UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
(Mark one)
| | QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period ended:
or
| | 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:
PETROGRESS, INC.
| (Exact name of registrant as specified in its charter) |
| | | |
| (State or other jurisdiction of incorporation of organization) | (I.R.S. Employer Identification No.) |
| |
| (Address of principal executive offices & zip code) |
| +30 ( |
| (Registrant’s telephone number, including area code) |
| NONE |
| (Former name or former address, if changed since last report) |
| Securities registered pursuant to Section 12(b) of the Act: |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |
| | N/A | N/A | |
Indicate by check mark whether the registrant (1) has filed all report 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.
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 such files).
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 | ☐ |
| ☐ | Smaller reporting company | ||
| Emerging growth company |
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
There were,
TABLE OF CONTENTS
| PAGE |
||
| Cautionary Statements Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 |
2 |
|
| PART I |
||
| FINANCIAL INFORMATION |
||
| Item 1. | Consolidated Financial Statements | |
| Consolidated Statement of Comprehensive Income for the six months ended June 30, 2020 and 2019 |
3 |
|
| Consolidated Balance Sheet at June 30, 2020 and December 31, 2019 |
4 |
|
| Consolidated Statement of Cash Flows for the six months Ended June 30, 2020 and 2019 | 5 | |
| Consolidated Statement of Equity for the six months Ended June 30, 2020 and 2019 | 6 | |
| Notes to Consolidated Financial Statements | 7-10 | |
| Item 2. | Management’s Discussion and Analysis of the Financial Condition and Results of Operations | 11-15 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risks | 15 |
| Item 4. |
Controls and Procedures |
15 |
| PART II |
||
| OTHER INFORMATION |
||
| Item 1. | Legal Proceedings | 16 |
| Item 1A. | Risk Factors | 16 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 16 |
| Item 5. | Other Information | 16 |
| Item 6. | Exhibits | 17 |
| Signature |
18 |
|
PETROGRESS, INC.
Unless the context otherwise indicates, references to “Petrogress Inc.” “we”, “our”, or “us”, or the “Company” in this Form 10-Q are references to Petrogress Inc, -a Delaware corporation- including its wholly owned and majority-owned subsidiaries, and its ownership interests in equity method investees (corporate entities, partnerships, limited liability companies and other ventures over which Petrogress Inc exerts significant influence by virtue of its ownership interest) companies. Our significant subsidiaries are “Petronav Carriers LLC.” and “Petrogress Int’l LLC.”
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION
This quarterly report of Petrogress Corporation contains forward-looking statements relating to Petrogress operations that are based on management’s current expectations, estimates and projections about the petroleum, chemicals, transactions, vessels and other energy-related industries. 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. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “could,” “should,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on schedule,” “on track,” “is slated,” “goals,” “objectives,” “strategies,” “opportunities” and similar expressions are intended to identify such forward-looking statements.
The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Petrogress undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil prices; changing refining, marketing and chemicals margins; our ability to realize anticipated cost savings and expenditure reductions; actions of competitors or regulators; public health crises, such as pandemics (including coronavirus (COVID-19)) and epidemics, and any related government policies and actions; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of the our suppliers, vendors, partners and equity affiliates, particularly during extended periods of low prices for crude oil during the COVID-19 pandemic; the inability or failure of our joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of our operations due to war, accidents, piracy, political events, civil unrest, severe weather, cyber threats and terrorist acts, crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries, or other natural or human causes beyond the company's control; changing economic, regulatory and political environments in the countries in which we operate; general domestic and international economic and political conditions; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from other pending or future litigation; our future acquisition or disposition of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government-mandated sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; material reductions in corporate liquidity and access to debt markets; and our ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 10 through 14 of the company’s 2020 Annual Report on Form 10-K, and in subsequent filings with the U.S. Securities and Exchange Commission. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements.
PART I – FINANCIAL INFORMATION
Item 1 – Financial Statements
PETROGRESS, INC. and SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
| Six Months Ended June 30, | Three months Ended June 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues: | ||||||||||||||||
| Revenues from crude oil sales | $ | |||||||||||||||
| Revenues from gas oil sales | ||||||||||||||||
| Revenues for lubricants sales | ||||||||||||||||
| Revenues from freights & hires | ( | ) | ||||||||||||||
| Other Revenues | ( | ) | ||||||||||||||
| Total Revenues | $ | ( | ) | |||||||||||||
| Costs and other Deductions: | ||||||||||||||||
| Costs of goods sold (crude oil) | ( | ) | ( | ) | ||||||||||||
| Costs of goods sold (gas oil) | ( | ) | ( | ) | ||||||||||||
| Costs of goods sold (lubricants) | ( | ) | ( | ) | ( | ) | ||||||||||
| Vessels Leases & charters | ( | ) | ( | ) | ||||||||||||
| Total Cost and Other Deductions | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Gross profit | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Operating expenses: | ||||||||||||||||
| Corporate expenses | ( | ) | ( | ) | ( | ) | ||||||||||
| Operating expenses of commodities trade | ( | ) | ( | ) | ||||||||||||
| Fleet operating expenses | ( | ) | ( | ) | ||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Amortization expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Depreciation expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating income / (loss) before other expenses and income tax | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Other Income / (expense), net: | ||||||||||||||||
| Interest and finance expenses | ( | ) | ( | ) | ||||||||||||
| Amortization of note discount | ( | ) | ( | ) | ||||||||||||
| Change in fair market value of derivative liabilities | ( | ) | ( | ) | ||||||||||||
| Other income / (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other income / (expense), net | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Income / (loss) before income taxes | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Income tax expense | ||||||||||||||||
| Net income / (loss) | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Net income / (loss) attributable to: | ||||||||||||||||
| Shareholders of the Company | ( | ) | ( | ) | ( | ) | ||||||||||
| Non-controlling interests | ||||||||||||||||
| Other comprehensive loss, net of tax | ||||||||||||||||
| Comprehensive income / (loss) | $ | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
| Comprehensive income / (loss) attributable to: | ||||||||||||||||
| Shareholders of the Company | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Non-controlling interests | ||||||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| Basic earnings per share | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Diluted earnings per share | ||||||||||||||||
See accompanying notes to consolidated financial statements.
PETROGRESS, INC. and SUBSIDIARIES
Consolidated Statement of Balance Sheet (Unaudited)
| At June 30, | At December 31, | |||||||
| 2021 | 2020 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net | ||||||||
| Claims receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | $ | |||||||
| Non-Current Assets | ||||||||
| Goodwill | ||||||||
| Contract-related licensing agreements | ||||||||
| Investments in subsidiaries | ||||||||
| Right of use assets | ||||||||
| Vessels and other fixed assets, net | ||||||||
| Deferred charges, net | ||||||||
| Security deposit | ||||||||
| Total non-current assets | ||||||||
| Total Assets | ||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued expenses | ||||||||
| Due to related party | ||||||||
| Loan facility from related party | ||||||||
| Accrued interest | ||||||||
| Lease liabilities | ||||||||
| Short-Term Loans | ||||||||
| Convertible promissory notes | ||||||||
| Derivative liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Lease liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies | - | - | ||||||
| Shareholders’ equity: | ||||||||
| Series A Preferred shares, $ par value; authorized; shares issued and outstanding as of June 30, 2021 and December 31, 2020. | ||||||||
| Shares of Common stock, $ par value, shares authorized, and shares issued and outstanding as of June 30, 2021 and December 31, 2020. | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated comprehensive loss | ( | ) | ( | ) | ||||
| Retained earnings | ( | ) | ( | ) | ||||
| Equity attributable to Shareholders of the Company | ||||||||
| Non-controlling interests | ||||||||
| Total liabilities and shareholders’ equity | ||||||||
See accompanying notes to consolidated financial statements.
