☐ | 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 |
2021
☐ | 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 |
Large accelerated filer | ☐ | Accelerated filer | ☒ | Non-accelerated filer | ☐ | Emerging growth company | ☐ |
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). ☐ Yes ☒ No
U.S. GAAP ☒ | International Financial Reporting Standards as issued by the | Other ☐ | ||||||
International Accounting Standards Board | ☐ |
1 | |||||||||||
Part I | 2 | ||||||||||
Item 1. | 2 | ||||||||||
Item 2. | 2 | ||||||||||
Item 3. | 2 | ||||||||||
Item 4. | 32 | ||||||||||
Item 4A. | |||||||||||
Item 5. | |||||||||||
Item 6. | |||||||||||
Item 7. | |||||||||||
Item 8. | |||||||||||
Item 9. | |||||||||||
Item 10. | |||||||||||
Item 11. | 88 | ||||||||||
Item 12. | 90 | ||||||||||
PART II | |||||||||||
Item 13. | |||||||||||
Item 14. | |||||||||||
Item 15. | |||||||||||
Item 16A. | |||||||||||
Item 16B. | |||||||||||
Item 16C. | |||||||||||
Item 16D. | |||||||||||
Item 16E. | |||||||||||
Item 16F. | |||||||||||
Item 16G. | 95 | ||||||||||
Item 16H. | 95 | ||||||||||
Item | |||||||||||
PART III | |||||||||||
Item 17. | |||||||||||
Item 18. | |||||||||||
Item 19. |
Item 1. | Identity of Directors, Senior Management and Advisers |
Item 2. | Offer Statistics and Expected Timetable |
Item 3. | Key Information |
The following table sets forth our selected consolidated financial data and other operating data shown in U.S. dollars, other than share and fleet data. For the effects of the adoption of the new leasing standard (ASC 842), please refer to Note 2 to our consolidated financial statements. The table should be read together with “Item 5. Operating and Financial Review and Prospects.”
Our audited consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the years ended December 31, 2017, 2018 and 2019 and the audited consolidated balance sheets as of December 31, 2018 and 2019, together with the notes thereto, are included in “Item 18. Financial Statements” and should be read in their entirety. The selected consolidated income statement data for the years ended
December 31, 2015 and 2016 and the selected consolidated balance sheet data as of December 31, 2015, 2016 and 2017 have been derived from our audited consolidated financial statements which are not included in “Item 18. Financial Statements”.
Year Ended December 31, | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
INCOME STATEMENT DATA | ||||||||||||||||||||
Revenues | $ | 131,501,881 | $ | 136,539,399 | $ | 152,338,278 | $ | 164,330,202 | $ | 144,259,312 | ||||||||||
Revenues—related party | 9,814,000 | 7,592,784 | 1,973,643 | — | — | |||||||||||||||
Total Revenues | $ | 141,315,881 | $ | 144,132,183 | $ | 154,311,921 | $ | 164,330,202 | $ | 144,259,312 | ||||||||||
Operating expenses: | ||||||||||||||||||||
Voyage expenses | 15,849,855 | 13,618,025 | 13,804,032 | 18,649,258 | 15,201,978 | |||||||||||||||
Voyage expenses—related party | 1,725,683 | 1,772,240 | 1,912,505 | 2,037,917 | 1,788,543 | |||||||||||||||
Vessels’ operating expenses | 46,477,583 | 55,680,993 | 58,618,526 | 59,920,278 | 48,619,594 | |||||||||||||||
Vessels’ operating expenses-related party | 4,177,042 | 3,141,843 | 800,908 | 514,500 | 966,500 | |||||||||||||||
Charter hire expenses | 4,124,960 | 4,054,387 | 3,524,770 | 6,150,780 | 6,268,988 | |||||||||||||||
Dry-docking costs | 1,774,905 | 3,613,230 | 3,529,047 | 3,617,577 | 1,094,306 | |||||||||||||||
Management fees-related party | 6,452,145 | 7,346,180 | 7,205,490 | 7,027,195 | 5,730,910 | |||||||||||||||
General and administrative expenses | 3,655,316 | 3,110,409 | 2,898,958 | 3,046,962 | 3,706,320 | |||||||||||||||
Depreciation | 35,857,507 | 39,096,589 | 38,921,672 | 41,258,142 | 37,693,733 | |||||||||||||||
Impairment loss | 8,238,987 | 5,735,086 | 6,461,273 | 11,351,821 | 993,916 | |||||||||||||||
Other operating costs/(income) | — | — | 1,058,863 | (549,804 | ) | — | ||||||||||||||
Net (gain)/loss on sale of vessels | (33,251 | ) | (118,427 | ) | 77,314 | 763,925 | 485,516 | |||||||||||||
Total expenses | 128,300,732 | 137,050,555 | 138,813,358 | 153,788,551 | 122,550,304 | |||||||||||||||
Income from operations | 13,015,149 | 7,081,628 | 15,498,563 | 10,541,651 | 21,709,008 | |||||||||||||||
Interest and finance costs | (10,385,261 | ) | (14,268,148 | ) | (16,661,464 | ) | (23,286,547 | ) | (20,978,065 | ) | ||||||||||
Gain on deconsolidation of subsidiaries | — | — | — | — | 145,000 | |||||||||||||||
Loss on derivatives | (370,584 | ) | (767,196 | ) | (403,943 | ) | (11,982 | ) | (107,550 | ) | ||||||||||
Interest income and other income | 173,083 | 454,472 | 322,868 | 587,477 | 846,271 | |||||||||||||||
Foreign exchange gain/(loss) | 134,291 | (299,056 | ) | 25,739 | (107,119 | ) | (8,235 | ) | ||||||||||||
Other expenses, net | (10,448,471 | ) | (14,879,928 | ) | (16,716,800 | ) | (22,818,171 | ) | (20,102,579 | ) | ||||||||||
Equity gain in joint ventures | — | — | — | — | 486,695 | |||||||||||||||
Net income/(loss) | 2,566,678 | (7,798,300 | ) | (1,218,237 | ) | (12,276,520 | ) | 2,093,124 | ||||||||||||
Earnings/(loss) per share, basic | $ | 0.06 | $ | (0.20 | ) | $ | (0.03 | ) | $ | (0.31 | ) | $ | 0.05 | |||||||
Earnings/(loss) per share, diluted | $ | 0.06 | $ | (0.20 | ) | $ | (0.03 | ) | $ | (0.31 | ) | $ | 0.05 | |||||||
Weighted (basic and diluted) average number of shares outstanding | 41,315,127 | 39,824,038 | 39,809,364 | 39,860,563 | 39,800,434 | |||||||||||||||
Dividends declared per share | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 |
As of December 31, | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
BALANCE SHEET DATA | ||||||||||||||||||||
Current assets, including cash | $ | 123,372,369 | $ | 76,478,045 | $ | 62,838,725 | $ | 138,866,439 | $ | 77,932,439 | ||||||||||
Total assets | 1,037,874,170 | 1,001,942,344 | 996,226,191 | 1,036,722,488 | 954,188,931 | |||||||||||||||
Current liabilities | 103,714,126 | 81,366,606 | 78,748,931 | 103,490,335 | 67,136,139 | |||||||||||||||
Derivative liability | 978,853 | 364,823 | 126,525 | 465,389 | 2,655,817 | |||||||||||||||
Total long-term debt, including current portion | 422,162,554 | 397,885,589 | 384,908,448 | 443,317,446 | 365,983,458 | |||||||||||||||
Net assets | 583,051,160 | 573,975,304 | 573,478,772 | 561,252,511 | 559,186,640 | |||||||||||||||
Capital stock | 442,850 | 442,850 | 442,850 | 445,496 | 445,496 | |||||||||||||||
Number of shares of common stock outstanding | 40,517,676 | 39,860,563 | 39,860,563 | 39,860,563 | 39,584,274 |
Year ended December 31, | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
OTHER FINANCIAL DATA | ||||||||||||||||||||
Net cash provided by operating activities | $ | 48,054,596 | $ | 36,154,088 | $ | 52,354,053 | $ | 37,809,225 | $ | 30,818,599 | ||||||||||
Net cash (used in)/provided by investing activities(13) | (151,799,747 | ) | (54,074,771 | ) | (48,913,177 | ) | (78,552,902 | ) | 33,487,288 | |||||||||||
Net cash provided by/(used in) financing activities | 87,899,271 | (27,213,272 | ) | (14,069,329 | ) | 57,271,476 | (61,616,546 | ) | ||||||||||||
FLEET DATA | ||||||||||||||||||||
Average number of vessels(1) | 48.8 | 53.4 | 52.6 | 50.8 | 42.6 | |||||||||||||||
Total voyage days for fleet(2) | 18,446 | 19,999 | 19,717 | 19,363 | 16,230 | |||||||||||||||
Total time and bareboat charter days for fleet(3) | 14,516 | 15,831 | 16,772 | 15,696 | 13,541 | |||||||||||||||
Total spot market days for fleet(4) | 3,930 | 4,168 | 2,945 | 3,667 | 2,689 | |||||||||||||||
Total calendar days for fleet(5) | 18,541 | 20,275 | 19,917 | 19,544 | 16,328 | |||||||||||||||
Fleet utilization(6) | 99.5 | % | 98.6 | % | 99.0 | % | 99.1 | % | 99.4 | % | ||||||||||
Fleet operational utilization(7) | 92.5 | % | 91.1 | % | 96.2 | % | 95.5 | % | 97.5 | % | ||||||||||
AVERAGE DAILY RESULTS | ||||||||||||||||||||
Adjusted average charter rate(8) | $ | 6,708 | $ | 6,437 | $ | 7,029 | $ | 7,418 | $ | 7,842 | ||||||||||
Vessel operating expenses(9) | 2,732 | 2,901 | 2,983 | 3,092 | 3,037 | |||||||||||||||
General and administrative expenses(10) | 197 | 153 | 146 | 156 | 227 | |||||||||||||||
Management fees(11) | 348 | 362 | 362 | 360 | 351 | |||||||||||||||
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Total daily operating expenses(12) | 2,929 | 3,054 | 3,129 | 3,248 | $ | 3,264 | ||||||||||||||
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Year ended December 31, | ||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||
Voyage revenues | $ | 141,315,881 | $ | 144,132,183 | $ | 154,311,921 | $ | 164,330,202 | $ | 144,259,312 | ||||||||||
Voyage expenses | (17,575,538 | ) | (15,390,265 | ) | (15,716,537 | ) | (20,687,175 | ) | (16,990,521 | ) | ||||||||||
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Charter equivalent revenues | $ | 123,740,343 | $ | 128,741,918 | $ | 138,595,384 | $ | 143,643,027 | $ | 127,268,791 | ||||||||||
Total voyage days for fleet | 18,446 | 19,999 | 19,717 | 19,363 | 16,230 | |||||||||||||||
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Adjusted average charter rate | $ | 6,708 | $ | 6,437 | $ | 7,029 | $ | 7,418 | $ | 7,842 | ||||||||||
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B. Capitalization and Indebtedness
The imposition by the U.S., China or other governments of protectionist trade measures, including tariffs and other trade restrictions, the exit of the United Kingdom from the EU, the continuing war in Syria, renewed terrorist attacks around the world and the refugee crisis could also adversely affect global economic conditions and the world LPG, oil and petroleum markets and in turn the demand for seaborne transportation of these commodities. The tariffs imposed,In addition, the conflict in Ukraine is disrupting energy production and threatened, by the U.S.trade patterns and Chinaits impact on energy prices and LPG charter rates, which initially have led to concerns regarding a potentially protracted trade war that may continue to negatively affect LPG shipping markets in Asia, which were weak throughout most of 2019.increased, is uncertain. The global response to the emergence of a pandemic crisis such as the recent outbreak, particularly if it persists,alsocontinue to have a material adverse effect on our financial performance, particularly for our vessels in the spot market or with charters expiring in 2020.
2022.
The recent dramatic decline
results.
The product carrier and crude oil tanker shipping sectors are cyclical, which may lead to lower charter rates and lower vessel values.
The medium range type product carrier and crude oil tanker shipping sectors are cyclical with attendant volatility in charter rates and vessel values. Two of our three product carriers are currently operating on time charters scheduled to expire in May 2020 and June 2020, respectively, while our remaining product carrier is operatingunderabareboat charter scheduled to expire inSeptember 2020.As of April 1, 2020, our crude oil tanker was operating in the spot market. If prevailing market conditions in these sectors, which are currently extremely volatile as a result of theCOVID-19 outbreak in conjunction with the current market oversupply of oil, we may not be able to renew or replace existing charters for these vessels at the same or similar rates. If we were required to enter into a charter when charter hire rates are low, our results of operations could be adversely affected.
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 adjustmentloss 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.
0.5% (lowered from 3.5%) sulfur cap on marine fuels used by vessels not equipped with scrubbers and the International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”), which requires vessels to install expensive ballast water treatment systems, we may be required to incur additional costs to meet maintenance and inspection requirements, to develop contingency plans for potential spills, and to obtain additional insurance coverage. Environmental 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 may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our
increase the costs of operating and maintaining our ships and could require us to install new emission controls, as well as acquire allowances, pay taxes related to our greenhouse gas emissions or administer and manage a greenhouse gas emissions program.
on vessels, mining of waterways and other efforts to disrupt shipping in the area. Continuing conflicts, instability and other recent developments in Ukraine, the Middle East and elsewhere, including attacks in recent attacksyears 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 or the Black Sea, may be otherwise disrupted. Acts of terrorism may increase with the continuing conflicts in the Middle East and North Africa, and therefore our vessels may face higher risks of being attacked.
Company, and individuals with these formerly targeted Iranian business sectors.have beenwere
None of our vessels called in any ports in Cuba, North Korea, Syria or Iran in 2014, 2015 or 2019. In 2016, two of our vessels made a total of two port calls to Iran, representing less than 0.1% of the 2,412 total port calls made by all the vessels owned by us in 2016 and in 2017 six of our vessels made a total of 82 port calls to Iran which represents 2.67% of the 3,074 port calls made by
entities or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.
2023.
traveling unloaded to pick up cargo. When the current charters for our fleet expire or are terminated, it may not be possible to
They
all, which may also be further negatively impacted by the
turn, could have an adverse effect on our earnings and cash flow. In addition, LIBOR, which was at low levels for an extended period of time, increased in 2017 and 2018 before declining in 2019, and may againrecently has begun to increase from these levels.substantially, with expectations that it will increase further. Our financial condition could be materially adversely affected at any time that we have not entered into interest rate hedging arrangements to hedge our exposure to the interest rates applicable to our credit facilities and any other financing arrangements we may enter into in the future, including those we enter into to finance a portion of the amounts payable with respect to newbuildings.
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, the
impacted.
parties
industry, including due to oil majors and other charterers electing not to do business with Stealth Maritime or us.
our fleet. Our vessels, in particular our LPG carriers require a technically skilled staff with specialized training. If the technical managers’ crewing agents are unable to employ such technically skilled staff, they may not be able to adequately staff our vessels. If Stealth Maritime is unable to operate our financial and operations systems effectively, or our technical managers are unable to recruit suitable employees as we expand our fleet, our results of operation and our ability to expand our fleet may be adversely affected.
As of April 1, 2020, we had an agreement to acquire one 11,000 cbm newbuilding LPG carrier with expected delivery to us in the first quarter of 2021.
and technical managers and integrating newly acquired vessels into existing infrastructures. We may not be successful in executing any growth initiatives and may incur significant expenses and losses in connection therewith.
product carrier and crude oil tanker markets,market, we may not be able to compete for charters with new entrants or established companies with greater resources.
We have three medium range product carriers and one Aframax crude oil tanker; however,
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.
yours.
number of days in such taxable year, one or more persons each of whom owns either directly or under applicable attribution rules, at least 5% of our shares of common stock, own, in the aggregate, 50% or more of our shares of common stock, unless we can establish, in accordance with applicable documentation requirements, that a sufficient number of the shares of common stock in the closely-held block are owned, directly or indirectly, by persons that are residents of foreign jurisdictions that provide United States shipping companies with an
governance standards applicable to U.S. listed companies other than that, while Nasdaq requires listed companies
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.
