Annual report pursuant to Section 13 and 15(d)

Equity Method Investment

v3.8.0.1
Equity Method Investment
12 Months Ended
Dec. 31, 2017
Equity Method Investment [Abstract]  
EQUITY METHOD INVESTMENT

NOTE 7 – EQUITY METHOD INVESTMENT

 

At December 31, 2017 and 2016, equity method investment amounted to $30,521,466 and $28,493,273, 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 December 31, 2017, 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 $153.0 million) and as of December 31, 2017, Pingtan Fishing had contributed its share of registered capital of RMB 200 million (approximately $30.6 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 years ended December 31, 2017, 2016 and 2015, the Company’s share of Global Deep Ocean’s net loss was $33,246, $33,073 and $19,700, respectively, which was included in loss on equity method investment in the accompanying consolidated statements of operations and comprehensive income (loss).

 

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

 

    December 31,
2017
    December 31,
2016
 
Current assets   $ 49,372,645     $ 48,488,573  
Noncurrent assets     6,974,590       4,335,801  
Current liabilities     151,312       18,007  
Noncurrent liabilities     -       -  
Equity     56,195,923       52,806,367  

 

    Year ended December 31,  
    2017     2016     2015  
Net revenue   $ -     $ -     $ -  
Gross profit     -       -       -  
Loss from operation     166,128       165,293       84,468  
Net loss     166,232       165,365       84,468