Commitments and Contingencies
|3 Months Ended|
Mar. 31, 2017
|Commitments and Contingencies [Abstract]|
|COMMITMENTS AND CONTINGENCIES||
NOTE 15 – COMMITMENTS AND CONTINGENCIES
The Company has employment agreements with certain employees that provided severance payments upon termination of employment under certain circumstances, as defined in the applicable agreements. The Company has estimated its possible severance payments of approximately $10,000 as of March 31, 2017 and December 31, 2016, which have not been reflected in its consolidated financial statements.
See note 10 for related party operating lease commitment.
Rental payment and related administrative service charge
See note 10 for related party rental and related administrative service agreement commitment.
Fishing vessels construction agreement
In December 2015, Hong Long entered into an agreement with Fujian Xinchang Ship Construction Co., Ltd. (“Xinchang”) related to the construction of 4 fishing vessels (“Xinchang Construction Agreement”). The agreement expired in October 2016. In March 2016, Pingtan Fishing and Hong Long and Xinchang entered into a Three-party Agreement. According to the Three-party Agreement, Hong Long assigned all of its rights and obligations related to the Xinchang Construction Agreement to Pingtan Fishing. The project requires a total investment of RMB 140 million (approximately $20.3 million). The funds are required to be invested over the construction period of the project. As of March 31, 2017 and December 31, 2016, Pingtan Fishing has paid RMB 135.5 million (approximately $19.6 million) and RMB 133.0 million (approximately $19.2 million) of the total investment that was recorded as property, plant and equipment and prepayment for long-term assets on the accompanying consolidated balance sheets, respectively.
Fishing vessels purchase agreement
On March 28, 2017, the Company entered into an agreement with Hong Long related to the purchase of 5 vessels. The purchase price for these 5 vessels is approximately $38.5 million. As of March 31, 2017, the Company has paid approximately $21.6 million and the remaining balance of approximately $16.9 was included in accrued liabilities and other payables – related party on the accompanying consolidated balance sheets.
The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights.
Reference 1: http://www.xbrl.org/2003/role/presentationRef