☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
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☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Toro Corp.
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(Exact name of Registrant as specified in its charter)
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N/A |
(Translation of Registrant’s name into English)
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Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
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223 Christodoulou Chatzipavlou Street
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Hawaii Royal Gardens
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3036 Limassol, Cyprus
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(Address of principal executive offices)
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Petros Panagiotidis, Chairman and Chief Executive Officer
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223 Christodoulou Chatzipavlou Street, Hawaii Royal Gardens, 3036
Limassol, Cyprus
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Phone number: + 357 25 357 768
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Fax Number: +357 25 357 796
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(Name, Telephone, E-mail and/or Facsimile number and
Address of Company Contact Person)
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Securities registered or to be registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Shares, $0.001 par value, including associated Preferred Share Purchase Rights under the Shareholder Protection Rights Agreement
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TORO
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Nasdaq Capital Market
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☐ Yes
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☒ No
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☐ Yes
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☒ No
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☒ Yes
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☐ No
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☒ Yes
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☐ No
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☐
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Emerging Growth Company ☒
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☐ Yes
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☒ No
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☐ Yes
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☐ No
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PAGE
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1
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ITEM 1.
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1
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ITEM 2.
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1
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ITEM 3.
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1
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ITEM 4.
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35
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ITEM 4A.
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49
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ITEM 5.
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50
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ITEM 6.
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66
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ITEM 7.
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68
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ITEM 8.
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73
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ITEM 9.
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74
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ITEM 10.
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75
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ITEM 11.
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88
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ITEM 12.
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88
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89 |
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ITEM 13.
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89 |
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ITEM 14.
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89 |
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ITEM 15.
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89 |
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ITEM 16.
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90
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ITEM 16A.
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90 | |
ITEM 16B.
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90
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ITEM 16C.
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90 | |
ITEM 16D.
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91 | |
ITEM 16E.
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91 | |
ITEM 16F.
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92
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ITEM 16G.
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92 | |
ITEM 16H.
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93 | |
ITEM 16I.
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93 | |
ITEM 16J.
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93 | |
ITEM 16K.
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CYBERSECURITY | 93 |
94
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ITEM 17.
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94
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ITEM 18.
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94
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ITEM 19.
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94
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the effects of the Spin-Off;
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our business strategy, expected capital spending and other plans and objectives for future operations, including our ability to expand our business as a new entrant to the tanker and liquefied petroleum gas
(“LPG”) shipping industry;
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market conditions and trends, including volatility and cyclicality in charter rates (particularly for vessels employed in the spot voyage market or pools), factors affecting supply and demand for vessels, such
as fluctuations in demand for and the price of the products we transport, fluctuating vessel values, changes in worldwide fleet capacity, opportunities for the profitable operations of vessels in the segments of the shipping industry in
which we operate and global economic and financial conditions, including interest rates, inflation and the growth rates of world economies;
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our ability to realize the expected benefits of vessel acquisitions or sales, and the effects of any change in our fleet’s size or composition, increased transactions costs and other adverse effects (such as
lost profit) due to any failure to consummate any sale of our vessels, on our future financial condition, operating results, future revenues and expenses, future liquidity and the adequacy of cash flows from our operations;
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our relationships with our current and future service providers and customers, including the ongoing performance of their obligations, dependence on their expertise, compliance with applicable laws, and any
impacts on our reputation due to our association with them;
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the availability of debt or equity financing on acceptable terms and our ability to comply with the covenants contained in agreements relating thereto, in particular due to economic, financial or operational
reasons;
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our continued ability to enter into time charters, voyage charters or pool arrangements with existing and new customers and pool operators and to re-charter our vessels upon the expiry of the existing charters
or pool agreements;
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any failure by our contractual counterparties to meet their obligations;
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changes in our operating and capitalized expenses, including bunker prices, dry-docking, insurance costs, costs associated with regulatory compliance and costs associated with climate change;
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our ability to fund future capital expenditures and investments in the acquisition and refurbishment of our vessels (including the amount and nature thereof and the timing of completion thereof, the delivery and
commencement of operations dates, expected downtime and lost revenue);
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instances of off-hire;
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fluctuations in interest rates and currencies, including the value of the U.S. dollar relative to other currencies;
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any malfunction or disruption of information technology systems and networks that our operations rely on or any impact of a possible cybersecurity breach;
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existing or future disputes, proceedings or litigation;
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future sales of our securities in the public market, our ability to maintain compliance with applicable listing standards or the delisting of our common shares;
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volatility in our share price;
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potential conflicts of interest involving members of our Board, senior management and certain of our service providers that are related parties;
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general domestic and international geopolitical conditions, such as political instability, events or conflicts (including armed conflicts, such as the war in Ukraine and the conflict in the Middle East), acts of
piracy or maritime aggression, such as recent maritime incidents involving vessels in and around the Red Sea, sanctions, “trade wars” and potential governmental requisitioning of our vessels during a period of war or emergency;
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global public health threats and major outbreaks of disease;
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any material cybersecurity incident;
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changes in seaborne and other transportation, including due to the maritime incidents in and around the Red Sea, fluctuating demand for tanker and LPG carriers and/or disruption of shipping routes due to
accidents, political events, international sanctions, international hostilities and instability, piracy, smuggling or acts of terrorism;
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changes in governmental rules and regulations or actions taken by regulatory authorities, including changes to environmental regulations applicable to the shipping industry and to vessel rules and regulations,
as well as changes in inspection procedures and import and export controls;
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inadequacies in our insurance coverage;
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developments in tax laws, treaties or regulations or their interpretation in any country in which we operate and changes in our tax treatment or classification;
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the impact of climate change, adverse weather and natural disasters;
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accidents or the occurrence of other unexpected events, including in relation to the operational risks associated with transporting crude oil and/or refined petroleum products; and
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any other factor described in this Annual Report.
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ITEM 1. |
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
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A.
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Directors and Senior Management
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B.
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Advisers
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C.
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Auditors
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ITEM 2. |
OFFER STATISTICS AND EXPECTED TIMETABLE
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ITEM 3. |
KEY INFORMATION
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A.
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[Reserved]
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B.
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Capitalization and Indebtedness
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C.
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Reasons for the Offer and Use of Proceeds
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D.
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Risk Factors
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Charter rates for our vessels are volatile and cyclical in nature. A decrease in charter rates may adversely affect our business, financial condition and operating results.
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An oversupply of tanker vessel and LPG carrier capacity may prolong or further depress charter rates when they occur, which may limit our ability to operate our vessels profitably.
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Future growth in the demand for our services will depend among others on changes in supply and demand, economic growth in the world economy and demand for LPG and LPG transportation relative to changes in
worldwide fleet capacity.
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Global economic and financial conditions may negatively impact the sectors of the shipping industry in which we operate, including the extension of credit.
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Risks involved in operating ocean-going vessels could affect our business and reputation.
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The operation of tankers has unique operational risks associated with the transportation of oil.
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The age of our tanker vessel may impact our ability to obtain financing and a decline in the market values of our vessels could limit the amount of funds that we can borrow, cause us to breach certain financial
covenants in our future credit facilities and/or result in impairment charges or losses on sale.
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Geopolitical conditions, such as political instability or conflict, terrorist attacks and international hostilities, can affect the seaborne transportation industry, which could adversely affect our business.
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Compliance with rules and other vessel requirements imposed by classification societies may be costly and could reduce our net cash flows and negatively impact our results of operations.
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We are subject to international laws and regulations and standards (including, but not limited to, environmental standards such as IMO 2020 for the low sulfur fuels and the International Ballast Water Convention
for discharging of ballast water), as well as to regional requirements, such as European Union and U.S. laws and regulations for the prevention of water pollution, each of which may adversely affect our business, results of operations,
and financial condition. In particular, new short-, medium- and long-term measures developed by the IMO, the European Union and other entities to promote decarbonization and the reduction of greenhouse gas (“GHG”) emissions may adversely
impact our operations and markets.
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Increased inspection procedures and tighter import and export controls could increase costs and disrupt our business.
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We may not be able to execute our strategy and we may not realize the benefits we expect from acquisitions or other strategic transactions.
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We operate secondhand vessels, some of which have an age above the industry average, which may lead to increased technical problems for our vessels and/or higher operating expenses or affect our ability to
profitably charter our vessels and to comply with environmental standards and future maritime regulations and result in a more rapid depreciation in our vessels’ market and book values.
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We are dependent upon Castor Ships, a related party, and other third-party sub-managers for the management of our fleet and business, and failure of such counterparties to meet their obligations could cause us
to suffer losses or could negatively impact our results of operations and cash flows.
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Our Chairman and Chief Executive Officer, who may be deemed to beneficially own, directly or indirectly, a majority of our outstanding common shares and 100% of our Series B Preferred Shares, has control over
us.
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We expect that any new or amended credit facility we enter into will contain restrictive financial covenants that we may not be able to comply with due to economic, financial or operational reasons and may limit
our business and financing activities.
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We do not have a declared dividend policy and our Board may never declare dividends on our common shares.
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Our share price may be highly volatile, and as a result, investors in our common shares could incur substantial losses.
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Future issuances of common shares or other equity securities, including as a result of an optional conversion of Series A Preferred Shares, or the potential for such issuances, may impact the price of our common
shares and could impair our ability to raise capital through equity offerings. Shareholders may experience significant dilution as a result of any such issuances.
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We are incorporated in the Marshall Islands, which does not have a well-developed body of corporate and case law.
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We have limited the fields in which we focus our operations and this may have an adverse effect on our business, financial condition and operating results.
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low charter rates, particularly for vessels employed on short-term time charters and in the spot voyage market or pools;
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decreases in the market value of vessels and the limited second-hand market for the sale of vessels;
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limited financing for vessels;
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widespread loan covenant defaults; and
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declaration of bankruptcy by certain vessel operators, vessel managers, vessel owners, shipyards and charterers.
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a marine disaster;
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war and terrorism;
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piracy;
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environmental and other accidents;
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cargo and property losses and damage;
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business interruptions caused by mechanical failure, human error, armed conflict, terrorism, piracy, political action in various countries, labor strikes or adverse weather conditions; and
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work stoppages or other labor problems with crew members serving on our vessels, some of whom are unionized and covered by collective bargaining agreements.
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global and regional economic and political conditions and developments, including economic growth in global and local economies and the timeframe over which such growth occurs, demand for tanker transport that
exceeds capacity for such fleets worldwide, armed conflicts (such as Russia’s invasion of Ukraine or the armed conflict(s) in the Middle East, including maritime incidents in and around the Red Sea, and the spread or worsening of any such
conflicts) and terrorist activities, international trade sanctions, embargoes and strikes, particularly those that impact the regions or trade routes traveled by our vessels, the regions where the cargoes we carry are produced or
consumed, or any similar events which would interrupt the production or consumption of liquefied gases and associated products;
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regional availability of refining capacity and inventories compared to geographies of oil production regions;
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developments in international trade, including national policies regarding strategic oil inventories (including the reduction or replenishment of strategic reserves and if strategic reserves are set at a lower
level in the future as oil decreases in the energy mix), actions taken by OPEC and major oil producers and refiners and fluctuations in the profit margins of crude oil and refined petroleum products;
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the distance over which crude oil and/or refined petroleum products are to be moved by sea;
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changes in seaborne and other transportation and distribution patterns, typically influenced by the relative advantage of the various sources of production, locations of consumption, pricing differentials and
seasonality;
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alternative sources of energy, such as natural gas, coal, hydroelectric power and other alternative sources of energy;
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environmental and other regulatory developments;
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epidemics and pandemics;
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natural catastrophes;
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currency exchange and interest rates; and
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the weather.
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supply and demand for energy resources and crude oil and/or refined petroleum products
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the number of newbuilding orders and deliveries;
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the number of shipyards and ability of shipyards to deliver vessels;
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port and canal congestion;
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the number of conversions of tankers to other uses or conversions of other vessels to tankers;
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scrapping of older vessels;
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vessel freight rates, which are affected by factors that may affect the rate of newbuilding, scrapping and laying-up vessels (as set out below);
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the availability of modern tanker capacity;
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the speed of vessels being operated;
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vessel casualties; and
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the number of vessels that are out of service or laid up.
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office assessments and audits of the vessel operator;
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the operator’s environmental, health and safety record;
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compliance with the standards of the International Maritime Organization (the “IMO”), a United Nations agency that issues international trade standards for shipping;
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compliance with heightened industry standards that have been set by several oil companies;
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shipping industry relationships, reputation for customer service, technical and operating expertise;
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compliance with oil majors’ codes of conduct, policies and guidelines, including transparency, anti-bribery and ethical conduct requirements and relationships with third parties;
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shipping experience and quality of ship operations, including cost-effectiveness;
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quality, experience and technical capability of crews;
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the ability to finance vessels at competitive rates and overall financial stability;
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relationships with shipyards and the ability to obtain suitable berths;
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construction management experience, including the ability to procure on-time delivery of new vessels according to customer specifications;
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willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events; and
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competitiveness of the bid in terms of overall price.
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prevailing level of charter rates;
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general economic and market conditions affecting the shipping industry;
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the types, sizes and ages of the vessels, including as compared to other vessels in the market;
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supply of and demand for vessels;
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• |
the availability and cost of other modes of transportation;
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distressed asset sales, including newbuilding contract sales below acquisition costs due to lack of financing;
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cost of newbuildings;
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governmental or other regulations, including those that may limit the useful life of vessels; and
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the need to upgrade vessels as a result of environmental, safety, regulatory or charterer requirements, technological advances in vessel design or equipment or otherwise.
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changes in the supply of vessel capacity for the seaborne transportation of LPG products, which is influenced by the following factors:
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the available supply of LPG products;
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changes in the supply of vessel capacity for the seaborne transportation of LPG products, which is influenced by the following factors:
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the availability of financing for new and secondhand LPG carriers and shipping activity;
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the number of newbuilding deliveries and the ability of shipyards to deliver newbuildings by contracted delivery dates and capacity levels of shipyards;
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the scrapping rate of older vessels and secondhand LPG carrier values in relation to scrap prices;
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the number of vessels that are out of service, as a result of vessel casualties, repairs and dry-dockings;
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the number of conversions LPG carriers to other uses or conversions of other vessels to LPG carriers, as applicable;
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port and canal congestion;
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the speed of LPG carriers being operated;
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changes in environmental and other regulations that may limit the useful lives of vessels;
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changes in LPG carrier prices; and
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any factors that affect the foregoing;
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changes in the level of demand for seaborne transportation of LPG products, which is influenced by the following factors:
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the level of production of LPG products in net export regions;
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the level of demand for LPG products globally, and in particular, in net import regions such as Asia, Europe, Latin America and India;
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regional availability of refining, liquefaction and deliquefaction capacity and inventories compared to geographies of oil and natural gas production and liquefaction and deliquefaction regions;
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a reduction in global or general industrial activity specifically in the plastics and chemical industry;
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changes in the cost of petroleum and natural gas from which liquefied gases are derived; and
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prevailing global and regional economic conditions;
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global and regional economic and political conditions and developments, including economic growth in global and local economies and the timeframe over which such growth occurs, demand for LPG carrier transport that exceeds capacity for
such fleets worldwide, armed conflicts (such as Russia’s invasion of Ukraine or the armed conflict(s) in the Middle East, including maritime incidents in and around the Red Sea, and the spread or worsening of any such conflicts) and
terrorist activities, international trade sanctions, embargoes and strikes, particularly those that impact the regions or trade routes traveled by our vessels, the regions where the cargoes we carry are produced or consumed, or any
similar events which would interrupt the production or consumption of liquefied gases and associated products;
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developments in international trade, including national policies regarding strategic oil inventories (including the reduction or replenishment of strategic reserves and if strategic reserves are set at a lower level in the future as
oil decreases in the energy mix), actions taken by OPEC and major oil and gas producers and refiners, as well a major LPG companies, and fluctuations in the profit margins of crude oil, refined petroleum products and/or LPG;
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the distances between exporting and importing regions over which LPG products are to be transported by sea;
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infrastructure to support seaborne LPG products trade, including pipelines, railways and terminals;
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changes in seaborne and other transportation and distribution patterns, typically influenced by the relative advantage of the various sources of production, locations of consumption, opportunities for arbitrage, pricing differentials
and seasonality;
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changes to the arbitrage of certain LPG products in different countries, regions or continents;
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currency exchange and interest rates;
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changes in environmental and other regulations that may limit the production or consumption of LPG products;
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competition from alternative sources of energy alternative sources of energy, such as natural gas, coal, hydroelectric power and other alternative sources of energy, and consumer demand for “green” or sustainable products;
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inclement weather and/or natural catastrophes; and
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epidemics and pandemics.
