REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ☒ | ||||||
Emerging growth company |
International Financial Reporting Standards as issued by | Other ☐ | |||||||
the International Accounting Standards Board | ☐ |
• | future operating or financial results; |
• | global and regional economic and political conditions including the conflict in Ukraine and related sanctions ; |
• | impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of oil and oil products, the ability and willingness of charterers to fulfill their obligations to us and prevailing charter rates, availability of shipyards performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing; |
• | pending or recent acquisitions, business strategy and expected capital spending or operating expenses; |
• | competition in the marine transportation industry; |
• | shipping market trends, including charter rates, factors affecting supply and demand and world tanker fleet composition; |
• | potential disruption of shipping routes due to accidents, diseases, pandemics, political events, piracy or acts by terrorists, including the impact of the COVID-19 pandemic and the ongoing efforts throughout the world to contain it and the conflict in Ukraine and the related global response; |
• | ability to employ our vessels profitably; |
• | performance by the counterparties to our charter agreements; |
• | future refined petroleum product and oil prices and production; |
• | future supply and demand for oil and refined petroleum products; |
• | our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities, the terms of such financing and our ability to comply with covenants set forth in our financing arrangements; |
• | performance by the shipyards constructing any newbuilding vessels we order; and |
• | expectations regarding vessel acquisitions and dispositions. |
A. |
[RESERVED] |
B. |
Capitalization and Indebtedness |
C. |
Reasons For the Offer and Use of Proceeds |
D. |
Risk Factors |
• | The cyclical nature of the demand for seaborne transportation of oil and petroleum products, which is currently at low levels, may lead to significant changes in our chartering and vessel utilization, which may result in difficulty finding profitable charters for our vessels. |
• | Economic and political factors, including increased trade protectionism and tariffs and health pandemics, such as the COVID-19 pandemic, could materially adversely affect our business, financial position and results of operations. |
• | The COVID-19 pandemic will continue to have negative consequences for the shipping industry, including demand for oil and charter rates, which may continue to negatively affect our results of operations. |
• | The tanker industry is highly dependent upon the crude oil and petroleum products industries, with the level of availability and demand for oil and petroleum products. |
• | An over-supply of ships may lead to a reduction in charter rates, vessel values and profitability. |
• | Our operations outside the United States expose us to global risks, such as political conflict, terrorism and public health concerns, including the conflict in Ukraine and related sanctions, which may interfere with the operation of our vessels. |
• | We are subject to regulation and liability under environmental, health and safety laws that could require significant expenditures. |
• | The market values of our vessels may remain at relatively low levels for a prolonged period and over time may fluctuate significantly. When the market values of our vessels are low, we may incur a loss on sale of a vessel or record an impairment charge, which may adversely affect our profitability and possibly lead to defaults under our loan agreements. |
• | Technological innovation could reduce our charter hire income and the value of our vessels. |
• | Changes in fuel, or bunker, prices may adversely affect profits. |
• | We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our financial conditions and results of operations. |
• | Risks involved with operating ocean-going vessels could affect our business and reputation, which would adversely affect our revenues and stock price. |
• | Governments could requisition our vessels during a period of war or emergency, and maritime claimants could arrest our vessels. |
• | The small size of our fleet and any limitation in the availability or operation of these vessels could have a material adverse effect on our business, results of operations and financial condition. |
• | We are dependent on the ability and willingness of our charterers to honor their commitments to us for all our revenues . |
• | We are exposed to the volatile spot market and charters at attractive rates may not be available when the charters for our vessels expire which would have an adverse impact on our revenues and financial condition. |
• | Our fleet’s average age is above the average age of the global tanker fleet, and as our vessels age we may have difficulty competing with younger, more technologically advanced tankers for charters from oil majors and other top-tier charterers. |
• | Unless we set aside reserves for vessel replacement, at the end of a vessel’s useful life, our revenue will decline, which would adversely affect our cash flows and income. |
• | We depend upon a few significant customers for a large part of our revenues. The loss of one or more of these customers could adversely affect our financial performance. |
• | Our existing loan agreement contains, and our future loan agreements likely will contain, restrictive covenants that may limit our liquidity and corporate activities. |
• | The market values of our vessels may decrease, which could cause us to breach covenants in our credit and loan facility, and could have a material adverse effect on our business, financial condition and results of operations. |
• | The book value of our vessels is currently substantially higher than their market value, and if we sell a vessel at a time when vessel prices have not increased, the sale may be for less than the vessel’s carrying value, which would result in a reduction in our profits. |
• | A significant increase in our debt levels may adversely affect us and our cash flows. |
• | We depend on our manager, Stealth Maritime Corporation S.A., to operate our business. |
• | Delays in the delivery of any newbuilding or secondhand tankers we agree to acquire could harm our operating results. |
• | We are exposed to volatility in, and related to the phasing out of, LIBOR. |
• | We may enter into derivative contracts to hedge our exposure to fluctuations in interest rates, which could result in higher than market interest rates and charges against our income. |
• | We may have to pay tax on U.S.-source income or may become a passive foreign investment company. |
• | As a foreign private issuer we are entitled to claim an exemption from certain Nasdaq corporate governance standards, and if we elected to rely on this exemption, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements. |
• | We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law or a bankruptcy act, and it may be difficult to enforce service of process and judgments against us and our officers and directors. |
• | As an independent, publicly traded company, we may not enjoy the same benefits that we did as part of StealthGas, and our ability to meet our capital needs may be harmed by the loss of financial support from StealthGas. |
• | Our historical financial information may not be representative of the results we would have achieved as a stand-alone public company and may not be a reliable indicator of our future results. |
• | The market price of our common stock has fluctuated and may continue to fluctuate in the future, and we may not pay dividends on our common stock. |
• | You may experience future dilution as a result of future equity offerings and other issuances of our common shares, preferred shares or other securities. |
• | Anti-takeover provisions in our organizational documents and other agreements could make it difficult for our stockholders to replace or remove our current Board of Directors or have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common stock and Series A Preferred Shares. |
• | Our Series A Preferred Shares are subordinated to our debt obligations and investors’ interests could be diluted by the issuance of additional preferred shares and by other transactions. |
• | Holders of our Series A Preferred Shares have extremely limited voting rights. |
• | The Series A Preferred Shares represent perpetual equity interests and holders have no right to receive any greater payment than the liquidation preference regardless of the circumstances. |
• | supply and demand for energy resources and oil and petroleum products; |
• | regional availability of refining capacity and inventories compared to geographies of oil production regions; |
• | national policies regarding strategic oil inventories (including if strategic reserves are set at a lower level in the future as oil decreases in the energy mix); |
• | global and regional economic and political conditions, including armed conflicts, terrorist activities, embargoes and strikes; |
• | currency exchange rates; |
• | the distance over which oil and oil products are to be moved by sea; |
• | changes in seaborne and other transportation patterns; |
• | changes in governmental or maritime self-regulatory organizations’ rules and regulations or actions taken by regulatory authorities; |
• | environmental and other legal and regulatory developments; |
• | weather and natural disasters; |
• | developments in international trade, including those relating to the imposition of tariffs; |
• | competition from alternative sources of energy; and |
• | international sanctions, embargoes, import and export restrictions, nationalizations and wars. |
• | supply and demand for energy resources and oil and petroleum products; |
• | demand for alternative sources of energy; |
• | the number of newbuilding orders and deliveries, including slippage in deliveries; |
• | the number of vessel casualties; |
• | technological advances in tanker design and capacity; |
• | the number of shipyards and ability of shipyards to deliver vessels; |
• | availability of financing for new vessels and shipping activity; |
• | the degree of scrapping or recycling rate of older vessels, depending, amongst other things, on scrapping or recycling rates and international scrapping or recycling regulations; |
• | price of steel and vessel equipment; |
• | the number of conversions of tankers to other uses or conversions of other vessels to tankers; |
• | the number of product tankers trading crude or “dirty” oil products (such as fuel oil); |
• | the number of vessels that are out of service, namely those that are laid up, drydocked, awaiting repairs or otherwise not available for hire; |
• | changes in government and industry environmental and other regulations that may limit the useful lives of tankers and environmental concerns and regulations; |
• | product imbalances (affecting the level of trading activity); |
• | developments in international trade, including refinery additions and closures; |
• | port or canal congestion; and |
• | speed of vessel operation. |
• | increases and decreases in the demand and price for crude oil and petroleum products; |
• | availability of crude oil and petroleum products; |
• | demand for crude oil and petroleum product substitutes, such as natural gas, coal, hydroelectric power and other alternate sources of energy that may, among other things, be affected by environmental regulation; |
• | actions taken by OPEC and major oil producers and refiners; |
• | political turmoil in or around oil producing nations; |
• | global and regional political and economic conditions; |
• | developments in international trade; |
• | international trade sanctions; |
• | environmental factors; |
• | natural catastrophes; |
• | terrorist acts; |
• | weather; and |
• | changes in seaborne and other transportation patterns. |
• | general economic and market conditions affecting the shipping industry; |
• | age, sophistication and condition of our vessels; |
• | types and sizes of vessels; |
• | availability of other modes of transportation; |
• | cost and delivery of schedules for new-buildings; |
• | governmental and other regulations; |
• | supply and demand for refined petroleum products; |
• | the prevailing level of product tanker charter rates and crude oil tanker rates; and |
• | technological advances. |
• | marine accident or disaster; |
• | piracy and terrorism; |
• | explosions; |
• | environmental accidents; |
• | pollution; |
• | loss of life; |
• | cargo and property losses or damage; and |
• | business interruptions caused by mechanical failure, human error, war, political action in various countries, labor strikes or adverse weather conditions. |
• | incur additional indebtedness; |
• | create liens on our assets; |
• | sell capital stock of our subsidiaries; |
• | make investments; |
• | engage in mergers or acquisitions; |
• | pay dividends; and |
• | make capital expenditures. |
• | the administration, chartering and operations supervision of our fleet; |
• | our recognition and acceptance as owners of product and crude oil carriers, including our ability to attract charterers; |
• | our ability to obtain vetting approval from oil majors; |
• | relations with charterers and charter brokers; |
• | operational expertise; and |
• | management experience. |
• | locating and acquiring suitable vessels; |
• | identifying and completing acquisitions or joint ventures; |
• | integrating any acquired business successfully with our existing operations; |
• | expanding our customer base; and |
• | obtaining required financing. |
• | actual or anticipated fluctuations in quarterly and annual variations in our results of operations; |
• | changes in market valuations or sales or earnings estimates or publication of research reports by analysts; |
• | changes in earnings estimates or shortfalls in our operating results from levels forecasted by securities analysts; |
• | speculation in the press or investment community about our business or the shipping industry, and the product and crude oil tanker sector in particular; |
• | changes in market valuations of similar companies and stock market price and volume fluctuations generally; |
• | payment of dividends; |
• | strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances or restructurings; |
• | changes in government and other regulatory developments; |
• | additions or departures of key personnel; |
• | general market conditions and the state of the securities markets; and |
• | domestic and international economic, market and currency factors unrelated to our performance. |
Name |
Year Built |
Country Built |
Vessel Size (dwt) |
Vessel Type |
Employment Status |
Daily Charter Rate |
Expiration of Charter(1) |
|||||||||||||||||||||
Magic Wand |
2008 | Korea | 47,000 | MR product tanker | Time Charter | $ | 12,250 | April 2022(2) | ||||||||||||||||||||
Clean Thrasher |
2008 | Korea | 47,000 | MR product tanker | Time Charter | $ | 13,250 | March 2022(3) | ||||||||||||||||||||
Falcon Maryam |
2009 | Korea | 46,000 | MR product tanker | Bareboat | $ | 7,800 | September 2022 | ||||||||||||||||||||
Stealth Berana |
2010 | Korea | 115,804 | Aframax oil tanker | Time Charter | $ | 16,450 | March 2022(4) | ||||||||||||||||||||
Fleet Total |
255,804 dwt |
(1) | Earliest date charters could expire. |
(2) | The charterer has an option to extend the charter for an additional year at a daily charter rate of $14,500. |
(3) | The charterer has an option for a period of another 45 days at a daily rate of $14,500. |
(4) | The charterer declined to exercise its charter extension options and on March 4, 2022 redelivered the Stealth Berana to us, which operated in the spot market, until commencing a 2-month time charter at daily rate of $33,000 on March 24, 2022. |
• | natural resources damage and the costs of assessment thereof; |
• | real and personal property damage; |
• | net loss of taxes, royalties, rents, fees and other lost revenues; |
• | lost profits or impairment of earning capacity due to property or natural resources damage; and |
• | net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources. |
• | on-board installation of automatic information systems, or AIS, to enhance vessel-to-vessel and vessel-to-shore communications; |
• | on-board installation of ship security alert systems; |
• | the development of vessel security plans; and |
• | compliance with flag state security certification requirements. |
• | Calendar days. possession including off-hire days associated with major repairs, dry dockings or special or intermediate surveys. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenue and the amount of expense that we record during that period. In. We may also elect to sell vessels in our fleet from time to time. |
• | Voyage days net of off-hire days associated with major repairs, dry dockings or special or intermediate surveys. The shipping industry uses voyage days (also referred to as available days) to measure the number of days in a period during which vessels are available to generate revenues. |
• | Fleet utilization; Fleet operational utilization vessels are off-hire for reasons such as scheduled repairs, vessel upgrades or drydockings and other surveys, and uses fleet operational utilization to also measure a company’s efficiency in finding suitable employment for its vessels. |
• | Cyclicality the COVID-19 pandemic, which reduced demand for oil and in turn demand for the seaborne transportation of oil and oil products in the second half of 2020 and in 2021, and production cuts. While the global economy has begun to recover in parts of the world, driven in part by the availability of COVID-19 vaccines, and in turn energy demand and oil prices have shown some recent improvement, the success and timing of COVID-19 containment strategies remain uncertain, particularly in light of the emergence of variants such as Delta and Omicron, and charter rates face significant downside risks, including in the event of renewed weakness in the global economy and lower demand for the seaborne transport of refined petroleum products and crude oil, particularly resulting from failure to contain the COVID-19 pandemic. In addition, the conflict in Ukraine is disrupting energy production and trade patterns, including shipping in the Black Sea and elsewhere, and its impact on energy prices and tanker rates, which initially have increased, is uncertain, particularly if it results in an economic downturn and reduced demand for oil. |
• | Seasonality. |
Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
FLEET DATA |
||||||||||||
Average number of vessels(1) |
4.0 | 4.0 | 4.0 | |||||||||
Total voyage days for fleet(2) |
1,456 | 1,417 | 1,428 | |||||||||
Total time charter days for fleet(3) |
569 | 615 | 762 | |||||||||
Total bareboat charter days for fleet(3) |
880 | 446 | 365 | |||||||||
Total spot market days for fleet(4) |
7 | 356 | 301 | |||||||||
Total calendar days for fleet(5) |
1,460 | 1,464 | 1,460 | |||||||||
Fleet utilization(6) |
99.7 | % | 96.8 | % | 97.8 | % | ||||||
Fleet operational utilization(7) |
99.7 | % | 95.7 | % | 90.5 | % | ||||||
AVERAGE DAILY RESULTS |
||||||||||||
Adjusted average charter rate(8) |
8,762 | 12,073 | 9,649 | |||||||||
Vessel operating expenses(9) |
2,603 | 4,891 | 5,091 | |||||||||
General and administrative expenses(10) |
227 | 150 | 421 | |||||||||
Management fees(11) |
250 | 344 | 361 | |||||||||
|
|
|
|
|
|
|||||||
Total daily operating expenses(12) |
2,830 | 5,041 | 5,512 | |||||||||
|
|
|
|
|
|
(1) | Average number of vessels is the number of owned vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period. |
(2) | Our total voyage days for our fleet reflect the total days the vessels we operated were in our possession for the relevant periods, net of off-hire days associated with major repairs, drydockings or special or intermediate surveys. |
(3) | Total time and bareboat charter days for fleet are the number of voyage days the vessels in our fleet operated on time or bareboat charters for the relevant period. |
(4) | Total spot market charter days for fleet are the number of voyage days the vessels in our fleet operated on spot market charters for the relevant period. |
