10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark one)

[ X ] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2019

[    ] Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

For the transition period from ___________________________ to _________________________________

Commission File Number: 000-55854

PETROGRESS, INC.

(Exact name of registrant as specified in its charter)

Delaware	27-2019626
(State or other jurisdiction of incorporation of organization)	(I.R.S. Employer Identification No.)

1, Akti Xaveriou Avenue 5th Floor - Piraeus - Greece	18538
(Address of principal executive offices)	(Zip Code)

+30 (210) 459-9741

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [   ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [ X ] No [   ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[   ]	Accelerated filer	[   ]
Non-accelerated filer	[   ]	Smaller reporting company	[X]
		Emerging growth company	[X]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [   ] No [X]

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: The number of shares of the registrant’s Common Stock, par value $0.001 per share, outstanding as of May 15, 2019 was 3,874,808.

Table of Contents

	Page
INTRODUCTORY COMMENT	1
Caution Regarding Forward-Looking Information	1
Part I - Financial Information
Item 1 - Financial Statements	2
Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3 - Quantitative and Qualitative Disclosures About Market Risk	14
Item 4 - Controls and Procedures	14
Part II - Other Information
Item 1 - Legal Proceedings	15
Item 1A - Risk Factors	15
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3 - Defaults Upon Senior Securities	15
Item 4 - Mine Safety Disclosures	15
Item 5 - Other Information	15
Item 6 – Exhibits	15
Signatures	15

INTRODUCTORY COMMENT

 
Throughout this Quarterly Report on Form 10-Q (the “Report”), the terms “we,” “us,” “our,” “Petrogress,” or the “Company” refers to Petrogress, Inc., a Delaware corporation and its subsidiary companies. As of March 31, 2019, our significant subsidiaries were Petrogres Co. Limited, Petronav Carriers LLC, Petrogress Int’l LLC and Petrogres Africa Co. Limited.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

All statements in this Report that are not representations of historical fact are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and subject to the safe-harbor provisions of the United States Private Securities Litigation Reform Act of 1995. The disclosure and analysis set forth in this Report includes assumptions, expectations, projections, intentions and beliefs about future events in a number of places, particularly in relation to our operations, cash flows, financial position, plans, strategies, business prospects, changes and trends in our business and the markets in which we operate. These statements are intended as forward-looking statements. In some cases, predictive, future-tense or forward-looking words such as “believe,” “intend,” “anticipate,” “estimate,” “project,” “forecast,” “plan,” “potential,” “may,” “should” and “expect” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.

  
We caution that the forward-looking statements included in this Report represent our estimates and assumptions only as of the date hereof and are not intended to give any assurance as to future results. These forward-looking statements are not statements of historical fact and represent only our management’s belief as of the date hereof, and involve risks and uncertainties that could cause actual results to differ materially and inversely from expectations expressed in or indicated by the forward-looking statements. Assumptions, expectations, projections, intentions and beliefs about future events may, and often do, vary from actual results and these differences can be material. As a result, the forward-looking events discussed in this Report might not occur and our actual results may differ materially from those anticipated in the forward-looking statements. Accordingly, you should not unduly rely on any forward-looking statements.

 
We undertake no obligation to update or revise any forward-looking statements contained in this, whether as a result of new information, future events, a change in our views or expectations or otherwise. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

1

Part I - Financial Information

Item 1 - Financial Statements

PETROGRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS 

	As of March 31, 2019			As of December 31, 2018
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents		1,252,785			661,010
Accounts receivable, net of allowance for doubtful accounts of $0 and $344,466 as of March 31, 2019 and December 31, 2018, respectively		5,123,752			4,779,432
Claims receivable, net		547,600			547,600
Inventories		1,218,524			417,135
Prepaid expenses and other current assets		1,066,448			1,765,276
Total current assets		9,209,109			8,170,453
Non-Current Assets
Goodwill		900,000			900,000
Vessels and other fixed assets, net		4,267,066			4,450,906
Deferred charges, net		20,061			26,750
Security deposit		10,584			10,638
Total non-current assets		5,197,711			5,388,294
Total Assets		14,406,820			13,558,747
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses		1,931,982			1,265,452
Due to related party		1,213,297			1,176,863
Loan facility from related party		148,900			148,900
Accrued Interest		8,594			8,744
Total current liabilities		3,302,773			2,599,959
Total liabilities		3,302,773			2,599,959
Shareholders' equity:
Series A Preferred shares, $100 par value, 100 shares authorized, 100 and 100 shares issued and outstanding as of March 31, 2019 and December 31, 2018 respectively		10,000			10,000
Preferred shares (undesignated), $0.001 par value, 999,900 shares authorized, 0 shares and 0 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively		-			-
Shares of Common stock, $0.001 par value, 19,000,000 shares authorized, 3,828,412 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively		3,829			3,829
Additional paid-in capital		9,535,161			9,535,161
Accumulated comprehensive loss		(10,231	)		(10,231	)
Retained earnings		1,466,362			1,315,870
Equity attributable to Shareholders of the Company		11,005,121			10,854,629
Non-controlling interests		98,926			104,159
Total liabilities and shareholders' equity		14,406,820			13,558,747

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

PETROGRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended March 31,
	2019			2018
	(Unaudited)			(Unaudited)
Revenues	$	2,122,678		$	2,565,264
Costs of goods sold		(1,165,752	)		(1,406,537	)
Gross profit		956,926			1,158,727
Operating expenses:
Corporate expenses		(5,063	)		(300,138	)
Selling, general and administrative expenses		(549,559	)		(541,313	)
Depreciation expense		(197,280	)		(227,619	)
Total operating expenses		(751,902	)		(1,069,070	)
Operating income before other expenses and income taxes		205,024			89,657
Other income/ (expense), net:
Interest and finance expenses		(12,363	)		(1,427	)
Other income / (expense), net		(47,402	)		25,614
Total other income/ (expense), net		(59,765	)		24,187
Income before income taxes		145,259			113,844
Income tax expense		-			-
Net income	$	145,259		$	113,844
Net income attributable to:
Shareholders of the company		150,492			120,480
Non-controlling interests		(5,233	)		(6,636	)
	$	145,259		$	113,844
Other comprehensive income/ (loss)
Foreign currency translation adjustment		-			724
Comprehensive income	$	145,259		$	114,568
Comprehensive income attributable to:
Shareholders of the company		150,492			121,204
Non-controlling interests		(5,233	)		(6,636	)
	$	145,259		$	114,568
Weighted average number of shares of Common Stock:
Basic		3,828,412			3,299,234
Diluted		3,828,412			5,293,239
Basic earnings per share		0.04			0.03
Diluted earnings per share		0.04			0.02

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Petrogress, INC. and Subsidiaries

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

									Additional			Accumulated								Non-			Total
	Preferred Stock				Common Stock				Paid-in			Comprehensive			Retained					controlling			Shareholders’
	Shares		Amount		Shares		Amount		Capital			Loss			Earnings		Total			interest			Equity
Balances at December 31, 2017		100	$	10,000		3,177,452	$	3,098	$	9,100,838		$	(7,744	)	$	1,008,823	$	10,115,015		$	98,758		$	10,213,773
Common stock issued for convertible notes		-		-		76,614		77		209,923			-			-		210,000			-			210,000
Common stock issued to settle liabilities		-		-		190,705		191		457,501			-			-		457,692			-			457,692
Cancellation of common stock issued for services		-		-		-		-		(146,767	)		-			-		(146,767	)		-			(146,767	)
Common stock issued for board advisory services		-		-		800		80		1,416			-			-		1,496			-			1,496
Common stock issued for accrued interest of LOC		-		-		382,841		383		-			-			-		383			-			383
Foreign currency translation adjustment		-		-		-		-		-			(2,487	)		-		(2,487	)		-			(2,487	)
Elimination of Petrogress Africa Ltd apic/due from shareholders		-		-		-		-		(87,750	)		-			-		(87,750	)		(12,250	)		(100,000	)
Net income		-		-		-		-		-			-			307,047		307,047			17,651			324,698
Balances at December 31, 2018		100	$	10,000		3,828,412	$	3,829	$	9,535,161		$	(10,231	)	$	1,315,870	$	10,854,629		$	104,159		$	10,958,788
Net income		-		-		-		-		-			-			150,492		150,492			(5,233	)		145,259
Balances at March 31, 2019		100	$	10,000		3,828,412	$	3,829	$	9,535,161		$	(10,231	)	$	1,466,362		11,005,121			98,926		$	11,104,047

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

PETROGRESS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  

	Three Months Ended March 31,
	2019			2018
	(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	145,259		$	113,844
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		197,280			227,619
Change in Fair value of share-based payments issued for services		-			153,178
Gain on settlement of convertible promissory notes		-			(12,835	)
Changes in working capital:
- (Increase)/ decrease in Accounts receivable, net		(344,320	)		(1,632,138	)
- (Increase)/ decrease in Inventories		(801,389	)		(1,876	)
- Amounts due from related party		-			58,529
- (Increase)/ decrease in Prepaid expenses and other current assets		705,517			(102,146	)
- (Increase)/ decrease in Security deposit		54			-
Increase/(decrease) in:
- Increase/ (decrease) in Accounts payable and accrued expenses		666,530			562,692
- Increase/ (decrease) in Amounts due to related party		36,434			-
- Increase/ (decrease) in Accrued Interest		(150	)		3,196
Net cash provided by/ (used in) operating activities		605,215			(629,937	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property plant and equipment		(13,440	)		(84,600	)
Acquisition of subsidiary		-			-
Net cash used in investing activities		(13,440	)		(84,600	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from loan facility from related party		-			63,000
Net cash provided by/ (used in) financing activities		-			63,000
Effect of exchange rate changes on cash		-			724
Net (decrease)/ increase in cash and cash equivalents		591,775			(650,813	)
Cash and cash equivalents, Beginning of Period		661,010			1,150,999
Cash and cash equivalents, End of Period	$	1,252,785		$	500,186
Cash paid for interest expense	$	-		$	-
Cash paid for income taxes	$	-		$	-
Non-cash investing and financing activities:
Common stock issued for settlement of notes and interest payable	$	-		$	297,500
Common stock issued for settlement of services	$	-		$	210,000

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Petrogress, Inc. and Subsidiaries

Notes to CONDENSED Consolidated Financial Statements

(unaudited)

Note 1 - Background and Description of Business and Preparation of Financial Statements

Nature of the Business

Petrogress, Inc. was incorporated on February 10, 2010 under the laws of the State of Florida as 800 Commerce, Inc. ("800 Commerce") for the purpose of marketing credit card processing services on behalf of merchant payment processing service providers. On February 29, 2016, 800 Commerce entered into an Agreement concerning the Exchange of Securities ("SEA") with Petrogres Co. Limited, a Marshall Islands corporation, and its sole shareholder, Christos Traios, a Greek citizen. Under the terms of the SEA, 800 Commerce issued 136,000,000 shares of restricted Common Stock, representing approximately 85% of the post-transaction issued and outstanding shares, to Mr. Traios in exchange for 100% of the shares of Petrogres Co. Limited.

800 Commerce's acquisition of Petrogres Co. Limited effected a change in control and was accounted for as a "reverse acquisition" whereby Petrogres Co. Limited was the acquirer for financial statement purposes. Accordingly, the historical financial statements of 800 Commerce are those of Petrogres Co. Limited and its subsidiaries from their respective inception and those of the consolidated entity subsequent to the February 29, 2016 transaction date.

