Quarterly report pursuant to Section 13 or 15(d)

Property, Plant and Equipment

Property, Plant and Equipment

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

NOTE 9 – PROPERTY, PLANT AND EQUIPMENT

At September 30, 2021 and December 31, 2020, property, plant and equipment consisted of the following:

	Useful life	September 30, 2021			December 31, 2020
		(Unaudited)
Fishing vessels	10 - 20 Years	$	373,527,611		$	304,764,105
Vehicles	5 Years		41,211			23,336
Office and other equipment	3 – 5 Years		491,057			488,084
			374,059,879			305,275,525
Less: accumulated depreciation			(67,936,505	)		(55,120,514	)
		$	306,123,374		$	250,155,011

During the nine months ended September 30, 2021, the 20 vessels that received approval from MARA to operate in international waters after modification and rebuilt into 20 seine vessels, had been completed and deployed to international water for operation.

During the nine months ended September 30, 2021, the Company received a government subsidy for a group of fishing vessels amounting to RMB 151.2 million (approximately US$23.4 million). The subsidy is related to assets which requires deducting it from the carrying amount of the asset.

For the three months ended September 30, 2021 and 2020, depreciation expense amounted to $5,317,274 and $3,944,203, respectively, of which $4,315,313 and $3,170,392, respectively, was included in cost of revenue and inventories, and the remainder was included in general and administrative expense. For the nine months ended September 30, 2021 and 2020, depreciation expense amounted to $12,510,131 and $10,616,935, of which $11,363,316 and $8,342,357, respectively, was included in cost of revenue and inventories, and the remainder was included in general and administrative expense, respectively.

The Company had 81 and 82 fishing vessels at September 30, 2021 and December 31, 2020, with net carrying amount of approximately $219.8 million and $227.3 million, respectively, pledged as collateral for its bank loans.

The Company recognized an impairment loss of $495,857 and nil for the three months ended September 30, 2021 and 2020, respectively. The Company recognized impairment loss of $1,471,223 and nil for the nine months ended September 30, 2021 and 2020, respectively. During the nine months ended September 30, 2021, the Company assessed the recoverability of 1 krill fishing vessel that was in the building stage based on the undiscounted future cash flow that the fishing vessel is expected to generate as less than the carrying amount, and recognized an impairment loss of 1,471,223.