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Pingtan Marine Enterprise Ltd. – ‘8-K’ for 11/4/14

On:  Thursday, 11/6/14, at 5:27pm ET   ·   For:  11/4/14   ·   Accession #:  1144204-14-65770   ·   File #:  1-35192

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

11/06/14  Pingtan Marine Enterprise Ltd.    8-K:4,7,9  11/04/14    2:205K                                   Vintage/FA

Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                      HTML     81K 
 2: EX-99.1     Miscellaneous Exhibit                               HTML     15K 


8-K   —   Current Report


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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): November 4, 2014

 

PINGTAN MARINE ENTERPRISE LTD.

(Exact name of registrant as specified in its charter)

 

Cayman Islands 001-35192 n/a

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

ID Number)

 

18/F, Zhongshan Building A

No. 154 Hudong Road

Fuzhou, PRC, 350001

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: 86-10-6569-3988

 

Not Applicable

(Former name or former address, if changed since last report.)

  

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 
 

 

Item 4.02 Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Report.

 

On November 4, 2014, ,the Audit Committee of the Board of Directors of Pingtan Marine Enterprise., Ltd. (the “Company”, “us”, “we”), (“our”) concluded that certain of the Company’s consolidated financial statements could no longer be relied upon and the Company needs to correct the following consolidated financial statements to reflect these errors:

 

• our audited consolidated balance sheets as of December 31, 2013 and 2012 and the related consolidated statements of income and comprehensive income for the years ended December 31, 2013 and 2012.

 

• our unaudited consolidated balance sheet as of September 30, 2013 and the related condensed consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2013.

 

• our unaudited condensed consolidated balance sheets as of June 30, 2014 and 2013 and the related condensed consolidated statements of income and comprehensive income for the three and six months ended June 30,. 2014 and 2013.

 

• our unaudited condensed consolidated balance sheets as of March 31, 2014 and 2013 and the related condensed consolidated statements of income and comprehensive income for the three months ended March 31,. 2014 and 2013.

 

The Company, including the Audit Committee of the Board of Directors, has discussed these matters with the Company’s previous independent registered public accounting firm, UHY VOCATION HK CPA LIMITED.

 

We shall file an amended 10-K report for the year ended December 31, 2013. The amended Annual Report on Form 10-K/A of Pingtan Marine Enterprise Ltd for the year ended December 31, 2013 will reflect the restatement of our consolidated financial statements as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and.2012.

.

We will file amended 10-Q reports for the periods ended June 30, 2014 and March 31, 2014. The amended Quarterly Reports on Form 10-Q/A of Pingtan Marine Enterprise Ltd for the periods ended June 30, 2014 and March 31, 2014 will reflect the restatement of our unaudited consolidated financial statements as of June 30, 2014 and March 31, 2014, and for the three and six months ended June 30, 2014 and 2013, and for the three months ended March 31, 2014 and 2013.

 

The Quarterly Reports on Form 10-Q of Pingtan Marine Enterprise Ltd for the period ended September 30. 2014 will reflect the restatement of our unaudited consolidated financial statements for the three and nine months ended September 30, 2013.

 

The effect of this restatement in the Company’s consolidated financial statements at December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012 are summarized and shown in the tables as follows:

 

The Company’s consolidated financial statements will be restated as of December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012. We incorrectly reflected certain balances of China Growth Equity Investments Ltd. in our consolidated financial statements at December 31, 2012 that should have been reflected as part of the recapitalization of the Company on the effective date of the share exchange agreement that occurred on February 25, 2013. Accordingly, we will amend our consolidated financial statements for the year ended December 31, 2013 and 2012 to only reflect the historical consolidated financial statements of CDGC and Merchant Supreme as the accounting acquirer prior to February 25. 2013 and the consolidated financial statements of PME, CDGC and Merchant Supreme and related subsidiaries for all periods subsequent to the closing date.

 

In summary, the effect of such restatement at December 31, 2012 and for the year ended December 31, 2012 was primarily to reduce cash by $3,565,355 for the amount of cash acquired on the merger date of February 25, 2013, to increase net income by $2,376,347 by reducing general administrative expense for amounts related to accounting acquiree prior to the merger date, to increase net income and property and equipment by $606,335 due to the reduction of depreciation expense and an increase in capitalized interest, and to remove additional paid-in capital related to the accounting acquiree of approximately $5.9 million.

