SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q Quarterly report pursuant to sections 13 or 15(d)

Filing Date: 2020-08-17 | Period of Report: 2020-06-30 SEC Accession No. 0001213900-20-022502

(HTML Version on secdatabase.com)

FILER Pingtan Marine Enterprise Ltd. Mailing Address Business Address 18-19/F, ZHONGSHAN 18-19/F, ZHONGSHAN CIK:1517130| IRS No.: 000000000 | State of Incorp.:E9 | Fiscal Year End: 1231 BUILDING A, BUILDING A, Type: 10-Q | Act: 34 | File No.: 001-35192 | Film No.: 201110064 NO. 154 HUDONG ROAD NO. 154 HUDONG ROAD SIC: 0900 Fishing, hunting and trapping F4 350001 FUZHOU F4 350001 86-591-8727-1266

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to ______

COMMISSION FILE NUMBER: 001-35192

PINGTAN MARINE ENTERPRISE LTD. (Exact name of Registrant as specified in its charter)

Cayman Islands N/A (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification No.)

18-19/F, Zhongshan Building A, No. 154 Hudong Road Fuzhou, 350001 (Address of principal executive offices)

(86) 591-8727-1266 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange on which Title of each class Trading Symbol(s) registered Ordinary Shares, $0.001 par value PME The NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒

As of August 17, 2020, the outstanding number of the registrant’s ordinary shares, par value $0.001 per share, was 79,055,053.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PINGTAN MARINE ENTERPRISE LTD. FORM 10-Q June 30, 2020

TABLE OF CONTENTS

Page No. PART I - FINANCIAL INFORMATION

Item 1. Financial Statements 1 Consolidated Balance Sheets as of June 30, 2020 (Unaudited) and December 31, 2019 1 Unaudited Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 2020 and 2019 2 Unaudited Consolidated Statement of Changes in Shareholders’ Equity for the Three Months Ended March 31 and June 30, 2020 3 Unaudited Consolidated Statement of Changes in Shareholders’ Equity for the Three Months Ended March 31 and June 30, 2019 4 Unaudited Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019 5 Condensed Notes to Unaudited Consolidated Financial Statements 6 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 3 Quantitative and Qualitative Disclosures About Market Risk 45 Item 4 Controls and Procedures 46

PART II - OTHER INFORMATION

Item 1. Legal Proceedings 47 Item 1A. Risk Factors 47 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 48 Item 3. Defaults upon Senior Securities 48 Item 4. Mine Safety Disclosures 48 Item 5. Other Information 48 Item 6. Exhibits 48

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document FORWARD LOOKING STATEMENTS

This report contains forward-looking statements regarding our business, financial condition, results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements, but are not deemed to represent an all-inclusive means of identifying forward- looking statements as denoted in this report. Additionally, statements concerning future matters are forward-looking statements.

Although forward-looking statements in this report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, the impact of the coronavirus (COVID-19) on the Company’s financial condition, business operations and liquidity; the impact of COVID-19 on our customers and distributors; anticipated growth and growth strategies; need for additional capital and the availability of financing; operational, mechanical, climatic or other unanticipated issues that adversely affect the production capacity of the Company’s vessels; delays in deploying vessels; our ability to successfully manage relationships with customers, distributors and other important relationships; technological changes; competition; demand for our products and services; the deterioration of general economic conditions, whether internationally, nationally or in the local markets in which we operate; legislative or regulatory changes that may adversely affect our business; and those specifically addressed under the headings “Risks Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K, in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q and information contained in other reports that we file with the SEC. You are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this report.

We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this report, except as required by law. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which are designed to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

Unless otherwise indicated, references in this report to “we,” “us” or the “Company” refer to Pingtan Marine Enterprise Ltd. and its subsidiaries.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (IN U.S. DOLLARS)

June 30, December 31, 2020 2019 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 3,405,523 $ 10,092,205 Restricted cash 10,770,608 - Accounts receivable, net of allowance for doubtful accounts 12,624,501 9,273,446 Due from related parties 81,252,639 12,477,777 Inventories, net of reserve for inventories 56,605,991 30,527,752 Prepaid expenses 750,349 1,354,129 Other receivables 219,325 613,384

Total Current Assets 165,628,936 64,338,693

OTHER ASSETS: Cost method investment 2,966,311 3,010,235 Equity method investment 27,249,283 27,923,464 Prepayment for long-term assets 63,950,903 49,040,338 Right-of-use asset 253,628 438,254 Property, plant and equipment, net 297,397,430 259,377,729

Total Other Assets 391,817,555 339,790,020

Total Assets $557,446,491 $404,128,713

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES: Accounts payable $ 17,363,276 $ 7,951,766 Accounts payable - related parties 2,366,568 1,707,217 Short-term bank loans 90,684,370 10,034,116 Long-term bank loans - current portion 60,880,006 57,122,789 Accrued liabilities and other payables 11,579,704 11,428,018 Lease liability- current liability 222,567 375,922 Due to related parties 18,354 168,328

Total Current Liabilities 183,114,845 88,788,156

OTHER LIABILITIES: Lease liability - 32,203 Long-term bank loans - non-current portion 214,352,709 160,230,498

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Total Liabilities 397,467,554 249,050,857

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY: Equity attributable to owners of the company: Ordinary shares ($0.001 par value; 125,000,000 shares authorized; 79,055,053 shares issued and 79,055 79,055 outstanding at June 30, 2020 and December 31, 2019) Additional paid-in capital 81,682,599 81,682,599 Retained earnings 60,375,134 54,286,454 Statutory reserve 15,748,751 15,748,751 Accumulated other comprehensive loss (17,786,987) (16,080,908) Total equity attributable to owners of the company 140,098,552 135,715,951 Non-controlling interest 19,880,385 19,361,905

Total Shareholders’ Equity 159,978,937 155,077,856

Total Liabilities and Shareholders’ Equity $557,446,491 $404,128,713

See notes to consolidated financial statements.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (IN U.S. DOLLARS)

For the Three Months Ended For the Six Months Ended June 30, June 30, 2020 2019 2020 2019

REVENUE $ 23,463,133 $ 25,463,094 $ 40,770,133 $ 43,887,303

COST OF REVENUE 21,299,920 16,196,280 32,854,363 30,539,838

GROSS PROFIT 2,163,213 9,266,814 7,915,770 13,347,465

OPERATING EXPENSES: Selling 1,046,519 535,276 1,948,170 1,245,205 General and administrative 795,332 1,365,250 2,065,475 4,960,640 General and administrative - depreciation 789,334 749,056 1,500,767 1,971,217 Subsidy (564,095) - (8,338,088) - Loss on fixed assets disposal - 166,152 - 166,152

Total Operating Expenses 2,067,090 2,815,734 (2,823,676) 8,343,214

INCOME FROM OPERATIONS 96,123 6,451,080 10,739,446 5,004,251

OTHER INCOME (EXPENSE): Interest income 1,162,486 17,773 2,362,612 20,289 Interest expense (2,936,529) (1,598,082) (5,835,425) (2,127,247) Foreign currency transaction gain (loss) 21,718 (139,715) (344,691) (49,631) Gain from cost method investment 132,753 347,651 132,753 347,651 Loss on equity method investment (143,015) (271,227) (268,543) (381,843) Other income (expense) 5,084 226,487 (30,456) 252,158

Total Other Expense, net (1,757,503) (1,417,113) (3,983,750) (1,938,623)

(LOSS) INCOME BEFORE INCOME TAXES (1,661,380) 5,033,967 6,755,696 3,065,628

INCOME TAXES - - - -

NET (LOSS) INCOME $ (1,661,380) $ 5,033,967 $ 6,755,696 $ 3,065,628

LESS: NET (LOSS) INCOME ATTRIBUTABLE TO THE NON- (85,370) 454,923 667,016 373,823 CONTROLLING INTEREST

NET (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF THE ) COMPANY $ (1,576,010 $ 4,579,044 $ 6,088,680 $ 2,691,805

COMPREHENSIVE INCOME (LOSS): NET (LOSS) INCOME (1,661,380) 5,033,967 6,755,696 3,065,628 OTHER COMPREHENSIVE (LOSS) INCOME Unrealized foreign currency translation gain (loss) (166,176) (3,066,793) (1,854,615) (167,444)

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document COMPREHENSIVE (LOSS) INCOME $ (1,827,556) $ 1,967,174 $ 4,901,081 $ 2,898,184 LESS: COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE (98,734) 209,407 518,480 334,384 TO THE NON-CONTROLLING INTEREST COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO ) OWNERS OF THE COMPANY $ (1,728,822 $ 1,757,767 $ 4,382,601 $ 2,563,800

NET(LOSS)INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY Basic and diluted $ (0.02) $ 0.06 $ 0.08 $ 0.03

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: Basic and diluted 79,055,053 79,055,053 79,055,053 79,055,053

See condensed notes to unaudited consolidated financial statements

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE THREE MONTHS ENDED JUNE 30, 2020 AND 2019 (IN U.S. DOLLARS)

Equity Attributable To Owners of The Company Accumulated Ordinary Shares Additional Other Non- Total Number of Paid-in Retained Statutory Comprehensive controlling Shareholders’ Shares Amount Capital Earnings Reserve Loss Interest Equity

Balance, March 31, 2020 79,055,053 $ 79,055 $81,682,599 $61,951,144 $15,748,751 $ (17,634,175) $19,979,119 $161,806,493 (Unaudited)

Net income - - - (1,576,010) - - (85,370) (1,661,380)

Dividend declared ------

Foreign currency - - - - - (152,812) (13,364) (166,176) translation adjustment

Balance, June 30, 2020 ) (Unaudited) 79,055,053 $ 79,055 $81,682,599 $60,375,134 $15,748,751 $ (17,786,987 $19,880,385 $159,978,937

Balance, March 31, 2019 79,055,053 $ 79,055 $81,682,599 $47,705,830 $14,760,112 $ (10,754,775) $19,017,299 $152,490,120 (Unaudited)

Net income - - - 4,579,044 - - 454,923 5,033,967

Dividend declared ------

Foreign currency - - - - - (2,821,277) (245,516) (3,066,793) translation adjustment

Balance, June 30, 2019 79,055,053 $ 79,055 $81,682,599 $52,284,874 $14,760,112 $ (13,576,052) $19,226,706 $154,457,294 (Unaudited)

See condensed notes to unaudited consolidated financial statements

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 2020 AND 2019 (IN U.S. DOLLARS)

Equity Attributable To Owners of The Company Accumulated Ordinary Shares Additional Other Non- Total Number of Paid-in Retained Statutory Comprehensive controlling Shareholders’ Shares Amount Capital Earnings Reserve Loss Interest Equity

Balance, December 31, 79,055,053 $79,055 $81,682,599 $54,286,454 $15,748,751 $ (16,080,908) $19,361,905 $ 155,077,856 2019

Net income - - - 6,088,680 - - 667,016 6,755,696

Dividend declared ------

Foreign currency - - - - - (1,706,079) (148,536) (1,854,615) translation adjustment

Balance, June 30, 2020 ) (Unaudited) 79,055,053 $79,055 $81,682,599 $60,375,134 $15,748,751 $ (17,786,987 $19,880,385 $ 159,978,937

Balance, December 31, 79,055,053 $79,055 $81,682,599 $49,593,069 $14,760,112 $ (13,448,047) $18,892,322 $ 151,559,110 2018

Net income - - - 2,691,805 - - 373,823 3,065,628

Dividend declared ------

Foreign currency - - - - - (128,005) (39,439) (167,444) translation adjustment

Balance, June 30, 2019 79,055,053 $79,055 $81,682,599 $52,284,874 $14,760,112 $ (13,576,052) $19,226,706 $ 154,457,294 (Unaudited)

See condensed notes to unaudited consolidated financial statements

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN U.S. DOLLARS)

For the Six Months Ended June 30, 2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,755,696 $ 3,065,628 Adjustments to reconcile net income from operations to net cash provided by operating activities: Depreciation 6,672,732 5,071,259 Increase in allowance for doubtful accounts 57,205 - Increase (decrease) in reserve for inventories 2,000,619 (358,040) Loss on equity method investment 268,543 381,843 Impairment loss of fishing vessels - 2,475,442 Changes in operating assets and liabilities: Accounts receivable (3,567,172) (2,452,909) Inventories (28,703,844) (2,426,497) Prepaid expenses 587,974 2,569 Other receivables 387,716 (375,533) Other receivables - related party - (20,230) Accounts payable 9,592,030 1,973,993 Accounts payable - related parties 688,894 (2,896,036) Advance from customers (824,813) - Accrued liabilities and other payables 1,145,268 2,572,773 Accrued liabilities and other payables - related party - (1,290) Due to related parties (323,577) 1,221,527

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (5,262,729) 8,234,499

CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (85,240,006) (59,984,190) Proceeds from government grants for fishing vessels construction 20,893,357 3,623,171 Deposit for purchase of land use right - (7,373,762)

NET CASH USED IN INVESTING ACTIVITIES (64,346,649) (63,734,781)

CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds of short-term bank loans 81,343,591 - Proceeds from long-term bank loans 76,076,167 100,283,152 Repayments of long-term bank loans (14,611,982) (4,719,207) Due to related parties - (10,220,387) Due from related parties - (28,678,209) Advance to related party-HL (69,423,710)

NET CASH PROVIDED BY FINANCING ACTIVITIES 73,384,066 56,665,349

EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND RESTRICTED CASH 309,238 41,357

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 4,083,926 1,206,424

CASH, CASH EQUIVALENTS AND RESTRICTED CASH - beginning of period 10,092,205 1,966,855

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document CASH, CASH EQUIVALENTS AND RESTRICTED - end of period $ 14,176,131 $ 3,173,279

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for: Interest $ 6,750,422 $ 2,095,373 Income taxes $ - $ -

RECONCILIATION TO AMOUNTS ON CONSOLIDATED BALANCE SHEETS: Cash and cash equivalents 3,405,523 3,173,279 Restricted cash 10,770,608 - TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH $ 14,176,131 $ 3,173,279 NON-CASH INVESTING AND FINANCING ACTIVITIES: Acquisition of property and equipment by decreasing prepayment for long-term assets $(15,731,909) $ - Property and equipment acquired on credit as payable $ - 24,435,995

See condensed notes to unaudited consolidated financial statements

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (IN U.S. DOLLARS) JUNE 30, 2020

NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATION

Pingtan Marine Enterprise Ltd. (the “Company” or “PME”), formerly China Growth Equity Investment Limited (“CGEI”), incorporated in the Cayman Islands as an exempted limited liability company, was incorporated as a blank check company on January 18, 2010 with the purpose of directly or indirectly acquiring, through a merger, share exchange, asset acquisition, plan of arrangement, recapitalization, reorganization or similar business combination, an operating business, or control of such operating business through contractual arrangements, that has its principal business and/or material operations located in the People’s Republic of China (“PRC”). In connection with its initial business combination, in February 2013, CGEI changed its name to Pingtan Marine Enterprise Ltd.

On October 24, 2012, CGEI and China Dredging Group Co., Ltd (“CDGC” or “China Dredging”) entered into a Merger Agreement providing for the combination of CGEI and CDGC and on October 24, 2012, CGEI also acquired all of the outstanding capital shares and other equity interests of Merchant Supreme Co., Ltd. (“Merchant Supreme”), a company incorporated on June 25, 2012, in the British Virgin Islands (“BVI”), as per a Share Purchase Agreement. On February 25, 2013, the merger between the Company, CDGC and Merchant Supreme became effective and has been accounted for as a “reverse merger” and recapitalization since the common shareholders of CDGC and Merchant Supreme (i) owned a majority of the outstanding ordinary shares of the Company immediately following the completion of the transaction, and (ii) have significant influence and the ability to elect or appoint or to remove a majority of the members of the governing body of the combined entity. In accordance with the provision of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805-40, CDGC and Merchant Supreme are deemed the accounting acquirers and the Company is the legal acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of the Company. Accordingly, the assets and liabilities and the historical operations that are reflected in the consolidated financial statements are those of CDGC, Merchant Supreme and their subsidiaries and are recorded at the historical cost basis. The Company’s assets, liabilities and results of operations were consolidated with the assets, liabilities and results of operations of CDGC, Merchant Supreme and their subsidiaries subsequent to the acquisition date of February 25, 2013. Following the completion of the business combination which became effective on February 25, 2013, CDGC and Merchant Supreme became the wholly-owned subsidiaries of the Company. The Company’s ordinary shares, par value $0.001 per share, are listed on The NASDAQ Capital Market under the symbol “PME”.

In order to place increased focus on the fishing business and pursue more effective growth opportunities, the Company decided to exit and sell the specialized dredging services operated by China Dredging. The Company completed the sale of CDGC and its subsidiaries on December 4, 2013.

On February 9, 2015, the Company terminated its existing Variable Interest Entity (“VIE”) agreements, pursuant to an Agreement of Termination dated February 9, 2015, entered into by and among Ms. Honghong Zhuo, Mr. Zhiyan Lin (each a shareholder of Provincial Pingtan County Ocean Fishing Group Co., Ltd (“Pingtan Fishing”), and together the “Pingtan Fishing’s Shareholders”), Pingtan Fishing and Pingtan Guansheng Ocean Fishing Co., Ltd. (“Pingtan Guansheng”). On February 9, 2015, the Pingtan Fishing’s Shareholders transferred 100% of their equity interest in Pingtan Fishing to Fujian Heyue Marine Fishing Development Co., Ltd. (“Fujian Heyue”), pursuant to an Equity Transfer Agreement dated February 9, 2015, entered into by and among the Pingtan Fishing’s Shareholders, Pingtan Fishing and Fujian Heyue. On February 15, 2015, China Agriculture Industry Development Fund Co., Ltd. (“China Agriculture”) invested RMB 400 million (approximately $65 million) into Pingtan Fishing for an 8% equity interest in Pingtan Fishing. After the restructuring transactions described above, Pingtan Fishing and its entities became the 92% equity-owned subsidiaries of the Company and was no longer a VIE.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (IN U.S. DOLLARS) JUNE 30, 2020

NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATION (continued)

Details of the Company’s subsidiaries which are included in these consolidated financial statements as of June 30, 2020, are as follows:

Place and date Percentage of Name of subsidiaries Principal activities of incorporation ownership Merchant Supreme Co., Ltd. BVI, Intermediate holding 100% held by PME (“Merchant Supreme”) June 25, 2012 company

Prime Cheer Corporation Ltd. Hong Kong, 100% held by Merchant Intermediate holding (“Prime Cheer”) May 3, 2012 Supreme company

Pingtan Guansheng Ocean Fishing Co., Ltd. PRC, Intermediate holding 100% held by Prime Cheer (“Pingtan Guansheng”) October 12, 2012 company

Fujian Heyue Marine Fishing Development Co., Ltd. PRC, 100% held by Pingtan Intermediate holding (“Fujian Heyue”) January 27, 2015 Guansheng company

Fujian Provincial Pingtan County Fishing Group Co., PRC, Ltd. 92% held by Fujian Heyue Oceanic fishing February 27, 1998 (“Pingtan Fishing”)

Pingtan Dingxin Fishing Information Consulting Co., PRC, 100% held by Pingtan Ltd. Dormant October 23, 2012 Fishing (“Pingtan Dingxin”)

Pingtan Yikang Global Fishery Co., Ltd. PRC, 100% held by Pingtan Dormant (“Yikang Fishery”) September 14, 2017 Fishing

Pingtan Shinsilkroad Fishery Co., Ltd. PRC, 100% held by Pingtan Dormant (“Shinsilkroad Fishery”) September 14, 2017 Fishing

Fuzhou Howcious Investment Co., Ltd PRC, 100% held by Pingtan Dormant (“Howcious Investment”) September 5, 2017 Fishing

Pingtan Ocean Fishery Co., Ltd PRC, 100% held by Pingtan Dormant (“Ocean Fishery”) July 21, 2017 Fishing

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (IN U.S. DOLLARS) JUNE 30, 2020

NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATION (continued)

Fujian Heyue, through its PRC subsidiary, Pingtan Fishing, engages in ocean fishing with its owned and controlled vessels within the Indian Exclusive Economic Zone, the international waters and Arafura Sea of Indonesia.

The Company had a working capital deficit of $17,485,909 as of June 30, 2020. In order to mitigate its liquidity risk, the Company plans to rely on the proceeds from loans from banks and/or financial institutions to increase working capital in order to meet capital demands, and the government subsidies for modification and rebuilding project and reimbursement of certain operating expenses. In addition, Mr. Zhuo, the Chief Executive Officer and Chairman of the Board, will continue to provide financial support to the Company when necessary.

The Company meets its day-to-day working capital requirements through cash flow provided by operations, bank loans and related parties’ advances. The Indonesian government’s moratorium on fishing licenses renewals creates uncertainty over fishing operations in Indonesian waters. The Company’s forecasts and projections show that the Company has adequate resources to continue in operational existence to meet its obligations in the twelve months following the date of this filing, considering operations in Indian waters and international waters and consideration of opportunities in new fishing territories. Also, in the past two years, the Company has upgraded 67 fishing vessels and the deployment of these vessels into operation will generate more revenue and cash inflows to the Company. In addition, the Company receives subsidies for modification and rebuilding projects and is reimbursed for certain operating expenses from government entities, as an encouragement of the development of ocean fishing industry.

The situation created by the COVID-19 pandemic has led to an unprecedented economic uncertainty globally, it has caused a decrease in unit selling price, an increase of inventory and has resulted in accounts receivables not being timely paid as anticipated. In order to maintain strong liquidity, the management of the Company has been paying close attention to the operation and optimizing the collection of accounts receivable. For new customers, the Company adopts the policy of receiving payment before pick-up.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

These interim consolidated financial statements of the Company and its subsidiaries are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures necessary for a fair presentation of these interim consolidated financial statements have been included. The results reported in the unaudited consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).

The Company’s unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 16, 2020.

Use of estimates

The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in the three and six months ended June 30, 2020 and 2019 include allowance for doubtful accounts, reserve for inventories, the

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document useful life of property, plant and equipment, assumptions used in assessing impairment of long-term assets and valuation of deferred tax assets and accruals for taxes due.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PINGTAN MARINE ENTERPRISE LTD. AND SUBSIDIARIES CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (IN U.S. DOLLARS) JUNE 30, 2020

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Cash

Cash consists of cash on hand and cash in banks. The Company maintains cash with various financial institutions in the PRC and Hong Kong and none of these deposits are covered by insurance. At June 30, 2020 and December 31, 2019, cash balances in the PRC were $3,193,562 and $9,971,626, respectively, and cash balances in Hong Kong were $211,961 and $120,579, respectively, and are uninsured. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

Restricted cash

Restricted cash consists of cash deposits held by the Export Import Bank of China to secure its bank loans and Hong Long’s short term bank loans. At June 30, 2020 and December 31, 2019, restricted cash amounted to $10,770,608 and nil, respectively.

Fair value of financial instruments

The Company adopted the guidance of ASC Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the consolidated balance sheets for cash, restricted cash, accounts receivable, inventories, advances to suppliers, prepaid expenses, prepaid expenses – related party, other receivables, other receivables – related party, accounts payable, accounts payable – related parties, short-term bank loans, accrued liabilities and other payables, accrued liabilities and other payables – related party, and due to related parties approximate their fair market value based on the short-term maturity of these instruments. The fair value of the Company’s long-term bank loans under its agreements approximates its carrying value at June 30, 2020. The fair value of the Company’s long-term bank loans under its agreements were estimated using Level 2 inputs based on market data. As of June 30, 2020, the Company does not have any assets or liabilities that are measured on a recurring basis at fair value.

ASC Topic 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Accounts receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balance, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. The Company only grants credit terms to established customers who are deemed to be financially responsible. Credit periods to customers are within 180 days after customers received the purchased goods. At June 30, 2020 and December 31, 2019, the Company had established, based on a review of its outstanding balances, an allowance for doubtful accounts in the amounts of $64,664 and $7,960, respectively.

Inventories

Inventories, consisting of frozen fish and marine catches, are stated at the lower of cost or net realizable value utilizing the weighted average method. The cost of inventories is primarily comprised of fuel, freight, depreciation, direct labor, consumables, government levied charges and taxes. Consumables include fishing nets and metal containers used by fishing vessels. The Company’s fishing fleets in Indian waters and the international waters operate throughout the year, although the May to July period demonstrates lower catch quantities compared to the October to January period, which is the peak season.

A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record a reserve for the difference between the cost and the market value. These reserves are recorded based on estimates. At June 30, 2020 and December 31, 2019, the Company recorded a reserve for inventories in the amount of $2,249,685 and $266,405, respectively.

When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value. The Company regularly evaluates its ability to realize the value of inventories based on a combination of factors including the following: forecasted sales and estimated current and future market value.

Fishing licenses

Each of the Company’s fishing vessels requires an approval from the Ministry of Agriculture and Rural Affairs of the PRC (“MOA”) to carry out ocean fishing projects in international waters and foreign territories, and to the extent required, a fishing license in local fishing territory where the vessel operates. These approvals are valid for a period from 3 to 12 months and are awarded to the Company at no cost. The Company applies for the renewal of the license prior to expiration to avoid interruptions of fishing vessels’ operations. Since 2014 there has been a moratorium on fishing in Indonesian waters. Each of our fishing vessels operating in Indonesian waters requires a fishing license granted by the authority in Indonesia.

Investment in unconsolidated company – Global Deep Ocean

The Company uses the equity method of accounting for its investment in, and earning or loss of, companies that it does not control but over which it does exert significant influence. The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable. The Company reviews its investments for other-than-temporary impairment whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. Investments identified as having an indication of impairment are subject to further analysis to determine if the impairment is other-than-temporary and this analysis requires estimating the fair value of the investment. The determination of fair value of the investment involves considering factors such as current economic and market conditions, the operating performance of the entities including current earnings trends and forecasted cash flows, and other company and industry specific information. If the Company considers any decline to be other than temporary (based on various factors, including

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. See Note 6 for discussion of equity method investment.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Property, plant and equipment

Property, plant and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

The estimated useful lives of the assets are as follows:

Estimated useful life Fishing vessels 10 - 20 Years Vehicles 5 Years Office and other equipment 3 - 5 Years

Expenditures for repairs and maintenance, which do not extend the useful life of the assets, are expensed as incurred.

Capitalized interest

Interest associated with the construction of fishing vessels is capitalized and included in the cost of the fishing vessels. When no debt is incurred specifically for the construction of a fishing vessel, interest is capitalized on amounts expended on the construction using the weighted-average cost of the Company’s outstanding borrowings. Capitalization of interest ceases when the construction is substantially complete or the construction activity is suspended for more than a brief period. The Company capitalized interest of $765,066 and $163,934 for the three months ended June 30, 2020 and 2019, respectively, in the fishing vessels under construction. The Company capitalized interest of $1,008,925 and $185,753 for the six months ended June 30, 2020 and 2019, respectively, in the fishing vessels under construction.

Impairment of long-lived assets

In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates the impairment by comparing the carrying amount of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment loss based on the excess of the carrying amount of the long-lived assets over their fair value. Impairment loss represents the impairment loss on the vessels whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recovered. The Company recognized impairment loss of nil and $245,940 for the three months ended June 30, 2020 and 2019, respectively. The Company recognized impairment loss of nil and $2,475,442 for the six months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2019, the Company dismantled 1 transport vessel and deregistered 6 fishing vessels and applied to the MOA for rebuilding 7 new vessels. As a result of the rebuilding projects, the Company assessed the recoverability of the 7 fishing vessels based on the undiscounted future cash flow that the fishing vessels are expected to generate as less than the carrying amount, and recognized an impairment loss.

Revenue recognition

The Company catches different species of fish, ships them back to China and sells the catches to distributors and retailers by acting as a wholesaler. Marine catch is the Company’s one and only product line. The product type, contractual price and quantities are identified in contracts. The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers, and the Company does not accept returns from customers. The Company’s revenues are recorded at a point in time. All of the

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document operations are considered by the Company’s Chief Operating Decision Maker to be aggregated in one reportable operating segment and the Company’s revenue is disaggregated by product type in terms of species of fish sold pursuant to ASC Topic 606-10-55-91(a).

The Company’s revenue is generated from the sale of frozen fish and other marine catches. The Company recognizes revenue at the amount the Company expects to be entitled to be paid, determined when control of the products is transferred to its customers, which occurs upon delivery of and acceptance of the frozen fish by the customer and the Company has a right to receive payment.

The Company has identified one performance obligation as the frozen fish and other marine catches identified in the contract are picked up by the customers at cold storage warehouse, with revenue being recognized at a point in time. The Company initially recognizes revenue in an amount which is estimated based on contractual prices. The receivables under contracts, whereby pricing is based on contractual prices, are primarily collected within 180 days of completion of its performance obligation.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition (continued)

Disaggregation of revenue

The following tables disaggregate revenues under ASC Topic 606 by species of fish: For the three months ended June 30, 2020 and 2019, our revenue by species of fish was as follows (dollars in thousands, except for average price):

Three Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,108 14,970,511 $ 0.81 51.6% Peru squid 2,855 1,949,315 1.46 12.2% Chub mackerel 2,064 2,285,335 0.90 8.8% Croaker fish 1,839 1,015,030 1.81 7.8% Cuttle fish 1,666 398,240 4.18 7.1% Others 2,931 1,136,003 2.58 12.5% Total $ 23,463 21,754,435 $ 1.08 100.0%

Three Months Ended June 30, 2019 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,573 11,418,082 $ 1.10 49.4% Argentina squid(whole) 3,530 780,888 4.52 13.9% Ribbon fish 2,061 612,469 3.37 8.1% Croaker fish 1,813 827,012 2.19 7.1% Indian squid 715 120,880 5.92 2.8% Others 4,771 1,669,067 2.86 18.7% Total $ 25,463 15,428,398 $ 1.65 100.0%

The following tables disaggregate revenues under ASC Topic 606 by species of fish: For the six months ended June 30, 2020 and 2019, our revenue by species of fish was as follows (dollars in thousands, except for average price):

Six Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 19,821 23,272,651 $ 0.85 48.6% Peru squid 4,838 3,053,765 1.58 11.9% Cuttle fish 4,116 925,140 4.45 10.1% Chub mackerel 4,015 4,555,204 0.88 9.8% Croaker fish 3,096 1,707,819 1.81 7.6% Others 4,884 1,779,139 2.75 12.0% Total $ 40,770 35,293,718 $ 1.16 100.0%

Six Months Ended June 30, 2019

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 17,629 15,997,031 $ 1.10 40.2% Ribbon fish 6,014 1,814,302 3.31 13.7% Argentina squid(whole) 3,800 889,945 4.27 8.7% Croaker fish 3,245 1,466,500 2.21 7.4% Cuttle fish 2,437 445,359 5.47 5.6% Others 10,762 3,558,206 3.02 24.4% Total $ 43,887 24,171,343 $ 1.82 100.0%

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Government subsidies

Government subsidies are recognized when there is reasonable assurance that the subsidy will be received and all attaching conditions will be satisfied. When the subsidy relates to an expense item, it is recognized as income over the periods necessary to match the subsidy on a systematic basis to the costs that it is intended to compensate. Where the subsidy relates to an asset, it is credited to the cost of the asset and is released to the income statement over the expected useful life in a consistent manner with the depreciation method for the relevant asset.

Income taxes

Under the current laws of the Cayman Islands and British Virgin Islands, the Company and Merchant Supreme are not subject to any income or capital gains tax, and dividend payments that the Company may make are not subject to any withholding tax in the Cayman Islands or British Virgin Islands. Under the current laws of Hong Kong, Prime Cheer is not subject to any capital gains tax and dividend payments are not subject to any withholding tax in Hong Kong.