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prevailing level of charter rates;
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general economic and market conditions affecting the shipping industry;
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the types, sizes and ages of the LPG carriers, including as compared to other LPG carriers in the market and as relates to environmental and energy efficiency;
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supply of and demand for LPG carriers, including as a result of the competitive environment we operate in;
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the availability and cost of other modes of transportation;
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distressed asset sales, including newbuilding contract sales below acquisition costs due to lack of financing;
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cost of newbuildings;
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speculative LPG carrier orders from peers during periods of low LPG carrier prices, thereby increasing the supply of LPG carrier capacity, satisfying demand sooner and potentially suppressing charter rates;
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shipyard capacity;
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• |
governmental or other regulations, including those that may limit the useful life of LPG carriers;
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• |
the need to upgrade LPG carriers as a result of environmental, safety, regulatory or charterer requirements, technological advances in LPG carrier design or equipment or otherwise; and
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The size of the LPG carrier market is small and illiquid resulting to only a limited number of vessel sales taking place on an annual basis.
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identify suitable vessels, including newbuilding slots at reputable shipyards and/or shipping companies for acquisitions at attractive prices;
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realize anticipated benefits, such as new customer relationships, cost savings or cash flow enhancements from acquisitions;
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obtain required financing for our existing and new operations;
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integrate any acquired vessels, assets or businesses successfully with our existing operations, including obtaining any approvals and qualifications necessary to operate vessels that we acquire;
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• | enlarge our customer base and continue to meet technical and safety performance standards; |
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• |
ensure, either directly or through our manager and sub-managers, that an adequate supply of qualified personnel and crew are available to manage and operate our growing business and fleet;
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improve our operating, financial and accounting systems and controls; and
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cope with competition from other companies, many of which have significantly greater financial resources than we do, and may reduce our acquisition opportunities or cause us to pay higher prices.
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as our vessels age, typically, they become less fuel-efficient and more costly to maintain than more recently constructed vessels due to improvements in design, engineering and technology and due to increased
maintenance requirements;
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• |
cargo insurance rates increase with the age of a vessel, making our vessels more expensive to operate; and
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governmental regulations, environmental and safety or other equipment standards related to the age of vessels may also require expenditures for alterations or the addition of new equipment to our vessels and may
restrict the type of activities in which our vessels may engage.
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incurring or guaranteeing additional indebtedness outside of our ordinary course of business;
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charging, pledging or encumbering our vessels;
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changing the flag, class, management or ownership of our vessels;
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changing the commercial and technical management of our vessels;
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declaring or paying any dividends or other distributions at a time when the Company has an event of default or the payment of such distribution would cause an event of default;
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forming or acquiring any subsidiaries;
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making any investments in any person, asset, firm, corporation, joint venture or other entity;
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• |
merging or consolidating with any other person;
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changing the ownership, beneficial ownership, control or management of the Company entities party to the facility, or of any of secured vessels, if the effect of such change would be to materially change the
ultimate legal and beneficial ownership in effect at the time the facility was executed; and
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• |
entering into any demise charter contract or let our vessels under any pooling agreement whereby all of the vessel’s earnings are pooled or shared with any other person.
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• |
the market price of our common shares may experience rapid and substantial increases or decreases unrelated to our operating performance or prospects, or macro or industry fundamentals;
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• |
to the extent volatility in our common shares is caused by a “short squeeze” in which coordinated trading activity causes a spike in the market price of our common shares as traders with a short position make
market purchases to avoid or to mitigate potential losses, investors may purchase common shares at inflated prices unrelated to our financial performance or prospects, and may thereafter suffer substantial losses as prices decline once
the level of short-covering purchases has abated; and
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• |
if the market price of our common shares declines, you may be unable to resell your shares at or above the price at which you acquired them. We cannot assure you that the equity issuance of our common shares
will not fluctuate, increase or decline significantly in the future, in which case you could incur substantial losses.
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• |
investor reaction to our business strategy;
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• |
the sentiment of the significant number of retail investors whom we believe hold our common shares, in part due to direct access by retail investors to broadly available trading platforms, and whose investment
thesis may be influenced by views expressed on financial trading and other social media sites and online forums;
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• |
the amount and status of short interest in our common shares, access to margin debt, trading in options and other derivatives on our common shares and any related hedging and other trading factors;
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• |
our continued compliance with the listing standards of the Nasdaq Capital Market and any action we may take to maintain such compliance, such as a reverse stock split;
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• |
regulatory or legal developments in the United States and other countries, especially changes in laws or regulations applicable to our industry;
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• |
variations in our financial results or those of companies that are perceived to be similar to us;
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|
• |
our ability or inability to raise additional capital and the terms on which we raise it;
|
|
• |
our dividend strategy;
|
|
• |
our continued compliance with our debt covenants;
|
|
• |
variations in the value of our fleet;
|
|
• |
declines in the market prices of stocks generally;
|
|
• |
trading volume of our common shares;
|
|
• |
sales of our common shares by us or our shareholders;
|
|
• |
speculation in the press or investment community about our Company, our industry or our securities;
|
|
• |
general economic, industry and market conditions; and
|
|
• |
other events or factors, including those resulting from such events, or the prospect of such events, including war, terrorism and other international conflicts, public health issues including health epidemics or
pandemics, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the United States or elsewhere, could disrupt our operations or result in political or
economic instability.
|
|
• |
our existing shareholders’ proportionate ownership interest in us will decrease;
|
|
• |
the earnings per share and the per share amount of cash available for dividends on our common shares (as and if declared) could decrease;
|
|
• |
the relative voting strength of each previously outstanding common share could be diminished;
|
|
• |
the market price of our common shares could decline; and
|
|
• |
our ability to raise capital through the sale of additional securities at a time and price that we deem appropriate could be impaired.
|
|
• |
authorizing our Board to issue “blank check” preferred shares without shareholder approval;
|
|
• |
providing for a classified Board with staggered, three-year terms;
|
|
• |
establishing certain advance notice requirements for nominations for election to our Board or for proposing matters that can be acted on by shareholders at shareholder meetings;
|
|
• |
prohibiting cumulative voting in the election of directors;
|
|
• |
prohibiting any owner of 15% or more of our voting stock from engaging in a business combination with us within three years after the owner acquired such ownership, except under certain conditions;
|
|
• |
limiting the persons who may call special meetings of shareholders; and
|
|
• |
establishing supermajority voting provisions with respect to amendments to certain provisions of our Articles of Incorporation and Bylaws.
|
ITEM 4. |
INFORMATION ON THE COMPANY
|
A.
|
History and Development of the Company
|
B.
|
Business Overview
|
Vessel
Name
|
Capacity
(dwt)
|
Year
Built
|
Country of
Construction
|
Type of
Charter
|
Gross Charter
Rate ($/day)
|
Estimated
Earliest Charter
Expiration
|
Estimated
Latest Charter
Expiration
|
||||||||
Handysize Segment
|
|||||||||||||||
M/T Wonder
Mimosa
|
36,718
|
2006
|
S. Korea
|
Tanker Pool(1)
|
N/A
|
N/A
|
N/A
|
||||||||
LPG Carrier
Segment
|
|||||||||||||||
LPG Dream
Terrax
|
4,743
|
2020
|
Japan
|
Time Charter Period
|
310,000 per month
|
August 2024
|
August 2025
|
||||||||
LPG Dream
Arrax
|
4,753
|
2015
|
Japan
|
Voyage(2)
|
$1,080,000 lump sum
|
April 2024(3)
|
N/A
|
||||||||
LPG Dream
Syrax
|
5,158
|
2015
|
Japan
|
Time Charter Period
|
308,500 per month
|
April 2024
|
May 2024
|
||||||||
LPG Dream
Vermax
|
5,155
|
2015
|
Japan
|
Time Charter Period (4)
|
314,950 per month
|
March 2025
|
March 2026
|
(1) |
The vessel is currently participating in an unaffiliated tanker pool specializing in the employment of Handysize tanker vessels.
|
(2) |
After redelivery from the current charter, estimated to take place on April 26, 2024, in accordance with the prevailing charter party terms, the vessel has been fixed at a gross charter rate equal to $323,000
per month for a period of minimum 12 to maximum 24 months.
|
(3) |
Estimated completion date of voyage.
|
(4) |
In accordance with the prevailing charter party, on January 31, 2024, the vessel has been fixed for a period of minimum 12 to maximum 24 months, at a gross charter rate equal to $318,000 per month, starting from
March 22, 2024.
|
|
(i)
|
injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;
|
(ii)
|
injury to, or economic losses resulting from, the destruction of real and personal property;
|
(iii)
|
loss of subsistence use of natural resources that are injured, destroyed or lost;
|
(iv)
|
net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;
|
(v)
|
lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and
|
(vi)
|
net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss
of subsistence use of natural resources.
|
C.
|
Organizational Structure
|
D.
|
Property, Plants and Equipment
|
ITEM 4A. |
UNRESOLVED STAFF COMMENTS
|
ITEM 5. |
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
A.
|
Operating Results
|
|
• |
The levels of demand and supply of seaborne cargoes and vessel tonnage in the shipping industries in which we operate;
|
|
• |
The cyclical nature of the shipping industry in general and its impact on charter and freight rates and vessel values;
|
|
• |
The successful implementation of our business strategy, including the ability to obtain equity and debt financing at acceptable and attractive terms to fund future capital expenditures and/or to implement this
business strategy;
|
|
• |
The global economic growth outlook and trends;
|
|
• |
Economic, regulatory, political and governmental conditions that affect shipping and the tanker shipping industry, including international conflict or war (or threatened war), such as between Russia and Ukraine
and in the Middle East, and acts of piracy or maritime aggression, such as recent maritime incidents involving vessels in and around the Red Sea;
|
|
• |
The employment and operation of our fleet including the utilization rates of our vessels;
|
|
• |
The ability to successfully employ our vessels at economically attractive rates and the strategic decisions regarding the employment mix of our fleet in the voyage, time charter and pool markets, as our charters
expire or are otherwise terminated;
|
|
• |
Management of the operational, financial, general and administrative elements involved in the conduct of our business and ownership of our fleet, including the effective and efficient management of our fleet by
our manager and its sub-managers, and each of their suppliers;
|
|
• |
The number of charterers and pool operators who use our services and the performance of their obligations under their agreements, including their ability to make timely payments to us;
|
|
• |
The ability to maintain solid working relationships with our existing charterers and pool operators and our ability to increase the number of our charterers through the development of new working relationships;
|
|
• |
The vetting approvals requested by oil majors and the Chemical Distribution Institute (CDI) for the vessels managed by our
manager and/or sub-managers;
|
|
• |
Dry-docking and special survey costs and duration, both expected and unexpected;
|
|
• |
Our borrowing levels and the finance costs related to our outstanding debt as well as our compliance with our debt covenants;
|
|
• |
Management of our financial resources, including banking relationships and of the relationships with our various stakeholders;
|
|
• |
Major outbreaks of diseases and governmental responses thereto; and
|
|
• |
The level of any distribution on all classes of our shares.
|
|
Year ended
December 31,
|
Year ended
December 31,
|
||||||
|
2022
|
2023
|
||||||
Total vessel revenues
|
$
|
111,885,865
|
$
|
78,468,574
|
||||
Voyage expenses – including commissions to related party
|
(29,319,414
|
)
|
(4,444,716
|
)
|
||||
TCE revenues
|
$
|
82,566,451
|
$
|
74,023,858
|
||||
Available Days
|
3,037
|
2,734
|
||||||
Daily TCE Rate
|
$
|
27,187
|
$
|
27,075
|
|
Year ended
December 31,
|
Year ended
December 31,
|
||||||
|
2022
|
2023
|
||||||
Total vessel revenues
|
$
|
96,248,212
|
$
|
56,163,961
|
||||
Voyage expenses – including commissions to related party
|
(29,100,348
|
)
|
(1,939,564
|
)
|
||||
TCE revenues
|
$
|
67,147,864 |
$
|
54,224,397
|
||||
Available Days
|
2,307
|
1,355
|
||||||
Daily TCE Rate
|
$
|
29,106
|
$
|
40,018
|
Year ended
December 31,
|
Year ended
December 31,
|
|||||||
|
2022
|
2023
|
||||||
Total vessel revenues
|
$
|
15,637,653
|
$
|
15,611,872
|
||||
Voyage expenses – including commissions to related party
|
(219,066
|
)
|
(198,730
|
)
|
||||
TCE revenues
|
$
|
15,418,587
|
$
|
15,413,142
|
||||
Available Days
|
730
|
642
|
||||||
Daily TCE Rate
|
$
|
21,121 |
$
|
24,008
|
Year ended
December 31,
|
||||
|
2023
|
|||
Total vessel revenues
|
$
|
6,692,741
|
||
Voyage expenses – including commissions to related party
|
(2,306,422
|
)
|
||
TCE revenues
|
$
|
4,386,319
|
||
Available Days
|
737
|
|||
Daily TCE Rate
|
$
|
5,952
|
|
Year ended
December 31,
|
Year ended
December 31,
|
||||||
|
2022
|
2023
|
||||||
Daily vessel operating expenses
|
$
|
6,969
|
$
|
7,331
|
||||
Ownership Days
|
3,115
|
2,876
|
||||||
Available Days
|
3,037
|
2,734
|
||||||
Operating Days
|
3,028
|
2,650
|
||||||
Fleet Utilization
|
100
|
%
|
97
|
%
|
||||
Daily TCE Rate
|
$
|
27,187
|
$
|
27,075
|
||||
EBITDA
|
$
|
58,881,032
|
$
|
144,719,062
|
|
Year ended
December 31,
|
Year ended
December 31,
|
||||||
|
2022
|
2023
|
||||||
Daily vessel operating expenses
|
$
|
7,290
|
$
|
8,041
|
||||
Ownership Days
|
2,385
|
1,454
|
||||||
Available Days
|
2,307
|
1,355
|
||||||
Operating Days
|
2,298
|
1,325
|
||||||
Fleet Utilization
|
100
|
%
|
98
|
%
|
||||
Daily TCE Rate
|
$
|
29,106
|
$
|
40,018
|
|
Year ended
December 31,
|
Year ended
December 31,
|
||||||
|
2022
|
2023
|
||||||
Daily vessel operating expenses
|
$
|
5,921
|
$
|
7,539
|
||||
Ownership Days
|
730
|
685
|
||||||
Available Days
|
730
|
642
|
||||||
Operating Days
|
730
|
635
|
||||||
Fleet Utilization
|
100
|
%
|
99
|
%
|
||||
Daily TCE Rate
|
$
|
21,121
|
$
|
24,008
|
|
Year ended
December 31,
|
|||
|
2023
|
|||
Daily vessel operating expenses
|
$
|
5,738
|
||
Ownership Days
|
737
|
|||
Available Days
|
737
|
|||
Operating Days
|
690
|
|||
Fleet Utilization
|
94
|
%
|
||
Daily TCE Rate
|
$
|
5,952
|
|
Year ended
December 31,
|
Year ended
December 31,
|
||||||
|
2022
|
2023
|
||||||
Net income
|
$
|
49,926,383
|
140,636,993
|
|||||
Depreciation and amortization
|
7,294,476
|
6,839,702
|
||||||
Interest and finance costs, net(1)
|
699,992
|
(3,108,300
|
)
|
|||||
U.S. source income taxes
|
960,181
|
350,667
|
||||||
EBITDA
|
$
|
58,881,032
|
$
|
144,719,062
|
(1) |
Includes interest and finance costs and interest income, if any.
