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Related Party Transactions
3 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
Related Party Transactions

NOTE 11 – RELATED PARTY TRANSACTIONS

 

All transactions listed below are related to the Company as they are all with affiliates of our Chairman of the Board, Mr. Phillip Lau.

 

DUE TO/FROM RELATED PARTIES

 

On June 30, 2020 and March 31, 2020, the Company had amounts due to related parties in the amounts of approximately $402,000 and $502,000, respectively for services provided by these companies and licensing fees for use of pedestal model molds and tools owned by the parent company. On June 30, 2020 and March 31, 2020, the Company had $0 and $100,000 due from a related party for goods sold to this company.

 

TRADE

 

During the three months ended June 30, 2020 and June 30, 2019 the Company sold approximately $0 and $74,000 respectively to Winglight Pacific, Ltd. (“Winglight”), a related party, at a discounted price, similar to prices granted to major direct import customers shipped internationally with freight prepaid. The average gross profit margin on sales to Winglight for the three months ended June 30, 2020 and 2019 was 0% and 21.7%, respectively. The product was shipped to Cosmo Communications of Canada (“Cosmo”), another related company and the Company’s primary distributor of its products to Canada at that time. These amounts were included as a component of net sales in the accompanying condensed consolidated statements of operations.

 

During the three months ended June 30, 2020 and 2019 the Company sold approximately $0 and $71,000, respectively of product directly to Cosmo from its California warehouse facility. These amounts were included as a component of net sales in the accompanying condensed consolidated statements of operations.

 

On July 30, 2020, the Company and Cosmo reached agreement that Cosmo would no longer be the Company’s Canadian distributor and the Company became the sole and exclusive distributor of the Company’s products in Canada. As part of the agreement, the companies executed a Purchase and Sales agreement whereby the Company acquired all of Cosmo’s karaoke inventory for approximately $685,000.

 

The Company incurred service expenses from Starlight Electronics Co, Ltd, (“SLE”) a related party. The services from SLE for the three month ended June 30, 2020 and 2019 were approximately $91,000 and $101,000, respectively. These amounts were included as a component of general and administrative expenses in the accompanying condensed consolidated statements of operations.