek with technical support, consulting services and other management services relating
to its day-to-day business operations and management, on an exclusive basis. The Exclusive Technical Consulting and Service Agreement
has come into effect as of March 31, 2018. For services rendered to HiTek by WFOE under this agreement, WFOE is entitled to collect
a service fee that shall be paid per quarter of 100% of HiTek’s quarterly profit. The term of the Exclusive Technical Consulting
and Service Agreement is ten years unless it is terminated by WFOE with 30-day prior notice. Equity Interest Pledge Agreement WFOE, HiTek and HiTek shareholders entered into an Equity Interest
Pledge Agreement, pursuant to which HiTek shareholders pledged all of their equity interests in HiTek to WFOE in order
to guarantee the performance of HiTek’s obligations under the Exclusive Technical Consulting and Service Agreement as described
above. The Equity Interest Pledge Agreement has come into effect as of March 31, 2018. During the term of the pledge, WFOE is entitled
to receive any dividends declared on the pledged equity interests of HiTek. The Equity Interest Pledge Agreement ends
when all contractual obligations under the Exclusive Technical Consulting and Service Agreement have been fully performed. Exclusive Equity Interests Purchase Agreement Under the Exclusive Equity Interests Purchase Agreement, the
HiTek Shareholders granted WFOE (or its designee) an exclusive option to purchase, to the extent permitted under PRC law, part
or all of their equity interests in HiTek. The option price is equal to the capital paid in by the HiTek Shareholders subject to
any appraisal or restrictions required by applicable PRC laws and regulations. The Exclusive Equity Interests Purchase Agreement
remains effective for a term of ten years and may be renewed at WFOE’s election. Power of Attorney Each shareholder of the HiTek has executed an irrevocable power
of attorney in favor of WFOE. Pursuant to this power of attorney, the WFOE has full power and authority to exercise all of such
shareholders’ rights with respect to their equity interest in the VIE Companies, including HiTek,
Huasheng and Huoerguosi. The power of attorney will remain in force for so long as the shareholder remains a shareholder of
HiTek. During the years ended December 31, 2019 and 2018, there were
no transactions in HiTek Global Inc. and HiTek HK besides minimal capital transactions and professional fee payments. As of December
31, 2019, our variable interest entities accounted for an aggregate of 97% and 100% of our total assets and total liabilities,
respectively. As of December 31, 2018, our variable interest entities accounted for an aggregate of 100% of our total assets and
total liabilities. Use of Estimates The preparation of the consolidated financial statements in
conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported
amounts of revenues and expenses during the reporting period. Significant accounting estimates reflected in the Company’s
consolidated financial statements include allowance for doubtful accounts, inventory obsolescence, deferred taxes, and the useful
lives of property and equipment. Since the use of estimates is an integral component of the financial reporting process, actual
results could differ from those estimates. Fair Values of
Financial Instruments The U.S. GAAP accounting standards regarding fair value of financial
instruments and related fair value measurements define fair value, establish a three-level valuation hierarchy that requires an
entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of inputs are defined as follows: Level 1 inputs to the valuation methodology are quoted
prices (unadjusted) for identical assets or liabilities in active markets. Level 2 inputs to the valuation methodology include
quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability,
either directly or indirectly, for substantially the full term of the financial instrument. Level 3 inputs to the valuation methodology
are unobservable. ASC 825-10 “Financial Instruments”, allows entities
to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option
may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option
is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent
reporting date. The Company did not elect to apply the fair value option to any outstanding instruments. The carrying amounts reported in the consolidated balance sheets
for cash, accounts receivable, accounts receivable – related party, prepaid expenses and other, accounts payable and accrued
liabilities, income taxes payable, VAT and other taxes payable, and due to related parties approximate their fair market value
based on the short-term maturity of these instruments. The Company’s investments measured at fair value on a
recurring basis consist of various mutual funds and trading securities. The valuation for the Level 1 position is based on quoted
prices in active markets. The following table presents information about our assets and liabilities that are measured at fair value
on a recurring basis as of December 31, 2019 and 2018 and indicates the fair value hierarchy of the valuation techniques we
utilized to determine such fair value. The valuation techniques are based on the fair value measurement on a recurring basis of
the mutual funds and trading securities.
