| RELATED PARTY BALANCES AND TRANSACTIONS |
NOTE 14 — RELATED PARTY BALANCES AND TRANSACTIONS The table below sets forth major related parties of the Company and their relationships with the Company. | Name | | Relationship with the Company | | Mr. Tsai Ming Hsing, Richard (“Mr. Tsai”) | | Controlling stockholder of the Company | | Mr. Ng Wing Fai (“Mr. Ng”) | | Chief Executive Officer and Executive Director of the Company | | Ms. Wong Suet Fai Almond | | Chief Operating Officer of the Company | | JFA Capital | | Investment private funds controlled by Mr. Tsai | | NSD Capital | | Investment private funds controlled by Mr. Tsai | | TAG Holdings Limited | | Stockholder and immediate holding company of the Company | | TAG Financial Holdings Limited | | Company controlled by Mr. Tsai | | Convoy Financial Services Limited | | Company controlled by Mr. Tsai | | Convoy Global Holdings Limited | | Company controlled by Mr. Tsai | | Giant Wisdom Ventures Limited | | Company controlled by Mr. Tsai | | Green Nature Limited | | Company controlled by Mr. Tsai, former sole stockholder of Series B Preferred Stock | | Total Formation Inc. | | Stockholder of the Company and company controlled by Mr. Tsai | | Capital Truth Holdings Ltd. | | Stockholder of the Company | | DeSilva 2000 Living Trust | | Company controlled by director of subsidiaries of the Company | | HCMPS Healthcare Holdings Limited | | Company with common director – Mr. Ng | In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attain adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by the stockholder. Amounts represent advances or amounts paid in satisfaction of liabilities. | (i) | Related party balances |
Related party balances consisted of the following: | | | | | As of | | | | | | | June 30,
2026 | | | December 31,
2025 | | | Balance with related parties: | | | | | | | | | | | | Long-term investment – Investment E | | (a) | | $ | 520 | | | $ | 524 | | | Loan interest payable | | (b) | | $ | 9,340 | | | $ | 5,778 | | | Borrowings | | (c) | | $ | 52,810 | | | $ | 48,959 | | | Convertible debts | | (d) | | $ | 59,722 | | | $ | 59,722 | | | (a) | The Company purchased 4% equity interest in Investment E from a related party in May 2021, based on historical cost. The Company has a common director with Investment E. | | (b) | Loan interest payable due to related parties represented the interest payable accrued on the short-term borrowings from four related parties. | | (c) | Borrowings consisted of short-term loans obtained from the Company’s senior management, major stockholder of ultimate holding company, a company controlled by director of subsidiaries and a stockholder. The amounts were secured, interest-bearing and repayable on demand (see Note 8(b)). | | (d) | TFI Note obtained from the Company’s major stockholder of ultimate holding company. The amount was secured, interest-bearing, and repayable on demand. The Company issued an exchangeable note of approximately $5.4 million to Giant Wisdom Ventures Limited which bears interest at a fixed rate of 15% per annum and mature on January 16, 2025. The note is secured by a pledge of 5,000,000 shares of common stock of BKFC owned by the Company (see Note 9). | | (ii) | Transactions with related parties |
In the ordinary course of business, during the three and six months ended June 30, 2026 and 2025, the Company involved with transactions, either at cost or current market prices and on the normal commercial terms among related parties. The following table provides the transactions with these parties for the periods as presented (for the portion of such period that they were considered related): | | | | | For the three months ended
June 30, | | | For the six months ended
June 30, | | | | | | | 2026 | | | 2025 | | | 2026 | | | 2025 | | | Nature of transactions | | | | | | | | | | | | | | | | Office rental and operating fees | | (e) | | $ | — | | | $ | 1,187 | | | $ | 663 | | | $ | 2,365 | | | Interest expense | | (f) | | $ | 2,293 | | | $ | 764 | | | $ | 3,586 | | | $ | 1,399 | | | (e) | Pursuant to the service agreement, the Company agreed to pay the office and administrative expenses to the holding company for the use of office premises, including, among other things, building management fees, government rates and rent, office rent, and lease-related interest and depreciation that were actually incurred by the holding company. | | (f) | The interest expense incurred for borrowings from four related parties (see Note 8(b)). | Apart from the transactions and balances detailed above and elsewhere in these accompanying unaudited condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented.
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