|
Year ended
December 31, 2022
|
Year ended
December 31, 2023
|
Change –amount
|
||||||||||
Total vessel revenues
|
$
|
111,885,865
|
$
|
78,468,574
|
$
|
(33,417,291
|
)
|
|||||
Expenses:
|
||||||||||||
Voyage expenses (including commissions to related party)
|
(29,319,414
|
)
|
(4,444,716
|
)
|
24,874,698
|
|||||||
Vessel operating expenses
|
(21,708,290
|
)
|
(21,084,635
|
)
|
623,655
|
|||||||
Management fees to related parties
|
(2,833,500
|
)
|
(3,153,660
|
)
|
(320,160
|
)
|
||||||
Depreciation and amortization
|
(7,294,476
|
)
|
(6,839,702
|
)
|
454,774
|
|||||||
General and administrative expenses (including costs from related parties)
|
(2,093,347
|
)
|
(5,357,265
|
)
|
(3,263,918
|
)
|
||||||
(Provision)/ recovery of provision for doubtful accounts
|
(266,732
|
)
|
266,732
|
533,464
|
||||||||
Gain on sale of vessels
|
3,222,631
|
99,026,692
|
95,804,061
|
|||||||||
Operating income
|
$
|
51,592,737
|
$
|
136,882,020
|
85,289,283
|
|||||||
Interest and finance costs, net(1)
|
(699,992
|
)
|
3,108,300
|
3,808,292
|
||||||||
Foreign exchange losses
|
(6,181
|
)
|
(23,493
|
)
|
(17,312
|
)
|
||||||
Dividend income from related party
|
—
|
1,020,833
|
1,020,833
|
|||||||||
Income taxes
|
(960,181
|
)
|
(350,667
|
)
|
609,514
|
|||||||
Net income and comprehensive income
|
$
|
49,926,383
|
$
|
140,636,993
|
$
|
90,710,610
|
(1) |
Includes interest and finance costs, net of interest income, if any.
|
Year ended
December 31, 2022
|
Year ended
December 31, 2023
|
Change –amount
|
|||||||||||
Total vessel revenues
|
$
|
96,248,212
|
$
|
56,163,961
|
$
|
(40,084,251
|
)
|
||||||
Expenses:
|
|||||||||||||
Voyage expenses (including commissions to related party)
|
(29,100,348
|
)
|
(1,939,564
|
)
|
27,160,784
|
||||||||
Vessel operating expenses
|
(17,386,009
|
)
|
(11,691,675
|
)
|
5,694,334
|
||||||||
Management fees to related parties
|
(2,167,000
|
)
|
(1,443,009
|
)
|
723,991
|
||||||||
Depreciation and amortization
|
(5,889,352
|
)
|
(3,475,084
|
)
|
2,414,268
|
||||||||
(Provision )/ recovery of provision for doubtful accounts
|
(266,732
|
)
|
266,732
|
533,464
|
|||||||||
Gain on sale of vessels
|
3,222,631
|
90,800,434
|
87,577,803
|
||||||||||
Segment operating income
|
$
|
44,661,402
|
$
|
128,681,795
|
$
|
84,020,393
|
Year ended
December 31, 2022
|
Year ended
December 31, 2023
|
Change –amount
|
||||||||||
Total vessel revenues
|
$ |
15,637,653
|
$ |
15,611,872
|
$
|
(25,781
|
)
|
|||||
Expenses:
|
||||||||||||
Voyage expenses (including commissions to related party)
|
(219,066
|
)
|
(198,730
|
)
|
20,336
|
|||||||
Vessel operating expenses
|
(4,322,281
|
)
|
(5,164,248
|
)
|
(841,967
|
)
|
||||||
Management fees to related parties
|
(666,500
|
)
|
(688,547
|
)
|
(22,047
|
)
|
||||||
Depreciation and amortization
|
(1,405,124
|
)
|
(1,490,577
|
)
|
(85,453
|
)
|
||||||
Gain on sale of vessels
|
-
|
8,226,258
|
8,226,258
|
|||||||||
Segment operating income
|
$ |
9,024,682
|
$ |
16,296,028 |
$ | 7,271,346 |
|
Year ended
December 31, 2023
|
|||
Total vessel revenues
|
$
|
6,692,741
|
||
Expenses:
|
||||
Voyage expenses (including commissions to related party)
|
(2,306,422
|
)
|
||
Vessel operating expenses
|
(4,228,712
|
)
|
||
Management fees to related parties
|
(1,022,104
|
)
|
||
Depreciation and amortization
|
(1,874,041
|
)
|
||
Segment Operating loss
|
$
|
(2,738,538
|
)
|
|
• |
an exemption from the auditor attestation requirement of management’s assessment of the effectiveness of the emerging growth company’s internal controls over financial reporting pursuant to Section 404(b) of
Sarbanes-Oxley; and
|
|
• |
an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in
which the auditor would be required to provide additional information about the audit and financial statements.
|
B.
|
Liquidity and Capital Resources
|
|
For the year
ended
|
For the year
ended
|
||||||
|
December 31,
2022
|
December 31,
2023
|
||||||
Net cash provided by operating activities
|
41,538,177
|
56,126,319
|
||||||
Net cash provided by investing activities
|
11,788,681
|
50,706,251
|
||||||
Net cash (used in)/ provided by financing activities
|
(16,510,675
|
)
|
6,273,237
|
C.
|
Research and Development, Patents and Licenses, Etc.
|
D.
|
Trend Information
|
E.
|
Critical Accounting Estimates
|
|
• |
the charter revenues from existing time charters for the fixed fleet days;
|
|
• |
the estimated vessel operating expenses and voyage expenses;
|
|
• |
the estimated dry-docking expenditures;
|
|
• |
an estimated gross daily charter rate for the unfixed days (based on the ten-year average of the historical one-year time charter rates available for each type of vessel) over the remaining economic life of each
vessel, excluding estimated days of scheduled off-hires and net of estimated commissions;
|
|
• |
the residual value of vessels;
|
|
• |
commercial and technical management fees;
|
|
• |
an estimated utilization rate; and
|
|
• |
the remaining estimated lives of our vessels, consistent with those used in our depreciation calculations.
|
A.
|
Directors and Senior Management
|
Name
|
|
Age
|
|
Position
|
Petros Panagiotidis
|
|
33
|
|
Chairman, Chief Executive Officer and Class C Director
|
Angelos Rounick Platanias
|
|
33
|
|
Secretary and Class B Director
|
Petros Zavakopoulos
|
|
32
|
|
Class A Director
|
Ioannis E. Lazaridis
|
|
56
|
|
Chief Financial Officer
|
B.
|
Compensation
|
C.
|
Board Practices
|
D.
|
Employees
|
E.
|
Share Ownership
|
F.
|
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
|
A.
|
Major Shareholders
|
Name of Beneficial Owner
|
No. of Common Shares
|
Percentage
|
||||||
Pani Corp. (1)
|
9,611,240
|
51.9
|
%
|
|||||
All executive officers and directors (other than Petros Panagiotidis) as a group(2)
|
—
|
—
|
%
|
(1) |
Pani Corp. is a corporation organized under the laws of the Republic of Liberia. Pani is controlled by the Company’s Chairman and Chief Executive
Officer, Petros Panagiotidis. As of February 29, 2024, Mr. Panagiotidis beneficially owns 9,611,240 common shares, which includes 11,240 common shares acquired by Pani from Thalassa Investment Co. S.A., an entity controlled by Mr.
Panagiotidis, on April 25, 2023. The 9,611,240 common shares represent 51.9% of common shares outstanding, net of treasury shares, as of February 29, 2024. Mr. Panagiotidis also beneficially owns through Pelagos 40,000 of the Company’s
Series B Preferred Shares, representing all such Series B Preferred Shares outstanding, each Series B Preferred Share having the voting power of 100,000 common shares. For further information regarding the Series B Preferred Shares,
refer to “Item 10. Additional Information—B. Memorandum and Articles of Association.” Mr. Panagiotidis therefore beneficially owns 51.7% of the
Company’s total outstanding share capital, net of treasury shares and controls 99.8% of the aggregate voting power of the Company’s total issued and outstanding share capital, net of treasury shares.
|
(2) |
Excluding Petros Panagiotidis, none of the directors and executive officers individually, nor taken as a group, hold more than 1% of the outstanding common shares.
|
B.
|
Related Party Transactions
|
C.
|
Interests of Experts and Counsel
|
ITEM 8. |
FINANCIAL INFORMATION
|
A.
|
Consolidated Statements and other Financial Information
|
B.
|
Significant Changes
|
ITEM 9. |
THE OFFER AND LISTING
|
A.
|
Offer and Listing Details
|
B.
|
Plan of Distribution
|
C.
|
Markets
|
D.
|
Selling Shareholders
|
E.
|
Dilution
|
F.
|
Expenses of the Issue
|
ITEM 10. |
ADDITIONAL INFORMATION
|
A.
|
Share Capital
|
B.
|
Memorandum and Articles of Association
|
|
• |
the designation of the series;
|
|
• |
the number of shares of the series;
|
|
• |
the preferences and relative, participating, option or other special rights, if any, and any qualifications, limitations or restrictions of such series; and
|
|
• |
the voting rights, if any, of the holders of the series.
|
|
• |
Ranking. With respect to the payment of dividends and distributions of assets upon any liquidation, dissolution or winding up, the Series A Preferred
shares rank (i) senior to our common shares, the Series B Preferred Shares and any class or series of our stock that ranks junior to the Series A Preferred Shares in the payment of dividends or in the distribution of assets upon our
liquidation, dissolution or winding up (together with our common stock, “Junior Stock”); (ii) senior to or on a parity with the Series C Preferred Shares and each other series of our preferred shares we may issue with respect to the
payment of dividends and distributions of assets upon any liquidation, dissolution or winding up of the Company; and (iii) junior to all existing and future indebtedness and other non-equity claims on us.
|
|
• |
Dividends. Holders of Series A Preferred Shares shall be entitled to receive, when, as and if declared by our Board, but only out of funds legally
available therefor, cumulative cash dividends at the Annual Rate and no more, payable quarterly in arrears on the 15th day of each January, April, July and October, respectively, in each year, beginning on April 15, 2023 (each, a
“Dividend Payment Date”), with respect to the Dividend Period ending on the day preceding such respective Dividend Payment Date, to holders of record on the 15th
calendar day before such Dividend Payment Date or such other record date not more than 30 days preceding such Dividend Payment Date fixed for that purpose by our Board (or a duly authorized committee of the Board) in advance of payment of
each particular dividend. The amount of the dividend per Series A Preferred Share for each Dividend Period will be calculated on the basis of a 360-day year consisting of twelve 30-day months.
|
|
• |
Restrictions on Dividends, Redemption and Repurchases. So long as any Series A Preferred Share remains outstanding, unless full Accrued Dividends on
all outstanding Series A Preferred Shares through and including the most recently completed Dividend Period have been paid or declared and a sum sufficient for the payment thereof has been set aside for payment, no dividend may be
declared or paid or set aside for payment, and no distribution may be made, on any Junior Stock, other than a dividend payable solely in stock that ranks junior to the Series A Preferred Shares in the payment of dividends and in the
distribution of assets on any liquidation, dissolution or winding up of the Company. “Accrued Dividends” means, with respect to Series A Preferred Shares, an amount computed at the Annual Rate from, as to each share, the date of issuance
of such share to and including the date to which such dividends are to be accrued (whether or not such dividends have been declared), less the aggregate amount of all dividends previously paid on such share.
|
|
• |
Redemption. The Series A Preferred Shares are perpetual and have no maturity date. We may, at our option, redeem the Series A Preferred Shares in whole
or in part, at any time and from time to time after the Reset Date, at a cash redemption price equal to the stated amount, together with an amount equal to all Accrued Dividends to, but excluding, the redemption date.
|
|
• |
Conversion Rights. The Series A Preferred Shares are convertible, at their holder’s option, to common shares, in whole or in part, at any time and from
time to time from and after the third anniversary of the Issue Date until but excluding the Reset Date. Subject to certain adjustments, the “Conversion Price” for any conversion of the Series A Preferred Shares shall be the lower of (i)
150% of the VWAP of our common shares over the five consecutive trading day period commencing on and including the Distribution Date, and (ii) the VWAP of our common shares over the 10 consecutive trading day period expiring on the
trading day immediately prior to the date of delivery of written notice of the conversion; provided, that, in no event shall the Conversion Price be less than $2.50. The number of common shares to be issued to a converting holder shall be
equal to the quotient of (i) the aggregate stated amount of the Series A Preferred Shares converted plus Accrued Dividends (but excluding any dividends declared but not yet paid) thereon on the date on which the conversion notice is
delivered divided by (ii) the Conversion Price. Castor will have registration rights in relation to the common shares issued upon conversion. See “Item 7. Major Shareholders and Related Party
Transactions—B. Related Party Transactions—Contribution and Spin-Off Distribution Agreement.” The Series A Preferred Shares otherwise are not convertible into or exchangeable for property or shares of any other series or class of
our capital stock.
|
|
• |
Liquidation Rights. In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, before
any distribution or payment out of our assets may be made to or set aside for the holders of any Junior Stock, holders of Series A Preferred Shares will be entitled to receive out of our assets legally available for distribution to our
shareholders an amount equal to the stated amount per share ($1,000), together with an amount equal to all Accrued Dividends to the date of payment whether or not earned or declared (the “Liquidation Preference”). If the Liquidation
Preference has been paid in full to all holders of Series A Preferred Shares and all holders of any class or series of our stock that ranks on a parity with Series A Preferred Shares in the distribution of assets on liquidation,
dissolution or winding up of the Company, the holders of Junior Stock will be entitled to receive all of our remaining assets according to their respective rights and preferences.
|
|
• |
Voting Rights. Except as indicated below or otherwise required by law, the holders of the Series A Preferred Shares do not have any voting rights.
|
|
○ |
Right to Elect Directors on Nonpayment of Dividends. If and whenever dividends payable on Series A Preferred Shares or any class or series of our stock that ranks on a
parity with the Series A Preferred Shares in the payment of dividends (“Dividend Parity Stock”) having voting rights equivalent to those described in this paragraph (“Voting Parity Stock”) have not been declared and paid (or, in the case
of Series A Preferred Shares and Voting Parity Stock bearing dividends on a cumulative basis, shall be in arrears) in an aggregate amount equal to full dividends for at least six quarterly Dividend Periods or their equivalent (whether or
not consecutive) (a “Nonpayment Event”), the number of directors then constituting our Board shall be automatically increased by (i) one, if at such time the Board consists of eight or fewer directors or (ii) two, if at such time the
Board consists of nine or more directors, and the holders of Series A Preferred Shares, together with the holders of any outstanding Voting Parity Stock then entitled to vote for additional directors, voting together as a single class in
proportion to their respective stated amounts, shall be entitled to elect the additional director or two directors, as the case may be (the “Preferred Share Directors”); provided that our Board shall at no time include more than two
Preferred Share Directors (including, for purposes of this limitation, all directors that the holders of any series of voting preferred shares are entitled to elect pursuant to like voting rights). When (i) Accrued Dividends have been
paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series A Preferred Shares after a Nonpayment Event, and (ii) the rights of holders of any Voting Parity Stock to participate in electing the Preferred
Share Directors shall have ceased, the right of holders of the Series A Preferred Shares to participate in the election of Preferred Share Directors shall cease (but subject always to the revesting of such voting rights in the case of any
future Nonpayment Event), the terms of office of all the Preferred Share Directors shall forthwith terminate, and the number of directors constituting our Board shall automatically be reduced accordingly. Any Preferred Share Director may
be removed at any time without cause by the holders of record of a majority of the outstanding Series A Preferred Shares and Voting Parity Stock, when they have the voting rights described above (voting together as a single class in
proportion to their respective stated amounts). The Preferred Share Directors shall each be entitled to one vote per director on any matter that shall come before our Board for a vote.