The Company is not incorporated nor does it engage in any trade or business in the United States and is not subject to United States federal income taxes. The Company did not derive any significant amount of income subject to such taxes after completion of the Share Exchange and accordingly, no relevant tax provision is made in the accompanying unaudited consolidated statements of operations and comprehensive income (loss).

The Company’s subsidiary, Pingtan Fishing, is a qualified ocean fishing enterprise certified by the MOA. The qualification renews on April 1 of each year. Pingtan Fishing is exempt from income tax derived from its ocean fishing operations in the periods it processes a valid Ocean Fishing Enterprise Qualification Certificate issued by the MOA.

The China’s Enterprise Income Tax Law (“EIT Law”), which went into effect on January 1, 2018, also provides that an enterprise established under the laws of foreign countries or regions but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its worldwide income. The Implementing Rules of the new EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” On April 22, 2009, the PRC State Administration of Taxation further issued a notice entitled “Notice Regarding Recognizing Offshore-Established Enterprises Controlled by PRC Shareholders as Resident Enterprises Based on Their Place of Effective Management.” Under this notice, a foreign company controlled by a PRC company or a group of PRC companies shall be deemed as a PRC resident enterprise if (i) the senior management and the core management departments in charge of its daily operations mainly function in the PRC; (ii) its financial decisions and human resource decisions are subject to decisions or approvals of persons or institutions in the PRC; (iii) its major assets, accounting books, company seals, minutes and files of board meetings and shareholders’ meetings are located or kept in the PRC; and (iv) more than half of the directors or senior management personnel with voting rights reside in the PRC. Based on a review of surrounding facts and circumstances, the Company does not believe that it is likely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, should the Company be treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC tax on worldwide income at a uniform tax rate of 25% retroactive to May 3, 2012.

In addition, Pingtan Fishing is not subject to foreign income taxes for its operations in either India or Indonesia Exclusive Economic Zones or the Western and Central Pacific Fisheries Commission areas.

Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be effective when the differences are expected to reverse.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income taxes (continued)

Deferred tax assets are reduced by a valuation allowance to the extent that management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations and comprehensive income (loss) in the period that includes the enactment date.

The Company prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures. As of June 30, 2020 and December 31, 2019, there were no amounts that had been accrued with respect to uncertain tax positions.

Shipping and handling costs

Shipping and handling costs are included in selling expense and amounted to $44,952 and $92,585 for the three months ended June 30, 2020 and 2019, respectively. Shipping and handling costs amounted to $321,093 and $213,578 for the six months ended June 30, 2020 and 2019, respectively.

Employee benefits

The Company makes mandatory contributions to the PRC government’s health, retirement benefit and unemployment funds in accordance with the relevant Chinese social security laws. The costs of these payments are charged to the same accounts as the related salary costs in the same period as the related salary costs incurred. Employee benefit costs amounted to $1,242,254 and $611,472 for the three months ended June 30, 2020 and 2019, respectively. Employee benefit costs amounted to $2,511,059 and $1,216,354 for the six months ended June 30, 2020 and 2019, respectively.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign currency translation

The reporting currency of the Company is the U.S. dollar. The functional currency of the Company and Merchant Supreme and Prime Cheer, the Company’s subsidiaries, is the U.S. dollar. The functional currency of Pingtan Guansheng, Fujian Heyue and Pingtan Fishing, the Company’s subsidiaries, is the Chinese Renminbi (“RMB”). For the Company’s subsidiaries Pingtan Guansheng, Fujian Heyue and Pingtan Fishing, whose functional currencies are the RMB, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income. The cumulative translation adjustment and effect of exchange rate changes on cash for the six months ended June 30, 2020 and 2019 was $309,238 and $41,357, respectively. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date and any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transactions in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

Asset and liability accounts at June 30, 2020 and December 31, 2019 were translated at 7.0795 RMB to $1.00 and at 6.9762 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of operations for the six months ended June 30, 2020 and 2019 were 7.0319 RMB and 6.7808 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate.

Earnings per share

ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Basic net income per share is computed by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of ordinary shares, ordinary share equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive ordinary shares consist of the ordinary shares issuable upon the exercise of ordinary share warrants (using the treasury stock method). Ordinary share equivalents are not included in the calculation of diluted earnings per share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact. The following table presents a reconciliation of basic and diluted net income per share:

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net (loss) income available to owners of the company for basic and $ (1,576,010) $ 4,579,044 $ 6,088,680 $ 2,691,805 diluted net income per share of ordinary stock Weighted average ordinary stock outstanding - basic and diluted 79,055,053 79,055,053 79,055,053 79,055,053

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Net (loss) income per ordinary share attributable to owners of the ) Company - basic and diluted $ (0.02 $ 0.06 $ 0.08 $ 0.03

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Non-controlling interest

On February 15, 2015, China Agriculture invested RMB 400 million (approximately $65 million) into Pingtan Fishing and acquired an 8% equity interest in Pingtan Fishing. As of June 30, 2020, China Agriculture owned 8% of the equity interest of Pingtan Fishing, which was not under the Company’s control.

Related parties

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions.

Comprehensive income (loss)

Comprehensive income (loss) is comprised of net income and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive income (loss) for the three and six months ended June 30, 2020 and 2019 included net income and unrealized gain from foreign currency translation adjustments.

Segment information

ASC Topic 280 “Segment reporting” establishes standards for reporting information on operating segments in interim and annual financial statements. All of the Company’s operations are considered by the chief operating decision maker to be aggregated in one reportable operating segment. All of the Company’s customers are in the PRC and all income is derived from ocean fishery.

Commitments and contingencies

In the normal course of business, the Company is subject to contingencies, including legal proceedings and environmental claims, arising out of the normal course of businesses that relate to a wide range of matters, including among others, liability for breaches of contracts. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments, including historical operations, scientific evidence and the specifics of each matter.

The Company’s management has evaluated all such proceedings and claims that existed as of June 30, 2020. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, liquidity or results of operations.

Concentrations of credit, economic and political risks

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operation in the PRC is subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances aboard, and rates and methods of taxation, among other things.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. All of the Company’s cash is maintained with state-owned banks within the PRC and Hong Kong, and none of these deposits are covered by insurance. The Company has not experienced any losses in such accounts. A portion of the Company’s sales are credit sales which are primarily to customers whose abilities to pay are dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk.

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NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Concentrations of credit, economic and political risks (continued)

According to the sale agreement signed on December 4, 2013, the Company does not own 20 fishing vessels but has the operating rights to operate these vessels which are owned by a related company, Fuzhou Hong Long Ocean Fishery Co., Ltd (“Hong Long”) and the Company is entitled to 100% of the net profit (loss) of the vessels. The Company has latitude in establishing price and discretion in supplier selection. There were no economic risks associated with the operating rights but the Company may need to bear the operation risks and credit risks as aforementioned.

As the Company has historically derived the majority of its revenue from Indonesian waters, the suspension of fishing operations in this area has had and will continue to have a significant negative impact on the Company.

Recent Adopted Accounting Standards

Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”). The amendments in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, including but not limited to lease residual value guarantee, rate implicit in the lease and lease term and purchase option. The amendments in ASU 2018-11 provide an optional transition method for adoption of the new standard, which will allow entities to continue to apply the legacy guidance in ASC Topic 840, including its disclosure requirements, in the comparative periods presented in the year of adoption.

Effective January 1, 2019, we adopted the new standard using the modified retrospective approach and implemented internal controls to enable the preparation of financial information upon adoption. We elected to adopt both the transition relief provided in ASU 2018-11 and the package of practical expedients which allowed us, among other things, to retain historical lease classifications and accounting for any leases that existed prior to adoption of the standard. Additionally, we elected the practical expedients allowing us not to separate lease and non-lease components and not record leases with an initial term of twelve months or less (“short-term leases”) on the balance sheet across all existing asset classes. Adoption of the new standard resulted in the recording of right use asset and lease liability of $0.77 million as of January 1, 2019, which primarily relates to our corporate office leases. The standard did not materially impact our condensed consolidated statements of operations or cash flows. Adopting the new standard did not have a material impact on the accounting for leases under which we are the lessee.

In August 2018, the FASB issued ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement.” This standard eliminates the current requirement to disclose the amount or reason for transfers between level 1 and level 2 of the fair value hierarchy and the requirement to disclose the valuation methodology for level 3 fair value measurements. The standard includes additional disclosure requirements for level 3 fair value measurements, including the requirement to disclose the changes in unrealized gains and losses in other comprehensive income during the period and permits the disclosure of other relevant quantitative information for certain unobservable inputs. The new guidance is effective for interim and annual periods beginning after December 15, 2019. We applied the new standard beginning January 1, 2020.

Recent accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”, which will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. In November 2019, the FASB issued ASU 2019-10. Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, finalizes effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses, leases, and hedging standards. The effective date for SEC filers, excluding smaller reporting companies as defined by the SEC, remains as fiscal years beginning after December 15, 2019. The new effective date for all other entities is fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

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NOTE 3 – ACCOUNTS RECEIVABLE

At June 30, 2020 and December 31, 2019, accounts receivable consisted of the following:

June 30, December 31, 2020 2019 Accounts receivable $ 12,689,165 $ 9,281,406 Less: allowance for doubtful accounts (64,664) (7,960) $ 12,624,501 $ 9,273,446

The Company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of an individual balance.

NOTE 4 – INVENTORIES

At June 30, 2020 and December 31, 2019, inventories consisted of the following:

June 30, December 31, 2020 2019 Frozen fish and marine catches work in progress $ 26,174,721 $ 25,401,843 Frozen fish and marine catches in transit 12,555,420 3,459,004 Frozen fish and marine catches in warehouse 20,125,535 1,933,310 58,855,676 30,794,157 Less: reserve for inventories (2,249,685) (266,405) $ 56,605,991 $ 30,527,752

Frozen fish and marine catches work in progress represents fish inventory in vessels’ refrigerators, which has not been delivered to ports in China, nor applied for duty-exemption import into China.

Frozen fish and marine catches in transit represents fish inventory that obtained duty-exemption import permission and is in the process of being shipped to China.

Frozen fish and marine catches in warehouse represents fish inventory in cold storage warehouses located in China.

As of June 30, 2020, our total inventory balance was $56,605,991 compared to $30,527,752 as of December 31, 2019. The change in the balance is mainly attributable to an increase in frozen fish and marine catches in warehouse by $18.19 million and an increase in frozen fish and marine catches in transit by $9.10 million, a large portion of which was booked as frozen fish and marine catches work in progress as of December 31, 2019.

A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record a reserve for the difference between the cost and the market value. These reserves are recorded based on estimates.

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NOTE 5 – COST METHOD INVESTMENT

At June 30, 2020 and December 31, 2019, cost method investment amounted to $2,966,311 and $3,010,235, respectively. The investment represents Pingtan Fishing’s, the Company’s subsidiary, minority interest in Fujian Pingtan Rural-Commercial Bank Joint-Stock Co., Ltd. (“Pingtan Rural-Commercial Bank”), a private financial institution. Pingtan Fishing completed its registration as a shareholder on October 17, 2012 and paid RMB 21 million (approximately $3.0 million) to purchase 5% of the common stock of Pingtan Rural- Commercial Bank. Pingtan Fishing held 15,113,250 shares and accounted for 4.8% investment in the total equity investment of the bank as of June 30, 2020 and December 31, 2019.

In according to ASC Topic 321, the Company elected to use the measurement alternative to measure such investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. The Company monitors its investment in the non-marketable security and will recognize, if ever existing, a loss in value which is deemed to be other than temporary. The Company determined that there was no impairment on this investment as of June 30, 2020 and December 31, 2019.

NOTE 6 – EQUITY METHOD INVESTMENT

At June 30, 2020 and December 31, 2019, equity method investment amounted to $27,249,283 and $27,923,464, respectively. The investment represents the Company’s subsidiary, Pingtan Fishing’s interest in Global Deep Ocean. On June 12, 2014, Pingtan Fishing incorporated Global Deep Ocean with other two unrelated companies in PRC. In April 2017, these two companies sold their shares to another unrelated party, Zhen Lin. As of June 30, 2020, Pingtan Fishing and Zhen Lin accounted for 20% and 80% of the total ownership, respectively.

Global Deep Ocean will process, cold storage, and transport Deep Ocean fishing products. Total registered capital of Global Deep Ocean is RMB 1 billion (approximately $141.3 million) and as of June 30, 2020, Pingtan Fishing had contributed its share of registered capital of RMB 200 million (approximately $28.3 million).

The Company treats the equity investment in the consolidated financial statements under the equity method. Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Company’s share of the incorporated-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post incorporation change in the Company’s share of the investee’s net assets and any impairment loss relating to the investment. For the three months ended June 30, 2020 and 2019, the Company’s share of Global Deep Ocean’s net loss was $143,015 and $127,212, respectively, which was included in loss on equity method investment in the accompanying consolidated statements of operations and comprehensive income. For the six months ended June 30, 2020 and 2019, the Company’s share of Global Deep Ocean’s net loss was $268,543 and $237,828, respectively, which was included in loss on equity method investment in the accompanying consolidated statements of operations and comprehensive income.

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NOTE 7 – PREPAYMENT FOR LONG-TERM ASSETS

At June 30, 2020 and December 31, 2019, prepayment for long-term assets consisted of prepayment for fishing vessels’ construction. The Company reclassifies the prepayment for fishing vessels’ construction to construction-in-progress using the percentage of completion method. During the six months ended June 30, 2020, the Company reclassified RMB 466,335,000 (approximately $66.3 million) from prepayment for long-term assets to construction-in-progress.

For the six months ended June 30, 2020, a summary of activities in prepayment for long-term assets was as follows:

Prepayment for fishing vessels’ construction Balance - December 31, 2019 $ 49,040,338 Prepayments made for fishing vessels’ construction 82,048,948 Reclassification to construction-in-progress (66,317,069) Foreign currency fluctuation (821,314) Balance – June 30, 2020 $ 63,950,903

NOTE 8 – PROPERTY, PLANT AND EQUIPMENT

At June 30, 2020 and December 31, 2019, property, plant and equipment consisted of the following:

June 30, December 31, Useful life 2020 2019 Fishing vessels 10 - 20 Years $329,999,848 $304,619,431 Vehicles 5 Years 21,508 21,826 Office and other equipment 3 – 5 Years 438,279 427,154 Construction-in-progress - 18,830,995 - 349,290,630 305,068,411 Less: accumulated depreciation (51,893,200) (45,690,682) $297,397,430 $259,377,729

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NOTE 8 – PROPERTY, PLANT AND EQUIPMENT (continued)

On January 19, 2020, the Company received a government subsidy for 30 completed fishing vessels that amounted to RMB 146.9 million (approximately $20.8 million). The subsidy is related to assets requires deducting it from the carrying amount of the asset.

For the three months ended June 30, 2020 and 2019, depreciation expense amounted to $3,294,304 and $2,331,141, respectively, of which $2,504,970 and $1,582,085, respectively, was included in cost of revenue and inventories, and the remainder was included in general and administrative expense. For the six months ended June 30, 2020 and 2019, depreciation expense amounted to $6,672,732 and $5,071,259, of which $5,171,965 and $3,100,042, respectively, was included in cost of revenue and inventories, and the remainder was included in general and administrative expense, respectively.

The Company had 70 fishing vessels at June 30, 2020 and December 31, 2019, with net carrying amount of approximately $162.8 million and $190.8 million, respectively, pledged as collateral for its bank loans.

Included in construction-in-progress are fishing vessels under construction which includes the costs of construction and any interest charges arising from borrowings used to finance these assets during the period of construction of the assets. No provision for depreciation is made on fishing vessels under construction until such time as the relevant assets are completed and ready for their intended use.

The Company recognized impairment loss of nil and $245,940 for the three months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2019, the Company dismantled 1 transport vessel and deregistered 6 fishing vessels and applied to the MOA for rebuilding 7 new vessels. As a result of the rebuilding projects, the Company assessed the recoverability of the 7 fishing vessels based on the undiscounted future cash flow that the fishing vessels are expected to generate as less than the carrying amount, and recognized an impairment loss. The Company recognized impairment loss of nil and $2,475,442 for the six months ended June 30, 2020 and 2019, respectively.

37 vessels in Indonesian waters, are not in operation because the licenses are currently inactive due to a moratorium. The Indonesian government’s moratorium on fishing license renewals in 2014 has had, and will continue to have a significant negative impact on our results of operations and financial condition. Given the impact of the moratorium, the Company assessed the recoverability of these 37 vessels for the six months ended 2020 and 2019 based on the undiscounted future cash flows, these vessels are available for fishing in other fisheries by redeployment, the impairment test was carried out with reference to the relevant operation data of the Company’s comparable vessels, and considered upgrading and improvement costs based on the Company’s historical experience. As of the six months ended June 30, 2020 and 2019, the payback period used in the undiscounted cash flow analysis used in the recoverability assessment is less than its remaining useful life and the carrying value of the fishing vessels are expected to be recoverable. Therefore, no impairment loss was recognized.

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NOTE 9 – RELATED PARTIES TRANSACTIONS

Due from related party

At June 30, 2020 and December 31, 2019, the due from related party amount consisted of the following:

June 30, December 31, 2020 2019 Due from related party-Hong Long $ 81,252,639 $ 12,477,777

Due from related party-Hong Long will be repaid in the following installments, with an annual interest rate of 4.35%, guaranteed by two land use rights owned jointly by two companies controlled by Zhuo's family.

The installments due from related party-Hong Long are as follows:

Before Installments August 14, 2020 $ 14,125,291 August 31, 2020 16,950,350 September 20, 2020 35,313,228 October 20, 2020 14,125,291 December 20, 2020 738,479 Total $ 81,252,639

Accounts payable - related parties

At June 30, 2020 and December 31, 2019, accounts payable - related parties consisted of the following:

June 30, December 31, Name of related party 2020 2019 Hong Long (1) $ 268,447 $ 270,230 Huna Lin 2,098,121 1,436,987 $ 2,366,568 $ 1,707,217

(1) Hong Long is an affiliate company majority owned by a family member of the Company’s CEO.

These accounts payable - related parties’ amounts are short-term in nature, non-interest bearing, unsecured and payable on demand.

Due to related parties

At June 30, 2020 and December 31, 2019, the due to related parties amount consisted of the following:

June 30, December 31, 2020 2019 Accrued compensation for LiMing Yung, Chief Financial Officer $ 15,000 $ 15,000 Accrued compensation for Xinrong Zhuo, Chief Executive Officer 3,354 3,328 Advance from Xinrong Zhuo - 150,000 $ 18,354 $ 168,328

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The advance from Xinrong Zhuo, the Company’s Chief Executive Officer, is for working capital purposes and short-term in nature, non- interest bearing, unsecured and payable on demand.

Operating lease

On July 31, 2012, the Company entered into a lease for office space with Ping Lin, the spouse of the Company’s CEO (the “Office Lease”). Pursuant to the Office Lease, the annual rent is RMB 84,000 (approximately $11,900) and the renewed Office Lease expires on July 31, 2021.

For the three months ended June 30, 2020 and 2019, rent expense related to the Office Lease amounted to $2,964 and $3,081, respectively. For the six months ended June 30, 2020 and 2019, rent expense related to the Office Lease amounted to $5,973 and $6,194, respectively. The future minimum rental payment required under the Office Lease is as follows:

Twelve-month period Ending June 30: Amount 2021 $ 11,946

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NOTE 9 – RELATED PARTIES TRANSACTIONS (continued)

Rental and related administrative service agreement

On July 1, 2013, the Company entered into a service agreement with Hai Yi Shipping Limited that permitted the Company to use a portion of the premises located in Hong Kong as office space and provided related administrative services (the “Service Agreement”). Pursuant to the Service Agreement, the monthly payments are HK$298,500 (approximately $38,000) and the Service Agreement expired on December 31, 2017. On January 1, 2018, the Service Agreement was renewed to February 28, 2018 under the same conditions. On March 1, 2018, the Company entered into a lease agreement directly with the landlord under the same conditions that expires on February 28, 2021.

For the three months ended June 30, 2020 and 2019, rent expense and the corresponding administrative service charge related to the Service Agreement amounted to $115,528 and $114,192, respectively. For the six months ended June 30, 2020 and 2019, rent expense and the corresponding administrative service charge related to the Service Agreement amounted to $230,728 and $228,359, respectively.

As of June 30, 2019, the future minimum lease payments on operating leases were as follows:

June 30, 2020 Maturity of lease liabilities 2020 $ 210,340 2021 35,425 Total minimum lease payments $ 245,765 Imputed interest (23,162) Present value of minimum lease payments $ 222,603

The remaining lease terms (in years) and discount rates consisted of the following:

June 30, 2020 Lease term and discount rate Remaining operating lease term 0.67 Discount rate 5.13%

Purchases from related parties

During the three and six months ended June 30, 2020 and 2019, purchases from related parties were as follows:

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Purchase of fuel, fishing nets and other on board consumables from Zhiyan Lin $ - $ 190 $ - $ 544 from Fuzhou Honglong Ocean Fishery Co., Ltd. 636,530 1,986,605 1,064,720 2,669,186 636,530 1,986,795 1,064,720 2,669,730 Purchase of leasing from Ping Lin 2,964 3,081 5,973 6,194 2,964 3,081 5,973 6,194 Purchase of vessel maintenance service, docking and freight

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document from Huna Lin 210,961 7,585 3,411,251 406,567 $ 210,961 $ 7,585 $ 3,411,251 $ 406,567

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NOTE 10 – BANK LOANS

Short-term bank loans

Short-term bank loans represent the amounts due to various banks that are due within one year. These loans can be renewed with the banks upon maturities. At June 30, 2020 and December 31, 2019, short-term bank loans consisted of the following:

June 30, December 31, 2020 2019 Loan from Fujian Haixia Bank, due on November 1, 2020 with annual interest rate of 6.0900% at June 30, 2020, collateralized by Hong Long’s 6 fishing vessels and 7 real estate properties of Ping Lin and $ 4,237,587 $ 4,300,335 Ying Liu, the debt ratio of borrower should not be higher than or equal to 100%. Loan from Fujian Haixia Bank, due on November 6, 2020 with annual interest rate of 6.0900% at June 30, 2020, collateralized by Hong Long’s 6 fishing vessels and 7 real estate properties of Ping Lin and 4,943,852 5,017,058 Ying Liu, the debt ratio of borrower should not be higher than or equal to 100%. Loan from Fujian Haixia Bank, due on November 14, 2020 with annual interest rate of 6.0900% at June 30, 2020, collateralized by Hong Long’s 6 fishing vessels and 7 real estate properties of Ping Lin and 706,265 716,723 Ying Liu, the debt ratio of borrower should not be higher than or equal to 100%. Loan from The Export-Import Bank of China, due on January 21, 2021 with annual interest rate of 3.8800% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo and Hong Long, pledged deposits 38,420,792 - provided by Hong Long amounted to RMB 42 million, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from The Export-Import Bank of China, due on July 21, 2020, August 21, 2020 and September 13, 2020, with annual interest rate of 3.3300% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo 42,375,874 - and Hong Long, pledged deposits provided by Hong Long amounted to RMB 20 million. $ 90,684,370 $ 10,034,116

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NOTE 10 – BANK LOANS (continued)

Long-term bank loans

Long-term bank loans represent the amounts due to various banks lasting over one year. Usually, the long-term bank loans cannot be renewed with these banks upon maturities. The Company is in compliance with all long-term bank loan covenants. At June 30, 2020 and December 31, 2019, long-term bank loans consisted of the following:

June 30, December 31, 2020 2019 Loan from The Export-Import Bank of China, due on various dates until August 28, 2020 with annual interest rate of 4.750% at June 30, 2020 and December 31, 2019, guaranteed by Hong Long, Xinrong $ 4,661,346 $ 4,730,369 Zhuo and Ping Lin. Loan from The Export-Import Bank of China, due on various dates until January 30, 2023 with annual interest rate of 4.900% at June 30, 2020 and December 31, 2019, guaranteed by Xinrong Zhuo and 2,825,058 5,017,058 Ping Lin and collateralized by 2 fishing vessels and collateralized by two related parties’ investments in equity interest of one PRC local banks. Loan from China Development Bank, due on various dates until November 27, 2023 with annual interest rate of 5.145% at June 30, 2020 and December 31, 2019, guaranteed by Xinrong Zhuo, 4,661,346 5,447,092 Honghong Zhuo, Mr. and Mrs. Zhiyan Lin and 17 fishing vessels, the debt ratio of borrower should not be higher than 80%. Loan from The Export-Import Bank of China, due on various dates until March 28, 2025 with annual interest rate of 4.949% at June 30, 2020 and December 31, 2019, guaranteed by Hong Long, Xinrong 59,326,224 65,938,477 Zhuo, Ping Lin and collateralized by 20 fishing vessels. Loan from The Export-Import Bank of China, due on various dates until September 30, 2020 with annual interest rate of 4.750% at June 30, 2020 and December 31, 2019, guaranteed by Hong Long, 15,537,820 16,484,619 Xinrong Zhuo, Ping Lin and collateralized by equity investment of 67 million shares of Hong Long in International Bank. Loan from The Export-Import Bank of China, due on various dates until August 21, 2026 with annual interest rate of 4.700% at June 30, 2020 and December 31, 2019, guaranteed by Pin Lin, Xinrong 57,843,068 63,214,931 Zhuo and Yaohua Zhuo, 15 fishing vessels, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from The Export-Import Bank of China, due on various dates until October 21, 2025 with annual interest rate of 4.700% at June 30, 2020 and December 31, 2019, guaranteed by Pin Lin, Xinrong 44,360,477 45,017,345 Zhuo, Yaohua Zhuo and Hong Long, 15 fishing vessels and 1 transport vessel, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from China Development Bank, due on various dates until July 30, 2026 with annual interest rate of 5.390% at June 30, 2020 and December 31, 2019, guaranteed by Xinrong Zhuo, 11 fishing vessels 10,452,716 11,503,396 and 6 Hong Long’s fishing vessels, real estate of Mingguang Wanhao Property co., LTD., totalled area 22,123.50m2, the debt ratio of borrower should not be higher than 80%. Loan from The Export-Import Bank of China, due on various dates until October 21, 2025 with annual interest rate of 4.700% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo and 8,045,766 - Hong Long, 15 fishing vessels and 1 transport vessel, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from The Export-Import Bank of China, due on various dates until April 21, 2028 with annual interest rate of 4.650% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo, Hong 18,362,879 Long and Huanghai Shipbuilding Co., Ltd., the Land Use Right of B2 plot in central business district on the north shore of Minjiang river, 1 vessel. Loan from The Export-Import Bank of China, due on various dates until December 21, 2028 with annual 19,775,408 interest rate of 4.650% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo, Hong

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Long and Huanghai Shipbuilding Co., Ltd., the Land Use Right of B2 plot in central business district on the north shore of Minjiang river, 1 vessel. Loan from Bank of Communications, due on various dates until June 27, 2025 with annual interest rate of 4.650% at June 30, 2020, guaranteed by Xinrong Zhuo, Huanghai Shipbuilding Co., Ltd. and 29,380,607 Fujian Jingfu Ocean Fishery Development Co., Ltd.. Total long-term bank loans $275,232,715 $217,353,287 Less: current portion (60,880,006) (57,122,789) Long-term bank loans, non-current portion $214,352,709 $160,230,498

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NOTE 10 – BANK LOANS (continued)

Long-term bank loans (continued)

The future maturities of long-term bank loans are as follows:

Due in twelve-month periods ending June 30, Principal 2021 $ 60,880,006 2022 42,446,500 2023 50,215,411 2024 50,074,158 2025 48,090,967 Thereafter 23,525,673 $275,232,715 Less: current portion (60,880,006) Long-term liability $214,352,709

The weighted average interest rate for short-term bank loans was approximately 4.1% and 6.6% for the six months ended June 30, 2020 and 2019, respectively.

The weighted average interest rate for long-term bank loans was approximately 4.9% and 5.0% for the six months ended June 30, 2020 and 2019, respectively.

For the three months ended June 30, 2020 and 2019, interest expense related to bank loans amounted to $3,701,595 and $1,684,081, respectively, of which, $765,066 and $163,934 was capitalized to construction-in-progress, respectively. For the six months ended June 30, 2020 and 2019, interest expense related to bank loans amounted to $6,844,350 and $2,235,066, respectively, of which $1,008,925 and $185,753 was capitalized to construction-in-progress, respectively.

NOTE 11 – ACCRUED LIABILITIES AND OTHER PAYABLES

At June 30, 2020 and December 31, 2019, accrued liabilities and other payables consisted of the following:

June 30, December 31, 2020 2019 Accrued salaries and related benefits $ 10,903,530 $ 10,003,346 Accrued interest due 427,970 339,629 Other 248,204 1,085,043 $ 11,579,704 $ 11,428,018

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NOTE 12 – CERTAIN RISKS AND CONCENTRATIONS

Credit risk

At June 30, 2020 and December 31, 2019, the Company’s cash included bank deposits in accounts maintained within the PRC and Hong Kong where there are currently no rules or regulations in place for obligatory insurance to cover bank deposits in event of bank failure. However, the Company does not experience any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Major customers

The following table sets forth information as to each customer that accounted for 10% or more of the Company’s sales for the three and six months ended June 30, 2020 and 2019.

Three Months Ended Six Months Ended June 30, June 30, Customer 2020 2019 2020 2019 A 19% 22% 15% 22% B 14% 12% 12% 14% C 13% * * * D 12% * * * E 11% * 12% * F * 18% * 17% G * 12% * 11%

* less than 10%

Three customers accounted for 10% or more of the Company’s total outstanding accounts receivable at June 30, 2020 and December 31, 2019, respectively.

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NOTE 12 – CERTAIN RISKS AND CONCENTRATIONS (continued)

Major suppliers

The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s purchases for the three and six months ended June 30, 2020 and 2019.

Three Months Ended Six Months Ended June 30, June 30, Supplier 2020 2019 2020 2019 A 35% * 29% * B 25% * 23% * C 10% * * *

One supplier, whose outstanding accounts payable accounted for 10% or more of the Company’s total outstanding accounts payable and accounts payable – related parties at June 30, 2020, accounted for 53.2% of the Company’s total outstanding accounts payable and accounts payable – related parties at June 30, 2020.

Two suppliers, whose outstanding accounts payable accounted for 10% or more of the Company’s total outstanding accounts payable and accounts payable – related parties at December 31, 2019, accounted for 76.0% of the Company’s total outstanding accounts payable and accounts payable – related parties at December 31, 2019.

NOTE 13 – COMMITMENTS AND CONTINGENCIES

Severance payments

The Company has employment agreements with certain employees that provide for severance payments to such employees upon termination of employment under certain circumstances, as defined in the applicable agreements. The Company has estimated its possible severance payments to be approximately $10,000 as of June 30, 2020 and December 31, 2019, which have not been reflected in its consolidated financial statements.

Operating lease

See note 9 for related party operating lease commitment.

Rental payment and related administrative service charge

See note 9 for related party rental and related administrative service agreement commitment.

NOTE 14 – SUBSEQUENT EVENTS

On July 21, 2020, the Company repaid a long-term bank loan of $5.65 million to The Export-Import Bank of China in accordance with the loan repayment schedule.

On August 5, 2020, the Company received the government subsidy for reimbursement of certain operating expenses amounted to $12.0 million.