 

Additionally, we restated our consolidated financial statements as of December 31, 2013 and for the year ended December 31, 2103 to:

 

a)adjust the prepaid vessel rights to the historical cost of the vessels leased which is the historical cost of the 20 vessels on the books of Hong Long, to reflect the historical cost of the 20 leased vessels as a capital lease and reclassify such amounts to property, plant and equipment, to adjust the related depreciation and amortization expense, and to reflect any excess amounts paid for the leased operating rights as a capital distribution pursuant to ASC 805-50;
b)clarify certain disclosures related to the acquisition of 46 vessels from a related party in June 2013 and disclosure related to the acquisition of operating license rights to 20 vessels in December 2013 from a related party; and,.
c)to record other miscellaneous adjustments such as the reclassification of certain balance sheet items and adjustment to adjust depreciation expense.

 

 
 

 

In summary, the effect of such restatement at December 31, 2013 and for the year ended December 31, 2013 was to reduce total assets by approximately $188 million primarily related to the adjustment of prepaid vessel rights to the historical cost of the vessels leased which is the historical cost of the 20 vessels on the books of Hong Long and to reflect the historical cost of the 20 leased vessels as a capital lease and reclassify such amounts to property, plant and equipment, to reduce liabilities by $1.3 million, and a related reduction of stockholders’ equity by $187 million.

 

The restatement had a positive impact on the consolidated statement of income for all affected periods. For the year ended December 31, 2013, net income from continuing operations increased by approximately $1.6 million, or $0.01 per basic and diluted share, to $47.1 million, or $0.60 per basic and diluted share.

 

Accordingly, the Company’s consolidated balance sheets at December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012, the consolidated statements of income and comprehensive income (loss) and statement of cash flows have been restated herein. The effect of correcting these error in the Company’s consolidated financial statements at December 31, 2013 and 2012 and for the years ended December 31, 2013 and 2012 are shown in the tables as follows:

 

Condensed consolidated balance sheet data  December 31, 2012 
   As previously reported   Adjustments to Restate      Restated 
Cash  $10,426,140   $(3,565,355)  (a)  $6,860,785 
Prepaid expenses   410,966    (24,000)  (a)   386,966 
Total Current Assets   437,448,840    (3,589,355)  (a)   433,859,485 
Property, plant and equipment   37,141,906    606,335       37,748,241 
Total Assets  $484,009,837   $(2,983,020)     $481,026,817 
                   
Accrued liabilities and other payables   1,033,784    (18)  (a)   1,033,766 
Total Current Liabilities   67,021,530    (18)      67,021,512 
Total Liabilities   83,710,851    (18)      83,710,833 
                   
Stockholders’ Equity:                  
Ordinary shares ($0.001 par value; 225,000,000 shares authorized; 77,215,000 shares issued and outstanding at December 31, 2012)   79,055    (1,840)  (a)   77,215 
Additional paid-in capital   141,381,098    (5,953,916)  (a)   135,427,182 
Retained earnings   217,224,220    2,972,754   (a)   220,196,974 
Total Stockholders’ Equity   400,298,986    (2,983,002)      397,315,984 
Total Liabilities and Stockholders’ Equity  $484,009,837   $(2,983,020)     $481,026,817 

 

(a)To properly reflect the historical consolidated financial statements of CDGC and Merchant Supreme as the accounting acquirer prior to February 25. 2013 and the consolidated financial statements of PME, CDGC and Merchant Supreme and related subsidiaries for all periods subsequent to the closing date and to reflect other miscellaneous adjustments.

 

Condensed consolidated statement of income and comprehensive income:  For the Year ended December 31, 2012 
   As previously reported   Adjustments to Restate      Restated 
Cost of revenue  $41,876,140   $(305,668)    $41,570,472 
Gross profit   25,585,328    305,668       25,890,996 
General and administrative expenses   2,839,848    (2,376,347)  (a)   463,501 
Operating income   22,097,630    2,682,015       24,779,645 
Interest expense   (3,176,920)   300,667       (2,876,253)
Net income from continuing operations   21,297,586    2,982,682       24,280,268 
Consolidated net income  $105,792,014   $2,982,682      $108,774,696 
Comprehensive income  $109,904,896   $2,982,682      $112,887,578 
                   
Basic and diluted earnings per share                  
- From continuing operations  $0.27   $0.05      $0.32 
- From discontinued operations   1.07    0.02       1.09 
- Net income  $1.34   $0.07      $1.41 
                   
Weighted average number of ordinary shares outstanding                  
- Basic and diluted   79,055,053    (1,840,053)      77,215,000 

 

(a)To properly reflect the historical consolidated financial statements of CDGC and Merchant Supreme as the accounting acquirer prior to February 25. 2013 and the consolidated financial statements of PME, CDGC and Merchant Supreme and related subsidiaries for all periods subsequent to the closing date and to reflect other miscellaneous adjustments.