On March 9, 2016, our Board of Directors approved an amendment to our Articles of Incorporation to change the Company’s name to Petrogress, Inc. On March 15, 2016, Mr. Traios was appointed Chief Executive Officer. On November 16, 2016, Petrogress, Inc. filed Articles of Merger and Plan of Merger in Florida and Delaware to change the Company’s domicile by merging with and into a Delaware corporation formed solely for the purpose of effecting the reincorporation.

The Company operates as a fully integrated international merchant of petroleum products, focused on the supply and trade of light petroleum fuel oil (LPFO), refined oil products and other petrochemical products to local refineries in West Africa and Mediterranean countries. The Company operates as a holding company and provides its services primarily through its wholly-owned and majority-owned subsidiaries: Petrogres Co. Limited, which provides management of crude oil purchases and sales; Petronav Carriers LLC, which manages day-to-day operations of our affiliated tanker fleet, currently consisting of four vessels; Petrogress Int’l LLC, which is a holding company for subsidiaries currently conducting business in Cyprus and Ghana. including a 90% interest in Petrogres Africa Co. Limited, which attends to and services our tanker fleet in Ghana.

The accompanying unaudited condensed interim consolidated financial statements (the "Interim Statements") have been prepared pursuant to the rules and regulations for reporting on Securities and Exchange Commission (the "SEC") Form 10-Q. Accordingly, certain information and disclosures required by generally accepted accounting principles for complete consolidated financial statements are not included herein. The Interim Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the SEC on April 12, 2019. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The interim results for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future interim periods.

The Company's management team operates from its principal offices located in Piraeus, Greece.

Basis of Presentation

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles (“GAAP”) and has elected a year-end of December 31.

All significant intercompany transactions and accounts have been eliminated.

These interim consolidated financial statements are unaudited; however, in the opinion of our management, these statements reflect all adjustments necessary for a fair statement of the results for the periods reported. All such adjustments are of a normal, recurring nature unless otherwise disclosed. These interim consolidated financial statements, including the notes, have been prepared in accordance with the rules of the SEC applicable to interim period financial statements and do not include all of the information and disclosures required by GAAP for complete financial statements.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2018. The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the full year.

6

Principles of consolidation

The consolidated financial statements of the Company include the consolidated accounts of the Company and its wholly-owned and majority-owned subsidiaries. Our significant subsidiaries are described below.  

Petrogres Co. Limited

Petrogres Co. Limited, is a Marshall Islands corporation, incorporated in 2009.

Petronav Carriers LLC

Petronav Carriers LLC, was formed in Delaware in April 2016.

Petrogress Int'l LLC

Petrogress Int’l LLC, is a Delaware limited liability company, acquired by the Company in September 2017.

Emerging Growth Company

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or “JOBS Act.” Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

Note 2 - Summary of Significant Accounting Policies

Cash and Cash Equivalents

We consider all highly liquid investments with an original term of three months or less to be cash equivalents.

Accounts Receivable, net

The amount shown as accounts receivable, net at each balance sheet date includes estimated recoveries from customers and charterers for sales of oil products, hires, freight and demurrage billings, net of allowance for doubtful accounts. Accounts receivable involve risk, including the credit risk of non-payment by the customer. Accounts receivable are considered past due based on contractual and invoice terms. An estimate is made of the allowance for doubtful accounts based on a review of all outstanding amounts at each period, and an allowance is made for any accounts which management believes are not recoverable. The determination of bad debt allowances constitutes a significant estimate.

As of March 31, 2019, and December 31, 2018, 0 and $344,466 of allowances for doubtful accounts were recorded.

Inventories

The Company's inventories consist primarily of purchased crude oil for re-sale and gas oil in transit on a marine vessel at the respective balance sheet date, and both are valued at the purchased cost or market using the mark-to-market method of valuation.

Inventories	At March 31, 2019		At December 31, 2018
Crude Oil (Commodities)	$	-	$	279,196
Gas Oil (Bunkers on board)		127,322		137,939
Gas Oil (Commodities)		1,050,000		-
Lubricants (Commodities)		41,202		-
Total Inventories	$	1,218,524	$	417,135

7

Vessels and other fixed assets, net

We depreciate our vessels on a straight-line basis over the estimated useful life which is 10 years from the date of their transfer to the Company. Depreciation is calculated based on a vessel’s cost less the estimated residual value. The estimated useful lives of vessels and equipment are as follows:

Vessels (in years)	10
Office equipment and furniture (in years)	10

Income taxes

The Company files income tax returns in various jurisdictions, as appropriate and required. The Company was not subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for any period prior to January 1, 2012.

We account for income taxes in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 740-10, Income Taxes. We recognize deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. We record a valuation allowance related to a deferred tax asset when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. We classify interest and penalties as a component of interest and other expenses. To date, we have not incurred any liability for unrecognized tax benefits, including assessments of penalties and/or interest.

We measure and record uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized. Our tax years subsequent to 2011 remain subject to examination by federal and state tax jurisdictions.

Earnings Per Share

The Company reports earnings per share in accordance with ASC 260, "Earnings per Share." Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period.

Accounting for Equity-based Payments

We account for stock awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees. The measurement date is the earlier of (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of our common stock and recognized as expense during the period in which services are provided.

Comprehensive Income

We adopted ASC Topic 220, "Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Items included in Comprehensive loss consist of cancellation of available-for-sale securities and foreign currency translation adjustments.

Revenue Recognition

The Company recognizes revenue for crude oil sales and gas oil sales, its primary sources of revenue, at an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for transferring goods or services to its customers. The Company's policy is to record revenue when, (a) control of the goods (crude oil, gas oil and other petrochemical products) is passed to its customers and (b) the vessels charter (voyages and long term) service is rendered to its independent charterers or Petrogres Co. Limited.

8

Fair Value of Financial Instruments

Our financial instruments consist primarily of cash, accounts receivable, accounts payable and accrued expenses, and convertible debt.

The carrying amount of cash, accounts receivable, accounts payable and accrued expenses, and convertible debt, as applicable, approximates fair value due to the short-term nature of these items and/or the current interest rates payable in relation to current market conditions.

Interest rate risk is the risk that our earnings are subject to fluctuations in interest rates on either investments or on debt. We do not use derivative instruments to moderate exposure to interest rate risk, if any.

Financial risk is the risk that our earnings are subject to fluctuations in interest rates or foreign exchange rates. We do not use derivative instruments to moderate exposure to financial risk, if any.

Fair value measurements are determined under a three-level hierarchy for fair value measurements that prioritizes the inputs to valuation techniques used to measure fair value, distinguishing between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (“observable inputs”) and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). Fair value is the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, we primarily use prices and other relevant information generated by market transactions involving identical or comparable assets (“market approach”). We also consider the impact of a significant decrease in volume and level of activity for an asset or liability when compared with normal activity to identify transactions that are not orderly.

The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Securities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The three hierarchy levels are defined as follows:

Level 1 - Quoted prices in active markets that is unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 - Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;

Level 3 - Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s own credit risk as observed in the credit default swap market.

Effects of Recent Accounting Pronouncements not yet adopted

In January 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-01, Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). This standard affects the accounting for equity instruments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. In February 2018, the FASB issued ASU 2018-03, “Technical Corrections and Improvements to Financial Instruments (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This update was issued to clarify certain narrow aspects of guidance concerning the recognition of financial assets and liabilities established in ASU No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”. This includes an amendment to clarify that an entity measuring an equity security using the measurement alternative may change its measurement approach to a fair valuation method in accordance with Topic 820, Fair Value Measurement, through an irrevocable election that would apply to that security and all identical or similar investments of the same issued. The update is effective for fiscal years beginning after December 15, 2018. We have evaluated the impact of the adoption of this standard and we do not expect this guidance to have a significant impact on our consolidated financial statements and related disclosures.

9

In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”). In January 2018, the FASB issued ASU 2018-01, which provides additional implementation guidance on the previously issued ASU 2016-02. Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. We have evaluated the impact on the consolidated financial statements which is immaterial.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business.” These amendments clarify the definition of a business. The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The amendments should be applied prospectively as of the beginning of the period of adoption. We have evaluated the impact of the adoption of this standard and we do not expect this guidance to have a significant impact on our consolidated financial statements and related disclosures.

Note 3 - Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade accounts receivables. Concentrations of credit risk with respect to trade receivables are limited due to the short payment terms dictated by the industry and operating environment. As of March 31, 2019 and December 31, 2018, management is of the opinion that the Company had no significant concentrations of credit risk, except as disclosed in Note 7.

Note 4 - Vessels and other fixed assets, net

Vessels and other fixed assets, net consisted of the following as of March 31, 2019 and December 31, 2018:

							Estimated useful
	March 31, 2019			December 31, 2018			Life (in years)
Marine vessels	$	10,171,930		$	10,171,930			10
Furniture and equipment		203,290			189,848			10
Accumulated depreciation		(6,108,154	)		(5,910,872	)
Vessels and other fixed assets, net	$	4,267,066		$	4,450,906

Depreciation for the three months ended March 31, 2019 and March 31, 2018, was $197,280 and $227,619, respectively.

Note 5 - Preferred stock

On July 14, 2017, Christos Traios, our President, Chief Executive Officer and sole Director approved a resolution authorizing the establishment of Series A Preferred Stock (“Series A”). The Series A Preferred Stock consists of 100 shares in total with a re-designated par value of $100 per share. The holder(s) of the Series A shares have rights as a class to a number of votes equal to two (2) times the sum of: (i) the total number of shares of Common Stock which are issued and outstanding at the time of any election or vote by the shareholders; plus (ii) the number of shares of Preferred Stock issued and outstanding of any other class that has voting rights, if any. These voting rights may be exercised for any matter requiring shareholder approval by vote or consent, and may, if required, permit a number of votes in excess of the total number of shares authorized. The holders of the Series A are not entitled to convert the Series A shares into shares of Common Stock or any other class of the Company’s stock. The Series A shares are not be entitled to dividends, but, in the event of liquidation, dissolution or winding up of the Comany, either voluntary or involuntary, the holders of the Series A shares would be entitled to receive out of the assets of the Company, prior to and in preference to any distribution of the assets or surplus funds of the Company to the holders of any other class of preferred stock or the Common Stock, the amount of One Hundred Dollars ($100) per share, and will not be entitled to receive any portion of the remaining assets of the Company except by reason of ownership of shares of any other class of the Company’s stock. The Series A shares are not subject to redemption by the Company.

On October 6, 2017, the Company issued the above 100 Series A shares of Preferred stock to Christos Traios, our President, Chief Executive Officer and sole Director as provided in his employment agreement.

On July 9, 2018, the Company filed the Amendment to the Company's Certificate of Incorporation with the Delaware Secretary of State to, among other things, reduce the number of authorized shares of Preferred Stock from 10,000,000 to 1,000,000. The Amendment took effect on July 18, 2018. There was no change in the par value of the Company's Preferred Stock.

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Note 6 - Related party transactions

Officer's compensation

During the three months ended March 31, 2019 and March 31, 2018, the Company recorded officers’ compensation of $45,000 and $60,000, respectively. For the period ended March 31, 2019, $7,129 was paid and the remaining amount was accrued and included in Amounts Due to Related Party on the Consolidated Balance Sheets as of March 31, 2019.

