☐ | 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 |
2020
☐ | 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 | ||
Common Stock, par value $0.01 per share | GASS | The Nasdaq Stock Market LLC |
Large accelerated filer | ☐ | Accelerated filer | ☒ | Non-accelerated filer | ☐ | Emerging growth company | ☐ |
U.S. GAAP ☒ | International Financial Reporting Standards as issued by the
| Other ☐ | ||||||
International Accounting Standards Board | ☐ |
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Item 19. | 100 |
Item 1. | Identity of Directors, Senior Management and Advisers |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
Year Ended December 31, | ||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||
INCOME STATEMENT DATA | ||||||||||||||||||||
Revenues | $ | 122,158,892 | $ | 131,501,881 | $ | 136,539,399 | $ | 152,338,278 | $ | 164,330,202 | ||||||||||
Revenues—related party | 9,814,000 | 9,814,000 | 7,592,784 | 1,973,643 | — | |||||||||||||||
Total Revenues | $ | 131,972,892 | $ | 141,315,881 | $ | 144,132,183 | $ | 154,311,921 | $ | 164,330,202 | ||||||||||
Operating expenses: | ||||||||||||||||||||
Voyage expenses | 12,474,090 | 15,849,855 | 13,618,025 | 13,804,032 | 18,649,258 | |||||||||||||||
Voyage expenses—related party | 1,613,421 | 1,725,683 | 1,772,240 | 1,912,505 | 2,037,917 | |||||||||||||||
Vessels’ operating expenses | 41,335,984 | 46,477,583 | 55,680,993 | 58,618,526 | 59,920,278 | |||||||||||||||
Vessels’ operating expenses-related party | 4,099,352 | 4,177,042 | 3,141,843 | 800,908 | 514,500 | |||||||||||||||
Charter hire expenses | 320,804 | 4,124,960 | 4,054,387 | 3,524,770 | 6,150,780 | |||||||||||||||
Dry-docking costs | 465,681 | 1,774,905 | 3,613,230 | 3,529,047 | 3,617,577 | |||||||||||||||
Management fees | 5,501,675 | 6,452,145 | 7,346,180 | 7,205,490 | 7,027,195 | |||||||||||||||
General and administrative expenses | 3,150,929 | 3,655,316 | 3,110,409 | 2,898,958 | 3,046,962 | |||||||||||||||
Depreciation | 33,811,607 | 35,857,507 | 39,096,589 | 38,921,672 | 41,258,142 | |||||||||||||||
Impairment loss | 6,168,747 | 8,238,987 | 5,735,086 | 6,461,273 | 11,351,821 | |||||||||||||||
Other Operating Costs | — | — | — | 1,058,863 | (549,804 | ) | ||||||||||||||
Net (gain)/loss on sale of vessels | — | (33,251 | ) | (118,427 | ) | 77,314 | 763,925 | |||||||||||||
Total expenses | 108,942,290 | 128,300,732 | 137,050,555 | 138,813,358 | 153,788,551 | |||||||||||||||
Income from operations | 23,030,602 | 13,015,149 | 7,081,628 | 15,498,563 | 10,541,651 | |||||||||||||||
Interest and finance costs | (9,314,539 | ) | (10,385,261 | ) | (14,268,148 | ) | (16,661,464 | ) | (23,286,547 | ) | ||||||||||
Loss on derivatives | (1,348,384 | ) | (370,584 | ) | (767,196 | ) | (403,943 | ) | (11,982 | ) | ||||||||||
Interest income | 456,924 | 173,083 | 454,472 | 322,868 | 587,477 | |||||||||||||||
Foreign exchange (loss)/gain | (138,777 | ) | 134,291 | (299,056 | ) | 25,739 | (107,119 | ) | ||||||||||||
Other expenses, net | (10,344,776 | ) | (10,448,471 | ) | (14,879,928 | ) | (16,716,800 | ) | (22,818,171 | ) | ||||||||||
Net income/(loss) | 12,685,826 | 2,566,678 | (7,798,300 | ) | (1,218,237 | ) | (12,276,520 | ) | ||||||||||||
Earnings/(loss) per share, basic | $ | 0.32 | $ | 0.06 | $ | (0.20 | ) | $ | (0.03 | ) | $ | (0.31) | ||||||||
Earnings/(loss) per share, diluted | $ | 0.32 | $ | 0.06 | $ | (0.20 | ) | $ | (0.03 | ) | $ | (0.31) | ||||||||
Weighted (basic and diluted) average number of shares outstanding | 39,305,644 | 41,315,127 | 39,824,038 | 39,809,364 | 39,860,563 | |||||||||||||||
Dividends declared per share | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 |
As of December 31, | ||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||
BALANCE SHEET DATA | ||||||||||||||||||||
Current assets, including cash | $ | 139,742,461 | $ | 123,372,369 | $ | 76,478,045 | $ | 62,838,725 | $ | 138,866,439 | ||||||||||
Total assets | 944,358,260 | 1,037,874,170 | 1,001,942,344 | 996,226,191 | 1,036,722,488 | |||||||||||||||
Current liabilities | 67,289,874 | 103,714,126 | 81,366,606 | 78,748,931 | 103,490,335 | |||||||||||||||
Derivative liability | 2,456,663 | 978,853 | 364,823 | 126,525 | 465,389 | |||||||||||||||
Total long-term debt, including current portion | 323,982,310 | 422,162,554 | 397,885,589 | 384,908,448 | 443,317,446 | |||||||||||||||
Net assets | 592,390,274 | 583,051,160 | 573,975,304 | 573,478,772 | 561,252,511 | |||||||||||||||
Capital stock | 442,850 | 442,850 | 442,850 | 442,850 | 445,496 | |||||||||||||||
Number of shares of common stock outstanding | 42,889,773 | 40,517,676 | 39,860,563 | 39,860,563 | 39,860,563 |
Year ended December 31, | ||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||
OTHER FINANCIAL DATA | ||||||||||||||||||||
Net cash provided by operating activities | $ | 55,237,735 | $ | 48,054,596 | $ | 36,154,088 | $ | 52,354,053 | $ | 37,809,225 | ||||||||||
Net cash used in investing activities(13) | (91,533,088 | ) | (151,799,747 | ) | (54,074,771 | ) | (48,913,177 | ) | (78,552,902 | ) | ||||||||||
Net cash provided by/(used in) financing activities | 79,018,076 | 87,899,271 | (27,213,272 | ) | (14,069,329 | ) | 57,271,476 | |||||||||||||
FLEET DATA | ||||||||||||||||||||
Average number of vessels(1) | 44.1 | 48.8 | 53.4 | 52.6 | 50.8 | |||||||||||||||
Total voyage days for fleet(2) | 16,028 | 18,446 | 19,999 | 19,717 | 19,363 | |||||||||||||||
Total time and bareboat charter days for fleet(3) | 13,893 | 14,516 | 15,831 | 16,772 | 15,696 | |||||||||||||||
Total spot market days for fleet(4) | 2,135 | 3,930 | 4,168 | 2,945 | 3,667 | |||||||||||||||
Total calendar days for fleet(5) | 16,136 | 18,541 | 20,275 | 19,917 | 19,544 | |||||||||||||||
Fleet utilization(6) | 99.3 | % | 99.5 | % | 98.6 | % | 99.0 | % | 99.1 | % | ||||||||||
Fleet operational utilization(7) | 93.3 | % | 92.5 | % | 91.1 | % | 96.2 | % | 95.5 | % | ||||||||||
AVERAGE DAILY RESULTS | ||||||||||||||||||||
Adjusted average charter rate(8) | $ | 7,355 | $ | 6,708 | $ | 6,437 | $ | 7,029 | $ | 7,418 | ||||||||||
Vessel operating expenses(9) | 2,816 | 2,732 | 2,901 | 2,983 | 3,092 | |||||||||||||||
General and administrative expenses(10) | 195 | 197 | 153 | 146 | 156 | |||||||||||||||
Management fees(11) | 341 | 348 | 362 | 362 | 360 | |||||||||||||||
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Total daily operating expenses(12) | 3,011 | 2,929 | 3,054 | 3,129 | 3,248 | |||||||||||||||
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Year Ended December 31, | ||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||
INCOME STATEMENT DATA | ||||||||||||||||||||
Revenues | $ | 136,539,399 | $ | 152,338,278 | $ | 164,330,202 | $ | 144,259,312 | $ | 145,003,021 | ||||||||||
Revenues—related party | 7,592,784 | 1,973,643 | — | — | — | |||||||||||||||
Total Revenues | $ | 144,132,183 | $ | 154,311,921 | $ | 164,330,202 | $ | 144,259,312 | $ | 145,003,021 |
Year Ended December 31, | ||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Voyage expenses | $ | 13,618,025 | $ | 13,804,032 | $ | 18,649,258 | $ | 15,201,978 | $ | 12,259,795 | ||||||||||
Voyage expenses—related party | 1,772,240 | 1,912,505 | 2,037,917 | 1,788,543 | 1,799,209 | |||||||||||||||
Vessels’ operating expenses | 55,680,993 | 58,618,526 | 59,920,278 | 48,619,594 | 52,344,721 | |||||||||||||||
Vessels’ operating expenses-related party | 3,141,843 | 800,908 | 514,500 | 966,500 | 950,500 | |||||||||||||||
Charter hire expenses | 4,054,387 | 3,524,770 | 6,150,780 | 6,268,988 | 318,606 | |||||||||||||||
Dry-docking costs | 3,613,230 | 3,529,047 | 3,617,577 | 1,094,306 | 3,640,327 | |||||||||||||||
Management fees-related party | 7,346,180 | 7,205,490 | 7,027,195 | 5,730,910 | 5,599,351 | |||||||||||||||
General and administrative expenses | 3,110,409 | 2,898,958 | 3,046,962 | 3,706,320 | 2,301,308 | |||||||||||||||
Depreciation | 39,096,589 | 38,921,672 | 41,258,142 | 37,693,733 | 37,455,093 | |||||||||||||||
Impairment loss | 5,735,086 | 6,461,273 | 11,351,821 | 993,916 | 3,857,307 | |||||||||||||||
Other operating costs/(income) | — | 1,058,863 | (549,804 | ) | — | — | ||||||||||||||
Net (gain)/loss on sale of vessels | (118,427 | ) | 77,314 | 763,925 | 485,516 | 1,134,854 | ||||||||||||||
Total expenses | 137,050,555 | 138,813,358 | 153,788,551 | 122,550,304 | 121,661,071 | |||||||||||||||
Income from operations | 7,081,628 | 15,498,563 | 10,541,651 | 21,709,008 | 23,341,950 | |||||||||||||||
Interest and finance costs | (14,268,148 | ) | (16,661,464 | ) | (23,286,547 | ) | (20,978,065 | ) | (14,129,893 | ) | ||||||||||
Gain on deconsolidation of subsidiaries | — | — | — | 145,000 | — | |||||||||||||||
Loss on derivatives | (767,196 | ) | (403,943 | ) | (11,982 | ) | (107,550 | ) | (50,976 | ) | ||||||||||
Interest income and other income | 454,472 | 322,868 | 587,477 | 846,271 | 167,794 | |||||||||||||||
Foreign exchange (loss)/gain | (299,056 | ) | 25,739 | (107,119 | ) | (8,235 | ) | (54,374 | ) | |||||||||||
Other expenses, net | (14,879,928 | ) | (16,716,800 | ) | (22,818,171 | ) | (20,102,579 | ) | (14,067,449 | ) | ||||||||||
Equity earnings in joint ventures | — | — | — | 486,695 | 2,709,984 | |||||||||||||||
Net (loss)/income | (7,798,300 | ) | (1,218,237 | ) | (12,276,520 | ) | 2,093,124 | 11,984,485 | ||||||||||||
(Loss)/earnings per share, basic | $ | (0.20 | ) | $ | (0.03 | ) | $ | (0.31 | ) | $ | 0.05 | $ | 0.31 | |||||||
(Loss)/earnings per share, diluted | $ | (0.20 | ) | $ | (0.03 | ) | $ | (0.31 | ) | $ | 0.05 | $ | 0.31 | |||||||
Weighted (basic and diluted) average number of shares outstanding | 39,824,038 | 39,809,364 | 39,860,563 | 39,800,434 | 38,357,893 | |||||||||||||||
Dividends declared per share | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 |
As of December 31, | ||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||
BALANCE SHEET DATA | ||||||||||||||||||||
Current assets, including cash | $ | 76,478,045 | $ | 62,838,725 | $ | 138,866,439 | $ | 77,932,439 | $ | 48,053,524 | ||||||||||
Total assets | 1,001,942,344 | 996,226,191 | 1,036,722,488 | 954,188,931 | 944,006,307 | |||||||||||||||
Current liabilities | 81,366,606 | 78,748,931 | 103,490,335 | 67,136,139 | 63,061,107 | |||||||||||||||
Derivative liability | 364,823 | 126,525 | 465,389 | 2,655,817 | 5,240,911 | |||||||||||||||
Total long-term debt, including current portion | 397,885,589 | 384,908,448 | 443,317,446 | 365,983,458 | 351,797,213 | |||||||||||||||
Net assets | 573,975,304 | 573,478,772 | 561,252,511 | 559,186,640 | 564,596,415 | |||||||||||||||
Capital stock | 442,850 | 442,850 | 445,496 | 445,496 | 431,836 | |||||||||||||||
Number of shares of common stock outstanding | 39,860,563 | 39,860,563 | 39,860,563 | 39,584,274 | 37,858,437 |
Year Ended December 31, | ||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||
OTHER FINANCIAL DATA | ||||||||||||||||||||
Net cash provided by operating activities | $ | 36,154,088 | $ | 52,354,053 | $ | 37,809,225 | $ | 30,818,599 | $ | 52,113,096 | ||||||||||
Net cash (used in)/provided by investing activities(13) | (54,074,771 | ) | (48,913,177 | ) | (78,552,902 | ) | 33,487,288 | (58,074,154 | ) | |||||||||||
Net cash (used in)/provided by financing activities | (27,213,272 | ) | (14,069,329 | ) | 57,271,476 | (61,616,546 | ) | (23,119,072 | ) | |||||||||||
FLEET DATA | ||||||||||||||||||||
Average number of vessels(1) | 53.4 | 52.6 | 50.8 | 42.6 | 41.6 | |||||||||||||||
Total voyage days for fleet(2) | 19,999 | 19,717 | 19,363 | 16,230 | 15,079 | |||||||||||||||
Total time and bareboat charter days for fleet(3) | 15,831 | 16,772 | 15,696 | 13,541 | 12,442 | |||||||||||||||
Total spot market days for fleet(4) | 4,168 | 2,945 | 3,667 | 2,689 | 2,637 | |||||||||||||||
Total calendar days for fleet(5) | 20,275 | 19,917 | 19,544 | 16,328 | 15,292 | |||||||||||||||
Fleet utilization(6) | 98.6 | % | 99.0 | % | 99.1 | % | 99.4 | % | 98.6 | % | ||||||||||
Fleet operational utilization(7) | 91.1 | % | 96.2 | % | 95.5 | % | 97.5 | % | 96.1 | % | ||||||||||
AVERAGE DAILY RESULTS | ||||||||||||||||||||
Adjusted average charter rate(8) | $ | 6,437 | $ | 7,029 | $ | 7,418 | $ | 7,842 | $ | 8,684 | ||||||||||
Vessel operating expenses(9) | 2,901 | 2,983 | 3,092 | 3,037 | 3,485 | |||||||||||||||
General and administrative expenses(10) | 153 | 146 | 156 | 227 | 150 | |||||||||||||||
Management fees(11) | 362 | 362 | 360 | 351 | 366 | |||||||||||||||
Total daily operating expenses(12) | 3,054 | 3,129 | 3,248 | $ | 3,264 | 3,635 | ||||||||||||||
(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 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 compareperiod-to-period |
Year ended December 31, | ||||||||||||||||||||
2014 | 2015 | 2016 | 2017 | 2018 | ||||||||||||||||
Voyage revenues | $ | 131,972,892 | $ | 141,315,881 | $ | 144,132,183 | $ | 154,311,921 | $ | 164,330,202 | ||||||||||
Voyage expenses | (14,087,511 | ) | (17,575,538 | ) | (15,390,265 | ) | (15,716,537 | ) | (20,687,175 | ) | ||||||||||
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Charter equivalent revenues | $ | 117,885,381 | $ | 123,740,343 | $ | 128,741,918 | $ | 138,595,384 | $ | 143,643,027 | ||||||||||
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Total voyage days for fleet | 16,028 | 18,446 | 19,999 | 19,717 | 19,363 | |||||||||||||||
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Adjusted average charter rate | $ | 7,355 | $ | 6,708 | $ | 6,437 | $ | 7,029 | $ | 7,418 | ||||||||||
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Year Ended December 31, | ||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | ||||||||||||||||
Voyage revenues | $ | 144,132,183 | $ | 154,311,921 | $ | 164,330,202 | $ | 144,259,312 | $ | 145,003,021 | ||||||||||
Voyage expenses | (15,390,265 | ) | (15,716,537 | ) | (20,687,175 | ) | (16,990,521 | ) | (14,059,004 | ) | ||||||||||
Charter equivalent revenues | $ | 128,741,918 | $ | 138,595,384 | $ | 143,643,027 | $ | 127,268,791 | $ | 130,944,017 | ||||||||||
Total voyage days for fleet | 19,999 | 19,717 | 19,363 | 16,230 | 15,079 | |||||||||||||||
Adjusted average charter rate | $ | 6,437 | $ | 7,029 | $ | 7,418 | $ | 7,842 | $ | 8,684 | ||||||||||
(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. In addition to these fees there is also a fixed daily fee of $280 charged to four LPG vessels for which some services are currently provided by third party managers. 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. |
(13) | Effective December 31, 2017, the Company adopted the new standard Accounting Standards Update ASU 2016-18 – Restricted Cash. The implementation of this update affected the presentation in the statement of |
cash flows relating to changes in restricted cash which are presented as part of Cash whereas the Company |
previously presented these within investing activities. This standard was retrospectively applied to all periods presented. |
(14) | As of January 1, 2018, the Company adopted Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (“ASC 606”) utilizing the modified retrospective method of transition. The Company recorded an adjustment of approximately $0.3 million to decrease its opening retained earnings on its consolidated balance sheet on January 1, 2018. |
weather.
Reduced demand for LPG products and LPG shipping would have an adverse effect on our future growth and would harm our business, results of operations and financial condition.
results.
six of our oldest vessels.respectively. If we sell vessels at a time when vessel prices have fallen, the sale may be for less than the vessel’s carrying value in our financial statements, resulting in a loss and reduction in earnings.profitability. Furthermore, if vessel values experience significant declines, we may have to record an impairment adjustment in our financial statements, which would also result in a reduction in our profits. If the market value of our fleet declines, we may not be in compliance with certain provisions of our existing loan agreements and we may not be able to refinance our debt or obtain additional financing or, if reinstated, pay dividends. If we are unable to pledge additional collateral, our lenders could accelerate our debt and foreclose on our fleet. The loss of our vessels would mean we could not run our business.
vessels to install expensive ballast water treatment systems, (“BWTS”), we may be required to incur additional costs to meet new maintenance and inspection requirements, to develop contingency plans for potential spills, and to obtain additional insurance coverage. ThoseEnvironmental laws and regulations are often revised, and we cannot predict the ultimate cost of complying with them, or the impact they may have on the resale prices or useful lives of our vessels. However, a failure to comply with applicable laws and regulations
emission controls, as well as acquire allowances, pay taxes related to our greenhouse gas emissions or administer and manage a greenhouse gas emissions program.
vessels are registered affect us. In the past, political conflicts, particularly in the Arabian Gulf, resulted in attacks on vessels, mining of waterways and other efforts to disrupt shipping in the area. Continuing conflicts, instability and other recent developments in the Middle East and elsewhere, including recent attacks involving vessels and vessel seizures in the Strait of Hormuz and off the coast of Gibraltar, the recent attack on an Iranian tanker near the Saudi Arabian port city of Jeddah and the presence of U.S. or other armed forces in Syria and Afghanistan, may lead to additional acts of terrorism or armed conflict around the world, and our vessels may face higher risks of being attacked or detained, or shipping routes transited by our vessels, such as the Strait of Hormuz, may be
The U.S. government’s primary Iran sanctions have remained largely unchanged, including during the period from the JCPOA Implementation Day to the
2022.
charterers, as well as the perceived impact of emissions by our vessels on the climate.charterers.
Regulators and law enforcement agencies in the United Kingdom and elsewhere are conducting civil and criminal investigations into whether the banks that contribute to the British Bankers’ Association (the “BBA”) in connection with the calculation of daily LIBOR may have been under-reporting or otherwise manipulating or attempting to manipulate LIBOR. A number of BBA member banks have entered into settlements with their regulators and law enforcement agencies with respect to this alleged manipulation of LIBOR.
On July 27, 2017, theThe United Kingdom Financial Conduct Authority (“FCA”), which regulates LIBOR, has announced that it intendswill
impacted.
We are accordingly dependent upon our fleet manager, Stealth Maritime, for:
entity with respect to which Harry N. Vafias is an executive officer, director or the principal shareholder) is our fleet manager or Harry Vafias is an executive officer or director of the Company, Stealth Maritime has granted us a right of first refusal to acquire any LPG carrier, which Stealth Maritime may acquire in the future. In addition, Stealth Maritime has agreed that it will not
As of April 1, 2019, we had completed our newbuilding program and had no agreements to acquire any additional vessels. However, delays
In addition, the refund guarantors under the newbuilding contracts, which are banks, financial institutions and other credit agencies, may also be affected by financial market conditions in the same manner as our lenders and, as a result, may be unable or unwilling to meet their obligations under their refund guarantees. If the shipbuilders or refund guarantors are unable or unwilling to meet their obligations to the sellers of the vessels, this may impact our acquisition of vessels and may materially and adversely affect our operations and our obligations under our credit facilities. The delivery of any secondhand vessels could be delayed because of, among other things, hostilities or political disturbances,
vessels with other comparable vessels, or any other vessels, quickly or, if LPG carrier values were higher than currently anticipated at the time we were required to sell these vessels, at a cost equal to the purchase price paid by the charterer. Consequently, if we sell additional vessels or if these purchase options were to be exercised, the expected size of our LPG carrier fleet would be reduced, and as a result our anticipated level of revenues would be reduced.
We have expanded into the product carrier sector and into the crude oil tanker sector and we may not be able to successfully execute this expansion, or any further expansion, in such sectors or any other sectors, such as dry or other wet or gas shipping sectors we choose to expand into, which could have an adverse effect on our business, results of operation and financial condition.
We have expanded into the product carrier sector with the acquisition of three medium range product carriers and into the crude oil tanker sector with one Aframax tanker. In the future, we may further expand in
these sectors or into dry or other wet or other gas shipping sectors if opportunities arise. We have limited experience in these sectors, including the product carrier and crude oil tanker sectors, and an inability to successfully execute our recent expansion into these sectors or any such future expansion plans could:
be costly;
distract us from our LPG carrier business; and
divert management resources,
each of which could have an adverse effect on our business, results of operation and financial condition. We may also from time to time consider various alternatives for our product carriers and crude oil tankers that could involve the sale of all or a portion of our interest in these vessels and sectors.
Purchasing and operating previously owned, or secondhand, vessels may result in increased operating costs and vessels
the outcome of matters on which our stockholders are entitled to vote, including the election of our Board of Directors and other significant corporate actions. The interests of this stockholder may be different from your interests.
yours.
entities he controls with the terms of that agreement may enable us and our subsidiaries to qualify for the benefits of Section 883 even where persons (each of whom owns, either directly or under applicable attribution rules, 5% or more of our shares) own, in the aggregate, more than 50% of our outstanding shares. However, his compliance and the compliance of such entities he controls with the terms of that agreement may not enable us or our subsidiaries to qualify for the benefits of Section 883. We or any of our subsidiaries may not qualify for the benefits of Section 883 for any year.
There is also substantial doubt that the courts of the Marshall Islands would enter judgments in original actions brought in those courts predicated on U.S., federal or state securities laws.
