StealthGas (GASS) 6-K Current report (foreign)

Exhibit 99.4

2019 ANNU AL R E P O R T

COMPANY PROFILE STEALTHGAS INC. is an international provider of seaborne transportation services primarily to the liquefied petroleum gas sector (LPG). Our vessels carry various petroleum and petrochemical gas products in liquefied form such as propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer, which are all byproducts of natural gas and crude oil. Furthermore, the company owns three M.R. Product Carriers and so has a presence in the transportation of products such as aviation fuel, vegetable oil and gasoline, as well as crude oil through its ownership of one Aframax tanker. The Company owns and operates the world’s largest independently owned small LPG carrier fleet in in the 3,000 to 8,000 cbm range. In addition it owns four 22,000 cbm LPG vessels, as well as four LPG vessels in the 35,000 cbm to 38,000 cbm range owned through our joint venture arrangements. As of April 1, 2020, the Company’s operating LPG fleet consisted of 45 vessels, including eight LPG vessels in which StealthGas owns equity interests pursuant to joint venture agreements and one 11,000 cbm LPG carrier newbuilding on order with expected delivery in the first quarter of 2021. HIGHLIGHTS OPERATIONAL FINACIAL • Annual operational utilization of 97.5%, compared to • Voyage revenues amounted to $144.3 million, marking 95.5% in 2018. a 12.2% decrease compared to 2018- as a result of our strategic fleet contraction. • Net income of $2.1 million in 2019, corresponding to • Fleet calendar days of 16,230 reduced by 16.2% com-an EPS of $0.05. pared to 2018, as a result of our strategic fleet reduction. • Low gearing, as debt to assets stands at 38% as of year end, mostly due to our intense repayment sched- • Conclusion of 7 LPG vessel sales within 2019 (including ule, while our net debt to asset ratio is as low as 31%. • Cash on hand of $68.5 million- an increase of $4.0 mil-the sale of 4 LPG vessels to one of our Joint Venture lion compared to year end 2018. arrangements) enhancing our cash base with an aggre- • Purchase of 540,910 GASS shares up to the end of gate of about $48 million. 2019 for an aggregate consideration of $1.8 million, following the initiation of a further stock repurchase program in May 2019.

MICHAEL JOLLIFFE CHAIRMAN OF THE BOARD Dear Shareholders, Admittedly, 2019, was an interesting year for the broader shipping market. Despite a general economic slowdown in GDP, overall demand for our industry’s services remained quite strong and confidence was high. We had several variables such as geopolitics, trade wars and sanctions influencing the market. Some segments such as crude tankers gained a short term benefit- as close to the end of 2019 US sanctions on China impacted on their trade in Iran and the collapse of oil prices pushed tanker spot rates up to historical highs, while other segments like our core market of small LPGs faced a rate decrease in the Asia region. Major concern for all ship owners, since early 2019, was the IMO 2020 requirements for reduction in the sulphur content of the fuel oil used by ships. The need to comply with the new environmental regulations including the Ballast Water Convention caused a shift in shipping practices and required considerable investment from shipowners. However the COVID-19 pandemic outbreak that made an appearance at the end of 2019, proved to be a global shock affecting all market economies thus altering the priorities and anticipated course of business in our shipping segment. As for our Company, StealthGas exerted a good performance in terms of operational utilization- marking 97.5% for the year. The Company was profitable. In addition to this we kept active in terms of S&P activity, agreeing and concluding within 2019 three more sales of small LPG vessels, added LPG vessels into our first Joint Venture arrangement – with the most important addition being a 38,000 cbm fully refrigerated vessel. In early 2020 a second Joint Venture arrangement was established, thus strengthening further our presence in the Medium Gas Carrier segment. In other words, StealthGas continues to diversify and to broaden its presence across the LPG carriers’ size spectrum. Last but not least, with our stock trading at a large discount to our net asset value, our Board took the decision, in May 2019, to initiate a share buyback program of up to $10 million, in order to support our stock and our shareholders. Up to the end of 2019 we purchased close to half a million GASS shares for an aggregate consideration of about $1.8 million. Going forward, although LPG market fundamentals and demand remain strong, the COVID-19 pandemic has had severe consequences across the global economy thus heavily affecting seaborne trade in all sectors. We remain confident however that we are well positioned to grasp all positive market opportunities when this issue is resolved. We thank our shareholders for their long standing commitment to our Company, our financial institutions for their trust and support and our crew and officers for their ongoing efforts to preserve and manage our top quality fleet. Sincerely yours Michael Jolliffe

HARRY VAFIAS Dear Shareholders, In spite of the various market challenges faced, mostly in the Asian region, 2019 proved to be a positive year for StealthGas. We turned profitable, continued with the divestment of smaller LPG vessels and invested in new strategic partnerships thus strengthening our presence in larger LPG sub segments Indeed the US- China trade war and more specifically the tariffs imposed on US LPG imports in late August 2018, significantly affected and altered the LPG trade pattern across the Asian region. US exports were redirected to other destinations such as Japan, South Korea and Indonesia while China’s imports were mainly sourced from the Middle East. Overall broader trading volumes were not affected, however, market sentiment was influenced thus witnessing a slowdown in petrochemicals trade and softer rates in the Asian spot market. Up to the end of 2019 LPG trade looked promising. Sentiment in the Asian market had begun to improve, new markets such as India had gained significant attention and the operation of new PDH plants in China made the demand prospects in our market strong. However, the outbreak of the COVID-19 pandemic that towards the end of 2019 destabilized the Asian region and then the imposed lockdowns made it a global economic disruptive event. It remains to be seen as to what extent the markets will be affected in 2020 and if the global economy will be able to exit this crisis smoothly. Focusing on StealthGas, year 2019 was a good time for our strategic endeavors. We took the decision to invest proceeds from the sale of smaller LPG vessels into two Joint Venture arrangements in which we own equity interests. Our first Joint Venture with an unaffiliated third party investor was established in early 2019. In this arrangement, we sold equity stakes in four of our small LPG vessels and added a 38,000 cbm LPG vessel—thus expanding in the Medium Gas Carrier segment. Moreover, with the second Joint Venture arrangement which we formed in early 2020, we acquired an additional three secondhand 35,000 cbm LPG vessels and therefore diversified our presence across the LPG carriers segment even further. As previously stated, small LPGs remain our core business and we operate a conservative business model placing emphasis on period coverage and strong earnings visibility. With regards to our capital structure, we keep a conservative stance as well. As StealthGas is deleveraging at a strong pace, at of the end of 2019 our debt to asset ratio stood at about 38%—and we are expecting a further decline in the years ahead. We should also mention that our debt decline coupled with the decline in LIBOR rates assisted us in lowering our finance costs. Looking ahead, we believe StealthGas is strong enough to endure further market softening due to the COVID-19 pandemic will bring upon and we are eager to strengthen our financial results even further once global economy balance is restored. We appreciate our management’s and crew efforts for preserving our fleet quality, our clients for the long lasting trust in StealthGas and our shareholders for their commitment and patience during market turnarounds. Sincerely yours Harry Vafias

FLEET STRATEGY & EMPROYMENT Our fleet strategy remains conservative. We place great emphasis on securing our fleet period coverage, committing to a contract duration depending on the market cycle. We prefer shorter period contracts (less than 12 months) at times when market is softer and longer contracts when market rates are firmer. For 2019, we had about 84% of our voyage days committed to period charters. In terms of charters and charter extensions, in 2019, we were able to arrange a total of 31 period contracts. In conjunction with period coverage circumspection, we are keen on preserving an element of diversification in our fleet. This diversification has been enhanced with StealthGas entering into the Medium Gas Carriers segment through vessel acquisitions with our Joint Venture partners. We remain market leaders of the small LPG segment and place strategic emphasis on this, while intelligently diversifying our fleet so as to mitigate any market risk that may arise. POSITIVE MARKET DRIVERS Up to the end of 2019, our core small LPGs market segment had quite positive fundamentals. Although rates, particularly in Asia were affected by the US -China trade war, they still remained favorable for ship owners. In addition to this, the small LPG market has an ageing fleet, hence demolition was anticipated to intensify, coupled with a very small orderbook. All of these factors signaled a promising future for our market however the oil price crisis along with COVID-19 pandemic outbreak have both affected shipping, creating an uncertain broader market environment. Although difficult to make predictions in these unprecedented market conditions, we remain confident our positive segment fundamentals will assist towards market correction should these crisis factors subside.

YEAR VESSEL SIZE VESSEL NAME BUILT (DWT) TYPE Eco Nebula 2007 38,898 F.R. Gaschem Bremen 2010 35,232 F.R. Gaschem Stade 2010 35,214 F.R. Gaschem Hamburg 2010 35,204 F.R. Gas Haralambos 2007 7,020 F.P. Gas Defiance 2008 5,018 F.P. Gas Shuriken 2008 5,018 F.P. Eco Lucidity 2015 3,517 F.P. YEAR VESSEL VESSEL NAME BUILT SIZE TYPE Eco Arctic 2018 22,363 S.R. Eco Ice 2018 22,358 S.R. Eco Freeze 2018 22,353 S.R. Eco Frost 2017 22,359 S.R. VESSEL SIZE VESSEL Eco Nical 2016 7,541 F.P. NAME (DWT) TYPE Gas Husky 2012 7,516 F.P. To be named 11,000 F.P. Gas Esco 2012 7,514 F.P. Eco Dominator 2016 7,221 F.P. Eco Galaxy 2015 7,213 F.P. Eco Chios 2014 7,211 F.P. Eco Stream 2014 7,210 F.P. Gas Flawless 2007 6,337 F.P. Gas Prodigy 2003 5,031 F.P. Eco Enigma 2015 5,025 F.P. Eco Universe 2015 5,025 F.P. Eco Czar 2015 5,020 F.P. Eco Nemesis 2015 5,019 F.P. Gas Monarch 1997 5,018 F.P. Gas Elixir 2011 5,018 F.P. Gas Cerberus 2011 5,018 F.P. Gas Myth 2011 5,018 F.P. Gas Inspiration 2006 5,018 F.P. Eco Invictus 2014 5,016 F.P. Eco Green 2015 4,991 F.P. Eco Dream 2015 4,989 F.P. Gas Spirit 2001 4,112 F.P. Gas Nemesis II(ex. Gas Zael) 2001 4,111 F.P. Eco Loyalty 2015 3,529 F.P. Eco Elysium 2014 3,526 F.P. Eco Royalty 2015 3,525 F.P. VESSEL YEAR VESSEL Eco Corsair 2014 3,524 F.P. NAME SIZE BUILT TYPE (DWT) Gas Imperiale 2008 3,515 F.P. Gas Astrid 2009 3,514 F.P. Magic Wand (ex. Navig8 Fidelity) 2008 47,000 M.R. product carrier Gas Exelero 2009 3,513 F.P. Stealth Falcon (ex. Navig8 Faith) 2008 47,000 M.R. product carrier Gas Alice 2006 3,513 F.P. Falcon Maryam (ex.Stealth Bahla) 2009 46,000 M.R. product carrier Gas Galaxy 1997 3,312 F.P. Stealth Berana (ex. Spike) 2010 115,804 Aframax oil tanker Gas Pasha 1995 3,310 F.P.    

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 20-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-36797

STEALTHGAS INC.

(Exact name of Registrant as specified in its charter)

Not applicable

(Translation of Registrant’s Name into English)

Republic of the Marshall Islands

(Jurisdiction of incorporation or organization)

331 Kifissias Avenue, Erithrea 14561 Athens, Greece

(Address of principal executive offices)

Harry N. Vafias

331 Kifissias Avenue, Erithrea 14561, Athens, Greece

Telephone: (011) (30) (210) 625 0001

Facsimile: (011) (30) (210) 625 0018

(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	GASS	The Nasdaq Stock Market LLC

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION

PURSUANT TO SECTION 15(d) OF THE ACT:

None

The number of outstanding shares of each of the issuer’s classes of capital or common stock as of December 31, 2019 was: 39,584,274 shares of Common Stock, par value $0.01 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ☐  Yes    ☒  No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    ☐  Yes    ☒  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    ☐  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes    ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.

