☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
CASTOR MARITIME INC. | ||
(Exact name of Registrant as specified in its charter) | ||
N/A | ||
(Translation of Registrant’s name into English) | ||
Republic of the Marshall Islands | ||
(Jurisdiction of incorporation or organization) |
223 Christodoulou Chatzipavlou Street | ||
Hawaii Royal Gardens | ||
3036 Limassol, Cyprus | ||
(Address of principal executive offices) |
Petros Panagiotidis, Chairman, Chief Executive Officer and Chief Financial Officer 223 Christodoulou Chatzipavlou Phone number: + 357 25 357 767 | ||
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) |
Title of each class | ||||
Trading Symbol(s) | ||||
Name of each exchange on which registered | ||||
Common Shares, $0.001 par value, including associated Share Purchase Rights under the Shareholder Protection Rights Agreement | CTRM | Nasdaq Capital Market |
☐ Yes | ☒ No |
☐ Yes | ☒ No |
☒ Yes | ☐ No |
☐ No |
Large accelerated filer ☐ | Accelerated filer ☐ |
Non-accelerated filer ☒ | Emerging Growth Company ☐ |
☒ | U.S. GAAP |
☐ | International Financial Reporting Standards as issued by the International Accounting Standards Board |
☐ | Other |
☐ | Item 17 |
☐ | Item 18 |
☐ Yes | ☒ No |
☐ Yes |
[PAGE] | ||
1 | ||
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 4A. | ||
ITEM 5. | ||
ITEM 6. | ||
ITEM 7. | ||
ITEM 8. | ||
ITEM 9. | ||
ITEM 10. | ||
ITEM 11. | ||
ITEM 12. | ||
105 | ||
ITEM 13. | ||
ITEM 14. | ||
ITEM 15. | ||
ITEM 16. | ||
ITEM 16A. | ||
ITEM 16B. | ||
ITEM 16C. | ||
ITEM 16D. | ||
ITEM 16E. | ||
ITEM 16F. | ||
ITEM 16G. | ||
ITEM 16H. | ||
ITEM 16I. | 109 | |
ITEM 16J. | 109 | |
ITEM 16K. | CYBERSECURITY | 109 |
110 | ||
ITEM 17. | ||
ITEM 18. | ||
ITEM 19. |
• |
ITEM 1. | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS |
A. | DIRECTORS AND SENIOR MANAGEMENT |
B. | ADVISERS |
C. | AUDITORS |
ITEM 2. | OFFER STATISTICS AND EXPECTED TIMETABLE |
ITEM 3. | KEY INFORMATION |
[RESERVED] |
In U.S. dollars, except for share data | Period from December 13, 2016 to September 30, 2017 | Year ended September 30, 2018 | ||||||
Statement of Comprehensive Income | ||||||||
Revenues | 2,018,061 | 3,960,822 | ||||||
Voyage expenses | 80,853 | 37,373 | ||||||
Vessel operating expenses | 1,194,995 | 1,727,770 | ||||||
General and administrative expenses | 94,440 | 459,400 | ||||||
Depreciation & amortization | 182,346 | 637,611 | ||||||
Management fees to related party | 55,500 | 111,480 | ||||||
Operating Income | 409,927 | 987,188 | ||||||
Interest income | - | 4,243 | ||||||
Bank charges | (532 | ) | (3,393 | ) | ||||
Gain on derivative financial instruments | 475,530 | - | ||||||
Foreign exchange losses | (7,021 | ) | (8,539 | ) | ||||
Other, net | 740 | 1,439 | ||||||
Total other income/(loss), net | 468,717 | (6,250 | ) | |||||
- | - | |||||||
Net income and comprehensive income | 878,644 | 980,938 | ||||||
Earnings/(losses) per common share, basic & diluted | 0.35 | (0.28 | ) | |||||
Weighted average number of common shares, basic and diluted | 2,400,000 | 2,400,000 | ||||||
Other financial data: | ||||||||
Net Cash Provided by Operating Activities | 770,749 | 902,706 | ||||||
Selected Balance Sheet Data (at period/year end): | September 30, 2017 | September 30, 2018 | ||||||
Cash and Cash Equivalents | 836,468 | 1,739,174 | ||||||
Total Assets | 8,717,918 | 9,623,798 | ||||||
Common Stock | 2,400,000 | 2,400,000 | ||||||
Total Shareholders’ Equity | 8,493,644 | 9,474,582 |
C. | REASONS FOR THE OFFER AND USE OF PROCEEDS |
D. |
• | A decline in the market values of our vessels could limit the amount of funds that we can borrow, cause us to breach certain financial covenants in our current or future credit facilities and/or result in impairment charges or losses on sale. |
• | We have limited the fields in which we focus our operations and this may have an adverse effect on our business, financial condition and/or operating results. |
• | We may be unable to achieve some or all of the benefits that we expect to achieve from the spin-off of our tanker business. |
(i) | maintaining a certain minimum level of cash on pledged deposit accounts with the borrowers; |
(ii) | maintaining a certain minimum value ratio at the borrowers’ level, which is the ratio of the aggregate market value of the mortgaged vessels plus the value of any additional security and value of the pledged deposit and/or the value of dry dock reserve accounts to the aggregate principal amounts due under the facilities; |
(iii) | maintaining a dry dock reserve at the borrowers’ level; |
(iv) | not having a ratio of net debt to assets adjusted for the market value of the vessels above a certain level; |
(v) | maintaining a certain level of minimum free cash at Castor Maritime; and |
(vi) | maintaining a trailing 12 months EBITDA to net interest expense ratio at and above a certain level. |
ITEM 4. | INFORMATION ON THE COMPANY |
A. |
Vessel Name | Year Built | Type of Charter | Capacity (dwt) | Delivered to Spetses | Latest Charter Expiration | |||||
Magic P | 2004 | Time Charter | 76,453 | February 21, 2017 | February 2019 |
B. | BUSINESS OVERVIEW |
Vessel Name | Capacity (dwt) | Year Built | Country of Construction | Type of Employment (1) | Gross Charter Rate ($/day) | Estimated Redelivery Date | |
Earliest | Latest | ||||||
M/V Magic Orion (3) | 180,200 | 2006 | Japan | TC period | 101% of BCI5TC (2) | Jan-24(2) | Apr-24 |
M/V Magic Venus(3) | 83,416 | 2010 | Japan | TC period | $11,300 per day (4) | Apr-24 | Jul-24 |
M/V Magic Thunder | 83,375 | 2011 | Japan | TC period | $11,500 (5) | Sep-24 | -(13) |
M/V Magic Perseus | 82,158 | 2013 | Japan | TC period | $13,850 (6) | Sep-24 | -(13) |
M/V Magic Starlight | 81,048 | 2015 | China | TC period | $10,725 (7) | Jun-24 | -(14) |
M/V Magic Nebula (3) | 80,281 | 2010 | Korea | TC trip | $14,000 | Apr-24 | May-24 |
M/V Magic Nova(3) | 78,833 | 2010 | Japan | TC period | 101% of BPI4TC (8) | Apr-24 | -(14) |
M/V Magic Mars | 76,822 | 2014 | Korea | TC period | $12,648 (9) | May-24 | -(14) |
M/V Magic Horizon(3) | 76,619 | 2010 | Japan | TC period | 103% of BPI4TC | Mar-24 | -(15) |
M/V Magic P | 76,453 | 2004 | Japan | TC period | $11,904 (10) | May-24 | -(14) |
M/V Magic Vela | 75,003 | 2011 | China | TC period | 95% of BPI4TC | May-24 | Aug-24 |
M/V Magic Eclipse | 74,940 | 2011 | Japan | TC period | 100% of BPI4TC | Mar-24 | Jun-24 |
M/V Magic Pluto | 74,940 | 2013 | Japan | TC period | $14,050 (11) | Sep-24 | -(13) |
M/V Magic Callisto | 74,930 | 2012 | Japan | TC period | $12,524 (12) | Apr-24 | Jul-24 |
(1) | TC stands for time charter. |
(2) | The benchmark vessel used in the calculation of the average of the Baltic Capesize Index 5TC routes (“BCI5TC”) is a non-scrubber fitted 180,000mt dwt vessel (Capesize) with specific age, speed – consumption, and design characteristics. Based on the terms of charter, the estimated earliest redelivery date for the M/V Magic Orion was January 2024. |
(3) | We agreed to sell the M/V Magic Orion, M/V Magic Venus, M/V Magic Nova, M/V Magic Horizon and M/V Magic Nebula on December 7, 2023, December 21, 2023, January 19, 2024, January 19, 2024 and February 15, 2024 respectively. The vessels are still employed under their existing charter parties and are each expected to be delivered to their new owners during the first quarter of 2024, apart from the M/V Magic Nebula which is expected to be delivered to its new owner during the second quarter of 2024. |
(4) | The vessel’s daily gross charter rate is equal to 100% of Baltic Panamax Index 5TC routes (“BPI5TC”). The benchmark vessel used in the calculation of the average of the BPI5TC is a non-scrubber fitted 82,000mt dwt vessel (Kamsarmax) with specific age, speed–consumption, and design characteristics. In accordance with the prevailing charter party, on November 13, 2023, we converted the index-linked rate to fixed from January 1, 2024 until March 31, 2024 at a rate of $11,300 per day. Upon completion of this period, the rate will be converted back to index‑linked. |
(5) | The vessel’s daily gross charter rate is equal to 97% of BPI5TC. In accordance with the prevailing charter party, on November 17, 2023, we converted the index-linked rate to fixed from January 1, 2024 until March 31, 2024 at a rate of $11,500 per day. Upon completion of this period, in accordance with the prevailing charter party, on January 19, 2024, we converted the index-linked rate to fixed from April 1, 2024 until June 30, 2024 at a rate of $16,200 per day. Thereafter, the rate will be converted back to index-linked. |
(6) | The vessel’s daily gross charter rate is equal to 100% of BPI5TC. In accordance with the prevailing charter party, on November 29, 2023, we converted the index-linked rate to fixed from January 1, 2024 until March 31, 2024, at a rate of $13,850 per day. Upon completion of this period, in accordance with the prevailing charter party, on January 17, 2024, we converted the index-linked rate to fixed from April 1, 2024 until June 30, 2024 at a rate of $16,300 per day. Thereafter, the rate will be converted back to index-linked. |
(7) | The vessel’s daily gross charter rate is equal to 98% of BPI5TC. In accordance with the prevailing charter party, on November 10, 2023, we converted the index-linked rate to fixed from January 1, 2024, until March 31, 2024, at a rate of $10,725 per day. Upon completion of this period, in accordance with the prevailing charter party, on January 12, 2024, we converted the index-linked rate to fixed from April 1, 2024 until June 30, 2024 at a rate of $14,600 per day. Thereafter, the rate will be converted back to index-linked. |
(8) | The benchmark vessel used in the calculation of the average of the Baltic Panamax Index 4TC routes (“BPI4TC”) is a non-scrubber fitted 74,000mt dwt vessel (Panamax) with specific age, speed – consumption, and design characteristics. |
(9) | The vessel’s daily gross charter rate is equal to 102% of BPI4TC. In accordance with the prevailing charter party, on November 30, 2023, we converted the index-linked rate to fixed from January 1, 2024, until March 31, 2024, at a rate of $12,648 per day. Upon completion of this period, in accordance with the prevailing charter party, on January 16, 2024, we converted the index-linked rate to fixed from April 1, 2024 until June 30, 2024 at a rate of $14,750 per day. Thereafter, the rate will be converted back to index-linked. |
(10) | The vessel’s daily gross charter rate is equal to 96% of BPI4TC. In accordance with the prevailing charter party, on November 30, 2023, we converted the index-linked rate to fixed from January 1, 2024, until March 31, 2024, at a rate of $11,904 per day. In accordance with the prevailing charter party, on February 6, 2024, we converted the index-linked rate to fixed from April 1, 2024 until September 30, 2024 at a rate of $15,150 per day. Upon completion of these periods, the rate will be converted back to index‑linked rate. |
(11) | The vessel’s daily gross charter rate is equal to 100% of BPI4TC. In accordance with the prevailing charter party, on November 30, 2023, we converted the index-linked rate to fixed from January 1, 2024 until March 31, 2024 at a rate of $14,050 per day. Upon completion of this period, the rate will be converted back to index‑linked rate. |
(12) | The vessel’s daily gross charter rate is equal to 101% of BPI4TC. In accordance with the prevailing charter party, on November 30, 2023, we converted the index-linked rate to fixed from January 1, 2024 until March 31, 2024 at a rate of $12,524 per day. Upon completion of this period, the rate will be converted back to index‑linked rate. |
(13) | The earliest redelivery under the prevailing charter party is 9 months after delivery. Thereafter, both we and the charterers have the option to terminate the charter by providing 3 months written notice to the other party. |
(14) | The earliest redelivery under the prevailing charter party is 7 months after delivery. Thereafter, both we and the charterers have the option to terminate the charter by providing 3 months written notice to the other party. |
(15) | The earliest redelivery under the prevailing charter party is 8 months after delivery. Thereafter, both we and the charterers have the option to terminate the charter by providing 3 months written notice to the other party. |
Vessel Name | Capacity (dwt) | Year Built | Country of Construction | Type of employment | Gross Charter Rate ($/day) | Estimated Earliest Charter Expiration | Estimated Latest Charter Expiration | |||||||||
Containership Segment | ||||||||||||||||
M/V Ariana A | 38,117 | 2005 | Germany | TC period | $ | 16,000 | May-24 | Jun-24 | ||||||||
M/V Gabriela A | 38,121 | 2005 | Germany | TC period | $ | 26,350 | Feb-24 | May-24 |
Dry Bulk Carriers | |||||||||||||||
Vessel Name | Vessel Type | DWT | Year Built | Country of Construction | Purchase Price (in million) | Delivery Date | |||||||||
2021 Acquisitions | |||||||||||||||
Magic Orion | Capesize | 180,200 | 2006 | Japan | $ | 17.50 | 03/17/2021 | ||||||||
Magic Venus | Kamsarmax | 83,416 | 2010 | Japan | $ | 15.85 | 03/02/2021 | ||||||||
Magic Argo | Kamsarmax | 82,338 | 2009 | Japan | $ | 14.50 | 03/18/2021 | ||||||||
Magic Twilight | Kamsarmax | 80,283 | 2010 | S. Korea | $ | 14.80 | 04/09/2021 | ||||||||
Magic Nebula | Kamsarmax | 80,281 | 2010 | S. Korea | $ | 15.45 | 05/20/2021 | ||||||||
Magic Thunder | Kamsarmax | 83,375 | 2011 | Japan | $ | 16.85 | 04/13/2021 | ||||||||
Magic Eclipse | Panamax | 74,940 | 2011 | Japan | $ | 18.48 | 06/07/2021 | ||||||||
Magic Starlight | Kamsarmax | 81,048 | 2015 | China | $ | 23.50 | 05/23/2021 | ||||||||
Magic Vela | Panamax | 75,003 | 2011 | China | $ | 14.50 | 05/12/2021 | ||||||||
Magic Perseus | Kamsarmax | 82,158 | 2013 | Japan | $ | 21.00 | 08/09/2021 | ||||||||
Magic Pluto | Panamax | 74,940 | 2013 | Japan | $ | 19.06 | 08/06/2021 | ||||||||
Magic Mars | Panamax | 76,822 | 2014 | S. Korea | $ | 20.40 | 09/20/2021 | ||||||||
Magic Phoenix | Panamax | 76,636 | 2008 | Japan | $ | 18.75 | 10/26/2021 | ||||||||
2022 Acquisitions | |||||||||||||||
Magic Callisto | Panamax | 74,930 | 2012 | Japan | $ | 23.55 | 01/04/2022 |
Containerships | |||||||||||||||
2022 Acquisitions | |||||||||||||||
Ariana A | 2,700 TEU capacity Containership | 38,117 | 2005 | Germany | $ | 25.00 | 11/23/22 | ||||||||
Gabriela A | 2,700 TEU capacity Containership | 38,121 | 2005 | Germany | $ | 25.75 | 11/30/22 |
Aframax/LR2 Tankers* | |||||||||||||||
2021 Acquisitions | |||||||||||||||
Wonder Polaris | Aframax LR2 | 115,351 | 2005 | S. Korea | $ | 13.60 | 03/11/21 | ||||||||
Wonder Sirius | Aframax LR2 | 115,341 | 2005 | S. Korea | $ | 13.60 | 03/22/21 | ||||||||
Wonder Vega | Aframax | 106,062 | 2005 | S. Korea | $ | 14.80 | 05/21/21 | ||||||||
Wonder Avior | Aframax LR2 | 106,162 | 2004 | S. Korea | $ | 12.00 | 05/27/21 | ||||||||
Wonder Arcturus(1) | Aframax LR2 | 106,149 | 2002 | S. Korea | $ | 10.00 | 05/31/21 | ||||||||
Wonder Musica | Aframax LR2 | 106,290 | 2004 | S. Korea | $ | 12.00 | 06/15/21 | ||||||||
Wonder Bellatrix | Aframax LR2 | 115,341 | 2006 | S. Korea | $ | 18.15 | 12/23/21 |
(1) | The Wonder Arcturus was sold on May 9, 2022, and delivered to an unaffiliated third-party on July 15, 2022. |
Handysize Tankers* | |||||||||||||||
2021 Acquisitions | |||||||||||||||
Wonder Mimosa | Handysize | 36,718 | 2006 | S. Korea | $ | 7.25 | 05/31/21 | ||||||||
Wonder Formosa | Handysize | 36,660 | 2006 | S. Korea | $ | 8.00 | 06/22/21 |
Dry Bulk Carriers | |||||||||||||||
2023 Disposals | |||||||||||||||
Vessel Name | Vessel Type | DWT | Year Built | Country of Construction | Sale Price (in million) | Delivery Date | |||||||||
Magic Phoenix | Panamax | 76,636 | 2008 | Japan | $ | 14.0 | 27/11/2023 | ||||||||
Magic Argo | Kamsarmax | 82,338 | 2009 | Japan | $ | 15.75 | 14/12/2023 | ||||||||
Magic Twilight | Kamsarmax | 80,283 | 2010 | S. Korea | $ | 17.5 | 20/07/2023 | ||||||||
Magic Rainbow | Panamax | 73,593 | 2007 | China | $ | 12.6 | 18/04/2023 | ||||||||
Magic Sun | Panamax | 75,311 | 2001 | S. Korea | $ | 6.55 | 14/11/2023 |
C. |
D. |
ITEM 4A. | UNRESOLVED STAFF COMMENTS |
ITEM 5. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
A. | OPERATING RESULTS |
The levels of demand and supply of seaborne cargoes and vessel tonnage in the shipping segments in which we operate; |
- | The cyclical nature of the shipping industry in general and its impact on charter rates and vessel values; |
- | The successful implementation of the Company’s business strategy, including our ability to obtain equity and debt financing at acceptable and attractive terms to fund future capital expenditures and/or to implement our business strategy; |
- | Economic, regulatory, political and governmental conditions that affect shipping and the dry bulk and container segments, including international conflict or war (or threatened war), such as between Russia and Ukraine and in the Middle East, and acts of piracy or maritime aggression, such as recent maritime incidents involving vessels in and around the Red Sea; |
- | The employment and operation of our |
Our ability to successfully employ our vessels at economically attractive rates and our strategic decisions regarding the employment mix of our fleet as our charters expire or are otherwise terminated; |
- | Management of the financial, operating, general and administrative elements involved in the conduct of our business and ownership of our |
- | The number of customers who use our services and the performance of their obligations under their agreements, including their ability to make timely payments to us; |
- | Our ability to maintain solid working relationships with our existing customers and our ability to increase the number of our charterers through the development of new working relationships; |
- | The reputation and safety record of our manager and/or sub-managers for the management of our vessels; |
- | Dry-docking and special survey costs and duration, both expected and unexpected; |
- | The level of any distribution on all classes of our shares; |
- | Our borrowing levels and the finance costs related to our outstanding debt as well as our compliance with our debt covenants; |