Item 4. | Information on the Company |
the sale of two vesselstanker, and had contracted to acquire one 11,000 cbm LPG carrier newbuilding under construction, which were classified as of December 31, 2018 as held for sale and the sale of a 49.9% equity interestwas delivered in the entities owning four remaining vessels that were also classified as held for sale.February 2021. As of April 1, 2019,2021, our fleet is composed of 4446 LPG carriers, (including two vessels that arechartered-in which aggregate 18,517 cbm in capacity and fourincluding eight JV vessels which aggregate 20,573165,121 cbm, in which we own a 50.1% equity interest and which we refer to as the JV Vessels), with a total capacity of approximately 298,099 cubic meters (cbm),436,692
Name Eco Arctic Eco Ice Eco Freeze Eco Frost Kazak (2) Eco Nical Gas Cathar(2) Gas Husky Gas Esco Eco Dominator(7) Eco Galaxy Eco Chios(3) Eco Stream(3) Gas Haralambos(8) Gas Flawless Gas Ethereal Gas Prodigy Eco Enigma Eco Universe Eco Czar Eco Nemesis Gas Monarch Gas Defiance(8) Gas Shuriken(8) Gas Elixir Gas Cerberus Gas Myth Gas Inspiration Eco Invictus Eco Green(4) Eco Dream(4) Gas Spirit Gas Nemesis II(ex. Gas Zael) Eco Loyalty(5)(6) Eco Elysium(5) Eco Royalty(5)(6) Eco Corsair(5)(9) Eco Lucidity(8) Gas Imperiale Gas Astrid(3) Gas Exelero(3) Gas Alice Gas Galaxy Gas Pasha(44(38 Vessels) Year
Built Vessel Size
(cbm) Vessel
Type Employment Status Expiration of
Charter(1) 2018 22,000 semi-refrigerated Time Charter February 2020 2018 22,000 semi-refrigerated Time Charter February 2020 2018 22,000 semi-refrigerated Time Charter April 2019 2017 22,000 semi-refrigerated Time Charter October 2019 2010 11,000 fully-pressurized Time Charter December 2019 2016 7,541 fully-pressurized Time Charter December 2019 2001 7,517 fully-pressurized Time Charter June 2019 2012 7,516 fully-pressurized Bareboat Charter June 2019 2012 7,514 fully-pressurized Bareboat Charter December 2019 2016 7,221 fully-pressurized Time Charter May 2019 2015 7,213 fully-pressurized Time Charter December 2019 2014 7,211 fully-pressurized Bareboat Charter June 2022 2014 7,210 fully-pressurized Bareboat Charter March 2022 2007 7,020 fully-pressurized Time Charter January 2020 2007 6,337 fully-pressurized Time Charter March2021 2006 5,036 fully-pressurized Time Charter December 2019 2003 5,031 fully-pressurized Spot — 2015 5,025 fully-pressurized Spot — 2015 5,025 fully-pressurized Time Charter August 2019 2015 5,020 fully-pressurized Time Charter January 2020 2015 5,019 fully-pressurized Time Charter September 2019 1997 5,018 fully-pressurized Spot — 2008 5,018 fully-pressurized Time Charter January 2020 2008 5,018 fully-pressurized Spot — 2011 5,018 fully-pressurized Spot — 2011 5,018 fully-pressurized Time Charter April 2019 2011 5,018 fully-pressurized Time Charter January 2020 2006 5,018 fully-pressurized Time Charter October 2019 2014 5,016 fully-pressurized Time Charter November 2019 2015 4,991 fully-pressurized Time Charter November 2020 2015 4,989 fully-pressurized Time Charter September 2020 2001 4,112 fully-pressurized Time Charter November 2019 2001 4,111 fully-pressurized Spot — 2015 3,529 fully-pressurized Bareboat Charter June 2022 2014 3,526 fully-pressurized Bareboat Charter September 2021 2015 3,525 fully-pressurized Bareboat Charter April 2022 2014 3,524 fully-pressurized Time Charter December 2019 2015 3,517 fully-pressurized Time Charter August 2019 2008 3,515 fully-pressurized Spot — 2009 3,514 fully-pressurized Bareboat Charter April 2022 2009 3,513 fully-pressurized Bareboat Charter June 2022 2006 3,513 fully-pressurized Time Charter August 2019 1997 3,312 fully-pressurized Time Charter January 2021 1995 3,310 fully-pressurized Time Charter April 2019 298,099 cbm
Name | Year Built | Vessel Size (cbm) | Vessel Type | Employment Status | Expiration of Charter(1) | |||||
Eco Arctic | 2018 | 22,363 | semi-refrigerated | Time Charter | September 2021 | |||||
Eco Ice | 2018 | 22,358 | semi-refrigerated | Time Charter | February 2022 |
Name | Year Built | Vessel Size (cbm) | Vessel Type | Employment Status | Expiration of Charter(1) | |||||
Eco Freeze | 2018 | 22,353 | semi-refrigerated | Time Charter | October 2021 | |||||
Eco Frost | 2017 | 22,359 | semi-refrigerated | Time Charter | February 2022 | |||||
Eco Blizzard | 2021 | 11,013 | fully-pressurized | Time Charter | May 2021 | |||||
Eco Alice | 2020 | 7,543 | fully-pressurized | Spot | — | |||||
Eco Nical | 2016 | 7,541 | fully-pressurized | Time Charter | June 2021 | |||||
Gas Husky | 2012 | 7,516 | fully-pressurized | Time Charter | August 2021 | |||||
Gas Esco | 2012 | 7,514 | fully-pressurized | Time Charter | June 2021 | |||||
Eco Dominator | 2016 | 7,221 | fully-pressurized | Time Charter | June 2021 | |||||
Eco Galaxy | 2015 | 7,213 | fully-pressurized | Spot | — | |||||
Eco Chios(4) | 2014 | 7,211 | fully-pressurized | Bareboat Charter | May 2022 | |||||
Eco Stream(4) | 2014 | 7,210 | fully-pressurized | Bareboat Charter | March 2022 | |||||
Gas Flawless | 2007 | 6,337 | fully-pressurized | Time Charter | June 2021 | |||||
Gas Prodigy | 2003 | 5,031 | fully-pressurized | Spot | — | |||||
Eco Enigma | 2015 | 5,025 | fully-pressurized | Time Charter | January 2022 | |||||
Eco Universe(6) | 2015 | 5,025 | fully-pressurized | Time Charter | February 2022 | |||||
Eco Czar | 2015 | 5,020 | fully-pressurized | Time Charter | April 2021 | |||||
Eco Nemesis(6) | 2015 | 5,019 | fully-pressurized | Time Charter | March 2022 | |||||
Gas Monarch | 1997 | 5,018 | fully-pressurized | Spot | — | |||||
Gas Elixir | 2011 | 5,018 | fully-pressurized | Spot | — | |||||
Gas Cerberus | 2011 | 5,018 | fully-pressurized | Spot | — | |||||
Gas Myth(6) | 2011 | 5,018 | fully-pressurized | Time Charter | January 2023 | |||||
Gas Inspiration | 2006 | 5,018 | fully-pressurized | Spot | — | |||||
Eco Invictus(6) | 2014 | 5,016 | fully-pressurized | Time Charter | November 2021 | |||||
Eco Texiana | 2020 | 5,030 | fully-pressurized | Time Charter | June 2021 | |||||
Eco Green | 2015 | 4,991 | fully-pressurized | Spot | — | |||||
Eco Dream | 2015 | 4,989 | fully-pressurized | Spot | — | |||||
Gas Spirit | 2001 | 4,112 | fully-pressurized | Time Charter | November 2021 | |||||
Eco Loyalty(7) | 2015 | 3,529 | fully-pressurized | Time Charter | February 2022 | |||||
Eco Elysium(5) | 2014 | 3,526 | fully-pressurized | Time Charter | June 2024 | |||||
Eco Royalty(7) | 2015 | 3,525 | fully-pressurized | Time Charter | February 2022 | |||||
Eco Corsair | 2014 | 3,524 | fully-pressurized | Time Charter | February 2022 | |||||
Gas Imperiale | 2008 | 3,515 | fully-pressurized | Spot | — | |||||
Gas Astrid(4) | 2009 | 3,514 | fully-pressurized | Bareboat Charter | March 2022 | |||||
Gas Exelero(4) | 2009 | 3,513 | fully-pressurized | Bareboat Charter | June 2022 | |||||
Gas Alice | 2006 | 3,513 | fully-pressurized | Time Charter | August 2021 | |||||
Gas Galaxy | 1997 | 3,312 | fully-pressurized | Time Charter | September 2022 | |||||
271,571 cbm | ||||||||||
JV LPG Vessels (8 vessels) | ||||||||||
Eco Nebula(2) | 2007 | 38,898 | fully-refrigerated | Time Charter | June 2021 | |||||
Gaschem Bremen(3) | 2010 | 35,232 | fully-refrigerated | Time Charter | August 2021 | |||||
Eco Evoluzione (ex. Gaschem Stade)(3) | 2010 | 35,214 | fully-refrigerated | Time Charter | August 2021 | |||||
Gaschem Hamburg(3),(8) | 2010 | 35,204 | fully-refrigerated | Time Charter | April 2021 | |||||
Gas Haralambos(2) | 2007 | 7,020 | fully-pressurized | Spot | — | |||||
Gas Defiance(2) | 2008 | 5,018 | fully-pressurized | Spot | — | |||||
Gas Shuriken(2) | 2008 | 5,018 | fully-pressurized | Time Charter | May 2021 | |||||
Eco Lucidity(2) | 2015 | 3,517 | fully-pressurized | Time Charter | April 2021 | |||||
165,121 cbm | ||||||||||
Total LPG Carrier Fleet: 46 vessels | 436,692 cbm |
(1) | Earliest date charters could expire. |
(2) |
JV vessel owned by |
(3) | JV vessel owned by a joint venture established in 2020 in which we own a 51% equity interest. |
(4) | Subject to a purchase option pursuant to which the charterer may purchase such vessel at any time during the charter at a price that declines over time by an agreed annual amount or pro-rated from the agreed value of the vessel at the time of entering into the charter in the first quarter of 2014. |
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(5) |
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Charterer has option to extend charter for an additional three-year period. |
(6) | Charterer has option to extend charter for an additional year. |
(7) |
Charterer has two options to extend, each, of one-year duration. |
(8) |
In March 2021, we entered into a memorandum of agreement to sell this vessel |
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Name Magic Wand (ex. Navig8 Fidelity) Stealth Falcon (ex. Navig8 Faith) Falcon Maryam (ex.Stealth Bahla) Stealth Berana (ex. Spike) Year
Built Vessel Size
(dwt) Vessel
Type Employment
Status Expiration of
Charter(1) 2008 47,000 MR product carrier Time Charter May 2020 2008 47,000 MR product carrier Bareboat Charter April 2019 2009 46,000 MR product carrier Bareboat Charter September 2020 2010 115,804 Aframax oil tanker Bareboat Charter March 2020 255,804 dwt
Built
(dwt)
Type
Status
Charter(1) 2008 47,000 MR product carrier Time Charter March 2022 2008 47,000 MR product carrier Time Charter August 2021 2009 46,000 MR product carrier Bareboat Charter September 2021 2010 115,804 Aframax oil tanker Time Charter September 2021 (1)
In the first quarter of 2020, we acquired three 2010-built Medium Gas Carriers, the
Under the November 2006 agreement, which was amended effective January 1, 2007, as approved by our Board of Directors, including all of our independent directors, we pay Stealth Maritime a fixed management fee of $440 per vessel operating under a voyage or time charter per day (except for four vessels for which a fixed daily fee of $280 is charged by Stealth Maritime as part of the services is currently provided by third party managers) on a monthly basis in advance,
2022.
2022.
been periodically updated with relevant amendments. MARPOL addresses pollution from ships by oil, noxious liquid substances carried in bulk, harmful substances carried by sea in packaged form, sewage, garbage, and air emissions. Our vessels are subject to standards imposed by the IMO.
VI.
The IMO confirmed in October 2016 that a global 0.5% sulfur cap on marine fuels will come into force on January 1, 2020, as agreed in amendments adopted in 2008 for Annex VI to MARPOL. Annex VI sets progressively stricter regulations to control sulfur oxides (SOx) and nitrous oxides (NOx) emissions from ships, which present both environmental and health risks. The 0.5% sulfur cap marks a significant reduction from the current global sulfur cap of 3.5%, which had been implemented since January 1, 2012. When the 2020 sulfur cap was decided upon in 2008, it was also agreed that a review should be undertaken to assess whether there was sufficient compliant fuel available to meet the 2020 date, failing which, the date could be deferred to 2025. That review was completed in July 2016 by a consortium of consultants led by CE Delft and submitted to the IMO’s Marine Environment Protection Committee (MEPC) during their 70th session. The review concluded that sufficient compliant fuel would be available to meet the new requirement. However, there have been competing studies, that hold the opposing view that refining capacity will not be sufficient in 2020, with an estimated60-70% additional sulfur plant capacity required by 2020. China, Hong Kong and Taiwan have announced an early implementation of the sulfur cap effective January 1, 2019. The regulations, which were announced inmid-2018 and apply from January 2019, are similar to those already applied in the ECAs. They set a sulfur content limit of 0.5% and will affect all vessels sailing within 12 nautical miles of the coast as well as when berthing. There have also been questions as to how the sulfur cap will be enforced, as it is up to individual parties to MARPOL to enforce fines and sanctions. We may incur costs to comply with the amended Annex VI requirements, including if we were to elect to install scrubbers on any of our vessels .We currently have no committed capital expenditure obligations for the installation of scrubbers.
At the international level, the
requirements so that they are triggered by the entry into force date. In effect, this makes all vessels constructed before September 8, 2017 “existing” vessels, allowing for the installation of ballast water management systems on such vessels at the first renewal IOPPInternational Oil Pollution Prevention (“IOPP”) survey following entry into force of the BWM Convention. In July 2017, the implementation scheme was further changed to require vessels
Although the 2010 oil spill disaster in the Gulf
A list of approved equipment can be found on the Coast Guard Maritime Information Exchange web page. Several U.S. states, such as California, have also adopted more stringent legislation or regulations relating to the permitting and management of ballast water discharges compared to U.S. Environmental Protection Agency (“EPA”) regulations.
Vessel Security Regulations
Since the terrorist attacks
on-board installation of automatic information systems, or AIS, to enhancevessel-to-vessel andvessel-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.
The United States Coast Guard regulation’s aim to align with international maritime security standards exemptednon-United States vessels from MTSA vessel security measures provided such vessels have on board, by July 1, 2004, a valid International Ship Security Certificate (ISSC) that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code. We have obtained ISSCs for all of our vessels and implemented the various security measures addressed by the MTSA, SOLAS and the ISPS Codes to ensure that our vessels attain compliance with all applicable security requirements within the prescribed time periods. We do not believe these additional requirements will have a material financial impact on our operations.
Disclosure of Activities pursuant to Section 13(r) of the U.S. Securities Exchange Act of 1934
Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act. Section 13(r) requires an issuer to disclose whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran. Disclosure is required even where the activities, transactions or dealings are conducted in compliance with applicable law. Provided in this section is information concerning the activities of us and our affiliates that occurred in 2018 and which we believe may be required to be disclosed pursuant to Section 13(r) of the Exchange Act.
In 2018, 4 of our vessels made an aggregate of 12 port calls to Iran to load C3+ (a petrochemical gas) which was subsequently discharged in China, all of which port calls and discharges were made prior to November 5, 2018. These port calls were made while the vessels were on consecutive voyage charters to an international Far Eastern trader operating under such charterer’s instructions. These port calls represented 0.5% of the 2,653 total port calls made by all the vessels owned by us in 2018. As the vessel owner, we earned revenues at the agreed daily charter rates from the charterer. The aggregate gross revenue attributable to these port calls in 2018 was approximately $13.7 million while the aggregate net profit before finance charges (we do not attribute finance charges to individual vessel voyages) was approximately $1.5 million. All the charter party agreements for our vessels restrict the charterers from calling in Iran in violation of U.S. sanctions, or carrying any cargo to or from Iran which is subject to U.S. sanctions.
We do not believe that any of these transactions or activities are sanctionable. January 16, 2016 was “implementation day” under the Joint Comprehensive Plan of Action (“JCPOA”) among the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States), the E.U., and Iran, and the United States and the E.U. lifted nuclear-related sanctions on Iran which werere-imposed by the United States on August 6, 2018 and November 5, 2018. All activities, transactions and dealings reported in this section occurred after the implementation date of the JCPOA and prior to there-implementation of the applicable U.S. sanctions. We do not intend to charter our vessels to charterers who may make, or maysub-let the vessels tosub-charterers who may make, port calls to Iran, so long as the activities are not permissible and potentially sanctionable under U.S. or other applicable laws.
trading companies, the principal charterers of our product carriers and crude oil tankers, also operate their own vessels and transport oil for themselves and third party charterers in direct competition with independent owners and operators. Competition for charters, including for the transportation of oil and oil products, can be intense and depends on price as well as on the location, size, age, condition, specifications and acceptability of the vessel and its operator to the charterer and is frequently tied to having an available vessel with the appropriate approvals
Item 4A. | Unresolved Staff Comments |
Item 5. | Operating and Financial Review and Prospects |
operated a fleet of 4745 LPG carriers, including 44eight JV vessels, we own and 3 vessels that were chartered in, that carry various petroleum gas products in liquefied form, including propane, butane, butadiene, isopropane, propylene and VCM (“Vinyl Chloride Monomer”), three medium range product carriers that carry refined petroleum products such as gasoline, diesel,
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With regardregards to the vessels
sooner and potentially suppressing charter rates. With regardregards to the four tankers in our fleet, onetwo of our product carriers are employed on fixed-rate time charters expiring in August 2021 and March 2022, respectively, and one product carrier is employeddeployed on fixed rate bareboat charter expiring in
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period charters expiring in 2021 and 2022 while our Aframax tanker is on a time charter expiring in 2021. The short term duration of these period charters and their potential operation in the spot market, may expose us to seasonal changes in the tanker markets, which are typically stronger in the winter months as a result of increased oil consumption in the northern hemisphere but weaker in the summer months as a result of lower oil consumption in the northern hemisphere and refinery maintenance, to the extent we charter our tankers on shorter term charters.
performance. If we commit vessels on period charters, future spot market rates may be higher or lower than those rates at which we have time chartered our vessels.
7.
non-executive members of our Board of Directors in August 2018. As of December 31, 2018, we had $0.6 million of unrecognized stock-based compensation expense that we expect to recognize ratably over the remaining vesting period to August 2019.
docked.
$0.8 $0.8 million must be amortized throughout the lease period of the vessels. The lease for the is scheduled to expire
Results of Operations
Year ended December 31, 2018 compared to the year ended December 31, 2017
The average number of vessels in our fleet was 50.8 for the year ended December 31, 2018 compared to 52.6 for the year ended December 31, 2017.
REVENUES—Voyage revenues for the year ended December 31, 2018 were $164.3 million compared to $154.3 million for the year ended December 31, 2017, an increase of $10.0 million, primarily due to improved market conditions. Total calendar days for our fleet were 19,554 for the year ended December 31, 2018 compared to 19,917 for the year ended December 31, 2017; due to the decrease in the average number of vessels in our fleet. Of the total calendar days in 2018, 4,691 or 24.0% were bareboat charter days and 11,005 or 56.3% were time charter days and 3,667 or 18.8% were spot days. This compares to 4,934 or 24.8% bareboat charter days and 11,838 or 59.4% time charter days and 2,945 or 14.8% were spot days in 2017. Our fleet operational utilization was 95.5% and 96.2% for the years ended December 31, 2018 and December 31, 2017, respectively.
VOYAGE EXPENSES—Voyage expenses were $20.7 million for the year ended December 31, 2018 compared to $15.7 million for the year ended December 31, 2017, an increase of $5.0 million, or 31.8%. This was primarily due to the increased number of spot days and the higher bunker prices prevailing in 2018 compared to 2017. Voyage expenses consisted largely of bunker charges in the amount of $11.6 million for 2018 compared to bunker charges in the amount of $6.7 million for 2017, an increase of $4.9 million. Under spot charters we are responsible for paying the vessels’ bunkers consumption, as well as most expenses. Voyage expenses also included port expenses of $2.8 million for the year ended December 31, 2018 compared to $2.5 million for the year ended December 31, 2017, an increase of $0.3 million and commissions to third parties which were $2.8 million for the year ended December 31, 2018 and $2.7 million for the year ended December 31, 2017.
VESSEL OPERATING EXPENSES—Vessel operating expenses were $60.4 million for the year ended December 31, 2018 compared to $59.4 million for the year ended December 31, 2017, an increase of $1.0 million, or 1.7%. The increase in operating expenses , in spite of the net reduction of the average number of our owned vessels by two, was mainly driven by the operation of three additional new 22,000 cbm semi-refrigerated LPG vessels not yet delivered in the same period of last year which are more expensive to operate compared to smaller LPG vessels. Other components of vessel operating expenses were repairs and maintenance costs which increased from $6.4 million in the year ended December 31, 2017 to $7.4 million in the year ended December 31, 2018 mainly due to some unforeseen technical needs of some older vessels.
DRY DOCKING COSTS—Dry docking costs were $3.6 million for the year ended December 31, 2018 compared to $3.5 million for the year ended December 31, 2017, an increase of $0.1 million, or 2.9%. For each of the year ended December 31, 2018 and the year ended December 31, 2017 seven vessels were dry docked.
MANAGEMENT FEES—Management fees were $7.0 million for the year ended December 31, 2018 compared to $7.2 million for the year ended December 31, 2017, a decrease of $0.2 million or 2.8%. The decrease was due to the lower average number of vessels in the fleet. The daily management fees per vessel did not change during these periods and remained at $440 per day for vessels under time and spot charter and at $125 per day for vessels under bareboat charter.
GENERAL AND ADMINISTRATIVE EXPENSES—General and administrative expenses for the year ended December 31, 2018 were $3.0 million compared to $2.9 million for the year ended December 31, 2017, an increase of $0.1 million or 3.4%. Included in the general and administrative expenses for the years ended December 31, 2018 and December 31, 2017 are $1.2 million and $1.1 million respectively paid to our manager for the services of the Company’s executive officers pursuant to our management agreement. Stock based compensation expense for the vested andnon- vested shares, which is also part of the general and administrative expenses, increased to $0.3 million during the year ended December 31, 2018 from $0.1 million during the year ended December 31, 2017.
DEPRECIATION—Depreciation expenses for the 50.8 average number of vessels in our fleet for the year ended December 31, 2018 were $41.3 million compared to $38.9 million for the 52.6 average number of vessels in our fleet for the year ended December 31, 2017 an increase of $2.4 million or 6.2%. This increase in depreciation expenses, in spite of the net reduction of the average number of our owned vessels by two was mainly due to the addition of three 22,000 cbm semi-refrigerated vessels which have significantly higher carrying values, and therefore associated annual depreciation expense compared to a smaller LPG vessel.
IMPAIRMENT LOSS—During the year ended December 31, 2018 the Company recognized an impairment loss of $11.4 million for eleven of its vessels, six of which were classified as held for sale as of December 31, 2018. With regards to the remaining five vessels for which we incurred impairment charges, one was delivered to her new owners in the second quarter of 2018, three were delivered to their new owners in the third quarter of 2018 while the remaining one was delivered to their new owners in the fourth quarter of 2018. During the year ended December 31, 2017, the Company recognized an impairment loss of $6.5 million for seven of its oldest vessels, four of which were sold in 2017.
NET (GAIN)/ LOSS ON SALE OF VESSELS—During the year ended December 31, 2018 we agreed to the sale of seven vessels. Five of these vessels theGas Enchanted, theGas Evoluzione, theGas Legacy, theGas Sikousis, and theGas Marathon were delivered to their new owners within 2018 and for these vessels we incurred a net loss on the sale of these vessels of $0.8 million. The remaining two vessels agreed to be sold within the year 2018, theGas Sincerity and theGas Texiana were delivered to their new owners within the first quarter of 2019. During the year ended December 31, 2017 we sold four of our oldest vessels, theGas Moxie,theGas Nirvana, theGas Iconand the Gas Emperor allfor further trading. The net loss on the sale of these vessels was $77.3 thousands.