Quoted Significant Significant
Prices in Other Other
Active Observable Unobservable
December 31, Markets Inputs Inputs
2019 (Level 1) (Level 2) (Level 3)
Trading equity securities $ 174,276 $ 174,276 $ - $ -
Mutual funds 1,792,331 - 1,792,331 -
Total $ 1,966,607 $ 174,276 $ 1,792,331 $ -
Quoted Significant Significant
Prices in Other Other
Active Observable Unobservable
December 31, Markets Inputs Inputs
2018 (Level 1) (Level 2) (Level 3)
Trading equity securities $ 138,437 $ 138,437 $ - $ -
Mutual funds 1,955,965 - 1,955,965 -
Total $ 2,094,402 $ 138,437 $ 1,955,965 $ - Earnings Per Share Basic earnings per share
is computed by dividing net income by the weighted-average number of ordinary shares outstanding during the period. Diluted earnings
(loss) per share is computed by dividing net income by the weighted-average number of ordinary shares and dilutive potential ordinary
shares outstanding during the period. For the years ended December
31, 2019 and 2018, there were no other contracts to issue ordinary shares, such as options, warrants or conversion rights, which
would have a dilutive effect on earnings per share. Cash and Cash Equivalents Cash consists of cash on hand and cash in banks. The Company
considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
The Company maintains cash with various financial institutions in the PRC. As of December 31, 2019 and 2018, cash balances held
in PRC banks are uninsured. The Company has not experienced any losses in bank accounts during the years ended December 31, 2019
and 2018. Concentrations of Credit
Risk Currently, all of the Company’s operations are carried
out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the
political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s
operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North
America. The Company’s results may be adversely affected by changes in governmental policies with respect to laws and regulations,
anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Financial instruments which potentially subject the Company
to concentrations of credit risk consist principally of cash and cash equivalents, short-term investments, trade accounts receivable,
and accounts receivable – related parties and advances to suppliers. A portion of the Company’s sales are credit sales
which are to the customers whose ability to pay is dependent upon the industry economics prevailing in these areas; however, concentrations
of credit risk with respect to trade accounts receivables is limited due to generally short payment terms. The Company also performs
ongoing credit evaluations of its customers to help further reduce credit risk. Short-term Investments Short-term investments consist of trading stock and mutual funds.
The Company classifies mutual funds as trading securities in accordance with FASB ASC Topic 320 “Investments — Debt
and Equity Securities.” If a security is acquired with the intent of selling it within hours or days, the security
shall be classified as trading securities. Investments in stock are classified as marketable equity securities with readily
determinable fair values. Short-term investments are measured at fair value based
on the quoted market prices of the securities as of December 31, 2019 and 2018 in the Consolidated Balance Sheets. Net realized
and unrealized holding gains and losses for short term investments are included in Consolidated Statements of
Operations. Accounts Receivable,
Accounts Receivable - related party and Concentration of Risk Accounts receivable are presented net of an allowance for doubtful
accounts. If any, the Company maintains an allowance for doubtful accounts for estimated losses resulting from the inability of
its customers to make required payments. The Company reviews the collectability of its receivables on an ongoing basis. After all
attempts to collect a receivable have failed. The receivable is written off against the allowance. The Company reviews the accounts receivable on a periodic basis
and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the
collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s
historical payment history, its current credit-worthiness and current economic trends. The Company considers the following factors where determining
whether to permit a longer payment period:
● the customer’s past payment history;
● the customer’s general risk profile, including factors such as the customer’s size, age and public or private status;
● macroeconomic conditions that may affect a customer’s ability to pay; and
● the relative importance of the customer relationship to the Company’s business. The normal payment period was approximately 6 months to 1 year
after the customers received goods or were served. The Company gave customers different credit period considering
the above factors. For the large customers such as large-scale oil and coal mine customers, the Company gave a two-year credit
period during 2019. For IT outsourcing customers, the Company gave a year and half credit period during 2019. For small and medium
customers, the Company gave a half year credit period. In accordance with ASC 210-10-45, the non-current accounts receivable
and non-current accounts receivable-related parties represent the amounts that the Company does not reasonably expect to be realized
during the normal operating cycle of the Company. Considering the limited operating history with the large and medium sized customers,
in accordance with ASC 210-10-45, the operating cycle of the Company is not identifiable. Therefore, the Company uses one-year
time period as the basis to the separation of current and non-current assets. Advances to Suppliers,
Net Advances to suppliers are the amounts prepaid to suppliers for
purchases of inventory. In evaluating the reserve for doubtful account, the Company mainly considers the age of the balance. As
of December 31, 2019 and 2018, advances to suppliers consisted of the following:
As of December 31,
2019 2018
Advances to suppliers $ 9,408 $ 291,023
Less: reserve for doubtful account (4,965 ) (5,801 )
Total $ 4,443 $ 285,222 Deferred Offering Costs The Company complies with the requirement
of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”.