Our current
Item 4. | Information on the Company |
2022, and ceased to
Name | Year Built | Vessel Size (cbm) | Vessel Type | Employment Status | Expiration of Charter(1) | |||||
Eco Arctic | 2018 | 22,363 | semi-refrigerated | Time Charter | September 2020 | |||||
Eco Ice | 2018 | 22,358 | semi-refrigerated | Time Charter | February 2022 | |||||
Eco Freeze | 2018 | 22,353 | semi-refrigerated | Time Charter | July 2020 | |||||
Eco Frost | 2017 | 22,359 | semi-refrigerated | Time Charter | February 2022 | |||||
Eco Nical | 2016 | 7,541 | fully-pressurized | Time Charter | June 2020 | |||||
Gas Husky | 2012 | 7,516 | fully-pressurized | Bareboat Charter | July 2020 | |||||
Gas Esco | 2012 | 7,514 | fully-pressurized | Bareboat Charter | June 2020 | |||||
Eco Dominator | 2016 | 7,221 | fully-pressurized | Time Charter | May 2020 | |||||
Eco Galaxy | 2015 | 7,213 | fully-pressurized | Time Charter | December 2020 | |||||
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 | March2021 | |||||
Gas Prodigy | 2003 | 5,031 | fully-pressurized | Time Charter | March 2021 | |||||
Eco Enigma | 2015 | 5,025 | fully-pressurized | Time Charter | July 2020 | |||||
Eco Universe | 2015 | 5,025 | fully-pressurized | Time Charter | February 2021 | |||||
Eco Czar(6) | 2015 | 5,020 | fully-pressurized | Time Charter | January 2021 | |||||
Eco Nemesis | 2015 | 5,019 | fully-pressurized | Time Charter | March 2021 | |||||
Gas Monarch | 1997 | 5,018 | fully-pressurized | Spot | — | |||||
Gas Elixir | 2011 | 5,018 | fully-pressurized | Time Charter | July 2020 | |||||
Gas Cerberus | 2011 | 5,018 | fully-pressurized | Time Charter | May 2020 | |||||
Gas Myth(6) | 2011 | 5,018 | fully-pressurized | Time Charter | January 2021 | |||||
Gas Inspiration | 2006 | 5,018 | fully-pressurized | Time Charter | August 2020 | |||||
Eco Invictus | 2014 | 5,016 | fully-pressurized | Time Charter | November 2020 | |||||
Eco Green(6) | 2015 | 4,991 | fully-pressurized | Time Charter | October 2020 | |||||
Eco Dream(6) | 2015 | 4,989 | fully-pressurized | Time Charter | September 2020 | |||||
Gas Spirit | 2001 | 4,112 | fully-pressurized | Time Charter | November 2020 | |||||
Gas Nemesis II(ex. Gas Zael)(6) | 2001 | 4,111 | fully-pressurized | Spot | — | |||||
Eco Loyalty(7)(5) | 2015 | 3,529 | fully-pressurized | Bareboat Charter | June 2022 | |||||
Eco Elysium(7)(5) | 2014 | 3,526 | fully-pressurized | Bareboat Charter | August 2021 | |||||
Eco Royalty(7)(5) | 2015 | 3,525 | fully-pressurized | Bareboat Charter | April 2022 | |||||
Eco Corsair(7) | 2014 | 3,524 | fully-pressurized | Bareboat Charter | December 2029 | |||||
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 | January 2021 | |||||
Gas Pasha | 1995 | 3,310 | fully-pressurized | Time Charter | June 2020 | |||||
255,406 cbm |
JV LPG Vessels (8 vessels)
Eco Nebula(2) | 2007 | 38,898 | fully-refrigerated | Time Charter | September 2020 | |||||
Gaschem Bremen(3) | 2010 | 35,232 | fully-refrigerated | Time Charter | July 2020 | |||||
Gaschem Stade(3) | 2010 | 35,214 | fully-refrigerated | Time Charter | August 2020 | |||||
Gaschem Hamburg(3) | 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 | Time Charter | May 2020 | |||||
Gas Shuriken(2) | 2008 | 5,018 | fully-pressurized | Time Charter | December 2020 | |||||
Eco Lucidity(2) | 2015 | 3,517 | fully-pressurized | Spot | — | |||||
165,121 cbm |
Contracted Newbuilding LPG Carriers (1 Vessel)
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Name | Year Built | Vessel Size (cbm) | Vessel Type | Employment Status | Expiration of Charter(1) | |||||
Eco Arctic | 2018 | 22,363 | semi-refrigerated | Time Charter | November 2022 | |||||
Eco Ice | 2018 | 22,358 | semi-refrigerated | Spot | — | |||||
Eco Freeze | 2018 | 22,353 | semi-refrigerated | Time Charter | April 2022 | |||||
Eco Frost | 2017 | 22,359 | semi-refrigerated | Time Charter | August 2022 | |||||
Eco Blizzard | 2021 | 11,013 | fully-pressurized | Time Charter | October 2022 | |||||
Eco Alice | 2020 | 7,543 | fully-pressurized | Time Charter | July 2022 | |||||
Eco Nical(4) | 2016 | 7,541 | fully-pressurized | Time Charter | October 2022 | |||||
Gas Husky | 2012 | 7,516 | fully-pressurized | Time Charter | July 2022 | |||||
Gas Esco | 2012 | 7,514 | fully-pressurized | Spot | — | |||||
Eco Dominator(6) | 2016 | 7,221 | fully-pressurized | Time Charter | March 2023 | |||||
Eco Galaxy | 2015 | 7,213 | fully-pressurized | Time Charter | December 2022 | |||||
Eco Chios | 2014 | 7,211 | fully-pressurized | Bareboat Charter | May 2022 | |||||
Eco Stream | 2014 | 7,210 | fully-pressurized | Spot | — | |||||
Gas Flawless | 2007 | 6,337 | fully-pressurized | Time Charter | April 2022 | |||||
Gas Prodigy | 2003 | 5,031 | fully-pressurized | Time Charter | April 2022 | |||||
Eco Enigma | 2015 | 5,025 | fully-pressurized | Time Charter | January 2023 | |||||
Eco Universe(6) | 2015 | 5,025 | fully-pressurized | Time Charter | February 2023 | |||||
Eco Czar | 2015 | 5,020 | fully-pressurized | Time Charter | June 2022 | |||||
Eco Nemesis(6) | 2015 | 5,019 | fully-pressurized | Time Charter | March 2023 | |||||
Gas Monarch(7) | 1997 | 5,018 | fully-pressurized | Spot | — | |||||
Gas Elixir | 2011 | 5,018 | fully-pressurized | Spot | — | |||||
Gas Cerberus | 2011 | 5,018 | fully-pressurized | Time Charter | April 2022 | |||||
Gas Myth(6) | 2011 | 5,018 | fully-pressurized | Time Charter | January 2023 | |||||
Eco Invictus(6) | 2014 | 5,016 | fully-pressurized | Time Charter | November 2022 | |||||
Eco Texiana | 2020 | 5,030 | fully-pressurized | Time Charter | July 2022 | |||||
Eco Green(6) | 2015 | 4,991 | fully-pressurized | Time Charter | June 2022 | |||||
Eco Dream | 2015 | 4,989 | fully-pressurized | Time Charter | June 2022 | |||||
Gas Spirit | 2001 | 4,112 | fully-pressurized | Time Charter | April 2022 | |||||
Eco Elysium(5) | 2014 | 3,526 | fully-pressurized | Time Charter | June 2024 | |||||
Eco Royalty(6) | 2015 | 3,525 | fully-pressurized | Time Charter | February 2023 | |||||
Eco Corsair | 2014 | 3,524 | fully-pressurized | Time Charter | February 2023 | |||||
Gas Astrid | 2009 | 3,514 | fully-pressurized | Bareboat Charter | April 2022 | |||||
Gas Exelero | 2009 | 3,513 | fully-pressurized | Bareboat Charter | June 2022 | |||||
Gas Alice(6) | 2006 | 3,513 | fully-pressurized | Time Charter | August 2023 | |||||
Gas Galaxy | 1997 | 3,312 | fully-pressurized | Time Charter | September 2022 | |||||
259,508 cbm | ||||||||||
JV LPG Vessels (7 vessels) | ||||||||||
Eco Nebula(2) | 2007 | 38,898 | fully-refrigerated | Time Charter | July 2022 | |||||
Gaschem Bremen(3) | 2010 | 35,232 | fully-refrigerated | Time Charter | March 2023 | |||||
Eco Evoluzione (ex. Gaschem Stade)(3) | 2010 | 35,214 | fully-refrigerated | Time Charter | August 2022 | |||||
Gas Haralambos(2)(6) | 2007 | 7,020 | fully-pressurized | Time Charter | June 2022 | |||||
Gas Defiance(2) | 2008 | 5,018 | fully-pressurized | Time Charter | May 2022 | |||||
Gas Shuriken(2) | 2008 | 5,018 | fully-pressurized | Time Charter | December 2022 | |||||
Eco Lucidity(2)(6) | 2015 | 3,517 | fully-pressurized | Time Charter | December 2022 | |||||
129,918 cbm | ||||||||||
Total LPG Carrier Fleet: 42 vessels | 389,426 cbm |
(1) | Earliest date charters could expire. |
(2) | JV vessel owned by a joint venture established in 2019 in which we own a 50.1% equity interest. |
(3) | JV vessel owned by a joint venture established in 2020 in which we own a 51% equity interest. |
(4) |
Charterer has the option to |
(5) | Charterer has option to extend charter for an additional three-year period. |
(6) | Charterer has option to extend charter for an additional year. |
(7) |
On April 19, 2022, the |
Product Carriers/Crude Oil Tanker (4 Vessels)
Name | Year Built | Vessel Size (dwt) | Vessel Type | Employment Status | Expiration of Charter(1) | |||||||||
Magic Wand (ex. Navig8 Fidelity) | 2008 | 47,000 | MR product carrier | Time Charter | May 2020 | |||||||||
Clean Thrasher | 2008 | 47,000 | MR product carrier | Time Charter | June 2020 | |||||||||
Falcon Maryam (ex.Stealth Bahla) | 2009 | 46,000 | MR product carrier | Bareboat Charter | September 2020 | |||||||||
Stealth Berana (ex. Spike) | 2010 | 115,804 | Aframax oil tanker | Spot | — | |||||||||
255,804 dwt |
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secretarial services. In addition, Stealth Maritime provides services for the chartering of our vessels and monitoring thereof, freight collection, and sale and purchase. In providing most of these services, Stealth Maritime pays third parties and receives reimbursement from us. In addition, Stealth Maritime may subcontract technical management and crew management for some of our vessels to third parties, including Hellenic Manning Overseas Inc, formerly known as Navis Maritime Services Inc., in which an affiliate of Stealth Maritime has a 25% interest, and Jebsens Maritime Inc. – previously Selandia Crew Management Philippines Inc, all based in Manila, and Brave Maritime (an affiliate of Stealth Maritime) based in Greece.interest. As of April 1, 2020,2022, the technical management of twosix of our ships was subcontracted by Stealth Maritime to Brave Maritime.Maritime.. These crew and technical managers are supervised by Stealth Maritime. These crew and technical managers are supervised by Stealth Maritime. In addition, the three medium range gas carrier JV vessels acquired in the first quarter of 2020 will be technically managed by third party manager through the end of their current charters, at which time technical management is expected to be assumed by Stealth Maritime.
2023.
The remaining vessels were crewed by their respective technical managers and their crewing agents.
subject to market conditions. Time and bareboat charters are for a fixed period of time. A voyage charter is generally a contract to carry a specific cargo from a loading port to a discharging port for an agreed-upon total charge. Under voyage charters we pay for voyage expenses such as port, canal and fuel costs. Under a time charter the charterer pays for voyage expenses while under a bareboat charter the charterer pays for voyage expenses and operating expenses such as crewing, supplies, maintenance and repairs including special survey and
2023.
standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, any future requirements may limit our ability to do business, increase our operating costs, force the early retirement of one or more of our vessels, and/or affect their resale value, all of which could have a material adverse effect on our financial condition and results of operations.
with its separate OPA regime described below, is not a party to the CLC). This convention generally applies to vessels that carry oil in bulk as cargo. Under this convention and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, the registered owner of a regulated vessel is strictly liable for pollution damage in the territorial waters or exclusive economic zone of a contracting state caused by the discharge of any oil from the ship, subject to certain defenses. Under an amendment to the 1992 Protocol that became effective on November 1, 2003, for vessels of 5,000 to 140,000 gross tons, liability per incident is limited to 4.51 million Special Drawing Rights (“SDR”) plus 631 SDR for each additional gross ton over 5,000. For a vessel over 140,000 gross tons, liability is limited to 89.77 million SDR. The SDR is an International Monetary Fund unit pegged to a basket of currencies. The right to limit liability under the CLC is forfeited where the spill is caused by the owner’s actual fault and, under the 1992 Protocol, where the spill is caused by the owner’s intentional or reckless conduct. Vessels trading in states that are parties to the CLC must provide evidence of insurance covering the liability of the owner. In jurisdictions where the CLC has not been adopted, various legislative schemes or common law regimes govern, and liability is imposed either on the basis of fault or in a manner similar to that convention. We believe that our protection and indemnity insurance will cover any liability under the CLC.
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 with International Oil Pollution Prevention (“IOPP”)IOPP certificates expiring between September 8, 2017 and September 8, 2019 to comply at their second IOPP renewal. All ships must have installed a ballast water treatment system by September 8, 2024. Each vessel in our current fleet has been issued or will be issued a ballast water management plan Statement of Compliance by the classification society with respect to the applicable IMO regulations and guidelines. The cost of compliance could increase for our vessels as a result of these requirements, although it is difficult to predict the overall impact of such a requirement on our operations.
The operations
subject to the Kyoto Protocol. The Kyoto Protocol was extended to 2020 at the 2012 United Nations Climate Change Conference, with the hope that a new climate change treaty would be adopted by 2015 and come into effect by 2020. The Paris Agreement adopted under the United Nations Framework Convention on Climate Change in December 2015 contemplates commitments from each nation party thereto to take action to reduce greenhouse gas emissions and limit increases in global temperatures but did not include any restrictions or other measures specific to shipping emissions. However, restrictions on shipping emissions are likely to continue to be considered and a new treaty may be adopted in the future that includes restrictions on shipping emissions. International or multi-national bodies or individual countries may adopt their own climate change regulatory initiatives. The IMO’s Marine Environment Protection Committee adopted two sets of mandatory requirements to address greenhouse gas emissions from shipping that entered into force in January 2013. The Energy Efficiency Design Index establishes minimum energy efficiency levels per capacity mile and applies to new vessels of 400 gross tons or greater. Currently operating vessels must develop and implement Ship Energy Efficiency Plans. By 2025, all new ships built must be 30% more energy efficient than those built in 2014, but it is likely that the IMO will increase these requirements such that new ships must be up to 50% more energy efficient than those built in 2014 by 2022. These new requirements could cause us to incur additional costs to comply. MARPOL adopted in June 2021 will build on the EEDI and SEEMP and require ships to reduce carbon intensity based on a new Energy Efficiency Existing Ship Index and reduce operational carbon intensity reductions based on a new operational carbon intensity indicator, in line with the IMO strategy which aims to reduce carbon intensity of international shipping by 40% by 2030. The USCG plans to develop and propose regulations to implement these provisions in the United States. The IMO is also considering the development of market-based mechanisms for limiting greenhouse gas emissions from ships, but it is impossible to predict the likelihood of adoption of such a standard or the impact on our operations. In April 2015, the EU adopted regulations requiring the monitoring and reporting of greenhouse gas emissions from marine vessels (of over
the convention dealing specifically with maritime security. The chapter went into effect in July 2004, and imposes various detailed security obligations on vessels and port authorities, most of which are contained in the newly created International Ship and Port Facilities Security or, ISPS, Code. Among the various requirements are:
a member of the International Association of Classification Societies. Every vessel’s hull and machinery is “classed” by a classification society authorized by its country of registry. The classification society certifies that the vessel has been built and maintained in accordance with the rules of such classification society and complies with applicable rules and regulations of the country of registry of the vessel and the international conventions of which that country is a member. Each vessel is inspected by a surveyor of the classification society every year—an annual survey, every two to three years—an intermediate survey, and every four to five years—a special survey. Vessels also may be required, as part of the intermediate survey process, to bemetdealt concurrently with the special survey.
from oil or other substances, and salvage, towing and other related costs, including wreck removal. Subject to the “capping” discussed below, our coverage, except for pollution, is unlimited.
Ownership of medium range product carriers and crude oil tankers capable of transporting crude oil and refined petroleum products, such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, is highly diversified and is divided among many independent tanker owners. Many oil companies and other oil 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.
Item 4A. | Unresolved Staff Comments |
Item 5. | Operating and Financial Review and Prospects |
(cbm), three medium range product carriers with a total capacity of 140,000 dwt and one 115,804 dwt Aframax tanker. For the years ended December 31, 2017, 2018 and 2019, we owned an average of 52.6, 50.8 and 42.6 vessels, respectively, generating revenues of $154.3 million, $164.3 million and $144.3 million, respectively.
In the first quarter of 2019, we sold a 49.9% equity interest in the subsidiaries owning four of our vessels, the will continue to manage these vessels. These four vessels were classified as held for sale as of December 31, 2018, and following the closing date of these sales, the entities owning these vessels, including associated debt totaling $30.1 million, are no longer fully consolidated in our balance sheet as we and the investor have joint control over the vessels.these entities. In the thirdsecond quarter of 2019 we acquired a 2007-built, 38,000 cbm LPG carrier, theOurTheeight vessels, which we refer to as the JV Vessels, are accounted for under the equity method.
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particular voyage. Under a bareboat charter, the charterer is responsible for all vessel operating expenses and voyage expenses incurred during the term of the charter. Under a voyage or spot charter, we are responsible for both the vessel operating expenses and the voyage expenses incurred in performing the charter. |
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of, and demand for, LPG carrier capacity. From the last quarter of 2011 until the third quarter of 2014, LPG carrier market conditions generally improved from low levels with higher LPG carrier charter rates and utilization levels, however, the impact of the dramatic decline in oil prices on demand for LPG adversely affected LPG carrier charter rates and utilization levels from the fourth quarter of 2014 until the latter part of 2017, particularly in the smaller vessel classes. In 2017, there were increases in oil prices and in the second half of 2017 some limited improvement in LPG carrier charter rates and utilization levels which continued in 2018 and until the beginning of 2020, when the broader shipping market was globally affected by the outbreak of the COVID-19 virus and the resulting disruptions to the international shipping industry and energy demand, |
As
operating in the spot market. We have had less exposure to fluctuations in charter rates for these vessels as we have historically employed them on multi-year charters; however, the charters for three of these vessels expire this year and one of these vessels is operating in the spot market, which exposes us to prevailing charter rates in the product and crude tanker sectors when these vessels’ existing charters expire. Currently tanker charter market rates are relatively strong, mainly due to reserve restocking and storage activity driven by very low oil prices which have been impacted by COVID-19 and increased production by Saudi Arabia and other oil producing countries prior to recent cuts; however, charter rates are subject to downside risks including the possibility of a prolonged downturn in global economic activity due to theCOVID-19 outbreak which has reduced demand for oil and could reduce demand for the seaborne transportation of oil and oil products.
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quarter of 2019, and we acquired with the same JV arrangement a 38,000 cbm LPG carrier in the second quarter of 2019 in which we also have a 50.1% equity interest. See “Note 7 Investments in Joint Ventures” in our audited consolidated financial statements include elsewhere in this report, for additional information regarding this joint venture.interest.. In addition, we further acquired, through a separate joint venture, a 51% equity interest in three 35,000 cbm LPG carriers in the first quarter of 2020. We account for our2020, one of which was subsequently sold to a third party in the first half of 2021 and subsequently exercised an option to acquire from a related party a 51% equity interest in a 40,000 cbm newbuilding LPG carrier to be delivered in 2023, the remaining 49% having been bought by our JV partner. See “Note 7 Investments in Joint Ventures” in our audited consolidated financial statements include elsewhere in this report, for additional information regarding these joint ventures.
accounting since we have joint control over the joint venture entities. We do not consolidate the joint venture entities because we do not have a controlling financial interest. The significant factors considered and judgments made in determining that the power to direct the activities of the joint venture entities that most significantly impact their economic performance are shared, are that all significant business decisions over operating and financial policies of the joint venture entities, require unanimous consent from each joint venture investor.
4.
ability to control these fixed and variable expenses, also affects our financial results. In addition, the type of charter under which our vessels are employed (time, bareboat or spot charter) also affects our operating expenses because we do not pay the operating expenses of vessels that we deploy on bareboat charters. Factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for insurance and regulations related to safety and environmental matters may also cause these expenses to increase.
Inflation
Inflation has only a moderate effect on our expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, administrative and financing expenses.
$1.0 million.
docked.
cash flows estimated to be generated by those assets are less than their carrying amounts and the asset’s carrying value exceeds its fair value. The Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the consolidated statements of operations. For the years ended December 31, 2019, 20182021, 2020 and 2017,2019, we recognized an impairment loss of $1.0(1) $44.6 million on four tankers related to Tanker
Six
in connection with establishing those facilities, which are deferred and amortized over the period of the facility, which we also include in interest expense. We will incur additional interest expenses under any new credit facilities we enter into to finance or refinance the purchase price of additional vessels as described in the “Liquidity“—Liquidity and Capital Resources” section below.
Results of Operations
Year ended December 31, 2019 compared to the year ended December 31, 2018
The average number of vessels in our fleet was 42.6 for the year ended December 31, 2019 compared to 50.8 for the year ended December 31, 2018.
REVENUES—Voyage revenues for the year ended December 31, 2019 were $144.3 million compared to $164.3 million for the year ended December 31, 2018, a decrease of $ 20.0 million, primarily due to the strategic decision to sell mostly older small LPG vessels for further trading. Total calendar days for our fleet were 16,328 for the year ended December 31, 2019 compared to 19,554 for the year ended December 31, 2018; due to the decrease in the average number of vessels in our fleet. Of the total calendar days in 2019, 4,191 or 25.7% were bareboat charter days and 9,350 or 57.3% were time charter days and 2,689 or 16.5% were spot days. This compares to 4,691 or 24.0% bareboat charter days and 11,005 or 56.3%-time charter days and 3,667 or 18.8% were spot days in 2018. Our fleet operational utilization was 97.5% and 95.5% for the years ended December 31, 2019 and December 31, 2018, respectively.
VOYAGE EXPENSES—Voyage expenses were $17.0 million for the year ended December 31, 2019 compared to $20.7 million for the year ended December 31, 2018, a decrease of $3.7 million, or 17.9%. This was primarily due to the decreased number of spot days by 26.7%. Voyage expenses consisted largely of bunker charges in the amount of $8.2 million for 2019 compared to bunker charges in the amount of $11.6 million for 2018, a decrease of $3.4 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 $3.2 million for the year ended December 31, 2019 compared to $2.8 million for the year ended December 31, 2018, an increase of $0.4 million and commissions to third parties which were $2.7 million for the year ended December 31, 2019 and $2.8 million for the year ended December 31, 2018.