U.S. GAAP  ☒	International Financial Reporting Standards as issued by the		Other  ☐
	International Accounting Standards Board	☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    ☐  Item 17    ☐  Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes    ☒  No

Indicate by check mark whether the registrant has filed a report on and attestion to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report:    ☒  Yes    ☐  No

TABLE OF CONTENTS

FORWARD-LOOKING INFORMATION		1
Part I		2
Item 1.	Identity of Directors, Senior Management and Advisers	2
Item 2.	Offer Statistics and Expected Timetable	2
Item 3.	Key Information	2
Item 4.	Information on the Company	32
Item 4A.	Unresolved Staff Comments	46
Item 5.	Operating and Financial Review and Prospects	46
Item 6.	Directors, Senior Management and Employees	65
Item 7.	Major Shareholders and Related Party Transactions	71
Item 8.	Financial Information	76
Item 9.	The Offer and Listing	76
Item 10.	Additional Information	76
Item 11.	Quantitative and Qualitative Disclosures About Market Risk	90
Item 12.	Description of Securities Other than Equity Securities	91
PART II		92
Item 13.	Defaults, Dividend Arrearages and Delinquencies	92
Item 14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	92
Item 15.	Controls and Procedures	92
Item 16A.	Audit Committee Financial Expert	95
Item 16B.	Code of Ethics	95
Item 16C.	Principal Accountant Fees and Services	95
Item 16D.	Exemptions from the Listing Standards for Audit Committees	96
Item 16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	96
Item 16F.	Change in Registrant’s Certifying Accountant	96
Item 16G.	Corporate Governance	97
Item 16H.	Mine Safety Disclosures	97
PART III		98
Item 17.	Financial Statements	98
Item 18.	Financial Statements	98
Item 19.	Exhibits	98

FORWARD-LOOKING INFORMATION

This Annual Report on Form 20-F includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as “forward-looking statements.” We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material.

All statements in this document that are not statements of historical fact are forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, but are not limited to, such matters as:

• future operating or financial results;

• global and regional economic and political conditions including the impact of the COVID-19 pandemic and efforts throughout the world to contain its spread, including effects on global economic activity, demand for seaborne transportation of LPG, oil and oil products, the ability and willingness of charterers to fulfill their obligations to us and prevailing charter rates, shipyards performing scrubber installations, drydocking and repairs, changing vessel crews and availability of financing;

• pending or recent acquisitions, business strategy and expected capital spending or operating expenses;

• our cooperation with our joint venture partners and any expected benefits from such joint venture arrangements;

• competition in the marine transportation industry;

• shipping market trends, including charter rates, factors affecting supply and demand and world fleet composition;

• potential disruption of shipping routes due to accidents, diseases, pandemics, political events, piracy or acts by terrorists, including the impact of the COVID-19 pandemic and the ongoing efforts throughout the world to contain it;

• ability to employ our vessels profitably;

• performance by the counterparties to our charter agreements;

• future liquefied petroleum gas (“LPG”), refined petroleum product and oil prices and production;

• future supply and demand for oil and refined petroleum products and natural gas of which LPG is a byproduct;

• our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities, the terms of such financing and our ability to comply with covenants set forth in our existing and future financing arrangements;

• performance by the shipyards constructing our newbuilding vessels; and

• expectations regarding vessel acquisitions and dispositions.

When used in this document, the words “anticipate,” “believe,” “intend,” “estimate,” “project,” “forecast,” “plan,” “potential,” “may,” “should” and “expect” reflect forward-looking statements. Such statements reflect our current views and assumptions and all forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect our future financial results are discussed more fully under “Item 3. Key Information—Risk Factors,” as well as elsewhere in this Annual Report on Form 20-F and in our other filings with the U.S. Securities and Exchange Commission (“SEC”). We caution readers of this Annual Report not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake no obligation to publicly update or revise any forward-looking statements.

1

Part I

StealthGas Inc. is a Marshall Islands company that is referred to in this Annual Report on Form 20-F, together with its subsidiaries, as “StealthGas,” the “Company,” “we,” “us,” or “our.” This Annual Report should be read in conjunction with our consolidated financial statements and the accompanying notes thereto, which are included in Item 18 to this Annual Report.

We use the term cubic meters, or “cbm,” in describing the size of our liquefied petroleum gas (“LPG”) carriers and the term deadweight tons, or “dwt,” in describing the size of our product carriers and crude oil tanker. We use the term “small” to describe LPG carriers of between 3,000 and 8,000 cbm in capacity and the term “medium range gas carriers” or “MGCs” to describe LPG carriers of between 34,000 and 39,000 cbm in capacity. Unless otherwise indicated, all references to currency amounts in this annual report are in U.S. dollars.

All data regarding our fleet and the terms of our charters is as of April 1, 2020, unless otherwise indicated. As of April 1, 2020, our operating fleet was composed of 45 LPG carriers with a total capacity of 420,527 cbm, three medium range product carriers with a total capacity of 140,000 dwt and one 115,804 dwt Aframax tanker, as well as one 11,000 LPG carrier newbuilding with expected delivery in the first quarter of 2021. Our fleet on the water, of 45 LPG carriers includes five vessels in which we own a 50.1% equity interest pursuant to a joint venture agreement with an unaffiliated financial investor, and three vessels in which we own a 51 % equity interest pursuant to a joint venture agreement with an unaffiliated third party (we refer to these eight vessels, collectively, as the “JV Vessels”). We do not consolidate the results of operations of these joint ventures and account for our equity interest in these joint ventures under the equity method of accounting. See “Item 4. Information on the Company—Business Overview—Our Fleet”.

Item 1. Identity of Directors, Senior Management and Advisers

Not Applicable.

Item 2. Offer Statistics and Expected Timetable

Not Applicable.

Item 3. Key Information

A. Selected Consolidated Financial Data

The following table sets forth our selected consolidated financial data and other operating data shown in U.S. dollars, other than share and fleet data. For the effects of the adoption of the new leasing standard (ASC 842), please refer to Note 2 to our consolidated financial statements. The table should be read together with “Item 5. Operating and Financial Review and Prospects.”

Our audited consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the years ended December 31, 2017, 2018 and 2019 and the audited consolidated balance sheets as of December 31, 2018 and 2019, together with the notes thereto, are included in “Item 18. Financial Statements” and should be read in their entirety. The selected consolidated income statement data for the years ended

2

December 31, 2015 and 2016 and the selected consolidated balance sheet data as of December 31, 2015, 2016 and 2017 have been derived from our audited consolidated financial statements which are not included in “Item 18. Financial Statements”.

	Year Ended December 31,
	2015			2016			2017			2018			2019
INCOME STATEMENT DATA
Revenues	$	131,501,881		$	136,539,399		$	152,338,278		$	164,330,202		$	144,259,312
Revenues—related party		9,814,000			7,592,784			1,973,643			—			—
Total Revenues	$	141,315,881		$	144,132,183		$	154,311,921		$	164,330,202		$	144,259,312
Operating expenses:
Voyage expenses		15,849,855			13,618,025			13,804,032			18,649,258			15,201,978
Voyage expenses—related party		1,725,683			1,772,240			1,912,505			2,037,917			1,788,543
Vessels’ operating expenses		46,477,583			55,680,993			58,618,526			59,920,278			48,619,594
Vessels’ operating expenses-related party		4,177,042			3,141,843			800,908			514,500			966,500
Charter hire expenses		4,124,960			4,054,387			3,524,770			6,150,780			6,268,988
Dry-docking costs		1,774,905			3,613,230			3,529,047			3,617,577			1,094,306
Management fees-related party		6,452,145			7,346,180			7,205,490			7,027,195			5,730,910
General and administrative expenses		3,655,316			3,110,409			2,898,958			3,046,962			3,706,320
Depreciation		35,857,507			39,096,589			38,921,672			41,258,142			37,693,733
Impairment loss		8,238,987			5,735,086			6,461,273			11,351,821			993,916
Other operating costs/(income)		—			—			1,058,863			(549,804	)		—
Net (gain)/loss on sale of vessels		(33,251	)		(118,427	)		77,314			763,925			485,516
Total expenses		128,300,732			137,050,555			138,813,358			153,788,551			122,550,304
Income from operations		13,015,149			7,081,628			15,498,563			10,541,651			21,709,008
Interest and finance costs		(10,385,261	)		(14,268,148	)		(16,661,464	)		(23,286,547	)		(20,978,065	)
Gain on deconsolidation of subsidiaries		—			—			—			—			145,000
Loss on derivatives		(370,584	)		(767,196	)		(403,943	)		(11,982	)		(107,550	)
Interest income and other income		173,083			454,472			322,868			587,477			846,271
Foreign exchange gain/(loss)		134,291			(299,056	)		25,739			(107,119	)		(8,235	)
Other expenses, net		(10,448,471	)		(14,879,928	)		(16,716,800	)		(22,818,171	)		(20,102,579	)
Equity gain in joint ventures		—			—			—			—			486,695
Net income/(loss)		2,566,678			(7,798,300	)		(1,218,237	)		(12,276,520	)		2,093,124
Earnings/(loss) per share, basic	$	0.06		$	(0.20	)	$	(0.03	)	$	(0.31	)	$	0.05
Earnings/(loss) per share, diluted	$	0.06		$	(0.20	)	$	(0.03	)	$	(0.31	)	$	0.05
Weighted (basic and diluted) average number of shares outstanding		41,315,127			39,824,038			39,809,364			39,860,563			39,800,434
Dividends declared per share	$	0.00		$	0.00		$	0.00		$	0.00		$	0.00

3

	As of December 31,
	2015		2016		2017		2018		2019
BALANCE SHEET DATA
Current assets, including cash	$	123,372,369	$	76,478,045	$	62,838,725	$	138,866,439	$	77,932,439
Total assets		1,037,874,170		1,001,942,344		996,226,191		1,036,722,488		954,188,931
Current liabilities		103,714,126		81,366,606		78,748,931		103,490,335		67,136,139
Derivative liability		978,853		364,823		126,525		465,389		2,655,817
Total long-term debt, including current portion		422,162,554		397,885,589		384,908,448		443,317,446		365,983,458
Net assets		583,051,160		573,975,304		573,478,772		561,252,511		559,186,640
Capital stock		442,850		442,850		442,850		445,496		445,496
Number of shares of common stock outstanding		40,517,676		39,860,563		39,860,563		39,860,563		39,584,274

	Year ended December 31,
	2015			2016			2017			2018			2019
OTHER FINANCIAL DATA
Net cash provided by operating activities	$	48,054,596		$	36,154,088		$	52,354,053		$	37,809,225		$	30,818,599
Net cash (used in)/provided by investing activities(13)		(151,799,747	)		(54,074,771	)		(48,913,177	)		(78,552,902	)		33,487,288
Net cash provided by/(used in) financing activities		87,899,271			(27,213,272	)		(14,069,329	)		57,271,476			(61,616,546	)
FLEET DATA
Average number of vessels(1)		48.8			53.4			52.6			50.8			42.6
Total voyage days for fleet(2)		18,446			19,999			19,717			19,363			16,230
Total time and bareboat charter days for fleet(3)		14,516			15,831			16,772			15,696			13,541
Total spot market days for fleet(4)		3,930			4,168			2,945			3,667			2,689
Total calendar days for fleet(5)		18,541			20,275			19,917			19,544			16,328
Fleet utilization(6)		99.5	%		98.6	%		99.0	%		99.1	%		99.4	%
Fleet operational utilization(7)		92.5	%		91.1	%		96.2	%		95.5	%		97.5	%
AVERAGE DAILY RESULTS
Adjusted average charter rate(8)	$	6,708		$	6,437		$	7,029		$	7,418		$	7,842
Vessel operating expenses(9)		2,732			2,901			2,983			3,092			3,037
General and administrative expenses(10)		197			153			146			156			227
Management fees(11)		348			362			362			360			351
Total daily operating expenses(12)		2,929			3,054			3,129			3,248		$	3,264

(1) Average number of vessels is the number of owned vessels that constituted our fleet for the relevant period, as measured by the sum of the number of days each vessel was a part of our fleet during the period divided by the number of calendar days in that period.

(2) Our total voyage days for our fleet reflect the total days the vessels we operated were in our possession for the relevant periods, net of off-hire days associated with major repairs, drydockings or special or intermediate surveys.

(3) Total time and bareboat charter days for fleet are the number of voyage days the vessels in our fleet operated on time or bareboat charters for the relevant period.

(4) Total spot market charter days for fleet are the number of voyage days the vessels in our fleet operated on spot market charters for the relevant period.

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(5) Total calendar days are the total days the vessels we operated were in our possession for the relevant period including off-hire days associated with major repairs, drydockings or special or intermediate surveys.