- | Management of our financial resources, including banking relationships and of the relationships with our various stakeholders; |
- | Major outbreaks of diseases and governmental responses thereto; and |
- | The performance of the listed equity securities in which the Company currently has investments, which is subject to market risk and price volatility, and may adversely affect our results due to the realization of losses upon disposition of these investments or the recognition of significant unrealized losses during their holding period. |
For the period ended September 30, 2017 | For the period ended September 30, 2018 | |||||||
(In U.S. dollars, except for days and utilization) | ||||||||
Operational Metrics | ||||||||
Available days (1) | 216 | 336 | ||||||
Ownership days (2) | 222 | 365 | ||||||
Fleet utilization (3) | 97 | % | 92 | % | ||||
Daily time charter equivalent (or TCE) (4) | 8,969 | 11,677 | ||||||
Daily vessel operating expenses (5) | 5,383 | 4,734 | ||||||
Daily management fees (6) | 250 | 305 | ||||||
Daily general and administrative expenses (7) | 425 | 1,259 | ||||||
For the period ended September 30, 2017 | For the year ended September 30, 2018 | |||||||
(In U.S. dollars, except for available days) | ||||||||
Revenues (net of address commissions) | 2,018,061 | 3,960,822 | ||||||
Voyage expenses | (80,853 | ) | (37,373 | ) | ||||
Time charter equivalent revenues | 1,937,208 | 3,923,449 | ||||||
Available days | 216 | 336 | ||||||
Time charter equivalent rate | 8,969 | 11,677 |
Period ended September 30,2017 | Year ended September 30, 2018 | Change -amount | Change-% | |||||||||||||
Revenues (net of address commissions) | 2,018,061 | 3,960,822 | 1,942,761 | 96 | % | |||||||||||
Expenses: | ||||||||||||||||
Voyage expenses | 80,853 | 37,373 | (43,480 | ) | (54 | %) | ||||||||||
Vessel operating expenses | 1,194,995 | 1,727,770 | 532,775 | 45 | % | |||||||||||
Management fees to related party | 55,500 | 111,480 | 55,980 | 101 | % | |||||||||||
General and administrative expenses | 94,440 | 459,400 | 364,960 | 386 | % | |||||||||||
Depreciation and amortization | 182,346 | 637,611 | 455,265 | 250 | % | |||||||||||
Operating income | 409,927 | 987,188 | 577,261 | 141 | % | |||||||||||
Other income/(expenses): | ||||||||||||||||
Bank charges | (532 | ) | (3,393 | ) | (2,861 | ) | 538 | % | ||||||||
Interest income | - | 4,243 | 4,243 | 100 | % | |||||||||||
Foreign exchange losses | (7,021 | ) | (8,539 | ) | (1,518 | ) | 22 | % | ||||||||
Gain on derivative financial instruments | 475,530 | - | (475,530 | ) | (100 | %) | ||||||||||
Other, net | 740 | 1,439 | 699 | 94 | % | |||||||||||
Total other income/(losses), net: | 468,717 | (6,250 | ) | (474,967 | ) | (101 | %) | |||||||||
Net profit before income taxes | 878,644 | 980,938 | 102,294 | 12 | % | |||||||||||
Income taxes | - | - | - | |||||||||||||
Net income and comprehensive income | 878,644 | 980,938 | 102,294 | 12 | % | |||||||||||
Earnings/(loss) per common share, basic and diluted | 0.35 | (0.28 | ) | |||||||||||||
Weighted average number of common shares, basic and diluted | 2,400,000 | 2,400,000 | ||||||||||||||
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Total vessel revenues | $ | 150,216,130 | $ | 97,515,511 | ||||
Voyage expenses - including commissions to related party | (3,721,277 | ) | (5,052,228 | ) | ||||
TCE revenues | $ | 146,494,853 | $ | 92,463,283 | ||||
Available Days | 7,175 | 7,483 | ||||||
Daily TCE Rate | $ | 20,417 | $ | 12,356 |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Total vessel revenues | $ | 148,930,997 | $ | 82,996,018 | ||||
Voyage expenses - including commissions to related party | (3,649,944 | ) | (4,425,879 | ) | ||||
TCE revenues | $ | 145,281,053 | $ | 78,570,139 | ||||
Available Days | 7,105 | 6,777 | ||||||
Daily TCE Rate | $ | 20,448 | $ | 11,594 |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Total vessel revenues | $ | 1,285,133 | $ | 14,519,493 | ||||
Voyage expenses - including commissions to related party | (71,333 | ) | (626,349 | ) | ||||
TCE revenues | $ | 1,213,800 | $ | 13,893,144 | ||||
Available Days | 70 | 706 | ||||||
Daily TCE Rate | $ | 17,340 | $ | 19,679 |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Daily vessel operating expenses | $ | 5,601 | $ | 5,583 | ||||
Ownership Days | 7,367 | 7,507 | ||||||
Available Days | 7,175 | 7,483 | ||||||
Operating Days | 7,125 | 7,433 | ||||||
Fleet Utilization | 99 | % | 99 | % | ||||
Daily TCE Rate | $ | 20,417 | $ | 12,356 | ||||
EBITDA | $ | 91,790,822 | $ | 51,607,538 |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Daily vessel operating expenses | $ | 5,577 | $ | 5,441 | ||||
Ownership Days | 7,297 | 6,777 | ||||||
Available Days | 7,105 | 6,777 | ||||||
Operating Days | 7,056 | 6,727 | ||||||
Fleet Utilization | 99 | % | 99 | % | ||||
Daily TCE Rate | $ | 20,448 | $ | 11,594 |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Daily vessel operating expenses | $ | 8,024 | $ | 6,900 | ||||
Ownership Days | 70 | 730 | ||||||
Available Days | 70 | 706 | ||||||
Operating Days | 69 | 706 | ||||||
Fleet Utilization | 99 | % | 99 | % | ||||
Daily TCE Rate | $ | 17,340 | $ | 19,679 |
Year Ended December 31, | ||||||||
2022 | 2023 | |||||||
Net Income | $ | 66,540,925 | $ | 21,303,156 | ||||
Depreciation and amortization | 18,535,237 | 22,076,831 | ||||||
Interest and finance costs, net (1) | 6,325,991 | 8,049,757 | ||||||
Income taxes | 388,669 | 177,794 | ||||||
EBITDA | $ | 91,790,822 | $ | 51,607,538 |
(1) | Includes interest and finance costs and interest income, if any. |
(In U.S. Dollars, except for number of share data) | Year ended December 31, 2022 | Year ended December 31, 2023 | Change- amount | Change % | ||||||||||||
Total vessel revenues | $ | 150,216,130 | $ | 97,515,511 | $ | 52,700,619 | 35.1 | % | ||||||||
Expenses: | ||||||||||||||||
Voyage expenses (including commissions to related party) | (3,721,277 | ) | (5,052,228 | ) | 1,330,951 | 35.8 | % | |||||||||
Vessel operating expenses | (41,259,554 | ) | (41,913,628 | ) | 654,074 | 1.6 | % | |||||||||
Management fees to related parties | (6,562,400 | ) | (7,167,397 | ) | 604,997 | 9.2 | % | |||||||||
Depreciation and amortization | (18,535,237 | ) | (22,076,831 | ) | 3,541,594 | 19.1 | % | |||||||||
General and administrative expenses (including costs from related party) | (7,043,937 | ) | (5,681,371 | ) | 1,362,566 | 19.3 | % | |||||||||
Net gain on sale of vessels | — | 6,383,858 | 6,383,858 | 100 | % | |||||||||||
Operating income | $ | 73,093,725 | $ | 22,007,914 | $ | 51,085,811 | 69.9 | % | ||||||||
Interest and finance costs, net | (6,325,991 | ) | (8,049,757 | ) | 1,723,766 | 27.2 | % | |||||||||
Other income (1) | 161,860 | 7,522,793 | 7,360,933 | 4547.7 | % | |||||||||||
Income taxes | (388,669 | ) | (177,794 | ) | 210,875 | 54.3 | % | |||||||||
Net income and comprehensive income from continuing operations, net of taxes | $ | 66,540,925 | $ | 21,303,156 | $ | 45,237,769 | 68.0 | % | ||||||||
Net income and comprehensive income from discontinued operations, net of taxes | $ | 52,019,765 | $ | 17,339,332 | $ | 34,680,433 | 66.7 | % | ||||||||
Net income and comprehensive income | $ | 118,560,690 | $ | 38,642,488 | $ | 79,918,202 | 67.4 | % |
(in U.S. Dollars) | Year ended December 31, 2022 | Year ended December 31, 2023 | Change- amount | Change % | ||||||||||||
Total vessel revenues | 148,930,997 | 82,996,018 | 65,934,979 | 44.3 | % | |||||||||||
Expenses: | ||||||||||||||||
Voyage expenses (including commissions to related party) | (3,649,944 | ) | (4,425,879 | ) | 775,935 | 21.3 | % | |||||||||
Vessel operating expenses | (40,697,898 | ) | (36,876,772 | ) | 3,821,126 | 9.4 | % | |||||||||
Management fees to related parties | (6,481,000 | ) | (6,469,699 | ) | 11,301 | 0.2 | % | |||||||||
Depreciation and amortization | (18,039,966 | ) | (16,689,989 | ) | 1,349,977 | 7.5 | % | |||||||||
Net gain on sale of vessels | — | 6,383,858 | 6,383,858 | 100.0 | % | |||||||||||
Segment operating income(1) | 80,062,189 | 24,917,537 | 55,144,652 | 68.9 | % |
(1) | Does not include corporate general and administrative expenses. See the discussion under “Consolidated Results of Operations” above. |
Period ended December 31, 2022 | Year ended December 31, 2023 | Change - amount | Change % | |||||||||||||
Total vessel revenues | 1,285,133 | 14,519,493 | 13,234,360 | 1,029.8 | % | |||||||||||
Expenses: | ||||||||||||||||
Voyage expenses (including commissions to related party) | (71,333 | ) | (626,349 | ) | 555,016 | 778.1 | % | |||||||||
Vessel operating expenses | (561,656 | ) | (5,036,856 | ) | 4,475,200 | 796.8 | % | |||||||||
Management fees to related parties | (81,400 | ) | (697,698 | ) | 616,298 | 757.1 | % | |||||||||
Depreciation and amortization | (495,271 | ) | (5,386,842 | ) | 4,891,571 | 987.7 | % | |||||||||
Segment operating income | 75,473 | 2,771,748 | 2,696,275 | 3,572.5 | % |
B. |
Cash Flows (In US Dollars) | Year ended September 30,2017 | Year ended September 30,2018 |
Net cash from operating activities | 770,749 | 902,706 |
Net cash from investing activities | (7,549,281) | - |
Net cash from financing activities | 7,615,000 | - |
For the year ended, | ||||||||
(in U.S. Dollars) | December 31, 2022 | December 31, 2023 | ||||||
Net cash provided by operating activities from continuing operations | $ | 95,675,549 | $ | 22,183,365 | ||||
Net cash used in investing activities from continuing operations | (75,525,774 | ) | (8,968,304 | ) | ||||
Net cash provided by/(used in) financing activities from continuing operations | 51,954,994 | (2,141,740 | ) | |||||
Net cash provided by operating activities from discontinued operations | 28,077,502 | 20,409,041 | ||||||
Net cash provided by/(used in) investing activities from discontinued operations | 11,788,681 | (153,861 | ) | |||||
Net cash used in financing activities from discontinued operations | (3,050,000 | ) | (62,734,774 | ) | ||||
Cash, cash equivalents and restricted cash at beginning of period | 43,386,468 | 152,307,420 | ||||||
Cash, cash equivalents and restricted cash at end of period | $ | 152,307,420 | $ | 120,901,147 |
C. |
D. |
E. |
Vessels | Date acquired | Carrying value as of December 31, 2023 (in millions of United States dollars) | Carrying value as of December 31, 2022 (in millions of United States dollars) | ||||||
M/V Magic P | 02/21/2017 | $ | 6.2 | $ | 6.6 | ||||
M/V Magic Sun | 09/05/2019 | $ | - | $ | 5.9 | ||||
M/V Magic Moon | 10/20/2019 | $ | 8.8 | $ | 9.0 | ||||
M/V Magic Rainbow | 08/08/2020 | $ | - | $ | 8.3 | ||||
M/V Magic Horizon | 10/09/2020 | $ | 10.9 | $ | 11.6 | ||||
M/V Magic Nova | 10/15/2020 | $ | 11.8 | $ | 12.4 | ||||
M/V Magic Venus | 03/02/2021 | $ | 14.0 | $ | 14.7 | ||||
M/V Magic Orion | 03/17/2021 | $ | 15.4 | $ | 16.3 | ||||
M/V Magic Argo | 03/18/2021 | $ | - | $ | 13.3 | ||||
M/V Magic Twilight | 04/09/2021 | $ | - | $ | 13.8 | ||||
M/V Magic Thunder | 04/13/2021 | $ | 14.9 | $ | 15.7 | ||||
M/V Magic Vela | 05/12/2021 | $ | 13.4 | $ | 14.1 | ||||
M/V Magic Nebula | 05/20/2021 | $ | 13.8 | $ | 14.6 | ||||
M/V Magic Starlight | 05/23/2021 | $ | 21.0 | $ | 22.0 | ||||
M/V Magic Eclipse | 06/07/2021 | $ | 16.3 | $ | 17.2 | ||||
M/V Magic Pluto | 08/06/2021 | $ | 19.3 | $ | 20.3 | ||||
M/V Magic Perseus | 08/09/2021 | $ | 19.6 | $ | 20.6 | ||||
M/V Magic Mars | 09/20/2021 | $ | 18.8 | $ | 19.6 | ||||
M/V Magic Phoenix | 10/26/2021 | $ | - | $ | 17.6* | ||||
M/V Magic Callisto | 01/04/2022 | $ | 21.2* | $ | 22.4* | ||||
M/V Ariana A | 11/23/2022 | $ | 21.5* | $ | 23.9* | ||||
M/V Gabriela A | 11/30/2022 | $ | 20.9* | $ | 23.5* | ||||
Total | $ | 267.8 | $ | 343.4 |
ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. |
Name | Age | Position | |||
Petros Panagiotidis | Chairman, Chief Executive Officer, Chief Financial Officer, President, Treasurer and Class C Director | ||||
Dionysios Makris | Secretary and Class B Director | ||||
Georgios Daskalakis | Class A Director |
Board Diversity Matrix | |||||||||
As of February 27, 2024 | As of December 31, 2023 | ||||||||
Country of Principal Executive Offices | Cyprus | Cyprus | |||||||
Foreign Private Issuer | Yes | Yes | |||||||
Disclosure Prohibited Under Home Country Law | No | No | |||||||
Total Number of Directors | 3 | 3 | |||||||
Female | Male | Non- Binary | Did Not Disclose Gender | Female | Male | Non-Binary | Did Not Disclose Gender | ||
Part I: Gender Identity | |||||||||
Directors | 0 | 3 | 0 | 0 | 0 | 3 | 0 | 0 | |
Part II: Demographic Background | |||||||||
Underrepresented Individual in Home Country Jurisdiction | 0 | 0 | |||||||
LGBTQ+ | 0 | 0 | |||||||
Did Not Disclose Demographic Background | 0 | 0 |
B. |
C. |
D. |
E. |
F. | DISCLOSURE OF A REGISTRANT’S ACTION TO RECOVER ERRONEOUSLY AWARDED COMPENSATION |
ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. |
Name of Beneficial Owner | No. of Common Shares | Percentage | ||||||
All executive officers and directors as a group (1) (2) | - | - | % |
(1) | Neither any member of our Board of Directors or executive officer individually, nor all of them taken as a group, holds more than 1% of our outstanding common shares. |
(2) | By virtue of his control of Thalassa, our Chairman, Chief Executive Officer and Chief Financial Officer, Petros Panagiotidis, is the ultimate beneficial owner of 112,409 common shares and 12,000 Series B Preferred Shares (representing all such Series B Preferred Shares outstanding, each Series B Preferred Share having the voting power of 100,000 common shares). Mr. Panagiotidis therefore beneficially owns 0.12% of our total issued and outstanding share capital and controls 92.6% of the aggregate voting power of the Company’s total issued and outstanding share capital as of February 27, 2024. Please see “Item 10. Additional Information—B. Memorandum and Articles of Association” for a description of the rights of holders of our Series B Preferred Shares relative to the rights of holders of our common shares. |
Name of Beneficial Owner | No. of Shares | Percentage | ||||||
Thalassa Investment Co. S.A.(1) | 1,124,094 | 46.8 | % | |||||
Universe Shipping Inc. (2) | 235,200 | (5) | 9.8 | % | ||||
Simple Life Corp. (3) | 230,400 | (5) | 9.6 | % | ||||
Directors and Officers (excluding Petros Panagiotidis)(4) | 0 | 0 | % |
B. |
C. | Interests of Experts and Counsel |
ITEM 8. | FINANCIAL INFORMATION |
A. |
B. |
ITEM 9. | THE OFFER AND LISTING |
A. |
B. |
C. |
D. |
E. |
F. |
ITEM 10. | ADDITIONAL INFORMATION |
A. |
B. |
the designation |
• | Conversion. The Series B Preferred Shares are not convertible into common shares. |
• | Distributions. In the event that we declare a dividend of the stock of a subsidiary which we control, the holder(s) of the Series B Preferred Shares are entitled to receive preferred shares of such subsidiary. Such preferred shares will have at least substantially identical rights and preferences to our Series B Preferred Shares and be issued in an equivalent number to our Series B Preferred Shares. The Series B Preferred Shares have no other dividend or distribution rights. |
• | Voting. Each Series B Preferred Share has the voting power of 100,000 common shares and counts for 100,000 votes for purposes of determining quorum at a meeting of shareholders, subject to adjustment to maintain a substantially identical voting interest in Castor following the (i) creation or issuance of a new series of shares of the Company carrying more than one vote per share to be issued to any person other than holders of the Series B Preferred Shares, except for the creation (but not the issuance) of Series C Participating Preferred Shares substantially in the form approved by the Board and included as an exhibit to this registration statement, without the prior affirmative vote of a majority of votes cast by the holders of the Series B Preferred Shares or (ii) issuance or approval of common shares pursuant to and in accordance with the Shareholder Protection Rights Agreement. The Series B Preferred Shares vote together with common shares as a single class, except that the Series B Preferred Shares vote separately as a class on amendments to the Articles of Incorporation that would materially alter or change the powers, preference or special rights of the Series B Preferred Shares. |
• | Liquidation, Dissolution or Winding Up. Upon any liquidation, dissolution or winding up of the Company, the Series B Preferred Shares shall have the same liquidation rights as and pari passu with the common shares up to their par value of $0.001 per share and, thereafter, the Series B Preferred Shares have no right to participate further in the liquidation, dissolution or winding up of the Company. |
• | Conversion. The Series D Preferred Shares are convertible, at their holder’s option, to common shares after the first anniversary of August 7, 2023 and at any time thereafter. The conversion price for any conversion of the Series D Preferred Shares shall be the lower of (i) $0.70 and (ii) the 5 day value weighted average price immediately preceding the conversion. The conversion price is subject to certain adjustments, including due to a stock dividend, subdivision, split or combination. The minimum conversion price is $0.30 per common share. The Series D Preferred Shares otherwise are not convertible into or exchangeable for property or shares of any other series or class of our capital stock. |
• | Redemption. The Company may, at its option, redeem the Series D Preferred Shares in whole or in part, at any time and from time to time after the fifth anniversary of August 7, 2023 (the Series D Preferred Shares issue date), at a cash redemption price equal to 105% of the stated amount, together with an amount equal to all accrued dividends. |
• | Dividends. Holders of Series D Preferred Shares are entitled to receive, when, as and if declared by the Board, cumulative dividends at 5.00% per annum of the stated amount, in cash or Series D Preferred Shares, payable quarterly in arrears on the 15th day of each January, April, July and October, respectively, in each year, beginning on October 15, 2023. For each dividend period commencing on and from the seventh anniversary of August 7, 2023, the rate shall be the annual dividend rate in effect for the prior dividend period multiplied by a factor of 1.3; provided that such dividend rate cannot exceed 20% per annum. |
