☐ |
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
|
OR
|
|
☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year
ended
December 31, 2016
|
|
OR
|
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _________________________
to __________________________________________
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OR
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☐ |
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Date of event requiring this shell company report
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|
Commission file
number 001-33283
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|
EUROSEAS LTD.
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(Exact name of Registrant as specified in its charter)
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(Translation of Registrant's name into English)
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Marshall Islands
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(Jurisdiction of incorporation or organization)
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4 Messogiou & Evropis Street, 151 24 Maroussi Greece
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(Address of principal executive offices)
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Tasos Aslidis, Tel: (908) 301-9091,
euroseas@euroseas.gr
, Euroseas Ltd. c/o Tasos Aslidis,
11 Canterbury Lane, Watchung, NJ 07069
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(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one)
|
||
Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
☒U.S. GAAP
International Financial Reporting Standards as issued by the International Accounting Standards Board.
☐Other
If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow
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||
☐ Item 17 ☐ Item 18
|
||
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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||
☐ Yes ☒ No
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||
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
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||
Indicate by check mark whether the registrant has filed all documents and reports to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
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||
☐ Yes ☐ No
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||
Forward-Looking Statements
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1
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|
Part I
|
||
Item 1.
|
Identity of Directors, Senior Management and Advisers
|
2
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Item 2.
|
Offer Statistics and Expected Timetable
|
2
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Item 3.
|
Key Information
|
2
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Item 4.
|
Information on the Company
|
40
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Item 4A.
|
Unresolved Staff Comments
|
60
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Item 5.
|
Operating and Financial Review and Prospects
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60
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Item 6.
|
Directors, Senior Management and Employees
|
75
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Item 7.
|
Major Shareholders and Related Party Transactions
|
81
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Item 8.
|
Financial Information
|
85
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Item 9.
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The Offer and Listing
|
86
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Item 10.
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Additional Information
|
87
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Item 11.
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Quantitative and Qualitative Disclosures About Market Risk
|
101
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Item 12.
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Description of Securities Other than Equity Securities
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102
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Part II
|
||
Item 13.
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Defaults, Dividend Arrearages and Delinquencies
|
102
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Item 14.
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Material Modifications to the Rights of Security Holders and Use of Proceeds
|
102
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Item 15.
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Controls and Procedures
|
103
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Item 16A.
|
Audit Committee Financial Expert
|
104
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Item 16B.
|
Code of Ethics
|
104
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Item 16C.
|
Principal Accountant Fees and Services
|
104
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Item 16D.
|
Exemptions from the Listing Standards for Audit Committees
|
105
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Item 16E.
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Purchases of Equity Securities by the Issuer and Affiliated Purchasers
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105
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Item 16F.
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Change in Registrant's Certifying Accountant
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105
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Item 16G.
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Corporate Governance
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105
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Item 16H.
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Mine Safety Disclosure
|
105
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Part III
|
||
Item 17.
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Financial Statements
|
105
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Item 18.
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Financial Statements
|
105
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Item 19.
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Exhibits
|
106
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· |
our future operating or financial results;
|
· |
future, pending or recent acquisitions, joint ventures, business strategy, areas of possible expansion, and expected capital spending or operating expenses;
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· |
drybulk and container shipping industry trends, including charter rates and factors affecting vessel supply and demand;
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· |
our financial condition and liquidity, including our ability to obtain additional financing in the future to fund capital expenditures, acquisitions and other general corporate activities;
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· |
availability of crew, number of off-hire days, drydocking requirements and insurance costs;
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· |
our expectations about the availability of vessels to purchase or the useful lives of our vessels;
|
· |
our expectations relating to dividend payments and our ability to make such payments;
|
· |
our ability to leverage to our advantage our manager's relationships and reputations in the drybulk and container shipping industry;
|
· |
changes in seaborne and other transportation patterns;
|
· |
changes in governmental rules and regulations or actions taken by regulatory authorities;
|
· |
potential liability from future litigation;
|
· |
global and regional political conditions;
|
· |
acts of terrorism and other hostilities, including piracy; and
|
· |
other factors discussed in the section titled "Risk Factors."
|
Item 1. |
Identity of Directors, Senior Management and Advisers
|
Item 2. |
Offer Statistics and Expected Timetable
|
Item 3. |
Key Information
|
A. |
Selected Financial Data
|
Euroseas Ltd. – Summary of Selected Historical Financials
(in US Dollars except for Fleet Data and number of shares)
|
||||||||||||||||||||
Year Ended December 31,
|
||||||||||||||||||||
2012
|
2013
|
2014
|
2015
|
2016
|
||||||||||||||||
Statement of Operations Data
|
||||||||||||||||||||
Voyage revenue
|
54,921,697
|
40,850,051
|
42,586,963
|
39,656,670
|
29,789,036
|
|||||||||||||||
Related party revenue
|
240,000
|
240,000
|
240,000
|
240,000
|
240,000
|
|||||||||||||||
Commissions
|
(2,673,703
|
)
|
(1,936,381
|
)
|
(2,192,626
|
)
|
(2,216,836
|
)
|
(1,604,747
|
)
|
||||||||||
Net revenue
|
52,487,994
|
39,153,670
|
40,634,337
|
37,679,834
|
28,424,289
|
|||||||||||||||
Voyage expenses
|
(1,329,668
|
)
|
(1,537,898
|
)
|
(3,963,181
|
)
|
(2,312,513
|
)
|
(1,291,712
|
)
|
||||||||||
Vessel operating expenses
|
(25,075,139
|
)
|
(25,191,250
|
)
|
(25,279,087
|
)
|
(25,204,593
|
)
|
(18,161,862
|
)
|
||||||||||
Dry-docking expenses
|
(1,616,425
|
)
|
(3,816,699
|
)
|
(1,975,590
|
)
|
(1,912,407
|
)
|
(2,204,784
|
)
|
||||||||||
Vessel depreciation
|
(17,385,608
|
)
|
(19,983,772
|
)
|
(12,137,445
|
)
|
(10,995,023
|
)
|
(8,788,121
|
)
|
||||||||||
Related party management fees
|
(4,984,098
|
)
|
(4,891,024
|
)
|
(4,894,559
|
)
|
(4,151,335
|
)
|
(3,179,596
|
)
|
||||||||||
Loss on termination and impairment of newbuilding contracts
|
-
|
-
|
-
|
-
|
(7,050,179
|
)
|
||||||||||||||
Other general and administrative expenses
|
(3,661,426
|
)
|
(3,542,619
|
)
|
(3,514,636
|
)
|
(3,327,061
|
)
|
(3,472,422
|
)
|
||||||||||
Impairment loss and loss on write-down of vessel held for sale
|
-
|
(78,207,462
|
)
|
(3,500,000
|
)
|
(1,641,885
|
)
|
(5,924,668
|
)
|
|||||||||||
Net (loss) / gain on sale of vessels
|
(8,568,234
|
)
|
(1,935,019
|
)
|
-
|
461,586
|
10,597
|
|||||||||||||
Other operating income
|
254,604
|
-
|
-
|
-
|
-
|
|||||||||||||||
Operating loss
|
(9,878,000
|
)
|
(99,952,073
|
)
|
(14,630,161
|
)
|
(11,403,397
|
)
|
(21,638,458
|
)
|
||||||||||
Interest and other financing costs
|
(1,977,226
|
)
|
(1,845,776
|
)
|
(2,152,187
|
)
|
(1,486,534
|
)
|
(2,531,999
|
)
|
||||||||||
Impairment of other investment
|
-
|
-
|
-
|
-
|
(4,421,452
|
)
|
||||||||||||||
Interest income
|
484,886
|
387,292
|
422,240
|
26,656
|
22,330
|
|||||||||||||||
Equity loss in joint venture
|
(1,219,692
|
)
|
(2,023,191
|
)
|
(2,541,775
|
)
|
(2,158,393
|
)
|
(2,444,627
|
)
|
||||||||||
Impairment in joint venture
|
-
|
-
|
-
|
-
|
(14,071,075
|
)
|
||||||||||||||
Other (loss) / income
|
(608,709
|
)
|
8,921
|
982,978
|
973,685
|
864,158
|
||||||||||||||
Dividends to Series B preferred shares
|
-
|
-
|
(1,440,100
|
)
|
(1,639,149
|
)
|
(1,725,699
|
)
|
||||||||||||
Net loss attributable to common shareholders
|
(13,198,741
|
)
|
(103,424,827
|
)
|
(19,359,005
|
)
|
(15,687,132
|
)
|
(45,946,822
|
)
|
||||||||||
Loss per share, basic and diluted
|
(3.42
|
)
|
(22.76
|
)
|
(3.53
|
)
|
(2.45
|
)
|
(5.63
|
)
|
||||||||||
Common stock dividends declared
|
4,437,984
|
2,067,570
|
-
|
-
|
-
|
|||||||||||||||
Cash dividends declared per common share
|
0.98
|
0.45
|
-
|
-
|
-
|
|||||||||||||||
Preferred stock dividends declared
|
-
|
-
|
1,440,100
|
1,639,149
|
1,725,699
|
|||||||||||||||
Preferred dividends declared per preferred share
|
-
|
-
|
44.81
|
48.53
|
48.60
|
|||||||||||||||
Weighted average number of shares outstanding during period, basic and diluted
|
3,895,010
|
4,544,284
|
5,479,418
|
6,410,794
|
8,165,703
|
Euroseas Ltd. – Summary of Selected Historical Financials (continued)
|
As of December 31,
|
||||||||||||||||||||
Balance Sheet Data
|
2012
|
2013
|
2014
|
2015
|
2016
|
|||||||||||||||
Current assets
|
45,070,412
|
16,951,998
|
30,847,380
|
21,584,299
|
10,444,083
|
|||||||||||||||
Vessels, net
|
206,934,746
|
105,463,737
|
111,150,227
|
88,957,752
|
105,584,633
|
|||||||||||||||
Deferred assets and other long term assets
|
9,000,000
|
7,565,677
|
7,700,000
|
4,968,034
|
5,911,051
|
|||||||||||||||
Investment in joint venture
|
16,989,061
|
21,215,870
|
18,674,094
|
16,515,701
|
-
|
|||||||||||||||
Total assets
|
277,994,219
|
156,443,600
|
190,242,991
|
172,124,391
|
133,249,421
|
|||||||||||||||
Current liabilities including current portion of long term debt
(1)
|
22,190,164
|
18,731,659
|
25,011,124
|
19,241,147
|
11,174,635
|
|||||||||||||||
Long term debt, including current portion
|
61,262,422
|
45,471,246
|
53,921,379
|
40,238,468
|
49,916,194
|
|||||||||||||||
Total liabilities
|
68,368,073
|
51,741,518
|
59,600,387
|
44,996,549
|
55,781,792
|
|||||||||||||||
Preferred shares
|
-
|
-
|
30,440,100
|
32,079,249
|
33,804,948
|
|||||||||||||||
Common shares outstanding
|
4,531,960
|
4,572,325
|
5,715,731
|
8,195,760
|
10,876,112
|
|||||||||||||||
Share capital
|
135,958
|
137,169
|
171,472
|
245,873
|
326,283
|
|||||||||||||||
Total shareholders' equity
|
209,626,146
|
104,702,082
|
100,202,504
|
95,048,593
|
54,106,764
|
|||||||||||||||
Cash Flow Data
|
Year Ended December 31,
|
|||||||||||||||||||
2012
|
2013
|
2014
|
2015
|
2016
|
||||||||||||||||
Net cash provided by / (used in) operating activities
|
8,513,106
|
4,031,889
|
(730,277
|
)
|
(2,027,572
|
)
|
(832,238
|
)
|
||||||||||||
Net cash used in investing activities
|
(3,505,057
|
)
|
(7,879,468
|
)
|
(37,092,981
|
)
|
(10,633,989
|
)
|
(18,806,820
|
)
|
||||||||||
Net cash (used in) / provided by financing activities
|
(2,837,952
|
)
|
(18,127,144
|
)
|
51,834,441
|
(4,034,223
|
)
|
14,131,514
|
Euroseas Ltd. – Summary of Selected Historical Financials (continued) | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
Fleet Data
(2)
|
2012
|
2013
|
2014
|
2015
|
2016
|
|||||||||||||||
Number of vessels
|
15.21
|
14.56
|
14.60
|
14.74
|
11.52
|
|||||||||||||||
Calendar days
|
5,566
|
5,313
|
5,330
|
5,380
|
4,218
|
|||||||||||||||
Available days
|
5,521
|
5,185
|
5,245
|
5,290
|
4,071
|
|||||||||||||||
Voyage days
|
5,280
|
4,961
|
5,126
|
4,933
|
3,887
|
|||||||||||||||
Utilization Rate (percent)
|
95.6
|
%
|
95.7
|
%
|
97.7
|
%
|
93.3
|
%
|
95.5
|
%
|
||||||||||
(In U.S. dollars per day per vessel)
|
||||||||||||||||||||
Average TCE rate
(3)
|
10,155
|
7,924
|
7,534
|
7,570
|
7,331
|
|||||||||||||||
Vessel Operating Expenses
|
4,507
|
4,741
|
4,740
|
4,685
|
4,306
|
|||||||||||||||
Management Fees
|
895
|
921
|
919
|
772
|
754
|
|||||||||||||||
G&A Expenses
|
657
|
639
|
663
|
615
|
823
|
|||||||||||||||
Total Operating Expenses excluding drydocking expenses
|
6,058
|
6,301
|
6,322
|
6,072
|
5,883
|
|||||||||||||||
Drydocking expenses
|
290
|
718
|
372
|
355
|
523
|
Year Ended December 31, | ||||||||||||||||||||
2012
|
2013
|
2014
|
2015
|
2016
|
||||||||||||||||
(In U.S. dollars, except for voyage days and TCE rates which are expressed in U.S. dollars per day)
|
||||||||||||||||||||
Voyage revenues
|
54,921,697
|
40,850,051
|
42,586,963
|
39,656,670
|
29,789,036
|
|||||||||||||||
Voyage expenses
|
(1,329,668
|
)
|
(1,537,898
|
)
|
(3,963,181
|
)
|
(2,312,513
|
)
|
(1,291,712
|
)
|
||||||||||
Time Charter Equivalent or TCE Revenues
|
53,592,029
|
39,312,153
|
38,623,782
|
37,344,157
|
28,497,324
|
|||||||||||||||
Voyage days
|
5,280
|
4,961
|
5,126
|
4,933
|
3,887
|
|||||||||||||||
Average TCE rate
|
10,155
|
7,924
|
7,534
|
7,570
|
7,331
|
B. |
Capitalization and Indebtedness
|
C. |
Reasons for the Offer and Use of Proceeds
|
D. |
Risk Factors
|
· |
supply of, and demand for, drybulk commodities and containerized cargo;
|
· |
changes in the exploration or production of energy resources, commodities, semi-finished and finished consumer and industrial products, and the resulting changes in the international pattern of trade;
|
· |
global and regional economic and political conditions, including armed conflicts and terrorist activities;
|
· |
embargoes and strikes;
|
· |
the location of regional and global exploration, production and manufacturing facilities;
|
· |
availability of credit to finance international trade;
|
· |
the location of consuming regions for energy resources, commodities, semi-finished and finished consumer and industrial products;
|
· |
the distance drybulk and containerized commodities are to be moved by sea;
|
· |
environmental and other regulatory developments;
|
· |
currency exchange rates;
|
· |
changes in global production and manufacturing distribution patterns of finished goods that utilize drybulk and other containerized commodities;
|
· |
changes in seaborne and other transportation patterns; and
|
· |
weather and other natural phenomena.