As of August 12, 2020, the Company received repayment of Hong Long amounted to $18.9 million.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the results of operations and financial condition of Pingtan Marine Enterprise Ltd. for the three and six months ended June 30, 2020 and 2019 should be read in conjunction with the Pingtan Marine Enterprise Ltd. unaudited financial statements and the notes thereto contained elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 15, 2020. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Unless otherwise indicated, references to the “Company,” “us” or “we” refer to Pingtan Marine Enterprise Ltd. and its subsidiaries. All amounts expressed below are in US dollars.

Overview

We are a marine enterprise group primarily engaging in ocean fishing through our operating subsidiary, Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd., or Pingtan Fishing, which is organized in the People’s Republic of China (“PRC”). We carry out marine fishing operations in the international waters and the approved waters in access fishing countries with many of our owned vessels or licensed vessels for which we have exclusive operating license rights. We provide high quality seafood to a diverse group of customers including distributors, restaurant owners and exporters in the PRC.

We initially had a fishing fleet of 40 vessels in 2013. By June 2015, we expanded the number of vessels to 135 through construction of 3 new vessels, the purchase of 72 licensed vessels and the acquisition of 20-year exclusive operation rights to 20 vessels. Our fishing fleet consists of vessels of diversified fishing methods, including trawling, drift netting, light luring seine, long line fishing and squid jigging.

From 2017 to 2018, we purchased 2 refrigerated transport vessels and 4 squid jigging vessels. Of those vessels, 2 transport vessels and 2 squid jigging vessels finished renovation in subsequent years and were deployed to international waters. The remaining 2 vessels’ ownership transfer was not yet completed, but the Company is entitled to 100% of the operations and net profits (losses) from the vessels.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In April 2018, 27 vessels received approval from the MOA to operate in the international waters after the completion of modification and rebuilding projects. The 27 fishing vessels were modified and rebuilt into 20 squid jigging vessels and 7 light luring seine vessels and have been deployed to sea for operation in late 2018 and early 2019.

In 2019, the Company had 30 fishing vessels that received approval from the MOA to operate in the international waters after completion of modification and rebuilding. The 30 vessels were rebuilt and modified into 15 squid jigging vessels and 15 seine vessels. All the 30 vessels finished renovation in 2019 and were deployed to international waters for operation. In late 2019, we applied to the MOA for permits to modify and rebuild 10 fishing vessels.

In January 2020, we purchased 1 refrigerated transport vessel and started modifying and rebuilding the vessel. We expect the modification and rebuilding project to be completed in November 2020, and the transport vessel will then be deployed to international waters.

During three months ended June 30, 2020, we have accomplished the modification and rebuilding project for 10 fishing vessels and started building of 1 new krill fishing vessel.

As of June 30, 2020, we owned 51 squid jigging vessels, 26 trawlers, 25 seine vessels, 13 drifters, 4 longline fishing vessels, and 2 transport vessels and had exclusive operating license rights to 20 drifters. Additionally, 1 transport vessel was in the modification and rebuilding stage and 1 new krill fishing vessel was in the building stage.

Among the 143 vessels, 69 were located in international waters, 12 were located in the Bay of Bengal in India, 13 were located in the PRC, 37 were located in the Arafura Sea in Indonesia, 10 were preparing for operation in international water, 1 transport vessel was in the modification and rebuilding stage and 1 new krill fishing vessel was in the building stage.

We catch nearly 30 different species of fish, including squid, ribbon fish, croaker fish and cuttle fish. All of our catch is shipped back to the PRC. We arrange chartered transportation ships to deliver frozen stocks to cold storage warehouses located in one of the PRC’s largest seafood trading centers, the Mawei Seafood Market in Fujian Province.

We derive our revenue primarily from the sale of frozen seafood products. We sell our products directly to customers, including seafood processors, distributors, restaurant owners and exporters. Most of our customers have long-term, cooperative relationships with us. Our existing customers also introduce new customers to us from time to time. In July 2017, we entered into an exclusive strategic cooperation agreement to sell our fish products directly to consumers online. Based on past experiences, demand for seafood products is the highest from December to January, during the Chinese New Year. We believe that our profitability and growth are dependent on our ability to deploy our vessels to new fishing grounds and our ability to expand our customer base.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Significant factors affecting our results of operations

● COVID-19 pandemic: In December 2019, a novel strain of coronavirus (COVID-19) surfaced in China. In reaction to this outbreak, many provinces and municipalities in China activated the highest Level-I Response to the emergency public health incident. As a result, business activities in China were seriously affected.

Emergency quarantine measures and travel restrictions have had a significant impact on many sectors across China, which has also adversely affected our operations. To reduce the impact on our production and operation, we implemented certain safety measures to allow us to gradually resume work in mid-February. For the employees who left Fuzhou during the Spring Festival holiday and could not return to Fuzhou as scheduled, or those who could only resume work after satisfying the 14-day quarantine requirement, we provided paid leave. Since resuming work in mid-February, we have been using a shift system and adopted additional health and safety procedures to protect our employees. With these measures, we were able to maintain our sales and operations from mid-February to mid-March. On March 23, 2020, we resumed normal operations and are conducting business as usual with health and safety procedures to protect our employees, our management is focused on mitigating the effects of COVID-19 on our business operations while protecting the health of our employees. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by local authorities or that we determine are in the best interests of our employees, customers, partners and suppliers.

Some of our customers are fish processing plants that exports processed fish products to foreign countries. These customers tended to reduce or postpone their purchases from us in the initial stage of the pandemic and have now started adjusting their business strategies in relation to exportation or domestic sale. It has caused there to be a decrease in our unit selling price, an increase of inventory and has resulted in accounts receivables not being timely paid as anticipated.

The situation created by the COVID-19 pandemic has led to an unprecedented economic uncertainty globally. However, the extent of the impact on our financial condition and results of operations is still highly uncertain and will depend on future developments, such as the ultimate duration and scope of the outbreak, its impact on our customers and exporters, how quickly normal economic conditions, operations, and the demand for our products can resume and whether the pandemic leads to recessionary conditions in China.

While we anticipate that our results of operations will continue to be impacted by this pandemic in the third and fourth quarters of 2020, we are unable to reasonably estimate the extent of the impact on our full-year results of operations, our liquidity or our overall financial position.

● Governmental policies: Fishing is a highly regulated industry and our operations require licenses and permits. Our ability to obtain, sustain or renew such licenses and permits on acceptable terms is subject to changes in regulations and policies and is at the discretion of the applicable government agencies. Our inability to obtain, or loss or denial of extensions to, any of our applicable licenses or permits could hamper our ability to generate revenue from our operations.

● Resource & environmental factors: Our fishing expeditions are based in the EEZ, the international waters and the Arafura Sea of Indonesia. Any earthquake, tsunami, adverse weather or oceanic conditions, or other disasters in such areas may result in disruption to our operations and could adversely affect our sales. Adverse weather conditions such as storms, cyclones and typhoons or cataclysmic events may also decrease the volume of fish catches or may even hamper our operations. Our fishing volumes may also be adversely affected by major climatic disruptions such as El Nino, which in the past has caused significant decreases in seafood catch worldwide. Besides weather patterns, other unpredictable factors, such as fish migration, may also impact our harvest volume.

● Fluctuation on fuel prices: Our operations may be adversely affected by fluctuations in fuel prices. Changes in fuel prices may result in increases in the selling prices of our products, and may, in turn, adversely affect our sales volume, revenue and operating profit.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Competition: We engage in the business in the EEZ, the international waters, and the Arafura Sea of Indonesian. Competition within our designated fishing areas is not currently significant as the region is not overfished or regulated by government limits on the number of vessels that are allowed to fish in the territories; however, there is no guarantee that competition will ● not become more intense. Competition in the consumer market in China, however, is keen. We compete with other fishing companies that offer similar and varied products. There is significant demand for fish in the Chinese market. We believe our catch appeals to a wide segment of consumers because of the low price points of our products.

Fishing licenses: Each of our fishing vessels requires approval from the MOA to carry out ocean fishing projects in international waters and foreign territories. Different countries may have different policies for foreign cooperation in fisheries. Some countries require fishing licenses issued by the accessed country; some others may require establishment of a joint venture or sole proprietorship to obtain local licenses.

In early December 2014, the Indonesian government introduced a six-month moratorium on issuing new fishing licenses and renewals so that the country’s Ministry of Maritime Affairs and Fisheries (“MMAF”) could combat illegal fishing and rectify ocean fishing order. In February 2015, we ceased all fishing operations in Indonesia. During the moratorium, we were informed that the fishing licenses of four vessels operated through PT. Avona, one of the local companies through which we conduct business in Indonesia, and the fishery business license of PT. Dwikarya, the other local company through which we conduct ● business in Indonesia, were revoked. Although, in November 2015, the Indonesian government announced that the moratorium had concluded, the MMAF has neither implemented new fishing policies nor resumed the license renewal process. As a result of the above, all local fishing licenses of our vessels in Indonesia are presently inactive. We have been paying close attention to any new trends in fishing policy and have been actively exploring other business operations and redeploying vessels to other locations.

In October 2016, we deployed 13 vessels, which were granted fishing licenses by the Ministry of Agriculture and Fisheries of the Democratic Republic of Timor-Leste (“MAF”), to operate in the Indo-Pacific waters of the country. In September 2017, we were informed that the fishing licenses of these 13 vessels were suspended and the vessels were docked in the port by the MAF. The 13 vessels have returned to the PRC.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document RESULTS OF OPERATIONS

Comparison of results of operations for the three and six months ended June 30, 2020 and 2019

Revenue

We catch different species of fish, ship them back to China and sell the catches to distributors and retailers by acting as a wholesaler. Marine catch is our one and only product line. The product type, contractual price and quantities are identified in contracts. We do not offer promotional payments, customer coupons, rebates or other cash redemption offers to our customers, and we do not accept returns from customers. Our revenues are recorded at a point in time. All of our operations are considered by the Company’s Chief Operating Decision Maker to be aggregated in one reportable operating segment and our revenue is disaggregated by product type in terms of species of fish sold pursuant to ASC 606-10-55-91(a).

The revenue is generated from the sale of frozen fish and other marine catches. We recognize revenue at the amount we expect to be entitled to be paid, determined when control of the products is transferred to our customers, which occurs upon delivery of and acceptance of the frozen fish by the customer and we have a right to payment.

We have identified one performance obligation as the frozen fish and other marine catches identified in the contract are picked up by the customers at our cold storage warehouse, with revenue being recognized at a point in time. We initially recognize revenue in an amount which is estimated based on contractual prices. The receivables under contracts, whereby pricing is based on contractual prices, are primarily collected within 180 days.

For the three months ended June 30, 2020 and 2019, our revenue by species of fish was as follows (dollars in thousands, except for average price):

Three Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,108 14,970,511 $ 0.81 51.6% Peru squid 2,855 1,949,315 1.46 12.2% Chub mackerel 2,064 2,285,335 0.90 8.8% Croaker fish 1,839 1,015,030 1.81 7.8% Cuttle fish 1,666 398,240 4.18 7.1% Others 2,931 1,136,003 2.58 12.5% Total $ 23,463 21,754,435 $ 1.08 100.0%

Three Months Ended June 30, 2019 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,573 11,418,082 $ 1.10 49.4% Argentina squid(whole) 3,530 780,888 4.52 13.9% Ribbon fish 2,061 612,469 3.37 8.1% Croaker fish 1,813 827,012 2.19 7.1% Indian squid 715 120,880 5.92 2.8% Others 4,771 1,669,067 2.86 18.7% Total $ 25,463 15,428,398 $ 1.65 100.0%

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document For the six months ended June 30, 2020 and 2019, our revenue by species of fish was as follows (dollars in thousands, except for average price):

Six Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 19,821 23,272,651 $ 0.85 48.6% Peru squid 4,838 3,053,765 1.58 11.9% Cuttle fish 4,116 925,140 4.45 10.1% Chub mackerel 4,015 4,555,204 0.88 9.8% Croaker fish 3,096 1,707,819 1.81 7.6% Others 4,884 1,779,139 2.75 12.0% Total $ 40,770 35,293,718 $ 1.16 100.0%

Six Months Ended June 30, 2019 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 17,629 15,997,031 $ 1.10 40.2% Ribbon fish 6,014 1,814,302 3.31 13.7% Argentina squid(whole) 3,800 889,945 4.27 8.7% Croaker fish 3,245 1,466,500 2.21 7.4% Cuttle fish 2,437 445,359 5.47 5.6% Others 10,762 3,558,206 3.02 24.4% Total $ 43,887 24,171,343 $ 1.82 100.0%

For the three months ended June 30, 2020, we had revenue of $23,463,133, as compared to revenue of $25,463,094 for the three months ended June 30, 2019, a decrease of $1,999,961, or 7.9%. Sales volumes in the three months ended June 30, 2020 increased by 41.0% to 21,754,435 kg from 15,428,398 kg in the three months ended June 30, 2019. Average unit sale price decreased 34.5% in the three months ended June 30, 2020 as compared to the three months ended June 30, 2019.

For the six months ended June 30, 2020, we had revenue of $40,770,133, as compared to revenue of $43,887,303 for the six months ended June 30, 2019, a decrease of $3,117,170, or 7.1%. Sales volumes in the six months ended June 30, 2020 increased 46.0% to 35,293,718 kg from 24,171,343 kg in the six months ended June 30, 2019. Average unit sale price decreased 36.3% in the six months ended June 30, 2020 as compared to the six months ended June 30, 2019.

For the three and six months ended June 30, 2020, our decrease in revenue was primarily attributable to the fish species with highest sales volume being sold at lower selling prices - Indian Ocean squid was our major product for the three and six months ended June 30, 2020 - and an increase in the number of fishing vessels catching Indian Ocean squid on the market led to the increased supply, which pulled down the average unit sale price. For the three and six months ended June 30, 2020, the decrease in revenue as compared to the same period in 2019 was primarily attributable to the different sales mix and the decrease in the average unit sale price decreased, despite the increase in sales volume with more vessels in operations. Lower unit sales prices are expected to continue for the remainder of year 2020 due to the impact of COVID-19 pandemic.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Cost of revenue

Our cost of revenue primarily consists of fuel cost, depreciation, direct labor cost, freight, fishing vessels maintenance fees, and other overhead costs. Fuel cost, depreciation, and labor cost generally accounted for the majority of our cost of revenue. The following table sets forth our cost of revenue information, both in amounts and as a percentage of revenue for the three months ended June 30, 2020 and 2019 (dollars in thousands):

Three Months Ended June 30, 2020 2019 % of % of % of % of Amount cost of Amount cost of revenue revenue revenue revenue Fuel cost $ 13,393 62.9% 57.1% $ 9,961 61.5% 39.1% Labor cost 3,034 14.2% 12.9% 2,380 14.7% 9.3% Freight 2,249 10.6% 9.6% 2,052 12.7% 8.1% Depreciation 2,001 9.4% 8.5% 1,582 9.8% 6.2% Spare parts 233 1.1% 1.0% 222 1.3% 0.9% Maintenance fee 19 0.1% 0.1% 6 - - Other 371 1.7% 1.6% (7) - - Total cost of revenue $ 21,300 100.0% 90.8% $ 16,196 100.0% 63.6%

The following table sets forth our cost of revenue information, both in amounts and as a percentage of revenue, for the six months ended June 30, 2020 and 2019 (dollars in thousands):

Six Months Ended June 30, 2020 2019 % of % of % of % of Amount cost of Amount cost of revenue revenue revenue revenue Fuel cost $ 20,750 63.2% 50.9% $ 18,504 60.5% 42.2% Labor cost 4,792 14.6% 11.8% 4,424 14.5% 10.1% Freight 3,213 9.8% 7.9% 3,463 11.3% 7.9% Depreciation 2,981 9.1% 7.3% 3,100 10.2% 7.1% Spare parts 541 1.6% 1.3% 882 2.9% 2.0% Maintenance fee 16 0.0% 0.0% 19 0.1% - Other 561 1.7% 1.4% 148 0.5% 0.3% Total cost of revenue $ 32,854 100.0% 80.6% $ 30,540 100.0% 69.6%

Cost of revenue for the three months ended June 30, 2020 was $21,299,920, representing an increase of $5,103,640, or 31.5%, as compared to $16,196,280 for the three months ended June 30, 2019. Cost of revenue for the six months ended June 30, 2020 was $32,854,363, representing an increase of $2,314,525, or 7.6%, as compared to $30,539,838 for the six months ended June 30, 2019. The increase was primarily attributable to the increase in our production activities.

At June 30, 2020, we recorded a reserve for inventories in the amount of $2,249,685

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Gross profit

Our gross profit is affected primarily by decrease in average unit sale price and changes in production costs. Fuel cost, depreciation, and labor cost together account for about 87.7% and 88.9% of cost of revenue for the three months ended June 30, 2020 and 2019, respectively. Fuel cost, depreciation, and labor cost together account for about 87.6% and 86.3% of cost of revenue for the six months ended June 30, 2020 and 2019, respectively. The fluctuation of fuel price and change in labor cost may significantly affect our cost level and gross profit.

The following table sets forth information as to our revenue, cost of revenue, gross profit and gross margin for the three and six months ended June 30, 2020 and 2019.

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Revenue $ 23,463,133 $ 25,463,094 $ 40,770,133 $ 43,887,303 Cost of revenue $ 21,299,920 $ 16,196,280 $ 32,854,363 $ 30,539,838 Gross profit $ 2,163,213 $ 9,266,814 $ 7,915,770 $ 13,347,465 Gross margin 9.2% 36.4% 19.4% 30.4%

Gross profit for the three months ended June 30, 2020 was $2,163,213, representing a change of $7,103,601, or 76.7%, as compared to gross profit of $9,266,814 for the three months ended June 30, 2019. Gross profit for the six months ended June 30, 2020 was $7,915,770, representing a change of $5,431,695, or 40.7%, as compared to gross profit of $13,347,465 for the six months ended June 30, 2019. The decrease was due to the decrease in our sales revenue and the fact that our unit production cost of fish was not significantly affected.

Gross margin decreased to 9.2% for the three months ended June 30, 2020 from 36.4% for the three months ended June 30, 2019. Gross margin decreased to 19.4% for the six months ended June 30, 2020 from 30.4% for the six months ended June 30, 2019. The decrease in gross margin for the three and six months ended June 30, 2020 as compared to the three and six months ended June 30, 2019 was primarily due to the decrease in average unit sale price by 34.5% and 36.3%, respectively, while the cost per unit had a slight decrease. A key species of our sales mix was Indian Ocean squid whose market price was on the low side, and the market price of frozen seafood was affected due to the COVID-19 pandemic, which together led to a decrease in the average unit sale price of sales mix.

Selling expense

Our selling expense mainly includes shipping and handling fees, insurance, customs clearance charges and storage fees. Our sales activities are conducted through direct selling by our internal sales staff. Because of the strong demand for our products and services, we typically do not aggressively market and distribute our products. As a result, our selling expense has been relatively small as a percentage of our revenue.

Selling expense amounted to $1,046,519 for the three months ended June 30, 2020, as compared to $535,276 for the three months ended June 30, 2019, an increase of $511,243, or 95.5%. Selling expense amounted to $1,948,170 for the six months ended June 30, 2020, as compared to $1,245,205 for the six months ended June 30, 2019, an increase of $702,965, or 56.5%. Selling expense as a percentage of revenue for the three months ended June 30, 2020 increased to 4.5% from 2.1% for the same period in 2019. Selling expense as a percentage of revenue for the six months ended June 30, 2020 increased to 4.8% from 2.8% for the corresponding period in 2019, which was mainly attributable to the increase in insurance and storage fees. Selling expense for the three and six months ended June 30, 2020 and 2019 consisted of the following:

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Insurance $ 418,132 $ 86,548 $ 830,806 $ 535,731 Storage fees 238,496 139,691 420,740 243,054 Shipping and handling fees 44,952 92,585 321,093 213,578 Customs clearance charge 20,581 41,123 33,211 74,180 Other 324,358 175,329 342,320 178,662

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document $ 1,046,519 $ 535,276 $ 1,948,170 $ 1,245,205

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document For the three months ended June 30, 2020, insurance increased by $331,584, or 383.1%, as compared to the three months ended June 30, 2019. For the six months ended June 30, 2020 insurance increased by $295,075, or 55.1%, as compared to the six ● months ended June 30, 2019. The increase was mainly attributable to 30 vessels that were in the modification and rebuilding project being completed in the second half of the year 2019 and were insured in 2020.

For the three months ended June 30, 2020, storage fees increased by $98,805, or 70.7%, as compared to the three months ended June 30, 2019. For the six months ended June 30, 2020, storage fees increased by $177,686, or 73.1%, as compared to the six ● months ended June 30, 2019. The increase was mainly attributable to larger warehouses being rented as more fish were delivered for inventory.

For the three months ended June 30, 2020, shipping and handling fees decreased by $47,633, or 51.4%, as compared to the three months ended June 30, 2019. For the six months ended June 30, 2020, shipping and handling fees increased by $107,515, or ● 50.3%, as compared to the six months ended June 30, 2019. The change was mainly attributable to the number of deliveries from ports to the warehouse in China.

For the three months ended June 30, 2020, customs clearance charges decreased by $20,542, or 50.0%, as compared to the three months ended June 30, 2019. For the six months ended June 30, 2020, customs clearance charge decreased by $40,969, ● or 55.2%, as compared to the six months ended June 30, 2019. The change was mainly attributable to the number of customs declaration.

Other miscellaneous selling expenses for the three months ended June 30, 2020 increased by $149,029, or 85.0%, as compared to the three months ended June 30, 2019. Other miscellaneous selling expenses for the six months ended June 30, 2020 increased ● by $163,658, or 91.6%, as compared to the six months ended June 30, 2019. The increase was mainly attributable to the increase in satellite communication fees for fishing vessels.

General and administrative expense

General and administrative expense amounted to $1,584,666 for the three months ended June 30, 2020, as compared to $2,114,306 for the three months ended June 30, 2019, a decrease of $529,640, or 25.1%. General and administrative expense amounted to $3,566,242 for the six months ended June 30, 2020, as compared to $6,931,857 for the six months ended June 30, 2019, a decrease of $3,365,615, or 48.6%. General and administrative expense for the three and six months ended June 30, 2020 and 2019 consisted of the following:

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Depreciation $ 789,334 $ 749,056 $ 1,500,767 $ 1,971,217 Compensation and related benefits 248,037 322,011 562,918 697,291 Professional fees 146,736 180,401 845,332 823,948 Rent and related administrative service charge 118,492 129,913 236,701 266,321 Bad debt (recovery) expense (50,337) - 57,205 - Travel and entertainment 4,392 30,311 8,873 108,126 Impairment loss - 245,940 - 2,475,442 Other 328,012 456,674 354,446 589,512 $ 1,584,666 $ 2,114,306 $ 3,566,242 $ 6,931,857

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We recorded the depreciation in relation to vessels that are not operating as operation expense rather than cost of revenue. For the three months ended June 30, 2020, depreciation expense increased by $40,278, or 5.4%, as compared to the three months ended ● June 30, 2019. For the six months ended June 30, 2020, depreciation expense decreased by $470,450, or 23.9%, as compared to the six months ended June 30, 2019.

Compensation and related benefits decreased by $73,974, or 23.0%, for the three months ended June 30, 2020 as compared to ● the three months ended June 30, 2019. For the six months ended June 30, 2020, compensation and related benefits decreased by $134,373, or 19.3%, as compared to the six months ended June 30, 2019.

Professional fees, which primarily consist of legal fees, accounting fees, investor relation service charges, valuation service fees and other fees associated with being a public company, for the three months ended June 30, 2020, decreased by $33,665, or 18.7%, as compared to the three months ended June 30, 2019. The decrease in the three months ended June 30, 2020 was primarily attributable to a decrease in accounting fees of approximately $55,000 and offset by an increase in legal fees of ● approximately $20,000. For the six months ended June 30, 2020, professional fees increased by $21,384, or 2.6%, as compared to the six months ended June 30, 2019. The increase in the six months ended June 30, 2020, was primarily attributable to an increase in legal fees of approximately $28,000, an increase in investor relation service charges of approximately $17,000, offset by a decrease in accounting fees of approximately $23,000 and a decrease in consulting fees of approximately $10,000.

Rent and related administrative service charge decreased by $11,421, or 8.8%, for the three months ended June 30, 2020 as ● compared to the three months ended June 30, 2019. For the six months ended June 30, 2020, rent and related administrative service charge decreased by $29,620, or 11.1%, as compared to the six months ended June 30, 2019.

For the three months ended June 30, 2020, travel and entertainment expense decreased by $25,919, or 85.5%, as compared to the three months ended June 30, 2019. For the six months ended June 30, 2019, travel and entertainment expense decreased by ● $99,253, or 91.8%, as compared to the six months ended June 30, 2019. The decrease was mainly attributable to a decrease in travel expense of approximately $25,000 and a decrease in entertainment expense of approximately $74,000.

For the three months ended June 30, 2020, we recorded bad debt recovery of $50,337 as compared to nil for the three months ended June 30, 2019. For the six months ended June 30, 2020, we recorded bad debt expense of $57,205 as compared to nil for ● the six months ended June 30, 2019. Based on our periodic review of accounts receivable balances, we adjusted the allowance for doubtful accounts after considering management’s evaluation of the collectability of individual receivable balances, including the analysis of subsequent collections, the customers’ collection history, and recent economic events.

Impairment loss represents the impairment loss on the vessels whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recovered. During the six months ended June 30, 2019, we dismantled 1 transport ● vessel and deregistered 6 fishing vessels and applied to the MOA for rebuilding 7 new vessels. As a result of the rebuilding projects, we assessed the recoverability of the 7 fishing vessels based on the undiscounted future cash flow that the fishing vessels are expected to generate as less than the carrying amount, and recognized an impairment loss of $2,475,442.

Other general and administrative expense, which primarily consists of communication fees, office supplies, miscellaneous taxes, bank service charge, depreciation, and NASDAQ listing fee. For the three months ended June 30, 2020, other general and ● administrative expense decreased by $128,662, or 28.2%, as compared to the three months ended June 30, 2019. For the six months ended June 30, 2020, other general and administrative expense decreased by $235,066, or 39.9%, as compared to the six months ended June 30, 2019.

Subsidy

Subsidy mainly consists of an incentive granted by the Chinese government to encourage the development of the ocean fishing industry in order to satisfy the demand of natural seafood in China and other small miscellaneous subsidies from the Chinese government. For the three months ended June 30, 2020, we received subsidies of $564,095. For the six months ended June 30, 2020, we received subsidies of $8,338,088 reimbursement of certain operating expenses. We did not receive any subsidies during the three and six months ended June 30, 2019 due to the Chinese government’s schedule.

Loss on fixed assets disposal

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Loss on fixed assets disposal represents the loss on the disposal of fixed assets we recorded as it incurred. For the three and six months ended June 30, 2020 and 2019, the loss on fixed assets disposal was nil and $166,152, respectively.

Income from operations

As a result of the factors described above, for the three months ended June 30, 2020, income from operations amounted to $96,123, as compared to income from operations of $6,451,080 for the three months ended June 30, 2019, a change of $6,354,957, or 98.5%. For the six months ended June 30, 2020, income from operations amounted to $10,739,446, as compared to income from operations of $5,004,251 for the six months ended June 30, 2019, a change of $5,735,195, or 114.6%.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other income/expense

Other income/expense mainly include interest income from bank deposits, interest expense generated from short-term and long-term bank borrowings, foreign currency transaction gain, gain from cost method investment, and loss on equity method investment.

For the three months ended June 30, 2020, other expense, net, amounted to $1,757,503 as compared to other expense, net, of $1,417,113 for the three months ended June 30, 2019, an increase of $340,390, or 24.0%, which was primarily attributable to an increase in interest expenses of approximately $1,338,000 as a result of an increase in bank loans, a decrease in gain from cost method investment of approximately $215,000 and a decrease in other income of approximately $221,000, offset by an increase in interest income of approximately $1,145,000, an increase in foreign currency transaction gain of approximately $161,000 and a decrease in loss on equity method investment of approximately $128,000.

For the six months ended June 30, 2020, other expense, net, amounted to $3,983,750 as compared to other expense, net, of $1,938,623 for the six months ended June 30, 2019, an increase of $2,045,127, or 105.5%, which was primarily attributable to an increase in interest expenses of approximately $3,708,000 as a result of increase in bank loans, an increase in foreign currency transaction loss of approximately $295,000, a decrease in gain from cost method investment of approximately $215,000, an increase in other expenses of approximately $283,000, offset by an increase in interest income of approximately $2,342,000 and a decrease in loss on equity method investment of approximately $113,000.

Income taxes

We are exempted from income taxes for income generated from our ocean fishing operations in China for the three and six months ended June 30, 2020 and 2019.

Net (loss) income

As a result of the factors described above, our net loss was $1,661,380 for the three months ended June 30, 2020, as compared to net income of $5,033,967 for the three months ended June 30, 2019, a change of $6,695,347 or 133.0%. Our net income was $6,755,696 for the six months ended June 30, 2020, as compared to net income of $3,065,628 for the six months ended June 30, 2019, a change of $3,690,068 or 120.4%.

Net (loss) income attributable to owners of the Company

The net loss attributable to owners of the Company was $1,576,010, or $(0.02) per ordinary share (basic and diluted), for the three months ended June 30, 2020, as compared with net income attributable to owners of the Company of $4,579,044, or $0.06 per ordinary share (basic and diluted), for the three months ended June 30, 2019, a change of $6,155,054 or 134.4%.

The net income attributable to owners of the Company was $6,088,680, or $0.08 per ordinary share (basic and diluted), for the six months ended June 30, 2020, as compared with net income attributable to owners of the Company of $2,691,805, or $0.03 per ordinary share (basic and diluted), for the six months ended June 30, 2019, a change of $3,396,875 or 126.2%.

Foreign currency translation adjustment

Our reporting currency is the U.S. dollar. The functional currency of the Company and Merchant Supreme and Prime Cheer, subsidiaries of the Company, is the U.S. dollar and the functional currency of the Company’s subsidiaries which are incorporated in China is the Chinese Renminbi (“RMB”). The financial statements of our subsidiaries which are incorporated in China are translated to U.S. dollars using period end rates of exchange for assets and liabilities, and average rates of exchange (for the period) for revenue, costs, and expenses. Net gains and losses resulting from foreign exchange transactions are included in the consolidated statements of operations and comprehensive income (loss). As a result of foreign currency translations, which are a non-cash adjustment, we reported a foreign currency translation loss of $166,176 for the three months ended June 30, 2019, as compared to foreign currency translation loss of $3,066,793 for the three months ended June 30, 2019. We reported a foreign currency translation loss of $1,854,615 for the six months ended June 30, 2020, as compared to foreign currency translation loss of $167,444 for the six months ended June 30, 2019. This non-cash loss had the effect of increasing/decreasing our reported comprehensive loss/gain and this non-cash gain had the effect of decreasing/ increasing our reported comprehensive loss/gain.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 39

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Comprehensive (loss) income

As a result of our foreign currency translation adjustment, we had comprehensive loss for the three months ended June 30, 2020 of $1,827,556, as compared to comprehensive income of $1,967,174 for the three months ended June 30, 2019. We had comprehensive income of $4,901,081 for the six months ended June 30, 2020, as compared to comprehensive income of $2,898,184 for the six months ended June 30, 2019.