PETROGRESS, INC. and SUBSIDIARIES
Consolidated Statement of Cash Flows (Unaudited)
| Six Months Ended June 30, | ||||||||
| 2021 | 2020 | |||||||
| CASH FLOW FROM OPERATING ACTIVITIES | ||||||||
| Net income / (loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net income/ (loss) to net cash provided by operating activities: | ||||||||
| Depreciation expense | ||||||||
| Provision for losses on accounts receivable | ||||||||
| Change in fair value of derivative liabilities | ||||||||
| Share-based compensation expense | ||||||||
| Loss on disposition of fixed assets | ||||||||
| Amortization of discount on convertible note | ||||||||
| Amount of derivative in excess of face value of PCN | ||||||||
| Elimination of Petrogres Hellas Co | ||||||||
| Gain / (loss) on settlement of convertible promissory note | ||||||||
| Elimination of PGAS Africa APIC | ( | ) | ||||||
| Changes in working capital | ||||||||
| (Increase) / Decrease in accounts receivable, net | ( | ) | ||||||
| (Increase) / Decrease in claims receivable, net | ( | ) | ||||||
| (Increase) / Decrease in inventories | ( | ) | ||||||
| (Increase) / Decrease in amounts due from related party | ||||||||
| (Increase) / Decrease in prepaid expenses | ||||||||
| Increase / (Decrease) in accounts payable and accrued expenses | ||||||||
| Increase / (Decrease) in amounts due to related party | ( | ) | ( | ) | ||||
| Increase / (Decrease) in short-terms loans | ||||||||
| Increase / (Decrease) in accrued interest | ( | ) | ||||||
| Increase / (Decrease) in lease liabilities | ( | ) | ||||||
| (Increase) / Decrease in security deposit | ( | ) | ||||||
| (Increase) / Decrease in deferred charges, net | ||||||||
| CASH PROVIDED BY OPERATING ACTIVITIES | $ | $ | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchase of property, plant and equipment | ( | ) | ||||||
| Investments in subsidiaries | ( | ) | ||||||
| Purchase of vessels and other equipment | ||||||||
| Acquisition of intangible assets | ( | ) | ||||||
| CASH USED IN INVESTING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Proceeds from convertible promissory notes | ||||||||
| Proceeds from advances from related party | ||||||||
| CASH PROVIDED BY FINANCING ACTIVITIES | $ | $ | ||||||
| Effects of exchange rate changes | ||||||||
| NET DECREASE IN CASH | ( | ) | ( | ) | ||||
| CASH AT BEGINNING OF YEAR | ||||||||
| CASH AT PERIOD END | $ | $ | ||||||
See accompanying notes to consolidated financial statements.
PETROGRESS, INC. and SUBSIDIARIES
Consolidated Statement of Equity (Unaudited)
| Six Months ended June 30, 2020 | Preferred Shares number | Preferred Shares amount | Common Stocks Number - Amount | Additional Paid -in- capital | Accumulated Comprehensive Profit/(Loss) | Retaining Earnings | Non- Controlling interest | Total Shareholders Equity | ||||||||||||||||||||||||||||
| Balance at December 31, 2019 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
| Stock issued for liabilities | ||||||||||||||||||||||||||||||||||||
| Stock issued for services | ||||||||||||||||||||||||||||||||||||
| Net Income (loss) | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Balance at March 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
| Stock issued for liabilities | ||||||||||||||||||||||||||||||||||||
| Stock issued for services | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Elimination of PG Africa | - | - | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Net Income (Loss) | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balance at June 30, 2020 | $ | $ | $ | $ | ( | ) | $ | ) | $ | ( | ) | $ | ||||||||||||||||||||||||
| Six Months ended June 30, 2021 | ||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2020 | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | |||||||||||||||||||||||||
| Stock issued for Liabilities | ||||||||||||||||||||||||||||||||||||
| Stock issued for services | - | - | ||||||||||||||||||||||||||||||||||
| Net Income (Loss) | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balances at March 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ||||||||||||||||||||||||||
| Stock issued for liabilities | - | - | ||||||||||||||||||||||||||||||||||
| Elimination of Petrogres Hellas | - | - | ||||||||||||||||||||||||||||||||||
| Net Income (Loss) | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Balances at June 30, 2021 | $ | $ | $ | $ | ( | ) | $ | ) | $ | $ | ||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
PETROGRESS, INC.
Notes to Consolidated Financial Statements (Unaudited)
| Note 1. | General |
Petrogress, Inc (PGI), is an integrate energy company, engaged in the upstream, downstream and midstream segments. We sell crude oil and refined products internationally, to buyers on the spot market and to independent entrepreneurs. The company operates internationally through its wholly owned subsidiaries "Petrogress Int'l LLC.", "Petronav Carriers LLC.". The company is registered in Delaware and headquartered from Piraeus-Greece, where the company maintain its principal marketing and operating offices at 1, Akti Xaveriou, 18538 Piraeus, Greece.
Impact of the novel coronavirus (COVID-19) pandemic; the outbreak of COVID-19 and decreases in commodity prices resulting from oversupply, government-imposed travel restrictions and other constraints on economic activity caused a significant decline in the demand for our products and created disruptions and volatility in the global marketplace beginning late in the first quarter 2020, which negatively affected our results of operations and cash flows throughout 2020. While demand and commodity prices have shown signs of recovery, demand is not back to pre-pandemic levels, and financial results could continue to be challenged in future quarters. There continues to be uncertainty and unpredictability around the extent to which the COVID-19 pandemic will impact our results, which could be material
Basis of Presentation; the accompanying consolidated financial statements of Petrogress and its subsidiaries (together, Petrogress or the company) have not been audited by an independent registered public accounting firm. In the opinion of the company’s management, the interim data includes all adjustments necessary for a fair statement of the results for the interim periods. These adjustments were of a normal recurring nature. The results for six-months period ended June 30, 2021, are not necessarily indicative of future financial results. The term “earnings” is defined as net income attributable to Petrogress.
Subsidiaries and Affiliated Companies; the Consolidated Financial Statements include the accounts of controlled subsidiary companies more than 50 percent owned and any variable-interest entities in which the company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated.
Principles of consolidation; the consolidated financial statements include the consolidated accounts of the Company and its wholly owned and majority-owned subsidiaries as listed in the below table. Inter-company transaction balances and unrealized gains/(losses) on transactions between the companies are eliminated.
| Subsidiaries & Affiliates | Incorporation | Percentage Participation | ||||
| Petrogress Int’l LLC. (PIL) | Delaware | % | (owned to PGI) | |||
| Petronav Carriers LLC. (PCL) | Delaware | % | (owned to PGI) | |||
|
| Note 2. | New Accounting Standards |
Recently adopted; Effective January 1, 2021, we adopted Accounting Standards Update (ASU) 2016-13 and its related amendments
| Note 3. | Information relating to the consolidated statement of cash flows |
Read Cash Flow statement - page 5
| Note 4. | Summarized Financial Data – Petrogress, Inc. |
The summarized financial information for Petrogress Inc (PGI) presented as follows:
| Six months Ended | ||||||||
| June 30, | ||||||||
| 2021 | 2020 | |||||||
| Sales and other operating revenues | $ | $ | ||||||
| Costs and other deductions | ( | ) | ( | ) | ||||
| Net income (loss) attributable to PGI | ( | ) | ( | ) | ||||
| Current assets | ||||||||
| Other assets | ||||||||
| Current liabilities | ||||||||
| Other liabilities | ||||||||
| Total PGI net equity | $ | $ | ||||||
Notes to Consolidated Financial Statements (continued)
| Note 5. | Operating Segments & Geographic presence |
The company’s primary country is the United States of America, its country of Domicile; while Greece is the head operating location. Most of our marketing, sales, ship-management and other related functions are performed at our main office in Piraeus, Greece. The company evaluate the performance of its operating earnings based on its subsidiaries sales.
| (a) | Earnings by operating subsidiaries and their trading areas are presented in the following table: |
| Six months Ended June 30, | |||||||||
| Operating Subsidiaries (1) | 2021 | 2020 | |||||||
| ● Petrogress Int’l LLC. | (Internationally) | $ | |||||||
| ● Petronav Carriers LLC. | (Internationally) | ||||||||
| Totals | $ | $ | |||||||
| (b) | Earnings by products and other services are presented in the following table: |
| Six months Ended June 30, | ||||||||
| Sales volumes per product & service (2) | 2021 | 2020 | ||||||
| ● Crude oil | $ | |||||||
| ● Gas oil | ||||||||
| ● Lubricants | ||||||||
| ● Vessel’s hires & freights | ||||||||
| ● Others | ||||||||
| Totals | $ | $ | ||||||
Segment Information; Petrogress’ chief operating decision maker is the chief executive officer (“CEO”) of its general partner. The CEO reviews Petrogress’ discrete financial information, makes operating decisions, assesses financial performance and allocates resources on a type of service basis. Petrogress has two reportable segments: Commodities and Other (C&O) revenues and Hires & Freights (H&F). Each of these segments is organized and managed based upon the nature of the products and services it offers.