|
· |
the number of newbuilding deliveries;
|
· |
the scrapping rate of older vessels;
|
· |
the price of steel and other materials;
|
· |
port and canal congestion;
|
· |
changes in environmental and other regulations that may limit the useful life of vessels;
|
· |
vessel casualties;
|
· |
the number of vessels that are out of service; and
|
· |
changes in global commodity production.
|
· |
general economic and market conditions affecting the shipping industry in general;
|
· |
supply of drybulk and container vessels, including newbuildings;
|
· |
demand for drybulk and container vessels;
|
· |
types and sizes of vessels;
|
· |
scrap values;
|
· |
other modes of transportation;
|
· |
cost of newbuildings;
|
· |
technological advances;
|
· |
new regulatory requirements from governments or self-regulated organizations;
|
· |
competition from other shipping companies; and
|
· |
prevailing level of charter rates.
|
· |
locating and acquiring suitable vessels;
|
· |
identifying and consummating acquisitions or joint ventures;
|
· |
integrating any acquired business successfully with our existing operations;
|
· |
enhancing our customer base;
|
· |
managing our expansion; and
|
· |
obtaining required financing on acceptable terms.
|
· |
incur additional indebtedness;
|
· |
create liens on our assets;
|
· |
sell capital stock of our subsidiaries;
|
· |
make investments;
|
· |
engage in mergers or acquisitions;
|
· |
pay dividends;
|
· |
make capital expenditures;
|
· |
change the management of our vessels or terminate or materially amend the management agreement relating to each vessel; and
|
· |
sell our vessels.
|
· |
work stoppages or other hostilities, political or economic disturbances that disrupt the operations of the shipyard;
|
· |
quality or engineering problems;
|
· |
bankruptcy or other financial crisis of the shipyard;
|
· |
a backlog of orders at the shipyard;
|
· |
disputes between us and the shipyard regarding contractual obligations;
|
· |
weather interference or catastrophic events, such as major earthquakes or fires;
|
· |
our requests for changes to the original vessel specifications or disputes with the shipyard; or
|
· |
shortages of or delays in the receipt of necessary construction materials, such as steel, or equipment, such as main engines, electricity generators and propellers.
|
· |
marine disaster;
|
· |
piracy;
|
· |
environmental accidents;
|
· |
grounding, fire, explosions and collisions;
|
· |
cargo and property losses or damage;
|
· |
business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions; and
|
· |
work stoppages or other labor problems with crew members serving on our vessels including crew strikes and/or boycotts.
|
· |
actual or anticipated fluctuations in quarterly and annual variations in our results of operations;
|
· |
changes in market valuations or sales or earnings estimates or publication of research reports by analysts;
|
· |
changes in earnings estimates or shortfalls in our operating results from levels forecasted by securities analysts;
|
· |
speculation in the press or investment community about our business or the shipping industry;
|
· |
changes in market valuations of similar companies and stock market price and volume fluctuations generally;
|
· |
payment of dividends;
|
· |
strategic actions by us or our competitors such as mergers, acquisitions, joint ventures, strategic alliances or restructurings;
|
· |
changes in government and other regulatory developments;
|
· |
additions or departures of key personnel;
|
· |
general market conditions and the state of the securities markets; and
|
· |
domestic and international economic, market and currency factors unrelated to our performance.
|
Item 4. |
Information on the Company
|
A. |
History and Development of the Company
|
B. |
Business Overview
|
Name
|
Type
|
Dwt
|
TEU
|
Year Built
|
Employment (*)
|
TCE Rate ($/day)
|
Dry Bulk Vessels
|
||||||
XENIA
|
Kamsarmax
|
82,000
|
2016
|
TC until Jan-20 +1 year in charterer's option
|
$14,100 Option @ $14,350
|
|
EIRINI P
|
Panamax
|
76,466
|
2004
|
TC until Jan-18
|
Hire 104% of Average BPI 4TC
(1)
|
|
PANTELIS
|
Panamax
|
74,020
|
2000
|
TC until Jun-17
|
$8,850
|
|
TASOS
|
Panamax
|
75,100
|
2000
|
TC until Apr-17
|
$6,950
|
|
MONICA P
|
Handymax
|
46,667
|
1998
|
TC until Apr-17
|
$4,500
|
|
ALEXANDROS P
|
Ultramax
|
63,500
|
2017
|
TC until Aug-17
|
114% of BSI
(2)
|
|
Hull No YZJ 1153
|
Ultramax
|
82,000
|
2018(**)
|
-
|
-
|
|
Total Dry Bulk Vessels
|
7
|
499,753
|
||||
Container Carriers
|
||||||
EVRIDIKI G (ex-MAERSK NOUMEA)
|
Feeder
|
34,677
|
2,556
|
2001
|
TC until Jan-18
|
$11,000
|
AGGELIKI P
|
Feeder
|
30,360
|
2,008
|
1998
|
TC until Aug-17
|
$6,000
|
JOANNA
|
Feeder
|
22,301
|
1,732
|
1999
|
TC until Jul-17
|
$6,450
|
MANOLIS P
|
Feeder
|
20,346
|
1,452
|
1995
|
TC until Sep-17
|
$6,000
|
AEGEAN EXPRESS
|
Feeder
|
18,581
|
1,439
|
1997
|
TC until Jul-17
|
$6,500
|
NINOS
|
Feeder
|
18,253
|
1,169
|
1990
|
TC until Apr-17
|
$7,000
|
KUO HSIUNG
|
Feeder
|
18,154
|
1,169
|
1993
|
TC until May-17
|
$7,000
|
Total Container Carriers
|
7
|
162,672
|
11,525
|
|||
Fleet Grand Total
|
14
|
662,425
|
11,525
|
(*) |
TC denotes time charter. All dates listed are the earliest redelivery dates under each TC.
|
(**) |
For newbuilding contracts, the information represents the expected year of delivery.
|
(1) |
Denotes the Baltic Panamax Index
|
(2) |
Denotes the Baltic Supramax Index
|
· |
reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values;
|
· |
news and industry reports of similar vessel sales;
|
· |
news and industry reports of sales of vessels that are not similar to our vessels where we have made certain adjustments in an attempt to derive information that can be used as part of our estimates;
|
· |
approximate market values for our vessels or similar vessels that we have received from shipbrokers, whether solicited or unsolicited, or that shipbrokers have generally disseminated;
|
· |
offers that we may have received from potential purchasers of our vessels; and
|
· |
vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various other shipping industry participants and observers.
|
Name
|
Capacity
|
Purchase Date
|
Carrying Value as of December 31, 2015
|
Carrying Value as of December 31,
2016
|
|||||||||
Dry Bulk Vessels
|
(dwt)
|
(million USD)
|
(million USD)
|
||||||||||
PANTELIS
|
74,020
|
Jul-2009
|
$
|
17.1
|
(1)
|
$
|
15.48
|
(2)
|
|||||
EIRINI P
|
76,466
|
May-2014
|
$
|
19.33
|
(1)
|
$
|
18.09
|
(2)
|
|||||
MONICA P
|
46,667
|
Jan-2009
|
$
|
10.22
|
(1)
|
$
|
9.08
|
(2)
|
|||||
XENIA
|
82,000
|
Feb-2016
|
-
|
$
|
30.87
|
(2)
|
|||||||
Total Dry Bulk Vessels
|
279,153
|
$
|
46.65
|
$
|
73.52
|
||||||||
Container Carriers
|
(teu)
|
||||||||||||
EVRIDIKI
|
2,556
|
May-2008
|
$
|
11.35
|
$
|
10.53
|
(2)
|
||||||
AGGELIKI P
|
2,008
|
Jun-2010
|
$
|
6.37
|
(1)
|
$
|
5.81
|
(2)
|
|||||
MANOLIS P
|
1,452
|
Apr-2007
|
$
|
3.1
|
$
|
2.77
|
(2)
|
||||||
NINOS
|
1,169
|
Feb-2001
|
$
|
1.51
|
$
|
1.51
|
|||||||
JOANNA
|
1,732
|
Jul-2013
|
$
|
5.01
|
$
|
4.61
|
(2)
|
||||||
KUO HSIUNG
|
1,169
|
May-2002
|
$
|
2.21
|
$
|
1.95
|
|||||||
RT DAGR
|
1,645
|
Dec-2016
|
-
|
$
|
1.80
|
||||||||
AEGEAN EXPRESS
|
1,439
|
Sep-2016
|
-
|
$
|
3.08
|
(2)
|
|||||||
Total Container Carriers
|
13,170
|
$
|
29.55
|
$
|
32.06
|
||||||||
Fleet Total
|
$
|
76.2
|
$
|
105.58
|
· |
Experienced Management Team
. Our management team has significant experience in all aspects of commercial, technical, operational and financial areas of our business. Aristides J. Pittas, our Chairman and Chief Executive Officer, holds a dual graduate degree in Naval Architecture and Marine Engineering and Ocean Systems Management from the Massachusetts Institute of Technology. He has worked in various technical, shipyard and ship management capacities and since 1991 has focused on the ownership and operation of vessels carrying dry cargoes. Dr. Anastasios Aslidis, our Chief Financial Officer, holds a Ph.D. in Ocean Systems Management also from Massachusetts Institute of Technology and has over 20 years of experience, primarily as a partner at a Boston based international consulting firm focusing on investment and risk management in the maritime industry.
|
· |
Cost Efficient Vessel Operations
. We believe that because of the efficiencies afforded to us through Eurobulk, the strength of our management team and the quality of our fleet, we are, and will continue to be, a reliable, low cost vessel operator, without compromising our high standards of performance, reliability and safety. Despite the average age of our fleet being approximately 16.15 years on March 31, 2017 during 2016, our total vessel operating expenses, including management fees and general and administrative expenses but excluding drydocking expenses were $5,883 per day for the year ended December 31, 2016. We consider this amount to be among the lowest of the publicly listed drybulk or containerships shipping companies in the United States. Our technical and operating expertise allows us to efficiently manage and transport a wide range of cargoes with a flexible trade route profile, which helps reduce ballast time between voyages and minimize off-hire days. Our professional, well-trained masters, officers and on board crews further help us to control costs and ensure consistent vessel operating performance. We actively manage our fleet and strive to maximize utilization and minimize maintenance expenditures for operational and commercial utilization. For the year ended December 31, 2016, our operational fleet utilization was 99.8%, up from 99.4% in 2015, while our commercial utilization rate increased from 93.9% in 2015 to 95.7% in 2016. Our total fleet utilization rate in 2016 was 95.5%.
|
· |
Strong Relationships with Customers and Financial Institutions
. We believe ourselves, Eurobulk, Eurobulk FE and the Pittas family to have developed strong industry relationships and to have gained acceptance with charterers, lenders and insurers because of long-standing reputation for safe and reliable service and financial responsibility through various shipping cycles. Through Eurobulk and Eurobulk FE, we offer reliable service and cargo carrying flexibility that enables us to attract customers and obtain repeat business. We also believe that the established customer base and reputation of ourselves, Eurobulk, Eurobulk FE and the Pittas family help us to secure favorable employment for our vessels with well-known charterers.
|
· |
Renew and Expand our Fleet
. We expect to grow our fleet in a disciplined manner through timely and selective acquisitions of quality vessels. We perform in-depth technical review and financial analysis of each potential acquisition and only purchase vessels as market opportunities present themselves. We focus on purchasing well-maintained secondhand vessels, newbuildings or newbuilding resales based on the evaluation of each investment option at the time it is made.
During 2014, we ordered or acquired the contracts of four drybulk carrier newbuildings and acquired one secondhand drybulk carrier. During 2015 we sold three of our containerships. Within 2016 we took delivery of one newbuilding drybulk carrier and acquired another two secondhand containerships.
In January 2017, we took delivery of one secondhand and one newbuilding drybulk carrier and sold one drybulk carrier and one containership. In addition, in March 2017, we signed an addendum to our newbuilding contract with Jiangsu Tianyuan Marine Import & Export Co., Ltd., and Jiangsu Yangzijiang Shipbuilding Co., Ltd. and Jiangsu New Yangzi Shipbuilding Co., Ltd. to proceed with the construction of an 82,000 DWT bulk carrier.
|
· |
Maintain Balanced Employment
. We intend to employ our fleet on either longer term time charters, i.e. charters with duration of more than a year, or shorter term time/spot charters. We seek longer term time charter employment to obtain adequate cash flow to cover as much as possible of our fleet's recurring costs, consisting of vessel operating expenses, management fees, general and administrative expenses, interest expense and drydocking costs for the upcoming 12-month period. We also may use forward freight agreements ("FFA" or "FFAs") – as a substitute for time charter employment – to partly provide coverage for our drybulk vessels in order to increase the predictability of our revenues. We look to deploy the remainder of our fleet on spot charters, shipping pools or contracts of affreightment depending on our view of the direction of the markets and other tactical or strategic considerations. When we expect charter rates to improve we try to increase the percentage of our fleet employed in shorter term contracts (allowing us to take advantage of higher rates in the future), while when we expect the market to weaken we try to increase the percentage of our fleet employed in longer term contracts (allowing us to take advantage of higher current rates). We believe this balanced employment strategy will provide us with more predictable operating cash flows and sufficient downside protection, while allowing us to participate in the potential upside of the spot market during periods of rising charter rates. As of March 31, 2017, on the basis of our existing time charters, approximately 53% of our vessel capacity in the remainder of 2017 and approximately 8% in 2018 are under time charter contracts, which will ensure employment of a portion of our fleet, partly protect us from market fluctuations and increase our ability us to make principal and interest payments on our debt and pay dividends to our shareholders.
|
· |
Operate a Fleet in Two Sectors
. While remaining focused on the dry cargo segment of the shipping industry, we intend to continue to develop a diversified fleet of drybulk carriers and containerships of up to Kamsarmax size vessels. A diversified drybulk fleet profile will allow us to better serve our customers in both major and minor drybulk trades, and to reduce any dependency on any one cargo, trade route or customer. We will remain focused on the smaller size ship segment of the container market, which has not experienced the same level of expansion in vessel supply as has occurred with larger containerships. A diversified fleet, in addition to enhancing the stability of our cash flows, will also help us to reduce our exposure to unfavorable developments in any one shipping sector and to benefit from upswings in any one shipping sector experiencing rising charter rates.
|
· |
Optimize Use of Financial Leverage
. We intend to use bank debt to partly fund our vessel acquisitions and increase financial returns for our shareholders. We actively assess the level of debt we incur in light of our ability to repay that debt based on the level of cash flow generated from our balanced chartering strategy and efficient operating cost structure. Our debt repayment schedule as of December 31, 2016 calls for a reduction of more than 42% of our debt by the end of 2018 and an additional reduction of about 38% by the end of 2019 for a total of 80% reduction over the next two years, excluding any new debt that we assumed or may assume. As our debt is being repaid we expect that our ability to raise or borrow additional funds more cheaply in order to grow our fleet and generate better returns for our shareholders will increase.
|
(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) |
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;
|
(iv) |
loss of subsistence use of natural resources that are injured, destroyed or lost;
|
(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.