|
|
○ |
Other Voting Rights. So long as any Series A Preferred Shares are outstanding, in addition to any other
vote or consent of shareholders required by law or by our Articles of Incorporation, the vote or consent of the holders of at least two thirds of the Series A Preferred Shares at the time outstanding, voting together with any other
series of preferred shares that would be adversely affected in substantially the same manner and entitled to vote as a single class in proportion to their respective stated amounts (to the exclusion of all other series of preferred
shares), given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating: (i) any amendment, alteration or repeal of any provision of our
Articles of Incorporation or Bylaws that would alter or change the voting powers, preferences or special rights of the Series A Preferred Shares so as to affect them adversely; (ii) the issuance of Dividend Parity Stock if the Accrued
Dividends on all outstanding Series A Preferred Shares through and including the most recently completed Dividend Period have not been paid or declared and a sum sufficient for the payment thereof has been set aside for payment; (iii)
any amendment or alteration of the Articles of Incorporation to authorize or create, or increase the authorized amount of, any shares of any class or series or any securities convertible into shares of any class or series of our capital
stock ranking prior to Series A in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding up of the Company; or (iv) any consummation of (x) a binding share exchange or reclassification
involving the Series A Preferred Shares, (y) a merger or consolidation of the Company with another entity (whether or not a corporation), or (z) a conversion, transfer, domestication or continuance of the Company into another entity or
an entity organized under the laws of another jurisdiction, unless in each case (A) the Series A Preferred Shares remain outstanding or, in the case of any such merger or consolidation with respect to which we are not the surviving or
resulting entity, or any such conversion, transfer, domestication or continuance, the Series A Preferred Shares are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and
(B) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions, and
limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and restrictions and limitations thereof, of the Series A
Preferred Shares immediately prior to such consummation, taken as a whole. The foregoing voting rights do not apply in connection with the creation or issuance of Series C Participating Preferred Shares of the Company substantially in
the form approved by the Board in connection with the Shareholder Protection Rights Agreement.
|
|
• |
No Preemptive Rights; No Sinking Fund. Holders of the Series A Preferred Shares do not have any preemptive rights. The Series A Preferred Shares will
not be subject to any sinking fund or any other obligation of us for their repurchase or retirement.
|
|
• |
Conversion. The Series B Preferred Shares are not convertible into common shares.
|
|
• |
Distributions. In the event that we declare a dividend of the stock of a subsidiary which we control, the holder(s) of the Series B Preferred Shares
are entitled to receive preferred shares of such subsidiary. Such preferred shares will have at least substantially identical rights and preferences to our Series B Preferred Shares and be issued in an equivalent number to our Series B
Preferred Shares. The Series B Preferred Shares have no other dividend or distribution rights.
|
|
• |
Voting. Each Series B Preferred Share has the voting power of 100,000 common shares and counts for 100,000 votes for purposes of determining quorum at
a meeting of shareholders, subject to adjustment to maintain a substantially identical voting interest in Toro following the (i) creation or issuance of a new series of shares of the Company carrying more than one vote per share to be
issued to any person other than holders of the Series B Preferred Shares, except for the creation (but not the issuance) of Series C Participating Preferred Shares substantially in the form approved by the Board and included as an exhibit
to this Annual Report, without the prior affirmative vote of a majority of votes cast by the holders of the Series B Preferred Shares or (ii) issuance or approval of common shares pursuant to and in accordance with the Shareholder
Protection Rights Agreement. The Series B Preferred Shares vote together with the common shares as a single class, except that the Series B Preferred Shares vote separately as a class on amendments to the Articles of Incorporation that
would materially alter or change the powers, preference or special rights of the Series B Preferred Shares.
|
|
• |
Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, the Series B Preferred Shares shall have the
same liquidation rights as and pari passu with the common shares up to their par value of $0.001 per share and, thereafter, the Series B Preferred Shares have no right to participate further in
the liquidation, dissolution or winding up of the Company.
|
|
• |
not be redeemable;
|
|
• |
entitle holders to dividend payments in an amount per share equal to the aggregate per share amount of all cash dividends, and the aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in our common shares or a subdivision of our outstanding common shares (by reclassification or otherwise) declared on our common shares; and
|
|
• |
entitle holders to 1,000 votes per Series C Participating Preferred Share on all matters submitted to a vote of the shareholders of the Company.
|
|
• |
Distribution and Transfer of the Rights. Our Board will declare a dividend of one Right for each share of our common shares outstanding. Prior to the
Separation Time referred to below, the Rights would be evidenced by and trade with our common shares and would not be exercisable. After the Separation Time, we would cause the Rights Agent to mail Rights certificates to shareholders and
the Rights would trade independent of the common shares. New Rights will accompany any new common shares of the Company issued after the Distribution until the Separation Time.
|
|
• |
Separation Time. Rights would separate from our common shares and become exercisable following the earlier of (i) the tenth (10) business day (or other
date designated by resolution of the Board) after any person (other than Mr. Panagiotidis or his controlled affiliates) commences a tender offer that would result in such person becoming the beneficial owner of a total of 15% or more of
the common shares or (ii) the date of the “Flip-in” Trigger.
|
|
• |
Exercise of the Rights. On or after the Separation Time, each Right would initially entitle the holder to purchase, for $22 (the “Exercise Price”), one
common share (or one one-thousandth of a share of Series C Participating Preferred Shares, such portion of a Series C Participating Preferred Share being designed to give the shareholder approximately the same dividend, voting and
liquidation rights as would one common share). Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.
|
|
• |
“Flip-in” Trigger. Upon public announcement by the Company that any person other than Mr. Panagiotidis or his controlled affiliates (an “Acquiring
Person”) has acquired 15% or more of our outstanding common shares:
|
|
(i) |
Rights owned by the Acquiring Person or transferees thereof would automatically be void; and
|
|
(ii) |
each other Right will automatically become a right to buy, for the Exercise Price, that number of common shares of the Company (or equivalent fractional shares of Series C Participating Preferred Shares) having
a market value of twice the Exercise Price.
|
|
• |
“Flip-over” Trigger. After an Acquiring Person has become such, (i) the Company may not consolidate or merge with any person, if the Company’s Board is
controlled by the Acquiring Person or the Acquiring Person is the beneficial owner of 50% or more of the outstanding shares of our common shares, and the transaction is with the Acquiring Person or its affiliate or associate or the shares
owned by the Acquiring Person are treated differently from those of other shareholders, and (ii) the Company may not sell 50% or more of its assets if the Company’s Board is controlled by the Acquiring Person unless in either case proper
provision is made so that each Right would thereafter become a right to buy, for the Exercise Price, that number of common shares of such other person having a market value of twice the Exercise Price.
|
|
• |
Redemption. The Rights may be redeemed by the Board, at any time until a “Flip-in” Trigger has occurred, at a redemption price of $0.001 per Right.
|
|
• |
Power to Amend. Our Board may amend the Rights Agreement in any respect until a “Flip-in” Trigger has occurred. Thereafter, our Board may amend the
Rights Agreement in any respect not materially adverse to Rights holders generally.
|
|
• |
Expiration. The Rights will expire on the tenth anniversary of the Distribution Date.
|
C.
|
Material Contracts
|
D.
|
Exchange Controls
|
E.
|
Taxation
|
|
(1) |
we are organized in a foreign country that grants an “equivalent exemption” to corporations organized in the United States; and
|
|
(2) |
either
|
|
(a) |
more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are “residents” of a foreign country that grants an “equivalent exemption” to corporations organized in the United
States (each such individual is a “qualified shareholder” and collectively, “qualified shareholders”), which we refer to as the “50% Ownership Test,” or
|
|
(b) |
our stock is “primarily and regularly traded on an established securities market” in our country of organization, in another country that grants an “equivalent exemption” to U.S. corporations, or in the United
States, which we refer to as the “Publicly-Traded Test.”
|
|
• |
We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and
|
|
• |
substantially all our USSGTI is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the
same points for voyages that begin or end in the United States.
|
|
• |
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
|
|
• |
at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.
|
|
• |
the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common shares;
|
|
• |
the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and
|
|
• |
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax
deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
|
• |
the gain is effectively connected with a trade or business conducted by the Non-U.S. Holder in the United States. If the Non-U.S. Holder is entitled to the benefits of a U.S. income tax treaty with respect to
that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
|
|
• |
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
|
F.
|
Dividends and Paying Agents
|
G.
|
Statement by Experts
|
H.
|
Documents on Display
|
I.
|
Subsidiary Information
|
J.
|
Annual Report to Security Holders
|
ITEM 11. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 12. |
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
ITEM 13. |
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
ITEM 14. |
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
ITEM 15. |
CONTROLS AND PROCEDURES
|
A.
|
Disclosure Controls and Procedures
|
B.
|
Management’s Annual Report on Internal Control Over Financial Reporting
|
|
• |
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
|
• |
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and
expenditures are being made only in accordance with authorizations of the Company’s management and directors; and
|
|
• |
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
C.
|
Attestation Report of the Registered Public Accounting Firm
|
D.
|
Changes in Internal Control Over Financial Reporting
|
ITEM 16. |
[RESERVED]
|
ITEM 16A. |
AUDIT COMMITTEE FINANCIAL EXPERT
|
ITEM 16B. |
CODE OF ETHICS
|
ITEM 16C. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
For the year ended
|
||||||||
In U.S. dollars
|
December 31,
2022
|
December 31,
2023
|
||||||
Audit Fees
|
$
|
216,939
|
$
|
419,711
|
ITEM 16D. |
EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
|
ITEM 16E. |
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS
|
Period
|
Total Number of
Shares Purchased(1),(2)
|
Average Price
Paid per Share(3)
|
Total Number
of Shares Purchased
as part of Publicly
Announced Plans
or Programs
|
Maximum Number
(or Approximate Dollar
Value) of Shares that
May Yet Be Purchased
Under the Plans
or Programs
|
||||||||||||
November 10-30, 2023
|
60,176
|
$
|
4.1901
|
60,176
|
$
|
4,747,856
|
||||||||||
December 1-31, 2023
|
162,424
|
$
|
4.8794
|
162,424
|
$
|
3,955,318
|
||||||||||
Total
|
222,600
|
N/A
|
222,600
|
N/A
|
(1) |
On November 11, 2023, we announced the launch of the Repurchase Program authorizing the repurchase of up to $5.0 million of our common shares commencing November 10, 2023 through to March 31,
2024. The Repurchase Program was approved by the Board on November 6, 2023. The Repurchase Program may be suspended or terminated at any time by the Board.
|
(2) |
Common shares were repurchased by Toro in open market transactions.
|
(3) |
The average price paid per share does not include commissions paid for each transaction.
|
ITEM 16F. |
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
|
ITEM 16G. |
CORPORATE GOVERNANCE
|
|
• |
Independence of Directors. The Nasdaq requires that a U.S. listed company maintain a majority of independent directors. Although our Board is currently composed of three
directors a majority of whom are independent, we cannot assure you that in the future we will have a majority of independent directors.
|
|
• |
Executive Sessions. The Nasdaq requires that non-management directors meet regularly in executive sessions without management. The Nasdaq also requires that all
independent directors meet in an executive session at least once a year. As permitted under Marshall Islands law and our bylaws, our non-management directors do not regularly hold executive sessions without management.
|
|
• |
Nominating/Corporate Governance Committee. The Nasdaq requires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a
committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Marshall Islands law and our bylaws, we do not currently have a nominating or corporate governance committee, nor do we expect
to establish such committees.
|
|
• |
Compensation Committee. The Nasdaq requires U.S. listed companies to have a compensation committee composed entirely of independent directors and a committee charter
addressing the purpose, responsibility, rights and performance evaluation of the committee. As permitted under Marshall Islands law, we do not currently have a compensation committee. To the extent we establish such committee in the
future, it may not consist of independent directors, entirely or at all.
|
|
• |
Audit Committee. The Nasdaq requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members, all of whom are independent.
As permitted by Nasdaq Rule 5615(a)(3), we follow home country practice regarding audit committee composition. Therefore, our audit committee is composed of two independent directors, Mr. Angelos Rounick Platanias and Mr. Petros
Zavakopoulos. Although the members of our audit committee are independent, we are not required to ensure their independence under Nasdaq Rule 5605(c)(2)(A) subject to compliance with Rules 10A-3(b)(1) and 10A-3(c) under the Securities
Exchange Act of 1934.
|
|
• |
Shareholder Approval Requirements. The Nasdaq requires that a listed U.S. company obtain prior shareholder approval for certain issuances of authorized stock or the
approval of, and material revisions to, equity compensation plans. As permitted under Marshall Islands law and our bylaws, we do not intend seek shareholder approval prior to issuances of authorized stock or the approval of and material
revisions to equity compensation plans.
|
|
• |
Corporate Governance Guidelines. The Nasdaq requires U.S. companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other
things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual
performance evaluation of the Board. We are not required to adopt such guidelines under Marshall Islands law and we have not and do not intend to adopt such guidelines.
|
ITEM 16H. |
MINE SAFETY DISCLOSURE
|
ITEM 16I. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
|
ITEM 17.
|
FINANCIAL STATEMENTS
|
ITEM 18.
|
FINANCIAL STATEMENTS
|
ITEM 19.
|
EXHIBITS
|
Amended & Restated Articles of Incorporation of Toro (incorporated by reference to Exhibit 1.1 to Toro’s registration statement on Form 20-F filed with the
SEC on February 2, 2023).
|
|
Amended & Restated Bylaws of Toro (incorporated by reference to Exhibit 1.2 to Toro’s registration statement on Form 20-F filed with the SEC on February 2,
2023).
|
|
Statement of Designation of the Rights, Preferences and Privileges of the 1.00% Series A Fixed Rate Cumulative Perpetual Convertible Preferred Shares of Toro
(incorporated by reference to Exhibit 1.3 to Toro’s registration statement on Form 20-F filed with the SEC on February 2, 2023).
|
|
Statement of Designation of the Rights, Preferences and Privileges of the Series B Preferred Shares of Toro (incorporated by reference to Exhibit 1.4 to Toro’s
registration statement on Form 20-F filed with the SEC on February 2, 2023).
|
|
Statement of Designation of the Rights, Preferences and Privileges of the Series C Participating Preferred Shares of Toro (incorporated by reference to Exhibit
1.5 to Toro’s registration statement on Form 20-F filed with the SEC on February 2, 2023).
|
|
2.2 |
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934.
|
Shareholder Protection Rights Agreement by and between Toro and Broadridge Corporate Issuer Solutions, Inc., as rights agent (incorporated by reference to
Exhibit 4.1 to Toro’s registration statement on Form 20-F filed with the SEC on February 2, 2023).
|
|
Contribution and Spin-Off Distribution Agreement between Toro and Castor Maritime Inc. (incorporated by reference to Exhibit 4.2 to Toro’s annual report on Form
20-F filed with the SEC on March 8, 2023).
|
|
Master Management Agreement by and among Toro, its shipowning subsidiaries and Castor Ships S.A. (incorporated by reference to Exhibit 4.3 to Toro’s registration
statement on Form 20-F filed with the SEC on February 2, 2023).
|
|
Subscription Agreement by and between Toro Corp. and Pani Corp., dated as of April 17, 2023 (incorporated by reference to Exhibit 4.2 of Toro’s registration
statement on Form F-3 (File No. 333-275478) filed with the SEC on November 13, 2023).
|
|
Share Purchase Agreement by and between Toro Corp. and Castor Maritime Inc., dated as of August 7, 2023 (incorporated by reference to Exhibit 99.1 of Toro’s
report on Form 6-K furnished to the SEC on August 8, 2023).
|
|
List of Subsidiaries.