• | Restrictions on Dividends, Redemption and Repurchases. So long as any Series D Preferred Share remains outstanding, unless full Accrued Dividends on all outstanding Series D Preferred Shares through and including the most recently completed Dividend Period have been paid or declared and a sum sufficient for the payment thereof has been set aside for payment, no dividend may be declared or paid or set aside for payment, and no distribution may be made, on any Junior Stock, other than a dividend payable solely in stock that ranks junior to the Series D Preferred Shares in the payment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Company. “Accrued Dividends” means, with respect to Series D Preferred Shares, an amount computed at the Annual Rate from, as to each share, the date of issuance of such share to and including the date to which such dividends are to be accrued (whether or not such dividends have been declared), less the aggregate amount of all dividends previously paid on such share. |
• | Voting. Except as indicated below or otherwise required by law, the holders of the Series D Preferred Shares do not have any voting rights, except for (a) the right to elect, together with parity stock, up to two preferred directors, in certain circumstances upon nonpayment of dividends and (b) together with any other series of preferred shares that would be adversely affected in substantially the same manner and entitled to vote as a single class in proportion to their respective stated amounts (to the exclusion of all other series of preferred shares), given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, will be necessary for effecting or validating: (i) any amendment, alteration or repeal of any provision of our Articles of Incorporation or Bylaws that would alter or change the voting powers, preferences or special rights of the Series D Preferred Shares so as to affect them adversely; (ii) the issuance of Dividend Parity Stock if the Accrued Dividends on all outstanding Series D Preferred Shares through and including the most recently completed Dividend Period have not been paid or declared and a sum sufficient for the payment thereof has been set aside for payment; (iii) any amendment or alteration of the Articles of Incorporation to authorize or create, or increase the authorized amount of, any shares of any class or series or any securities convertible into shares of any class or series of our capital stock ranking prior to Series A in the payment of dividends or in the distribution of assets on any liquidation, dissolution or winding up of the Company; or (iv) any consummation of (x) a binding share exchange or reclassification involving the Series D Preferred Shares, (y) a merger or consolidation of the Company with another entity (whether or not a corporation), or (z) a conversion, transfer, domestication or continuance of the Company into another entity or an entity organized under the laws of another jurisdiction, unless in each case (A) the Series D Preferred Shares remain outstanding or, in the case of any such merger or consolidation with respect to which we are not the surviving or resulting entity, or any such conversion, transfer, domestication or continuance, the Series D Preferred Shares are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, and (B) such shares remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions, and limitations and restrictions thereof, taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and restrictions and limitations thereof, of the Series D Preferred Shares immediately prior to such consummation, taken as a whole. The foregoing voting rights do not apply in connection with the issuance of Series C Participating Preferred Shares of the Company. |
• | Liquidation, Dissolution or Winding Up. In the event of any liquidation, dissolution or winding up of the affairs of the Company, whether voluntary or involuntary, before any distribution or payment out of the Company’s assets may be made to or set aside for the holders of any Junior Stock (as defined in the statement of designations of the Series D Preferred Shares), holders of Series D Preferred Shares will be entitled to receive out of our assets legally available for distribution to our shareholders an amount equal to the stated amount per share ($1,000), together with an amount equal to all accrued dividends to the date of payment whether or not earned or declared. |
• | No Preemptive Rights; No Sinking Fund. Holders of the Series D Preferred Shares do not have any preemptive rights. The Series D Preferred Shares will not be subject to any sinking fund or any other obligation of us for their repurchase or retirement. |
C. |
D. |
E. |
We have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and |
at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or |
at least 50% of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income. |
F. |
G. |
H. |
I. |
J. | ANNUAL REPORT TO SECURITY HOLDERS |
ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
(U.S. dollars) | Fair Value at December 31, 2023 | Hypothetical Percentage Change | Estimated Fair Value After Hypothetical Price Change | Estimated Increase /(Decrease) in Net Income/(Loss) (1) | |||||||||
Equity securities at fair value | $ | 77,089,100 | 25% increase | $ | 96,361,375 | $ | 19,272,275 | ||||||
25% decrease | $ | 57,816,825 | $ | (19,272,275 | ) |
(1) | Changes in unrealized gains and losses on listed equity securities at fair value are included in earnings in the consolidated statements of comprehensive income. |
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. |
B. |
C. |
D. |
ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT |
ITEM 16B. | CODE OF ETHICS |
ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
For the year ended | ||||||||
In U.S. dollars | December 31, 2022 | December 31, 2023 | ||||||
Audit Fees | $ | 482,000 | $ | 439,820 |
Year Ended | ||||||||
In U.S. dollars | 2018 | 2017 | ||||||
Audit Fees | 91,700 | 49,500 |
ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED |
ITEM 16F. | CHANGE IN REGISTRANT`S CERTIFYING |
ITEM 16G. | CORPORATE GOVERNANCE |
• | Independence of Directors. The Nasdaq requires that a U.S. listed company maintain a majority of independent directors. While our Board is currently comprised of three directors a majority of whom are independent, we cannot assure you that in the future we will have a majority of independent directors. |
• | Executive Sessions. The Nasdaq requires that non-management directors meet regularly in executive sessions without management. The Nasdaq also requires that all independent directors meet in an executive session at least once a year. As permitted under Marshall Islands law and our bylaws, our non-management directors do not regularly hold executive sessions without management. |
• | Nominating/Corporate Governance Committee. The Nasdaq requires that a listed U.S. company have a nominating/corporate governance committee of independent directors and a committee charter specifying the purpose, duties and evaluation procedures of the committee. As permitted under Marshall Islands law and our bylaws, we do not currently have a nominating or corporate governance committee. |
• | Compensation Committee. The Nasdaq requires U.S. listed companies to have a compensation committee composed entirely of independent directors and a committee charter addressing the purpose, responsibility, rights and performance evaluation of the committee. As permitted under Marshall Islands law, we do not currently have a compensation committee. To the extent we establish such committee in the future, it may not consist of independent directors, entirely or at all. |
• | Audit Committee. The Nasdaq requires, among other things, that a listed U.S. company have an audit committee with a minimum of three members, all of whom are independent. As permitted by Nasdaq Rule 5615(a)(3), we follow home country practice regarding audit committee composition and therefore our audit committee consists of two independent members of our Board, Mr. Georgios Daskalakis and Mr. Dionysios Makris. Although the members of our audit committee are independent, we are not required to ensure their independence under Nasdaq Rule 5605(c)(2)(A) subject to compliance with Rules 10A-3(b)(1) and 10A-3(c) under the Securities Exchange Act of 1934. |
• | Shareholder Approval Requirements. The Nasdaq requires that a listed U.S. company obtain prior shareholder approval for certain issuances of authorized stock or the approval of, and material revisions to, equity compensation plans. As permitted under Marshall Islands law and our bylaws, we do not seek shareholder approval prior to issuances of authorized stock or the approval of and material revisions to equity compensation plans. |
• | Corporate Governance Guidelines. The Nasdaq requires U.S. companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation of the Board. We are not required to adopt such guidelines under Marshall Islands law and we have not adopted such guidelines. |
ITEM 16H. | MINE SAFETY DISCLOSURE |
ITEM 16I. | DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
ITEM 16J. | INSIDER TRADING POLICIES |
ITEM 16K. | CYBERSECURITY |
ITEM 19. | EXHIBITS |
Articles of Incorporation of the Company incorporated by reference to Exhibit 3.1 to the Company’s registration statement on Form F-4 filed with the | |||
Articles of Amendment to the Articles of Incorporation of the Company, as amended, filed with the Registry of the Marshall Islands on May 27, 2021 incorporated by reference to Exhibit 99.1 to Amendment No. 2 to Form 8-A filed with the SEC on May 28, 2021. | |||
Bylaws of the Company incorporated by reference to Exhibit 3.2 to the Company’s registration statement on Form F-4 filed with the | |||
Form of Common Share Certificate incorporated by reference to Exhibit | |||
Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934. | |||
Form of Class A Warrant incorporated by reference to Exhibit 4.8 of Amendment No. 2 to the Company’s registration statement on Form | |||
Form of | |||
Stockholder Rights Agreement dated as of November 20, 2017 by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent, incorporated by reference to Exhibit 10.2 to the Company’s registration statement on Form F-4 filed with the | |||
Amended and Restated Statement of Designation of the Rights, Preferences and Privileges of the Series B Preferred Shares of the Company, filed with the Registrar of Corporations of the Republic of the Marshall Islands on November 22, 2022, incorporated by reference to Exhibit 4.2 of the Company’s annual report on Form 20-F filed with the SEC on March 8, 2023. | |||
Amended and Restated Statement of Designations of Rights, Preferences and Privileges of Series C Participating Preferred Stock of Castor Maritime Inc., filed with the Registrar of Corporations of the Republic of the Marshall Islands on March 30, 2022, incorporated by reference to Exhibit 4.6 of the Company’s annual report on Form 20-F filed with the SEC on March 31, 2022. | |||
Statement of Designation of Rights, Preferences and Privileges of 5.00% Series D Cumulative Perpetual Convertible Preferred Shares of the Castor Maritime Inc., filed with the Registrar of Corporations of the Republic of the Marshall Islands on August 10, 2023, incorporated by reference to Exhibit 99.2 of the Company’s report on Form 6-K furnished to the SEC on November 9, 2023. | |||
Share Purchase Agreement by and between Castor Maritime Inc. and Toro Corp., dated as of August 7, 2023, incorporated by reference to Exhibit 99.2 of the Company’s report on Form 6-K furnished to the SEC on August 8, 2023. | |||
Exchange Agreement dated | |||
$11.0 Million Secured Term Loan Facility, dated November 22, 2019, by and among Alpha Bank S,A., as |
First Supplemental Agreement, dated February 14, 2024 in respect of $11.0 Million Secured Term Loan Facility, dated November 22, 2019, by and | |||
$15.29 Million Term Loan Facility, dated January 22, 2021, by and among Hamburg Commercial Bank AG and the banks and financial institutions listed in Schedule 1 thereto, as lenders, and Pocahontas Shipping Co. and Jumaru Shipping Co., as borrowers, incorporated by reference to Exhibit 4.15 of the Company’s annual report on Form 20-F filed with the SEC on March 3, 2021. | |||
Amended Facility Agreement dated July 3, 2023 in Respect of $15.29 Million Term Loan Facility, dated January 22, 2021, by and among Hamburg Commercial Bank AG and the banks and financial institutions listed in Schedule 1 thereto, as lenders, and Pocahontas Shipping Co. and Jumaru Shipping Co., as borrowers. | |||
$40.75 Million Term Loan Facility, dated July 23, 2021, by and among Hamburg Commercial Bank AG and the banks and financial institutions listed in Schedule 1 thereto, and Liono Shipping Co., Snoopy Shipping Co., Cinderella Shipping Co., and Luffy Shipping Co., as borrowers, incorporated by reference to Exhibit 4.18 of the Company’s annual report on Form 20-F filed with the SEC on March 31, 2022. | |||
Amended Facility Agreement dated July 3, 2023 in Respect of $40.75 Million Term Loan Facility, dated July 23, 2021, by and among Hamburg Commercial Bank AG and the banks and financial institutions listed in Schedule 1 thereto, and Liono Shipping Co., Snoopy Shipping Co., Cinderella Shipping Co., and Luffy Shipping Co., as borrowers. | |||
$55.0 Million Term Loan Facility, dated January 12, 2022, by and among Deutsche Bank AG, as lender, and Mulan Shipping Co., Johnny Bravo Shipping Co., Songoku Shipping Co., Asterix Shipping Co. and Stewie Shipping Co., as borrowers, incorporated by reference to Exhibit 4.20 of the Company’s annual report on Form 20-F filed with the SEC on March 31, 2022. | |||
$22.5 Million Term Loan Facility, dated November 22, 2022, by and among Chailease International Financial Services Co., Ltd., as lender, Jerry Shipping Co. and Tom Shipping Co., as borrowers and Castor Maritime, as guarantor, incorporated by reference to Exhibit 4.11 of the Company’s annual report on Form 20-F filed with the SEC on March 8, 2023. | |||
Warrant Agency Agreement, among the Company and American Stock Transfer & Trust Company, LLC, dated June 26, 2020, incorporated by reference to Exhibit 4.1 of the Company’s report on Form 6-K furnished to the SEC on June 29, 2020. | |||
Securities Purchase Agreement by and between the Company and the purchasers identified on the signature pages thereto, dated July 12, 2020, incorporated by reference to Exhibit 4.2 of the Company’s report on Form 6-K furnished to the SEC on July 15, 2020. | |||
Securities Purchase Agreement by and between the Company and the purchasers identified on the signature pages thereto, dated April 5, 2021, incorporated by reference to Exhibit 4.2 of the Company’s report on Form 6-K furnished to the SEC on April 7, 2021. | |||
Master Management Agreement, dated September 1, 2020, by and among the Company, its shipowning subsidiaries and Castor Ships S.A., incorporated by reference to Exhibit | |||
Amended and Restated Master Management Agreement, dated July 28, 2022, by and among Castor Maritime Inc., its shipowning subsidiaries and Castor Ships S.A., incorporated by reference to Exhibit 4.16 of the Company’s | |||
Addendum No.1 to the Amended and |
Contribution and Spin-Off Distribution Agreement entered into by and between Castor Maritime Inc. and Toro Corp., dated March 7, 2023, incorporated by reference to Exhibit 4.18 of the Company’s annual report on Form 20-F filed with the SEC on March 8, 2023. | |||
Equity Distribution Agreement entered into by and between Castor Maritime Inc. and Maxim Group LLC, dated May 23, 2023, incorporated by reference to Exhibit 1.1 of the Company’s report on Form 6-K furnished to the SEC on May 23, 2023. | |||
Form of Memorandum of Agreement for Vessel Sale. | |||
List of | |||
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer and Chief Financial Officer. | |||
Certification of the Chief Executive Officer | |||
Consent of Independent Registered Public Accounting Firm. | |||
Policy Regarding the Recovery of Erroneously Awarded Incentive-Based Compensation. | |||
101.INS | Inline XBRL Instance Document | ||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||
101.CAL | Inline XBRL Taxonomy Extension Schema Calculation Linkbase Document | ||
101.DEF | Inline XBRL Taxonomy Extension Schema Definition Linkbase Document | ||
101.LAB | Inline XBRL Taxonomy Extension Schema Label Linkbase Document | ||
101.PRE | Inline XBRL Taxonomy Extension Schema Presentation Linkbase Document | ||
104 | Cover Page Interactive Data File (Inline XBRL) |
CASTOR MARITIME INC. | ||||
/s/ Petros Panagiotidis | ||||
Name: Petros Panagiotidis | ||||
Title: Chairman, Chief Executive Officer and Chief Financial Officer |
Report of Independent Registered Public Accounting Firm (PCAOB ID 1163) | F-2 | ||
F-5 | |||
F-6 | |||
F-7 | |||
F-8 | |||
F-9 |
Castor Maritime Inc.and Shareholders’ of,Majuro, Republic of the Marshall Islandsits subsidiarysubsidiaries (the "Company"“Company”) as of September 30, 2018December 31, 2023 and 2017,2022, the related consolidated statements of comprehensive income, changes inshareholders’ equity and mezzanine equity, and cash flows, for each of the year ended September 30, 2018 and forthree years in the period ended December 13, 2016 to September 30, 2017,31, 2023, and the related notes (collectively referred to as the "consolidated financial statements"“financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2018December 31, 2023 and 2017,2022, and the results of its operations and its cash flows for each of the year ended September 30, 2018 and forthree years in the period ended December 13, 2016 to September 30, 2017,31, 2023, in conformity with accounting principles generally accepted in the United States of America. consolidated financial statements are the responsibility of the Company'sCompany’s management. Our responsibility is to express an opinion on the Company's consolidatedCompany’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.January 31, 2019Company'sCompany’s auditor since 2018.
