Investments in Foreign Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Financial Information of Foreign Joint Venture

The tables below present a summary of BOMAY's assets and liabilities and equity at September 30, 2021 and December 31, 2020, and its operational results for the three and nine months ended September 30, 2021 and 2020 in U.S. dollars (in thousands, unaudited):


	September 30, 2021		December 31, 2020
Assets:
Total current assets	$	60,707	$	51,811
Total non-current assets	6,690		7,136
Total assets	$	67,397	$	58,947
Liabilities and equity:
Total liabilities	$	34,779	$	26,355
Total joint ventures’ equity	32,618		32,592
Total liabilities and equity	$	67,397	$	58,947


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revenue	$	10,040	$	17,641	$	43,261	$	44,844
Gross Profit	3,420		3,224		8,111		7,456
Earnings	688		1,663		2,923		3,662

Schedule of Activity in Investment in Foreign Joint Ventures

The table below presents a summary of activity in our investment in BOMAY for the periods ended September 30, 2021 and December 31, 2020 in U.S. dollars (in thousands, unaudited):


	September 30, 2021		December 31, 2020
Investment 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	1,267		2,705
Dividend distributions	(1,387)		(2,054)
Balance at end of period	1,788		1,908
Foreign currency translation:
Balance at the beginning of the period	656		(69)
Change during the period	146		725
Balance at end of period	802		656
Total investment in BOMAY at end of period	$	11,923	$	11,897

(1)Accumulated statutory reserves in equity method investments of $2.66 million at September 30, 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 seven year life of the joint venture. The Company accreted $97 thousand for both the nine months ended September 30, 2021 and 2020, which is included in income from equity investments in foreign joint ventures in the accompanying unaudited interim condensed consolidated statements of operations. As of September 30, 2021 and December 31, 2020, accumulated accretion totaled $280 thousand and $183 thousand, respectively.