Revolving Line of Credit

On October 31, 2018, Christos P. Traios, notified the Company that he was terminating the Revolving Line of Credit Agreement dated July 13, 2017 (the “Credit Agreement”) pursuant to which Mr. Traios provided a revolving line of credit in the principal amount of up to $1,000,000 to the Company. As such, no further advances have been made under the Credit Agreement and existing advances in principal amount of $148,900 under the Line of Credit Note issued in connection with the Credit Agreement will become due upon the current maturity date, July 13, 2019.

The Company accounts for this agreement under ASC 808-10, Collaborative Agreements, and has recognized the portion of revenues and expenses attributed to the Company.

During the three months ended March 31, 2019, the Company recognized revenues totaling $1,917,178 from sales of crude oil to Platon Gas Oil Ghana Limited (“PGO”).  These revenues are not subject to the Company’s collaborative arrangement with PGO and are those solely of the Company.  No other costs related to the collaborative arrangement have been incurred directly by the Company and a formal accounting to determine profit or loss has not yet occurred. 

The table below presents the movement of the amounts due to Christos Traios during the three months ended March 31, 2019:

Amounts due to related party December 31, 2018	$	1,176,863
Wages accrued to Christos Traios		45,000
Wages paid to Christos Traios, in cash		(7,129	)
Amount due from Christos Traios		(1,437	)
Amounts due to related party March 31, 2019	$	1,213,297

Note 7 - Revenue Concentrations

The Company sells to commercial customers in foreign markets. The following is a summary of customers who accounted for more than five percent (5%) of the Company’s revenues for the periods ended March 31, 2019 and 2018:

Customer	March 31, 2019			March 31, 2018
A		94	%		85	%
B		*			7	%
C		6	%		*

The following is a summary of customers who accounted for more than five percent (5%) of the Company’s accounts receivable for the periods ended March 31, 2019 and December 31, 2018:

Customer	March 31, 2019			December 31, 2018
A		61	%		63	%
B		15	%		16	%
C		6	%		6	%
D		5	%		5	%
E		5	%		*

Note 8 – Subsequent Events

On April 1, 2019, Petrogress Int’l LLC and Petrogres Co. Limited entered into a merger agreement, pursuant to which Petrogres Co. Limited was merged with and into Petrogress Int’l LLC, which survived the merger. The merger became effective April 23, 2019.

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As of April 24, 2019, Petrogress, Inc., Petrogress Int’l LLC and Christos P. Traios agreed on an amendment to the Securities Purchase Agreement dated effective as of September 30, 2017 between Petrogress Int’l LLC and Christos P. Traios, pursuant to which the Company purchased its interest in Petrogres Africa Company Limited. The amendment adjusts the aggregate purchase price to $900,000, which is to be paid to Mr. Traios on or before October 23, 2019. In the event that the purchase price is not paid in full by the payment date, any outstanding and unpaid amount of the purchase price is convertible at the option of Mr. Traios, in whole or in part, into shares of Common Stock at a conversion price equal to 65% of the lowest trading price during the 10 trading days. Notwithstanding the foregoing, the conversion rights are capped at 3,500,000 shares of Common Stock (as such number may be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by Petrogress).

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview of Business

Petrogress, Inc. was incorporated on February 10, 2010 under the laws of the State of Florida as 800 Commerce, Inc. for the purpose of marketing credit card processing services on behalf of merchant payment processing service providers. On February 29, 2016, 800 Commerce entered into an Agreement concerning the Exchange of Securities with Petrogres Co. Limited, a Marshall Islands corporation, and its sole shareholder, Christos Traios. 800 Commerce issued 136,000,000 shares of restricted Common Stock, representing approximately 85% of the post-transaction issued and outstanding shares, to Mr. Traios in exchange for 100% of the shares of Petrogres Co. Limited.

800 Commerce's acquisition of Petrogres Co. Limited effected a change in control and was accounted for as a "reverse acquisition" whereby Petrogres Co. Limited was the acquirer for financial statement purposes. Accordingly, the historical financial statements of 800 Commerce are those of Petrogres Co. Limited and its subsidiaries from their respective inception and those of the consolidated entity subsequent to the February 29, 2016 transaction date. In connection with the transaction, Mr. Traios was appointed as a director of the Company, and it amended its constituent documents to increase its authorized capital to 490,000,000 shares of Common Stock, par value $0.001, and 10,000,000 preferred shares, par value $0.001.

On March 9, 2016, the Company's Board of Directors approved an amendment to the Articles of Incorporation to change the name of the Company to Petrogress, Inc. On March 15, 2016, Mr. Traios was appointed Chief Executive Officer. On November 16, 2016, Petrogress filed Articles of Merger and Plan of Merger in Florida and Delaware to change the Company's domicile by merging with and into a Delaware corporation formed solely for the purpose of effecting the change of domicile. The Company's name and capitalization remained the same, and the Certificate of Incorporation and Bylaws of the Delaware corporation are the constituent documents of the surviving corporation.

On July 9, 2018, the Company filed an amendment (the "Amendment") to the Company's Certificate of Incorporation with the Delaware Secretary of State to (a) effect a reverse stock split of the Company's Common Stock at a ratio of one-for-100, (b) reduce the number of authorized shares of Common Stock from 490,000,000 to 19,000,000 and (c) reduce the number of authorized shares of Preferred Stock from 10,000,000 to 1,000,000. The Amendment took effect on July 18, 2018. There was no change in the par value of the Company's Common Stock or Preferred Stock.

The Company currently operates as a fully integrated international merchant of petroleum products, focused on the supply and trade of light petroleum fuel oil (LPFO), refined oil products and other petrochemical products to local refineries in West Africa and Mediterranean countries. The Company operates as a holding company and provides its services primarily through its wholly-owned and majority-owned subsidiaries: Petrogres Co. Limited, which provides management of crude oil purchases and sales; Petronav Carriers LLC, which manages day-to-day operations of our tanker fleet, currently consisting of four vessels; Petrogress Int'l LLC, which is a holding company for subsidiaries currently conducting business in Cyprus and Ghana, including a 90% interest in Petrogres Africa Co. Limited, which attends to and services our tanker fleet in Ghana.

The Company's management team operates from its principal offices located in Piraeus, Greece.

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Results of Operations

Comparison of Three Months Ended March 31, 2019 and 2018

The Company has recognized revenues for the three months ended March 31, 2019 and 2018, as follows:

	Three Months Ended March 31,
	2019		2018
Crude oil net sales	$	1,917,178	$	2,173,264
Gas oil net sales		-		332,000
Hire-Freights		194,500		-
Other		11,000		60,000
Totals	$	2,122,678	$	2,565,264

Total revenues for the three months ended March 31, 2019, decreased by $442,586 or approximately 17%. The decrease in sales revenue for the three months ended March 31, 2019 resulted from the lack of sales of Gas Oil to third parties. Consequently, inventories as at March 31, 2019 and 2018 were $1,218,524 and $417,135, respectively, an increase of $801,389 or approximately 192%.

Directly related to our sales activity and volumes, we experienced the following cost of sales amounts for the three months ended March 31, 2019 and 2018: 

	Three Months Ended March 31,
	2019		2018
Crude oil purchase cost	$	1,165,752	$	1,072,221
Gas oil purchase cost		-		294,000
Shipping expenses		-		40,316
Totals	$	1,165,752	$	1,406,537

Selling, general and administrative expenses for the three months ended March 31, 2019 and 2018 were $542,872 and $541,313, respectively.

For the three months ended March 31, 2019, the Company experienced net income of $145,259 compared to net income of $113,844 for the three months ended March 31, 2018.

Liquidity and Capital Resources

At March 31, 2019 and December 31, 2018, the Company had cash and cash equivalents of $1,252,785 and $661,010, with corresponding working capital of $5,906,336 and $5,570,494, respectively.

Our need for capital resources is driven by our expansion plans, ongoing maintenance and improvement of our vessels, support of our operational expenses, corporate overhead and expenses associated with SEC regulatory compliance.

Since the reverse acquisition of Petrogres Co. Limited on February 29, 2016, the Company's principal sources of cash are (a) net cash provided from operating subsidiaries activities, which includes the sale and shipment of petroleum products, and (b) cash contributed to the Company by Christos Traios, our President, Chief Executive Officer, sole Director and controlling stockholder.

Management continues to seek the necessary financing for the expansion of Company's operations. Additional funding is expected to be generated through equity financing from the sale of common stock and/or the issuance of debt. If the Company is successful in completing equity financing, existing stockholders will experience dilution of their interest in our Company. Management does not currently have any outside financing arranged and cannot provide investors with any assurance that the Company will be able to raise sufficient funding from the sale of our common stock or debt on acceptable terms to fund our plans to expand the Company's operations.

Our intention to expand our operations, increase the oil sales or seek new projects within the energy and shipping industries, however, expansion of existing operations will be subject to the availability of additional financing necessary to support such initiatives.

Critical Accounting Policies

Our financial statements and related public financial information are based on the application of GAAP. GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

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Our significant accounting policies are summarized in Note 2 of our accompanying consolidated financial statements. While all of these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates.

Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause effect on our results of operations, financial position or liquidity for the periods presented in this report.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Reg. 240.12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4 - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Christos Traios, our Chief Executive Officer and Evangelos Makris, our Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of March 31, 2019, pursuant to Exchange Act Rule 13a-15. Such disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company is accumulated and communicated to the appropriate management on a basis that permits timely decisions regarding disclosure. Based upon that evaluation, the Company's principal executive officer concluded that the Company's disclosure controls and procedures as of March 31, 2019 were not effective to provide reasonable assurance that information required to be disclosed in the Company's periodic filings under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Controls

Our disclosure controls and procedures provide our principal executive officer and principal financial officer with reasonable assurances that our disclosure controls and procedures will achieve their objectives. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting can or will prevent all human error. A control system, no matter how well designed and implemented, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are internal resource constraints, and the benefit of controls must be weighed relative to their corresponding costs. Because of the limitations in all control systems, no evaluation of controls can provide complete assurance that all control issues and instances of error, if any, within our company are detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur due to human error or mistake. Additionally, controls, no matter how well designed, could be circumvented by the individual acts of specific persons within the organization. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated objectives under all potential future conditions.

Management is aware that there is a lack of segregation of duties due to the fact that the Company only has one director and one executive officer dealing with general administrative and financial matters. This constitutes a significant deficiency in the internal controls. Management has decided that considering the officer and director involved, the control procedures in place, and the outsourcing of certain financial functions, the risks associated with such lack of segregation were low and the potential benefits of adding additional employees to clearly segregate duties did not justify the expenses associated with such increases. Management periodically reevaluates this situation. In light of the Company's current cash flow situation, the Company does not intend to increase staffing to mitigate the current lack of segregation of duties within the general administrative and financial functions.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal controls over financial reporting during the three months ended March 31, 2019 that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

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Part II - Other Information

Item 1 - Legal Proceedings

None.

Item 1A - Risk Factors

We are a smaller reporting company as defined by Reg. 240.12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3 - Defaults Upon Senior Securities

None.

Item 4 - Mine Safety Disclosure

None.

Item 5 - Other Information

None.

Item 6 - Exhibits

The following exhibits are filed with this Quarterly Report on Form 10-Q or are incorporated by reference as described below.