Deferred offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that
are directly related to the Proposed Public Offering. Deferred offering costs will be charged to shareholders’ equity upon
the completion of the Proposed Public Offering. Should the Proposed Public Offering prove to be unsuccessful, these deferred costs,
as well as additional expenses to be incurred, will be charged to operations. Inventories Inventories are stated at the lower of cost (weighted average
basis) or net realizable value. The methods of determining inventory costs are used consistently from year to year. Allowance for
inventory obsolescence is provided when the market value of certain inventory items is lower than the cost. Property, Equipment and Software,
Net Property, equipment and software are carried at cost and are
depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed
as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated
depreciation and amortization are removed from the accounts, and any resulting gains or losses are included in income in the year
of disposition. The Company examines the possibility of decreases in the value of property, equipment and software, when events
or changes in circumstances reflect the fact that their recorded value may not be recoverable. Estimated useful lives are as follows, taking into account the
assets’ estimated residual value:
Classification Estimated useful life
Furniture and office equipment 2-3 years
Computer equipment 2-3 years
Transportation equipment 5 years
Buildings and improvements 20 years
Software 3 years Impairment of Long-lived Assets In accordance with ASC Topic 360, the Company reviews long-lived
assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully
recoverable. The Company recognizes an impairment loss when the sum of expected undiscounted future cash flows is less than the
carrying amount of the asset. The amount of impairment is measured as the difference between the asset’s estimated fair value
and its book value. The Company did not record any impairment charge for the years ended December 31, 2019 and 2018. Revenue Recognition Beginning January 1, 2019, the Company adopted the ASU 2014-09,
Topic 606, “Revenue from Contracts with Customers” and its related amendments (collectively referred to as “FASB
ASC 606”) for its new revenue recognition accounting policy that depicts the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
With adoption of ASC 606, revenue is now recognized when all of the following five steps are met: (i) identify the contract(s)
with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate
the transaction price to the performance obligations; (v) recognize revenue when (or as) each performance obligation is satisfied.
The adoption of the new revenue recognition standard has no material impact on the Company’s consolidated financial statements
for any periods prior to 2019. Therefore, prior period amounts are not adjusted. The Company generates its revenues primarily from four sources:
(1) hardware sales, (2) software sales, (3) IT services and (4) tax devices and services. The Company recognizes revenue when performance
obligations under the terms of a contract with its customers are satisfied. This occurs when the control of the goods and services
have been transferred to the customer.
■ Hardware sales Hardware revenues are generated primarily from the sale of computer
and network hardware to end users. The products include computers, printers, internet cables, certain internet servers, cameras
and monitors. The sales of hardware represent a single performance obligation. The Company usually recognizes the revenue at the
point in time when ownership is transferred to end customers. The Company’s revenue derived from sales of hardware is reported
on a gross basis since the Company is primarily obligated in the transaction, bears inventory and credit risk and has discretion
in establishing the prices. Hardware sales are classified as “Revenue-Hardware” on the Company’s consolidated
statements of operations.
■ Software sales HiTek also does business in software sales and focuses on the
perpetual licenses sales for one of the self-developed software Communication Interface System(“CIS”). CIS is based
on LINUX, which is a general embedded interface system used in petrochemical and coal enterprises. The system is used to communicate
the RCTX-X module, collect the work diagram, the electricity diagram, the pressure temperature and other measures, and can extract
the data and import it to the software of the windows platform to display analysis. Performance Obligations - Software contracts with customers
include multiple performance obligations such as sale of software license, installation of software, operation training service
and warranty. The installation and operation training are essential to the functionality of the software which are provided to
the clients prior to the acceptance of the software. The Company provides one-year warranty which mainly telephone supports. The
Company estimates that costs associated with warranty are de minimis to the overall contract. Therefore, the Company does not further
allocate transaction price. The Company recognizes the revenue at the point in time when
the software is accepted by the customer. Revenues from software sales contracts are classified as “Revenue-Software”
on the Company’s consolidated statements of operations.