(5) | Total calendar days are the total days the vessels we operated were in our possession for the relevant period including off-hire days associated with major repairs, drydockings or special or intermediate surveys. |
(6) | Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period. |
(7) | Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days (excluding commercially idle days) by fleet calendar days for the relevant period. |
(8) | Adjusted average charter rate is a measure of the average daily revenue performance of a vessel on a per voyage basis. We determine the adjusted average charter rate by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage and are payable by us under a spot charter (which would otherwise be paid by the charterer under a time or bareboat charter contract), as well as commissions or any voyage costs incurred while the vessel is idle. Charter equivalent revenues and adjusted average charter rate are non-GAAP measures which provide additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because they assist Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. They are also standard shipping industry performance measures used primarily to compare period-to-period |
Year Ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Voyage revenues |
$ | 13,329,640 | $ | 20,302,052 | $ | 17,362,669 | ||||||
Voyage expenses |
$ | 572,553 | $ | 3,194,312 | $ | 3,584,415 | ||||||
|
|
|
|
|
|
|||||||
Charter equivalent revenues |
$ | 12,757,087 | $ | 17,107,740 | $ | 13,778,254 | ||||||
Total voyage days for fleet |
1,456 | 1,417 | 1,428 | |||||||||
|
|
|
|
|
|
|||||||
Adjusted average charter rate |
$ | 8,762 | $ | 12,073 | $ | 9,649 | ||||||
|
|
|
|
|
|
(9) | Vessel operating expenses, including related party vessel operating expenses, consist of crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period. |
(10) | Daily general and administrative expenses are calculated by dividing total general and administrative expenses by fleet calendar days for the relevant period. |
(11) | Management fees are based on a fixed rate management fee of $440 per day for each vessel in our fleet under spot or time charter and a fixed rate fee of $125 per day for each of the vessels operating on bareboat charter. Daily management fees are calculated by dividing total management fees by fleet calendar days for the relevant period. |
(12) | Total operating expenses, or “TOE”, is a measurement of our total expenses associated with operating our vessels. TOE is the sum of vessel operating expenses and general and administrative expenses. Daily TOE is calculated by dividing TOE by fleet calendar days for the relevant time period. |
Percentage difference between our average 2021 rates as compared with the base rates |
5-year historical average rate |
3-year historical average rate |
1-year historical average rate |
|||||||||||||||||||||||||
No. of vessels |
Amount ($ million) |
No. of vessels |
Amount ($ million) |
No. of vessels |
Amount ($ million) |
|||||||||||||||||||||||
Product Tankers |
-13.04 | % | 3 | 33.9 | 3 | 33.9 | 3 | 33.9 | ||||||||||||||||||||
Aframax Tanker |
-12.39 | % | — | — | — | — | — | — |
Percentage difference between our average 2020 rates as compared with the base rates |
5-year historical average rate |
3-year historical average rate |
1-year historical average rate |
|||||||||||||||||||||||||
No. of vessels |
Amount ($ million) |
No. of vessels |
Amount ($ million) |
No. of vessels |
Amount ($ million) |
|||||||||||||||||||||||
Product Tankers |
-20.45 | % | 3 | 34.6 | 3 | 34.6 | 3 | 34.6 | ||||||||||||||||||||
Aframax Tanker |
0.33 | % | — | — | — | — | — | — |
• | exemption from the auditor attestation requirement in the assessment of the emerging growth company’s internal controls over financial reporting under Section 404(b) of the Sarbanes-Oxley Act; |
• | exemption from new or revised financial accounting standards applicable to public companies until such standards are also applicable to private companies; and |
• | exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and financial statements. |
• | ensure that our leverage, which is defined as the ratio of total liabilities to total assets, does not at any time exceed 70%; |
• | maintain a ratio of the aggregate market value of the vessels securing the loan to the principal amount outstanding under such loan (which we sometimes refer to as the value maintenance or security coverage clause) at all times in excess of 125%; |
• | ensure that our ratio of EBITDA to interest expense over the preceding twelve months is at all times more than 2.5 times; and |
• | Maintain, from December 31, 2021 until the second anniversary of the loan agreement (i.e., November 10, 2023), cash, cash equivalents, and restricted cash of the higher of $0.5 million per vessel and $2.5 million. Thereafter the required cash, cash equivalents, and restricted cash balance will be the higher of $1.0 million per vessel and $5.0 million. |
Item 6. |
Directors, Senior Management and Employees |
Name |
Age |
Positions |
Year Became Director |
Year Director’s Current Term Expires |
||||||||||
Harry N. Vafias |
43 | Chief Executive Officer, President and Class III Director | 2021 | 2024 | ||||||||||
John Kostoyannis |
55 | Class II Director | 2021 | 2023 | ||||||||||
George Xiradakis |
57 | Class I Director | 2021 | 2022 | ||||||||||
Ifigeneia (Fenia) Sakellari |
41 | Interim Chief Financial Officer |
• | a Code of Business Conduct and Ethics; |
• | a Nominating and Corporate Governance Committee Charter; |
• | a Compensation Committee Charter; and |
• | an Audit Committee Charter. |
• | integrity of the Company’s financial statements, including its system of internal controls; |
• | Company’s compliance with legal and regulatory requirements; |
• | independent auditor’s qualifications and independence; |
• | retention, setting of compensation for, termination and evaluation of the activities of the Company’s independent auditors, subject to any required shareholder approval; and |
• | performance of the Company’s independent audit function and independent auditors, |
• | reviewing the Board structure, size and composition and making recommendations to the Board with regard to any adjustments that are deemed necessary; |
• | identifying candidates for the approval of the Board to fill Board vacancies as and when they arise as well as developing plans for succession, in particular, of the chairman and executive officers; |
• | overseeing the Board’s annual evaluation of its own performance and the performance of other Board committees; |
• | retaining, setting compensation and retentions terms for and terminating any search firm to be used to identify candidates; and |
• | developing and recommending to the Board for adoption a set of Corporate Governance Guidelines applicable to the Company and to periodically review the same. |
• | establishing and periodically reviewing the Company’s compensation programs; |
• | reviewing the performance of directors, officers and employees of the Company who are eligible for awards and benefits under any plan or program and adjust compensation arrangements as appropriate based on performance; |
• | reviewing and monitoring management development and succession plans and activities; |
• | reporting on compensation arrangements and incentive grants to the Board; |
• | retaining, setting compensation and retention terms for, and terminating any consultants, legal counsel or other advisors that the Compensation Committee determines to employ to assist it in the performance of its duties; and |
• | preparing any Compensation Committee report included in our annual proxy statement. |
Item 7. |
Major Shareholders and Related Party Transactions |
• | each person or entity that we know beneficially owns 5% or more of our shares of common stock; |
• | our Chief Executive Officer and our other executive officers; |
• | each of our directors; and |
• | all of our current directors and executive officers as a group. |
Common Shares Beneficially Owned |
Series A Preferred Shares Beneficially Owned |
|||||||||||||||
Name of Beneficial Owner |
Number |
Percentage |
Number |
Percentage |
||||||||||||
Principal Stockholders |
||||||||||||||||
None. |
||||||||||||||||
Executive Officers and Directors |
||||||||||||||||
Harry N. Vafias(1) |
1,032,382 | 1.5 | % | 172,063 | 21.6 | % | ||||||||||
John Kostoyannis |
1,412 | * | 235 | * | ||||||||||||
George Xiradakis |
— | — | — | — | ||||||||||||
Ifigeneia (Fenia) Sakellari |
399 | * | 66 | * | ||||||||||||
All executive officers and directors as a group (four persons) |
1,034,194 | 1.5 | % | 172,364 | 21.6 | % |
* | Less than 1%. |
(1) | The shares beneficially owned by Harry N. Vafias consist of, according to a Schedule 13D jointly filed with the SEC on December 13, 2021 by Flawless Management Inc. and Harry N. Vafias with respect to our common stock, Harry N. Vafias has sole voting power and sole dispositive power with respect to all shares beneficially owned by Flawless Management Inc. or directly by Mr. Vafias. |
Item 8. |
Financial Information |
Item 9. |
The Offer and Listing |
Item 10. |
Additional Information |
• | senior to all classes of our common shares, and to each other class or series of shares established after the initial issue date of the Series A Preferred Shares by our board of directors, the terms of which class |
or series do not expressly provide that it is made senior to or on parity with the Series A Preferred Shares as to dividend distributions and distributions upon the liquidation, dissolution or winding-up of our affairs, whether voluntary or involuntary (collectively, the “Junior Securities”); |
• | on a parity with any class or series of shares established after the initial issue date of the Series A Preferred Shares by our board of directors, the terms of which class or series are not expressly subordinated or senior to the Series A Preferred Shares as to dividend distributions and distributions upon the liquidation, dissolution or winding-up of our affairs, whether voluntary or involuntary (collectively, the “Parity Securities”); and |
• | junior to (i) all of our indebtedness and other liabilities with respect to assets available to satisfy claims against us, and (ii) each class or series of capital stock expressly made senior to the Series A Preferred Shares as to the payment of dividends and amounts payable upon liquidation, dissolution or winding up, whether voluntary or involuntary (such shares described in this clause (ii), the “Senior Securities”). |
• | the acquisition by any “person” or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our shares entitling that person or group to exercise more than 50% of the total voting power of all of our shares entitled to vote generally in elections of directors (except that such person or group will be deemed to have beneficial ownership of all securities that such person or group has the right to acquire, whether such right is currently exercisable or is exercisable only upon the passage of time or occurrence of a subsequent condition); and |
• | following the closing of any transaction referred to in the above bullet point, neither we nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts representing such securities) listed on the New York Stock Exchange (“NYSE”), the NYSE American or the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market (collectively, “Nasdaq”) or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or the Nasdaq. |
• | persons who are the beneficial owners of 15% or more of the outstanding voting stock of the corporation; and |
• | persons who are affiliates or associates of the corporation and who hold 15% or more of the corporation’s outstanding voting stock at any time within three years before the date on which the person’s status as an interested stockholder is determined. |
• | certain mergers or consolidations of the corporation or any direct or indirect majority-owned subsidiary of the company; |
• | the sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets having an aggregate market value equal to 10% or more of either the aggregate market value of all assets of the corporation, determined on a consolidated basis, or the aggregate value of all the outstanding stock of the corporation; |
• | certain transactions that result in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
• | any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation that is owned directly or indirectly by the interested stockholder; and |
• | any receipt by the interested stockholder of the benefit (except as a stockholder) of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
• | before a person becomes an interested stockholder, the board of directors of the corporation approves the business combination or transaction in which the stockholder became an interested stockholder; |
• | upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than certain excluded shares; |
• | following a transaction in which the person became an interested stockholder, the business combination is (a) approved by the board of directors of the corporation and (b) authorized at a regular or special meeting of stockholders, and not by written consent, by the vote of the holders of at least two-thirds of the voting stock of the corporation not owned by the stockholder; or |
• | a transaction with a stockholder that was or became an interested stockholder prior to the consummation of our initial public offering. |
• | persons who are the beneficial owners of 15% or more of the outstanding voting stock of the corporation; and |
• | persons who are affiliates or associates of the corporation and who hold 15% or more of the corporation’s outstanding voting stock at any time within three years before the date on which the person’s status as an interested stockholder is determined. |
• | certain mergers or consolidations of the corporation or any direct or indirect majority-owned subsidiary of the company; |
• | the sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets having an aggregate market value equal to 10% or more of either the aggregate market value of all assets of the corporation, determined on a consolidated basis, or the aggregate value of all the outstanding stock of the corporation; |
• | certain transactions that result in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
• | any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation that is owned directly or indirectly by the interested stockholder; and |
• | any receipt by the interested stockholder of the benefit (except as a stockholder) of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
• | before a person becomes an interested stockholder, the board of directors of the corporation approves the business combination or transaction in which the stockholder became an interested stockholder; |
• | upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than certain excluded shares; |
• | following a transaction in which the person became an interested stockholder, the business combination is (a) approved by the board of directors of the corporation and (b) authorized at a regular or special meeting of stockholders, and not by written consent, by the vote of the holders of at least two-thirds of the voting stock of the corporation not owned by the stockholder; or |
• | the transaction is with a stockholder that was or became an interested stockholder prior to or at the time the Spin-Off was consummated. |
• | Imperial Petroleum is organized in a foreign country, or its country of organization, that grants an “equivalent exemption” to corporations organized in the United States; and |
• | more than 50% of the value of Imperial Petroleum’s stock is owned, directly or indirectly, by “qualified shareholders,” individuals who are “residents” of a foreign country that grants an “equivalent exemption” to corporations organized in the United States, which we refer to as the “50% Ownership Test,” or |
• | Imperial Petroleum’s stock is “primarily and regularly traded on an established securities market” in a country that grants an “equivalent exemption” to United States corporations, or in the United States, which we refer to as the “Publicly-Traded Test.” |
• | Imperial Petroleum has, or is considered to have, a fixed place of business in the United States involved in the earning of shipping income; and |
• | Substantially all of Imperial Petroleum’s U.S. source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States. |
• | at least 75% of Imperial Petroleum’s gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or |
• | at least 50% of the average value of Imperial Petroleum’s assets during such taxable year produce, or are held for the production of, passive income, which we refer to as “passive assets”. |
• | such gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States, if the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or |
• | the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met. |
• | fails to provide an accurate taxpayer identification number; |
• | is notified by the IRS that he failed to report all interest or dividends required to be shown on your United States federal income tax returns; or |
• | in certain circumstances, fails to comply with applicable certification requirements. |
Item 11. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 12. |
Description of Securities Other than Equity Securities |
Item 13. |
Defaults, Dividend Arrearages and Delinquencies |
Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. |
Controls and Procedures |
Item 16A. |
Audit Committee Financial Expert |
Item 16B. |
Code of Ethics |
Item 16C. |
Principal Accountant Fees and Services |
2021 |
||||
Audit fees |
$ | 194 | ||
Assurance/audit related fees |
— | |||
Tax fees |
— | |||
All other fees |
— | |||
Total |
$ |
194 |
Item 16D. |
Exemptions from the Listing Standards for Audit Committees |
Item 16E. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Item 16F. |
Change in Registrant’s Certifying Accountant |
Item 16H. |
Mine Safety Disclosures |
Item 17. |
Financial Statements |
Item 18. |
Financial Statements |
Item 19. |
Exhibits |
IMPERIAL PETROLEUM INC. | ||
By: | /s/ Harry N. Vafias | |
Name: | Harry N. Vafias | |
Title: | President and Chief Executive Officer |
Pages |
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F-2 |
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F-3 |
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F-4 |
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F-5 |
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F-6 |
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F-7 |
As of December 31, 2020 |
As of December 31, 2021 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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Restricted cash |
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Receivable from related party (Note 3) |
— | |||||||
Trade and other receivables |
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Other current assets (Note 10) |
— | |||||||
Inventories |
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Advances and prepayments |
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Total current assets |
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Non current assets |
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Vessels, net (Note 4) |
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Restricted cash |
— | |||||||
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Total non current assets |
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Total assets |
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Liabilities and net parent investment |
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Current liabilities |
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Trade accounts payable |
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Payable to related parties (Note 3) |
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Accrued liabilities (Note 6) |
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Customer deposits (Note 13) |
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Deferred income |
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Current portion of long-term debt (Note 5) |