Exhibit	Description
10.1	Agreement and Plan of Merger dated April 1, 2019 between Petrogress Int’l LLC and Petrogres Co. Limited*
10.2	Securities Purchase Agreement dated effective as of September 30, 2017 between Christos P. Traios and Petrogress Int’l LLC (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K as filed with the Commission on November 2, 2017)
10.3	Amendment to Securities Purchase Agreement dated effective as of April 24, 2019 among Christos P. Traios, Petrogress, Inc., and Petrogress Int’l LLC*
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14a/Rule 14d-14(a)*
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14a/Rule 14d-14(a)*
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350**
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350**
101.1	Interactive data files pursuant to Rule 405 of Regulation S-T*

*	Filed herewith.
**	Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

May 15, 2019	Petrogress, Inc.
	By:	/s/ Christos P. Traios
		Christos P. Traios
		President and Chief Executive Officer (Principal Executive Officer)

By:	/s/ Evangelos Makris
	Evangelos Makris
	Chief Financial Officer (Principal Financial and Accounting Officer)

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Exhibit Index

Exhibit	Description
10.1	Agreement and Plan of Merger dated April 1, 2019 between Petrogress Int’l LLC and Petrogres Co. Limited*
10.1	Securities Purchase Agreement dated effective as of September 30, 2017 between Christos P. Traios and Petrogress Int’l LLC (Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K as filed with the Commission on November 2, 2017)
10.3	Amendment to Securities Purchase Agreement dated effective as of April 24, 2019 among Christos P. Traios, Petrogress, Inc., and Petrogress Int’l LLC*
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14a/Rule 14d-14(a)*
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14a/Rule 14d-14(a)*
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Secti on 1350**
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350**
101.1	Interactive data files pursuant to Rule 405 of Regulation S-T*

*	Filed herewith.
**	Furnished herewith

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EX-10.1

Exhibit 10.1

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger (the “Agreement”) is entered into the 1^st day of April, 2019, by and between Petrogress Int’l LLC (the “Surviving Company”), a Delaware limited liability company and Petrogres Co. Limited (the “Merging Company”), a corporation organized in the Republic of the Marshall Islands, said entities being hereinafter sometimes collectively referred to as the “Constituent Entities.”

WHEREAS, the Surviving Company is a limited liability company duly organized and existing under the laws of the State of Delaware with 100% of its membership interests being owned by Petrogress, Inc. (“Petrogress”), a Delaware corporation.

WHEREAS, the Merging Company is a corporation duly organized and existing under the laws of the Republic of the Marshall Islands with 100% of its capital stock being owned by Petrogress.

WHEREAS, the sole member of the Surviving Company and Christos Traios, the sole director of the Merging Company have determined that it is advisable that the Merging Company be merged with and into the Surviving Company on the terms and conditions hereinafter set forth (the “Merger”).

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, it is agreed that, in accordance with the applicable statutes of the State of Delaware and the Republic of the Marshall Islands, the Merging Company will be, as of the Effective Date (defined hereafter), merged with and into the Surviving Company, with the Surviving Company being the surviving limited liability company governed under the laws of the State of Delaware, and that the terms and conditions of such Merger, the mode of carrying it into effect, and the manner of converting securities will be as follows:

ARTICLE I
MERGER

On the Effective Date, the Merging Company will be merged with and into the Surviving Company, the separate existence of the Merging Company will cease, and the Surviving Company will be the surviving limited liability company governed under the laws of the State of Delaware, and such Merger will in all respects have the effect provided for in Title 6, Section 18-209 of the Delaware Limited Liability Act.

Prior to and from and after the Effective Date, the Constituent Entities will take all such action as will be necessary or appropriate to effectuate the Merger. If at any time after the Effective Date, any of the Constituent Entities are advised that any further assignments, conveyances, or assurances in law are necessary or desirable to carry out the provisions hereof, the officers, directors or members, as appropriate, of the Constituent Entities will execute and deliver any and all proper deeds, assignments, and assurances in law, and do all things necessary or proper to carry out the provisions hereof.

1

ARTICLE II
TERMS OF MERGER

On the Effective Date:

(a)     Effect of Merger. The separate existence of the Merging Company shall cease and the Merging Company shall be merged with and into the Surviving Company, and the Surviving Company shall succeed to, without further act or deed, and without any transfer or assignment having occurred, and shall possess all the rights, privileges, powers and franchises, whether of a public or of a private nature, and be subject to all the restrictions, disabilities and duties of each of the Constituent Entities; and all and singular, the rights, privileges, powers and franchises of each of the Constituent Entities, and all property, real, personal and mixed, and all debts due to each of the Constituent Entities on whatever account, whether for stock subscriptions or for any other things in action or belonging to each of the Constituent Entities, shall be vested in the Surviving Company; and all property, rights, privileges, powers and franchises, and all and every other interest of the Constituent Entities shall be thereafter the property of the Surviving Company; and the title to any real estate vested by deed or otherwise in each of the Constituent Entities shall not revert or be in any way impaired by reason of the Merger; provided, that all rights of creditors and all liens upon any property of the Constituent Entities shall be preserved unimpaired, and all debts, liabilities and duties of each of the Constituent Entities shall attach to the Surviving Entity and may be enforced against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by the Surviving Company.

(b)     Certificate of Formation. The Certificate of Formation, as amended, of the Surviving Company shall be the Certificate of Formation of the Surviving Company from and after the Merger until the same shall thereafter be altered, amended or repealed in accordance with law, the Certificate of Formation and the Company Agreement of the Surviving Company.

(c)     Company Agreement. The Company Agreement of the Surviving Company shall be the Company Agreement of the Surviving Company from and after the Merger until the same shall thereafter be altered, amended or repealed in accordance with law, the Certificate of Formation and said Company Agreement of the Surviving Company.

(d)     Conversion of Shares. All of the outstanding shares of capital stock of the Merging Company will be automatically canceled without any consideration being exchanged therefor and all of the outstanding membership interest of the Surviving Company shall be identical to the outstanding membership interest of the Surviving Company immediately prior to the Effective Date.

(e)     Managing Member. The managing member of the Surviving Company (who holds such position subject to the provisions of the Certificate of Formation and Company Agreement of the Surviving Company from the Effective Date until their successors are elected and qualified) shall be the managing member of the Surviving Company in office immediately prior to the Effective Date.

2

(f)     Officers. The officers of the Surviving Company (who shall hold their respective offices subject to the provisions of the Company Agreement of the Surviving Entity from the Effective Date until their successors are elected and qualified) shall be the officers of the Surviving Company in office immediately prior to the Effective Date.

(g)     Employees. The employees, if any, of the Merging Company immediately prior to the Effective Date shall become, commencing upon the Effective Date, employees of the Surviving Company, entitled to benefits substantially equivalent to those which they enjoyed as employees of the Merging Company.

(h)     Books and Records. The assets, liabilities, reserves and accounts of the Constituent Entities shall be taken up on the books of the Surviving Company at the amounts at which they are then carried on the respective books of the Constituent Entities, subject to such adjustments or eliminations of intercompany items as may be appropriate in giving effect to the Merger.

(i)     Plans and Policies. All corporate acts, plans, policies, approvals, obligations and authorizations of the Merging Company, and its directors, officers and agents, which were valid and effective immediately prior to the Effective Date, shall be taken for all purposes as the acts, plans, policies, approvals, obligations and authorizations of the Surviving Company and shall be as effective and binding thereon as the same were with respect to the Merging Company.

(j)     Contracts. All right, title and interest in and to all outstanding contracts and agreements entered into by the Constituent Entities and in effect on the Effective Date shall vest in the Surviving Company, without further act or deed, and without transfer or assignment having occurred; provided, however, that if any contracts or agreements of the Constituent Entities cannot be transferred by their terms or because of the inability to obtain a required consent, the proper managers, officers or authorized agents of the Constituent Entities will use their best efforts to provide the Surviving Entity with the economic and other benefits accruing under such contracts or agreements.

ARTICLE III
OWNERSHIP CERTIFICATES

After the Effective Date, each holder of an outstanding certificate or certificates theretofore representing shares of capital stock of the Merging Company, if any, may surrender the same to the Surviving Company for cancellation.

ARTICLE IV
APPROVAL; EFFECTIVENESS OF MERGER

This Agreement will be submitted to the respective members of each of the Constituent Entities as provided by the applicable laws of the State of Delaware and the laws of the Republic of the Marshall Islands, as applicable. If this Agreement is duly authorized and adopted by the requisite votes of such members and is not terminated and abandoned pursuant to the provisions of Article V, then at such time as the proper officers of the Surviving Company shall deem proper, a Certificate of Merger shall promptly be executed and filed in accordance with the laws of the State of Delaware. The Merger will become effective as of the date of filing of the Certificate of Merger with the Delaware Secretary of State (the “Effective Date”).

3

ARTICLE V
TERMINATION

At any time prior to the Effective Date, the officers of the Constituent Entities may terminate and abandon this Agreement for any reason deemed appropriate by such officers notwithstanding favorable action on the Merger by the sole member or sole director of the Constituent Entities.

ARTICLE VI
AMENDMENT

To the extent permitted by law, this Agreement may be amended, supplemented or interpreted at any time by action taken by the sole member and sole director of the Constituent Entities, as the case may be, and in the case of an interpretation, the actions of such member and director shall be binding.

ARTICLE VII
MISCELLANEOUS

This Agreement may be executed in counterparts, each of which when so executed will be deemed to be an original, and such counterparts will together constitute but one and the same instrument. Electronic signatures will be considered original signatures.

*     *     *     *     *     *

4

EXECUTED as of the date first above written.

Petrogress Int’l LLC, a Delaware limited liability company
By:
	Christos Traios, President
Petrogres Co. Limited, a corporation organized in the Republic of the Marshall Islands
By:
	Christos Traios, President

AGREEMENT AND PLAN OF MERGER

EX-10.3

Exhibit 10.3

AMENDMENT TO

SECURITIES PURCHASE AGREEMENT

This Amendment to Securities Purchase Agreement dated effective as of April 24, 2019 (this “Amendment”) is entered into by and among Christos P. Traios (the “Seller”), Petrogress, Inc., a Delaware corporation (“Petrogress”), and Petrogress Int’l LLC, a Delaware limited liability company and wholly owned subsidiary of Petrogress (“Purchaser,” and together with Petrogress and Seller, the “Parties” and each individually, a “Party”).

WHEREAS, the Seller and Purchaser entered into that certain Securities Purchase Agreement dated effective as of September 30, 2017 (the “Agreement”); and

WHEREAS, the Parties desire to amend certain provisions of the Agreement relating to the consideration payable to the Seller for the 1,080,000 Shares (the “Shares”) of Petrogres Africa Company Limited (the “Company”) and to join Petrogress, solely to serve as a guarantor of payment of the Purchase Price in the event Seller exercises its Optional Conversion rights as provided for herein;

NOW THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, the Parties agree to modify and amend the Agreement as follows:

1.        Amendment of Section 2. Section “2. PURCHASE PRICE” of the Agreement is hereby amended and restated in its entirety to read as follows:

“2.      PURCHASE PRICE AND CONVERSION.

(a)     Purchase Price. The aggregate purchase price for the Shares of the Company (the “Purchase Price”) shall be Nine Hundred Thousand Dollars (USD$900,000), to be paid to the Seller on or before October 23, 2019 (the “Payment Date”).