OTHER OPERATING COSTS/(INCOME) — During the year ended December 31, 2018 we received $0.6 million of legal claims. This income was partially offset by a $0.1 million charge related to the delay of the delivery of our new 22,000 cbm semi-refrigerated vessels.
INTEREST AND FINANCE COSTS—Interest and finance costs were $23.3 million for the year ended December 31, 2018 compared to $16.7 million for the year ended December 31, 2017, an increase of $6.6 million, or 39.5%. The increase in interest and finance cost was mainly due the increase in our bank debt and to an increase in Libor rates.
INTEREST INCOME—Interest income was $0.6 million for the year ended December 31, 2018 compared to $0.3 million for the year ended December 31, 2017, an increase of $0.3 million related mostly to a higher amount of time deposits and higher deposit rates offered compared to rates offered in the same period of last year.
NET INCOME/(LOSS)—As a result of the above factors, we recorded a net loss of $12.3 million for the year ended December 31, 2018, compared to net loss of $1.2 million for the year ended December 31, 2017.
Year ended December 31, 2017 compared to the year ended December 31, 2016
The average number of vessels in our fleet was 52.6 for the year ended December 31, 2017 compared to 53.4 for the year ended December 31, 2016.
REVENUES—Voyage revenues for the year ended December 31, 2017 were $154.3 million compared to $144.1 million for the year ended December 31, 2016, an increase of $10.2 million, primarily due to improved market conditions. Total calendar days for our fleet were 19,917 for the year ended December 31, 2017 compared to 20,275 for the year ended December 31, 2016; due to the decrease in the average number of vessels in our fleet. Of the total calendar days in 2017, 4,934 or 24.8% were bareboat charter days and 11,838 or 59.4% were time charter days. This compares to 5,080 or 25.1% bareboat charter days and 10,751 or 53.0% time charter days in 2016. Our fleet operational utilization was 96.2% and 91.1% for the years ended December 31, 2017 and December 31, 2016, respectively.
VOYAGE EXPENSES—Voyage expenses were $15.7 million for the year ended December 31, 2017 compared to $15.4 million for the year ended December 31, 2016, an increase of $0.3 million, or 1.9%. This was primarily due to higher fuel prices prevailing throughout the year 2017 compared to year 2016. Voyage expenses consisted largely of bunker charges in the amount of $6.7 million for 2017 compared to bunker charges in the amount of $6.1 million for 2016, an increase of $0.6 million. Under spot charters we are responsible for paying the vessels’ bunkers consumption, as well as most expenses. Voyage expenses also included port expenses of $2.5 million for the year ended December 31, 2017 compared to $3.3 million for the year ended December 31, 2016, a decrease of $0.8 million and commissions to third parties which were $2.7 million for the year ended December 31, 2017, compared to $2.5 million for the year ended December 31, 2016, an increase of $0.2 million.
VESSEL OPERATING EXPENSES—Vessel operating expenses were $59.4 million for the year ended December 31, 2017 compared to $58.8 million for the year ended December 31, 2016, an increase of $0.6 million, or 1.0%. The increase in operating expenses was driven by one of our product tankers coming off bareboat as well as increased maintenance costs for some vessels in the fleet. Other components of vessel operating expenses were repairs and maintenance costs which increased from $5.7 million in the year ended December 31, 2016 to $6.4 million in the year ended December 31, 2017.
DRY DOCKING COSTS—Dry docking costs were $3.5 million for the year ended December 31, 2017 compared to $3.6 million for the year ended December 31, 2016, a decrease of $0.1 million, or 2.8%. For the year ended December 31, 2017 seven vessels were dry docked compared to ten vessels for the year ended December 31, 2016. In 2017 the Company faced higher drydocking cost as per vessel drydocked due to the trading areas of some of the vessels due for drydock.
MANAGEMENT FEES—Management fees were $7.2 million for the year ended December 31, 2017 compared to $7.3 million for the year ended December 31, 2016, a decrease of $0.1 million or 1.4%. The decrease was due to the lower average number of vessels in the fleet; 52.6 for the year ended December 31, 2017 compared to 53.4 for the year ended December 31, 2016. The daily management fees per vessel did not change during these periods and remained $440 per day for vessels under time and spot charter and $125 per day for vessels under bareboat charter. The decrease in management fees in 2017 resulted from decrease in the total number of calendar days, which was due to the decrease in the average size of our fleet.
GENERAL AND ADMINISTRATIVE EXPENSES—General and administrative expenses for the year ended December 31, 2017 were $2.9 million compared to $3.1 million for the year ended December 31, 2016, a decrease of $0.2 million or 6.5%. Included in the general and administrative expenses for both years ended December 31, 2017 and December 31, 2016 are $1.1 million paid to our manager for the services of the Company’s executive officers pursuant to our management agreement. Stock based compensation expense for the vested andnon- vested shares, which is also part of the general and administrative expenses, decreased to $0.1 million during the year ended December 31, 2017 from $0.3 million during the year ended December 31, 2016.
DEPRECIATION—Depreciation expenses for the 52.6 average number of vessels in our fleet for the year ended December 31, 2017 were $38.9 million compared to $39.1 million for the 53.4 average number of vessels in our fleet for the year ended December 31, 2016 a decrease of $0.2 million, or 0.5%.
IMPAIRMENT LOSS—During the year ended December 31, 2017, the Company recognized an impairment loss of $6.5 million for seven of its oldest vessels, four of which were sold in 2017 while for the year ended December 31, 2016 the Company recognized an impairment loss of $5.7 million for six of its oldest vessels.
NET (GAIN)/ LOSS ON SALE OF VESSELS—During the year ended December 31, 2017 we sold four of our oldest vessels, theGas Moxie,theGas Nirvana, theGas Iconand the Gas Emperor allfor further trading. The net loss on the sale of these vessels was $77.3 thousands. During the year ended December 31, 2016, we sold two vessels, theGasArctic for demolition and theGas Icefor further trading. The net gain on the sale of these vessels was $118.4 thousands.
OTHER OPERATING COSTS—On November 17, 2016 and on July 18, 2017 at our request due to charter market conditions, the delivery dates for the four 22,000 cbm newbuildings were delayed. As a consequence, for the postponement of the delivery date the Company agreed to pay to the shipbuilder an additional charge. These charges were included in the accompanying consolidated statement of operations under the caption “Other Operating Costs” for the year ended December 31, 2017.
INTEREST AND FINANCE COSTS—Interest and finance costs were $16.7 million for the year ended December 31, 2017 compared to $14.3 million for the year ended December 31, 2016, an increase of $2.4 million, or 16.8%. The increase in interest and finance cost was mainly due to an increase in loan interest expenses, mainly as a result of the increase in Libor rates.
LOSS ON DERIVATIVES—Included in the results for the year ended December 31, 2017 are net losses from interest rate derivative instruments of $0.4 million. Interest paid on interest rate swap arrangements amounted to $0.4 million for the year ended December 31, 2017, compared to $1.1 million for the year ended December 31, 2016 and net gains from change in fair value of the same arrangements was nil for the year ended December 31, 2017 compared to gains of $0.3 million for the year ended December 31, 2016.
INTEREST INCOME—Interest income was $0.3 million for the year ended December 31, 2017 compared to $0.5 million for the year ended December 31, 2016, a decrease of $0.2 million, related mostly to a lower amount of time deposits.
NET INCOME/(LOSS)—As a result of the above factors, we recorded a net loss of $1.2 million for the year ended December 31, 2017, compared to net loss of $7.8 million for the year ended December 31, 2016.
B. Liquidity and Capital Resources
As of December 31, 2018, we had cash and cash equivalents of $64.5 million, restricted cash of $3.0 million classified as current assets and restricted cash of $11.9 million classified asnon- current assets.
Our principal sources of funds for our liquidity needs are cash flows from operations and long-term bank borrowings. Additional sources of funds include proceeds from vessel sales and any equity offerings.
We had net proceeds from vessel sales of $29.7 million in 2018, $11.5 million in 2017 and $1.5 million in 2016. In the first quarter of 2019, we agreed to sell a 49.9% equity interest in four of our vessels, theGas Defiance, theGas Shuriken, theGas Haralambos and theEco Lucidity, to a leading maritime-focused investor for an aggregate consideration of $20.7 million. We last raised capital in 2014, through three registered common stock offerings with net proceeds of approximately $112.3 million. Our principal use of funds has been to acquire our vessels, maintain the quality of our vessels, service our debt and fund working capital requirements, as well as to repurchase shares of our common stock in 2014, 2015 and the first half of 2016.
Our liquidity needs, as of December 31, 2018 through the end of 2019, primarily relate to scheduled debt repayments, funding expenses for operating our vessels and general and administrative expenses, as well as any vessel acquisitions we elect to make either independently or in collaboration with a third party investor. Generally, our primary sources of funds, in the short term, have been cash from operating activities and, in the long term, bank borrowings and equity financings.
As of December 31, 2018, our aggregate debt outstanding net of deferred finance charges was $443.3 million, of which $71.8 million was classified as current liability. An amount of $30.1 million classified as current liability as of December 31, 2018 is debt associated with our four JV vessels, of which $16.3 million was repaid up to March 27, 2019 and the remaining amount will no longer be consolidated in our financial statements.
We believe our working capital is sufficient for our present short-term liquidity requirements. We believe our internally generated cash flows will be sufficient to fund our operations, including working capital requirements, for at least 12 months taking into account our existing capital commitments and debt service requirements.
For a description of our credit facilities please refer to the discussion under the heading “—Credit Facilities” below.
Our dividend policy or any resumption of stock repurchases will also affect our liquidity position. See “Item 8. Financial Information—Dividend Policy.”
Cash Flows
Net cash provided by operating activities—was $37.8 million for the year ended December 31, 2018, $52.4 million for the year ended December 31, 2017, and $36.2 million for the year ended December 31, 2016. This represents the net amount of cash, after expenses, generated by chartering our vessels. The reduction of our net cash provided by our operating activities in 2018 compared to the same period of last year was attributed mostly to the higher net losses incurred in 2018 driven primarily by the increased voyage expenses by $5.0 million and the increased finance costs by $6.6 million. Net cash provided by operating activities increased in 2017 compared to 2016, mainly due to the increase in revenue as a result of improved fleet utilization and a rise in freight rates.
Net cash used in investing activities—was $78.6 million for the year ended December 31, 2018, $48.9 million for the year ended December 31, 2017, and $54.1 million for the year ended December 31, 2016. During 2018, we acquired three 22,000 cbm new LPG semi-refrigerated vessels, theEco Ice, theEco Arctic and theEco Freeze, for which we paid a total of $108.3 million. During 2017, we acquired one LPG vessel,theEco Frost,for which we paid a total of $33.3 million, while we paid an amount of $27.3 million as advances related to the three remaining LPG newbuilding deliveries, two of which were delivered in January 2018 and one in April 2018.During 2016, we acquired two LPG vessels, theEco Nical and theEco Dominator, for which we paid a total of $33.0 million while we paid an amount of $23.2 million as advances related to the four remaining LPG newbuilding deliveries. With regards to the sale of vessels, during 2018, we agreed to sell seven vessels, all for further trading. Five of these vessels, theGas Enchanted, theGas Evoluzione, theGas Legacy, theGas Sikousis, and theGas Marathon were delivered to their new owners within 2018 with net sale proceeds of $29.1 million. In 2017, we sold four of our oldest vessels, theGas Moxie, theGas Nirvana, theGas Icon and theGas Emperor, all for further trading with net sale proceeds of $11.5 million. In 2016, we sold two of our oldest vessels, the Gas Arctic for demolition and theGas Ice for further trading, with net sale proceeds of $1.5 million.
Net cash (used in)/ provided by financing activities—net cash provided by financing activities was $57.3 million for the year ended December 31, 2018, consisting mainly of $115.7 million in proceeds from long-term debt, while $56.7 million in loan repayments of which $46.7 million were regular loan installments and $10.0 million were voluntary repayments of existing credit facilities of two of our vessels agreed to be sold. Net cash used in financing activities was $14.1 million for the year ended December 31, 2017, consisting mainly of $56.3 million of loan repayments and $43.0 million of debt proceeds. Net cash used in financing activities was $27.2 million for the year ended December 31, 2016, consisting mainly of $31.2 million in proceeds from long-term debt offset by $55.6 million in loan repayments.
As and when we identify assets that we believe will provide attractive returns, we generally enter into specific term loan facilities and borrow amounts under these facilities as the vessels are delivered to us. This is the primary driver of the timing and amount of cash provided to us by our financing activities, however, from time to time to bolster our cash position and take advantage of financing opportunities, including to refinance the acquisition cost of vessels acquired earlier, we have entered into and may in the future borrow under credit facilities secured by previously unencumbered vessels in our then-existing fleet.
Credit Facilities
We, and certain of our subsidiaries, have entered into a number of credit facilities in connection with financing the acquisition of certain vessels in our fleet. The following summarizes certain terms of our credit facilities under which we had aggregate outstanding indebtedness net of deferred finance charges of $443.3 million, as of December 31, 2018 which is reflected in our balance sheet as “Long-term debt” and “Current portion of long-term debt.” For a description of our credit facilities also see Note 11 to our consolidated financial statements included elsewhere in this report.
Credit Facility Issue Date | Outstanding Principal Amount (in millions) | Maturity | Installment Frequency | Installment Amount (in millions) | Balloon (in millions) | Mortgaged Vessels | ||||||||||||
February 12, 2008 | $ | 11.88 | Dec 2022 | Quarterly | $ | 0.59 | $ | 2.41 | Stealth Falcon (ex. Navig8 Faith) | |||||||||
July 30, 2008 | $ | 13.85 | Nov 2020 | Semi-Annual | $ | 0.97 | $ | 9.97 | Gas Defiance, Gas Shuriken | |||||||||
April 14, 2014 | $ | 11.70 | Apr 2024 | Quarterly | $ | 0.32 | $ | 4.60 | Gas Astrid, Gas Exelero |
Credit Facility Issue Date | Outstanding Principal Amount (in millions) | Maturity | Installment Frequency | Installment Amount (in millions) | Balloon (in millions) | Mortgaged Vessels | ||||||||||||
April 16, 2014 | $ | 16.30 | Apr 2020 | Quarterly | $ | 0.52 | $ | 13.18 | Gas Haralambos, Eco Lucidity | |||||||||
December 14, 2018 | $ | 14.09 | Dec 2023 | Quarterly | $ | 0.55 | $ | 3.09 | Stealth Berana, | |||||||||
$ | 9.48 | Dec 2023 | Quarterly | $ | 0.20 | $ | 5.48 | Eco Invictus | ||||||||||
March 27, 2018 | $ | 25.20 | Mar 2024 | Quarterly | $ | 0.83 | $ | 7.88 | Gas Elixir Gas Cerberus Gas Myth | |||||||||
March 1, 2011 | $ | 11.63 | Jan 2020 | Quarterly | $ | 0.38 | $ | 9.75 | Gas Husky | |||||||||
$ | 11.75 | Jun 2020 | Quarterly | $ | 0.38 | $ | 9.50 | Gas Esco | ||||||||||
September 23, 2013 | $ | 15.24 | Dec 2022 | Quarterly | $ | 0.74 | $ | 3.04 | Gas Ethereal, Gas Alice, Gas Inspiration, Gas Imperiale | |||||||||
March 24, 2014 | $ | 11.48 | Mar 2021 | Semi-Annual | $ | 0.63 | $ | 8.33 | Eco Stream | |||||||||
$ | 11.48 | Jun 2021 | Semi-Annual | $ | 0.63 | $ | 8.33 | Eco Chios | ||||||||||
$ | 12.67 | Jul 2022 | Semi-Annual | $ | 0.54 | $ | 8.33 | Eco Galaxy | ||||||||||
June 20, 2014 | $ | 7.53 | Jan 2023 | Quarterly | $ | 0.17 | $ | 4.64 | Eco Corsair | |||||||||
$ | 8.08 | Jan 2023 | Quarterly | $ | 0.19 | $ | 4.93 | Eco Elysium | ||||||||||
July 29, 2014 | $ | 9.24 | Jul 2023 | Quarterly | $ | 0.26 | $ | 4.23 | Eco Enigma | |||||||||
$ | 9.24 | Jul 2023 | Quarterly | $ | 0.26 | $ | 4.23 | Eco Universe | ||||||||||
July 4, 2014 | $ | 8.73 | Aug 2021 | Quarterly | $ | 0.20 | $ | 6.50 | Eco Czar | |||||||||
$ | 8.73 | Sep 2021 | Quarterly | $ | 0.20 | $ | 6.50 | Eco Nemesis | ||||||||||
December 20, 2013 | $ | 12.75 | Sep 2022 | Quarterly | $ | 0.25 | $ | 9.00 | Eco Dream | |||||||||
$ | 12.75 | Sep 2022 | Quarterly | $ | 0.25 | $ | 9.00 | Eco Green | ||||||||||
$ | 12.90 | Feb 2023 | Quarterly | $ | 0.25 | $ | 8.74 | Eco Nical | ||||||||||
$ | 13.15 | Jun 2023 | Quarterly | $ | 0.25 | $ | 8.74 | Eco Dominator | ||||||||||
December 24, 2015 | $ | 8.96 | Dec 2022 | Quarterly | $ | 0.19 | $ | 5.97 | Eco Royalty | |||||||||
$ | 8.96 | Dec 2022 | Quarterly | $ | 0.19 | $ | 5.97 | Eco Loyalty | ||||||||||
December 7, 2017 | $ | 9.20 | Dec 2022 | Quarterly | $ | 0.33 | $ | 4.00 | �� | Magic Wand | ||||||||
$ | 10.32 | Dec 2022 | Quarterly | $ | 0.36 | $ | 4.50 | Stealth Bahla | ||||||||||
May 18, 2016 | $ | 29.45 | May 2025 | Quarterly | $ | 0.51 | $ | 16.25 | Eco Frost | |||||||||
$ | 31.60 | Dec 2025 | Quarterly | $ | 0.52 | $ | 16.57 | Eco Ice | ||||||||||
March 1, 2017 | $ | 33.62 | Jan 2026 | Quarterly | $ | 0.63 | $ | 15.23 | Eco Arctic | |||||||||
$ | 34.00 | Apr 2026 | Quarterly | $ | 0.63 | $ | 15.11 | Eco Freeze |
The interest rates on the outstanding loans as of December 31, 2018 are based on LIBOR plus a margin which varies from 0.80% to 3.00%. The average interest rates (including the margin) on the above outstanding loans were 5.34% for the year ended December 31, 2018 and 3.97% for the year ended December 31, 2017. As
of December 31, 2018, $111.5 million of our outstanding loans were covered by interest rate swap agreements paying fixed rates ranging from 1.52% to 2.89% and received floating rates based on LIBOR.
As of April 1, 2019, sixof our vessels, theGas Prodigy, theGas Flawless,the Gas Monarch,the Gas Pasha, the Gas Spirit, and theGas Nemesis II, were unencumbered. We had no undrawn borrowing capacity under our existing credit facilities.
Financial Covenants
Our credit facilities contain financial covenants requiring us to:
ensure that our leverage, which is defined as total debt net of cash/total market adjusted assets, does not at any time exceed 80%;
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 a range from 125% to 130% depending on our different loan agreements;
ensure that our ratio of EBITDA (as defined in the loan agreements) to interest expense over the preceding twelve months is at all times more than 2.5 times; and
to maintain on a monthly basis a cash balance amounting to $3,002,490 representing a proportionate amount of the next installment and relevant interest plus a minimum aggregate cash balance amounting to $11,930,059 in the earnings account with the relevant banks.
We are also required to maintain at the end of each quarter a free cash balance of $10,000,000.
Our current loan agreements also require that our Chief Executive Officer, Harry Vafias, together with his immediate family, at all times own at least 10% of our outstanding capital stock and certain of our loan agreements provide that it would be an event of default if Harry Vafias ceased to serve as an executive officer or director of our company, Harry Vafias, together with his immediate family, ceased to control our company or any other person or group controlled 25% or more of the voting power of our outstanding capital stock. In addition, our loan agreements include restrictions on the payment of dividends in amounts exceeding 50% of our free cash flow in any rolling12-month period.
Our existing credit facility agreements contain customary events of default with respect to us and our applicable subsidiaries, including upon thenon-payment of amounts due under the credit facility; breach of covenants; matters affecting the collateral under such facility; insolvency proceedings and the occurrence of any event that, in light of which, the lender considers that there is a significant risk that the borrowers are, or will later become, unable to discharge their liabilities as they fall due.
Our credit facilities provide that upon the occurrence of an event of default, the lenders may require that all amounts outstanding under the credit facility be repaid immediately and terminate our ability to borrow under the credit facility and foreclose on the mortgages over the vessels and the related collateral. Our credit facilities also contain cross-default clauses.
C. Research and Development, Patents and Licenses
None.
D. Trend Information
Our results of operations depend primarily on the charter hire rates that we are able to realize. In turn, charter rates are determined by the underlying balance in demand and supply for our vessels. Demand for LPG
transportation is influenced by various global economic factors and trade patterns, while the supply is primarily a factor of the fleet growth, determined by the number of vessels in the order book entering the fleet and the number of vessels exiting the fleet, primarily sold for demolition. As a result, the LPG shipping sector has been a highly cyclical industry experiencing volatility in charter hire rates and vessel values.
After a difficult period following the global financial crisis we saw some improvement from the fourth quarter of 2011 to the third quarter of 2014, charter rates subsequently declined sharply, due largely to the dramatic decline in oil prices, and despite some reasonable improvement between the second half of 2017 and until the first quarter of 2019 the charter rates remain well below levels reached in 2007 and 2008. Although prospects for the small LPG segment currently appear favorable as the orderbook for 2019 and the next couple of years is negligible, future growth in the demand for LPG carriers and charter rates will depend on economic growth in the world economy and demand for LPG. Global financial conditions remain volatile and demand for LPG transportation may decrease in the future. We believe that the future growth in demand for LPG carriers and the charter rate levels will depend primarily upon the supply and demand for LPG particularly supply in the United States and the economies of the Middle East where large quantities are produced, and demand in the Far East and developing countries like Asia and Africa and in general upon seasonal and regional changes in supply/demand and changes to the capacity of the world fleet.
As a result of the volatility and rate declines witnessed in the overall shipping markets during the past few years and the global financial conditions, credit to finance vessel acquisitions has become scarcer. Companies in the shipping sector generally depend on credit facilities, to partially finance their acquisitions.
E. Off Balance Sheet Arrangements
We do not have anyoff-balance sheet arrangements.
F. Contractual Obligations
Contractual obligations as of December 31, 2018 were:
Payments due by period (in thousands) | ||||||||||||||||||||
Total | Less than 1 year (2019) | 1-3 years (2020-2021) | 3-5 years (2022-2023) | More than 5 years (After January 1, 2024) | ||||||||||||||||
Long-term debt obligations | $ | 445,971 | $ | 72,584 | $ | 126,461 | $ | 150,110 | $ | 96,816 | ||||||||||
Interest on principal amounts outstanding(1) | $ | 77,869 | $ | 20,295 | $ | 32,221 | $ | 18,210 | $ | 7,143 | ||||||||||
Interest on interest rate swap arrangements outstanding(1) | $ | (85 | ) | $ | (242 | ) | $ | (218 | ) | $ | 241 | $ | 134 | |||||||
Management fees(2) | $ | 8,578 | $ | 5,719 | $ | 2,859 | $ | — | $ | — | ||||||||||
Operating lease obligations | $ | 6,654 | $ | 6,264 | $ | 390 | $ | $ | ||||||||||||
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Total | $ | 538,987 | $ | 104,620 | $ | 161,713 | $ | 168,561 | $ | 104,093 | ||||||||||
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Critical Accounting Policies
with an annual 1% revenue increase for both categories.
We also assumed an average annual inflation rate of 1.5% for operating expenses using as a base rate:
the actual operating expenses as per vessel for each respective period for the vessels of less than twenty years of age, and
the average operating expenses of the last five years for the vessels of twenty years of age and above.
