| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Cayman Islands | | N/A |
(State or other jurisdiction of | | (I.R.S. Employer |
incorporation or organization) | | Identification No.) |
Large Accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company x |
| | (Do not check if a smaller reporting company) |
PART I. | FINANCIAL INFORMATION | 2 |
| | |
ITEM 1. | FINANCIAL STATEMENTS | 2 |
| | |
| Consolidated Balance Sheets at September 30, 2013 (Unaudited) and December 31, 2012 | 2 |
| Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2013 and 2012 (Unaudited) | 3 |
| Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2013 and 2012 (Unaudited) | 4 |
| Consolidated Statement of Changes in Shareholders’ Equity for the Nine Months Ended September 30, 2013 (Unaudited) | 5 |
| Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012 (Unaudited) | 6 |
| Notes to Unaudited Consolidated Financial Statements | 8 |
| | |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 48 |
| | |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 62 |
| | |
ITEM 4. | CONTROLS AND PROCEDURES | 62 |
| | |
PART II. | OTHER INFORMATION | 63 |
| | |
ITEM 1. | LEGAL PROCEEDINGS | 63 |
ITEM 1A. | RISK FACTORS | 63 |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 63 |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | 63 |
ITEM 4. | MINE SAFETY DISCLOSURES | 63 |
ITEM 5. | OTHER INFORMATION | 63 |
ITEM 6. | EXHIBITS | 63 |
1 | ||
| | September 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | (A) | | ||
Assets | | | | | | | |
Current assets | | | | | | | |
Cash | | $ | 10,832,000 | | $ | 10,426,140 | |
Notes receivable (banker's acceptances) transferred from related parties | | | - | | | 3,645,817 | |
Accounts receivable - third parties | | | 10,252,829 | | | 11,478,436 | |
Other receivables | | | 11,015 | | | 29,885 | |
Advance to related parties | | | - | | | 49,802,821 | |
Prepaid expenses | | | 4,932,497 | | | 410,966 | |
Inventories | | | 5,427,251 | | | 194,331 | |
Assets of discontinued operations | | | 250,209,548 | | | 361,460,444 | |
Total current assets | | | 281,665,140 | | | 437,448,840 | |
| | | | | | | |
Other assets | | | | | | | |
Long-term investment | | | 3,431,373 | | | 3,328,789 | |
Deposit on setting up of Joint Venture | | | - | | | 6,090,302 | |
Property, plant and equipment, net | | | 66,979,281 | | | 37,141,906 | |
Other receivables | | | 3,283,333 | | | - | |
Total other assets | | | 73,693,987 | | | 46,560,997 | |
| | | | | | | |
Total assets | | $ | 355,359,127 | | $ | 484,009,837 | |
| | | | | | | |
Liabilities and equity | | | | | | | |
Current liabilities | | | | | | | |
Accounts payable - third parties | | $ | 151,000 | | $ | 70,732 | |
- related parties | | | 163,303 | | | 5,765,632 | |
Receipt in advance - third parties | | | 476,399 | | | - | |
- related parties | | | - | | | 12,681,102 | |
Short-term loans | | | 22,363,811 | | | 25,169,260 | |
Long-term loans - current portion | | | 11,413,399 | | | 8,094,308 | |
Accrued liabilities and other payables | | | 3,684,872 | | | 1,033,784 | |
Advance from related parties | | | 115,472 | | | 153,961 | |
Deferred income | | | 1,714,706 | | | - | |
Liabilities of discontinued operations | | | 181,463,364 | | | 14,052,751 | |
Total current liabilities | | | 221,546,326 | | | 67,021,530 | |
| | | | | | | |
Other liabilities | | | | | | | |
Long-term loans, net of current portion | | | 58,431,373 | | | 16,689,321 | |