|
· |
on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status;
|
· |
on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore;
|
· |
the development of vessel security plans;
|
· |
ship identification number to be permanently marked on a vessel's hull;
|
· |
a continuous synopsis record kept onboard showing a vessel's history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and
|
· |
compliance with flag state security certification requirements.
|
Vessel
|
Next
|
Type
|
||
JOANNA
|
September 2017
|
Drydocking
|
||
EIRINI P
|
June 2017
|
Drydocking
|
||
TASOS
|
January 2018
|
Drydocking
|
||
AEGEAN EXPRESS
|
October 2017
|
Special Survey
|
||
AGGELIKI P.
|
October 2017
|
Special Survey
|
||
PANTELIS
|
February 2018
|
Drydocking
|
||
MANOLIS P
|
July 2018
|
Drydocking
|
||
EVRIDIKI
|
May 2019
|
Drydocking
|
||
MONICA P
|
April 2018
|
Special Survey
|
||
NINOS.
|
July 2018
|
Drydocking
|
||
KUO HSIUNG
|
November 2019
|
Drydocking
|
||
XENIA
|
February 2021
|
Special Survey
|
||
ALEXANDROS P
|
January 2022
|
Special Survey
|
C. |
Organizational structure
|
D. |
Property, plants and equipment
|
Item 5. |
Operating and Financial Review and Prospects
|
A. |
Operating results
|
Vessel
|
Charter Rate as of 12/31/2016
|
Remaining
Months Chartered
|
Remaining Life (years)
|
Rate Year 1 (2017)
|
Rate Year 2 (2018)
|
Rate Year 3+ (2019+)
|
Breakeven Rate (USD/day)
|
|||||||||||||||||||||
Joanna*
|
-
|
3
|
7.5
|
6,243
|
6,243
|
11,382
|
7,723
|
|||||||||||||||||||||
Aggeliki
|
6,000
|
7
|
6.5
|
6,438
|
6,438
|
12,088
|
8,736
|
|||||||||||||||||||||
Manolis P
|
6,800
|
2
|
3.5
|
5,717
|
5,717
|
10,423
|
6,821
|
|||||||||||||||||||||
Monica P
|
11,400
|
1
|
6.5
|
6,638
|
6,638
|
16,868
|
10,297
|
|||||||||||||||||||||
Eirini P**
|
0
|
0
|
12.5
|
8,691
|
8,691
|
21,603
|
11,304
|
|||||||||||||||||||||
Xenia
|
14,100
|
36
|
24.5
|
8,774
|
8,774
|
21,811
|
9,244
|
|||||||||||||||||||||
Pantelis
|
5,850
|
1.5
|
8.5
|
8,440
|
8,440
|
20,980
|
11,975
|
|||||||||||||||||||||
Evridiki
|
11,000
|
13
|
9.5
|
6,845
|
6,845
|
15,285
|
9,403
|
|||||||||||||||||||||
Aegean Express
|
6,300
|
2
|
5.5
|
5,687
|
5,687
|
10,368
|
7,324
|
B. |
Liquidity and Capital Resources
|
C. |
Research and development, patents and licenses, etc.
|
D. |
Trend information
|
E. |
Off-balance Sheet Arrangements
|
F. |
Tabular Disclosure of Contractual Obligations
|
In U.S. dollars
|
Total
|
Less Than
One Year
|
One to
Three Years |
Three to
Five Years
|
More Than
Five Years
|
|||||||||||||||
Bank debt
|
$
|
52,356,915
|
$
|
7,697,915
|
$
|
34,128,000
|
$
|
1,868,000
|
$
|
8,663,000
|
||||||||||
Interest Payments (1)
|
$
|
7,411,695
|
$
|
2,560,242
|
$
|
3,292,728
|
$
|
1,045,576
|
$
|
513,149
|
||||||||||
Vessel Management fees (2)
|
$
|
7,008,957
|
$
|
3,434,952
|
$
|
3,574,005
|
---
|
|||||||||||||
Other Management fees (3)
|
$
|
4,070,000
|
$
|
2,000,000
|
$
|
2,070,000
|
---
|
—
|
||||||||||||
Total(4)
|
$
|
70,847,567
|
$
|
15,693,109
|
$
|
43,064,733
|
$
|
2,913,576
|
$
|
9,176,149
|
Item 6. |
Directors, Senior Management and Employees
|
A. |
Directors and Senior Management
|
Name
|
Age
|
Position
|
Aristides J. Pittas
|
57
|
Chairman, President and CEO; Class A Director
|
Dr. Anastasios Aslidis
|
56
|
CFO and Treasurer; Class A Director
|
Aristides P. Pittas
|
65
|
Vice Chairman; Class A Director
|
Stephania Karmiri
|
49
|
Secretary
|
Panagiotis Kyriakopoulos
|
56
|
Class B Director
|
George Skarvelis
|
56
|
Class B Director
|
George Taniskidis
|
56
|
Class C Director
|
Apostolos Tamvakakis
|
65
|
Class C Director (since June 25, 2013)
|
Tim Gravely
|
39
|
Series B Director (since January 31, 2014)
|
B. |
Compensation
|
· |
We are not required under Marshall Islands law to maintain a Board of Directors with a majority of independent directors, and we may not be able to maintain a Board of Directors with a majority of independent directors in the future.
|
· |
In lieu of a compensation committee comprised of independent directors, our Board of Directors will be responsible for establishing the executive officers' compensation and benefits. Under Marshall Islands law, compensation of the executive officers is not required to be determined by an independent committee.
|
· |
In lieu of a nomination committee comprised of independent directors, our Board of Directors will be responsible for identifying and recommending potential candidates to become board members and recommending directors for appointment to board committees. Shareholders may also identify and recommend potential candidates to become candidates to become board members in writing. No formal written charter has been prepared or adopted because this process is outlined in our bylaws.
|
· |
In lieu of obtaining an independent review of related party transactions for conflicts of interests, consistent with Marshall Islands law requirements, a related party transaction will be permitted if: (i) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors and the Board of Directors in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, or, if the votes of the disinterested directors are insufficient to constitute an act of the Board of Directors as defined in Section 55 of the Marshall Islands Business Corporations Act, by unanimous vote of the disinterested directors; or (ii) the material facts as to his relationship or interest are disclosed and the shareholders are entitled to vote thereon, and the contract or transaction is specifically approved in good faith by a simple majority vote of the shareholders; or (iii) the contract or transaction is fair as to the Company as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof or the shareholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.
|
· |
As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islands law. Consistent with Marshall Islands law, we will notify our shareholders of meetings between 15 and 60 days before the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting. In addition, our bylaws provide that shareholders must give us advance notice to properly introduce any business at a meeting of the shareholders. Our bylaws also provide that shareholders may designate in writing a proxy to act on their behalf.
|
· |
In lieu of holding regular meetings at which only independent directors are present, our entire Board of Directors, a majority of whom are independent, will hold regular meetings as is consistent with the laws of the Republic of the Marshall Islands.
|
· |
The Board of Directors adopted a new Equity Incentive Plan in July 2014. Shareholder approval was not necessary since Marshall Islands law permits the Board of Directors to take such actions.
|
· |
As a foreign private issuer, we are not required to obtain shareholder approval if any of our directors, officers, or 5% or greater shareholders has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the company, or assets to be acquired, or in the consideration to be paid in the transaction(s) and the present or potential issuance of common stock, or securities convertible into or exercisable for common stock, could result in an increase in outstanding common stock or voting power of 5% or more.
|
· |
In lieu of obtaining shareholder approval prior to the issuance of designated securities, the Company will comply with provisions of the Marshall Islands Business Corporations Act, providing that the Board of Directors approves share issuances.
|
Item 7. |
Major Shareholders and Related Party Transactions
|
A. |
Major Stockholders
|
Name of Beneficial Owner(1)
|
Number of Shares
of Voting Common Stock Beneficially Owned |
Percent of
Voting of common Stock (14) |
Number of Shares
of Voting Series B Preferred Stock Beneficially Owne |
Percent of
Voting of Series B Preferred Shares (15) |
Number of Shares of Voting Common Stock Beneficially Owned Upon Conversion; 50% Voting Before Conversion
|
Percent of Total Voting Securities
|
||||||||||||||||||
Friends Investment Company Inc.(2)
|
3,252,807
|
29.1
|
%
|
-
|
-
|
25.4
|
%
|
|||||||||||||||||
Tennenbaum Opportunities Fund VI, LLC (3, 4)
|
900,000
|
8.1
|
%
|
29,269
|
81.4
|
%
|
2,650,137
|
17.4
|
%
|
|||||||||||||||
Tennenbaum Opportunities Fund V, LLC (3, 4)
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Family United Navigation Co.
|
390,000
|
3.5
|
%
|
-
|
-
|
-
|
3.0
|
%
|
||||||||||||||||
Preferred Friends Investment Company Inc.(4)
|
-
|
-
|
6,673
|
18.6
|
%
|
604,216
|
2.4
|
%
|
||||||||||||||||
Aristides J. Pittas(5)
|
25,245
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
George Skarvelis(6)
|
4,001
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
George Taniskidis(7)
|
3,476
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Panagiotis Kyriakopoulos(8)
|
44,023
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Aristides P. Pittas(9)
|
6,885
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Anastasios Aslidis(10)
|
29,106
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Apostolos Tamvakakis(11)
|
5,576
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Timothy Gravely
|
-
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Stephania Karmiri(12)
|
-
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
Symeon Pariaros(13)
|
4,936
|
*
|
-
|
-
|
-
|
*
|
||||||||||||||||||
All directors and officers and 5% owners as a group
|
4,666,055
|
41.7
|
%
|
35,942
|
100
|
%
|
3,254,353
|
59.1
|
%
|
* |
Indicates less than 1.0%.
|
(1) |
Beneficial ownership is determined in accordance with the Rule 13d-3(a) of the Securities Exchange Act of 1934, as amended, and generally includes voting or investment power with respect to securities. Except as subject to community property laws, where applicable, the person named above has sole voting and investment power with respect to all shares of common stock shown as beneficially owned by him/her.
|
(2) |
Represents 3,252,807 shares of common stock held of record by Friends. A majority of the shareholders of Friends are members of the Pittas family. Investment power and voting control by Friends resides in its Board of Directors which consists of five directors, a majority of whom are members of the Pittas family. Actions by Friends may be taken by a majority of the members on its Board of Directors.
|
(3) |
Tennenbaum Capital Partners, LLC serves as investment advisor to, inter alia, Tennenbaum Opportunities Fund VI, LLC, and has sole voting and investment power with respect to all securities owned of record by Tennenbaum Opportunities Fund VI, LLC. The address for each of Tennenbaum Capital Partners, LLC and Tennenbaum Opportunities Fund VI, LLC is 2951 28th Street, Suite 1000, Santa Monica, CA 90405.
|
(4) |
Common shares are issuable upon conversion of Series B Preferred Shares (or any convertible notes into which the Series B Preferred Shares may convert) owned by this shareholder (based on the current conversion ratio).
|
(5) |
Does not include 442,064 shares of common stock held of record by Friends, by virtue of ownership interest in Friends by Mr. Pittas. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Does not include 1,781 shares of Series B Preferred stock held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends Investment Company Inc. by Mr. Pittas. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 7,425 shares vesting on July 1, 2017, 8,910 shares vesting on November 16, 2017 and 8,910 shares vesting on November 16, 2018.
|
(6) |
Includes 790 shares vesting on July 1, 2017, 948 shares vesting on November 16, 2017 and 948 shares vesting on November 16, 2018.
|
(7) |
Does not include 15,564 shares of common stock held of record by Friends, by virtue of Mr. Taniskidis' ownership in Friends. Mr. Taniskidis disclaims beneficial ownership except to the extent of his pecuniary interest. Does not include 175 shares of Series B Preferred stock held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends Investment Company Inc.by Mr. Taniskidis and members of his family. Mr. Taniskidis disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 790 shares vesting on July 1, 2017, 948 shares vesting on November 16, 2017 and 948 shares vesting on November 16, 2018.
|
(8) |
Includes 790 shares vesting on July 1, 2017, 948 shares vesting on November 16, 2017 and 948 shares vesting on November 16, 2018.
|
(9) |
Does not include 525,458 shares of common stock held of record by Friends and Family United Navigation Co., by virtue of ownership interest in Friends of Mr. Pittas and members of his family. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Does not include 85 shares of Series B Preferred stock held of record by Preferred Friends Investment Company Inc., by virtue of ownership interest in Preferred Friends Investment Company Inc.by Mr. Pittas and members of his family. Mr. Pittas disclaims beneficial ownership except to the extent of his pecuniary interest. Includes 2,025 shares vesting on July 1, 2017, 2,430 shares vesting on November 16, 2017 and 2,430 shares vesting on November 16, 2018.
|
(10) |
Includes 5,040 shares vesting on July 1, 2017, 6,048 shares vesting on November 16, 2017 and 6,048 shares vesting on November 16, 2018.
|
(11) |
Includes 790 shares vesting on July 1, 2017, 948 shares vesting on November 16, 2017 and 948 shares vesting on November 16, 2018.
|
(12) |
Does not include 426 shares of common stock held of records by Friends, by virtue of Mrs. Karmiri's ownership in Friends. Mrs. Karmiri disclaims beneficial ownership except to the extent of her pecuniary interest.
|
(13) |
Includes 790 shares vesting on July 1, 2017, 948 shares vesting on November 16, 2017 and 948 shares vesting on November 16, 2018.
|
(14) |
Voting stock includes 116,280 unvested shares for a total of 11,177,892 issued and outstanding shares of the Company as of April 29, 2016.
|
(15) |
Series B Preferred Shares vote on an as-converted basis weighted by 50%.
|
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
|
Period
|
Low
|
High
|
||||||
Year Ended Dec. 31, 2012
|
8.60
|
30.50
|
||||||
Year Ended Dec. 31, 2013
|
9.30
|
17.90
|
||||||
Year Ended Dec. 31, 2014
|
7.50
|
14.20
|
||||||
Year Ended Dec. 31, 2015
|
2.55
|
8.40
|
||||||
Year Ended Dec. 31, 2016
|
1.19
|
4.85
|
||||||
1st quarter 2015
|
7.10
|
8.10
|
||||||
2nd quarter 2015
|
6.60
|
8.40
|
||||||
3rd quarter 2015
|
4.18
|
7.60
|
||||||
4th quarter 2015
|
2.55
|
4.81
|
||||||
1st quarter 2016
|
1.75
|
2.68
|
||||||
2nd quarter 2016
|
1.79
|
3.09
|
||||||
3rd quarter 2016
|
1,59
|
2.8
|
||||||
4th quarter 2016
|
1.19
|
4.85
|
||||||
1st quarter 2017
|
1.35
|
1.91
|
||||||
2nd quarter 2017 (through April 6)
|
1.35
|
|
1.39
|
|
||||
October 2016
|
1.40
|
2.10
|
||||||
November 2016
|
1.19
|
4.85
|
||||||
December 2016
|
1.39
|
2.50
|
||||||
January 2017
|
1.60
|
1.91
|
||||||
February 2017
|
1.37
|
1.77
|
||||||
March 2017
|
1.35
|
1.54
|
||||||
April 2017 (through April 6)
|
1.35
|
|
1.39
|
|
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
|
C. |
Material Contracts
|
D. |
Exchange Controls
|
E. |
Taxation
|
· |
we are organized in a foreign country, or our country of organization, that grants an "equivalent exemption" to corporations organized in the United States; and
|
· |
more than 50% of the value of our stock is owned, directly or indirectly, by "qualified shareholders," individuals who are "residents" of our country of organization or of another foreign country that grants an "equivalent exemption" to corporations organized in the United States, which we refer to as the "50% Ownership Test," or
|
· |
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 United States 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 of our U.S.-source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.