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer.
|
|
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer.
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
Policy Regarding the Recovery of Erroneously Awarded Incentive-Based Compensation.
|
|
101.INS
|
Inline XBRL Instance Document.
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document.
|
101.CAL
|
Inline XBRL Taxonomy Extension Schema Calculation Linkbase Document.
|
101.DEF
|
Inline XBRL Taxonomy Extension Schema Definition Linkbase Document.
|
101.LAB
|
Inline XBRL Taxonomy Extension Schema Label Linkbase Document.
|
101.PRE
|
Inline XBRL Taxonomy Extension Schema Presentation Linkbase Document.
|
104
|
Cover Page
Interactive Data File (Inline XBRL included in Exhibit 101).
|
Page
|
|
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 1163)
|
F-2
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7
|
|
December 31,
|
December 31,
|
||||||||
ASSETS
|
Note
|
2022
|
2023
|
|||||||
CURRENT ASSETS:
|
||||||||||
Cash and cash equivalents
|
$
|
41,779,594
|
$
|
155,235,401
|
||||||
Due from related parties, current
|
3
|
558,327
|
3,923,315
|
|||||||
Accounts receivable trade, net
|
10,616,573
|
4,132,282
|
||||||||
Inventories
|
893,569
|
260,555
|
||||||||
Prepaid expenses and other assets
|
915,244
|
1,584,015
|
||||||||
Total current assets
|
54,763,307
|
165,135,568
|
||||||||
|
||||||||||
NON-CURRENT ASSETS:
|
||||||||||
Vessels, net
|
3,5
|
92,486,178
|
88,708,051
|
|||||||
Restricted cash
|
6
|
700,000
|
350,000
|
|||||||
Due from related parties
|
3
|
1,708,474
|
1,590,501
|
|||||||
Prepaid expenses and other assets, non current
|
5,199,999
|
357,769
|
||||||||
Deferred charges, net
|
4
|
2,621,145
|
1,420,574
|
|||||||
Investment in related party
|
3 |
— | 50,541,667 | |||||||
Total non-current assets
|
102,715,796
|
142,968,562
|
||||||||
Total assets
|
$
|
157,479,103
|
$
|
308,104,130
|
||||||
|
||||||||||
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY
|
||||||||||
CURRENT LIABILITIES:
|
||||||||||
Current portion of long-term debt, net
|
6
|
2,606,302
|
1,311,289
|
|||||||
Due to related parties
|
3
|
—
|
315,000
|
|||||||
Accounts payable
|
1,643,468 | 3,187,728 | ||||||||
Deferred revenue
|
—
|
310,000
|
||||||||
Accrued liabilities
|
2,269,281
|
2,735,007
|
||||||||
Total current liabilities
|
6,519,051
|
7,859,024
|
||||||||
|
||||||||||
NON-CURRENT LIABILITIES:
|
||||||||||
Long-term debt, net
|
6
|
10,463,172 |
3,902,497 |
|||||||
Total non-current liabilities
|
10,463,172 |
3,902,497 |
||||||||
|
||||||||||
Commitments and contingencies
|
10
|
— |
—
|
|||||||
|
||||||||||
MEZZANINE EQUITY:
|
||||||||||
1.00% Series A fixed rate cumulative perpetual
convertible preferred shares: 0 and 140,000 shares issued and outstanding as of December 31, 2022, and December 31, 2023, respectively, aggregate liquidation preference of $0 and $140,000,000 as of December 31, 2022 and
December 31, 2023, respectively
|
8 | — | 119,601,410 | |||||||
Total mezzanine equity
|
— | 119,601,410 | ||||||||
|
||||||||||
SHAREHOLDERS’ EQUITY:
|
||||||||||
Former Net Parent Company investment
|
140,496,912 | — | ||||||||
Common shares, $0.001 par value; 1,000 and 3,900,000,000
shares authorized; 1,000 and 19,021,758
shares issued; 1,000 and 18,978,409
shares (net of treasury shares) outstanding as of December 31, 2022, and December 31, 2023 respectively
|
7,11 | 1 | 19,022 | |||||||
Preferred shares, $0.001 par value: 0 and 100,000,000 shares
authorized; Series B preferred shares: 0 and 40,000 shares issued and outstanding as of December 31, 2022 and December 31, 2023, respectively
|
7 | — | 40 | |||||||
Additional paid-in capital
|
— | 57,244,290 | ||||||||
Treasury shares; 0 and 43,349 shares as of December 31, 2022 and 2023, respectively |
7 | — | (223,840 | ) | ||||||
Due from stockholder
|
(1 | ) | — | |||||||
(Accumulated deficit)/Retained Earnings
|
(32 | ) | 119,701,687 | |||||||
Total shareholders’ equity
|
140,496,880 | 176,741,199 | ||||||||
Total liabilities, mezzanine equity and shareholders’ equity
|
$ | 157,479,103 | $ | 308,104,130 |
|
Period Ended
December 31,
|
Year Ended
December 31,
|
Year Ended
December 31,
|
|||||||||||
|
Note
|
2021
|
2022
|
2023 |
||||||||||
REVENUES:
|
||||||||||||||
Time charter revenues
|
13
|
$
|
9,115,257
|
$
|
13,656,027
|
$ |
12,148,571 | |||||||
Voyage charter revenues
|
13
|
15,002,012
|
51,805,097
|
3,806,244 | ||||||||||
Pool revenues
|
13
|
5,146,999
|
46,424,741
|
62,513,759 | ||||||||||
Total vessel revenues
|
|
29,264,268
|
111,885,865
|
78,468,574 | ||||||||||
|
||||||||||||||
EXPENSES:
|
||||||||||||||
Voyage expenses (including $372,037,
$1,437,276 and $1,004,035
to related party for the period ended December 31, 2021 and the years ended December 31, 2022, and 2023, respectively)
|
3,14
|
(11,059,518
|
)
|
(29,319,414
|
)
|
(4,444,716 | ) | |||||||
Vessel operating expenses
|
14
|
(12,361,871
|
)
|
(21,708,290
|
)
|
(21,084,635 | ) | |||||||
Management fees to related parties
|
3
|
(1,853,850
|
)
|
(2,833,500
|
)
|
(3,153,660 | ) | |||||||
(Provision) / Recovery of provision for doubtful accounts
|
—
|
(266,732
|
)
|
266,732 | ||||||||||
Depreciation and amortization
|
4,5
|
(3,834,117
|
)
|
(7,294,476
|
)
|
(6,839,702 | ) | |||||||
General and administrative expenses (including $326,642,
$624,087 and $2,701,777
to related party for the period ended December 31, 2021 and the years ended December 31, 2022, and 2023, respectively)
|
3,11
|
(889,096
|
)
|
(2,093,347
|
)
|
(5,357,265 | ) | |||||||
Gain on sale of vessels
|
3,5
|
—
|
3,222,631
|
99,026,692 | ||||||||||
Total expenses
|
$ |
(29,998,452
|
)
|
$ |
(60,293,128
|
)
|
$ |
58,413,446 | ||||||
|
||||||||||||||
Operating (loss)/income | $ |
(734,184 | ) | $ |
51,592,737 |
$ |
136,882,020 | |||||||
|
||||||||||||||
OTHER (EXPENSES)/INCOME:
|
||||||||||||||
Interest and finance costs
|
15
|
(506,012
|
)
|
(902,604
|
)
|
(964,253 | ) | |||||||
Interest income
|
|
652
|
202,612
|
4,072,553 | ||||||||||
Dividend income from related party |
3,16 |
— | — | 1,020,833 | ||||||||||
Foreign exchange gains/(losses) |
15,327
|
(6,181
|
)
|
(23,493 | ) | |||||||||
Total other (expenses)/ income, net
|
$ |
(490,033
|
)
|
$ |
(706,173
|
)
|
$ |
4,105,640 | ||||||
|
||||||||||||||
Net (loss)/income, before taxes
|
$
|
(1,224,217
|
)
|
$
|
50,886,564
|
$ |
140,987,660 | |||||||
Income taxes
|
(206,174
|
)
|
(960,181
|
)
|
(350,667 | ) | ||||||||
Net (loss)/income and comprehensive (loss)/income
|
$
|
(1,430,391
|
)
|
$
|
49,926,383
|
$ |
140,636,993 | |||||||
Dividend on Series A Preferred Shares
|
3,12
|
— | — | (1,166,667 | ) | |||||||||
Deemed dividend on Series A Preferred Shares
|
8
|
— | — | (2,429,275 | ) | |||||||||
Net (loss)/income attributable to common shareholders
|
$ | (1,430,391 | ) | $ | 49,926,383 | $ |
137,041,051 | |||||||
(Loss)/Earnings per common share, basic
|
12
|
(0.15 | ) | 5.28 | 8.69 | |||||||||
(Loss)/Earnings per common share, diluted
|
12
|
(0.15 | ) | 1.17 | 2.87 | |||||||||
Weighted average number of common shares, Basic
|
12
|
9,461,009 | 9,461,009 | 15,443,485 | ||||||||||
Weighted average number of common shares, Diluted
|
12
|
9,461,009 | 42,677,249 | 48,659,725 |
Treasury stock |
Mezzanine equity
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
# of
Series B
Preferred
Shares
|
Par
Value of
Preferred
Series B shares
|
# of
Common
shares
|
Par
Value of
Common
Shares
|
Additional
Paid-in
capital
|
# of shares | Amount |
Due from
Stockholder
|
Former
Parent
Company
Investment
|
(Accumulated
deficit)/
Retained
Earnings
|
Total
Shareholders’
Equity
|
# of
Series A
Preferred
Shares
|
Mezzanine
Equity
|
||||||||||||||||||||||||||||||||||||||||
Balance, January 13, 2021
|
—
|
—
|
—
|
—
|
—
|
— | — |
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||||||||||||||
Net loss and comprehensive loss
|
—
|
—
|
—
|
—
|
—
|
— |
— |
—
|
(1,430,391
|
)
|
—
|
(1,430,391
|
)
|
—
|
—
|
|||||||||||||||||||||||||||||||||||||
Net increase in Former Parent Company Investment
|
—
|
—
|
—
|
—
|
—
|
— | — |
—
|
105,461,561
|
—
|
105,461,561
|
—
|
—
|
|||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021
|
—
|
—
|
—
|
—
|
—
|
— | — |
—
|
104,031,170
|
—
|
104,031,170
|
—
|
—
|
|||||||||||||||||||||||||||||||||||||||
Issuance of common shares
|
— | — | 1,000 | 1 | — | — |
— |
(1 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Net income/(loss) and Comprehensive income/(loss)
|
—
|
—
|
—
|
—
|
—
|
— |
— |
—
|
49,926,415
|
(32
|
)
|
49,926,383
|
—
|
—
|
||||||||||||||||||||||||||||||||||||||
Net decrease in Former Parent Company Investment
|
—
|
—
|
—
|
—
|
—
|
— | — |
—
|
(13,460,673
|
)
|
—
|
(13,460,673
|
)
|
—
|
—
|
|||||||||||||||||||||||||||||||||||||
Balance, December 31, 2022
|
— | — | 1,000 | 1 | — | — | — | (1 | ) | 140,496,912 | (32 | ) | 140,496,880 | — | — | |||||||||||||||||||||||||||||||||||||
Net income and comprehensive income
|
— |
— |
— |
— |
— |
— |
— |
— |
17,339,332 |
123,297,661 |
140,636,993 |
— |
— |
|||||||||||||||||||||||||||||||||||||||
Net increase in Former Parent Company investment
|
— | — |
— | — | — | — | — | — | 211,982 | — | 211,982 | |||||||||||||||||||||||||||||||||||||||||
Cancellation of common shares due to spin off
|
—
|
—
|
(1,000
|
)
|
(1
|
)
|
—
|
— | — |
1
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||||||||||||||
Capitalization at spin off, including issuance of capital and preferred stock, net of costs (Note 8)
|
40,000
|
40
|
9,461,009
|
9,461
|
38,156,985
|
— | — |
—
|
(158,048,226
|
)
|
—
|
(119,881,740
|
)
|
140,000
|
117,172,135
|
|||||||||||||||||||||||||||||||||||||
Issuance of common shares pursuant to private placement (Note 3 and 7)
|
—
|
—
|
8,500,000
|
8,500
|
18,638,736
|
— | — |
—
|
—
|
—
|
18,647,236
|
—
|
—
|
|||||||||||||||||||||||||||||||||||||||
Issuance of restricted stock and compensation cost (Note 11)
|
—
|
—
|
1,240,000
|
1,240
|
1,271,458
|
— | — |
—
|
—
|
—
|
1,272,698
|
—
|
—
|
|||||||||||||||||||||||||||||||||||||||
Repurchase of common shares (Note 7)
|
— | — | (179,251 | ) | (179 | ) | (822,889 | ) | (43,349 | ) | (223,840 | ) | — | — | — | (1,046,908 | ) | — | — | |||||||||||||||||||||||||||||||||
Dividend on Series A preferred shares (Note 8)
|
—
|
—
|
—
|
—
|
—
|
— | — |
—
|
—
|
(1,166,667
|
)
|
(1,166,667
|
)
|
—
|
—
|
|||||||||||||||||||||||||||||||||||||
Deemed dividend on Series A preferred shares (Note 8)
|
—
|
—
|
—
|
—
|
—
|
— | — |
—
|
—
|
(2,429,275
|
)
|
(2,429,275
|
)
|
—
|
2,429,275
|
|||||||||||||||||||||||||||||||||||||
Balance, December 31, 2023
|
40,000
|
40
|
19,021,758
|
19,022
|
57,244,290
|
(43,349 | ) | (223,840 | ) |
—
|
—
|
119,701,687
|
176,741,199
|
140,000
|
119,601,410
|
|
Note
|
Period ended
December 31,
2021
|
Year ended
December 31,
2022
|
Year ended
December 31,
2023
|
||||||||||
Cash Flows (used in)/provided by Operating Activities:
|
||||||||||||||
Net (loss)/income
|
$
|
(1,430,391
|
)
|
$
|
49,926,383
|
$ | 140,636,993 | |||||||
Adjustments to reconcile net (loss)/income to net cash (used in)/provided by Operating activities:
|
||||||||||||||
Depreciation and amortization
|
4,5
|
3,834,117
|
7,294,476
|
6,839,702 | ||||||||||
Amortization of deferred finance charges
|
15
|
94,789
|
119,731
|
137,112 | ||||||||||
Gain on sale of vessels
|
5
|
—
|
(3,222,631
|
)
|
(99,026,692 | ) | ||||||||
Provision for doubtful accounts
|
|
— |
266,732
|
— | ||||||||||
Stock based compensation cost |
11 |
— | — | 1,272,698 | ||||||||||
Changes in operating assets and liabilities:
|
||||||||||||||
Accounts receivable trade, net
|
(4,102,150
|
)
|
(6,781,154
|
)
|
6,484,291 | |||||||||
Inventories
|
(3,137,855
|
)
|
2,244,286
|
633,014 | ||||||||||
Due from/to related parties
|
1,668,276
|
(3,935,077
|
)
|
(3,788,681 | ) | |||||||||
Prepaid expenses and other assets
|
(1,352,501
|
)
|
(4,762,742
|
)
|
4,211,685 | |||||||||
Other deferred charges
|
(25,335
|
)
|
25,335
|
— | ||||||||||
Accounts payable
|
47,831
|
1,304,711
|
1,492,412 | |||||||||||
Accrued liabilities
|
474,616
|
1,512,592
|
381,414 | |||||||||||
Deferred revenue
|
547,939
|
(547,939
|
)
|
310,000 | ||||||||||
Dry-dock costs paid
|
(1,034,380
|
)
|
(1,906,526
|
)
|
(3,457,629 | ) | ||||||||
Net Cash (used in)/provided by Operating Activities
|
(4,415,044
|
)
|
41,538,177
|
56,126,319 | ||||||||||
|
||||||||||||||
Cash flow (used in)/provided by Investing Activities:
|
||||||||||||||
Vessel acquisitions and other vessel improvements
|
5
|
(111,288,060
|
)
|
(852,603
|
)
|
(72,237,732 | ) | |||||||
Investment in related party | 3 | — | — | (50,000,000 | ) | |||||||||
Net proceeds from sale of vessel
|
—
|
12,641,284
|
172,943,983 | |||||||||||
