Quarterly report pursuant to Section 13 or 15(d)

Equity Method Investment

v3.19.3
Equity Method Investment
9 Months Ended
Sep. 30, 2019
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY METHOD INVESTMENT

NOTE 6 – EQUITY METHOD INVESTMENT

 

At September 30, 2019 and December 31, 2018, equity method investment amounted to $27,663,103 and $28,872,521, respectively. The investment represents the Company's subsidiary, Pingtan Fishing's interest in Global Deep Ocean. On June 12, 2014, Pingtan Fishing incorporated Global Deep Ocean with other two unrelated companies in PRC. In April 2017, these two companies sold their shares to another unrelated party, Zhen Lin. As of September 30, 2019, Pingtan Fishing and Zhen Lin accounted for 20% and 80% of the total ownership, respectively.

 

Global Deep Ocean will process, cold storage, and transport deep ocean fishing products. Total registered capital of Global Deep Ocean is RMB 1 billion (approximately $141.4 million) and as of September 30, 2019, Pingtan Fishing had contributed its share of registered capital of RMB 200 million (approximately $28.3 million).

 

The Company treats the equity investment in the consolidated financial statements under the equity method. Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Company's share of the incorporated-date fair values of the investee's identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post incorporation change in the Company's share of the investee's net assets and any impairment loss relating to the investment. For the three months ended September 30, 2019 and 2018, the Company's share of Global Deep Ocean's net loss was $126,848 and $60,422, respectively, which was included in loss on equity method investment in the accompanying consolidated statements of operations and comprehensive income. For the nine months ended September 30, 2019 and 2018, the Company's share of Global Deep Ocean's net loss was $364,676 and $121,537, respectively, which was included in loss on equity method investment in the accompanying consolidated statements of operations and comprehensive income.