(6) Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days, and is determined by dividing voyage days by fleet calendar days for the relevant period.

(7) Fleet operational utilization is the percentage of time that our vessels generated revenue, and is determined by dividing voyage days (excluding commercially idle days) by fleet calendar days for the relevant period.

(8) Adjusted average charter rate is a measure of the average daily revenue performance of a vessel on a per voyage basis. We determine the adjusted average charter rate by dividing voyage revenues (net of voyage expenses) by voyage days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage and are payable by us under a spot charter (which would otherwise be paid by the charterer under a time or bareboat charter contract), as well as commissions. Charter equivalent revenues and adjusted average charter rate are non-GAAP measures which provide additional meaningful information in conjunction with voyage revenues, the most directly comparable GAAP measure, because they assist Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. They are also standard shipping industry performance measures used primarily to compare period-to-period changes in a shipping company’s performance despite changes in the mix of charter types (i.e., spot charters or time charters, but not bareboat charters) under which the vessels may be employed between the periods. Our calculation of charter equivalent revenues and adjusted average charter rate may not be comparable to that reported by other companies in the shipping or other industries. Under bareboat charters, we are not responsible for either voyage expenses, unlike spot charters, or vessel operating expenses, unlike spot charters and time charters; however, no adjustment for such reduced vessel operating expenses for our vessels deployed under bareboat charters is reflected in the adjusted average charter rate. Reconciliation of charter equivalent revenues as reflected in the consolidated statements of operations and calculation of adjusted average charter rate follow:

	Year ended December 31,
	2015			2016			2017			2018			2019
Voyage revenues	$	141,315,881		$	144,132,183		$	154,311,921		$	164,330,202		$	144,259,312
Voyage expenses		(17,575,538	)		(15,390,265	)		(15,716,537	)		(20,687,175	)		(16,990,521	)��
Charter equivalent revenues	$	123,740,343		$	128,741,918		$	138,595,384		$	143,643,027		$	127,268,791
Total voyage days for fleet		18,446			19,999			19,717			19,363			16,230
Adjusted average charter rate	$	6,708		$	6,437		$	7,029		$	7,418		$	7,842

(9) Vessel operating expenses, including related party vessel operating expenses, consist of crew costs, provisions, deck and engine stores, lubricating oil, insurance, maintenance and repairs, is calculated by dividing vessel operating expenses by fleet calendar days for the relevant time period.

(10) Daily general and administrative expenses are calculated by dividing total general and administrative expenses by fleet calendar days for the relevant period.

(11) Management fees are based on a fixed rate management fee of $440 per day for each vessel in our fleet under spot or time charter and a fixed rate fee of $125 per day for each of the vessels operating on bareboat charter. Daily management fees are calculated by dividing total management fees by fleet calendar days for the relevant period.

(12) Total operating expenses, or “TOE”, is a measurement of our total expenses associated with operating our vessels. TOE is the sum of vessel operating expenses and general and administrative expenses. Daily TOE is calculated by dividing TOE by fleet calendar days for the relevant time period.

(13) Effective December 31, 2017, the Company adopted the new standard Accounting Standards Update ASU 2016-18 – Restricted Cash. The implementation of this update affected the presentation in the statement of cash flows relating to changes in restricted cash which are presented as part of Cash whereas the Company previously presented these within investing activities. This standard was retrospectively applied to all periods presented.

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(14) As of January 1, 2018, the Company adopted Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (“ASC 606”) utilizing the modified retrospective method of transition. The Company recorded an adjustment of approximately $0.3 million to decrease its opening retained earnings on its consolidated balance sheet on January 1, 2018.

B. Capitalization and Indebtedness

Not applicable

C. Reasons For the Offer and Use of Proceeds

Not Applicable.

D. Risk Factors

Risks Related To Our Industry

The cyclical nature of the demand for LPG transportation may lead to significant changes in our chartering and vessel utilization, which may adversely affect our revenues, profitability and financial position.

Historically, the international LPG carrier market has been cyclical with attendant volatility in profitability, charter rates and vessel values. The degree of charter rate volatility among different types of gas carriers has varied widely. Because many factors influencing the supply of and demand for vessel capacity are unpredictable, the timing, direction and degree of changes in the international gas carrier market are also not predictable. Charter rates for small LPG carriers generally improved from the second half of 2017 through 2019, however, the recent outbreak of the COVID-19 virus and the resulting disruptions to the international shipping industry and energy demand, including the recent dramatic decline in the price of oil, have and could continue to negatively affect small and medium range LPG carrier charter rates. If charter rates do not improve or further decline significantly, as they did beginning in late 2014 to the first half of 2017 largely as a result of low oil prices, our earnings may decrease, particularly with respect to our vessels deployed in the spot market, or those vessels whose charters will be subject to renewal during 2020, as they may not be extended or renewed on favorable terms when compared to the terms of the expiring charters. As of April 1, 2020, of our 45 operating LPG carriers, including eight JV Vessels, five were deployed in the spot market while another 21 were scheduled to complete their existing time or bareboat charters during 2020. Any of the foregoing factors could have an adverse effect on our revenues, profitability, liquidity, cash flow and financial position.

Future growth in the demand for LPG carriers and charter rates, including for the vessel size segments comprising our fleet, will depend on economic growth in the world economy and demand for LPG product transportation that exceeds the capacity of the growing worldwide LPG carrier fleet’s ability to match it. We believe that the future growth in demand for LPG carriers and the charter rate levels for LPG carriers will depend primarily upon the supply and demand for LPG, particularly in the economies of China, Japan, India and Southeast Asia, as well as U.S. shale production, and upon seasonal and regional changes in demand and changes to the capacity of the world fleet. The capacity of the world shipping fleet appears likely to increase in the near term, although growth in the 3,000 to 8,000 cbm segment of small LPG carriers is expected to be limited in the period 2020-2021. Oil prices may remain relatively low and economic growth may be limited in the near term, and possibly for an extended period, which could have an adverse effect on our business and results of operations.

The factors affecting the supply and demand for LPG carriers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.

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The factors that influence demand for our vessels include:

• supply and demand for LPG products;

• the price of oil;

• global and regional economic conditions;

• the distance LPG products are to be moved by sea;

• availability of alternative transportation means;

• changes in seaborne and other transportation patterns;

• environmental and other regulatory developments;

• weather; and

• pandemics, such as the outbreak and spread of COVID-19 in 2020;

The factors that influence the supply of vessel capacity include:

• the number of newbuilding deliveries;

• the scrapping rate of older vessels;

• LPG carrier prices;

• changes in environmental and other regulations that may limit the useful lives of vessels; and

• the number of vessels that are out of service.

A significant decline in demand for the seaborne transport of LPG or a significant increase in the supply of LPG carrier capacity without a corresponding growth in LPG carrier demand could cause a significant decline in prevailing charter rates, which could materially adversely affect our financial condition and operating results and cash flow.

Various economic and political factors, including increased trade protectionism and tariffs and health pandemics, such as the COVID-19 outbreak, could materially adversely affect our business, financial position and results of operations, as well as our future prospects.

Our business and operating results have been, and will continue to be, affected by global and regional economic conditions. The recovery of the global economy from the severe decline in prior years remains subject to downside risks. More specifically, some LPG products we carry are used in cyclical businesses, such as the manufacturing of plastics and in the chemical industry, and, accordingly, weakness and reduction in demand in those industries could adversely affect the LPG carrier industry. In particular, an adverse change in economic conditions affecting China, Japan, India or Southeast Asia generally could have a negative effect on the demand for LPG products, thereby adversely affecting our business, financial position and results of operations, as well as our future prospects. In recent years China and India have been among the world’s fastest growing economies in terms of gross domestic product, and any economic slowdown in the Asia Pacific region particularly in China or India may adversely affect LPG demand and our results of operations. Moreover, any deterioration in the economy of the United States or the European Union (“EU”), may further adversely affect economic growth in Asia. In addition, although to date, the continuing adverse economic conditions in Greece have not had an adverse effect on our managers’ operations, the slow recovery of, and any renewed deterioration in, the Greek economy may result in the imposition of new regulations that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Greek government new taxes or other fees. Our business, financial position and results of operations, as well as our future prospects, could likely be materially and adversely affected by adverse economic conditions in any of these countries or regions.

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The imposition by the U.S., China or other governments of protectionist trade measures, including tariffs and other trade restrictions, the exit of the United Kingdom from the EU, the continuing war in Syria, renewed terrorist attacks around the world and the refugee crisis could also adversely affect global economic conditions and the world LPG, oil and petroleum markets and in turn the demand for seaborne transportation of these commodities. The tariffs imposed, and threatened, by the U.S. and China have led to concerns regarding a potentially protracted trade war that may continue to negatively affect LPG shipping markets in Asia, which were weak throughout most of 2019. The global response to the emergence of a pandemic crisis such as the recent COVID-19 outbreak, particularly if it persists, and the economic impact thereof could also have a material adverse effect on our financial performance, particularly for our vessels in the spot market or with charters expiring in 2020.

The recent outbreak of the COVID-19 virus and the resulting disruptions to the international shipping industry and energy demand, including the recent dramatic decline in the price of oil, could negatively affect our business, financial performance and our results of operations, including our ability to obtain charters and financing.

The outbreak of the COVID-19 virus in late 2019 has led a number of countries, ports and organizations to take measures against its spread, such as quarantines and restrictions on travel. Such measures were taken initially in Chinese ports, where we conduct a significant amount of our operations, and have gradually expanded to other countries globally covering most ports where we conduct business. These measures have and will likely continue to cause severe trade disruptions due to, among other things, the unavailability of personnel, supply chain disruption, interruptions of production, delays in planned strategic projects and closure of businesses and facilities.

The recent COVID-19 pandemic has introduced uncertainty in a number of areas of our business, including our operational, commercial and financial activities. It has also negatively impacted, and may continue to impact negatively, global economic activity, demand for energy including LPG, and funds flows and sentiment in the global financial markets. The global response to the outbreak, particularly if it persists, and the economic impact thereof, could also have a material adverse effect on our ability to secure charters at profitable rates, or at all, particularly for our vessels in the spot market or with charters expiring in 2020, as demand for additional charters could be severely affected. These factors could also have a material adverse effect on the business of our charterers, which could adversely affect their ability and willingness to perform their obligations under our existing charters as well as decreasing demand for future charters. COVID-19 is also affecting oil major vetting processes, which could lead to the loss of oil major approvals to conduct business with us and in turn the loss of revenue under existing charters or future chartering opportunities.

Our business and the LPG shipping industry as a whole is likely to be impacted not only from a reduced demand for LPG shipping services, but also from a reduced workforce and delays of crew changes as a result of quarantines applicable in several countries and ports and delays of vessels as a result of port checks due to cases, or suspected cases, of the COVID-19 amongst crew, as well as delays in the construction of newbuild vessels, scheduled drydockings, intermediate or special surveys of vessels and scheduled and unscheduled ship repairs and upgrades, including the installation of ballast water treatment equipment. In addition, the impact of COVID-19 on credit markets and financial institutions could result in increased interest rate spreads and other costs and difficulty in obtaining, bank financing, including to refinance balloon payments due upon maturity of existing credit facilities and to finance the purchase price of additional vessel acquisitions, which could limit our ability to grow our business in line with our strategy.

The recent dramatic decline in the price of oil, in part due to the COVID-19 outbreak and changes in production by Saudi Arabia and other oil producing countries, could make LPG a less attractive alternative for some uses and generally lead to reduced production of oil and gas, of which LPG is a byproduct. Reduced demand for LPG products and LPG shipping would have an adverse effect on our future growth and would harm our business, results of operations and financial condition.

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Failure of the continued spread of the virus to be controlled could significantly impact economic activity, and demand for LPG and LPG shipping, which could further negatively affect our business, financial condition, results of operations and cashflows.

If the demand for LPG products and LPG shipping does not grow, or decreases, our business, results of operations and financial condition could be adversely affected.