— | |||||||
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Total current liabilities |
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Non current liabilities |
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Long-term debt (Note 5) |
— |
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Total non current liabilities |
— |
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Total liabilities |
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Commitments and contingencies (Note 14) |
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Stockholders’ equity |
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Former Parent Company investment |
— | |||||||
Capital stock, , |
— |
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Preferred stock, , |
— |
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Additional paid-in capital (Note 8) |
— |
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Accumulated deficit |
— |
( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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For the years ended December 31, |
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2019 |
2020 |
2021 |
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Revenues |
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Revenues (Note 10) |
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Total revenues |
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Expenses |
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Voyage expenses |
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Voyage expenses – related party (Notes 3) |
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Vessels’ operating expenses (Note 11) |
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Vessels’ operating expenses – related party (Notes 3, 11) |
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Dry-docking costs |
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Management fees – related party (Note 3) |
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General and administrative expenses (including $ and $ (Note 3) |
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Depreciation (Note 4) |
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Total expenses |
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Loss from operations |
( |
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( |
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( |
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Other (expenses) / income |
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Interest and finance costs |
( |
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Interest income |
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Foreign exchange gain/(loss) |
( |
) | ( |
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Other expenses, net |
( |
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( |
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( |
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Net loss |
( |
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( |
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( |
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Loss per share attributable to common shareholders - basic and diluted (Note 9) |
( |
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) | ( |
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Weighted average number of shares, basic and diluted |
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Capital stock |
Preferred stock |
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Number of Shares (Note 8) |
Amount (Note 8) |
Number of Shares (Note 8) |
Amount (Note 8) |
Additional Paid-in Capital (Note 8) |
Accumulated Deficit |
Former Parent Company Investment |
Total |
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Balance, January 1, 2019 |
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Net decrease in former Parent Company investment |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net loss for the year |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
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Balance, December 31, 2019 |
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Net decrease in former Parent Company Investment |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net loss for the year |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
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Balance, December 31, 2020 |
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Net decrease in former Parent Company investment |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Net loss for the period from January 1, 2021 to Spin-Off |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Dividends to former Parent Company (Note 5) |
— | — | — | — | — | — | ( |
) | ( |
) | ||||||||||||||||||||||
Capitalization at spin-off, including issuance of capital and preferred stock |
— | ( |
) | |||||||||||||||||||||||||||||
Issuance of preferred stock over par as Offpart of Spin- |
— | — | — | — | — | — | ||||||||||||||||||||||||||
Deemed contribution of preferred shares as part of Spin-off (Note 8) |
— | — | — | — |
( |
) | — | — | ( |
) | ||||||||||||||||||||||
Net loss for the period from the spin-off to December 31, 2021 |
— | — | — | — | — | ( |
) | — | ( |
) | ||||||||||||||||||||||
Dividends declared on preferred shares |
— | — | — | — | ( |
) | — | — | ( |
) | ||||||||||||||||||||||
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Balance, December 31, 2021 |
( |
) | ||||||||||||||||||||||||||||||
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For the years ended December 31, |
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2019 |
2020 |
2021 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net loss for the year |
( |
) | ( |
) | ( |
) | ||||||
Adjustments to reconcile net loss to net cash provided by operating activities: |
||||||||||||
Depreciation |
||||||||||||
Amortization of deferred finance charges |
— | — | ||||||||||
Changes in operating assets and liabilities: |
||||||||||||
(Increase)/decrease in |
||||||||||||
Trade and other receivables |
( |
) | ( |
) | ||||||||
Other current assets |
— | ( |
) | |||||||||
Inventories |
( |
) | ( |
) | ||||||||
Advances and prepayments |
( |
) | ( |
) | ( |
) | ||||||
Trade accounts payable |
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Balance with related parties |
— | ( |
) | |||||||||
Accrued liabilities |
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Deferred income |
( |
) | ||||||||||
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Vessel improvements |
— | ( |
) | ( |
) | |||||||
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Net cash used in investing activities |
— |
( |
) |
( |
) | |||||||
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Cash flows from financing activities: |
||||||||||||
Net transfers to former Parent Company |
( |
) | ( |
) | ( |
) | ||||||
Dividends paid to former Parent Company |
— | — | ( |
) | ||||||||
Deferred finance charges paid |
— | — | ( |
) | ||||||||
Customer deposits paid |
( |
) | ( |
) | ( |
) | ||||||
Dividends paid on preferred shares |
— | — | ( |
) | ||||||||
Proceeds from long-te r m debt |
— | — | ||||||||||
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Net cash used in financing activities |
( |
) |
( |
) |
( |
) | ||||||
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Net increase/(decrease) in cash, cash equivalents and restricted cash |
( |
) |
( |
) | ||||||||
Cash, cash equivalents and restricted cash at the beginning of the year |
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Cash, cash equivalents and restricted cash at the end of the year |
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Supplemental cash flow information: |
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Non cash investing activity – Vessel improvements included in liabilities |
— | — | ||||||||||
Reconciliation of cash, cash equivalents and restricted cash |
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Cash and cash equivalents |
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Restricted cash, current |
— | |||||||||||
Restricted cash, non-current |
— | — | ||||||||||
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Total cash, cash equivalents and restricted cash shown in the statements of cash flows |
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1. |
General Information |
Company |
Date of Incorporation |
Name of Vessel Owned by Subsidiary |
Dead Weight Tonnage (“dwt”) |
Acquisition Date |
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|
7 | |
|
8 | | |||||||||||
|
7 | |
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8 |
| |||||||||||
|
8 |
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9 |
| |||||||||||
|
8 | |
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0 |
|
1. |
General Information - Continued |
Year ended December 31, |
||||||||||||
Charterer |
2019 |
2020 |
2021 |
|||||||||
A |
% | % |
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B |
% | % |
% | |||||||||
C |
% | — |
||||||||||
D |
— | % |
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E |
— | % |
||||||||||
F |
— |
% | ||||||||||
G |
— |
% | ||||||||||
H |
— |
% |
2. |
Significant Accounting Policies |
2. |
Significant Accounting Policies - continued |
2. |
Significant Accounting Policies – continued |
2. |
Significant Accounting Policies – continued |
3. |
Transactions with Related Parties |
Year ended December 31, |
||||||||||||||
Location in statement of operations |
2019 |
2020 |
2021 |
|||||||||||
Management fees |
Management fees – related party | |||||||||||||
Brokerage commissions |
Voyage expenses – related party | |||||||||||||
Superintendent fees |
Vessels’ operating expenses – related party | |||||||||||||
Crew management fees |
Vessels’ operating expenses – related party | |||||||||||||
Executive compensation |
General and administrative expenses | |||||||||||||
General and administrative expenses – Former Parent |
General and administrative expenses |
4. |
Vessels, net |
Vessel Cost |
Accumulated depreciation |
Net book value |
||||||||||
Balance as at January 1, 2020 |
$ |
$ |
( |
) |
$ |
|||||||
|
|
|
|
|
|
|||||||
Acquisitions and improvements |
— | |||||||||||
Depreciation for the year |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Balance as at December 31, 2020 |
$ |
$ |
( |
) |
$ |
|||||||
Reduction in vessels improvements |
( |
) | — | ( |
) | |||||||
Depreciation for the year |
— |
( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Balance as at December 31, 2021 |
$ |
$ |
( |
) |
$ |
|||||||
|
|
|
|
|
|
5. |
Long-term Debt |
Term Loan |
Drawn |
December 31, |
||||||||||||||
Issue Date |
Maturity Date |
Amount |
2020 |
2021 |
||||||||||||
|
||||||||||||||||
|
|
|
|
|||||||||||||
Total |
||||||||||||||||
Current portion of long-term debt |
|
— | ||||||||||||||
Long - term debt |
— | |||||||||||||||
|
|
|
|
|||||||||||||
Total debt |
— |
|||||||||||||||
Current portion of deferred finance charges |
|
— | ||||||||||||||
Deferred finance charges non-current |
|
— | ||||||||||||||
|
|
|
|
|||||||||||||
Total deferred finance charges |
|
— |
||||||||||||||
|
|
|
|
|||||||||||||
Total debt |
— | |||||||||||||||
Less: Total deferred finance charges |
|
— |
||||||||||||||
|
|
|
|
|||||||||||||
Total debt, net of deferred finance charges |
|
— |
||||||||||||||
Less: Current portion of long-term debt, |
|
— |
||||||||||||||
|
|
|
|
|||||||||||||
Total long – term debt |
|
— |
||||||||||||||
|
|
|
|
• | the aggregate market value of the mortgaged vessels at all times exceeds |
• | the leverage of the Company defined as Total Debt net of Cash should not exceed |
• | the Interest Coverage Ratio of the Company which is EBITDA (as defined in the loan agreement) to interest expense to be at all times greater than 2.5:1, |
• | at least a certain percentage of the Company is to always be owned by members of the Vafias family, |
• | the Company should maintain a free cash balance to the higher of $ |
December 31, |
Amount |
|||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
2026 |
||||
|
|
|||
Total |
6. |
Accrued Liabilities |
As of December 31, |
||||||||
2020 |
2021 |
|||||||
Interest on long-term debt |
||||||||
Administrative expenses |
||||||||
Voyage expenses |
||||||||
Vessel operating expenses |
||||||||
|
|
|
|
|||||
Total |
$ |
$ |
||||||
|
|
|
|
7. |
Fair Value of Financial Instruments and Concentration of Credit Risk |
8. |
Stockholders’ Equity |
Series |
Description |
Initial Issuance Date |
Total Shares Outstanding |
Liquidation Preference per Share (in dollars) |
Carrying Value (1) |
Dividend Rate | ||||||||||||
Series A |
2021 |
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(1) | There are no issuance costs. |
9. |
Loss per share |
Year Ended December 31, |
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2020 |
2021 |
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Net loss |
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Less: Cumulative dividends on Series A Preferred Shares |
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Net loss attributable to common shareholders, basic |
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Weighted average number of shares outstanding, basic and diluted |
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Loss per share, basic and diluted |
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10. |
Revenues |
Year ended December 31, |
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2020 |
2021 |
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Time charter revenues |
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Bareboat revenues |
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Voyage charter revenues |
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Other income/(expenses) |
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11. |
Vessel Operating Expenses |
Year ended December 31, |
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Vessels’ Operating Expenses |
2019 |
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2021 |
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Insurance |
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12. |
Income Taxes |
13. |
Customer Deposits |
(a) | On October 12, 2015 an amount of $ re paid to the bareboat charterers. The remaining amount of $ |
(b) | On February 21, 2015 an amount of $ |
14. |
Commitments and Contingencies |
• | From time to time the Company expects to be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. With regards to a charter party agreement of our Aframax tanker “Stealth Berana”, the Company commenced arbitration during 2020 in respect of all disputes arising under this agreement, including the claims of the charterers for alleged losses in connection with the redelivery of the vessel to the Company. The Company provided security for the claims of the charterers by way of a payment of $by StealthGas Inc. into an escrow account (Note 3). The respective liability to StealthGas Inc. had been included in “Payable to related party” in the combined balance sheet as of December 31, 2020. As of December 31, 2020, an amount of $was kept in the escrow account and was presented under current restricted cash in the combined balance sheet as of December 31, 2020. In August 2021, the Company reached a settlement agreement with the charterers. Based on the settlement agreement, the funds held in the escrow account were released and the Company received the net amount of $in full and final settlement of the claims of the Company and the charterers including the liabilities of the Company due to the customer deposits (Note 13). |
• | Future minimum contractual charter revenues, gross of commissions, based on vessels committed to non-cancellable, time and bareboat charter contracts as of December 31, 2021, amount to $ |
15. |
Subsequent Events |
Exhibit 2.1
DESCRIPTION OF IMPERIAL PETROLEUM INC.S SECURITIES
REGISTERED PURSUANT TO SECTION 12
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
References in this description to the Company, we, our, or us are to Imperial Petroleum Inc. Defined terms used but not defined herein have the meaning given to them in our Annual Report on Form 20-F to which this description is an exhibit.
The common stock of Imperial Petroleum Inc., par value $0.01 per share (the Common Stock), and 8.75% Series A Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share, liquidation preference $25.00 per share (the Series A Preferred Shares), are the only securities of the Company registered under Section 12 of the Securities Exchange Act of 1934, as amended. Other than the Series A Preferred Shares, none of the Companys preferred stock, par value $0.01 per share (the Preferred Stock) is so registered. This description does not describe every aspect of the Companys capital stock and is subject to, and qualified in its entirety by reference to, the provisions of the Companys Restated Articles of Incorporation; including the Series A Preferred Shares Statement of Designations, and the Companys Amended and Restated By-laws, each as currently in effect, each of which is incorporated by reference as an exhibit to the Annual Report on Form 20-F of the Company, to which this description is filed as Exhibit 2.1.
Authorized Capitalization
Under our amended and restated articles of incorporation, our authorized capital stock consists of 2,000,000,000 shares of common stock, par value $0.01 per share, and 200,000,000 shares of preferred stock, par value $0.01 per share. All of our shares of stock are in registered form. As of March 28, 2022, 69,937,222 Common Shares and 795,878 8.75% Series A Cumulative Redeemable Perpetual Preferred Shares were issued and outstanding, as well as Class A Warrants to purchase up to 43,000 Common Shares at an exercise price of $1.25 per share, Class B Warrants to purchase up to 43,124,950 Common Shares at an exercise price of $1.60 per share and underwriters warrants to purchase up to 552,000 Common Shares at an exercise price of $1.375 per share and 1,724,998 Common Shares at an exercise price of $2.00 per share.
Common Stock
Under our amended and restated articles of incorporation, we are authorized to issue up to 2,000,000,000 shares of common stock, par value $0.01 per share, of which there were 4,775,272 shares issued and outstanding as of December 31, 2021 and 69,937,222 shares outstanding as of March 28, 2022. As of March 28, 2022, we also had outstanding Class A Warrants to purchase up to 43,000 shares of common stock at an exercise price of $1.25 per share, Class B Warrants to purchase up to 43,124,950 shares of common stock at an exercise price of $1.60 per share and underwriters warrants to purchase up to 552,000 Common Shares at an exercise price of $1.375 per share and 1,724,998 Common Shares at an exercise price of $2.00 per share. All of the 3,900,000 pre-funded warrants issued on March 23, 2022 were exercised, at a price of $0.01 per share, for an aggregate of 3,900,000 common shares.
Each outstanding common share is entitled to one vote, either in person or by proxy, on all matters that may be voted upon by their holders at meetings of the shareholders. Holders of our common shares (i) have equal ratable rights to dividends from funds legally available therefore, if declared by the Board of Directors; (ii) are entitled to share ratably in all of our assets available for distribution upon liquidation, dissolution or winding up; and (iii) do not have preemptive, subscription or conversion rights or redemption or sinking fund provisions. All issued common shares when issued will be fully paid for and non-assessable.
Our stockholders have approved the amendment of the Companys amended and restated articles of incorporation to effect one or more reverse stock splits of the shares of our common stock issued and outstanding at the time of the reverse split at an exchange ratio of between one-for-two and one-for-five hundred, with the Board of Directors to determine, in its sole discretion, whether to implement any reverse stock split, as well as the specific timing and ratio, within such approved range of ratios; provided that any such split is implemented prior to the third anniversary of our spin-off from StealthGas Inc.