Cash flows for the six months ended June 30, 2020 compared to the six months ended June 30, 2019

The following summarizes the key components of our cash flows for the six months ended June 30, 2020 and 2019:

Six Months Ended June 30, 2020 2019 Net cash (used in) provided by operating activities $ (5,262,729) $ 8,234,499 Net cash used in investing activities (64,346,649) (63,734,781) Net cash provided by financing activities 73,384,066 56,665,349 Effect of exchange rate on cash 309,238 41,357 Net increase in cash, cash equivalents and restricted cash $ 4,083,926 $ 1,206,424

Net cash flow used in operating activities was $5,262,729 for the six months ended June 30, 2020 as compared to net cash flow provided by operating activities of $8,234,499 for the six months ended June 30, 2019, a change of $13,497,228.

Net cash flow used in operating activities for the six months ended June 30, 2020 primarily reflected our net income of approximately $6,756,000, and the add-back of non-cash items, mainly consisting of depreciation of approximately $6,673,000, an increase in allowance for doubtful accounts of approximately $57,000, an increase in reserve for inventories of approximately $2,001,000 due to an increase in the number of fishing vessels catching Indian Ocean squid on the market led to the increased supply, which pulled down the average unit sale price and loss on equity method investment of approximately $269,000, and changes in operating assets and liabilities primarily consisting of an increase in accounts receivable of approximately ● $3,567,000, an increase in inventories of approximately $28,704,000 due to our business expansion resulting from more fishing vessels put in operations, a decrease in advance from customers of approximately $825,000 and a decrease in due to related parties of approximately $324,000, offset by a decrease in prepaid expenses of approximately $588,000, a decrease in other receivables of approximately $388,000, an increase in accounts payable of approximately $9,592,000, an increase in accounts payable-related parties of approximately $689,000 and an increase in accrued liabilities and other payables of approximately $1,145,000.

Net cash flow provided by operating activities for the six months ended June 30, 2019 primarily reflected our net income of approximately $3,066,000, and the add-back of non-cash items, mainly consisting of depreciation of approximately $5,071,000, a decrease in reserve for inventories of approximately $358,000, loss on equity method investment of approximately $382,000 and impairment loss of fishing vessels of approximately $2,475,000, and changes in operating assets and liabilities primarily ● consisting of an increase in accounts payable of approximately $1,974,000, an increase in accrued liabilities and other payables of approximately $2,573,000 and an increase in due to related parties of approximately $1,222,000, offset by an increase in accounts receivable of approximately $2,453,000, an increase in inventory of approximately $2,426,000 due to our business expansion which resulted from more fishing vessels being put into operations, an increase in other receivable of approximately $376,000, and a decrease in accounts payable - related parties of approximately $2,896,000.

Net cash flow used in investing activities was $64,346,649 for the six months ended June 30, 2020 as compared to $63,734,781 for the six months ended June 30, 2019. During the six months ended June 30, 2020, we made payments for purchase of property, plant and equipment of approximately $85,240,000, offset by proceeds received from government grants for fishing vessel construction of approximately $20,893,000. During the six months ended June 30, 2019, we made payments for purchase of property, plant and equipment of approximately $59,984,000, made deposit for purchase of land use right of approximately $7,374,000, offset by proceeds received from government grants for fishing vessel construction of approximately $3,623,000.

Net cash flow provided by financing activities was $73,384,066 for the six months ended June 30, 2020 as compared to net cash flow used in financing activities of $56,665,349 for the six months ended June 30, 2019. During the six months ended June 30,

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 2020, we received proceeds from short-term bank loans of approximately of $81,344,000 and proceeds from long-term bank loans of approximately of $76,076,000, offset by the repayments of long-term bank loans of approximately $14,612,000, loans issued to related parties of approximately $69,424,000. During the six months ended June 30, 2019, we received long-term bank loans of approximately $100,283,000, offset by the repayments of long-term bank loans of approximately $4,719,000 and advances to related parties of approximately $10,220,000 and advances from related parties of approximately $28,678,000.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document LIQUIDITY AND CAPITAL RESOURCES

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations and otherwise operate on an ongoing basis. Our principal liquidity demands are based on the capital needs of Pingtan Fishing related to the acquisition or construction of new fishing vessels and continuously upgrading and renovating existing vessels, and our general corporate purposes. We historically relied on cash flow provided by operations and bank loans to supplement our working capital. We also receive government subsidies as a government incentive for encouraging development of ocean fishing industry. Since the outbreak of COVID-19, we have been paying close attention to the operation of our customers and optimizing the collection of accounts receivable. For new customers, we adopt the policy of receiving payment before pick-up. At June 30, 2020 and December 31, 2019, we had cash balances of approximately $3,405,523 and $10,092,205, respectively. The significant portion of these funds are located in financial institutions located in the PRC and will continue to be indefinitely reinvested in our operations in the PRC.

The following table sets forth a summary of changes in our working capital from December 31, 2019 to June 30, 2020:

December 31, 2019 to June 30, 2020 June 30, December 31, Percentage Change 2020 2019 Change Working capital deficit: Total current assets $165,628,936 $ 64,338,693 $101,290,243 157.4% Total current liabilities 183,114,845 88,788,156 94,326,689 106.2% Working capital deficit: $ (17,485,909) $ (24,449,463) $ 6,963,554 (28.5)%

Our working capital deficit decreased $6,963,554 to a working capital deficit of $17,485,909 at June 30, 2020 from a working capital deficit of $24,449,463 at December 31, 2019. This decrease in working capital deficit is primarily attributable to an increase in restricted cash of approximately $10,771,000, an increase in accounts receivable, net of allowance for doubtful accounts, of approximately $3,351,000, an increase in due from related parties of approximately $68,775,000, an increase in inventories, net of reserve for inventories, of approximately $26,078,000 due to our business expansion resulting from having more fishing vessels put in operations, a decrease in lease liability of approximately $153,000 and a decrease in due to related parties of approximately $150,000, offset by a decrease in prepaid expenses of approximately $604,000, a decrease in other receivables of approximately $394,000, an increase in accounts payable of approximately $9,412,000, an increase in accounts payable - related parties of approximately $659,000, a significant increase in short-term bank loans of approximately $80,650,000, an increase in long-term bank loans - current portion approximately of $3,757,000 due to the repayment schedule and an increase in accrued liabilities and other payables of approximately $152,000.

In order to mitigate our liquidity risk, we plan to rely on the proceeds from loans from banks and/or financial institutions to increase working capital in order to meet capital demands, and the government subsidies for modification and rebuilding project and reimbursement of certain operating expenses. In addition, Mr. Zhuo, the Chief Executive Officer and Chairman of the Board, will continue to provide financial support to the Company when necessary.

The Company meets its day-to-day working capital requirements through cash flow provided by operations, bank loans and related parties’ advances. The Indonesian government’s moratorium on fishing licenses renewals creates uncertainty over fishing operations in Indonesian waters. The Company’s forecasts and projections show that the Company has adequate resources to continue in operational existence to meet its obligations in the twelve months following the date of this filing, considering the management has control over the timing and scope of investments in vessel building and operations in Indian waters and international waters and consideration of opportunities in new fishing territories. Also, in the past two years, the Company has upgraded 67 fishing vessels, 1 transport vessel was in the modification and rebuilding project and 1 new krill fishing vessel was in building stage, the deployment of more vessels in operation will generate more revenue and cash inflows to the Company. In addition, the Company receives subsidies for modification and rebuilding project and reimbursement of certain operating expenses from government, as an encouragement of the development of ocean fishing industry. At June 30, 2020, due from Hong Long amounted to $81.3 million, as of August 12, 2020, the Company received repayment of Hong Long amounted to $18.9 million.

The installments due from related party-Hong Long are as follows:

Before Installments

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document August 14, 2020 $ 14,125,291 August 31, 2020 16,950,350 September 20, 2020 35,313,228 October 20, 2020 14,125,291 December 20, 2020 738,479 Total $ 81,252,639

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The situation created by the COVID-19 pandemic has led to an unprecedented economic uncertainty globally, it has caused a decrease in unit selling price, an increase of inventory and has resulted in accounts receivables not being timely paid as anticipated. In order to maintain strong liquidity, the management of the Company has been paying close attention to the operation and optimizing the collection of accounts receivable. For new customers, the Company adopts the policy of receiving payment before pick-up. During the six months ended June 30, 2020, the Company obtained $81.3 million and $76.1 million in short-term and long-term loans from banks, respectively, to maintain strong liquidity.

Because the exchange rate conversion is different for consolidated balance sheets and consolidated statements of cash flows, the changes in assets and liabilities reflected on consolidated statements of cash flows are not necessarily identical to the comparable changes reflected on consolidated balance sheets.

Contractual Obligations and Off-Balance Sheet Arrangements

Contractual obligations

We have certain fixed contractual obligations and commitments that include future estimated payments. Changes in our business needs, cancellation provisions, changing interest rates, and other factors may result in actual payments differing from the estimates. We cannot provide certainty regarding the timing and amounts of payments. We have presented below a summary of the most significant assumptions used in our determination of amounts presented in the tables, in order to assist in the review of this information within the context of our consolidated financial position, results of operations, and cash flows.

The following tables summarize our contractual obligations as of June 30, 2020 (dollars in thousands), and the effect these obligations are expected to have on our liquidity and cash flows in future periods.

Payments Due by Period Less than Contractual obligations: Total 1-3 years 3-5 years + 1 year 5 years Related party office lease obligation $ 12 $ 12 $ - $ - $ - Short-term bank loans (1) 90,684 90,684 - - - Office lease obligation 223 223 - - - Long-term bank loans 275,233 60,880 92,662 98,165 23,526 Total $ 366,152 $ 151,799 $ 92,662 $ 98,165 $ 23,526

Historically, we have refinanced these short-term bank loans for an additional term of six months to one year and we expect to (1) continue to refinance these loans upon expiration.

Off-balance sheet arrangements

None.

Critical Accounting Policies and Estimates

Inventories

Frozen fish and marine catches work in progress represents fish inventory in vessels’ refrigerators, which has not been delivered to ports in China, nor applied for duty-exemption import into China.

Frozen fish and marine catches in transit represents fish inventory that obtained duty-exemption import permission and is in the process of being shipped to China.

Frozen fish and marine catches in warehouse represents fish inventory in cold storage warehouses located in China.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record reserve for the difference between the cost and the market value. These reserves are recorded based on estimates.

Property, plant and equipment

37 vessels in Indonesian waters are not in operation because their licenses are currently inactive due to the moratorium. The Indonesian government’s 2014 moratorium on fishing license renewals has had, and will continue to have, a significant negative impact on our results of operations and financial condition. Given the impact of the moratorium, the Company assessed the recoverability of these 37 vessels for the year ended December 31, 2019 based on the undiscounted future cash flows and the availability of the vessels for redeployment in other fisheries. The impairment test was carried out with reference to the relevant operation data of the Company’s comparable vessels and took into account upgrading and improvement costs based on the Company’s historical experience. As of December 31, 2019, the payback period used in the undiscounted cash flow analysis used in the recoverability assessment is less than its remaining useful life and the carrying value of the fishing vessels are expected to be recoverable. Therefore, no impairment loss was recognized.

Recently Adopted Accounting Standards

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” This guidance supersedes current guidance on revenue recognition in Topic 605, “Revenue Recognition.” In addition, there are disclosure requirements related to the nature, amount, timing, and uncertainty of revenue recognition. In August 2015, the FASB issued ASU No. 2015-14 to defer the effective date of ASU No. 2014-09 for all entities by one year. For public business entities that follow U.S. GAAP, the deferral results in the new revenue standard are being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted for interim and annual periods beginning after December 15, 2016. We applied the new revenue standard beginning January 1, 2018. We have analyzed the Company’s revenue from contracts with customers in accordance with the new revenue standard to determine the impact on our consolidated financial statements.

Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”). The amendments in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, including but not limited to lease residual value guarantee, rate implicit in the lease and lease term and purchase option. The amendments in ASU 2018-11 provide an optional transition method for adoption of the new standard, which will allow entities to continue to apply the legacy guidance in ASC 840, including its disclosure requirements, in the comparative periods presented in the year of adoption.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Effective January 1, 2019, we adopted the new standard using the modified retrospective approach and implemented internal controls to enable the preparation of financial information upon adoption. We elected to adopt both the transition relief provided in ASU 2018-11 and the package of practical expedients which allowed us, among other things, to retain historical lease classifications and accounting for any leases that existed prior to adoption of the standard. Additionally, we elected the practical expedients allowing us not to separate lease and non-lease components and not record leases with an initial term of twelve months or less (“short-term leases”) on the balance sheet across all existing asset classes.

Adoption of the new standard resulted in the recording of right use asset and lease liability of $0.77 million as of January 1, 2019, which primarily relates to our corporate office leases. The standard did not materially impact our condensed consolidated statements of operations or cash flows. Adopting the new standard did not have a material impact on the accounting for leases under which we are the lessee.

In August 2018, the FASB issued ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement.” This standard eliminates the current requirement to disclose the amount or reason for transfers between level 1 and level 2 of the fair value hierarchy and the requirement to disclose the valuation methodology for level 3 fair value measurements. The standard includes additional disclosure requirements for level 3 fair value measurements, including the requirement to disclose the changes in unrealized gains and losses in other comprehensive income during the period and permits the disclosure of other relevant quantitative information for certain unobservable inputs. The new guidance is effective for interim and annual periods beginning after December 15, 2019. We applied the new standard beginning January 1, 2020.

Recent accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”, which will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. In November 2019, the FASB issued ASU 2019-10. Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, finalizes effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses, leases, and hedging standards. The effective date for SEC filers, excluding smaller reporting companies as defined by the SEC, remains as fiscal years beginning after December 15, 2019. The new effective date for all other entities is fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Commodity price risk

Oil cost accounts for approximately 62.9% and 63.2% of our total cost of revenue for the three and six months ended June 30, 2020, respectively. We are primarily exposed to oil price volatility caused by supply conditions, political and economic variables and other unpredictable factors. We purchase oil used by our vessels at prevailing market prices. We do not have formal long-term purchase contracts with our suppliers and, therefore, we are exposed to the risk of fluctuating oil prices.

We did not have any commodity price derivatives or hedging arrangements outstanding at June 30, 2020 and did not employ any commodity price derivatives in the six months ended June 30, 2020.

Foreign currency exchange rate risk

While our reporting currency is the USD, all of our consolidated revenue and consolidated cost of revenue and a significant portion of our consolidated expenses are denominated in RMB. Furthermore, a significant portion of our assets are denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenue and result of operations may be affected by fluctuations in the exchange rate between USD and RMB.

The value of the RMB against the USD and other currencies is affected by, among other things, changes in the PRC’s political and economic conditions. Since July 2005, the RMB has not been pegged to the USD. Although the People’s Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the USD in the medium to long term. Moreover, it is possible that in the future, PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market.

If the RMB depreciates against the USD, the value of our RMB revenue, earnings and assets as expressed in our USD financial statements will decline. A 1% average appreciation (depreciation) of the RMB against the USD would increase (decrease) our comprehensive income by $49,011 for the six months ended June 30, 2020 based on our revenue, costs and expenses, and assets and liabilities denominated in RMB as of June 30, 2020. To date, we have not entered into any hedging transactions to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedging transactions may be limited and we may not be able to successfully hedge our exposure at all.

Interest rate risk

We are exposed to interest rate risk arising from short-term and long-term variable rate borrowings from time to time. Our future interest expense will fluctuate in line with any change in our borrowing rates. Our bank borrowings amounted to $365.9 million at June 30, 2020. Based on the variable nature of the underlying interest rate, the bank borrowings approximated fair value at that date.

A hypothetical 100 basis point change in interest rates would impact our interest on our borrowings by approximately $67,504. The potential change in interest amount is calculated based on the change in the interest amount over a one year period due to an immediate 100 basis point change in interest rates.

Inflation risk

Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling and general and administrative expenses as a percentage of total revenue if the selling prices of our products do not increase with these increased costs.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Securities Exchange Act of 1934, as amended (“Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to management, including the principal executive and financial officers, as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

In connection with the preparation of the quarterly report on Form 10-Q for the quarter ended June 30, 2020, our management, including our principal executive officer and principal financial officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures, which are defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based on this evaluation, management concluded that our disclosure controls and procedures were effective as of June 30, 2020.

Changes in Internal Controls over Financial Reporting

During the three months ended June 30, 2020, there were no changes in the Company’s internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934).

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of legal proceedings, refer to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on March 16, 2020.

ITEM 1A. RISK FACTORS

Other than as set forth below, there have been no material changes in the risk factors described in Part I, “Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the SEC on March 16, 2020. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors below and also those discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, which could materially affect our business, financial condition or future results. The risks described below and in our Annual Report on Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

We face risks related to the novel coronavirus (COVID-19) pandemic that have, and are expected to continue to have, an adverse impact on our business, results of operations and financial condition.

In December 2019, a novel strain of coronavirus (COVID-19) surfaced in China. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. The COVID-19 pandemic has adversely affected the global economy, our markets in China and our business.

In reaction to the pandemic, many provinces and municipalities in China, where are business is currently conducted, activated the highest response to the emergency public health incident. Emergency quarantine measures and travel restrictions have had a significant impact on many sectors across China, which has also adversely affected our operations including the fishing industry. In response to the pandemic, we extended the Chinese Spring Festival holiday for one more week and adopted work in shifts after the holiday. To reduce the impact of the pandemic on our production and operation, we implemented certain safety measures to allow us to gradually resume work in mid-February. With these measures, we were able to maintain our sales and operations from mid-February to mid-March. On March 23, 2020, we resumed operations with enhanced health and safety procedures in place to protect our employees. We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by local authorities or that we determine are in the best interests of our employees, customers, partners and suppliers. If a significant portion of our workforce is affected by COVID-19 either directly or due to government closures or otherwise, associated work stoppages or facility closures would halt or delay production, which could have an adverse impact on our business and financial performance.

The pandemic has had, and continues to have an adverse impact on our customers. Some of our customers are fish processing plants that export processed fish products to foreign countries. These customers tended to reduce or postpone their purchases from us in the initial stage of the pandemic and have now started adjusting their business strategies in relation to exportation or domestic sale. This change in strategy has caused a decrease in our unit selling price, an increase of inventory and our accounts receivables not being timely paid as anticipated. If the economic effects caused by the pandemic continue or increase in China, overall customer demand may continue to decrease, which could have an adverse effect on our business, results of operations and financial condition.

Our principal liquidity demands are based on the capital needs of Pingtan Fishing related to the acquisition or construction of new fishing vessels and continuously upgrading and renovating existing vessels, and our general corporate purposes. Maintaining strong liquidity has been and will continue to be a priority for us during the current economic disruption. During the six months ended June 30, 2020, we have obtained $81.3 million and $76.1 million in short-term loan and long-term loan from banks, respectively.

We anticipate that our results of operations will continue to be impacted by this pandemic in the third and fourth quarters of 2020. However, the extent of the impact on our financial condition and results of operations is still highly uncertain and will depend on future developments, such as the ultimate duration and scope of the outbreak, its continuing impact on our customers, how quickly normal economic conditions, operations, and the demand for our products can resume and whether the pandemic leads to recessionary conditions

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document in China. We may continue to experience the effects of the pandemic even after it has waned, and our business, results of operations and financial condition could continue to be affected.

In addition to the risks specifically described above, the impact of COVID-19 is likely to implicate and exacerbate other risks disclosed in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2019.

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Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

Exhibit

31.1* Certification of the Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).

31.2* Certification of the Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).

Certification of the Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d- 14(b) and 32* 18 U.S.C. 1350.

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101.DEF* INLINE XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT

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* Filed herewith

48

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document SIGNATURES

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

PINGTAN MARINE ENTERPRISE LTD. (Registrant)

Date: August 17, 2020 By: /s/ Xinrong Zhuo Xinrong Zhuo Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

Date: August 17, 2020 By: /s/ LiMing Yung LiMing Yung Chief Financial Officer (Principal Financial and Accounting Officer)

49

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Xinrong Zhuo, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q (the “report”) of Pingtan Marine Enterprise Ltd.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact 2. necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all 3. material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures 4. (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15 (f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under a) our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be b) designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions c) about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the d) registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over 5. financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting a) which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the b) registrant’s internal control over financial reporting.

Date: August 17, 2020 By: /s/ Xinrong Zhuo Xinrong Zhuo Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit 31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, LiMing Yung, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q (the “report”) of Pingtan Marine Enterprise Ltd;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact 2. necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all 3. material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures 4. (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15 (f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under a) our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be b) designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions c) about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the d) registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over 5. financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting a) which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the b) registrant’s internal control over financial reporting.

Dated: August 17, 2020 By: /s/ LiMing Yung LiMing Yung Chief Financial Officer (Principal Financial and Accounting Officer)

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Exhibit 32

Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350

Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350

The undersigned, Xinrong Zhuo and LiMing Yung, in their capacities as Chief Executive Officer and Chief Financial Officer, respectively, of Pingtan Marine Enterprise Ltd. (the “Registrant”) do each hereby certify with respect to the Quarterly Report on Form 10-Q of the Registrant for the period ended June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), that, to the best of their knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of (2) the Registrant as of, and for, the periods presented in this Report.

Date: August 17, 2020 /s/ Xinrong Zhuo Xinrong Zhuo Chairman of the Board and Chief Executive Officer (Principal Executive Officer)

Date: August 17, 2020 /s/ LiMing Yung LiMing Yung Chief Financial Officer (Principal Financial and Accounting Officer)

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Document And Entity 6 Months Ended Information - shares Jun. 30, 2020 Aug. 17, 2020 Document Information Line Items Entity Registrant Name PINGTAN MARINE ENTERPRISE LTD. Trading Symbol PME Document Type 10-Q Current Fiscal Year End Date --12-31 Entity Common Stock, Shares Outstanding 79,055,053 Amendment Flag false Entity Central Index Key 0001517130 Entity Current Reporting Status Yes Entity Filer Category Accelerated Filer Document Period End Date Jun. 30, 2020 Document Fiscal Year Focus 2020 Document Fiscal Period Focus Q2 Entity Small Business true Entity Emerging Growth Company false Entity Shell Company false Document Quarterly Report true Document Transition Report false Entity File Number 001-35192 Entity Incorporation, State or Country Code E9 Entity Tax Identification Number 00-0000000 Entity Address, Address Line One 18-19/F Entity Address, Address Line Two Zhongshan Building A Entity Address, Address Line Three No. 154 Hudong Road Entity Address, City or Town Fuzhou Entity Address, Country CN Entity Address, Postal Zip Code 350001 City Area Code (86) Local Phone Number 591-8727-1266 Title of 12(b) Security Ordinary Shares, $0.001 par value Security Exchange Name NASDAQ Entity Interactive Data Current Yes

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Balance Sheets Jun. 30, Dec. 31, - USD ($) 2020 2019 CURRENT ASSETS: Cash and cash equivalents $ $ 3,405,523 10,092,205 Restricted cash 10,770,608 Accounts receivable, net of allowance for doubtful accounts 12,624,501 9,273,446 Due from related parties 81,252,639 12,477,777 Inventories, net of reserve for inventories 56,605,991 30,527,752 Prepaid expenses 750,349 1,354,129 Other receivables 219,325 613,384 Total Current Assets 165,628,936 64,338,693 OTHER ASSETS: Cost method investment 2,966,311 3,010,235 Equity method investment 27,249,283 27,923,464 Prepayment for long-term assets 63,950,903 49,040,338 Right-of-use asset 253,628 438,254 Property, plant and equipment, net 297,397,430 259,377,729 Total Other Assets 391,817,555 339,790,020 Total Assets 557,446,491 404,128,713 CURRENT LIABILITIES: Accounts payable 17,363,276 7,951,766 Accounts payable - related parties 2,366,568 1,707,217 Short-term bank loans 90,684,370 10,034,116 Long-term bank loans - current portion 60,880,006 57,122,789 Accrued liabilities and other payables 11,579,704 11,428,018 Lease liability- current liability 222,567 375,922 Due to related parties 18,354 168,328 Total Current Liabilities 183,114,845 88,788,156 OTHER LIABILITIES: Lease liability 32,203 Long-term bank loans - non-current portion 214,352,709 160,230,498 Total Liabilities 397,467,554 249,050,857 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY: Ordinary shares ($0.001 par value; 125,000,000 shares authorized; 79,055,053 shares 79,055 79,055 issued and outstanding at June 30, 2020 and December 31, 2019) Additional paid-in capital 81,682,599 81,682,599 Retained earnings 60,375,134 54,286,454 Statutory reserve 15,748,751 15,748,751 Accumulated other comprehensive loss (17,786,987)(16,080,908) Total equity attributable to owners of the company 140,098,552 135,715,951 Non-controlling interest 19,880,385 19,361,905 Total Shareholders’ Equity 159,978,937 155,077,856

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Total Liabilities and Shareholders’ Equity $ $ 557,446,491 404,128,713

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consolidated Balance Sheets Jun. 30, 2020Dec. 31, 2019 (Parentheticals) - $ / shares Statement of Financial Position [Abstract] Ordinary shares, par value (in Dollars per share) $ 0.001 $ 0.001 Ordinary shares, shares authorized 125,000,000 125,000,000 Ordinary shares, shares issued 79,055,053 79,055,053 Ordinary shares, shares outstanding 79,055,053 79,055,053

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Unaudited Consolidated 3 Months Ended 6 Months Ended Statements of Operations Jun. 30, Jun. 30, Jun. 30, Jun. 30, and Comprehensive (Loss) 2020 2019 2020 2019 Income - USD ($) Income Statement [Abstract] REVENUE $ $ $ $ 23,463,133 25,463,094 40,770,133 43,887,303 COST OF REVENUE 21,299,920 16,196,280 32,854,363 30,539,838 GROSS PROFIT 2,163,213 9,266,814 7,915,770 13,347,465 OPERATING EXPENSES: Selling 1,046,519 535,276 1,948,170 1,245,205 General and administrative 795,332 1,365,250 2,065,475 4,960,640 General and administrative - depreciation 789,334 749,056 1,500,767 1,971,217 Subsidy (564,095) (8,338,088) Loss on fixed assets disposal 166,152 166,152 Total Operating Expenses 2,067,090 2,815,734 (2,823,676)8,343,214 INCOME FROM OPERATIONS 96,123 6,451,080 10,739,446 5,004,251 OTHER INCOME (EXPENSE): Interest income 1,162,486 17,773 2,362,612 20,289 Interest expense (2,936,529)(1,598,082)(5,835,425)(2,127,247) Foreign currency transaction gain (loss) 21,718 (139,715) (344,691) (49,631) Gain from cost method investment 132,753 347,651 132,753 347,651 Loss on equity method investment (143,015) (271,227) (268,543) (381,843) Other income (expense) 5,084 226,487 (30,456) 252,158 Total Other Expense, net (1,757,503)(1,417,113) (3,983,750)(1,938,623) (LOSS) INCOME BEFORE INCOME TAXES (1,661,380)5,033,967 6,755,696 3,065,628 INCOME TAXES NET (LOSS) INCOME (1,661,380)5,033,967 6,755,696 3,065,628 LESS: NET (LOSS) INCOME ATTRIBUTABLE TO THE (85,370) 454,923 667,016 373,823 NON-CONTROLLING INTEREST NET (LOSS) INCOME ATTRIBUTABLE TO OWNERS OF (1,576,010)4,579,044 6,088,680 2,691,805 THE COMPANY COMPREHENSIVE INCOME (LOSS): NET (LOSS) INCOME (1,661,380)5,033,967 6,755,696 3,065,628 OTHER COMPREHENSIVE (LOSS) INCOME Unrealized foreign currency translation gain (loss) (166,176) (3,066,793)(1,854,615)(167,444) COMPREHENSIVE (LOSS) INCOME (1,827,556)1,967,174 4,901,081 2,898,184 LESS: COMPREHENSIVE (LOSS) INCOME (98,734) 209,407 518,480 334,384 ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO $ $ $ $ OWNERS OF THE COMPANY (1,728,822)1,757,767 4,382,601 2,563,800 NET(LOSS)INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF THE COMPANY Basic and diluted (in Dollars per share) $ (0.02) $ 0.06 $ 0.08 $ 0.03

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: Basic and diluted (in Shares) 79,055,053 79,055,053 79,055,053 79,055,053

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Unaudited Consolidated Accumulated Additional Non- Statements of Changes In Ordinary Retained Statutory Other Paid-in controlling Total Shareholders’ Equity - USD Shares Earnings Reserve Comprehensive Capital Interest ($) Loss Balance at Dec. 31, 2018 $ $ $ $ $ $ 79,055 $ (13,448,047) 81,682,599 49,593,069 14,760,112 18,892,322 151,559,110 Balance (in Shares) at Dec. 31, 79,055,053 2018 Net income 2,691,805 373,823 3,065,628 Dividend declared Foreign currency translation (128,005) (39,439) (167,444) adjustment Balance at Jun. 30, 2019 $ 79,055 81,682,599 52,284,874 14,760,112 (13,576,052) 19,226,706 154,457,294 Balance (in Shares) at Jun. 30, 79,055,053 2019 Balance at Mar. 31, 2019 $ 79,055 81,682,599 47,705,830 14,760,112 (10,754,775) 19,017,299 152,490,120 Balance (in Shares) at Mar. 31, 79,055,053 2019 Net income 4,579,044 454,923 5,033,967 Dividend declared Foreign currency translation (2,821,277) (245,516) (3,066,793) adjustment Balance at Jun. 30, 2019 $ 79,055 81,682,599 52,284,874 14,760,112 (13,576,052) 19,226,706 154,457,294 Balance (in Shares) at Jun. 30, 79,055,053 2019 Balance at Dec. 31, 2019 $ 79,055 81,682,599 54,286,454 15,748,751(16,080,908) 19,361,905 155,077,856 Balance (in Shares) at Dec. 31, 79,055,053 2019 Net income 6,088,680 667,016 6,755,696 Dividend declared Foreign currency translation (1,706,079) (148,536) (1,854,615) adjustment Balance at Jun. 30, 2020 $ 79,055 81,682,599 60,375,134 15,748,751(17,786,987) 19,880,385 159,978,937 Balance (in Shares) at Jun. 30, 79,055,053 2020 Balance at Mar. 31, 2020 $ 79,055 81,682,599 61,951,144 15,748,751(17,634,175) 19,979,119 161,806,493 Balance (in Shares) at Mar. 31, 79,055,053 2020 Net income (1,576,010) (85,370) (1,661,380) Dividend declared Foreign currency translation (152,812) (13,364) (166,176) adjustment Balance at Jun. 30, 2020 $ $ $ $ $ $ 79,055 $ (17,786,987) 81,682,599 60,375,134 15,748,751 19,880,385 159,978,937 Balance (in Shares) at Jun. 30, 79,055,053 2020

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Unaudited Consolidated 6 Months Ended Statements of Cash Flows - Jun. 30, Jun. 30, USD ($) 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,755,696 $ 3,065,628 Adjustments to reconcile net income from operations to net cash provided by operating activities: Depreciation 6,672,732 5,071,259 Increase in allowance for doubtful accounts 57,205 Increase (decrease) in reserve for inventories 2,000,619 (358,040) Loss on equity method investment 268,543 381,843 Impairment loss of fishing vessels 2,475,442 Changes in operating assets and liabilities: Accounts receivable (3,567,172) (2,452,909) Inventories (28,703,844)(2,426,497) Prepaid expenses 587,974 2,569 Other receivables 387,716 (375,533) Other receivables - related party (20,230) Accounts payable 9,592,030 1,973,993 Accounts payable - related parties 688,894 (2,896,036) Advance from customers (824,813) Accrued liabilities and other payables 1,145,268 2,572,773 Accrued liabilities and other payables - related party (1,290) Due to related parties (323,577) 1,221,527 NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (5,262,729) 8,234,499 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (85,240,006)(59,984,190) Proceeds from government grants for fishing vessels construction 20,893,357 3,623,171 Deposit for purchase of land use right (7,373,762) NET CASH USED IN INVESTING ACTIVITIES (64,346,649)(63,734,781) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds of short-term bank loans 81,343,591 Proceeds from long-term bank loans 76,076,167 100,283,152 Repayments of long-term bank loans (14,611,982) (4,719,207) Due to related parties (10,220,387) Due from related parties (28,678,209) Advance to related party-HL (69,423,710) NET CASH PROVIDED BY FINANCING ACTIVITIES 73,384,066 56,665,349 EFFECT OF EXCHANGE RATE ON CASH, CASH EQUIVALENTS AND 309,238 41,357 RESTRICTED CASH NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 4,083,926 1,206,424 CASH, CASH EQUIVALENTS AND RESTRICTED CASH - beginning of period 10,092,205 1,966,855 CASH, CASH EQUIVALENTS AND RESTRICTED - end of period 14,176,131 3,173,279 Cash paid for:

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Interest 6,750,422 2,095,373 Income taxes RECONCILIATION TO AMOUNTS ON CONSOLIDATED BALANCE SHEETS: Cash and cash equivalents 3,405,523 3,173,279 Restricted cash 10,770,608 TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH 14,176,131 3,173,279 NON-CASH INVESTING AND FINANCING ACTIVITIES: Acquisition of property and equipment by decreasing prepayment for long-term assets (15,731,909) Property and equipment acquired on credit as payable $ 24,435,995

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Description of Business and 6 Months Ended Organization Jun. 30, 2020 Accounting Policies [Abstract] DESCRIPTION OF NOTE 1 – DESCRIPTION OF BUSINESS AND ORGANIZATION BUSINESS AND Pingtan Marine Enterprise Ltd. (the “Company” or “PME”), formerly China Growth Equity ORGANIZATION Investment Limited (“CGEI”), incorporated in the Cayman Islands as an exempted limited liability company, was incorporated as a blank check company on January 18, 2010 with the purpose of directly or indirectly acquiring, through a merger, share exchange, asset acquisition, plan of arrangement, recapitalization, reorganization or similar business combination, an operating business, or control of such operating business through contractual arrangements, that has its principal business and/or material operations located in the People’s Republic of China (“PRC”). In connection with its initial business combination, in February 2013, CGEI changed its name to Pingtan Marine Enterprise Ltd.