Net cash (used in)/provided by Investing Activities
|
(111,288,060
|
)
|
11,788,681
|
50,706,251 | ||||||||||
|
||||||||||||||
Cash flows (used in)/provided by Financing Activities:
|
||||||||||||||
Net increase/(decrease) in Former Parent Company Investment |
105,461,561 | (13,460,675 | ) | 211,982 | ||||||||||
Issuance of Series B Preferred shares |
7
|
— | — | 40 | ||||||||||
Gross proceeds from issuance of common shares pursuant to private placement |
3,7
|
— | — | 19,465,000 | ||||||||||
Common shares issuance expenses pursuant to private placement
|
3,7 |
— | — | (817,764 | ) | |||||||||
Payment of Dividend on Series A Preferred Shares |
8 |
— | — | (851,667 | ) | |||||||||
Payment for repurchase of common shares |
7 | — | — | (1,046,908 | ) | |||||||||
Proceeds from long-term debt
|
|
18,000,000
|
—
|
— | ||||||||||
Repayment of long-term debt
|
6 |
(1,700,000
|
)
|
(3,050,000
|
)
|
(7,992,800 | ) | |||||||
Payment of deferred financing costs
|
(395,046 | ) | — | — | ||||||||||
Payments related to Spin-Off |
3 |
— | — | (2,694,646 | ) | |||||||||
Net cash provided by/(used in) Financing Activities
|
121,366,515
|
(16,510,675
|
)
|
6,273,237 | ||||||||||
|
||||||||||||||
Net increase in cash, cash equivalents, and restricted cash
|
5,663,411
|
36,816,183
|
113,105,807 | |||||||||||
Cash, cash equivalents and restricted cash at the beginning of the period
|
—
|
5,663,411
|
42,479,594 | |||||||||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
5,663,411
|
$ |
42,479,594
|
$ |
155,585,401 | ||||||||
|
||||||||||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
|
|||||||||||||
Cash and cash equivalents
|
$
|
4,963,411
|
$
|
41,779,594
|
$ |
155,235,401 | ||||||||
Restricted cash, non-current
|
700,000
|
700,000
|
350,000 | |||||||||||
Cash, cash equivalents, and restricted cash
|
$ |
5,663,411
|
$ |
42,479,594
|
$ |
155,585,401 | ||||||||
|
||||||||||||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||||||||
Cash paid for interest
|
348,799
|
690,543
|
773,870 | |||||||||||
Unpaid vessel acquisition and other vessel improvement costs (included in Accounts payable and Accrued liabilities)
|
466,874
|
—
|
68,815 | |||||||||||
Unpaid deferred dry-dock costs (included in Accounts payable and Accrued liabilities)
|
—
|
573,001
|
602,117 | |||||||||||
Dividend declared but unpaid
|
— | — | 315,000 | |||||||||||
Deemed dividend on Series A Preferred Shares
|
— | — | 2,429,275 |
1. |
Basis of Presentation and General information:
|
1. |
Basis of Presentation and General information: (continued)
|
Company
|
|
Country of
incorporation
|
|
Date of
incorporation
|
|
Vessel Name
|
|
DWT
|
|
Year
Built
|
|
Delivery date
to Vessel
owning company
|
||
1
|
|
Gamora Shipping Co. (“Gamora”)
|
|
Marshall Islands
|
|
01/13/2021
|
|
M/T Wonder Sirius
|
|
115,341
|
|
2005
|
|
March 22, 2021
|
2
|
|
Vision Shipping Co. (“Vision”)
|
|
Marshall Islands
|
|
04/27/2021
|
|
M/T Wonder Mimosa
|
|
36,718
|
|
2006
|
|
May 31, 2021
|
3
|
|
Zatanna Shipping Co. (“Zatanna”)
|
|
Marshall Islands
|
|
05/02/2023
|
|
LPG Dream Terrax
|
|
4,743
|
|
2020
|
|
May 26, 2023
|
4 |
Starfire Shipping Co. (“Starfire”) |
Marshall Islands |
05/02/2023 |
LPG Dream Arrax |
4,753 | 2015 |
June 14, 2023 |
|||||||
5 |
Cyborg Shipping Co. (“Cyborg”) |
Marshall Islands
|
05/02/2023 |
LPG Dream Syrax |
5,158 | 2015 |
July 18, 2023 |
|||||||
6 |
Nightwing Shipping Co. (“Nightwing”) |
Marshall Islands |
05/02/2023 |
LPG Dream Vermax |
5,155 | 2015 |
August 4, 2023 |
1. |
Basis of Presentation and General information: (continued)
|
1
|
Toro RBX Corp. (“Toro RBX”) (1)
|
2
|
Elektra Shipping Co. (“Elektra”) (2)
|
3 |
Rocket Shipping Co. (“Rocket”)(3) |
4 |
Drax Shipping Co. (“Drax”)(4) |
5 | Colossus Shipping Co. (“Colossus”) (5) |
6 | Hawkeye Shipping Co. (“Hawkeye”)(6) |
7 |
Xavier Shipping Co. (“Xavier”) (7)
|
8 |
Starlord Shipping Co. (“Starlord”) (8)
|
(1) |
Incorporated
under the laws of the Marshall Islands on October 3, 2022, this entity serves as the cash manager of the Company’s subsidiaries with effect from March 7, 2023.
|
(2)
|
Incorporated under the laws of the Marshall Islands
on April 27, 2021, no longer owns any vessel following the sale of the M/T Wonder Arcturus on May 9, 2022, for a gross
sale price of $13.15 million and delivery of such vessel to an unaffiliated third-party on July 15, 2022.
|
(3)
|
Incorporated under the laws of the Marshall Islands
on January 13, 2021, no longer owns any vessel following the sale of the M/T Wonder Polaris on May 18, 2023, for a gross
sale price of $34.5 million and delivery of such vessel to an unaffiliated third-party on June 26, 2023.
|
(4)
|
Incorporated under the laws of the Marshall Islands
on November 22, 2021, no longer owns any vessel following the sale of the M/T Wonder Bellatrix on May 12, 2023, for a
gross sale price of $37.0 million and delivery of such vessel to an unaffiliated third-party on June 22, 2023.
|
(5)
|
Incorporated under the laws of the Marshall Islands
on April 27, 2021, no longer owns any vessel following the sale of the M/T Wonder Musica on June 15, 2023, for a gross
sale price of $28.0 million and delivery of such vessel to an unaffiliated third-party on July 6, 2023.
|
(6)
|
Incorporated under the laws of the Marshall Islands
on April 27, 2021, no longer owns any vessel following the sale of the M/T Wonder Avior on April 28, 2023, for a gross
sale price of $30.1 million and delivery of such vessel to an unaffiliated third-party on July 17, 2023.
|
(7)
|
Incorporated under the laws of the Marshall Islands on April 27, 2021, no longer
owns any vessel following the sale of the M/T Wonder Formosa on
September 1, 2023, for a gross sale price of $18.0 million and delivery of such vessel to an unaffiliated third-party
on November 16, 2023.
|
(8)
|
Incorporated under the laws of the Marshall Islands
on April 15, 2021, no longer owns any vessel following the
sale of the M/T Wonder Vega on September 5, 2023, for a gross sale
price of $31.5 million and delivery of such vessel to an unaffiliated third-party on December 21, 2023.
|
Charterer/Pool manager
|
Period Ended
December 31,
2021
|
Year Ended
December 31,
2022
|
Year Ended
December 31,
2023
|
|||||||||
A
|
|
31
|
%
|
—
|
% | — | % |
|||||
B
|
17
|
%
|
—
|
% | — | % |
||||||
C
|
—
|
% |
17
|
%
|
61 | % | ||||||
D
|
—
|
% |
14
|
%
|
20 | % | ||||||
E |
—
|
% |
11
|
%
|
— | % | ||||||
F | — | % |
— | % |
11 | % | ||||||
Total
|
48
|
%
|
42
|
%
|
92 | % |
2. |
Significant Accounting Policies and Recent Accounting Pronouncements:
|
2.
|
Significant Accounting Policies and Recent Accounting Pronouncements: (continued)
|
2.
|
Significant Accounting Policies and Recent Accounting Pronouncements: (continued)
|
2.
|
Significant Accounting Policies and Recent Accounting Pronouncements: (continued)
|
|
• |
based on the pool points attributed to each vessel (which are determined by vessel attributes such as cargo carrying capacity, speed, fuel consumption, and construction and other
characteristics); or
|
|
• |
by making adjustments to account for the cost of performance, the bunkering fees and the trading capabilities of each vessel and the number of days the vessel participated in the
pool in the period (excluding off-hire days).
|
2.
|
Significant Accounting Policies and Recent Accounting Pronouncements: (continued)
|
2.
|
Significant Accounting Policies and Recent Accounting Pronouncements: (continued)
|
2.
|
Significant Accounting Policies and Recent Accounting Pronouncements: (continued)
|
3. |
Transactions with Related Parties:
|
|
Period ended
December 31,
|
Year ended
December 31,
|
Year ended
December 31,
|
|||||||||
|
2021 |
2022
|
2023
|
|||||||||
Management fees-related parties
|
||||||||||||
Management fees – Pavimar (b)
|
$ | 1,308,600 |
$
|
977,400
|
$
|
—
|
||||||
Management fees – Castor Ships (a)
|
545,250 |
1,856,100
|
3,153,660
|
|||||||||
|
||||||||||||
Included in Voyage expenses
|
||||||||||||
Charter hire commissions – Castor Ships (a)
|
$ | 372,037 | $ | 1,437,276 | $ | 1,004,035 | ||||||
|
||||||||||||
Included in General and administrative expenses
|
||||||||||||
Administration fees – Castor Ships (a)
|
$ | 326,642 | $ | 624,087 | $ | 2,701,777 | ||||||
Stock compensation cost (Note 11)
|
$ | — | $ | — | $ | 1,272,698 | ||||||
|
||||||||||||
Included in Gain on sale of vessels
|
||||||||||||
Sale & purchase commission – Castor Ships (a)
|
$ | — | $ | 131,500 | $ | 1,790,900 | ||||||
Included in Vessels’ cost |
||||||||||||
Sale & purchase commission – Castor Ships (a) |
$ | 1,094,000 | $ | — | $ | 707,150 |
December 31,
2022
|
December 31,
2023
|
|||||||
Assets:
|
||||||||
Due from Castor Ships (a) – current
|
$ |
558,327
|
$ |
3,923,315
|
||||
Due from Castor Ships (a) – non-current
|
1,708,474
|
1,590,501
|
||||||
Investment in related party (d) – non-current |
— |
50,541,667 |
||||||
Liabilities:
|
|
|||||||
Due to Former Parent Company (d) – current
|
$
|
—
|
$
|
315,000 |
(a)
|
Castor Ships:
|
3. |
Transactions with Related Parties: (continued)
|
3. |
Transactions with Related Parties: (continued)
|
(b) |
Pavimar:
|
3. |
Transactions with Related Parties: (continued)
|
(c)
|
Pool Agreement
|
(d)
|
Former Parent Company:
|
3. |
Transactions with Related Parties: (continued)
|
(e)
|
Pani Corp. Subscription Agreement:
|
4. |
Deferred Charges, net:
|
|
Dry-docking costs
|
|||
Balance December 31, 2021
|
$
|
868,917
|
||
Additions
|
2,479,526
|
|||
Amortization
|
(727,298
|
)
|
||
Balance December 31, 2022
|
$
|
2,621,145
|
||
Additions
|
3,486,746
|
|||
Amortization
|
(1,244,197
|
)
|
||
Disposals
|
(3,443,120 | ) | ||
Balance December 31, 2023
|
$
|
1,420,574
|
5. |
Vessels, net
|
(a) |
Vessels, net:
|
|
Vessel Cost
|
Accumulated
depreciation
|
Net Book Value
|
|||||||||
Balance December 31, 2021
|
$
|
111,754,934
|
$
|
(3,668,654
|
)
|
$
|
108,086,280
|
|||||
Acquisitions, improvements, and other vessel costs
|
385,729
|
—
|
385,729
|
|||||||||
Vessel disposal |
(10,018,583 | ) | 599,930 | (9,418,653 | ) | |||||||
Depreciation
|
—
|
(6,567,178
|
)
|
(6,567,178
|
)
|
|||||||
Balance December 31, 2022
|
$ |
102,122,080
|
$ |
(9,635,902
|
)
|
$ |
92,486,178
|
|||||
Acquisitions, improvements, and other vessel costs
|
72,306,547
|
—
|
72,306,547
|
|||||||||
Vessel disposals
|
(80,304,259
|
)
|
9,815,090
|
(70,489,169
|
)
|
|||||||
Depreciation
|
—
|
(5,595,505
|
)
|
(5,595,505
|
)
|
|||||||
Balance December 31, 2023
|
$
|
94,124,368
|
$
|
(5,416,317
|
)
|
$
|
88,708,051
|
5. |
Vessels, net: (continued)
|
(b) |
Vessel Acquisitions and other Capital Expenditures:
|
(c) |
Vessel Disposals:
|
5. |
Vessels, net: (continued)
|
6. |
Long-Term Debt:
|
Loan facilities
|
Borrowers
|
As of December 31,
2022
|
As of December 31,
2023
|
|||||||
$18.0 Million Term Loan Facility
|
Rocket- Gamora
|
13,250,000
|
5,257,200
|
|||||||
Total long-term debt
|
$
|
13,250,000
|
$
|
5,257,200
|
||||||
Less: Deferred financing costs
|
(180,526
|
)
|
(43,414
|
)
|
||||||
Total long-term debt, net of deferred finance costs
|
13,069,474
|
5,213,786
|
||||||||
Presented:
|
||||||||||
Current portion of long-term debt
|
$
|
2,700,000
|
$
|
1,345,600
|
||||||
Less: Current portion of deferred finance costs
|
(93,698
|
)
|
(34,311
|
)
|
||||||
Current portion of long-term debt, net of deferred finance costs
|
$
|
2,606,302
|
$
|
1,311,289
|
|
|||||
|
|
|||||||||
Non-Current portion of long-term debt
|
|
10,550,000
|
3,911,600
|
|||||||
Less: Non-Current portion of deferred finance costs
|
|
(86,828
|
)
|
(9,103
|
)
|
|||||
Non-Current portion of long-term debt, net of deferred finance costs
|
|
$
|
10,463,172
|
$
|
3,902,497
|
6. |
Long-Term Debt: (continued)
|
Year ending December 31,
|
Amount
|
|||
2024
|
$ |
1,345,600
|
||
2025
|
3,911,600
|
|||
Total long-term debt
|
$
|
5,257,200
|
6. |
Long-Term Debt: (continued)
|
7. |
Equity Capital Structure:
|
7. |
Equity Capital Structure: (continued)
|
8. |
Mezzanine equity:
|
8. |
Mezzanine equity: (continued)
|
9. |
Financial Instruments and Fair Value Disclosures:
|
|
• |
Cash and cash equivalents, accounts receivable trade, net, amounts due from/to related party/(ies) and accounts payable: The carrying values
reported in the consolidated balance sheets for those financial instruments are reasonable estimates of their fair values due to their short-term maturity nature. Cash and cash equivalents are considered Level 1 items as they
represent liquid assets with short term maturities. The carrying value approximates the fair market value for interest bearing cash classified as restricted cash, non-current and is considered Level 1 item of the fair value hierarchy.