 

 
 

 

Condensed consolidated statement of cash flows  For the Year ended December 31, 2012 
   As previously reported   Adjustments to Restate      Restated 
Cash flows from operating activities:                  
Net income  $105,792,014   $2,982,682   (a)   108,774,696 
Income from continuing operations   21,297,586    2,982,682       24,280,268 
Depreciation of property, plant and equipment   2,983,086    (305,668)  (a)   2,677,418 
Accrued liabilities and other payables   763,533    14,054   (a)   777,587 
Net cash provided by operating activities from continuing operations   42,558,162    2,691,068       45,249,230 
Cash flows from investing activities:                  
Purchase of property, plant and equipment   (33,692,090)   (300,667)  (a)   (33,992,757)
Net cash used in investing activities from continuing operations   (77,050,831)   (300,667)      (77,351,498)
Cash flows from financing activities:                  
Cash acquired in recapitalization   5,955,756    (5,955,756)  (a)   - 
Net cash provided by financing activities from continuing operations   43,107,542    (5,955,756)      37,151,786 
                   
Net increase in cash   61,284,375    (3,565,355)      57,719,020 
Cash at the beginning of year   114,204,340    -       114,204,340 
Cash at the end of year  $175,488,715   $(3,565,355)     $171,923,360 

  

(a)To properly reflect the historical consolidated financial statements of CDGC and Merchant Supreme as the accounting acquirer prior to February 25. 2013 and the consolidated financial statements of PME, CDGC and Merchant Supreme and related subsidiaries for all periods subsequent to the closing date and other miscellaneous adjustments.

 

Condensed consolidated balance sheet data  December 31, 2013 
   As previously reported   Adjustments to Restate      Restated 
Prepaid expenses  $2,380,874   $1,928,700   (c)  $4,309,574 
Total Current Assets   28,778,004    1,928,700       30,706,704 
Other Assets                  
Other receivables   1,213,440    (1,213,440)  (c)   - 
Prepaid fixed assets deposits   1,928,700    32,056,448   (c)   33,985,148 
Prepaid operating license rights   215,381,356    (215,381,356)  (b)   - 
Property, plant and equipment, net   107,178,269    (5,207,562)  (b)(c)   101,970,707 
Total Other Assets   329,170,718    (189,745,910)      139,424,808 
Total Assets  $357,948,722   $(187,817,210)     $170,131,512 
                   
Accrued liabilities and other payables   3,851,047    792,225   (c)   4,643,272 
Deferred income   1,733,485    (1,213,440)  (c)   520,045 
Total Current Liabilities   51,211,565    (421,215)      50,790,350 
Total Liabilities   105,711,292    (421,215)      105,290,077 
                   
Stockholders’ Equity:                  
Additional paid-in capital   -    117,525,377   (b)   117,525,377 
Statutory reserves   22,410,773    (15,997,881)  (b)   6,412,892 
Retained earnings (deficit)   199,341,512    (262,995,957)  (c)(b)   (63,654,445)
Accumulated other comprehensive income   30,406,090    (25,927,534)  (b)   4,478,556 
Total Stockholders’ Equity   252,237,430    (187,395,995)      64,841,435 
Total Liabilities and Stockholders’ Equity  $357,948,722   $(187,817,210)     $170,131,512 

 

(b)adjust the prepaid vessel rights to the historical cost of the vessels leased which is the historical cost of the 20 vessels on the books of Hong Long, to reflect the historical cost of the 20 leased vessels as a capital lease and reclassify such amounts to property, plant and equipment, to adjust the related depreciation and amortization expense, and to reflect any excess amounts paid for the leased operating rights as a capital distribution pursuant to ASC 805-50;
(c)To record other miscellaneous adjustments such as the reclassify certain balance sheets items and adjustment to adjust depreciation expense.

