Investments in Foreign Joint Ventures (Tables)

3 Months Ended

Mar. 31, 2023

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 March 31, 2023 and December 31, 2022, and its operational results for the three months ended March 31, 2023 and 2022 in U.S. dollars (in thousands):


	March 31, 2023		December 31, 2022
Assets:
Total current assets	$	92,669	$	88,536
Total non-current assets	2,964		3,016
Total assets	$	95,633	$	91,552
Liabilities and equity:
Total liabilities	$	61,581	$	58,482
Total joint ventures’ equity	34,052		33,070
Total liabilities and equity	$	95,633	$	91,552


	Three Months Ended March 31,
		2023		2022
Revenue		$	21,214	$	10,079
Gross Profit		2,403		1,609
Earnings		901		323

Schedule of Activity in Investment in Foreign Joint Ventures

The table below presents the components of our investment in BOMAY and a summary of the activity within those components for the three months ended March 31, 2023 in U.S. dollars (in thousands):


	Initial Investment at Merger (1), (2)		Undistributed Earnings		Cumulative Foreign Exchange Translation Adj		Investment in BOMAY
Balance at December 31, 2022	$	9,333	$	2,295	$	(22)	$	11,606
Equity in earnings	—		393		—		393
Less: dividend distributions	—		—		—		—
Foreign currency translation gain (loss)	—		—		93		93
Balance at March 31, 2023	$	9,333	$	2,688	$	71	$	12,092

_______________

(1)Accumulated statutory reserves in equity method investments of $2.7 million at March 31, 2023 and December 31, 2022 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 is being accreted over an original period of nine years (the expected life of the joint venture). The Company's accretion during the three months ended March 31, 2023 and 2022 both totaled approximately $32 thousand each, respectively, and is included in income from equity investment in foreign joint venture in the accompanying Condensed Consolidated Statements of Operations. The remaining basis difference, net of accumulated accretion at March 31, 2023 and December 31, 2022 is summarized in the following table (in thousands):


	March 31, 2023		December 31, 2022
Original basis difference	$	1,165	$	1,165
Less accumulated accretion	(475)		(443)
Net remaining basis difference at end of period	$	690	$	722