VESSEL OPERATING EXPENSES—Vessel operating expenses were $49.6 million for the year ended December 31, 2019 compared to $60.4 million for the year ended December 31, 2018, a decrease of $10.8 million, or 17.9%. The decrease in operating expenses, was due to the net reduction of the average number of our owned fleet by 8.2 vessels. Other components of vessel operating expenses were repairs and maintenance costs which decreased from $7.4 million in the year ended December 31, 2018 to $5.7 million in the year ended December 31, 2019 mainly due to our fleet contraction.
DRY DOCKING COSTS—Dry docking costs were $1.1 million for the year ended December 31, 2019 compared to $3.6 million for the year ended December 31, 2018, a decrease of $2.5 million, or 69.4%. Drydocking costs for the year ended December 31, 2019 related to the drydocking of two small LPG vessels and the docking survey of one small LPG vessel. For the year ended December 31, 2018, seven vessels were drydocked.
MANAGEMENT FEES—Management fees were $5.7 million for the year ended December 31, 2019 compared to $7.0 million for the year ended December 31, 2018, a decrease of $1.3 million or 18.6%. 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, 2019 were $3.7 million compared to $3.0 million for the year ended December 31, 2018, an
increase of $0.7 million or 23.3%, mainly due to higher stock based compensation charges incurred within the year. Included in the general and administrative expenses for the years ended December 31, 2019 and December 31, 2018 are $1.1 million and $1.2 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 vested andnon-vested shares granted as equity awards, which is also part of the general and administrative expenses, increased to $0.6 million during the year ended December 31, 2019 from $0.3 million during the year ended December 31, 2018.
DEPRECIATION—Depreciation expenses for the 42.6 average number of vessels in our fleet for the year ended December 31, 2019 were $37.7 million compared to $41.3 million for the 50.8 average number of vessels in our fleet for the year ended December 31, 2018 a decrease of $3.6 million or 8.7%. This decrease in depreciation expenses was due to the net reduction of the average number of vessels in our owned fleet.
IMPAIRMENT LOSS- During the year ended December 31, 2019 the Company recognized an impairment loss of $1.0 million for two of its oldest LPG vessels. 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 her new owners in the fourth quarter of 2018.
NET (GAIN)/ LOSS ON SALE OF VESSELS—During the year 2019 we delivered to their new owners, theGas Sincerity, theGas Texiana and we agreed and concluded the sale of theGas Ethereal from all of which we incurred a net loss on the sale of these of vessels of $0.5 million. 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 as stated above, delivered to their new owners within the first quarter of 2019.
OTHER OPERATING COSTS/(INCOME)—During the year ended December 31, 2019 our other operating income was nil. 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 $21.0 million for the year ended December 31, 2019 compared to $23.3 million for the year ended December 31, 2018, a decrease of $2.3 million, or 9.9%. The decrease in interest and finance cost was mostly attributed to the decrease of our leverage.
INTEREST INCOME—Interest income was $0.8 million for the year ended December 31, 2019 compared to $0.6 million for the year ended December 31, 2018, an increase of $0.2 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.
EQUITY GAIN IN JOINT VENTURES- was $0.49 million in the year ended December 31, 2019 compared to nil in the year ended December 31, 2018, which related to the financial performance of our joint venture established in the first quarter of 2019, pursuant to which we sold a 49.9% equity interest in the subsidiaries owning four of our vessels, theGasHaralambos, theGas Defiance, theGas Shuriken and theEco Lucidity, and acquired a 2007-built, 38,000 cbm LPG carrier, theEco Nebula, in the second quarter of 2019 in which we also have a 50.1% equity interest.
NET INCOME/(LOSS)—As a result of the above factors, we recorded a net income of $2.1 million for the year ended December 31, 2019, compared to net loss of $12.3 million for the year ended December 31, 2018.
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.
B. Liquidity and Capital Resources
As of December 31, 2019, we had cash and cash equivalents of $68.5 million, restricted cash of $1.6 million classified as current assets and restricted cash of $12.1 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 $18.7 million in 2019, $29.7 million in 2018 and $11.5 million in 2017. 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.
Our liquidity needs, as of December 31, 2019 through the end of 2020, primarily relate to scheduled debt repayments, funding expenses for operating our vessels, general and administrative expenses and committed capital expenditures as well as any vessel acquisitions we elect to make either independently or in collaboration with a third party investor. As of December 31, 2019 our committed capital expenditures in 2020 consist of a further advance payment for the 11,000 cbm LPG carrier newbuilding to be delivered in August 2021, in an amount of approximately $2.9 million. In addition to this we have 10 scheduled drydockings for 2020, the costs of which are anticipated to be covered from our operating cash flows, while we do not have material expenditure requirements for water ballast system installations. In the first quarter of 2020, we invested $42.0 million from cash on hand for the acquisition of three MGC vessels through a joint venture arrangement, in which we have 51% equity interest. In the beginning of 2020 we received a term sheet to partially finance these vessels with the corresponding loan amount for our equity stake invested amounting to approximately $26.0 million, for which the Company would provide a corporate guarantee and receive the proceeds of such amount of borrowings. Generally, our primary sources of funds, in the short term, have been cash from operating activities and in 2019 proceeds from sale of vessels and in the long term, bank borrowings and equity financings.
As of December 31, 2019, our aggregate debt outstanding net of deferred finance charges was $366.0 million, of which $40.7 million was classified as current liability.
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, as well as the expected impact of theCOVID-19 outbreak on the global economy and our business which could however, be even more severe than currently anticipated.
For a description of our credit facilities please refer to the discussion under the heading “—Credit Facilities” below. Our dividend policy and stock repurchases will also affect our liquidity position. See “Item 8. Financial Information—Dividend Policy.” On March 31, 2020, we announced the commencement of a tender offer to purchase up to 4,761,904 shares, or about 12.1%, of our outstanding common stock using funds available from cash and cash equivalents at a price of $2.10 per share. The tender offer expired at 5:00 P.M., New York City Time, on April 28, 2020. Based on the preliminary count by the depositary for the tender offer, the Company expects to repurchase a total of 1,366,045 shares of its common stock through the tender offer at a price of $2.10 per share, for a total cost of $2,868,694.50, excluding fees and expenses. The total of 1,366,045 shares that the Company expects to accept for repurchase represents approximately 3.5% of the Company’s total outstanding shares of common stock as of April 28, 2020. The number of shares of common stock expected to be purchased by the Company and the aggregate purchase price for the shares are preliminary and subject to final confirmation by the depositary and the proper delivery of shares tendered, including shares tendered pursuant to the guaranteed delivery procedure.
On May 23, 2019, we publicly announced that our Board of Directors had authorized the repurchase of up to $10,000,000 of shares of our common stock. As of April 1, 2020, 900,702 shares of common stock had been repurchased for an aggregate of $2.8 million (excluding commissions), with the average purchase price of $3.16 per share. No further repurchases will be conducted prior to the expiration of 10 business days following the expiration of the tender offer. We also repurchased, under a prior repurchase program, $20.3 million shares of common stock from 2014 throughmid-2016.
Cash Flows
Net cash provided by operating activities—was $30.8 million for the year ended December 31, 2019, $37.8 million for the year ended December 31, 2018 and $52.4 million for the year ended December 31, 2017. This represents the net amount of cash, after expenses, generated by chartering our vessels. Net cash provided by operating activities decreased in 2019 compared to 2018, mainly due to our fleet contraction and some movements of our working capital items namely trade and other receivables, claims receivable and trade
accounts payable that negatively impacted our operating cash flow. The reduction in our net cash provided by our operating activities in 2018 compared to the same period of 2017 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/ (used in) investing activities—was an inflow of $33.5 million for the year ended December 31, 2019, while net cash used in investing activities were $78.6 million for the year ended December 31, 2018 and $48.9 million for the year ended December 31, 2017. During 2019 our net proceeds from sale of vessels were $18.7 million corresponding to the sale of three small LPG vessels,the Gas Sincerity, theGas Texiana and theGas Ethereal. In addition, during 2019 we sold to a Joint Venture scheme a 49.9% equity stake in four of our small LPG vessels, the Gas Defiance,the Gas Shuriken,the Eco Lucidity and the Gas Haralambos, with proceeds from the sale of interest in subsidiaries amounting to $20.7 million. With regard to vessel acquisitions, during 2019, we acquired, under our JV arrangement, a 50.1% equity stake in a 38,000 cbm LPG vessel theEco Nebula for which we paid an amount of $10.6 million. Furthermore, an amount of $7.4 million was returned to us by the unconsolidated joint ventures, as a return of investment. Finally, within 2019 we made an advance payment of $3.0 million for an 11,000 cbm LPG vessel with expected delivery in August 2021.
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 vessels,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. With regard 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.
Net cash (used in)/ provided by financing activities— net cash used in financing activities was $61.6 million for the year ended December 31, 2019, consisting mainly of $33.5 million in proceeds from long-term debt offset by $97.4 million in loan repayments, of which $42.1 million were regular loan period installments. The remaining $55.3 million includes mostly loan repayments associated with the vessels classified as held for sale as of December 31, 2018 and a small portion of debt repayment associated with some loan restructurings. 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.
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 $366.0 million, as of December 31, 2019, 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 | ||||||||||||||||
May 28, 2019 | $ | 10.36 | Apr 2024 | Quarterly | $ | 0.32 | $ | 4.60 | Gas Astrid, Gas Exelero | |||||||||||||
December 14, 2018 | $ | 11.89 | Dec 2023 | Quarterly | $ | 0.55 | $ | 3.09 | Stealth Berana, | |||||||||||||
$ | 8.68 | Dec 2023 | Quarterly | $ | 0.20 | $ | 5.48 | Eco Invictus | ||||||||||||||
August 6, 2019 | $ | 21.90 | Mar 2024 | Quarterly | $ | 0.83 | $ | 7.88 | Gas Elixir Gas Cerberus Gas Myth | |||||||||||||
July 5, 2019 | $ | 21.44 | July 2026 | Quarterly | $ | 0.79 | $ | 0.0 | Gas Husky Gas Esco | |||||||||||||
March 29, 2019 | $ | 18.24 | Dec 2022 | Quarterly | $ | 1.13 | $ | 4.63 | Gas Alice, Gas Inspiration, Gas Imperiale | |||||||||||||
Stealth Falcon | ||||||||||||||||||||||
August 7, 2019 | $ | 9.22 | Mar 2021 | Semi-Annual | $ | 0.63 | $ | 7.33 | Eco Stream | |||||||||||||
$ | 9.22 | Jun 2021 | Semi-Annual | $ | 0.63 | $ | 7.33 | Eco Chios | ||||||||||||||
$ | 10.59 | Jul 2022 | Semi-Annual | $ | 0.54 | $ | 7.33 | Eco Galaxy | ||||||||||||||
June 20, 2014 | $ | 6.85 | Jan 2023 | Quarterly | $ | 0.17 | $ | 4.64 | Eco Corsair | |||||||||||||
$ | 7.34 | Jan 2023 | Quarterly | $ | 0.19 | $ | 4.93 | Eco Elysium | ||||||||||||||
July 29, 2014 | $ | 8.19 | Jul 2023 | Quarterly | $ | 0.26 | $ | 4.23 | Eco Enigma | |||||||||||||
$ | 8.19 | Jul 2023 | Quarterly | $ | 0.26 | $ | 4.23 | Eco Universe | ||||||||||||||
July 4, 2014 | ||||||||||||||||||||||
$ | 7.92 | Aug 2021 | Quarterly | $ | 0.20 | $ | 6.50 | Eco Czar | ||||||||||||||
$ | 7.92 | Sep 2021 | Quarterly | $ | 0.20 | $ | 6.50 | Eco Nemesis | ||||||||||||||
August 6, 2019 | $ | 11.75 | Sep 2022 | Quarterly | $ | 0.25 | $ | 9.00 | Eco Dream | |||||||||||||
$ | 11.75 | Sep 2022 | Quarterly | $ | 0.25 | $ | 9.00 | Eco Green | ||||||||||||||
$ | 11.93 | Feb 2023 | Quarterly | $ | 0.25 | $ | 8.74 | Eco Nical | ||||||||||||||
$ | 12.17 | Jun 2023 | Quarterly | $ | 0.25 | $ | 8.74 | Eco Dominator | ||||||||||||||
December 24, 2015 | $ | 8.21 | Dec 2022 | Quarterly | $ | 0.19 | $ | 5.97 | Eco Royalty | |||||||||||||
$ | 8.21 | Dec 2022 | Quarterly | $ | 0.19 | $ | 5.97 | Eco Loyalty | ||||||||||||||
December 7, 2017 | $ | 7.90 | Dec 2022 | Quarterly | $ | 0.33 | $ | 4.00 | Magic Wand | |||||||||||||
$ | 8.87 | Dec 2022 | Quarterly | $ | 0.36 | $ | 4.50 | Stealth Bahla | ||||||||||||||
May 18, 2016 | $ | 27.42 | May 2025 | Quarterly | $ | 0.51 | $ | 16.25 | Eco Frost | |||||||||||||
$ | 29.52 | Dec 2025 | Quarterly | $ | 0.52 | $ | 16.57 | Eco Ice | ||||||||||||||
March 1, 2017 | $ | 31.08 | Jan 2026 | Quarterly | $ | 0.63 | $ | 15.23 | Eco Arctic | |||||||||||||
$ | 31.48 | Apr 2026 | Quarterly | $ | 0.63 | $ | 15.11 | Eco Freeze |
The interest rates on the outstanding loans as of December 31, 2019 are based on LIBOR plus a margin which varies from 2.15% to 3.00%. The average interest rates (including the margin) on the above outstanding loans were 4.91% for the year ended December 31, 2019 and 5.34% for the year ended December 31, 2018. As of December 31, 2019, $111.8 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, 2020, sevenof our vessels, theGas Prodigy, theGas Flawless,the Gas Monarch,the Gas Pasha, the Gas Spirit, theGas Galaxy and theGas Nemesis II, were unencumbered. Other than the $26 million related to one of our JV arrangements, as discussed above in “—Liquidity and Capital Resources”, we had no undrawn borrowing capacity under our remaining 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 135% 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 $1,589,768 representing a proportionate amount of the next installment and relevant interest plus a minimum aggregate cash balance amounting to $12,065,222 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 mid and long term as the order book for 2020 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, in particular due to theCOVID-19 pandemic, which is expected to result in a recession in the global economy, the duration and severity of which is unpredictable, and have far reaching effects on the shipping industry, and has and could continue to negatively impact demand for seaborne LPG transportation which may further decrease in the future. The price of oil, which has declined sharply in 2020, also impacts demand for seaborne transportation of LPG, crude oil and oil products. 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, 2019 were:
Payments due by period (in thousands) | ||||||||||||||||||||
Total | Less than 1 year (2020) | 1-3 years (2021-2022) | 3-5 years (2023-2024) | More than 5 years (After January 1, 2025) | ||||||||||||||||
Long-term debt obligations | $ | 368,229 | $ | 41,421 | $ | 154,600 | $ | 92,934 | $ | 79,274 | ||||||||||
Interest on principal amounts outstanding(1) | 39,059 | 13,817 | 16,402 | 6,524 | 2,316 | |||||||||||||||
Interest on interest rate swap arrangements outstanding(1) | 5,551 | 818 | 2,559 | 1,601 | 573 | |||||||||||||||
Management fees(2) | 8,321 | 5,547 | 2,774 | — | — | |||||||||||||||
Vessel purchase commitments | 26,021 | 2,891 | 23,130 | — | — | |||||||||||||||
Operating lease obligations | 341 | 341 | — | — | — | |||||||||||||||
Executive fees | 583 | 583 | — | — | — | |||||||||||||||
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Total | $ | 448,105 | $ | 65,418 | $ | 199,465 | $ | 101,059 | $ | 82,163 | ||||||||||
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Critical Accounting Policies
Estimates
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:
94.0%
During the first nine months of 2018, the Company identified and recorded an impairment loss of $8,161,963 for seven of its vessels, theGas Legacy, theGas Enchanted, theGas Evoluzione, theGas Sikousis, theGas Marathon, theGas SincerityandtheGas Texiana, which were agreed to be sold for further trading. As of December 31, 2018, the Company identified and recorded an additional impairment loss of $3,189,858 relating to vesselsGas Shuriken,Gas Defiance,Gas Haralambosand Eco Lucidity,following the decision to enter into, or potentially enter into, as applicable, joint venture agreements with a third party investor based on which the third party investor would acquire a 49.9% equity interest in these four vessel owning companies of the Company and the vessels were classified as vessels held for sale. For the three months ended December 31, 2018, no impairment loss was identified and recorded for the Company’s vessels that are held for use.
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. The total impairment loss identified and recorded by the Company was $993,916 as of December 31, 2019, $11,351,821 as of December 31, 2018 and $6,461,273 during the year ended December 31, 2017.
current average rates for our fleet compared with the base rates used in the impairment test as described above, as well as an analysis of the impact on our impairment analysis if we were to utilize the most recent five-year, three-year and
Percentage difference between our average 2019 rates as compared with the base rates for the vessels | 5-year historical average rate | 3-year historical average rate | 1-year historical average rate | |||||||||||||||||||||||||||||
of less than twenty years of age | of twenty years of age and above | No. of vessels | Amount ($ million) | No. of vessels | Amount ($ million) | No. of vessels | Amount ($ million) | |||||||||||||||||||||||||
LPG Carriers | -0.89 | % | -1.66 | % | 2 | 1.0 | 2 | 1.0 | 2 | 1.0 | ||||||||||||||||||||||
Product Carriers | -20.81 | % | — | 3 | 32.1 | 3 | 32.1 | 3 | 32.1 | |||||||||||||||||||||||
Aframax Tanker | -33.34 | % | — | — | — | — | — | 1 | 5.3 |
Percentage difference between our average 2021 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 | 0.59 | % | -1.86 | % | — | — | — | — | 1 | 1.8 |
residual value would have the effect of increasing the annual depreciation charge. No events or circumstances occurred in 20192021 that would require us to revise estimates related to depreciation and such revisions are not expected to occur in the future.