|
9. |
Financial Instruments and Fair Value Disclosures: (continued)
|
|
• |
Long-term debt: The secured credit facility discussed in Note 6, has a recorded value which is a reasonable estimate of its fair value due to
its variable interest rate and is thus considered Level 2 item in accordance with the fair value hierarchy as SOFR rates are observable at commonly quoted intervals for the full terms of the loans.
|
|
• |
Investment in related party: Investment in related party is initially measured at the transaction price and subsequently assessed for the
existence of any observable market for the Castor Series D Preferred Shares and any observable price changes for identical or similar investments and the existence of any indications for impairment. As per the Company’s assessment
no such case was identified as at December 31, 2023.
|
10. |
Commitments and Contingencies:
|
(a) |
Commitments under long-term lease contracts
|
Twelve-month period ending December 31,
|
Amount
|
|||
2024
|
$
|
3,708,206 |
||
Total
|
$
|
3,708,206
|
|
11. |
Equity Incentive Plan:
|
Number of
restricted shares
|
Weighted average grant
date fair value per
non-vested share
|
|||||||
Non-vested, September 6, 2023
|
—
|
—
|
||||||
Granted
|
1,240,000
|
5.83
|
||||||
Non-vested, December 31, 2023
|
1,240,000
|
5.83
|
12. |
(Loss)/Earnings Per Common Share:
|
12. |
(Loss)/Earnings Per Common Share: (continued)
|
Period ended
December 31,
|
Year ended
December 31,
|
Year ended
December 31,
|
||||||||||
|
2021
|
2022
|
2023 |
|||||||||
Net (loss)/income and comprehensive
(loss)/income
|
$
|
(1,430,391
|
)
|
$
|
49,926,383
|
$ | 140,636,993 | |||||
Dividend on Series A Preferred Shares
|
—
|
—
|
(1,166,667 | ) | ||||||||
Deemed dividend on Series A Preferred Shares
|
—
|
—
|
(2,429,275 | ) | ||||||||
Undistributed earnings to non-vested participating securities
|
— | — | (2,805,275 | ) | ||||||||
Net (loss)/income attributable to
common Shareholders, basic
|
$
|
(1,430,391
|
)
|
$
|
49,926,383
|
$ | 134,235,776 | |||||
Undistributed earnings to non-vested participating
securities
|
—
|
—
|
2,805,275 | |||||||||
Undistributed earnings reallocated to non-vested
participating securities
|
—
|
—
|
(926,641 | ) | ||||||||
Dividend on Series A Preferred Shares
|
—
|
—
|
1,166,667 | |||||||||
Deemed dividend on Series A Preferred Shares
|
—
|
—
|
2,429,275 | |||||||||
Net (loss)/income attributable to
common Shareholders, diluted
|
$
|
(1,430,391
|
)
|
$
|
49,926,383
|
$ | 139,710,352 | |||||
Weighted average number of common shares outstanding,
basic
|
9,461,009
|
9,461,009
|
15,443,485 | |||||||||
Effect of dilutive shares
|
—
|
33,216,240
|
33,216,240 | |||||||||
Weighted average number of common shares outstanding,
diluted
|
9,461,009
|
42,677,249
|
48,659,725 | |||||||||
(Loss)/Earnings per common share,
basic
|
$
|
(0.15
|
)
|
$
|
5.28
|
$ | 8.69 | |||||
(Loss)/Earnings per common share,
diluted
|
$
|
(0.15
|
)
|
$
|
1.17
|
$ | 2.87 |
13. |
Vessel Revenues:
|
|
Period ended
December 31,
|
Year ended
December 31,
|
Year ended
December 31,
|
|||||||||
|
2021
|
2022
|
2023 |
|||||||||
Time charter revenues
|
9,115,257
|
13,656,027
|
12,148,571 | |||||||||
Voyage charter revenues
|
15,002,012
|
51,805,097
|
3,806,244 | |||||||||
Pool revenues
|
5,146,999
|
46,424,741
|
62,513,759 | |||||||||
Total Vessel Revenues
|
$
|
29,264,268
|
$
|
111,885,865
|
$ |
78,468,574 |
13. |
Vessel Revenues: (Continued)
|
14. |
Vessel Operating and Voyage Expenses:
|
|
Period ended
December 31,
|
Year ended
December 31,
|
Year ended
December 31,
|
|||||||||
Voyage expenses
|
2021
|
2022
|
2023 |
|||||||||
Brokerage commissions
|
521,052
|
1,661,958
|
448,801 | |||||||||
Brokerage commissions- related party
|
372,037
|
1,437,276
|
1,004,035 | |||||||||
Port & other expenses
|
3,916,046
|
5,794,018
|
1,131,354 | |||||||||
Bunkers consumption
|
6,251,624
|
20,430,020
|
1,862,481 | |||||||||
Gain on bunkers
|
(1,241
|
)
|
(3,858
|
)
|
(1,955 | ) | ||||||
Total Voyage expenses
|
$
|
11,059,518
|
$
|
29,319,414
|
$ |
4,444,716 |
14. |
Vessel Operating and Voyage Expenses: (Continued)
|
|
Period ended
December 31,
|
Year ended
December 31,
|
Year ended
December 31,
|
|||||||||
Vessel Operating Expenses
|
2021
|
2022
|
2023 |
|||||||||
Crew & crew related costs
|
7,037,784
|
12,315,509
|
11,525,793 | |||||||||
Repairs & maintenance, spares, stores, classification, chemicals & gases, paints, victualling
|
3,166,746
|
4,892,750
|
4,049,156 | |||||||||
Lubricants
|
601,049
|
1,058,930
|
876,319 | |||||||||
Insurance
|
875,873
|
1,434,441
|
1,058,302 | |||||||||
Tonnage taxes
|
147,569
|
342,796
|
294,688 | |||||||||
Other
|
532,850
|
1,663,864
|
3,280,377 | |||||||||
Total Vessel operating expenses
|
$
|
12,361,871
|
$
|
21,708,290
|
$ |
21,084,635 |
15. |
Interest and Finance Costs:
|
Period ended
December 31,
|
Year ended
December 31,
|
Year ended
December 31,
|
||||||||||
|
2021
|
2022 |
2023
|
|||||||||
Interest on long-term debt
|
$
|
383,186
|
$ |
719,105 |
$
|
737,207
|
||||||
Amortization of deferred finance charges
|
94,789
|
119,731 |
137,112
|
|||||||||
Other finance charges
|
28,037
|
63,768 |
89,934
|
|||||||||
Total
|
$
|
506,012
|
$ |
902,604 |
$
|
964,253
|
16. |
Segment Information:
|
16. |
Segment Information: (continued)
|
Period ended December 31, 2021
|
Year ended December 31, 2022 |
Year ended December 31, 2023
|
||||||||||||||||||||||||||||||||||||||
Aframax/LR2
tanker
segment
|
Handysize
tanker
segment
|
Total
|
Aframax/LR2
tanker
segment
|
Handysize
tanker
segment
|
Total |
Aframax/LR2
tanker
segment
|
Handysize
tanker
segment
|
LPG carrier segment |
Total
|
|||||||||||||||||||||||||||||||
- Time charter revenues
|
$
|
9,115,257
|
$
|
—
|
$
|
9,115,257
|
$ | 13,656,027 | $ | — | $ | 13,656,027 |
$
|
8,709,215
|
$
|
—
|
$ | 3,439,356 |
$
|
12,148,571
|
||||||||||||||||||||
- Voyage charter revenues
|
15,002,012
|
—
|
15,002,012
|
51,805,097 | — | 51,805,097 |
552,859
|
—
|
3,253,385 |
3,806,244
|
||||||||||||||||||||||||||||||
- Pool revenues
|
2,442,144
|
2,704,855
|
5,146,999
|
30,787,088 | 15,637,653 | 46,424,741 |
46,901,887
|
15,611,872
|
— |
62,513,759
|
||||||||||||||||||||||||||||||
Total vessel revenues
|
$
|
26,559,413
|
$
|
2,704,855
|
$
|
29,264,268
|
$ | 96,248,212 | $ | 15,637,653 | $ | 111,885,865 |
$
|
56,163,961
|
$
|
15,611,872
|
$ | 6,692,741 |
$
|
78,468,574
|
||||||||||||||||||||
Voyage expenses (including charges from related parties)
|
(11,003,925
|
)
|
(55,593
|
)
|
(11,059,518
|
)
|
(29,100,348 | ) | (219,066 | ) | (29,319,414 | ) |
(1,939,564
|
)
|
(198,730
|
)
|
(2,306,422 | ) |
(4,444,716
|
)
|
||||||||||||||||||||
Vessel operating expenses
|
(9,776,724
|
)
|
(2,585,147
|
)
|
(12,361,871
|
)
|
(17,386,009 | ) | (4,322,281 | ) | (21,708,290 | ) |
(11,691,675
|
)
|
(5,164,248
|
)
|
(4,228,712 | ) |
(21,084,635
|
)
|
||||||||||||||||||||
Management fees to related parties
|
(1,433,950
|
)
|
(419,900
|
)
|
(1,853,850
|
)
|
(2,167,000 | ) | (666,500 | ) | (2,833,500 | ) |
(1,443,009
|
)
|
(688,547
|
)
|
(1,022,104 | ) |
(3,153,660
|
)
|
||||||||||||||||||||
(Provision)/ recovery of provision for doubtful accounts
|
—
|
—
|
—
|
(266,732 | ) | — | (266,732 | ) |
266,732
|
—
|
— |
266,732
|
||||||||||||||||||||||||||||
Depreciation and Amortization
|
(3,087,764
|
)
|
(746,353
|
)
|
(3,834,117
|
)
|
(5,889,352 | ) | (1,405,124 | ) | (7,294,476 | ) |
(3,475,084
|
)
|
(1,490,577
|
)
|
(1,874,041 | ) |
(6,839,702
|
)
|
||||||||||||||||||||
Gain on sale of vessels
|
—
|
—
|
—
|
3,222,631 | — | 3,222,631 |
90,800,434
|
8,226,258
|
— |
99,026,692
|
||||||||||||||||||||||||||||||
Segments operating income/ (loss)
|
$
|
1,257,050
|
$
|
(1,102,138
|
)
|
$
|
154,912
|
$ | 44,661,402 | $ | 9,024,682 | $ | 53,686,084 |
$
|
128,681,795
|
$
|
16,296,028
|
$ | (2,738,538 | ) |
$
|
142,239,285
|
||||||||||||||||||
Interest and finance costs
|
(506,012
|
)
|
(902,604 | ) |
(964,253
|
)
|
||||||||||||||||||||||||||||||||||
Interest income
|
652
|
202,612 |
4,072,553
|
|||||||||||||||||||||||||||||||||||||
Dividend income from related party
|
— |
— | 1,020,833 | |||||||||||||||||||||||||||||||||||||
Foreign exchange losses
|
15,327
|
(6,181 | ) |
(23,493
|
)
|
|||||||||||||||||||||||||||||||||||
Less: Unallocated corporate general and administrative expenses (including related parties)
|
(889,096
|
)
|
(2,093,347 | ) |
(5,357,265
|
)
|
||||||||||||||||||||||||||||||||||
Net (loss)/income and comprehensive (loss)/income, before taxes
|
$
|
(1,224,217
|
)
|
$ | 50,886,564 |
$
|
140,987,660
|
16. |
Segment Information: (continued)
|
As of December 31,
2022
|
As of December 31,
2023
|
|||||||
Aframax/LR2 tanker segment
|
$
|
134,093,677
|
$
|
22,802,392
|
||||
Handysize tanker segment
|
23,385,458
|
10,445,507
|
||||||
LPG carrier segment | — | 71,651,775 | ||||||
Cash and cash equivalents(1) | (32 | ) | 151,757,138 | |||||
Prepaid expenses and other assets(1) | — | 51,447,318 | ||||||
Total assets
|
$
|
157,479,103
|
$
|
308,104,130
|
(1) |
Refers to assets of other, non-vessel owning, entities included in the consolidated financial statements.
|
17. |
Income Taxes:
|
18. |
Subsequent Events:
|
(a) |
Dividend on Series A Preferred Shares: On January 16, 2024, the Company paid to Castor a dividend on the Series A Preferred Shares, which was declared on December 27, 2023,amounting to $350,000 for the dividend period from October 15, 2023 to
January 14, 2024.
|
(b) |
Sale of the M/T Wonder Sirius and prepayment of the $18.0 Million Term Facility: On
January 8, 2024, the Company entered into an agreement with an unaffiliated third party for the sale of the M/T Wonder Sirius, at a price of $33.8 million. The vessel was delivered to its new owner on January 24, 2024. The Company
expects to record during the first quarter of 2024 a net gain on the sale of the M/T Wonder Sirius of approximately $20.9 million, excluding any transaction related costs. The Company used part of the proceeds of the sale of M/T Wonder Sirius to fully prepay the remaining outstanding balance of $5.3
million under the $18.0 Million Term Facility (described in Note 6), under which the M/T Wonder
Sirius served as security. As a result, we have no outstanding indebtedness under any facility as of February 29, 2024. Further, as a result of the sale, the Company no longer has any Aframax/LR2 vessels and management has determined that, with effect from the second quarter of 2024, the Company operates
in two
reportable segments: (i) the Handysize tanker segment and (ii) the LPG carrier segment.
|
(c) |
Share Repurchase Program: Between January 1, 2024 and February 29, 2024, the Company repurchased 476,970 shares of
common stock for aggregate consideration of 2.8
million under its share repurchase program.
|
|
• |
the designation of the series;
|
|
• |
the number of shares of the series;
|
|
• |
the preferences and relative, participating, option or other special rights, if any, and any qualifications, limitations or restrictions of such series; and
|
|
• |
the voting rights, if any, of the holders of the series.
|
• |
Distribution and Transfer of the Rights. Our Board will declare a dividend of one Right for each share of our common shares
outstanding. Prior to the Separation Time referred to below, the Rights would be evidenced by and trade with our common shares and would not be exercisable. After the Separation Time, we would cause the Rights Agent to mail Rights
certificates to shareholders and the Rights would trade independent of the common shares. New Rights will accompany any new common shares of the Company issued after the Distribution until the Separation Time.
|
|
• |
Separation Time. Rights would separate from our common shares and become exercisable following the earlier of (i) the tenth
(10) business day (or other date designated by resolution of the Board) after any person (other than Mr. Panagiotidis or his controlled affiliates) commences a tender offer that would result in such person becoming the beneficial owner of
a total of 15% or more of the common shares or (ii) the date of the “Flip-in” Trigger.
|
|
• |
Exercise of the Rights. On or after the Separation Time, each Right would initially entitle the holder to purchase, for $22
(the “Exercise Price”), one common share (or one one-thousandth of a share of Series C Participating Preferred Shares, such portion of a Series C Participating Preferred Share being designed to give the shareholder approximately the same
dividend, voting and liquidation rights as would one common share). Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.
