Annual report pursuant to Section 13 and 15(d)

Inventories

v3.21.2
Inventories
12 Months Ended
Dec. 31, 2020
Inventory Disclosure [Abstract]  
INVENTORIES

NOTE 4 – INVENTORIES

 

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

 

    December 31,
2020
    December 31,
2019
 
Frozen fish and marine catches - warehouse   $ 44,272,021     $ 1,933,310  
Frozen fish and marine catches - work in progress     20,702,914       25,401,843  
Frozen fish and marine catches - in transit     18,761,950       3,459,004  
      83,736,885       30,794,157  
Less: reserve for inventories     (16,125,749 )     (266,405 )
    $ 67,611,136     $ 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 the PRC, nor applied for duty-exemption import into the PRC.

 

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

 

Frozen fish and marine catches - warehouse represent fish inventory in cold storage warehouses located in the PRC.

 

As of December 31, 2020, our total inventory balance was $67,611,136 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 $42.34 million and an increase in frozen fish and marine catches in transit by $15.30 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. For the year ended 2020, due to the influence of COVID-19, the quantity of inventories increased significantly while the average selling price decreased by over 40%, resulting in the net realizable value of inventories being lower than its cost, which required a significant provision for obsolete inventory in 2020. The provision for obsolete inventory was $16,125,749, $266,405 and $413,893 for the years ended December 31, 2020, 2019 and 2018, respectively. These reserves are recorded based on estimates.