Investment in OC-BVI

3 Months Ended

Mar. 31, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments Disclosure [Text Block]

6. Investment in OC-BVI

The Company owns 50% of the outstanding voting common shares and a 43.53% equity interest in the profits of Ocean Conversion (BVI) Ltd. (“OC-BVI”). The Company also owns certain profit-sharing rights in OC-BVI that raise its effective interest in the profits of OC-BVI to approximately 45%. Pursuant to a management services agreement, OC-BVI pays the Company monthly fees for certain engineering and administrative services. OC-BVI’s sole customer is the Ministry of Communications and Works of the Government of the British Virgin Islands (the “Ministry”) to which it sells bulk water.

The Company’s equity investment in OC-BVI amounted to $2,604,523 and $2,584,987 as of March 31, 2019 and December 31, 2018, respectively.

Summarized financial information for OC-BVI is as follows:

	March 31,		December 31,
	2019		2018
Current assets	$	2,440,488	$	2,286,179
Non-current assets		3,785,738		3,859,310
Total assets	$	6,226,226	$	6,145,489

	March 31,		December 31,
	2019		2018
Current liabilities	$	151,498	$	132,005
Non-current liabilities		1,061,100		1,048,950
Total liabilities	$	1,212,598	$	1,180,955

	Three Months Ended March 31,
	2019			2018
Revenues	$	760,593		$	712,203
Cost of revenues		513,380			260,924
Gross profit		247,213			451,279
General and administrative expenses		186,028			198,503
Income from operations		61,185			252,776
Other income (expense), net		(12,091	)		(56,700	)
Net income		49,094			196,076
Income attributable to non-controlling interests		18,168			10,935
Net income attributable to controlling interests	$	30,926		$	185,141

A reconciliation of the beginning and ending balances for the Company’s investment in OC-BVI for the three months ended March 31, 2019 is as follows:

Balance as of December 31, 2018	$	2,584,987
Profit-sharing and equity from earnings of OC-BVI		19,536
Distributions received from OC-BVI		-
Balance as of March 31, 2019	$	2,604,523

The Company recognized $13,461 and $80,593 in earnings from its equity investment in OC-BVI for the three months ended March 31, 2019 and 2018, respectively. The Company recognized $6,075 and $28,350 in profit-sharing income from its profit-sharing agreement with OC-BVI for the three months ended March 31, 2019 and 2018, respectively.

For the three months ended March 31, 2019 and 2018, the Company recognized approximately $100,577 and $123,763, respectively, in revenues from its management services agreement with OC-BVI. Amounts payable by OC-BVI to the Company were $74,442 and $46,746 as of March 31, 2019 and December 31, 2018, respectively.