Total other liabilities | | | 58,431,373 | | | 16,689,321 | |
Total liabilities | | | 279,977,699 | | | 83,710,851 | |
| | | | | | | |
Shareholders' equity | | | | | | | |
Ordinary shares, 225,000,000 shares authorized with $0.001 authorized with $0.001 per share; 79,055,053 shares issued and outstanding as of September 30, 2013 and December 31, 2012 | | | 79,055 | | | 79,055 | |
Additional paid-in capital | | | 26,645,687 | | | 141,381,098 | |
Statutory reserves | | | 19,877,314 | | | 19,386,642 | |
Retained earnings | | | - | | | 217,224,220 | |
Accumulated other comprehensive income | | | 28,779,372 | | | 22,227,971 | |
Total shareholders’ equity | | | 75,381,428 | | | 400,298,986 | |
| | | | | | | |
Total liabilities and shareholders' equity | | $ | 355,359,127 | | $ | 484,009,837 | |
2 | ||
| | For the Three Months Ended September 30, | | For the Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 (A) | | 2013 | | 2012 (A) | | ||||
| | | | | | | | | | | | | |
Revenue | | $ | 20,609,107 | | $ | 13,152,223 | | $ | 61,640,940 | | $ | 39,039,757 | |
| | | | | | | | | | | | | |
Cost of revenue | | | (12,446,879) | | | (9,693,182) | | | (38,974,488) | | | (28,572,398) | |
| | | | | | | | | | | | | |
Gross profit | | | 8,162,228 | | | 3,459,041 | | | 22,666,452 | | | 10,467,359 | |
| | | | | | | | | | | | | |
Selling and marketing expenses | | | (361,999) | | | (146,641) | | | (730,734) | | | (608,483) | |
| | | | | | | | | | | | | |
General and administrative expenses | | | (1,178,035) | | | (209,633) | | | (2,345,569) | | | (578,544) | |
| | | | | | | | | | | | | |
Operating income | | | 6,622,194 | | | 3,102,767 | | | 19,590,149 | | | 9,280,332 | |
| | | | | | | | | | | | | |
Other income/(expense) | | | | | | | | | | | | | |
Investment income | | | 218 | | | 20 | | | 69,289 | | | 15,146 | |
Interest income | | | 2,306 | | | 678 | | | 4,861 | | | 2,888 | |
Interest expenses | | | (1,049,041) | | | (1,079,474) | | | (2,444,782) | | | (2,438,124) | |
Subsidy income | | | 168,900 | | | 3,783,578 | | | 204,492 | | | 3,783,578 | |
Sundry income | | | 8 | | | - | | | 2,021 | | | - | |
Gain/(Loss) on foreign exchange, net | | | 194,433 | | | (21,051) | | | (25,972) | | | (52,770) | |
Total other income/(expense) | | | (683,176) | | | 2,683,751 | | | (2,190,091) | | | 1,310,718 | |
| | | | | | | | | | | | | |
Income from continuing operations before income taxes | | | 5,939,018 | | | 5,786,518 | | | 17,400,058 | | | 10,591,050 | |
| | | | | | | | | | | | | |
Income tax expense | | | - | | | - | | | - | | | - | |
| | | | | | | | | | | | | |
Net income from continuing operations | | | 5,939,018 | | | 5,786,518 | | | 17,400,058 | | | 10,591,050 | |
| | | | | | | | | | | | | |
Net income from discontinued operations, net of taxes | | | 12,362,523 | | | 17,375,250 | | | 39,461,777 | | | 60,773,049 | |
| | | | | | | | | | | | | |
Consolidated net income | | $ | 18,301,541 | | $ | 23,161,768 | | $ | 56,861,835 | | $ | 71,364,099 | |
| | | | | | | | | | | | | |
Basic and diluted earnings per share | | | | | | | | | | | | | |
- From continuing operations | | $ | 0.08 | | $ | 0.07 | | $ | 0.22 | | $ | 0.13 | |
- From discontinued operations | | | 0.15 | | | 0.22 | | | 0.50 | | | 0.77 | |
- Net income | | $ | 0.23 | | $ | 0.29 | | $ | 0.72 | | $ | 0.90 | |
Weighted average number of ordinary shares outstanding | | | | | | | | | | | | | |
- Basic and diluted | | | 79,055,053 | | | 79,055,053 | | | 79,055,053 | | | 79,055,053 | |
