Commitments and Contingencies
|12 Months Ended|
Dec. 31, 2015
|Commitments and Contingencies [Abstract]|
|COMMITMENTS AND CONTINGENCIES||
NOTE 17 – 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 December 31, 2015 and 2014, which have not been reflected in its consolidated financial statements.
On January 14, 2015, a purported class action was filed by Paul Fila, individually and on behalf of all others similarly situated, against the Company and certain of its executive officers and directors in the U.S. District Court for the Southern District of New York. As with any litigation proceeding, the Company cannot predict with certainty the eventual outcome of any outstanding legal actions. The Company expects to incur expenses in connection with the defense of this lawsuit, and it may have to pay damages or settlement costs in connection with any resolution thereof.
See note 12 for related party operating lease commitment.
Rental payment and related administrative service charge
See note 12 for related party rental and related administrative service agreement commitment.
Equity investment commitment
On June 12, 2014, Pingtan Fishing incorporated an equity investment with two companies for the fishery processing purpose. Total registered capital of the equity investment is approximately $154.1 million (RMB 1 billion) and Pingtan Fishing accounted for 35% of the total ownership. Accordingly, Pingtan Fishing has the obligation to contribute approximately $53.9 million (RMB 350 million) as the equity investment’s registered capital. In the fourth quarter of 2015, Pingtan fishing transferred 15% of the total ownership to a third party. Therefore, Pingtan Fishing has the obligation to contribute approximately $30.8 million (RMB 200 million) as the equity investment’s registered capital. As of December 31, 2015, the Pingtan Fishing has contributed approximately $30.5 million (RMB 198 million) as registered capital that was recorded as equity method investment on the accompanying consolidated balance sheets. Pingtan Fishing intends to use its present working capital together with bank loans to fund the project cost.
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