|
· |
at least 75% of 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 our assets during such taxable year produce, or are held for the production of, passive income, which we refer to as "passive assets".
|
· |
such gain is effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States, if the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with respect to that gain, that gain is taxable only if it is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States; or
|
· |
the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.
|
· |
fails to provide an accurate taxpayer identification number;
|
· |
is notified by the IRS that he failed to report all interest or dividends required to be shown on your United States federal income tax returns; or
|
· |
in certain circumstances, fails to comply with applicable certification requirements.
|
F. |
Dividends and paying agents
|
G. |
Statement by experts
|
H. |
Documents on display
|
I. |
Subsidiary Information
|
Item 11. |
Quantitative and Qualitative Disclosures about Market Risk
|
Year Ended December 31,
|
Amount in $ (loans)
|
Amount in $ (swap)
|
||||||
2017
|
488,389
|
|
(100,000
|
)
|
||||
2018
|
390,833
|
(100,000
|
)
|
|||||
2019
|
179,018
|
(40,548
|
)
|
|||||
2020
|
100,640
|
-
|
||||||
2021 and thereafter
|
192,583
|
-
|
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) |
Evaluation of Disclosure Controls and Procedures
|
(c) |
Attestation Report of the Registered Public Accounting Firm
|
2015
(dollars in thousands) |
2016
(dollars in thousands) |
|||||||
Audit Fees
|
$
|
325
|
$
|
304
|
||||
Audit related fees
|
-
|
-
|
||||||
Tax fees
|
-
|
-
|
||||||
All other fees / expenses
|
-
|
-
|
||||||
Total
|
$
|
325
|
$
|
304
|
Item 17. |
Financial Statements
|
Item 18. |
Financial Statements
|
Item 19. |
Exhibits
|
1.1
|
Amended and Restated Articles of Incorporation of Euroseas Ltd.(12)
|
|
1.2
|
Bylaws of Euroseas Ltd.(11)
|
|
1.3
|
Amendment to Bylaws of Euroseas Ltd.(11)
|
|
2.1
|
Specimen Common Stock Certificate(7)
|
|
2.2
|
Form of Securities Purchase Agreement(1)
|
|
2.3
|
Form of Registration Rights Agreement(1)
|
|
2.4
|
Form of Warrant(1)
|
|
2.5
|
Registration Rights Agreement between Euroseas Ltd. and Friends Investment Company Inc., dated November 2, 2005(2)
|
|
2.6
|
Registration Rights Agreement among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd. and All Seas Investors III LP dated March 25, 2010(11)
|
|
2.7
|
Form of Subscription Rights Certificate(13)
|
|
2.8
|
Registration Obligation Agreement by and among Euroseas Ltd., Tennenbaum Opportunities Partners V, LP and Tennenbaum Opportunities Fund VI, LLC dated December 14, 2016
|
|
3.1
|
Shareholder Voting Agreement among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd., All Seas Investors III LP, Friends Investment Company Inc. and Aristides J. Pittas dated March 25, 2010(11)
|
|
4.1
|
Form of Lock-up Agreement(1)
|
|
4.2
|
Form of Standard Ship Management Agreement(1)
|
|
4.3
|
Agreement between Eurobulk Ltd. and Eurochart S.A., for the provision of exclusive brokerage services, dated December 20, 2004(1)
|
|
4.4
|
Form of Current Time Charter(1)
|
|
4.5
|
Amended and Restated Master Management Agreement between Euroseas Ltd. and Eurobulk Ltd. dated as of July 17, 2007, as amended February 7, 2008(6)
|
|
4.6
|
Addendum No. 1 to Amended and Restated Master Management Agreement between Euroseas Ltd. and Eurobulk Ltd. dated as of February 7, 2009(9)
|
|
4.7
|
Loan Agreement between Xenia International Corp., as borrower, and Fortis Bank N.V./S.A., Athens Branch and others, as lenders, for the amount of US$8,250,000 dated June 30, 2006(3)
|
|
4.8
|
Loan Agreement between Prospero Maritime Inc., as borrower, and Calyon, as lender, for the amount of US$15,500,000 dated August 30, 2006(3)
|
|
4.9
|
Euroseas 2007 Equity Incentive Plan(8)
|
|
4.10
|
Loan Agreement among Xingang Shipping Ltd., as borrower, and HSBC Bank plc, as lender, and Diana Trading Ltd. and Euroseas Ltd., as corporate guarantors, for the amount of US$20,000,000 dated November 14, 2006(4)
|
|
4.11
|
Amendment to Loan Agreement among Xingang Shipping Ltd, as borrower, HSBC Bank plc, as lender, and Diana Trading Ltd. and Euroseas Ltd., as corporate guarantors, dated April 14, 2010(11)
|
|
4.12
|
Form of Right of First Refusal(5)
|
|
4.13
|
Form of Advisory Agreement(5)
|
|
4.14
|
Loan Agreement between Manolis Shipping Limited, as borrower, and EFG Eurobank Ergasias S.A., as lender, for the amount of US$10,000,000 dated June 7, 2007(6)
|
4.15
|
Supplemental Agreement to Loan Agreement between Manolis Shipping Limited, as borrower, and EFG Eurobank Ergasias S.A., as lender, dated August 5, 2009(11)
|
|
4.16
|
Loan Agreement between Trust Navigation Corp., as borrower, and EFG Eurobank Ergasias S.A., as lender, for the amount of US$15,000,000 dated October 29, 2007(6)
|
|
4.17
|
Amendment to Loan Agreement between Trust Navigation Corp., as borrower and EFG Eurobank Ergasias S.A., as lender, dated December 30, 2008(9)
|
|
4.18
|
Amendment to Loan Agreement between Trust Navigation Corp., as borrower, and EFG Eurobank Ergasias S.A., as lender, dated October 26, 2010(12)
|
|
4.19
|
Form of Senior Security Debt Indenture(7)
|
|
4.20
|
Form of Subordinated Debt Security Indenture(7)
|
|
4.21
|
Loan Agreement between Saf-Concord Shipping Ltd., as borrower, and EFG Eurobank Ergasias S.A., as lender, for the amount of US$10,000,000 dated January 9, 2009(9)
|
|
4.22
|
Loan Agreement between Eleni Shipping Ltd., as borrower, and Calyon, as lender, for the amount of US$10,000,000 dated April 30, 2009(9)
|
|
4.23
|
Shareholders Rights Agreement between Euroseas Ltd. and American Stock Transfer and Trust Company, LLC dated May 18, 2009(10)
|
|
4.24
|
Amendment to Shareholders Rights Agreement between Euroseas Ltd. and American Stock Transfer and Trust Company, LLC dated March 25, 2010(11)
|
|
4.25
|
Loan Agreement between Pantelis Shipping Corp., as borrower, and HSBC Bank plc, as lender, for the amount of US$13,000,000 dated December 14, 2009(11)
|
|
4.26
|
Amendment to Loan Agreement between Pantelis Shipping Corp., as borrower, and HSBC Bank plc, as lender, dated April 14, 2010(11)
|
|
4.27
|
Limited Liability Company Agreement for Euromar LLC, among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd. and All Seas Investors III LP dated March 25, 2010(11)
|
|
4.28
|
First Amendment to Limited Liability Company Agreement for Euromar LLC, among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd. and All Seas Investors III LP dated April 26, 2012(14)
|
|
4.29
|
Management Agreement among Euromar LLC, the vessel owning subsidiaries of Euromar LLC, Euroseas Ltd., Eurobulk Ltd. and Eurochart S.A. dated March 25, 2010(11)
|
|
4.30
|
Agreement Regarding Vessel Opportunities among Euroseas Ltd., Eurobulk Ltd., Eurochart S.A., Aristides J. Pittas and Euromar LLC dated March 25, 2010(11)
|
|
4.31
|
First Amendment to Agreement Regarding Vessel Opportunities among Euroseas Ltd., Eurobulk Ltd., Eurochart S.A., Aristides J. Pittas and Euromar LLC dated April 26, 2012(14)
|
|
4.32
|
Euroseas 2010 Equity Incentive Plan(11)
|
|
4.33
|
Loan Agreement between Noumea Shipping Ltd, as borrower, and Crédit Agricole Corporate and Investment Bank, as lender, for the amount of US$20,000,000 dated December 28, 2010(12)
|
|
4.34
|
Loan Agreement between Aggeliki Shipping Ltd, as borrower, and DVB Bank SE, as lender, for the amount of US$8,500,000 dated November 5, 2010(12)
|
|
4.35
|
Amendment to Loan Agreement between SAF Concord Shipping Ltd., as borrower, and EFG Eurobank Ergasias S.A., as lender, dated October 29, 2012 (previously filed as Exhibit 4.35 to the Company's Annual Report on Form 20-F (File No.
001-33283
) on April 30, 2013 and incorporated by reference herein)
|
|
4.36
|
Amendment to Loan Agreement between Manolis Shipping Ltd., SAF Concord Shipping Ltd, Tiger Navigation Corp. and Alterwall Business Inc., as borrowers, and EFG Eurobank Ergasias S.A., as lender, dated October 29, 2012 (previously filed as Exhibit 4.36 to the Company's Annual Report on Form 20-F (File No.
001-33283
) on April 30, 2013 and incorporated by reference herein)
|
|
4.37
|
Amendment to Loan Agreement between Xingang Shipping Ltd. and Diana Shipping Ltd., as borrowers, and HSBC Bank plc, as lender, dated April 5, 2013 (previously filed as Exhibit 4.37 to the Company's Annual Report on Form 20-F (File No.
001-33283
) on April 30, 2013 and incorporated by reference herein)
|
4.38
|
Second Amendment to Limited Liability Company Agreement for Euromar LLC, among Euroseas Ltd., Paros Ltd., All Seas Investors I Ltd., All Seas Investors II Ltd. and All Seas Investors III LP dated March 18, 2013 (previously filed as Exhibit 4.38 to the Company's Annual Report on Form 20-F (File No.
001-33283
) on April 30, 2013 and incorporated by reference herein)
|
|
4.39
|
Securities Purchase Agreement dated as of March 10, 2014 among Euroseas Ltd., 12 West Capital Fund LP and 12 West Capital Offshore Fund LP (previously filed as Exhibit 99.2 on Form 6-K (File No.
001-33283
) on March 18, 2014 and incorporated by reference herein)
|
|
4.40
|
Registration Rights Agreement dated March 14, 2014 among Euroseas Ltd., 12 West Capital Fund LP and 12 West Capital Offshore Fund LP (previously filed as Exhibit 99.3 on Form 6-K (File No.
001-33283
) on March 18, 2014 and incorporated by reference herein)
|
|
4.41
|
Amendment to Registration Rights Agreement, dated as of March 14, 2014 to the Registration Rights Agreement, dated as of January 26, 2014, as amended by and among Euroseas Ltd., Tennenbaum Opportunities Fund VI, LLC, and Friends Investment Company, Inc. (previously filed as Exhibit 99.4 on Form 6-K (File No.
001-33283
) on March 18, 2014 and incorporated by reference herein)
|
|
4.42
|
Third Amendment to Shareholders Rights Agreement dated as of March 14, 2014 between Euroseas Ltd. and American Stock Transfer and Trust Company, LLC. (previously filed as Exhibit 99.5 on Form 6-K (File No.
001-33283
) on March 18, 2014 and incorporated by reference herein)
|
|
4.43
|
Amended and Restated Statement of Designation of the Rights, Preferences and Privileges of Series B Convertible Perpetual Preferred Shares of Euroseas Ltd. (previously filed as Exhibit 99.1 on Form 6-K/A (File No.
001-33283
) on March 4, 2016 and incorporated by reference herein)
|
|
4.44
|
Specimen Certificate for the Series B Preferred Shares (previously filed as Exhibit 99.3 on Form 6-K (File No.
001-33283
) on January 29, 2014 and incorporated by reference herein)
|
|
4.45
|
Form of Securities Purchase Agreement in connection with the sale of the Series B Preferred Shares (previously filed as Exhibit 99.4 on Form 6-K (File No.
001-33283
) on January 29, 2014 and incorporated by reference herein)
|
|
4.46
|
Form of Registration Rights Agreement in connection with the sale of the Series B Preferred Shares (previously filed as Exhibit 99.5 on Form 6-K (File No.
001-33283
) on January 29, 2014 and incorporated by reference herein)
|
|
4.47
|
Form of Second Amendment to Shareholders Rights Agreement dated January 27, 2014 between Euroseas Ltd. and American Stock Transfer and Trust Company LLC (previously filed as Exhibit 99.6 on Form 6-K (File No.
001-33283
) on January 29, 2014 and incorporated by reference herein)
|
|
4.48
|
Addendum No. 6 to Amended and Restated Master Management Agreement between Euroseas Ltd. and Eurobulk Ltd. dated as of February 4, 2014 (previously filed as Exhibit 4.49 to the Company's Annual Report on Form 20-F (File No.
001-33283
) on April 30, 2015 and incorporated by reference herein)
|
|
4.49
|
Euroseas 2014 Equity Incentive Plan (previously filed as Exhibit 4.50 to the Company's Annual Report on Form 20-F (File No.
001-33283
) on April 30, 2015 and incorporated by reference herein)
|
|
4.50
|
Financial Agreement between Ultra Two Shipping Ltd, as borrower, and HSBC Bank Plc, as lender, relating to a term loan facility of up to US$19,950,000 dated January 12, 2015 (previously filed as Exhibit 4.51 to the Company's Annual Report on Form 20-F (File No.
001-33283
) on April 30, 2015 and incorporated by reference herein)
|
|
4.51
|
Loan Agreement between Ultra One Shipping Ltd, as borrower, and HSH Nordbank AG, as lead arranger, for a term loan facility of up to US$19,000,000 dated March 20, 2015 (previously filed as Exhibit 4.52 to the Company's Annual Report on Form 20-F (File No.
001-33283
) on April 30, 2015 and incorporated by reference herein)
|
|
4.52
|
Loan Agreement between Kamsarmax One Shipping Ltd, as borrower, and Nord LB, as lead arranger, for a term loan facility of up to US$16,560,000 dated February 17, 2016(15)
|
|
4.53
|
Loan Agreement between Saf-Concord Shipping Ltd et al., as borrowers, and Eurobank Ergasias S.a., as lead arranger, relating to a secured term loan of up to US$14,500,000 dated as of February 12, 2016(15)
|
|
4.54
|
Fourth Amendment to Shareholders Rights Agreement dated as of December 22, 2016 between Euroseas Ltd. and American Stock Transfer and Trust Company, LLC
|
|
4.55
|
Equity Distribution Agreement between Euroseas Ltd. and Maxim Group LLC dated December 20, 2016 (previously filed as Exhibit 99.1 on Form 6-K (File No.