Utilization rate was assumed to be:
As of June 30, 2017, the Company identified and recorded an impairment loss of $897,965 relating to one of the oldest vessels of the fleet,Gas Monarch, and as of September 30, 2017, the Company identified and recorded an impairment loss of $1,258,037, relating to two of the oldest vessels of the fleet,Gas Pasha andGas Evoluzione. In addition, during the first nine months of 2017, the Company identified and recorded an impairment loss of $4,305,271 for four of its oldest vessels, theGas Moxie, theGas Nirvana, theGas Icon and theGas Emperor which were sold during the year 2017, for further trading. For the three months ended December 31, 2017, no impairment loss was identified and recorded for the Company’s vessels that are held for use. Furthermore, as of December 31, 2017, the fair market value of each vessel of 20 years of age and above exceeded its carrying value. For 2016 we had six of our oldest vessels of the fleet impaired, theGas Moxie, theGas Emperor, the Gas Marathon, theGas Texiana, theGas Nirvana and theGas Galaxy, as in each case the undiscounted net operating cash flows of each of these vessels did not exceed the respective vessel’s carrying value. The total impairment loss identified and recorded by the Company was $11,351,821 as of December 31, 2018, $6,461,273 during the year ended December 31, 2017 and $5,735,086 as of December 31, 2016.
Percentage difference between our average 2018 rates as compared with the base rates for the vessels | 5-year historical average rate | 3-year historical average rate | 1-year historical average rate | |||||||||||||||||||||||||||||
of less than twenty years of age | of twenty years of age and above | No. of vessels | Amount ($ million) | No. of vessels | Amount ($ million) | No. of vessels | Amount ($ million) | |||||||||||||||||||||||||
LPG Carriers | -1.70 | % | 16.93 | % | — | — | — | — | — | — | ||||||||||||||||||||||
Product Carriers | -30.46 | % | — | — | — | 3 | 38.6 | 3 | 38.6 | |||||||||||||||||||||||
Aframax Tanker | -18.52 | % | — | — | — | — | — | — | — |
Percentage difference between our average 2020 rates as compared with the base rates for the vessels | 5-year historicalaverage rate | 3-year historicalaverage rate | 1-year historicalaverage rate | |||||||||||||||||||||||||||||
of less than twenty years of age | of twenty years of age and above | No. of vessels | Amount ($ million) | No. of vessels | Amount ($ million) | No. of vessels | Amount ($ million) | |||||||||||||||||||||||||
LPG Carriers | 1.55 | % | 5.52 | % | 1 | 0.7 | 1 | 0.7 | 2 | 2.8 | ||||||||||||||||||||||
Product Carriers | -20.45 | % | — | 3 | 34.6 | 3 | 34.6 | 3 | 34.6 | |||||||||||||||||||||||
Aframax Tanker | 0.33 | % | — | — | — | — | — | — | — |
However, we believe that with respect to each of these 25 vessels except for the
annual depreciation charge and extending it into later periods. A decrease in the useful life of the vessel or in the residual value would have the effect of increasing the annual depreciation charge. No events or circumstances occurred in 20182020 that would require us to revise estimates related to depreciation and such revisions are not expected to occur in the future.
Credit Facility Issue Date | Outstanding Principal Amount (in millions) | Maturity | Installment Frequency | Installment Amount (in millions) | Balloon (in millions) | Mortgaged Vessels | ||||||||||||||||
May 28, 2019 | $ | 9.08 | Apr 2024 | Quarterly | $ | 0.32 | $ | 4.60 | Gas Astrid, Gas Exelero | |||||||||||||
December 14, 2018 | $ | 9.69 | Dec 2023 | Quarterly | $ | 0.55 | $ | 3.09 | Stealth Berana, | |||||||||||||
$ | 7.90 | Dec 2023 | Quarterly | $ | 0.20 | $ | 5.48 | Eco Invictus | ||||||||||||||
August 6, 2019 | $ | 18.60 | Mar 2024 | Quarterly | $ | 0.83 | $ | 7.88 | Gas Elixir Gas Cerberus Gas Myth | |||||||||||||
July 5, 2019 | $ | 18.26 | July 2026 | Quarterly | $ | 0.79 | $ | 0.0 | Gas Husky Gas Esco | |||||||||||||
March 29, 2019 | $ | 13.70 | Dec 2022 | Quarterly | $ | 1.13 | $ | 4.63 | Gas Alice, Gas Inspiration, Gas Imperiale | |||||||||||||
Clean Thrasher | ||||||||||||||||||||||
August 7, 2019 | $ | 7.96 | Mar 2021 | Semi-Annual | $ | 0.63 | $ | 7.33 | Eco Stream | |||||||||||||
$ | 7.96 | Jun 2021 | Semi-Annual | $ | 0.63 | $ | 7.33 | Eco Chios | ||||||||||||||
$ | 9.50 | Jul 2022 | Semi-Annual | $ | 0.54 | $ | 7.33 | Eco Galaxy | ||||||||||||||
June 20, 2014 | $ | 6.17 | Jan 2023 | Quarterly | $ | 0.17 | $ | 4.64 | Eco Corsair | |||||||||||||
$ | 6.60 | Jan 2023 | Quarterly | $ | 0.19 | $ | 4.93 | Eco Elysium | ||||||||||||||
July 29, 2014 | $ | 7.13 | Jul 2023 | Quarterly | $ | 0.26 | $ | 4.23 | Eco Enigma | |||||||||||||
$ | 7.13 | Jul 2023 | Quarterly | $ | 0.26 | $ | 4.23 | Eco Universe | ||||||||||||||
July 4, 2014 | $ | 7.11 | Aug 2021 | Quarterly | $ | 0.20 | $ | 6.50 | Eco Czar | |||||||||||||
$ | 7.11 | Sep 2021 | Quarterly | $ | 0.20 | $ | 6.50 | Eco Nemesis | ||||||||||||||
August 6, 2019 | $ | 10.75 | Sep 2022 | Quarterly | $ | 0.25 | $ | 9.00 | Eco Dream | |||||||||||||
$ | 10.75 | Sep 2022 | Quarterly | $ | 0.25 | $ | 9.00 | Eco Green | ||||||||||||||
$ | 10.95 | Feb 2023 | Quarterly | $ | 0.25 | $ | 8.74 | Eco Nical | ||||||||||||||
$ | 11.19 | Jun 2023 | Quarterly | $ | 0.25 | $ | 8.74 | Eco Dominator | ||||||||||||||
December 24, 2015 | $ | 7.47 | Dec 2022 | Quarterly | $ | 0.19 | $ | 5.97 | Eco Royalty | |||||||||||||
$ | 7.47 | Dec 2022 | Quarterly | $ | 0.19 | $ | 5.97 | Eco Loyalty | ||||||||||||||
December 7, 2017 | $ | 6.60 | Dec 2022 | Quarterly | $ | 0.33 | $ | 4.00 | Magic Wand | |||||||||||||
$ | 7.41 | Dec 2022 | Quarterly | $ | 0.36 | $ | 4.50 | Stealth Bahla | ||||||||||||||
May 18, 2016 | $ | 25.39 | May 2025 | Quarterly | $ | 0.51 | $ | 16.25 | Eco Frost | |||||||||||||
$ | 27.45 | Dec 2025 | Quarterly | $ | 0.52 | $ | 16.57 | Eco Ice | ||||||||||||||
March 1, 2017 | $ | 28.55 | Jan 2026 | Quarterly | $ | 0.63 | $ | 15.23 | Eco Arctic | |||||||||||||
$ | 28.97 | Apr 2026 | Quarterly | $ | 0.63 | $ | 15.11 | Eco Freeze | ||||||||||||||
June 19, 2020 | $ | 11.12 | June 2026 | Quarterly | $ | 0.19 | $ | 6.90 | Eco Texiana | |||||||||||||
April 30, 2020 | $ | 15.60 | Nov 2026 | Quarterly | $ | 0.22 | $ | 10.62 | Eco Alice |
Payments due by period (in thousands) | ||||||||||||||||||||
Total | Less than 1 year (2021) | 1-3 years(2022-2023) | 3-5 years(2024-2025) | More than 5 years (After January 1, 2026) | ||||||||||||||||
Long-term debt obligations | $ | 353,529 | $ | 41,162 | $ | 138,165 | $ | 88,244 | $ | 85,958 | ||||||||||
Interest on principal amounts outstanding(1) | $ | 35,437 | $ | 8,229 | $ | 14,026 | $ | 10,513 | $ | 2,669 | ||||||||||
Interest on interest rate swap arrangements outstanding(1) | $ | 4,499 | $ | 1,703 | $ | 2,164 | $ | 632 | — | |||||||||||
Management fees(2) | $ | 8,882 | $ | 5,921 | $ | 2,961 | — | — | ||||||||||||
Vessel purchase commitments | $ | 23,152 | $ | 23,152 | — | — | — | |||||||||||||
Executive fees | $ | 586 | $ | 586 | — | — | — | |||||||||||||
Total | $ | 426,085 | $ | 80,753 | $ | 157,316 | $ | 99,389 | $ | 88,627 | ||||||||||
(1) | Based on assumed 3M LIBOR rates of 0.199% for 2021, 0.341% for 2022, 0.865% for 2023, 1.482% for 2024, and 1.949% for 2025 and 2.214% thereafter and the effect of our interest rate swap arrangements. |
(2) | Based on our management agreement with Stealth Maritime, we pay $125 per vessel per day for vessels on bareboat charter and $440 per vessel per day for vessels not on bareboat charter for our existing fleet (apart from four vessels for which some services are currently provided by third party managers, where a fixed daily fee of $280 is charged by Stealth Maritime). We also pay 1.25% of the gross freight, demurrage and charter hire collected from employment of our ships and 1% of the contract price of any vessels bought or sold on our behalf. The initial term of our management agreement with Stealth Maritime expired in June 2010, but is extended on a year-to-year |
Item 6. | Directors, Senior Management and Employees |
Name | Age | Positions | Year Became Director | Year Director’s Current Term Expires | ||||||||||
Harry N. Vafias | 41 | Chief Executive, President, Chief Financial Officer and Class III Director | 2004 | 2021 | ||||||||||
Michael G. Jolliffe | 69 | Chairman of the Board, Class II Director | 2004 | 2019 | ||||||||||
Lambros Babilis | 51 | Deputy Chairman and Class I Director | 2007 | 2020 | ||||||||||
Markos Drakos | 59 | Class III Director | 2006 | 2021 | ||||||||||
John Kostoyannis | 53 | Class II Director | 2010 | 2019 |
Name | Age | Positions | Year Became Director | Year Director’s Current Term Expires | ||||||||||
Harry N. Vafias | 43 | Chief Executive, President, Chief Financial Officer and Class III Director | 2004 | 2021 | ||||||||||
Michael G. Jolliffe | 71 | Chairman of the Board, Class II Director | 2004 | 2022 | ||||||||||
Markos Drakos | 61 | Class I Director | 2006 | 2023 | ||||||||||
John Kostoyannis | 55 | Class II Director | 2010 | 2022 |
Lambros Babilishas been Deputy Chairman of our Board of Directors and an Executive Director since 2007. Mr. Babilis was the Technical Manager of Stealth Maritime Corporation from 2006 until 2011 when he
became the Chief Operating Officer, and has worked for the Stealth Maritime Corporation since 2000. From 1997 until 2000, Mr. Babilis worked in the Technical Department of Multi Trading Ship Management, a company specializing in chemical tankers. From 1993 until 1997, Mr. Babilis worked in a consulting or research capacity for various EEC Shipping related projects and worked as a consultant to shipping companies and as a representative of the Technical Chamber of Greece to the Joint Committee of Health and Safety of Ship Repair (Perama Zone). In addition, from 1996 until 1997, Mr. Babilis was involved in the construction of the Landing Ships at Eleusis Shipyards (Detachment of Hellenic Navy). From 1992 until 1993, Mr. Babilis worked for an international consortium, including PricewaterhouseCoopers and Port and Transport Consulting of Bremen, for the design of the Port Management Information System of Piraeus Port Authority. Mr. Babilis started his career in the Operations Department of Trade and Transport Inc. Mr. Babilis has been involved in the research center of Athens University of Economics and Business and in the Ocean Transportation Economics department at the National Technical University of Athens. From 1994 until 1996, Mr. Babilis was the General Secretary of the Hellenic Association of Naval Architects. Mr. Babilis graduated from the National Technical University of Athens, department of Naval Architecture and Marine Engineering, in 1990, and received an honorary scholarship from the Hellenic Scholarship foundation.
respectively.
during the years ended December 31, 20172019 and 2016.2020. We recognized share-based compensation expense of $0.3 million, $0.1$0.6 million and $0.3 millionnil in 2016, 20172018, 2019 and 2018,2020, respectively. As of December 31, 2018, there was an additional $0.6 million of share-based compensation expense relating to the awards granted in August 2018 which we expect to recognize ratably over the remaining vesting period to August 2019.
2020.
paid at the time of the change in control will be assumed by, or replaced with awards that have comparable terms by, the surviving corporation (or a parent or subsidiary of the surviving corporation). Unless the award agreement provides otherwise, if a participant’s employment is terminated by us without cause, or the participant terminates
Item 7. | Major Shareholders and Related Party Transactions |
Shares Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percentage | ||||||
Principal Stockholders | ||||||||
Glendon Capital Management L.P.(1) | 6,403,167 | 16.0% | ||||||
Flawless Management Inc.(2) | 6,223,176 | 15.5% | ||||||
MSDC Management, L.P.(3) | 3,708,819 | 9.2% | ||||||
Redwood Capital Management, LLC(4) | 2,415,287 | 6.0% | ||||||
Executive Officers and Directors | ||||||||
Harry N. Vafias(2) | 6,891,966 | 17.2% | ||||||
Michael G. Jolliffe | * | * | ||||||
Lambros Babilis | * | * | ||||||
Markos Drakos | * | * | ||||||
John Kostoyannis | * | * | ||||||
All executive officers and directors as a group (5 persons) | 6,991,752 | 17.4% |
Shares of Common Stock Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percentage | ||||||
Principal Stockholders | ||||||||
Flawless Management Inc.(1) | 7,105,453 | 18.8 | % | |||||
Glendon Capital Management L.P.(2) | 6,498,794 | 17.2 | % | |||||
MSDC Management, L.P.(3) | 3,516,652 | 9.3 | % | |||||
Russell Investments Group, Ltd.(4) | 2,780,001 | 7.3 | % | |||||
Redwood Capital Management, LLC(5) | 2,404,887 | 6.4 | % | |||||
Renaissance Technologies LLC(6) | 2,300,800 | 6.1 | % | |||||
Executive Officers and Directors | ||||||||
Harry N. Vafias(1) | 7,774,243 | 20.5 | % | |||||
Michael G. Jolliffe | 32,430 | * | ||||||
Markos Drakos | 18,214 | * | ||||||
John Kostoyannis | 7,296 | * | ||||||
All executive officers and directors as a group (four persons) | 7,832,183 | 20.7 | % |
* | Less than 1%. |
(1) | The shares beneficially owned by Harry N. Vafias consist of, according to Amendment No. 1 to Schedule 13D jointly filed with the SEC on March 27, 2020 by Flawless Management Inc. and Harry N. Vafias, 7,774,243 shares of common stock beneficially owned by Harry N. Vafias, of which 7,105,453 shares of common stock are owned by Flawless Management Inc. and Harry N. Vafias and 668,790 shares beneficially owned by Harry N. Vafias. Harry N. Vafias has sole voting power and sole dispositive power with respect to all such shares. |
(2) | Based on filings made by Glendon Capital Management L.P. with the SEC. According to these filings, these shares are directly owned by Glendon Opportunities Fund, L.P. (the “Fund”), Altair Global Credit Opportunities Fund LLC (the “Sub-Advised Fund”) and a separately managed account. According to these filings, (i) the Fund is beneficial owner of over 10% of the issuer’s securities on an individual basis, (ii) theSub-Advised Fund and the separately managed account do not own 10% of the issuer’s securities on an individual basis and (iii) Glendon Capital Management LP is the investment manager to the Fund and the separately managed account and the investmentsub-adviser to theSub-Advised Fund, and may be deemed to beneficially own these securities under the Securities Exchange Act of 1934. |
|
(3) | According to Amendment No. |
(4) | According to a Schedule 13G filed by Russell Investments Group, Ltd. on February 12, 2020. |
(5) | According to Amendment No. |
(6) | According to Amendment No. 1 to a Schedule 13G jointly filed by and on behalf of Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation on February 11, 2021. |
On November 26, 2014, we publicly announced that our Board of Directors had authorized the repurchase of up to $10,000,000 of shares of our common stock and on February 26, 2015 we publicly announced that our Board of Directors had approved an additional $20,000,000 of common stock repurchases. As of April 1, 2019, 3,872,232 shares of common stock had been repurchased with no repurchase since April 2016 (843,022 in 2014, 2,372,097 in 2015, 657,113 in 2016 and nil in 2017, 2018 and 2019), for an aggregate of $20.3 million. Repurchases have been suspended under the program.
In the year ended December 31, 2018,2020, we paid Stealth Maritime a fixed management fee of $440 per vessel operating under a voyage or time charter per day,
We also reimburse Stealth Maritime for its payment for executive services related to our Chief Executive Officer, Deputy Chairman and Executive Director (until August 31, 2019), Chief Financial Officer, Internal Auditor and Chief Technical Officer. During the years ended December 31, 2016, 20172018, 2019 and 2018,2020, such compensation was in the aggregate amount of $1.1$1.2 million, $1.1 million and $1.2$1.0 million, respectively.
The initial term of our management agreement with Stealth Maritime expired in June 2010 but is extended on a
On May 26, 2014, The current account balance with the manager at December 31, 2019 and at December 31, 2020 was a liability of $2.1 million and $3.7 million, respectively. The liability represents payments made by Stealth Maritime on behalf of the ship-owning companies. Furthermore, the current account balance with entities that we entered into anown 50.1% equity interests, pursuant to a joint venture agreement with Brave Maritime fora financial investor, amounted to a liability of $5.0 million and $1.0 million, as of December 2019 and 2020 respectively, represents revenues collected by us on behalf of these entities. For the supervisionentities under our second joint venture arrangement in which we own 51% equity interest the current account balance as of the construction of eight of our newbuilding vessels for a fixed fee of Euro 390,000 per vessel. December 31, 2020 was nil.
refusal does not prohibit Stealth Maritime or an entity controlled by Mr. Vafias from managing vessels owned by unaffiliated third parties in competition with us, nor does it cover product carriers or crude oil tankers.
3, 2021.
In April 2012,Acquisition
2020 amounted to $46.9 million.
Item 8. | Financial Information |
Item 9. | The Offer and Listing |
Item 10. | Additional Information |
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.
to which we are a party.
bareboat and time or voyage charters. Under the rules described in the preceding paragraph, our wholly-owned vessel-owning subsidiaries that are directly or indirectly wholly-owned by us throughout a taxable year will be entitled to the benefits of Section 883 for such taxable year if we satisfy the 50% Ownership Test or the Publicly-Traded Test for such year. Due to the widely-held ownership of our stock, it may be difficult for us to satisfy the 50% Ownership Test. Our ability to satisfy the Publicly-Traded Test is discussed below.
Our shares of common stock have in the past and may in the future also be, owned, actually or under applicable attribution rules, such that 5% Stockholders own, in the aggregate, 50% or more of our common stock. In such circumstances, we will be subject to the 5% Override Rule unless we can establish that among the shares included in the closely-held block of our shares of common stock are a sufficient number of shares of common stock that are owned or treated as owned by “qualified share-holders” that the shares of common stock included in such block that are not so treated could not constitute 50% or more of the shares of our common stock for more than half the number of days during the taxable year. In order to establish this, such qualified share-holders would have to comply with certain documentation and certification requirements designed to substantiate their identity as qualified share-holders. For these purposes, a “qualified share-holder” includes (i) an individual that owns or is treated as owning shares of our common stock and is a resident of a jurisdiction that provides an
exemption that is equivalent to that provided by Section 883 of the Code and (ii) certain other persons. There can be no assurance that we will not be subject to the 5% Override Rule.
Dividends paid with respect to our common stock will generally be treated as passive category income or, in the case of certain types of United States Holders, general category income for purposes of computing allowable foreign tax credits for United States foreign tax credit purposes.
constitute “passive income” unless we are treated under specific rules as deriving our rental income in the active conduct of a trade or business.
with respect to our common stock, as discussed below. Regardless of whether a United States Holder makes a QEF election or a2018,2020, the United States Holder generally would be required to file an IRS Form 8621 reporting his ownership of shares in a PFIC.
average annual distributions received by the
return, such amended return must be filed not later than the date that is three years after the due date of the original return for such taxable year. Special rules apply where a person is treated, for purposes of the PFIC rules, as indirectly owning our common stock.
If a holder sells our common stock to or through a United States office or broker, the payment of the proceeds is subject to both United States backup withholding and information reporting unless the holder certifies that it is a
Item 11. | Quantitative and Qualitative Disclosures About Market Risk |
For the remainder of the fleet operating in the spot market we do not intend to enter into bunker hedging arrangements.
manage our exposure to changes in interest rates due to this floating rate indebtedness, we enter into interest rate swap agreements. Set forth below is a table of our interest rate swap arrangements converting floating interest rate exposure into fixed as of December 31, 20182020 and 2019.
Effective | Termination | Notional Amount on Effective Date (in millions) | Fixed Rate (StealthGas pays) | Floating Rate | Fair Value December 31, 2018 (in millions) | Notional Amount December 31, 2018 (in millions) | Estimated Notional Amount December 31, 2019 (in millions) | |||||||||||||||||||
Swap 1 | September 30, 2015 | September 30, 2020 | $ | 17.6 | 2.60 | % | 3 month U.S. dollar LIBOR | $ | (0.01 | ) | $ | 9.34 | $ | 6.82 | ||||||||||||
Swap 2 | September 30, 2015 | September 30, 2020 | $ | 17.6 | 1.69 | % | 3 month U.S. dollar LIBOR | $ | (0.13 | ) | $ | 9.34 | $ | 6.82 | ||||||||||||
Swap 3 | October 2, 2015 | October 2, 2020 | $ | 12.1 | 1.54 | % | 3 month U.S. dollar LIBOR | $ | (0.19 | ) | $ | 9.48 | $ | 8.60 | ||||||||||||
Swap 4 | November 4, 2015 | August 4, 2021 | $ | 11.2 | 1.52 | % | 3 month U.S. dollar LIBOR | $ | (0.22 | ) | $ | 8.73 | $ | 7.92 | ||||||||||||
Swap 5 | December 3, 2015 | September 3, 2021 | $ | 11.2 | 1.55 | % | 3 month U.S. dollar LIBOR | $ | (0.22 | ) | $ | 8.73 | $ | 7.92 | ||||||||||||
Swap 6 | August 16, 2017 | May 16, 2025 | $ | 16.0 | 2.12 | % | 3 month U.S. dollar LIBOR | $ | (0.31 | ) | $ | 14.73 | $ | 13.71 | ||||||||||||
Swap 7 | March 12, 2018 | December 11, 2022 | $ | 21.6 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | 0.09 | $ | 19.52 | $ | 16.77 | |||||||||||||
Swap 8 | April 10, 2018 | December 11, 2025 | $ | 32.6 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | 0.20 | $ | 31.60 | $ | 29.52 | |||||||||||||
Swap 9 | February 16, 2019 | February 16, 2024 | $ | 14.5 | 2.89 | % | 3 month U.S. dollar LIBOR | $ | 0.18 | $ | — | $ | 13.71 | |||||||||||||
Total | $ | (0.61 | ) | $ | 111.47 | $ | 111.79 |
2021. The swap valuations in the table presented below are presented from the Company’s perspective.
Effective Date | Termination Date | Notional Amount on Effective Date (in millions) | Fixed Rate (StealthGas pays) | Floating Rate (StealthGas Receives) | Fair Value December 31, 2020 (in millions) | Notional Amount December 31, 2020 (in millions) | Estimated Notional Amount December 31, 2021 (in millions) | |||||||||||||||||||
Swap 1 | November 4, 2015 | August 4, 2021 | $ | 11.2 | 1.52 | % | 3 month U.S. dollar LIBOR | $ | (0.07 | ) | $ | 7.11 | $ | — | ||||||||||||
Swap 2 | December 3, 2015 | September 3, 2021 | $ | 11.2 | 1.55 | % | 3 month U.S. dollar LIBOR | $ | (0.07 | ) | $ | 7.11 | $ | — | ||||||||||||
Swap 3 | August 16, 2017 | May 16, 2025 | $ | 16.0 | 2.12 | % | 3 month U.S. dollar LIBOR | $ | (0.86 | ) | $ | 12.70 | $ | 11.68 | ||||||||||||
Swap 4 | March 12, 2018 | December 11, 2022 | $ | 21.6 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (0.60 | ) | $ | 14.01 | $ | 11.26 | ||||||||||||
Swap 5 | April 10, 2018 | December 11, 2025 | $ | 32.6 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (2.68 | ) | $ | 27.45 | $ | 25.38 | ||||||||||||
Swap 6 | February 16, 2019 | February 16, 2024 | $ | 14.5 | 2.89 | % | 3 month U.S. dollar LIBOR | $ | (0.96 | ) | $ | 12.70 | $ | 11.68 | ||||||||||||
Total | $ | (5.24 | ) | $ | 81.08 | $ | 60.00 |
2020.