2017.
ASSETS | ||||||||
2017 | 2018 | |||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | 836,468 | 1,739,174 | ||||||
Accounts receivable trade | 342,605 | 2,453 | ||||||
Due from related party (Note 3) | 96,264 | 263,079 | ||||||
Inventories | 46,586 | 60,697 | ||||||
Prepaid expenses and other current assets | 29,060 | 44,597 | ||||||
Total current assets | 1,350,983 | 2,110,000 | ||||||
OTHER NON-CURRENT ASSETS: | ||||||||
Vessel, net of accumulated depreciation of $182,346 and $478,877 respectively (Note 5) | 7,366,935 | 7,070,404 | ||||||
Deferred charges, net of accumulated amortization of $0 and $341,080 (Note 4) | - | 443,394 | ||||||
Total other non-current assets, net | 7,366,935 | 7,513,798 | ||||||
Total assets | 8,717,918 | 9,623,798 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable | 105,104 | 33,483 | ||||||
Accrued liabilities | 119,170 | 115,733 | ||||||
Total current liabilities | 224,274 | 149,216 | ||||||
Commitments and contingencies (Note 8) | ||||||||
SHAREHOLDERS' EQUITY: | ||||||||
Preferred shares, $0.001 par value: 50,000,000 shares authorized (Note 6): | ||||||||
Series A- 9.75% cumulative redeemable perpetual preferred shares (liquidation preference of $25 per share), 480,000 shares issued and outstanding | 480 | 480 | ||||||
Series B preferred shares – 12,000 shares issued and outstanding | 12 | 12 | ||||||
Common shares, $0.001 par value; 1,950,000,000 shares authorized; 2,400,000 shares, issued and outstanding (Note 6) | 2,400 | 2,400 | ||||||
Additional paid-in capital (Note 6) | 7,612,108 | 7,612,108 | ||||||
Retained earnings | 878,644 | 1,859,582 | ||||||
Total shareholders' equity | 8,493,644 | 9,474,582 | ||||||
Total liabilities and shareholders' equity | 8,717,918 | 9,623,798 |
(Expressed in U.S. Dollars – except for share data) |
2017 | 2018 | |||||||
REVENUES: | ||||||||
Revenues (net of address commissions of $74,271 in 2017 and $153,406 in 2018) | 2,018,061 | 3,960,822 | ||||||
Total revenues | 2,018,061 | 3,960,822 | ||||||
EXPENSES: | ||||||||
Voyage expenses (Note 11) | 80,853 | 37,373 | ||||||
Vessel operating expenses (Note 11) | 1,194,995 | 1,727,770 | ||||||
Management fees to related party (Note 3) | 55,500 | 111,480 | ||||||
Depreciation and amortization (Note 5 & 4) | 182,346 | 637,611 | ||||||
General and administrative expenses (Note 12) | 94,440 | 459,400 | ||||||
Total Expenses | 1,608,134 | 2,973,634 | ||||||
Operating income | 409,927 | 987,188 | ||||||
OTHER INCOME (EXPENSES): | ||||||||
Bank charges | (532 | ) | (3,393 | ) | ||||
Gain on derivative financial instruments (Note 7) | 475,530 | - | ||||||
Foreign exchange losses | (7,021 | ) | (8,539 | ) | ||||
Interest income | - | 4,243 | ||||||
Other, net | 740 | 1,439 | ||||||
Total other income/(losses), net | 468,717 | (6,250 | ) | |||||
Net income and comprehensive income | 878,644 | 980,938 | ||||||
Earnings/(losses) per common share, basic and diluted (Note 10) | 0.35 | (0.28 | ) | |||||
Weighted average number of common shares, basic and diluted | 2,400,000 | 2,400,000 |
ASSETS | December 31, | December 31, | ||||||||||
CURRENT ASSETS: | Note | 2022 | 2023 | |||||||||
Cash and cash equivalents | $ | 100,593,557 | $ | 111,383,645 | ||||||||
Restricted cash | 8 | 1,684,269 | 2,327,502 | |||||||||
Accounts receivable trade, net | 2,706,412 | 2,914,899 | ||||||||||
Due from related parties | 4 | 2,664,976 | 5,650,168 | |||||||||
Inventories | 1,939,689 | 977,639 | ||||||||||
Prepaid expenses and other assets | 2,065,539 | 3,277,873 | ||||||||||
Investment in equity securities | 9 | — | 77,089,100 | |||||||||
Assets held for sale | 7(b) | — | 38,656,048 | |||||||||
Deferred charges, net | 51,138 | — | ||||||||||
Current assets of discontinued operations | 3 | 54,763,308 | — | |||||||||
Total current assets | 166,468,888 | 242,276,874 | ||||||||||
NON-CURRENT ASSETS: | ||||||||||||
Vessels, net | 7 | 343,408,466 | 229,536,996 | |||||||||
Restricted cash | 8 | 7,550,000 | 7,190,000 | |||||||||
Due from related parties | 4 | 3,514,098 | 4,504,340 | |||||||||
Prepaid expenses and other assets | 1,626,000 | 500,000 | ||||||||||
Deferred charges, net | 5 | 5,357,816 | 3,231,461 | |||||||||
Fair value of acquired time charters | 6 | 2,507,506 | 265,173 | |||||||||
Investment in related party | 4(c) | — | 117,537,135 | |||||||||
Non-current assets of discontinued operations | 3 | 102,715,796 | — | |||||||||
Total non-current assets | 466,679,682 | 362,765,105 | ||||||||||
Total assets | $ | 633,148,570 | $ | 605,041,979 | ||||||||
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY | ||||||||||||
CURRENT LIABILITIES: | ||||||||||||
Current portion of long-term debt, net | 8 | 29,170,815 | 17,679,295 | |||||||||
Debt related to assets held for sale, net | 8(a) | — | 2,406,648 | |||||||||
Accounts payable | 7,593,981 | 2,833,167 | ||||||||||
Deferred revenue | 2,583,879 | 1,548,892 | ||||||||||
Accrued liabilities | 5,494,043 | 3,592,728 | ||||||||||
Due to related parties | 4(d) | 227,622 | 541,666 | |||||||||
Current liabilities of discontinued operations | 3 | 6,519,051 | — | |||||||||
Total current liabilities | 51,589,391 | 28,602,396 | ||||||||||
NON-CURRENT LIABILITIES: | ||||||||||||
Long-term debt, net | 8 | 109,600,947 | 65,709,842 | |||||||||
Non-current liabilities of discontinued operations | 3 | 10,463,172 | — | |||||||||
Total non-current liabilities | 120,064,119 | 65,709,842 | ||||||||||
Commitments and contingencies | 12 | |||||||||||
MEZZANINE EQUITY: | ||||||||||||
5.00% Series D fixed rate cumulative perpetual convertible preferred shares: 0 and 50,000 shares issued and outstanding as of December 31, 2022, and December 31, 2023, respectively, aggregate liquidation preference of $0 and $50,000,000 as of December 31, 2022 and December 31, 2023, respectively | — | 49,549,489 | ||||||||||
Total mezzanine equity | 10 | — | 49,549,489 | |||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||||
Common shares, $0.001 par value; 1,950,000,000 shares authorized; 94,610,088 and 96,623,876 issued and outstanding as of December 31, 2022, and December 31, 2023, respectively | 10 | 94,610 | 96,624 | |||||||||
Preferred shares, $0.001 par value: 50,000,000 shares authorized; Series B Preferred Shares – 12,000 shares issued and outstanding as of December 31, 2022, and December 31, 2023 | 10 | 12 | 12 | |||||||||
Additional paid-in capital | 303,658,153 | 266,360,857 | ||||||||||
Retained earnings | 157,742,285 | 194,722,759 | ||||||||||
Total shareholders’ equity | 461,495,060 | 461,180,252 | ||||||||||
Total liabilities, mezzanine equity and shareholders’ equity | $ | 633,148,570 | $ | 605,041,979 |
Number of Shares issued | ||||||||||||||||||||||||||||
Common shares | Preferred A shares | Preferred B shares | Par Value of Shares issued | Additional Paid-in capital | Retained earnings | Total Shareholders' Equity | ||||||||||||||||||||||
Balance, December 13, 2016 | - | - | - | - | - | - | - | |||||||||||||||||||||
-Issuance of common shares as part of exchange and shareholders' contribution (Note6) | 2,400,000 | - | - | 2,400 | 7,612,108 | - | 7,614,508 | |||||||||||||||||||||
-Issuance of preferred shares as part of exchange (Note 6) | - | 480,000 | 12,000 | 492 | 2,740,000 | - | 2,740,492 | |||||||||||||||||||||
-Deemed contribution of preferred shares as part of exchange (Note 6) | - | - | - | - | (2,740,000 | ) | - | (2,740,000 | ) | |||||||||||||||||||
-Net income | - | - | - | - | - | 878,644 | 878,644 | |||||||||||||||||||||
Balance, September 30, 2017 | 2,400,000 | 480,000 | 12,000 | 2,892 | 7,612,108 | 878,644 | 8,493,644 | |||||||||||||||||||||
-Net income | - | - | - | - | - | 980,938 | 980,938 | |||||||||||||||||||||
Balance, September 30, 2018 | 2,400,000 | 480,000 | 12,000 | 2,892 | 7,612,108 | 1,859,582 | 9,474,582 |
Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||
Note | 2021 | 2022 | 2023 | |||||||||||||
REVENUES: | ||||||||||||||||
Time charter revenues | 6,14 | $ | 102,785,442 | $ | 150,216,130 | $ | 97,515,511 | |||||||||
Total vessel revenues | 102,785,442 | 150,216,130 | 97,515,511 | |||||||||||||
EXPENSES: | ||||||||||||||||
Voyage expenses (including $1,299,108, $1,944,288 and $1,274,384 to related party for the years ended December 31, 2021, 2022, and 2023, respectively) | 4,15 | (1,891,265 | ) | (3,721,277 | ) | (5,052,228 | ) | |||||||||
Vessel operating expenses | 15 | (26,841,600 | ) | (41,259,554 | ) | (41,913,628 | ) | |||||||||
Management fees to related parties | 4 | (4,890,900 | ) | (6,562,400 | ) | (7,167,397 | ) | |||||||||
Depreciation and amortization | 5,7 | (10,528,711 | ) | (18,535,237 | ) | (22,076,831 | ) | |||||||||
Provision for doubtful accounts | (2,483 | ) | — | — | ||||||||||||
General and administrative expenses (including $1,200,000, $2,100,000 and $3,099,000 to related party for the years ended December 31, 2021, 2022, and 2023, respectively) | 4, 16 | (3,266,310 | ) | (7,043,937 | ) | (5,681,371 | ) | |||||||||
Net gain on sale of vessels | 7 | — | — | 6,383,858 | ||||||||||||
Total expenses | (47,421,269 | ) | (77,122,405 | ) | (75,507,597 | ) | ||||||||||
Operating income | 55,364,173 | 73,093,725 | 22,007,914 | |||||||||||||
OTHER INCOME/(EXPENSES): | ||||||||||||||||
Interest and finance costs (including $204,167, $0 and $0 to related party for the years ended December 31, 2021, 2022 and 2023, respectively) | 4,8,17 | (2,348,987 | ) | (7,681,482 | ) | (11,259,643 | ) | |||||||||
Interest income | 74,472 | 1,355,491 | 3,209,886 | |||||||||||||
Foreign exchange gains / (losses) | 13,290 | 109,882 | (92,745 | ) | ||||||||||||
Dividend income on equity securities | 9 | — | 24,528 | 1,312,222 | ||||||||||||
Dividend income from related party | 4 | — | — | 1,166,667 | ||||||||||||
Gains on equity securities | 9 | — | 27,450 | 5,136,649 | ||||||||||||
Total other expenses, net | (2,261,225 | ) | (6,164,131 | ) | (526,964 | ) | ||||||||||
Net income and comprehensive income, from continuing operations, before taxes | $ | 53,102,948 | $ | 66,929,594 | $ | 21,480,950 | ||||||||||
Income taxes | (291,165 | ) | (388,669 | ) | (177,794 | ) | ||||||||||
Net income and comprehensive income from continuing operations, net of taxes | $ | 52,811,783 | $ | 66,540,925 | $ | 21,303,156 | ||||||||||
Net (loss) / income and comprehensive income from discontinued operations, net of taxes | 3 | (541,296 | ) | 52,019,765 | 17,339,332 | |||||||||||
Net income and comprehensive income | 52,270,487 | 118,560,690 | 38,642,488 | |||||||||||||
Deemed dividend on Series A Preferred Shares | (11,772,157 | ) | — | — | ||||||||||||
Deemed dividend on warrants repurchase | — | — | (444,885 | ) | ||||||||||||
Dividend on Series D Preferred Shares | — | — | (1,020,833 | ) | ||||||||||||
Deemed dividend on Series D Preferred Shares | — | — | (196,296 | ) | ||||||||||||
Net income attributable to common shareholders | 40,498,330 | 118,560,690 | 36,980,474 | |||||||||||||
Earnings per common share, basic, continuing operations | 13 | 0.49 | 0.70 | 0.21 | ||||||||||||
Earnings per common share, diluted, continuing operations | 13 | 0.48 | 0.70 | 0.10 | ||||||||||||
(Loss) / Earnings per common share, basic, discontinued operations | 13 | (0.01 | ) | 0.55 | 0.18 | |||||||||||
(Loss) / Earnings per common share, diluted, discontinued operations | 13 | (0.01 | ) | 0.55 | 0.08 | |||||||||||
Earnings per common share, basic, Total | 13 | 0.48 | 1.25 | 0.39 | ||||||||||||
Earnings per common share, diluted, Total | 13 | 0.47 | 1.25 | 0.17 | ||||||||||||
Weighted average number of common shares, basic | 13 | 83,923,435 | 94,610,088 | 95,710,781 | ||||||||||||
Weighted average number of common shares, diluted | 13 | 85,332,728 | 94,610,088 | 219,530,247 |
2017 | 2018 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | 878,644 | 980,938 | ||||||
Adjustments to reconcile net income to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation and amortization | 182,346 | 637,611 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable trade | (342,605 | ) | 340,152 | |||||
Inventories | (46,586 | ) | (14,111 | ) | ||||
Due from related party | (96,264 | ) | (166,815 | ) | ||||
Prepaid expenses and other current assets | (29,060 | ) | (15,537 | ) | ||||
Accounts payable | 105,104 | (71,621 | ) | |||||
Accrued liabilities | 119,170 | (3,437 | ) | |||||
Deferred dry-docking expenses | - | (784,474 | ) | |||||
Net Cash provided by Operating Activities | 770,749 | 902,706 | ||||||
Cash Flows used in Investing Activities: | ||||||||
Purchase of vessel | (7,549,281 | ) | - | |||||
Net cash used in Investing Activities | (7,549,281 | ) | - | |||||
Cash Flows provided by Financing Activities: | ||||||||
Shareholders' contribution | 7,615,000 | - | ||||||
Net cash provided by Financing Activities | 7,615,000 | - | ||||||
Net increase in cash and cash equivalents | 836,468 | 902,706 | ||||||
Cash and cash equivalents beginning of the period | - | 836,468 | ||||||
Cash and cash equivalents at the end of the period/year | 836,468 | 1,739,174 | ||||||
Supplemental cash flow information: Non cash Financing Activities Deemed contribution relating to issuance of preferred shares | 2,740,000 | - |
For the years ended December 31, 2021, 2022, and 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Expressed in U.S. Dollars – except for share data)
The accompanying notes are an integral part of these consolidated financial statements. CASTOR MARITIME INC. For the years ended December 31, 2021, 2022, and 2023 (Expressed in U.S. Dollars)
The accompanying notes are an integral part of these consolidated financial statements. CASTOR MARITIME INC. (Expressed in U.S. Dollars – except for share data unless otherwise stated)
Castor Maritime Inc. (“Castor”) was incorporated in September 2017 under the laws of the Republic of the Marshall Islands. The accompanying consolidated financial statements include the accounts of Castor On F-9
The assets and
With effect from July 1, 2022, Castor Ships S.A., a corporation incorporated under the laws of the Pavimar S.A. (“Pavimar”), a related party controlled by Ismini Panagiotidis, the sister of the F-10
As of December 31, 2023, the Company owned a diversified fleet of 17 vessels, with a combined carrying capacity of 1.4 million dwt, consisting of one Capesize, five Kamsarmax and nine Panamax dry bulk vessels, as well as two 2,700 TEU containerships. Details of the Company’s wholly owned subsidiaries as of December 31, 2023, are listed below. (a) Consolidated vessel owning subsidiaries:
(b) Consolidated subsidiaries formed to acquire vessels:
F-11
(c) Consolidated non-vessel owning subsidiaries:
(d) Entities comprising the discontinued operations as part of
F-12
Charterer concentration: During the
Principles of consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The consolidated financial statements include the accounts of Castor and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Castor, as the holding company, determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a voting interest entity or a variable interest entity. Under Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 810 “Consolidation”, a voting interest entity is an entity in which the total equity investment at risk is deemed sufficient to absorb the expected losses of the entity, the equity holders have all the characteristics of a controlling financial interest and the legal entity is structured with substantive voting rights. The holding company consolidates voting interest entities in which it owns all, or at least a majority (generally, greater than 50%) of the voting interest. Variable interest entities (“VIE”) are entities, as defined under ASC 810, that in general either have equity investors with non-substantive voting rights or that have equity investors that do not provide sufficient financial resources for the entity to support its activities. The holding company has a controlling financial interest in a VIE and is, therefore, the primary beneficiary of a VIE if it has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. A VIE should have only one primary beneficiary which is required to consolidate the VIE. A VIE may not have a primary beneficiary if no party meets the criteria described above. The Company evaluates all arrangements that may include a variable interest in an entity to determine if it is the primary beneficiary, and would therefore be required to include assets, liabilities and operations of a VIE in its consolidated financial statements. The Company has identified it has variable interests in Toro Corp., but is not the primary beneficiary. The Company reconsiders the initial determination of whether an entity is a VIE if certain types of events (“reconsideration events”) occur. If the Company holds a variable interest in an entity that previously was not a VIE, it reconsiders whether the entity has become a VIE. F-13 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Expressed in U.S. Dollars – except for share data unless otherwise stated)
Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include vessel valuations, the valuation of amounts due from charterers, residual value and the useful life of the vessels. Actual results may differ from these estimates. Segment Reporting The Company reports financial information and evaluates its operations by type of vessel. As a result, management, including the chief operating decision maker, reviews operating results by the segmented operating results of its fleet. The Company determined that, as of December 31, 2023, it operated under two reportable segments: as a provider of dry bulk commodities transportation services (referred to as the “dry bulk segment”) and as a provider of containership cargoes transportation services (referred to as the “containership segment”). The accounting policies applied to the reportable segments are the same as those used in the preparation of the Company’s consolidated financial statements. When the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographic information is impracticable. Other comprehensive income The Company follows the accounting guidance relating to comprehensive income, which requires separate presentation of certain transactions that are recorded directly as components of shareholders’ equity. The Company has no other comprehensive income/(loss) items and, accordingly, comprehensive income equals net income for the periods presented. Foreign currency translation The Company’s reporting and functional currency is the U.S. Dollar (“USD”). Transactions incurred in other currencies are translated into USD using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities that are denominated in other currencies are translated into USD to reflect the end-of-period exchange rates and any gains or losses are included in the consolidated statements of comprehensive income. Cash and cash equivalents The Company considers highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. Restricted Cash Restricted cash may comprise of (i) minimum liquidity collateral requirements or minimum required cash deposits that are required to be maintained under the Company’s financing arrangements, (ii) cash deposits in so-called “retention accounts” which may only be used as per the Company’s borrowing arrangements for the purpose of serving the loan installments coming due or, (iii) other cash deposits required to be retained until other specified conditions prescribed in the Company’s debt agreements are met. In the event that the obligation to maintain such deposits is expected to elapse within the next operating cycle, these deposits are classified as current assets. Otherwise, they are classified as non-current assets. F-14