 

 
 

 

Condensed consolidated statement of income and comprehensive income:  For the Year ended December 31, 2013 
   As previously reported   Adjustments to Restate      Restated 
Cost of revenues  $75,760,033    (776,743)  (b)(c)  $74,983,290 
Gross profit   46,907,736    776,743       47,684,479 
Operating income   42,097,821    776,743       42,874,564 
Interest expense   (4,171,989)   870,293   (c)   (3,301,696)
Total other income/(expense)   3,390,937    870,293       4,261,230 
Net income from continuing operations   45,488,758    1,647,036       47,135,794 
Consolidated net income  $97,399,420   $1,647,036      $99,046,456 
Comprehensive Income  $105,577,539   $1,663,962      $107,241,501 
                   
Basic and diluted earnings per share                  
- From continuing operations  $0.58   $0.01      $0.60 
- From discontinued operations   0.65    0.03       0.66 
- Net income  $1.23   $0.04      $1.26 
                   
Weighted average number of ordinary shares outstanding                  
- Basic and diluted   79,055,053    (282,310)      78,772,743 

  

(a)adjust the prepaid vessel rights to the historical cost of the vessels leased which is the historical cost of the 20 vessels on the books of Hong Long, to reflect the historical cost of the 20 leased vessels as a capital lease and reclassify such amounts to property, plant and equipment, to adjust the related depreciation and amortization expense, and to reflect any excess amounts paid for the leased operating rights as a capital distribution pursuant to ASC 805-50;
(b)To record other miscellaneous adjustments such as the reclassify certain balance sheets items and adjustment to adjust depreciation and interest expense.

 

 

 

Condensed consolidated statement of cash flows  For the Year ended December 31, 2013 
   As previously reported   Adjustments to Restate   Restated 
Cash flows from operating activities:               
Net income  $97,399,420   $1,647,036   $99,046,456 
Income from continuing operations   45,488,758    1,647,036    47,135,794 
Depreciation of property, plant and equipment   3,297,751    (903,059)   2,394,692 
Amortization of operating license rights   720,339    (720,339)   - 
Notes receivable (banker's acceptances)   -    3,745,196    3,745,196 
Accrued liabilities and other payables   2,737,334    846,655    3,583,989 
Net cash provided by operating activities from continuing operations:   47,651,313    4,615,489    52,266,802 
                
Cash flows from investing activities               
Purchase of property, plant and equipment   (256,831,561)   (870,293)   (257,701,854)
Net cash used in investing activities from continuing operations   (335,642,367)   (870,293)   (336,512,660)
Cash flows from financing activities:               
Cash acquired in recapitalization   -    3,565,355    3,565,355 
Repayment of short-term loans   (60,613,140)   (3,745,196)   (64,358,336)
Net cash provided by financing activities from continuing operations   31,327,336    (179,841)   31,147,495 
                
Net decrease in cash  $(167,332,116)  $3,565,355   $(163,766,761)

 

 
 

 

Item 7.01  Regulation FD Disclosure.

 

On November 6, 2014, the Company issued a press release discussing the restatement of its consolidated financial statements for the years ended December 31, 2013 and 2012, for the quarterly periods ended March 31, 2014 and 2013 and June 30, 2014 and 2013, and announcing a conference call on Tuesday, November 11, 2014 to discuss financial results for the quarter ended September 30, 2014. A copy of the press release is included as Exhibit 99.1.

 

In accordance with General Instruction B.2 of Form 8-K, the information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.

 

Item 9.01  Financial Statements and Exhibits.

 

(d)Exhibits.

 

99.1Press release issued on November 6, 2014 relating to financial statement restatement and announcing conference call.

 

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Pingtan Marine Enterprise Ltd.
       
  By: /s/ Roy Yu
    Name: Roy Yu
    Title: Chief Financial Officer

  

Date: November 6, 2014

 

 

 


Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘8-K’ Filing    Date    Other Filings
11/11/14
Filed on:11/6/14
For Period End:11/4/14
9/30/1410-Q
6/30/1410-Q
3/31/1410-Q
12/31/1310-K,  10-K/A
9/30/1310-Q
6/30/1310-Q
3/31/1310-Q
2/25/1325-NSE,  3,  8-K,  8-K/A
12/31/1210-K
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