3 | ||
| | For the Three Months Ended September 30, | | For the Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 (A) | | 2013 | | 2012 (A) | | ||||
| | | | | | | | | | | | | |
Net income | | $ | 18,301,541 | | $ | 23,161,768 | | $ | 56,861,835 | | $ | 71,364,099 | |
| | | | | | | | | | | | | |
Other comprehensive income | | | | | | | | | | | | | |
Foreign currency translation gain | | | 796,724 | | | 3,870,683 | | | 6,551,401 | | | 942,406 | |
Total comprehensive income | | $ | 19,098,265 | | $ | 27,032,451 | | $ | 63,413,236 | | $ | 72,306,505 | |
4 | ||
| | Ordinary Shares, | | | | | | | | | | | Accumulated | | | | | |||||
| | with no Par Value | | Additional | | | | | | | | other | | Total | | |||||||
| | Number of | | | | paid-in | | Statutory | | Retained | | comprehensive | | shareholders' | | |||||||
| | Shares | | Amount | | capital | | reserves | | earnings | | income | | equity | | |||||||
| | | | | | | | | | | | | | | | | | | | | | |
Balance as of January 1, 2013 (A) | | | 79,055,053 | | $ | 79,055 | | $ | 141,381,098 | | $ | 19,386,642 | | $ | 217,224,220 | | $ | 22,227,971 | | $ | 400,298,986 | |
| | | | | | | | | | | | | | | | | | | | | | |
Net income | | | - | | | - | | | - | | | - | | | 56,861,835 | | | - | | | 56,861,835 | |
| | | | | | | | | | | | | | | | | | | | | | |
Appropriation to statutory reserves | | | - | | | - | | | - | | | 490,672 | | | (490,672) | | | - | | | - | |
| | | | | | | | | | | | | | | | | | | | | | |
Foreign currency translation gain | | | - | | | - | | | - | | | - | | | - | | | 6,551,401 | | | 6,551,401 | |
| | | | | | | | | | | | | | | | | | | | | | |
Acquisition of fishing vessels from related party | | | - | | | - | | | (114,735,411) | | | - | | | (273,595,383) | | | - | | | (388,330,794) | |
| | | | | | | | | | | | | | | | | | | | | | |
Balance as of September 30, 2013 | | | 79,055,053 | | $ | 79,055 | | $ | 26,645,687 | | $ | 19,877,314 | | $ | - | | $ | 28,779,372 | | $ | 75,381,428 | |
5 | ||
| | For the Nine Months Ended September 30, | | ||||
| | 2013 | | 2012 (A) | | ||
| | | | | | | |
Cash flows from operating activities | | | | | | | |
Net income | | $ | 56,861,835 | | $ | 71,364,099 | |
Discontinued operations, net of tax | | | (39,461,777) | | | (60,773,049) | |
Income from continuing operations | | | 17,400,058 | | | 10,591,050 | |
| | | | | | | |
Adjustments to reconcile net income to net cash provided by operating activities | | | | | | | |
Depreciation of property, plant and equipment | | | 2,268,063 | | | 2,596,876 | |
Short term investment income | | | - | | | (15,868) | |
| | | | | | | |
Changes in operating assets and liabilities | | | | | | | |
Accounts receivable - third parties | | | 1,568,675 | | | (4,240,254) | |
- related parties | | | - | | | 4,586,762 | |
Other receivables | | | 19,657 | | | 6,766,975 | |
Prepaid expenses | | | (4,479,159) | | | 336,543 | |
Inventories | | | (5,191,641) | | | 756,413 | |
Accounts payable - third parties | | | 77,561 | | | 2,498,040 | |
- related parties | | | 494,616 | | | 3,443,700 | |
Receipt in advance - third parties | | | 473,183 | | | (382,150) | |
- related parties | | | (12,983,365) | | | - | |
Accrued liabilities and other payables | | | 2,602,770 | | | 1,146,071 | |
Net cash provided by operating activities from continuing operations | | | 2,250,418 | | | 28,084,158 | |
| | | | | | | |
Cash flows from investing activities | | | | | | | |