Our growth, which depends on growth in the supply and demand for LPG products and LPG shipping, was adversely affected by the sharp decrease in world trade and the global economy experienced in the latter part of 2008 and in 2009 and the decline in oil prices beginning in the third quarter of 2014. Although the global economy subsequently recovered, economic conditions and oil prices have again declined significantly with the advent of the COVID-19 pandemic in late 2019. World and regional demand for LPG products and LPG shipping can be adversely affected by a number of factors, such as:

• adverse global or regional economic or political conditions, particularly in LPG consuming regions, which could reduce energy consumption;

• a reduction in global or general industrial activity specifically in the plastics and chemical industries;

• a renewed decline in the price of oil which makes LPG a less attractive alternative for some uses and generally leads to reduced production of oil and gas;

• changes in the cost of petroleum and natural gas from which LPG is derived;

• decreases in the consumption of LPG or natural gas due to availability of new alternative energy sources, or increases in the price of LPG or natural gas relative to other energy sources, or other factors making consumption of LPG or natural gas less attractive; and

• increases in pipelines for LPG, which are currently few in number, linking production areas and industrial and residential areas consuming LPG, or the conversion of existing non-petroleum gas pipelines to petroleum gas pipelines in those markets.

Our operating results are subject to seasonal fluctuations, which could affect our operating results

We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charter hire rates. This seasonality may result in quarter-to-quarter volatility in our operating results. The LPG carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of propane and butane for heating during the winter months. Tanker markets are also typically stronger in the winter months as a result of increased oil consumption in the northern hemisphere, but weaker in the summer months as a result of lower oil consumption in the northern hemisphere and refinery maintenance. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. As a result, our revenues may be stronger in fiscal quarters ended December 31 and March 31, although the fourth quarter of 2018 did not exhibit this traditional strength as a result of a weak LPG shipping market in Asia, and conversely, our revenues may be weaker during the fiscal quarters ended June 30 and September 30. This seasonality could materially affect our quarterly operating results.

Our revenues, operations and future growth could be adversely affected by a decrease in supply of liquefied natural gas, or natural gas.

In recent years, there has been a strong supply of natural gas and an increase in the construction of plants and projects involving natural gas, of which LPG is a byproduct. Several of these projects, however, have experienced delays in their completion for various reasons and thus the expected increase in the supply of LPG from these projects may be delayed significantly. The recent severe declines in the price of oil and natural gas could exacerbate these dynamics. If the supply of natural gas decreases, we may see a concurrent reduction in the production of LPG, resulting in lesser demand and lower charter rates for our vessels, which could ultimately have a material adverse impact on our revenues, operations and future growth.

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The product carrier and crude oil tanker shipping sectors are cyclical, which may lead to lower charter rates and lower vessel values.

The medium range type product carrier and crude oil tanker shipping sectors are cyclical with attendant volatility in charter rates and vessel values. Two of our three product carriers are currently operating on time charters scheduled to expire in May 2020 and June 2020, respectively, while our remaining product carrier is operating under a bareboat charter scheduled to expire in September 2020. As of April 1, 2020, our crude oil tanker was operating in the spot market. If prevailing market conditions in these sectors, which are currently extremely volatile as a result of the COVID-19 outbreak in conjunction with the current market oversupply of oil, we may not be able to renew or replace existing charters for these vessels at the same or similar rates. If we were required to enter into a charter when charter hire rates are low, our results of operations could be adversely affected.

An over-supply of ships may lead to a reduction in charter rates, vessel values and profitability.

The market supply of LPG carriers and tankers is affected by a number of factors, such as supply and demand for LPG, natural gas and other energy resources, including oil and petroleum products, supply and demand for seaborne transportation of such energy resources, and the current and expected purchase orders for newbuildings. If the capacity of new LPG carriers and tankers delivered exceeds the capacity of such vessel types being scrapped and converted to non-trading vessels, global fleet capacity will increase. If the supply of LPG carrier or tanker capacity, for the vessel class sizes comprising our fleet in particular, increases, and if the demand for the capacity of such vessel types decreases, or does not increase correspondingly, charter rates could materially decline. A reduction in charter rates and the value of our vessels may have a material adverse effect on our results of operations.

The market values of our vessels may remain at relatively low levels for a prolonged period and over time may fluctuate significantly. When the market values of our vessels are low, we may incur a loss on sale of a vessel or record an impairment charge, as we did in each of the last five fiscal years, which may adversely affect our earnings and possibly lead to defaults under our loan agreements.

The market value of our vessels may fluctuate significantly, and these experienced significant declines during the economic crisis. Small LPG carrier and tanker values are currently at relatively low levels despite some improvement in 2019 and early 2020, prior to the onset of the COVID-19 pandemic throughout the world, and remain well below the highs reached in 2007 and 2008. The market values of our vessels are subject to potential significant fluctuations depending on a number of factors including:

• general economic and market conditions affecting the shipping industry;

• age, sophistication and condition of our vessels;

• types and sizes of vessels;

• availability of other modes of transportation;

• cost and delivery of schedules for newbuildings;

• governmental and other regulations;

• supply and demand for LPG products and refined petroleum products and oil, respectively;

• prevailing level of LPG charter rates and, with respect to our product carriers, the prevailing level of product carrier charter rates and crude oil tanker rates, respectively; and

• technological advances.

In 2019, we recognized an impairment loss of $1.0 million relating to two of our oldest vessels. We also recognized impairment losses in 2018, 2017 and 2016 of $11.4 million, $6.5 million and $5.7 million,

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respectively. If we sell vessels at a time when vessel prices have fallen, the sale may be for less than the vessel’s carrying value in our financial statements, resulting in a loss and reduction in earnings. Furthermore, if vessel values experience significant declines, we may have to record an impairment adjustment in our financial statements, which would also result in a reduction in our profits. If the market value of our fleet declines, we may not be in compliance with certain provisions of our existing loan agreements and we may not be able to refinance our debt or obtain additional financing or, if reinstated, pay dividends. If we are unable to pledge additional collateral, our lenders could accelerate our debt and foreclose on our fleet. The loss of our vessels would mean we could not run our business.

Technological innovation could reduce our charter hire income and the value of our vessels.

The charter hire rates and the value and operational life of a vessel are determined by a number of factors including the vessel’s efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of a vessel’s physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. If new LPG carriers or tankers are built that are more efficient or more flexible or have longer physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect the amount of charter hire payments we receive for our vessels, and the resale value of our vessels could significantly decrease. Consequently, our results of operations and financial condition could be adversely affected.

Changes in fuel, or bunker, prices may adversely affect profits.

While we do not bear the cost of fuel or bunkers under time and bareboat charters, fuel is a significant expense in our shipping operations when vessels are deployed under spot charters. The cost of fuel, including the fuel efficiency or capability to use lower priced fuel, can also be an important factor considered by charterers in negotiating charter rates. Changes in the price of fuel may adversely affect our profitability. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the OPEC (“Organization Of Petroleum Exporting Countries”) and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Furthermore, fuel may become significantly more expensive in the future, which may reduce our profitability. In addition, the recent entry into force, on January 1, 2020, of the 0.5% global sulfur cap in marine fuels used by vessels that are not equipped with sulfur oxide (“SOx”) exhaust gas cleaning systems (“scrubbers”) under the International Convention for Prevention of Pollution from Ships (“MARPOL”) Annex VI may lead to changes in the production quantities and prices of different grades of marine fuel by refineries and introduces an additional element of uncertainty in fuel markets, which could result in additional costs and adversely affect our cash flows, earnings and results from operations.

We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our financial conditions and results of operations.

Our business and the operation of our vessels are materially affected by government regulation in the form of international conventions and national, state and local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration. These regulations include, but are not limited to the U.S. Oil Pollution Act of 1990, or OPA, that establishes an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills and applies to any discharges of oil from a vessel, including discharges of fuel oil (bunkers) and lubricants, the U.S. Clean Air Act, U.S. Clean Water Act and the U.S. Marine Transportation Security Act of 2002, and regulations of the International Maritime Organization, or the IMO, including the International Convention for the Prevention of Pollution from Ships of 1975, the International Convention for the Prevention of Marine Pollution of 1973, and the International Convention for the Safety of Life at Sea of 1974. To comply with these and other regulations, including the January 1, 2020 entry into force of the MARPOL Annex VI sulfur emission requirements instituting a global

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0.5% (lowered from 3.5%) sulfur cap on marine fuels used by vessels not equipped with scrubbers and the International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”), which requires vessels to install expensive ballast water treatment systems, we may be required to incur additional costs to meet maintenance and inspection requirements, to develop contingency plans for potential spills, and to obtain insurance coverage. Environmental laws and regulations are often revised, and we cannot predict the ultimate cost of complying with them, or the impact they may have on the resale prices or useful lives of our vessels. However, a failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations. Additional laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which could materially adversely affect our operations. We are also required by various governmental and quasi-governmental agencies to obtain permits, licenses, certificates and financial assurances with respect to our operations. These permits, licenses, certificates and financial assurances may be issued or renewed with terms that could materially and adversely affect our operations.

The operation of our vessels is affected by the requirements set forth in the International Management Code for the Safe Operation of Ships and Pollution Prevention (“ISM Code”). The ISM Code requires ship owners and bareboat charterers to develop and maintain an extensive “Safety Management System” (“SMS”) that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation of the ship and describing procedures for dealing with emergencies. The failure of a ship owner or bareboat charterer to comply with the ISM Code may subject the owner or charterer to increased liability, may decrease available insurance coverage for the affected vessels, may result in a denial of access to, or detention in, certain ports or may result in a breach of our bank covenants. Currently, each of the vessels in our fleet is ISM Code-certified. Because these certifications are critical to our business, we place a high priority on maintaining them. Nonetheless, there is the possibility that such certifications may not be renewed.

We currently maintain, for each of our vessels, pollution liability insurance coverage in the amount of $1.0 billion per vessel per incident. In addition, we carry hull and machinery and protection and indemnity insurance to cover the risks of fire and explosion. Under certain circumstances, fire and explosion could result in a catastrophic loss. We believe that our present insurance coverage is adequate, but not all risks can be insured, and there is the possibility that any specific claim may not be paid, or that we will not always be able to obtain adequate insurance coverage at reasonable rates. If the damages from a catastrophic spill exceed our insurance coverage, the effect on our business would be severe and could possibly result in our insolvency.

We believe that regulation of the shipping industry will continue to become more stringent and compliance with such new regulations will be more expensive for us and our competitors. Substantial violations of applicable requirements or a catastrophic release from one of our vessels could have a material adverse impact on our financial condition and results of operations.

Climate change and greenhouse gas restrictions may adversely impact our operations and markets.

Due to concern over the risks of climate change, a number of countries and the IMO have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emission from ships. These regulatory measures may include adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for renewable energy. Emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, or the “Kyoto Protocol,” or any amendments or successor agreements, including the Paris Agreement adopted under the United Nations Framework Convention on Climate Change in December 2015, which contemplates commitments from each nation party thereto to take action to reduce greenhouse gas emissions and limit increases in global temperatures but did not include any restrictions or other measures specific to shipping emissions. However, restrictions on shipping emissions are likely to continue to be considered, and a new treaty may be adopted in the future that includes additional restrictions on shipping emissions to those already adopted under MARPOL. Compliance with future changes in laws and regulations relating to climate change could

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increase the costs of operating and maintaining our ships and could require us to install new emission controls, as well as acquire allowances, pay taxes related to our greenhouse gas emissions or administer and manage a greenhouse gas emissions program.

Adverse effects upon the oil and gas industry relating to climate change, including growing public concern about the environmental impact of climate change, may also have an effect on demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for oil, refined petroleum products, liquefied natural gas or liquefied petroleum gas in the future or create greater incentives for use of alternative energy sources. Any long-term material adverse effect on the oil and gas industry could have significant financial and operational adverse impacts on our business that we cannot predict with certainty at this time.

Our vessels are subject to periodic inspections by a classification society.

The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the Safety of Life at Sea Convention. Our fleet is currently classed with Lloyds Register of Shipping, Nippon Kaiji Kyokai, or NKK, the American Bureau of Shipping and Bureau Veritas.

A vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Our vessels are on special survey cycles for hull inspection and continuous survey cycles for machinery inspection. Every vessel is also required to be dry docked every two to three years for inspection of the underwater parts of such vessel. However, for vessels not exceeding 15 years that have means to facilitate underwater inspection in lieu of dry docking, the dry docking can be skipped and be conducted concurrently with the special survey.

If a vessel does not maintain its class and/or fails any annual survey, intermediate survey or special survey, the vessel will be unable to trade between ports and will be unemployable and we could be in violation of covenants in our loan agreements and insurance contracts or other financing arrangements. This would adversely impact our operations and revenues.

Maritime claimants could arrest our vessels, which could interrupt our cash flow.

Crew members, suppliers of goods and services to a vessel, shippers of cargo and others may be entitled to a maritime lien against that vessel for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of funds to have the arrest lifted.