1
Warrants
General. As of March 28, 2022, we had outstanding Class A Warrants to purchase up to 43,000 shares of common stock at an exercise price of $1.25 per share, Class B Warrants to purchase up to 43,124,950 shares of common stock at an exercise price of $1.60 per share of $0.01 per share and underwriters warrants to purchase up to 552,000 Common Shares at an exercise price of $1.375 per share and 1,724,998 Common Shares at an exercise price of $2.00 per share. All of the 3,900,000 pre-funded warrants issued on March 23, 2022 were exercised, at a price of $0.01 per share, for an aggregate of 3,900,000 common shares
The following summary of certain terms and provisions of the Class A Warrants, Class B Warrants and pre-funded warrants is not complete and is subject to, and qualified in its entirety by the provisions of the forms of Class A Warrant, Class B Warrant and pre-funded warrants, respectively, which are each filed as an exhibit to the Annual Report on Form 20-F, to which this description is filed as Exhibit 2.1
Exercisability. The pre-funded warrants are exercisable at any time after their original issuance. The Class A Warrants are exercisable at any time after their original issuance, of February 3, 2022, up to the date that is five years after their original issuance (February 3, 2027). The Class B Warrants are exercisable at any time after their original issuance, of March 23, 2022, up to the date that is five years after their original issuance (March 23, 2027). The Class A Warrants, Class B Warrants and pre-funded warrants are exercisable, at the option of each holder, in whole or in part by delivering to us a duly executed exercise notice and, at any time a registration statement registering the issuance of the common shares underlying the Class A Warrants, Class B Warrants or pre-funded warrants under the Securities Act is effective and available for the issuance of such shares, or an exemption from registration under the Securities Act is available for the issuance of such shares, by payment in full in immediately available funds for the number of common shares purchased upon such exercise. If a registration statement registering the issuance of the common shares underlying the Class A Warrants, Class B Warrants or pre-funded warrants under the Securities Act is not effective or available and an exemption from registration under the Securities Act is not available for the issuance of such shares, the holder may, in its sole discretion, elect to exercise the Class A Warrant, Class B Warrants or pre-funded warrants through a cashless exercise, in which case the holder would receive upon such exercise the net number of common shares determined according to the formula set forth in the Class A Warrant, Class B Warrants or pre-funded warrants. No fractional common shares will be issued in connection with the exercise of a Class A Warrant, Class B Warrants or pre-funded warrants. In lieu of fractional shares, we will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.
Exercise Limitation. A holder will not have the right to exercise any portion of the Class A Warrants, Class B Warrants or pre-funded warrants if the holder (together with its affiliates) would beneficially own in excess of 4.99% (or, upon election by a holder prior to the issuance of any Class A warrants, Class B Warrants or pre-funded warrants, 9.99%) of the number of shares of our common shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, upon at least 61 days prior notice from the holder to us with respect to any increase in such percentage.
Exercise Price. The exercise price per whole common share purchasable upon exercise of the Class A Warrants is $1.25 per share and upon exercise of the Class B Warrants is $1.60 per share. The exercise price of the pre-funded warrants is $0.01 per share. The exercise price and number of common shares issuable upon exercise will adjust in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common shares.
Transferability. Subject to applicable laws, the Class A Warrants, Class B Warrants and pre-funded warrants may be offered for sale, sold, transferred or assigned without our consent.
Exchange Listing. We do not intend to apply for the listing of the Class A Warrants, Class B Warrants or prefunded warrants on any stock exchange. Without an active trading market, the liquidity of the Class A Warrants, Class B Warrants and prefunded warrants will be limited.
2
Rights as a Shareholder. Except as otherwise provided in the Class A Warrants, Class B Warrants, or pre-funded warrants or by virtue of such holders ownership of our common shares, the holder of a Class A Warrant, Class B Warrant or pre-funded warrants does not have the rights or privileges of a holder of our common shares, including any voting rights, until the holder exercises the warrant.
Fundamental Transactions. In the event of a fundamental transaction, as described in the Class A Warrants, Class B Warrants and pre-funded warrants and generally including, with certain exceptions, any reorganization, recapitalization or reclassification of our common shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding common shares, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding common shares, the holders of the Class A Warrants, Class B Warrants and pre-funded warrants will be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction. Additionally, as more fully described in the Class A Warrant and Class B Warrant, as applicable, in the event of certain fundamental transactions, the holders of the Class A Warrants and Class B Warrants will be entitled to receive consideration in an amount equal to the Black Scholes value of the Class A Warrants or Class B Warrants, respectively, on the date of consummation of such transaction.
Governing Law. The Class A Warrants, Class B Warrants, prefunded warrants and related warrant agency agreement are governed by New York law.
Underwriters Warrants. The 552,000 Representatives Purchase Warrants, issued to the representative of the underwriters of our February 2022 underwritten public offering, have substantially similar terms as the Class A Warrants other than that they will be exercisable at any time, and from time to time, in whole or in part, during the period commencing July 31, 2022 and expiring January 31, 2027 at an exercise price of $1.375 per share. These warrants are governed by New York law.
The 1,724,998 Representatives Purchase Warrants, issued to the representative of the underwriters of our March 2022 underwritten public offering, have substantially similar terms as the Class B Warrants other than that they will be exercisable at any time, and from time to time, in whole or in part, during the period commencing September 18, 2022 and expiring March 18, 2027 at an exercise price of $2.00 per share. These warrants are governed by New York law.
Preferred Stock
Under our amended and restated articles of incorporation, we are authorized to issue up to 200,000,000 shares of preferred stock, par value $0.01 per share, of which 800,000 shares have been designated as Series A Preferred Shares, of which 795,878 Series A Preferred Shares are outstanding as of December 31, 2021 and March 25, 2022. The preferred stock may be issued in one or more series and our Board of Directors, without further approval from our shareholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights, liquidation preferences and other rights and restrictions relating to any series. Issuances of preferred stock, while providing flexibility in connection with possible financings, acquisitions and other corporate purposes, could, among other things, adversely affect the relative voting power of the holders of our common shares. See Description of Series A Preferred Shares below.
Transfer Agent and Registrar
American Stock Transfer & Trust Company, LLC is the transfer agent and registrar for Imperial Petroleum common shares and Series A Preferred Shares and the warrant agent for our Class A Warrants.
Listing
Our common shares are listed on the Nasdaq Capital Market under the symbol IMPP. Our Series A Preferred Shares are listed on the Nasdaq Capital Market under the symbol IMPPP.
3
Common Share Dividends
We currently intend to retain our future earnings, if any, to fund the development and growth of our business. Our board of directors will, however, evaluate our dividend policy consistent with our cash flows and liquidity requirements and we may consider paying dividends on our common shares depending on future performance of our business and financial condition. Declaration and payment of any future dividend is subject to the discretion of our Board of Directors. The timing and amount of dividend payments will be dependent upon our earnings, financial condition, cash requirements and availability, restrictions in our loan agreements, or other financing arrangements, the provisions of Marshall Islands law affecting the payment of distributions to stockholders and other factors, and will be subject to the priority of our Series A Preferred Shares, which, as described below earn dividends at a dividend rate of 8.75% per annum per $25.00 of liquidation preference per share. Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to pay dividends to us. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment thereof.
Under the terms of our 2021 DNB Senior Secured Credit Facility we are permitted to pay dividends so long as we are not in default under the covenants contained therein; provided that after June 30, 2022 the amount of dividends may not exceed 50% of our free cash flow for the last four consecutive quarters without the lenders consent.
Description of Series A Preferred Shares
The following description of the Series A Preferred Shares does not purport to be complete and is subject to, and qualified in its entirety by reference to the Statement of Designations designating the Series A Preferred Shares (the Statement of Designations) and setting forth the rights, preferences and limitations of the Series A Preferred Shares. A copy of the Statement of Designations, is filed as an exhibit to the annual report on Form 20-F to which this description is filed as Exhibit 2.1. References to Imperial Petroleum Inc., we, our and us refer specifically to Imperial Petroleum Inc.
General
As of December 31, 2021 and March 28, 2022, there are 800,000 Series A Preferred Shares authorized, and 795,878 Series A Preferred Shares issued and outstanding. We may, without notice to or consent of the holders of the then-outstanding Series A Preferred Shares, authorize and issue additional Series A Preferred Shares as well as Parity Securities and Junior Securities and, subject to the further limitations described under Voting Rights, Senior Securities.
The holders of our common shares are entitled to receive dividends out of assets legally available for that purpose at times and in amounts as our board of directors may from time to time determine. Upon the occurrence of a liquidation, dissolution or winding up the holders of common shares would be entitled to share ratably in the distribution of all of our assets remaining available for distribution after satisfaction of all our liabilities and payment to the holders of shares of any class or series of capital stock (including the Series A Preferred Shares) having preferential rights to receive distributions of our assets.
The Series A Preferred Shares entitle the holders thereof to receive cumulative cash dividends when, as and if declared by our board of directors out of legally available funds for such purpose. Each share of Series A Preferred Shares have a fixed liquidation preference of $25.00 per share plus an amount equal to accumulated and unpaid dividends thereon to the date fixed for payment, whether or not declared. Please read Liquidation Rights.
The Series A Preferred Shares represent perpetual equity interests in us and, unlike our indebtedness, will not give rise to a claim for payment of a principal amount at a particular date. As such, the Series A Preferred Shares rank junior to all of our indebtedness and other liabilities with respect to assets available to satisfy claims against us.
4
All the Series A Preferred Shares are represented by a single certificate issued to the Securities Depository (as defined below) and registered in the name of its nominee and, so long as a Securities Depository has been appointed and is serving, no person acquiring Series A Preferred Shares will be entitled to receive a certificate representing such shares unless applicable law otherwise requires or the Securities Depository resigns or is no longer eligible to act as such and a successor is not appointed. Please read Book-Entry System.
The Series A Preferred Shares are not convertible into common shares or other of our securities and will not have exchange rights or be entitled or subject to any preemptive or similar rights. The Series A Preferred Shares will not be subject to mandatory redemption or to any sinking fund requirements. The Series A Preferred Shares will be subject to redemption, in whole or from time to time in part, at our option commencing on June 30, 2022. Please read Redemption.
Ranking
The Series A Preferred Shares, with respect to dividend distributions and distributions upon the liquidation, winding-up and dissolution of our affairs, rank:
| senior to all classes of our common shares, and to each other class or series of shares established after the initial issue date of the Series A Preferred Shares by our board of directors, the terms of which class |
or series do not expressly provide that it is made senior to or on parity with the Series A Preferred Shares as to dividend distributions and distributions upon the liquidation, dissolution or winding-up of our affairs, whether voluntary or involuntary (collectively, the Junior Securities);
| on a parity with any class or series of shares established after the initial issue date of the Series A Preferred Shares by our board of directors, the terms of which class or series are not expressly subordinated or senior to the Series A Preferred Shares as to dividend distributions and distributions upon the liquidation, dissolution or winding-up of our affairs, whether voluntary or involuntary (collectively, the Parity Securities); and |
| junior to (i) all of our indebtedness and other liabilities with respect to assets available to satisfy claims against us, and (ii) each class or series of capital stock expressly made senior to the Series A Preferred Shares as to the payment of dividends and amounts payable upon liquidation, dissolution or winding up, whether voluntary or involuntary (such shares described in this clause (ii), the Senior Securities). |
Under the Statement of Designations, we may issue Junior Securities and, so long as cumulative dividends on the Series A Preferred Shares are not in arrears, Parity Securities from time to time in one or more series without the consent of the holders of the Series A Preferred Shares. Our board of directors has the authority to determine the preferences, powers, qualifications, limitations, restrictions and special or relative rights or privileges, if any, of any such series before the issuance of any shares of that series. Our board of directors will also determine the number of shares constituting each series of securities. Our ability to issue additional Senior Securities is limited as described under Voting Rights.
Liquidation Preference
The holders of issued and outstanding Series A Preferred Shares will be entitled, in the event of any liquidation, dissolution or winding up of our affairs, whether voluntary or involuntary, to receive the liquidation preference of $25.00 per share in cash plus an amount equal to accumulated and unpaid dividends thereon to (but not including) the date fixed for payment of such amount (whether or not declared), and no more, before any distribution will be made to the holders of our common shares or any other Junior Securities. A consolidation or merger of us with or into any other entity, individually or in a series of transactions, will not be deemed a liquidation, dissolution or winding up of our affairs for this purpose. In the event that our assets available for distribution to holders of the issued and outstanding Series A Preferred Shares and any Parity Securities are insufficient to permit payment of all required amounts, our assets then remaining will be distributed among the Series A Preferred Shares and any Parity Securities, as applicable, ratably on the basis of their relative aggregate liquidation preferences. After payment of all required amounts to the holders of the outstanding shares of Series A Preferred Shares and Parity Securities, our remaining assets and funds will be distributed among the holders of the common shares and any other Junior Securities then issued and outstanding according to their respective rights.
5
Voting Rights
The Series A Preferred Shares have no voting rights except as provided by Marshall Islands law and as follows. In the event that six quarterly dividends, whether consecutive or not, payable on Series A Preferred Shares are in arrears, the holders of Series A Preferred Shares will have the right, voting separately as a class together with holders of any other Parity Securities upon which like voting rights have been conferred and are exercisable, at the next meeting of shareholders called for the election of directors, to elect one member of our board of directors, and the size of our board of directors will be increased as needed to accommodate such change (unless the size of our board of directors already has been increased by reason of the election of a director by holders of Parity Securities upon which like voting rights have been conferred and with which the Series A Preferred Shares voted as a class for the election of such director). The right of such holders of Series A Preferred Shares to elect one member of our board of directors will continue until such time as all dividends accumulated and in arrears on the Series A Preferred Shares have been paid in full, at which time such right will terminate, subject to revesting in the event of each and every subsequent failure to pay six quarterly dividends as described above. Upon any termination of the right of the holders of the Series A Preferred Shares and any other Parity Securities to vote as a class for a director, the term of office of all directors then in office elected by such holders voting as a class will terminate immediately. Any director elected by the holders of the Series A Preferred Shares and any other Parity Securities shall each be entitled to one vote per director on any matter before our board of directors.
Unless we have received the affirmative vote or consent of the holders of at least two-thirds of the outstanding Series A Preferred Shares, voting as a single class, we may not (i) adopt any amendment to our articles of incorporation or Statement of Designations, that adversely alters the preferences, powers or rights of the Series A Preferred Shares, (ii) issue any Parity Securities if the cumulative dividends payable on outstanding Series A Preferred Shares are in arrears, or (iii) create or issue any Senior Securities.
On any matter described above on which the holders of the Series A Preferred Shares are entitled to vote as a class, such holders will be entitled to one vote per share. The Series A Preferred Shares held by us or any of our subsidiaries or affiliates will not be entitled to vote.
Dividends
General
Holders of Series A Preferred Shares will be entitled to receive, when, as and if declared by our board of directors out of legally available funds for such purpose, cumulative cash dividends from December 3, 2021.
Dividend Rate
Dividends on Series A Preferred Shares will be cumulative, commencing December 3, 2021 and payable on each Dividend Payment Date, commencing December 30, 2021, when, as and if declared by our board of directors or any authorized committee thereof out of legally available funds for such purpose. Dividends on the Series A Preferred Shares will accrue at a rate of 8.75% per annum per $25.00 stated liquidation preference per Series A Preferred Shares. The dividend rate is not subject to adjustment.
Dividend Payment Date
The Dividend Payment Dates for the Series A Preferred Shares will be each March 30, June 30, September 30 and December 30, commencing December 30, 2021. Dividends will accumulate in each dividend period from and including the preceding Dividend Payment Date or the initial issue date, as the case may be, to but excluding, the applicable Dividend Payment Date for such dividend period. If any Dividend Payment Date otherwise would fall on a day that is not a Business Day, declared dividends will be paid on the immediately succeeding Business Day without the accumulation of additional dividends. Dividends on the Series A Preferred Shares will be payable based on a 360-day year consisting of twelve 30-day months.
6
Business Day means a day on which the Nasdaq Stock Market is open for trading and which is not a Saturday, a Sunday or other day on which banks in New York City are authorized or required by law to close.
Payment of Dividends
Not later than the close of business, New York City time, on each Dividend Payment Date, we will pay those dividends, if any, on the Series A Preferred Shares that have been declared by our board of directors to the holders of such shares as such holders names appear on our share transfer books maintained by the Registrar and Transfer Agent on the applicable Record Date. The applicable record date (the Record Date), will be three Business Days immediately preceding the applicable Dividend Payment Date, except that in the case of payments of dividends in arrears, the Record Date with respect to a Dividend Payment Date will be such date as may be designated by our board of directors in accordance with our Bylaws then in effect and the Statement of Designations.