■ IT Services HiTek provides IT support and maintenance services for its clients.
HiTek’s IT service business is directly responsible for periodical check, on-call repairing and maintenance service, technical
support for client’s IT facilities and IT disaster recovery etc., The sales of IT service represent a single performance
obligation. Revenue from IT service contracts are recognized ratably over
service period because the Company performs periodical IT services.
■ Tax Devices and Services All businesses in China are required to purchase the Anti-Counterfeiting
Tax Control System (“ACTCS” or Golden Tax Disk or GTD) tax devices to issue the VAT Invoice and for quarterly VAT filing.
HiTek is authorized to carry out the implementation of ACTCS specialty hardware retailing. The price of GTD and related supporting
services are determined by the National Development and Reform Commission. Performance Obligations - Tax devices and services contracts
with customers include multiple performance obligations such as delivery of products, installation and after-sales supporting services.
The Company provides the after-sales supporting services and charges the service fee on an annual basis. The service period is
usually one year. Revenue from the sales of GTD devices is recognized at the point
in time when ownership is transferred to end customers. Revenue related to its service is recognized as the services are performed
and amounts are earned, using the straight-line method over the term of the related services agreement. The Company’s revenue derived from its gross billings
and is reported on a gross basis since the Company is primarily obligated in the transaction, is subject to inventory and credit
risk and has several but not all of the indications that revenue should be recorded on the gross basis.
■ Contract balances Prepayments received from customers prior to the services being
performed are recorded as deferred revenue. Deferred revenue consists of the annual service fees for Golden Tax Disk received from
customers while the services have not yet been performed. The Company recognizes the service fees amount as revenue on a straight-line
basis in accordance with the service periods.
■ Practical expedients and exemptions The Company generally expenses sales commissions if any incurred
because the amortization period would have been one year or less. Deferred Revenue Deferred revenue consists of the annual service fees for
Golden Tax Disk (defined below) received from customers but the services have not yet been performed. The Company recognizes
the service amount as revenue on a straight-line basis in accordance with the service periods. Deferred revenue as of
December 31, 2019 and 2018 was $763,191 and $795,344, respectively. For the year ended December 31, 2019 and 2018, the
Company recognized revenue of $795,344 and $877,607, respectively, that was included in the deferred revenue balance at the
beginning of each year. Cost of Revenue Cost of revenue is comprised of (i) the direct cost of our hardware
products purchased from third parties; (ii) logistics-related costs, which primarily include product packaging and freight-in charges;
(iii) third-party royalties paid related to the GTD; and (iv) compensation for the employees who handle the products and perform
IT services and other costs that are necessary for us to provide the services to our customers. Selling Expenses Selling expenses consists of primarily shipping and handling
costs for products sold and advertisement, marketing expenses for promotion of our products. During the year ended December 31,
2019, selling expenses also included sales commission paid to a third party for obtaining contracts with customers. General and Administrative Expenses General and administrative expenses consist primarily of costs
in salary and welfare expenses for our general administrative and management staff, facilities costs, depreciation and amortization
expenses, professional fees, accounting fees, meals and entertainment, utilities, and other miscellaneous expenses incurred in
connection with general operations. All depreciation and amortization expenses were recorded in general and administrative
expenses because fixed assets are mainly for sales and administrative purpose. Government Subsidies Grants are given by the government to mainly support the Company
for the sales of software products with the 3% VAT refund. Grants are recognized as government subsidies income in the
consolidated statements of operations when received. Research and Development Expenses The Company follows the guidance in FASB ASC 985-20, Cost of
Software to Be Sold, Leased or Marketed, regarding software development costs to be sold, leased, or otherwise marketed. FASB ASC
985-20-25 requires research and development costs for software development to be expensed as incurred until the software model
is technologically feasible. Technological feasibility is established when the enterprise has completed all planning, designing,
coding, testing, and identification of risks activities necessary to establish that the product can be produced to meet its design
specifications, features, functions, technical performance requirements. A certain amount of judgment and estimation is required
to assess when technological feasibility is established, as well as the ongoing assessment of the recoverability of capitalized
costs. The Company’s products reach technological feasibility shortly before the products are released and sold to the public.