On October 24, 2012, CGEI and China Dredging Group Co., Ltd (“CDGC” or “China Dredging”) entered into a Merger Agreement providing for the combination of CGEI and CDGC and on October 24, 2012, CGEI also acquired all of the outstanding capital shares and other equity interests of Merchant Supreme Co., Ltd. (“Merchant Supreme”), a company incorporated on June 25, 2012, in the British Virgin Islands (“BVI”), as per a Share Purchase Agreement. On February 25, 2013, the merger between the Company, CDGC and Merchant Supreme became effective and has been accounted for as a “reverse merger” and recapitalization since the common shareholders of CDGC and Merchant Supreme (i) owned a majority of the outstanding ordinary shares of the Company immediately following the completion of the transaction, and (ii) have significant influence and the ability to elect or appoint or to remove a majority of the members of the governing body of the combined entity. In accordance with the provision of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805-40, CDGC and Merchant Supreme are deemed the accounting acquirers and the Company is the legal acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of the Company. Accordingly, the assets and liabilities and the historical operations that are reflected in the consolidated financial statements are those of CDGC, Merchant Supreme and their subsidiaries and are recorded at the historical cost basis. The Company’s assets, liabilities and results of operations were consolidated with the assets, liabilities and results of operations of CDGC, Merchant Supreme and their subsidiaries subsequent to the acquisition date of February 25, 2013. Following the completion of the business combination which became effective on February 25, 2013, CDGC and Merchant Supreme became the wholly-owned subsidiaries of the Company. The Company’s ordinary shares, par value $0.001 per share, are listed on The NASDAQ Capital Market under the symbol “PME”.

In order to place increased focus on the fishing business and pursue more effective growth opportunities, the Company decided to exit and sell the specialized dredging services operated by China Dredging. The Company completed the sale of CDGC and its subsidiaries on December 4, 2013.

On February 9, 2015, the Company terminated its existing Variable Interest Entity (“VIE”) agreements, pursuant to an Agreement of Termination dated February 9, 2015, entered into by and among Ms. Honghong Zhuo, Mr. Zhiyan Lin (each a shareholder of Fujian Provincial Pingtan County Ocean Fishing Group Co., Ltd (“Pingtan Fishing”), and together the “Pingtan Fishing’s Shareholders”), Pingtan Fishing and Pingtan Guansheng Ocean Fishing Co., Ltd. (“Pingtan Guansheng”). On February 9, 2015, the Pingtan Fishing’s Shareholders transferred 100% of their equity interest in Pingtan Fishing to Fujian Heyue Marine Fishing Development Co., Ltd. (“Fujian Heyue”), pursuant to an Equity Transfer Agreement dated February 9, 2015, entered into by and among the Pingtan Fishing’s Shareholders, Pingtan Fishing and Fujian Heyue. On February 15, 2015, China Agriculture Industry Development Fund Co., Ltd. (“China Agriculture”) invested RMB 400 million (approximately $65 million) into Pingtan Fishing for an 8% equity interest

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document in Pingtan Fishing. After the restructuring transactions described above, Pingtan Fishing and its entities became the 92% equity-owned subsidiaries of the Company and was no longer a VIE.

Details of the Company’s subsidiaries which are included in these consolidated financial statements as of June 30, 2020, are as follows:

Place and date Percentage of Name of subsidiaries of Principal activities ownership incorporation Merchant Supreme Co., Ltd. BVI, 100% held by Intermediate (“Merchant Supreme”) June 25, 2012 PME holding company

Prime Cheer Corporation Ltd. Hong Kong, 100% held by Intermediate (“Prime Cheer”) May 3, 2012 Merchant Supreme holding company

Pingtan Guansheng Ocean Fishing Co., PRC, 100% held by Intermediate Ltd. October 12, Prime Cheer holding company (“Pingtan Guansheng”) 2012

Fujian Heyue Marine Fishing PRC, 100% held by Intermediate Development Co., Ltd. January 27, Pingtan Guansheng holding company (“Fujian Heyue”) 2015

Fujian Provincial Pingtan County PRC, 92% held by Fishing Group Co., Ltd. February 27, Oceanic fishing Fujian Heyue (“Pingtan Fishing”) 1998

Pingtan Dingxin Fishing Information PRC, 100% held by Consulting Co., Ltd. October 23, Dormant Pingtan Fishing (“Pingtan Dingxin”) 2012

PRC, Pingtan Yikang Global Fishery Co., Ltd. 100% held by September 14, Dormant (“Yikang Fishery”) Pingtan Fishing 2017

PRC, Pingtan Shinsilkroad Fishery Co., Ltd. 100% held by September 14, Dormant (“Shinsilkroad Fishery”) Pingtan Fishing 2017

PRC, Fuzhou Howcious Investment Co., Ltd 100% held by September 5, Dormant (“Howcious Investment”) Pingtan Fishing 2017

Pingtan Ocean Fishery Co., Ltd PRC, 100% held by Dormant (“Ocean Fishery”) July 21, 2017 Pingtan Fishing

Fujian Heyue, through its PRC subsidiary, Pingtan Fishing, engages in ocean fishing with its owned and controlled vessels within the Indian Exclusive Economic Zone, the international waters and Arafura Sea of Indonesia.

The Company had a working capital deficit of $17,485,909 as of June 30, 2020. In order to mitigate its liquidity risk, the Company plans to rely on the proceeds from loans from banks and/or financial institutions to increase working capital in order to meet capital demands, and the government subsidies for modification and rebuilding project and reimbursement of certain operating expenses. In addition, Mr. Zhuo, the Chief Executive Officer and Chairman of the Board, will continue to provide financial support to the Company when necessary.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company meets its day-to-day working capital requirements through cash flow provided by operations, bank loans and related parties’ advances. The Indonesian government’s moratorium on fishing licenses renewals creates uncertainty over fishing operations in Indonesian waters. The Company’s forecasts and projections show that the Company has adequate resources to continue in operational existence to meet its obligations in the twelve months following the date of this filing, considering operations in Indian waters and international waters and consideration of opportunities in new fishing territories. Also, in the past two years, the Company has upgraded 67 fishing vessels and the deployment of these vessels into operation will generate more revenue and cash inflows to the Company. In addition, the Company receives subsidies for modification and rebuilding projects and is reimbursed for certain operating expenses from government entities, as an encouragement of the development of ocean fishing industry.

The situation created by the COVID-19 pandemic has led to an unprecedented economic uncertainty globally, it has caused a decrease in unit selling price, an increase of inventory and has resulted in accounts receivables not being timely paid as anticipated. In order to maintain strong liquidity, the management of the Company has been paying close attention to the operation and optimizing the collection of accounts receivable. For new customers, the Company adopts the policy of receiving payment before pick-up.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant 6 Months Ended Accounting Policies Jun. 30, 2020 Accounting Policies [Abstract] SUMMARY OF NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT Basis of presentation ACCOUNTING POLICIES These interim consolidated financial statements of the Company and its subsidiaries are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures necessary for a fair presentation of these interim consolidated financial statements have been included. The results reported in the unaudited consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).

The Company’s unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 16, 2020.

Use of estimates

The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in the three and six months ended June 30, 2020 and 2019 include allowance for doubtful accounts, reserve for inventories, the useful life of property, plant and equipment, assumptions used in assessing impairment of long-term assets and valuation of deferred tax assets and accruals for taxes due.

Cash

Cash consists of cash on hand and cash in banks. The Company maintains cash with various financial institutions in the PRC and Hong Kong and none of these deposits are covered by insurance. At June 30, 2020 and December 31, 2019, cash balances in the PRC were $3,193,562 and $9,971,626, respectively, and cash balances in Hong Kong were $211,961 and $120,579, respectively, and are uninsured. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

Restricted cash

Restricted cash consists of cash deposits held by the Export Import Bank of China to secure its bank loans and Hong Long’s short term bank loans. At June 30, 2020 and December 31, 2019, restricted cash amounted to $10,770,608 and nil, respectively.

Fair value of financial instruments

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company adopted the guidance of ASC Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the consolidated balance sheets for cash, restricted cash, accounts receivable, inventories, advances to suppliers, prepaid expenses, prepaid expenses – related party, other receivables, other receivables – related party, accounts payable, accounts payable – related parties, short-term bank loans, accrued liabilities and other payables, accrued liabilities and other payables – related party, and due to related parties approximate their fair market value based on the short-term maturity of these instruments. The fair value of the Company’s long-term bank loans under its agreements approximates its carrying value at June 30, 2020. The fair value of the Company’s long-term bank loans under its agreements were estimated using Level 2 inputs based on market data. As of June 30, 2020, the Company does not have any assets or liabilities that are measured on a recurring basis at fair value.

ASC Topic 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

Accounts receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balance, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. The Company only grants credit terms to established customers who are deemed to be financially responsible. Credit periods to customers are within 180 days after customers received the purchased goods. At June 30, 2020 and December 31, 2019, the Company had established, based on a review of its outstanding balances, an allowance for doubtful accounts in the amounts of $64,664 and $7,960, respectively.

Inventories

Inventories, consisting of frozen fish and marine catches, are stated at the lower of cost or net realizable value utilizing the weighted average method. The cost of inventories is primarily comprised of fuel, freight, depreciation, direct labor, consumables, government levied charges and taxes. Consumables include fishing nets and metal containers used by fishing vessels. The Company’s fishing fleets in Indian waters and the international waters operate throughout the year, although the May to July period demonstrates lower catch quantities compared to the October to January period, which is the peak season.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record a reserve for the difference between the cost and the market value. These reserves are recorded based on estimates. At June 30, 2020 and December 31, 2019, the Company recorded a reserve for inventories in the amount of $2,249,685 and $266,405, respectively.

When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value. The Company regularly evaluates its ability to realize the value of inventories based on a combination of factors including the following: forecasted sales and estimated current and future market value.

Fishing licenses

Each of the Company’s fishing vessels requires an approval from the Ministry of Agriculture and Rural Affairs of the PRC (“MOA”) to carry out ocean fishing projects in international waters and foreign territories, and to the extent required, a fishing license in local fishing territory where the vessel operates. These approvals are valid for a period from 3 to 12 months and are awarded to the Company at no cost. The Company applies for the renewal of the license prior to expiration to avoid interruptions of fishing vessels’ operations. Since 2014 there has been a moratorium on fishing in Indonesian waters. Each of our fishing vessels operating in Indonesian waters requires a fishing license granted by the authority in Indonesia.

Investment in unconsolidated company – Global Deep Ocean

The Company uses the equity method of accounting for its investment in, and earning or loss of, companies that it does not control but over which it does exert significant influence. The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable. The Company reviews its investments for other-than-temporary impairment whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. Investments identified as having an indication of impairment are subject to further analysis to determine if the impairment is other-than-temporary and this analysis requires estimating the fair value of the investment. The determination of fair value of the investment involves considering factors such as current economic and market conditions, the operating performance of the entities including current earnings trends and forecasted cash flows, and other company and industry specific information. If the Company considers any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. See Note 6 for discussion of equity method investment.

Property, plant and equipment

Property, plant and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

The estimated useful lives of the assets are as follows:

Estimated useful life 10 - 20 Fishing vessels Years

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Vehicles 5 Years 3 - 5 Office and other equipment Years

Expenditures for repairs and maintenance, which do not extend the useful life of the assets, are expensed as incurred.

Capitalized interest

Interest associated with the construction of fishing vessels is capitalized and included in the cost of the fishing vessels. When no debt is incurred specifically for the construction of a fishing vessel, interest is capitalized on amounts expended on the construction using the weighted-average cost of the Company’s outstanding borrowings. Capitalization of interest ceases when the construction is substantially complete or the construction activity is suspended for more than a brief period. The Company capitalized interest of $765,066 and $163,934 for the three months ended June 30, 2020 and 2019, respectively, in the fishing vessels under construction. The Company capitalized interest of $1,008,925 and $185,753 for the six months ended June 30, 2020 and 2019, respectively, in the fishing vessels under construction.

Impairment of long-lived assets

In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates the impairment by comparing the carrying amount of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment loss based on the excess of the carrying amount of the long-lived assets over their fair value. Impairment loss represents the impairment loss on the vessels whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recovered. The Company recognized impairment loss of nil and $245,940 for the three months ended June 30, 2020 and 2019, respectively. The Company recognized impairment loss of nil and $2,475,442 for the six months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2019, the Company dismantled 1 transport vessel and deregistered 6 fishing vessels and applied to the MOA for rebuilding 7 new vessels. As a result of the rebuilding projects, the Company assessed the recoverability of the 7 fishing vessels based on the undiscounted future cash flow that the fishing vessels are expected to generate as less than the carrying amount, and recognized an impairment loss.

Revenue recognition

The Company catches different species of fish, ships them back to China and sells the catches to distributors and retailers by acting as a wholesaler. Marine catch is the Company’s one and only product line. The product type, contractual price and quantities are identified in contracts. The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers, and the Company does not accept returns from customers. The Company’s revenues are recorded at a point in time. All of the operations are considered by the Company’s Chief Operating Decision Maker to be aggregated in one reportable operating segment and the Company’s revenue is disaggregated by product type in terms of species of fish sold pursuant to ASC Topic 606-10-55-91(a).

The Company’s revenue is generated from the sale of frozen fish and other marine catches. The Company recognizes revenue at the amount the Company expects to be entitled to be paid, determined when control of the products is transferred to its customers, which occurs upon delivery of and acceptance of the frozen fish by the customer and the Company has a right to receive payment.

The Company has identified one performance obligation as the frozen fish and other marine catches identified in the contract are picked up by the customers at cold storage warehouse, with

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document revenue being recognized at a point in time. The Company initially recognizes revenue in an amount which is estimated based on contractual prices. The receivables under contracts, whereby pricing is based on contractual prices, are primarily collected within 180 days of completion of its performance obligation. Disaggregation of revenue

The following tables disaggregate revenues under ASC Topic 606 by species of fish: For the three months ended June 30, 2020 and 2019, our revenue by species of fish was as follows (dollars in thousands, except for average price):

Three Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,108 14,970,511 $ 0.81 51.6% Peru squid 2,855 1,949,315 1.46 12.2% Chub mackerel 2,064 2,285,335 0.90 8.8% Croaker fish 1,839 1,015,030 1.81 7.8% Cuttle fish 1,666 398,240 4.18 7.1% Others 2,931 1,136,003 2.58 12.5% Total $ 23,463 21,754,435 $ 1.08 100.0%

Three Months Ended June 30, 2019 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,573 11,418,082 $ 1.10 49.4% Argentina squid(whole) 3,530 780,888 4.52 13.9% Ribbon fish 2,061 612,469 3.37 8.1% Croaker fish 1,813 827,012 2.19 7.1% Indian squid 715 120,880 5.92 2.8% Others 4,771 1,669,067 2.86 18.7% Total $ 25,463 15,428,398 $ 1.65 100.0%

The following tables disaggregate revenues under ASC Topic 606 by species of fish: For the six months ended June 30, 2020 and 2019, our revenue by species of fish was as follows (dollars in thousands, except for average price):

Six Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 19,821 23,272,651 $ 0.85 48.6% Peru squid 4,838 3,053,765 1.58 11.9% Cuttle fish 4,116 925,140 4.45 10.1% Chub mackerel 4,015 4,555,204 0.88 9.8% Croaker fish 3,096 1,707,819 1.81 7.6% Others 4,884 1,779,139 2.75 12.0% Total $ 40,770 35,293,718 $ 1.16 100.0%

Six Months Ended June 30, 2019 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 17,629 15,997,031 $ 1.10 40.2% Ribbon fish 6,014 1,814,302 3.31 13.7% Argentina squid(whole) 3,800 889,945 4.27 8.7% Croaker fish 3,245 1,466,500 2.21 7.4% Cuttle fish 2,437 445,359 5.47 5.6%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Others 10,762 3,558,206 3.02 24.4% Total $ 43,887 24,171,343 $ 1.82 100.0%

Government subsidies

Government subsidies are recognized when there is reasonable assurance that the subsidy will be received and all attaching conditions will be satisfied. When the subsidy relates to an expense item, it is recognized as income over the periods necessary to match the subsidy on a systematic basis to the costs that it is intended to compensate. Where the subsidy relates to an asset, it is credited to the cost of the asset and is released to the income statement over the expected useful life in a consistent manner with the depreciation method for the relevant asset.

Income taxes

Under the current laws of the Cayman Islands and British Virgin Islands, the Company and Merchant Supreme are not subject to any income or capital gains tax, and dividend payments that the Company may make are not subject to any withholding tax in the Cayman Islands or British Virgin Islands. Under the current laws of Hong Kong, Prime Cheer is not subject to any capital gains tax and dividend payments are not subject to any withholding tax in Hong Kong.

The Company is not incorporated nor does it engage in any trade or business in the United States and is not subject to United States federal income taxes. The Company did not derive any significant amount of income subject to such taxes after completion of the Share Exchange and accordingly, no relevant tax provision is made in the accompanying unaudited consolidated statements of operations and comprehensive income (loss).

The Company’s subsidiary, Pingtan Fishing, is a qualified ocean fishing enterprise certified by the MOA. The qualification renews on April 1 of each year. Pingtan Fishing is exempt from income tax derived from its ocean fishing operations in the periods it processes a valid Ocean Fishing Enterprise Qualification Certificate issued by the MOA.

The China’s Enterprise Income Tax Law (“EIT Law”), which went into effect on January 1, 2018, also provides that an enterprise established under the laws of foreign countries or regions but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its worldwide income. The Implementing Rules of the new EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” On April 22, 2009, the PRC State Administration of Taxation further issued a notice entitled “Notice Regarding Recognizing Offshore-Established Enterprises Controlled by PRC Shareholders as Resident Enterprises Based on Their Place of Effective Management.” Under this notice, a foreign company controlled by a PRC company or a group of PRC companies shall be deemed as a PRC resident enterprise if (i) the senior management and the core management departments in charge of its daily operations mainly function in the PRC; (ii) its financial decisions and human resource decisions are subject to decisions or approvals of persons or institutions in the PRC; (iii) its major assets, accounting books, company seals, minutes and files of board meetings and shareholders’ meetings are located or kept in the PRC; and (iv) more than half of the directors or senior management personnel with voting rights reside in the PRC. Based on a review of surrounding facts and circumstances, the Company does not believe that it is likely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, should the Company be treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC tax on worldwide income at a uniform tax rate of 25% retroactive to May 3, 2012.

In addition, Pingtan Fishing is not subject to foreign income taxes for its operations in either India or Indonesia Exclusive Economic Zones or the Western and Central Pacific Fisheries Commission areas.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be effective when the differences are expected to reverse.

Deferred tax assets are reduced by a valuation allowance to the extent that management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations and comprehensive income (loss) in the period that includes the enactment date.

The Company prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures. As of June 30, 2020 and December 31, 2019, there were no amounts that had been accrued with respect to uncertain tax positions.

Shipping and handling costs

Shipping and handling costs are included in selling expense and amounted to $44,952 and $92,585 for the three months ended June 30, 2020 and 2019, respectively. Shipping and handling costs amounted to $321,093 and $213,578 for the six months ended June 30, 2020 and 2019, respectively.

Employee benefits

The Company makes mandatory contributions to the PRC government’s health, retirement benefit and unemployment funds in accordance with the relevant Chinese social security laws. The costs of these payments are charged to the same accounts as the related salary costs in the same period as the related salary costs incurred. Employee benefit costs amounted to $1,242,254 and $611,472 for the three months ended June 30, 2020 and 2019, respectively. Employee benefit costs amounted to $2,511,059 and $1,216,354 for the six months ended June 30, 2020 and 2019, respectively.

Foreign currency translation

The reporting currency of the Company is the U.S. dollar. The functional currency of the Company and Merchant Supreme and Prime Cheer, the Company’s subsidiaries, is the U.S. dollar. The functional currency of Pingtan Guansheng, Fujian Heyue and Pingtan Fishing, the Company’s subsidiaries, is the Chinese Renminbi (“RMB”). For the Company’s subsidiaries Pingtan Guansheng, Fujian Heyue and Pingtan Fishing, whose functional currencies are the RMB, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income. The cumulative translation adjustment and effect of exchange rate changes on cash for the six months ended June 30, 2020 and 2019 was $309,238 and $41,357, respectively. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date and any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transactions in foreign

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

Asset and liability accounts at June 30, 2020 and December 31, 2019 were translated at 7.0795 RMB to $1.00 and at 6.9762 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of operations for the six months ended June 30, 2020 and 2019 were 7.0319 RMB and 6.7808 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate.

Earnings per share

ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Basic net income per share is computed by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of ordinary shares, ordinary share equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive ordinary shares consist of the ordinary shares issuable upon the exercise of ordinary share warrants (using the treasury stock method). Ordinary share equivalents are not included in the calculation of diluted earnings per share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact. The following table presents a reconciliation of basic and diluted net income per share:

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net (loss) income available to owners of the company for basic and diluted net $ (1,576,010) $ 4,579,044 $ 6,088,680 $ 2,691,805 income per share of ordinary stock Weighted average ordinary stock 79,055,053 79,055,053 79,055,053 79,055,053 outstanding - basic and diluted Net (loss) income per ordinary share attributable to owners of the Company $ (0.02) $ 0.06 $ 0.08 $ 0.03 - basic and diluted

Non-controlling interest

On February 15, 2015, China Agriculture invested RMB 400 million (approximately $65 million) into Pingtan Fishing and acquired an 8% equity interest in Pingtan Fishing. As of June 30, 2020, China Agriculture owned 8% of the equity interest of Pingtan Fishing, which was not under the Company’s control.

Related parties

Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions.

Comprehensive income (loss)

Comprehensive income (loss) is comprised of net income and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive income (loss) for the three and six months ended June 30, 2020 and 2019 included net income and unrealized gain from foreign currency translation adjustments.

Segment information

ASC Topic 280 “Segment reporting” establishes standards for reporting information on operating segments in interim and annual financial statements. All of the Company’s operations are considered by the chief operating decision maker to be aggregated in one reportable operating segment. All of the Company’s customers are in the PRC and all income is derived from ocean fishery.

Commitments and contingencies

In the normal course of business, the Company is subject to contingencies, including legal proceedings and environmental claims, arising out of the normal course of businesses that relate to a wide range of matters, including among others, liability for breaches of contracts. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments, including historical operations, scientific evidence and the specifics of each matter.

The Company’s management has evaluated all such proceedings and claims that existed as of June 30, 2020. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, liquidity or results of operations.

Concentrations of credit, economic and political risks

The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operation in the PRC is subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti- inflationary measures, currency conversion, remittances aboard, and rates and methods of taxation, among other things.

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. All of the Company’s cash is maintained with state-owned banks within the PRC and Hong Kong, and none of these deposits are covered by insurance. The Company has not experienced any losses in such accounts. A portion of the Company’s sales are credit sales which are primarily to customers whose abilities to pay are dependent upon the industry economics prevailing in these areas; however, concentrations of credit risk with respect to trade accounts receivables is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk.

According to the sale agreement signed on December 4, 2013, the Company does not own 20 fishing vessels but has the operating rights to operate these vessels which are owned by a related company, Fuzhou Hong Long Ocean Fishery Co., Ltd (“Hong Long”) and the Company is entitled

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document to 100% of the net profit (loss) of the vessels. The Company has latitude in establishing price and discretion in supplier selection. There were no economic risks associated with the operating rights but the Company may need to bear the operation risks and credit risks as aforementioned.

As the Company has historically derived the majority of its revenue from Indonesian waters, the suspension of fishing operations in this area has had and will continue to have a significant negative impact on the Company.

Recent Adopted Accounting Standards

Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”). The amendments in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, including but not limited to lease residual value guarantee, rate implicit in the lease and lease term and purchase option. The amendments in ASU 2018-11 provide an optional transition method for adoption of the new standard, which will allow entities to continue to apply the legacy guidance in ASC Topic 840, including its disclosure requirements, in the comparative periods presented in the year of adoption.

Effective January 1, 2019, we adopted the new standard using the modified retrospective approach and implemented internal controls to enable the preparation of financial information upon adoption. We elected to adopt both the transition relief provided in ASU 2018-11 and the package of practical expedients which allowed us, among other things, to retain historical lease classifications and accounting for any leases that existed prior to adoption of the standard. Additionally, we elected the practical expedients allowing us not to separate lease and non-lease components and not record leases with an initial term of twelve months or less (“short-term leases”) on the balance sheet across all existing asset classes. Adoption of the new standard resulted in the recording of right use asset and lease liability of $0.77 million as of January 1, 2019, which primarily relates to our corporate office leases. The standard did not materially impact our condensed consolidated statements of operations or cash flows. Adopting the new standard did not have a material impact on the accounting for leases under which we are the lessee.

In August 2018, the FASB issued ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement.” This standard eliminates the current requirement to disclose the amount or reason for transfers between level 1 and level 2 of the fair value hierarchy and the requirement to disclose the valuation methodology for level 3 fair value measurements. The standard includes additional disclosure requirements for level 3 fair value measurements, including the requirement to disclose the changes in unrealized gains and losses in other comprehensive income during the period and permits the disclosure of other relevant quantitative information for certain unobservable inputs. The new guidance is effective for interim and annual periods beginning after December 15, 2019. We applied the new standard beginning January 1, 2020.

Recent accounting pronouncements

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”, which will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. In November 2019, the FASB issued ASU 2019-10. Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, finalizes effective date delays for private companies, not-for-profit organizations, and certain smaller reporting companies applying the credit losses, leases, and hedging standards. The effective date for SEC filers, excluding smaller reporting companies as defined by the SEC, remains as fiscal years beginning after December 15, 2019. The new effective date for all other entities is fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Accounts Receivable Jun. 30, 2020 Receivables [Abstract] ACCOUNTS RECEIVABLE NOTE 3 – ACCOUNTS RECEIVABLE

At June 30, 2020 and December 31, 2019, accounts receivable consisted of the following:

June 30, December 31, 2020 2019 Accounts receivable $12,689,165 $ 9,281,406 Less: allowance for doubtful accounts (64,664) (7,960) $12,624,501 $ 9,273,446

The Company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of an individual balance.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Inventories Jun. 30, 2020 Inventory Disclosure [Abstract] INVENTORIES NOTE 4 – INVENTORIES

At June 30, 2020 and December 31, 2019, inventories consisted of the following:

June 30, December 31, 2020 2019 Frozen fish and marine catches work in progress $26,174,721 $ 25,401,843 Frozen fish and marine catches in transit 12,555,420 3,459,004 Frozen fish and marine catches in warehouse 20,125,535 1,933,310 58,855,676 30,794,157 Less: reserve for inventories (2,249,685) (266,405) $56,605,991 $ 30,527,752

Frozen fish and marine catches work in progress represents fish inventory in vessels’ refrigerators, which has not been delivered to ports in China, nor applied for duty-exemption import into China.

Frozen fish and marine catches in transit represents fish inventory that obtained duty-exemption import permission and is in the process of being shipped to China.

Frozen fish and marine catches in warehouse represents fish inventory in cold storage warehouses located in China.

As of June 30, 2020, our total inventory balance was $56,605,991 compared to $30,527,752 as of December 31, 2019. The change in the balance is mainly attributable to an increase in frozen fish and marine catches in warehouse by $18.19 million and an increase in frozen fish and marine catches in transit by $9.10 million, a large portion of which was booked as frozen fish and marine catches work in progress as of December 31, 2019.

A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed expected market value due to obsolescence or quantities in excess of expected demand, the Company will record a reserve for the difference between the cost and the market value. These reserves are recorded based on estimates.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Cost Method Investment Jun. 30, 2020 ASU 2016-01 Transition [Abstract] COST METHOD NOTE 5 – COST METHOD INVESTMENT INVESTMENT At June 30, 2020 and December 31, 2019, cost method investment amounted to $2,966,311 and $3,010,235, respectively. The investment represents Pingtan Fishing’s, the Company’s subsidiary, minority interest in Fujian Pingtan Rural-Commercial Bank Joint-Stock Co., Ltd. (“Pingtan Rural- Commercial Bank”), a private financial institution. Pingtan Fishing completed its registration as a shareholder on October 17, 2012 and paid RMB 21 million (approximately $3.0 million) to purchase 5% of the common stock of Pingtan Rural-Commercial Bank. Pingtan Fishing held 15,113,250 shares and accounted for 4.8% investment in the total equity investment of the bank as of June 30, 2020 and December 31, 2019.

In according to ASC Topic 321, the Company elected to use the measurement alternative to measure such investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any. The Company monitors its investment in the non-marketable security and will recognize, if ever existing, a loss in value which is deemed to be other than temporary. The Company determined that there was no impairment on this investment as of June 30, 2020 and December 31, 2019.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Equity Method Investment Jun. 30, 2020 Equity Method Investments and Joint Ventures [Abstract] EQUITY METHOD NOTE 6 – EQUITY METHOD INVESTMENT INVESTMENT At June 30, 2020 and December 31, 2019, equity method investment amounted to $27,249,283 and $27,923,464, respectively. The investment represents the Company’s subsidiary, Pingtan Fishing’s interest in Global Deep Ocean. On June 12, 2014, Pingtan Fishing incorporated Global Deep Ocean with other two unrelated companies in PRC. In April 2017, these two companies sold their shares to another unrelated party, Zhen Lin. As of June 30, 2020, Pingtan Fishing and Zhen Lin accounted for 20% and 80% of the total ownership, respectively.