Segment Sales and Other Operating Revenues; Segment sales and other operating revenues, including internal transfers, for the six-month periods ended June 30, 2021 and 2020, are presented in the following table. Products are transferred between operating segments at internal product values that approximate market prices. Revenues for the upstream segment are derived primarily from the purchase and sale of crude oil, as well as the sale of third-party. Revenues for the downstream segment are derived from the refining and marketing of petroleum products such as gasoline, gas oils, lubricants, residual fuel oils and other products derived from crude oil. Revenues for the midstream segment generated from the vessels chartering and employment of transportation crude oil or refined products, the storing, the wholesale marketing and the retailing in our gas stations. “All Other” activities include revenues from shipping agency service and other operations.
| Six months Ended June 30, | |||||||||
| Sales and Other Operating Revenues | 2021 | 2020 | |||||||
| Upstream | International | $ | $ | ||||||
| Downstream | International | ||||||||
| Midstream | International | ||||||||
| All others | International | ||||||||
| Total Sales and Other Operating Revenues | $ | $ | |||||||
| Note 6. | Inventories |
Crude oil, Gas oil and bunkers onboard our vessels are recorded at weighted average cost and carried at the lower of cost or net realizable value. Supplies and other items consist principally of items, spare-parts, consumable goods and equipment supplied to our vessel which are valued at weighted average cost and reviewed periodically for obsolescence or impairment when market conditions indicate.
Notes to Consolidated Financial Statements (continued)
The table below presents our inventories as of June 30, 2021 and December 31, 2020, respectively:
| Commodities and Petroproducts Inventories | June 30, 2021 | December 31, 2020 | ||||||
| Crude Oil | $ | $ | ||||||
| Gas Oil | ||||||||
| Lubricants | ||||||||
| Vessels Inventories & Others | ||||||||
| Bunkers R.O.B.* | ||||||||
| Lubricants | ||||||||
| Provisions & Stores | ||||||||
| Total | $ | $ | ||||||
*Vessels ROB of Gas Oil, lubricants and new spare parts are calculated in the balance sheets separately from goods.
| Note 7. | Properties, Vessels and Equipment |
We depreciate our vessels on a straight-line basis over the estimated useful life which is
Vessels and other fixed assets, net consisted of the following as of June 30, 2021 and December 31, 2020:
| June 30, 2021 | December 31, 2020 | Estimated useful Life left (in years) | ||||||||||
| Vessels purchased costs* | $ | $ | ||||||||||
| Furniture and equipment | ||||||||||||
| Accumulated depreciation** | ( | ) | ( | ) | ||||||||
| Vessels and other fixed assets, net | $ | $ | ||||||||||
| * | On April 1, 2016, Vessel’s properties passed by a virtue of deed transfer (Private Placement) from the CEO Christos Traios (the “Transferor”) to PGI (the “Transferee-guarantor”) and such purchase cost has not been repaid to the beneficiary Transferor; |
| ** | Depreciation for the six months ended June 30, 2021 and 2020, was $ |
| Note 8. | Assets held for sale |
As of June 30, 2021, the company has
| Note 9. | Changes in Accumulated Compresence Income |
| Note 10. | Income Taxes |
We file 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. We classify interest and penalties as a component of interest and other expenses. To date, we have incurred any liability for unrecognized tax benefits, including assessments of penalties and/or interest.
| Note 11. | Litigation |
There are currently no material pending legal or governmental proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or of which any of their property is subject.
| Note 12. | Other Contingencies and Commitments |
The Company is not a party to any litigation, and, to its best knowledge, no action, suit or proceeding has been threatened against the Company.
Notes to Consolidated Financial Statements (continued)
| Note 13. | Fair Value Measurements |
The three levels of the fair value hierarchy of inputs the company uses to measure the fair value of an asset or liability are described 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. |
Marketable Securities; We classify marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income/ (loss), a separate component of shareholders’ equity. Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred
Derivatives; The company records its derivative instruments – other than any commodity derivative contracts that are designated as normal purchase and normal sale – on the Consolidated Balance Sheet at fair value, with the offsetting amount to the Consolidated Statement of Income.
Cash and Cash Equivalents; The company hold cash equivalents in US Dollars and Non-US Dollars. The instruments classified as cash equivalents are primarily bank time deposits with maturities of 90 days or less, and money market funds. “Cash and cash equivalents” had carrying/fair values of June 30, 2021.
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.
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
| Note 14. | Revenue |
“Sales and other operating revenue” on the Consolidated Statement of Income primarily arise from contracts with customers and consistent with ASC Topic 606. Related receivables are included in “Accounts and notes receivable, net” on the Consolidated Balance Sheet, net of the current expected credit losses. The net balance of these receivables was $
| Note 15. | Earnings / (Losses) per Share and Shareholders’ Equity |
The table below presents the calculation of basic and diluted net income / (loss) attributable to common shareholders per share as of June 30, 2021:
| June 30, | ||||||||
| Basic EPS Calculation | 2021 | 2020 | ||||||
| Net income attributable to common shareholders | $ | ( | ) | $ | ( | ) | ||
| Denominator for basic net income per share – weighted average shares | ||||||||
| Conversion of accrued interest on debt held by related party | - | |||||||
| Denominator for diluted net income per share | - | |||||||
| Basic net earnings per share | ( | ) | ( | ) | ||||
| Diluted net earnings per share | - | |||||||
As of June 30, 2021, and 2020, the basic weighted average number of shares of Common Stock of the Company was
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations
Key Financial Results
Second Quarter of 2021 compared to the Second Quarter of 2020
| Earnings by product sales |
Six months ended June 30, |
|||||||
| Net sales volumes per product |
2021 |
2020 |
||||||
| Crude Oil Sales |
$ | - | $ | 749,200 | ||||
| Gas Oil Sales |
870,000 | 622,000 | ||||||
| Lubricants Sales |
58,750 | 143,501 | ||||||
| Hires & Freights Sales |
315,000 | 218,000 | ||||||
| Other Revenues / Discounts |
215,368 | 34,080 | ||||||
| Totals |
$ | 1,459,118 | $ | 1,766,781 | ||||
Refer to the “Results of Operations” section beginning on page 14 for a discussion of our financial results.
Executive Overview
Petrogress, Inc., is based in Delaware and operates as a holding company and conducts its business through its wholly-owned subsidiaries: Petronav Carriers LLC., which manages day-to-day operations of its beneficially-owned affiliated tanker fleet; and Petrogress Int’l LLC., which provides management of crude oil purchases and sales;
The company maintain its principal marketing and operating offices at 1, Akti Xaveriou, 18538 Piraeus, Greece. Our telephone number at that address is +30 (210) 459-9741.
Business Environment and Outlook
Earnings of the company depend mostly on the profitability of its crude oil business segment. The most significant factor affecting the results of operations is the price of crude oil, which is determined in global markets outside of the company’s control. The price of crude oil has fallen significantly since mid-year 2020. The downturn in the price of crude oil has impacted the company's results of operations, cash flows, leverage, capital and exploratory investment program and production outlook. A sustained lower price environment could result in the impairment or write-off of specific assets in future periods. Similarly, impairments or write-offs have occurred, and may occur in the future, as a result of managerial decisions not to progress certain projects in the company’s portfolio. We have reacted to the downturn by effecting reductions in operating expenses, pacing and re-focusing of capital and exploratory expenditures. Our lack of cash liquidity remains on low levels for the rest of the year and undoubtedly shall continue affecting our operations and cash flow. In addition, the sea-transpiration impacted hardly due to global low demand of oil products. Nevertheless, it is our objective to deliver competitive results and shareholder value in any business environment.
Response to Market Conditions and COVID-19 During the pandemic period the travel restrictions and other constraints on economic activity were implemented in many locations around the world to limit the spread of the COVID-19 virus. Lower commodity prices negatively impacted the company’s first quarter 2021 financial and operating results. While demand and commodity prices have shown signs of recovery, they are not back to pre-pandemic levels, and financial results will likely continue to be challenged in future quarters. Due to the rapidly changing of environment, there continues to be uncertainty and unpredictability around the extent to which the COVID-19 pandemic will impact our results, which could be material.
Refer to the “Cautionary Statements Relevant to Forward-Looking Information” on Page 2 and to “Risk Factors” in Part II, Item 1A, on page 16-17 for a discussion of some of the inherent risks that could materially impact the company’s results of operations or financial condition.
* Petrogress, Inc. was incorporated on February 10, 2010 under the laws of the State of Florida as 800 Commerce, Inc. (“800 Commerce”). On February 29, 2016, 800 Commerce entered into an Agreement concerning the Exchange of Securities (“SEA”) with Petrogres Co. Limited, 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. was the acquirer for financial statement purposes. Accordingly, the historical financial statements of 800 Commerce are those of Petrogres Co. and its subsidiaries from their respective inception and those of the consolidated entity subsequent to the February 29, 2016 transaction date. 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. 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. During 2020 the company amended its Articles of Incorporation and increase its authorized shares of common stock to 100,000,000. There was no change in the par value of the Company's Common Stock or Preferred Stock as a result of the Amendment.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Operating sectors
Our business operates in the downstream and midstream sectors of the energy industry, where we acquire and supply crude oil, and engage in the refining and marketing of refined products and lubricants. As a supplier, we procure crude oil from our direct sources and deliver by our tankers fleet to buyers’ destinations. We provide our customers with services that require sophisticated logistical operations designed to meet their strict oil quality and delivery scheduling needs. Throughout our history, we have expanded our business capabilities through strategic alliances, select business and vessel acquisitions, and the establishment of new service centers.