Investments
Year Ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
INCOME STATEMENT DATA | ||||||||||||
Revenues | $ | 144,259,312 | $ | 145,003,021 | $ | 150,204,527 | ||||||
Revenues—related party | — | — | — | |||||||||
Total Revenues | $ | 144,259,312 | $ | 145,003,021 | $ | 150,204,527 | ||||||
Operating expenses: | ||||||||||||
Voyage expenses | 15,201,978 | 12,259,795 | 20,342,186 | |||||||||
Voyage expenses—related party | 1,788,543 | 1,799,209 | 1,867,100 | |||||||||
Vessels’ operating expenses | 48,619,594 | 52,344,721 | 60,443,813 | |||||||||
Vessels’ operating expenses—related party | 966,500 | 950,500 | 1,065,750 | |||||||||
Charter hire expenses | 6,268,988 | 318,606 | — | |||||||||
Dry-docking costs | 1,094,306 | 3,640,327 | 5,285,490 | |||||||||
Management fees | 5,730,910 | 5,599,351 | 5,831,900 | |||||||||
General and administrative expenses | 3,706,320 | 2,301,308 | 4,337,013 | |||||||||
Depreciation | 37,693,733 | 37,455,093 | 37,125,903 | |||||||||
Impairment loss | 993,916 | 3,857,307 | 44,616,214 | |||||||||
Other operating costs | — | — | — | |||||||||
Net loss on sale of vessels | 485,516 | 1,134,854 | 304,210 | |||||||||
Total expenses | 122,550,304 | 121,661,071 | 181,219,579 | |||||||||
Income/(Loss) from operations | 21,709,008 | 23,341,950 | (31,015,052 | ) | ||||||||
Interest and finance costs | (20,978,065 | ) | (14,129,893 | ) | (12,678,101 | ) | ||||||
Gain on deconsolidation on subsidiaries | 145,000 | — | — | |||||||||
(Loss)/Gain on derivatives | (107,550 | ) | (50,976 | ) | 240,153 | |||||||
Interest income | 846,271 | 167,794 | 26,379 | |||||||||
Foreign exchange loss | (8,235 | ) | (54,374 | ) | (23,288 | ) | ||||||
Other expenses, net | (20,102,579 | ) | (14,067,449 | ) | (12,434,857 | ) | ||||||
Equity earnings in joint ventures | 486,695 | 2,709,984 | 8,326,701 | |||||||||
Net income/(loss) | 2,093,124 | 11,984,485 | (35,123,208 | ) |
Year Ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
FLEET DATA | ||||||||||||
Average number of vessels(1) | 42.6 | 41.6 | 41.3 | |||||||||
Total voyage days for fleet(2) | 16,230 | 15,079 | 14,786 | |||||||||
Total time and bareboat charter days for fleet(3) | 13,541 | 12,442 | 11,714 | |||||||||
Total spot market days for fleet(4) | 2,689 | 2,637 | 3,072 | |||||||||
Total calendar days for fleet(5) | 16,328 | 15,292 | 15,071 | |||||||||
Fleet utilization(6) | 99.4 | % | 98.6 | % | 98.1 | % | ||||||
Fleet operational utilization(7) | 97.5 | % | 96.1 | % | 94.9 | % | ||||||
AVERAGE DAILY RESULTS | ||||||||||||
Adjusted average charter rate(8) | $ | 7,842 | $ | 8,684 | $ | 8,657 | ||||||
Vessel operating expenses(9) | 3,037 | 3,485 | 4,081 | |||||||||
General and administrative expenses | 227 | 150 | 288 | |||||||||
Management fees(11) | 351 | 366 | 387 | |||||||||
Total daily operating expenses(12) | $ | 3,264 | $ | 3,635 | $ | 4,369 | ||||||
(1) | Average number of vessels is the number of owned vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period. |
(2) | Our total voyage days for our fleet reflect the total days the vessels we operated were in our possession for the relevant periods, net of off-hire days associated with major repairs, drydockings or special or intermediate surveys. |
(3) | Total time and bareboat charter days for fleet are the number of voyage days the vessels in our fleet operated on time or bareboat charters for the relevant period. |
(4) | Total spot market charter days for fleet are the number of voyage days the vessels in our fleet operated on spot market charters for the relevant period. |
(5) | Total calendar days are the total days the vessels we operated were in our possession for the relevant period including off-hire days associated with major repairs, drydockings or special or intermediate surveys. |
(6) | Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period. |
(7) | Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days (excluding commercially idle days) by fleet calendar days for the relevant period. |
(8) | Adjusted average charter rate is a measure of the average daily revenue performance of a vessel on a per voyage basis. We determine the adjusted average charter rate by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage and are payable by us under a spot charter (which would otherwise be paid by the charterer under a time or bareboat charter contract), as well as commissions or any voyage costs incurred while the vessel is idle. Charter equivalent revenues and adjusted average charter rate are non-GAAP measures which provide additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because they assist Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. They are also standard shipping industry performance measures used primarily to compareperiod-to-period |
expenses, unlike spot charters and time charters; Reconciliation of charter equivalent revenues as reflected in the consolidated statements of operations and calculation of adjusted average charter rate follow: |
Year Ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Voyage revenues | $ | 144,259,312 | $ | 145,003,021 | $ | 150,204,527 | ||||||
Voyage expenses | (16,990,521 | ) | (14,059,004 | ) | (22,209,286 | ) | ||||||
Charter equivalent revenues | $ | 127,268,791 | $ | 130,944,017 | $ | 127,995,241 | ||||||
Total voyage days for fleet | 16,230 | 15,079 | 14,786 | |||||||||
Adjusted average charter rate | $ | 7,842 | $ | 8,684 | $ | 8,657 | ||||||
(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. |
Payments due by period (in thousands) | ||||||||||||||||||||
Total | Less than 1 year (2022) | 1-3 years(2023-2024) | 3-5 years(2025-2026) | More than 5 years (After January 1, 2027) | ||||||||||||||||
Long-term debt obligations | 303,167 | 39,639 | 61,214 | 154,656 | 47,658 | |||||||||||||||
Interest on principal amounts outstanding(1) | 35,224 | 6,951 | 16,415 | 10,378 | 1,479 | |||||||||||||||
Interest on interest rate swap arrangements outstanding(1) | 1,390 | 1,233 | 566 | (192 | ) | (216 | ) | |||||||||||||
Management fees(2) | 8,025 | 5,350 | 2,675 | — | — | |||||||||||||||
Executive fees | 524 | 524 | — | — | — | |||||||||||||||
Total | 348,330 | 53,697 | 80,870 | 164,842 | 48,921 | |||||||||||||||
(1) | Based on assumed 3M LIBOR rates (or replacement benchmark rate) of 0.52% for 2022, 1.31% for 2023, 1.60% for 2024, 1.65% for 2025, 1.63% for 2026 and 1.71% 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 |
Year Ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Net cash provided by operating activities | $ | 30,818,599 | $ | 52,113,096 | $ | 41,038,681 | ||||||
Net cash provided by/(used in) investing activities | 33,487,288 | (58,074,154 | ) | (19,247,631 | ) | |||||||
Net cash used in financing activities | (61,616,546 | ) | (23,119,072 | ) | (29,130,715 | ) |
Credit Facility Issue Date | Outstanding Principal Amount (in millions) | Maturity | Installment Frequency | Installment Amount (in millions) | Balloon (in millions) | Mortgaged Vessels | ||||||||||||||
December 14, 2018 | $ | 7.08 | Dec 2023 | Quarterly | $ | 0.20 | $ | 5.48 | Eco Invictus | |||||||||||
July 5, 2019 | $ | 15.08 | July 2026 | Quarterly | $ | 0.79 | $ | 0.0 | Gas Husky Gas Esco | |||||||||||
March 29, 2019 | $ | 3.04 | Dec 2022 | Quarterly | $ | 0.38 | $ | 1.54 | Gas Alice Gas Inspiration | |||||||||||
January 11, 2021 | $ | 7.19 | Jan 2026 | Quarterly | $ | 0.24 | $ | 3.09 | Eco Stream | |||||||||||
$ | 7.19 | Jan 2026 | Quarterly | $ | 0.24 | $ | 3.09 | Eco Chios | ||||||||||||
$ | 8.30 | Jan 2026 | Quarterly | $ | 0.24 | $ | 4.30 | Eco Galaxy | ||||||||||||
July 29, 2014 | $ | 6.07 | Jul 2023 | Quarterly | $ | 0.26 | $ | 4.23 | Eco Enigma | |||||||||||
$ | 6.07 | Jul 2023 | Quarterly | $ | 0.26 | $ | 4.23 | Eco Universe | ||||||||||||
January 19, 2021 | $ | 6.61 | Jan 2028 | Quarterly | $ | 0.17 | $ | 2.41 | Eco Czar | |||||||||||
$ | 6.61 | Jan 2028 | Quarterly | $ | 0.17 | $ | 2.41 | Eco Nemesis | ||||||||||||
$ | 6.59 | Jan 2028 | Quarterly | $ | 0.17 | $ | 2.39 | Eco Corsair | ||||||||||||
$ | 6.59 | Jan 2028 | Quarterly | $ | 0.17 | $ | 2.39 | Eco Elysium | ||||||||||||
$ | 7.17 | Jan 2028 | Quarterly | $ | 0.18 | $ | 2.79 | Eco Royalty | ||||||||||||
$ | 7.17 | Jan 2028 | Quarterly | $ | 0.18 | $ | 2.79 | Eco Loyalty | ||||||||||||
May 18, 2016 | $ | 23.36 | May 2025 | Quarterly | $ | 0.51 | $ | 16.25 | Eco Frost | |||||||||||
$ | 25.38 | Dec 2025 | Quarterly | $ | 0.52 | $ | 16.57 | Eco Ice | ||||||||||||
March 1, 2017 | $ | 26.00 | Jan 2026 | Quarterly | $ | 0.63 | $ | 15.23 | Eco Arctic | |||||||||||
$ | 26.45 | Apr 2026 | Quarterly | $ | 0.63 | $ | 15.11 | Eco Freeze | ||||||||||||
June 19, 2020 | $ | 10.35 | June 2026 | Quarterly | $ | 0.19 | $ | 6.90 | Eco Texiana | |||||||||||
April 30, 2020 | $ | 14.73 | Nov 2026 | Quarterly | $ | 0.22 | $ | 10.62 | Eco Alice | |||||||||||
$ | 18.06 | Feb 2027 | Quarterly | $ | 0.26 | $ | 12.83 | Eco Blizzard | ||||||||||||
August 5, 2021 | $ | 5.85 | Aug 2026 | Quarterly | $ | 0.27 | $ | 0.71 | Gas Elixir | |||||||||||
$ | 10.22 | Aug 2026 | Quarterly | $ | 0.25 | $ | 5.42 | Eco Dream | ||||||||||||
$ | 11.28 | Aug 2026 | Quarterly | $ | 0.27 | $ | 6.10 | Eco Nical | ||||||||||||
$ | 11.29 | Aug 2026 | Quarterly | $ | 0.26 | $ | 6.30 | Eco Dominator | ||||||||||||
$ | 5.88 | Aug 2026 | Quarterly | $ | 0.25 | $ | 1.20 | Gas Myth | ||||||||||||
$ | 5.86 | Aug 2026 | Quarterly | $ | 0.27 | $ | 0.75 | Gas Cerberus | ||||||||||||
$ | 3.84 | Aug 2026 | Quarterly | $ | 0.18 | $ | 0.37 | Gas Astrid | ||||||||||||
$ | 3.84 | Aug 2026 | Quarterly | $ | 0.18 | $ | 0.37 | Gas Exelero |
Under the equity methodfourth quarter of accounting, investments are stated2011 to the third quarter of 2014, LPG charter rates subsequently declined sharply, due largely to the dramatic decline in oil prices, and after reasonable improvement between the second half of 2017 and the first quarter of 2019, again declined, having been negatively impacted by the decrease in global demand for energy resulting from the COVID-19 pandemic. In the first quarter of 2022, charter rates remain below levels reached in 2014 albeit the market has seen an improvement beginning in the second half of 2021. Although prospects for the small LPG segment currently appear favorable mid and long term, as the order book for 2022 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, in particular due to the
G. Safe Harbor
See section “Forward-Looking Information” at the beginningMiddle 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 this annual report.
Item 6. | Directors, Senior Management and Employees |
Name | Age | Positions | Year Became Director | Year Director’s Current Term Expires | ||||||||||
Harry N. Vafias | 42 | Chief Executive, President, Chief Financial Officer and Class III Director | 2004 | 2021 | ||||||||||
Michael G. Jolliffe | 70 | Chairman of the Board, Class II Director | 2004 | 2022 | ||||||||||
Markos Drakos | 60 | Class I Director | 2006 | 2020 | ||||||||||
John Kostoyannis | 54 | Class II Director | 2010 | 2022 |
Name | Age | Positions | Year Became Director | Year Director’s Current Term Expires | ||||||||||
Harry N. Vafias | 44 | Chief Executive, President, Chief Financial Officer and Class III Director | 2004 | 2024 | ||||||||||
Michael G. Jolliffe | 72 | Chairman of the Board, Class II Director | 2004 | 2022 | ||||||||||
Markos Drakos | 62 | Class I Director | 2006 | 2023 | ||||||||||
John Kostoyannis | 56 | Class II Director | 2010 | 2022 |
a Director of ColdHarbour Marine, a company manufacturing equipment for the marine industry. Mr. Jolliffe is also a Trustee of The Honeypot children’s charity.
stockholders to elect the entire class of directors to be elected at any election of directors or for any other reason, may be filled only by an affirmative vote of a majority of the remaining directors then in office, even if less than a quorum, at any special meeting called for that purpose or at any regular meeting of the board of directors. Our Board of Directors is divided into three classes with only one class of directors being elected in each year and each class serving a three-year term.
As of August 31, 2019, Lambros Babilis, the Deputy Chairman of the Board of Directors and Executive Director of the Company, resigned from these positions, which reduced the size of the Company’s Board of Directors to four directors. Lambros Babilis also resigned from his position as Chief Executive Officer of the Company’s manager, Stealth Maritime Corporation.
2021.
prohibited by law or stock exchange regulation, may be delegated by our Board of Directors or by the Compensation Committee to an executive officer or any other person. The 2015 Plan allows the plan administrator to grant awards of shares of our common stock or the right to receive or purchase shares of our common stock (including options to purchase common stock, restricted stock and stock units, bonus stock, share units, performance units, and stock appreciation rights) to officers, directors or other persons or entities providing significant services to us or our subsidiaries. The actual terms of an award, including the number of shares of common stock relating to the award, any exercise or purchase price, any vesting, forfeiture or transfer restrictions, the time or times of exercisability for, or delivery of, shares of common stock, are determined by the plan administrator and set forth in a written award agreement with the participant.
Item 7. | Major Shareholders and Related Party Transactions |
each shareholder is based on 39,224,48238,202,181 shares of common stock outstanding as of April 1, 2020.2022. Information for certain holders is based on their latest filings with the Securities and Exchange Commission or information delivered to us.
Shares of Common Stock Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percentage | ||||||
Principal Stockholders | ||||||||
Flawless Management Inc.(1) | 7,105,453 | 18.1 | % | |||||
Glendon Capital Management L.P.(2) | 6,498,794 | 16.6 | % | |||||
MSDC Management, L.P.(3) | 3,708,819 | 9.5 | % | |||||
Russell Investments Group, Ltd.(4) | 2,780,001 | 7.1 | % | |||||
Redwood Capital Management, LLC(5) | 2,415,287 | 6.2 | % | |||||
Renaissance Technologies LLC(6) | 2,225,130 | 5.7 | % | |||||
Executive Officers and Directors | ||||||||
Harry N. Vafias(1) | 7,774,243 | 19.8 | % | |||||
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 | 20.0 | % |
Shares of Common Stock Beneficially Owned | ||||||||
Name of Beneficial Owner | Number | Percentage | ||||||
Principal Stockholders | ||||||||
Flawless Management Inc.(1) | 7,105,453 | 18.6 | % | |||||
Glendon Capital Management L.P.(2) | 6,498,794 | 17.0 | % | |||||
MSDC Management, L.P.(3) | 3,516,652 | 9.2 | % | |||||
Redwood Capital Management, LLC(4) | 2,404,887 | 6.3 | % | |||||
TowerView LLC(5) | 2,160,465 | 5.7 | % | |||||
Renaissance Technologies LLC(6) | 2,013,302 | 5.3 | % | |||||
Executive Officers and Directors | ||||||||
Harry N. Vafias(1)(7) | 8,375,069 | 21.9 | % | |||||
Michael G. Jolliffe | * | * | ||||||
Markos Drakos | * | * | ||||||
John Kostoyannis | * | * | ||||||
All executive officers and directors as a group (four persons) | 8,459,009 | 22.1 | % |
* | Less than 1%. |
(1) |
According to Amendment No. |
(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 “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 theinvestmentsub-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 Amendment No. |
(5) | According to a Schedule 13G filed by TowerView LLC on November 12, 2021. |
(6) | According to Amendment No. 2 to a Schedule 13G jointly filed by and on behalf of Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation on February |
On March 31, 2020, we announced the commencement
(7) | Includes 125,000 shares subject to stock options which are scheduled to vest on May 26, 2022, and excludes 125,000 shares subject to stock options which are scheduled to vest on May 26, 2023. |
preliminary count by the depositary for the tender offer and in accordance with the terms and conditions of the tender offer, the Company expects to repurchase a total of 1,366,045 shares of its common stock through the tender offer at a price of $2.10 per share, for a total cost of $2,868,694.50, excluding fees and expenses. The total of 1,366,045 shares that the Company expects to accept for repurchase represents approximately 3.5% of the Company’s total outstanding shares of common stock as of April 28, 2020. The number of shares of common stock expected to be purchased by the Company and the aggregate purchase price for the shares are preliminary and subject to final confirmation by the depositary and the proper delivery of shares tendered, including shares tendered pursuant to the guaranteed delivery procedure.
Based on the 1,366,045 shares of common stock that we expect to repurchase, as described above, and none of our executive officers or directors selling shares in the tender offer, the total number of our common shares outstanding will be reduced to 37,858,437 and the beneficial ownership of our directors and executive officers named in the table above will change to 20.7% of our total issued and outstanding shares from 20.0% of our total issued and outstanding shares as of April 1, 2020, reflecting an aggregate increase in beneficial share ownership by all directors and officers of 0.7 percentage points.
On May 23, 2019, we publicly announced that our Board of Directors had authorized the repurchase of up to $10,000,000 of shares of our common stock. As of April 1, 2020, 900,702 shares of common stock had been repurchased for an aggregate of $2.8 million (excluding commissions), with the average purchase price of $3.16 per share. No further repurchases will be conducted prior to the expiration of 10 business days following the expiration of the tender offer. We also repurchased, under a prior repurchase program, $20.3 million of shares of common stock from 2014 throughmid-2016.
Maritime is responsible for arranging for the crewing of the vessels, the day to day operations, inspections and vetting, supplies, maintenance, repairs, bunkering drydocking
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, 2017, 20182019, 2020 and 2019,2021, such compensation was in the aggregate amount of $1.1 million, $1.2$1.0 million and $1.1$1.0 million, respectively.
The initial term of our management agreement with Stealth Maritime expired in June 2010 but is extended on aManagermanager at December 31, 20182020 and at December 31, 20192021 was a liability of $7,930,642$3.7 million and $2,084,871,nil, respectively. The liability represents payments made by the Stealth Maritime on behalf of the ship-owning companies. The current account balance with Imperial at December 31, 2021 was a payable of $0.4 million and mainly represents revenues collected by us on behalf of Imperial and its subsidiaries. We and Imperial have common management at December 31, 2021. Furthermore, the current account balance with entities that we own 50.1% equity interests, pursuant to a joint venture agreement with a financial investor, amounted to a liability of $4,958,250$1.0 million and $1.1 million, as of December 31, 20192020 and 2021 respectively, represents revenues collected by us on behalf of these entities.
On May 26, 2014, For the entities under our second joint venture arrangement in which we entered into an agreement with Brave Maritime forown 51% equity interest the supervisioncurrent 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 and 2021 was nil and nil, respectively.
For the years ended December 31, 2019, 2020 and 2021, the supervision fees amounted to nil, $0.2 million and $0.2 million, respectively, and were capitalized to the cost of the respective vessels.
3, 2021.
In April 2012,Acquisitions
Item 8. | Financial Information |
Item 9. | The Offer and Listing |
Item 10. | Additional Information |
Directors could issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.
trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. The right of a dissenting stockholder to receive payment of the fair value of his or her shares shall not be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation. In the event of any further amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the circuit court in the judicial circuit in the Marshall Islands in which our Marshall Islands office is situated. The value of the shares of the dissenting stockholder is fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser.
however, the date of our annual meeting is more than 30 days before or 60 days after the first anniversary date of the previous year’s annual meeting, a stockholder’s notice must be received at our principal executive offices by the later of (i) the close of business on the 90th day prior to the annual meeting date or (ii) the close of business on the tenth day following the date on which such annual meeting date is first publicly announced or disclosed by us. Our bylaws also specify requirements as to the form and content of a stockholder’s notice. These provisions may impede stockholders’ ability to bring matters before an annual meeting of stockholders or make nominations for directors at an annual meeting of stockholders.
year or 1/6 of the days in a short taxable year; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year. We believe we will satisfy the trading frequency and trading volume tests. Even if this were not the case, the regulations provide that the trading frequency and trading volume tests will be deemed satisfied if, as we believe to be the case with our common stock, such class of stock is traded on an established market in the United States and such stock is regularly quoted by dealers making a market in such stock.
