Investments in Foreign Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Financial Information of Foreign Joint Venture

Below is summary financial information for BOMAY at September 30, 2020 and December 31, 2019, and operational results for the three and nine months ended September 30, 2020 and for the period from July 27, 2019 to September 30, 2019 in U.S. dollars (in thousands, unaudited):

	September 30, 2020		December 31, 2019
Assets:
Total current assets	$	60,324	$	81,247
Total non-current assets	5,675		5,775
Total assets	$	65,999	$	87,022
Liabilities and equity:
Total liabilities	$	37,597	$	58,176
Total joint ventures’ equity	28,402		28,846
Total liabilities and equity	$	65,999	$	87,022

	Three Months Ended September 30,		Nine Months Ended September 30,
	2020		2020
Revenue	$	17,641	$	44,844
Gross Profit	3,224		7,456
Earnings	1,663		3,662

	July - September 30,
	2019
Revenue	$	8,466
Gross Profit	1,668
Earnings	467

Schedule of Activity in Investment in Foreign Joint Ventures

The following is a summary of activity in our investment in BOMAY for the nine months ended September 30, 2020 and for the period from July 27, 2019 to December 31, 2019 in U.S. dollars (in thousands, unaudited):

	September 30, 2020		July 27, 2019 to December 31, 2019
Investments in BOMAY (1) (2)
Balance at the beginning of the period	$	9,333	$	9,333
Undistributed earnings:
Balance at the beginning of the period	1,257		—
Equity in earnings	1,529		1,257
Dividend distributions	(2,054)		—
Balance at end of period	732		1,257
Foreign currency translation:
Balance at the beginning of the period	(69)		—
Change during the period	320		(69)
Balance at end of period	251		(69)
Total investment in BOMAY at end of period	$	10,316	$	10,521

________

(1)Accumulated statutory reserves in equity method investments of $2.66 million at September 30, 2020 and December 31, 2019 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 $97 thousand during the nine months ended September 30, 2020 which is included in income from equity investments in foreign joint ventures in the accompanying condensed consolidated statement of operations. As of September 30, 2020, accumulated accretion totaled $151 thousand.