Other Businesses
Effected as on November 2019, the company concluded the negotiations to lease three Gas refilling stations in the Mainland of South Greece. The procedures for the obtaining the operating licenses from the local authorities are in progress, simultaneously with the preparation of gas stations designs and drawings in order to commence the modernization and renovation under our brand names. We estimate to have the first-one ready for operations within July. Our innovate gas-stations with their unique distinct design, have been developed to offer high performance fuels and a totally new experience to customers, with our vision to deliver a modern and compelling retail experience. The Gas-Stations shall be operated by our branch in Greece and all are designed to provide the drivers food options, cold and hot pre-packaged items.
Our key business segments
The following are descriptions of our recent initiatives undertaken in each of our key business segments:
Downstream; Earnings for the upstream segment are closely aligned with industry prices for crude oil. Crude oil prices are subject to external factors over which the company has no control, including product demand connected with global economic conditions, industry production and inventory levels, technology advancements, production quotas or other actions imposed by the Organization of Petroleum Exporting Countries (OPEC) or other producers, actions of regulators, weather-related damage and disruptions, competing fuel prices, natural and human causes beyond the company's control such as the COVID-19 pandemic, and regional supply interruptions. The company is actively managing its schedule of work, contracting, procurement, and supply chain activities to effectively manage costs, ensure supply chain resiliency and continuity, and support operational goals. The spot markets for many services and materials are softening in response to the economic impact of the COVID-19 pandemic, including the drastic reductions in demand for petroleum products, including gasoline and fuel, among others, and in crude oil prices, which have resulted in significant reductions in economic activity and associated spending in the energy sector. Commodity prices have fallen below break-even levels in many regions. The company’s most significant marketing areas are the West Coast of Africa and East Mediterranean.
Midstream; The outbreak of COVID-19 pandemic occurred the ceased of our entire fleet operations and employments which resulted the complete elimination of freight and hire incomes, while the fleet expenses remained on the same levels during the second quarter 2021. Nevertheless, we believe the shipping industry will be rectified and return to the normal levels, therefore we still seek to expand our midstream operations in other international ocean routes by adding to our fleet larger and younger tanker vessels. We are monitoring the vessel market for opportunities while we are also working to secure the necessary funding for expansion. Our business strategy is based in part upon the expansion of our business to new, or within existing, markets. In order to expand our operations, we will be required to use cash from operations, incur borrowings or raise capital through the sale of debt or equity securities in the public or private markets.
Results of Operations
The following section presents the results of operations and variances on a before-tax basis for the company’s business operations, as well as for “All Other.” Our operating revenues are driven primarily of the commodities trading sales and our tankers fleet employment days during which our vessels are generating revenues while our financial results are subject to a number of sectors and reflects to the following factors:
Cost of commodities; is the cost we purchase the oil products -mainly the crude oil- and such cost is based either on Brent Index prices or Fixed price, the quality and quantity of the product.
Commodities Operating Expenses; relates to products surveys before and after the shipment, bunkers supplied to the employment vessel, agency and representative services.
Shipping & Logistic Expenses; includes the sea freight and mobilization cost, the performed loading and discharging of the product, and any expenses occurred during the shipping time from the loading point up to unloading facilities.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Vessels Operating Expenses; includes crew wages and bonuses, their medical support and travelling, maintenance and repairs to the vessels hull and their machineries, expenses for supplies of spare-parts and consumable stores, paints, lubricants, fresh water, bunkers, agency services, etc.
General and Administrative Expenses; relates to our directors, officers and managers salaries and compensations, shore staff wages, employee’s federal insurance, offices lease and utilities, telecommunications, travelling and representations of our officers, our agency fees we pay to our branch’s offices in Greece, Cyprus, Ghana and Nigeria.
Corporate Expenses; are all company’s expenses and includes, our executive’s compensations, attorney’s fee, Auditors and accountant fees, Consultant’s and P/R fees, Transfer agents of our stock, and miscellaneous.
Other factors may affect our Results of Operations; In addition to the said expenses there are factors beyond of our control which may affect seriously our operations results. Inasmuch as we trade also West Africa, which is considered as high risky area, we are expose in a serious amount of risks, such as piracies and hijacks, civil wars, stolen of properties, economy distress, and credit risks.
EBITDA and Adjustment; EBITDA represents net income before expenses, taxes and depreciation. Adjusted EBITDA represents net income before expense, taxes, taxes, depreciation and amortization of dry-docking.
| Six months ended June 30, |
||||||||
| 2021 |
2020 |
|||||||
| Operating Earnings / (losses) |
$ | (1,378,208 | ) | $ | (1,928,663 | ) | ||
Operating losses of during the second quarter of 2021 amount to $(1,378,208), compared to operating losses of $(1,928,663) for the same period in 2020.
Consolidated Statement of Income
Sales of products provided in the below table:
| Six months Ended June 30, |
||||||||
| Net sales volumes per product |
2021 |
2020 |
||||||
| Crude Oil Sales |
$ | - | $ | 749,200 | ||||
| Gas Oil Sales |
870,000 | 622,000 | ||||||
| Lubricants Sales |
58,750 | 143,501 | ||||||
| Hires & Freights Sales |
315,000 | 218,000 | ||||||
| Other Revenues/Discounts |
215,368 | 34,080 | ||||||
| Totals |
$ | 1,459,118 | $ | 1,766,781 | ||||
Cost of Goods Sold provided in the below table:
| Six months Ended June 30, |
||||||||
| Cost of goods sold |
2021 |
2020 |
||||||
| Crude Oil purchased costs |
$ | - | $ | (1,250,000 | ) | |||
| Gas Oil purchased costs |
(630,000 | ) | (520,000 | ) | ||||
| Lubricants purchased costs |
(68,660 | ) | (129,000 | ) | ||||
| Vessels leases & charters |
(858,540 | ) | - | |||||
| Totals |
$ | (1,557,200 | ) | $ | (1,899,000 | ) | ||
| ● |
Sales: Total operating sales for the six months ended June 30, 2021 and 2020, were $1,459,118 and $1,766,781, respectively, a decrease of $307,663 or approximately 17%. |
| ● |
Cost of goods sold: For the six months ended June 30, 2021 and 2020, cost of goods sold was $1,557,200 and $1,889,000, respectively, a decrease of $331,800 or approximately 17%. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
| ● |
Corporate expenses: Corporate expenses mainly include the expenses incurred by Petrogress, Inc. Our Corporate expenses for the six months ended June 30, 2021 and 2020 were $8,661 and $293,168, respectively, a decrease of $284,507 or approximately 97%. |
| ● |
General and administrative expenses: For the six months ended June 30, 2021, General and administrative expenses decreased to $258,836 compared to $1,187,591 for the six months ended June 30, 2020, a decrease of $928,755 or approximately 78%. |
| ● |
Net income / (loss) attributable PGI: For the six months ended June 30, 2021, the Company had a net loss of $1,395,307 while for the six months ended June 30, 2020, the Company had a net loss of $3,077,232, a decrease of $1,681,925 or approximately 54%. |
| ● |
EBITDA: For the six months ended June 30, 2021, EBITDA amounted to $(1,378,208) compared to $(1,928,663) for the six months ended June 30, 2020. |
| Consolidated results of Operation (after eliminations) |
Six months Ended June 30, |
|||||||
| 2021 |
2020 |
|||||||
| Total Operating Revenues |
$ | 1,459,118 | $ | 1,766,781 | ||||
| Total Inventories (Bunkers – Lubricants & Spare parts) |
1,015,733 | 903,036 | ||||||
| Total Operating Expenses & Cost of Goods Sold* |
$ | (2,854,425 | ) | $ | (3,695,444 | ) | ||
* Operating expenses includes, corporate expenses, shipping & logistic, commodities purchase cost, fleet expenses, General and Administrative expenses, and Depreciation expense;
Summarized Financial Data – Subsidiaries
The management and operation of our business is performed directly and independently by each subsidiary. Assets, inventories, partnership interests, joint venture interests and contracts are held by the subsidiaries. Petrogress, Inc., the parent company, does not have revenues while it suffers all the necessary operating and general and administrative expenses in order to comply with the regulatory requirements of the SEC.