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.
more than 50% of our shipping income and that of our subsidiaries would be treated as being derived from United States-sources, we expect that the maximum effective rate of United States federal income tax on such gross shipping income would never exceed 2% under the 4% gross basis tax regime.
estate the income of which is subject to United States federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust.
prospectively from the date of enactment, our dividends from being treated as “qualified dividend income” eligible for the preferential tax rates described above.
will not acquiesce to the
“Taxation “Taxation of United States Holders Not Making a Timely QEF or
a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. You may access our public filings with the SEC without charge on this website.
Item 11. | Quantitative and Qualitative Disclosures About Market Risk |
Effective | Termination | Notional Amount on Effective Date (in millions) | Fixed Rate (StealthGas pays) | Floating Rate | Fair Value December 31, 2019 (in millions) | Notional Amount December 31, 2019 (in millions) | Estimated Notional Amount December 31, 2020 (in millions) | |||||||||||||||||||
Swap 1 | September 30, 2015 | September 30, 2020 | $ | 17.6 | 2.60 | % | 3 month U.S. dollar LIBOR | $ | (0.04 | ) | $ | 6.82 | $ | — | ||||||||||||
Swap 2 | September 30, 2015 | September 30, 2020 | $ | 17.6 | 1.69 | % | 3 month U.S. dollar LIBOR | $ | 0.005 | $ | 6.82 | $ | — | |||||||||||||
Swap 3 | October 2, 2015 | October 2, 2020 | $ | 12.1 | 1.54 | % | 3 month U.S. dollar LIBOR | $ | 0.03 | $ | 8.60 | $ | — | |||||||||||||
Swap 4 | November 4, 2015 | August 4, 2021 | $ | 11.2 | 1.52 | % | 3 month U.S. dollar LIBOR | $ | 0.02 | $ | 7.92 | $ | 7.11 | |||||||||||||
Swap 5 | December 3, 2015 | September 3, 2021 | $ | 11.2 | 1.55 | % | 3 month U.S. dollar LIBOR | $ | 0.02 | $ | 7.92 | $ | 7.11 | |||||||||||||
Swap 6 | August 16, 2017 | May 16, 2025 | $ | 16.0 | 2.12 | % | 3 month U.S. dollar LIBOR | $ | (0.25 | ) | $ | 13.71 | $ | 12.70 | ||||||||||||
Swap 7 | March 12, 2018 | December 11, 2022 | $ | 21.6 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (0.42 | ) | $ | 16.77 | $ | 14.01 | ||||||||||||
Swap 8 | April 10, 2018 | December 11, 2025 | $ | 32.6 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (1.37 | ) | $ | 29.52 | $ | 27.45 | ||||||||||||
Swap 9 | February 16, 2019 | February 16, 2024 | $ | 14.5 | 2.89 | % | 3 month U.S. dollar LIBOR | $ | (0.58 | ) | $ | 13.71 | $ | 12.70 | ||||||||||||
Total | $ | (2.585 | ) | $ | 111.79 | $ | 81.08 |
Effective Date | Termination Date | Notional Amount on Effective Date (in millions) | Fixed Rate (StealthGas pays) | Floating Rate (StealthGas Receives) | Fair Value December 31, 2021 (in millions) | Notional Amount December 31, 2021 (in millions) | Estimated Notional Amount December 31, 2022 (in millions) | |||||||||||||||||||
Swap 1 | August 16, 2017 | May 16, 2025 | $ | 16.0 | 2.12 | % | 3 month U.S. dollar LIBOR | $ | (0.36 | ) | $ | 11.7 | $ | 10.7 | ||||||||||||
Swap 2 | April 10, 2018 | December 11, 2025 | $ | 32.6 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (1.40 | ) | $ | 25.4 | $ | 23.3 | ||||||||||||
Swap 3 | February 16, 2019 | February 16, 2024 | $ | 14.5 | 2.89 | % | 3 month U.S. dollar LIBOR | $ | (0.49 | ) | $ | 11.7 | $ | 10.7 | ||||||||||||
Swap 4 | January 21, 2021 | January 21, 2028 | $ | 14.2 | 0.73 | % | 3 month U.S. dollar LIBOR | $ | (0.29 | ) | $ | 13.2 | $ | 11.8 | ||||||||||||
Swap 5 | January 21, 2021 | January 21, 2028 | $ | 14.2 | 0.73 | % | 3 month U.S. dollar LIBOR | $ | (0.29 | ) | $ | 13.2 | $ | 11.9 | ||||||||||||
Swap 6 | January 21, 2021 | January 21, 2028 | $ | 15.4 | 0.74 | % | 3 month U.S. dollar LIBOR | $ | (0.32 | ) | $ | 14.3 | $ | 13.0 | ||||||||||||
Total | $ | (3.15 | ) | $ | 89.5 | $ | 81.4 |
2021.
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 |
2021.
Item 16A. | Audit Committee Financial Expert |
Item 16B. | Code of Ethics |
Item 16C. | Principal Accountant Fees and Services |
2019 | 2018 | |||||||
Audit fees | $ | 359 | $ | 455 | ||||
Assurance/audit related fees | — | — | ||||||
Tax fees | — | — | ||||||
All other fees | — | — | ||||||
Total | $ | 359 | $ | 455 |
2021 | 2020 | |||||||
Audit fees | $ | 450 | $ | 381 | ||||
Assurance/audit related fees | — | — | ||||||
Tax fees | — | — | ||||||
All other fees | — | — | ||||||
Total | $ | 450 | $ | 381 |
information and (iii) audit services provided in connection with the filing of the registration statement of Imperial Petroleum relating to the Tanker Spin-Off, issuance of consents and assistance with and review of documents filed with the SEC.
2020.
2020.
2020.
Item 16D. | Exemptions from the Listing Standards for Audit Committees |
Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Shares may be purchased from time to time in open market or privately negotiated transactions, which may include derivative transactions, at times and prices that are considered to be appropriate by the Company and the program may be discontinued at any time. The below table presents information about our stock No share repurchases through March 31, 2020. All purchases have been made on the open market within the safe harbor provisions ofRegulation 10b-18under the Exchange Act. No further repurchases will be conducted prior to the expiration of 10 business days following the expiration of the tender offer announced by the Company onthis authorization since March 31, 2020.
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 |
The tender offer announced by the Company on March 31, 2020, expired at 5:00 P.M., New York City Time, on April 28, 2020. Based on the preliminary count by the depositary for the tender offer, the Company expects to repurchase a total of 1,366,045 shares of its common stock through the tender offer at a price of $2.10 per share, for a total cost of $2,868,694.50, excluding fees and expenses. The number of shares of common stock expected to be purchased by the Company and the aggregate purchase price for the shares are preliminary and subject to final confirmation by the depositary and the proper delivery of shares tendered.
Item 16F. | Change in Registrant’s Certifying Accountant |
Item 16G. | Corporate Governance |
Item 16I. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
Item 17. | Financial Statements |
Item 18. | Financial Statements |
Item 19. | Exhibits |
Number | Description | |
1.1 | ||
1.2 | ||
2.1 | ||
4.1 | ||
4.2 | ||
4.3 | ||
4.4 | ||
8 | ||
12.1 | ||
12.2 | ||
13.1 | ||
13.2 | ||
15.1 | ||
15.2 | ||
15.3 | ||
101.INS | Inline XBRL Instance Document | |
101.SCH | Inline XBRL Taxonomy Extension Schema | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
(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-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
F-10 |
April30, 2020
December 31, | ||||||||||||
Note | 2018 | 2019 | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 64,498,442 | 68,465,342 | ||||||||||
Trade and other receivables | 2,888,496 | 4,217,101 | ||||||||||
Other current assets | 16 | 134,301 | 118,246 | |||||||||
Claims receivable | — | 314,217 | ||||||||||
Inventories | 4 | 2,346,723 | 2,447,703 | |||||||||
Advances and prepayments | 1,089,539 | 749,681 | ||||||||||
Restricted cash | 3,002,490 | 1,589,768 | ||||||||||
Assets held for sale | 6 | 64,906,448 | — | |||||||||
Fair value of derivatives | 12 | — | 30,381 | |||||||||
|
|
|
| |||||||||
Total current assets | 138,866,439 | 77,932,439 | ||||||||||
|
|
|
| |||||||||
Non current assets | ||||||||||||
Advances for vessels under construction | 5 | — | 2,988,903 | |||||||||
Operating leaseright-of-use assets | 20 | — | 473,132 | |||||||||
Vessels, net | 6 | 884,748,691 | 835,152,403 | |||||||||
Other receivables | 108,930 | 286,915 | ||||||||||
Restricted cash | 11,930,059 | 12,065,222 | ||||||||||
Investments in joint ventures | 7 | — | 25,250,173 | |||||||||
Fair value of derivatives | 12 | 1,068,369 | 39,744 | |||||||||
|
|
|
| |||||||||
Total non current assets | 897,856,049 | 876,256,492 | ||||||||||
|
|
|
| |||||||||
Total assets | 1,036,722,488 | 954,188,931 | ||||||||||
|
|
|
| |||||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Current liabilities | ||||||||||||
Payable to related parties | 3 | 7,930,642 | 7,043,121 | |||||||||
Trade accounts payable | 10,349,358 | 9,032,690 | ||||||||||
Accrued liabilities | 8 | 6,879,488 | 6,002,079 | |||||||||
Operating lease liabilities | 20 | — | 473,132 | |||||||||
Customer deposits | 10 | 1,336,000 | 968,000 | |||||||||
Deferred income | 9 | 5,191,654 | 2,843,994 | |||||||||
Fair value of derivatives | 12 | — | 37,567 | |||||||||
Current portion of long-term debt | 11 | 41,726,837 | 40,735,556 | |||||||||
Current portion of long-term debt associated with vessels held for sale | 11 | 30,076,356 | — | |||||||||
|
|
|
| |||||||||
Total current liabilities | 103,490,335 | 67,136,139 | ||||||||||
|
|
|
| |||||||||
Non current liabilities | ||||||||||||
Fair value of derivatives | 12 | 465,389 | 2,618,250 | |||||||||
Long-term debt | 11 | 371,514,253 | 325,247,902 | |||||||||
|
|
|
| |||||||||
Total non current liabilities | 371,979,642 | 327,866,152 | ||||||||||
|
|
|
| |||||||||
Total liabilities | 475,469,977 | 395,002,291 | ||||||||||
|
|
|
| |||||||||
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 44,549,729 shares issued and 40,125,184 shares outstanding at December 31, 2018 and 44,549,729 shares issued and 39,584,274 shares outstanding at December 31, 2019 with a par value of $0.01 per share | 13 | 445,496 | 445,496 | |||||||||
Treasury stock, 4,424,545 shares at December 31, 2018 and 4,965,455 at December 31, 2019 with a par value of $0.01 per share | 13 | (22,523,528 | ) | (24,361,145 | ) | |||||||
Additionalpaid-in capital | 13 | 501,807,478 | 502,419,122 | |||||||||
Retained earnings | 80,849,086 | 82,942,210 | ||||||||||
Accumulated other comprehensive income/(loss) | 673,979 | (2,259,043 | ) | |||||||||
|
|
|
| |||||||||
Total stockholders’ equity | 561,252,511 | 559,186,640 | ||||||||||
|
|
|
| |||||||||
Total liabilities and stockholders’ equity | 1,036,722,488 | 954,188,931 | ||||||||||
|
|
|
|
December 31, | ||||||||||||
Note | 2020 | 2021 | ||||||||||
Assets | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 38,242,411 | 31,304,151 | ||||||||||
Receivables from related party | 3 | — | 63,767 | |||||||||
Trade and other receivables | 3,602,764 | 2,117,636 | ||||||||||
Other current assets | 16 | 309,608 | 298,984 | |||||||||
Claims receivable | 120,547 | 62,652 | ||||||||||
Inventories | 4 | 3,687,098 | 2,772,532 | |||||||||
Advances and prepayments | 782,125 | 637,881 | ||||||||||
Restricted cash | 1,308,971 | 2,198,775 | ||||||||||
Vessel held for sale | 6 | — | 12,250,000 | |||||||||
Total current assets | 48,053,524 | 51,706,378 | ||||||||||
Non current assets | ||||||||||||
Advances for vessel under construction | 3,5 | 6,539,115 | 0— | |||||||||
Operating lease right-of-use | 20 | 0 | 104,168 | |||||||||
Vessels, net | 3,6 | 832,335,059 | 681,337,153 | |||||||||
Other receivables | 26,427 | — | ||||||||||
Restricted cash | 13,488,820 | 12,197,611 | ||||||||||
Investments in joint ventures | 7 | 43,177,657 | 53,323,032 | |||||||||
Deferred finance charges | 385,705 | — | ||||||||||
Total non current assets | 895,952,783 | 746,961,964 | ||||||||||
Total assets | 944,006,307 | 798,668,342 | ||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||
Current liabilities | ||||||||||||
Payable to related parties | 3 | 4,659,861 | 1,491,705 | |||||||||
Trade accounts payable | 9,974,751 | 8,592,124 | ||||||||||
Accrued liabilities | 8 | 3,773,499 | 3,842,879 | |||||||||
Operating lease liabilities | 20 | — | 104,168 | |||||||||
Customer deposits | 10 | 968,000 | — | |||||||||
Deferred income | 9 | 2,995,657 | 5,666,285 | |||||||||
Fair value of derivatives | 12 | 141,447 | — | |||||||||
Current portion of long-term debt | 11 | 40,547,892 | 31,836,619 | |||||||||
Current portion of long-term debt associated with vessel held for sale | 11 | — | 7,173,988 | |||||||||
Total current liabilities | 63,061,107 | 58,707,768 | ||||||||||
Non current liabilities | ||||||||||||
Fair value of derivatives | 12 | 5,099,464 | 3,151,880 | |||||||||
Deferred income | 9 | — | 76,949 | |||||||||
Long-term debt | 11 | 311,249,321 | 261,960,975 | |||||||||
Total non current liabilities | 316,348,785 | 265,189,804 | ||||||||||
Total liabilities | 379,409,892 | 323,897,572 | ||||||||||
Commitments and contingencies | 19 | 0 | 0 | |||||||||
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 43,183,684 shares issued and 37,858,437 shares outstanding at December 31, 2020 and 43,527,428 shares issued and 38,202,181 shares outstanding at December 31, 2021 with a par value of $0.01 per share | 13 | 431,836 | 435,274 | |||||||||
Treasury stock, 5,325,247 at both December 31, 2020 and December 31, 2021 with a par value of $0.01 per share | 13 | (25,373,380 | ) | (25,373,380 | ) | |||||||
Additional paid-in capital | 13 | 499,564,087 | 443,009,334 | |||||||||
Retained earnings | 94,926,695 | 59,803,487 | ||||||||||
Accumulated other comprehensive loss | (4,952,823 | ) | (3,103,945 | ) | ||||||||
Total stockholders’ equity | 564,596,415 | 474,770,770 | ||||||||||
Total liabilities and stockholders’ equity | 944,006,307 | 798,668,342 | ||||||||||
2021
December 31, | ||||||||||||||
Note | 2017 | 2018 | 2019 | |||||||||||
Revenues | ||||||||||||||
Revenues | 152,338,278 | 164,330,202 | 144,259,312 | |||||||||||
Revenues – related party | 3 | 1,973,643 | — | — | ||||||||||
|
|
|
|
|
| |||||||||
Total revenues | 16 | 154,311,921 | 164,330,202 | 144,259,312 | ||||||||||
|
|
|
|
|
| |||||||||
Expenses | ||||||||||||||
Voyage expenses | 17 | 13,804,032 | 18,649,258 | 15,201,978 | ||||||||||
Voyage expenses – related party | 3,17 | 1,912,505 | 2,037,917 | 1,788,543 | ||||||||||
Charter hire expenses | 19,20 | 3,524,770 | 6,150,780 | 6,268,988 | ||||||||||
Vessels’ operating expenses | 17 | 58,618,526 | 59,920,278 | 48,619,594 | ||||||||||
Vessels’ operating expenses – related party | 3,17 | 800,908 | 514,500 | 966,500 | ||||||||||
Dry-docking costs | 3,529,047 | 3,617,577 | 1,094,306 | |||||||||||
Management fees – related party | 3 | 7,205,490 | 7,027,195 | 5,730,910 | ||||||||||
General and administrative expenses (including $1,209,499, $1,294,722, and $1,205,683 to related party) | 2,898,958 | 3,046,962 | 3,706,320 | |||||||||||
Depreciation | 6 | 38,921,672 | 41,258,142 | 37,693,733 | ||||||||||
Impairment loss | 3,6,12 | 6,461,273 | 11,351,821 | 993,916 | ||||||||||
Net loss on sale of vessels | 3,6 | 77,314 | 763,925 | 485,516 | ||||||||||
Other operating costs/(income) | 5 | 1,058,863 | (549,804 | ) | — | |||||||||
|
|
|
|
|
| |||||||||
Total expenses | 138,813,358 | 153,788,551 | 122,550,304 | |||||||||||
|
|
|
|
|
| |||||||||
Income from operations | 15,498,563 | 10,541,651 | 21,709,008 | |||||||||||
|
|
|
|
|
| |||||||||
Other (expenses)/income | ||||||||||||||
Interest and finance costs | (16,661,464 | ) | (23,286,547 | ) | (20,978,065 | ) | ||||||||
Gain on deconsolidation of subsidiaries | — | — | 145,000 | |||||||||||
Loss on derivatives | 12 | (403,943 | ) | (11,982 | ) | (107,550 | ) | |||||||
Interest income and other income | 322,868 | 587,477 | 846,271 | |||||||||||
Foreign exchange gain/(loss) | 25,739 | (107,119 | ) | (8,235 | ) | |||||||||
|
|
|
|
|
| |||||||||
Other expenses, net | (16,716,800 | ) | (22,818,171 | ) | (20,102,579 | ) | ||||||||
|
|
|
|
|
| |||||||||
(Loss)/Income before equity in income of investees | (1,218,237 | ) | (12,276,520 | ) | 1,606,429 | |||||||||
Equity gain in joint ventures | 7 | — | — | 486,695 | ||||||||||
|
|
|
|
|
| |||||||||
Net (Loss)/Income | (1,218,237 | ) | (12,276,520 | ) | 2,093,124 | |||||||||
|
|
|
|
|
| |||||||||
(Loss)/earnings per share | ||||||||||||||
– Basic and diluted | 15 | (0.03 | ) | (0.31 | ) | 0.05 | ||||||||
|
|
|
|
|
| |||||||||
Weighted average number of shares | ||||||||||||||
– Basic and diluted | 39,809,364 | 39,860,563 | 39,800,434 | |||||||||||
|
|
|
|
|
|
December 31, | ||||||||||||||||
Note | 2019 | 2020 | 2021 | |||||||||||||
Revenues | ||||||||||||||||
Revenues | 144,259,312 | 145,003,021 | 150,204,527 | |||||||||||||
Total revenues | 16 | 144,259,312 | 145,003,021 | 150,204,527 | ||||||||||||
Expenses | ||||||||||||||||
Voyage expenses | 15,201,978 | 12,259,795 | 20,342,186 | |||||||||||||
Voyage expenses – related party | 3 | 1,788,543 | 1,799,209 | 1,867,100 | ||||||||||||
Charter hire expenses | 20 | 6,268,988 | 318,606 | 0 | ||||||||||||
Vessels’ operating expenses | 17 | 48,619,594 | 52,344,721 | 60,443,813 | ||||||||||||
Vessels’ operating expenses – related party | 3,17 | 966,500 | 950,500 | 1,065,750 | ||||||||||||
Dry-docking costs | 1,094,306 | 3,640,327 | 5,285,490 | |||||||||||||
Management fees – related party | 3 | 5,730,910 | 5,599,351 | 5,831,900 | ||||||||||||