Global Deep Ocean will process, cold storage, and transport Deep Ocean fishing products. Total registered capital of Global Deep Ocean is RMB 1 billion (approximately $141.3 million) and as of June 30, 2020, Pingtan Fishing had contributed its share of registered capital of RMB 200 million (approximately $28.3 million).

The Company treats the equity investment in the consolidated financial statements under the equity method. Under the equity method, the investment is initially recorded at cost, adjusted for any excess of the Company’s share of the incorporated-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted for the post incorporation change in the Company’s share of the investee’s net assets and any impairment loss relating to the investment. For the three months ended June 30, 2020 and 2019, the Company’s share of Global Deep Ocean’s net loss was $143,015 and $127,212, respectively, which was included in loss on equity method investment in the accompanying consolidated statements of operations and comprehensive income. For the six months ended June 30, 2020 and 2019, the Company’s share of Global Deep Ocean’s net loss was $268,543 and $237,828, respectively, which was included in loss on equity method investment in the accompanying consolidated statements of operations and comprehensive income.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Prepayment for Long-Term 6 Months Ended Assets Jun. 30, 2020 Prepayment For Long Term Assets [Abstract] PREPAYMENT FOR LONG- NOTE 7 – PREPAYMENT FOR LONG-TERM ASSETS TERM ASSETS At June 30, 2020 and December 31, 2019, prepayment for long-term assets consisted of prepayment for fishing vessels’ construction. The Company reclassifies the prepayment for fishing vessels’ construction to construction-in-progress using the percentage of completion method. During the six months ended June 30, 2020, the Company reclassified RMB 466,335,000 (approximately $66.3 million) from prepayment for long-term assets to construction-in-progress.

For the six months ended June 30, 2020, a summary of activities in prepayment for long-term assets was as follows:

Prepayment for fishing vessels’ construction Balance - December 31, 2019 $ 49,040,338 Prepayments made for fishing vessels’ construction 82,048,948 Reclassification to construction-in-progress (66,317,069) Foreign currency fluctuation (821,314) Balance – June 30, 2020 $ 63,950,903

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Property, Plant and 6 Months Ended Equipment Jun. 30, 2020 Property, Plant and Equipment [Abstract] PROPERTY, PLANT AND NOTE 8 – PROPERTY, PLANT AND EQUIPMENT EQUIPMENT At June 30, 2020 and December 31, 2019, property, plant and equipment consisted of the following:

June 30, December 31, Useful life 2020 2019 Fishing vessels 10 - 20 Years $329,999,848 $304,619,431 Vehicles 5 Years 21,508 21,826 Office and other equipment 3 – 5 Years 438,279 427,154 Construction-in-progress - 18,830,995 - 349,290,630 305,068,411 Less: accumulated depreciation (51,893,200) (45,690,682) $297,397,430 $259,377,729

On January 19, 2020, the Company received a government subsidy for 30 completed fishing vessels that amounted to RMB 146.9 million (approximately $20.8 million). The subsidy is related to assets requires deducting it from the carrying amount of the asset.

For the three months ended June 30, 2020 and 2019, depreciation expense amounted to $3,294,304 and $2,331,141, respectively, of which $2,504,970 and $1,582,085, respectively, was included in cost of revenue and inventories, and the remainder was included in general and administrative expense. For the six months ended June 30, 2020 and 2019, depreciation expense amounted to $6,672,732 and $5,071,259, of which $5,171,965 and $3,100,042, respectively, was included in cost of revenue and inventories, and the remainder was included in general and administrative expense, respectively.

The Company had 70 fishing vessels at June 30, 2020 and December 31, 2019, with net carrying amount of approximately $162.8 million and $190.8 million, respectively, pledged as collateral for its bank loans.

Included in construction-in-progress are fishing vessels under construction which includes the costs of construction and any interest charges arising from borrowings used to finance these assets during the period of construction of the assets. No provision for depreciation is made on fishing vessels under construction until such time as the relevant assets are completed and ready for their intended use.

The Company recognized impairment loss of nil and $245,940 for the three months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2019, the Company dismantled 1 transport vessel and deregistered 6 fishing vessels and applied to the MOA for rebuilding 7 new vessels. As a result of the rebuilding projects, the Company assessed the recoverability of the 7 fishing vessels based on the undiscounted future cash flow that the fishing vessels are expected to generate as less than the carrying amount, and recognized an impairment loss. The Company recognized impairment loss of nil and $2,475,442 for the six months ended June 30, 2020 and 2019, respectively.

37 vessels in Indonesian waters, are not in operation because the licenses are currently inactive due to a moratorium. The Indonesian government’s moratorium on fishing license renewals in 2014 has had, and will continue to have a significant negative impact on our results of operations and financial condition. Given the impact of the moratorium, the Company assessed the recoverability of these 37 vessels for the six months ended 2020 and 2019 based on the undiscounted future cash

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document flows, these vessels are available for fishing in other fisheries by redeployment, the impairment test was carried out with reference to the relevant operation data of the Company’s comparable vessels, and considered upgrading and improvement costs based on the Company’s historical experience. As of the six months ended June 30, 2020 and 2019, the payback period used in the undiscounted cash flow analysis used in the recoverability assessment is less than its remaining useful life and the carrying value of the fishing vessels are expected to be recoverable. Therefore, no impairment loss was recognized.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Related Parties Transactions Jun. 30, 2020 Related Party Transactions [Abstract] RELATED PARTIES NOTE 9 – RELATED PARTIES TRANSACTIONS TRANSACTIONS Due from related party

At June 30, 2020 and December 31, 2019, the due from related party amount consisted of the following:

June 30, December 31, 2020 2019 Due from related party-Hong Long $81,252,639 $ 12,477,777

Due from related party-Hong Long will be repaid in the following installments, with an annual interest rate of 4.35%, guaranteed by two land use rights owned jointly by two companies controlled by Zhuo's family.

The installments due from related party-Hong Long are as follows:

Before Installments August 14, 2020 $14,125,291 August 31, 2020 16,950,350 September 20, 2020 35,313,228 October 20, 2020 14,125,291 December 20, 2020 738,479 Total $81,252,639

Accounts payable - related parties

At June 30, 2020 and December 31, 2019, accounts payable - related parties consisted of the following:

June 30, December 31, Name of related party 2020 2019 Hong Long (1) $ 268,447 $ 270,230 Huna Lin 2,098,121 1,436,987 $2,366,568 $ 1,707,217

Hong Long is an affiliate company majority owned by a family member of the Company’s (1) CEO.

These accounts payable - related parties’ amounts are short-term in nature, non-interest bearing, unsecured and payable on demand.

Due to related parties

At June 30, 2020 and December 31, 2019, the due to related parties amount consisted of the following:

June 30, December 31, 2020 2019 Accrued compensation for LiMing Yung, Chief Financial Officer $ 15,000 $ 15,000

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accrued compensation for Xinrong Zhuo, Chief Executive Officer 3,354 3,328 Advance from Xinrong Zhuo - 150,000 $ 18,354 $ 168,328

The advance from Xinrong Zhuo, the Company’s Chief Executive Officer, is for working capital purposes and short-term in nature, non-interest bearing, unsecured and payable on demand.

Operating lease

On July 31, 2012, the Company entered into a lease for office space with Ping Lin, the spouse of the Company’s CEO (the “Office Lease”). Pursuant to the Office Lease, the annual rent is RMB 84,000 (approximately $11,900) and the renewed Office Lease expires on July 31, 2021.

For the three months ended June 30, 2020 and 2019, rent expense related to the Office Lease amounted to $2,964 and $3,081, respectively. For the six months ended June 30, 2020 and 2019, rent expense related to the Office Lease amounted to $5,973 and $6,194, respectively. The future minimum rental payment required under the Office Lease is as follows:

Twelve-month period Ending June 30: Amount 2021 $ 11,946

Rental and related administrative service agreement

On July 1, 2013, the Company entered into a service agreement with Hai Yi Shipping Limited that permitted the Company to use a portion of the premises located in Hong Kong as office space and provided related administrative services (the “Service Agreement”). Pursuant to the Service Agreement, the monthly payments are HK$298,500 (approximately $38,000) and the Service Agreement expired on December 31, 2017. On January 1, 2018, the Service Agreement was renewed to February 28, 2018 under the same conditions. On March 1, 2018, the Company entered into a lease agreement directly with the landlord under the same conditions that expires on February 28, 2021.

For the three months ended June 30, 2020 and 2019, rent expense and the corresponding administrative service charge related to the Service Agreement amounted to $115,528 and $114,192, respectively. For the six months ended June 30, 2020 and 2019, rent expense and the corresponding administrative service charge related to the Service Agreement amounted to $230,728 and $228,359, respectively.

As of June 30, 2019, the future minimum lease payments on operating leases were as follows: June 30, 2020 Maturity of lease liabilities 2020 $ 210,340 2021 35,425 Total minimum lease payments $ 245,765 Imputed interest (23,162) Present value of minimum lease payments $ 222,603

The remaining lease terms (in years) and discount rates consisted of the following:

June 30, 2020 Lease term and discount rate Remaining operating lease term 0.67 Discount rate 5.13%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Purchases from related parties

During the three and six months ended June 30, 2020 and 2019, purchases from related parties were as follows:

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Purchase of fuel, fishing nets and other on board consumables from Zhiyan Lin $ - $ 190 $ - $ 544 from Fuzhou Honglong Ocean Fishery Co., 636,530 1,986,605 1,064,720 2,669,186 Ltd. 636,530 1,986,795 1,064,720 2,669,730 Purchase of leasing from Ping Lin 2,964 3,081 5,973 6,194 2,964 3,081 5,973 6,194 Purchase of vessel maintenance service, docking and freight from Huna Lin 210,961 7,585 3,411,251 406,567 $210,961 $ 7,585 $3,411,251 $ 406,567

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Bank Loans Jun. 30, 2020 Debt Disclosure [Abstract] BANK LOANS NOTE 10 – BANK LOANS

Short-term bank loans

Short-term bank loans represent the amounts due to various banks that are due within one year. These loans can be renewed with the banks upon maturities. At June 30, 2020 and December 31, 2019, short-term bank loans consisted of the following:

June 30, December 31, 2020 2019 Loan from Fujian Haixia Bank, due on November 1, 2020 with annual interest rate of 6.0900% at June 30, 2020, collateralized by Hong Long’s 6 fishing vessels and 7 real estate properties of Ping $ 4,237,587 $ 4,300,335 Lin and Ying Liu, the debt ratio of borrower should not be higher than or equal to 100%. Loan from Fujian Haixia Bank, due on November 6, 2020 with annual interest rate of 6.0900% at June 30, 2020, collateralized by Hong Long’s 6 fishing vessels and 7 real estate properties of Ping 4,943,852 5,017,058 Lin and Ying Liu, the debt ratio of borrower should not be higher than or equal to 100%. Loan from Fujian Haixia Bank, due on November 14, 2020 with annual interest rate of 6.0900% at June 30, 2020, collateralized by Hong Long’s 6 fishing vessels and 7 real estate properties of Ping 706,265 716,723 Lin and Ying Liu, the debt ratio of borrower should not be higher than or equal to 100%. Loan from The Export-Import Bank of China, due on January 21, 2021 with annual interest rate of 3.8800% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo and Hong Long, pledged 38,420,792 - deposits provided by Hong Long amounted to RMB 42 million, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from The Export-Import Bank of China, due on July 21, 2020, August 21, 2020 and September 13, 2020, with annual interest rate of 3.3300% at June 30, 2020, guaranteed by Pin Lin, Xinrong 42,375,874 - Zhuo and Hong Long, pledged deposits provided by Hong Long amounted to RMB 20 million. $90,684,370 $ 10,034,116

Long-term bank loans

Long-term bank loans represent the amounts due to various banks lasting over one year. Usually, the long-term bank loans cannot be renewed with these banks upon maturities. The Company is in compliance with all long-term bank loan covenants. At June 30, 2020 and December 31, 2019, long-term bank loans consisted of the following:

June 30, December 31, 2020 2019 Loan from The Export-Import Bank of China, due on various dates until August 28, 2020 with annual interest rate of 4.750% at June $ 4,661,346 $ 4,730,369 30, 2020 and December 31, 2019, guaranteed by Hong Long, Xinrong Zhuo and Ping Lin.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Loan from The Export-Import Bank of China, due on various dates until January 30, 2023 with annual interest rate of 4.900% at June 30, 2020 and December 31, 2019, guaranteed by Xinrong 2,825,058 5,017,058 Zhuo and Ping Lin and collateralized by 2 fishing vessels and collateralized by two related parties’ investments in equity interest of one PRC local banks. Loan from China Development Bank, due on various dates until November 27, 2023 with annual interest rate of 5.145% at June 30, 2020 and December 31, 2019, guaranteed by Xinrong Zhuo, 4,661,346 5,447,092 Honghong Zhuo, Mr. and Mrs. Zhiyan Lin and 17 fishing vessels, the debt ratio of borrower should not be higher than 80%. Loan from The Export-Import Bank of China, due on various dates until March 28, 2025 with annual interest rate of 4.949% at June 59,326,224 65,938,477 30, 2020 and December 31, 2019, guaranteed by Hong Long, Xinrong Zhuo, Ping Lin and collateralized by 20 fishing vessels. Loan from The Export-Import Bank of China, due on various dates until September 30, 2020 with annual interest rate of 4.750% at June 30, 2020 and December 31, 2019, guaranteed by Hong 15,537,820 16,484,619 Long, Xinrong Zhuo, Ping Lin and collateralized by equity investment of 67 million shares of Hong Long in Xiamen International Bank. Loan from The Export-Import Bank of China, due on various dates until August 21, 2026 with annual interest rate of 4.700% at June 30, 2020 and December 31, 2019, guaranteed by Pin 57,843,068 63,214,931 Lin, Xinrong Zhuo and Yaohua Zhuo, 15 fishing vessels, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from The Export-Import Bank of China, due on various dates until October 21, 2025 with annual interest rate of 4.700% at June 30, 2020 and December 31, 2019, guaranteed by Pin 44,360,477 45,017,345 Lin, Xinrong Zhuo, Yaohua Zhuo and Hong Long, 15 fishing vessels and 1 transport vessel, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from China Development Bank, due on various dates until July 30, 2026 with annual interest rate of 5.390% at June 30, 2020 and December 31, 2019, guaranteed by Xinrong Zhuo, 11 fishing vessels and 6 Hong Long’s fishing vessels, real estate 10,452,716 11,503,396 of Mingguang Wanhao Property co., LTD., totalled area 22,123.50m2, the debt ratio of borrower should not be higher than 80%. Loan from The Export-Import Bank of China, due on various dates until October 21, 2025 with annual interest rate of 4.700% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo, Yaohua 8,045,766 - Zhuo and Hong Long, 15 fishing vessels and 1 transport vessel, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from The Export-Import Bank of China, due on various dates until April 21, 2028 with annual interest rate of 4.650% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo, 18,362,879 Hong Long and Huanghai Shipbuilding Co., Ltd., the Land Use Right of B2 plot in central business district on the north shore of Minjiang river, 1 vessel. Loan from The Export-Import Bank of China, due on various dates until December 21, 2028 with annual interest rate of 4.650% at 19,775,408 June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo, Hong Long and Huanghai Shipbuilding Co., Ltd., the

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Land Use Right of B2 plot in central business district on the north shore of Minjiang river, 1 vessel. Loan from Bank of Communications, due on various dates until June 27, 2025 with annual interest rate of 4.650% at June 30, 29,380,607 2020, guaranteed by Xinrong Zhuo, Huanghai Shipbuilding Co., Ltd. and Fujian Jingfu Ocean Fishery Development Co., Ltd.. Total long-term bank loans $275,232,715 $217,353,287 Less: current portion (60,880,006) (57,122,789) Long-term bank loans, non-current portion $214,352,709 $160,230,498

The future maturities of long-term bank loans are as follows:

Due in twelve-month periods ending June 30, Principal 2021 $ 60,880,006 2022 42,446,500 2023 50,215,411 2024 50,074,158 2025 48,090,967 Thereafter 23,525,673 $275,232,715 Less: current portion (60,880,006) Long-term liability $214,352,709

The weighted average interest rate for short-term bank loans was approximately 4.1% and 6.6% for the six months ended June 30, 2020 and 2019, respectively.

The weighted average interest rate for long-term bank loans was approximately 4.9% and 5.0% for the six months ended June 30, 2020 and 2019, respectively.

For the three months ended June 30, 2020 and 2019, interest expense related to bank loans amounted to $3,701,595 and $1,684,081, respectively, of which, $765,066 and $163,934 was capitalized to construction-in-progress, respectively. For the six months ended June 30, 2020 and 2019, interest expense related to bank loans amounted to $6,844,350 and $2,235,066, respectively, of which $1,008,925 and $185,753 was capitalized to construction-in-progress, respectively.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accrued Liabilities and 6 Months Ended Other Payables Jun. 30, 2020 Payables and Accruals [Abstract] ACCRUED LIABILITIES AND OTHER NOTE 11 – ACCRUED LIABILITIES AND OTHER PAYABLES PAYABLES At June 30, 2020 and December 31, 2019, accrued liabilities and other payables consisted of the following:

June 30, December 31, 2020 2019 Accrued salaries and related benefits $10,903,530 $ 10,003,346 Accrued interest due 427,970 339,629 Other 248,204 1,085,043 $11,579,704 $ 11,428,018

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Certain Risks and 6 Months Ended Concentrations Jun. 30, 2020 Risks and Uncertainties [Abstract] CERTAIN RISKS AND NOTE 12 – CERTAIN RISKS AND CONCENTRATIONS CONCENTRATIONS Credit risk

At June 30, 2020 and December 31, 2019, the Company’s cash included bank deposits in accounts maintained within the PRC and Hong Kong where there are currently no rules or regulations in place for obligatory insurance to cover bank deposits in event of bank failure. However, the Company does not experience any losses in such accounts and believes it is not exposed to any significant risks on its cash in bank accounts.

Major customers

The following table sets forth information as to each customer that accounted for 10% or more of the Company’s sales for the three and six months ended June 30, 2020 and 2019.

Three Months Ended Six Months Ended June 30, June 30, Customer 2020 2019 2020 2019 A 19% 22% 15% 22% B 14% 12% 12% 14% C 13% * * * D 12% * * * E 11% * 12% * F * 18% * 17% G * 12% * 11%

* less than 10%

Three customers accounted for 10% or more of the Company’s total outstanding accounts receivable at June 30, 2020 and December 31, 2019, respectively.

Major suppliers

The following table sets forth information as to each supplier that accounted for 10% or more of the Company’s purchases for the three and six months ended June 30, 2020 and 2019.

Three Months Ended Six Months Ended June 30, June 30, Supplier 2020 2019 2020 2019 A 35% * 29% * B 25% * 23% * C 10% * * *

One supplier, whose outstanding accounts payable accounted for 10% or more of the Company’s total outstanding accounts payable and accounts payable – related parties at June 30, 2020, accounted for 53.2% of the Company’s total outstanding accounts payable and accounts payable – related parties at June 30, 2020.

Two suppliers, whose outstanding accounts payable accounted for 10% or more of the Company’s total outstanding accounts payable and accounts payable – related parties at December 31, 2019, accounted for 76.0% of the Company’s total outstanding accounts payable and accounts payable – related parties at December 31, 2019.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Commitments and 6 Months Ended Contingencies Jun. 30, 2020 Commitments and Contingencies Disclosure [Abstract] COMMITMENTS AND NOTE 13 – COMMITMENTS AND CONTINGENCIES CONTINGENCIES Severance payments

The Company has employment agreements with certain employees that provide for severance payments to such employees upon termination of employment under certain circumstances, as defined in the applicable agreements. The Company has estimated its possible severance payments to be approximately $10,000 as of June 30, 2020 and December 31, 2019, which have not been reflected in its consolidated financial statements.

Operating lease

See note 9 for related party operating lease commitment.

Rental payment and related administrative service charge

See note 9 for related party rental and related administrative service agreement commitment.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Subsequent Events Jun. 30, 2020 Subsequent Events [Abstract] SUBSEQUENT EVENTS NOTE 14 – SUBSEQUENT EVENTS

On July 21, 2020, the Company repaid a long-term bank loan of $5.65 million to The Export- Import Bank of China in accordance with the loan repayment schedule.

On August 5, 2020, the Company received the government subsidy for reimbursement of certain operating expenses amounted to $12.0 million.

As of August 12, 2020, the Company received repayment of Hong Long amounted to $18.9 million.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accounting Policies, by 6 Months Ended Policy (Policies) Jun. 30, 2020 Accounting Policies [Abstract] Basis of presentation Basis of presentation

These interim consolidated financial statements of the Company and its subsidiaries are unaudited. In the opinion of management, all adjustments (consisting of normal recurring accruals) and disclosures necessary for a fair presentation of these interim consolidated financial statements have been included. The results reported in the unaudited consolidated financial statements for any interim periods are not necessarily indicative of the results that may be reported for the entire year. The accompanying unaudited consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and do not include all information and footnotes necessary for a complete presentation of financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).

The Company’s unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain information and footnote disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 16, 2020.

Use of estimates Use of estimates

The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. Significant estimates in the three and six months ended June 30, 2020 and 2019 include allowance for doubtful accounts, reserve for inventories, the useful life of property, plant and equipment, assumptions used in assessing impairment of long-term assets and valuation of deferred tax assets and accruals for taxes due.

Cash Cash

Cash consists of cash on hand and cash in banks. The Company maintains cash with various financial institutions in the PRC and Hong Kong and none of these deposits are covered by insurance. At June 30, 2020 and December 31, 2019, cash balances in the PRC were $3,193,562 and $9,971,626, respectively, and cash balances in Hong Kong were $211,961 and $120,579, respectively, and are uninsured. The Company has not experienced any losses in bank accounts and believes it is not exposed to any risks on its cash in bank accounts.

Restricted cash Restricted cash

Restricted cash consists of cash deposits held by the Export Import Bank of China to secure its bank loans and Hong Long’s short term bank loans. At June 30, 2020 and December 31, 2019, restricted cash amounted to $10,770,608 and nil, respectively.

Fair value of financial Fair value of financial instruments instruments

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company adopted the guidance of ASC Topic 820 for fair value measurements which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the consolidated balance sheets for cash, restricted cash, accounts receivable, inventories, advances to suppliers, prepaid expenses, prepaid expenses – related party, other receivables, other receivables – related party, accounts payable, accounts payable – related parties, short-term bank loans, accrued liabilities and other payables, accrued liabilities and other payables – related party, and due to related parties approximate their fair market value based on the short-term maturity of these instruments. The fair value of the Company’s long-term bank loans under its agreements approximates its carrying value at June 30, 2020. The fair value of the Company’s long-term bank loans under its agreements were estimated using Level 2 inputs based on market data. As of June 30, 2020, the Company does not have any assets or liabilities that are measured on a recurring basis at fair value.

ASC Topic 825-10 “Financial Instruments” allows entities to voluntarily choose to measure certain financial assets and liabilities at fair value (fair value option). The fair value option may be elected on an instrument-by-instrument basis and is irrevocable, unless a new election date occurs. If the fair value option is elected for an instrument, unrealized gains and losses for that instrument should be reported in earnings at each subsequent reporting date. The Company did not elect to apply the fair value option to any outstanding instruments.

Accounts receivable Accounts receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balance, the Company considers many factors, including the age of the balance, a customer’s historical payment history, its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collection. The Company only grants credit terms to established customers who are deemed to be financially responsible. Credit periods to customers are within 180 days after customers received the purchased goods. At June 30, 2020 and December 31, 2019, the Company had established, based on a review of its outstanding balances, an allowance for doubtful accounts in the amounts of $64,664 and $7,960, respectively.

Inventories Inventories

Inventories, consisting of frozen fish and marine catches, are stated at the lower of cost or net realizable value utilizing the weighted average method. The cost of inventories is primarily comprised of fuel, freight, depreciation, direct labor, consumables, government levied charges and taxes. Consumables include fishing nets and metal containers used by fishing vessels. The Company’s fishing fleets in Indian waters and the international waters operate throughout the year, although the May to July period demonstrates lower catch quantities compared to the October to January period, which is the peak season.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document A reserve is established when management determines that certain inventories may not be saleable. If inventory costs exceed net realizable value due to obsolescence or quantities in excess of expected demand, the Company will record a reserve for the difference between the cost and the market value. These reserves are recorded based on estimates. At June 30, 2020 and December 31, 2019, the Company recorded a reserve for inventories in the amount of $2,249,685 and $266,405, respectively.

When recorded, inventory reserves are intended to reduce the carrying value of inventories to their net realizable value. The Company regularly evaluates its ability to realize the value of inventories based on a combination of factors including the following: forecasted sales and estimated current and future market value.

Fishing licenses Fishing licenses

Each of the Company’s fishing vessels requires an approval from the Ministry of Agriculture and Rural Affairs of the PRC (“MOA”) to carry out ocean fishing projects in international waters and foreign territories, and to the extent required, a fishing license in local fishing territory where the vessel operates. These approvals are valid for a period from 3 to 12 months and are awarded to the Company at no cost. The Company applies for the renewal of the license prior to expiration to avoid interruptions of fishing vessels’ operations. Since 2014 there has been a moratorium on fishing in Indonesian waters. Each of our fishing vessels operating in Indonesian waters requires a fishing license granted by the authority in Indonesia.

Investment in unconsolidated Investment in unconsolidated company – Global Deep Ocean company – Global Deep The Company uses the equity method of accounting for its investment in, and earning or loss Ocean of, companies that it does not control but over which it does exert significant influence. The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that recorded value may not be recoverable. The Company reviews its investments for other-than-temporary impairment whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. Investments identified as having an indication of impairment are subject to further analysis to determine if the impairment is other-than-temporary and this analysis requires estimating the fair value of the investment. The determination of fair value of the investment involves considering factors such as current economic and market conditions, the operating performance of the entities including current earnings trends and forecasted cash flows, and other company and industry specific information. If the Company considers any decline to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. See Note 6 for discussion of equity method investment.

Property, plant and equipment Property, plant and equipment

Property, plant and equipment are carried at cost and are depreciated on a straight-line basis over the estimated useful lives of the assets. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposition. The Company examines the possibility of decreases in the value of fixed assets when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.

The estimated useful lives of the assets are as follows:

Estimated useful life 10 - 20 Fishing vessels Years

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Vehicles 5 Years 3 - 5 Office and other equipment Years

Expenditures for repairs and maintenance, which do not extend the useful life of the assets, are expensed as incurred.

Capitalized interest Capitalized interest

Interest associated with the construction of fishing vessels is capitalized and included in the cost of the fishing vessels. When no debt is incurred specifically for the construction of a fishing vessel, interest is capitalized on amounts expended on the construction using the weighted-average cost of the Company’s outstanding borrowings. Capitalization of interest ceases when the construction is substantially complete or the construction activity is suspended for more than a brief period. The Company capitalized interest of $765,066 and $163,934 for the three months ended June 30, 2020 and 2019, respectively, in the fishing vessels under construction. The Company capitalized interest of $1,008,925 and $185,753 for the six months ended June 30, 2020 and 2019, respectively, in the fishing vessels under construction.

Impairment of long-lived Impairment of long-lived assets assets In accordance with ASC Topic 360, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates the impairment by comparing the carrying amount of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment loss based on the excess of the carrying amount of the long-lived assets over their fair value. Impairment loss represents the impairment loss on the vessels whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recovered. The Company recognized impairment loss of nil and $245,940 for the three months ended June 30, 2020 and 2019, respectively. The Company recognized impairment loss of nil and $2,475,442 for the six months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2019, the Company dismantled 1 transport vessel and deregistered 6 fishing vessels and applied to the MOA for rebuilding 7 new vessels. As a result of the rebuilding projects, the Company assessed the recoverability of the 7 fishing vessels based on the undiscounted future cash flow that the fishing vessels are expected to generate as less than the carrying amount, and recognized an impairment loss.

Revenue recognition Revenue recognition

The Company catches different species of fish, ships them back to China and sells the catches to distributors and retailers by acting as a wholesaler. Marine catch is the Company’s one and only product line. The product type, contractual price and quantities are identified in contracts. The Company does not offer promotional payments, customer coupons, rebates or other cash redemption offers to its customers, and the Company does not accept returns from customers. The Company’s revenues are recorded at a point in time. All of the operations are considered by the Company’s Chief Operating Decision Maker to be aggregated in one reportable operating segment and the Company’s revenue is disaggregated by product type in terms of species of fish sold pursuant to ASC Topic 606-10-55-91(a).

The Company’s revenue is generated from the sale of frozen fish and other marine catches. The Company recognizes revenue at the amount the Company expects to be entitled to be paid, determined when control of the products is transferred to its customers, which occurs upon delivery of and acceptance of the frozen fish by the customer and the Company has a right to receive payment.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Company has identified one performance obligation as the frozen fish and other marine catches identified in the contract are picked up by the customers at cold storage warehouse, with revenue being recognized at a point in time. The Company initially recognizes revenue in an amount which is estimated based on contractual prices. The receivables under contracts, whereby pricing is based on contractual prices, are primarily collected within 180 days of completion of its performance obligation. Disaggregation of revenue

The following tables disaggregate revenues under ASC Topic 606 by species of fish: For the three months ended June 30, 2020 and 2019, our revenue by species of fish was as follows (dollars in thousands, except for average price):

Three Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,108 14,970,511 $ 0.81 51.6% Peru squid 2,855 1,949,315 1.46 12.2% Chub mackerel 2,064 2,285,335 0.90 8.8% Croaker fish 1,839 1,015,030 1.81 7.8% Cuttle fish 1,666 398,240 4.18 7.1% Others 2,931 1,136,003 2.58 12.5% Total $ 23,463 21,754,435 $ 1.08 100.0%

Three Months Ended June 30, 2019 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,573 11,418,082 $ 1.10 49.4% Argentina squid(whole) 3,530 780,888 4.52 13.9% Ribbon fish 2,061 612,469 3.37 8.1% Croaker fish 1,813 827,012 2.19 7.1% Indian squid 715 120,880 5.92 2.8% Others 4,771 1,669,067 2.86 18.7% Total $ 25,463 15,428,398 $ 1.65 100.0%

The following tables disaggregate revenues under ASC Topic 606 by species of fish: For the six months ended June 30, 2020 and 2019, our revenue by species of fish was as follows (dollars in thousands, except for average price):

Six Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 19,821 23,272,651 $ 0.85 48.6% Peru squid 4,838 3,053,765 1.58 11.9% Cuttle fish 4,116 925,140 4.45 10.1% Chub mackerel 4,015 4,555,204 0.88 9.8% Croaker fish 3,096 1,707,819 1.81 7.6% Others 4,884 1,779,139 2.75 12.0% Total $ 40,770 35,293,718 $ 1.16 100.0%

Six Months Ended June 30, 2019 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 17,629 15,997,031 $ 1.10 40.2% Ribbon fish 6,014 1,814,302 3.31 13.7% Argentina squid(whole) 3,800 889,945 4.27 8.7%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Croaker fish 3,245 1,466,500 2.21 7.4% Cuttle fish 2,437 445,359 5.47 5.6% Others 10,762 3,558,206 3.02 24.4% Total $ 43,887 24,171,343 $ 1.82 100.0%

Government subsidies Government subsidies

Government subsidies are recognized when there is reasonable assurance that the subsidy will be received and all attaching conditions will be satisfied. When the subsidy relates to an expense item, it is recognized as income over the periods necessary to match the subsidy on a systematic basis to the costs that it is intended to compensate. Where the subsidy relates to an asset, it is credited to the cost of the asset and is released to the income statement over the expected useful life in a consistent manner with the depreciation method for the relevant asset.