In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel which is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one vessel in our fleet for claims relating to another of our ships or, possibly, another vessel managed by Stealth Maritime, as was the case with the arrest of one of our vessels in August 2015.

Governments could requisition our vessels during a period of war or emergency, resulting in loss of revenues.

A government could requisition for title or seize our vessels. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Also, a government could requisition our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels would adversely impact our operations and revenues, thereby resulting in loss of revenues.

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Risks involved with operating ocean-going vessels could affect our business and reputation, which would adversely affect our revenues and stock price.

The operation of an ocean-going vessel carries inherent risks. These risks include the possibility of:

• marine accident or disaster;

• piracy and terrorism;

• explosions;

• environmental accidents;

• pollution;

• loss of life;

• cargo and property losses or damage; and

• business interruptions caused by mechanical failure, human error, war, political action in various countries, labor strikes or adverse weather conditions.

Any of these circumstances or events could increase our costs or lower our revenues. The involvement of our vessels in a serious accident could harm our reputation as a safe and reliable vessel operator and lead to a loss of business.

Our vessels may suffer damage and we may face unexpected repair costs, which could affect our cash flow and financial condition.

If our vessels suffer damages, they may need to be repaired at a shipyard facility. The costs of repairs are unpredictable and can be substantial. We may have to pay repair costs that our insurance does not cover. The loss of earnings while these vessels are being repaired and repositioned, as well as the actual cost of these repairs, would have an adverse effect on our cash flow and financial condition. We do not intend to carry business interruption insurance.

Acts of piracy on ocean-going vessels could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean and in the Gulf of Aden, off the coast of Somalia. If these piracy attacks occur in regions in which our vessels are deployed and are characterized by insurers as “war risk” zones, as the Gulf of Aden continues to be, or Joint War Committee (JWC) “war and strikes” listed areas, premiums payable for such coverage, for which we are responsible with respect to vessels employed on spot charters, but not vessels employed on bareboat or time charters, could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew costs, including employing onboard security guards, could increase in such circumstances. We usually employ armed guards on board the vessels on time and spot charters that transit areas where Somali pirates operate. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition and results of operations.

Our operations outside the United States expose us to global risks, such as political conflict, terrorism and public health concerns, which may interfere with the operation of our vessels.

We are an international company and primarily conduct our operations outside the United States. Changing economic, political and governmental conditions in the countries where we are engaged in business or where our vessels are registered affect us. In the past, political conflicts, particularly in the Arabian Gulf, resulted in attacks

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on vessels, mining of waterways and other efforts to disrupt shipping in the area. Continuing conflicts, instability and other recent developments in the Middle East and elsewhere, including recent attacks involving vessels and vessel seizures in the Strait of Hormuz and off the coast of Gibraltar, the recent attack on an Iranian tanker near the Saudi Arabian port city of Jeddah and the presence of U.S. or other armed forces in Syria and Afghanistan, may lead to additional acts of terrorism or armed conflict around the world, and our vessels may face higher risks of being attacked or detained, or shipping routes transited by our vessels, such as the Strait of Hormuz, may be otherwise disrupted. Acts of terrorism may increase with the continuing conflicts in the Middle East and North Africa, and therefore our vessels may face higher risks of being attacked. In addition, future hostilities or other political instability in regions where our vessels trade could affect our trade patterns and adversely affect our operations and performance. If certain shipping lanes were to close, such as Iran’s past threat to close the Strait of Hormuz, it could adversely affect the availability of, and the demand for crude oil and petroleum products, as well as LPG. This would negatively affect our business and our customers’ investment decisions over an extended period of time. In addition, sanctions against oil exporting countries such as Iran, Syria and Venezuela, and the events in Ukraine and related sanctions against Russia, may also impact the availability of crude oil, petroleum products and LPG and which would increase the availability of applicable vessels, thereby impacting negatively charter rates. In addition, any charters that we enter into with Chinese customers may be subject to new regulations in China that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Chinese government new taxes or other fees. Changes in laws and regulations, including with regards to tax matters, and their implementation by local authorities could affect our vessels chartered to Chinese customers, as well as our vessels calling to Chinese ports, and could have a material adverse effect on our business, results of operations and financial condition.

Terrorist attacks, or the perception that LPG or natural gas facilities or oil refineries and LPG carriers, natural gas carriers or product carriers are potential terrorist targets, could materially and adversely affect the continued supply of LPG, natural gas and refined petroleum products to the United States and to other countries. Concern that LPG and natural gas facilities may be targeted for attack by terrorists has contributed to a significant community and environmental resistance to the construction of a number of natural gas facilities, primarily in North America. If a terrorist incident involving a gas facility or gas carrier did occur, the incident may adversely affect necessary LPG facilities or natural gas facilities currently in operation. Furthermore, future terrorist attacks could result in increased volatility of the financial markets in the United States and globally and could result in an economic recession in the United States or the world. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs.

In addition, public health threats, such as the coronavirus, influenza and other highly communicable diseases or viruses, outbreaks of which have from time to time occurred in various parts of the world in which we operate, including China, could adversely impact our operations, and the operations of our customers.

Our vessels may call on ports located in countries that are subject to sanctions and embargoes imposed by the U.S. or other governments, which could adversely affect our reputation and the market for our common stock.

From time to time on charterers’ instructions, our vessels have called and may again call on ports located in countries subject to sanctions and embargoes imposed by the United States government and countries identified by the United States government as state sponsors of terrorism, such as Iran, Syria and North Korea. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. On January 16, 2016, “Implementation Day” for the Iran Joint Comprehensive Plan of Action (JCPOA), the United States lifted its nuclear-related secondary sanctions against Iran which prohibited certain conduct by non-U.S. companies and individuals that occurred entirely outside of U.S. jurisdiction involving specified industry sectors in Iran, including the energy, petrochemical, automotive, financial, banking, mining, shipbuilding and shipping sectors. By lifting the secondary sanctions against Iran, the U.S. government effectively removed U.S. imposed restraints on dealings by non-U.S. companies, such as our

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Company, and individuals with these formerly targeted Iranian business sectors. Non-U.S. companies continued to be prohibited under U.S. sanctions from (i) knowingly engaging in conduct that seeks to evade U.S. restrictions on transactions or dealings with Iran or that causes the export of goods or services from the United States to Iran, (ii) exporting, re-exporting or transferring to Iran any goods, technology, or services originally exported from the U.S. and / or subject to U.S. export jurisdiction and (iii) conducting transactions with of the Iranian or Iran-related individuals and entities that remain or are placed in the future on OFAC’s list of Specially Designated Nationals and Blocked Persons (SDN List), notwithstanding the lifting of secondary sanctions. However, on August 6, 2018, the U.S. re-imposed an initial round of secondary sanctions and as of November 5, 2018, all of the secondary sanctions the U.S. had suspended under the JCPOA have been re-imposed.

The U.S. government’s primary Iran sanctions have remained largely unchanged, including during the period from the JCPOA Implementation Day to the re-imposition of secondary sanctions in 2018, and as a consequence, U.S. persons also continue to be broadly prohibited from engaging in transactions or dealings with the Government of Iran and Iranian financial institutions, which effectively impacts the transfer of funds to, from, or through the U.S. financial system whether denominated in US dollars or any other currency.

None of our vessels called in any ports in Cuba, North Korea, Syria or Iran in 2014, 2015 or 2019. In 2016, two of our vessels made a total of two port calls to Iran, representing less than 0.1% of the 2,412 total port calls made by all the vessels owned by us in 2016 and in 2017 six of our vessels made a total of 82 port calls to Iran which represents 2.67% of the 3,074 port calls made by all of our operating fleet within the stated year. In 2018, 4 of our vessels made a total of 12 port calls to Iran, all prior to November 5, 2018, representing 0.5% of the 2,653 port calls made by all of the vessels in our operating fleet in 2018. We believe all such port calls were made in full compliance with applicable economic sanctions laws and regulations, including those of the United States, the EU and other relevant jurisdictions. Our charter agreements include provisions that restrict trades of our vessels to countries targeted by economic sanctions unless such transportation activities involving sanctioned countries are permitted under applicable economic sanctions and embargo regimes. Our ordinary chartering policy is to seek to include similar provisions in all of our period charters. Prior to agreeing to waive existing charter party restrictions on carrying cargoes to or from ports that may implicate sanctions risks, we ensure that the charterers have proof of compliance with international and U.S. sanctions requirements, or applicable licenses or other exemptions.

Although we believe that we are in compliance with all applicable sanctions and embargo laws and regulations and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may vary or may be subject to changing interpretations and we may be unable to prevent our charterers from violating contractual and legal restrictions on their operations of the vessels. Any such violation could result in fines or other penalties for us and could result in some investors deciding, or being required, to divest their interest, or not to invest, in the Company. Additionally, some investors may decide to divest their interest, or not to invest, in the Company simply because we do business with companies that do lawful business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. Investor perception of the value of our common stock may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

Failure to comply with the U.S. Foreign Corrupt Practices Act and other anti-bribery legislation in other jurisdictions could result in fines, criminal penalties, contract terminations and an adverse effect on our business.

We operate in a number of countries through the world, including countries that may be known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted policies which are consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”) and other anti-bribery laws. We are subject, however, to the risk that we, our affiliated

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entities or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

A cyber-attack could materially disrupt our business.

Our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data. A successful cyber-attack could materially disrupt our operations, including the safety of our operations, or lead to unauthorized release of information or alteration of information on our systems. Any such attack or other breach of our information technology systems could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Risks Related To Our Business

We are dependent on the ability and willingness of our charterers to honor their commitments to us for all our revenues.

We derive all our revenues from the payment of charter hire by charterers of our vessels. The ability and willingness of each of our counterparties to perform their obligations under charter agreements with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the LPG carrier sector, or in the case of our product carriers the refined petroleum product carrier sector and in the case of our crude oil tanker the crude oil tanker sector, of the shipping industry and the overall financial condition of the counterparties, all of which may be negatively impacted by the COVID-19 pandemic and related containment efforts. In addition, in depressed market conditions, charterers may seek to renegotiate their charters or may default on their obligations under charters and our charterers may fail to pay charter hire or attempt to renegotiate charter rates. Should a counterparty fail to honor its obligations under agreements with us, it may be difficult to secure substitute employment for such vessel, and any new charter arrangements we secure in the spot market or on bareboat or time charters could be at lower rates. If we lose a charter, we may be unable to re-deploy the related vessel on terms as favorable to us. We would not receive any revenues from such a vessel while it remained unchartered, but we may be required to pay expenses necessary to maintain the vessel in proper operating condition, insure it and service any indebtedness secured by such vessel. The failure by charterers to meet their obligations to us or an attempt by charterers to renegotiate our charter agreements could have a material adverse effect on our revenues, results of operations and financial condition.

We are exposed to the volatile spot market and charters at attractive rates may not be available when the charters for our vessels expire which would have an adverse impact on our revenues and financial condition.

As of April 1, 2020, of our 49 vessels in the water, including eight JV Vessels 43 were under period charters (bareboat charters and time charters), while 6 were deployed in the spot market. As of April 1, 2020, 63% of our anticipated fleet days were covered by period charter contracts for the remainder of 2020 and 24% for 2021, with period charters for 24 of our vessels scheduled to expire in 2020 and 10 of our period charters scheduled to expire in 2021.

We are exposed to fluctuations in the charter market for the remaining anticipated voyage days that are not covered by fixed-rate contracts, and to the extent the counterparties to our fixed-rate charter contracts fail to honor their obligations to us. The successful operation of our vessels in the competitive and highly volatile spot charter market depends on, among other things, obtaining profitable spot charters, which depends greatly on vessel supply and demand, and minimizing, to the extent possible, time spent waiting for charters and time spent

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traveling unloaded to pick up cargo. When the current charters for our fleet expire or are terminated, it may not be possible to re-charter these vessels at similar rates, or at all, or to secure charters for any additional LPG carrier acquisitions at similarly profitable rates, or at all. As a result, we may have to accept lower rates or experience off hire time for our vessels, which would adversely impact our revenues, results of operations and financial condition.

We depend upon a few significant customers for a large part of our revenues. The loss of one or more of these customers could adversely affect our financial performance.