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 |
2020.
Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
Item 16C. | Principal Accountant Fees and Services |
2018 | 2017 | |||||||
Audit fees | $ | 455 | $ | 419 | ||||
Assurance/audit related fees | — | — | ||||||
Tax fees | — | — | ||||||
All other fees | — | — | ||||||
Total | $ | 455 | $ | 419 |
2020 | 2019 | |||||||
Audit fees | $ | 381 | $ | 359 | ||||
Assurance/audit related fees | — | — | ||||||
Tax fees | — | — | ||||||
All other fees | — | — | ||||||
Total | $ | 381 | $ | 359 |
2019.
2019.
2019.
Item 16D. | Exemptions from the Listing Standards for Audit Committees |
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Period | Total Number of Shares Purchased (a) | Average Price Paid Per Share (b) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c) | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (d) | ||||||||||||
May 24 to 31, 2019 | 18,442 | $ | 3.38 | 18,442 | $ | 9,937,575 | ||||||||||
June 04 to 28, 2019 | 58,789 | 3.35 | 77,231 | 9,740,500 | ||||||||||||
July 2 to 30, 2019 | 54,883 | 3.74 | 132,114 | 9,535,495 | ||||||||||||
August 1 to 30, 2019 | 81,534 | 3.44 | 213,648 | 9,254,962 | ||||||||||||
September 03 to 30, 2019 | 96,946 | 3.11 | 310,594 | 8,953,145 | ||||||||||||
October 01 to 31, 2019 | 89,392 | 3.30 | 399,986 | 8,657,759 | ||||||||||||
November 01 to 29, 2019 | 25,380 | 3.40 | 425,366 | 8,571,457 | ||||||||||||
December 02 to 31, 2019 | 115,544 | 3.54 | 540,910 | 8,162,383 | ||||||||||||
January 02 to 31, 2020 | 190,879 | 3.30 | 731,789 | 7,533,071 | ||||||||||||
February 21 to 28, 2020 | 33,890 | 2.84 | 765,679 | 7,436,666 | ||||||||||||
March 02 to 27, 2020 | 135,023 | 2.12 | 900,702 | 7,150,148 |
Item 16F. | Change in Registrant’s Certifying Accountant |
Item 16G. | Corporate Governance |
Item 17. | Financial Statements |
Not Applicable.
Item 18. | Financial Statements |
Item 19. | Exhibits |
(1) | Previously filed as Exhibit 3.1 to the Company’s Registration Statement on Form F-1 (FileNo. 333-127905) filed with the SEC and hereby incorporated by reference to such Registration Statement. |
(2) | Previously filed as Exhibit 99.1 to a Report on Form 6-K filed with the SEC on December 24, 2014. |
(3) | Previously filed as Exhibit 4.1 to the Company’s Annual Report on Form 20-F for the year ended December 31, 2006 filed with the SEC on June 5, 2007. |
(4) | Previously filed as Exhibit 10.2 to the Company’s Registration Statement on Form F-1 (FileNo. 333-127905) filed with the SEC and hereby incorporated by reference to such Registration Statement. |
(5) | Previously filed as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (FileNo. 333-207168) filed with the SEC on September 28, 2015. |
STEALTHGAS INC. | ||
By: | /s/ Harry N. Vafias | |
Name: | Harry N. Vafias | |
Title: | President and Chief Executive Officer |
Pages | ||||
F-2 | ||||
F-5 | ||||
F-6 | ||||
April24, 2019
As of December 31, 2017 and 2018 (Expressed
December 31, | ||||||||||||
Note | 2017 | 2018 | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 51,754,131 | 64,498,442 | ||||||||||
Trade and other receivables | 3,853,992 | 2,888,496 | ||||||||||
Other current assets | — | 134,301 | ||||||||||
Claims receivable | 15,951 | — | ||||||||||
Inventories | 4 | 2,762,299 | 2,346,723 | |||||||||
Advances and prepayments | 1,221,029 | 1,089,539 | ||||||||||
Restricted cash | 3,231,323 | 3,002,490 | ||||||||||
Assets held for sale | 6 | — | 64,906,448 | |||||||||
|
|
|
| |||||||||
Total current assets | 62,838,725 | 138,866,439 | ||||||||||
|
|
|
| |||||||||
Non current assets | ||||||||||||
Advances for vessels under construction and acquisitions | 5 | 61,577,818 | — | |||||||||
Vessels, net | 6 | 862,061,906 | 884,748,691 | |||||||||
Other receivables | 243,075 | 108,930 | ||||||||||
Restricted cash | 7,917,738 | 11,930,059 | ||||||||||
Deferred finance charges | 7 | 941,760 | — | |||||||||
Fair value of derivatives | 12 | 645,169 | 1,068,369 | |||||||||
|
|
|
| |||||||||
Total non current assets | 933,387,466 | 897,856,049 | ||||||||||
|
|
|
| |||||||||
Total assets | 996,226,191 | 1,036,722,488 | ||||||||||
|
|
|
| |||||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Current liabilities | ||||||||||||
Payable to related party | 3 | 14,209,624 | 7,930,642 | |||||||||
Trade accounts payable | 10,509,465 | 10,349,358 | ||||||||||
Accrued liabilities | 8 | 5,880,479 | 6,879,488 | |||||||||
Customer deposits | 10 | 1,820,700 | 1,336,000 | |||||||||
Deferred income | 9 | 4,362,056 | 5,191,654 | |||||||||
Current portion of long-term debt | 11 | 41,966,607 | 41,726,837 | |||||||||
Current portion of long-term debt associated with vessels held for sale | 11 | — | 30,076,356 | |||||||||
|
|
|
| |||||||||
Total current liabilities | 78,748,931 | 103,490,335 | ||||||||||
|
|
|
| |||||||||
Non current liabilities | ||||||||||||
Fair value of derivatives | 12 | 126,525 | 465,389 | |||||||||
Customer deposits | 10 | 736,000 | — | |||||||||
Deferred gain on sale and leaseback of vessels | 20 | 190,087 | — | |||||||||
Deferred income | 9 | 4,035 | — | |||||||||
Long-term debt | 11 | 342,941,841 | 371,514,253 | |||||||||
|
|
|
| |||||||||
Total noncurrent liabilities | 343,998,488 | 371,979,642 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 422,747,419 | 475,469,977 | ||||||||||
|
|
|
| |||||||||
Commitments and contingencies | 19 | |||||||||||
Stockholders’ equity | ||||||||||||
Capital stock, 5,000,000 preferred shares authorized and zero outstanding with a par value of $0.01 per share, 100,000,000 common shares authorized 44,285,108 shares issued and 39,860,563 shares outstanding at December 31, 2017 and 44,549,729 shares issued and 40,125,184 shares outstanding at December 31, 2018 with a par value of $0.01 per share | 13 | 442,850 | 445,496 | |||||||||
Treasury stock, 4,424,545 shares at December 31, 2017 and 2018 with a par value of $0.01 per share | 13 | (22,523,528 | ) | (22,523,528 | ) | |||||||
Additionalpaid-in capital | 13 | 501,471,768 | 501,807,478 | |||||||||
Retained earnings | 93,469,787 | 80,849,086 | ||||||||||
Accumulated other comprehensive income | 617,895 | 673,979 | ||||||||||
|
|
|
| |||||||||
Total stockholders’ equity | 573,478,772 | 561,252,511 | ||||||||||
|
|
|
| |||||||||
Total liabilities and stockholders’ equity | 996,226,191 | 1,036,722,488 | ||||||||||
|
|
|
|
Dollars, Except for Share Data)
December 31, | ||||||||||||
Note | 2019 | 2020 | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 68,465,342 | 38,242,411 | ||||||||||
Trade and other receivables | 4,217,101 | 3,602,764 | ||||||||||
Other current assets | 16 | 118,246 | 309,608 | |||||||||
Claims receivable | 314,217 | 120,547 | ||||||||||
Inventories | 4 | 2,447,703 | 3,687,098 | |||||||||
Advances and prepayments | 749,681 | 782,125 | ||||||||||
Restricted cash | 1,589,768 | 1,308,971 | ||||||||||
Fair value of derivatives | 12 | 30,381 | — | |||||||||
Total current assets | 77,932,439 | 48,053,524 | ||||||||||
Non current assets | ||||||||||||
Advances for vessel under construction | 3 5, | 2,988,903 | 6,539,115 | |||||||||
Operating lease right-of-use | 20 | 473,132 | 0 | |||||||||
Vessels, net | 3 6, | 835,152,403 | 832,335,059 | |||||||||
Other receivables | 286,915 | 26,427 | ||||||||||
Restricted cash | 12,065,222 | 13,488,820 | ||||||||||
Investments in joint ventures | 7 | 25,250,173 | 43,177,657 | |||||||||
Deferred finance charges | — | 385,705 | ||||||||||
Fair value of derivatives | 12 | 39,744 | — | |||||||||
Total non current assets | 876,256,492 | 895,952,783 | ||||||||||
Total assets | 954,188,931 | 944,006,307 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Current liabilities | ||||||||||||
Payable to related parties | 3 | 7,043,121 | 4,659,861 | |||||||||
Trade accounts payable | 9,032,690 | 9,974,751 | ||||||||||
Accrued liabilities | 8 | 6,002,079 | 3,773,499 | |||||||||
Operating lease liabilities | 20 | 473,132 | — | |||||||||
Customer deposits | 10 | 968,000 | 968,000 | |||||||||
Deferred income | 9 | 2,843,994 | 2,995,657 | |||||||||
Fair value of derivatives | 12 | 37,567 | 141,447 | |||||||||
Current portion of long-term debt | 11 | 40,735,556 | 40,547,892 | |||||||||
Total current liabilities | 67,136,139 | 63,061,107 | ||||||||||
Non current liabilities | 0 | 0 | ||||||||||
Fair value of derivatives | 12 | 2,618,250 | 5,099,464 | |||||||||
Long-term debt | 11 | 325,247,902 | 311,249,321 | |||||||||
Total non current liabilities | 327,866,152 | 316,348,785 | ||||||||||
Total liabilities | 395,002,291 | 379,409,892 | ||||||||||
Commitments and contingencies | 19 | |||||||||||
Stockholders’ equity | ||||||||||||
Capital stock, 5,000,000 preferred shares authorized and 0 outstanding with a par value of $0.01 per share, 100,000,000 common shares authorized 44,549,729 shares issued and 39,584,274 shares outstanding at December 31, 2019 and 43,183,684 shares issued and 37,858,437 shares outstanding at December 31, 2020 with a par value of $0.01 per share | 13 | 445,496 | 431,836 | |||||||||
Treasury stock, 4,965,455 at December 31, 2019 and 5,325,247 shares at December 31, 2020 with a par value of $0.01 per share | 13 | (24,361,145 | ) | (25,373,380 | ) | |||||||
Additional paid-in capital | 13 | 502,419,122 | 499,564,087 | |||||||||
Retained earnings | 82,942,210 | 94,926,695 | ||||||||||
Accumulated other comprehensive loss | (2,259,043 | ) | (4,952,823 | ) | ||||||||
Total stockholders’ equity | 559,186,640 | 564,596,415 | ||||||||||
Total liabilities and stockholders’ equity | 954,188,931 | 944,006,307 | ||||||||||
2020
December 31, | ||||||||||||||||
Note | 2016 | 2017 | 2018 | |||||||||||||
Revenues | ||||||||||||||||
Revenues | 136,539,399 | 152,338,278 | 164,330,202 | |||||||||||||
Revenues—related party | 3 | 7,592,784 | 1,973,643 | — | ||||||||||||
|
|
|
|
|
| |||||||||||
Total revenues | 16 | 144,132,183 | 154,311,921 | 164,330,202 | ||||||||||||
|
|
|
|
|
| |||||||||||
Expenses | ||||||||||||||||
Voyage expenses | 17 | 13,618,025 | 13,804,032 | 18,649,258 | ||||||||||||
Voyage expenses—related party | 3,17 | 1,772,240 | 1,912,505 | 2,037,917 | ||||||||||||
Charter hire expenses | 19,20 | 4,054,387 | 3,524,770 | 6,150,780 | ||||||||||||
Vessels’ operating expenses | 17 | 55,680,993 | 58,618,526 | 59,920,278 | ||||||||||||
Vessels’ operating expenses—related party | 3,17 | 3,141,843 | 800,908 | 514,500 | ||||||||||||
Dry-docking costs | 3,613,230 | 3,529,047 | 3,617,577 | |||||||||||||
Management fees—related party | 3 | 7,346,180 | 7,205,490 | 7,027,195 | ||||||||||||
General and administrative expenses (including $1,187,037, $1,209,499, and $1,294,722 to related party) | 3,110,409 | 2,898,958 | 3,046,962 | |||||||||||||
Depreciation | 6 | 39,096,589 | 38,921,672 | 41,258,142 | ||||||||||||
Impairment loss | 3,6,12 | 5,735,086 | 6,461,273 | 11,351,821 | ||||||||||||
Net (gain)/loss on sale of vessels | 6 | (118,427 | ) | 77,314 | 763,925 | |||||||||||
Other operating costs/(income) | 5 | — | 1,058,863 | (549,804 | ) | |||||||||||
|
|
|
|
|
| |||||||||||
Total expenses | 137,050,555 | 138,813,358 | 153,788,551 | |||||||||||||
|
|
|
|
|
| |||||||||||
Income from operations | 7,081,628 | 15,498,563 | 10,541,651 | |||||||||||||
|
|
|
|
|
| |||||||||||
Other (expenses)/income | ||||||||||||||||
Interest and finance costs | (14,268,148 | ) | (16,661,464 | ) | (23,286,547 | ) | ||||||||||
Loss on derivatives | 12 | (767,196 | ) | (403,943 | ) | (11,982 | ) | |||||||||
Interest income and other income | 454,472 | 322,868 | 587,477 | |||||||||||||
Foreign exchange (loss)/gain | (299,056 | ) | 25,739 | (107,119 | ) | |||||||||||
|
|
|
|
|
| |||||||||||
Other expenses, net | (14,879,928 | ) | (16,716,800 | ) | (22,818,171 | ) | ||||||||||
|
|
|
|
|
| |||||||||||
Net loss | (7,798,300 | ) | (1,218,237 | ) | (12,276,520 | ) | ||||||||||
|
|
|
|
|
| |||||||||||
Loss per share | ||||||||||||||||
—Basic and diluted | 15 | (0.20 | ) | (0.03 | ) | (0.31 | ) | |||||||||
|
|
|
|
|
| |||||||||||
Weighted average number of shares | ||||||||||||||||
—Basic and diluted | 39,824,038 | 39,809,364 | 39,860,563 | |||||||||||||
|
|
|
|
|
|
December 31, | ||||||||||||||||
Note | 2018 | 2019 | 2020 | |||||||||||||
Revenues | ||||||||||||||||
Revenues | 164,330,202 | 144,259,312 | 145,003,021 | |||||||||||||
Total revenues | 16 | 164,330,202 | 144,259,312 | 145,003,021 | ||||||||||||
Expenses | ||||||||||||||||
Voyage expenses | 18,649,258 | 15,201,978 | 12,259,795 | |||||||||||||
Voyage expenses – related party | 3 | 2,037,917 | 1,788,543 | 1,799,209 | ||||||||||||
Charter hire expenses | 20 | 6,150,780 | 6,268,988 | 318,606 | ||||||||||||
Vessels’ operating expenses | 17 | 59,920,278 | 48,619,594 | 52,344,721 | ||||||||||||
Vessels’ operating expenses – related party | 3,17 | 514,500 | 966,500 | 950,500 | ||||||||||||
Dry-docking costs | 3,617,577 | 1,094,306 | 3,640,327 | |||||||||||||
Management fees – related party | 3 | 7,027,195 | 5,730,910 | 5,599,351 | ||||||||||||
General and administrative expenses (including $1,294,722, $1,205,683 and $1,084,961 to related party) | 3 | 3,046,962 | 3,706,320 | 2,301,308 | ||||||||||||
Depreciation | 6 | 41,258,142 | 37,693,733 | 37,455,093 | ||||||||||||
Impairment loss | 3,6,12 | 11,351,821 | 993,916 | 3,857,307 | ||||||||||||
Net loss on sale of vessels | 3,6 | 763,925 | 485,516 | 1,134,854 | ||||||||||||
Other operating income | (549,804 | ) | — | — | ||||||||||||
Total expenses | 153,788,551 | 122,550,304 | 121,661,071 | |||||||||||||
Income from operations | 10,541,651 | 21,709,008 | 23,341,950 | |||||||||||||
Other (expenses)/income | ||||||||||||||||
Interest and finance costs | (23,286,547 | ) | (20,978,065 | ) | (14,129,893 | ) | ||||||||||
Gain on deconsolidation of subsidiaries | — | 145,000 | — | |||||||||||||
Loss on derivatives | 12 | (11,982 | ) | (107,550 | ) | (50,976 | ) | |||||||||
Interest income and other income | 587,477 | 846,271 | 167,794 | |||||||||||||
Foreign exchange loss | (107,119 | ) | (8,235 | ) | (54,374 | ) | ||||||||||
Other expenses, net | (22,818,171 | ) | (20,102,579 | ) | (14,067,449 | ) | ||||||||||
(Loss)/Income before equity in earnings of investees | (12,276,520 | ) | 1,606,429 | 9,274,501 | ||||||||||||
Equity earnings in joint ventures | 7 | — | 486,695 | 2,709,984 | ||||||||||||
Net (Loss)/Income | (12,276,520 | ) | 2,093,124 | 11,984,485 | ||||||||||||
(Loss)/Earnings per share | ||||||||||||||||
– Basic and diluted | 15 | (0.31 | ) | 0.05 | 0.31 | |||||||||||
Weighted average number of shares | ||||||||||||||||
– Basic and diluted | 39,860,563 | 39,800,434 | 38,357,893 | |||||||||||||
(Loss)/Income
2020
December 31, | ||||||||||||||||
Note | 2016 | 2017 | 2018 | |||||||||||||
Net loss | (7,798,300 | ) | (1,218,237 | ) | (12,276,520 | ) | ||||||||||
|
|
|
|
|
| |||||||||||
Other comprehensive income | ||||||||||||||||
Cash flow hedges | ||||||||||||||||
Effective portion of changes in fair value of interest swap contracts | 12 | 418,723 | 592,460 | 56,084 | ||||||||||||
|
|
|
|
|
| |||||||||||
Total other comprehensive income | 418,723 | 592,460 | 56,084 | |||||||||||||
|
|
|
|
|
| |||||||||||
Total comprehensive loss | (7,379,577 | ) | (625,777 | ) | (12,220,436 | ) | ||||||||||
|
|
|
|
|
|
December 31, | ||||||||||||||||
Note | 2018 | 2019 | 2020 | |||||||||||||
Net (loss)/income | (12,276,520 | ) | 2,093,124 | 11,984,485 | ||||||||||||
Other comprehensive income | ||||||||||||||||
Cash flow hedges | ||||||||||||||||
Effective portion of changes in fair value of interest swap contracts | 12 | 56,084 | (2,848,056 | ) | (2,632,826 | ) | ||||||||||
Reclassification adjustment | 12 | — | (84,966 | ) | (60,954 | ) | ||||||||||
Total other comprehensive income/(loss) | 56,084 | (2,933,022 | ) | (2,693,780 | ) | |||||||||||
Total comprehensive (loss)/income | (12,220,436 | ) | (839,898 | ) | 9,290,705 | |||||||||||
2020
Capital stock | Treasury stock | |||||||||||||||||||||||||||||||
Number of Shares (Note 13) | Amount (Note 13) | Number of Shares (Note 13) | Amount (Note 13) | Additional Paid-in Capital (Note 13) | Retained Earnings | Accumulated Other Comprehensive (Loss)/Income | Total | |||||||||||||||||||||||||
Balance, January 1, 2016 | 44,285,108 | 442,850 | (3,767,432 | ) | (20,486,872 | ) | 501,002,146 | 102,486,324 | (393,288 | ) | 583,051,160 | |||||||||||||||||||||
Stock based compensation | — | — | — | — | 340,377 | — | — | 340,377 | ||||||||||||||||||||||||
Stock repurchase | — | — | (657,113 | ) | (2,036,656 | ) | — | — | — | (2,036,656 | ) | |||||||||||||||||||||
Comprehensive loss for the year | — | — | — | — | — | (7,798,300 | ) | 418,723 | (7,379,577 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance, December 31, 2016 | 44,285,108 | 442,850 | (4,424,545 | ) | (22,523,528 | ) | 501,342,523 | 94,688,024 | 25,435 | 573,975,304 | ||||||||||||||||||||||
Stock based compensation | — | — | — | — | 129,245 | — | — | 129,245 | ||||||||||||||||||||||||
Comprehensive loss for the year | — | — | — | — | — | (1,218,237 | ) | 592,460 | (625,777 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance, December 31, 2017 | 44,285,108 | 442,850 | (4,424,545 | ) | (22,523,528 | ) | 501,471,768 | 93,469,787 | 617,895 | 573,478,772 | ||||||||||||||||||||||
Issuance of restricted shares and stock based compensation | 264,621 | 2,646 | — | — | 335,710 | — | — | 338,356 | ||||||||||||||||||||||||
Cumulative effect of accounting change* | — | — | — | — | — | (344,181 | ) | — | (344,181 | ) | ||||||||||||||||||||||
Comprehensive loss for the year | — | — | — | — | — | (12,276,520 | ) | 56,084 | (12,220,436 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Balance, December 31, 2018 | 44,549,729 | 445,496 | (4,424,545 | ) | (22,523,528 | ) | 501,807,478 | 80,849,086 | 673,979 | 561,252,511 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital stock | Treasury stock | |||||||||||||||||||||||||||||||
Number | Number | Additional | Accumulated | |||||||||||||||||||||||||||||
of | of | Paid-in | Other | |||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Capital | Retained | Comprehensive | ||||||||||||||||||||||||||
(Note 13) | (Note 13) | (Note 13) | (Note 13) | (Note 13) | Earnings | Income / (loss) | Total | |||||||||||||||||||||||||
Balance, December 31, 2017 | 44,285,108 | 442,850 | (4,424,545 | ) | (22,523,528 | ) | 501,471,768 | 93,469,787 | 617,895 | 573,478,772 | ||||||||||||||||||||||
Cumulative effect of accounting change – ASC 606 | — | — | — | — | — | (344,181 | ) | — | (344,181 | ) | ||||||||||||||||||||||
Balance, January 1, 2018 | 44,285,108 | 442,850 | (4,424,545 | ) | (22,523,528 | ) | 501,471,768 | 93,125,606 | 617,895 | 573,134,591 | ||||||||||||||||||||||
Issuance of restricted shares and stock based compensation | 264,621 | 2,646 | — | — | 335,710 | — | — | 338,356 | ||||||||||||||||||||||||
Comprehensive loss for the year | — | — | — | — | — | (12,276,520 | ) | 56,084 | (12,220,436 | ) | ||||||||||||||||||||||
Balance, December 31, 2018 | 44,549,729 | 445,496 | (4,424,545 | ) | (22,523,528 | ) | 501,807,478 | 80,849,086 | 673,979 | 561,252,511 | ||||||||||||||||||||||
Stock based compensation | — | — | — | — | 611,644 | — | — | 611,644 | ||||||||||||||||||||||||
Stock repurchase | — | — | (540,910 | ) | (1,837,617 | ) | — | — | — | (1,837,617 | ) | |||||||||||||||||||||
Comprehensive loss for the year | — | — | — | — | — | 2,093,124 | (2,933,022 | ) | (839,898 | ) | ||||||||||||||||||||||
Balance, December 31, 2019 | 44,549,729 | 445,496 | (4,965,455 | ) | (24,361,145 | ) | 502,419,122 | 82,942,210 | (2,259,043 | ) | 559,186,640 | |||||||||||||||||||||
Stock repurchase | — | — | (359,792 | ) | (1,012,235 | ) | — | — | — | (1,012,235 | ) | |||||||||||||||||||||
Stock repurchase and cancellation | (1,366,045 | ) | (13,660 | ) | — | — | (2,855,035 | ) | — | — | (2,868,695 | ) | ||||||||||||||||||||
Comprehensive income for the year | — | — | — | — | — | 11,984,485 | (2,693,780 | ) | 9,290,705 | |||||||||||||||||||||||
Balance, December 31, 2020 | 43,183,684 | 431,836 | (5,325,247 | ) | (25,373,380 | ) | 499,564,087 | 94,926,695 | (4,952,823 | ) | 564,596,415 | |||||||||||||||||||||
2020
December 31, | ||||||||||||
2016 | 2017 | 2018 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net loss for the year | (7,798,300 | ) | (1,218,237 | ) | (12,276,520 | ) | ||||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation | 39,096,589 | 38,921,672 | 41,258,142 | |||||||||
Amortization of deferred finance charges | 715,587 | 690,842 | 858,582 | |||||||||
Amortization of deferred gain on sale and leaseback of vessels | (195,574 | ) | (195,040 | ) | (190,087 | ) | ||||||
Share based compensation | 340,377 | 129,245 | 338,356 | |||||||||
Change in fair value of derivatives | (331,387 | ) | (27,372 | ) | (28,252 | ) | ||||||
Impairment loss | 5,735,086 | 6,461,273 | 11,351,821 | |||||||||
(Gain)/loss on sale of vessels | (118,427 | ) | 77,314 | 763,925 | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase)/decrease in | ||||||||||||
Trade and other receivables | 825,838 | (179,036 | ) | 531,796 | ||||||||
Other current assets | — | — | 159,363 | |||||||||
Claims receivable | (610,810 | ) | (235,705 | ) | 15,951 | |||||||
Inventories | 117,744 | 46,824 | (302,873 | ) | ||||||||
Advances and prepayments | (28,955 | ) | 57,328 | 131,490 | ||||||||
Increase/(decrease) in | ||||||||||||
Balances with related parties | (1,185,024 | ) | 6,434,290 | (6,278,982 | ) | |||||||
Trade accounts payable | 462,215 | 1,299,686 | 381,941 | |||||||||
Accrued liabilities | (303,460 | ) | 581,000 | 339,009 | ||||||||
Deferred income | (567,411 | ) | (490,031 | ) | 755,563 | |||||||
|
|
|
|
|
| |||||||
Net cash provided by operating activities | 36,154,088 | 52,354,053 | 37,809,225 | |||||||||
|
|
|
|
|
| |||||||
Cash flows from investing activities | ||||||||||||
Insurance proceeds | 610,810 | 219,754 | — | |||||||||
Vessels’ acquisitions and advances for vessels under construction | (56,215,758 | ) | (60,612,867 | ) | (108,295,690 | ) | ||||||
Proceeds from sale of vessels, net | 1,530,177 | 11,479,936 | 29,742,788 | |||||||||
|
|
|
|
|
| |||||||