(b)      Optional Conversion. In the event that the Purchase Price is not paid in full by the Payment Date, any outstanding and unpaid amount of the Purchase Price shall be convertible at the option of Seller (the “Optional Conversion”), in whole or in part, in lieu of and in satisfaction of the unpaid Purchase Price so converted (the “Conversion Amount”), into that number of fully paid and non-assessable shares of Common Stock, par value $0.001 (“Common Stock”) of Petrogress, as is equal to the quotient of the Conversion Amount divided by the applicable Conversion Price (hereinafter defined); provided, however, that in no event shall the Seller be entitled to convert any Conversion Amount in excess of that portion of the Purchase Price upon conversion of which the sum of the number of shares of Common Stock issuable upon the conversion of such Conversion Amount and the number of shares of Common Stock issued upon any prior Optional Conversion, would exceed 3,500,000 shares of Common Stock (the “Conversion Cap”). Notwithstanding the foregoing, the Parties agree that the Conversion Cap shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by Petrogress. Upon any Optional Conversion, the outstanding and unpaid Purchase Price due under the Agreement as hereby amended, shall be reduced in full by an amount equal to the number of shares of Common Stock issued upon such conversion multiplied by the applicable Conversion Price.

1

(c)     Notice of Conversion. If Seller desires to effect an Option Conversion, Seller shall deliver irrevocable written notice (“Conversion Notice”) to Petrogress at its principal executive offices, stating (1) that Seller desires to exercise its Optional Conversion right, (2) the Conversion Amount of the outstanding and unpaid Purchase Price to be so converted, and (3) the name or names (with address) in which a certificate or certificates for Common Stock are to be issued. Upon receipt of a Conversion Notice, Petrogress shall, as soon as practicable, deliver to Seller, certificates for the number of full shares of Common Stock to which it shall be entitled. Such conversion shall be deemed to have been made as of the date the Conversion Notice is actually received by Petrogress (the “Conversion Date”), and the person or persons entitled to receive Common Stock or other securities deliverable upon conversion shall be treated for all purposes as the record holder or holders thereof on such date.

(d)     Conversion Price. The “Conversion Price” shall be equal to sixty-five percent (65%) of the lowest Trading Price (as defined below) for Petrogress Common Stock during the ten (10) Trading Day (as defined below) period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price” means the closing bid price on the OTC Pink, OTCQB or applicable trading market as reported by a reliable reporting service (“Reporting Service”) or, if the OTC Pink is not the principal trading market for such security, the closing bid price of such security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined by Petrogress and the Seller. “Trading Day” shall mean any day on which the Common Stock is tradable for any period on the OTC Pink, OTCQB or applicable trading market on which the Common Stock is then being traded. The Conversion Price shall be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by Petrogress.

(e)     Authorized Shares. Petrogress covenants that during the period the conversion right exists, Petrogress will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion of the Purchase Price pursuant to the Purchase Agreement, subject to the Conversion Cap. Petrogress represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. ”

2.       Miscellaneous.

(a)     Effect. Except as amended hereby, the Agreement shall remain in full force and effect.

(b)     No Waiver. This Amendment is effective only in the specific instance and for the specific purpose for which it is executed and shall not be considered a waiver or agreement to amend as to any provision of the Agreement in the future.

2

(c)     Defined Terms. All capitalized terms used but not specifically defined herein shall have the same meanings given such terms in the Agreement unless the context clearly indicates or dictates a contrary meaning.

(d)     Governing Law. This Amendment shall be governed by, and construed and enforced in accordance with, the internal laws of the State of Delaware, without regard to conflicts of laws principles.

(e)     Counterparts. This Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and each of the parties hereto may execute this Amendment by signing any of such counterparts.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

3

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first above written.

Petrogress:

Petrogress, Inc.,

a Delaware corporation

By:

Name: Christos P. Traios

Title: Chief Executive Officer

Seller:

Christos P. Traios

Purchaser:

Petrogress Int’l LLC,

A Delaware limited liability company

By:

Name: Christos P. Traios

Title: Manager

[Amendment to Securities Purchase Agreement]

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Christos P. Traios, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Petrogress, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant ’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant ’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 15, 2019	Petrogress, Inc.
	By:	/s/ Christos P. Traios
		Christos P. Traios
		Principal Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Evangelos Makris, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of Petrogress, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant ’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant ’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

May 15, 2019	Petrogress, Inc.
	By:	/s/ Evangelos Makris
		Evangelos Makris
		Principal Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Petrogress, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2019 (the “Report”), I, Christos P. Traios, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Christos P. Traios      

Christos P. Traios

Principal Executive Officer

May 15, 2019

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company or purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Petrogress, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2019 (the “Report”), I, Evangelos Makris, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Evangelos Makris      

Evangelos Makris

Principal Financial Officer

May 15, 2019

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company or purposes of §18 of the Securities Exchange Act of 1934, as amended.

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2019	May 15, 2019
Document Information [Line Items]
Entity Registrant Name	Petrogress, Inc.
Entity Central Index Key	0001558465
Trading Symbol	pgas
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding (in shares)		3,874,808
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current Assets
Cash and cash equivalents	$ 1,252,785	$ 661,010
Accounts receivable, net of allowance for doubtful accounts of $0 and $344,466 as of March 31, 2019 and December 31, 2018, respectively	5,123,752	4,779,432
Claims receivable, net	547,600	547,600
Total Inventories	1,218,524	417,135
Prepaid expenses and other current assets	1,066,448	1,765,276
Total current assets	9,209,109	8,170,453
Non-Current Assets
Goodwill	900,000	900,000
Vessels and other fixed assets, net	4,267,066	4,450,906
Deferred charges, net	20,061	26,750
Security deposit	10,584	10,638
Total non-current assets	5,197,711	5,388,294
Total Assets	14,406,820	13,558,747
Current Liabilities
Accounts payable and accrued expenses	1,931,982	1,265,452
Due to related party	1,213,297	1,176,863
Loan facility from related party	148,900	148,900
Accrued Interest	8,594	8,744
Total current liabilities	3,302,773	2,599,959
Total liabilities	3,302,773	2,599,959
Shareholders' equity:
Preferred stock, value
Shares of Common stock, $0.001 par value, 19,000,000 shares authorized, 3,828,412 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively	3,829	3,829
Additional paid-in capital	9,535,161	9,535,161
Accumulated comprehensive loss	(10,231)	(10,231)
Retained earnings	1,466,362	1,315,870
Equity attributable to Shareholders of the Company	11,005,121	10,854,629
Non-controlling interests	98,926	104,159
Total liabilities and shareholders' equity	14,406,820	13,558,747
Series A Preferred Stock [Member]
Shareholders' equity:
Preferred stock, value	$ 10,000	$ 10,000

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Allowance of doubtful accounts	$ 0	$ 344,466
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	999,900	999,900
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	19,000,000	19,000,000
Common stock, shares issued (in shares)	3,828,412	3,828,412
Common stock, shares outstanding (in shares)	3,828,412	3,828,412
Series A Preferred Stock [Member]
Preferred stock, par value (in dollars per share)	$ 100	$ 100
Preferred stock, shares authorized (in shares)	100	100
Preferred stock, shares issued (in shares)	100	100
Preferred stock, shares outstanding (in shares)	100	100

XML

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues	$ 2,122,678	$ 2,565,264
Costs of goods sold	(1,165,752)	(1,406,537)
Gross profit	956,926	1,158,727
Operating expenses:
Corporate expenses	(5,063)	(300,138)
Selling, general and administrative expenses	(549,559)	(541,313)
Depreciation expense	(197,280)	(227,619)
Total operating expenses	(751,902)	(1,069,070)
Operating income before other expenses and income taxes	205,024	89,657
Other income/ (expense), net:
Interest and finance expenses	(12,363)	(1,427)
Other income / (expense), net	(47,402)	25,614
Total other income/ (expense), net	(59,765)	24,187
Income before income taxes	145,259	113,844
Income tax expense
Net income	145,259	113,844
Net income attributable to:
Shareholders of the company	150,492	120,480
Non-controlling interests	(5,233)	(6,636)
Net income	145,259	113,844
Foreign currency translation adjustment		724
Comprehensive income	145,259	114,568
Comprehensive income attributable to:
Shareholders of the company	150,492	121,204
Non-controlling interests	(5,233)	(6,636)
	$ 145,259	$ 114,568
Weighted average number of shares of Common Stock:
Basic (in shares)	3,828,412	3,299,234
Diluted (in shares)	3,828,412	5,293,239
Basic earnings per share (in dollars per share)	$ 0.04	$ 0.03
Diluted earnings per share (in dollars per share)	$ 0.04	$ 0.02

XML

Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - USD ($)	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Parent [Member]	Noncontrolling Interest [Member]	Total
Balances (in shares) at Dec. 31, 2017	100	3,177,452
Balances at Dec. 31, 2017	$ 10,000	$ 3,098	$ 9,100,838	$ (7,744)	$ 1,008,823	$ 10,115,015	$ 98,758	$ 10,213,773
Common stock issued for convertible notes (in shares)		76,614
Common stock issued for convertible notes		$ 77	209,923			210,000		210,000
Common stock issued to settle liabilities (in shares)		190,705
Common stock issued to settle liabilities		$ 191	457,501			457,692		457,692
Cancellation of common stock issued for services			(146,767)			(146,767)		(146,767)
Common stock issued for board advisory services (in shares)		800
Common stock issued for board advisory services		$ 80	1,416			1,496		1,496
Common stock issued for accrued interest of LOC (in shares)		382,841
Common stock issued for accrued interest of LOC		$ 383				383		383
Foreign currency translation adjustment				(2,487)		(2,487)		(2,487)
Elimination of Petrogress Africa Ltd apic/due from shareholders			(87,750)			(87,750)	(12,250)	(100,000)
Net income					307,047	307,047	17,651	324,698
Balances (in shares) at Dec. 31, 2018	100	3,828,412
Balances at Dec. 31, 2018	$ 10,000	$ 3,829	9,535,161	(10,231)	1,315,870	10,854,629	104,159	10,958,788
Foreign currency translation adjustment
Net income					150,492	150,492	(5,233)	145,259
Balances (in shares) at Mar. 31, 2019	100	3,828,412
Balances at Mar. 31, 2019	$ 10,000	$ 3,829	$ 9,535,161	$ (10,231)	$ 1,466,362	$ 11,005,121	$ 98,926	$ 11,104,047

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 145,259	$ 113,844
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	197,280	227,619
Change in Fair value of share-based payments issued for services		153,178
Gain on settlement of convertible promissory notes		(12,835)
Changes in working capital:
- (Increase)/ decrease in Accounts receivable, net	(344,320)	(1,632,138)
- (Increase)/ decrease in Inventories	(801,389)	(1,876)
- Amounts due from related party		58,529
- (Increase)/ decrease in Prepaid expenses and other current assets	705,517	(102,146)
- (Increase)/ decrease in Security deposit	54
- Increase/ (decrease) in Accounts payable and accrued expenses	666,530	562,692
- Increase/ (decrease) in Amounts due to related party	36,434
- Increase/ (decrease) in Accrued Interest	(150)	3,196
Net cash provided by/ (used in) operating activities	605,215	(629,937)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property plant and equipment	(13,440)	(84,600)
Acquisition of subsidiary
Net cash used in investing activities	(13,440)	(84,600)
Proceeds from loan facility from related party		63,000
Net cash provided by/ (used in) financing activities		63,000
Effect of exchange rate changes on cash		724
Net (decrease)/ increase in cash and cash equivalents	591,775	(650,813)
Cash and cash equivalents, Beginning of Period	661,010	1,150,999
Cash and cash equivalents, End of Period	1,252,785	500,186
Cash paid for interest expense
Cash paid for income taxes
Non-cash investing and financing activities:
Common stock issued for settlement of notes and interest payable		297,500
Common stock issued for settlement of services		$ 210,000

XML

Note 1 - Background and Description of Business and Preparation of Financial Statements

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note

1

- Background and Description of Business and Preparation of Financial Statements

Nature of the Business

Petrogress, Inc. was incorporated on

February 10, 2010

under the laws of the State of Florida as

800

Commerce, Inc. (

"800

Commerce") for the purpose of marketing credit card processing services on behalf of merchant payment processing service providers. On

February

29,

2016,

800

Commerce entered into an Agreement concerning the Exchange of Securities ("SEA") with Petrogres Co. Limited, a Marshall Islands corporation, and its sole shareholder, Christos Traios, a Greek citizen. Under the terms of the SEA,

800

Commerce issued

136,000,000

shares of restricted Common Stock, representing approximately

85%

of the post-transaction issued and outstanding shares, to Mr. Traios in exchange for

100%

of the shares of Petrogres Co. Limited.