Accounts receivable trade, net The amount shown as trade receivables, net, at each balance sheet date, includes receivables from charterers for hire, freight, and other potential sources of income (such as demurrage, ballast bonus compensation and/or holds cleaning compensation, etc.) under the Company’s charter contracts, net of any provision for doubtful accounts. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. Provision for doubtful accounts recorded as of December 31, 2022 and 2023 amounted to $0 for both years. Inventories Inventories consist of bunkers, lubricants and provisions on board each vessel. Inventories are stated at the lower of cost or net realizable value. Net realizable value is the estimated selling price less reasonably predictable costs of disposal and transportation. Cost is determined by the first in, first out method. Inventories consist of bunkers during periods when vessels are unemployed, undergoing dry-docking or special survey or under voyage charters. Intangible Assets/Liabilities Related to Time Charters Acquired When the Company identifies any intangible assets or liabilities associated with the acquisition of a vessel, the Company records such identified intangible assets or liabilities at fair value. Fair value is determined by reference to market data obtained from independent broker’s valuations. The valuations reflect the fair value of the vessel with and without the attached time charter and the cost of the acquisition is then allocated to the vessel and the intangible asset or liability on the basis of their relative fair values. The intangible asset or liability is amortized as an adjustment to revenues over the assumed remaining term of the acquired time charter and is classified as non-current asset or liability, as applicable, in the accompanying consolidated balance sheets. Insurance Claims The Company records insurance claim recoveries for insured losses incurred on damage to fixed assets, loss of hire and for insured crew medical expenses. Insurance claim recoveries are recorded, net of any deductible amounts, at the time when (i) the Company’s vessels suffer insured damages or at the time when crew medical expenses are incurred, (ii) recovery is probable under the related insurance policies, (iii) the Company can estimate the amount of such recovery and (iv) provided that the claim is not subject to litigation. No provision for credit losses was recorded as of December 31, 2022 and 2023 pursuant to the provisions of ASC 326. Investment in equity securities The Company measures equity securities with readily determinable fair values (including other ownership interests, such as partnerships, unincorporated joint ventures, and limited liability companies, but excluding equity investments that are accounted for under the equity method of accounting or result in consolidation of an investee) at fair value with changes in the fair value recognized through net income, in accordance with ASC 321 “Investments–Equity Securities” and the provisions enumerated under ASC 825 “Financial Instruments”. Any dividends subsequently distributed by the investee to the Company are recognized as income when received. F-15
Vessels, net Vessels, net are stated at cost net of accumulated depreciation and impairment, if any. The cost of a vessel consists of the contract price plus any direct expenses incurred upon acquisition, including improvements, delivery expenses and other expenditures to prepare the vessel for its intended use which is to provide worldwide integrated transportation services. Subsequent expenditures for conversions and major improvements are also capitalized when they appreciably extend the life, increase the earning capacity or improve the efficiency or safety of a vessel; otherwise these amounts are charged to expense as incurred. Vessels held for sale The Company classifies a vessel as being held for sale when all of the following criteria, enumerated under ASC 360 “Property, Plant, and Equipment”, are met: (i) management has committed to a plan to sell the vessel; (ii) the vessel is available for immediate sale in its present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell the vessel have been initiated; (iv) the sale of the vessel is probable, and transfer of the asset is expected to qualify for recognition as a completed sale within one year; (v) the vessel is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Vessels classified as held for sale are measured at the lower of their carrying amount or fair value less cost to sell. The resulting difference, if any, is recorded under ‘Impairment loss’ in the consolidated statement of comprehensive income. A vessel ceases being depreciated once it meets the held for sale classification criteria. Vessels’ depreciation Depreciation is computed using the straight-line method over the estimated useful life of a vessel, after considering the estimated salvage value. Each vessel’s salvage value is equal to the product of its lightweight tonnage and estimated scrap rate. Salvage values are periodically reviewed and revised, if needed, to recognize changes in conditions, new regulations or for other reasons. Revisions of salvage value affect the depreciable amount of the vessels and affect depreciation expense in the period of the revision and future periods. Management estimates the useful life of its vessels to be 25 years from the date of their initial delivery from the shipyard. Impairment of Vessels The Company reviews its vessels for impairment whenever events or changes in circumstances indicate that the carrying amount of a vessel may not be recoverable. When the estimate of future undiscounted cash flows expected to be generated by the use of a vessel is less than its carrying amount, the Company evaluates the vessel for an impairment loss. Measurement of the impairment loss is based on the fair value of the vessel in comparison to its carrying value, including any related intangible assets and liabilities. In this respect, management regularly reviews the carrying amount of its vessels in connection with their estimated recoverable amount. As at December 31, 2022 and 2023, the Company identified impairment indicators for certain of its vessels and, accordingly, estimated the vessels’ recoverable amount by projecting their undiscounted future operating cash flows. In developing estimates of future undiscounted operating cash flows, the Company made assumptions about future charter rates, utilization rates, vessel operating expenses, future dry-docking and/or special survey costs, the estimated remaining useful life of the vessels and their estimated residual value. Based on the results of the undiscounted cash flow tests performed, the Company determined that the vessels for which impairment indicators were present, were not impaired as of December 31, 2022 and 2023. F-16
Dry-docking and special survey costs Dry-docking and special survey costs are accounted under the deferral method whereby the actual costs incurred are deferred and are amortized on a straight-line basis over the period through the date the next survey is scheduled to become due. Costs deferred are limited to actual costs incurred at the yard and parts used in the dry-docking or special survey. Costs deferred include expenditures incurred relating to shipyard costs, hull preparation and painting, inspection of hull structure and mechanical components, steelworks, machinery works, and electrical works as well as lodging and subsistence of personnel sent to the yard site to supervise. If a dry-dock and/or a special survey is performed prior to its scheduled date, the remaining unamortized balance is immediately expensed. Unamortized balances of vessels that are sold are written-off and included in the calculation of the resulting gain or loss in the period of a vessel’s sale. The amortization charge related to dry-docking costs and special survey costs is presented within Depreciation and amortization in the accompanying consolidated statements of comprehensive income. Revenues and voyage expenses recognition The Company generates its revenues from time charter contracts. Under a time charter agreement, a contract is entered into for the use of a vessel for a specific period of time and a specified daily fixed or index-linked charter hire rate. An index-linked rate usually refers to freight rate indices issued by the Baltic Exchange, such as the Baltic Panamax Index. Revenues related to time charter contracts The Company accounts for its time charter contracts as operating leases pursuant to ASC 842 “Leases”. The Company has determined that the non-lease component in its time charter contracts relates to services for the operation of the vessel, which comprise of crew, technical and safety services, among others. The Company further elected to adopt a practical expedient that provides it with the discretion to recognize lease revenue as a combined single lease component for all time charter contracts (operating leases) since it determined that the related lease component and non-lease component have the same timing and pattern of transfer and the predominant component is the lease. The Company qualitatively assessed that more value is ascribed to the use of the asset (i.e., the vessel) rather than to the services provided under the time charter agreements. Lease revenues are recognized on a straight-line basis over the non-cancellable rental periods of such charter agreements, as rental service is provided, beginning when a vessel is delivered to the charterer until it is redelivered back to the Company, and is recorded as part of vessel revenues in the Company’s consolidated statements of comprehensive income/(loss). Revenues generated from variable lease payments are recognized in the period when changes in facts and circumstances on which the variable lease payments are based occur. Deferred revenue includes (i) cash received prior to the balance sheet date for which all criteria to recognize as lease revenue have not yet been met as at the balance sheet date and, accordingly, is related to revenue earned after such date and (ii) deferred contract revenue such as deferred ballast compensation earned as part of a lease contract. Lease revenue is shown net of commissions payable directly to charterers under the relevant time charter agreements. Charterers’ commissions represent discount on services rendered by the Company and no identifiable benefit is received in exchange for the consideration provided to the charterer. Apart from the agreed hire rate, the owner may be entitled to additional income, such as ballast bonus, which is considered as reimbursement of owner’s expenses and is recognized together with the lease component over the duration of the charter. The Company made an accounting policy election to recognize the related ballast costs, which mainly consist of bunkers, incurred over the period between the charter party date or the prior redelivery date (whichever is latest) and the delivery date to the charterer, provided they meet certain criteria, as contract fulfillment costs in accordance with ASC 340-40 and amortize these over the period of the charter. F-17
Voyage Expenses Voyage expenses, Accounting for Financial Instruments The principal financial assets of the Company consist of cash and cash equivalents, restricted cash, amounts due from related parties and trade receivables, net. The principal financial liabilities of the Company consist of trade and other payables, accrued liabilities, long-term debt and amounts due to related parties. Fair value measurements The Company Repairs and Maintenance All repair and maintenance expenses including underwater inspection expenses are expensed in the period incurred. Such costs are included in Vessel operating expenses in the accompanying consolidated statements of comprehensive income. Financing Costs Costs associated with long-term debt, including but not F-18 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Expressed in U.S. Dollars – except for share data unless otherwise stated)
Offering costs Expenses directly attributable to an equity offering are deferred and set off against the proceeds of the offering within paid-in capital, unless the offering is aborted, in which case they are written-off and charged to earnings. Earnings /(losses) per common share Basic earnings/(losses) per common share are computed by dividing net income available to common shareholders, by the weighted average number of common shares outstanding during the period. Diluted earnings per common share, reflects the potential dilution that could occur if securities were converted or other contracts to issue common stock were exercised at the beginning of the periods presented, or issuance date, if later. The treasury stock method is used to compute the dilutive effect of warrants issued. The if-converted method is used to compute the dilutive effect of shares which could be issued upon conversion of the convertible securities. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted earnings per share. Commitments, contingencies and provisions Commitments are recognized when the Company has a present legal or constructive obligation as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle this obligation, and a reliable estimate of the amount of the obligation can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the present value of the expenditure expected to be required to settle the obligation. Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are not recognized in the financial statements but are disclosed when an inflow of economic benefits is probable. Investment in related party (Financial Instruments, Recognition and Measurement): The Company has elected to measure equity securities without a readily determinable fair value, that do not qualify for the practical expedient in ASC 820 Fair Value Measurement to Discontinued Operations The Company classifies as discontinued operations, a component of an entity or group of components that has been disposed of by sale, disposed of other than by sale or is classified as held for sale and represents a strategic shift that has (or will have) a major effect on the company’s operations and financial results (Note 3). Warrants repurchases The Company records the repurchase of its warrants at cost. For warrants repurchased, if the instrument is classified as equity, any cash paid in the settlement is recorded as an F-19 Recent Accounting Pronouncements:
The Company’s discontinued operations relate to the operations of Toro, Elektra and the subsidiaries formerly comprising the Company’s Aframax/LR2 and Handysize tanker segments following completion of the Spin-Off on March 7, 2023. The Company has no continuing involvement in the Aframax/LR2 and Handysize tanker business as of such date (Note 1). The components of assets and liabilities of discontinued operations in the consolidated balance sheet at December 31, 2022 consisted of the following:
F-20 The
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During the years ended December 31, 2021, 2022, and 2023, the Company incurred the following charges in connection with related party transactions, which are included in the accompanying consolidated statements of comprehensive income:
As of December 31, 2022, and 2023, balances with related parties consisted of the following:
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(a) Castor Ships: During the period from September 1, 2020 (being the effective date of the initial Castor Ships Management Agreements), and up to June 30, 2022, pursuant to the terms and conditions stipulated in a master management agreement (the “Master Management Agreement”) and separate commercial ship Effective July 1, 2022, the Company and each of the Company’s vessel owning subsidiaries entered, by mutual consent, into an amended and restated master management agreement In exchange for the services provided by Castor Ships, the Company and its vessel owning subsidiaries, pay Castor Ships (i) a flat quarterly management fee in the amount of $0.75 million for the management and administration of their business (the “Flat Management Fee”), (ii) a commission of 1.25% on all gross income received from the operation of their vessels, and (iii) a commission of 1% on each consummated sale and purchase transaction. In addition, each of the Company’s vessel owning subsidiaries pay Castor Ships a daily management fee of $925 per containership and dry bulk vessel, and, until March 7, 2023, paid a daily management fee of $975 per tanker vessel (collectively, the “Ship Management Fees”) for the provision of the ship management services provided in the Amended and Restated Master Management Agreements. The Ship Management Fees and Flat Management Fee is adjusted annually for inflation on each anniversary of the Amended and Restated Master Management Agreement’s effective date. As a result of the inflation adjustment and effective July 1, 2023, the Ship Management Fee increased from $925 per vessel to $986 per vessel and the Flat Management Fee increased from $0.75 million to $0.8 million. Pavimar is paid directly by the dry bulk vessel owning subsidiaries its previously agreed proportionate daily management fee of $600 per vessel and Castor Ships is paid the residual amount of $325 (before the inflation adjustment) or $386, effective July 1, 2023. The Company also reimburses Castor Ships for extraordinary fees and costs, such as the costs of extraordinary repairs, maintenance or structural changes to the Company’s vessels. F-23
The Amended and Restated Master Management Agreement has a term of eight years from its effective date and this term automatically renews for a successive eight-year term on each anniversary of the effective date, starting from the first anniversary of the effective date, unless the agreements are terminated earlier In January 2023, Castor Ships transferred the technical sub-management of the Company’s containerships from Pavimar to a third-party ship management company. As of December 31, 2023, in accordance with the provisions of the Amended Castor Ship Management Agreements, Castor Ships (i) had subcontracted to a third-party ship management company the technical management of the Company’s containerships and (ii) was co-managing with Pavimar the Company’s dry bulk vessels. Castor Ships pays, at its own expense, the containership technical management company a fee During the years ended December 31, 2021, 2022 and 2023, the Company incurred sale and purchase commissions amounting to $0, $235,500 and $0 respectively, due to the acquisition of one Panamax vessel, included in ‘Vessels, net’ in the accompanying consolidated balance sheets and sale and purchase commissions amounting to $0, $0 and $664,000 respectively, due to the sale of three Panamax vessels and two Kamsarmax vessels, which are included in ‘Net gain on sale of vessels’ in the accompanying consolidated statements of comprehensive income. The Amended Castor Ship Management Agreements also provide for an advance funding equal to two months of vessel daily operating costs to be As of December 31, 2022, net amounts of $214 were due to Further, as of December 31, 2022, and December 31, 2023, amounts of $227,408 and $107,099, respectively, were due to Castor Ships in connection with the F-24