Income taxes Income taxes

Under the current laws of the Cayman Islands and British Virgin Islands, the Company and Merchant Supreme are not subject to any income or capital gains tax, and dividend payments that the Company may make are not subject to any withholding tax in the Cayman Islands or British Virgin Islands. Under the current laws of Hong Kong, Prime Cheer is not subject to any capital gains tax and dividend payments are not subject to any withholding tax in Hong Kong.

The Company is not incorporated nor does it engage in any trade or business in the United States and is not subject to United States federal income taxes. The Company did not derive any significant amount of income subject to such taxes after completion of the Share Exchange and accordingly, no relevant tax provision is made in the accompanying unaudited consolidated statements of operations and comprehensive income (loss).

The Company’s subsidiary, Pingtan Fishing, is a qualified ocean fishing enterprise certified by the MOA. The qualification renews on April 1 of each year. Pingtan Fishing is exempt from income tax derived from its ocean fishing operations in the periods it processes a valid Ocean Fishing Enterprise Qualification Certificate issued by the MOA.

The China’s Enterprise Income Tax Law (“EIT Law”), which went into effect on January 1, 2018, also provides that an enterprise established under the laws of foreign countries or regions but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its worldwide income. The Implementing Rules of the new EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” On April 22, 2009, the PRC State Administration of Taxation further issued a notice entitled “Notice Regarding Recognizing Offshore-Established Enterprises Controlled by PRC Shareholders as Resident Enterprises Based on Their Place of Effective Management.” Under this notice, a foreign company controlled by a PRC company or a group of PRC companies shall be deemed as a PRC resident enterprise if (i) the senior management and the core management departments in charge of its daily operations mainly function in the PRC; (ii) its financial decisions and human resource decisions are subject to decisions or approvals of persons or institutions in the PRC; (iii) its major assets, accounting books, company seals, minutes and files of board meetings and shareholders’ meetings are located or kept in the PRC; and (iv) more than half of the directors or senior management personnel with voting rights reside in the PRC. Based on a review of surrounding facts and circumstances, the Company does not believe that it is likely that its operations outside of the PRC should be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, should the Company be treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC tax on worldwide income at a uniform tax rate of 25% retroactive to May 3, 2012.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In addition, Pingtan Fishing is not subject to foreign income taxes for its operations in either India or Indonesia Exclusive Economic Zones or the Western and Central Pacific Fisheries Commission areas.

Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be effective when the differences are expected to reverse.

Deferred tax assets are reduced by a valuation allowance to the extent that management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the consolidated statements of operations and comprehensive income (loss) in the period that includes the enactment date.

The Company prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the tax return. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, accounting for income taxes in interim periods and income tax disclosures. As of June 30, 2020 and December 31, 2019, there were no amounts that had been accrued with respect to uncertain tax positions.

Shipping and handling costs Shipping and handling costs

Shipping and handling costs are included in selling expense and amounted to $44,952 and $92,585 for the three months ended June 30, 2020 and 2019, respectively. Shipping and handling costs amounted to $321,093 and $213,578 for the six months ended June 30, 2020 and 2019, respectively.

Employee benefits Employee benefits

The Company makes mandatory contributions to the PRC government’s health, retirement benefit and unemployment funds in accordance with the relevant Chinese social security laws. The costs of these payments are charged to the same accounts as the related salary costs in the same period as the related salary costs incurred. Employee benefit costs amounted to $1,242,254 and $611,472 for the three months ended June 30, 2020 and 2019, respectively. Employee benefit costs amounted to $2,511,059 and $1,216,354 for the six months ended June 30, 2020 and 2019, respectively.

Foreign currency translation Foreign currency translation

The reporting currency of the Company is the U.S. dollar. The functional currency of the Company and Merchant Supreme and Prime Cheer, the Company’s subsidiaries, is the U.S. dollar. The functional currency of Pingtan Guansheng, Fujian Heyue and Pingtan Fishing, the Company’s subsidiaries, is the Chinese Renminbi (“RMB”). For the Company’s subsidiaries Pingtan Guansheng, Fujian Heyue and Pingtan Fishing, whose functional currencies are the RMB, results of operations and cash flows are translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the end of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported on the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation adjustments resulting from the process of translating the local currency financial statements into U.S. dollars are included in determining comprehensive income. The cumulative translation adjustment and effect of exchange rate changes on cash for the six months ended June 30, 2020 and 2019 was $309,238 and $41,357, respectively. Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing at the balance sheet date and any transaction gains and losses that arise from exchange rate fluctuations on

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document transactions denominated in a currency other than the functional currency are included in the results of operations as incurred.

All of the Company’s revenue transactions are transacted in the functional currency of the operating subsidiaries. The Company does not enter into any material transactions in foreign currencies. Transaction gains or losses have not had, and are not expected to have, a material effect on the results of operations of the Company.

Asset and liability accounts at June 30, 2020 and December 31, 2019 were translated at 7.0795 RMB to $1.00 and at 6.9762 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rate. The average translation rates applied to the statements of operations for the six months ended June 30, 2020 and 2019 were 7.0319 RMB and 6.7808 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate.

Earnings per share Earnings per share

ASC Topic 260 “Earnings per Share,” requires presentation of both basic and diluted earnings per share (“EPS”) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS excludes dilution. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.

Basic net income per share is computed by dividing net income available to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted net income per share is computed by dividing net income by the weighted average number of ordinary shares, ordinary share equivalents and potentially dilutive securities outstanding during each period. Potentially dilutive ordinary shares consist of the ordinary shares issuable upon the exercise of ordinary share warrants (using the treasury stock method). Ordinary share equivalents are not included in the calculation of diluted earnings per share if their effect would be anti-dilutive. In a period in which the Company has a net loss, all potentially dilutive securities are excluded from the computation of diluted shares outstanding as they would have had an anti-dilutive impact. The following table presents a reconciliation of basic and diluted net income per share:

Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Net (loss) income available to owners of the company for basic and diluted net $ (1,576,010) $ 4,579,044 $ 6,088,680 $ 2,691,805 income per share of ordinary stock Weighted average ordinary stock 79,055,053 79,055,053 79,055,053 79,055,053 outstanding - basic and diluted Net (loss) income per ordinary share attributable to owners of the Company $ (0.02) $ 0.06 $ 0.08 $ 0.03 - basic and diluted

Non-controlling interest Non-controlling interest

On February 15, 2015, China Agriculture invested RMB 400 million (approximately $65 million) into Pingtan Fishing and acquired an 8% equity interest in Pingtan Fishing. As of June 30, 2020, China Agriculture owned 8% of the equity interest of Pingtan Fishing, which was not under the Company’s control.

Related parties Related parties

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Parties are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related party transactions.

Comprehensive income (loss) Comprehensive income (loss)

Comprehensive income (loss) is comprised of net income and all changes to the statements of stockholders’ equity, except those due to investments by stockholders, changes in paid-in capital and distributions to stockholders. For the Company, comprehensive income (loss) for the three and six months ended June 30, 2020 and 2019 included net income and unrealized gain from foreign currency translation adjustments.

Segment information Segment information

ASC Topic 280 “Segment reporting” establishes standards for reporting information on operating segments in interim and annual financial statements. All of the Company’s operations are considered by the chief operating decision maker to be aggregated in one reportable operating segment. All of the Company’s customers are in the PRC and all income is derived from ocean fishery.

Commitments and Commitments and contingencies contingencies In the normal course of business, the Company is subject to contingencies, including legal proceedings and environmental claims, arising out of the normal course of businesses that relate to a wide range of matters, including among others, liability for breaches of contracts. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments, including historical operations, scientific evidence and the specifics of each matter.

The Company’s management has evaluated all such proceedings and claims that existed as of June 30, 2020. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s financial position, liquidity or results of operations.

Concentrations of credit, Concentrations of credit, economic and political risks economic and political risks The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in the PRC, and by the general state of the PRC’s economy. The Company’s operation in the PRC is subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC, and by changes in governmental policies with respect to laws and regulations, anti- inflationary measures, currency conversion, remittances aboard, and rates and methods of taxation, among other things.

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash and trade accounts receivable. All of the Company’s cash is maintained with state-owned banks within the PRC and Hong Kong, and none of these deposits are covered by insurance. The Company has not experienced any losses in such accounts. A portion of the Company’s sales are credit sales which are primarily to customers whose abilities to pay are dependent upon the industry economics prevailing in these areas; however, concentrations of credit

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document risk with respect to trade accounts receivables is limited due to generally short payment terms. The Company also performs ongoing credit evaluations of its customers to help further reduce credit risk.

According to the sale agreement signed on December 4, 2013, the Company does not own 20 fishing vessels but has the operating rights to operate these vessels which are owned by a related company, Fuzhou Hong Long Ocean Fishery Co., Ltd (“Hong Long”) and the Company is entitled to 100% of the net profit (loss) of the vessels. The Company has latitude in establishing price and discretion in supplier selection. There were no economic risks associated with the operating rights but the Company may need to bear the operation risks and credit risks as aforementioned.

As the Company has historically derived the majority of its revenue from Indonesian waters, the suspension of fishing operations in this area has had and will continue to have a significant negative impact on the Company.

Recent Adopted Accounting Recent Adopted Accounting Standards Standards Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and ASU 2018-11, Leases (Topic 842), Targeted Improvements (“ASU 2018-11”). The amendments in ASU 2018-10 affect only narrow aspects of the guidance issued in the amendments in ASU 2016-02, including but not limited to lease residual value guarantee, rate implicit in the lease and lease term and purchase option. The amendments in ASU 2018-11 provide an optional transition method for adoption of the new standard, which will allow entities to continue to apply the legacy guidance in ASC Topic 840, including its disclosure requirements, in the comparative periods presented in the year of adoption.

Effective January 1, 2019, we adopted the new standard using the modified retrospective approach and implemented internal controls to enable the preparation of financial information upon adoption. We elected to adopt both the transition relief provided in ASU 2018-11 and the package of practical expedients which allowed us, among other things, to retain historical lease classifications and accounting for any leases that existed prior to adoption of the standard. Additionally, we elected the practical expedients allowing us not to separate lease and non-lease components and not record leases with an initial term of twelve months or less (“short-term leases”) on the balance sheet across all existing asset classes. Adoption of the new standard resulted in the recording of right use asset and lease liability of $0.77 million as of January 1, 2019, which primarily relates to our corporate office leases. The standard did not materially impact our condensed consolidated statements of operations or cash flows. Adopting the new standard did not have a material impact on the accounting for leases under which we are the lessee.

In August 2018, the FASB issued ASU 2018-13, “Changes to the Disclosure Requirements for Fair Value Measurement.” This standard eliminates the current requirement to disclose the amount or reason for transfers between level 1 and level 2 of the fair value hierarchy and the requirement to disclose the valuation methodology for level 3 fair value measurements. The standard includes additional disclosure requirements for level 3 fair value measurements, including the requirement to disclose the changes in unrealized gains and losses in other comprehensive income during the period and permits the disclosure of other relevant quantitative information for certain unobservable inputs. The new guidance is effective for interim and annual periods beginning after December 15, 2019. We applied the new standard beginning January 1, 2020.

Recent accounting Recent accounting pronouncements pronouncements In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”, which will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which a company recognizes an allowance based on the estimate of expected credit loss. In November 2019, the FASB issued ASU 2019-10. Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, finalizes effective date delays for private companies, not-for-profit organizations, and

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document certain smaller reporting companies applying the credit losses, leases, and hedging standards. The effective date for SEC filers, excluding smaller reporting companies as defined by the SEC, remains as fiscal years beginning after December 15, 2019. The new effective date for all other entities is fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact of adopting this standard on its consolidated financial statements.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Description of Business and 6 Months Ended Organization (Tables) Jun. 30, 2020 Accounting Policies [Abstract] Schedule of subsidiary and Place and date Percentage of variable interest entity Name of subsidiaries Principal activities of ownership incorporation Merchant Supreme Co., Ltd. BVI, 100% held by Intermediate (“Merchant Supreme”) June 25, 2012 PME holding company

Prime Cheer Corporation Ltd. Hong Kong, 100% held by Intermediate (“Prime Cheer”) May 3, 2012 Merchant Supreme holding company

Pingtan Guansheng Ocean Fishing Co., PRC, 100% held by Intermediate Ltd. October 12, Prime Cheer holding company (“Pingtan Guansheng”) 2012

Fujian Heyue Marine Fishing PRC, 100% held by Intermediate Development Co., Ltd. January 27, Pingtan holding company (“Fujian Heyue”) 2015 Guansheng

Fujian Provincial Pingtan County PRC, 92% held by Fishing Group Co., Ltd. February 27, Oceanic fishing Fujian Heyue (“Pingtan Fishing”) 1998

Pingtan Dingxin Fishing Information PRC, 100% held by Consulting Co., Ltd. October 23, Dormant Pingtan Fishing (“Pingtan Dingxin”) 2012

Pingtan Yikang Global Fishery Co., PRC, 100% held by Ltd. September Dormant Pingtan Fishing (“Yikang Fishery”) 14, 2017

PRC, Pingtan Shinsilkroad Fishery Co., Ltd. 100% held by September Dormant (“Shinsilkroad Fishery”) Pingtan Fishing 14, 2017

PRC, Fuzhou Howcious Investment Co., Ltd 100% held by September 5, Dormant (“Howcious Investment”) Pingtan Fishing 2017

Pingtan Ocean Fishery Co., Ltd PRC, 100% held by Dormant (“Ocean Fishery”) July 21, 2017 Pingtan Fishing

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant 6 Months Ended Accounting Policies (Tables) Jun. 30, 2020 Accounting Policies [Abstract] Schedule of estimated useful lives Estimated of the assets useful life 10 - 20 Fishing vessels Years Vehicles 5 Years 3 - 5 Office and other equipment Years

Schedule of disaggregate revenues Three Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,108 14,970,511 $ 0.81 51.6% Peru squid 2,855 1,949,315 1.46 12.2% Chub mackerel 2,064 2,285,335 0.90 8.8% Croaker fish 1,839 1,015,030 1.81 7.8% Cuttle fish 1,666 398,240 4.18 7.1% Others 2,931 1,136,003 2.58 12.5% Total $ 23,463 21,754,435 $ 1.08 100.0%

Three Months Ended June 30, 2019 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 12,573 11,418,082 $ 1.10 49.4% Argentina squid(whole) 3,530 780,888 4.52 13.9% Ribbon fish 2,061 612,469 3.37 8.1% Croaker fish 1,813 827,012 2.19 7.1% Indian squid 715 120,880 5.92 2.8% Others 4,771 1,669,067 2.86 18.7% Total $ 25,463 15,428,398 $ 1.65 100.0%

Six Months Ended June 30, 2020 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 19,821 23,272,651 $ 0.85 48.6% Peru squid 4,838 3,053,765 1.58 11.9% Cuttle fish 4,116 925,140 4.45 10.1% Chub mackerel 4,015 4,555,204 0.88 9.8% Croaker fish 3,096 1,707,819 1.81 7.6% Others 4,884 1,779,139 2.75 12.0% Total $ 40,770 35,293,718 $ 1.16 100.0%

Six Months Ended June 30, 2019 Volume Average Percentage Revenue (KG) price of revenue Indian Ocean squid $ 17,629 15,997,031 $ 1.10 40.2% Ribbon fish 6,014 1,814,302 3.31 13.7% Argentina squid(whole) 3,800 889,945 4.27 8.7% Croaker fish 3,245 1,466,500 2.21 7.4% Cuttle fish 2,437 445,359 5.47 5.6%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Others 10,762 3,558,206 3.02 24.4% Total $ 43,887 24,171,343 $ 1.82 100.0%

Schedule of reconciliation of basic Three Months Ended Six Months Ended and diluted net income per share June 30, June 30, 2020 2019 2020 2019 Net (loss) income available to owners of the company for basic $ (1,576,010) $ 4,579,044 $ 6,088,680 $ 2,691,805 and diluted net income per share of ordinary stock Weighted average ordinary stock 79,055,053 79,055,053 79,055,053 79,055,053 outstanding - basic and diluted Net (loss) income per ordinary share attributable to owners of $ (0.02) $ 0.06 $ 0.08 $ 0.03 the Company - basic and diluted

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Accounts Receivable (Tables) Jun. 30, 2020 Receivables [Abstract] Schedule of accounts receivable June 30, December 31, 2020 2019 Accounts receivable $12,689,165 $ 9,281,406 Less: allowance for doubtful accounts (64,664) (7,960) $12,624,501 $ 9,273,446

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Inventories (Tables) Jun. 30, 2020 Inventory Disclosure [Abstract] Schedule of inventories June 30, December 31, 2020 2019 Frozen fish and marine catches work in $26,174,721 $ 25,401,843 progress Frozen fish and marine catches in transit 12,555,420 3,459,004 Frozen fish and marine catches in warehouse 20,125,535 1,933,310 58,855,676 30,794,157 Less: reserve for inventories (2,249,685) (266,405) $56,605,991 $ 30,527,752

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Prepayment for Long-Term 6 Months Ended Assets (Tables) Jun. 30, 2020 Prepayment For Long Term Assets [Abstract] Schedule of prepayment for long-term Prepayment assets for fishing vessels’ construction Balance - December 31, 2019 $ 49,040,338 Prepayments made for fishing vessels’ construction 82,048,948 Reclassification to construction-in-progress (66,317,069) Foreign currency fluctuation (821,314) Balance – June 30, 2020 $ 63,950,903

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Property, Plant and 6 Months Ended Equipment (Tables) Jun. 30, 2020 Property, Plant and Equipment [Abstract] June 30, December 31, Schedule of property, plant and equipment Useful life 2020 2019 Fishing vessels 10 - 20 Years $329,999,848 $304,619,431 Vehicles 5 Years 21,508 21,826 Office and other equipment 3 – 5 Years 438,279 427,154 Construction-in-progress - 18,830,995 - 349,290,630 305,068,411 Less: accumulated depreciation (51,893,200) (45,690,682) $297,397,430 $259,377,729

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Parties Transactions 6 Months Ended (Tables) Jun. 30, 2020 Related Parties Transactions (Tables) [Line Items] June 30, December 31, Schedule of accounts payable - related parties Name of related party 2020 2019 Hong Long (1) $ 268,447 $ 270,230 Huna Lin 2,098,121 1,436,987 $2,366,568 $ 1,707,217

Schedule of installments due from related Before Installments party-Hong Long August 14, 2020 $14,125,291 August 31, 2020 16,950,350 September 20, 2020 35,313,228 October 20, 2020 14,125,291 December 20, 2020 738,479 Total $81,252,639

Schedule of due to related parties June 30, December 31, 2020 2019 Accrued compensation for LiMing Yung, Chief $ 15,000 $ 15,000 Financial Officer Accrued compensation for Xinrong Zhuo, Chief 3,354 3,328 Executive Officer Advance from Xinrong Zhuo - 150,000 $ 18,354 $ 168,328

Schedule of future minimum lease payments Twelve-month period Ending June 30: Amount on office lease 2021 $ 11,946

Schedule of future minimum lease payments June 30, on operating leases 2020 Maturity of lease liabilities 2020 $210,340 2021 35,425 Total minimum lease payments $245,765 Imputed interest (23,162) Present value of minimum lease payments $222,603

Schedule of remaining lease terms and June 30, discount rates 2020 Lease term and discount rate Remaining operating lease term 0.67 Discount rate 5.13%

Schedule of purchases from related parties Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 Purchase of fuel, fishing nets and other on board consumables

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document from Zhiyan Lin $ - $ 190 $ - $ 544 from Fuzhou Honglong 636,530 1,986,605 1,064,720 2,669,186 Ocean Fishery Co., Ltd. 636,530 1,986,795 1,064,720 2,669,730 Purchase of leasing from Ping Lin 2,964 3,081 5,973 6,194 2,964 3,081 5,973 6,194 Purchase of vessel maintenance service, docking and freight from Huna Lin 210,961 7,585 3,411,251 406,567 $210,961 $ 7,585 $3,411,251 $ 406,567 Hong Long [Member] Related Parties Transactions (Tables) [Line Items] Schedule of accounts payable - related parties June 30, December 31, 2020 2019 Due from related party-Hong Long $81,252,639 $ 12,477,777

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Bank Loans (Tables) Jun. 30, 2020 Debt Disclosure [Abstract] Schedule of short-term bank June 30, December 31, loans 2020 2019 Loan from Fujian Haixia Bank, due on November 1, 2020 with annual interest rate of 6.0900% at June 30, 2020, collateralized by Hong Long’s 6 fishing vessels and 7 real estate properties of Ping $ 4,237,587 $ 4,300,335 Lin and Ying Liu, the debt ratio of borrower should not be higher than or equal to 100%. Loan from Fujian Haixia Bank, due on November 6, 2020 with annual interest rate of 6.0900% at June 30, 2020, collateralized by Hong Long’s 6 fishing vessels and 7 real estate properties of Ping 4,943,852 5,017,058 Lin and Ying Liu, the debt ratio of borrower should not be higher than or equal to 100%. Loan from Fujian Haixia Bank, due on November 14, 2020 with annual interest rate of 6.0900% at June 30, 2020, collateralized by Hong Long’s 6 fishing vessels and 7 real estate properties of Ping 706,265 716,723 Lin and Ying Liu, the debt ratio of borrower should not be higher than or equal to 100%. Loan from The Export-Import Bank of China, due on January 21, 2021 with annual interest rate of 3.8800% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo and Hong Long, pledged 38,420,792 - deposits provided by Hong Long amounted to RMB 42 million, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from The Export-Import Bank of China, due on July 21, 2020, August 21, 2020 and September 13, 2020, with annual interest rate of 3.3300% at June 30, 2020, guaranteed by Pin Lin, Xinrong 42,375,874 - Zhuo and Hong Long, pledged deposits provided by Hong Long amounted to RMB 20 million. $90,684,370 $ 10,034,116

Schedule of long-term bank June 30, December 31, loans 2020 2019 Loan from The Export-Import Bank of China, due on various dates until August 28, 2020 with annual interest rate of 4.750% at June $ 4,661,346 $ 4,730,369 30, 2020 and December 31, 2019, guaranteed by Hong Long, Xinrong Zhuo and Ping Lin. Loan from The Export-Import Bank of China, due on various dates until January 30, 2023 with annual interest rate of 4.900% at June 30, 2020 and December 31, 2019, guaranteed by Xinrong 2,825,058 5,017,058 Zhuo and Ping Lin and collateralized by 2 fishing vessels and collateralized by two related parties’ investments in equity interest of one PRC local banks. Loan from China Development Bank, due on various dates until November 27, 2023 with annual interest rate of 5.145% at June 30, 2020 and December 31, 2019, guaranteed by Xinrong Zhuo, 4,661,346 5,447,092 Honghong Zhuo, Mr. and Mrs. Zhiyan Lin and 17 fishing vessels, the debt ratio of borrower should not be higher than 80%. Loan from The Export-Import Bank of China, due on various dates until March 28, 2025 with annual interest rate of 4.949% at June 59,326,224 65,938,477 30, 2020 and December 31, 2019, guaranteed by Hong Long, Xinrong Zhuo, Ping Lin and collateralized by 20 fishing vessels.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Loan from The Export-Import Bank of China, due on various dates until September 30, 2020 with annual interest rate of 4.750% at June 30, 2020 and December 31, 2019, guaranteed by Hong 15,537,820 16,484,619 Long, Xinrong Zhuo, Ping Lin and collateralized by equity investment of 67 million shares of Hong Long in Xiamen International Bank. Loan from The Export-Import Bank of China, due on various dates until August 21, 2026 with annual interest rate of 4.700% at June 30, 2020 and December 31, 2019, guaranteed by Pin 57,843,068 63,214,931 Lin, Xinrong Zhuo and Yaohua Zhuo, 15 fishing vessels, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from The Export-Import Bank of China, due on various dates until October 21, 2025 with annual interest rate of 4.700% at June 30, 2020 and December 31, 2019, guaranteed by Pin 44,360,477 45,017,345 Lin, Xinrong Zhuo, Yaohua Zhuo and Hong Long, 15 fishing vessels and 1 transport vessel, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from China Development Bank, due on various dates until July 30, 2026 with annual interest rate of 5.390% at June 30, 2020 and December 31, 2019, guaranteed by Xinrong Zhuo, 11 fishing vessels and 6 Hong Long’s fishing vessels, real estate 10,452,716 11,503,396 of Mingguang Wanhao Property co., LTD., totalled area 22,123.50m2, the debt ratio of borrower should not be higher than 80%. Loan from The Export-Import Bank of China, due on various dates until October 21, 2025 with annual interest rate of 4.700% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo, Yaohua 8,045,766 - Zhuo and Hong Long, 15 fishing vessels and 1 transport vessel, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Loan from The Export-Import Bank of China, due on various dates until April 21, 2028 with annual interest rate of 4.650% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo, 18,362,879 Hong Long and Huanghai Shipbuilding Co., Ltd., the Land Use Right of B2 plot in central business district on the north shore of Minjiang river, 1 vessel. Loan from The Export-Import Bank of China, due on various dates until December 21, 2028 with annual interest rate of 4.650% at June 30, 2020, guaranteed by Pin Lin, Xinrong Zhuo, Yaohua 19,775,408 Zhuo, Hong Long and Huanghai Shipbuilding Co., Ltd., the Land Use Right of B2 plot in central business district on the north shore of Minjiang river, 1 vessel. Loan from Bank of Communications, due on various dates until June 27, 2025 with annual interest rate of 4.650% at June 30, 29,380,607 2020, guaranteed by Xinrong Zhuo, Huanghai Shipbuilding Co., Ltd. and Fujian Jingfu Ocean Fishery Development Co., Ltd.. Total long-term bank loans $275,232,715 $217,353,287 Less: current portion (60,880,006) (57,122,789) Long-term bank loans, non-current portion $214,352,709 $160,230,498

Schedule of future maturities Due in twelve-month periods ending June 30, Principal of long-term bank loans 2021 $ 60,880,006 2022 42,446,500 2023 50,215,411 2024 50,074,158 2025 48,090,967

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Thereafter 23,525,673 $275,232,715 Less: current portion (60,880,006) Long-term liability $214,352,709

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accrued Liabilities and 6 Months Ended Other Payables (Tables) Jun. 30, 2020 Payables and Accruals [Abstract] Schedule of accrued liabilities and other payables June 30, December 31, 2020 2019 Accrued salaries and related benefits $10,903,530 $ 10,003,346 Accrued interest due 427,970 339,629 Other 248,204 1,085,043 $11,579,704 $ 11,428,018

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Certain Risks and 6 Months Ended Concentrations (Tables) Jun. 30, 2020 Major Customers [Member] Certain Risks and Concentrations (Tables) [Line Items] Three Schedule of concentration of risks Six Months Months Ended Ended June 30, June 30, Customer 2020 2019 2020 2019 A 19% 22% 15% 22% B 14% 12% 12% 14% C 13% * * * D 12% * * * E 11% * 12% * F * 18% * 17% G * 12% * 11%

* less than 10%

Major Suppliers [Member] Certain Risks and Concentrations (Tables) [Line Items] Three Schedule of concentration of risks Six Months Months Ended Ended June 30, June 30, Supplier 2020 2019 2020 2019 A 35% * 29% * B 25% * 23% * C 10% * * *

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Dec. Feb. Description of Business and Jun. 30, Feb. 15, 31, 15, Organization (Details) 2020 Feb. 09, 2015 2019 2015 $ / shares in Units, ¥ in USD ($) 2015 USD ($) $ / CNY Millions $ / shares shares (¥) Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] Ordinary shares, par value (in Dollars per share) | $ / shares $ $ 0.001 0.001 Working capital deficit (in Dollars) | $ $ 17,485,909 Pingtan Fishing [Member] Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] Percentage of ownership 100.00% Percentage of equity-owned subsidiaries 92.00% China Agriculture Industry Development Fund Co., Ltd. [Member] Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] Percentage of ownership 8.00% 8.00% Agriculture investment $ ¥ 400 65,000,000

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Description of Business and 6 Months Ended Organization (Details) - Schedule of subsidiary and Jun. 30, 2020 variable interest entity Merchant Supreme Co., Ltd. [Member] Variable Interest Entity [Line Items] Place and date of incorporation BVI, June 25, 2012 Percentage of ownership 100% held by PME Principal activities Intermediate holding company Prime Cheer Corporation Ltd. [Member] Variable Interest Entity [Line Items] Place and date of incorporation Hong Kong, May 3, 2012 Percentage of ownership 100% held by Merchant Supreme Principal activities Intermediate holding company Pingtan Guansheng Ocean Fishing Co., Ltd. [Member] Variable Interest Entity [Line Items] Place and date of incorporation PRC, October 12, 2012 Percentage of ownership 100% held by Prime Cheer Principal activities Intermediate holding company Fujian Heyue Marine Fishing Development Co., Ltd. [Member] Variable Interest Entity [Line Items] Place and date of incorporation PRC, January 27, 2015 Percentage of ownership 100% held by Pingtan Guansheng Principal activities Intermediate holding company Fujian Provincial Pingtan County Fishing Group Co., Ltd. [Member] Variable Interest Entity [Line Items] Place and date of incorporation PRC, February 27, 1998 Percentage of ownership 92% held by Fujian Heyue Principal activities Oceanic fishing Pingtan Dingxin Fishing Information Consulting Co., Ltd. [Member] Variable Interest Entity [Line Items] Place and date of incorporation PRC, October 23, 2012 Percentage of ownership 100% held by Pingtan Fishing Principal activities Dormant Pingtan Yikang Global Fishery Co., Ltd. [Member] Variable Interest Entity [Line Items] Place and date of incorporation PRC, September 14, 2017 Percentage of ownership 100% held by Pingtan Fishing Principal activities Dormant Pingtan Shinsilkroad Fishery Co., Ltd. [Member] Variable Interest Entity [Line Items] Place and date of incorporation PRC, September 14, 2017 Percentage of ownership 100% held by Pingtan Fishing Principal activities Dormant

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Fuzhou Howcious Investment Co., Ltd [Member] Variable Interest Entity [Line Items] Place and date of incorporation PRC, September 5, 2017 Percentage of ownership 100% held by Pingtan Fishing Principal activities Dormant Pingtan Ocean Fishery Co., Ltd [Member] Variable Interest Entity [Line Items] Place and date of incorporation PRC, July 21, 2017 Percentage of ownership 100% held by Pingtan Fishing Principal activities Dormant

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 3 Months Ended 6 Months Ended Months Ended Summary of Significant Dec. Feb. Accounting Policies (Details) May Jun. 30, Jun. 30, Jun. 30, Jun. 30, 31, Dec. 31, Feb. 15, 15, ¥ in Millions Dec. 04, 03, 2020 2019 2020 2019 2018 2019 2015 2015 2013 2012 USD ($) USD ($) USD ($) USD ($) USD USD ($) USD ($) CNY ($) (¥) Summary of Significant Accounting Policies (Details) [Line Items] Cash balances $ $ $ $ $ 3,405,523 3,405,523 3,173,279 3,173,279 10,092,205 Restricted cash 10,770,608 10,770,608 Allowance for doubtful 64,664 64,664 7,960 accounts Reserve for inventories 2,249,685 2,249,685 266,405 Impairment loss 245,940 2,475,442 Effective income tax rate on 25.00% 25.00% estimated profit Shipping and handling costs 44,952 92,585 $ 321,093 213,578 Employee benefit costs $ 611,472 2,511,059 1,216,354 1,242,254 Cumulative translation adjustment and effect of $ 309,238 $ 41,357 exchange rate Description of foreign Asset and currency translation liability accounts at June 30, 2020 and December 31, 2019 were translated at 7.0795 RMB to $1.00 and at 6.9762 RMB to $1.00, respectively, which were the exchange rates on the balance sheet dates. Equity accounts were stated at their historical rate. The average