In our operating history we have derived a significant part of our revenue from a small number of charterers. For the year ended December 31, 2019 we had three customers from which we derived more than 10% of our revenues, while in 2017 and 2018 we had no such customers. For the year ended December 31, 2019, our three largest customers accounted for 32.1% of our revenues. Overall, we anticipate a limited number of customers will continue to represent significant amounts of our revenue. If these customers cease doing business or do not fulfill their obligations under the charters for our vessels, our results of operations and cash flows could be adversely affected. Further, if we encounter any difficulties in our relationships with these charterers, our results of operations, cash flows and financial condition could be adversely affected.

Our loan agreements or other financing arrangements contain restrictive covenants that may limit our liquidity and corporate activities.

Our loan agreements impose, and our future financing arrangements may impose, operating and financial restrictions on us. These restrictions may limit our ability to:

• incur additional indebtedness;

• create liens on our assets;

• sell capital stock of our subsidiaries;

• make investments;

• engage in mergers or acquisitions;

• pay dividends; and

• make capital expenditures.

Our loan agreements require us to maintain specified financial ratios, satisfy financial covenants and contain cross-default clauses.

They also require that our Chief Executive Officer, Harry Vafias, together with his immediate family, at all times own at least 10% of our outstanding capital stock and certain of our loan agreements provide that it would be an event of default if Harry Vafias ceased to serve as an executive officer or director of our company, Harry Vafias together with his immediate family, ceased to control our company or any other person or group controlled 25% or more of the voting power of our outstanding capital stock. In addition, our loan agreements include restrictions on the payment of dividends in amounts exceeding 50% of our free cash flow in any rolling 12-month period. As of December 31, 2019, we were in compliance with the covenants in our loan agreements.

As a result of the restrictions in our loan agreements, or similar restrictions in our future financing arrangements with respect to future vessels which we have yet to identify, we may need to seek permission from our lenders in order to engage in some corporate actions. Our lenders’ interests may be different from ours, and we may not be able to obtain their permission when needed. This may prevent us from taking actions that we believe are in our best interest which may adversely impact our revenues, results of operations and financial condition.

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A failure by us to meet our payment and other obligations, including our financial covenants and security coverage requirement, could lead to defaults under our secured loan agreements. Our lenders could then accelerate our indebtedness and foreclose on our fleet. The loss of our vessels would mean we could not run our business.

The market values of our vessels may decrease, which could cause us to breach covenants in our credit and loan facilities, and could have a material adverse effect on our business, financial condition and results of operations.

Our loan agreements, which are secured by liens on our vessels, contain various financial covenants, including requirements that relate to our financial condition, operating performance and liquidity. For example, we are required to maintain a maximum consolidated leverage ratio that is based, in part, upon the market value of the vessels securing the applicable loan, as well as a minimum ratio of the market value of vessels securing a loan to the principal amount outstanding under such loan. The market value of LPG carriers, product carriers and crude oil tankers is sensitive to, among other things, changes in the LPG carrier, product carrier and crude oil tanker charter markets, respectively, with vessel values deteriorating in times when LPG carrier, product carrier and tanker charter rates, as applicable, are falling and improving when charter rates are anticipated to rise. Lower charter rates in the LPG carrier, product carrier and crude oil tanker markets coupled with the difficulty in obtaining financing for vessel purchases have adversely affected product carrier and Aframax tanker values, and the impact of the dramatic decline in oil prices on demand for LPG has adversely affected LPG carrier values since the fourth quarter of 2014, with some improvement alongside increasing oil prices in the second half of 2017 through 2019, which could again decline with the recent dramatic decline in the price of oil relating to increases in oil production by various countries and the COVID-19 pandemic. A continuation or worsening of these conditions would lead to a significant decline in the fair market values of our vessels, which may affect our ability to comply with these loan covenants. If the value of our vessels deteriorates, we may have to record an impairment adjustment in our financial statements as we did in each of our last five fiscal years which would adversely affect our financial results and could further hinder our ability to raise capital.

A failure to comply with our covenants and/or obtain covenant waivers or modifications could result in our lenders requiring us to post additional collateral, enhance our equity and liquidity, increase our interest payments or pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet or accelerate our indebtedness, which would impair our ability to continue to conduct our business. If our indebtedness is accelerated, we may not be able to refinance our debt or obtain additional financing and could lose our vessels if our lenders foreclose their liens. In addition, if we find it necessary to sell our vessels at a time when vessel prices are low, we will recognize losses and a reduction in our earnings, which could affect our ability to raise additional capital necessary for us to comply with our loan agreements.

Global economic conditions and disruptions in world financial markets, including renewed disruptions as a consequence of the current COVID-19 pandemic, and the resulting governmental action could have a material adverse impact on our results of operations, financial condition and cash flows.

Global financial markets and economic conditions have been disrupted and volatile at times over the past decade, including in March and April 2020 as a result of the COVID-19 pandemic. While the global economy had improved in recent years, the recent outbreak of COVID-19 has dramatically disrupted the global economy and is expected to cause a recession, the duration of which is unpredictable. This may also prolong tight credit markets and potentially cause such conditions to become more severe. These issues, along with the limited supply of credit to the shipping industry and the re-pricing of credit risk and the difficulties currently experienced by financial institutions, have made, and will likely continue to make, it difficult to obtain financing, all of which could be exacerbated by the COVID-19 pandemic. As a result of the disruptions in the credit markets and higher capital requirements, many lenders had already in prior years increased margins on lending rates, enacted tighter lending standards, required more restrictive terms (including higher collateral ratios for advances, shorter maturities and smaller loan amounts), or refused to refinance existing debt on terms similar to existing debt or at

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all, which may also be further negatively impacted by the COVID-19 pandemic. Furthermore, certain banks that have historically been significant lenders to the shipping industry have reduced or ceased lending activities in the shipping industry in recent years. New banking regulations, including tightening of capital requirements and the resulting policies adopted by lenders, could further reduce lending activities. We may experience difficulties in obtaining financing commitments, or be unable to fully draw on the capacity under our committed credit facilities in the future, or refinance our credit facilities when our current facilities mature if our lenders are unwilling to extend financing to us or unable to meet their funding obligations due to their own liquidity, capital or solvency issues. We cannot be certain that financing will be available on acceptable terms or at all. In the absence of available financing, we also may be unable to take advantage of business opportunities or respond to competitive pressures.

Our ability to obtain additional debt financing may be dependent on the performance of our then existing charters and the creditworthiness of our charterers, as well as the perceived impact of emissions by our vessels on the climate.

The actual or perceived credit quality of our charterers, and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require in order to purchase additional vessels or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing, or obtain financing at a higher than anticipated cost may materially affect our results of operation and our ability to implement our business strategy.

In 2019, a number of leading lenders to the shipping industry and other industry participants announced a global framework by which financial institutions can assess the climate alignment of their ship finance portfolios, called the Poseidon Principles, and additional lenders have subsequently announced their intention to adhere to such principles. If the ships in our fleet are deemed not to satisfy the emissions and other sustainability standards contemplated by the Poseidon Principles, the availability and cost of bank financing for such vessels may be adversely affected.

A significant increase in our debt levels may adversely affect us and our cash flows.

As of December 31, 2019 we had outstanding indebtedness, net of deferred arrangement fees, of $366.0 million. We would expect to incur further indebtedness in connection with any further expansion of our fleet. This increase in the level of indebtedness and the need to service the indebtedness may impact our profitability and cash available for growth of our fleet, working capital and dividends if any. Additionally, further increases in interest rate levels, which have started to increase in the last few years from historically low levels, may increase the cost of servicing our indebtedness with similar results.

To finance our future fleet expansion program beyond our current fleet, we expect to incur additional secured debt. We have to dedicate a portion of our cash flow from operations to pay the principal and interest on our debt. These payments limit funds otherwise available for working capital, capital expenditures, and other purposes, including any distributions of cash to our stockholders, and our inability to service our debt could lead to acceleration of our debt and foreclosure on our fleet.

Moreover, carrying secured indebtedness exposes us to increased risks if the demand for LPG, oil or oil-related marine transportation decreases and charter rates and vessel values are adversely affected.

We are exposed to volatility in the London Interbank Offered Rate (“LIBOR”).

The amounts outstanding under our senior secured credit facilities have been, and we expect borrowings under additional credit facilities we have entered into and may enter into in the future will generally be, advanced at a floating rate based on LIBOR, which has increased in the last few years after a period of stability at low levels, and was volatile in prior years, which can affect the amount of interest payable on our debt, and which, in

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turn, could have an adverse effect on our earnings and cash flow. In addition, LIBOR, which was at low levels for an extended period of time, increased in 2017 and 2018 before declining in 2019, and may again increase from these levels. Our financial condition could be materially adversely affected at any time that we have not entered into interest rate hedging arrangements to hedge our exposure to the interest rates applicable to our credit facilities and any other financing arrangements we may enter into in the future, including those we enter into to finance a portion of the amounts payable with respect to newbuildings. As of December 31, 2019, we had approximately 30.4% of our loan exposure under interest rate swap arrangements. Even if we have entered into interest rate swaps or other derivative instruments for purposes of managing our interest rate exposure, our hedging strategies may not be effective and we may incur substantial losses.

Increased regulatory oversight, uncertainty relating to the LIBOR calculation process and potential phasing out of LIBOR after 2021 may adversely affect the amounts of interest we pay under our debt arrangements and our results of operations.

Regulators and law enforcement agencies in the United Kingdom and elsewhere are conducting civil and criminal investigations into whether the banks that contribute to the British Bankers’ Association (the “BBA”) in connection with the calculation of daily LIBOR may have been under-reporting or otherwise manipulating or attempting to manipulate LIBOR. A number of BBA member banks have entered into settlements with their regulators and law enforcement agencies with respect to this alleged manipulation of LIBOR.

On July 27, 2017, the United Kingdom Financial Conduct Authority (“FCA”), which regulates LIBOR, announced that it intends to stop persuading or compelling banks to submit rates for the calculation of LIBOR to the administrator of LIBOR after 2021 (the “FCA Announcement”). The FCA Announcement indicates that the continuation of LIBOR on the current basis is not guaranteed after 2021. The Secured Overnight Financing Rate, or “SOFR”, has been proposed by the Alternative Reference Rate Committee, a committee convened by the U.S. Federal Reserve that includes major market participants and on which regulators participate, as an alternative rate to replace U.S. Dollar LIBOR. It is not possible to predict the effect of the FCA Announcement, including any discontinuation or change in the method by which LIBOR rates are determined, or how any such changes or alternative methods for calculating benchmark interest rates would be applied to any particular existing agreement containing terms based on LIBOR, such as our existing loan agreements, which generally have alternative calculation provisions, however, if implicated, these could also create additional risks and uncertainties. Any such changes or developments in the method pursuant to which LIBOR rates are determined may result in an increase in reported LIBOR rates or any alternative rates. If that were to occur, the amount of interest we pay under our credit facilities and any other financing arrangements may be adversely affected which may adversely affect our results of operations.

The derivative contracts we have entered into to hedge our exposure to fluctuations in interest rates could result in higher than market interest rates and charges against our income, as well as reductions in our stockholders’ equity.

We have entered into interest rate swaps for purposes of managing our exposure to fluctuations in interest rates applicable to indebtedness under our credit facilities which were advanced at floating rates based on LIBOR. Our hedging strategies, however, may not be effective and we may incur substantial losses if interest rates or currencies move materially differently from our expectations.

To the extent our interest rate swaps do not qualify for treatment as hedges for accounting purposes, we recognize fluctuations in the fair value of such contracts in our statement of operations. In addition, changes in the fair value of any derivative contracts that do qualify for treatment as hedges, are recognized in “Accumulated other comprehensive income” on our balance sheet. Our financial condition could also be materially adversely affected to the extent we do not hedge our exposure to interest rate fluctuations under our financing arrangements under which loans have been advanced at a floating rate based on LIBOR.

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In addition, we had entered in the past and may enter in the future into foreign currency derivative contracts in order to hedge an exposure to foreign currencies related to shipbuilding contracts.

Any hedging activities we engage in may not effectively manage our interest rate and foreign exchange exposure or have the desired impact on our financial condition or results of operations.

Because we generate all of our revenues in U.S. dollars but incur a portion of our expenses in other currencies, exchange rate fluctuations could adversely affect our results of operations.

We generate all of our revenues in U.S. dollars and the majority of our expenses are also in U.S. dollars. However, a relatively small portion of our overall expenses, mainly executive compensation, is incurred in Euros. This could lead to fluctuations in net income due to changes in the value of the U.S. dollar relative to the other currencies, in particular the Euro. Expenses incurred in foreign currencies against which the U.S. dollar falls in value can thereby increase, decreasing our net income.