(b) Pavimar: From the Company’s inception and until June 30, 2022, Pavimar, provided, on an exclusive basis, all of Effective July 1, 2022, the technical management agreements entered into between Pavimar and the Company’s tanker vessel owning subsidiaries were terminated by mutual consent. In connection with such termination, Pavimar and the tanker vessel owning subsidiaries agreed to mutually discharge and release each other from any past and future liabilities arising from the respective agreements. Further, with effect from July 1, 2022, pursuant to the terms of the Amended and Restated Master Management Agreement, Pavimar, continues to provide, as co-manager with Castor Ships, the dry-bulk vessel owning subsidiaries with the same range of technical management services it provided prior to the Company’s entry into the Amended and Restated Management Agreement, in exchange for the previously agreed daily management fee of $600 per vessel. Pavimar also performed the technical management of containerships as sub-manager for Castor Ships from their date of acquisition. Pavimar had subcontracted the technical management of four (comprising of three dry bulk and one containership) and three dry bulk of the Company’s vessels to third-party ship-management companies as of December 31, 2022 and December 31, 2023, respectively. These third-party management companies provided technical management services to the respective vessels for a fixed annual fee which is paid by Pavimar at its own expense. In connection with the subcontracting services rendered by the third-party ship-management companies, the Company had, as of December 31, 2022, and December 31, 2023, aggregate working capital guarantee deposits due from Pavimar of $258,252 in both periods, which are presented in ‘Due from related parties, current’ in the accompanying consolidated balance sheet. In addition, Pavimar and its subcontractor third-party managers make payments for operating expenses with funds paid from the Company to Pavimar. As of December 31, 2022, and December 31, 2023, net amounts of $2,665,824 and $3,302,157 were due from Pavimar, respectively, in relation to advance payments to Pavimar on behalf of the Company. Further, as of December 31, 2022, and December 31, 2023, amounts of $259,100 and $193,450 were due to Pavimar in connection with additional services covered by the technical management agreements. As a result, as of December 31, 2022, and December 31, 2023, net amounts of $2,664,976 and $3,366,959, respectively, due from Pavimar, which are presented in ‘Due from related parties, current’, respectively, in the accompanying consolidated balance sheets. (c) Investment in related party: As discussed in Note 1, as part of the Spin-Off Castor received 140,000 Series A Preferred Shares, having a stated amount of $1,000 and a par value of $0.001 per share. The Company is the holder of all of the issued and outstanding Series A Preferred Shares (Note 1). The Series A Preferred Shares do not have voting rights. The Series A Preferred Shares are convertible into common shares at the Company’s option commencing upon the third anniversary of the issue date until but excluding the seventh anniversary, at a conversion price equal to the lesser of (i) 150% of the VWAP of Toro common shares over the five consecutive trading day period commencing on the distribution date, and (ii) the VWAP of Toro common shares over the 10 consecutive trading day period expiring on the trading day immediately prior to the date of delivery of written notice of the conversion; provided, that, in no event shall the conversion price be less than $2.50. F-25
As there was no observable market for the Series A Preferred Shares, these were recognized at $117,222,135 (Note 11), being the fair value of the shares determined through Level 3 inputs of the fair value hierarchy by taking into consideration a third-party valuation. The fair value on the initial recognition is deemed to be the cost. The valuation methodology applied comprised the bifurcation of the value of the Series A Preferred Shares in two components namely, the “straight” preferred stock component and the option component. The mean of the sum of the two components was used to estimate the value for the Series A Preferred Shares at $117,222,135. The valuation methodology and the significant unobservable inputs used for each component are set out below:
As of December 31, 2023, the aggregate value of investments in Toro amounted to $117,537,135, including $315,000 of accrued dividends and are separately presented as ‘Investment in related party’ in the accompanying consolidated balance sheets. As of December 31, 2023, the Company did not identify any impairment or any observable prices for identical or similar investments of the same issuer. Furthermore, Castor is entitled to receive cumulative cash dividends, at the annual rate of 1.00% on the stated amount of $1,000 per share, of the 140,000 Series A Preferred Shares, receivable quarterly in arrears on the 15th day of January, April, July and October in each year, subject to Toro’s Board of Directors approval. However, for each quarterly dividend period commencing on or after the reset date (the seventh anniversary of the issue date of the Series A Preferred Shares), the dividend rate will be the dividend rate in effect for the prior quarterly dividend period multiplied by a factor of 1.3; provided that the dividend rate will not exceed 20% per annum in respect of any quarterly dividend period. During the years ended December 31, 2023, 2022 and 2021, dividend income derived from the Company’s investment in Toro amounted to $ 1,166,667, $0 and $0 respectively and is presented in ‘Dividend income from related party’ in the accompanying consolidated statements of comprehensive income. During the year ended December 31, 2023, the Company received dividend of $851,667 from its investment in Toro. Following the successful completion of the Spin-Off, Toro reimbursed Castor $2,694,647 for expenses related to the Spin-Off that had been incurred by Castor. (d) Issuance of Series D Preferred shares to Toro Corp: On August 7, 2023, the Company issued 50,000 5.00% Series D fixed rate cumulative perpetual convertible preferred shares (the “Series D Preferred Shares”) to Toro in exchange for $50,000,000 in cash, as referenced in Note 10. The amount of accrued dividend on the Series D Preferred Shares due to Toro as of December 31, 2023, was $541,666 and is presented net in ‘Due to related parties, current’ in the accompanying consolidated balance sheets. F-26
(e) Thalassa - $5.0 Million Term Loan Facility: On August 30, 2019, the Company entered into a $5.0 million unsecured term loan with Thalassa, the proceeds of which were used to partly finance the acquisition of the M/V Magic Sun. The Company drew down the entire loan amount on September 3, 2019. The facility bore a fixed interest rate of 6.00% per annum and initially had a bullet repayment on March 3, 2021, which, pursuant to a supplemental agreement dated March 2, 2021, was granted a six-month extension. At its extended maturity, on September 3, 2021, the Company repaid $5.0 million of principal and $609,167 of accrued interest due and owing from it to Thalassa and, as a result, the Company, with effect from that date, was discharged from all its liabilities and obligations under this facility. During the year ended December 31, 2021, the Company incurred interest costs in connection with the above facility amounting to $204,167 which are included in ‘Interest and finance costs’ in the accompanying consolidated statements of comprehensive income. (f) Vessel Acquisitions/ Disposals: On December 21, 2023, the Company entered into an agreement with an entity beneficially owned by a family member of the Company’s Chairman, Chief Executive Officer and Chief Financial Officer for the sale of the M/V Magic Venus, a 2010-built Kamsarmax bulk carrier vessel, for a price of $17.5 million. The terms of the transaction were negotiated and approved by a special committee of the Company’s disinterested and independent directors. The vessel is expected to be delivered to its new owner by the end of the first quarter of 2024. On January 4, 2022, the Company’s wholly owned subsidiary, Mickey, pursuant to a purchase agreement entered into on December 17, 2021, took delivery of the M/V Magic Callisto, a Japanese-built Panamax dry bulk carrier acquired from a third-party in which a family member of Petros Panagiotidis had a minority interest. The vessel was purchased for $23.55 million. The terms of the transaction were negotiated and approved by a special committee of disinterested and independent directors of the Company. The M/V Magic Callisto acquisition was financed with cash on hand. Further, on October 26, 2022, two of the Company’s wholly owned subsidiaries, Tom S and Jerry S, entered into two separate agreements for each to acquire a 2005 German-built 2,700 TEU containership vessel, from two separate entities beneficially owned by family members of Petros Panagiotidis. The purchase price for such vessels was $25.75 million and $25.00 million, respectively. The terms of these transactions were negotiated and approved by a special committee of the Company’s disinterested and independent directors. The acquisition of both vessels was financed with cash on hand and by utilizing the net proceeds from the $22.5 Million Term Loan Facility.
The movement in deferred dry-docking costs, net in the accompanying consolidated balance sheets is as follows:
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During the years ended December 31, 2022 and 2023, four of the Company’s dry bulk carrier vessels (the M/V Magic Horizon, the M/V Magic Moon, the M/V Magic P and the M/V Magic Perseus) and one of the Company’s container vessels (the M/V Ariana A) concluded scheduled drydocking repairs, respectively.
In connection with the acquisition of the M/V Magic Pluto in May 2021 with a time charter attached, the Company initially recognized an intangible liability of $1,940,000, representing the fair value of the unfavorable time charter acquired. The M/V Magic Pluto attached charter commenced In connection with the acquisitions in October 2022 of the M/V Ariana A and the M/V Gabriela A with time charters attached, the Company recognized intangible assets of $897,436 and $2,019,608, respectively, representing the fair values of the favorable time charters attached to the vessels. The M/V Ariana A and M/V Gabriela A attached charters commenced upon the vessels’ deliveries, on November For the years ended December 31, 2021, 2022, and 2023, the amortization of the acquired time charters related to the aboveacquisitions amounted to $1,940,000, $409,538 and $2,242,333, respectively, and is included in ‘Time Charter Revenues’ in the accompanying consolidated statements of comprehensive income. The aggregate unamortized portion of the M/V Gabriela A intangible asset as of December 31, 2023, amounted to $265,173 and will be amortized to vessel revenues within 2024, in accordance with the anticipated expiration date of the respective charter contract.
(a) Vessels, net: The amounts in the accompanying consolidated balance sheets are analyzed as follows:
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Vessel Acquisitions and other Capital Expenditures: During the year ended December 31, 2021, the Company agreed to acquire the M/V Magic Callisto for a purchase price of $23.55 million, which acquisition was concluded on January 4, 2022. Certain advances paid during the year ended December 31, 2021 were transferred from Advances for vessel acquisitions to Vessels, net in 2022. The vessel acquisition was financed with cash on hand and the net proceeds from the equity financing discussed under Note 10 below. During the year ended December 31, 2022, the Company agreed to acquire two containerships, the M/V Ariana A and the M/V Gabriela A, for an aggregate cash consideration of $50.75 million (the “2022 Vessel Acquisitions”, see also Note 4(f)). Both acquisitions were financed with cash on hand and the net proceeds from the $22.5 Million Term Loan Facility discussed in Note 8 and were delivered to the Company in November 2022. Details regarding the 2022 Vessel Acquisitions delivered as of December 31, 2022, are presented below.
During the year ended December 31, 2022, the Company incurred aggregate capitalized vessel improvement costs amounting to $2.6 million, mainly related to the ballast water treatment system (“BWTS”) installations on the M/V Magic Moon, M/V Magic Rainbow, M/V Magic Perseus, M/V Magic P that were concluded in 2022. During the year ended December 31, 2023, the Company incurred aggregate vessel improvement costs of $0.4 million mainly relating to the installation of new equipment pursuant to environmental regulations. (b) Assets held for sale/ Disposal of vessels On March 13, 2023, the Company entered into an agreement with an unaffiliated third party for the sale of the M/V Magic Rainbow for a On June 2, 2023, the Company entered into an agreement with an unaffiliated third party for the sale of the M/V Magic Twilight for a gross sale price of $17.5 million. The M/V Magic Twilight was delivered to its new owners on July 20, 2023. In connection with this sale, the Company recognized during the third quarter of 2023 a net gain of $3.2 million which is separately presented in ‘Net gain on sale of vessels’ in the accompanying consolidated statements of comprehensive income. F-29
On September 22, 2023, the Company entered into an agreement with an unaffiliated third party for the sale of the M/V Magic Argo for a gross sale price of $15.75 million. The M/V Magic Argo was delivered to its new owners on December 14, 2023. In connection with this sale, the Company recognized during the fourth quarter of 2023 a net gain of $2.6 million which is separately presented in ‘Net gain on sale of vessels’ in the accompanying consolidated statements of comprehensive income. On October 6, 2023, the Company entered into an agreement with an unaffiliated third party for the sale of the M/V Magic Sun for a gross sale price of $6.55 million. The M/V Magic Sun was delivered to its new owners on November 14, 2023. In connection with this sale, the Company recognized during the fourth quarter of 2023 a net gain of $0.7 million which is separately presented in ‘Net gain on sale of vessels’ in the accompanying consolidated statements of comprehensive income. On October 16, 2023, the Company entered into an agreement with an unaffiliated third party for the sale of the M/V Magic Phoenix for a gross sale price of $14 million. The M/V Magic Phoenix was delivered to its new owners on November 27, 2023. In connection with this sale, the Company recognized during the fourth quarter of 2023 a net loss of $3.3 million which is included in ‘Net gain on sale of vessels’ in the accompanying consolidated statements of comprehensive income. The respective sales of the above vessels took place due to favorable offers in each case. On March 23, 2023, the Company entered into an agreement with an unaffiliated third party for the sale of the M/V Magic Moon for a gross sale price of $13.95 million. On September 26, 2023, the Company announced that the previously announced sale of the M/V Magic Moon was terminated following the buyers’ failure to take On As a result, as of December 31, 2022, and December 31, 2023, net amounts of $0 and $38,656,048, respectively, are presented in ‘Assets held for sale’, in the accompanying consolidated balance sheets. As of Consistent with prior practices, the F-30
The amount of long-term debt shown in the accompanying consolidated balance sheet of December 31, 2023, is
On November 22, 2019, two of the Company’s wholly owned dry bulk vessel ship-owning subsidiaries, Spetses and Pikachu owning the M/V Magic P and the M/V Magic Moon, respectively, entered into the Company’s first senior secured term loan facility in the amount of $11.0 million with Alpha Bank S.A (“Alpha Bank”). The facility was drawn down in two tranches on December 2, 2019. This facility has a term of five years from the drawdown date, bears interest at a margin over LIBOR per annum and is repayable in twenty (20) equal quarterly installments of $400,000 each, plus a balloon installment of $3.0 million payable simultaneously with the last installment at maturity, on December 2, 2024. On February 14, 2024, we entered into a first supplemental agreement with Alpha Bank, pursuant to which, with effect from April 3, 2023, SOFR replaced LIBOR as the reference rate under this facility and the margin was increased by a percentage of 0.045%, which is the equivalent of the positive difference as of April 3, 2023 between USD LIBOR and SOFR for the first rollover period commencing April 3, 2023 selected upon application of SOFR methodology. Such percentage will apply over the tenor of the loan going forward regardless of future rollover periods. The above facility is secured by, including but not limited to, a first preferred mortgage and first priority general assignment covering earnings, insurances and requisition compensation over the vessels owned by the borrowers, an earnings account pledge, shares security deed relating to the shares of the vessels’ owning subsidiaries, manager’s undertakings and is guaranteed by the Company. The respective facility also contains certain customary minimum liquidity restrictions and financial covenants that require the borrowers to (i) maintain a certain level of minimum free liquidity per collateralized vessel, and (ii) meet a specified minimum security requirement ratio, which is the ratio of the aggregate market value of the mortgaged vessels plus the value of any additional security and the value of the minimum free liquidity requirement referred to above to the aggregate principal amounts due under the facility. This facility’s net proceeds were partly used by the Company to repay a $7.5 million bridge loan on December 6, 2019, whereas the remainder of the proceeds was used for general corporate purposes including financing vessel acquisitions. As of December 31, 2023, the loan tranche relating to M/V Magic Moon, amounting to $2.4 million has been classified as Debt related to assets held for sale under current liabilities. On January 16, 2024, the Company repaid $2.4 million under this facility from the proceeds of the sale of M/V Magic Moon, representing the part of the loan secured by M/V Magic Moon, and the repayment schedule was adjusted accordingly.