Net cash used in investing activities | (54,074,771 | ) | (48,913,177 | ) | (78,552,902 | ) | ||||||
|
|
|
|
|
| |||||||
Cash flows from financing activities | ||||||||||||
Stock repurchase | (2,070,306 | ) | — | — | ||||||||
Deferred finance charges paid | (712,614 | ) | (815,256 | ) | (503,265 | ) | ||||||
Customer deposits paid | — | — | (1,220,700 | ) | ||||||||
Loan repayments | (55,630,352 | ) | (56,254,073 | ) | (56,717,059 | ) | ||||||
Proceeds from long-term debt | 31,200,000 | 43,000,000 | 115,712,500 | |||||||||
|
|
|
|
|
| |||||||
Net cash (used in)/provided by financing activities | (27,213,272 | ) | (14,069,329 | ) | 57,271,476 | |||||||
|
|
|
|
|
| |||||||
Net (decrease)/increase in cash and cash equivalents | (45,133,955 | ) | (10,628,453 | ) | 16,527,799 | |||||||
Cash and cash equivalents at beginning of year | 118,665,600 | 73,531,645 | 62,903,192 | |||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents at end of year | 73,531,645 | 62,903,192 | 79,430,991 | |||||||||
|
|
|
|
|
| |||||||
Cash breakdown | ||||||||||||
Cash and cash equivalents | 64,993,923 | 51,754,131 | 64,498,442 | |||||||||
Restricted cash, current | 3,363,012 | 3,231,323 | 3,002,490 | |||||||||
Restricted cash,non-current | 5,174,710 | 7,917,738 | 11,930,059 | |||||||||
|
|
|
|
|
| |||||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | 73,531,645 | 62,903,192 | 79,430,991 | |||||||||
|
|
|
|
|
| |||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the year for interest, net of amounts capitalized | 12,429,729 | 14,643,885 | 21,087,903 | |||||||||
Non cash investing activity—Vessels under construction | 124,288 | 605,800 | 63,752 | |||||||||
|
|
|
|
|
|
December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net (loss)/income for the year | (12,276,520 | ) | 2,093,124 | 11,984,485 | ||||||||
Adjustments to reconcile net (loss)/income to net cash provided by operating activities: | ||||||||||||
Depreciation | 41,258,142 | 37,693,733 | 37,455,093 | |||||||||
Amortization of deferred finance charges | 858,582 | 885,191 | 698,364 | |||||||||
Amortization of deferred gain on sale and leaseback of vessels | (190,087 | ) | 0 | |||||||||
Amortization of operating lease right-of-use | — | 1,572,943 | 473,132 | |||||||||
Share based compensation | 338,356 | 611,644 | 0 | |||||||||
Change in fair value of derivatives | (28,252 | ) | 255,650 | (38,561 | ) | |||||||
Equity earnings in joint ventures | — | (486,695 | ) | (2,709,984 | ) | |||||||
Impairment loss | 11,351,821 | 993,916 | 3,857,307 | |||||||||
Net loss on sale of vessels | 763,925 | 485,516 | 1,134,854 | |||||||||
Gain on deconsolidation of subsidiaries | — | (145,000 | ) | 0 | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase)/decrease in | ||||||||||||
Trade and other receivables | 531,796 | (1,506,590 | ) | 874,825 | ||||||||
Other current assets | 159,363 | 16,055 | (191,362 | ) | ||||||||
Claims receivable | 15,951 | (1,307,763 | ) | 193,670 | ||||||||
Inventories | (302,873 | ) | 617,468 | (1,239,395 | ) | |||||||
Changes in operating lease liabilities | — | (1,572,943 | ) | (473,132 | ) | |||||||
Advances and prepayments | 131,490 | 339,858 | (32,444 | ) | ||||||||
Increase/(decrease) in | ||||||||||||
Balances with related parties | (6,278,982 | ) | (5,845,771 | ) | 1,617,032 | |||||||
Trade accounts payable | 381,941 | (1,316,668 | ) | 761,193 | ||||||||
Accrued liabilities | 339,009 | (217,409 | ) | (2,403,644 | ) | |||||||
Deferred income | 755,563 | (2,347,660 | ) | 151,663 | ||||||||
Net cash provided by operating activities | 37,809,225 | 30,818,599 | 52,113,096 | |||||||||
Cash flows from investing activities | ||||||||||||
Insurance proceeds | 0 | 993,546 | 0 | |||||||||
Proceeds from sale of interests in subsidiaries | — | 20,720,975 | 0 | |||||||||
Vessels’ acquisitions and advances for vessels under construction | (108,295,690 | ) | (2,988,903 | ) | (48,121,422 | ) | ||||||
Proceeds from sale of vessels, net | 29,742,788 | 18,721,123 | 5,264,768 | |||||||||
Investment in joint ventures | — | (11,322,600 | ) | (41,998,500 | ) | |||||||
Return of investments from joint ventures | — | 7,363,147 | 26,781,000 | |||||||||
Advances to joint ventures | — | (5,083,919 | ) | (29,245 | ) | |||||||
Advances from joint ventures | — | 5,083,919 | 29,245 | |||||||||
Net cash (used in)/provided by investing activities | (78,552,902 | ) | 33,487,288 | (58,074,154 | ) | |||||||
Cash flows from financing activities | ||||||||||||
Stock repurchase | — | (1,837,617 | ) | (3,880,930 | ) | |||||||
Deferred finance charges paid | (503,265 | ) | (477,201 | ) | (538,004 | ) | ||||||
Advances from joint ventures | — | 4,958,250 | 1,841,380 | |||||||||
Advances to joint ventures | — | — | (5,841,672 | ) | ||||||||
Customer deposits paid | (1,220,700 | ) | (368,000 | ) | 0 | |||||||
Loan repayments | (56,717,059 | ) | (97,371,978 | ) | (41,804,846 | ) | ||||||
Proceeds from long-term debt | 115,712,500 | 33,480,000 | 27,105,000 | |||||||||
Net cash provided by/(used in) financing activities | 57,271,476 | (61,616,546 | ) | (23,119,072 | ) | |||||||
Net increase/(decrease) in cash and cash equivalents | 16,527,799 | 2,689,341 | (29,080,130 | ) | ||||||||
Cash and cash equivalents and restricted cash at beginning of year | 62,903,192 | 79,430,991 | 82,120,332 | |||||||||
Cash and cash equivalents and restricted cash at end of year | 79,430,991 | 82,120,332 | 53,040,202 | |||||||||
December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
Cash breakdown | ||||||||||||
Cash and cash equivalents | 64,498,442 | 68,465,342 | 38,242,411 | |||||||||
Restricted cash, current | 3,002,490 | 1,589,768 | 1,308,971 | |||||||||
Restricted cash, non-current | 11,930,059 | 12,065,222 | 13,488,820 | |||||||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | 79,430,991 | 82,120,332 | 53,040,202 | |||||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the year for interest, net of amounts capitalized | 21,087,903 | 20,768,672 | 12,905,065 | |||||||||
Non cash investing activity – Vessels, net | — | — | 206,820 | |||||||||
Non cash investing activity – Vessels under construction | 63,752 | 63,752 | 180,400 | |||||||||
Non cash financing activity – Deferred finance charges | — | — | 32,464 | |||||||||
During 2016, 2017
operating activities due to 2019-nCoV other than the decrease in market rates in 2020, and increased crew cost, the extent to which a new wave of the 2019-nCoV will impact the Company’s results of operations and financial condition will depend on future developments, which are uncertain and cannot be predicted, including among others, new information which may emerge concerning the severity of the virus and the effectiveness of the actions taken to contain or treat its impact or any resurgence or mutation of the virus, the availability and effectiveness of vaccines and their global deployment. Accordingly, an estimate of the future impact cannot be made at this time.
NoNaN provision for doubtful accounts was required for any of the periods presented.
2019 and 2020.2017. Concerning assets held for sale as of December 31, 2018, refer to Note 6.one1 reportable segment as well as one1 operating segment. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographical information is impracticable.considered eitherclassified as operating or finance 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. Revenues from timeTime charter and bareboat chartersrevenues are recognized ratablywhen 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 linestraight-line basis over the periodterm of the respective charter.charter as service is provided. Revenues from profit sharing arrangements in time charters are recognized in the period earned. Under time and bareboat charter agreements, all voyages expenses, except commissions are assumed by the charterer.beginbegins to be satisfied once the vessel is ready to load the cargo. The voyage charter party agreement generally has a demurrage clause according to which the charterer reimburses the vessel owner for any potential delays exceeding the allowedrevenueincome 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
Leasing: Leases are classified as capital leases if they meet at least one of the following criteria: (i) the leased asset automatically transfers title at the end of the lease term; (ii) the lease contains a bargain purchase option; (iii) the lease term equals or exceeds 75% of the remaining estimated economic life of the leased asset; (iv) or the present value of the minimum lease payments equals or exceeds 90% of the excess of fair value of the leased property. If none of the above criteria is met, the lease is accounted for as an operating lease. Operating lease payments are recognized as an operating expense in the consolidated statement of operations on a straight-line basis over the lease term. For sale and lease back transactions, when the lease qualifies as an operating lease and the lease back is considered “more than minor but less than substantially all” i.e. the seller-lessee retains
more than a minor part but less than substantially all of the use of the asset, the resulting gains are deferred and amortized to income over the lease period.
instrument is recognized in the statement of income. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to net profit or loss for the year as a component of “Loss on derivatives”.
The Company adopted the provisions of ASC 606 for the reporting period commencing on January 1, 2018 and has elected to use the modified retrospective transition method for the implementation of this standard. The Company applied the provisions of ASC 606 to all contracts that were not completed at the date of initial application. As such, the comparative information has not been restated and continues to be reported under the accounting standards in effect for periods prior to January 1, 2018. An adjustment amounting to $0.3 million was posted in the Company’s opening retained earningsentities as of January 1, 2018.
Since7, 2021 through December 31, 2022. The Company is currently evaluating the Company’s performance obligation under each voyage contract is met evenly as the voyage progresses, the revenue is recognized on a straight-line basis over the voyage days from the date the vessel is ready to load the cargo to completion of its discharge and is not related to the timing of payment received from its customers. Payment terms under voyage charters are disclosed in the relevant voyage charter agreements. Based on these terms, freight is mainly paid after the completion of the discharge of the cargo. Prior to the adoptionimpact of this standard revenues generated under voyage charter agreements were recognized on apro-rata basis over the period of the voyage which was deemed to commence upon the later of the completion of discharge of the vessel’s previous cargo or upon vessel’s arrival to the agreed upon port, and deemed to end upon the completion of discharge of the delivered cargo. The financial impact on the Company’s financial statements derives from voyage charters which do not commence and end in the same reporting period due to the timing of recognition of revenue, as well as the timing of recognition of certain voyage related costs.
Further, the adoption of ASC 606 impacted the accounts receivable, other assets, payables to related parties and accrued and other liabilities on our consolidated balance sheet as of December 31, 2018. Under ASC 606, receivables represent an entity’s unconditional right to consideration, billed or unbilled. As of December 31, 2018, other current assets include bunker and port expenses of $0.1 million incurred between the contract date and the date of the vessel’s arrival to the load port. As of January 1, 2018 there was $0.3 million relating to contract fulfillment costs. As of December 31, 2018 and 2017 the unearned revenue related to undelivered performance obligations amounted to nil and $0.07 million, respectively and has been included in “Deferred income” in the accompanying consolidated balance sheet. The Company recognized as revenue the $0.07 million in the first quarter of 2018.
The following table presents the impact of the adoption of ASU2014-09 on our consolidated balance sheet at December 31, 2018:
As at December 31, 2018 | ||||||||||||
As reported | Balances without adoption of ASU2014-09 | Effect of change | ||||||||||
Assets | ||||||||||||
Current Assets | ||||||||||||
Trade and other receivables | $ | 2,888,496 | $ | 2,941,191 | $ | (52,695 | ) | |||||
Other current assets | 134,301 | — | 134,301 | |||||||||
Liabilities | ||||||||||||
Payable to related party | 7,930,642 | 7,931,297 | (655 | ) | ||||||||
Accrued and other liabilities | 6,879,488 | 6,880,536 | (1,048 | ) |
The following table presents the impact of the adoption of ASU2014-09 on our consolidated statement of operations:
For the year ended December 31, 2018 | ||||||||||||
As reported | Balances without adoption of ASU2014-09 | Effect of change | ||||||||||
Total revenues | $ | 164,330,202 | $ | 163,744,736 | $ | (585,466 | ) | |||||
Voyage expenses | 18,649,258 | 18,498,600 | 150,658 | |||||||||
Voyage expenses—related party | 2,037,917 | 2,030,599 | 7,318 | |||||||||
Net loss | (12,276,520 | ) | (12,704,010 | ) | (427,490 | ) | ||||||
Basic earnings per share | $ | (0.31 | ) | $ | (0.32 | ) | $ | (0.01 | ) | |||
Diluted earnings per share | $ | (0.31 | ) | $ | (0.32 | ) | $ | (0.01 | ) |
The cumulative effect of changes made to our opening Consolidated Balance Sheet on January 1, 2018 for the adoption of ASC 606:
December 31, 2017 | Effect of adoption of ASC 606 | January 1, 2018 | ||||||||||
Assets | ||||||||||||
Current Assets | ||||||||||||
Trade and other receivables | 3,853,992 | (567,845 | ) | 3,286,147 | ||||||||
Other current assets | — | 293,664 | 293,664 | |||||||||
Liabilities | ||||||||||||
Deferred income | 4,362,056 | 70,000 | 4,432,056 | |||||||||
Stockholders’ Equity | ||||||||||||
Retained earnings | 93,469,787 | (344,181 | ) | 93,125,606 |
The adoption of ASC 606 had no impact on net cash provided by operating activities, investing activities and financing activities for the year ended December 31, 2018.
In February 2016, the FASB issued ASU2016-02, Leases (Topic 842). The standard amends the existing accounting standards for lease accounting and adds additional disclosures about leasing arrangements. The ASU requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by most leases, while lessor accounting remains largely unchanged. The new leases standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. This update is effective for public entities with reporting periods beginning after December 15, 2018.
On July 30, 2018, the FASB issued ASU2018-11 to provide entities with relief from the costs of implementing certain aspects of the new leases standard, ASU2016-02 (codified as ASC 842). Specifically, under the amendments in ASU2018-11:
|
|
The transition relief amendments in the ASU apply to entities that have not yet adopted ASC 842. The effective date and transition requirements for the amendments in this update for entities that have not adopted Topic 842 before the issuance of this update are the same as the effective date and transition requirements in Update2016-02.
In December 2018, the FASB issued ASU2018-20 to provide narrow scope improvements for lessors. The amendments in this update related to sales taxes and other similar taxes collected from lessees affect all lessors that elect the accounting policy election. In addition, amendments in this update related to lessor costs affect all lessor entities that have lease contracts that either require lessees to pay lessor costs directly to a third party or require lessees to reimburse lessors for costs paid by lessors directly to third parties. Finally, the amendments in this update related to recognition of variable payments for contracts with lease andnon-lease components affect all lessor entities with variable payments that relate to both lease andnon-lease components. The effective date and transition requirements for the amendments in this update for entities that have not adopted Topic 842 before the issuance of this update are the same as the effective date and transition requirements in ASU2016-02. The Company adopted this standard for the reporting period commencing on January 1, 2019 and elected the practical expedient under ASU2018-11 for the vessels under time charter agreements. Furthermore, the Company applied the transition provisions of ASU2016-02 at its adoption date, rather than the earliest comparative period presented in the financial statements, as permitted by ASU2018-11. The nature of the lease component andnon-lease component that were combined as a result of applying the practical expedient are the contract for the hire of a vessel and the fees for operating and maintaining the vessel respectively. The lease component is the predominant component and the Company accounts for the combined component as an operating lease in accordance with Topic 842. The most significant effects of adoption relate to the recognition ofright-of-use assets and lease liabilities on the Company’s balance sheet for operating leases where the Company is a lessee and providing new disclosures about the Company’s leasing activities. The Company currently expects theright-of-use assets and lease liabilities as of January 1, 2019 to be approximately $1.9 million based on the present value of the Company’s remaining minimum lease payments, primarily due to the recognition of right of use assets and lease liabilities with respect to operating leases. The Company does not believe the adoption of ASC 842 will have a material effect on its consolidated results of operations or cash flows.
In August 2016, the FASB issued the ASU2016-15—classification of certain cash payments and cash receipts. This ASU addresses certain cash flow issues with the objective of reducing the existing diversity in practice. This update was effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU on January 1, 2018. The impact of the adoption of this amended guidance did not result in any changes in the classification of cash receipts and cash payments.
In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU2017-12”).ASU2017-12 is intended to (i) improve the transparency and understandability of information conveyed to financial statement users about an entity’s risk management activities by better aligning the entity’s financial reporting for hedging relationships with those risk management activities and (ii) reduce the complexity of and simplify the application of hedge accounting by preparers. For public business entities, the ASU is effective for fiscal years beginning after December 15, 2018, and interim periods therein; however, early adoption by all entities is permitted. The adoption of this ASU is not expected to have a material effect on the Company’s consolidated financial statements and accompanying notes.
3.
day (the “Superintendent fees”).
fees”).
operations.
In April 2012, the Company entered into time charter agreements for two of the Company’s vessels with Emihar Petroleum Inc., a company affiliated with members of the Vafias family incorporated in the Marshall Islands. The above time charter agreements expired in August 2016 and June 2017. Revenue from the related
party amounted to $7,592,784, $1,973,643Manager and nil for each of the years ended December 31, 2016, 2017 and 2018, respectively, and are included in the consolidated statements of operations under the caption “Revenues—related party”incurs a rental expense (the “Rental expense”). In accordance with the time charter agreements for these vessels’ operating expenses, the Company paid to the Manager amounts of $2,969,843, $675,408 and nil for the years ended December 31, 2016, 2017 and 2018, respectively, which are included in the consolidated statements of operations under the caption “Vessels’ operating expenses—related party”.
On May 26, 2014, the Company entered into an agreement with Brave for the supervision of the construction of eight of its vessels for a fixed fee of Euro 390,000 per vessel.
Year ended December 31, | ||||||||||||||
Location in statement of operations | 2018 | 2019 | 2020 | |||||||||||
Management fees | Management fees – related party | 7,027,195 | 5,730,910 | 5,599,351 | ||||||||||
Brokerage commissions | Voyage expenses – related party | 2,037,917 | 1,788,543 | 1,799,209 | ||||||||||
Superintendent fees | Vessels’ operating expenses – related party | 137,000 | 104,000 | 38,000 | ||||||||||
Crew management fees | Vessels’ operating expenses – related party | 377,500 | 862,500 | 912,500 | ||||||||||
Commissions - vessels sold | Net loss on sale of vessels | 184,000 | 109,000 | 54,000 | ||||||||||
Commissions - vessels sold | Impairment loss | 212,650 | — | — | ||||||||||
Executive compensation | General and administrative expenses | 1,210,036 | 1,118,491 | 994,840 | ||||||||||
Rental expense | General and administrative expenses | 84,686 | 87,192 | 90,121 |
December 31, | ||||||||||||||
Location in balance sheet | 2018 | 2019 | 2020 | |||||||||||
Commissions - vessels purchased | Vessels, net | 1,598,858 | — | 435,000 | ||||||||||
Supervision fees | Vessels, net | 1,790,789 | — | 0 | ||||||||||
Supervision fees | Advances for vessel under construction | — | — | 210,970 |
Company on September 30, 2020 and
December 31, | ||||||||
2017 | 2018 | |||||||
Bunkers | 1,312,116 | 1,082,384 | ||||||
Lubricants | 1,450,183 | 1,264,339 | ||||||
|
|
|
| |||||
Total | 2,762,299 | 2,346,723 | ||||||
|
|
|
|
December 31, | ||||||||
2019 | 2020 | |||||||
Bunkers | 1,112,667 | 2,152,601 | ||||||
Lubricants | 1,335,036 | 1,534,497 | ||||||
Total | 2,447,703 | 3,687,098 | ||||||
On November 17, 2016 and on July 18, 2017,that the Company agreed withto acquire in 2019. The vessel, which was named “Eco Blizzard”, was delivered to the shipbuilderCompany on February 5, 2021 after the postponementpayment of the delivery datesinstallment to the shipbuilder amounting to $23,152,125.
