Vessels and Vessel Improvements

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Vessels and Vessel Improvements

As of December 31, 2022, the Company’s owned fleet consisted of 53 drybulk vessels.

During the fourth quarter of 2022, the Company entered into a memorandum of agreement to acquire a high-specification 2015-built Ultramax bulkcarrier for total consideration of $24.3 million. The Company paid a deposit of $3.6 million on this vessel as of December 31, 2022. The vessel was delivered to the Company during the first quarter of 2023.

During the third quarter of 2022, the Company entered into a memorandum of agreement to acquire a high-specification 2015-built scrubber-fitted Ultramax bulkcarrier for total consideration of $27.5 million. The vessel was delivered to the Company during the fourth quarter of 2022.

During the second quarter of 2022, the Company signed a memorandum of agreement to sell the vessel Cardinal (a 2004-built Supramax) for total consideration of $15.8 million. The vessel was delivered to the buyer during the third quarter of 2022. The Company recorded a gain of $9.3 million upon sale of the vessel in the Consolidated Statement of Operations for the year ended December 31, 2022.

During the second quarter of 2021, the Company signed a memorandum of agreement to sell the vessel Tern (a 2003-built Supramax) for 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 and wrote off $0.3 million of unamortized drydock costs upon sale of the vessel in the Consolidated Statement of Operations for the year ended December 31, 2021.

During the second quarter of 2021, the Company entered into memorandum of agreements to acquire two high-specification 2015-built, scrubber-fitted Ultramax bulkcarriers. 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.

During the first quarter of 2021, the Company entered into another series of memorandum of agreements to purchase four vessels. The first vessel was a high-specification 2017-built, scrubber-fitted Ultramax bulkcarrier 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 were 2011-built, Crown-58 Supramax bulkcarriers 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 in 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 fourth quarter of 2020, the Company entered into a series of memorandum of agreements to purchase two high-specification 2015-built, scrubber-fitted Ultramax bulkcarriers and one high-specification 2016-built, scrubber fitted Ultramax bulkcarrier 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.

In 2018, the Company entered into a contract for the purchase of BWTS for its owned vessels. As of December 31, 2022, 48 of our owned vessels have BWTS installed. For the year ended December 31, 2022, the Company recorded $8.2 million in Vessels and vessel improvements in the Consolidated Balance Sheet related to the acquisition and installation of BWTS. As of December 31, 2022, the Company made payments of $2.0 million related to BWTS that are expected to be acquired and installed during scheduled drydockings in 2023 and are recorded in Advances for ballast water systems and other assets in the Consolidated Balance Sheet.

Activity within Vessels and vessel improvements for the years ended December 31, 2022 and 2021 is as follows:


	December 31, 2022		December 31, 2021
Beginning balance	$	908,076	$	810,714
Transfer from advances paid for vessel purchases	—		3,250
Purchase of vessels and vessel improvements	28,289		128,326
Fair value of warrants issued as consideration for vessel purchases	—		10,680
Sale of vessels	(5,592)		(4,886)
Purchase of scrubbers and BWTS	8,794		4,589
Depreciation expense	(47,690)		(44,597)
Ending balance	$	891,877	$	908,076