General and administrative expenses (including $1,205,683, $1,084,961 and $1,126,112 to related party) | 3 | 3,706,320 | 2,301,308 | 4,337,013 | ||||||||||||
Depreciation | 6 | 37,693,733 | 37,455,093 | 37,125,903 | ||||||||||||
Impairment loss | 3,6,12 | 993,916 | 3,857,307 | 44,616,214 | ||||||||||||
Net loss on sale of vessels | 3,6 | 485,516 | 1,134,854 | 304,210 | ||||||||||||
Total expenses | 122,550,304 | 121,661,071 | 181,219,579 | |||||||||||||
Income/(Loss) from operations | 21,709,008 | 23,341,950 | (31,015,052 | ) | ||||||||||||
Other (expenses)/income | ||||||||||||||||
Interest and finance costs | (20,978,065 | ) | (14,129,893 | ) | (12,678,101 | ) | ||||||||||
Gain on deconsolidation of subsidiaries | 145,000 | — | — | |||||||||||||
Loss/(gain) on derivatives | 12 | (107,550 | ) | (50,976 | ) | 240,153 | ||||||||||
Interest income and other income | 846,271 | 167,794 | 26,379 | |||||||||||||
Foreign exchange loss | (8,235 | ) | (54,374 | ) | (23,288 | ) | ||||||||||
Other expenses, net | (20,102,579 | ) | (14,067,449 | ) | (12,434,857 | ) | ||||||||||
Income/(Loss) before equity in earnings of investees | 1,606,429 | 9,274,501 | (43,449,909 | ) | ||||||||||||
Equity earnings in joint ventures | 7 | 486,695 | 2,709,984 | 8,326,701 | ||||||||||||
Net Income/(Loss) | 2,093,124 | 11,984,485 | (35,123,208 | ) | ||||||||||||
Earnings/(Loss) per share | ||||||||||||||||
– Basic and diluted | 15 | 0.05 | 0.31 | (0.93 | ) | |||||||||||
Weighted average number of shares | ||||||||||||||||
– Basic and diluted | 39,800,434 | 38,357,893 | 37,858,437 | |||||||||||||
(Loss)/ Income
2021
December 31, | ||||||||||||||
Note | 2017 | 2018 | 2019 | |||||||||||
Net (loss)/income | (1,218,237 | ) | (12,276,520 | ) | 2,093,124 | |||||||||
|
|
|
|
|
| |||||||||
Other comprehensive income | ||||||||||||||
Cash flow hedges | ||||||||||||||
Effective portion of changes in fair value of interest swap contracts | 12 | 592,460 | 56,084 | (2,848,056 | ) | |||||||||
Reclassification adjustment | 12 | — | — | (84,966 | ) | |||||||||
|
|
|
|
|
| |||||||||
Total other comprehensive income/(loss) | 592,460 | 56,084 | (2,933,022 | ) | ||||||||||
|
|
|
|
|
| |||||||||
Total comprehensive loss | (625,777 | ) | (12,220,436 | ) | (839,898 | ) | ||||||||
|
|
|
|
|
|
December 31, | ||||||||||||||||
Note | 2019 | 2020 | 2021 | |||||||||||||
Net income/(loss) | 2,093,124 | 11,984,485 | (35,123,208 | ) | ||||||||||||
Other comprehensive (loss)/income | ||||||||||||||||
Cash flow hedges | ||||||||||||||||
Effective portion of changes in fair value of interest swap contracts | 12 | (2,848,056 | ) | (2,632,826 | ) | 2,114,488 | ||||||||||
Reclassification adjustment | 12 | (84,966 | ) | (60,954 | ) | (265,610 | ) | |||||||||
Total other comprehensive (loss)/income | (2,933,022 | ) | (2,693,780 | ) | 1,848,878 | |||||||||||
Total comprehensive (loss)/income | (839,898 | ) | 9,290,705 | (33,274,330 | ) | |||||||||||
2021
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, January 1, 2017 | 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 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
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 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, January 1, 2019 | 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 | |||||||||||||||||||||
Issuance of restricted shares and stock based compensation | 343,744 | 3,438 | — | — | 607,350 | — | — | 610,788 | ||||||||||||||||||||||||
Distribution of net assets (Note 1) | — | — | — | — | (57,162,103 | ) | — | — | (57,162,103 | ) | ||||||||||||||||||||||
Comprehensive loss for the year | — | — | — | — | — | (35,123,208 | ) | 1,848,878 | (33,274,330 | ) | ||||||||||||||||||||||
Balance, December 31, 2021 | 43,527,428 | 435,274 | (5,325,247 | ) | (25,373,380 | ) | 443,009,334 | 59,803,487 | (3,103,945 | ) | 474,770,770 | |||||||||||||||||||||
2021
December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net (loss)/income for the year | (1,218,237 | ) | (12,276,520 | ) | 2,093,124 | |||||||
Adjustments to reconcile net (loss)/income to net cash provided by operating activities: | ||||||||||||
Depreciation | 38,921,672 | 41,258,142 | 37,693,733 | |||||||||
Amortization of deferred finance charges | 690,842 | 858,582 | 885,191 | |||||||||
Amortization of deferred gain on sale and leaseback of vessels | (195,040 | ) | (190,087 | ) | — | |||||||
Amortization of operating leaseright-of-use assets | — | — | 1,572,943 | |||||||||
Share based compensation | 129,245 | 338,356 | 611,644 | |||||||||
Change in fair value of derivatives | (27,372 | ) | (28,252 | ) | 255,650 | |||||||
Equity gain in joint ventures | — | — | (486,695 | ) | ||||||||
Impairment loss | 6,461,273 | 11,351,821 | 993,916 | |||||||||
Net loss on sale of vessels | 77,314 | 763,925 | 485,516 | |||||||||
Gain on deconsolidation of subsidiaries | — | — | (145,000 | ) | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase)/decrease in | ||||||||||||
Trade and other receivables | (179,036 | ) | 531,796 | (1,506,590 | ) | |||||||
Other current assets | — | 159,363 | 16,055 | |||||||||
Claims receivable | (235,705 | ) | 15,951 | (1,307,763 | ) | |||||||
Inventories | 46,824 | (302,873 | ) | 617,468 | ||||||||
Changes in operating lease liabilities | — | — | (1,572,943 | ) | ||||||||
Advances and prepayments | 57,328 | 131,490 | 339,858 | |||||||||
Increase/(decrease) in | ||||||||||||
Balances with related parties | 6,434,290 | (6,278,982 | ) | (5,845,771 | ) | |||||||
Trade accounts payable | 1,299,686 | 381,941 | (1,316,668 | ) | ||||||||
Accrued liabilities | 581,000 | 339,009 | (217,409 | ) | ||||||||
Deferred income | (490,031 | ) | 755,563 | (2,347,660 | ) | |||||||
|
|
|
|
|
| |||||||
Net cash provided by operating activities | 52,354,053 | 37,809,225 | 30,818,599 | |||||||||
|
|
|
|
|
| |||||||
Cash flows from investing activities | ||||||||||||
Insurance proceeds | 219,754 | — | 993,546 | |||||||||
Proceeds from sale of interests in subsidiaries | — | — | 20,720,975 | |||||||||
Vessels’ acquisitions and advances for vessels under construction | (60,612,867 | ) | (108,295,690 | ) | (2,988,903 | ) | ||||||
Proceeds from sale of vessels, net | 11,479,936 | 29,742,788 | 18,721,123 | |||||||||
Investment in joint ventures | — | — | (11,322,600 | ) | ||||||||
Return of investments by joint ventures | — | — | 7,363,147 | |||||||||
Advances to joint ventures | — | — | (5,083,919 | ) | ||||||||
Advances from joint ventures | — | — | 5,083,919 | |||||||||
|
|
|
|
|
| |||||||
Net cash (used in)/provided by investing activities | (48,913,177 | ) | (78,552,902 | ) | 33,487,288 | |||||||
|
|
|
|
|
| |||||||
Cash flows from financing activities | ||||||||||||
Stock repurchase | — | — | (1,837,617 | ) | ||||||||
Deferred finance charges paid | (815,256 | ) | (503,265 | ) | (477,201 | ) | ||||||
Advances from joint ventures | — | — | 4,958,250 | |||||||||
Customer deposits paid | — | (1,220,700 | ) | (368,000 | ) | |||||||
Loan repayments | (56,254,073 | ) | (56,717,059 | ) | (97,371,978 | ) | ||||||
Proceeds from long-term debt | 43,000,000 | 115,712,500 | 33,480,000 | |||||||||
|
|
|
|
|
| |||||||
Net cash (used in)/provided by financing activities | (14,069,329 | ) | 57,271,476 | (61,616,546 | ) | |||||||
|
|
|
|
|
| |||||||
Net (decrease)/increase in cash and cash equivalents | (10,628,453 | ) | 16,527,799 | 2,689,341 | ||||||||
Cash and cash equivalents and restricted cash at beginning of year | 73,531,645 | 62,903,192 | 79,430,991 | |||||||||
|
|
|
|
|
| |||||||
Cash and cash equivalents and restricted cash at end of year | 62,903,192 | 79,430,991 | 82,120,332 | |||||||||
|
|
|
|
|
| |||||||
Cash breakdown | ||||||||||||
Cash and cash equivalents | 51,754,131 | 64,498,442 | 68,465,342 | |||||||||
Restricted cash, current | 3,231,323 | 3,002,490 | 1,589,768 | |||||||||
Restricted cash,non-current | 7,917,738 | 11,930,059 | 12,065,222 | |||||||||
|
|
|
|
|
|
December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | 62,903,192 | 79,430,991 | 82,120,332 | |||||||||
|
|
|
|
|
| |||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the year for interest, net of amounts capitalized | 14,643,885 | 21,087,903 | 20,768,672 | |||||||||
Non cash investing activity – Vessels under construction | 605,800 | 63,752 | 63,752 | |||||||||
|
|
|
|
|
|
December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net income/(loss) for the year | 2,093,124 | 11,984,485 | (35,123,208 | ) | ||||||||
Adjustments to reconcile net income/(loss) to net cash provided by operating activities: | ||||||||||||
Depreciation | 37,693,733 | 37,455,093 | 37,125,903 | |||||||||
Amortization of deferred finance charges | 885,191 | 698,364 | 1,157,804 | |||||||||
Amortization of operating lease right-of-use | 1,572,943 | 473,132 | 89,638 | |||||||||
Share based compensation | 611,644 | 0 | 610,788 | |||||||||
Change in fair value of derivatives | 255,650 | (38,561 | ) | (240,153 | ) | |||||||
Equity earnings in joint ventures | (486,695 | ) | (2,709,984 | ) | (8,326,701 | ) | ||||||
Impairment loss | 993,916 | 3,857,307 | 44,616,214 | |||||||||
Net loss on sale of vessels | 485,516 | 1,134,854 | 304,210 | |||||||||
Gain on deconsolidation of subsidiaries | (145,000 | ) | 0 | 0 | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase)/decrease in | ||||||||||||
Trade and other receivables | (1,506,590 | ) | 874,825 | (977,005 | ) | |||||||
Other current assets | 16,055 | (191,362 | ) | 10,624 | ||||||||
Claims receivable | (1,307,763 | ) | 193,670 | 57,895 | ||||||||
Inventories | 617,468 | (1,239,395 | ) | 644,079 | ||||||||
Changes in operating lease liabilities | (1,572,943 | ) | (473,132 | ) | (89,638 | ) | ||||||
Advances and prepayments | 339,858 | (32,444 | ) | (100,482 | ) | |||||||
Increase/(decrease) in | ||||||||||||
Balances with related parties | (5,845,771 | ) | 1,617,032 | (3,231,923 | ) | |||||||
Trade accounts payable | (1,316,668 | ) | 761,193 | 262,569 | ||||||||
Accrued liabilities | (217,409 | ) | (2,403,644 | ) | 557,086 | |||||||
Deferred income | (2,347,660 | ) | 151,663 | 3,690,981 | ||||||||
Net cash provided by operating activities | 30,818,599 | 52,113,096 | 41,038,681 | |||||||||
Cash flows from investing activities | ||||||||||||
Insurance proceeds | 993,546 | 0 | 0 | |||||||||
Proceeds from sale of interests in subsidiaries | 20,720,975 | 0 | 0 | |||||||||
Vessels’ acquisitions and advances for vessels under construction | (2,988,903 | ) | (48,121,422 | ) | (25,224,746 | ) | ||||||
Proceeds from sale of vessels, net | 18,721,123 | 5,264,768 | 7,795,790 | |||||||||
Investment in joint ventures | (11,322,600 | ) | (41,998,500 | ) | (3,348,675 | ) | ||||||
Return of investments from joint ventures | 7,363,147 | 26,781,000 | 1,530,000 | |||||||||
Advances to joint ventures | (5,083,919 | ) | (29,245 | ) | 0 | |||||||
Advances from joint ventures | 5,083,919 | 29,245 | 0 | |||||||||
Net cash provided by/(used in) investing activities | 33,487,288 | (58,074,154 | ) | (19,247,631 | ) | |||||||
Cash flows from financing activities | ||||||||||||
Stock repurchase | (1,837,617 | ) | (3,880,930 | ) | 0 | |||||||
Deferred finance charges paid | (477,201 | ) | (538,004 | ) | (1,463,766 | ) | ||||||
Advances from joint ventures | 4,958,250 | 1,841,380 | 0 | |||||||||
Advances to joint ventures | — | (5,841,672 | ) | 0 | ||||||||
Customer deposits paid | (368,000 | ) | 0 | (600,000 | ) | |||||||
Loan repayments | (97,371,978 | ) | (41,804,846 | ) | (173,012,428 | ) | ||||||
Proceeds from long-term debt | 33,480,000 | 27,105,000 | 150,650,000 | |||||||||
Cash retained by Imperial at spin-off | — | — | (4,704,521 | ) | ||||||||
Net cash used in financing activities | (61,616,546 | ) | (23,119,072 | ) | (29,130,715 | ) | ||||||
Net increase/(decrease) in cash and cash equivalents | 2,689,341 | (29,080,130 | ) | (7,339,665 | ) | |||||||
Cash and cash equivalents and restricted cash at beginning of year | 79,430,991 | 82,120,332 | 53,040,202 | |||||||||
Cash and cash equivalents and restricted cash at end of year | 82,120,332 | 53,040,202 | 45,700,537 | |||||||||
December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Cash breakdown | ||||||||||||
Cash and cash equivalents | 68,465,342 | 38,242,411 | 31,304,151 | |||||||||
Restricted cash, current | 1,589,768 | 1,308,971 | 2,198,775 | |||||||||
Restricted cash, non-current | 12,065,222 | 13,488,820 | 12,197,611 | |||||||||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | 82,120,332 | 53,040,202 | 45,700,537 | |||||||||
Supplemental Cash Flow Information: | ||||||||||||
Cash paid during the year for interest, net of amounts capitalized | 20,768,672 | 12,905,065 | 8,607,590 | |||||||||
Non cash investing activity – Vessels | 63,752 | 387,220 | 217,570 | |||||||||
Non cash financing activity – Deferred finance charges | — | 32,464 | 0 | |||||||||
Distribution of net assets of Imperial Petroleum Inc. to stockholders (Note 1) | — | — | 57,162,103 | |||||||||
|
Year ended December 31, | ||||||||||||
Charterer | 2019 | 2020 | 2021 | |||||||||
A | 12 | % | 15 | % | — | |||||||
B | 10 | % | — | — | ||||||||
C | 10 | % | 10 | % | — |
Year ended December 31, | ||||||||||||
Charterer | 2017 | 2018 | 2019 | |||||||||
A | — | — | 12 | % | ||||||||
B | — | — | 10 | % | ||||||||
C | — | — | 10 | % |
| ||||
December 3, 2021 | ||||
Cash, including restricted cash | 4,704,521 | |||
Trade and other receivables | 2,488,560 | |||
Inventories | 270,489 | |||
Advances and prepayments | 244,725 | |||
Vessels, net (after impairment of $40,185,873) | 80,500,000 | |||
Trade accounts payable | (1,618,146 | ) | ||
Accrued and other liabilities | (312,642 | ) | ||
Deferred income | (943,404 | ) | ||
Customer deposits | (368,000 | ) | ||
Debt | (27,804,000 | ) | ||
Net assets of Imperial distributed to stockholders | 57,162,103 |
Any remaining costs to complete the claims are included in accrued liabilities.
incurred.
charterer, while under bareboat charter agreements, the charterer also assumes responsibility for all vessel operating expenses, dry-docking expenses and risk of operation.
The Company adopted Accounting Standards Update2014-09, “Revenue from Contracts with Customers” (“ASC 606”) as of January 1, 2018 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.
Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses,dry-docking expenses and risk of operation.
Impact of Recently Adopted Accounting Standards
The new lease standard will continue to classify leases as either financingfinance or operating arrangements, with such classification affecting the pattern and classification of expense recognition. recognition in an entity’s income statement. For operating leases, ASC 842 requires recognition in an entity’s income statement of a single lease expense, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis.
fees”).
operations.
In
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. On January 25, 2016, the Company entered into a new supervision agreement with Brave for the supervision of the construction of four of its newbuilding vesselsthe vessel discussed in Note 5 for a fixed fee of Euro 490,000 per vessel. For390,000 (the “Supervision fees”).
Year ended December 31, | ||||||||||||||
Location in statement of operations | 2019 | 2020 | 2021 | |||||||||||
Management fees | Management fees – related party | 5,730,910 | 5,599,351 | 5,831,900 | ||||||||||
Brokerage commissions | Voyage expenses – related party | 1,788,543 | 1,799,209 | 1,867,100 | ||||||||||
Superintendent fees | Vessels’ operating expenses – related party | 104,000 | 38,000 | 117,000 | ||||||||||
Crew management fees | Vessels’ operating expenses – related party | 862,500 | 912,500 | 948,750 | ||||||||||
Commissions - vessels sold | Net loss on sale of vessels | 109,000 | 54,000 | 81,000 | ||||||||||
Commissions - vessel held for sale | Impairment loss | 0 | 0 | 125,000 | ||||||||||
Executive compensation | General and administrative expenses | 1,118,491 | 994,840 | 1,028,386 | ||||||||||
Rental expense | General and administrative expenses | 87,192 | 90,121 | 97,726 |
December 31, | ||||||||||||||
Location in balance sheet | 2019 | 2020 | 2021 | |||||||||||
Commissions - vessels purchased | Vessels, net | — | 435,000 | 289,347 | ||||||||||
Supervision fees | Advances for vessel under construction/Vessels, net | — | 210,970 | 236,521 |
Company contributed its 51% interests in Gas Enterprises International Inc. to MGC Agressive Holdings Inc. (Note 7).
December 31, | ||||||||
2018 | 2019 | |||||||
Bunkers | 1,082,384 | 1,112,667 | ||||||
Lubricants | 1,264,339 | 1,335,036 | ||||||
|
|
|
| |||||
Total | 2,346,723 | 2,447,703 | ||||||
|
|
|
|
December 31, | ||||||||
2020 | 2021 | |||||||
Bunkers | 2,152,601 | 1,120,372 | ||||||
Lubricants | 1,534,497 | 1,652,160 | ||||||
Total | 3,687,098 | 2,772,532 | ||||||
On November 17, 2016 and on July 18, 2017,2019. The vessel, which was named “Eco Blizzard”, was delivered to the Company agreed withon February 5, 2021 after the payment of the delivery installment to the shipbuilder amounting to postpone the delivery of four newbuildings for an additional charge. $23,152,125.