Balance, December 31, | 0 | |||
Advance for vessel under construction | ||||
Capitalized interest | ||||
| ||||
Balance, December 31, 2019 | 2,988,903 | |||
Advance for vessel under construction | ||||
Capitalized interest | ||||
168,344 | ||||
Supervision fees (Note 3) | ||||
Other capitalized expenses | ||||
| ||||
| ||||
Balance, December 31, | 6,539,115 | |||
Vessel cost | Accumulated Depreciation | Net Book Value | ||||||||||
Balance, December 31, 2016 | 1,075,613,321 | (211,913,582 | ) | 863,699,739 | ||||||||
Acquisitions (transfer from Advances for Vessels under Construction and Acquisitions) | 55,302,364 | — | 55,302,364 | |||||||||
Disposals | (11,557,252 | ) | — | (11,557,252 | ) | |||||||
Impairment loss | (29,222,564 | ) | 22,761,291 | (6,461,273 | ) | |||||||
Depreciation for the year | — | (38,921,672 | ) | (38,921,672 | ) | |||||||
|
|
|
|
|
| |||||||
Balance, December 31, 2017 | 1,090,135,869 | (228,073,963 | ) | 862,061,906 | ||||||||
Acquisitions (transfer from Advances for Vessels under Construction and Acquisitions) | 169,331,460 | — | 169,331,460 | |||||||||
Vessels held for sale | (64,188,000 | ) | — | (64,188,000 | ) | |||||||
Impairment loss | (60,018,802 | ) | 48,666,981 | (11,351,821 | ) | |||||||
Disposal | (29,846,712 | ) | — | (29,846,712 | ) | |||||||
Depreciation for the year | — | (41,258,142 | ) | (41,258,142 | ) | |||||||
|
|
|
|
|
| |||||||
Balance, December 31, 2018 | 1,105,413,815 | (220,665,124 | ) | 884,748,691 | ||||||||
|
|
|
|
|
|
The additions in 2017 relate to the acquisition of vessel “Eco Frost”.
In April 2017, the Company entered into a memorandum of agreement for the disposal of the vessel “Gas Icon”, to an unaffiliated third party for $2,900,000. The vessel, including her inventories on board, was classified as assets held for sale in the second quarter of 2017. As a result, the Company measured the vessel at the lower of its carrying amount and fair value less the cost associated with the sale and recognized an impairment charge of $1,747,923 in its consolidated statement of operations for the year ended December 31, 2017. The vessel was delivered to her new owners on July 20, 2017.
In May 2017, the Company entered into a memorandum of agreement for the disposal of the vessel “Gas Emperor”, to an unaffiliated third party for $2,900,000. The vessel, including her inventories on board, was classified as assets held for sale in the second quarter of 2017. As a result, the Company measured the vessel at the lower of its carrying amount and fair value less the cost associated with the sale and recognized an impairment charge of $580,004 in its consolidated statement of operations for the year ended December 31, 2017. The vessel was delivered to her new owners on September 2, 2017.
In August 2017, the Company entered into a memorandum of agreement for the disposal of the vessel “Gas Moxie”, to an unaffiliated third party for $2,575,000. The vessel, including her inventories on board, was classified as assets held for sale in the third quarter of 2017. As a result, the Company measured the vessel at the lower of its carrying amount and fair value less the cost associated with the sale and recognized an impairment charge of $570,626 in its consolidated statement of operations for the year ended December 31, 2017. The vessel was delivered to her new owners on November 7, 2017.
In September 2017, the Company entered into a memorandum of agreement for the disposal of the vessel “Gas Nirvana”, to an unaffiliated third party for $3,675,000. The vessel, including her inventories on board, was classified as assets held for sale in the third quarter of 2017. As a result, the Company measured the vessel at the lower of its carrying amount and fair value less the cost associated with the sale and recognized an impairment charge of $1,406,718 in its consolidated statement of operations for the year ended December 31, 2017. The vessel was delivered to her new owners on November 17, 2017.
The Company decided to dispose the vessels “Gas Icon”, “Gas Emperor”, “Gas Moxie” and “Gas Nirvana” as the agreed selling price was a suitable opportunity for the Company and realized an aggregate loss from the sale of these vessels of $77,314 which is included in the Company’s consolidated statement of operations under the caption “Net (gain)/loss on sale of vessels” for the year ended December 31, 2017.
As a result of the impairment analysis performed for the year ended December 31, 2017, due to the prevailing conditions in the shipping industry, undiscounted net operating cash flows exceeded each vessel’s carrying value with the exception of three vessels and therefore the Company identified and recorded an impairment loss of $2,156,002 which is presented under the caption “Impairment loss” in its consolidated statement of operations.
The additions in 2018 relate to the acquisition of vessels “Eco Arctic”, “Eco Ice” and “Eco Freeze”.
Vessel cost | Accumulated Depreciation | Net Book Value | ||||||||||
Balance, December 31, 2018 | 1,105,413,815 | (220,665,124 | ) | 884,748,691 | ||||||||
Impairment loss | (3,250,000 | ) | 2,256,084 | (993,916 | ) | |||||||
Disposal | (14,561,832 | ) | 3,653,193 | (10,908,639 | ) | |||||||
Depreciation for the year | — | (37,693,733 | ) | (37,693,733 | ) | |||||||
Balance, December 31, 2019 | 1,087,601,983 | (252,449,580 | ) | 835,152,403 | ||||||||
Additions | 44,894,678 | — | 44,894,678 | |||||||||
Impairment loss | (14,511,735 | ) | 10,654,428 | (3,857,307 | ) | |||||||
Disposals | (6,500,000 | ) | 100,378 | (6,399,622 | ) | |||||||
Depreciation for the year | — | (37,455,093 | ) | (37,455,093 | ) | |||||||
Balance, December 31, 2020 | 1,111,484,926 | (279,149,867 | ) | 832,335,059 | ||||||||
At
At
During the first quarter of 2019, the Company entered into four4 joint venture agreements with a third party investor based on which the third party investor acquired a 49.9% equity interest in four4 vessel owning companies of the Company and therefore gainedwill beare accounted for in the Company’s financial statements as an equity investment since the Company and the third party investor will have joint control over these entities, with only the related profit share reflected.entities. As a result, the vessels were classified as assets held for sale in the fourth quarter of 2018. The Company measured the vessels at the lower of their carrying amount and fair value less the cost associated with the transaction and recognized an impairment charge of $3,189,858 in its consolidated statement of operations for the year ended December 31, 2018.
statements of operations.
Deferred finance chargesInvestments in joint ventures
a 100% basis is as follows:
December 31, 2019 | ||||||||||||||||||||
Spacegas Inc. | Financial Power Inc. | Cannes View Inc. | Colorado Oil and Gas Inc | Frost Investments Corp Inc. | ||||||||||||||||
Current assets | 2,237,644 | 1,745,681 | 2,560,065 | 2,265,263 | 13,693,747 | |||||||||||||||
Non-current assets | 13,221,364 | 13,229,810 | 14,532,274 | 12,801,053 | 20,396,424 | |||||||||||||||
Current liabilities | 1,426,128 | 1,583,998 | 1,702,293 | 2,488,495 | 2,653,152 | |||||||||||||||
Long-term liabilities | 5,530,995 | 5,530,995 | 7,792,274 | 6,818,237 | 10,757,210 | |||||||||||||||
Revenues | 3,362,478 | 3,281,896 | 2,707,338 | 2,032,648 | 2,047,026 | |||||||||||||||
Operating income/(loss) | 1,122,467 | 477,559 | 872,331 | (85,071 | ) | (370,748 | ) | |||||||||||||
Net income/(loss) | 854,885 | 212,498 | 627,671 | (303,415 | ) | (420,191 | ) |
December 31, 2020 | ||||||||||||||||||||||||
Spacegas Inc. | Financial Power Inc. | Cannes View Inc. | Colorado Oil and Gas Inc | Frost Investments Corp Inc. | MGC Aggressive Holdings Inc. | |||||||||||||||||||
Current assets | 2,163,484 | 2,359,816 | 1,267,542 | 1,126,697 | 10,831,800 | 5,096,668 | ||||||||||||||||||
Non-current assets | 12,559,048 | 12,575,608 | 13,801,972 | 12,335,790 | 19,464,419 | 82,809,937 | ||||||||||||||||||
Current liabilities | 1,118,776 | 1,491,243 | 1,440,769 | 2,688,747 | 2,575,067 | 8,315,433 | ||||||||||||||||||
Long-term liabilities | 4,855,255 | 4,855,255 | 7,050,860 | 6,169,497 | 9,384,573 | 40,958,366 | ||||||||||||||||||
Revenues | 3,222,037 | 3,481,799 | 2,764,359 | 2,704,455 | 6,866,426 | 18,409,814 | ||||||||||||||||||
Operating income/(loss) | 451,895 | 935,869 | (645,197 | ) | (817,717 | ) | 3,122,539 | 4,869,260 | ||||||||||||||||
Net income/(loss) | 246,616 | 728,428 | (1,019,886 | ) | (1,155,342 | ) | 2,656,770 | 3,882,812 |
December 31, | ||||||||
2017 | 2018 | |||||||
Interest on long-term debt | 2,839,121 | 3,656,811 | ||||||
Administrative expenses | 204,472 | 251,257 | ||||||
Other operating costs | 563,333 | 660,000 | ||||||
Vessel operating and voyage expenses | 2,273,553 | 2,311,420 | ||||||
|
|
|
| |||||
Total | 5,880,479 | 6,879,488 | ||||||
|
|
|
|
December 31, | ||||||||
2019 | 2020 | |||||||
Interest on long-term debt | 2,790,621 | 1,887,414 | ||||||
Administrative expenses | 205,184 | 209,553 | ||||||
Vessel operating and voyage expenses | 3,006,274 | 1,676,532 | ||||||
Total | 6,002,079 | 3,773,499 | ||||||
(a) | On October 12, 2015 an amount of $736,000 was received from the bareboat charterer of Product carrier “Clean Thrasher” (ex. “Stealth Falcon” |
(b) | On February |
Term Loans | Drawn Amount | December 31, 2017 | Movement in 2018 | December 31, 2018 | ||||||||||||||||||
Issue Date | Maturity Date | Additions | Repayments | |||||||||||||||||||
February 12, 2008 | February 19, 2020 | 40,250,000 | 14,375,000 | — | (2,500,000 | ) | 11,875,000 | |||||||||||||||
July 30, 2008 | November 4, 2020 | 33,240,000 | 15,789,000 | — | (1,939,000 | ) | 13,850,000 | |||||||||||||||
October 9, 2008 | October 9, 2020 | 29,437,000 | 6,310,000 | — | (6,310,000 | ) | — | |||||||||||||||
December 14, 2018 | December 18, 2023 | 14,094,184 | 17,114,365 | — | (3,020,181 | ) | 14,094,184 | |||||||||||||||
April 14, 2014 | April 14, 2020 | 20,400,000 | 13,100,000 | — | (1,400,000 | ) | 11,700,000 | |||||||||||||||
March 27, 2018 | March 1, 2024 | 27,675,000 | 27,950,000 | — | (2,750,000 | ) | 25,200,000 | |||||||||||||||
March 1, 2011 | June 20, 2020 | 43,250,000 | 26,375,000 | — | (3,000,000 | ) | 23,375,000 | |||||||||||||||
September 23, 2013 | September 30, 2020 | 45,212,500 | 23,739,007 | — | (8,494,310 | ) | 15,244,697 | |||||||||||||||
March 24, 2014 | July 31, 2022 | 50,225,000 | 39,235,000 | — | (3,605,000 | ) | 35,630,000 | |||||||||||||||
April 16, 2014 | April 16, 2020 | 30,000,000 | 19,005,000 | — | (2,705,000 | ) | 16,300,000 | |||||||||||||||
December 14, 2018 | December 18, 2023 | 9,480,000 | 10,360,000 | — | (880,000 | ) | 9,480,000 | |||||||||||||||
June 20, 2014 | January 8, 2023 | 20,925,000 | 17,020,000 | — | (1,420,000 | ) | 15,600,000 | |||||||||||||||
December 20, 2013 | June 30, 2023 | 67,200,000 | 55,515,000 | — | (3,960,000 | ) | 51,555,000 | |||||||||||||||
December 24, 2015 | December 14, 2022 | 22,400,000 | 19,413,344 | — | (1,493,328 | ) | 17,920,016 | |||||||||||||||
July 4, 2014 | September 3, 2021 | 22,750,000 | 19,093,750 | — | (1,625,000 | ) | 17,468,750 | |||||||||||||||
July 29, 2014 | July 7, 2023 | 25,350,000 | 20,596,875 | — | (2,112,500 | ) | 18,484,375 | |||||||||||||||
December 7, 2017 | December 11, 2022 | 22,275,000 | 10,500,000 | 11,775,000 | (2,755,000 | ) | 19,520,000 | |||||||||||||||
May 18, 2016 | December 31, 2025 | 65,650,000 | 31,484,500 | 33,150,000 | (3,585,240 | ) | 61,049,260 | |||||||||||||||
March 1, 2017 | April 17, 2026 | 70,787,500 | — | 70,787,500 | (3,162,501 | ) | 67,624,999 | |||||||||||||||
|
|
|
|
|
|
|
| |||||||||||||||
Total | 386,975,841 | 115,712,500 | (56,717,060 | ) | 445,971,281 | |||||||||||||||||
Current portion of long-term debt |
| 42,580,323 | 42,433,562 | |||||||||||||||||||
Current portion of long-term debt associated with vessels held for sale |
| — | 30,150,000 | |||||||||||||||||||
Long term debt | 344,395,518 | 373,387,719 | ||||||||||||||||||||
|
|
|
| |||||||||||||||||||
Total debt | 386,975,841 | 445,971,281 | ||||||||||||||||||||
Current portion of deferred finance charges |
| 613,716 | 706,725 | |||||||||||||||||||
Current portion of deferred finance charges associated with vessels held for sale |
| — | 73,644 | |||||||||||||||||||
Deferred finance chargesnon-current |
| 1,453,677 | 1,873,466 | |||||||||||||||||||
|
|
|
| |||||||||||||||||||
Total deferred finance charges |
| 2,067,393 | 2,653,835 | |||||||||||||||||||
|
|
|
| |||||||||||||||||||
Total debt | 386,975,841 | 445,971,281 | ||||||||||||||||||||
Less: Total deferred finance charges |
| 2,067,393 | 2,653,835 | |||||||||||||||||||
|
|
|
| |||||||||||||||||||
Total debt, net of deferred finance charges |
| 384,908,448 | 443,317,446 | |||||||||||||||||||
Less: Current portion of long-term debt, net of current portion of deferred finance charges |
| 41,966,607 | 41,726,837 | |||||||||||||||||||
|
|
|
| |||||||||||||||||||
Less: Current portion of long-term debt associated with vessels held for sale, net of current portion of deferred finance charges |
| — | 30,076,356 | |||||||||||||||||||
|
|
|
| |||||||||||||||||||
342,941,841 | 371,514,253 | |||||||||||||||||||||
|
|
|
|
The below are changes in term loans during the years ended December 31, 2017 and 2018.
Term Loans | Drawn Amount | December 31, 2019 | 2020 | |||||||||||
Issue Date/ Refinancing Date | Maturity Date | |||||||||||||
December 14, 2018 | December 18, 2023 | 14,094,184 | 11,894,184 | 9,694,184 | ||||||||||
May 28, 2019 | April 16, 2024 | 11,000,000 | 10,360,000 | 9,080,000 | ||||||||||
August 6, 2019 | March 1, 2024 | 27,675,000 | 21,900,000 | 18,600,000 | ||||||||||
July 5, 2019 | July 11, 2026 | 22,230,000 | 21,436,071 | 18,260,357 | ||||||||||
March 29, 2019 | December 29, 2022 | 25,458,432 | 18,237,048 | 13,701,816 | ||||||||||
August 7, 2019 | July 31, 2022 | 50,225,000 | 29,025,000 | 25,420,000 | ||||||||||
December 14, 2018 | December 18, 2023 | 9,480,000 | 8,680,000 | 7,880,000 | ||||||||||
June 20, 2014 | January 8, 2023 | 20,925,000 | 14,180,000 | 12,760,000 | ||||||||||
August 6, 2019 | June 30, 2023 | 67,200,000 | 47,595,000 | 43,635,000 | ||||||||||
December 24, 2015 | December 14, 2022 | 22,400,000 | 16,426,688 | 14,933,360 | ||||||||||
July 4, 2014 | September 3, 2021 | 22,750,000 | 15,843,750 | 14,218,750 | ||||||||||
July 29, 2014 | July 7, 2023 | 25,350,000 | 16,371,875 | 14,259,375 | ||||||||||
December 7, 2017 | December 11, 2022 | 22,275,000 | 16,765,000 | 14,010,000 | ||||||||||
May 18, 2016 | December 31, 2025 | 65,650,000 | 56,945,940 | 52,842,620 | ||||||||||
March 1, 2017 | April 17, 2026 | 70,787,500 | 62,568,747 | 57,512,495 | ||||||||||
June 17, 2020 | June 19, 2026 | 11,505,000 | 0 | 11,121,500 | ||||||||||
April 30, 2020 | October 7, 2026 | 15,600,000 | 0 | 15,600,000 | ||||||||||
Total | 368,229,303 | 353,529,457 | ||||||||||||
Current portion of long-term debt | 41,421,346 | 41,161,686 | ||||||||||||
Long-term debt | 326,807,957 | 312,367,771 | ||||||||||||
Total debt | 368,229,303 | 353,529,457 | ||||||||||||
Current portion of deferred finance charges | 685,790 | 613,794 | ||||||||||||
Deferred finance charges non-current | 1,560,055 | 1,118,450 | ||||||||||||
Total deferred finance charges | 2,245,845 | 1,732,244 | ||||||||||||
Total debt | 368,229,303 | 353,529,457 | ||||||||||||
Less: Total deferred finance charges | 2,245,845 | 1,732,244 | ||||||||||||
Total debt, net of deferred finance charges | 365,983,458 | 351,797,213 | ||||||||||||
Less: Current portion of long-term debt, net of current portion of deferred finance charges | 40,735,556 | 40,547,892 | ||||||||||||
325,247,902 | 311,249,321 | |||||||||||||
to $32,500,000 was drawn down on May 16, 2017 and the second tranche amounting to $33,150,000 was drawn down on January 10, 2018.
On March 1, 2017 the Company, entered into a term loan with the bank to partially finance the acquisition of two LPG carriers on their delivery. The aggregate term loan is up to $76,020,000 and was drawn down in two tranches upon the delivery of each vessel. The first tranche amounting to $35,525,000 was drawn down on January 4, 2018 and on January 10, 2018 and the second tranche amounting to $35,262,500 was drawn down on April 13, 2018 and on April 17, 2018.
On December 7, 2017, the Company entered into a term loan with a bank to repay amounts outstanding under existing loan and to refinance the cost of acquisition of one product carrier. The term loan is up to $22,500,000 and was drawn down in two tranches. The first tranche amounting to $10,500,000 was drawn down on December 11, 2017 and the second tranche amounting to $11,775,000 was drawn down on February 8, 2018.
On March 27, 2018, the Company entered into a term loan amounting to $27,675,000 with the same bank to refinance the existing term loan dated February 1, 2011. An installment amounting to $275,000 was paid on January 22, 2018 relating to the existing term loan dated February 1, 2011.
On August 17, 2018, the Company voluntary repaid the outstanding balance of the term loan dated October 9, 2008, amounting to $5,920,000.
On December 14, 2018, the Company entered into a term loan with the same bank to refinance the existing term loans dated June 12, 2014 and September 15, 2016. The aggregate committed term loan is up to $23,574,184 and was drawn down in two tranches at the signing date of the term loan.
On March 29, 2019,2021, the Company entered into a term loan with a bank to refinance the existing term loansloan dated February 12, 2008 and September 23, 2013. Two installments amounting to $625,000 and $1,036,265 were paid on February 19, 2019 and on March 29, 2019, respectively, relating to the existing term loans.August 7, 2019. The new term
On April 15, 2019, the Company signedwith a commitment letter with the same bank to refinance the existing term loanloans dated April 14, 2014. Two installments amounting to $700,000 were paid on January 16, 2019July 4, 2014, June 20, 2014 and April 16, 2019 relating to the existing term loan.December 24, 2015. The new term
companies, as owners of the vessels. The term loans contain financial covenants requiring the Company to ensure that:
Gross deferred finance charges amounting to $7,871,170 and $8,374,435 as of December 31, 2017 and December 31, 2018, respectively, represent fees paid to the lenders for obtaining the related loans, and are presented on the balance sheet as a direct deduction from the carrying amount of the related loan and credit facility net of accumulated amortization. For the years ended December 31, 2016, 2017 and 2018, the amortization of deferred financing charges amounted to $715,587, $690,841 and $858,582, respectively, and is included in interest and finance costs in the consolidated statements of operations.
Year ended December 31, 2016: 3.43%
Year ended December 31, 2017: 3.97%
For the years ended December 31, 2018, 2019 and 2020, the amortization of deferred financing charges amounted to $858,582, $885,191 and $698,364, respectively, and is included in interest and finance costs in the consolidated statements of operations.
December 31, | Amount | |||
2019 | 72,583,562 | |||
2020 | 59,421,264 | |||
2021 | 67,040,014 | |||
2022 | 86,626,911 | |||
2023 | 63,483,131 | |||
Thereafter | 96,816,399 | |||
|
| |||
Total | 445,971,281 | |||
|
|
December 31, | Amount | |||
2021 | 41,161,686 | |||
2022 | 72,773,038 | |||
2023 | 65,392,513 | |||
2024 | 34,928,954 | |||
2025 | 53,314,974 | |||
Thereafter | 85,958,292 | |||
Total | 353,529,457 | |||
On June 2, 2017, the Companyarrangements as a condition of its term loan dated May 18, 2016, entered into an amortizing interest rate swap agreement for a notional amount of $15,996,125. The agreement is effective from August 16, 2017 and expires on May 16, 2025; under this agreement the Company receives each quarter interest on the notional amount based on the three month LIBOR rate and pays interest based on a fixed interest rate of 2.12%.
On February 1, 2018, the Company as a condition of its term loan dated May 18, 2016, entered into an amortizing interest rate swap agreement for a notional amount of $32,632,000. The agreement is effective from April 10, 2018 and expires on December 31, 2025; under this agreement the Company receives each quarter interest on the notional amount based on the three month LIBOR rate and pays interest based on a fixed interest rate of 2.74%.
On February 28, 2018, the Company as a condition of its term loan dated December 7, 2017, entered into an amortizing interest rate swap agreement for a notional amount of $21,586,250. The agreement is effective from March 12, 2018 and expires on December 11, 2022; under this agreement the Company receives each quarter interest on the notional amount based on the three month LIBOR rate and pays interest based on a fixed interest rate of 2.74%.
On December 10, 2018, the Company as a condition of its term loan dated May 18, 2016, entered into an amortizing interest rate swap agreement for a notional amount of $14,472,875. The agreement is effective from February 16, 2019 and expires on February 16, 2024; under this agreement the Company receives each quarter interest on the notional amount based on the three month LIBOR rate and pays interest based on a fixed interest rate of 2.89%.
2020.
