Vessels and vessel improvements

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Vessels and Vessel Improvements

As of December 31, 2021, the Company’s owned fleet consisted of 53 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 bulk carriers for a total purchase price of $51.5 million including direct expenses of acquisition. The Company paid a deposit of $3.3 million on these vessels as of December 31, 2020. 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 bulk carrier for a total purchase price of $15.3 million and a warrant convertible into 212,315 common shares of the Company. The remaining three vessels are 2011-built, Crown-58 Supramax bulk carriers that were purchased for a total purchase price of $20.5 million and a warrant convertible into 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 Vessels and vessel improvements on the 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 bulk carriers. This acquisition was partially financed with cash on hand, which included proceeds raised from equity issued under the Company's ATM Offering. The total cost of the vessels acquired including the direct costs of acquisition was $42.2 million. The Company took delivery of the two vessels in each of the third and fourth quarters of 2021.

In the second quarter of 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 Consolidated Statements of Operations for the year ended December 31, 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 purchase of ballast water treatment systems (“BWTS”) on 39 of our owned vessels. The projected costs, including installation, are approximately $0.5 million per BWTS. The Company intends to complete the installations during scheduled drydockings. The Company completed installation of BWTS on 23 vessels and recorded $11.5 million in Vessels and vessel improvements in the Consolidated Balance Sheet as of December 31, 2021. Additionally, the Company recorded $4.4 million as advances paid towards installation of BWTS on the remaining vessels as a noncurrent asset in its Consolidated Balance Sheet as of December 31, 2021.

The Vessels and vessel improvements activity for the years ended December 31, 2021 and 2020 is below:


	December 31, 2021		December 31, 2020
Vessels and vessel improvements	$	810,713,959	$	835,959,084
Transfer from advances paid for vessel purchases	3,250,000		—
Purchase of vessels and vessel improvements	128,326,112		979,612
Fair value of warrants issued as consideration for vessel purchases	10,679,988		—
Sale of vessels	(4,885,998)		(23,458,118)
Scrubbers and BWTS	4,588,585		39,706,507
Depreciation expense	(44,596,733)		(42,473,126)
Vessels and vessel improvements	$	908,075,913	$	810,713,959