Payment for long term investment | | | - | | | (2,995,958) | |
Proceeds from disposition of short-term investment | | | - | | | 808,449 | |
Proceeds from deferred income | | | 6,224,357 | | | - | |
Purchase of property, plant and equipment | | | (216,850,307) | | | (6,574,964) | |
Advance to related parties | | | (4,044,837) | | | (52,772,881) | |
Net cash used in investing activities from continuing operations | | | (214,670,787) | | | (61,535,354) | |
| | | | | | | |
Cash flows from financing activities | | | | | | | |
Proceeds from short-term loans | | | 43,439,587 | | | 51,478,882 | |
Repayment of short-term loans | | | (46,996,499) | | | (36,078,434) | |
Proceeds from long-term loans | | | 45,889,055 | | | 26,630,736 | |
Repayment of long-term loans | | | (1,890,743) | | | - | |
Proceeds from additional paid in capital | | | - | | | 13 | |
Advance from related parties, net of reception in form of note receivable | | | 3,847,492 | | | (10,222,164) | |
Net cash provided by financing activities from continuing operations | | | 44,288,892 | | | 31,809,033 | |
6 | ||
| | For the Nine Months Ended September 30, | | ||||
| | 2013 | | 2012 (A) | | ||
| | | | | | | |
Cash flow from discontinued operations | | | | | | | |
Net cash provided by operating activities from discontinued operations | | | 71,420,962 | | | 73,322,045 | |
Net cash provided by investing activities from discontinued operations | | | 7,624,250 | | | 23,934,193 | |
Net cash (used in)/provided by financing activities from discontinued | | | | | | | |
operations | | | (560,216) | | | 168,559 | |
Net cash provided by discontinued operations | | | 78,484,996 | | | 97,424,797 | |
| | | | | | | |
Effect of exchange rate | | | 1,977,422 | | | 732,443 | |
| | | | | | | |
Net (decrease)/increase in cash | | | (87,669,059) | | | 96,515,077 | |
| | | | | | | |
Cash at the beginning of period (1) | | | 175,488,715 | | | 114,204,340 | |
| | | | | | | |
Cash at the end of period (2) | | $ | 87,819,656 | | $ | 210,719,417 | |
| | | | | | | |
Supplemental disclosure of cash flow information: | | | | | | | |
| | | | | | | |
Cash paid: | | | | | | | |
From discontinued operations | | | | | | | |
Income tax paid | | $ | 12,814,679 | | $ | 23,111,634 | |
| | | | | | | |
From continuing operations | | | | | | | |
Interest paid | | $ | 2,325,864 | | $ | 2,559,454 | |
| | | | | | | |
Supplemental disclosure of non-cash transaction eliminated in above: | | | | | | | |
| | | | | | | |
Note payable-related party | | $ | 155,166,195 | | $ | - | |
| | | | | | | |
Purchase of property, plant and equipment by setting off advances to | | | | | | | |
related parties | | $ | 54,882,642 | | $ | - | |
Deposit on setting up Joint Venture netted of accounts | | | | | | | |
payable-related parties | | $ | 6,090,302 | | $ | - | |
7 | ||
8 | ||
Continuing operations | | | | | | | |
| | | | | | | |
Name of subsidiaries | | Place and date of incorporation | | Percentage of ownership | | Principal activities | |
| | | | | | | |
Merchant Supreme Co., Ltd. (“Merchant Supreme”) | | BVI, June 25, 2012 | | 100% held by PME | | Intermediate holding company | |
| | | | | | | |
Prime Cheer Corporation Ltd. (“Prime Cheer”) | | Hong Kong, May 3, 2012 | | 100% held by Merchant Supreme | | Intermediate holding company | |
| | | | | | | |
Pingtan Guansheng Ocean Fishing Co., Ltd. ("Pingtan Guansheng") | | PRC October 12, 2012 | | 100% held by Prime Cheer | | Intermediate holding company | |