On January 23, 2020, pursuant to the terms of a credit agreement, the Company’s wholly owned dry bulk vessel ship-owning subsidiary, Bistro, entered into a $4.5 million senior secured term loan facility with Chailease International Financial Services Co., Ltd (“Chailease International”). The facility was drawn down on January 31, 2020, is repayable in twenty (20) equal quarterly installments of $150,000 each, plus a balloon installment of $1.5 million payable simultaneously with the last installment at maturity, and bears interest at a margin over LIBOR per annum. On June 21, 2023, the Company entered into an amendment agreement to its $4.5 million senior secured term loan facility with Chailease International. With effect from July 31, 2023, the interest rate was replaced by a replacement interest rate, comprised of Term SOFR, a credit spread adjustment of 0.11448% and the margin. The above facility contains a standard security package including a first preferred mortgage on the vessel owned by the borrower (the M/V Magic Sun), pledge of bank account, charter assignment, shares pledge and a general assignment over the vessel’s earnings, insurances and any requisition compensation in relation to the vessel owned by the borrower and is guaranteed by the Company and Pavimar. Pursuant to the terms of this facility, the Company is also subject to certain minimum liquidity restrictions requiring the borrower to maintain a certain credit balance in an account of the lender as “cash collateral” as well as certain negative covenants customary for facilities of this type. The credit agreement governing this facility also requires maintenance of a minimum value to loan ratio being the aggregate principal amount of (i) fair market value of the collateral vessel and (ii) the value of any additional security (including the cash collateral referred to above), to the aggregate principal amount of the loan. This facility’s net proceeds were used to fund vessel acquisitions in 2021 and for general corporate purposes. On November 14, 2023, Chailease International entered into a deed of release, with respect to the M/V Magic Sun, releasing and discharging the underlying borrower and all securities created over the M/V Magic Sun in full after the settlement of the outstanding balance of $2.25 million. As of December 31, 2023, this loan facility has been fully repaid. F-32
On January 22, 2021, pursuant to the terms of a credit agreement, two of the Company’s wholly owned dry bulk vessel ship-owning subsidiaries, Pocahontas and Jumaru, entered into a $15.29 million senior secured term loan facility with Hamburg Commercial Bank AG. The loan was drawn down in two tranches on January 27, 2021, is repayable in sixteen (16) equal quarterly installments of $471,000 each, plus a balloon installment in the amount of $7.8 million payable at maturity and bears interest at a margin over LIBOR per annum. On July 3, 2023, the Company entered into an amendment agreement to this facility providing that, with effect from July 3, 2023, the LIBOR-based interest rate was replaced by a replacement interest rate, i.e. Term SOFR, and the margin. The above facility contains a standard security package including first preferred mortgages on the vessels owned by the borrowers (the M/V Magic Horizon and the M/V Magic Nova), pledge of bank accounts, charter assignments and a general assignment over the vessels’ earnings, insurances and any requisition compensation in relation to the vessels owned by the borrowers, and is guaranteed by the Company. Pursuant to this facility, the Company is also subject to a certain minimum liquidity restriction requiring the borrowers to maintain a certain restricted cash balance with the lender, to maintain and gradually fund certain dry-dock reserve accounts in order to ensure the payment of any costs incurred in relation to the next dry-docking of each mortgaged vessel, as well as to certain negative covenants customary, for facilities of this type. The credit agreement governing this facility also requires maintenance of a minimum security cover ratio being the aggregate amount of (i) the aggregate market value of the collateral vessels, (ii) the value of the minimum liquidity deposits referred to above, (iii) the value of the dry-dock reserve accounts referred to above and (iv) any additional security provided, over the aggregate principal amount of the loan outstanding.
On July 23, 2021, pursuant to the terms of a credit agreement, four of the Company’s wholly owned dry bulk vessel ship-owning subsidiaries, Liono, Snoopy, Cinderella and Luffy, entered into a $40.75 million senior secured term loan facility with Hamburg Commercial Bank AG. The loan was drawn down in four tranches on July 27, 2021, is repayable in twenty (20) equal quarterly installments of $1,154,000 each, plus a balloon installment in the amount of $17.7 million payable at maturity simultaneously with the last installment and bears interest at a margin over LIBOR per annum. On July 3, 2023, the Company entered into an amendment agreement to its $40.75 million senior secured term loan facility with Hamburg Commercial Bank AG. With effect from July 3, 2023, the interest rate was replaced by a replacement interest rate, i.e. Term SOFR, and the margin. The above facility contains a standard security package including first preferred mortgages on the vessels owned by the borrowers, pledge of bank accounts, charter assignments, and a general assignment over the vessels’ earnings, insurances and any requisition compensation in relation to the vessels owned by the borrowers(the M/V Magic Thunder, M/V Magic Nebula and the M/V Magic Eclipse), and is guaranteed by the Company. The Company is also subject to a certain minimum liquidity restriction requiring the borrowers to maintain a certain minimum restricted cash balance with the lender (a specified portion of which shall be released to the borrowers following the repayment of the fourth installment with respect to all four tranches), to maintain and gradually fund certain dry-dock reserve accounts to ensure the payment of any costs incurred in relation to the next dry-docking of each mortgaged vessel, as well as to certain negative covenants customary for facilities of this type. The credit agreement governing this facility also requires maintenance of a minimum security cover ratio being the aggregate amount of (i) the aggregate market value of the collateral vessels, (ii) the value of the dry-dock reserve accounts referred to above and, (iii) any additional security provided, over the aggregate principal amount outstanding of the loan. This facility’s net proceeds were used to fund vessel acquisitions in 2021 and for general corporate purposes. On July 20, 2023, Hamburg Commercial Bank AG entered into a deed of partial release, with respect to the M/V Magic Twilight, releasing and discharging the underlying borrower and all securities created over the M/V Magic Twilight in full after the settlement of the outstanding balance of $7.91 million pertaining to M/V Magic Twilight’s tranche. The facility’s repayment schedule was adjusted accordingly. F-33
On November 22, 2021, pursuant to the terms of a credit agreement, two of the Company’s wholly owned dry bulk vessel ship-owning subsidiaries, Bagheera and Garfield, entered into a $23.15 million senior secured term loan facility with Chailease International Financial Services (Singapore) Pte. Ltd (“Chailease Singapore”). The loan was drawn down in two tranches on November 24, 2021, the first in a principal amount of $10.15 million and the second in a principal amount of $13.0 million. Both tranches mature five years after the drawdown date and are repayable in sixty (60) monthly installments (1 to 18 in the amount of $411,500 and 19 to 59 in the amount of $183,700) and (b) a balloon installment in the amount of $8.2 million payable at maturity simultaneously with the last installment and bear interest at a margin over LIBOR per annum. On May 23, 2023, the Company entered into an amendment agreement to this facility providing that, with effect from April 24, 2023, the LIBOR-based interest rate was replaced by a replacement interest rate, comprised of Term SOFR 1M, a credit spread adjustment of 0.11448% and the margin. The above facility contains a standard security package including first preferred mortgages on the vessels owned by the borrowers, pledge of bank accounts, shares security deed relating to the shares of the vessels’ owning subsidiaries, charter assignments, shares pledge, and a general assignment over the vessels’ earnings, insurances and any requisition compensation in relation to the vessels owned by the borrowers (the M/V Magic Rainbow and the M/V Magic Phoenix) and is guaranteed by the Company. Pursuant to this facility, the Company is also subject to certain negative covenants customary for facilities of this type and a certain minimum liquidity restriction requiring the borrowers to maintain a certain minimum cash balance with the lender. This facility’s net proceeds were used to fund vessel acquisitions in 2021 and for general corporate purposes. On April 18, 2023, Chailease Singapore entered into a deed of partial release, with respect to the M/V Magic Rainbow, releasing and discharging the underlying borrower and all securities created over the M/V Magic Rainbow in full after the settlement of the outstanding balance of $6.95 million pertaining to M/V Magic Rainbow’s tranche. The facility’s repayment schedule was adjusted accordingly. On November 27, 2023, Chailease Singapore entered into a deed of release, with respect to the M/V Magic Phoenix, releasing and discharging the underlying borrower and all securities created over the M/V Magic Phoenix in full after the settlement of the outstanding facility balance of $8.6 million. As of December 31, 2023, this loan facility has been fully repaid.
On January 12, 2022, the Company entered into a $55.0 million senior secured term loan facility with Deutsche Bank AG (the “$55.0 Million Term Loan Facility”), through and secured by five of the Company’s dry bulk vessel owning subsidiaries, those owning the M/V Magic Starlight, M/V Magic Mars, M/V Magic Pluto, M/V Magic Perseus and the M/V Magic Vela, and guaranteed by the Company. The loan was drawn down in full in five tranches on January 13, 2022. This facility has a tenor of five years from the drawdown date, bears interest at a 3.15% margin over adjusted SOFR per annum and is repayable in (a) twenty (20) quarterly installments (installments 1 to 6 in the amount of $3,535,000, installments 7 to 12 in the amount of $1,750,000 and installments 13 to 20 in the amount of $1,340,000) and (b) a balloon installment in the amount of $12.57 million, such balloon installment payable at maturity together with the last repayment installment. This facility contains a standard security package including a first preferred cross-collateralized mortgage on the vessels owned by the borrowers, pledge of bank accounts, charter assignments, shares pledge, a general assignment over the vessel’s earnings, insurances, and any requisition compensation in relation to the vessel owned by the borrower, and managers’ undertakings and is guaranteed by the Company. Pursuant to the terms of this facility, the borrowers are subject to (i) a specified minimum security cover requirement, which is the maximum ratio of the aggregate principal amounts due under the facility to the aggregate market value of the mortgaged vessels plus the value of the dry-dock reserve accounts referred to below and any additional security, and (ii) to certain minimum liquidity restrictions requiring the Company to maintain certain blocked and free liquidity cash balances with the lender, to maintain and gradually fund certain dry-dock reserve accounts in order to ensure the payment of any costs incurred in relation to the next dry-docking of each mortgaged vessel, as well as to certain customary, for this type of facilities, negative covenants. Moreover, the facility contains certain financial covenants requiring the Company as guarantor to maintain (i) a ratio of net debt to assets adjusted for the market value of the Company’s fleet of vessels,to net interest expense ratio above a certain level, (ii) an amount of unencumbered cash above a certain level and, (iii) the Company’s trailing 12 months EBITDA to net interest expense ratio not to fall below a certain level. This facility’s net proceeds are for acquisitions and for general corporate purposes. F-34
As of December 31, 2022 and 2023, the Company was in compliance with all financial covenants prescribed in its debt agreements. Restricted cash as of December 31, 2022 and 2023, current and non-current, represent minimum liquidity deposits, retention deposits and cash balances in dry-dock reserve accounts required under certain of our loan facilities. The annual principal payments for the Company’s outstanding debt arrangements (including the debt related to assets held for sale) as of December 31, 2023, required to be made after the balance sheet date, are as follows:
The weighted average interest rate on the Company’s long-term debt for the years ended December 31, 2021, 2022 and 2023 was 3.7%, 5.1% and 8.5% respectively. Total interest incurred on long-term debt for the years ended December 31, 2021, 2022 and 2023, amounted to $1.8 million, $6.8 million and $9.8 million respectively, and is included in Interest and finance costs (Note 17) in the accompanying consolidated statements of comprehensive income. F-35
A summary of the movement in listed equity securities for the year ended December 31, 2023 is presented in the table below:
On June 30, 2023, the Company filed a Schedule 13G, reporting that it holds 1,391,500 shares of common stock of Eagle Bulk Shipping Inc. (“Eagle”), representing 14.99% of the issued and outstanding shares of common stock of Eagle as of June 23, 2023. In the years ended December 31, 2021, 2022 and 2023, the Company received dividends of $0, $24,528 and $1,312,222, respectively, from its investments in listed equity securities.