001-33283
) on December 22, 2016 and incorporated by reference herein)
|
|
4.56 |
Second Supplemental Agreement between Ultra One Shipping Ltd., as borrower, and HSH Nordbank AG, as lead arranger, for a term loan facility of up to US$19,000,000 dated December 22, 2016
|
|
8.1
|
Subsidiaries of the Registrant
|
|
12.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
12.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
13.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
13.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
15.1
|
Consent of Deloitte Certified Public Accountants S.A.
|
|
101.INS*
|
XBRL Instance Document
|
|
101.SCH*
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* |
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for the purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.
|
(1) |
Filed as an Exhibit to the Company's Registration Statement (File No. 333-129145) on October 20, 2005.
|
(2) |
Filed as an Exhibit to the Company's Amendment No.1 to Registration Statement (File No. 333-129145) on December 5, 2005.
|
(3) |
Filed as an Exhibit to the Company's Post-Effective Amendment No. 1 to Registration Statement (File No. 333-129145) on September 12, 2006.
|
(4) |
Filed as an Exhibit to the Company's Registration Statement (File No. 333-138780) on November 17, 2006.
|
(5) |
Filed as an Exhibit to the Company's Amendment No. 4 to Registration Statement (File No. 333-138780) on January 29, 2007.
|
(6) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 13, 2008.
|
(7) |
Filed as an Exhibit to the Company's Registration Statement (File No. 333-152089) on July 2, 2008.
|
(8) |
Filed as an Exhibit to the Company's Post-Effective Amendment No. 1 to Registration Statement (File No. 333-148124) on July 17, 2008.
|
(9) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 18, 2009.
|
(10) |
Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 18, 2009.
|
(11) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 28, 2010.
|
(12) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 27, 2011.
|
(13) |
Filed as an Exhibit to the Company's Form 6-K (File No. 001-33283) on May 25, 2012.
|
(14) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on April 27, 2012.
|
(15) |
Filed as an Exhibit to the Company's Annual Report on Form 20-F (File No. 001-33283) on May 2, 2016.
|
EUROSEAS LTD.
(Registrant) |
|||
By:
|
/s/ Aristides J. Pittas
|
||
Aristides J. Pittas
|
|||
Chairman, President and CEO
|
|||
Pages
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2015 and 2016
|
F-3
|
Consolidated Statements of Operations for the Years Ended December 31, 2014, 2015 and 2016
|
F-5
|
Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 2014, 2015 and 2016
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2014, 2015 and 2016
|
F-7
|
Notes to the Consolidated Financial Statements
|
F-9
|
Notes
|
2015
|
2016
|
||||||||||
Assets
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
8,715,636
|
3,208,092
|
||||||||||
Trade accounts receivable, net
|
1,408,272
|
1,432,114
|
||||||||||
Other receivables
|
1,231,391
|
870,415
|
||||||||||
Inventories
|
3
|
1,464,940
|
1,291,279
|
|||||||||
Restricted cash
|
9
|
5,916,743
|
655,739
|
|||||||||
Prepaid expenses
|
175,506
|
172,398
|
||||||||||
Vessel held for sale
|
5
|
2,671,811
|
2,814,046
|
|||||||||
Total current assets
|
21,584,299
|
10,444,083
|
||||||||||
Fixed assets
|
||||||||||||
Vessels, net
|
5
|
88,957,752
|
105,584,633
|
|||||||||
Advances for vessels under construction and vessel acquisition deposits
|
4
|
32,701,867
|
17,753,737
|
|||||||||
Long-term assets
|
||||||||||||
Restricted cash
|
9
|
4,550,000
|
5,484,268
|
|||||||||
Deferred charges, net
|
6
|
418,034
|
426,783
|
|||||||||
Other investment
|
16
|
7,396,738
|
4,000,000
|
|||||||||
Investment in joint venture
|
16
|
16,515,701
|
-
|
|||||||||
Total long-term assets
|
150,540,092
|
133,249,421
|
||||||||||
Total assets
|
172,124,391
|
143,693,504
|
||||||||||
Liabilities, Mezzanine equity and shareholders' equity
|
||||||||||||
Current liabilities
|
||||||||||||
Long-term debt, current portion
|
9
|
14,685,766
|
5,549,218
|
|||||||||
Loan from related party
|
8,9
|
-
|
2,000,000
|
|||||||||
Trade accounts payable
|
1,394,874
|
1,864,263
|
||||||||||
Accrued expenses
|
7
|
1,203,070
|
1,312,293
|
|||||||||
Liabilities from assets held for sale
|
5
|
1,122,208
|
-
|
|||||||||
Deferred revenues
|
462,124
|
437,322
|
||||||||||
Due to related company
|
8
|
322,703
|
11,539
|
|||||||||
Derivatives
|
15,18
|
50,402
|
-
|
|||||||||
Total current liabilities
|
19,241,147
|
11,174,635
|
Notes
|
December 31, 2015
|
December 31, 2016
|
||||||||||
Long-term liabilities
|
||||||||||||
Long-term debt, net of current portion
|
9
|
25,552,702
|
44,366,976
|
|||||||||
Derivatives
|
15, 18
|
202,700
|
240,181
|
|||||||||
Total long-term liabilities
|
25,755,402
|
44,607,157
|
||||||||||
Total liabilities
|
44,996,549
|
55,781,792
|
||||||||||
Commitments and contingencies
|
11
|
|||||||||||
Mezzanine Equity
|
||||||||||||
Preferred shares (par value $0.01, 20,000,000 shares authorized, 33,779 and 35,505 issued and outstanding, respectively)
|
17
|
32,079,249
|
33,804,948
|
|||||||||
Shareholders' equity
|
||||||||||||
Common stock (par value $0.03, 200,000,000 shares authorized, 8,195,760 and 10,876,112 issued and outstanding)
|
245,873
|
326,283
|
||||||||||
Additional paid-in capital
|
278,833,156
|
283,757,739
|
||||||||||
Accumulated deficit
|
(184,030,436
|
)
|
(229,977,258
|
)
|
||||||||
Total shareholders' equity
|
95,048,593
|
54,106,764
|
||||||||||
Total liabilities, mezzanine equity and shareholders' equity
|
172,124,391
|
143,693,504
|
Notes
|
2014
|
2015
|
2016
|
|||||||||||||
Revenues
|
||||||||||||||||
Voyage revenue
|
42,586,963
|
39,656,670
|
29,789,036
|
|||||||||||||
Related party revenue
|
16
|
240,000
|
240,000
|
240,000
|
||||||||||||
Commissions (including, $517,828 $475,792 and $372,806, respectively, to related party)
|
8, 14
|
(2,192,626
|
)
|
(2,216,836
|
)
|
(1,604,747
|
)
|
|||||||||
Net revenue
|
40,634,337
|
37,679,834
|
28,424,289
|
|||||||||||||
Operating expenses
|
||||||||||||||||
Voyage expenses
|
14
|
3,963,181
|
2,312,513
|
1,291,712
|
||||||||||||
Vessel operating expenses (including, $347,363, $305,150 and $233,077, respectively, to related party)
|
8, 14
|
25,279,087
|
25,204,593
|
18,161,862
|
||||||||||||
Dry-docking expenses
|
1,975,590
|
1,912,407
|
2,204,784
|
|||||||||||||
Vessel depreciation
|
5
|
12,137,445
|
10,995,023
|
8,788,121
|
||||||||||||
Related party management fees
|
8
|
4,894,559
|
4,151,335
|
3,179,596
|
||||||||||||
Other general and administrative expenses (including $2,000,000, $2,000,000 and $2,000,000, respectively, to related party)
|
8, 12
|
3,514,636
|
3,327,061
|
3,472,422
|
||||||||||||
Net gain on sale of vessels (including $0, $77,022 and $27,741 to related party)
|
5
|
-
|
(461,586
|
)
|
(10,597
|
)
|
||||||||||
Loss on termination and impairment of newbuilding contracts
|
4
|
-
|
-
|
7,050,179
|
||||||||||||
Impairment loss and loss on write-down of vessel held for sale (including $0, $28,055 and $29,469, respectively, to related party)
|
5
|
3,500,000
|
1,641,885
|
5,924,668
|
||||||||||||
Total operating expenses
|
55,264,498
|
49,083,231
|
50,062,747
|
|||||||||||||
Operating loss
|
(14,630,161
|
)
|
(11,403,397
|
)
|
(21,638,458
|
)
|
||||||||||
Other income/(expenses)
|
||||||||||||||||
Interest and other financing costs
|
(2,152,187
|
)
|
(1,486,534
|
)
|
(2,531,999
|
)
|
||||||||||
Loss on derivatives, net
|
15
|
(44,648
|
)
|
(261,674
|
)
|
(119,154
|
)
|
|||||||||
Other investment income
|
16
|
987,604
|
1,212,938
|
1,024,714
|
||||||||||||
Impairment of other investment
|
16
|
-
|
-
|
(4,421,452
|
)
|
|||||||||||
Foreign exchange gain / (loss)
|
40,022
|
22,421
|
(41,402
|
)
|
||||||||||||
Interest income
|
422,240
|
26,656
|
22,330
|
|||||||||||||
Other expenses, net
|
(746,969
|
)
|
(486,193
|
)
|
(6,066,963
|
)
|
||||||||||
Equity loss in joint venture
|
16
|
(2,541,775
|
)
|
(2,158,393
|
)
|
(2,444,627
|
)
|
|||||||||
Impairment in joint venture
|
16
|
-
|
-
|
(14,071,075
|
)
|
|||||||||||
Net loss
|
(17,918,905
|
)
|
(14,047,983
|
)
|
(44,221,123
|
)
|
||||||||||
Dividends to Series B preferred shares
|
17
|
(1,440,100
|
)
|
(1,639,149
|
)
|
(1,725,699
|
)
|
|||||||||
Net loss attributable to common shareholders
|
(19,359,005
|
)
|
(15,687,132
|
)
|
(45,946,822
|
)
|
||||||||||
Loss per share attributable to common shareholders - basic and diluted
|
13
|
(3.53
|
)
|
(2.45
|
)
|
(5.63
|
)
|
|||||||||
Weighted average number of shares outstanding during the year, basic
and diluted
|
13
|
5,479,418
|
6,410,794
|
8,165,703
|
Number of Shares Outstanding
|
Common
Stock
Amount
|
Additional Paid - in
Capital
|
Accumulated Deficit
|
Total
|
||||||||||||||||
Balance, January 1, 2014
|
4,572,326
|
137,170
|
253,549,211
|
(148,984,299
|
)
|
104,702,082
|
||||||||||||||
Net loss attributable to common shareholders
|
(19,359,005
|
)
|
(19,359,005
|
)
|
||||||||||||||||
Issuance of shares from private placement, net of issuance costs
|
1,116,487
|
33,495
|
14,466,505
|
-
|
14,500,000
|
|||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
43,724
|
1,312
|
508,802
|
-
|
510,114
|
|||||||||||||||
Canceled shares due to repurchase program
|
(16,806
|
)
|
(505
|
)
|
(150,182
|
)
|
-
|
(150,687
|
)
|
|||||||||||
Balance, December 31, 2014
|
5,715,731
|
171,472
|
268,374,336
|
(168,343,304
|
)
|
100,202,504
|
||||||||||||||
Net loss attributable to common shareholders
|
(15,687,132
|
)
|
(15,687,132
|
)
|
||||||||||||||||
Issuance of shares from rights offering, net of issuance costs
|
2,343,335
|
70,300
|
10,156,810
|
-
|
10,227,110
|
|||||||||||||||
Rounding of stock split
|
794
|
24
|
(24
|
)
|
-
|
-
|
||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
135,900
|
4,077
|
302,034
|
-
|
306,111
|
|||||||||||||||
Balance December 31, 2015
|
8,195,760
|
245,873
|
278,833,156
|
(184,030,436
|
)
|
95,048,593
|
||||||||||||||
Net loss attributable to common shareholders
|
-
|
-
|
-
|
(45,946,822
|
)
|
(45,946,822
|
)
|
|||||||||||||
Issuance of shares from private placement, net of issuance costs
|
719,425
|
21,583
|
978,417
|
-
|
1,000,000
|
|||||||||||||||
Issuance of shares for vessel acquisition, net of issuance costs
|
900,000
|
27,000
|
1,773,000
|
-
|
1,800,000
|
|||||||||||||||
Issuance of shares sold at the market (ATM), net of issuance costs
|
978,847
|
29,365
|
1,881,287
|
-
|
1,910,652
|
|||||||||||||||
Issuance of restricted shares for stock incentive award and share-based compensation
|
82,080
|
2,462
|
291,879
|
-
|
294,341
|
|||||||||||||||
Balance December 31, 2016
|
10,876,112
|
326,283
|
283,757,739
|
(229,977,258
|
)
|
54,106,764
|
2014
|
2015
|
2016
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net loss
|
(17,918,905
|
)
|
(14,047,983
|
)
|
(44,221,123
|
)
|
||||||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation of vessels
|
12,137,445
|
10,995,023
|
8,788,121
|
|||||||||
Impairment loss and loss on write-down of vessel held for sale
|
3,500,000
|
1,641,885
|
5,924,668
|
|||||||||
Amortization and write off of deferred charges
|
137,032
|
150,189
|
613,326
|
|||||||||
Net gain on sale of vessels
|
-
|
(461,586
|
)
|
(10,597
|
)
|
|||||||
Share-based compensation
|
510,114
|
306,111
|
294,341
|
|||||||||
Loss on termination and impairment of newbuilding contracts
|
-
|
-
|
7,050,179
|
|||||||||
Unrealized gain on derivatives
|
(718,977
|
)
|
(45,669
|
)
|
(12,921
|
)
|
||||||
Other income accrued
|
(987,604
|
)
|
(1,212,938
|
)
|
(1,024,714
|
)
|
||||||
Impairment on other investment
|
-
|
-
|
4,421,452
|
|||||||||
Equity loss and impairment of investment in joint venture
|
2,541,775
|
2,158,393
|
16,515,702
|
|||||||||
Changes in operating assets and liabilities:
|
||||||||||||
(Increase) / decrease in:
|
||||||||||||
Trade accounts receivable
|
(316,841
|
)
|
781,714
|
(23,842
|
)
|
|||||||
Prepaid expenses
|
(52,983
|
)
|
172,725
|
3,108
|
||||||||
Other receivables
|
596,113
|
(386,671
|
)
|
360,976
|
||||||||
Inventories
|
(284,816
|
)
|
293,990
|
245,079
|
||||||||
Increase / (decrease) in:
|
||||||||||||
Due to related company
|
242,330
|
(823,105
|
)
|
(311,164
|
)
|
|||||||
Trade accounts payable
|
466,139
|
(1,262,798
|
)
|
588,420
|
||||||||
Accrued expenses
|
(394,155
|
)
|
54,673
|
(8,447
|
)
|
|||||||
Deferred revenue
|
(186,944
|
)
|
(341,525
|
)
|
(24,802
|
)
|
||||||
Net cash used in operating activities
|
(730,277
|
)
|
(2,027,572
|
)
|
(832,238
|
)
|
||||||
Cash flows from investing activities:
|
||||||||||||
Cash paid for vessels under construction and vessel acquisition
|
(15,637,368
|
)
|
(16,628,889
|
)
|
(27,329,825
|
)
|
||||||
Advance received for vessel held for sale
|
-
|
1,122,208
|
-
|
|||||||||
Purchase of a vessel
|
(21,323,935
|
)
|
-
|
-
|
||||||||
Release of restricted cash
|
168,322
|
4,102,364
|
5,675,034
|
|||||||||
Increase in restricted cash
|
(300,000
|
)
|
(6,575,014
|
)
|
(1,348,297
|
)
|
||||||
Proceeds from sale of vessels
|
-
|
7,345,342
|
4,196,268
|
|||||||||
Net cash used in investing activities
|
(37,092,981
|
)
|
(10,633,989
|
)
|
(18,806,820
|
)
|
||||||
2014
|
2015
|
2016
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of preferred stock, net of commissions paid
|
29,700,000
|
-
|
-
|
|||||||||
Proceeds from issuance of common stock, net of commissions paid
|
14,550,000
|
10,545,007
|
3,168,058
|
|||||||||
Funds used for common stock buyback
|
(150,687
|
)
|
-
|
-
|
||||||||
Offering expenses paid
|
(564,922
|
)
|
(400,696
|
)
|
(82,377
|
)
|
||||||
Dividends paid
|
(13,050
|
)
|
-
|
-
|
||||||||
Loan arrangement fees paid
|
(299,900
|
)
|
(442,574
|
)
|
(790,042
|
)
|
||||||
Proceeds from long-term debt
|
23,300,000
|
8,400,000
|
28,300,000
|
|||||||||
Proceeds from related party loan
|
-
|
-
|
2,000,000
|
|||||||||
Repayment of long-term debt
|
(14,687,000
|
)
|
(22,135,960
|
)
|
(18,464,125
|
)
|
||||||
Net cash provided by / (used in) financing activities
|
51,834,441
|
(4,034,223
|
)
|
14,131,514
|
||||||||
Net increase / (decrease) in cash and cash equivalents
|
14,011,183
|
(16,695,784
|
)
|
(5,507,544
|
)
|
|||||||
Cash and cash equivalents at beginning of year
|
11,400,237
|
25,411,420
|
8,715,636
|
|||||||||
Cash and cash equivalents at end of year
|
25,411,420
|
8,715,636
|
3,208,092
|
|||||||||
Supplemental cash flow information
Cash paid for interest, net of capitalized expenses
|
2,000,850
|
1,352,737
|
1,727,186
|
|||||||||
Financing, and investing activities fees:
|
||||||||||||
Loan arrangement fees accrued
|
-
|
72,600
|
38,400
|
|||||||||
Offering expenses accrued
|
86,078
|
3,279
|
178,308
|
|||||||||
Payment-in-kind dividends
|
1,440,100
|
1,639,149
|
1,725,699
|
|||||||||
Capital expenditures included in liabilities
|
-
|
385,488
|
218,909
|
|||||||||
Shares issued as consideration for vessel acquisition including inventory on-board
|
-
|
-
|
1,800,000
|
1. |
Basis of Presentation and General Information
|
· |
Allendale Investment S.A. incorporated in Panama on January 22, 2002, owner of the Panama flag 18,154 deadweight tons ("DWT") / 1,169 twenty-foot equivalent ("TEU" – a measure of carrying capacity in containers) container carrier M/V "Kuo Hsiung", which was built in 1993 and acquired on May 13, 2002.