Petrogress Int’l LLC. (PIL)
Summarized financial information is presented in the following table:
| Six months Ended |
||||||||
| June 30 |
||||||||
| 2021 |
2020 |
|||||||
| Sales and other operating revenues |
$ | 928,750 | $ | 1,514,701 | ||||
| Inventory (Crude oil & Lubricants) |
851,365 | 699,397 | ||||||
| Cost and other expenses |
(1,197,729 | ) | (2,097,517 | ) | ||||
| Net income / (loss) attributable to Petrogress, Inc.* |
$ | 582,386 | $ | 116,581 | ||||
* 100% Net income / (loss) attributable to Petrogress, Inc.
Petronav Carriers LLC. (PCL)
Summarized financial information is presented in the following table:
| Six months Ended |
||||||||
| June 30 |
||||||||
| 2021 |
2020 |
|||||||
| Sales and other operating revenues |
$ | 530,368 | $ | 447,080 | ||||
| Inventory (Bunkers – Lubricants & Spare Parts) |
164,369 | 203,639 | ||||||
| Cost and other expenses |
(1,344,427 | ) | (1,451,300 | ) | ||||
| Net income / (loss) attributable to Petrogress, Inc. * |
$ | (649,690 | ) | $ | (800,581 | ) | ||
* 100% Net income / (loss) attributable to Petrogress, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Petrogress, Inc. (PGI)
The following table presents the results of equity interest PGI has into the subsidiaries:
| Six months Ended |
||||||||
| June 30 |
||||||||
| 2021 |
2020 |
|||||||
| Sales and other operating revenues |
$ | - | $ | - | ||||
| Corporate, Administrative and other expenses |
(147,639 | ) | (1,487,941 | ) | ||||
| Net income / (loss) attributable to Petrogress, Inc.* |
$ | (147,639 | ) | $ | (1,487,941 | ) | ||
Net income / (loss) attributable from ownership interest of the subsidiaries.
Liquidity & Capital Resources
Our main sources of liquidity are cash and cash equivalents, accounts receivable and internally generated cash flow from operations. At June 30, 2021, we had a working capital of $316,985 consisting of $38,595 in cash and cash equivalents, $2,472,329 in accounts receivable, $708,224 in claims receivable, $1,015,733 in inventories, and $572,763 in prepaid expenses and other current assets.
For the six months ended June 30, 2021, net cash provided by operating activities was $453,271 compared to $699,043 for the same period in 2020. Assets included in the calculation of the Company’s working capital have increased by $344,723 mainly from the increase in accounts receivable
The company’s future debt level is dependent primarily on results of operations, cash that may be generated from asset dispositions, the capital program, lending commitments to affiliates, and shareholder contributions. 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 the expenses we suffer in order to comply with the regulatory requirements of SEC. Specifically, Petrogress, Inc., the parent company, does not have revenues while it suffers all the necessary operating and general and administrative expenses to comply with the regulatory requirements of the SEC.
Cash and Cash Equivalents; The following table presents sources and use of cash and cash equivalents:
| Six months Ended June 30, |
||||||||
| Sources of cash and cash equivalents |
2021 |
2020 |
||||||
| Operating activities |
$ | 453,271 | $ | 699,043 | ||||
| Borrowing |
- | - | ||||||
| Others |
- | - | ||||||
| Total sources of cash and cash equivalents |
$ | 453,271 | $ | 699,043 | ||||
Management seeks to secure the necessary financing for the expansion of Company’s operations. The company needs to raise a reasonable finance in order to expand its operations, increase the oil sales and support its projects of the gas-stations
Item 3 – Quantitative and Qualitative Disclosures about Market Risk
Information about market risks for the six months ended June 30, 2021, does not differ materially from that discussed under Item 7A of Petrogress 2020 Annual Report on Form 10-K.
Item 4 – Controls and Procedures
(a) Evaluation of disclosure controls and procedures
The company’s management has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company’s disclosure controls and procedures were effective as of June 30, 2021.
(b) Changes in internal control over financial reporting
During the six months ended June 30, 2021, there were no changes in the company’s internal control over financial reporting that have materially affected or are reasonably likely to affect, the company’s internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1 – Legal Proceedings
Information about legal proceedings for the six months ended June 30, 2021, does not differ materially from that discussed under Item 3 of Petrogress 2020 Annual Report on Form 10-K.
Item 1A – Risk Factors
Some inherent risks could materially impact the company’s financial results of operations or financial condition. Information about risk factors for the six months ended June 30, 2021, does not differ materially from that set forth under the heading “Risk Factors” on pages 10 through 14 of the company’s 2020 Annual Report on Form 10-K.
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds
The table below presents the issued shares during the quarter ended June 30, 2020:
| Period |
Total Number of Shares |
Class |
||||||
| April 1 – April 30, 2021 |
- | |||||||
| May 1 – May 31, 2021 |
- | |||||||
| June 1 – June 30, 2021 |
- | |||||||
| Total |
- | |||||||
Item 5 – Other Information
None
Item 6- Exhibits
The information required by this Item 6 is set forth in the Exhibit Index accompanying this Form 10Q
Exhibits Index
| Exhibit Number |
Exhibits Description |
Page(s) |
||
| 31.1 | Certification of Principal Executive Officer pursuant to Rule 13a-14a/Rule 14d-14(a)* | Page 19 | ||
| 31.2 | Certification of Principal Financial Officer pursuant to Rule 13a-14a/Rule 14d-14(a)* | Page 20 | ||
| 32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.* | Page 21 | ||
| 32.2 | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.* | Page 22 | ||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.* | |||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | |||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | |||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | |||
| 104 | Cover Page Interactive Data File included as Exhibit 101 (embedded within the Inline XBRL document)* |
* Filed herewith
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
| Date: August 31, 2021 |
PETROGRESS, INC. |
|
| By: |
/s/ Christos Traios |
|
| Christos Traios |
||
| President and Chief Executive Officer (Principal Executive Officer) |
||
| By: |
/s/ Evangelos Makris |
|
| Evangelos Makris |
||
| Chief Financial Officer (Principal Financial and Accounting Officer) |
||
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. |
|
August 31, 2021 |
Petrogress, Inc. |
|
|
By: |
/s/ Christos P. Traios |
|
|
Christos P. Traios |
||
|
Chief Executive Officer |
||
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): |
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(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 |
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(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. |
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August 31, 2021 |
Petrogress, Inc. |
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By: |
/s/ Evangelos Makris |
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Evangelos Makris |
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Chief Financial Officer |
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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 June 30, 2020 (the “Report”), I, Christos Traios, Chief 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:
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(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
Chief Executive Officer
August 31, 2021
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 June 30, 2020 (the “Report”), I, Evangelos Makris, Chief 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:
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(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
Chief Financial Officer
August 31, 2021
Consolidated Statement of Balance Sheet (Current Period Unaudited) (Parentheticals) - $ / shares |
Jun. 30, 2021 |
Dec. 31, 2020 |
|---|---|---|
| Preferred stock, par value (in dollars per share) | $ 100 | $ 100 |
| Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
| Preferred stock, shares issued (in shares) | 100 | 100 |
| Preferred stock, shares outstanding (in shares) | 100 | 100 |
| Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
| Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
| Common stock, shares issued (in shares) | 35,152,558 | 35,151,058 |