For the years ended December 31, 2018 and 2019,2021, the movement of the account, advances for vesselsvessel under construction and acquisitions was as follows:
| ||||
| ||||
| ||||
| ||||
Balance, December 31, | 2,988,903 | |||
Advance for vessel under construction | 2,891,283 | |||
Capitalized interest | ||||
Supervision fees (Note 3) | ||||
Other capitalized expenses | 279,615 | |||
Balance, December 31, 2020 | 6,539,115 | |||
Advance for vessel under construction | 23,152,125 | |||
Supervision fees (Note 3) | 236,521 | |||
Commissions - vessels purchased (Note 3) | 289,347 | |||
Capitalized interest | 20,060 | |||
Other capitalized expenses | 129,729 | |||
Transfer to vessels. Net (Note 6) | (30,366,897 | ) | ||
Balance, December 31, 2021 | 0 |
Vessel cost | Accumulated Depreciation | Net Book Value | ||||||||||
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 | ) | |||||||
Disposals | (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 | ||||||||
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 | ||||||||
|
|
|
|
|
|
The additions in 2018 relate to the acquisition of vessels “Eco Arctic”, “Eco Ice” and “Eco Freeze”.
In March 2018, the Company entered into a memorandum of agreement for the disposal of the vessel “Gas Legacy”, to an unaffiliated third party for $4,990,000. The vessel, including her inventories on board, was classified as assets held for sale in the first quarter of 2018. 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 $1,418,672 in its consolidated statement of operations for the year ended December 31, 2018. The vessel was delivered to her new owners on August 31, 2018.
At March 31, 2018, the Company decided to seek to dispose of the vessel “Gas Enchanted”. As a result of this decision, the undiscounted net operating cash flows of this vessel did not exceed its carrying value and the Company identified and recognized an impairment charge of $1,937,822 in its consolidated statement of operations for the year ended December 31, 2018. In April 2018, the Company concluded a memorandum of agreement for the disposal of this vessel, to an unaffiliated third party for $8,950,000. The vessel was delivered to her new owners on May 7, 2018.
In April 2018, the Company entered into a memorandum of agreement for the disposal of the vessel “Gas Evoluzione”, to an unaffiliated third party for $3,575,000. The vessel, including her inventories on board, was classified as assets held for sale in the second quarter of 2018. The total impairment charge recognized in the Company’s consolidated statements of operations for the year ended December 31, 2018 amounted to $604,774. The vessel was delivered to her new owners on August 28, 2018.
On June 30, 2018, the Company decided to seek to dispose of the vessel “Gas Sikousis”. As a result of this decision, the undiscounted net operating cash flows of this vessel did not exceed its carrying value and the Company identified and recognized an impairment charge of $842,332 in its consolidated statement of operations for the year ended December 31, 2018. In July 2018, the Company concluded a memorandum of agreement for the disposal of this vessel, to an unaffiliated third party for $9,450,000. The vessel was delivered to her new owners on September 27, 2018.
In July 2018, the Company entered into three separate memoranda of agreement for the disposal of the vessels “Gas Marathon”, “Gas Sincerity and “Gas Texiana” to unaffiliated third parties for a total of $12,700,000. The vessels, including their inventories on board, were classified as vessels held for sale in the third quarter of 2018. The total impairment charge recognized in the Company’s consolidated statements of operations for the year ended December 31, 2018 amounted to $3,358,363. The vessels were delivered to their new owners on October 13, 2018, January 28, 2019 and February 13, 2019, respectively.
The Company disposed the above mentioned vessels as the agreed selling price was a suitable opportunity for the Company and realized an aggregate loss from the sale of these vessels of $763,925 which is included in the Company’s consolidated statement of operations under the caption “Net loss on sale of vessels” for the year ended December 31, 2018.
Vessel cost | Accumulated Depreciation | Net Book Value | ||||||||||
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 | ||||||||
Transfer from Advances for vessel under construction and acquisitions (Note 5) | 30,366,897 | — | 30,366,897 | |||||||||
Other additions | 1,227,314 | — | 1,227,314 | |||||||||
Impairment loss | (169,553,060 | ) | 124,936,846 | (44,616,214 | ) | |||||||
Disposals | (8,100,000 | ) | 0 | (8,100,000 | ) | |||||||
Transfer to Vessel held for sale | (12,250,000 | ) | — | (12,250,000 | ) | |||||||
Spin-off of tankers (Note 1) | (80,500,000 | ) | — | (80,500,000 | ) | |||||||
Depreciation for the year | — | (37,125,903 | ) | (37,125,903 | ) | |||||||
Balance, December 31, 2021 | 872,676,077 | (191,338,924 | ) | 681,337,153 | ||||||||
As of December 31, 2018, six vessels, together with their inventories on board amounting to $718,448, were classified as assets held for sale in the accompanying consolidated balance sheet.
At
Amount returned to the Company amounted to $24,276,000.
December 31, 2019 | ||||||||||||||||||||
Space Gas 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 Agressive 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, 2021 | ||||||||||||||||||||||||
Spacegas Inc. | Financial Power Inc. | Cannes View Inc. | Colorado Oil and Gas Inc | Frost Investments Corp Inc. | MGC Agressive Holdings Inc. | |||||||||||||||||||
Current assets | 2,347,954 | 3,112,192 | 1,630,592 | 1,017,765 | 13,208,202 | 23,228,225 | ||||||||||||||||||
Non-current assets | 11,900,116 | 11,924,795 | 13,071,670 | 11,870,528 | 18,532,414 | 56,221,031 | ||||||||||||||||||
Current liabilities | 1,426,492 | 1,506,835 | 1,687,929 | 3,231,113 | 2,247,545 | 5,357,705 | ||||||||||||||||||
Long-term liabilities | 4,178,256 | 4,178,256 | 6,307,812 | 5,519,327 | 8,008,092 | 22,799,849 | ||||||||||||||||||
Revenues | 3,023,283 | 3,464,824 | 4,227,682 | 3,154,728 | 7,162,657 | 17,468,871 | ||||||||||||||||||
Operating income/(loss) | 26,559 | 893,121 | 396,337 | (216,091 | ) | 3,509,152 | 13,857,864 | |||||||||||||||||
Net (loss)/income | (105,179 | ) | 762,975 | 128,636 | (466,393 | ) | 3,148,404 | 12,918,760 |
December 31, | ||||||||
2018 | 2019 | |||||||
Interest on long-term debt | 3,656,811 | 2,790,621 | ||||||
Administrative expenses | 251,257 | 205,184 | ||||||
Other operating costs | 660,000 | — | ||||||
Vessel operating and voyage expenses | 2,311,420 | 3,006,274 | ||||||
|
|
|
| |||||
Total | 6,879,488 | 6,002,079 | ||||||
|
|
|
|
December 31, | ||||||||
2020 | 2021 | |||||||
Interest on long-term debt | 1,887,414 | 1,883,321 | ||||||
Administrative expenses | 209,553 | 210,930 | ||||||
Vessel operating and voyage expenses | 1,676,532 | 1,748,628 | ||||||
Total | 3,773,499 | 3,842,879 | ||||||
(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 21, 2015 an amount of $1,820,700 was received from the bareboat charterer of Aframax tanker “Stealth Berana” (ex. “Spike”) which is equal to five-months hire. An amount of $1,220,700 was returned to the charterer at the end of the bareboat charter on March 7, 2018. The remaining amount of $600,000 was kept as a guarantee for the new bareboat charter which commenced on March 7, 2018. The bareboat charter ended during 2020 and the balance was fully settled in 2021 following the agreement reached with the charterers (Note 19). |
Term Loans | Drawn Amount | December 31, 2018 | Movement in 2019 | Deconsolidated (Note 7) | December 31, 2019 | |||||||||||||||||||||
Issue Date/ Refinancing Date | Maturity Date | Additions | Repayments | |||||||||||||||||||||||
February 12, 2008 | February 19, 2020 | 40,250,000 | 11,875,000 | — | (11,875,000 | ) | — | — | ||||||||||||||||||
July 30, 2008 | November 4, 2020 | 33,240,000 | 13,850,000 | — | — | (13,850,000 | ) | — | ||||||||||||||||||
December 14, 2018 | December 18, 2023 | 14,094,184 | 14,094,184 | — | (2,200,000 | ) | — | 11,894,184 | ||||||||||||||||||
May 28, 2019 | April 16, 2024 | 11,000,000 | 11,700,000 | — | (1,340,000 | ) | — | 10,360,000 | ||||||||||||||||||
August 6, 2019 | March 1, 2024 | 27,675,000 | 25,200,000 | — | (3,300,000 | ) | — | 21,900,000 | ||||||||||||||||||
March 1, 2011 | June 20, 2020 | 43,250,000 | 23,375,000 | — | (23,375,000 | ) | — | — | ||||||||||||||||||
July 5, 2019 | July 11, 2026 | 22,230,000 | — | 22,230,000 | (793,929 | ) | — | 21,436,071 | ||||||||||||||||||
March 29, 2019 | December 29, 2022 | 25,458,432 | 15,244,697 | 11,250,000 | (8,257,649 | ) | — | 18,237,048 | ||||||||||||||||||
August 7, 2019 | July 31, 2022 | 50,225,000 | 35,630,000 | — | (6,605,000 | ) | — | 29,025,000 | ||||||||||||||||||
April 16, 2014 | April 16, 2020 | 30,000,000 | 16,300,000 | — | (16,300,000 | ) | — | — | ||||||||||||||||||
December 14, 2018 | December 18, 2023 | 9,480,000 | 9,480,000 | — | (800,000 | ) | — | 8,680,000 | ||||||||||||||||||
June 20, 2014 | January 8, 2023 | 20,925,000 | 15,600,000 | — | (1,420,000 | ) | — | 14,180,000 | ||||||||||||||||||
August 6, 2019 | June 30, 2023 | 67,200,000 | 51,555,000 | — | (3,960,000 | ) | — | 47,595,000 | ||||||||||||||||||
December 24, 2015 | December 14, 2022 | 22,400,000 | 17,920,016 | — | (1,493,328 | ) | — | 16,426,688 | ||||||||||||||||||
July 4, 2014 | September 3, 2021 | 22,750,000 | 17,468,750 | — | (1,625,000 | ) | — | 15,843,750 | ||||||||||||||||||
July 29, 2014 | July 7, 2023 | 25,350,000 | 18,484,375 | — | (2,112,500 | ) | — | 16,371,875 | ||||||||||||||||||
December 7, 2017 | December 11, 2022 | 22,275,000 | 19,520,000 | — | (2,755,000 | ) | — | 16,765,000 | ||||||||||||||||||
May 18, 2016 | December 31, 2025 | 65,650,000 | 61,049,260 | — | (4,103,320 | ) | — | 56,945,940 | ||||||||||||||||||
March 1, 2017 | April 17, 2026 | 70,787,500 | 67,624,999 | — | (5,056,252 | ) | — | 62,568,747 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||
Total | 445,971,281 | 33,480,000 | (97,371,978 | ) | (13,850,000 | ) | 368,229,303 | |||||||||||||||||||
Current portion of long-term debt | 42,433,562 | 41,421,346 | ||||||||||||||||||||||||
Current portion of long-term debt associated with vessels held for sale | 30,150,000 | — | ||||||||||||||||||||||||
Long term debt | 373,387,719 | 326,807,957 | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||
Total debt | 445,971,281 | 368,229,303 | ||||||||||||||||||||||||
Current portion of deferred finance charges | 706,725 | 685,790 | ||||||||||||||||||||||||
Current portion of deferred finance charges associated with vessels held for sale | 73,644 | — | ||||||||||||||||||||||||
Deferred finance chargesnon-current | 1,873,466 | 1,560,055 | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||
Total deferred finance charges | 2,653,835 | 2,245,845 | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||
Total debt | 445,971,281 | 368,229,303 | ||||||||||||||||||||||||
Less: Total deferred finance charges | 2,653,835 | 2,245,845 | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||
Total debt, net of deferred finance charges |
| 443,317,446 | 365,983,458 | |||||||||||||||||||||||
Less: Current portion of long-term debt, net of current portion of deferred finance charges | 41,726,837 | 40,735,556 | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||
Less: Current portion of long-term debt associated with vessels held for sale, net of current portion of deferred finance charges | 30,076,356 | — | ||||||||||||||||||||||||
|
|
|
| |||||||||||||||||||||||
371,514,253 | 325,247,902 | |||||||||||||||||||||||||
|
|
|
|
The below are changes in term loans during the years ended December 31, 2018 and 2019.
On May 18, 2016 the Company entered into a term loan with a bank to partially finance the acquisition of two LPG carriers under construction, by two of the Company’s wholly owned subsidiaries. The term loan is up to $74,480,000 and was drawn down in two tranches upon the delivery of each vessel. The first tranche amounting 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.
Term Loans | Drawn Amount | December 31, 2020 | 2021 | |||||||||||
Issue Date/ Refinancing Date | Maturity Date | |||||||||||||
December 14, 2018 | November 10, 2021 | 14,094,184 | 9,694,184 | 0 | ||||||||||
May 28, 2019 | August 6, 2021 | 11,000,000 | 9,080,000 | 0 | ||||||||||
August 6, 2019 | August 6, 2021 | 27,675,000 | 18,600,000 | 0 | ||||||||||
July 5, 2019 | July 11, 2026 | 22,230,000 | 18,260,357 | 15,084,643 | ||||||||||
March 29, 2019 | December 29, 2022 | 25,458,432 | 13,701,816 | 3,039,647 | ||||||||||
January 11, 2021 | January 14, 2026 | 50,225,000 | 25,420,000 | 22,675,000 | ||||||||||
December 14, 2018 | December 18, 2023 | 9,480,000 | 7,880,000 | 7,080,000 | ||||||||||
June 20, 2014 | January 21, 2021 | 20,925,000 | 12,760,000 | �� | 0 | |||||||||
August 6, 2019 | August 6, 2021 | 67,200,000 | 43,635,000 | 0 | ||||||||||
December 24, 2015 | January 25, 2021 | 22,400,000 | 14,933,360 | 0 | ||||||||||
January 19, 2021 | January 21, 2028 | 43,800,000 | 14,218,750 | 40,731,975 | ||||||||||
July 29, 2014 | July 7, 2023 | 25,350,000 | 14,259,375 | 12,146,875 | ||||||||||
December 7, 2017 | November 10, 2021 | 22,275,000 | 14,010,000 | 0 | ||||||||||
May 18, 2016 | December 31, 2025 | 65,650,000 | 52,842,620 | 48,739,300 | ||||||||||
March 1, 2017 | April 17, 2026 | 70,787,500 | 57,512,495 | 52,456,243 | ||||||||||
June 17, 2020 | June 19, 2026 | 11,505,000 | 11,121,500 | 10,354,500 | ||||||||||
April 30, 2020 | November 7, 2026 | 15,600,000 | 15,600,000 | 14,733,333 | ||||||||||
April 30, 2020 | February 4, 2027 | 18,850,000 | 0 | 18,064,582 | ||||||||||
August 5, 2021 | August 6, 2026 | 60,000,000 | 0 | 58,060,931 | ||||||||||
Total | 353,529,457 | 303,167,029 | ||||||||||||
Current portion of long-term debt | 41,161,686 | 32,464,732 | ||||||||||||
Current portion of long-term debt associated with vessel held for sale | 0 | 7,173,988 | ||||||||||||
Long-term debt | 312,367,771 | 263,528,309 | ||||||||||||
Total debt | 353,529,457 | 303,167,029 | ||||||||||||
Current portion of deferred finance charges | 613,794 | 628,113 | ||||||||||||
Deferred finance charges non-current | 1,118,450 | 1,567,334 | ||||||||||||
Total deferred finance charges | 1,732,244 | 2,195,447 | ||||||||||||
Total debt | 353,529,457 | 303,167,029 | ||||||||||||
Less: Total deferred finance charges | 1,732,244 | 2,195,447 | ||||||||||||
Total debt, net of deferred finance charges | 351,797,213 | 300,971,582 | ||||||||||||
Less: Current portion of long-term debt, net of current portion of deferred finance charges | 40,547,892 | 31,836,619 | ||||||||||||
Less: Current portion of long-term debt, associated with vessel held for sale | 0 | 7,173,988 | ||||||||||||
Long-term debt | 311,249,321 | 261,960,975 | ||||||||||||
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 6, 2019, the Company entered into a supplemental agreement with the bank based on which the margin of the existing loan changed from 2.7% to 2.5%.
On April 27, 2018, the Company voluntary repaid $4,122,370 being part of the outstanding balance of the term loan dated September 23, 2013.
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 January 30, 2019, the Company signed a side letter with the bank to reduce the margin of an existing loan dated July 4, 2014 from 3% to 2.5%.
On February 1, 2019, the Company sold 49.9% of the equity interests of two subsidiaries which had borrowed a loan dated July 30, 2008. Since the retained investments in these companies are accounted for under the equity method (Note 7), the loan is no longer included in the consolidated balance sheets of the Company.
On March 27, 2019, the Company voluntary repaid the outstanding balance of the term loan dated April 16, 2014, amounting to $15,780,000.
On March 29, 2019,21, 2021, the Company entered into a term loan with a bank to refinance the existing term loans dated February 12, 2008 and September 23, 2013. Two installments amounting to $625,000 and $1,036,265 were paid on February 19,July 29, 2014, December 14, 2018, July 5, 2019 and on March 29, 2019, respectively, relatingJune 17, 2020. Outstanding balance of these loans as of December 31, 2021 amounted to the existing term loans.$44,666,018. The new term loan amounts to $59,400,000
On May 28, 2019, the Company entered into a term loan with the same bank to refinance the existing term loan dated April 14, 2014. Two installments amounting to $700,000 were paid on January 16, 2019 and April 16, 2019 relating to the existing term loan. The new term loan is $11,000,000 and will be repayable, with the first installment commencing three months after the drawdown, in twenty consecutive24 equal quarterly installments plusand a balloon payment payable together with the last installment.
On July 5, 2019,installment in January 2028
On August 6, 2019, the Company entered into a supplemental agreement with the bank to reduce the marginDecember 2021 discussed above.
Gross deferred finance charges amounting to $8,374,435 and $8,851,636 as of December 31, 2018 and December 31, 2019, 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, 2017, 2018 and 2019, the amortization of deferred financing charges amounted to $690,841, $858,582 and $885,191, respectively, and is included in interest and finance costs in the consolidated statements of operations.
Year ended December 31, 2017: 3.97%
Year ended December 31, 2018: 5.34%
For the years ended December 31, 2019, 2020 ad 2021, the amortization of deferred financing charges amounted to $885,191, $698,364 and $1,157,804, respectively, and is included in interest and finance costs in the consolidated statements of operations.