So long as the Series A Preferred Shares are held of record by the Securities Depository or its nominee, declared dividends will be paid to the Securities Depository in same-day funds on each Dividend Payment Date. The Securities Depository will credit accounts of its participants in accordance with the Securities Depositorys normal procedures. The participants will be responsible for holding or disbursing such payments to beneficial owners of the Series A Preferred Shares in accordance with the instructions of such beneficial owners.
No dividend may be declared or paid or set apart for payment on any Junior Securities (other than dividend payable solely in shares of Junior Securities) unless full cumulative dividends have been or contemporaneously are being paid or provided for on all issued and outstanding Series A Preferred Shares and any Parity Securities through the most recent respective dividend payment dates. Accumulated dividends in arrears for any past dividend period may be declared by our board of directors and paid on any date fixed by our board of directors, whether or not a Dividend Payment Date, to holders of the Series A Preferred Shares on the record date for such payment, which may not be more than 60 days, nor less than 15 days, before such payment date. Subject to the next succeeding sentence, if all accumulated dividends in arrears on all outstanding Series A Preferred Shares and any Parity Securities have not been declared and paid, or sufficient funds for the payment thereof have not been set apart, payment of accumulated dividends in arrears will be made in order of their respective dividend payment dates, commencing with the earliest. If less than all dividends payable with respect to all Series A Preferred Shares and any Parity Securities are paid, any partial payment will be made pro rata with respect to the Series A Preferred Shares and any Parity Securities entitled to a dividend payment at such time in proportion to the aggregate amounts remaining due in respect of such shares at such time. Holders of the Series A Preferred Shares will not be entitled to any dividend, whether payable in cash, property or stock, in excess of full cumulative dividends. No interest or sum of money in lieu of interest will be payable in respect of any dividend payment which may be in arrears on the Series A Preferred Shares.
Redemption
The Series A Preferred Shares represent perpetual equity interests in us. We will have no obligation to redeem or repurchase any Series A Preferred Shares at any time.
Optional Redemption
We may redeem, at our option, in whole or from time to time in part, the Series A Preferred Shares (i) on or after June 30, 2022 and prior to June 30, 2023, at a price equal to $26.00 per Series A Preferred Share, (ii) on or after June 30, 2023 and prior to June 30, 2024, at a price equal to $25.75 per Series A Preferred Share, (iii) on or after June 30, 2024 and prior to June 30, 2025, at a price equal to $25.50 per Series A Preferred Share, (iv) on or after June 30, 2025 and prior to June 30, 2026, at a price equal to $25.25 per Series A Preferred Share, and (v) on or after June 30, 2026, at a price equal to $25.00 per Series A Preferred Share, plus, in each case, an amount equal to all accumulated and unpaid dividends thereon to (but not including) the date of redemption, whether or not declared. Any such optional redemption may be effected only out of funds legally available for such purpose.
7
Redemption Upon a Change of Control
In connection with a Change of Control (as defined below), we may, at our option, redeem the Series A Preferred Shares, in whole but not in part, no later than 90 days after the first date on which such Change of Control occurs, at a redemption price of (1) if the Change of Control occurs prior to December 31, 2023, $26.50 per share and (2) if the Change of Control occurs on or after December 31, 2023 at the same redemption prices as apply to an optional redemption as set forth above under Optional Redemption, plus, in the case of either (1) or (2), an amount equal to all accumulated and unpaid dividends thereon to (but not including) the date of redemption, whether or not declared. Any such redemption may be effected only out of funds legally available for such purpose.
A Change of Control means the following events have occurred and are continuing:
| the acquisition by any person or group (within the meaning of Section 13(d)(3) of the Exchange Act) of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of purchases, mergers or other acquisition transactions of our shares entitling that person or group to exercise more than 50% of the total voting power of all of our shares entitled to vote generally in elections of directors (except that such person or group will be deemed to have beneficial ownership of all securities that such person or group has the right to acquire, whether such right is currently exercisable or is exercisable only upon the passage of time or occurrence of a subsequent condition); and |
| following the closing of any transaction referred to in the above bullet point, neither we nor the acquiring or surviving entity has a class of common securities (or American Depositary Receipts representing such securities) listed on the New York Stock Exchange (NYSE), the NYSE American or the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market (collectively, Nasdaq) or listed or quoted on an exchange or quotation system that is a successor to the NYSE, the NYSE American or the Nasdaq. |
Redemption Procedure
We will give notice of any redemption by mail, postage prepaid, not less than 30 days and not more than 60 days before the scheduled date of redemption, to the holders of any shares to be redeemed as such holders names appear on our share transfer books maintained by the Registrar and Transfer Agent at the address of such holders shown therein. Such notice shall state: (1) the redemption date, (2) the number of Series A Preferred Shares to be redeemed and, if less than all issued and outstanding Series A Preferred Shares are to be redeemed, the number (and the identification) of shares to be redeemed from such holder, (3) the redemption price, (4) the place where the Series A Preferred Shares are to be redeemed and shall be presented and surrendered for payment of the redemption price therefor, and (5) that dividends on the shares to be redeemed will cease to accumulate from and after such redemption date.
If fewer than all of the issued and outstanding Series A Preferred Shares are to be redeemed, the number of shares to be redeemed will be determined by us, and such shares will be redeemed pro rata or by lot as the Securities Depository shall determine, with adjustments to avoid redemption of fractional shares. So long as all Series A Preferred Shares are held of record by the Securities Depository or its nominee, we will give notice, or cause notice to be given, to the Securities Depository of the number of Series A Preferred Shares to be redeemed and the Securities Depository will determine the number of Series A Preferred Shares to be redeemed from the account of each of its participants holding such shares in its participant account.
So long as the Series A Preferred Shares are held of record by the Securities Depository or its nominee, the redemption price will be paid by the Paying Agent to the Securities Depository on the redemption date. The Securities Depositorys normal procedures provide for it to distribute the amount of the redemption price in same-day funds to its participants who, in turn, are expected to distribute such funds to the persons for whom they are acting as agent.
If we give or cause to be given a notice of redemption, then we will deposit with the Paying Agent funds sufficient to redeem the Series A Preferred Shares as to which notice has been given by the close of business, New York City time, no later than the Business Day immediately preceding the date fixed for redemption, and will give the Paying Agent irrevocable instructions and authority to pay the redemption price to the holder or holders thereof upon surrender or deemed surrender (which will occur automatically if the certificate representing such shares is issued in the name of the Securities Depository or its nominee) of the certificates therefor. If notice of redemption shall have been given, then from and after the date fixed for redemption, unless we default in providing funds sufficient for such redemption at the time and place specified for payment pursuant to the notice, all dividends on such shares will cease to accumulate and all rights of holders of such shares as our shareholders will cease, except the right to receive the redemption price, including an amount equal to accumulated and unpaid dividends to (but not including) the date fixed for redemption, whether or not declared. We will be entitled to receive from the Paying Agent the interest income, if any, earned on such funds deposited with the Paying Agent (to the extent that such interest income is not required to pay the redemption price of the shares to be redeemed), and the holders of any shares so redeemed will have no claim to any such interest income. Any funds deposited with the Paying Agent hereunder by us for any reason, including, but not limited to, redemption of Series A Preferred Shares, that remain unclaimed or unpaid after two years after the applicable redemption date or other payment date, shall be, to the extent permitted by law, repaid to us upon our written request after which repayment the holders of the Series A Preferred Shares entitled to such redemption or other payment shall have recourse only to us.
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If only a portion of the Series A Preferred Shares represented by a certificate has been called for redemption, upon surrender of the certificate to the Paying Agent (which will occur automatically if the certificate representing such shares is registered in the name of the Securities Depository or its nominee), the Paying Agent will issue to the holder of such shares a new certificate (or adjust the applicable book-entry account) representing the number of Series A Preferred Shares represented by the surrendered certificate that have not been called for redemption.
Notwithstanding any notice of redemption, there will be no redemption of any Series A Preferred Shares called for redemption until funds sufficient to pay the full redemption price of such shares, including all accumulated and unpaid dividends to the date of redemption, whether or not declared, have been deposited by us with the Paying Agent.
We and our affiliates may from time to time purchase the Series A Preferred Shares, subject to compliance with all applicable securities and other laws. Neither we nor any of our affiliates has any obligation or any present plan or intention, to purchase any Series A Preferred Shares. Any shares repurchased and cancelled by us will revert to the status of authorized but unissued preferred shares, undesignated as to series.
Notwithstanding the foregoing, in the event that full cumulative dividends on the Series A Preferred Shares and any Parity Securities have not been paid or declared and set apart for payment, we may not repurchase, redeem or otherwise acquire, in whole or in part, any Series A Preferred Shares or Parity Securities except pursuant to a purchase or exchange offer made on the same terms to all holders of Series A Preferred Shares and any Parity Securities. Common shares and any other Junior Securities may not be redeemed, repurchased or otherwise acquired unless full cumulative dividends on the Series A Preferred Shares and any Parity Securities for all prior and the then-ending dividend periods have been paid or declared and set apart for payment.
No Sinking Fund
The Series A Preferred Shares do not have the benefit of any sinking fund.
Articles of Incorporation and Bylaws
Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Marshall Islands Business Corporations Act, or BCA. Our articles of incorporation and bylaws do not impose any limitations on the ownership rights of our stockholders.
Under our bylaws, annual stockholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held in or outside of the Marshall Islands. Special meetings may be called by the Board of Directors. Our Board of Directors may set a record date between 15 and 60 days before the date of any meeting to determine the stockholders that will be eligible to receive notice and vote at the meeting.
Directors. Our directors are elected by a plurality of the votes cast at a meeting of the stockholders by the holders of shares entitled to vote in the election. There is no provision for cumulative voting.
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The Board of Directors may change the number of directors by a vote of a majority of the entire board. Each director shall be elected to serve until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. The Board of Directors has the authority to fix the amounts which shall be payable to the members of our Board of Directors for attendance at any meeting or for services rendered to us.
Dissenters Rights of Appraisal and Payment. Under the BCA, our stockholders have the right to dissent from various corporate actions, including any merger or sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. However, the right of a dissenting stockholder under the BCA to receive payment of the fair value of his shares is not available for the shares of any class or series of stock, which shares or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of the stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a securities exchange or admitted for trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. The right of a dissenting stockholder to receive payment of the fair value of his or her shares shall not be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation. In the event of any further amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the circuit court in the judicial circuit in the Marshall Islands in which our Marshall Islands office is situated. The value of the shares of the dissenting stockholder is fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser.
Stockholders Derivative Actions. Under the BCA, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.
Anti-takeover Provisions of our Charter Documents. Several provisions of our articles of incorporation and bylaws may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directors to maximize stockholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise, that a stockholder may consider in its best interest and (2) the removal of incumbent officers and directors.
Blank Check Preferred Stock. Under the terms of our articles of incorporation, our Board of Directors has authority, without any further vote or action by our stockholders, to issue up to 5,000,000 shares of blank check preferred stock. Our Board of Directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.
Classified Board of Directors. Our articles of incorporation provide for a Board of Directors serving staggered, three-year terms. Approximately one-third of our Board of Directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It could also delay stockholders who do not agree with the policies of the Board of Directors from removing a majority of the Board of Directors for two years.
Election and Removal of Directors. Our articles of incorporation and bylaws prohibit cumulative voting in the election of directors. Our bylaws require parties other than the Board of Directors to give advance written notice of nominations for the election of directors. Our bylaws also provide that our directors may be removed only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capital stock entitled to vote for those directors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.
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Calling of Special Meetings of Stockholders. Our bylaws provide that special meetings of our stockholders may be called only by resolution of our Board of Directors.
Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our bylaws provide that stockholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of stockholders must provide timely notice of their proposal in writing to the corporate secretary.
Generally, to be timely, a stockholders notice must be received at our principal executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the previous years annual meeting. If, however, the date of our annual meeting is more than 30 days before or 60 days after the first anniversary date of the previous years annual meeting, a stockholders notice must be received at our principal executive offices by the later of (i) the close of business on the 90th day prior to the annual meeting date or (ii) the close of business on the tenth day following the date on which such annual meeting date is first publicly announced or disclosed by us. Our bylaws also specify requirements as to the form and content of a stockholders notice. These provisions may impede stockholders ability to bring matters before an annual meeting of stockholders or make nominations for directors at an annual meeting of stockholders.
Business Combinations. Our articles of incorporation prohibit us from engaging in a business combination with certain persons for three years following the date the person becomes an interested stockholder. Interested stockholders generally include:
| persons who are the beneficial owners of 15% or more of the outstanding voting stock of the corporation; and |
| persons who are affiliates or associates of the corporation and who hold 15% or more of the corporations outstanding voting stock at any time within three years before the date on which the persons status as an interested stockholder is determined. |
Subject to certain exceptions, a business combination includes, among other things:
| certain mergers or consolidations of the corporation or any direct or indirect majority-owned subsidiary of the company; |
| the sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets having an aggregate market value equal to 10% or more of either the aggregate market value of all assets of the corporation, determined on a consolidated basis, or the aggregate value of all the outstanding stock of the corporation; |
| certain transactions that result in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
| any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation that is owned directly or indirectly by the interested stockholder; and |
| any receipt by the interested stockholder of the benefit (except as a stockholder) of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
These provisions of our articles of incorporation do not apply to a business combination if:
| before a person becomes an interested stockholder, the board of directors of the corporation approves the business combination or transaction in which the stockholder became an interested stockholder; |
| upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than certain excluded shares; |
| following a transaction in which the person became an interested stockholder, the business combination is (a) approved by the board of directors of the corporation and (b) authorized at a regular or special meeting of stockholders, and not by written consent, by the vote of the holders of at least two-thirds of the voting stock of the corporation not owned by the stockholder; or |
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| a transaction with a stockholder that was or became an interested stockholder prior to the consummation of our initial public offering. |
Our purpose is to engage in any lawful act or activity relating to the business of chartering, rechartering or operating tankers, drybulk carriers or other vessels or any other lawful act or activity customarily conducted in conjunction with shipping, and any other lawful act or activity approved by the Board of Directors of the Corporation. Our articles of incorporation and bylaws do not impose any limitations on the ownership rights of our stockholders.
Under our bylaws, annual stockholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held in or outside of the Marshall Islands. Special meetings may be called by the Board of Directors. Our Board of Directors may set a record date between 15 and 60 days before the date of any meeting to determine the stockholders that will be eligible to receive notice and vote at the meeting.
Directors.
Our directors are elected by a plurality of the votes cast at a meeting of the stockholders by the holders of shares entitled to vote in the election. There is no provision for cumulative voting.
The Board of Directors may change the number of directors by a vote of a majority of the entire board. Each director shall be elected to serve until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. The Board of Directors has the authority to fix the amounts which shall be payable to the members of our Board of Directors for attendance at any meeting or for services rendered to us.
Dissenters Rights of Appraisal and Payment.
Under the BCA, our stockholders have the right to dissent from various corporate actions, including any merger or sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. However, the right of a dissenting stockholder under the BCA to receive payment of the fair value of his shares is not available for the shares of any class or series of stock, which shares or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of the stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a securities exchange or admitted for trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. The right of a dissenting stockholder to receive payment of the fair value of his or her shares shall not be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation. In the event of any further amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the circuit court in the judicial circuit in the Marshall Islands in which our Marshall Islands office is situated. The value of the shares of the dissenting stockholder is fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser.
Stockholders Derivative Actions.
Under the BCA, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.
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Anti-takeover Provisions of our Charter Documents.
Several provisions of our articles of incorporation and bylaws may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directors to maximize stockholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise, that a stockholder may consider in its best interest and (2) the removal of incumbent officers and directors.
Blank Check Preferred Stock.
Under the terms of our articles of incorporation, our Board of Directors has authority, without any further vote or action by our stockholders, to issue up to 200,000,000 shares of blank check preferred stock, of which 800,000 have been designated Series A Preferred Shares and of which 795,878 are issued and outstanding as of December 31, 2021 and March 25, 2022. Our Board of Directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.
