Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Shareholders' Equity

v3.22.1
Shareholders' Equity
12 Months Ended
Dec. 31, 2021
Stockholders' Equity Note [Abstract]  
SHAREHOLDERS' EQUITY

NOTE 13 – SHAREHOLDERS’ EQUITY

 

Preferred shares

 

    Number of
shares
    Total  
Balance, December 31, 2020    
-
    $
-
 
Issuance of preferred shares1     4,000,000       4,000  
Conversion from preferred shares to ordinary shares     (3,409,078 )     (3,409 )
Redemption of Preferred Shares2     (590,922 )     (591 )
Balance, December 31, 2021    
-
    $
-
 

 

1 On January 8, 2021, the Company issued 4,000,000 of its Series A Convertible Preferred Shares, par value $0.001 per share (“Series A Preferred Shares”), at a purchase price of $1.00 per share and a stated value of $1.10 per share, in a registered direct offering.

2 On May 27, 2021, the Company redeemed 590,922 Series A Preferred Shares and repurchased 793,192 ordinary shares that were converted following the failure to file the 10-K from the purchaser for aggregate consideration of $1,450,000.

 

Ordinary shares

 

    Number of
shares
    Total  
Balance, December 31, 2020     79,302,428     $ 79,302  
Issuance of ordinary shares1     3,625,954       3,626  
Conversion from preferred shares to ordinary shares     3,805,775       3,806  
Repurchase of ordinary shares2     (793,192 )     (793 )
Balance, December 31, 2021     85,940,965     $ 85,941  

 

1 On March 8, 2021, the Company sold 3,625,954 ordinary shares at a price of $1.31 per share, and 2,719,464 five-year warrants to purchase ordinary shares at an exercise price of $1.31 per share, in a registered direct offering.

2 On May 27, 2021, the Company redeemed 590,922 Series A Preferred Shares and repurchased 793,192 ordinary shares that were converted following the failure to file the 10-K from the purchaser for aggregate consideration of $1,450,000.

 

Statutory reserve

 

Pingtan Guansheng, Fujian Heyue, Pingtan Fishing and Pingtan Dingxin, which operate in the PRC are required to reserve 10% of their net profits after income tax, as determined in accordance with the PRC accounting rules and regulations. Appropriation to the statutory reserve by the Company is based on profit arrived at under PRC accounting standards for business enterprises for each year. The statutory reserves of the Company represent the statutory reserves of the above-mentioned companies as required under the PRC law.

 

The profit arrived at must be set off against any accumulated losses sustained by the Company in prior years, before allocation is made to the statutory reserve. Appropriation to the statutory reserve must be made before distribution of dividends to shareholders. The appropriation is required until the statutory reserve reaches 50% of the registered capital. This statutory reserve is not distributable in the form of cash dividends. As of December 31, 2015, the Company appropriated the required 50% of its registered capital to statutory reserve for Heyue. Accordingly, no additional statutory reserve for Heyue was required for the years ended December 31, 2021, 2020 and 2019. The Company made appropriation to statutory reserve for Pingtan Fishing amounted to $126,462 and $2,961 by the end of year 2021 and 202, respectively. 

 

Pingtan Guansheng, Pingtan Dingxin, Pingtan Ocean, Fuzhou Howcious Investment, Pingtan Shinsilkroad and Pingtan Yikang had sustained losses since their establishment. No appropriation to their statutory reserves was required as they incurred recurring net losses.

 

For the years ended December 31, 2021 and 2020, statutory reserve activities for Pingtan Fishing and Fujian Heyue were as follows:

 

    Pingtan
Fishing
    Fujian
Heyue
    Total  
Balance - December 31, 2019   $ 14,944,569     $ 804,182     $ 15,748,751  
Addition to statutory reserve     2,961      
-
      2,961  
Balance – December 31, 2020     14,947,530       804,182       15,751,712  
Addition to statutory reserve     126,462      
-
      126,462  
Balance – December 31, 2021   $ 15,073,992     $ 804,182     $ 15,878,174