Name of VIEs |
|
Fujian Provincial Pingtan County Fishing Group Co., Ltd. (“Pingtan Fishing”) |
|
Pingtan Dingxin Fishing Information Consulting Co., Ltd. (“Pingtan Dingxin”) |
|
Pingtan Duoying Fishing Information Consulting Co., Ltd. (“Pingtan Duoying”) |
|
Pingtan Ruiying Fishing Information Consulting Co., Ltd. (“Pingtan Ruiying”) |
9 | ||
The following entities represent the discontinued operations: | |
| |
Name of subsidiaries | |
| |
China Dredging Group Co., Ltd(“CDGC” or “China Dredging) | |
| |
China Dredging (HK) Company Limited (“China Dredging HK”) | |
| |
Master Gold Corporation Limited (“Master Gold”) | |
| |
Fujian Wanggang Dredging Construction Co., Ltd (“Fujian Wanggang”) | |
| |
Pingtan Xingyi Port Service Co., Ltd (“Pingtan Xingyi”) | |
| |
Pingtan Zhuoying Dredging Engineering Construction Co., Ltd (“Pingtan Zhuoying”) | |
Name of VIEs | |
| |
Wonder Dredging Engineering LLC (“Wonder Dredging”) | |
| |
Fujian Xinggang Port Service Co., Ltd. (“Fujian Service”) | |
Notes: | | | |
1. | Principal amount per the Company’s SEC filings as of June 30, 2013. |
| | For the Three Months Ended September 30, | | For the Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | ||||
| | | | | | | | | | | | | |
Revenue | | $ | 54,323,389 | | $ | 46,892,465 | | $ | 131,610,091 | | $ | 165,986,546 | |
| | | | | | | | | | | | | |
Cost of revenue | | | (33,520,993) | | | (20,942,489) | | | (74,761,710) | | | (76,537,718) | |
| | | | | | | | | | | | | |
Gross profit | | | 20,802,396 | | | 25,949,976 | | | 56,848,381 | | | 89,448,828 | |
| | | | | | | | | | | | | |
General and administrative expenses | | | (2,200,183) | | | (1,900,068) | | | (5,614,875) | | | (6,544,286) | |
| | | | | | | | | | | | | |
Operating income | | | 18,602,213 | | | 24,049,908 | | | 51,233,506 | | | 82,904,542 | |
| | | | | | | | | | | | | |
Other income/(expense) | | | (1,513,074) | | | (577,851) | | | 431,465 | | | (1,170,850) | |
| | | | | | | | | | | | | |
Income before income taxes | | | 17,089,139 | | | 23,472,057 | | | 51,664,971 | | | 81,733,692 | |
| | | | | | | | | | | | | |
Income tax expense | | | (4,726,616) | | | (6,096,807) | | | (12,203,194) | | | (20,960,643) | |
| | | | | | | | | | | | | |
Net income from discontinued operation, net of taxes | | $ | 12,362,523 | | $ | 17,375,250 | | $ | 39,461,777 | | $ | 60,773,049 | |
10 | ||
| | September 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | | | | |
Assets | | | | | | | |
Current assets | | | | | | | |
Cash | | $ | 76,987,656 | | $ | 165,062,575 | |
Accounts receivable - third parties | | | 4,399,624 | | | 23,446,249 | |
Cost and estimated earnings in excess of billings on contracts in progress | | | 14,208,348 | | | 8,133,021 | |
Other receivables | | | 466,284 | | | 4,189 | |
Inventories | | | 4,415,589 | | | 5,029,653 | |
Total current assets | | | 100,477,501 | | | 201,675,687 | |
| | | | | | | |
Other assets | | | | | | | |
Prepaid other deposits | | | - | | | 4,430 | |
Prepaid dredger deposits | | | 24,190,023 | | | 23,274,105 | |
Security deposits | | | 16,830,065 | | | 25,087,880 | |
Deposit for BT project | | | 68,055,556 | | | 66,852,860 | |
Property, plant and equipment, net | | | 40,656,403 | | | 44,565,482 | |
Total other assets | | | 149,732,047 | | | 159,784,757 | |
| | | | | | | |
Total assets | | $ | 250,209,548 | | $ | 361,460,444 | |
| | | | | | | |
Liabilities | | | | | | | |
Current liabilities | | | | | | | |