Under the
Each outstanding common share entitles the holder to one vote on all matters submitted to a vote of shareholders. Subject to preferences that may be applicable to any outstanding preferred shares, common shareholders are entitled to receive ratably all dividends, if any, declared by the On June 23, 2020, the Company entered into an agreement with Maxim Group LLC (“Maxim”), acting as underwriter, pursuant to which it offered and sold 5,911,000 units, each unit consisting of (i) one common share or a pre-funded warrant to purchase one common share at an exercise price equal to $0.10 per common share (a “Pre-Funded Warrant”), and (ii) one Class A Warrant to purchase one common share (a “Class A Warrant”), for $3.50 per unit (or $3.40 per unit including a Pre-Funded Warrant). This offering closed on June 26, 2020 and resulted in the issuance of 5,908,269 common shares (the “ 2020 June Equity Offering Shares”) and 5,911,000 Class A Warrants, which also included 771,000 over-allotment units pursuant to an over-allotment option that was exercised by Maxim on June 24, 2020. The Company raised gross and net cash proceeds from this transaction of $20.7 million and $18.6 million, respectively. The Class A Warrants issued in the above offering have a term of five years and are exercisable immediately and throughout their term for $3.50 per common share (American style option). The exercise price of the Class A Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common shares and also upon any distributions of assets, including cash, stock or other property to existing shareholders. On March 7, 2023, in connection with the Spin-Off and in accordance with the terms of the Class A Warrants, the exercise price of the Class A Warrants was reduced to $2.53. F-36
During the years ended December 31, 2022, and 2023, no exercises of Class A Warrants took place. As a result, as of December 31, 2022 and 2023, 62,344 Class A Warrants remained unexercised and potentially issuable into common stock of the Company. 2020 registered direct equity offering (the “2020 July Equity Offering”) On July 12, 2020, the Company entered into agreements with certain unaffiliated institutional investors pursuant to which it offered and sold 5,775,000 common shares in a registered offering. In a concurrent private placement, the Company also issued warrants to purchase up to 5,775,000 common shares (the “Private Placement Warrants”). In connection with this offering, which closed on July 15, 2020, the Company received gross and net cash proceeds of approximately $17.3 million and $15.7 million, respectively. The 2020 Private Placement Warrants issued in the offering discussed above have a term of five years and are exercisable immediately and throughout their term for $3.50 per common share (American style option). The exercise price of the Private Placement Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common shares and also upon any distributions of assets, including cash, stock or other property to existing shareholders. On March 7, 2023, in connection with the Spin-Off and in accordance with the terms of the Private Placement Warrants, the exercise price of the Private Placement Warrants was reduced to $2.53. During the year ended December 31, 2022, there were no exercises of Private Placement Warrants. As of December 31, 2022, 67,864 Private Placement Warrants remained unexercised and potentially issuable into common stock of the Company. On October 6, 2023, the Company repurchased, in privately negotiated transactions with certain of these unaffiliated third-party warrantholders, 67,864 Private Placement Warrants for $0.105 per repurchased warrant, or an aggregate purchase price of $7,126. Following the repurchase, as of December 31, 2023, no Private Placement Warrants remain outstanding. 2021 First Registered Direct Equity Offering On December 30, 2020, the Company entered into agreements with certain unaffiliated institutional investors pursuant to which it offered and sold 9,475,000 common shares and warrants to purchase up to 9,475,000 common shares (the “January 5 Warrants”) in a registered direct offering. In connection with this direct equity offering, which closed on January 5, 2021, the Company received gross and net cash proceeds of approximately $18.0 million and $16.5 million, respectively. The January 5 Warrants issued in the above equity offering had a term of five years and were exercisable immediately and throughout their term for $1.90 per common share (American style option). The exercise price of the January 5 Warrants was subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common shares and upon any distributions of assets, including cash, stock or other property to existing shareholders. F-37
As of February 10, 2021, all the January 5 Warrants had been exercised, and, pursuant to their exercise and the issuance by the Company of 9,475,000 common shares, the Company received gross and net proceeds of $18.0 million. 2021 Second Registered Direct Equity Offering On January 8, 2021, the Company entered into agreements with certain unaffiliated institutional investors pursuant to which it offered and sold 13,700,000 common shares and warrants to purchase up to 13,700,000 common shares (the “January 12 Warrants”) in a registered direct offering. In connection with this direct equity offering, which closed on January 12, 2021, the Company received gross and net cash proceeds of $26.0 million and $24.1 million, respectively. The January 12 Warrants issued in the above offering had a term of five years and were exercisable immediately and throughout their term for $1.90 per common share (American style option). The exercise price of the January 12 Warrants was subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common shares and also upon any distributions of assets, including cash, stock or other property to existing shareholders. As of February 10, 2021, all the January 12 Warrants had been exercised, and, pursuant to their exercise and the issuance by the Company of 13,700,000 common shares, the Company received gross and net proceeds of $26.0 million. 2021 Third Registered Direct Equity Offering On April 5, 2021, the Company entered into agreements with certain unaffiliated institutional investors pursuant to which it offered and sold 19,230,770 common shares and warrants to purchase up to 19,230,770 common shares (the “April 7 Warrants”) in a registered direct offering. In connection with this direct equity offering, which closed on April 7, 2021, the Company received gross and net cash proceeds of approximately $125.0 million and $116.3 million, respectively. The April 7 Warrants issued in the above offering have a term of five years and are exercisable immediately and throughout their term for $6.50 per common share (American style option). The exercise price of the April 7 Warrants is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common shares and also upon any distributions of assets, including cash, stock or other property to existing shareholders. On March 7, 2023, in connection with the Spin-Off and in accordance with the terms of the April 7 Warrants, the exercise price of the April 7 Warrants was reduced to $5.53. Between their issuance date and December 31, 2022, there were no exercises of the April 7 Warrants and, as a result, as of December 31, 2022, 19,230,770 April 7 Warrants remained unexercised and potentially issuable into common stock of the Company. F-38
On October 6, 2023, the Company repurchased, in privately negotiated transactions with unaffiliated third-party warrantholders, 8,900,000 April 7 Warrants for $0.105 per repurchased warrant, for an aggregate purchase price of $0.9 million. Following the repurchase, 10,330,770 April 7 Warrants with an exercise price of $5.53, remain outstanding, each exercisable for one common share of Castor. As of October 6, 2023, the fair value of the warrants repurchased were estimated by the Company using the Black Scholes method using the following Level 3 inputs by applying the same methodology as per initial fair value measurement for the April 7 Warrants and the Private Placement Warrants. For this assessment the Company updated the Level 3 inputs considering expected volatility of 100% for the valuation of the instrument based on an exercise price of $5.53 and $2.23 respectively. The Company considered the guidance under FASB ASC Topic 505-30 for the warrants repurchase and, as a result, as of October 6, 2023, the difference between the carrying value and the fair value of the April 7 Warrants and Private Placement Warrants, amounting to $0.4 million, was recognized in retained earnings as a deemed dividend, and has been considered in the 2023 earnings per share calculations (Note 13). The Company accounted for the Class A Warrants, the Private Placement Warrants and the January 5, January 12 and April 7 Warrants as equity in accordance with the accounting guidance under ASC 815-40. The accounting guidance provides a scope exception from classifying and measuring as a financial liability a contract that would otherwise meet the definition of a derivative if the contract is both (i) indexed to the entity’s own stock and (ii) meets the equity classifications conditions. The Company concluded these warrants were equity-classified since they contained no provisions which would require the Company to account for the warrants as a derivative liability, and therefore were initially measured at fair value in permanent equity with subsequent changes in fair value not measured. In connection with the Spin-Off, the exercise price of each of the Class A Warrants, April 7 Warrants and Private Placement Warrants was decreased in accordance with their terms by the fair market value (as determined by our Board of Directors, in good faith) of the Toro common shares upon completion of the Spin-Off. June 2021 at-the-market common stock offering program, as amended on March 31, 2022 (the “ATM Program”) On June 14, 2021 (the “ATM Program Effective Date”), the Company entered into an equity distribution agreement which was amended and restated on March 31, 2022 (the “Equity Distribution Agreement”). Under the Equity Distribution Agreement, which expired on June 14, 2022, the Company could, from time to time, offer and sell its common shares through an at-the-market offering (the “ATM Program”), having an aggregate offering price of up to $150.0 million. No warrants, derivatives, or other share classes were associated with this transaction. No sales have been effected under the ATM Program during the year ended December 31, 2022. May 2023 at-the-market common shares offering program (the “New ATM Program”) On May 23, 2023, the Company, entered into an equity distribution agreement for the New ATM Program, with Maxim, under which the Company may sell an aggregate offering price of up to $30.0 million of its common shares with Maxim acting as a sales agent over a minimum period of 12 months. No warrants, derivatives, or other share classes were associated with this transaction. As of December 31, 2023, the Company had received gross proceeds of $0.9 million under the New ATM Program by issuing 2,013,788 common shares. The net proceeds under the New ATM Program, after deducting sales commissions and other transaction fees and expenses (advisory and legal fees), amounted to $0.6 million. F-39
Nasdaq Notification On April 20, 2023, the Company received a notification from the Nasdaq Stock Market (“Nasdaq”) that it was not in compliance with the minimum $1.00 per share bid price requirement for continued listing (the “Minimum Bid Price Requirement”) on the Nasdaq Capital Market and was provided with 180 calendar daysto regain compliance with the Minimum Bid Price Requirement. On October 18, 2023, the Company received a notification letter from Nasdaq granting the Company an additional 180-day extension, until April 15, 2024 to regain compliance with the Minimum Bid Price Requirement (the “Second Compliance Period”) The Company can cure this deficiency if the closing bid price of its common shares is $1.00 per share or higher for at least ten consecutive business days during the cure period. The Company intends to regain compliance with the Minimum Bid Price Requirement within the Second Compliance Period and is considering all available options, including a reverse stock split, for which it has received shareholder approval. During the Second Compliance Period, the Company’s common shares will continue to be listed and trade on the Nasdaq Capital Market and its business operations are not affected by receipt of the notification. If the Company does not regain compliance within the Second Compliance Period, its common shares will be subject to delisting by Nasdaq. Series A Preferred Shares On September 22, 2017, Castor entered into a
(iii) 480,000 9.75% Series A cumulative redeemable perpetual preferred shares On December As of December 31, 2021, there were no accumulated, due or overdue dividends on the Series A Preferred Shares, since, pursuant to the Series A Preferred Stock Amendment Agreement dated October 10, 2019, all Description of Series B The Series B Series B Preferred Shares amendment: On November 15, 2022, the Company approved an amendment to the terms of its Series B Preferred Shares to entitle the holder thereof to (i) receive preferred shares with at least substantially identical rights and preferences in the event of a future spin-off of a controlled company, (ii) participate in a liquidation, dissolution or winding up of Castor pari passu with Castor’s common shares up to the Series B Preferred Shares’ nominal value and (iii) have their voting power adjusted to maintain a substantially identical voting interest upon the occurrence of certain corporate events. F-40
5.00% SERIES D CUMULATIVE PERPETUAL CONVERTIBLE PREFERRED SHARES On August 7, 2023, the Company agreed to issue 50,000 Series D Preferred Shares, having a stated value of
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The Series D Preferred Shares have been classified in Mezzanine equity as per ASC 480-10-S99 “Distinguishing liabilities from Equity – SEC Materials” as they are in essence redeemable at the option of the holder as Mr. Panagiotidis, the Chief Executive Officer and controlling shareholder of Castor and Toro, can effectively determine the timing of the redemption of the Series D Preferred Shares. The Company uses an effective interest rate of 6.12% over the expected life of the Series D Preferred Shares being nine years, which is the expected earliest redemption date. This is consistent with the As of December 31, 2023, the net value of Mezzanine Equity amounted to $49,549,489, comprising (i) the fair value measurement of the The principal financial assets of the Company consist of cash at banks, The following methods and assumptions were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents, restricted cash, accounts receivable trade, net, amounts due from/to related party/(ies) and accounts payable: The carrying values reported in the accompanying consolidated balance sheets for those financial instruments are reasonable estimates of their fair values due to their short-term maturity nature. Cash and cash equivalents and restricted cash, current are considered Level 1 items as they represent liquid assets with short term maturities. The carrying value approximates the fair market value for interest bearing cash classified as restricted cash, non-current and is considered Level 1 item of the fair value hierarchy. Investment in listed equity securities:The carrying value reported in the accompanying consolidated balance sheet for this financial instrument represents its fair value and is considered Level 1 item of the fair value hierarchy as it is determined though quoted prices in an active market. Long-term debt: The secured credit facilities discussed in Note 8, have a recorded value which is a reasonable estimate of their fair value due to their variable interest rate and are thus considered Level 2 items in accordance with the fair value hierarchy as SOFR rates are observable at commonly quoted intervals for the full terms of the loans. Investment in related party:Investments in related party is initially measured at fair value which is deemed to be the cost and subsequently assessed for the existence of any observable market for the Series A Preferred Shares and any observable price changes for identical or similar investments and the existence of any indications for impairment. As per the Company’s assessment no such case was identified as at December 31, 2023. Concentration of credit risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable. The Company places its cash and cash equivalents, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of the relative credit standing of the financial institutions in which it places its deposits. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations of its CASTOR MARITIME INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Expressed in
Various claims, lawsuits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently, management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. The Company is covered for liabilities associated with the
The following table sets forth the future minimum contracted lease payments to the Company (gross of charterers’ commissions), based on the Company’s vessels’ commitments to non-cancelable time charter contracts as of December 31, 2023. Non-cancelable time charter contracts include both fixed-rate time charters or charters linked to the Baltic Dry Index (“BDI”). For index linked contracts, contracted lease payments have been calculated using the BDI linked rate as measured at the commencement date. F-43
In addition, certain of the variable-rate contracts have the option at the Company’s option to convert to a fixed rate for a predetermined period, in such cases where lease payments have been converted to a fixed rate, the minimum contracted lease payments for this period are calculated using the agreed converted fixed rate. The calculation does not include any assumed off-hire days.
Following the buyers’ failure to take delivery of M/V Magic Moon, the Company terminated the sale of the vessel under the Memorandum of Agreement, dated March 23, 2023, between the Company and the buyers (the “MoA”). Notably, the MoA required that the buyers deposit 10% of the purchase price into an escrow account administered by the escrow agent as security for completion of the transaction according to the terms and conditions set forth in the MoA and the buyers deposited $1,395,000 into such account prior to their breach of the MoA. The Company accordingly initiated arbitration proceedings during September 2023 for the release of and remittance to the Company of the $1,395,000 deposit held in escrow based on the Company’s position that the buyers’ failure to take delivery of the M/V Magic Moon constituted a default under the MoA. While the Company is unable to provide any assurances as to the ultimate outcome of the case, it believes it will prevail at arbitration. All the submissions on behalf of the Company have been properly prepared, reviewed and filed and the arbitrator’s award is expected to be issued within the next 45 to 60 days. In addition, the Company included in the claim both the damages that it has suffered due to the unlawful breach of MoA by the buyers as well as all the related expenses it has incurred due to the buyers’ default under the MoA. As of December 31, 2023, the Company has included the amount of $115,000 in ‘Prepaid expenses and other assets’ in the accompanying consolidated balance sheets. In light of the ongoing nature of the dispute, the Company has followed the provisions of ASC 450-30-25-1 and has not recorded the expected gain on the sale of the M/V Magic Moon in its financial statements for the year ended December 31, 2023. Separately, the M/V Magic Moon was arrested by the buyers to secure a claim before the Korean courts for the amount of $1,395,000, equal to the amount of the deposit and the Company paid a counter-security of $1,395,000 for the purpose of lifting the arrest of the vessel. The Company has applied to the Korean courts to decide the issue of the return of the counter-security to the Company. While the Company is unable to provide any assurances as to the ultimate outcome of the case, it believes it will prevail in its request from the courts in Korea to award to the Company the return of the counter-security. The Company has included the $1,395,000 in ‘Prepaid expenses and other assets’ in the accompanying consolidated balance sheets for the year ended December 31, 2023 incurred in connection with the cash deposit made by the Company for the purpose of lifting the arrest of the M/V Magic Moon. It is possible that from time to time in the ordinary course of business the Company may be involved in legal proceedings or investigations, which could have an adverse impact on its reputation, business and financial condition and divert the attention of management from the operation of the business. However, the Company believes that the current legal proceedings are not expected to have a material adverse effect on its business, financial position or results of operations. F-44
Diluted earnings/(loss) per common share, if applicable, reflects the potential dilution that could occur if potentially dilutive instruments were exercised, resulting in the issuance of additional shares that would then share in the Company’s net income. For the year ended December 31, 2023, the effect of the warrants outstanding during that period and as of that date, would be antidilutive, hence they were excluded from the computation of diluted earnings per share. For the purpose of calculating diluted earnings per common share, the weighted average number of diluted shares outstanding includes the conversion of outstanding Series D Preferred Shares (Note 10) calculated with the “if converted” method by using the average closing market price over the reporting period from August 7, 2023 (the date of their issuance) to December 31, 2023. For the year ended December 31, 2022, the effect of the warrants outstanding during that period and as of that date, would be antidilutive, and, accordingly, they were excluded from the computation of diluted earnings per share. For the year ended December 31, 2021, the denominator of diluted earnings per common share calculation includes the incremental shares assumed issued under the treasury stock method weighted for the period the shares were outstanding with respect to warrants that were outstanding during the year ended December 31, 2021. Securities that could potentially dilute basic earnings per share for the year ended December 31, 2021, that were excluded from the computation of diluted earnings per share because to do so would have been antidilutive, were the unexercised, as of December 31, 2021, April 7 Warrants, calculated in accordance with the treasury stock method. The components of the calculation of basic and diluted earnings / (loss) per common share are as follows:
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The following table includes the vessel revenues earned by the Company in each of the years ended December 31, 2021, 2022 and 2023, as presented in the accompanying consolidated statements of comprehensive income:
During each of the years ended December 31, 2021, 2022 and 2023, the Company generated its revenues from time charters. The Company typically enters into fixed rate or index-linked rate charters with an option to convert to fixed rate time charters ranging from one month to twelve months and in isolated cases on longer terms depending on market conditions. The charterer has the full discretion over the ports visited, shipping routes and vessel speed, subject to the owner protective restrictions discussed below. Time charter agreements may have extension options ranging from months, to sometimes, years. The time charter party generally provides, among others, typical warranties regarding the speed and the performance of the vessel as well as owner protective restrictions such that the vessel is sent only to safe ports by the charterer, subject always to compliance with applicable sanction laws and war risks, and carries only lawful and non-hazardous cargo. From time to time, the Company’s dry bulk vessels are fixed on period charter contracts with the rate of daily hire linked to the average of the time charter routes comprising the respective indices for dry bulk vessels of the Baltic Exchange. Such contracts also carry an option for the Company to convert the index-linked rate to a fixed rate for a minimum period of three months and up to the maximum remaining duration of the charter contract, according to the average of the forward freight agreement curve of the respective Baltic index for the desired period, at the time of conversion. The index-linked contracts with conversion clause provide flexibility and allow the Company to either enjoy exposure in the spot market, when the rate is floating, or to secure foreseeable cash flow when the rate has been converted to fixed over a certain period. F-46
The amounts in the accompanying consolidated statements of comprehensive income are analyzed as follows:
General and administrative expenses are analyzed as follows:
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The amounts in the accompanying consolidated statements of comprehensive income are analyzed as follows:
Castor and Pursuant to §883 of the Internal Revenue Code of the United States In the Company’s case, it would have satisfied the Publicly-Traded Test if its common shares represented more than 50% of the voting power of its stock, and it can establish that nonqualified shareholders cannot exercise voting control over the corporation because a qualified Because the position stated above is uncertain, the Company has recorded provisions of F-48 CASTOR MARITIME INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Expressed in U.S. Dollars – except for share data unless otherwise stated)
In late 2022, the Company acquired two containerships. As a result of the different characteristics of such containerships in relation to the Company’s other operating segments, the Company determined that, with effect from the fourth quarter of 2022, it operated in two reportable segments: (i) the dry bulk segment and The table below presents information about the Company’s reportable segments as of and for the years ended December 31, 2021, 2022, and 2023. The accounting policies followed in the preparation of the reportable segments are the same as those followed in the preparation of the Company’s consolidated financial statements. Segment results are evaluated based on income from operations.
F-49 19. Segment Information (continued): A reconciliation of total segment assets to total assets presented in the accompanying consolidated
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