Vessels

9 Months Ended

Sep. 30, 2021

Property, Plant and Equipment [Abstract]

Vessel and Vessel Improvements

As of September 30, 2021, the Company’s owned operating fleet consisted of 52 drybulk vessels.

During the fourth quarter of 2020, the Company entered into a series of memorandum of agreements to purchase three high specification scrubber-fitted Ultramax bulkcarriers for a total purchase price of $51.5 million including direct expenses of acquisition. The Company took delivery of the vessels during the first quarter of 2021.

During the first quarter of 2021, the Company entered into another series of memorandum of agreements to purchase four vessels. The first vessel is a high-specification scrubber-fitted Ultramax bulkcarrier for a total purchase price of $15.3 million and warrant for 212,315 common shares of the Company. The remaining three vessels are 2011-built Crown-58 Supramax bulkcarriers that were purchased for a total purchase price of $22.4 million and warrants for 329,583 common shares of the Company. The above mentioned prices include direct expenses of acquisition. Common shares were issuable upon exercise of warrants on a pro-rata basis in connection with each vessel delivery. The warrants were measured at fair value on the date of the memorandum of agreement and recorded as Vessel and vessel improvements on the Condensed Consolidated Balance Sheets when the Company took delivery of the vessels. The fair value of the warrants for the total of 541,898 common shares was approximately $10.7 million as of the date of the memorandum of agreements for each vessel. The Company took delivery of the

four vessels during the second and third quarters of 2021 and issued 541,898 shares of common stock upon conversion of outstanding warrants.

During the second quarter of 2021, the Company entered into memorandum of agreements to acquire two high-specification 2015-built scrubber-fitted Ultramax bulkcarriers for a total consideration of $44.0 million. This acquisition was partially financed with cash on hand, which included proceeds raised from equity issued under the Company's ATM Offering. The Company took delivery of one vessel in the third quarter of 2021 for a total purchase price of $22.2 million including direct expenses of acquisition. The remaining vessel was delivered in October 2021.

On June 1, 2021, the Company signed a memorandum of agreement to sell the vessel Tern for a total net consideration of $9.2 million after commissions and associated selling expenses. The vessel was delivered to the buyer during the third quarter of 2021. The Company recorded a gain of $4.0 million in its Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2021. Additionally, the Company wrote off $0.3 million of unamortized drydock costs upon sale of the vessel.

During the third quarter of 2018, the Company entered into a contract for the installation of ballast water treatment systems ("BWTS") on 39 of our owned vessels. The projected cost, including installation, is approximately $0.5 million per BWTS. The Company intends to complete the installations during scheduled drydockings. The Company completed installation of BWTS on 17 vessels and recorded $8.5 million in Vessels and vessel improvements in the Condensed Consolidated Balance Sheets as of September 30, 2021. Additionally, the Company recorded $5.3 million as advances paid towards installation of BWTS on the remaining vessels as a Noncurrent asset in its Condensed Consolidated Balance Sheets as of September 30, 2021.

The Vessels and vessel improvements activity for the nine months ended September 30, 2021 is below:


Vessels and vessel improvements, at December 31, 2020	$	810,713,959
Purchase of vessels and vessel improvements	109,884,516
Advances paid for vessel purchases as of December 31, 2020	3,250,000
Fair value of warrants issued as consideration for vessel purchases	10,679,988
Sale of vessel	(4,885,998)
Scrubbers and BWTS	1,505,004
Depreciation expense	(32,742,401)
Vessels and vessel improvements, at September 30, 2021	$	898,405,068