We are dependent on our relationship with Stealth Maritime Corporation S.A.

As of April 1, 2020, Stealth Maritime Corporation S.A. (“Stealth Maritime”) served as commercial manager for all 49 operating vessels in our fleet, including our 8 JV vessels and technical manager for 33 of the 38 operating vessels in our fleet not deployed on bareboat charters, while subcontracting the technical management of 5 of the remaining vessels in our fleet not deployed on bareboat charters, two vessels to Brave Maritime, which is affiliated with Stealth Maritime, and three to an unaffiliated third party.

We are accordingly dependent upon our fleet manager, Stealth Maritime, for:

• the administration, chartering and operations supervision of our fleet;

• our recognition and acceptance as owners of LPG, product and crude oil carriers, including our ability to attract charterers;

• relations with charterers and charter brokers;

• operational expertise; and

• management experience.

The loss of Stealth Maritime’s services or its failure to perform its obligations to us properly for financial or other reasons could materially and adversely affect our business and the results of our operations. Although we may have rights against Stealth Maritime if it defaults on its obligations to us, you would have no recourse against Stealth Maritime. In addition, we might not be able to find a replacement manager on terms as favorable as those currently in place with Stealth Maritime. Further, we expect that we will need to seek approval from our lenders to change our manager. In addition, if Stealth Maritime or Brave Maritime suffers material damage to its reputation or relationships, including as a result of a spill or other environmental incident or an accident, or any violation or alleged violation of U.S., EU or other sanctions, involving ships managed by Stealth Maritime or Brave Maritime whether or not owned by us, it may harm the ability of us or our subsidiaries to successfully compete in our industry.

We depend on third party managers to manage part of our fleet.

Stealth Maritime subcontracts the management for some of our vessels to third parties, including technical support, crewing, operation, maintenance and repair. The loss of their services or their failure to perform their obligations could materially and adversely affect the results of our operations. Although we may have rights against these managers if they default on their obligations, you would have no recourse against these parties. In addition, we might not be able to find replacement technical managers on terms as favorable as those currently in place.

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We may enter into certain significant transactions with companies affiliated with members of the Vafias family which may result in conflicts of interests.

In addition to our management contract with Stealth Maritime, a company controlled by members of the Vafias family other than our Chief Executive Officer, from time to time we may enter into other transactions with companies affiliated with members of the Vafias family such as the two charters we entered into in April 2012 and the agreements for the acquisition of four newbuilding LPG carriers in September 2012. Stealth Maritime also contracts for the crewing of vessels in our fleet with Hellenic Manning Overseas Inc, formerly known as Navis Maritime Services Inc., which is 25% owned by an affiliate of Stealth Maritime. Such transactions could create conflicts of interest that could adversely affect our business or your interests as holders of our common stock, as well as our financial position, results of operations and our future prospects.

Our directors and officers may in the future hold direct or indirect interests in companies that compete with us.

Our directors and officers each have a history of involvement in the shipping industry and may in the future, directly or indirectly, hold investments in companies that compete with us. In that case, they may face conflicts between their own interests and their obligations to us.

Companies affiliated with us, including Stealth Maritime and Brave Maritime, may manage or acquire vessels that compete with our fleet.

It is possible that Stealth Maritime or companies affiliated with Stealth Maritime, including Brave Maritime, could, in the future, agree to manage vessels that compete directly with ours. As long as Stealth Maritime (or an entity with respect to which Harry N. Vafias is an executive officer, director or the principal shareholder) is our fleet manager or Harry Vafias is an executive officer or director of the Company, Stealth Maritime has granted us a right of first refusal to acquire any LPG carrier, which Stealth Maritime may acquire in the future. In addition, Stealth Maritime has agreed that it will not charter-in any LPG carrier without first offering the opportunity to charter-in such vessel to us. Our President and Chief Executive Officer, Harry N. Vafias, has granted us an equivalent right with respect to any entity that he is an executive officer, director or principal shareholder of, so long as he is an executive officer or a director of our company. Were we, however, to decline any such opportunity offered to us or if we do not have the resources or desire to accept any such opportunity, Stealth Maritime or the entity controlled by Mr. Vafias could retain and manage the vessel. This right of first refusal does not cover product carriers or crude oil tankers. In addition, these restrictions, including the right of first refusal, do not apply to Brave Maritime. Furthermore, this right of first refusal does not prohibit Stealth Maritime from managing vessels owned by unaffiliated third parties in competition with us. In such cases, they could compete with our fleet and may face conflicts between their own interests and their obligations to us. In the future, we may also consider further diversifying into wet, dry or other gas shipping sectors, which, like product carriers and crude oil tankers, are not covered by this right of first refusal agreement. Any such vessels would be in competition with Stealth Maritime and companies affiliated with Stealth Maritime. Stealth Maritime might be faced with conflicts of interest with respect to their own interests and their obligations to us that could adversely affect our business and your interests as stockholders.

As our fleet has grown in size, we have needed to improve our operations and financial systems, staff and crew; if we cannot maintain these systems or continue to recruit suitable employees, our business and results of operations may be adversely affected.

We have significantly expanded our fleet since our initial public offering in October 2005, and as a consequence of this, Stealth Maritime has invested considerable sums in upgrading its operating and financial systems, as well as hiring additional well-qualified personnel to manage the vessels now managed by Stealth Maritime. In addition, as we have expanded our fleet, we have had to rely on our technical managers to recruit suitable additional seafarers and ashore administrative and management personnel. Stealth Maritime and those technical managers may not be able to continue to hire suitable employees to the extent we continue to expand

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our fleet. Our vessels, in particular our LPG carriers, require a technically skilled staff with specialized training. If the technical managers’ crewing agents are unable to employ such technically skilled staff, they may not be able to adequately staff our vessels. If Stealth Maritime is unable to operate our financial and operations systems effectively, or our technical managers are unable to recruit suitable employees as we expand our fleet, our results of operation and our ability to expand our fleet may be adversely affected.

Delays in the delivery of any newbuilding or secondhand LPG carriers we agree to acquire could harm our operating results.

As of April 1, 2020, we had an agreement to acquire one 11,000 cbm newbuilding LPG carrier with expected delivery to us in the first quarter of 2021. Delays in the delivery of this vessel or any additional newbuilding or secondhand vessels we may agree to acquire in the future, would delay our receipt of revenues generated by these vessels and, to the extent we have arranged charter employment for these vessels, could possibly result in the cancellation of those charters, and therefore adversely affect our anticipated results of operations. Although this would delay our funding requirements for the installment payments to purchase these vessels, it would also delay our receipt of revenues under any charters we arrange for such vessels. The delivery of newbuilding vessels could be delayed, other than at our request, because of, among other things, work stoppages or other labor disturbances; bankruptcy or other financial crisis of the shipyard building the vessel; hostilities, health pandemics such as COVID-19 or political or economic disturbances in the countries where the vessels are being built, including any escalation of tensions involving North Korea; weather interference or catastrophic event, such as a major earthquake, tsunami or fire; our requests for changes to the original vessel specifications; requests from our customers, with whom we have arranged any charters for such vessels, to delay construction and delivery of such vessels due to weak economic conditions and shipping demand and a dispute with the shipyard building the vessel.

In addition, the refund guarantors under the newbuilding contracts, which are banks, financial institutions and other credit agencies, may also be affected by financial market conditions in the same manner as our lenders and, as a result, may be unable or unwilling to meet their obligations under their refund guarantees. If the shipbuilders or refund guarantors are unable or unwilling to meet their obligations to the sellers of the vessels, this may impact our acquisition of vessels and may materially and adversely affect our operations and our obligations under our credit facilities. The delivery of any secondhand vessels could be delayed because of, among other things, hostilities or political disturbances, non-performance of the purchase agreement with respect to the vessels by the seller, our inability to obtain requisite permits, approvals or financing or damage to or destruction of the vessels while being operated by the seller prior to the delivery date.

If we fail to manage our growth properly, we may not be able to successfully expand our market share.

As and when market conditions permit, we intend to continue to prudently grow our fleet over the long term. The acquisition of such additional vessels could impose significant additional responsibilities on our management and staff, and may necessitate that we, and they, increase the number of personnel. In the future, we may not be able to identify suitable vessels, acquire vessels on advantageous terms or obtain financing for such acquisitions. Any future growth will depend on:

• locating and acquiring suitable vessels;

• identifying and completing acquisitions or joint ventures;

• integrating any acquired business successfully with our existing operations;

• expanding our customer base; and

• obtaining required financing.

Growing a business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel, managing relationships with customers and our commercial

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and technical managers and integrating newly acquired vessels into existing infrastructures. We may not be successful in executing any growth initiatives and may incur significant expenses and losses in connection therewith.

We may decide to sell certain of the vessels in our fleet if in our view market conditions are favorable for such sales or sell our LPG carriers in our fleet that are subject to purchase options held by the charterers of the respective vessels, which, if exercised, could reduce the size of our LPG carrier fleet and reduce our future revenues.

Since our initial public offering through to December 31, 2019 we have sold 38 LPG carriers, including 4 LPG carriers of which 49.9% equity interest was sold to a JV arrangement. We may decide to sell more vessels from our fleet if, in our view, the market conditions are favorable for such sales. The chartering arrangements with respect to four LPG carriers of our fleet include options for the respective charterers to purchase the vessels at stipulated prices at any time during the term of the existing charter for the respective vessels which are due to end in 2022. The option exercise prices with respect to these vessels decline over time and reflect an estimate, made at the time of entry into the applicable charter in the first quarter of 2014, of market prices. In addition, the chartering arrangements for four LPG carriers in our fleet give the charterer the right to purchase the respective vessels at the end of the current charter term in 2021 and 2022 and 2029. This might result in our company realizing losses or gains depending on the time each vessel option is exercised. If the charterers were to exercise these options with respect to any or all of these vessels or if we sell additional vessels, the expected size of our LPG carrier fleet would be reduced and, if there were a scarcity of secondhand LPG carriers available for acquisition at such time and because of the delay in delivery associated with commissioning newbuilding LPG carriers, we could be unable to replace these vessels with other comparable vessels, or any other vessels, quickly or, if LPG carrier values were higher than currently anticipated at the time we were required to sell these vessels, at a cost equal to the purchase price paid by the charterer. Consequently, if we sell additional vessels or if these purchase options were to be exercised, the expected size of our LPG carrier fleet would be reduced, and as a result our anticipated level of revenues would be reduced.

In addition, the operation of our two JV agreements present certain operational risks. Pursuant to one JV arrangement we sold a 49.9% equity interest in four JV vessels in the first quarter of 2019, and we acquired pursuant to the same JV arrangement a 50.1% equity interest in a 38,000 cbm LPG carrier in the second quarter of 2019. In addition, we further acquired, through a separate joint venture, a 51% equity interest in three 35,000 cbm LPG carriers in the first quarter of 2020. These acquisitions and vessel operations under a JV structure may increase certain administrative burdens, delay decision-making, and make it more difficult to obtain debt financing or complicate the operation of the vessels acquired under the joint venture agreements. For example, the joint venture agreements require that certain decisions regarding chartering or sale of the JV vessels be made jointly by us and the applicable JV investor. Accordingly, if the respective JV investors were to fail to cooperate with us with respect to these matters, such JV vessels may have to be sold or fixed on a period charter at an inopportune time, which could adversely affect our results of operations.

We may be unable to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of our management and our results of operation.

Our success depends to a significant extent upon the abilities and efforts of our management team, including our Chief Executive Officer, Harry Vafias. In addition, Harry Vafias is a member of the Vafias family, which controls Stealth Maritime, our fleet manager. Our success will depend upon our and Stealth Maritime’s ability to hire and retain qualified managers to oversee our operations. The loss of any of these individuals could adversely affect our business prospects and financial condition. Difficulty in hiring and retaining personnel could adversely affect our results of operations. We do not have employment agreements directly with our key personnel who are technically employees of Stealth Maritime, our fleet manager, although under our management agreement with Stealth Maritime, our relationship is governed by terms substantially similar to those typically included in employment agreements. We do not maintain “key man” life insurance on any of our officers.

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In the highly competitive international LPG carrier, product carrier and crude oil tanker markets, we may not be able to compete for charters with new entrants or established companies with greater resources.