800

Commerce's acquisition of Petrogres Co. Limited effected a change in control and was accounted for as a "reverse acquisition" whereby Petrogres Co. Limited was the acquirer for financial statement purposes. Accordingly, the historical financial statements of

800

Commerce are those of Petrogres Co. Limited and its subsidiaries from their respective inception and those of the consolidated entity subsequent to the

February

29,

2016

transaction date.

On

March 9, 2016,

our Board of Directors approved an amendment to our Articles of Incorporation to change the Company’s name to Petrogress, Inc. On

March 15, 2016,

Mr. Traios was appointed Chief Executive Officer. On

November 16, 2016,

Petrogress, Inc. filed Articles of Merger and Plan of Merger in Florida and Delaware to change the Company’s domicile by merging with and into a Delaware corporation formed solely for the purpose of effecting the reincorporation.

The Company operates as a fully integrated international merchant of petroleum products, focused on the supply and trade of light petroleum fuel oil (LPFO), refined oil products and other petrochemical products to local refineries in West Africa and Mediterranean countries. The Company operates as a holding company and provides its services primarily through its wholly-owned and majority-owned subsidiaries: Petrogres Co. Limited, which provides management of crude oil purchases and sales; Petronav Carriers LLC, which manages day-to-day operations of our affiliated tanker fleet, currently consisting of

four

vessels; Petrogress Int’l LLC, which is a holding company for subsidiaries currently conducting business in Cyprus and Ghana. including a

90%

interest in Petrogres Africa Co. Limited, which attends to and services our tanker fleet in Ghana.

The accompanying unaudited condensed interim consolidated financial statements (the "Interim Statements") have been prepared pursuant to the rules and regulations for reporting on Securities and Exchange Commission (the "SEC") Form

10

-Q. Accordingly, certain information and disclosures required by generally accepted accounting principles for complete consolidated financial statements are

not

included herein. The Interim Statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest Annual Report on Form

10

-K for the year ended

December 31, 2018

as filed with the SEC on

April 12, 2019.

In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The interim results for the

three

months ended

March 31, 2019

are

not

necessarily indicative of the results to be expected for the year ending

December 31, 2019

or for any future interim periods.

The Company's management team operates from its principal offices located in Piraeus, Greece.

Basis of Presentation

The Company follows the accrual basis of accounting in accordance with generally accepted accounting principles (“GAAP”) and has elected a year-end of

December 31.

All significant intercompany transactions and accounts have been eliminated.

These interim consolidated financial statements are unaudited; however, in the opinion of our management, these statements reflect all adjustments necessary for a fair statement of the results for the periods reported. All such adjustments are of a normal, recurring nature unless otherwise disclosed. These interim consolidated financial statements, including the notes, have been prepared in accordance with the rules of the SEC applicable to interim period financial statements and do

not

include all of the information and disclosures required by GAAP for complete financial statements.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form

10

-K for the year ended

December 31, 2018.

The results of operations for the

three

months ended

March 31, 2019

are

not

necessarily indicative of the results to be expected for the full year.

Principles of consolidation

The consolidated financial statements of the Company include the consolidated accounts of the Company and its wholly-owned and majority-owned subsidiaries. Our significant subsidiaries are described below.  

Petrogres Co. Limited

Petrogres Co. Limited, is a Marshall Islands corporation, incorporated in

2009.

Petronav Carriers LLC

Petronav Carriers LLC, was formed in Delaware in

April 2016.

Petrogress Int'l LLC

Petrogress Int’l LLC, is a Delaware limited liability company, acquired by the Company in

September 2017.

Emerging Growth Company

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of

2012,

or “JOBS Act.” Section

107

of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section

7

(a)(

2

)(B) of the Securities Act for complying with new or revised accounting standards. As an emerging growth company, we can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reported period. Actual results could differ from those estimates.

XML

Note 2 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Significant Accounting Policies [Text Block]

Note

2

- Summary of Significant Accounting Policies

Cash and Cash Equivalents

We consider all highly liquid investments with an original term of

three

months or less to be cash equivalents.

Accounts Receivable, net

The amount shown as accounts receivable, net at each balance sheet date includes estimated recoveries from customers and charterers for sales of oil products, hires, freight and demurrage billings, net of allowance for doubtful accounts. Accounts receivable involve risk, including the credit risk of non-payment by the customer. Accounts receivable are considered past due based on contractual and invoice terms. An estimate is made of the allowance for doubtful accounts based on a review of all outstanding amounts at each period, and an allowance is made for any accounts which management believes are

not

recoverable. The determination of bad debt allowances constitutes a significant estimate.

As of

March 31, 2019,

and

December 31, 2018,

0

and

$344,466

of allowances for doubtful accounts were recorded.

Inventories

The Company's inventories consist primarily of purchased crude oil for re-sale and gas oil in transit on a marine vessel at the respective balance sheet date, and both are valued at the purchased cost or market using the mark-to-market method of valuation.

Inventories	At March 31, 2019		At December 31, 2018
Crude Oil (Commodities)	$	-	$	279,196
Gas Oil (Bunkers on board)		127,322		137,939
Gas Oil (Commodities)		1,050,000		-
Lubricants (Commodities)		41,202		-
Total Inventories	$	1,218,524	$	417,135

Vessels and other fixed assets, net

We depreciate our vessels on a straight-line basis over the estimated useful life which is

10

years from the date of their transfer to the Company. Depreciation is calculated based on a vessel’s cost less the estimated residual value. The estimated useful lives of vessels and equipment are as follows:

Vessels (in years)	10
Office equipment and furniture (in years)	10

Income taxes

The Company files income tax returns in various jurisdictions, as appropriate and required. The Company was

not

subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for any period prior to

January 1, 2012.

We account for income taxes in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)

740

-

10,

Income Taxes. We recognize deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. We record a valuation allowance related to a deferred tax asset when it is more likely than

not

that some portion of the deferred tax asset will

not

be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

ASC

740

-

10

prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. We classify interest and penalties as a component of interest and other expenses. To date, we have

not

incurred any liability for unrecognized tax benefits, including assessments of penalties and/or interest.

We measure and record uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-

not

recognition threshold at the effective date

may

be recognized or continue to be recognized. Our tax years subsequent to

2011

remain subject to examination by federal and state tax jurisdictions.

Earnings

Per Share

The Company reports earnings per share in accordance with ASC

260,

"Earnings per Share." Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period.

Accounting for

Equity-based

Payments

We account for stock awards issued to non-employees in accordance with ASC

505

-

50,

Equity-Based Payments to Non-Employees. The measurement date is the earlier of (

1

) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (

2

) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of our common stock and recognized as expense during the period in which services are provided.

Comprehensive Income

We adopted ASC Topic

220,

"Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Items included in Comprehensive loss consist of cancellation of available-for-sale securities and foreign currency translation adjustments.

Revenue Recognition

The Company recognizes revenue for crude oil sales and gas oil sales, its primary sources of revenue, at an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for transferring goods or services to its customers. The Company's policy is to record revenue when, (a) control of the goods (crude oil, gas oil and other petrochemical products) is passed to its customers and (b) the vessels charter (voyages and long term) service is rendered to its independent charterers or Petrogres Co. Limited.

Fair Value of Financial Instruments

Our financial instruments consist primarily of cash, accounts receivable, accounts payable and accrued expenses, and convertible debt.

The carrying amount of cash, accounts receivable, accounts payable and accrued expenses, and convertible debt, as applicable, approximates fair value due to the short-term nature of these items and/or the current interest rates payable in relation to current market conditions.

Interest rate risk is the risk that our earnings are subject to fluctuations in interest rates on either investments or on debt. We do

not

use derivative instruments to moderate exposure to interest rate risk, if any.

Financial risk is the risk that our earnings are subject to fluctuations in interest rates or foreign exchange rates. We do

not

use derivative instruments to moderate exposure to financial risk, if any.

Fair value measurements are determined under a

three

-level hierarchy for fair value measurements that prioritizes the inputs to valuation techniques used to measure fair value, distinguishing between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (“observable inputs”) and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). Fair value is the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, we primarily use prices and other relevant information generated by market transactions involving identical or comparable assets (“market approach”). We also consider the impact of a significant decrease in volume and level of activity for an asset or liability when compared with normal activity to identify transactions that are

not

orderly.

The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level

1

measurements) and the lowest priority to unobservable inputs (Level

3

measurements). Securities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The

three

hierarchy levels are defined as follows:

Level

1

- Quoted prices in active markets that is unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

Level

2

- Quoted prices for identical assets and liabilities in markets that are

not

active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;

Level

3

- Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s own credit risk as observed in the credit default swap market.

Effects of Recent Accounting Pronouncements

not

yet adopted

In

January 2016,

the FASB issued Accounting Standards Update (“ASU”)

No.

 

2016

-

01,

Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities

(“ASU

2016

-

01”

). This standard affects the accounting for equity instruments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. In

February 2018,

the FASB issued ASU

2018

-

03,

“Technical Corrections and Improvements to Financial Instruments (Subtopic

825

-

10

) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This update was issued to clarify certain narrow aspects of guidance concerning the recognition of financial assets and liabilities established in ASU

No.

2016

-

01,

 “Financial Instruments—Overall (Subtopic

825

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities”. This includes an amendment to clarify that an entity measuring an equity security using the measurement alternative

may

change its measurement approach to a fair valuation method in accordance with Topic

820,

Fair Value Measurement, through an irrevocable election that would apply to that security and all identical or similar investments of the same issued. The update is effective for fiscal years beginning after

December 15, 2018.

We have evaluated the impact of the adoption of this standard and we do

not

expect this guidance to have a significant impact on our consolidated financial statements and related disclosures.

In

February 2016,

the FASB issued ASU

No.

 

2016

-

02,

Leases

(“ASU

2016

-

02”

). In

January 2018,

the FASB issued ASU

2018

-

01,

which provides additional implementation guidance on the previously issued ASU

2016

-

02.

Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (

1

) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (

2

) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. We have evaluated the impact on the consolidated financial statements which is immaterial.

In

January 2017,

the FASB issued ASU

2017

-

01,

“

Business Combinations

(Topic

805

): Clarifying the Definition of a Business.” These amendments clarify the definition of a business. The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2018.