Accounts payable - third parties | | $ | 10,549,864 | | $ | 3,690,417 | |
Income tax payable | | | 4,813,797 | | | 5,333,519 | |
Accrued liabilities and other payables | | | 4,011,855 | | | 2,704,350 | |
Accrued interest - related party | | | 1,768,470 | | | - | |
Receipt in advance - third parties | | | 5,153,183 | | | - | |
Advance from related parties | | | - | | | 560,216 | |
Derivative liability | | | - | | | 1,764,249 | |
Note payable - related party | | | 155,166,195 | | | - | |
Total current liabilities | | $ | 181,463,364 | | $ | 14,052,751 | |
11 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
| (a) | Basis of presentation |
12 | ||
| | September 30, | | December 31, | | ||
| | 2013 | | 2012 | | ||
| | (Unaudited) | | | | ||
ASSETS | | | | | | | |
Cash | | $ | 10,678,707 | | $ | 6,710,472 | |
Notes receivable (banker's acceptances) transferred from related parties | | | - | | | 3,645,817 | |
Accounts receivable - third parties | | | 10,252,829 | | | 11,478,436 | |
Other receivables | | | 3,294,318 | | | 29,885 | |
Advance to related parties | | | - | | | 49,802,897 | |
Inventories | | | 5,427,251 | | | 194,331 | |
Prepaid expenses - third parties | | | 4,908,497 | | | 386,966 | |
Long-term investment | | | 3,431,373 | | | 3,328,789 | |
Deposit on setting up Joint Venture | | | - | | | 6,092,302 | |
Property, plant and equipment, net | | | 66,979,281 | | | 37,141,906 | |
| | $ | 104,972,256 | | $ | 118,811,801 | |
| | | | | | | |
LIABILITIES | | | | | | | |
Accounts payable - third parties | | $ | 151,000 | | $ | 70,732 | |
- related parties | | | 163,303 | | | 5,765,632 | |
Receipt in advance - third parties | | | 476,399 | | | - | |
- related parties | | | - | | | 12,681,102 | |
Short-term loans | | | 22,363,811 | | | 25,169,260 | |
Accrued liabilities and other payables | | | 3,462,405 | | | 1,033,640 | |
Long-term loans | | | 69,844,772 | | | 24,783,629 | |
| | $ | 96,461,690 | | $ | 69,503,995 | |
13 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (…/Cont’d) |
| | For the Three Months Ended September 30, | | For the Nine Months Ended September 30 | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | ||||
| | | | | | | | | | | | | |
Revenue | | $ | 20,609,107 | | $ | 13,152,223 | | $ | 61,640,940 | | $ | 39,039,757 | |
| | | | | | | | | | | | | |
Cost of revenue | | $ | (12,446,879) | | $ | (9,693,182) | | $ | (38,974,488) | | $ | (28,572,398) | |
| | | | | | | | | | | | | |
Net income attributable to the Company | | $ | 6,868,193 | | $ | 5,789,531 | | $ | 19,102,412 | | $ | 10,594,063 | |
14 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (…/Cont’d) |
15 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (…/Cont’d) |
(d) | Foreign currency translation (…/Cont’d) |
| | September 30, 2013 | | December 31, 2012 | |
Balance sheet items, except for equity accounts | | RMB6.12=$1 | | RMB6.3086=$1 | |
| | HKD7.7551=$1 | | HKD7.7507=$1 | |
| | For the Three Months Ended September 30, | | ||
| | 2013 | | 2012 | |
Items in statements of income and cash flows | | RMB6.1226=$1 | | RMB6.2923=$1 | |
| | HKD7.7551=$1 | | HKD7.7546=$1 | |
| | For the Nine Months Ended September 30, | | ||
| | 2013 | | 2012 | |
Items in statements of income and cash flows | | RMB6.1616=$1 | | RMB6.3085=$1 | |
| | HKD7.7575=$1 | | HKD7.7575=$1 | |
16 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (…/Cont’d) |
| (g) | Revenue recognition |
| (h) | Government grant |
