Quarterly report pursuant to Section 13 or 15(d)

RELATED PARTY TRANSACTIONS

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RELATED PARTY TRANSACTIONS
9 Months Ended
Feb. 28, 2022
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

6. RELATED PARTY TRANSACTIONS

 

Related party debt consisted of the following:

 

    February 28, 2022     May 31, 2021  
             
Due to Frangipani Trade Services (1)   $ 753,273     $ 903,927  
Due to employee (2)     37,500       60,000  
Due to employee (3)     83,226       149,996  
      873,999       1,113,923  
Less: current portion     (174,822 )     (397,975 )
    $ 699,177     $ 715,948  

 

(1) Due to Frangipani Trade Services (“FTS”), an entity owned by the Company’s CEO, is due on demand and is non-interest bearing. The principal amount of this Promissory Note bears no interest; provided that any amount due under this Note which is not paid when due shall bear interest at an interest rate equal to six percent (6%) per annum. The principal amount is due and payable in six payments of $150,655 the first payment due on November 30, 2021, with each succeeding payment to be made six months after the preceding payment.
   
(2) On May 29, 2020, the Company entered into a $90,000 payable with an employee for the acquisition of UL BOS common stock from a previous owner. The payment terms consist of thirty-six monthly non-interest-bearing payments of $2,500 from the date of closing.
   
(3) On May 29, 2020, the Company entered into a $200,000 payable with an employee for the acquisition of UL BOS common stock from a previous owner. The payment terms consist of thirty-six monthly non-interest-bearing payments of $5,556 from the date of closing.

 

Consulting Agreements

 

Unique entered into a Consulting Services Agreement on May 29, 2020 for a term of three years with Great Eagle Freight Limited (“Great Eagle” or “GEFD”), a Hong Kong Company (the “Consulting Services Agreement”) where the Company pays $500,000 per year until the expiration of the agreement on May 28, 2023. The fair value of the services was determined to be less than the cash payments and the difference was recorded as Contingent Liability on the consolidated balance sheets and amortized over the life of the agreement. Unique paid $250,000 during the year ended May 31, 2021, and amortized balances were $353,334 and $565,338 as of February 28, 2022 and May 31, 2021, respectively.

 

 

The Company utilizes financial reporting services from the firm owned and controlled by David Briones, a member of the Board of Directors. The service fees are $5,000 per month. Total fees were $15,000 and none for three months ended February 28, 2022 and 2021, respectively. Total fees were $45,000 and none for nine months ended February 28, 2022 and 2021, respectively.

 

Accounts Receivable - trade and Accounts Payable - trade

 

Transactions with related parties account for $1.9 million and $28.4 million of accounts receivable and accounts payable as of February 28, 2022, respectively compared to $1.3 million and $10.8 million of accounts receivable and accounts payable as of May 31, 2021.

 

Revenue and Expenses

 

Revenue from related party transactions is for export services from related parties or for delivery at place imports nominated by such related parties. For the three and nine months ended February 28, 2022, these transactions represented $0.5 million and $1.3 million of revenue, respectively.

 

Revenue from related party transactions is for export services from related parties or for delivery at place imports nominated by such related parties. For the three and six months ended February 28, 2021, these transactions represented $0.7 million and $1.9 million of revenue, respectively.

 

Direct costs are services billed to the Company by related parties for shipping activities. For the three and nine months ended February 28, 2022, these transactions represented $56.2 million and $157.4 million of total direct costs, respectively.

 

Direct costs are services billed to the Company by related parties for shipping activities. For the three and six months ended February 28, 2021, these transactions represented $15.1 million and $42.7 million of total direct costs, respectively.