|
· |
Alterwall Business Inc. incorporated in Panama on January 15, 2001, owner of the Panama flag 18,253 DWT / 1,169 TEU container carrier M/V "Ninos" (previously named M/V "Quingdao I") which was built in 1990 and acquired on February 16, 2001.
|
· |
Diana Trading Ltd. incorporated in the Marshall Islands on September 25, 2002, owner of the Marshall Islands flag 69,734 DWT bulk carrier M/V "Irini", which was built in 1988 and acquired on October 15, 2002. M/V "Irini" was sold on July 10, 2013.
|
1. |
Basis of Presentation and General Information- Continued
|
· |
Xenia International Corp., incorporated in the Marshall Islands on April 6, 2006, owner of the Marshall Islands flag 22,568 DWT / 950 TEU multipurpose M/V "Tasman Trader", which was built in 1990 and acquired on April 27, 2006. On March 7, 2012, the vessel was renamed M/V "Anking". On June 4, 2013 the vessel was sold.
|
· |
Prospero Maritime Inc., incorporated in the Marshall Islands on July 21, 2006, owner of the Marshall Islands flag 69,268 DWT dry bulk M/V "Aristides N.P.", which was built in 1993 and acquired on September 21, 2006. The vessel was sold on January 15, 2016.
|
· |
Xingang Shipping Ltd., incorporated in Liberia on October 16, 2006, owner of the Liberian flag 23,596 DWT / 1,599 TEU container carrier M/V "YM Xingang I" , which was built in February 1993 and acquired on November 15, 2006. On July 11, 2009, the vessel was renamed M/V "Mastro Nicos" and on November 5, 2009, it was renamed M/V "YM Port Kelang". On October 25, 2011 the vessel was renamed M/V "Marinos". The vessel was sold on November 26, 2015.
|
· |
Manolis Shipping Ltd., incorporated in the Marshall Islands on March 16, 2007, owner of the Marshall Islands flag 20,346 DWT / 1,452 TEU container carrier M/V "Manolis P", which was built in 1995 and acquired on April 12, 2007.
|
· |
Eternity Shipping Company, incorporated in the Marshall Islands on May 17, 2007, owner of the Marshall Islands flag 30,007 DWT / 1,742 TEU container carrier M/V "Clan Gladiator", which was built in 1992 and acquired on June 13, 2007. On May 9, 2008, M/V "Clan Gladiator" was renamed M/V "OEL Transworld" and on August 31, 2009 the vessel was renamed M/V "Captain Costas". The vessel was sold on May 10, 2016.
|
· |
Pilory Associates Corp., incorporated in Panama on July 4, 2007, owner of the Panamanian flag 33,667 DWT / 1,932 TEU container carrier M/V "Despina P", which was built in 1990 and acquired on August 13, 2007. The vessel was sold on December 28, 2015.
|
· |
Tiger Navigation Corp., incorporated in Marshall Islands on August 29, 2007, owner of the Marshall Islands flag 31,627 DWT / 2,228 TEU container carrier M/V "Tiger Bridge", which was built in 1990 and acquired on October 4, 2007. The vessel was sold on November 9, 2015.
|
· |
Noumea Shipping Ltd, incorporated in Marshall Islands on May 14, 2008, owner of the Marshall Islands flag 34,677 DWT / 2,556 TEU container carrier M/V "Maersk Noumea", renamed "Evridiki G", which was built in 2001 and acquired on May 22, 2008.
|
· |
Saf-Concord Shipping Ltd., incorporated in Liberia on June 8, 2008, owner of the Liberian flag 46,667 DWT bulk carrier M/V "Monica P", which was built in 1998 and acquired on January 19, 2009.
|
1. |
Basis of Presentation and General Information - Continued
|
· |
Eleni Shipping Ltd., incorporated in Liberia on February 11, 2009, owner of the Liberian flag 72,119 DWT bulk carrier M/V "Eleni P", which was built in 1997, acquired on March 6, 2009 and sold on January 26, 2017.
|
· |
Pantelis Shipping Ltd., incorporated in the Republic of Malta on July 2, 2009, owner of the Maltese flag 74,020 DWT bulk carrier M/V "Pantelis" which was built in 2000 and acquired on July 23, 2009. On December 15, 2009, ownership of the vessel was transferred to Pantelis Shipping Corp., incorporated in Liberia, and the vessel changed its flag to the Liberian flag.
|
· |
Aggeliki Shipping Ltd., incorporated in the Republic of Liberia on May 21, 2010, owner of the Liberian flag 30,306 DWT / 2008 TEU container carrier M/V "Aggeliki P" which was built in 1998 and acquired on June 21, 2010.
|
· |
Joanna Maritime Ltd., incorporated in Liberia on June 10, 2013, owner of the Liberian flag 22,301 DWT / 1,732 TEU container carrier M/V "Joanna" which was built in 1999 and acquired on July 4, 2013. The vessel has been renamed Vento di Grecale.
|
· |
Eirini Shipping Ltd., incorporated in the Republic of Liberia on February 2, 2014, owner of the Liberian flag 76,466 DWT bulk carrier M/V "Eirini P" which was built in 2004 and acquired on May 26, 2014.
|
· |
Ultra One Shipping Ltd., incorporated in the Republic of Liberia on November 21, 2013, entered on November 29, 2013, into a shipbuilding contract with Yangzhou Dayang Shipbuilding Co., Ltd. and Sumec Marine Co., Ltd., for the construction of a 63,500 DWT bulk carrier (Hull No. DY160, to be named M/V "Alexandros P"). The shipbuilding contract was cancelled on June 29, 2016 due to excessive construction delays. On December 21, 2016, an agreement was reached to acquire the vessel which was delivered on January 16, 2017.
|
· |
Ultra Two Shipping Ltd., incorporated in the Republic of Liberia on November 21, 2013, entered on November 29, 2013, into a shipbuilding contract with Yangzhou Dayang Shipbuilding Co., Ltd. and Sumec Marine Co., Ltd., for the construction of a 63,500 DWT bulk carrier (Hull No. DY161). The shipbuilding contract was cancelled on September 2, 2016 due to excessive construction delays.
|
1. |
Basis of Presentation and General Information - Continued
|
· |
Kamsarmax One Shipping Ltd., incorporated in the Republic of the Marshall Islands on April 4, 2014, agreed to acquire from Klaveness Bulk AS, the 82,000 DWT bulk carrier Hull No. YZJ2013-1116 (named M/V "Xenia"). The vessel is a new-building and was delivered on February 25, 2016.
|
· |
Kamsarmax Two Shipping Ltd., incorporated in the Republic of the Marshall Islands on April 4, 2014, entered on April 4, 2014, into a shipbuilding contract with Jiangsu Tianyuan Marine Import & Export Co., Ltd., and Jiangsu Yangzijiang Shipbuilding Co., Ltd. and Jiangsu New Yangzi Shipbuilding Co., Ltd., for the construction of a 82,000 DWT bulk carrier (Hull No. YZJ2013-1153). In July 2016, Kamsarmax Two Shipping Ltd. signed and amended agreement which provides it with an option to terminate the contract by December 31, 2016 (subsequently, extended to March 31, 2017) without any additional cost. In March 2017, the Company decided not to exercise the option to terminate the contract but proceed with construction of the vessel which is expected to be delivered by June 2018 (see also Note 20).
|
· |
Jonathan John Shipping Ltd., incorporated in the Republic of the Marshall Islands on August 19, 2016, owner of the Panamanian flag 18,581 DWT / 1,439 TEU container carrier M/V "Aegean Express" which was built in 1997 and delivered on September 29, 2016.
|
· |
Areti Shipping Ltd., incorporated in the Republic of the Marshall Islands on November 15, 2016, owner of the Cypriot flag 75,100 DWT bulk carrier M/V "Tasos" which was built in 2000 and delivered on January 9, 2017.
|
· |
Hull 2 Shipping Ltd., incorporated in the Republic of the Marshall Islands on December 30, 2013, owner of the Marshall Islands flag 20,976 DWT / 1,645 TEU container carrier M/V "RT Dagr" which was built in 1998 and delivered on December 23, 2016. The vessel was sold on January 31, 2017.
|
1. |
Basis of Presentation and General Information - Continued
|
Year ended December 31,
|
||||||||||||
Charterer
|
2014
|
2015
|
2016
|
|||||||||
GSS
|
4
|
%
|
16
|
%
|
22
|
%
|
||||||
MSC
|
11
|
%
|
13
|
%
|
16
|
%
|
||||||
KLAVENESS
|
-
|
-
|
15
|
%
|
||||||||
CMA-CGM
|
13
|
%
|
17
|
%
|
14
|
%
|
2. |
Significant Accounting Policies
|
2. |
Significant Accounting Policies - Continued
|
2. |
Significant Accounting Policies - Continued
|
2. |
Significant Accounting Policies - Continued
|
2. |
Significant Accounting Policies - Continued
|
2. |
Significant Accounting Policies - Continued
|
2. |
Significant Accounting Policies - Continued
|
2. |
Significant Accounting Policies - Continued
|
2. |
Significant Accounting Policies - Continued
|
3. |
Inventories
|
2015
|
2016
|
|||||||
Lubricants
|
990,440
|
788,426
|
||||||
Victualing
|
105,369
|
140,716
|
||||||
Bunkers
|
369,131
|
362,137
|
||||||
Total
|
1,464,940
|
1,291,279
|
Costs
|
||||
Balance, January 1, 2015
|
15,687,490
|
|||
Advances for vessels under construction
|
17,014,377
|
|||
Balance, December 31, 2015
|
32,701,867
|
|||
Advances for vessels under construction
|
23,135,658
|
|||
Vessel acquisition deposits
|
797,830
|
|||
Vessel delivered during the period
|
(31,831,439
|
)
|
||
Loss on termination and impairment of newbuilding contracts
|
(7,050,179
|
)
|
||
Balance, December 31, 2016
|
17,753,737
|
5. |
Vessels, net
|
5. |
Vessels, net - Continued
|
6. |
Deferred Charges, net
|
2015
|
2016
|
|||||||
Balance, beginning of year
|
-
|
418,034
|
||||||
Write-off of loan commitment fees
|
-
|
(411,642
|
)
|
|||||
Loan commitment fees
|
418,034
|
420,391
|
||||||
Balance, end of year
|
418,034
|
426,783
|
7. |
Accrued Expenses
|
As of December 31, 2015
|
As of December 31, 2016
|
|||||||
Accrued payroll expenses
|
319,443
|
230,917
|
||||||
Accrued interest and commitment fees
|
153,102
|
310,389
|
||||||
Accrued general and administrative expenses
|
112,570
|
278,826
|
||||||
Accrued commissions
|
36,189
|
54,173
|
||||||
Other accrued expenses
|
581,766
|
437,988
|
||||||
Total
|
1,203,070
|
1,312,293
|
8. |
Related Party Transactions
|
8. |
Related Party Transactions - Continued
|
9. |
Long-Term Debt
|
Borrower
|
December 31,
2015 |
December 31,
2016 |
|||||||
Xingang Shipping Ltd. / Joanna Maritime Ltd.
|
(a)
|
1,276,040
|
1,103,915
|
||||||
Manolis Shipping Ltd.
|
(b)
|
4,500,000
|
-
|
||||||
Saf Concord Shipping Ltd.
|
(c)
|
3,250,000
|
-
|
||||||
Pantelis Shipping Corp.
|
(d)
|
5,120,000
|
4,840,000
|
||||||
Noumea Shipping Ltd.
|
(e)
|
7,800,000
|
6,360,000
|
||||||
Eirini Shipping Ltd. / Eleni Shipping Ltd.
|
(f)
|
13,200,000
|
11,600,000
|
||||||
Allendale Investments S.A. / Alterwall Business Inc. / Manolis Shipping Ltd. / Saf Concord Shipping Ltd. / Aggeliki Shipping Ltd. /Eternity Shipping Company / Jonathan John Shipping Ltd.
|
(g)
|
-
|
13,120,000
|
||||||
Kamsarmax One Shipping Ltd
|
(h)
|
-
|
13,333,000
|
||||||
Euroseas Ltd.