| (i) | Deferred income |
| (j) | Fishing licenses |
17 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (…/Cont’d) |
| (k) | Inventories |
| (l) | Property, plant and equipment |
| | Estimated lives | |
Fishing vessel | | 10-20 | |
Major improvement on fishing vessel | | 4-20 | |
Motor vehicle | | 3-5 | |
Ship and office equipments | | 3-5 | |
18 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (…/Cont’d) |
| (n) | Impairment of long-lived assets |
| (o) | Income taxes |
19 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (…/Cont’d) |
| (p) | Fair value measurements |
| (q) | Commitments and contingencies |
20 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (…/Cont’d) |
| (r) | Economic and political risks |
| (s) | Pension and employee benefits |
| (t) | Segment information |
| (u) | Earnings per ordinary share |
21 | ||
3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (…/Cont’d) |
(u) Earnings per ordinary share (…/Cont’d) |
| | For the Three Months Ended September 30, | | For the Nine Months Ended September 30, | | ||||||||
| | 2013 | | 2012 | | 2013 | | 2012 | | ||||
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | | ||||
| | | | | | | | | | | | | |
Net income | | $ | 18,301,541 | | $ | 23,161,768 | | $ | 56,861,835 | | $ | 71,364,099 | |
| | | | | | | | | | | | | |
Weighted average number of ordinary shares outstanding (Basic and diluted) | | | 79,055,053 | | | 79,055,053 | | | 79,055,053 | | | 79,055,053 | |
| | | | | | | | | | | | | |
Earnings per ordinary share (Basic and diluted) | | | | | | | | | | | | | |
- From continuing operations | | $ | 0.08 | | $ | 0.07 | | $ | 0.22 | | $ | 0.13 | |
- From discontinued operations | | | 0.15 | | | 0.22 | | | 0.50 | | | 0.77 | |
- Net income | | $ | 0.23 | | $ | 0.29 | | $ | 0.72 | | $ | 0.90 | |
| | For the Three Months Ended | | For the Nine Months Ended | | ||||
| | September 30, | | September 30, | | ||||
| | 2013 | | 2012 | | 2013 | | 2012 | |
| | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) | |
| | | | | | | | | |
Warrants to purchase common stock | | 8,966,667 | | 8,966,667 | | 8,966,667 | | 8,966,667 | |
22 | ||
4. | CASH |
| | September 30, 2013 | | | December 31, 2012 | | |
| | (Unaudited) | | | | | |
| | | | | | | |
Hong Kong | | $ | - | | $ | 3,565,355 | |
| | | | | | | |
Maximum exposure to credit risk | | $ | - | | $ | 3,565,355 | |
Cash is denominated in the following currency: | | | | | | | |
| | | | | | | |
| | September 30, 2013 | | December 31, 2012 | | ||
| | | (Unaudited) | | | | |
| | | | | | | |
USD | | $ | - | | $ | 3,565,355 | |
23 | ||
4. | CASH (…/Cont’d) |
| | September 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | | | | |
| | | | | | | |
Hong Kong | | $ | 678 | | $ | 862 | |
The PRC | | | 10,831,322 | | | 6,859,923 | |
| | $ | 10,832,000 | | $ | 6,860,785 | |
| | | | | | | |
Maximum exposure to credit risk | | $ | 10,832,000 | | $ | 6,860,785 | |
| | September 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | | | | |
| | | | | | | |
USD | | $ | 150,057 | | $ | 150,001 | |
RMB | | | 10,681,265 | | | 6,709,922 | |
HKD | | | 678 | | | 862 | |
| | $ | 10,832,000 | | $ | 6,860,785 | |
5. | ACCOUNTS RECEIVABLE - THIRD PARTIES |
| | September 30, 2013 | | December 31, 2012 | | ||
| | (Unaudited) | | <td style="TEXT-ALIGN: center; FONT-STYLE: normal; FONT-FAMILY: Times New Roman; BACKGROUND: #ffffff; FONT-SIZE: 10pt; VERTICAL-ALIGN: bottom; BORDER-TOP: #000000 1px soli