Classified Board of Directors.
Our articles of incorporation provide for a Board of Directors serving staggered, three-year terms. Approximately one-third of our Board of Directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It could also delay stockholders who do not agree with the policies of the Board of Directors from removing a majority of the Board of Directors for two years.
Election and Removal of Directors.
Our articles of incorporation and bylaws prohibit cumulative voting in the election of directors. Our bylaws require parties other than the Board of Directors to give advance written notice of nominations for the election of directors. Our bylaws also provide that our directors may be removed only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capital stock entitled to vote for those directors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.
Calling of Special Meetings of Stockholders.
Our bylaws provide that special meetings of our stockholders may be called only by resolution of our Board of Directors.
Advance Notice Requirements for Stockholder Proposals and Director Nominations.
Our bylaws provide that stockholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of stockholders must provide timely notice of their proposal in writing to the corporate secretary.
Generally, to be timely, a stockholders notice must be received at our principal executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the previous years annual meeting. If, however, the date of our annual meeting is more than 30 days before or 60 days after the first anniversary date of the previous years annual meeting, a stockholders notice must be received at our principal executive offices by the later of (i) the close of business on the 90th day prior to the annual meeting date or (ii) the close of business on the tenth day following the date on which such annual meeting date is first publicly announced or disclosed by us. Our bylaws also specify requirements as to the form and content of a stockholders notice. These provisions may impede stockholders ability to bring matters before an annual meeting of stockholders or make nominations for directors at an annual meeting of stockholders.
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Business Combinations.
Our articles of incorporation prohibit us from engaging in a business combination with certain persons for three years following the date the person becomes an interested stockholder. Interested stockholders generally include:
| persons who are the beneficial owners of 15% or more of the outstanding voting stock of the corporation; and |
| persons who are affiliates or associates of the corporation and who hold 15% or more of the corporations outstanding voting stock at any time within three years before the date on which the persons status as an interested stockholder is determined. |
Subject to certain exceptions, a business combination includes, among other things:
| certain mergers or consolidations of the corporation or any direct or indirect majority-owned subsidiary of the company; |
| the sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets having an aggregate market value equal to 10% or more of either the aggregate market value of all assets of the corporation, determined on a consolidated basis, or the aggregate value of all the outstanding stock of the corporation; |
| certain transactions that result in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
| any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation that is owned directly or indirectly by the interested stockholder; and |
| any receipt by the interested stockholder of the benefit (except as a stockholder) of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
These provisions of our articles of incorporation do not apply to a business combination if:
| before a person becomes an interested stockholder, the board of directors of the corporation approves the business combination or transaction in which the stockholder became an interested stockholder; |
| upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than certain excluded shares; |
| following a transaction in which the person became an interested stockholder, the business combination is (a) approved by the board of directors of the corporation and (b) authorized at a regular or special meeting of stockholders, and not by written consent, by the vote of the holders of at least two-thirds of the voting stock of the corporation not owned by the stockholder; or |
| the transaction is with a stockholder that was or became an interested stockholder prior to or at the time the Spin-Off was consummated. |
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Exhibit 12.1
CERTIFICATIONS
I, Harry N. Vafias, certify that:
1. | I have reviewed this annual report on Form 20-F of Imperial Petroleum 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 company as of, and for, the periods presented in this report; |
4. | The Companys other certifying officers 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 Company 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 company, 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.) | [Omitted] |
c.) | evaluated the effectiveness of the Companys 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 Companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and |
5. | The Companys other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent function): |
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 Companys 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 Companys internal control over financial reporting. |
Date: March 29, 2022 |
/s/ Harry N. Vafias |
Harry N. Vafias |
President and Chief Executive Officer |
Exhibit 12.2
CERTIFICATIONS
I, Ifigeneia Sakellari, certify that:
1. | I have reviewed this annual report on Form 20-F of Imperial Petroleum 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 company as of, and for, the periods presented in this report; |
4. | The Companys other certifying officers 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 Company 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 company, 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.) | [Omitted] |
c.) | evaluated the effectiveness of the Companys 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 Companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting; and |
5. | The Companys other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Companys auditors and the audit committee of the Companys board of directors (or persons performing the equivalent function): |
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 Companys 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 Companys internal control over financial reporting. |
Date: March 29, 2022
/s/ Ifigeneia Sakellari |
Ifigeneia Sakellari |
Chief Financial Officer |
Exhibit 13.1
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 Annual Report on Form 20-F of Imperial Petroleum Inc. (the Company) for the fiscal year ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned officer of the Company hereby certifies to the undersigneds knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: March 29, 2022
/s/ Harry N. Vafias |
Harry N. Vafias |
President and Chief Executive Officer |
Exhibit 13.2
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 Annual Report on Form 20-F of Imperial Petroleum Inc. (the Company) for the fiscal year ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned officer of the Company hereby certifies to the undersigneds knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date March 29, 2022
/s/ Ifigeneia Sakellari |
Ifigeneia Sakellari |
Chief Financial Officer |
Consolidated balance sheets (Parenthetical) - shares |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Common stock shares authorized | 2,000,000,000 | 2,000,000,000 |
Common stock shares issued | 4,775,272 | 0 |
Common stock shares outstanding | 4,775,272 | 0 |
Preferred stock shares authorized | 200,000,000 | 200,000,000 |
Preferred stock shares issued | 795,878 | 0 |
Preferred stock shares outstanding | 795,878 | 0 |
Consolidated statements of operations - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Statement [Abstract] | |||
Total revenues | $ 17,362,669 | $ 20,302,052 | $ 13,329,640 |
Expenses | |||
Voyage expenses | 3,366,223 | 2,944,071 | 405,965 |
Voyage expenses – related party | 218,192 | 250,241 | 166,588 |
Vessels' operating expenses | 7,346,527 | 7,112,094 | 3,775,700 |
Vessels' operating expenses – related party | 86,500 | 48,500 | 24,000 |
Dry-docking costs | 14,380 | 935,565 | 22,265 |
Management fees – related party | 527,425 | 503,355 | 365,515 |
General and administrative expenses (including $331,408, $219,717 and $311,676 to related party) | 614,786 | 219,717 | 331,408 |
Depreciation | 8,674,663 | 8,643,920 | 8,613,177 |
Total expenses | 20,848,696 | 20,657,463 | 13,704,618 |
Loss from operations | (3,486,027) | (355,411) | (374,978) |
Other (expenses) / income | |||
Interest and finance costs | (145,013) | (10,008) | (7,663) |
Interest income | 980 | 108 | 7,229 |
Foreign exchange gain/(loss) | (9,919) | (28,450) | 228 |
Other expenses, net | (153,952) | (38,350) | (206) |
Net loss | $ (3,639,979) | $ (393,761) | $ (375,184) |
Loss per share attributable to common shareholders - basic and diluted | $ (0.79) | $ (0.08) | $ (0.08) |
Weighted average number of shares, basic and diluted | 4,775,272 | 4,775,272 | 4,775,272 |
Consolidated statements of operations (Parenthetical) - USD ($) |
12 Months Ended | ||
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Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Income Statement [Abstract] | |||
Related party transaction general and administration expenses | $ 311,676 | $ 219,717 | $ 331,408 |
Consolidated statements of stockholders' equity - USD ($) |
Total |
Spin Off Transaction [Member] |
After Spin Off And Upto Reporting Date [Member] |
Upto And Before Spin Off [Member] |
Common Stock [Member] |
Common Stock [Member]
Spin Off Transaction [Member]
|
Preferred Stock [Member] |
Preferred Stock [Member]
Spin Off Transaction [Member]
|
Additional Paid-in Capital [Member] |
Additional Paid-in Capital [Member]
Spin Off Transaction [Member]
|
Retained Earnings [Member] |
Retained Earnings [Member]
After Spin Off And Upto Reporting Date [Member]
|
Former Parent Company [Member] |
Former Parent Company [Member]
Spin Off Transaction [Member]
|
Former Parent Company [Member]
Upto And Before Spin Off [Member]
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2018 | $ 147,856,932 | $ 0 | $ 0 | $ 0 | $ 0 | $ 147,856,932 | |||||||||
Beginning balance, Shares at Dec. 31, 2018 | 0 | 0 | |||||||||||||
Net decrease in former Parent Company investment | (3,800,177) | (3,800,177) | |||||||||||||
Net loss for the year | (375,184) | (375,184) | |||||||||||||
Ending balance at Dec. 31, 2019 | 143,681,571 | $ 0 | $ 0 | 0 | 0 | 143,681,571 | |||||||||
Ending balance, Shares at Dec. 31, 2019 | 0 | 0 | |||||||||||||
Net decrease in former Parent Company investment | (9,225,887) | (9,225,887) | |||||||||||||
Net loss for the year | (393,761) | (393,761) | |||||||||||||
Ending balance at Dec. 31, 2020 | 134,061,923 | $ 0 | $ 0 | 0 | 0 | 134,061,923 | |||||||||
Ending balance, Shares at Dec. 31, 2020 | 0 | 0 | |||||||||||||
Net decrease in former Parent Company investment | (7,792,798) | (7,792,798) | |||||||||||||
Dividends to former Parent Company | (25,752,729) | (25,752,729) | |||||||||||||
Issuance of capital and preferred stock at Spin-Off | 15,113,723 | $ 0 | $ 47,753 | $ 7,959 | 15,113,723 | $ 97,292,262 | $ (97,347,974) | ||||||||
Issuance of capital and preferred stock at Spin-Off, Shares | 4,775,272 | 795,878 | |||||||||||||
Deemed contribution of preferred shares as part of Spin-off | (15,113,723) | (15,113,723) | |||||||||||||
Dividends declared on preferred shares | (130,574) | (130,574) | |||||||||||||
Net loss for the year | (3,639,979) | $ (471,557) | $ (3,168,422) | $ (471,557) | $ (3,168,422) | ||||||||||
Ending balance at Dec. 31, 2021 | $ 96,745,843 | $ 47,753 | $ 7,959 | $ 97,161,688 | $ (471,557) | $ 0 | |||||||||
Ending balance, Shares at Dec. 31, 2021 | 4,775,272 | 795,878 |
General Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
General Information |
Imperial Petroleum Inc. (“Imperial”) was formed by StealthGas Inc (the “former Parent Company”) on May 14, 2021 under the laws of the Republic of the Marshall Islands. Initial share capital of Imperial consisted of 500 common shares. StealthGas Inc. separated its crude and product tankers by transferring to Imperial its interest in the 4 subsidiaries noted below (the “Subsidiaries”), each owning one tanker. The transfer was completed on November 10, 2021 in exchange for 4,774,772 newly issued common shares and 795,878 Series A 8.75 % Preferred Shares (the “Series A Preferred Shares”) in Imperial. The transfer included the issuance of a new class of Preferred Shares, which were recorded at fair value. As further discussed in Note 8, the Company also recorded a deemed contribution of $15.1 million representing the fair value of the Preferred Shares. On December 3, 2021, StealthGas Inc. distributed the 4,775,272 common shares and 795,878 8.75% Series A Preferred Shares (with a liquidation preference of $25.00 per share) in Imperial to holders of StealthGas Inc.’s common stock on a pro rata basis (the “Spin-Off”). The accompanying consolidated financial statements include the accounts of Imperial and its wholly owned Subsidiaries (collectively, the “Company”) using the historical carrying costs of the assets and the liabilities of the Subsidiaries from their dates of incorporation. For periods up to December 3, 2021, the accompanying financial statements reflect the financial position and results of the carve-out operations of the Subsidiaries that were contributed to Imperial.At December 31, 2021, the Company’s fleet was comprised of 4 tankers consisting of 3 medium range (M.R.) type product tankers and one aframax crude oil tanker providing worldwide marine transportation services under long, medium or short-term charters. The Company’s vessels are managed by Stealth Maritime Corporation S.A. (the “Manager”), a company controlled by members of the family of the Company’s Chief Executive Officer. The Manager, a related party, was incorporated in Liberia and registered in Greece on May 17, 1999 under the provisions of law 89/1967, 378/1968 and article 25 of law 27/75 as amended by article 4 of law 2234/94. (See Note 3). At December 31, 2021, the 4 subsidiaries included in the Company’s consolidated financial statements were:
Prior to the Spin-Off, the Company was dependent upon StealthGas Inc. for a major part of its working capital and financing requirements as StealthGas Inc. used a centralized approach to cash management and financing of its operations. Financial transactions relating to the Company were accounted for through the net parent investment account. For periods up to December 3, 2021, net parent investment represents StealthGas Inc.’s interest in the Company’s net assets and includes the Company’s cumulative earnings as adjusted for cash distributions to and cash contributions from StealthGas Inc. For periods up to December 3, 2021, the consolidated statements of operations reflect expense allocations made to the Company by StealthGas Inc. for certain corporate functions and for shared services provided by StealthGas Inc. These allocations were made by StealthGas Inc. on a pro-rata basis. See Note 3 “Transactions with Related Parties – General and administrative expenses” for further information on expenses allocated by StealthGas Inc. Both the Company and StealthGas Inc. consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefit received by the Company during the periods presented. During 2019, 2020 and 2021 four charterers accounted for 10% or more of the Company’s revenues.