December 31, | Amount | |||
2020 | 41,421,346 | |||
2021 | 67,415,096 | |||
2022 | 87,184,402 | |||
2023 | 66,658,845 | |||
2024 | 26,275,286 | |||
Thereafter | 79,274,328 | |||
|
| |||
Total | 368,229,303 | |||
|
|
December 31, | Amount | |||
202 2 | 39,638,720 | |||
202 3 | 30,607,086 | |||
202 4 | 30,607,086 | |||
202 5 | 62,933,106 | |||
202 6 | 91,723,313 | |||
Thereafter | 47,657,718 | |||
Total | 303,167,029 | |||
Effective Date | Termination Date | Fixed Rate (Company pays) | Floating Rate (Company Receives) | Fair Value Asset/(Liability) December 31, 2019 | Notional Amount December 31, 2019 | |||||||||||||
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 | |||||||||
Swap 5 | December 3, 2015 | September 3, 2021 | 1.55 | % | 3 month U.S. dollar LIBOR | $ | 16,906 | $ | 7,921,875 | |||||||||
Swap 6 | August 16, 2017 | May 16, 2025 | 2.12 | % | 3 month U.S. dollar LIBOR | $ | (249,020 | ) | $ | 13,711,250 | ||||||||
Swap 7 | March 12, 2018 | December 11, 2022 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (419,160 | ) | $ | 16,765,000 | ||||||||
Swap 8 | April 10, 2018 | December 11, 2025 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (1,369,934 | ) | $ | 29,524,000 | ||||||||
Swap 9 | February 16, 2019 | February 16, 2024 | 2.89 | % | 3 month U.S. dollar LIBOR | $ | (580,136 | ) | $ | 13,711,250 | ||||||||
|
|
|
| |||||||||||||||
Total | $ | (2,585,692 | ) | $ | 111,789,084 | |||||||||||||
|
|
|
|
Effective Date | Termination Date | Fixed Rate (Company pays) | Floating Rate (Company Receives) | Fair Value Asset/ (Liability) December 31, 2020 | Notional Amount December 31, 2020 | Fair Value Asset/ (Liability) December 31, 2021 | Notional Amount December 31, 2021 | |||||||||||||||||||
Swap 1 | November 4, 2015 | August 4, 2021 | 1.52 | % | 3 month U.S. dollar LIBOR | $ | (69,821 | ) | $ | 7,109,375 | — | — | ||||||||||||||
Swap 2 | December 3, 2015 | September 3, 2021 | 1.55 | % | 3 month U.S. dollar LIBOR | $ | (71,626 | ) | $ | 7,109,375 | — | — | ||||||||||||||
Swap 3 | August 16, 2017 | May 16, 2025 | 2.12 | % | 3 month U.S. dollar LIBOR | $ | (857,234 | ) | $ | 12,695,750 | $ | (358,988 | ) | $ | 11,680,250 | |||||||||||
Swap 4 | March 12, 2018 | December 11, 2022 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (598,572 | ) | $ | 14,010,000 | 0 | 0 | ||||||||||||||
Swap 5 | April 10, 2018 | December 11, 2025 | 2.74 | % | 3 month U.S. dollar LIBOR | $ | (2,682,391 | ) | $ | 27,452,000 | $ | (1,398,025 | ) | $ | 25,380,000 | |||||||||||
Swap 6 | February 16, 2019 | February 16, 2024 | 2.89 | % | 3 month U.S. dollar LIBOR | $ | (961,267 | ) | $ | 12,695,750 | $ | (486,439 | ) | $ | 11,680,250 | |||||||||||
Swap 7 | January 21, 2021 | January 21, 2028 | 0.73 | % | 3 month U.S. dollar LIBOR | 0 | 0 | $ | (293,862 | ) | $ | 13,210,750 | ||||||||||||||
Swap 8 | January 21, 2021 | January 21, 2028 | 0.73 | % | 3 month U.S. dollar LIBOR | 0 | 0 | $ | (292,709 | ) | $ | 13,173,250 | ||||||||||||||
Swap 9 | January 21, 2021 | January 21, 2028 | 0.74 | % | 3 month U.S. dollar LIBOR | 0 | 0 | $ | (321,857 | ) | $ | 14,347,975 | ||||||||||||||
Total | $ | (5,240,911 | ) | $ | 81,072,250 | $ | (3,151,880 | ) | $ | 89,472,475 |
loss.
Derivatives designated as hedging instruments | Balance Sheet Location | December 31, | ||||||||||||||||
2018 | 2019 | |||||||||||||||||
Asset Derivatives | Liability Derivatives | Asset Derivatives | Liability Derivatives | |||||||||||||||
Interest Rate Swap Agreements | Non current assets — Fair value of derivatives | 1,068,369 | — | 39,744 | — | |||||||||||||
Interest Rate Swap Agreements | Non current liabilities — Fair value of derivatives | — | 465,389 | — | 2,618,250 | |||||||||||||
|
|
|
|
|
|
|
| |||||||||||
Total derivatives designated as hedging instruments | 1,068,369 | 465,389 | 39,744 | 2,618,250 | ||||||||||||||
|
|
|
|
|
|
|
|
Derivatives not designated as hedging instruments | Balance Sheet Location | December 31, | ||||||||||||||||
2018 | 2019 | |||||||||||||||||
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 designated as hedging instruments | Balance Sheet Location | December 31, | ||||||||||||||||
2020 | 2021 | |||||||||||||||||
Asset Derivatives | Liability Derivatives | Asset Derivatives | Liability Derivatives | |||||||||||||||
Interest Rate Swap Agreements | Current liabilities — Fair value of derivatives | — | 141,447 | — | — | |||||||||||||
Interest Rate Swap Agreements | Non current liabilities — Fair value of derivatives | — | 5,099,464 | — | 3,151,880 | |||||||||||||
Total derivatives designated as hedging instruments | — | 5,240,911 | — | 3,151,880 | ||||||||||||||
Derivatives not designated as hedging instruments | Location of Gain/(Loss) | Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||||
Interest Rate Swap — Reclassification from OCI | Loss on derivatives | — | — | 84,966 | ||||||||||
Interest Rate Swap — Change in Fair Value | Loss on derivatives | — | — | (327,147 | ) | |||||||||
Interest Rate Swap — Realized income | Loss on derivatives | — | — | 134,631 | ||||||||||
|
|
|
|
|
| |||||||||
Total loss on derivatives | — | — | (107,550 | ) | ||||||||||
|
|
|
|
|
|
Derivatives designated as hedging instruments | Location of (Loss)/Gain | Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||||
Interest Rate Swap — (Loss) reclassified from OCI (Effective portion) | Loss on derivatives | (403,943 | ) | (11,982 | ) | — | ||||||||
Interest Rate Swap — Income reclassified from OCI (Effective portion) | Interest and finance costs | — | — | 67,424 | ||||||||||
|
|
|
|
|
| |||||||||
Total loss on derivatives | (403,943 | ) | (11,982 | ) | 67,424 | |||||||||
|
|
|
|
|
|
Derivatives not designated as hedging instruments | Location of Gain/(Loss) Recognized | Year Ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||||
Interest Rate Swap — Reclassification from OCI | Loss on derivatives | 84,966 | 60,954 | 265,610 | ||||||||||
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 | ) | (25,457 | ) | ||||||||
Total loss/(gain) on derivatives | (107,550 | ) | (50,976 | ) | 240,153 | |||||||||
Derivatives designated as hedging instruments | Location of (Loss)/Gain Recognized | Year Ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||||
Interest Rate Swap — Realized Income/(Loss) | Interest and finance costs | 67,424 | (1,190,400 | ) | (2,183,187 | ) | ||||||||
Total loss on derivatives | 67,424 | (1,190,400 | ) | (2,183,187 | ) | |||||||||
Unrealized Gain / (Loss) on cash flow hedges | ||||
Balance, January 1, | ||||
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 | ) | ||
Effective portion of changes in fair value of interest swap contracts | 2,114,488 | |||
Reclassification adjustment | ( | ) | ||
| ||||
Balance, December 31, 2021 | ( | ) | ||
| ||||
The estimated net amount of existing gains at December 31, 2019, that will be reclassified into earnings within the next twelve months relating to previously designated cash flow hedges is $60,954.
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) | |||||||||||||
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 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 | ) | — | ||||||||||
|
|
|
|
|
|
|
|
2021:
Fair Value as of December 31, 2021 | 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 | (3,151,880 | ) | — | (3,151,880 | ) | — | ||||||||||
Total | (3,151,880 | ) | — | (3,151,880 | ) | — | ||||||||||
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 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 9,400,000 | — | 9,400,000 | — | (1,531,130 | ) |
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 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | 55,230,000 | — | 55,230,000 | — | (3,189,858 | ) |
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 their 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.
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) |
$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) |
Fair Value as of June 30, 2021 | 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 | 12,500,000 | — | 12,500,000 | — | (1,125,243 | ) | ||||||||||||||
Long-lived assets held and used | 3,250,000 | — | 3,250,000 | — | (49,977 | ) | ||||||||||||||
Total | 15,750,000 | — | 15,750,000 | — | (1,175,220) |
Fair Value as of December 31, 2021 | 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 | 12,650,000 | — | 12,650,000 | — | (1,333,950 | ) | ||||||||||||||
Total | 12,650,000 | — | 12,650,000 | — | (1,333,950) |
On November 20, 2014, the Company granted 230,713 ofnon-vested restricted
2021.
The stock based compensation expense for the vested and2017, 20182019, 2020 and 20192021 amounted to $129,245, $338,356$611,644, NaN and $611,644,$462,508, respectively, and is included in the consolidated statements of operations under the caption “General and administrative expenses”.
Number of restricted shares | Weighted average grant date fair value per non-vested share | |||||||
Non-vested, January 1, 2019 | 264,621 | 3.59 | ||||||
Vested | (264,621 | ) | 3.59 | |||||
|
|
|
| |||||
Non-vested, December 31, 2019 | — | — | ||||||
|
|
|
|
Number of restricted shares | Weighted average grant date fair value per non-vested share | |||||||
Non-vested, January 1, 2021 | 0 | 0 | ||||||
Granted | 343,744 | 2.99 | ||||||
Non-vested, December 31, 2021 | 343,744 | 2.99 | ||||||
The remaining
December 31, 2021 | ||||||||
Option shares # | Weighted-Average Exercise Price $ | |||||||
Outstanding – beginning of year | — | — | ||||||
Granted | 250,000 | 2.99 | ||||||
Exercised | — | — | ||||||
Outstanding – end of year | 250,000 | 2.99 | ||||||
Exercisable – end of year | — | |||||||
Year Ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Numerator | ||||||||||||
Net (loss)/income | (1,218,237 | ) | (12,276,520 | ) | 2,093,124 | |||||||
Less: Undistributed earnings allocated tonon-vested shares | — | — | (8,922 | ) | ||||||||
|
|
|
|
|
| |||||||
Net (loss)/income attributable to common shareholders, basic | (1,218,237 | ) | (12,276,520 | ) | 2,084,202 | |||||||
|
|
|
|
|
| |||||||
Denominator | ||||||||||||
|
|
|
|
|
| |||||||
Weighted average number of shares outstanding, basic and diluted | 39,809,364 | 39,860,563 | 39,800,434 | |||||||||
|
|
|
|
|
| |||||||
(Loss)/earnings per share, basic and diluted | (0.03 | ) | (0.31 | ) | 0.05 | |||||||
|
|
|
|
|
|
Year Ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Numerator | ||||||||||||
Net income/(loss) | 2,093,124 | 11,984,485 | (35,123,208 | ) | ||||||||
Less: Undistributed earnings allocated to non-vested shares | (8,922 | ) | 0 | 0 | ||||||||
Net income/(loss) attributable to common shareholders, basic | 2,084,202 | 11,984,485 | (35,123,208 | ) | ||||||||
Denominator | ||||||||||||
Weighted average number of shares outstanding, basic and diluted | 39,800,434 | 38,357,893 | 37,858,437 | |||||||||
Earnings/( Loss) per share, basic and diluted | 0.05 | 0.31 | (0.93 | ) | ||||||||
calculations for the year ended December 31, 2021. Non-vested, participating restricted common stock was included in the basic earnings per share calculations for the years ended December 31, 2019 and 2020.
Year ended December 31, | ||||||||||||
2017 | 2018 | 2019 | ||||||||||
Time charter revenues | 96,339,915 | 104,099,818 | 97,249,537 | |||||||||
Time charter revenues – related party | 1,973,643 | — | — | |||||||||
Bareboat revenues | 27,647,268 | 24,646,311 | 21,764,102 | |||||||||
Voyage charter revenues | 26,924,708 | 34,266,082 | 24,018,198 | |||||||||
Other income | 1,426,387 | 1,317,991 | 1,227,475 | |||||||||
|
|
|
|
|
| |||||||
Total | 154,311,921 | 164,330,202 | 144,259,312 | |||||||||
|
|
|
|
|
|
Year ended December 31, | ||||||||||||
2019 | 2020 | 2021 | ||||||||||
Time charter revenues | 97,249,537 | 101,837,425 | 105,966,167 | |||||||||
Bareboat revenues | 21,764,102 | 16,876,956 | 9,624,684 | |||||||||
Voyage charter revenues | 24,018,198 | 25,161,401 | 33,813,496 | |||||||||
Other income | 1,227,475 | 1,127,239 | 800,180 | |||||||||
Total | 144,259,312 | 145,003,021 | 150,204,527 | |||||||||
the time charters. These options expire in 2022.
Year ended December 31, | ||||||||||||
Voyage Expenses | 2017 | 2018 | 2019 | |||||||||
Port expenses | 2,546,926 | 2,841,661 | 3,170,781 | |||||||||
Bunkers | 6,668,126 | 11,641,615 | 8,153,437 | |||||||||
Commissions | 4,584,612 | 4,796,483 | 4,443,642 | |||||||||
Other voyage expenses | 1,916,873 | 1,407,416 | 1,222,661 | |||||||||
|
|
|
|
|
| |||||||
Total | 15,716,537 | 20,687,175 | 16,990,521 | |||||||||
|
|
|
|
|
|
Year ended December 31, | ||||||||||||
Vessels’ Operating Expenses | 2017 | 2018 | 2019 | |||||||||
Crew wages and related costs | 37,345,800 | 36,628,082 | 30,874,618 | |||||||||
Insurance | 2,016,647 | 2,068,485 | 2,162,523 | |||||||||
Repairs and maintenance | 6,424,557 | 7,359,816 | 5,677,033 | |||||||||
Spares and consumable stores | 8,508,276 | 8,907,211 | 7,783,902 | |||||||||
Miscellaneous expenses | 5,124,154 | 5,471,184 | 3,088,018 | |||||||||
|
|
|
|
|
| |||||||
Total | 59,419,434 | 60,434,778 | 49,586,094 | |||||||||
|
|
|
|
|
|
Year ended December 31, | ||||||||||||
Vessels’ Operating Expenses | 2019 | 2020 | 2021 | |||||||||
Crew wages and related costs | 30,874,618 | 32,073,496 | 38,454,397 | |||||||||
Insurance | 2,162,523 | 1,889,041 | 2,196,444 | |||||||||
Repairs and maintenance | 5,677,033 | 6,590,006 | 7,282,481 | |||||||||
Spares and consumable stores | 7,783,902 | 7,990,022 | 9,123,975 | |||||||||
Miscellaneous expenses | 3,088,018 | 4,752,656 | 4,452,266 | |||||||||
Total | 49,586,094 | 53,295,221 | 61,509,563 | |||||||||
During 2019, the Company agreed to acquire an LPG carrier which is currently under construction, as described in Note 5. The Company has future outstanding commitments for installment payments for this agreement as follows:
December 31 | Amount | |||
2020 | 2,891,283 | |||
2021 | 23,130,260 | |||
|
| |||
Total | 26,021,543 | |||
|
|
In November and December 2014, the Company sold the vessels Gas Premiership and Gas Cathar and realized a total gain of $780,695. The Company entered into bareboat charter agreements to leaseback the vessels for a period of four years. The charter back agreements are accounted for as operating leases and the gain on the sale was deferred and is being amortized to income over the four-year lease period.
The Company charters in vessels to supplement its own fleet and employs them both on time charters and voyage charters. The time charter-in contracts range in lease terms from 1 year to 5 years. The Company elected the practical expedient of ASC 842 that allows for time charter-in contracts with an initial lease term of one year or less to be excluded from the operating lease right-of-use assets and lease liabilities recognized on our consolidated balance sheet. The Company recognized the operating lease right-of-use assets and the corresponding lease liabilities on the consolidated balance sheet for time charter-in contracts with a lease term of more than one year at the commencement of the lease. The Company will continue to recognize the lease payments for all vessel operating leases as charter hire expenses on the consolidated statements of operations on a straight-line basis over the lease term.
Under ASC 842, leases are classified as either finance or operating arrangements, with such classification affecting the pattern and classification of expense recognition in an entity’s income statement. For operating leases, ASC 842 requires recognition in an entity’s income statement of a single lease expense, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Right-of-use assets represent a right to use an underlying asset for the lease term and the related lease liability represents an obligation to make lease payments pursuant to the contractual terms of the lease agreement.
The Company used the incremental borrowing rate which amounted to 5.6% at January 1, 2019 for the lease contract for which the Company recorded operating lease right-of-use assets and corresponding lease liabilities.
The Company had one time charter-in contract for one vessel which was greater than 12 months at lease commencement date as of the date of adoption of ASC 842. A brief description of this contract is below:
|
operations.
Adoption
The objective of the disclosure requirements under ASC 842 is to enable users of an entity’s financial statements to assess the amount, timing and uncertainty of cash flows arising from lease arrangements. In addition to the qualitative leasing disclosures included above, below are quantitative disclosures that are intended to meet the stated objective of ASC 842.
Description | Location in balance sheet | December 31, 2019 | January 1, 2019 (a) | |||||||
Non current assets: | ||||||||||
Chartered-in contract greater than 12 months | Operating lease right-of-use assets | $ | 386,388 | $ | 1,879,085 | |||||
Office leases | Operating lease right-of-use assets | 86,744 | — | |||||||
|
|
|
| |||||||
$ | 473,132 | $ | 1,879,085 | |||||||
|
|
|
| |||||||
Liabilities: | ||||||||||
Chartered-in contract greater than 12 months | Current portion of operating lease liabilities | $ | 386,388 | $ | 1,492,697 | |||||
Office leases | Current portion of operating lease liabilities | 86,744 | — | |||||||
|
|
|
| |||||||
Lease liabilities - current portion | $ | 473,132 | $ | 1,492,697 | ||||||
|
|
|
| |||||||
Chartered-in contract greater than 12 months | Operating lease liabilities | $ | — | $ | 386,388 | |||||
|
|
|
| |||||||
Lease liabilities - non current portion | $ | — | $ | 386,388 | ||||||
|
|
|
|
|
Description | Location in balance sheet | December 31, 2020 | December 31, 2021 | |||||||
Non current assets: | ||||||||||
Office leases | Operating lease right-of-use | $ | — | $ | 104,168 | |||||
$ | — | $ | 104,168 | |||||||
Liabilities: | ||||||||||
Office leases | Current portion of operating lease liabilities | $ | — | $ | 104,168 | |||||
Lease liabilities - current portion | $ | — | $ | 104,168 | ||||||
Description | Location in statement of operations | 2019 | ||||
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 | ||||
|
| |||||
Total charter hire expenses | 6,268,988 | |||||
|
| |||||
Lease expense for office leases | General and administrative expenses | 87,192 | ||||
Sub lease income from chartered-in contracts greater than 12 months * | Revenues | 3,091,390 |
Description | Location in statement of operations | 2019 | 2020 | 2021 | ||||||||||
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 | 97,726 | ||||||||||
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, chartered-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 years ended December 31, 2020 and 2021. |
The Company did not enter into any operating leases greater than 12 months for the yearyears ended December 31, 2019, as a lessee.
2020 and 2021 amounted to $1,647,192, $408,727 and $97,726, respectively.
2020 and 2021 and reflects our incremental borrowing rate.
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 |
2021:
Year | Office leases | Total Operating leases | ||||||
Discount rate upon adoption | 5.6 | % | 5.6 | % | ||||
2022 (undiscounted lease payments) | $ | 107,520 | $ | 107,520 | ||||
107,520 | 107,520 | |||||||
Present value of lease liability | 104,168 | 104,168 | ||||||
Lease liabilities - short term | 104,168 | 104,168 | ||||||
Total lease liabilities | 104,168 | 104,168 | ||||||
Discount based on incremental borrowing rate (Difference between undiscounted lease payments and present value of lease liability) | $ | 3,352 | $ | 3,352 |
|
|
|
|
|
F-32