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document translation rates applied to the statements of operations for the six months ended June 30, 2020 and 2019 were 7.0319 RMB and 6.7808 RMB to $1.00, respectively. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. Recognition of Asset and Liability for Lease of Acquiree 6.7808 [Policy Text Block] Number of reportable segment 1 Entitlement of net profit loss towards fishing vessels by 100.00% entity, percentage Rigth use of asset and $ liabilities 770,000 Pingtan Fishing [Member] Summary of Significant Accounting Policies (Details) [Line Items] Acquisition, percentage 8.00% 8.00% 8.00% 8.00% China Agriculture Industry Development Fund Co., Ltd. [Member] Summary of Significant Accounting Policies (Details) [Line Items] Agriculture investment $ ¥ 400 65,000,000 Asset under Construction [Member]

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant Accounting Policies (Details) [Line Items] Interest costs capitalized $ 765,066 $ 163,934$ 1,008,925 $ 185,753 CHINA Summary of Significant Accounting Policies (Details) [Line Items] Cash balances 3,193,562 3,193,562 9,971,626 HONG KONG Summary of Significant Accounting Policies (Details) [Line Items] Cash balances $ 211,961 $ 211,961 $ 120,579

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant 6 Months Ended Accounting Policies (Details) - Schedule of estimated Jun. 30, 2020 useful lives of the assets Fishing vessels [Member] | Minimum [Member] Business Acquisition [Line Items] Property, plant and equipment, Estimated useful life 10 years Fishing vessels [Member] | Maximum [Member] Business Acquisition [Line Items] Property, plant and equipment, Estimated useful life 20 years Vehicles [Member] Business Acquisition [Line Items] Property, plant and equipment, Estimated useful life 5 years Office and other equipment [Member] | Minimum [Member] Business Acquisition [Line Items] Property, plant and equipment, Estimated useful life 3 years Office and other equipment [Member] | Maximum [Member] Business Acquisition [Line Items] Property, plant and equipment, Estimated useful life 5 years

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant 3 Months Ended 6 Months Ended Accounting Policies (Details) Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019 - Schedule of disaggregate USD ($) USD ($) USD ($) USD ($) revenues $ / shares $ / shares $ / shares $ / shares Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 23,463,133 $ 25,463,094 $ 40,770,133 $ 43,887,303 Volume (KG) 21,754,435 15,428,398 35,293,718 24,171,343 Average price (in Dollars per share) | $ / shares $ 1.08 $ 1.65 $ 1.16 $ 1.82 Percentage of revenue 100.00% 100.00% 100.00% 100.00% Indian Ocean squid [Member] Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 12,108,000 $ 12,573,000 $ 19,821,000 $ 17,629,000 Volume (KG) 14,970,511 11,418,082 23,272,651 15,997,031 Average price (in Dollars per share) | $ / shares $ 0.81 $ 1.10 $ 0.85 $ 1.10 Percentage of revenue 51.60% 49.40% 48.60% 40.20% Peru squid [Member] Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 2,855,000 $ 4,838,000 Volume (KG) 1,949,315 3,053,765 Average price (in Dollars per share) | $ / shares $ 1.46 $ 1.58 Percentage of revenue 12.20% 11.90% Chub mackerel [Member] Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 2,064,000 $ 4,015,000 Volume (KG) 2,285,335 4,555,204 Average price (in Dollars per share) | $ / shares $ 0.90 $ 0.88 Percentage of revenue 8.80% 9.80% Croaker fish [Member] Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 1,839,000 $ 1,813,000 $ 3,096,000 $ 3,245,000 Volume (KG) 1,015,030 827,012 1,707,819 1,466,500 Average price (in Dollars per share) | $ / shares $ 1.81 $ 2.19 $ 1.81 $ 2.21 Percentage of revenue 7.80% 7.10% 7.60% 7.40% Cuttle fish [Member] Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 1,666,000 $ 4,116,000 $ 2,437,000 Volume (KG) 398,240 925,140 445,359 Average price (in Dollars per share) | $ / shares $ 4.18 $ 4.45 $ 5.47 Percentage of revenue 7.10% 10.10% 5.60% Others [Member] Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 2,931,000 $ 4,771,000 $ 4,884,000 $ 10,762,000 Volume (KG) 1,136,003 1,669,067 1,779,139 3,558,206

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Average price (in Dollars per share) | $ / shares $ 2.58 $ 2.86 $ 2.75 $ 3.02 Percentage of revenue 12.50% 18.70% 12.00% 24.40% Argentina squid(whole) [Member] Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 3,530,000 $ 3,800,000 Volume (KG) 780,888 889,945 Average price (in Dollars per share) | $ / shares $ 4.52 $ 4.27 Percentage of revenue 13.90% 8.70% Ribbon fish [Member] Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 2,061,000 $ 6,014,000 Volume (KG) 612,469 1,814,302 Average price (in Dollars per share) | $ / shares $ 3.37 $ 3.31 Percentage of revenue 8.10% 13.70% Indian squid [Member] Disaggregation of Revenue [Line Items] Revenue (in Dollars) | $ $ 715,000 Volume (KG) 120,880 Average price (in Dollars per share) | $ / shares $ 5.92 Percentage of revenue 2.80%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Summary of Significant 3 Months Ended 6 Months Ended Accounting Policies (Details) - Schedule of reconciliation Jun. 30, Jun. 30, Jun. 30, Jun. 30, of basic and diluted net 2020 2019 2020 2019 income per share - USD ($) Schedule of reconciliation of basic and diluted net income per share [Abstract] Net (loss) income available to owners of the company for basic $ $ $ $ and diluted net income per share of ordinary stock (1,576,010)4,579,044 6,088,680 2,691,805 Weighted average ordinary stock outstanding - basic and diluted 79,055,053 79,055,05379,055,05379,055,053 Net (loss) income per ordinary share attributable to owners of the $ (0.02) $ 0.06 $ 0.08 $ 0.03 Company - basic and diluted

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accounts Receivable (Details) - Schedule of Jun. 30, 2020Dec. 31, 2019 accounts receivable - USD ($) Schedule of accounts receivable [Abstract] Accounts receivable $ 12,689,165 $ 9,281,406 Less: allowance for doubtful accounts (64,664) (7,960) Accounts receivable, net $ 12,624,501 $ 9,273,446

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Inventories (Details) - USD 6 Months Ended ($) Jun. 30, 2020 Dec. 31, 2019 Inventory Disclosure [Abstract] Total inventory $ 56,605,991 $ 30,527,752 Increase in frozen fish and marine catches in warehouse 18,190,000 Increase in frozen fish and marine catches in transit $ 9,100,000

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Inventories (Details) - Schedule of inventories - Jun. 30, 2020Dec. 31, 2019 USD ($) Schedule of inventories [Abstract] Frozen fish and marine catches work in progress $ 26,174,721 $ 25,401,843 Frozen fish and marine catches in transit 12,555,420 3,459,004 Frozen fish and marine catches in warehouse 20,125,535 1,933,310 Inventories, gross 58,855,676 30,794,157 Less: reserve for inventories (2,249,685) (266,405) Total inventories $ 56,605,991 $ 30,527,752

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Cost Method Investment Jun. 30, 2020Dec. 31, 2019 Oct. 17, 2012Oct. 17, 2012 (Details) USD ($) USD ($) USD ($) CNY (¥) ¥ in Millions shares shares Cost Method Investment (Details) [Line Items] Cost method investment | $ $ 2,966,311 $ 3,010,235 Pingtan Fishing [Member] Cost Method Investment (Details) [Line Items] Cost method investment $ 3,000,000.0 ¥ 21 Percentage of common stock subscribed 5.00% 5.00% Number of shares held as investment | shares 15,113,250 15,113,250 Cost method investment, ownership percentage 4.80% 4.80%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3 Months Ended 6 Months Ended Equity Method Investment Jun. 30, Jun. 30, Jun. 30, Jun. 30, Jun. 30, Dec. 31, (Details) 2020 2019 2020 2019 2020 2019 ¥ in Millions USD ($) USD ($) USD ($) USD ($) CNY (¥) USD ($) Equity Method Investment (Details) [Line Items] Equity method investment $ $ $ 27,249,283 27,249,283 27,923,464 Joint venture registered capital 141,300,000 141,300,000 ¥ 1,000 Loss on equity method investments $ $ $ (143,015) $ (268,543) (271,227) (381,843) Pingtan Fishing [Member] Equity Method Investment (Details) [Line Items] Percentage of ownership 20.00% 20.00% 20.00% Joint venture registered capital $ $ ¥ 200 28,300,000 28,300,000 Zhen Lin [Member] Equity Method Investment (Details) [Line Items] Percentage of ownership 80.00% 80.00% 80.00% Global Deep Ocean [Member] Equity Method Investment (Details) [Line Items] Loss on equity method investments $ 143,015 $ 127,212 $ 268,543 $ 237,828

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Prepayment for Long-Term Assets (Details) - 6 months USD ($) CNY (¥) ended Jun. 30, 2020 $ in Millions Prepayment For Long Term Assets [Abstract] Prepayment for long-term assets reclassified $ 66.3 ¥ 466,335,000

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Prepayment for Long-Term 6 Months Ended Assets (Details) - Schedule of Jun. 30, 2020 prepayment for long-term USD ($) assets Schedule of prepayment for long-term assets [Abstract] Balance at Beginning $ 49,040,338 Prepayments made for fishing vessels’ construction 82,048,948 Reclassification to construction-in-progress (66,317,069) Foreign currency fluctuation (821,314) Balance at Ending $ 63,950,903

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3 Months Ended 6 Months Ended Property, Plant and Jan. 19, Jan. 19, Jun. 30, Jun. 30, Jun. 30, Jun. 30, Dec. 31, Equipment (Details) 2020 2020 2020 2019 2020 2019 2019 ¥ in Millions USD ($) CNY (¥) USD ($) USD ($) USD ($) USD ($) USD ($) Property, Plant and Equipment [Line Items] Received government subsidy $ ¥ 146.9 20,800,000 Depreciation $ $ $ 3,294,304 $ 6,672,732 2,331,141 5,071,259 Number of fishing vessels 70 Impairment loss on vessels 245,940 2,475,442 Secured Debt [Member] Property, Plant and Equipment [Line Items] Number of fishing vessels 70 70 Net carrying amount of fishing $ $ $ vessels 162,800,000 162,800,000 190,800,000 Cost of Sales [Member] Property, Plant and Equipment [Line Items] Depreciation $ $ $ 2,504,970 $ 5,171,965 1,582,085 3,100,042

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Property, Plant and 6 Months Ended Equipment (Details) - Schedule of property, plant Jun. 30, 2020 Dec. 31, 2019 and equipment - USD ($) Property, Plant and Equipment [Line Items] Property, plant and equipment, gross $ 349,290,630 $ 305,068,411 Less: accumulated depreciation (51,893,200) (45,690,682) Property, plant and equipment, net 297,397,430 259,377,729 Fishing Vessels [Member] Property, Plant and Equipment [Line Items] Property, plant and equipment, gross $ 329,999,848 304,619,431 Fishing Vessels [Member] | Minimum [Member] Property, Plant and Equipment [Line Items] Property, plant and equipment, Useful life 10 years Fishing Vessels [Member] | Maximum [Member] Property, Plant and Equipment [Line Items] Property, plant and equipment, Useful life 20 years Vehicles [Member] Property, Plant and Equipment [Line Items] Property, plant and equipment, Useful life 5 years Property, plant and equipment, gross $ 21,508 21,826 Office and other equipment [Member] Property, Plant and Equipment [Line Items] Property, plant and equipment, gross $ 438,279 427,154 Office and other equipment [Member] | Minimum [Member] Property, Plant and Equipment [Line Items] Property, plant and equipment, Useful life 3 years Office and other equipment [Member] | Maximum [Member] Property, Plant and Equipment [Line Items] Property, plant and equipment, Useful life 5 years Construction-in-progress [Member] Property, Plant and Equipment [Line Items] Property, plant and equipment, gross $ 18,830,995

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3 Months 6 Months 1 Months Ended Ended Ended Jun. Jun. Jun. Jun. Related Parties Transactions 30, 30, 30, 30, (Details) Jul. 01, 2013 Jul. 01, 2013 Jul. 31, 2012 Jul. 31, 2012 2020 2019 2020 2019 USD ($) HKD ($) USD ($) CNY (¥) USD USD USD USD ($) ($) ($) ($) Related Party Transaction [Line Items] Debt instrument interest rate 4.35% 4.35% Office rent expenses $ 2,964 $ 3,081 $ 5,973 $ 6,194 Rent expense and $ $ $ $ corresponding administrative 115,528114,192230,728228,359 service charge Ping Lin [Member] Related Party Transaction [Line Items] Lessee, Operating Lease, Pursuant to the Pursuant to the Description Office Lease, Office Lease, the annual rent the annual rent is RMB is RMB 84,000 84,000 (approximately (approximately $11,900) and $11,900) and the renewed the renewed Office Lease Office Lease expires on July expires on July 31, 2021. 31, 2021. Operating office lease, rent $ 11,900 ¥ 84,000 expense Hai Yi Shipping Limited [Member] Related Party Transaction [Line Items] Related party transaction, Pursuant to the Pursuant to the description Service Service Agreement, Agreement, the monthly the monthly payments are payments are HK$298,500 HK$298,500 (approximately (approximately $38,000) and $38,000) and the Service the Service Agreement Agreement expired on expired on December 31, December 31, 2017. 2017. Sale leaseback transaction $ 38,000 $ 298,500 monthly rental payments

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Parties Transactions (Details) - Schedule of Jun. 30, 2020Dec. 31, 2019 accounts payable - related parties - USD ($) Schedule of accounts payable - related parties [Abstract] Due from related party-Hong Long $ 81,252,639 $ 12,477,777

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Parties Transactions (Details) - Schedule of Jun. 30, Dec. 31, installments due from 2020 2019 related party-Hong Long - USD ($) Related Parties Transactions (Details) - Schedule of installments due from related party-Hong Long [Line Items] Total $ $ 81,252,63912,477,777 August 14, 2020 [Member] Related Parties Transactions (Details) - Schedule of installments due from related party-Hong Long [Line Items] Total 14,125,291 August 31, 2020 [Member] Related Parties Transactions (Details) - Schedule of installments due from related party-Hong Long [Line Items] Total 16,950,350 September 20, 2020 [Member] Related Parties Transactions (Details) - Schedule of installments due from related party-Hong Long [Line Items] Total 35,313,228 October 20, 2020 [Member] Related Parties Transactions (Details) - Schedule of installments due from related party-Hong Long [Line Items] Total 14,125,291 December 20, 2020 [Member] Related Parties Transactions (Details) - Schedule of installments due from related party-Hong Long [Line Items] Total $ 738,479

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Parties Transactions (Details) - Schedule of Jun. 30, Dec. 31, accounts payable - related 2020 2019 parties - USD ($) Related Parties Transactions (Details) - Schedule of accounts payable - related parties [Line Items] Accounts payable - related parties $ $ 2,366,568 1,707,217 Hong Long [Member] Related Parties Transactions (Details) - Schedule of accounts payable - related parties [Line Items] Accounts payable - related parties [1] 268,447 270,230 Huna Lin [Member] Related Parties Transactions (Details) - Schedule of accounts payable - related parties [Line Items] Accounts payable - related parties $ $ 2,098,121 1,436,987 [1]Hong Long is an affiliate company majority owned by a family member of the Company’s CEO.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Parties Transactions Jun. 30, Dec. 31, (Details) - Schedule of due to 2020 2019 related parties - USD ($) Related Parties Transactions (Details) - Schedule of due to related parties [Line Items] Due to related parties $ 18,354 $ 168,328 LiMing Yung [Member] Related Parties Transactions (Details) - Schedule of due to related parties [Line Items] Due to related parties 15,000 15,000 Xinrong Zhuo [Member] Related Parties Transactions (Details) - Schedule of due to related parties [Line Items] Due to related parties 3,354 3,328 Advance from Xinrong Zhuo [Member] Related Parties Transactions (Details) - Schedule of due to related parties [Line Items] Due to related parties $ 150,000

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Parties Transactions Jun. 30, (Details) - Schedule of future 2020 minimum lease payments on USD ($) office lease Office Lease [Member] Related Parties Transactions (Details) - Schedule of future minimum lease payments on office lease [Line Items] 2021 $ 11,946

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Parties Transactions (Details) - Schedule of future Jun. 30, minimum lease payments on 2020 operating leases - Operating USD ($) Lease [Member] Related Parties Transactions (Details) - Schedule of future minimum lease payments on operating leases [Line Items] 2020 $ 210,340 2021 35,425 Total minimum lease payments 245,765 Imputed interest (23,162) Present value of minimum lease payments $ 222,603

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Parties Transactions (Details) - Schedule of Jun. 30, 2020 remaining lease terms and discount rates Schedule of remaining lease terms and discount rates [Abstract] Remaining operating lease term 8 months 1 day Discount rate 5.13%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Related Parties Transactions 3 Months Ended 6 Months Ended (Details) - Schedule of Jun. 30, Jun. 30, Jun. 30, Jun. 30, purchases from related 2020 2019 2020 2019 parties - USD ($) Purchase of fuel, fishing nets and other on board consumables Purchase of fuel, fishing nets and other on board $ 636,530 $ 1,986,795 $ 1,064,720 $ 2,669,730 consumables Purchase of leasing Purchase of leasing 2,964 3,081 5,973 6,194 Purchase of vessel maintenance service, docking and freight Purchase of vessel maintenance service, docking and freight 210,961 7,585 3,411,251 406,567 Zhiyan Lin [Member] Purchase of fuel, fishing nets and other on board consumables Purchase of fuel, fishing nets and other on board 190 544 consumables Fuzhou Honglong Ocean Fishery Co., Ltd. [Member] Purchase of fuel, fishing nets and other on board consumables Purchase of fuel, fishing nets and other on board 636,530 1,986,605 1,064,720 2,669,186 consumables Ping Lin [Member] Purchase of leasing Purchase of leasing 2,964 3,081 5,973 6,194 Huna Lin [Member] Purchase of vessel maintenance service, docking and freight Purchase of vessel maintenance service, docking and freight $ 210,961 $ 7,585 $ 3,411,251 $ 406,567

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 3 Months Ended 6 Months Ended Bank Loans (Details) - USD Jun. 30, Jun. 30, Jun. 30, Jun. 30, ($) 2020 2019 2020 2019 Property, Plant and Equipment [Line Items] Weighted average interest rate for short-term bank 4.10% 6.60% 4.10% 6.60% loans Weighted average interest rate for long-term bank loans 4.90% 5.00% 4.90% 5.00% Interest expense $ 3,701,595 $ 1,684,081 $ 6,844,350 $ 2,235,066 Construction in Progress [Member] Property, Plant and Equipment [Line Items] Interest costs capitalized $ 765,066 $ 163,934 $ 1,008,925 $ 185,753

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Bank Loans (Details) - Schedule of short-term bank Jun. 30, 2020Dec. 31, 2019 loans - USD ($) Short-term Debt [Line Items] Short-term bank loans $ 90,684,370 $ 10,034,116 Fujian Haixia Bank [Member] | Due on November 1, 2020 [Member] Short-term Debt [Line Items] Short-term bank loans 4,237,587 4,300,335 Fujian Haixia Bank [Member] | Due on November 6, 2020 [Member] Short-term Debt [Line Items] Short-term bank loans 4,943,852 5,017,058 Fujian Haixia Bank [Member] | Due on November 14, 2020 [Member] Short-term Debt [Line Items] Short-term bank loans 706,265 716,723 Export-Import Bank of China [Member] | Due on January 21, 2021 [Member] Short-term Debt [Line Items] Short-term bank loans 38,420,792 Export-Import Bank of China [Member] | Due on July 21, 2020 [Member] Short-term Debt [Line Items] Short-term bank loans $ 42,375,874

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Bank Loans (Details) - 6 Months Ended Schedule of short-term bank Jun. 30, 2020 loans (Parentheticals) Fujian Haixia Bank [Member] | Due on November 1, 2020 [Member] Short-term Debt [Line Items] Annual interest rate 6.09% Debt instrument, maturity date Nov. 01, 2020 Short-term debt description Collateralized by Hong Long's 6 fishing vessels and 7 real estate properties Debt ratio of borrower 100.00% Fujian Haixia Bank [Member] | Due on November 6, 2020 [Member] Short-term Debt [Line Items] Annual interest rate 6.09% Debt instrument, maturity date Nov. 06, 2020 Short-term debt description Collateralized by Hong Long's 6 fishing vessels and 7 real estate properties Debt ratio of borrower 100.00% Fujian Haixia Bank [Member] | Due on November 14, 2020 [Member] Short-term Debt [Line Items] Annual interest rate 6.09% Debt instrument, maturity date Nov. 14, 2020 Short-term debt description Collateralized by Hong Long's 6 fishing vessels and 7 real estate properties Debt ratio of borrower 100.00% Export-Import Bank of China [Member] | Due on January 21, 2021 [Member] Short-term Debt [Line Items] Annual interest rate 3.88% Debt instrument, maturity date Jan. 21, 2021 Short-term debt description Guaranteed by Pin Lin, Xinrong Zhuo and Hong Long, pledged deposits provided by Hong Long amounted to RMB 42 million, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Export-Import Bank of China [Member] | Due on July 21, 2020 [Member] Short-term Debt [Line Items]

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Annual interest rate 3.33% Debt instrument, maturity date Jul. 21, 2020 Short-term debt description Guaranteed by Pin Lin, Xinrong Zhuo and Hong Long, pledged deposits provided by Hong Long amounted to RMB 20 million.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Bank Loans (Details) - Schedule of long-term bank Jun. 30, 2020 Dec. 31, 2019 loans - USD ($) Debt Instrument [Line Items] Total long-term bank loans $ 275,232,715$ 217,353,287 Less: current portion (60,880,006) (57,122,789) Long-term bank loans, non-current portion 214,352,709 160,230,498 Due on August 28, 2020 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Total long-term bank loans 4,661,346 4,730,369 Due on January 30, 2023 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Total long-term bank loans 2,825,058 5,017,058 Due on November 27, 2023 [Member] | China Development Bank [Member] Debt Instrument [Line Items] Total long-term bank loans 4,661,346 5,447,092 Due on March 28, 2025 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Total long-term bank loans 59,326,224 65,938,477 Due on September 30, 2020 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Total long-term bank loans 15,537,820 16,484,619 Due on August 21, 2026 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Total long-term bank loans 57,843,068 63,214,931 Due on October 21, 2025 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Total long-term bank loans 44,360,477 45,017,345 Due on July 30, 2026 [Member] | China Development Bank [Member] Debt Instrument [Line Items] Total long-term bank loans 10,452,716 11,503,396 Due on October 21, 2025 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Total long-term bank loans 8,045,766 Due on April 21, 2028 [Member] | Due on April 21, 2028 [Member] Debt Instrument [Line Items] Total long-term bank loans 18,362,879 Due on December 21, 2028 [Member] | Due on December 21, 2028 [Member] Debt Instrument [Line Items] Total long-term bank loans 19,775,408 Due on June 27, 2025 [Member] | Due on June 27, 2025 [Member] Debt Instrument [Line Items] Total long-term bank loans $ 29,380,607

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 6 Months Ended Bank Loans (Details) - Dec. Schedule of long-term bank Jun. 30, 2020 31, loans (Parentheticals) 2019 Debt Instrument [Line Items] Debt instrument, maturity date Dec. 21, 2028 Due on August 28, 2020 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Annual interest rate 4.75% 4.75% Debt instrument, maturity date Aug. 28, 2020 Long-term debt description Guaranteed by Hong Long, Xinrong Zhuo and Ping Lin. Due on January 30, 2023 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Annual interest rate 4.90% 4.90% Debt instrument, maturity date Jan. 30, 2023 Long-term debt description Guaranteed by Xinrong Zhuo and Ping Lin and collateralized by 2 fishing vessels and collateralized by two related parties' investments in equity interest of one PRC local banks. Due on November 27, 2023 [Member] | China Development Bank [Member] Debt Instrument [Line Items] Annual interest rate 5.145% 5.145% Debt instrument, maturity date Nov. 27, 2023 Long-term debt description Guaranteed by Xinrong Zhuo, Honghong Zhuo, Mr. and Mrs. Zhiyan Lin and 17 fishing vessels Debt ratio of borrower 80.00% Due on March 28, 2025 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Annual interest rate 4.949% 4.949% Debt instrument, maturity date Mar. 28, 2025 Long-term debt description Guaranteed by Hong Long, Xinrong Zhuo, Ping Lin and collateralized by 20 fishing vessels.

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Due on September 30, 2020 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Annual interest rate 4.75% 4.75% Debt instrument, maturity date Sep. 30, 2020 Long-term debt description Guaranteed by Hong Long, Xinrong Zhuo, Ping Lin and collateralized by equity investment of 67 million shares of Hong Long in Xiamen International Bank. Due on August 21, 2026 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Annual interest rate 4.70% 4.70% Debt instrument, maturity date Aug. 21, 2026 Long-term debt description Guaranteed by Pin Lin, Xinrong Zhuo and Yaohua Zhuo, 15 fishing vessels, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Due on October 21, 2025 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Annual interest rate 4.70% 4.70% Debt instrument, maturity date Oct. 21, 2025 Long-term debt description Guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo and Hong Long, 15 fishing vessels and 1 transport vessel, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Due on July 30, 2026 [Member] | China Development Bank [Member] Debt Instrument [Line Items] Annual interest rate 5.39% 5.39% Debt instrument, maturity date Jul. 30, 2026 Long-term debt description Guaranteed by Xinrong Zhuo, 11 fishing vessels and 6 Hong Long's fishing vessels, real estate of Mingguang Wanhao Property co., LTD., totalled area 22,123.50m2 Debt ratio of borrower 80.00% Due on October 21, 2025 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items]

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Annual interest rate 4.70% 4.70% Debt instrument, maturity date Oct. 21, 2025 Long-term debt description Guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo and Hong Long, 15 fishing vessels and 1 transport vessel, the Land Use Right of B2 plot in central business district on the north shore of Minjiang river. Due on April 21, 2028 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Annual interest rate 4.65% 4.65% Debt instrument, maturity date Apr. 21, 2028 Long-term debt description Guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo, Hong Long and Huanghai Shipbuilding Co., Ltd., the Land Use Right of B2 plot in central business district on the north shore of Minjiang river, 1 vessel. Due on December 21, 2028 [Member] | Export-Import Bank of China [Member] Debt Instrument [Line Items] Annual interest rate 4.65% 4.65% Long-term debt description Guaranteed by Pin Lin, Xinrong Zhuo, Yaohua Zhuo, Hong Long and Huanghai Shipbuilding Co., Ltd., the Land Use Right of B2 plot in central business district on the north shore of Minjiang river, 1 vessel. Due on June 27, 2025 [Member] Debt Instrument [Line Items] Debt instrument, maturity date Jun. 27, 2025 Long-term debt description Guaranteed by Xinrong Zhuo, Huanghai Shipbuilding Co., Ltd. and Fujian Jingfu Ocean Fishery Development Co., Ltd.. Due on June 27, 2025 [Member] | Bank of Communications [Member] Debt Instrument [Line Items] Annual interest rate 4.65% 4.65%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Bank Loans (Details) - Schedule of future maturities Jun. 30, 2020 Dec. 31, 2019 of long-term bank loans - USD ($) Schedule of future maturities of long-term bank loans [Abstract] 2021 $ 60,880,006 2022 42,446,500 2023 50,215,411 2024 50,074,158 2025 48,090,967 Thereafter 23,525,673 Total long-term bank loans 275,232,715 $ 217,353,287 Less: current portion (60,880,006) (57,122,789) Long-term liability $ 214,352,709$ 160,230,498

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Accrued Liabilities and Other Payables (Details) - Schedule of accrued Jun. 30, 2020Dec. 31, 2019 liabilities and other payables - USD ($) Schedule of accrued liabilities and other payables [Abstract] Accrued salaries and related benefits $ 10,903,530 $ 10,003,346 Accrued interest due 427,970 339,629 Other 248,204 1,085,043 Accrued liabilities and other payables $ 11,579,704 $ 11,428,018

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 12 Months 3 Months Ended 6 Months Ended Certain Risks and Ended Concentrations (Details) Jun. 30, Jun. 30, Jun. 30, Jun. 30, Dec. 31, 2019 2020 2019 2020 2019 Major Customers [Member] Concentration Risk [Line Items] Concentration risk, percentage 10.00% 10.00% 10.00% 10.00% Major Customers [Member] | Accounts Receivable [Member] Concentration Risk [Line Items] Number of customer 3 3 Percentage of total outstanding accounts receivable 10.00% 10.00% related parties Major Suppliers [Member] Concentration Risk [Line Items] Concentration risk, percentage 10.00% 10.00% 10.00% 10.00% Major Suppliers [Member] | Accounts payable [Member] Concentration Risk [Line Items] Concentration risk, percentage 10.00% 10.00% Number of suppliers 1 2 Percentage of total outstanding accounts payable 53.20% 76.00% related parties

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Certain Risks and 3 Months Ended 6 Months Ended Concentrations (Details) - Schedule of concentration of Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019 risks Customer A [Member] Concentration Risk [Line Items] Concentration risk, percentage 19.00% 22.00% 15.00% 22.00% Customer B [Member] Concentration Risk [Line Items] Concentration risk, percentage 14.00% 12.00% 12.00% 14.00% Customer C [Member] Concentration Risk [Line Items] Concentration risk, percentage 13.00% [1] [1] [1] Customer D [Member] Concentration Risk [Line Items] Concentration risk, percentage 12.00% [1] [1] [1] Customer E [Member] Concentration Risk [Line Items] Concentration risk, percentage 11.00% [1] 12.00% [1] Customer F [Member] Concentration Risk [Line Items] Concentration risk, percentage [1] 18.00% [1] 17.00% Customer G [Member] Concentration Risk [Line Items] Concentration risk, percentage [1] 12.00% [1] 11.00% [1]less than 10%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Certain Risks and 3 Months Ended 6 Months Ended Concentrations (Details) - Schedule of concentration of Jun. 30, 2020Jun. 30, 2019Jun. 30, 2020Jun. 30, 2019 risks Supplier A [Member] Concentration Risk [Line Items] Concentration risk, Percentage [1] 35.00% 29.00% Supplier B [Member] Concentration Risk [Line Items] Concentration risk, Percentage [1] 25.00% 23.00% Supplier C [Member] Concentration Risk [Line Items] Concentration risk, Percentage [1] 10.00% [1]less than 10%

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Commitments and 6 Months Ended12 Months Ended Contingencies (Details) - Jun. 30, 2020 Dec. 31, 2019 USD ($) Commitments and Contingencies Disclosure [Abstract] Severance payments $ 10,000 $ 10,000

Copyright © 2020 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Subsequent Events (Details) 1 Months Ended - Subsequent Event [Member] - USD ($) Aug. 12, 2020Aug. 05, 2020 Jul. 21, 2020 $ in Thousands Subsequent Events (Details) [Line Items] Repayment of long-term bank loan $ 5,650 Reimbursement of operating expenses for government subsidy $ 12,000 Received repayment of Hong Long $ 18,900

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