Coronavirus Outbreak: |
Significant Accounting Policies |
12 Months Ended | ||
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Dec. 31, 2021 | |||
Accounting Policies [Abstract] | |||
Significant Accounting Policies |
Principles of Consolidation: Use of Estimates: Other comprehensive income / (loss) The Company has no other comprehensive income / (loss) and accordingly comprehensive income / (loss) equals net income / (loss) for all periods presented. As such, no statement of comprehensive income / (loss) has been presented. Foreign Currency Translation: Cash and Cash Equivalents: Restricted Cash: non-current assets. Trade Receivables: un-collectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No provision for doubtful accounts was required for any of the periods presented. Inventories: first-in, first-out method. The Company considers victualing and stores as being consumed when purchased and, therefore, such costs are expensed when incurred. Vessels, net Acquisitions: Impairment or Disposal of Long-lived Assets: 360-10, “Property, Plant and Equipment” (“ASC 360-10”), which requires impairment losses to be recorded for long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related vessels, quarterly. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the consolidated statements of operations. Various factors including anticipated future charter rates, estimated scrap values, future dry-docking costs and estimated vessel operating costs are included in this analysis. These factors are based on historical trends as well as future expectations. Undiscounted cash flows are determined by considering the revenues from existing charters for those vessels that have long term employment and when there is no charter in place the estimates based on historical average rates. No impairment loss was identified and recorded for any of the periods presented. Vessels’ Depreciation: Segment Reporting: Accounting for Special Survey and Dry-docking Costs:dry-docking costs are expensed in the period incurred. Accounting for Revenue and Related Expenses: A time charter is a contract for the use of a vessel for a specific period of time and a specified daily charter hire rate, which is generally payable in advance. Operating costs incurred for running the vessel such as crew costs, vessel insurance, repairs and maintenance and lubricants are paid for by the Company under time charter agreements. A time charter generally provides typical warranties and owner protective restrictions. The performance obligations in a time charter are satisfied over the term of the contract beginning when the vessel is delivered to the charterer until it is redelivered back to the owner of the vessel. Some of the Company’s time charters may also contain profit sharing provisions, under which the Company can realize additional revenues in the event that spot rates are higher than the base rates in these time charters. A bareboat charter is a contract in which the vessel owner provides the vessel to the charterer for a fixed period of time at a specified daily rate, which is generally payable in advance, and the charterer generally assumes all risks and costs of operation during the bareboat charter period. The Company’s time charter and bareboat contracts are classified as operating leases pursuant to Accounting Standards Codification (“ASC”) 842 - Leases, and therefore do not fall under the scope of Accounting Standards Codification (“ASC”) 606 because (i) the vessel is an identifiable asset (ii) the owner of the vessel does not have substantive substitution rights and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives the economic benefits from such use. Time charter and bareboat revenues are recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Time charter and bareboat charter revenues are recognized as earned on a straight-line basis over the term of the charter as service is provided. Revenues from profit sharing arrangements in time charters are recognized in the period earned. Under time charter agreements, all voyages expenses, except commissions are assumed by the charterer. Under bareboat charter agreements, the charterer further assumes all vessel operating expenses, dry-docking expenses and risk of operation. Upon implementation of ASC 842, the Company elected to make use of a practical expedient for lessors to not separate the lease and non-lease components included in the time charter revenue but rather to recognize operating lease revenue as a combined single lease component for all time charter contracts as the related lease component, the hire of a vessel, and the non-lease component, the fees for operating and maintaining the vessel, have the same timing and pattern of transfer (both the lease and non-lease components are earned by passage of time) and the predominant component is the lease. A voyage charter is a contract in which the vessel owner undertakes to transport a specific amount and type of cargo on a load port-to-discharge lay-time as per the charter party clause at the ports visited which is recorded as demurrage revenue, while in the case of despatch, the owner reimburses the charterer for the earlier discharging of the cargo from the agreed time. The Company has determined that there is one single performance obligation for each of its voyage charters, which is to provide the charterer with an integrated transportation service within a specified time period. In addition, the Company has concluded that a contract for a voyage charter meets the criteria to recognize revenue over time because the charterer simultaneously receives and consumes the benefits of the Company’s performance as the Company performs. Therefore, since the Company’s performance obligation under each voyage contract is met evenly as the voyage progresses, revenues from voyage charters are recognized on a straight line basis over the voyage duration which commences once the vessel is ready to load the cargo and terminates upon the completion of the discharge of the cargo. Demurrage/despatch revenues/expenses are recognized when the amount can be estimated and its collection/payment is probable. In voyage charters, vessel operating and voyage expenses are paid for by the Company. The voyage charters are considered service contracts which fall under the provisions of ASC 606 because the Company retains control over the operations of the vessels such as the routes taken or the vessels’ speed.Deferred income represents cash received for undelivered performance obligations and deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide for varying charter rates. The portion of the deferred revenue that will be earned within the next twelve months is classified as current liability and the remaining as long-term liability. Vessel voyage expenses are direct expenses to voyage revenues and primarily consist of brokerage commissions, port expenses, canal dues and bunkers. Brokerage commissions are paid to shipbrokers for their time and efforts for negotiating and arranging charter party agreements on behalf of the Company and expensed over the related charter period and all the other voyage expenses are expensed as incurred except for expenses during the ballast portion of the voyage. Any expenses incurred during the ballast portion of the voyage (period between the contract date and the date of the vessel’s arrival to the load port) such as bunker expenses, canal tolls and port expenses are deferred and are recognized on a straight-line basis, in voyage expenses, over the voyage duration as the Company satisfies the performance obligations under the contract provided these costs are (1) incurred to fulfill a contract that the Company can specifically identify, (2) able to generate or enhance resources of the company that will be used to satisfy performance of the terms of the contract, and (3) expected to be recovered from the charterer. These costs are considered ‘contract fulfillment costs’ and are included in ‘other current assets’ in the accompanying consolidated balance sheets. Vessel operating expenses comprise all expenses relating to the operation of the vessel, including crewing, repairs and maintenance, insurance, stores, lubricants and other operating expenses. Vessel operating expenses are expensed as incurred. Dividends: paid-in capital. Losses per common share: Recent Accounting Pronouncements: Reference Rate Reform: As of December 31, 2021, the Company has not yet evaluated the effects of this standard on its consolidated financial position, results of operations, and cash flows. |
Transactions with Related Parties |
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transactions with Related Parties |
The Manager provides the vessels with a wide range of shipping services such as chartering, technical support and maintenance, insurance, consulting, financial and accounting services, for a fixed daily fee of $440 per vessel operating under a voyage or time charter or $125 per vessel operating under a bareboat charter (the “Management fees”) and a brokerage commission of 1.25% on freight, hire and demurrage per vessel (the “Brokerage commissions”), as per the management agreement between the Manager and the Company. In addition, the Manager arranges for supervision onboard the vessels, when required, by superintendent engineers and when such visits exceed a period of five days in a twelve month period, an amount of $500 is charged for each additional day (the “Superintendent fees”). Effective from May 31, 2020, the Manager provides crew management services to the vessels Magic Wand and Clean Thrasher. These services have been subcontracted by the Manager to an affiliated ship-management company, Hellenic Manning Overseas Inc. (ex. Navis Maritime Services Inc.). The Company pays to the Manager a fixed monthly fee of $2,500 per vessel (the “Crew management fees”). In addition to management services, the Company reimburses the Manager for the compensation of its executive officers for an amount of $250,149 for the first 12 months following the Spin-Off (the “Executive compensation”). In addition, for periods up to the Spin-Off, an allocation of general and administrative expenses incurred by StealthGas Inc. has been included in General and administrative expenses of the Company based on the number of calendar days the Company’s vessels operated under StealthGas Inc.’s fleet compared to the number of calendar days of the total StealthGas Inc.’s fleet. These expenses consisted mainly of executive compensation, office rent, investor relations and consultancy fees (the “General and administrative expenses – Former Parent”). The related party balance with StealthGas Inc. mainly relating to collections received net of payments made on behalf of the Company was a receivable $355,023 at December 31, 2021 (2020: a liability of $1,473,000 (Note 14 )). The current account balance with the Manager at December 31, 2021 was a liability of $1,119,055 (2020: nil). The liability mainly represents payments made by the Manager on behalf of the Company. The amounts charged by the Company’s related parties comprised the following:
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Vessels, net |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessels, net |
An analysis of vessels, net is as follows:
As of December 31, 2020 and 2021, the Company performed an impairment review of its vessels, due to the prevailing conditions in the shipping industry. As a result of the impairment review, undiscounted net operating cash flows exceeded each vessel’s carrying value and therefore no impairment was recorded. The Company’s vessels have been provided as collateral to secure the Company’s bank loans as discussed in Note 5. |
Long-term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-term Debt |
The above loan Spin-Off (Note 1). The term loan contains financial covenants requiring the Company to ensure that:
In addition, the term loan generally permits the declaration or payment of cash dividends so long as the Company is not in default thereunder nor would be in default as a result of such dividend payment until June 30, 2022, and thereafter declare and pay dividends in amounts up to 50% of its free cash flow in any rolling 12-month period so long as the Company is not in default thereunder nor would be in default as a result of such dividend payment. The interest rate on the outstanding loan as of December 31, 2021 is based on LIBOR plus a margin of 1.95%. The average interest rate (including the margin) on the above outstanding loan was 2.17% for the year ended December 31, 2021. Bank loan interest expense for the above loan for the years ended December 31, 2019, 2020 and 2021 amounted to nil, nil and $87,724, respectively. Interest expense is included in interest and finance costs in the consolidated statements of operations. For the years ended December 31, 2019, 2020 and 2021, the amortization of deferred financing charges amounted to nil, nil and $32,587, respectively, and is included in interest and finance costs in the consolidated statements of operations. At December 31, 2021, the Company was in compliance with all of its debt financial covenants. The annual principal payments to be made, for the abovementioned loan, after December 31, 2021 are as follows:
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Accrued Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities |
Accrued liabilities consist of the following:
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Fair Value of Financial Instruments and Concentration of Credit Risk |
12 Months Ended | ||
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Dec. 31, 2021 | |||
Fair Value Disclosures [Abstract] | |||
Fair Value of Financial Instruments and Concentration of Credit Risk |
Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, restricted cash, trade and other receivables, trade accounts payable, balances with related parties and accrued liabilities. The Company limits its credit risk with respect to accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its trade accounts receivable. The Company places its cash and cash equivalents, time deposits with high credit quality financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. Fair Value Disclosures: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The carrying values of cash and cash equivalents, restricted cash, trade and other receivables, trade accounts payable, balances with related parties and accrued liabilities are reasonable estimates of their fair value due to the short term nature of these financial instruments. Cash and cash equivalents are considered Level 1 items as they represent liquid assets with short-term maturities. The fair value of long term bank loans is estimated based on current rates offered to the Company for similar debt of the same remaining maturities. Their carrying value approximates their fair market value due to their variable interest rate, being LIBOR. LIBOR rates are observable at commonly quoted intervals for the full terms of the loans and hence floating rate loans are considered Level 2 items in accordance with the fair value hierarchy. |
Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity |
Under the Spin-Off discussed in Note 1, the Company had issued a total of 4,775,272 common shares and 795,878 of 8.75% Series A cumulative redeemable perpetual preferred shares. The reported loss per common share calculations (Note 9) give retroactive effect to the issuance of the common shares as of January 1, 2019. Common Shares: Each and non-assessable. Preferred Shares
8.75% Series A cumulative redeemable perpetual preferred shares: Holders the Spin-Off. Dividends on the Series A Preferred Shares will accrue at a rate of 8.75% per annum per $25.00 stated liquidation preference per Series A Preferred Shares. The dividend rate is not subject to adjustment. Dividends are payable on the 30th day of March, June, September and December of each year. Total cumulative dividends for the period from December 3, 2021 to December 29, 2021 amounted to $140,246. In December 2021, the Company declared and paid dividends amounting to $130,574 ($0.1640625 per share) on its Series A preferred shares relating to the period from December 3, 2021 to December 29, 2021.In the event o f any liquidation, dissolution or winding-up of the Company’s affairs, whether voluntary or involuntary, holders of the Series A Preferred Shares will have the right to receive the liquidation preference of $25.00 per share plus an amount equal to all accumulated and unpaid dividends thereon to (but not including) the date of payment, whether or not declared, before any payments are made to holders of the Company’s common shares or any other junior securities. The Series A Preferred Shares represent perpetual equity interests in the Company. The Company has no obligation to redeem or repurchase any Series A Preferred Shares at any time. The Series A Preferred Shares will be subject to redemption, in whole or from time to time in part, at the Company’s option commencing on June 30, 2022. Holders of the Series A Preferred Shares generally have no voting rights. However, if and whenever dividends payable on the Series A Preferred Shares are in arrears for six or more quarterly periods, whether or not consecutive, holders of Series A Preferred Shares (voting together as a class with holders of any Parity Securities upon which like voting rights have been conferred and are exercisable) will, subject to certain exceptions, be entitled to elect one additional director to serve on the Company’s board of directors unless the size of the board of directors already has been increased by reason of the election of a director by holders of Parity Securities upon which like voting rights have been conferred. This right will continue until the Company pays, or declares and sets apart for payment, all cumulative dividends on the Series A Preferred Shares. Furthermore paid-in capital. The fair value of these shares was determined using Level 1 items in accordance with the fair value hierarchy. |
Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loss per share |
The Company calculates basic and diluted loss per share as follows:
There were no dilutive shares for any of the periods presented. |
Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues |
The amounts in the accompanying consolidated statements of operations are analyzed as follows:
The amount of revenue earned as demurrage relating to the Company’s voyage charters for the years ended December 31, 2019, 2020 and 2021 was nil, $1.0 million and $0.9 million, respectively and is included within “Voyage charter revenues” in the above table. As of December 31, 2020 and 2021, the Company recognized $173,930 and $nil, respectively, of contract fulfillment costs which mainly represent bunker expenses incurred prior to commencement of loading relating to the Company’s voyage charters. These costs are recorded in “Other current assets” in the consolidated balance sheets. As of December 31, 2020 and 2021, revenues relating to undelivered performance obligations of the Company’s voyage charters amounted to $774,269 and $nil, respectively. The Company recognized the undelivered performance obligation as of December 31, 2020 as revenues in the first quarter of 2021. |
Vessel Operating Expenses |
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Other Income and Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vessel Operating Expenses |
The amounts in the accompanying consolidated statements of operations are analyzed as follows:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||
Income Taxes |
Under the laws of the countries of the companies’ incorporation and/or vessels’ registration, the companies are not subject to tax on international shipping income, however, they are subject to registration and tonnage taxes, which have been included in Vessels’ operating expenses in the consolidated statements of operations. Pursuant to the Internal Revenue Code of the United States (the “Code”), U.S. source income from the international operations of ships is generally exempt from U.S. tax if the company operating the ships meets certain requirements. Among other things, in order to qualify for this exemption, the company operating the ships must be incorporated in a country which grants an equivalent exemption from income taxes to U.S. corporations. The Company satisfies these initial criteria. In addition, these companies must be more than 50% owned by individuals who are residents, as defined, in the country of incorporation or another foreign country that grants an equivalent exemption to U.S. corporations. The Company also currently satisfies the more than 50% beneficial ownership requirement. |
Customer Deposits |
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Revenue Recognition and Deferred Revenue [Abstract] | |||||||
Customer Deposits |
These amounts represent deposits received from charterers as guarantees and are comprised as follows:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||
Commitments and Contingencies |
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Subsequent Events |
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Subsequent Events [Abstract] | |||
Subsequent Events |