| Common stock, shares outstanding (in shares) | 35,152,558 | 35,151,058 |
Consolidated Statement of Cash Flows (Unaudited) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| CASH FLOW FROM OPERATING ACTIVITIES | ||
| Net Income (loss) | $ (1,395,307) | $ (3,077,232) |
| Adjustments to reconcile net income/ (loss) to net cash provided by operating activities: | ||
| Depreciation expense | 308,450 | 306,895 |
| Provision for losses on accounts receivable | 0 | 0 |
| Change in fair value of derivative liabilities | 0 | 629,679 |
| Share-based compensation expense | 0 | 424,940 |
| Loss on disposition of fixed assets | 0 | 0 |
| Amortization of discount on convertible note | 250,379 | 174,292 |
| Amount of derivative in excess of face value of PCN | 0 | 74,590 |
| Elimination of Petrogres Hellas Co | 309,672 | 0 |
| Gain / (loss) on settlement of convertible promissory note | 0 | 83,933 |
| Elimination of PGAS Africa APIC | 0 | (755,702) |
| Changes in working capital | ||
| (Increase) / Decrease in accounts receivable, net | (335,539) | 223,513 |
| (Increase) / Decrease in claims receivable, net | (143,710) | 103,355 |
| (Increase) / Decrease in inventories | (112,697) | 828,664 |
| (Increase) / Decrease in amounts due from related party | 0 | 720,000 |
| (Increase) / Decrease in prepaid expenses | 855,644 | 741,423 |
| Increase / (Decrease) in accounts payable and accrued expenses | 1,512,900 | 238,427 |
| Increase / (Decrease) in amounts due to related party | (143,201) | (651,414) |
| Increase / (Decrease) in short-terms loans | 87,000 | 0 |
| Increase / (Decrease) in accrued interest | (13,715) | 0 |
| Increase / (Decrease) in lease liabilities | (733,559) | 626,401 |
| (Increase) / Decrease in security deposit | 5,258 | (1,178) |
| (Increase) / Decrease in deferred charges, net | 1,534 | 8,457 |
| CASH PROVIDED BY OPERATING ACTIVITIES | 453,109 | 699,043 |
| CASH FLOWS FROM INVESTING ACTIVITIES | ||
| Purchase of property, plant and equipment | 0 | (60,113) |
| Investments in subsidiaries | (1,547,872) | 0 |
| Purchase of vessels and other equipment | 172,205 | 0 |
| Acquisition of intangible assets | 669,065 | (875,886) |
| CASH USED IN INVESTING ACTIVITIES | (706,602) | (935,999) |
| Proceeds from convertible promissory notes | 0 | 0 |
| Proceeds from advances from related party | 16,053 | 0 |
| CASH PROVIDED BY FINANCING ACTIVITIES | 16,053 | 0 |
| Effects of exchange rate changes | 0 | 0 |
| NET DECREASE IN CASH | (237,440) | (236,956) |
| CASH AT BEGINNING OF YEAR | 276,035 | 391,360 |
| CASH AT PERIOD END | $ 38,595 | $ 154,404 |
Consolidated Statement of Equity (Unaudited) - USD ($) |
Preferred Stock [Member] |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
AOCI Attributable to Parent [Member] |
Retained Earnings [Member] |
Noncontrolling Interest [Member] |
Total |
|---|---|---|---|---|---|---|---|
| Balance (in shares) at Dec. 31, 2019 | 100 | 4,446,645 | |||||
| Balance at Dec. 31, 2019 | $ 10,000 | $ 4,447 | $ 10,073,810 | $ (9,763) | $ (1,634,645) | $ 69,992 | $ 8,513,841 |
| Stock issued for liabilities (in shares) | 0 | 325,556 | |||||
| Stock issued for liabilities | $ 0 | $ 325 | 101,381 | 0 | 0 | 0 | 101,706 |
| Stock issued for services (in shares) | 0 | 26,000 | |||||
| Stock issued for services | $ 0 | $ 26 | 8,387 | 0 | 0 | 0 | 8,413 |
| Net Income (loss) | $ 0 | $ 0 | 0 | 0 | (910,397) | (12,347) | (922,744) |
| Balance (in shares) at Mar. 31, 2020 | 100 | 4,798,201 | |||||
| Balance at Mar. 31, 2020 | $ 10,000 | $ 4,798 | 10,183,578 | (9,763) | (2,545,042) | 57,645 | 7,701,216 |
| Balance (in shares) at Dec. 31, 2019 | 100 | 4,446,645 | |||||
| Balance at Dec. 31, 2019 | $ 10,000 | $ 4,447 | 10,073,810 | (9,763) | (1,634,645) | 69,992 | 8,513,841 |
| Net Income (loss) | (3,077,232) | ||||||
| Balance (in shares) at Jun. 30, 2020 | 100 | 7,833,562 | |||||
| Balance at Jun. 30, 2020 | $ 10,000 | $ 7,834 | 9,377,530 | (9,763) | (4,479,206) | (69,992) | 4,906,395 |
| Balance (in shares) at Mar. 31, 2020 | 100 | 4,798,201 | |||||
| Balance at Mar. 31, 2020 | $ 10,000 | $ 4,798 | 10,183,578 | (9,763) | (2,545,042) | 57,645 | 7,701,216 |
| Stock issued for liabilities (in shares) | 0 | 3,035,361 | |||||
| Stock issued for liabilities | $ 0 | $ 3,036 | 249,893 | 0 | 0 | 0 | 252,929 |
| Stock issued for services | 0 | 0 | (8,100) | 0 | 0 | 0 | (8,100) |
| Net Income (loss) | 0 | 0 | 0 | 0 | (1,772,397) | 0 | (1,772,397) |
| Elimination of PG Africa | 0 | 0 | (1,047,841) | 0 | (161,767) | (57,645) | (1,267,253) |
| Elimination of Petrogres Hellas | $ (0) | $ (0) | 1,047,841 | (0) | 161,767 | 57,645 | 1,267,253 |
| Balance (in shares) at Jun. 30, 2020 | 100 | 7,833,562 | |||||
| Balance at Jun. 30, 2020 | $ 10,000 | $ 7,834 | 9,377,530 | (9,763) | (4,479,206) | (69,992) | 4,906,395 |
| Balance (in shares) at Dec. 31, 2020 | 100 | 35,151,058 | |||||
| Balance at Dec. 31, 2020 | $ 10,000 | $ 35,151 | 10,561,797 | (15,552) | (4,275,702) | 0 | 6,315,694 |
| Stock issued for liabilities (in shares) | 0 | 1,500 | |||||
| Stock issued for liabilities | $ 0 | $ 2 | 239,100 | 5,488 | 0 | 0 | 244,590 |
| Stock issued for services | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Net Income (loss) | $ 0 | $ 0 | 0 | 0 | (146,185) | 0 | (146,185) |
| Balance (in shares) at Mar. 31, 2021 | 100 | 35,152,558 | |||||
| Balance at Mar. 31, 2021 | $ 10,000 | $ 35,153 | 10,800,897 | (10,064) | (4,421,887) | 0 | 6,414,099 |
| Balance (in shares) at Dec. 31, 2020 | 100 | 35,151,058 | |||||
| Balance at Dec. 31, 2020 | $ 10,000 | $ 35,151 | 10,561,797 | (15,552) | (4,275,702) | 0 | 6,315,694 |
| Net Income (loss) | (1,395,307) | ||||||
| Balance (in shares) at Jun. 30, 2021 | 100 | 35,152,558 | |||||
| Balance at Jun. 30, 2021 | $ 10,000 | $ 35,153 | 10,800,897 | (4,275) | (5,361,337) | 0 | 5,480,438 |
| Balance (in shares) at Mar. 31, 2021 | 100 | 35,152,558 | |||||
| Balance at Mar. 31, 2021 | $ 10,000 | $ 35,153 | 10,800,897 | (10,064) | (4,421,887) | 0 | 6,414,099 |
| Stock issued for liabilities | 0 | 0 | 0 | 5,789 | 0 | 0 | 5,789 |
| Net Income (loss) | 0 | 0 | 0 | 0 | (1,249,122) | 0 | (1,249,122) |
| Elimination of PG Africa | 0 | 0 | 0 | 0 | (309,672) | 0 | (309,672) |
| Elimination of Petrogres Hellas | $ 0 | $ 0 | 0 | 0 | 309,672 | 0 | 309,672 |
| Balance (in shares) at Jun. 30, 2021 | 100 | 35,152,558 | |||||
| Balance at Jun. 30, 2021 | $ 10,000 | $ 35,153 | $ 10,800,897 | $ (4,275) | $ (5,361,337) | $ 0 | $ 5,480,438 |
Note 1 - General |
6 Months Ended | ||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||
| Significant Accounting Policies [Text Block] |
Petrogress, Inc (PGI), is an integrate energy company, engaged in the upstream, downstream and midstream segments. We sell crude oil and refined products internationally, to buyers on the spot market and to independent entrepreneurs. The company operates internationally through its wholly owned subsidiaries "Petrogress Int'l LLC.", "Petronav Carriers LLC.". The company is registered in Delaware and headquartered from Piraeus-Greece, where the company maintain its principal marketing and operating offices at 1, Akti Xaveriou, 18538 Piraeus, Greece.
Impact of the novel coronavirus (COVID-19) pandemic; the outbreak of COVID-19 and decreases in commodity prices resulting from oversupply, government-imposed travel restrictions and other constraints on economic activity caused a significant decline in the demand for our products and created disruptions and volatility in the global marketplace beginning late in the first quarter 2020, which negatively affected our results of operations and cash flows throughout 2020. While demand and commodity prices have shown signs of recovery, demand is not back to pre-pandemic levels, and financial results could continue to be challenged in future quarters. There continues to be uncertainty and unpredictability around the extent to which the COVID-19 pandemic will impact our results, which could be material
Basis of Presentation; the accompanying consolidated financial statements of Petrogress and its subsidiaries (together, Petrogress or the company) have not been audited by an independent registered public accounting firm. In the opinion of the company’s management, the interim data includes all adjustments necessary for a fair statement of the results for the interim periods. These adjustments were of a normal recurring nature. The results for six-months period ended June 30, 2021, are not necessarily indicative of future financial results. The term “earnings” is defined as net income attributable to Petrogress.