|
|
• |
“Flip-in” Trigger. Upon public announcement by the Company that any person other than Mr. Panagiotidis or his controlled
affiliates (an “Acquiring Person”) has acquired 15% or more of our outstanding common shares:
|
(i) |
Rights owned by the Acquiring Person or transferees thereof would automatically be void; and
|
|
(ii) |
each other Right will automatically become a right to buy, for the Exercise Price, that number of common shares of the Company (or equivalent fractional shares of Series C Participating Preferred Shares) having a market value of twice
the Exercise Price.
|
|
• |
“Flip-over” Trigger. After an Acquiring Person has become such, (i) the Company may not consolidate or merge with any
person, if the Company’s Board is controlled by the Acquiring Person or the Acquiring Person is the beneficial owner of 50% or more of the outstanding shares of our common shares, and the transaction is with the Acquiring Person or its
affiliate or associate or the shares owned by the Acquiring Person are treated differently from those of other shareholders, and (ii) the Company may not sell 50% or more of its assets if the Company’s Board is controlled by the Acquiring
Person unless in either case proper provision is made so that each Right would thereafter become a right to buy, for the Exercise Price, that number of common shares of such other person having a market value of twice the Exercise Price.
|
|
• |
Redemption. The Rights may be redeemed by the Board, at any time until a “Flip-in” Trigger has occurred, at a redemption
price of $0.001 per Right.
|
|
• |
Power to Amend. Our Board may amend the Rights Agreement in any respect until a “Flip-in” Trigger has occurred. Thereafter, our Board may amend the Rights Agreement in any respect not materially adverse to Rights holders generally.
|
|
• |
Expiration. The Rights will expire on the tenth anniversary of the Distribution Date.
|
|
• |
authorizing our Board to issue “blank check” preferred shares without shareholder approval;
|
|
• |
providing for a classified Board with staggered, three-year terms for three classes of directors;
|
|
• |
establishing certain advance notice requirements for nominations for election to our Board or for proposing matters that can be acted on by shareholders at shareholder meetings;
|
|
• |
prohibiting cumulative voting in the election of directors;
|
|
• |
limiting the persons who may call special meetings of shareholders; and
|
|
• |
establishing supermajority voting provisions with respect to amendments to certain provisions of our Articles of Incorporation and Bylaws.
|
|
• |
the Board approved either the Business Combination or the transaction which resulted in the shareholder becoming an Interested Shareholder;
|
|
• |
upon consummation of the transaction which resulted in the shareholder becoming an Interested Shareholder, the Interested Shareholder owned at least 85% of the voting stock of the Company outstanding at the time the transaction
commenced, excluding for purposes of determining the number of voting stock outstanding those shares or equity interests owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants
do not have the right to determine confidentially whether shares or equity interests held subject to the plan will be tendered in a tender or exchange offer; or
|
|
• |
at or subsequent to such time, the Business Combination is approved by the Board and authorized at an annual or special meeting of shareholders, and not by written consent, by the affirmative vote of the holders of at least two-thirds of
the outstanding voting stock that is not owned by the Interested Shareholder.
|
|
• |
A shareholder becomes an Interested Shareholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient shares or equity interests so that the shareholder ceases to be an Interested Shareholder; and (ii)
would not, at any time within the three-year period immediately prior to a Business Combination between the Company and such shareholder, have been an Interested Shareholder but for the inadvertent acquisition of ownership; or
|
|
• |
The Business Combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement or the notice required hereunder of a proposed transaction which (i) constitutes one of the
transactions described in the following sentence; (ii) is with or by a person who either was not an Interested Shareholder during the previous three years or who became an Interested Shareholder with the approval of the Board; and (iii) is
approved or not opposed by a majority of the members of the Board then in office (but not less than one) who were directors prior to any person becoming an Interested Shareholder during the previous three years or were recommended for
election or elected to succeed such directors by a majority of such directors. The proposed transactions referred to in the preceding sentence are limited to:
|
|
o |
a merger or consolidation of the Company (except for a merger in respect of which, pursuant to the BCA, no vote of the shareholders of the Company is required);
|
|
o |
a sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), whether as part of a dissolution or otherwise, of assets of the Company or of any direct or indirect
majority-owned subsidiary of the Company (other than to any direct or indirect wholly-owned subsidiary or to the Company) having an aggregate market value equal to 50% or more of either the aggregate market value of all of the assets of the
Company determined on a consolidated basis or the aggregate market value of all the outstanding common shares of the Company; or
|
|
o |
a proposed tender or exchange offer for 50% or more of the outstanding common shares of the Company.
|
Marshall Islands
|
Delaware
|
||||
Shareholder Meetings
|
|||||
May be held at a time and place as designated in the bylaws.
|
May be held at such time or place as designated in the certificate of incorporation or the bylaws, or if not so designated, as determined by the board of directors.
|
||||
Notice:
|
Notice:
|
||||
Whenever shareholders are required to take any action at a meeting, written notice of the meeting shall be given which shall state the place, date and hour of the meeting and, unless it is an annual
meeting, indicate that it is being issued by or at the direction of the person calling the meeting. Notice of a special meeting shall also state the purpose for which the meeting is called.
|
Whenever shareholders are required to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, if any, date and hour of the meeting, and the means of remote
communication, if any.
|
||||
A copy of the notice of any meeting shall be given personally, sent by mail or by electronic mail not less than 15 nor more than 60 days before the meeting.
|
Written notice shall be given not less than 10 nor more than 60 days before the meeting.
|
||||
Shareholders’ Voting Rights
|
|||||
Unless otherwise provided in the articles of incorporation, any action required to be taken at a meeting of shareholders may be taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, is signed by all the shareholders entitled to vote with respect to the subject matter thereof, or if the articles of incorporation so provide, by the holders of outstanding shares having not
less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
|
Any action required to be taken at a meeting of shareholders may be taken without a meeting if a consent for such action is in writing and is signed by shareholders having not fewer than the minimum number
of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
|
Marshall Islands
|
Delaware
|
Merger or Consolidation
|
|||||
Any two or more domestic corporations may merge or consolidate into a single corporation if approved by the board of each constituent corporation and if authorized by a majority vote at a shareholder
meeting of each such corporation by the holders of outstanding shares.
Authorization by a majority vote of the holders of a class of shares may be required if such class is entitled to vote if a proposed amendment to the articles, undertaken in connection with such merger or
consolidation, would increase or decrease the aggregate number of authorized shares of such class, increase or decrease the par value of the shares of such class, or alter or change the powers, preferences or special rights of the shares
of such class so as to affect them adversely.
|
Any two or more corporations existing under the laws of the state may merge into a single corporation pursuant to a board resolution and upon the majority vote by shareholders of each constituent
corporation at an annual or special meeting.
Authorization by a majority vote of the holders of a class of shares may be required if such class is entitled to vote if a proposed amendment to the articles, undertaken in connection with such merger or
consolidation, would increase or decrease the aggregate number of authorized shares of such class, increase or decrease the par value of the shares of such class, or alter or change the powers, preferences, or special rights of the shares
of such class so as to affect them adversely.
However, unless expressly required by its certificate of incorporation, no vote of stockholders of a constituent corporation that has a class or series of stock that is listed on a national securities
exchange or held of record by more than 2,000 holders immediately prior to the execution of the agreement of merger by such constituent corporation shall be necessary to authorize a merger that meets certain conditions.
|
Marshall Islands
|
Delaware
|
Any sale, lease, exchange or other disposition of all or substantially all the assets of a corporation, if not made in the corporation’s usual or regular course of business, once approved by the board of
directors (and notice of the meeting shall be given to each shareholder of record, whether or not entitled to vote), shall be authorized by the affirmative vote of two-thirds of the shares of those entitled to vote at a shareholder
meeting, unless any class of shares is entitled to vote thereon as a class, in which event such authorization shall require the affirmative vote of the holders of a majority of the shares of each class of shares entitled to vote as a
class thereon and of the total shares entitled to vote thereon.
|
Every corporation may at any meeting of the board sell, lease or exchange all or substantially all of its property and assets as its board deems expedient and for the best interests of the corporation when
so authorized by a resolution adopted by the holders of a majority of the outstanding stock of the corporation entitled to vote.
|
||||
Upon approval by the board, any domestic corporation owning at least 90% of the outstanding shares of each class of another domestic corporation may merge such other corporation into itself without the
authorization of the shareholders of any such corporation.
|
Any corporation owning at least 90% of the outstanding shares of each class of another corporation may merge the other corporation into itself and assume all of its obligations without the vote or consent
of shareholders; however, in case the parent corporation is not the surviving corporation, the proposed merger shall be approved by a majority of the outstanding stock of the parent corporation entitled to vote at a duly called
shareholder meeting.
|
||||
Director
|
|||||
The number of directors may be fixed by the bylaws, by the shareholders, or by action of the board under the specific provisions of a bylaw. The number of board members may be changed by an amendment to the
bylaws, by the shareholders, or by action of the board under the specific provisions of a bylaw.
If the board is authorized to change the number of directors, it can only do so by a majority of the entire board and so long as no decrease in the number shall shorten the term of any incumbent director.
|
The number of board members shall be fixed by, or in a manner provided by, the bylaws and amended by an amendment to the bylaws, unless the certificate of incorporation fixes the number of directors, in
which case a change in the number shall be made only by an amendment to the certificate of incorporation.
Shareholders entitled to vote upon amendments to the bylaws hold the power to adopt, amend or repeal bylaws in a stock corporation that has received any payment for its stock, unless such power is otherwise
conferred upon the director’s in the certificate of incorporation. An amendment to the certification of incorporation must be approved by the board and a majority of outstanding stock entitled to vote thereon.
|
Marshall Islands
|
Delaware
|
Removal:
|
Removal:
|
||||
Any or all of the directors may be removed for cause by vote of the shareholders. The articles of incorporation or the bylaws may provide for such removal by board action, except in the case of any director
elected by cumulative voting, or by shareholders of any class or series when entitled by the provisions of the articles of incorporation.
|
Any or all of the directors may be removed, with or without cause, by the holders of a majority of the shares entitled to vote unless the certificate of incorporation otherwise provides.
|
||||
If the articles of incorporation or bylaws provide any or all of the directors may be removed without cause by vote of the shareholders.
|
In the case of a classified board, shareholders may effect removal of any or all directors only for cause unless the certificate of incorporation provides otherwise.
|
||||
Dissenters’ Rights of Appraisal
|
|||||
Shareholders have a right to dissent from any plan of merger, consolidation or sale of all or substantially all assets not made in the usual course of business, and receive payment of the fair value of
their shares. However, the right of a dissenting shareholder under the BCA to receive payment of the appraised fair value of his shares shall not be available for the shares of any class or series of stock, which shares or depository
receipts in respect thereof, at the record date fixed to determine the shareholders entitled to receive notice of and to vote at the meeting of the shareholders to act upon the agreement of merger or consolidation, were either (i) listed
on a securities exchange or admitted for trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. The right of a dissenting shareholder 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 shareholders of the surviving corporation.
|
Appraisal rights shall be available for the shares of any class or series of stock of a corporation in a merger or consolidation, subject to limited exceptions, such as a merger or consolidation of
corporations listed on a national securities exchange in which listed stock is offered for consideration which is (i) listed on a national securities exchange or (ii) held of record by more than 2,000 holders. Notwithstanding those
limited exceptions, appraisal rights will be available if shareholders are required by the terms of an agreement of merger or consolidation to accept certain forms of uncommon consideration.
|
Marshall Islands
|
Delaware
|
A holder of any adversely affected shares who does not vote on or consent in writing to an amendment to the articles of incorporation has the right to dissent and to receive payment for such shares if the
amendment:
• alters or abolishes any preferential right of any outstanding shares having preference; or
• creates, alters, or abolishes any provision or right in respect to the redemption of any outstanding shares; or
• alters or abolishes any preemptive right granted by law and not disseated by the articles of incorporation of such holder to acquire shares or other securities; or
• excludes or limits the right of such holder to vote on any matter, except as such right may be limited by the voting rights given to new shares then being
authorized of any existing or new class.
|
Shareholders do not have appraisal rights due to an amendment of the company’s certificate of incorporation unless provided for in such certificate.
|
Subsidiary
|
Jurisdiction of Incorporation
|
||
Colossus Shipping Co.
|
Marshall Islands
|
||
Cyborg Shipping Co.
|
Marshall Islands
|
||
Drax Shipping Co.
|
Marshall Islands
|
||
Elektra Shipping Co.
|
Marshall Islands
|
||
Gamora Shipping Co.
|
Marshall Islands
|
||
Hawkeye Shipping Co.
|
Marshall Islands
|
||
Nightwing Shipping Co.
|
Marshall Islands
|
||
Rocket Shipping Co.
|
Marshall Islands
|
||
Starfire Shipping Co.
|
Marshall Islands
|
||
Starlord Shipping Co.
|
Marshall Islands
|
||
Toro RBX Corp.
|
Marshall Islands
|
||
Vision Shipping Co.
|
Marshall Islands
|
||
Xavier Shipping Co.
|
Marshall Islands
|
||
Zatanna Shipping Co.
|
Marshall Islands
|
(1) |
I have reviewed this annual report on Form 20-F of Toro Corp.;
|
(2) |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
(3) |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the
company as of, and for, the periods presented in this report;
|
(4) |
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
|
(d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
(5) |
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s
board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and
report financial information; and
|
|
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Date: March 12, 2024
|
By:
|
/s/ Petros Panagiotidis
|
Name:
|
Petros Panagiotidis
|
|
Title:
|
Chairman and Chief Executive Officer
|
(1) |
I have reviewed this annual report on Form 20-F of Toro Corp.;
|
(2) |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
(3) |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the
company as of, and for, the periods presented in this report;
|
(4) |
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
|
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
|
(c) |
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
|
(d) | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
(5) |
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s
board of directors (or persons performing the equivalent functions):
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(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
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(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Date: March 12, 2024
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By:
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/s/ Ioannis Lazaridis
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Name:
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Ioannis Lazaridis
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Title:
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Chief Financial Officer
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1. |
the Annual Report on Form 20-F for the year ended December 31, 2023 (the “Form 20-F”) of the Company fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the
Securities Exchange Act of 1934; and
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2. |
the information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: March 12, 2024
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By:
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/s/ Petros Panagiotidis
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Name:
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Petros Panagiotidis
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Title:
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Chairman and Chief Executive Officer
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1. |
the Annual Report on Form 20-F for the year ended December 31, 2023 (the “Form 20-F”) of the Company fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the
Securities Exchange Act of 1934; and
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2. |
the information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: March 12, 2024
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By:
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/s/ Ioannis Lazaridis
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Name:
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Ioannis Lazaridis
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Title:
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Chief Financial Officer
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I. |
BACKGROUND
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II. |
STATEMENT OF POLICY
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III. |
SCOPE OF POLICY
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• |
after beginning service as an Executive Officer,
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• |
who served as an Executive Officer at any time during the performance period for that Incentive-Based Compensation,
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• |
while the Company has a class of securities listed on Nasdaq, and
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• |
during the three completed fiscal years immediately preceding the date that the Company is required to prepare a Restatement (the “Recovery
Period”).
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• |
the date the board of directors of the Company (the “Board”), a committee of the Board, or the officer or officers of
the Company authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare a Restatement, and
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• |
the date a court, regulator, or other legally authorized body directs the Company to prepare a Restatement.
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IV. |
AMOUNT SUBJECT TO RECOVERY
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V. |
EXCEPTIONS
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VI. |
PROHIBITION AGAINST INDEMNIFICATION
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VII. |
DISCLOSURE
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VIII. |
DEFINITIONS
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X.
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EFFECTIVENESS
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