In February 2022, the Company completed an underwritten public offering and issue d 11,040,000 common shares, 11,040,000 Class A warrants an d 552,000Representative Purchase warrants for net proceeds, after underwriting discounts and commissions, of $ million. Furthermore, the Company proceeded with the issuance of 10,997,000 common shares upon exercise of Class A warrants for an aggregate exercise price of $ million. The total net proceeds are expected to be used for capital expenditures and for other general corporate purposes. On March 4, 2022, the Company agreed to acquire two M.R. product tankers from a related party for an aggregate purchase price of $31.0 million. On March 15, 2022, the Board of Directors of the Company declared a dividend of $0.546875 per Series A Preferred Share payable on March 30, 2022 to holders of Series A Preferred Shares as of March 25, 2022. In March 2022, the Company completed an underwritten public offering and issued 43,124,950 common shares and Class B warrants for net proceeds, after underwriting discounts and commissions, of $64.3 million. expected to be used for capital expenditures and for other general corporate purposes. A s a result of the recent conflict in Ukraine, the EU, U.S. and other countries have imposed sanctions in response to Russian action. The extent to which this will impact the Company’s future results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted. Accordingly, an estimate of the impact cannot be made at this time. |
Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation: |
Use of Estimates | Use of Estimates: |
Other comprehensive income / (loss) | Other comprehensive income / (loss) The Company has no other comprehensive income / (loss) and accordingly comprehensive income / (loss) equals net income / (loss) for all periods presented. As such, no statement of comprehensive income / (loss) has been presented. |
Foreign Currency Translation | Foreign Currency Translation: |
Cash and Cash Equivalents | Cash and Cash Equivalents: |
Restricted Cash | Restricted Cash: non-current assets. |
Trade Receivables | Trade Receivables: un-collectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No provision for doubtful accounts was required for any of the periods presented. |
Inventories | Inventories: first-in, first-out method. The Company considers victualing and stores as being consumed when purchased and, therefore, such costs are expensed when incurred. |
Vessels, net Acquisitions | Vessels, net Acquisitions: |
Impairment or Disposal of Long-lived Assets | Impairment or Disposal of Long-lived Assets: 360-10, “Property, Plant and Equipment” (“ASC 360-10”), which requires impairment losses to be recorded for long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related vessels, quarterly. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the consolidated statements of operations. Various factors including anticipated future charter rates, estimated scrap values, future dry-docking costs and estimated vessel operating costs are included in this analysis. These factors are based on historical trends as well as future expectations. Undiscounted cash flows are determined by considering the revenues from existing charters for those vessels that have long term employment and when there is no charter in place the estimates based on historical average rates. No impairment loss was identified and recorded for any of the periods presented. |
Vessels' Depreciation | Vessels’ Depreciation: |
Segment Reporting | Segment Reporting: |
Accounting for Special Survey and Dry-docking Costs | Accounting for Special Survey and Dry-docking Costs:dry-docking costs are expensed in the period incurred. |
Accounting for Revenue and Related Expenses | Accounting for Revenue and Related Expenses: A time charter is a contract for the use of a vessel for a specific period of time and a specified daily charter hire rate, which is generally payable in advance. Operating costs incurred for running the vessel such as crew costs, vessel insurance, repairs and maintenance and lubricants are paid for by the Company under time charter agreements. A time charter generally provides typical warranties and owner protective restrictions. The performance obligations in a time charter are satisfied over the term of the contract beginning when the vessel is delivered to the charterer until it is redelivered back to the owner of the vessel. Some of the Company’s time charters may also contain profit sharing provisions, under which the Company can realize additional revenues in the event that spot rates are higher than the base rates in these time charters. A bareboat charter is a contract in which the vessel owner provides the vessel to the charterer for a fixed period of time at a specified daily rate, which is generally payable in advance, and the charterer generally assumes all risks and costs of operation during the bareboat charter period. The Company’s time charter and bareboat contracts are classified as operating leases pursuant to Accounting Standards Codification (“ASC”) 842 - Leases, and therefore do not fall under the scope of Accounting Standards Codification (“ASC”) 606 because (i) the vessel is an identifiable asset (ii) the owner of the vessel does not have substantive substitution rights and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives the economic benefits from such use. Time charter and bareboat revenues are recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Time charter and bareboat charter revenues are recognized as earned on a straight-line basis over the term of the charter as service is provided. Revenues from profit sharing arrangements in time charters are recognized in the period earned. Under time charter agreements, all voyages expenses, except commissions are assumed by the charterer. Under bareboat charter agreements, the charterer further assumes all vessel operating expenses, dry-docking expenses and risk of operation. Upon implementation of ASC 842, the Company elected to make use of a practical expedient for lessors to not separate the lease and non-lease components included in the time charter revenue but rather to recognize operating lease revenue as a combined single lease component for all time charter contracts as the related lease component, the hire of a vessel, and the non-lease component, the fees for operating and maintaining the vessel, have the same timing and pattern of transfer (both the lease and non-lease components are earned by passage of time) and the predominant component is the lease. A voyage charter is a contract in which the vessel owner undertakes to transport a specific amount and type of cargo on a load port-to-discharge lay-time as per the charter party clause at the ports visited which is recorded as demurrage revenue, while in the case of despatch, the owner reimburses the charterer for the earlier discharging of the cargo from the agreed time. The Company has determined that there is one single performance obligation for each of its voyage charters, which is to provide the charterer with an integrated transportation service within a specified time period. In addition, the Company has concluded that a contract for a voyage charter meets the criteria to recognize revenue over time because the charterer simultaneously receives and consumes the benefits of the Company’s performance as the Company performs. Therefore, since the Company’s performance obligation under each voyage contract is met evenly as the voyage progresses, revenues from voyage charters are recognized on a straight line basis over the voyage duration which commences once the vessel is ready to load the cargo and terminates upon the completion of the discharge of the cargo. Demurrage/despatch revenues/expenses are recognized when the amount can be estimated and its collection/payment is probable. In voyage charters, vessel operating and voyage expenses are paid for by the Company. The voyage charters are considered service contracts which fall under the provisions of ASC 606 because the Company retains control over the operations of the vessels such as the routes taken or the vessels’ speed.Deferred income represents cash received for undelivered performance obligations and deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide for varying charter rates. The portion of the deferred revenue that will be earned within the next twelve months is classified as current liability and the remaining as long-term liability. Vessel voyage expenses are direct expenses to voyage revenues and primarily consist of brokerage commissions, port expenses, canal dues and bunkers. Brokerage commissions are paid to shipbrokers for their time and efforts for negotiating and arranging charter party agreements on behalf of the Company and expensed over the related charter period and all the other voyage expenses are expensed as incurred except for expenses during the ballast portion of the voyage. Any expenses incurred during the ballast portion of the voyage (period between the contract date and the date of the vessel’s arrival to the load port) such as bunker expenses, canal tolls and port expenses are deferred and are recognized on a straight-line basis, in voyage expenses, over the voyage duration as the Company satisfies the performance obligations under the contract provided these costs are (1) incurred to fulfill a contract that the Company can specifically identify, (2) able to generate or enhance resources of the company that will be used to satisfy performance of the terms of the contract, and (3) expected to be recovered from the charterer. These costs are considered ‘contract fulfillment costs’ and are included in ‘other current assets’ in the accompanying consolidated balance sheets. Vessel operating expenses comprise all expenses relating to the operation of the vessel, including crewing, repairs and maintenance, insurance, stores, lubricants and other operating expenses. Vessel operating expenses are expensed as incurred. |
Dividends | Dividends: paid-in capital. |
Losses per common share | Losses per common share: |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: Reference Rate Reform: As of December 31, 2021, the Company has not yet evaluated the effects of this standard on its consolidated financial position, results of operations, and cash flows. |
General Information (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Subsidiary Companies | At December 31, 2021, the 4 subsidiaries included in the Company’s consolidated financial statements were:
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Summary of Percentage of Company's Revenues | During 2019, 2020 and 2021 four charterers accounted for 10% or more of the Company’s revenues.
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Transactions with Related Parties (Tables) |
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Summary of Amounts Charged By The Company's Related Parties | The amounts charged by the Company’s related parties comprised the following:
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Vessels, net (Tables) |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Analysis of Vessels, Net | An analysis of vessels, net is as follows:
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Long-term Debt (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Long-Term Debt |
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Summary of Annual Principal Payments Loan | The annual principal payments to be made, for the abovementioned loan, after December 31, 2021 are as follows:
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Accrued Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities, Current [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Accrued Liabilities | Accrued liabilities consist of the following:
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Loss Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Basic and Diluted Net Income (Loss) Per Common Share | The Company calculates basic and diluted loss per share as follows:
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Revenues (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Revenues Amounts in Accompanying Consolidated Statements of Operations | The amounts in the accompanying consolidated statements of operations are analyzed as follows:
|
Vessel Operating Expenses (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Vessel Operating Expenses Amounts in Accompanying Consolidated Statements of Operations | The amounts in the accompanying consolidated statements of operations are analyzed as follows:
|
General Information - Summary of Percentage of Company's Revenues (Detail) - Revenue Benchmark [Member] - Revenue from Rights Concentration Risk [Member] |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Charterer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 0.00% | 34.00% | 57.00% |
Charterer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 16.00% | 12.00% | 18.00% |
Charterer C [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 0.00% | 16.00% | |
Charterer D [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 0.00% | 21.00% | |
Charterer E [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 0.00% | 14.00% | |
Charterer F [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% | ||
Charterer G [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% | ||
Charterer H [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% |
General Information - Summary of Percentage of Company's Revenues (Parenthetical) (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Revenue Benchmark [Member] | Revenue from Rights Concentration Risk [Member] | Minimum [Member] | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 10.00% | 10.00% |
Significant Accounting Policies - Additional Information (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021
USD ($)
Segment
|
Dec. 31, 2020
USD ($)
Segment
|
Dec. 31, 2019
USD ($)
Segment
|
|
Accounting Policies [Line Items] | |||
Impairment loss long lived assets held for use | $ | $ 0 | $ 0 | $ 0 |
Number of operating segments | 1 | 1 | 1 |
Number of reportable segments | 1 | 1 | 1 |
Maritime Equipment [Member] | |||
Accounting Policies [Line Items] | |||
Property plant and equipment useful lives | 25 years | 25 years | 25 years |
Transactions with Related Parties - Summary of Amounts Charged By The Company's Related Parties (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Related Party Transaction [Line Items] | |||
General and administrative expenses | $ 311,676 | $ 219,717 | $ 331,408 |
Management fees [Member] | |||
Related Party Transaction [Line Items] | |||
Related party | 527,425 | 503,355 | 365,515 |
Brokerage commissions [Member] | |||
Related Party Transaction [Line Items] | |||
Related party | 218,192 | 250,241 | 166,588 |
Superintendent fees [Member] | |||
Related Party Transaction [Line Items] | |||
Related party | 26,500 | 13,500 | 24,000 |
Crew management fees [Member] | |||
Related Party Transaction [Line Items] | |||
Related party | 60,000 | 35,000 | 0 |
Executive compensation [Member] | |||
Related Party Transaction [Line Items] | |||
General and administrative expenses | 19,875 | 0 | 0 |
Former Parent Expense [Member] | |||
Related Party Transaction [Line Items] | |||
General and administrative expenses | $ 291,801 | $ 219,717 | $ 331,408 |
Vessels, net - Summary of Analysis of Vessels, Net (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Line Items] | ||
Vessel Cost, Balance at beginning of year | $ 231,766,688 | $ 230,844,288 |
Vessel Cost, Acquisitions and improvements | 922,400 | |
Vessel Cost, Reduction in vessels improvements | (51,800) | |
Vessel Cost, Balance at end of year | 231,714,888 | 231,766,688 |
Accumulated depreciation, Balance at beginning of year | (103,077,241) | (94,433,321) |
Accumulated depreciation, Depreciation for the year | (8,674,663) | (8,643,920) |
Accumulated depreciation, Balance at end of year | (111,751,904) | (103,077,241) |
Net book value, Balance at beginning of year | 128,689,447 | 136,410,967 |
Net book value, Acquisitions and improvements | 922,400 | |
Net book value, Reduction in vessels improvements | (51,800) | |
Net book value, Depreciation for the year | (8,674,663) | (8,643,920) |
Net book value, Balance at end of year | $ 119,962,984 | $ 128,689,447 |
Long-term Debt - Summary of Long-term Debt (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Debt Instrument [Line Items] | ||
Issue Date | Nov. 10, 2021 | |
Maturity Date | Nov. 10, 2026 | |
Drawn Amount | $ 28,000,000 | |
Total | 28,000,000 | $ 0 |
Current portion of long-term debt | 4,804,000 | |
Long-term debt | 23,196,000 | |
Current portion of deferred finance charges | 56,384 | |
Deferred finance charges non-current | 107,029 | |
Total deferred finance charges | 163,413 | |
Total debt | 28,000,000 | |
Total debt, net of deferred finance charges | 27,836,587 | |
Less: Current portion of long-term debt, net of current portion of deferred finance charges | 4,747,616 | |
Total long – term debt | $ 23,088,971 |
Long-term Debt - Summary of Annual Principal Payments Loan (Detail) |
Dec. 31, 2021
USD ($)
|
---|---|
Maturities of Long-term Debt [Abstract] | |
2022 | $ 4,804,000 |
2023 | 4,804,000 |
2024 | 4,804,000 |
2025 | 4,804,000 |
2026 | 8,784,000 |
Total | $ 28,000,000 |
Accrued Liabilities - Summary of Accrued Liabilities (Detail) - USD ($) |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Interest on long-term debt | $ 92,578 | $ 0 |
Administrative expenses | 94,735 | 0 |
Voyage expenses | 158,231 | 170,607 |
Vessel operating expenses | 141,130 | 220,316 |
Total | $ 486,674 | $ 390,923 |
Stockholders' Equity - Summary of Preferred Shares Outstanding (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Class of Stock [Line Items] | ||
Total Shares Outstanding | 795,878 | 0 |
Carrying Value | $ 7,959 | |
8.75% Series A Cumulative Redeemable Perpetual Preferred Shares [Member] | ||
Class of Stock [Line Items] | ||
Description | 8.75% Cumulative Redeemable Perpetual | |
Initial Issuance Date | Nov. 10, 2021 | |
Total Shares Outstanding | 795,878 | |
Liquidation Preference per Share (in dollars) | $ 25.00 | |
Carrying Value | $ 7,959 | |
Dividend Rate | 8.75% |
Stockholders' Equity - Additional Information (Detail) - USD ($) |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 29, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Class of Stock [Line Items] | |||
Common stock shares authorized | 2,000,000,000 | 2,000,000,000 | |
Common stock par or stated value per share | $ 0.01 | ||
Preferred stock shares authorized | 200,000,000 | 200,000,000 | |
Preferred stock par or stated value per share | $ 0.01 | ||
Common stock shares issued | 4,775,272 | 0 | |
Preferred stock shares issued | 795,878 | 0 | |
Eight Point Seven Five Percentage Series A Cumulative Redeemable Perpetual Preferred Shares [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock dividend rate percentage | 8.75% | ||
Preferred stock liquidation preference per share | $ 25.00 | ||
Dividends, preferred stock | $ 130,574 | ||
Cumulative dividends | $ 140,246 | ||
Preferred stock, fair value disclosure | $ 15,121,682 | ||
Preferred stock shares issued | 795,878 | ||
Dividends, preferred stock per share | $ 0.1640625 |
Loss Per Share - Summary of Basic and Diluted Net Income (Loss) Per Common Share (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Class of Stock [Line Items] | |||
Net loss | $ (3,639,979) | $ (393,761) | $ (375,184) |
Less: Cumulative dividends on Series A Preferred Shares | (140,246) | 0 | 0 |
Net loss attributable to common shareholders, basic | $ (3,780,225) | $ (393,761) | $ (375,184) |
Weighted average number of shares outstanding, basic and diluted | 4,775,272 | 4,775,272 | 4,775,272 |
Loss per share, basic and diluted | $ (0.79) | $ (0.08) | $ (0.08) |
Revenues - Summary of Revenues Amounts in Accompanying Consolidated Statements of Operations (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 17,362,669 | $ 20,302,052 | $ 13,329,640 |
Other income/(expenses) | 152,150 | 37,971 | (1,502) |
Time Charter Revenues [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 10,813,545 | 9,669,520 | 7,564,274 |
Bareboat Revenues [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 2,717,105 | 2,967,678 | 5,766,868 |
Voyage Charter Revenues [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 3,679,869 | $ 7,626,883 | $ 0 |
Revenues - Additional Information (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Other Current Assets [Member] | |||
Revenue, Major Customer [Line Items] | |||
Capitalized Contract Cost, Net | $ 0 | $ 173,930 | |
Voyage Charter Revenues [Member] | |||
Revenue, Major Customer [Line Items] | |||
Revenues | 0 | 1,000,000.0 | $ 900,000 |
Revenue, Remaining Performance Obligation, Amount | $ 0 | $ 774,269 |
Vessel Operating Expenses - Summary of Vessel Operating Expenses Amounts in Accompanying Consolidated Statements of Operations (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Other Income and Expenses [Abstract] | |||
Crew wages and related costs | $ 4,321,751 | $ 3,804,598 | $ 2,002,508 |
Insurance | 323,719 | 290,866 | 159,969 |
Repairs and maintenance | 845,200 | 1,227,639 | 452,857 |
Spares and consumable stores | 1,181,483 | 1,015,100 | 692,845 |
Miscellaneous expenses | 760,874 | 822,391 | 491,521 |
Total | $ 7,433,027 | $ 7,160,594 | $ 3,799,700 |
Income Taxes - Additional Information (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Percentage of beneficial ownership requirement by individuals | 50.00% |
Customer Deposits - Additional Information (Detail) - Bareboat charterer [Member] - USD ($) |
1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
May 30, 2019 |
Mar. 07, 2018 |
Oct. 12, 2015 |
Feb. 21, 2015 |
Aug. 31, 2021 |
Dec. 31, 2020 |
|
Customer Deposits [Line Items] | ||||||
Proceeds from deposits from customers | $ 736,000 | $ 1,820,700 | ||||
Payments for Deposits | $ 368,000 | |||||
Payables to customers | $ 368,000 | $ 600,000 | ||||
Deposits from customers hire term | 3 months | 5 months | ||||
Customer refundable fees | $ 1,220,700 | $ 500,000 | $ 100,000 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
1 Months Ended | 12 Months Ended | |
---|---|---|---|
Aug. 31, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Loss Contingencies [Line Items] | |||
Full and final settlement escrow deposits | $ 765,031 | ||
Future minimum contractual charter revenue | $ 4,642,050 | ||
StealthGas Inc. [Member] | |||
Loss Contingencies [Line Items] | |||
Security for the claims | $ 1,473,000 | ||
Escrow deposit | $ 1,165,031 |
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