Investments in Foreign Joint Ventures (Tables)

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Financial Information of Foreign Joint Venture

Below is summary financial information for BOMAY at March 31, 2021 and December 31, 2020, and operational results for the three months ended March 31, 2021 and 2020 in U.S. dollars (in thousands, unaudited):


	March 31, 2021		December 31, 2020
Assets:
Total current assets	$	52,096	$	51,811
Total non-current assets	7,042		7,136
Total assets	$	59,138	$	58,947
Liabilities and equity:
Total liabilities	$	25,636	$	26,355
Total joint ventures’ equity	33,502		32,592
Total liabilities and equity	$	59,138	$	58,947


	Three Months Ended March 31,
	2021		2020
Revenue	$	14,216	$	8,556
Gross Profit	2,233		896
Earnings	970		(284)

Schedule of Activity in Investment in Foreign Joint Ventures

The following is a summary of activity in our investment in BOMAY for the periods ended March 31, 2021 and December 31, 2020 in U.S. dollars (in thousands, unaudited):


	March 31, 2021		December 31, 2020
Investments in BOMAY (1)(2)
Initial investment	$	9,333	$	9,333
Undistributed earnings:
Balance at the beginning of the period	1,908		1,257
Equity in earnings	421		2,705
Dividend distributions	—		(2,054)
Balance at end of period	2,329		1,908
Foreign currency translation:
Balance at the beginning of the period	656		(69)
Change during the period	(62)		725
Balance at end of period	594		656
Total investment in BOMAY at end of period	$	12,256	$	11,897

________

(1)Accumulated statutory reserves in equity method investments of $2.66 million at March 31, 2021 and December 31, 2020 is included in our investment in BOMAY. In accordance with the People’s Republic of China, (“PRC”) regulations on enterprises with foreign ownership, an enterprise established in the PRC with foreign ownership is required to provide for certain statutory reserves, namely (i) General Reserve Fund, (ii) Enterprise Expansion Fund and (iii) Staff Welfare and Bonus Fund, which are appropriated from net profit as reported in the enterprise’s PRC statutory accounts. A non-wholly-owned foreign invested enterprise is permitted to provide for the above allocation at the discretion of its board of directors. The aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends.

(2)The Company’s initial investment in BOMAY differed from the Company’s 40% share of BOMAY’s equity as a result of applying fair value accounting pursuant to ASC 805. The basis difference of approximately $1.2 million will be accreted over the remaining eight year life of the joint venture. The Company accreted $32 thousand and $43 thousand during the three months ended March 31, 2021 and 2020, respectively, which is included in income from equity investments in foreign joint ventures in the accompanying condensed consolidated statement of operations. As of March 31, 2021 and December 31, 2020, accumulated accretion totaled $215 thousand and $183 thousand, respectively.