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Investment in OC-BVI | 9 Months Ended
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Sep. 30, 2019
Investment in OC-BVI |
Investment in OC-BVI | 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 $1,879,448 and $2,584,987 as of September 30, 2019 and December 31, 2018, respectively. Summarized financial information for OC-BVI is as follows:
|  | September 30, |  | December 31,
|  | 2019 |  | 2018
Current assets |  | $ | 886,760 |  | $ | 2,286,179
Non-current assets |  |  | 3,576,216 |  |  | 3,859,310
Total assets |  | $ | 4,462,976 |  | $ | 6,145,489
|  | September 30, |  | December 31,
|  | 2019 |  | 2018
Current liabilities |  | $ | 93,129 |  | $ | 132,005
Non-current liabilities |  |  | 672,300 |  |  | 1,048,950
Total liabilities |  | $ | 765,429 |  | $ | 1,180,955
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Revenue |  | $ | 803,861 |  | $ | 708,601 |  | $ | 2,358,836 |  | $ | 2,138,238
Cost of revenue |  |  | 523,038 |  |  | 354,476 |  |  | 1,626,152 |  |  | 888,628
Gross profit |  |  | 280,823 |  |  | 354,125 |  |  | 732,684 |  |  | 1,249,610
General and administrative expenses |  |  | 170,385 |  |  | 325,721 |  |  | 594,980 |  |  | 742,645
Income from operations |  |  | 110,438 |  |  | 28,404 |  |  | 137,704 |  |  | 506,965
Other income (expense), net |  |  | (4,050) |  |  | 3,360,304 |  |  | (20,191) |  |  | 3,458,070
Net income |  |  | 106,388 |  |  | 3,388,708 |  |  | 117,513 |  |  | 3,965,035
Income attributable to non-controlling interests |  |  | 18,691 |  |  | 6,773 |  |  | 56,206 |  |  | 36,180
Net income attributable to controlling interests |  | $ | 87,697 |  | $ | 3,381,935 |  | $ | 61,307 |  | $ | 3,928,855
A reconciliation of the beginning and ending balances for the Company’s investment in OC-BVI for the nine months ended September 30, 2019 is as follows:
Balance as of December 31, 2018 |  | $ | 2,584,987
Profit sharing and equity from earnings of OC-BVI |  |  | 36,811
Distributions received from OC-BVI |  |  | (742,350)
Balance as of September 30, 2019 |  | $ | 1,879,448
The Company recognized $38,174 and $1,472,154 in earnings from its equity investment in OC-BVI for the three months ended September 30, 2019 and 2018, respectively, and $26,686 and $1,710,230 for the nine months ended September 30, 2019 and 2018, respectively. The Company recognized $2,025 and $536,625 in profit sharing income from its profit-sharing agreement with OC-BVI for the three months ended September 30, 2019 and 2018, respectively, and $10,125 and $621,675 for the nine months ended September 30, 2019 and 2018, respectively. For the three months ended September 30, 2019 and 2018, the Company recognized $95,980 and $97,668, respectively, in revenue from its management services agreement with OC-BVI. For the nine months ended September 30, 2019 and 2018, the Company recognized $287,349 and $344,344, respectively, in revenue from its management services agreement with OC-BVI. The Company also recognized approximately $710,000 in revenue for the three and nine months ended September 30, 2018 for the refurbishment of OC-BVI's Bar Bay plant. Amounts payable by OC-BVI to the Company were $12,182 and $46,746 as of September 30, 2019 and December 31, 2018, respectively.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SX 210.3A-04) -URI http://asc.fasb.org/extlink&oid=116822174&loc=d3e355119-122828 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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