|
(i)
|
5,375,000
|
-
|
||||||
40,521,040
|
50,356,915
|
||||||||
Less: Current portion
|
(14,810,000
|
)
|
(5,697,915
|
)
|
|||||
Long-term portion
|
25,711,040
|
(44,659,000
|
)
|
||||||
Deferred Charges, current portion
|
124,234
|
148,697
|
|||||||
Deferred charges, long-term portion
|
158,338
|
292,024
|
|||||||
Long-term debt, current portion net of deferred charges
|
14,685,766
|
5,549,218
|
|||||||
Long-term debt, long-term portion net of deferred charges
|
25,552,702
|
44,366,976
|
Euroseas Ltd.
|
(j)
|
-
|
2,000,000
|
To December 31:
|
||||
2017
|
7,697,915
|
|||
2018
|
14,304,000
|
|||
2019
|
19,824,000
|
|||
2020
|
934,000
|
|||
2021
|
934,000
|
|||
Thereafter
|
8,663,000
|
|||
Total
|
52,356,915
|
9. |
Long-Term Debt - continued
|
(a) |
On September 30, 2016, the Company signed a Supplemental Agreement with HSBC Bank PLC to defer the six remaining consecutive quarterly instalments of $75,000 each (being $450,000 in aggregate) to be payable together with the balloon payment of $653,915 in one bullet payment of $1,103,915 in November, 2017. The asset coverage ratio was reduced from 130% to 75% until the maturity of this agreement. A cash sweep mechanism was put in place until the entire deferred amount is repaid.
|
(b) |
This loan was fully repaid on February 12, 2016 with part of the proceeds of a new loan (see Note 9-(g)).
|
(c) |
This loan was fully repaid on February 12, 2016 with part of the proceeds of a new loan (see Note 9-(g)).
|
(d) |
On September 30, 2016, the Company signed a Supplemental Agreement with HSBC Bank PLC to defer the six remaining consecutive quarterly instalments of $280,000 each (being $1,680,000 in aggregate) until (a) 29 September 2017 (being the initial final repayment date together with the balloon payment of $3,160,000 in one bullet payment of $4,840,000) or (b) to extend the final repayment date of the deferred amount and the balloon payment until 29 December 2018 if Euroseas agrees with the current lender of container vessel Evridiki G (being Credit Agricole) or any other bank the extension of the repayment date of her balloon instalment at least until her current charter matures in the first quarter of 2018. In this case the outstanding amount of $4,840,000 will be paid in four quarterly instalments, the first two instalments of $280,000 each, the third instalment in the amount of $560,000 and the fourth instalment of $3,720,000 comprised by $560,000 and the balloon payment, The first instalment will be paid in March 2018 and the following instalments on quarterly intervals thereafter and the last one in December 2018. The asset coverage ratio was reduced from 130% to 75% until December 31, 2017. A cash sweep mechanism was put in place until the entire deferred amount is repaid. A cash collateral amount of $300,000 (corresponding to the minimum cash balance requirement) to be pledged in the cash collateral account of Eirini P/Eleni P. For the avoidance of doubt the aforementioned cash collateral is in addition to the cash collateral required to be maintained in the cash collateral account pursuant to the Eirini P/Eleni P loan agreement (see Note 9-(f)).
|
(e) |
On December 22, 2016, the supplemental agreement with Noumea Shipping Ltd., owner of M/V "Evridiki G" was signed in order to refinance the final quarterly instalment of $720,000 and the balloon payment of $6,360,000 originally due in December 2016. The borrower and the lender agreed to amend the repayment profile in respect of the loan of which $7,080,000 remained outstanding as of the date of the supplemental agreement and to extend the final maturity date to January 2018. The loan will be repaid with three repayments of $720,000 each, due in December 2016, in July 2017 and in January 2018 together with the balloon payment of $4,920,000 due in January 2018. The security cover ratio covenant has been waived until November 15, 2017, when it will be restored to 110%.
|
(f) |
On September 30, 2016, the Company signed a Supplemental Agreement with HSBC Bank PLC. The outstanding balance of the loan of Eirini Shipping Ltd / Eleni Shipping Ltd. of $12,850,000 prior to the closing of the supplemental agreement was reduced to $11,600,000 via prepayment of the cash collateral of $1,250,000 (which was effected after the signing of the respective supplemental agreement). In addition, seven principal instalments of $350,000 each, from June 2016 to December 2017 were deferred. Repayment of the loan will be resumed in March 2018 and the outstanding balance of $11,600,000 will be repaid in two quarterly instalments of $350,000 each, four of $725,000 each plus a balloon payment of $8,000,000 due in May 2019. The asset coverage ratio was reduced from 130% to 75% until December 31, 2017. A cash sweep mechanism was put in place until the entire deferred amount is repaid. A cash collateral amount of $600,000 (corresponding to the minimum cash balance requirement) to be pledged in the cash collateral account of M/V "Eirini P" / M/V "Eleni P". For the avoidance of doubt the aforementioned cash collateral is in addition to the cash collateral required to be maintained in the cash collateral account pursuant to the Pantelis loan agreement. M/V "Eleni P" was sold on January 26, 2017; the proceeds from the sale were used to partly pay for the acquisition of M/V "Tasos" which replaced M/V "Eleni P" as collateral for the loan.
|
(g) |
On February 12, 2016, the Company signed and drew a term loan facility with Eurobank Ergasias S.A in order to refinance all of its existing facilities with the bank. This is a $14,500,000 loan drawn by Saf-Concord Shipping Ltd, Eternity Shipping Company, Allendale Investments S.A., Manolis Shipping Limited, Alterwall Business Inc., Aggeliki Shipping Ltd and Jonathan John Shipping Ltd. (which was cross-collateralized as per supplemental agreement dated September 27, 2016 replacing Eternity Shipping Company, the owner of M/V "Captain Costas" that was sold in 2016) as Borrowers. The loan is payable in twelve equal consecutive quarterly instalments of $460,000 each, with a balloon payment of $8,980,000 to be paid together with the last instalment in February 2019. The interest was based on LIBOR plus a margin of 6.00%. The loan is secured with the following: (i) first priority mortgages over M/V "Monica P", M/V "Captain Costas" replaced by M/V "Aegean Express" after her sale, M/V "Kuo Hsuing", M/V "Manolis P", M/V "Ninos", M/V "Aggeliki P", (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd and other covenants and guarantees similar to the rest of the loans of the Company, and (iv) a $2,800,000 cash collateral deposit pledged in favor of the bank. The Company paid loan arrangement fee of $247,500 for this loan.
|
9. |
Long-Term Debt - continued
|
(h) |
On February 17, 2016, the Company signed a term loan facility with Nord LB and on February 25, 2016 a loan of $13,800,000 was drawn by Kamsarmax One Shipping Ltd. to partly finance the purchase of M/V "Xenia". The loan is to be repaid in fourteen consecutive equal semi-annual installments of $467,000 plus a balloon amount of $7,262,000. The margin of the loan is 2.95% above LIBOR. The loan is secured with (i) first priority mortgages over M/V "Xenia", (ii) first assignment of earnings and insurance, (iii) a corporate guarantee of Euroseas Ltd and other covenants and guarantees similar to the rest of the loans of the Company. The Company paid loan arrangement fee of $187,335 for this loan.
|
(i) |
This loan was fully repaid on of February 12, 2016 with part of the proceeds of a new loan (see Note 9-(g)).
|
(j) |
On November 29, 2016, Euroseas signed an agreement with Colby Trading Ltd, a company affiliated with its CEO, to draw a $2 million loan to finance working capital needs. Interest on the loan is payable quarterly, and there are no principal repayments until January 2018 when the loan matures. The Company may elect to capitalize the interest to the outstanding principal amount. Under certain limited circumstances, the Company can pay principal and interest in equity, and the loan is convertible in common stock of the Company at the option of the lender at certain times. The Company repaid this loan on February 28, 2017 along with $50,556 interest.
|
9. |
Long-Term Debt - continued
|
10. |
Income Taxes
|
11. |
Commitments and Contingencies
|
(a) |
As of December 31, 2016 a subsidiary of the Company, Alterwall Business Inc. owner of M/V "Ninos", has a dispute with a fuel oil supplier who claimed a maritime lien against the vessel after the company which had time-chartered the vessel from the Company went bankrupt and failed to pay certain invoices. The vessel was arrested in Karachi and released after a bank guarantee for an amount of $0.53 million, for which the bank has restricted an equal amount of the Company's cash which is presented within Restricted Cash, was provided on behalf of the Company. Legal proceedings continue. The Company has not made a provision for any loss as although it believes it will be successful, it cannot determine the possible outcome of the legal proceedings.
|
11. |
Commitments and Contingencies - Continued
|
(b) |
As of December 31, 2016, the Company had a newbuilding contract for the construction of one Kamsarmax drybulk carrier. The contract contains an opt-out clause in favor of the Company which can be invoked by March 31, 2017 without penalty except for the progress payment already made. However, the Company decided to proceed with the original contract as modified in an addendum signed in March 2017. According to the amended newbuilding contract, the Company will make payments of $4.5 million in 2017 and $18.0 million in 2018 for the construction of the vessel.
|
12. |
Stock Incentive Plan
|
a) |
On November 3, 2014 an award of 45,000 non-vested restricted shares, was made to 19 key persons of which 50% vested on November 16, 2015 and 50% vested on November 16, 2016; awards to officers and directors amounted to 26,100 shares and the remaining 18,900 shares were awarded to employees of Eurobulk.
|
b) |
On November 6, 2015 an award of 68,400 non-vested restricted shares, was made to 19 key persons of which 50% vested on July 1, 2016 and 50% will vest on July 1, 2017; awards to officers and directors amounted to 40,040 shares and the remaining 28,360 shares were awarded to employees of Eurobulk.
|
c) |
On November 3, 2016 an award of 82,080 non-vested restricted shares, was made to 19 key persons of which 50% will vest on November 1, 2017 and 50% will vest on November 1, 2018; awards to officers and directors amounted to 48,048 shares and the remaining 34,032 shares were awarded to employees of Eurobulk.
|
12. |
Stock Incentive Plan - continued
|
Non-vested Shares
|
Shares
|
Weighted-Average Grant-Date Fair Value
|
||||||
Non-vested on January 1, 2016
|
90,900
|
5.67
|
||||||
Granted
|
82,080
|
1.21
|
||||||
Vested
|
(56,700
|
)
|
6.57
|
|||||
Non-vested on December 31, 2016
|
116,280
|
2.08
|
13. |
Earnings / (Loss) Per Share
|
2014
|
2015
|
2016
|
||||||||||
Income:
|
||||||||||||
Net loss attributable to common shareholders
|
(19,359,005
|
)
|
(15,687,132
|
)
|
(45,946,822
|
)
|
||||||
Basic and diluted earnings per share:
|
||||||||||||
Weighted average common shares – Outstanding
|
5,479,418
|
6,410,794
|
8,165,703
|
|||||||||
Basic and diluted loss per share
|
(3.53
|
)
|
(2.45
|
)
|
(5.63
|
)
|
14. |
Voyage, Vessel Operating Expenses and Commissions
|
Year ended December 31,
|
||||||||||||
2014
|
2015
|
2016
|
||||||||||
Voyage expenses
|
||||||||||||
Port charges and canal dues
|
1,214,856
|
832,917
|
421,140
|
|||||||||
Bunkers
|
2,748,325
|
1,479,596
|
870,572
|
|||||||||
Total
|
3,963,181
|
2,312,513
|
1,291,712
|
|||||||||
Vessel operating expenses
|
||||||||||||
Crew wages and related costs
|
13,985,377
|
14,164,355
|
10,670,721
|
|||||||||
Insurance
|
2,364,112
|
2,412,366
|
1,649,313
|
|||||||||
Repairs and maintenance
|
501,733
|
503,934
|
341,481
|
|||||||||
Lubricants
|
2,379,191
|
2,433,956
|
1,611,543
|
|||||||||
Spares and consumable stores
|
4,083,942
|
4,058,153
|
2,770,405
|
|||||||||
Professional and legal fees
|
498,240
|
492,852
|
214,317
|
|||||||||
Other
|
1,466,492
|
1,138,977
|
904,082
|
|||||||||
Total
|
25,279,087
|
25,204,593
|
18,161,862
|
15. |
Derivative Financial Instruments
|
Derivatives not designated as hedging instruments
|
Balance Sheet Location
|
December 31, 2015
|
December 31, 2016
|
||||||
Interest rate swap contracts
|
Current liabilities – Derivatives
|
50,402
|
-
|
||||||
Interest rate swap contracts
|
Long-term liabilities – Derivatives
|
202,700
|
240,181
|
||||||
Total derivative liabilities
|
|
253,102
|
240,181
|
Derivatives not designated as hedging instruments
|
Location of gain (loss) recognized
|
Year Ended December 31, 2014
|
Year Ended December 31, 2015
|
Year Ended December 31, 2016
|
|||||||||
Interest rate – Fair value
|
Loss on derivatives, net
|
718,977
|
45,669
|
12,921
|
|||||||||
Interest rate contracts - Realized loss
|
Loss on derivatives, net
|
(763,625
|
)
|
(307,343
|
)
|
(132,075
|
)
|
||||||
Total loss on derivatives
|
|
(44,648
|
)
|
(261,674
|
)
|
(119,154
|
)
|
16. |
Investment in Joint Venture and Other Investment
|
2014
|
2015
|
2016
|
||||||||||
Current assets
|
9,520,607
|
11,880,202
|
13,253,581
|
|||||||||
Non current assets
|
252,531,888
|
223,366,979
|
193,942,132
|
|||||||||
Current liabilities
|
16,194,148
|
116,207,106
|
103,687,334
|
|||||||||
Non current liabilities
|
115,181,837
|
3,495,007
|
5,010,852
|
|||||||||
Members' contributions
|
175,000,000
|
175,000,000
|
175,000,000
|
|||||||||
Voyage revenue
|
31,663,989
|
34,419,758
|
24,910,758
|
|||||||||
Net revenue
|
30,269,066
|
33,114,016
|
23,949,441
|
|||||||||
Operating loss
|
(11,058,601
|
)
|
(7,912,039
|
)
|
(9,165,809
|
)
|
||||||
Net loss
|
(17,798,476
|
)
|
(15,108,751
|
)
|
(17,112,389
|
)
|
16. |
Investment in Joint Venture and Other Investment- continued
|
In USD
|
Other Investment
|
|||
Balance, January 1, 2015
|
6,183,800
|
|||
Total gain for period included in Investment income
|
1,212,938
|
|||
Balance, December 31, 2015
|
7,396,738
|
|||
Total gain for the period included in Investment income
|
1,024,714
|
|||
Impairment of other investment
|
(4,421,452
|
)
|
||
Balance, December 31, 2016
|
4,000,000
|
17. |
Dividends Series B preferred shares
|
Number
of Shares |
Preferred Shares Amount
|
Dividends paid-in-kind
|
Total
|
|||||||||||||
Balance, January 1, 2014
|
-
|
-
|
-
|
-
|
||||||||||||
Issuance of preferred shares from private placement net of issuance costs
|
30,700
|
29,000,000
|
- |
29,000,000
|
||||||||||||
Dividends declared
|
1,440
|
- |
1,440,100
|
1,440,100
|
||||||||||||
Balance, December 31, 2014
|
32,140
|
29,000,000
|
1,440,100
|
30,440,100
|
||||||||||||
Dividends declared
|
1,639
|
- |
1,639,149
|
1,639,149
|
||||||||||||
Balance, December 31, 2015
|
33,779
|
29,000,000
|
3,079,249
|
32,079,249
|
||||||||||||
Dividends declared
|
1,726
|
- |
1,725,699
|
1,725,699
|
||||||||||||
Balance, December 31, 2016
|
35,505
|
29,000,000
|
4,804,948
|
33,804,948
|
17. |
Dividends Series B preferred shares - continued
|
18. |
Financial Instruments
|
18. |
Financial Instruments - continued
|
Fair Value Measurement as of December 31, 2016
|
||||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Liabilities
|
||||||||||||||||
Interest rate swap contracts, long-term portion
|
$
|
240,181
|
-
|
$
|
240,181
|
-
|
Fair Value Measurement as of December 31, 2015
|
||||||||||||||||
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
Liabilities
|
||||||||||||||||
Interest rate swap contracts, current and long-term portion
|
$
|
253,102
|
-
|
$
|
253,102
|
-
|
18. |
Financial Instruments - continued
|
18. |
Financial Instruments - continued
|
December 31, 2015
|
December 31, 2016
|
|||||||||||||||||||||||||||||||||||||||
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
Loss
2015
|
Fair Value
|
Level 1
|
Level 2
|
Level 3
|
Loss 2016
|
|||||||||||||||||||||||||||||||
Vessels held for sale
|
$
|
2,805,521
|
-
|
$
|
2,805,521
|
-
|
$
|
1,641,885
|
$
|
2,946,923
|
-
|
$
|
2,946,923
|
-
|
$
|
5,924,668
|
||||||||||||||||||||||||
Other investment
|
-
|
-
|
-
|
-
|
$
|
4,000,000
|
-
|
-
|
$
|
4,000,000
|
$
|
4,421,452
|
||||||||||||||||||||||||||||
Investment in joint venture
|
-
|
-
|
-
|
-
|
0
|
-
|
-
|
0
|
$
|
14,071,075
|
18. |
Financial Instruments - continued
|
19. |
Common Stock
|
20. |
Subsequent Events
|
(a) |
On January 9, 2017, the Company took delivery of M/V "Tasos".
