Annual report pursuant to Section 13 and 15(d)

Equity Method Investment

v3.21.2
Equity Method Investment
12 Months Ended
Dec. 31, 2020
Equity Method Investments and Joint Ventures [Abstract]  
EQUITY METHOD INVESTMENT

NOTE 7 – EQUITY METHOD INVESTMENT

 

At December 31, 2020 and 2019, the investment accounted for under the equity method amounted to $29,689,813 and $27,923,464, 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 two unrelated companies in the PRC. In April 2017, these two companies sold their shares to another unrelated party, Zhen Lin. On September 3, 2020, Zhen Lin sold his shares to Fujian Xinqiao Agricultural Development Group Co., Ltd. As of December 31, 2020, Pingtan Fishing and Fujian Xinqiao Agricultural Development Group Co., Ltd. accounted for 20% and 80% of the total ownership, respectively.

 

Global Deep Ocean processes, stores, and transports Deep Ocean fishing products. The total registered capital of Global Deep Ocean is RMB 1 billion (approximately US$153.3 million) and as of December 31, 2020, Pingtan Fishing had contributed its share of registered capital of RMB 200 million (approximately US$30.7 million). 

 

Global Deep Ocean commenced operations in 2020. During the years ended December 31, 2020, 2019 and 2018, we purchased frozen shrimp from Global Deep Ocean for approximately $17,187,000, nil and nil, respectively.

 

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 years ended December 31, 2020, 2019 and 2018, the Company’s share of Global Deep Ocean’s net loss was $156,085, $486,803 and $192,746, respectively, which was included in “loss on equity method investment” in the accompanying consolidated statements of operations and comprehensive (loss) income.

 

The tables below present the summarized financial information, as provided to the Company by the investee, for the unconsolidated company:

 

    December 31,
2020
    December 31,
2019
 
Current assets   $ 123,683,068     $ 75,494,648  
Noncurrent assets     40,594,887       25,108,507  
Current liabilities     7,910,987       860,179  
Noncurrent liabilities     93,763,889       50,428,600  
Equity     62,603,079       49,314,376  

 

    Year ended December 31,  
    2020     2019     2018  
Net revenue   $ 21,193,564     $
-
    $
-
 
Gross loss     (232,431 )    
-
     
-
 
Loss from operations     (780,422 )     (2,434,002 )     (963,731 )
Net loss     (780,422 )     (2,434,016 )     (963,731 )