Therefore, research and development costs are generally expensed as incurred. The Company expenses research and development expenses as incurred
and are included as part of general and administrative expenses. Research and development expenses for the years ended December
31, 2019 and 2018 were $25,322 and $26,833, respectively. The Company defers certain costs related to the software development
activities associated with certain software which the Company has determined have future economic benefit. Management periodically
reviews and revises, when necessary, its estimate of the future benefit of these costs and expenses them if it deems there no longer
is a future benefit. The Company has two software (for internal use) (Finance and Taxation Service Platform Mobile Application
and Corporate Full-Service Platform Mobile Application). As of December 31, 2018, the two software programs were placed into service
and an aggregate of $1,073,237 was capitalized and recorded as Property, equipment and software, net in the consolidated balance
sheet. For the year ended December 31 2019 and 2018, amortization expense amounted to $356,140 and $47,370, respectively. Income Taxes The Company is governed by the Income Tax Law of the PRC. The
Company accounts for income taxes using the asset/liability method prescribed by ASC 740, “Accounting for Income Taxes.”
Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and
tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected
to reverse. The Company records a valuation allowance to offset deferred tax assets if, based on the weight of available evidence,
it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes
of a change in tax rates is recognized as income or loss in the period that includes the enactment date. The Company applied the provisions of ASC 740-10-50,
“Accounting for Uncertainty in Income Taxes,” which provides clarification related to the process associated with
accounting for uncertain tax positions recognized in the Company’s consolidated financial statements. Audit periods
remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute
of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any
such adjustment could be material to the Company’s results of operations for any given quarterly or annual period
based, in part, upon the results of operations for the given period. Value Added Taxes (“VAT”) Prior to May 1, 2018, the Company is subject to VAT at the rate
from 6% and 17% on revenue generated from providing services and products, respectively. Starting from May 1, 2018, the VAT rate
for revenue generated from providing products was changed from 17% into 16%. Starting from April 1, 2019, the VAT rate for revenue
generated from providing products was changed from 16% into 13%. VAT is reported as a deduction of revenue when incurred. Entities
that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities.
Net VAT balance between input VAT and output VAT is recorded in taxes payable. Foreign Currency Translation The functional currency of the Company’s operations in
the PRC is the Chinese Yuan or Renminbi (“RMB”). The consolidated financial statements are translated to U.S. dollars
using the period end rates of exchange for assets and liabilities, equity is translated at historical exchange rates, and average
rates of exchange (for the period) are used for revenues and expenses and cash flows. As a result, amounts relating to assets and
liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on
the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into
U.S. dollars are included in determining comprehensive income / loss. Transactions denominated in foreign currencies are translated
into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign
currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date with any transaction
gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional
currency are included in the results of operations as incurred. All of the Company’s revenue transactions are transacted
in its functional currency. The Company does not enter into any material transaction in foreign currencies. Transaction gains or
losses have not had, and are not expected to have, a material effect on the results of operations of the Company. The exchange rates as of December 31, 2019 and 2018 and for
the year ended December 31, 2019 and 2018 are as follows:
December 31, For the years ended
2019 2018 2019 2018
Foreign currency Balance Sheet Balance Sheet Profits/Loss Profits/Loss
RMB:1USD 6.9630 6.8764 6.90740 6.61464 Comprehensive Income Comprehensive income is comprised of net income (loss) and all
changes to the statements of shareholders’ equity (deficit), except those due to investments by shareholders and changes
in paid-in capital. For the Company, comprehensive income for the years ended December 31, 2019 and 2018 consisted of net income
and unrealized income (loss) from foreign currency translation adjustment. Related Parties A party is considered to be related to the Company if the party
directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company.
Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners
of the Company and its management and other parties with which the Company may deal if one party controls or can significantly
influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented
from fully pursuing its own separate interests. A party which can significantly influence t |