|
(b) |
On January 16, 2017, the Company took delivery of M/V "Alexandros P".
|
(c) |
On January 26, 2017, the Company delivered to her new owners M/V "Eleni P" which was classified as held for sale as of December 31, 2016.
|
(d) |
On January 25, 2017, the Company drew a loan of $10,862,500 from HSH Nordbank secured by its newly acquired vessel M/V "Alexandros P" (ex-Hull DY 160). The loan is payable in thirteen equal consecutive quarterly instalments of $159,743 each, with a balloon payment of $8,785,841 to be paid together with the last instalment in April 2020. The interest rate margin is 3.00% over LIBOR.
|
(e) |
During January 2017, the Company sold 301,780 shares of common stock through its ATM common stock offering for gross proceeds net of commissions of $549,495.
|
(f) |
On January 31, 2017, the Company sold M/V "RT Dagr", a containership vessel it had acquired in 2016, for net proceeds of $2.3 million. The Company is expected to record a gain on sale of approximately $0.5 million.
|
(g) |
On March 13, 2017, the Company signed an amendment to its newbuilding contract with Jiangsu Tianyuan Marine Import & Export Co., Ltd., and Jiangsu Yangzijiang Shipbuilding Co., Ltd. and Jiangsu New Yangzi Shipbuilding Co., Ltd. to proceed with the construction of an 82,000 DWT bulk carrier (Hull No. YZJ2013-1153) to be delivered by June 2018 at a contract price of $22.50 million. The Company will pay three instalments of $2.25 million each, two in 2017 and one in 2018 and the remaining with the delivery of the vessel.
|
THE COMPANY:
|
||
EUROSEAS LTD.
|
||
By:
|
/s/ Anastasios Aslidis
|
|
Name: Anastasios Aslidis
|
||
Title: CFO
|
INVESTOR
:
Tennenbaum Opportunities Partners V, LP
Tennenbaum Opportunities Fund VI, LLC
On behalf of each of the above-listed entities:
By: Tennenbaum Capital Partners, LLC Its: Investment Manager |
||
By:
|
/s/ Michael Leitner
|
|
Name: Michael Leitner
|
||
Title: Managing Partner
|
EUROSEAS LTD.
|
|||
By:
|
/s/ Anastasios Aslidis
|
||
Name: Dr. Anastasios Aslidis
|
|||
Title: Chief Financial Officer
|
|||
AMERICAN STOCK TRANSFER AND TRUST COMPANY, LLC
as Rights Agent |
|||
By:
|
/s/ Michael A. Nespoli
|
||
Name: Michael A. Nespoli
|
|||
Title: Executive Director
|
|||
Clause
|
Page | |
1
|
Interpretation
|
1
|
2
|
Agreement of the Creditor Parties
|
2
|
3
|
Conditions Precedent
|
2
|
4
|
Representations and Warranties
|
3
|
5
|
Amendments to Loan Agreement and other Finance Documents
|
3
|
6
|
Further Assurances
|
5
|
7
|
Fees and Expenses
|
5
|
8
|
Communications
|
5
|
9
|
Supplemental
|
5
|
10
|
Law and Jurisdiction
|
6
|
Schedule 1 Lenders
|
7
|
|
Execution Pages
|
8
|
(1) |
ULTRA ONE SHIPPING LTD
, a corporation incorporated in the Republic of Liberia whose registered office is at 80 Broad Street, Monrovia, Liberia (the "
Borrower
");
|
(2) |
EUROSEAS LTD
, a corporation incorporated in the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960, as corporate guarantor (the "
Corporate Guarantor
")
|
(3) |
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1 herein, as
Lenders
;
|
(4) |
HSH NORDBANK AG
, acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as
Agent
;
|
(5) |
HSH NORDBANK AG
, acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as
Security Trustee
;
|
(6) |
HSH NORDBANK AG
, acting through its office at Gerhart-Hauptmann-Platz 50, D-20095 Hamburg, Germany, as
Mandated Lead Arranger
; and
|
(7) |
HSH NORDBANK AG,
acting through its office at Martensdamm 6, D-24103 Kiel, Germany, as
Swap Bank
.
|
(A) |
By a loan agreement dated 20 March 2015 (as amended and supplemented by a supplemental agreement dated 28 April 2016, the "
Loan Agreement
") and made between (i) the Borrower, (ii) the Lenders, (iii) the Agent, (iv) the Security Trustee, (v) the Mandated Lead Arranger and (vi) the Swap Bank, the Lenders agreed to make available to the Borrower a loan facility in an amount of (originally) up to US$19,000,000.
|
(B) |
The Borrower has requested that the Lenders give their consent to (inter alios) the extension of the Availability Period subject to (i) the reduction of the Maximum Advance Amount and the subsequent amendment of the repayment profile set out in clause 8.1 of the Loan Agreement and (ii) the increase of the minimum liquidity requirements set out in clause 11.19 of the Loan Agreement in the manner described in this Agreement (the "
Request
").
|
(C) |
This Agreement sets out the terms and conditions on which the Lenders agree, with effect on and from the Effective Date, to:
|
(i) |
the Request; and
|
(ii) |
the consequential amendments to the Loan Agreement and the other Finance Documents in connection with the Request.
|
1 |
INTERPRETATION
|
1.1 |
Defined expressions
|
1.2 |
Definitions
|
1.3 |
Application of construction and interpretation provisions of Loan Agreement
|
2 |
AGREEMENT OF THE CREDITOR PARTIES
|
2.1 |
Agreement of the Lenders
|
2.2 |
Agreement of the Creditor Parties
|
2.3 |
Effective Date
|
3 |
CONDITIONS PRECEDENT
|
3.1 |
General
|
3.2 |
Conditions precedent
|
(a) |
an original of this Agreement duly executed by the parties to it;
|
(b) |
a certificate from an officer of each of the Borrower and the Corporate Guarantor confirming the names of all their respective officers and directors (and in the case of the Borrower also its shareholders) and confirming that there have been no changes or amendments to the constitutional documents of the Borrower and the Corporate Guarantor which were previously delivered to the Agent;
|
(c) |
true and complete copies of the resolutions passed at separate meetings of (i) all the directors and shareholders of the Borrower and (ii) all the directors of the Corporate Guarantor authorising and approving the execution of this Agreement;
|
(d) |
the original of any power of attorney issued by each of the Borrower and the Corporate Guarantor pursuant to such resolutions aforesaid;
|
(e) |
evidence satisfactory to the Agent that each of the Borrower and the Corporate Guarantor is currently existing in goodstanding in the relevant jurisdiction of its incorporation;
|
(f) |
documentary evidence that the agent for service of process named in clause 30.4 of the Loan Agreement has accepted its appointment under this Agreement;
|
(g) |
favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of the Marshall Islands, Liberia and such other relevant jurisdiction as the Agent may require; and
|
(h) |
any other document or evidence as the Lenders may request in writing from the Borrower.
|
4 |
REPRESENTATIONS AND WARRANTIES
|
4.1 |
Repetition of Loan Agreement representations and warranties
|
4.2 |
Repetition of Finance Document representations and warranties
|
5 |
AMENDMENTS TO LOAN AGREEMENT AND OTHER FINANCE DOCUMENTS
|
5.1 |
Specific amendments to Loan Agreement
|
(a) |
by replacing the definitions of "Availability Period" and "Maximum Advance Amount" in clause 1.1 thereof with the following new definitions:
|
(a) |
31 January 2017 (or such later date as the Agent may, with the authorisation of the Lenders, agree with the Borrower); or
|
(b) |
if earlier, the date on which the Total Commitments are fully borrowed, cancelled or terminated;
|
(b) |
by replacing the figures "$19,000,000" and "62.5" with the figures "$11,000,000" and "55" respectively in Recital (A) and in clause 2.1 thereof;
|
(c) |
by deleting clause 8.1 thereof in its entirety and replacing it with the following new clause:
|
" 8.1 |
Amount of Instalments
|
(d) |
by deleting clause 11.19 thereof in its entirety and replacing it with the following new clause:
|
(a) |
$800,000 ("
Minimum Liquidity
") for the period commencing from the Drawdown Date and at all times thereafter until the irrevocable and unconditional payment of any and all Secured Liabilities; and
|
(b) |
in addition to the amount required under paragraph (a) of this Clause, an additional amount ("
Additional Minimum Liquidity
") of $900,000 for the period commencing from the Drawdown Date and at all times thereafter, which amount may be reduced to: (i) $600,000 on the first anniversary of the Drawdown Date and (ii) $300,000 on the second anniversary of the Drawdown Date and subsequently on the third anniversary of the Drawdown Date may be released to or to the order of the Borrower upon its written request,
Provided that
on each anniversary of the Drawdown Date: (i) the Instalments which are due then have been paid by the Borrower, (ii) the Borrower is in compliance with the minimum liquidity requirements set out in this Clause 11.19 and (iii) no Event of Default or Potential Event of Default has occurred or is continuing or will occur as a result of the reduction or release (as the case may be) of the relevant Additional Minimum Liquidity amount.";
|
(e) |
by construing all references throughout schedule 1, schedule 2, schedule 6, schedule 8 and in the cover page thereof to "$19,000,000" as if the same were references to "$11,000,000";
|
(f) |
by construing references throughout the Loan Agreement to "this Agreement", "hereunder" and other like expressions as if the same referred to the Loan Agreement as amended and supplemented by this Agreement; and
|
(g) |
by construing references throughout the Loan Agreement to each of the other Finance Documents as if the same referred to that Finance Document as amended and supplemented by this Agreement.
|
5.2 |
Amendments to Finance Documents
|
(a) |
the definition of, and references throughout each of the Finance Documents to, the Loan Agreement and any of the other Finance Documents shall be construed as if the same referred to the Loan Agreement and those Finance Documents as amended and supplemented by this Agreement; and
|
(b) |
the references throughout each of the Finance Documents to "this Agreement", "this Deed", "hereunder" and other like expressions shall be construed as if the same referred to such Finance Documents as amended and supplemented by this Agreement.
|
5.3 |
Finance Documents to remain in full force and effect
|
(a) |
the amendments to the Finance Documents contained or referred to in Clauses 5.1 and 5.2; and
|
(b) |
such further or consequential modifications as may be necessary to give full effect to the terms of this Agreement.
|
6 |
FURTHER ASSURANCES
|
6.1 |
Borrower's and Corporate Guarantor's obligation to execute further documents etc.
|
(a) |
execute and deliver to the Security Trustee or procure the execution and delivery to the Security Trustee of all such documents as in the opinion of the Agent (acting reasonably) are necessary for giving full effect to this Agreement and for perfecting and protecting the value of or enforcing any rights or securities granted to the Security Trustee under or pursuant to the Loan Agreement or any other Finance Document, each as amended and supplemented by this Agreement; and
|
(b) |
effect any registration or notarisation, give any notice or take any step, which the Agent may, by notice to the Borrower specify for any of the purposes described in Clause 6.1(a) above or for any similar or related purpose.
|
7 |
FEES AND EXPENSES
|
7.1 |
Fees and Expenses
|
8 |
COMMUNICATIONS
|
8.1 |
General
|
9 |
SUPPLEMENTAL
|
9.1 |
Counterparts
|
9.2 |
Third Party rights
|
10 |
LAW AND JURISDICTION
|
10.1 |
Governing law
|
10.2 |
Incorporation of the Loan Agreement provisions
|
Lender
|
Lending Office
|
|
HSH Nordbank AG
|
Gerhart-Hauptmann-Platz 50
20095 Hamburg
Germany
|
Subsidiary
|
Country of Incorporation
|
Oceanopera Shipping Limited
|
Cyprus
|
Oceanpride Shipping Limited
|
Cyprus
|
Aggeliki Shipping Ltd.
|
Liberia
|
Eirini Shipping Ltd.
|
Liberia
|
Eleni Shipping Ltd.
|
Liberia
|
Joanna Maritime Ltd.
|
Liberia
|
Saf-Concord Shipping Ltd.
|
Liberia
|
Trust Navigation Corp
|
Liberia
|
Ultra One Shipping Ltd.
|
Liberia
|
Ultra Two Shipping Ltd.
|
Liberia
|
Xingang Shipping Ltd.
|
Liberia
|
Pantelis Shipping Ltd.
|
Malta
|
Areti Shipping Ltd.
|
Marshall Islands
|
Diana Trading Ltd.
|
Marshall Islands
|
Eternity Shipping Company
|
Marshall Islands
|
Gregos Shipping Limited
|
Marshall Islands
|
Hull 2 Shipping Ltd.
|
Marshall Islands
|
Jonathan John Shipping Ltd.
|
Marshall Islands
|
Kamsarmax One Shipping Ltd.
|
Marshall Islands
|
Kamsarmax Two Shipping Ltd.
|
Marshall Islands
|
Manolis Shipping Ltd.
|
Marshall Islands
|
Noumea Shipping Ltd
|
Marshall Islands
|
Prospero Maritime Inc.
|
Marshall Islands
|
Tiger Navigation Corp.
|
Marshall Islands
|
Xenia International Corp.
|
Marshall Islands
|
Allendale Investment S.A.
|
Panama
|
Alterwall Business Inc.
|
Panama
|
Pilory Associates Corp.
|
Panama
|
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
|
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.
|
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
|
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.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|