Effective Date | Termination Date | Fixed Rate (Company pays) | Floating Rate (Company Receives) | Fair Value Asset/ (Liability) December 31, 2019 | Notional Amount December 31, 2019 | Fair Value Asset/ (Liability) December 31, 2020 | Notional Amount December 31, 2020 | |||||||||||||||||||
Swap 1 | September 30, 2015 | September 30, 2020 | 2.60 | % | 3 month U.S. dollar LIBOR | $ | (37,567 | ) | $ | 6,816,917 | — | — | ||||||||||||||
Swap 2 | September 30, 2015 | September 30, 2020 | 1.69 | % | 3 month U.S. dollar LIBOR | $ | 4,938 | $ | 6,816,917 | — | — | |||||||||||||||
Swap 3 | October 2, 2015 | October 2, 2020 | 1.54 | % | 3 month U.S. dollar LIBOR | $ | 25,443 | $ | 8,600,000 | — | — | |||||||||||||||
Swap 4 | November 4, 2015 | August 4, 2021 | 1.52 | % | 3 month U.S. dollar LIBOR | $ | 22,838 | $ | 7,921,875 | $ | (69,821 | ) | $ | 7,109,375 | ||||||||||||
Swap 5 | December 3, 2015 | September 3, 2021 | 1.55 | % | 3 month U.S. dollar LIBOR | $ | 16,906 | $ | 7,921,875 | $ | (71,626 | ) | $ | 7,109,375 | ||||||||||||
Swap 6 | August 16, 2017 | May 16, 2025 | 2.12 | % | 3 month U.S. dollar LIBOR | $ | (249,020 | ) | $ | 13,711,250 | $ | (857,234 | ) | $ | 12,695,750 | |||||||||||
Swap 7 | March 12, 2018 | December 11, 2022 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (419,160 | ) | $ | 16,765,000 | $ | (598,572 | ) | $ | 14,010,000 | |||||||||||
Swap 8 | April 10, 2018 | December 11, 2025 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (1,369,934 | ) | $ | 29,524,000 | $ | (2,682,391 | ) | $ | 27,452,000 | |||||||||||
Swap 9 | February 16, 2019 | February 16, 2024 | 2.89 | % | 3 month U.S. dollar LIBOR | $ | (580,136 | ) | $ | 13,711,250 | $ | (961,267 | ) | $ | 12,695,750 | |||||||||||
Total | $ | (2,585,692 | ) | $ | 111,789,084 | $ | (5,240,911 | ) | $ | 81,072,250 |
Balance Sheet Location | December 31, | |||||||||||||||||
2017 | 2018 | |||||||||||||||||
Derivatives designated as hedging instruments | Asset Derivatives | Liability Derivatives | Asset Derivatives | Liability Derivatives | ||||||||||||||
Interest Rate Swap | Non current assets—Fair value of derivatives | 645,169 | — | 1,068,369 | — | |||||||||||||
Interest Rate Swap | Non current liabilities—Fair value of derivatives | — | 126,525 | — | 465,389 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Total derivatives designated as hedging instruments | 645,169 | 126,525 | 1,068,369 | 465,389 | ||||||||||||||
|
|
|
|
|
|
|
|
Derivatives designated as hedging instruments | Balance Sheet Location | December 31, | ||||||||||||||||
2019 | 2020 | |||||||||||||||||
Asset Derivatives | Liability Derivatives | Asset Derivatives | Liability Derivatives | |||||||||||||||
Interest Rate Swap Agreements | Non current assets — Fair value of derivatives | 39,744 | — | — | — | |||||||||||||
Interest Rate Swap Agreements | Current liabilities — Fair value of derivatives | — | — | — | 141,447 | |||||||||||||
Interest Rate Swap Agreements | Non current liabilities — Fair value of derivatives | — | 2,618,250 | — | 5,099,464 | |||||||||||||
Total derivatives designated as hedging instruments | 39,744 | 2,618,250 | — | 5,240,911 | ||||||||||||||
Derivatives not designated as hedging instruments | Balance Sheet Location | December 31, | ||||||||||||||||
2019 | 2020 | |||||||||||||||||
Asset Derivatives | Liability Derivatives | Asset Derivatives | Liability Derivatives | |||||||||||||||
Interest Rate Swap Agreements | Current assets — Fair value of derivatives | 30,381 | — | — | — | |||||||||||||
Interest Rate Swap Agreements | Current liabilities — Fair value of derivatives | — | 37,567 | — | — | |||||||||||||
Total derivatives not designated as hedging instruments | 30,381 | 37,567 | — | — | ||||||||||||||
Derivatives not designated as hedging instruments | Location of Gain/(Loss) Recognized | Year Ended December 31, | ||||||||||||
2016 | 2017 | 2018 | ||||||||||||
Interest Rate Swap—Change in Fair Value | Loss on derivatives | 297,656 | — | — | ||||||||||
Interest Rate Swap—Realized loss | Loss on derivatives | (297,954 | ) | — | — | |||||||||
|
|
|
|
|
| |||||||||
Total loss on derivatives | (298 | ) | — | — | ||||||||||
|
|
|
|
|
|
Derivatives designated as hedging instruments | Location of Loss Recognized | Year Ended December 31, | ||||||||||||
2016 | 2017 | 2018 | ||||||||||||
Interest Rate Swap—Loss reclassified from OCI (Effective portion) | Loss on derivatives | (766,898 | ) | (403,943 | ) | (11,982 | ) | |||||||
|
|
|
|
|
| |||||||||
Total loss on derivatives | (766,898 | ) | (403,943 | ) | (11,982 | ) | ||||||||
|
|
|
|
|
|
Derivatives not designated as hedging instruments | Location of Gain/(Loss) Recognized | Year Ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||||
Interest Rate Swap — Reclassification from OCI | Loss on derivatives | — | 84,966 | 60,954 | ||||||||||
Interest Rate Swap — Change in Fair Value | Loss on derivatives | — | (327,147 | ) | 7,186 | |||||||||
Interest Rate Swap — Realized income/(expense) | Loss on derivatives | — | 134,631 | (119,116 | ) | |||||||||
Total loss on derivatives | — | (107,550 | ) | (50,976 | ) | |||||||||
Derivatives designated as hedging instruments | Location of (Loss)/Gain Recognized | Year Ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||||
Interest Rate Swap — Loss reclassified from OCI (Effective portion) | Loss on derivatives | (11,982 | ) | — | — | |||||||||
Interest Rate Swap — Income/(Loss) reclassified from OCI (Effective portion) | Interest and finance costs | — | 67,424 | (1,190,400 | ) | |||||||||
Total loss on derivatives | (11,982 | ) | 67,424 | (1,190,400 | ) | |||||||||
Unrealized Gain / (Loss) on cash flow hedges | ||||
Balance, January 1, | ||||
Effective portion of changes in fair value of interest swap contracts | ||||
| ||||
Balance, December 31, 2018 | 673,979 | |||
Effective portion of changes in fair value of interest swap contracts | ) | |||
Reclassification adjustment | ) | |||
Balance, December 31, 2019 | (2,259,043 | ) | ||
Effective portion of changes in fair value of interest swap contracts | ) | |||
Reclassification adjustment | ) | |||
Balance, December 31, 2020 | (4,952,823 | ) | ||
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 and other investments with high credit quality financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event ofreceivables from related party, trade and other receivables, claims receivable, payable to related party,parties, trade accounts payable and accrued liabilities are reasonable estimates of their fair value due to the short term nature of these financial instruments. Cash and cash equivalents and restricted cash 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. Additionally, the Company considers the creditworthiness of each counterparty when determining the fair value of the derivative instruments. The Company’s interest rate swap agreements are recorded at fair value. The fair value of the interest rate swaps is determined using a discounted cash flow method based on market-based LIBOR swap yield curves. LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swap and therefore are considered Level 2 items.
Fair Value as of December 31, 2017 | Fair Value Measurements Using | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets/(Liabilities): | ||||||||||||||||
Interest Rate Swap Agreements | 645,169 | — | 645,169 | — | ||||||||||||
Interest Rate Swap Agreements | (126,525 | ) | — | (126,525 | ) | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 518,644 | — | 518,644 | — | ||||||||||||
|
|
|
|
|
|
|
|
Fair Value as of December 31, 2019 | Fair Value Measurements Using | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets/(Liabilities): | ||||||||||||||||
Interest Rate Swap Agreements | 70,125 | — | 70,125 | — | ||||||||||||
Interest Rate Swap Agreements | (2,655,817 | ) | — | (2,655,817 | ) | — | ||||||||||
Total | (2,585,692 | ) | — | (2,585,692 | ) | — | ||||||||||
Fair Value as of December 31, 2017 | Fair Value Measurements Using | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets/(Liabilities): | ||||||||||||||||
Interest Rate Swap Agreements | 1,068,369 | — | 1,068,369 | — | ||||||||||||
Interest Rate Swap Agreements | (465,389 | ) | — | (465,389 | ) | — | ||||||||||
|
|
|
|
|
|
|
| |||||||||
Total | 602,980 | — | 602,980 | — | ||||||||||||
|
|
|
|
|
|
|
|
2020:
Fair Value as of December 31, 2020 | Fair Value Measurements Using | |||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets/(Liabilities): | ||||||||||||||||
Interest Rate Swap Agreements | (5,240,911 | ) | — | (5,240,911 | ) | — | ||||||||||
Total | (5,240,911 | ) | — | (5,240,911 | ) | — |
Fair Value as of June 30, 2017 | Fair Value Measurements Using | |||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Impairment Loss | ||||||||||||||||
Long-lived assets held and used | 6,000,000 | — | 6,000,000 | — | (897,965 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 6,000,000 | — | 6,000,000 | — | (897,965 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
The vessel Gas Monarch was recorded at its fair value of $6,000,000 as of June 30, 2017. Depreciation amounting to $255,015 was recorded in the period from July 1, 2017 to December 31, 2017 and the vessel was presented at its new deemed cost less depreciation of $5,744,985 in the accompanying consolidated balance sheet as of December 31, 2017.
Fair Value as of September 30, 2017 | Fair Value Measurements Using | |||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Impairment Loss | ||||||||||||||||
Long-lived assets held and used | 8,000,000 | — | 8,000,000 | — | (1,258,037 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 8,000,000 | — | 8,000,000 | — | (1,258,037 | ) | ||||||||||||||
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The vessels Gas Pasha and Gas Evoluzione were recorded at their fair value of $8,000,000 as of September 30, 2017. Depreciation amounting to $200,130 was recorded in the period from October 1, 2017 to December 31, 2017 and the vessels were presented at their new deemed cost less depreciation of $7,799,870 in the accompanying consolidated balance sheet as of December 31, 2017.
Fair Value as of December 31, 2019 | Fair Value Measurements Using | |||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Impairment Loss | ||||||||||||||||
Long-lived assets held and used | 6,000,000 | — | 6,000,000 | — | (993,916 | ) | ||||||||||||||
Total | 6,000,000 | — | 6,000,000 | — | (993,916) |
Fair Value as of June 30, 2020 | Fair Value Measurements Using | |||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Impairment Loss | ||||||||||||||||
Long-lived assets held and used | 3,000,000 | — | 3,000,000 | — | (305,607 | ) | ||||||||||||||
Total | 3,000,000 | — | 3,000,000 | — | (305,607) |
exceeded their fair value whichused) was determined based on their transaction price, as the sale price was agreed with unaffiliated third parties. These impairment charges were included in the accompanying consolidated statement of operations under the caption “Impairment loss” for the year ended December 31, 2017.
Fair Value as of June 30, 2018 | Fair Value Measurements Using | |||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Impairment Loss | ||||||||||||||||
Long-lived assets held and used | 9,400,000 | — | 9,400,000 | — | (1,531,130 | ) | ||||||||||||||
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Total | 9,400,000 | — | 9,400,000 | — | (1,531,130 | ) | ||||||||||||||
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The vessels Gas Sincerity and Gas Texiana were recorded at their fair value of $9,400,000 as of June 30, 2018. Following the memorandum of agreement for the disposal of these vessels in July 2018, Gas Sincerity and Gas Texiana were classified as held for sale as of September 30, 2018 and were recognized at their fair value less costs to sell. Fair value amounted to $9,400,000 and costs to sell amounted to $442,000. The vessels are classified as held for sale as of December 31, 2018 at fair value less costs to sell of $8,958,000 in the accompanying consolidated balance sheet as of December 31, 2018.
Fair Value as of December 31, 2018 | Fair Value Measurements Using | |||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Impairment Loss | ||||||||||||||||
Long-lived assets held for sale | 55,230,000 | — | 55,230,000 | — | (3,189,858 | ) | ||||||||||||||
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Total | 55,230,000 | — | 55,230,000 | — | (3,189,858 | ) | ||||||||||||||
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The vessels Gas Defiance, Gas Shuriken, Gas Haralambos and Eco Lucidity were classified as held for sale as of December 31, 2018 and were recognized at their fair value of $55,230,000 less costs to sell. Costs to sell amounted to nil.
During 2018, the Company recognized for eleven of its vessels an aggregate impairment charge of $11,351,821. Seven of the Company’s vessels were written down to theirits estimated fair value as determined by the Company based on their transaction price, as the sale price was agreed with unaffiliated third parties. Remaining four vessels were written down to their estimated fair value as their carrying amount exceeded their fair value which was determined based on vessel valuations, obtained from independent third party shipbrokers, which are mainly based on recent sales and purchase transactions of similar vessels.
vessels, resulting in an impairment charge of $305,607. Depreciation amounting to $170,884 was recorded in the period from July 1, 2020 to December 31, 2020 and the vessel was presented at its new deemed cost less depreciation of $2,829,116 in the accompanying consolidated balance sheet as of December 31, 2020.
Fair Value as of December 31, 2020 | Fair Value Measurements Using | |||||||||||||||||||
Description | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Impairment Loss | ||||||||||||||||
Long-lived assets held and used | 3,500,000 | — | 3,500,000 | — | (714,895 | ) | ||||||||||||||
Total | 3,500,000 | — | 3,500,000 | — | (714,895) |
On March 22, 2010, the Company’s Board of Directors adopted a new stock repurchase plan for up to $15,000,000 to be used for repurchasing the Company’s common shares. For the year ended December 31, 2010, the Company completed the repurchase of 1,205,229 shares paying an average price per share of $5.21. These shares were cancelled and removed from the Company’s capital stock. During the year ended December 31, 2011, the Company completed the repurchase of additional 551,646 shares paying an average price per share of $4.05. These shares are held as treasury stock by the Company. No shares were repurchased during the years ended December 31, 2012 and 2013.
On April 30, 2013, the Company completed afollow-on public offering of 11,500,000 shares of common stock, par value of $0.01, for $10.00 per share. The gross proceeds from the offering amounted to $115,000,000, while the net proceeds after the underwriters’ discounts and commissions and other related expenses amounted to $109,119,029.
On February 14, 2014, the Company completed an underwritten registered offering of 3,398,558 shares of common stock, par value of $0.01, for $9.71 per share. The gross proceeds from the offering amounted to $32,999,998, while the net proceeds after the underwriters’ discounts and commissions and other related expenses amounted to $31,937,044.
On August 12, 2014, the Company completed an underwritten registered offering of 3,500,000 shares of common stock, par value of $0.01, for $10.00 per share. The gross proceeds from the offering amounted to $35,000,000, while the net proceeds after the underwriters’ discounts and commissions and other related expenses amounted to $34,071,501.
On November 26, 2014, the Company’s Board of Directors adopted a new stock repurchase plan for up to $10,000,000 to be used for repurchasing the Company’s common shares. For the year ended December 31, 2014, the Company completed the repurchase of 843,022 shares paying an average price per share of $6.30. These shares are held as treasury stock by the Company.
On February 26, 2015,23, 2019, the Company’s Board of Directors approved the extension of the existing stock repurchase plan for an additional amount of $20,000,000$10,000,000 to be used for repurchasing the Company’s common shares. For the year ended December 31, 2015,2019, the Company completed the repurchase of 2,372,097540,910 shares paying an average price per share of $5.46.$3.40. For the year ended December 31, 2016,2020, the Company completed the repurchase of an additional 657,113359,792 shares paying an average price per share of $3.10.$2.81. These shares are held as treasury stock by the Company. For the yearsyear ended December 31, 2017 and 2018, the Company hasdid not mademake any repurchase of its common shares.
On November 22, 2012, the Company granted 74,761non-vested restricted shares to the Company’s CEO, CFO, Executive andnon-executive members
On November 20, 2014, the Company granted 230,713 ofnon-vested restricted shares under the 2007 plan to the Company’s CEO andnon-executive members of Board of Directors of the Company. The fair value of each share granted was $7.58 which is equal to the market value of the Company’s common stock on that day. The restricted shares vest over 3 years from the grant date (115,357 restricted shares on November 20, 2015, 57,678 restricted shares on November 20, 2016 and 57,678 restricted shares on November 20, 2017).
2020.
A summary of the status of the Company’s No restricted 2018, is presented below:
Number of restricted shares | Weighted average grant date fair value per non-vested share | |||||||
Non-vested, January 1, 2018 | — | — | ||||||
Granted | 264,621 | 3.59 | ||||||
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Non-vested, December 31, 2018 | 264,621 | 3.59 | ||||||
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2019 and 2020.
The Company applies the
Year Ended December 31, | ||||||||||||
2016 | 2017 | 2018 | ||||||||||
Numerator | ||||||||||||
Net loss | (7,798,300 | ) | (1,218,237 | ) | (12,276,520 | ) | ||||||
Less: Undistributed earnings allocated tonon-vested shares | — | — | — | |||||||||
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Net loss attributable to common shareholders, basic | (7,798,300 | ) | (1,218,237 | ) | (12,276,520 | ) | ||||||
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Denominator | ||||||||||||
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Weighted average number of shares outstanding, basic and diluted | 39,824,038 | 39,809,364 | 39,860,563 | |||||||||
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Loss per share, basic and diluted | (0.20 | ) | (0.03 | ) | (0.31 | ) | ||||||
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Year Ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
Numerator | ||||||||||||
Net (loss)/income | (12,276,520 | ) | 2,093,124 | 11,984,485 | ||||||||
Less: Undistributed earnings allocated to non-vested shares | 0 | (8,922 | ) | 0 | ||||||||
Net (loss)/income attributable to common shareholders, basic | (12,276,520 | ) | 2,084,202 | 11,984,485 | ||||||||
Denominator | ||||||||||||
Weighted average number of shares outstanding, basic and diluted | 39,860,563 | 39,800,434 | 38,357,893 | |||||||||
(Loss)/earnings per share, basic and diluted | (0.31 | ) | 0.05 | 0.31 | ||||||||
calculations for the year ended December 31, 2018.
anti-dilutive
Year ended December 31, | ||||||||||||
2016 | 2017 | 2018 | ||||||||||
Time charter revenues | 81,621,851 | 96,339,915 | 104,099,818 | |||||||||
Time charter revenues—related party | 7,592,784 | 1,973,643 | — | |||||||||
Bareboat revenues | 29,422,512 | 27,647,268 | 24,646,311 | |||||||||
Voyage charter revenues | 23,210,618 | 26,924,708 | 34,266,082 | |||||||||
Other income | 2,284,418 | 1,426,387 | 1,317,991 | |||||||||
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Total | 144,132,183 | 154,311,921 | 164,330,202 | |||||||||
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Year ended December 31, | ||||||||||||
2018 | 2019 | 2020 | ||||||||||
Time charter revenues | 104,099,818 | 97,249,537 | 101,837,425 | |||||||||
Bareboat revenues | 24,646,311 | 21,764,102 | 16,876,956 | |||||||||
Voyage charter revenues | 34,266,082 | 24,018,198 | 25,161,401 | |||||||||
Other income | 1,317,991 | 1,227,475 | 1,127,239 | |||||||||
Total | 164,330,202 | 144,259,312 | 145,003,021 | |||||||||
Year ended December 31, | ||||||||||||
Voyage Expenses | 2016 | 2017 | 2018 | |||||||||
Port expenses | 3,306,157 | 2,546,926 | 2,841,661 | |||||||||
Bunkers | 6,117,326 | 6,668,126 | 11,641,615 | |||||||||
Commissions | 4,259,812 | 4,584,612 | 4,796,483 | |||||||||
Other voyage expenses | 1,706, 970 | 1,916,873 | 1,407,416 | |||||||||
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Total | 15,390,265 | 15,716,537 | 20,687,175 | |||||||||
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Year ended December 31, | ||||||||||||
Vessels’ Operating Expenses | 2016 | 2017 | 2018 | |||||||||
Crew wages and related costs | 36,821,527 | 37,345,800 | 36,628,082 | |||||||||
Insurance | 2,421,948 | 2,016,647 | 2,068,485 | |||||||||
Repairs and maintenance | 5,724,148 | 6,424,557 | 7,359,816 | |||||||||
Spares and consumable stores | 8,514,293 | 8,508,276 | 8,907,211 | |||||||||
Miscellaneous expenses | 5,340,920 | 5,124,154 | 5,471,184 | |||||||||
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Total | 58,822,836 | 59,419,434 | 60,434,778 | |||||||||
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Year ended December 31, | ||||||||||||
Vessels’ Operating Expenses | 2018 | 2019 | 2020 | |||||||||
Crew wages and related costs | 36,628,082 | 30,874,618 | 32,073,496 | |||||||||
Insurance | 2,068,485 | 2,162,523 | 1,889,041 | |||||||||
Repairs and maintenance | 7,359,816 | 5,677,033 | 6,590,006 | |||||||||
Spares and consumable stores | 8,907,211 | 7,783,902 | 7,990,022 | |||||||||
Miscellaneous expenses | 5,471,184 | 3,088,018 | 4,752,656 | |||||||||
Total | 60,434,778 | 49,586,094 | 53,295,221 | |||||||||
outstanding loan balances and accrued interest of Spacegas Inc., Financial Power Inc. and MGC Aggressive Holdings Inc. as of December 31, 2020 amounted to $57,985,000 and $194,144, respectively.The Company assigns a remote possibility of default to the abovementioned loan agreements and hence has not established any provisions for losses relating to this matter. With regards to the guarantee provided for the loan agreement entered into by MGC Aggressive Holdings Inc., the joint venture party owning 49% equity interest in MGC Aggressive Holdings Inc. has provided a counter guarantee to the Company amounting to 49% of the outstanding loan balances of MGC Aggressive Holdings Inc. Total outstanding loan balances and accrued interest of MGC Aggressive Holdings Inc. as of December 31, 2020 amounted to $46,875,000 and 153,320, respectively. |
In March and December 2018, the Company chartered in the vessels Astrid and Kazak.
|
December 31 | Amount | |||
2021 | 23,152,125 | |||
Total | 23,152,125 | |||
Leases – The Company as Lessee
Description | Location in balance sheet | December 31, 2019 | December 31, 2020 | |||||||
Non current assets: | ||||||||||
Chartered-in contract greater than 12 months | Operating lease right-of-use | $ | 386,388 | $ | — | |||||
Office leases | Operating lease right-of-use | 86,744 | — | |||||||
$ | 473,132 | $ | — | |||||||
Liabilities: | ||||||||||
Chartered-in contract greater than 12 months | Current portion of operating lease liabilities | $ | 386,388 | $ | — | |||||
Office leases | Current portion of operating lease liabilities | 86,744 | — | |||||||
Lease liabilities - current portion | $ | 473,132 | $ | — | ||||||
Description | Location in statement of operations | 2019 | 2020 | |||||||
Lease expense for chartered-in contracts 12 months or less | Charter hire expenses | $ | 4,708,988 | — | ||||||
Lease expense for chartered-in contracts greater than 12 months | Charter hire expenses | 1,560,000 | 318,606 | |||||||
Total charter hire expenses | 6,268,988 | 318,606 | ||||||||
Lease expense for office leases | General and administrative expenses | 87,192 | 90,121 | |||||||
Sub lease income from chartered-in contracts greater than 12 months * | Revenues | 3,091,390 | 860,227 |
* | The sub-lease income represents only time charter revenue earned on thechartered-in contracts greater than 12 months. There is additional revenue of $482,879 earned from voyage charters on the samechartered-in contract which is recorded in Revenues in our consolidated statement of operations for the year ended December 31, 2019 (2020: NaN). Additionally, there is revenue earned from time charters fromchartered-in contracts 12 months or less which is included in Revenues in our consolidated statements of operations for the year ended December 31, 2019. No such contracts existed for the year ended December 31, 2020. |
21. Subsequent Events
Year | Chartered-in contracts greater than 12 months | Office leases | Total Operating leases | |||||||||
Discount rate upon adoption | 5.6 | % | 5.6 | % | 5.6 | % | ||||||
2020 (undiscounted lease payments) | $ | 390,000 | $ | 88,140 | $ | 478,140 | ||||||
390,000 | 88,140 | 478,140 | ||||||||||
Present value of lease liability | 386,388 | 86,744 | 473,132 | |||||||||
Lease liabilities - short term | 386,388 | 86,744 | 473,132 | |||||||||
Total lease liabilities | 386,388 | 86,744 | 473,132 | |||||||||
Discount based on incremental borrowing rate (Difference between undiscounted lease payments and present value of lease liability) | $ | 3,612 | $ | 1,396 | $ | 5,008 |
21. |
Subsequent Events |
F-33