Subsidiaries and Affiliated Companies; the Consolidated Financial Statements include the accounts of controlled subsidiary companies more than 50 percent owned and any variable-interest entities in which the company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated.
Principles of consolidation; the consolidated financial statements include the consolidated accounts of the Company and its wholly owned and majority-owned subsidiaries as listed in the below table. Inter-company transaction balances and unrealized gains/(losses) on transactions between the companies are eliminated.
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Note 2 - Accounting Standards |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Accounting Standards Update and Change in Accounting Principle [Text Block] |
Recently adopted; Effective January 1, 2021, we adopted Accounting Standards Update (ASU) 2016-13 and its related amendments |
Note 3 - Information Relating to the Consolidated Statement of Cash Flows |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Cash Flow, Supplemental Disclosures [Text Block] |
Read Cash Flow statement - page 5 |
Note 4 - Summarized Financial Data - Petrogress, Inc. |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Parent Company [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Condensed Financial Statements [Text Block] |
The summarized financial information for Petrogress Inc (PGI) presented as follows:
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Note 5 - Operating Segments & Geographic Presence |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting Disclosure [Text Block] |
The company’s primary country is the United States of America, its country of Domicile; while Greece is the head operating location. Most of our marketing, sales, ship-management and other related functions are performed at our main office in Piraeus, Greece. The company evaluate the performance of its operating earnings based on its subsidiaries sales.
Segment Information; Petrogress’ chief operating decision maker is the chief executive officer (“CEO”) of its general partner. The CEO reviews Petrogress’ discrete financial information, makes operating decisions, assesses financial performance and allocates resources on a type of service basis. Petrogress has two reportable segments: Commodities and Other (C&O) revenues and Hires & Freights (H&F). Each of these segments is organized and managed based upon the nature of the products and services it offers.
Segment Sales and Other Operating Revenues; Segment sales and other operating revenues, including internal transfers, for the six-month periods ended June 30, 2021 and 2020, are presented in the following table. Products are transferred between operating segments at internal product values that approximate market prices. Revenues for the upstream segment are derived primarily from the purchase and sale of crude oil, as well as the sale of third-party. Revenues for the downstream segment are derived from the refining and marketing of petroleum products such as gasoline, gas oils, lubricants, residual fuel oils and other products derived from crude oil. Revenues for the midstream segment generated from the vessels chartering and employment of transportation crude oil or refined products, the storing, the wholesale marketing and the retailing in our gas stations. “All Other” activities include revenues from shipping agency service and other operations.
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Note 6 - Inventories |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory Disclosure [Text Block] |
Crude oil, Gas oil and bunkers onboard our vessels are recorded at weighted average cost and carried at the lower of cost or net realizable value. Supplies and other items consist principally of items, spare-parts, consumable goods and equipment supplied to our vessel which are valued at weighted average cost and reviewed periodically for obsolescence or impairment when market conditions indicate.
The table below presents our inventories as of June 30, 2021 and December 31, 2020, respectively:
*Vessels ROB of Gas Oil, lubricants and new spare parts are calculated in the balance sheets separately from goods. |
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Note 7 - Properties, Vessels and Equipment |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Properties, Vessels, Inventories & Equipment [Text Block] |
We depreciate our vessels on a straight-line basis over the estimated useful life which is 10 years from the date of being placed in service by the Company or its affiliate. Depreciation is calculated based on a vessel’s cost less the estimated residual value.
Vessels and other fixed assets, net consisted of the following as of June 30, 2021 and December 31, 2020:
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Note 8 - Assets Held for Sale |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Assets Held for Sale [Text Block] |
As of June 30, 2021, the company has no classified any properties as “Assets held for sale” on the Consolidated Balance Sheet. |
Note 9 - Changes in Accumulated Compresence Income |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Comprehensive Income (Loss) Note [Text Block] |
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Note 10 - Income Taxes |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Income Tax Disclosure [Text Block] |
We file 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. We classify interest and penalties as a component of interest and other expenses. To date, we have incurred any liability for unrecognized tax benefits, including assessments of penalties and/or interest. |
Note 11 - Litigation |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Legal Matters and Contingencies [Text Block] |
There are currently no material pending legal or governmental proceedings, other than ordinary routine litigation incidental to the business, to which the Company or any of its subsidiaries is a party or of which any of their property is subject. |
Note 12 - Other Contingencies and Commitments |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Commitments and Contingencies Disclosure [Text Block] |
The Company is not a party to any litigation, and, to its best knowledge, no action, suit or proceeding has been threatened against the Company. |
Note 13 - Fair Value Measurements |
6 Months Ended | ||||||||
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Jun. 30, 2021 | |||||||||
| Notes to Financial Statements | |||||||||
| Fair Value Measurement and Measurement Inputs, Recurring and Nonrecurring [Text Block] |
The three levels of the fair value hierarchy of inputs the company uses to measure the fair value of an asset or liability are described as follows:
Marketable Securities; We classify marketable securities as available-for-sale securities, which are carried at their fair value based on the quoted market prices of the securities with unrealized gains and losses, net of deferred income taxes, reported as accumulated other comprehensive income/ (loss), a separate component of shareholders’ equity. Realized gains and losses on available-for-sale securities are included in net earnings in the period earned or incurred
Derivatives; The company records its derivative instruments – other than any commodity derivative contracts that are designated as normal purchase and normal sale – on the Consolidated Balance Sheet at fair value, with the offsetting amount to the Consolidated Statement of Income.
Cash and Cash Equivalents; The company hold cash equivalents in US Dollars and Non-US Dollars. The instruments classified as cash equivalents are primarily bank time deposits with maturities of 90 days or less, and money market funds. “Cash and cash equivalents” had carrying/fair values of June 30, 2021.
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.
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 |
Note 14 - Revenue |
6 Months Ended | ||
|---|---|---|---|
Jun. 30, 2021 | |||
| Notes to Financial Statements | |||
| Revenue from Contract with Customer [Text Block] |
“Sales and other operating revenue” on the Consolidated Statement of Income primarily arise from contracts with customers and consistent with ASC Topic 606. Related receivables are included in “Accounts and notes receivable, net” on the Consolidated Balance Sheet, net of the current expected credit losses. The net balance of these receivables was $2,472,329 and $2,136,790 at June 30, 2021, and December 31, 2020 respectively. |
Note 15 - Earnings (Losses) Per Share and Shareholders' Equity |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Text Block] |
The table below presents the calculation of basic and diluted net income / (loss) attributable to common shareholders per share as of June 30, 2021:
As of June 30, 2021, and 2020, the basic weighted average number of shares of Common Stock of the Company was 35,152,028 and 5,136,808, respectively. |
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Significant Accounting Policies (Policies) |
6 Months Ended | |||||||||||||||||||||
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Jun. 30, 2021 | ||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||
| Effect of Covid-19 Pandemic, Policy [Policy Text Block] | Impact of the novel coronavirus (COVID-19) pandemic; the outbreak of COVID-19 and decreases in commodity prices resulting from oversupply, government-imposed travel restrictions and other constraints on economic activity caused a significant decline in the demand for our products and created disruptions and volatility in the global marketplace beginning late in the first quarter 2020, which negatively affected our results of operations and cash flows throughout 2020. While demand and commodity prices have shown signs of recovery, demand is not back to pre-pandemic levels, and financial results could continue to be challenged in future quarters. There continues to be uncertainty and unpredictability around the extent to which the COVID-19 pandemic will impact our results, which could be material |
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| Basis of Accounting, Policy [Policy Text Block] | Basis of Presentation; the accompanying consolidated financial statements of Petrogress and its subsidiaries (together, Petrogress or the company) have not been audited by an independent registered public accounting firm. In the opinion of the company’s management, the interim data includes all adjustments necessary for a fair statement of the results for the interim periods. These adjustments were of a normal recurring nature. The results for six-months period ended June 30, 2021, are not necessarily indicative of future financial results. The term “earnings” is defined as net income attributable to Petrogress. |
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| Consolidation, Subsidiaries or Other Investments, Consolidated Entities, Policy [Policy Text Block] | Subsidiaries and Affiliated Companies; the Consolidated Financial Statements include the accounts of controlled subsidiary companies more than 50 percent owned and any variable-interest entities in which the company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated. |
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| Consolidation, Policy [Policy Text Block] | Principles of consolidation; the consolidated financial statements include the consolidated accounts of the Company and its wholly owned and majority-owned subsidiaries as listed in the below table. Inter-company transaction balances and unrealized gains/(losses) on transactions between the companies are eliminated.