The amendments should be applied prospectively as of the beginning of the period of adoption. We have evaluated the impact of the adoption of this standard and we do

not

expect this guidance to have a significant impact on our consolidated financial statements and related disclosures.

XML

Note 3 - Concentrations of Credit Risk

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note

3

- Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of trade accounts receivables. Concentrations of credit risk with respect to trade receivables are limited due to the short payment terms dictated by the industry and operating environment. As of

March 31, 2019

and

December 31, 2018,

management is of the opinion that the Company had

no

significant concentrations of credit risk, except as disclosed in Note

7.

XML

Note 4 - Vessels and Other Fixed Assets, Net

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note

4

- Vessels and other fixed assets, net

Vessels and other fixed assets, net consisted of the following as of

March 31, 2019

and

December 31, 2018:

							Estimated useful
	March 31, 2019			December 31, 2018			Life (in years)
Marine vessels	$	10,171,930		$	10,171,930			10
Furniture and equipment		203,290			189,848			10
Accumulated depreciation		(6,108,154	)		(5,910,872	)
Vessels and other fixed assets, net	$	4,267,066		$	4,450,906

Depreciation for the

three

months ended

March 31, 2019

and

March 31, 2018,

was

$197,280

and

$227,619,

respectively.

XML

Note 5 - Preferred Stock

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note

5

- Preferred stock

On

July 14, 2017,

Christos Traios, our President, Chief Executive Officer and sole Director approved a resolution authorizing the establishment of Series A Preferred Stock (“Series A”). The Series A Preferred Stock consists of

100

shares in total with a re-designated par value of

$100

per share. The holder(s) of the Series A shares have rights as a class to a number of votes equal to

two

(

2

) times the sum of: (i) the total number of shares of Common Stock which are issued and outstanding at the time of any election or vote by the shareholders; plus (ii) the number of shares of Preferred Stock issued and outstanding of any other class that has voting rights, if any. These voting rights

may

be exercised for any matter requiring shareholder approval by vote or consent, and

may,

if required, permit a number of votes in excess of the total number of shares authorized. The holders of the Series A are

not

entitled to convert the Series A shares into shares of Common Stock or any other class of the Company’s stock. The Series A shares are

not

be entitled to dividends, but, in the event of liquidation, dissolution or winding up of the Comany, either voluntary or involuntary, the holders of the Series A shares would be entitled to receive out of the assets of the Company, prior to and in preference to any distribution of the assets or surplus funds of the Company to the holders of any other class of preferred stock or the Common Stock, the amount of One Hundred Dollars (

$100

) per share, and will

not

be entitled to receive any portion of the remaining assets of the Company except by reason of ownership of shares of any other class of the Company’s stock. The Series A shares are

not

subject to redemption by the Company.

On

October 6, 2017,

the Company issued the above

100

Series A shares of Preferred stock to Christos Traios, our President, Chief Executive Officer and sole Director as provided in his employment agreement.

On

July 9, 2018,

the Company filed the Amendment to the Company's Certificate of Incorporation with the Delaware Secretary of State to, among other things, reduce the number of authorized shares of Preferred Stock from

10,000,000

to

1,000,000.

The Amendment took effect on

July 18, 2018.

There was

no

change in the par value of the Company's Preferred Stock.

XML

Note 6 - Related Party Transactions

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note

6

- Related

party

transactions

Officer's compensation

During the

three

months ended

March 31, 2019

and

March 31, 2018,

the Company recorded officers’ compensation of

$45,000

and

$60,000,

respectively. For the period ended

March 31, 2019,

$7,129

was paid and the remaining amount was accrued and included in Amounts Due to Related Party on the Consolidated Balance Sheets as of

March 31, 2019.

Revolving Line of Credit

On

October 31, 2018,

Christos P. Traios, notified the Company that he was terminating the Revolving Line of Credit Agreement dated

July 13, 2017 (

the “Credit Agreement”) pursuant to which Mr. Traios provided a revolving line of credit in the principal amount of up to

$1,000,000

to the Company. As such,

no

further advances have been made under the Credit Agreement and existing advances in principal amount of

$148,900

under the Line of Credit Note issued in connection with the Credit Agreement will become due upon the current maturity date,

July 13, 2019.

The Company accounts for this agreement under ASC

808

-

10,

Collaborative Agreements, and has recognized the portion of revenues and expenses attributed to the Company.

During the

three

months ended

March 31, 2019,

the Company recognized revenues totaling

$1,917,178

from sales of crude oil to Platon Gas Oil Ghana Limited (“PGO”).  These revenues are

not

subject to the Company’s collaborative arrangement with PGO and are those solely of the Company. 

No

other costs related to the collaborative arrangement have been incurred directly by the Company and a formal accounting to determine profit or loss has

not

yet occurred.

The table below presents the movement of the amounts due to Christos Traios during the

three

months ended

March 31, 2019:

Amounts due to related party December 31, 2018	$	1,176,863
Wages accrued to Christos Traios		45,000
Wages paid to Christos Traios, in cash		(7,129	)
Amount due from Christos Traios		(1,437	)
Amounts due to related party March 31, 2019	$	1,213,297

XML

Note 7 - Revenue Concentrations

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Revenue Concentrations Disclosure [Text Block]

Note

7

- Revenue Concentrations

The Company sells to commercial customers in foreign markets. The following is a summary of customers who accounted for more than

five

percent (

5%

) of the Company’s revenues for the periods ended

March 31, 2019

and

2018:

Customer	March 31, 2019			March 31, 2018
A		94	%		85	%
B		*			7	%
C		6	%		*

The following is a summary of customers who accounted for more than

five

percent (

5%

) of the Company’s accounts receivable for the periods ended

March 31, 2019

and

December 31, 2018:

Customer	March 31, 2019			December 31, 2018
A		61	%		63	%
B		15	%		16	%
C		6	%		6	%
D		5	%		5	%
E		5	%		*

XML

Note 8 - Subsequent Events

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Subsequent Events [Text Block]

Note

8

– Subsequent Events

On

April 1, 2019,

Petrogress Int’l LLC and Petrogres Co. Limited entered into a merger agreement, pursuant to which Petrogres Co. Limited was merged with and into Petrogress Int’l LLC, which survived the merger. The merger became effective

April 23, 2019

.

As of

April 24, 2019,

Petrogress, Inc., Petrogress Int’l LLC and Christos P. Traios agreed on an amendment to the Securities Purchase Agreement dated effective as of

September 30, 2017

between Petrogress Int’l LLC and Christos P. Traios, pursuant to which the Company purchased its interest in Petrogres Africa Company Limited.The amendment adjusts the aggregate purchase price to

$900,000,

which is to be paid to Mr. Traios on or before

October 23, 2019.

In the event that the purchase price is

not

paid in full by the payment date, any outstanding and unpaid amount of the purchase price is convertible at the option of Mr. Traios, in whole or in part, into shares of Common Stock at a conversion price equal to

65%

of the lowest trading price during the

10

trading days. Notwithstanding the foregoing, the conversion rights are capped at

3,500,000

shares of Common Stock (as such number

may

be equitably adjusted for stock splits, stock dividends, rights offerings, combinations, recapitalization, reclassifications, extraordinary distributions and similar events by Petrogress).

XML

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

We consider all highly liquid investments with an original term of

three

months or less to be cash equivalents.

Receivable [Policy Text Block]

Accounts Receivable, net

The amount shown as accounts receivable, net at each balance sheet date includes estimated recoveries from customers and charterers for sales of oil products, hires, freight and demurrage billings, net of allowance for doubtful accounts. Accounts receivable involve risk, including the credit risk of non-payment by the customer. Accounts receivable are considered past due based on contractual and invoice terms. An estimate is made of the allowance for doubtful accounts based on a review of all outstanding amounts at each period, and an allowance is made for any accounts which management believes are

not

recoverable. The determination of bad debt allowances constitutes a significant estimate.

As of

March 31, 2019,

and

December 31, 2018,

0

and

$344,466

of allowances for doubtful accounts were recorded.

Inventory, Policy [Policy Text Block]

Inventories

The Company's inventories consist primarily of purchased crude oil for re-sale and gas oil in transit on a marine vessel at the respective balance sheet date, and both are valued at the purchased cost or market using the mark-to-market method of valuation.

Inventories	At March 31, 2019		At December 31, 2018
Crude Oil (Commodities)	$	-	$	279,196
Gas Oil (Bunkers on board)		127,322		137,939
Gas Oil (Commodities)		1,050,000		-
Lubricants (Commodities)		41,202		-
Total Inventories	$	1,218,524	$	417,135

Property, Plant and Equipment, Policy [Policy Text Block]

Vessels and other fixed assets, net

We depreciate our vessels on a straight-line basis over the estimated useful life which is

10

years from the date of their transfer to the Company. Depreciation is calculated based on a vessel’s cost less the estimated residual value. The estimated useful lives of vessels and equipment are as follows:

Vessels (in years)	10
Office equipment and furniture (in years)

Income Tax, Policy [Policy Text Block]

Income taxes

The Company files income tax returns in various jurisdictions, as appropriate and required. The Company was

not

subject to U.S. federal, state and local, as applicable, income tax examinations by regulatory taxing authorities for any period prior to

January 1, 2012.

We account for income taxes in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”)

740

-

10,

Income Taxes. We recognize deferred tax assets and liabilities to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. We record a valuation allowance related to a deferred tax asset when it is more likely than

not

that some portion of the deferred tax asset will

not

be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.

ASC

740

-

10

prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition issues. We classify interest and penalties as a component of interest and other expenses. To date, we have

not

incurred any liability for unrecognized tax benefits, including assessments of penalties and/or interest.

We measure and record uncertain tax positions by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-

not

recognition threshold at the effective date

may

be recognized or continue to be recognized. Our tax years subsequent to

2011

remain subject to examination by federal and state tax jurisdictions.

Earnings Per Share, Policy [Policy Text Block]

Earnings

Per Share

The Company reports earnings per share in accordance with ASC

260,

"Earnings per Share." Basic earnings (loss) per share is computed by dividing net income (loss), after deducting preferred stock dividends accumulated during the period, by the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share is computed by dividing income by the weighted-average number of shares of common stock, common stock equivalents and other potentially dilutive securities outstanding during the period.

Share-based Payment Arrangement [Policy Text Block]

Accounting for

Equity-based

Payments

We account for stock awards issued to non-employees in accordance with ASC

505

-

50,

Equity-Based Payments to Non-Employees. The measurement date is the earlier of (

1

) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (

2

) the date at which the counterparty's performance is complete. Stock awards granted to non-employees are valued at their respective measurement dates based on the trading price of our common stock and recognized as expense during the period in which services are provided.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income

We adopted ASC Topic

220,

"Comprehensive Income." This statement establishes standards for reporting comprehensive income and its components in a financial statement. Comprehensive income as defined includes all changes in equity (net assets) during a period from non-owner sources. Items included in Comprehensive loss consist of cancellation of available-for-sale securities and foreign currency translation adjustments.

Revenue [Policy Text Block]

Revenue Recognition

The Company recognizes revenue for crude oil sales and gas oil sales, its primary sources of revenue, at an amount that reflects the consideration that the Company expects to be entitled to receive in exchange for transferring goods or services to its customers. The Company's policy is to record revenue when, (a) control of the goods (crude oil, gas oil and other petrochemical products) is passed to its customers and (b) the vessels charter (voyages and long term) service is rendered to its independent charterers or Petrogres Co. Limited.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

Our financial instruments consist primarily of cash, accounts receivable, accounts payable and accrued expenses, and convertible debt.

