NOTE 11 – 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, 2017 and December 31, 2016, short-term bank loans consisted of the following:

	June 30, 2017		December 31, 2016
Loan from Fujian Haixia Bank, due on September 14, 2017 with annual interest rate of 6.960% at June 30, 2017 and December 31, 2016, collateralized by Pingtan Fishing’s 17 fishing vessels	$	4,428,436	$	4,324,636
Loan from Fujian Haixia Bank, due on September 22, 2017 with annual interest rate of 1.529% at June 30, 2017 and December 31, 2016, collateralized by Pingtan Fishing’s 17 fishing vessels		1,150,000		1,150,000
Loan from Fujian Haixia Bank, due on October 10, 2017 with annual interest rate of 1.739% at June 30, 2017 and December 31, 2016, collateralized by Pingtan Fishing’s 17 fishing vessels		1,080,000		1,080,000
Loan from China Development Bank, due on March 21, 2017 with variable annual interest rate based on London Interbank Offered Rate (“LIBOR”)⁽¹⁾plus 230 basis points (3.211% at December 31, 2016), secured by the Company’s restricted cash which is a deposit with the lender of approximately $0.6 million (RMB 4 million) and collateralized by a related party’s land use right, and repaid on due date		-		3,000,000
Loan from China Development Bank, due on April 18, 2017 with variable annual interest rate based on LIBOR⁽¹⁾ plus 230 basis points (3.204% at December 31, 2016), secured by the Company’s restricted cash which is a deposit with the lender of approximately $0.6 million (RMB 4 million) and collateralized by a related party’s land use right, and repaid on due date		-		3,000,000
Loan from China Development Bank, due on April 18, 2017 with variable annual interest rate based on LIBOR⁽¹⁾ plus 230 basis points (3.257% at December 31, 2016), secured by the Company’s restricted cash which is a deposit with the lender of approximately $0.3 million (RMB 2 million) and collateralized by a related party’s land use right, and repaid on due date		-		1,500,000
Loan from China Development Bank, due on August 22, 2017 with variable annual interest rate based on LIBOR⁽¹⁾ plus 230 basis points (3.510% at June 30, 2017 and December 31, 2016), secured by the Company’s restricted cash which is a deposit with the lender of approximately $1.0 million (RMB 6.7 million) and collateralized by a related party’s two vessels		5,000,000		5,000,000
Loan from China Development Bank, due on December 9, 2017 with variable annual interest rate based on LIBOR⁽¹⁾ plus 230 basis points (3.593% at June 30, 2017 and December 31, 2016), secured by the Company’s restricted cash which is a deposit with the lender of approximately $0.5 million (RMB 3.5 million) and collateralized by a related party’s two vessels		2,500,000		2,500,000
Loan from China Development Bank, due on March 8, 2018 with variable annual interest rate based on LIBOR⁽¹⁾ plus 230 basis points (3.721% at June 30, 2017), secured by the Company’s restricted cash which is a deposit with the lender of approximately $1 million (RMB 7 million) and collateralized by seven vessels		5,000,000		-
Loan from China Development Bank, due on April 24, 2018 with variable annual interest rate based on LIBOR⁽¹⁾ plus 230 basis points (3.721% at June 30, 2017), secured by the Company’s restricted cash which is a deposit with the lender of approximately $0.7 million (RMB 4.9 million) and collateralized by four vessels		3,500,000		-
	$	22,658,436	$	21,554,636

(1)	Represents six-month LIBOR rate on the loan commencement date.

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. At June 30, 2017 and December 31, 2016, long-term bank loans consisted of the following:

	June 30, 2017			December 31, 2016
Loan from The Export-Import Bank of China, due on various dates until December 10, 2017 with annual interest rate of 4.750% and 4.900% at June 30, 2017 and December 31, 2016, respectively, collateralized by Hong Long’s investment in equity interest of a China local bank	$	3,011,337		$	5,852,674
Loan from The Export-Import Bank of China, due on various dates until December 10, 2017 with annual interest rate of 4.750% and 4.900% at June 30, 2017 and December 31, 2016, respectively, collateralized by Fujian International Trading and Transportation Co., Ltd.’s investment in equity interest of a China local bank		590,458			1,153,236
Loan from The Export-Import Bank of China, due on various dates until December 10, 2017 with annual interest rate of 4.750% and 4.900% at June 30, 2017 and December 31, 2016, respectively, guaranteed by Hong Long		2,479,924			4,742,684
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, 2017 and December 31, 2016, guaranteed by Huanghai Ship Construction Co., Ltd, Xinrong Zhuo and Ping Lin and collateralized by 2 fishing vessels under construction and collateralized by three related parties’ investments in equity interest of two PRC local banks		16,237,600			18,019,317
Loan from China Development Bank, due on various dates until November 27, 2023 with annual interest rate of 5.145% at June 30, 2017 and December 31, 2016, guaranteed by Xinrong Zhuo, Honghong Zhuo, Mr. and Mrs. Zhiyan Lin and 6 fishing vessels		9,004,488			9,370,045
Total long-term bank loans	$	31,323,807		$	39,137,956
Less: current portion		(11,838,687	)		(17,298,544	)
Long-term bank loans, non-current portion	$	19,485,120		$	21,839,412

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

Due in twelve-month periods ending June 30,	Principal
2018	$	11,838,687
2019		5,756,967
2020		5,904,582
2021		2,214,218
2022		1,623,760
Thereafter		3,985,593
	$	31,323,807
Less: current portion		(11,838,687	)
Long-term liability	$	19,485,120

The weighted average interest rate for short-term bank loans was approximately 3.5% and 4.8% for the six months ended June 30, 2017 and 2016, respectively.

The weighted average interest rate for long-term bank loans was approximately 5.0% and 5.3% for the six months ended June 30, 2017 and 2016, respectively.

For the three months ended June 30, 2017 and 2016, interest expense related to bank loans amounted to $705,418 and $699,084, respectively, of which, $57,085 and $303,226 was capitalized to construction-in-progress, respectively. For the six months ended June 30, 2017 and 2016, interest expense related to bank loans amounted to $1,413,830 and $1,334,829, respectively, of which, $62,421 and $416,705 was capitalized to construction-in-progress, respectively.