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Note 1 - General (Tables) |
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Jun. 30, 2021 | ||||||||||||||||||||||
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| Percentages Participation in Subsidiaries [Table Text Block] |
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Note 4 - Summarized Financial Data - Petrogress, Inc. (Tables) |
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| Condensed Financial Statements [Table Text Block] |
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Note 5 - Operating Segments & Geographic Presence (Tables) |
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| Disaggregation of Revenue [Table Text Block] |
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| Reconciliation of Revenue from Segments to Consolidated [Table Text Block] |
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Note 6 - Inventories (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Schedule of Inventory, Current [Table Text Block] |
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Note 7 - Properties, Vessels and Equipment (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Property, Plant and Equipment [Table Text Block] |
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Note 15 - Earnings (Losses) Per Share and Shareholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
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Note 1 - General - Percentages Participation in Subsidiaries (Details) |
Jun. 30, 2021 |
|---|---|
| Petrogress Int'l LLC [Member] | |
| Percentage participation | 100.00% |
| Petronav Carriers LLC [Member] | |
| Percentage participation | 100.00% |
Note 4 - Summarized Financial Data - Petrogress, Inc. - Condensed Financial Statement (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||||
|---|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
Dec. 31, 2020 |
|
| Costs and other deductions | $ (437,735) | $ (678,000) | $ (1,557,200) | $ (1,899,000) | |||
| Net income (loss) attributable to PGI | (1,249,122) | $ (146,185) | (1,772,397) | $ (922,744) | (1,395,307) | (3,077,232) | |
| Current assets | 4,807,644 | 4,807,644 | $ 5,309,291 | ||||
| Other assets | 5,163,453 | 5,163,453 | 4,772,093 | ||||
| Current liabilities | 4,490,659 | 4,490,659 | 3,044,835 | ||||
| Total PGI net equity | 5,480,438 | 5,480,438 | $ 6,315,694 | ||||
| Parent Company [Member] | |||||||
| Revenues | 1,459,118 | 1,766,781 | |||||
| Costs and other deductions | (2,854,425) | (4,844,013) | |||||
| Net income (loss) attributable to PGI | (1,395,307) | (3,077,232) | |||||
| Current assets | 4,807,644 | 5,097,212 | 4,807,644 | 5,097,212 | |||
| Other assets | 5,163,453 | 4,878,349 | 5,163,453 | 4,878,349 | |||
| Current liabilities | 4,490,659 | 4,464,695 | 4,490,659 | 4,464,695 | |||
| Other liabilities | 0 | 604,471 | 0 | 604,471 | |||
| Total PGI net equity | $ 5,480,438 | $ 4,906,395 | $ 5,480,438 | $ 4,906,395 | |||
Note 5 - Operating Segments & Geographic Presence - Revenue Recognized (Details) - USD ($) |
6 Months Ended | |
|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Revenue before Eliminations | $ 1,459,118 | $ 1,766,781 |
| Crude Oil Sales [Member] | ||
| Revenue before Eliminations | 0 | 749,200 |
| Gas Oil Sales [Member] | ||
| Revenue before Eliminations | 870,000 | 622,000 |
| Lubricants [Member] | ||
| Revenue before Eliminations | 58,750 | 143,501 |
| Freights and Hires [Member] | ||
| Revenue before Eliminations | 315,000 | 218,000 |
| Product and Service, Other [Member] | ||
| Revenue before Eliminations | 215,368 | 34,080 |
| Subsidiaries [Member] | Non-US [Member] | ||
| Revenue before Eliminations | 1,459,118 | 1,766,781 |
| Subsidiaries [Member] | Non-US [Member] | Petrogress Int'l LLC [Member] | ||
| Revenue before Eliminations | 928,750 | 1,514,701 |
| Subsidiaries [Member] | Non-US [Member] | Petronav Carriers LLC [Member] | ||
| Revenue before Eliminations | $ 530,368 | $ 252,080 |
Note 5 - Operating Segments and Geographic Presence - Disaggregation of Revenues (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| All others | $ (188,864) | $ 34,080 | $ 215,368 | $ 34,080 |
| Total Sales and Other Operating Revenues | $ (45,114) | $ 133,200 | 1,459,118 | 1,766,781 |
| Upstream [Member] | ||||
| Revenues | 0 | 749,200 | ||
| Downstream [Member] | ||||
| Revenues | 928,750 | 799,581 | ||
| Midstream [Member] | ||||
| Revenues | $ 315,000 | $ 218,000 | ||
Note 6 - Inventories - Goods Inventories (Details) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
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|---|---|---|---|---|
| Total Inventories | $ 1,015,733 | $ 903,036 | ||
| Crude Oil [Member] | ||||
| Total Inventories | 817,864 | 570,000 | ||
| Oil and Gas [Member] | ||||
| Total Inventories | 0 | 0 | ||
| Lubricants [Member] | ||||
| Total Inventories | 0 | 68,661 | ||
| Bunkers on Board, Gas Oil [Member] | ||||
| Total Inventories | [1] | 187,429 | 253,936 | |
| Vessel Lubricants [Member] | ||||
| Total Inventories | 10,440 | 10,439 | ||
| Provisions and Stores [Member] | ||||
| Total Inventories | $ 0 | $ 0 | ||
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Note 7 - Properties, Vessels and Equipment (Details Textual) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Depreciation, Total | $ 155,628 | $ 152,199 | $ 308,450 | $ 306,895 |
| Vessels [Member] | ||||
| Property, Plant and Equipment, Useful Life (Year) | 10 years | |||
Note 7 - Properties, Vessels and Equipment - Vessels and Other Fixed Assets (Details) - USD ($) |
6 Months Ended | |||||
|---|---|---|---|---|---|---|
Jun. 30, 2021 |
Dec. 31, 2020 |
|||||
| Accumulated depreciation | [1] | $ (7,926,514) | $ (7,445,859) | |||
| Net property and equipment | 3,349,059 | 3,829,714 | ||||
| Vessels [Member] | ||||||
| Property and equipment, gross | [2] | $ 10,888,423 | 10,888,423 | |||
| Estimated useful life (Year) | 10 years | |||||
| Vessels [Member] | Minimum [Member] | ||||||
| Estimated useful life (Year) | [2] | 2 years | ||||
| Office Equipment and Furniture [Member] | ||||||
| Property and equipment, gross | $ 387,150 | $ 387,150 | ||||
| Office Equipment and Furniture [Member] | Minimum [Member] | ||||||
| Estimated useful life (Year) | 4 years | |||||
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Note 8 - Assets Held for Sale (Details Textual) $ in Thousands |
Jun. 30, 2021
USD ($)
|
|---|---|
| Assets Held-for-sale, Not Part of Disposal Group, Total | $ 0 |
Note 10 - Income Taxes (Details Textual) $ in Thousands |
Jun. 30, 2021
USD ($)
|
|---|---|
| Unrecognized Tax Benefits, Ending Balance | $ 0 |
Note 13 - Fair Value Measurements (Details Textual) |
Jun. 30, 2021
USD ($)
|
|---|---|
| Cash and Cash Equivalents, Fair Value Disclosure | $ 38,595 |
Note 14 - Revenue (Details Textual) - USD ($) |
Jun. 30, 2021 |
Dec. 31, 2020 |
||
|---|---|---|---|---|
| Accounts Receivable, after Allowance for Credit Loss, Current, Total | [1] | $ 2,472,329 | $ 2,136,790 | |
| ||||
Note 15 - Earnings (Losses) Per Share and Shareholders' Equity (Details Textual) - shares |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Weighted Average Number of Shares Outstanding, Basic, Total (in shares) | 35,151,028 | 5,136,808 | 35,152,028 | 5,136,808 |
Note 15 - Earnings (Losses) Per Share and Shareholders' Equity - Calculation of Earnings Per Share (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
|---|---|---|---|---|
Jun. 30, 2021 |
Jun. 30, 2020 |
Jun. 30, 2021 |
Jun. 30, 2020 |
|
| Net income attributable to common shareholders | $ (1,395,307) | $ (3,077,232) | ||
| Basic (in shares) | 35,151,028 | 5,136,808 | 35,152,028 | 5,136,808 |
| Conversion of accrued interest on debt held by related party (in shares) | 0 | |||
| Denominator for diluted net income per share (in shares) | 0 | 0 | 0 | 0 |
| Basic earnings per share (in dollars per share) | $ (0.0356) | $ (0.35) | $ (0.0397) | $ (0.60) |
| Diluted earnings per share (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
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