The carrying amount of cash, accounts receivable, accounts payable and accrued expenses, and convertible debt, as applicable, approximates fair value due to the short-term nature of these items and/or the current interest rates payable in relation to current market conditions.

Interest rate risk is the risk that our earnings are subject to fluctuations in interest rates on either investments or on debt. We do

not

use derivative instruments to moderate exposure to interest rate risk, if any.

Financial risk is the risk that our earnings are subject to fluctuations in interest rates or foreign exchange rates. We do

not

use derivative instruments to moderate exposure to financial risk, if any.

Fair value measurements are determined under a

three

-level hierarchy for fair value measurements that prioritizes the inputs to valuation techniques used to measure fair value, distinguishing between market participant assumptions developed based on market data obtained from sources independent of the reporting entity (“observable inputs”) and the reporting entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (“unobservable inputs”). Fair value is the price that would be received to sell an asset or would be paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, we primarily use prices and other relevant information generated by market transactions involving identical or comparable assets (“market approach”). We also consider the impact of a significant decrease in volume and level of activity for an asset or liability when compared with normal activity to identify transactions that are

not

orderly.

The highest priority is given to unadjusted quoted prices in active markets for identical assets (Level

1

measurements) and the lowest priority to unobservable inputs (Level

3

measurements). Securities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The

three

hierarchy levels are defined as follows:

Level

1

- Quoted prices in active markets that is unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

Level

2

- Quoted prices for identical assets and liabilities in markets that are

not

active, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly;

Level

3

- Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s own credit risk as observed in the credit default swap market.

New Accounting Pronouncements, Policy [Policy Text Block]

Effects of Recent Accounting Pronouncements

not

yet adopted

In

January 2016,

the FASB issued Accounting Standards Update (“ASU”)

No.

 

2016

-

01,

Financial Instruments—Overall: Recognition and Measurement of Financial Assets and Financial Liabilities

(“ASU

2016

-

01”

). This standard affects the accounting for equity instruments, financial liabilities under the fair value option and the presentation and disclosure requirements of financial instruments. In

February 2018,

the FASB issued ASU

2018

-

03,

“Technical Corrections and Improvements to Financial Instruments (Subtopic

825

-

10

) – Recognition and Measurement of Financial Assets and Financial Liabilities”. This update was issued to clarify certain narrow aspects of guidance concerning the recognition of financial assets and liabilities established in ASU

No.

2016

-

01,

 “Financial Instruments—Overall (Subtopic

825

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities”. This includes an amendment to clarify that an entity measuring an equity security using the measurement alternative

may

change its measurement approach to a fair valuation method in accordance with Topic

820,

Fair Value Measurement, through an irrevocable election that would apply to that security and all identical or similar investments of the same issued. The update is effective for fiscal years beginning after

December 15, 2018.

We have evaluated the impact of the adoption of this standard and we do

not

expect this guidance to have a significant impact on our consolidated financial statements and related disclosures.

In

February 2016,

the FASB issued ASU

No.

 

2016

-

02,

Leases

(“ASU

2016

-

02”

). In

January 2018,

the FASB issued ASU

2018

-

01,

which provides additional implementation guidance on the previously issued ASU

2016

-

02.

Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (

1

) a lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and (

2

) a right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. We have evaluated the impact on the consolidated financial statements which is immaterial.

In

January 2017,

the FASB issued ASU

2017

-

01,

“

Business Combinations

(Topic

805

): Clarifying the Definition of a Business.” These amendments clarify the definition of a business. The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2018.

The amendments should be applied prospectively as of the beginning of the period of adoption. We have evaluated the impact of the adoption of this standard and we do

not

expect this guidance to have a significant impact on our consolidated financial statements and related disclosures.

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Note 2 - Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Inventory, Current [Table Text Block]

Inventories	At March 31, 2019		At December 31, 2018
Crude Oil (Commodities)	$	-	$	279,196
Gas Oil (Bunkers on board)		127,322		137,939
Gas Oil (Commodities)		1,050,000		-
Lubricants (Commodities)		41,202		-
Total Inventories	$	1,218,524	$	417,135

Property, Plant and Equipment, Estimated Useful Lives [Table Text Block]

Vessels (in years)	10
Office equipment and furniture (in years)	10

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Note 4 - Vessels and Other Fixed Assets, Net (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Property, Plant and Equipment [Table Text Block]

							Estimated useful
	March 31, 2019			December 31, 2018			Life (in years)
Marine vessels	$	10,171,930		$	10,171,930			10
Furniture and equipment		203,290			189,848			10
Accumulated depreciation		(6,108,154	)		(5,910,872	)
Vessels and other fixed assets, net	$	4,267,066		$	4,450,906

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Note 6 - Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2019

Notes Tables

Schedule of Amounts Due to Related Parties [Table Text Block]

Amounts due to related party December 31, 2018	$	1,176,863
Wages accrued to Christos Traios		45,000
Wages paid to Christos Traios, in cash		(7,129	)
Amount due from Christos Traios		(1,437	)
Amounts due to related party March 31, 2019	$	1,213,297

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Note 7 - Revenue Concentrations (Tables)

3 Months Ended

Mar. 31, 2019

Accounts Receivable [Member]

Notes Tables

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

Customer	March 31, 2019			December 31, 2018
A		61	%		63	%
B		15	%		16	%
C		6	%		6	%
D		5	%		5	%
E		5	%		*

Revenue from Contract with Customer Benchmark [Member]

Notes Tables

Schedules of Concentration of Risk, by Risk Factor [Table Text Block]

Customer	March 31, 2019			March 31, 2018
A		94	%		85	%
B		*			7	%
C		6	%		*

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Note 1 - Background and Description of Business and Preparation of Financial Statements (Details Textual) - shares	Feb. 29, 2016	Nov. 30, 2017
Acquisition of Petrogres Co. Limited [Member]
Stock Issued During Period, Shares, Acquisitions	136,000,000
Equity Method Investment, Ownership Percentage	85.00%
Business Acquisition, Percentage of Voting Interests Acquired	100.00%
Petrogres Africa Co. Ltd [Member]
Business Acquisition, Percentage of Voting Interests Acquired		90.00%

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Note 2 - Summary of Significant Accounting Policies (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Accounts Receivable, Allowance for Credit Loss, Current	$ 0	$ 344,466
Unrecognized Tax Benefits, Ending Balance	$ 0
Domestic Tax Authority [Member]
Open Tax Year	2011 2012 2013 2014 2015 2016 2017 2018 2019
State and Local Jurisdiction [Member]
Open Tax Year	2011 2012 2013 2014 2015 2016 2017 2018 2019
Vessels [Member]
Property, Plant and Equipment, Useful Life	10 years

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Note 2 - Summary of Significant Accounting Policies - Purchased Crude Oil and Gas Oil (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Total Inventories	$ 1,218,524	$ 417,135
Commodities, Crude Oil [Member]
Total Inventories		279,196
Bunkers on Board, Gas Oil [Member]
Total Inventories	127,322	137,939
Commodities, Gas Oil [Member]
Total Inventories	1,050,000
Commodities, Lubricants [Member]
Total Inventories	$ 41,202

XML

Note 2 - Summary of Significant Accounting Policies - Summary of Estimated Useful Lives of Vessels and Equipment (Details)	3 Months Ended
	Mar. 31, 2019
Vessels [Member]
Useful Life (Year)	10 years
Office Equipment and Furniture [Member]
Useful Life (Year)	10 years

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Note 4 - Vessels and Other Fixed Assets, Net (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Depreciation, Total	$ 197,280	$ 227,619

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Note 4 - Vessels and Other Fixed Assets, Net - Summary of Estimated Useful Lives of Vessels and Equipment (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Accumulated depreciation	$ (6,108,154)	$ (5,910,872)
Net property and equipment	4,267,066	4,450,906
Vessels [Member]
Property and equipment, gross	$ 10,171,930	10,171,930
Useful Life (Year)	10 years
Office Equipment and Furniture [Member]
Property and equipment, gross	$ 203,290	$ 189,848
Useful Life (Year)	10 years

XML

Note 5 - Preferred Stock (Details Textual) - $ / shares	Mar. 31, 2019	Dec. 31, 2018	Jul. 18, 2018	Jul. 17, 2018	Oct. 06, 2017	Jul. 14, 2017
Preferred Stock, Shares Issued, Total	0	0
Preferred Stock, Par or Stated Value Per Share	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	999,900	999,900	1,000,000	10,000,000
Series A Preferred Stock [Member]
Preferred Stock, Shares Issued, Total	100	100
Preferred Stock, Par or Stated Value Per Share	$ 100	$ 100				$ 100
Preferred Stock, Shares Authorized	100	100
Series A Preferred Stock [Member] | Sole Director, President and Chief Executive Officer [Member]
Preferred Stock, Shares Issued, Total					100	100
Preferred Stock, Par or Stated Value Per Share						$ 100

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Note 6 - Related Party Transactions (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Oct. 31, 2018
Long-term Line of Credit, Total	$ 148,900		$ 148,900
Revenue from Contract with Customer, Including Assessed Tax	2,122,678	$ 2,565,264
Crude Oil Sales [Member]
Revenue from Contract with Customer, Including Assessed Tax	1,917,178
Chief Executive Officer [Member]
Salary and Wage, Officer, Excluding Cost of Good and Service Sold	45,000	$ 60,000
Officers' Compensation, Previously Accured	$ 7,129
Chief Executive Officer [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity				$ 1,000,000
Long-term Line of Credit, Total				$ 148,900

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Note 6 - Related Party Transactions - Amounts Due to Related Party (Details) - President, Chief Executive Officer and Chief Financial Officer [Member]	3 Months Ended
	Mar. 31, 2019 USD ($)
Balance	$ 1,176,863
Wages accrued to Christos Traios	45,000
Wages paid to Christos Traios, in cash	(7,129)
Amount due from Christos Traios	(1,437)
Balance	$ 1,213,297

XML

Note 7 - Revenue Concentrations - Revenue Concentration by Customer (Details) - Customer Concentration Risk [Member] - Revenue from Contract with Customer Benchmark [Member]	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Customer A [Member]
Sales concentration percentage	94.00%	85.00%
Customer B [Member]
Sales concentration percentage		7.00%
Customer C [Member]
Sales concentration percentage	6.00%

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Note 7 - Revenue Concentrations - Accounts Receivable Concentration by Customer (Details) - Customer Concentration Risk [Member] - Accounts Receivable [Member]	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Customer A [Member]
Sales concentration percentage	61.00%	63.00%
Customer B [Member]
Sales concentration percentage	15.00%	16.00%
Customer C [Member]
Sales concentration percentage	6.00%	6.00%
Customer D [Member]
Sales concentration percentage	5.00%	5.00%
Customer E [Member]
Sales concentration percentage	5.00%

XML

Note 8 - Subsequent Events (Details Textual) - Forecast [Member] - Petrogres Africa Co. Ltd [Member]	Oct. 23, 2019 USD ($) shares
Payments to Acquire Businesses, Gross | $	$ 900,000
Business Combination, Conversion Price, Percentage of Lowest Price of Common Stock during Ten Trading Days	65.00%
Business Combination, Maximum Number of Shares on Conversion Rights | shares	3,500,000