We deploy our vessels in highly competitive markets that are capital intensive. Competition arises primarily from other vessel owners, some of which have greater resources than we do. Competition for the transportation of LPG, refined petroleum products and crude oil can be intense and depends on price, location, size, age, condition and the acceptability of the vessel and its managers to the charterers. Competitors with greater resources could enter and operate larger LPG carrier fleets through consolidations or acquisitions, and many larger fleets that compete with us in each of these sectors may be able to offer more competitive prices and fleets.

We have three medium range product carriers and one Aframax crude oil tanker; however, we principally operate LPG carriers and our lack of a diversified business could adversely affect us.

Unlike many other shipping companies, which may carry dry bulk, crude oil, oil products or products or goods shipped in containers, we currently depend primarily on the transport of LPG. The vast majority of our revenue has been and is expected to be derived from this single source—the seaborne transport of LPG. Due to our lack of a more diversified business model, adverse developments in the seaborne transport of LPG and the market for LPG products have a significantly greater impact on our financial conditions and results of operations than if we maintained more diverse assets or lines of business.

We have expanded into the product carrier sector and into the crude oil tanker sector and we may not be able to successfully execute this expansion, or any further expansion, in such sectors or any other sectors, such as dry or other wet or gas shipping sectors we choose to expand into, which could have an adverse effect on our business, results of operation and financial condition.

We have expanded into the product carrier sector with the acquisition of three medium range product carriers and into the crude oil tanker sector with one Aframax tanker. In the future, we may further expand in these sectors or into dry or other wet or other gas shipping sectors if opportunities arise. We have limited experience in these sectors, including the product carrier and crude oil tanker sectors, and an inability to successfully execute our recent expansion into these sectors or any such future expansion plans could:

• be costly;

• distract us from our LPG carrier business; and

• divert management resources,

each of which could have an adverse effect on our business, results of operation and financial condition. We may also from time to time consider various alternatives for our product carriers and crude oil tankers that could involve the sale of all or a portion of our interest in these vessels and sectors.

Purchasing and operating previously owned, or secondhand, vessels may result in increased operating costs and vessels off-hire, which could adversely affect our revenues.

Our examination of secondhand vessels, which may not include physical inspection prior to purchase, does not provide us with the same knowledge about their condition and cost of any required (or anticipated) repairs that we would have had if these vessels had been built for and operated exclusively by us. Generally, we do not receive the benefit of warranties on secondhand vessels.

In general, the cost of maintaining a vessel in good operating condition increases with its age. As of April 1, 2020, the average age of the vessels in our fleet, including the JV vessels, was approximately 9.4 years. Older vessels are typically less fuel efficient and more costly to maintain and operate than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates increase with the age of a vessel, making older vessels less desirable to charterers.

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Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations, or the addition of new equipment, to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives. If we sell vessels, the sales prices may not equal and could be less than their carrying values at that time.

The shipping industry has inherent operational risks that may not be adequately covered by our insurance.

We procure hull and machinery insurance, protection and indemnity insurance, which include environmental damage and pollution insurance coverage, and war risk insurance for our fleet. While we endeavor to be adequately insured against all known risks related to the operation of our ships, there remains the possibility that a liability may not be adequately covered and we may not be able to obtain adequate insurance coverage for our fleet in the future. The insurers may also not pay particular claims. Even if our insurance coverage is adequate, we may not be able to timely obtain a replacement vessel in the event of a loss. Our insurance policies contain deductibles for which we will be responsible and limitations and exclusions which may increase our costs or lower our revenue. In addition, if one of our ships, or other ships managed by Stealth Maritime or Brave Maritime and owned by an affiliated entity of Stealth Maritime or Brave Maritime, were to incur significant costs from an accident, spill or other environmental liability, our insurance premiums and costs could increase significantly.

Our major stockholder exerts considerable influence on the outcome of matters on which our stockholders are entitled to vote and his interests may be different from yours.

Our major stockholder, our Chief Executive Officer, including through a company he controls, owns approximately 19.8% of our outstanding common stock as of April 1, 2020 and exerts considerable influence on the outcome of matters on which our stockholders are entitled to vote, including the election of our Board of Directors and other significant corporate actions. The interests of this stockholder may be different from your interests.

We may have to pay tax on United States-source income, which would reduce our earnings.

Under the United States Internal Revenue Code of 1986, as amended, or the Code, 50% of the gross shipping income of vessel owning or chartering corporations, such as our subsidiaries, that is attributable to transportation that begins or ends, but does not both begin and end, in the United States is characterized as United States-source shipping income. United States-source shipping income is subject to either a (i) 4% United States federal income tax without allowance for deductions or (ii) taxation at the standard United States federal income tax rates (and potentially to a 30% branch profits tax), unless derived by a corporation that qualifies for exemption from tax under Section 883 of the Code and the Treasury Regulations promulgated thereunder.

Generally, we and our subsidiaries will qualify for this exemption for a taxable year if our shares are treated as “primarily and regularly traded” on an established securities market in the United States. Our shares of common stock will be so treated if (i) the aggregate number of our shares of common stock traded during such year on an established securities market in the United States exceeds the aggregate number of our shares of common stock traded during that year on established securities markets in any other single country, (ii) either (x) our shares of common stock are regularly quoted during such year by dealers making a market in our shares or (y) trades in our shares of common stock are effected, other than in de minimis quantities, on an established securities market in the United States on at least 60 days during such taxable year and the aggregate number of our shares of common stock traded on an established securities market in the United States during such year equals at least 10% of the average number of our shares of common stock outstanding during such taxable year and (iii) our shares of common stock are not “closely held” during such taxable year. For these purposes, our shares of common stock will be treated as closely held during a taxable year if, for more than one-half the

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number of days in such taxable year, one or more persons each of whom owns either directly or under applicable attribution rules, at least 5% of our shares of common stock, own, in the aggregate, 50% or more of our shares of common stock, unless we can establish, in accordance with applicable documentation requirements, that a sufficient number of the shares of common stock in the closely-held block are owned, directly or indirectly, by persons that are residents of foreign jurisdictions that provide United States shipping companies with an exemption from tax that is equivalent to that provided by Section 883 to preclude other stockholders in the closely-held block from owning 50% or more of the closely-held block of shares of common stock.

We believe that it is currently the case, and may also be the case in the future, that, one or more persons each of whom owns, either directly or under applicable attribution rules, at least 5% of our shares of common stock own, in the aggregate, 50% or more of our shares of common stock. In such circumstances, we and our subsidiaries may qualify for the exemption provided in Section 883 of the Code only if a sufficient number of shares of the closely-held block of our shares of common stock were owned or treated as owned by “qualified stockholders” so it could not be the case that, for more than half of the days in the taxable year, the shares of common stock in the closely-held block not owned or treated as owned by qualified stockholders represented 50% or more of our shares of common stock. For these purposes, a “qualified stockholder” includes an individual that owns or is treated as owning shares of our common stock and is a resident of a jurisdiction that provides an exemption that is equivalent to that provided by Section 883 of the Code and certain other persons; provided in each case that such individual or other person complies with certain documentation and certification requirements set forth in the Section 883 regulations and designed to establish status as a qualified stockholder.

Our Chief Executive Officer, who beneficially owned approximately 19.8% of our outstanding shares of common stock as of April 1, 2020, has entered into an agreement with us regarding his compliance, and the compliance by certain entities that he controls and through which he owns our shares, with the certification procedures designed to establish status as a qualified stockholder. In certain circumstances, his compliance and the compliance of such entities he controls with the terms of that agreement may enable us and our subsidiaries to qualify for the benefits of Section 883 even where persons (each of whom owns, either directly or under applicable attribution rules, 5% or more of our shares) own, in the aggregate, more than 50% of our outstanding shares. However, his compliance and the compliance of such entities he controls with the terms of that agreement may not enable us or our subsidiaries to qualify for the benefits of Section 883. We or any of our subsidiaries may not qualify for the benefits of Section 883 for any year.

If we or our subsidiaries do not qualify for the exemption under Section 883 of the Code for any taxable year, then we or our subsidiaries would be subject for those years to the 4% United States federal income tax on gross United States shipping income or, in certain circumstances, to net income taxation at the standard United States federal income tax rates (and potentially also to a 30% branch profits tax). The imposition of such tax could have a negative effect on our business and would result in decreased earnings and cash flow.

We could become a “passive foreign investment company,” which would have adverse United States federal income tax consequences to United States holders and, in turn, us.

A foreign corporation will be treated as a “passive foreign investment company,” or PFIC, for United States federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of “passive income” or (2) at least 50% of the average value of the corporation’s assets produce or are held for the production of those types of “passive income.” For purposes of these tests, “passive income” includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute “passive income” and working capital and similar assets held pending investment in vessels will generally be treated as an asset which produces passive income. United States stockholders of a PFIC are subject to a disadvantageous United States federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

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In connection with determining our PFIC status we treat and intend to continue to treat the gross income that we derive or are deemed to derive from our time chartering and voyage chartering activities as services income, rather than rental income. We believe that our income from time chartering and voyage chartering activities does not constitute “passive income” and that the assets that we own and operate in connection with the production of that income do not constitute assets held for the production of passive income. We treat and intend to continue to treat, for purposes of the PFIC rules, the income that we derive from bareboat charters as passive income and the assets giving rise to such income as assets held for the production of passive income. There is, however, no legal authority specifically under the PFIC rules regarding our current and proposed method of operation and it is possible that the Internal Revenue Service, or IRS, may not accept our positions and that a court may uphold such challenge, in which case we and certain of our subsidiaries could be treated as PFICs. In this regard we note that a federal court decision addressing the characterization of time charters concludes that they constitute leases for federal income tax purposes and employs an analysis which, if applied to our time charters, could result in our treatment and the treatment of our vessel-owning subsidiaries as PFICs. In addition, in making the determination as to whether we are a PFIC, we intend to treat the deposits that we make on our newbuilding contracts and that are with respect to vessels we do not expect to bareboat charter as assets which are not held for the production of passive income for purposes of determining whether we are a PFIC. We note that there is no direct authority on this point and it is possible that the IRS may disagree with our position.

We do not believe that we were a PFIC for 2019. This belief is based in part upon our beliefs regarding the value of the assets that we hold for the production of or in connection with the production of passive income relative to the value of our other assets. Should these beliefs turn out to be incorrect, then we and certain of our subsidiaries could be treated as PFICs for 2019. There can be no assurance that the U.S. Internal Revenue Service (“IRS”) or a court will not determine values for our assets that would cause us to be treated as a PFIC for 2019 or a subsequent year.

In addition, although we do not believe that we were a PFIC for 2019, we may choose to operate our business in the current or in future taxable years in a manner that could cause us to become a PFIC for those years. Because our status as a PFIC for any taxable year will not be determinable until after the end of the taxable year, and depends upon our assets, income and operations in that taxable year, there can be no assurance that we will not be considered a PFIC for 2020 or any future taxable year.

If the IRS were to find that we are or have been a PFIC for any taxable year, our United States stockholders would face adverse United States tax consequences. Under the PFIC rules, unless those stockholders make an election available under the Code (which election could itself have adverse consequences for such stockholders, as discussed below under “Item 10 Additional Information—E. Tax Considerations—United States Federal Income Taxation of United States Holders”), such stockholders would be liable to pay United States federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our shares of common stock, as if the excess distribution or gain had been recognized ratably over the stockholder’s holding period of our shares of common stock. See “Item 10. Additional Information—E. Tax Considerations—United States Federal Income Tax Consequences—United States Federal Income Taxation of United States Holders” for a more comprehensive discussion of the United States federal income tax consequences to United States stockholders if we are treated as a PFIC. As a result of these adverse tax consequences to United States stockholders, such a finding by the IRS may result in sales of our common stock by United States stockholders, which could lower the price of our common stock and adversely affect our ability to raise capital.

As a foreign private issuer we are entitled to claim an exemption from certain Nasdaq corporate governance standards, and if we elected to rely on this exemption, you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

As a foreign private issuer, we are entitled to claim an exemption from many of Nasdaq’s corporate governance practices. Currently, our corporate governance practices comply with the Nasdaq corporate

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governance standards applicable to U.S. listed companies other than that, while Nasdaq requires listed companies to obtain prior shareholder approval for certain issuances of authorized stock in transactions not involving a public offering, as permitted under Marshall Islands law and our articles of incorporation and bylaws, we do not need prior shareholder approval to issue shares of authorized stock. To the extent we rely on this or other exemptions you may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law or a bankruptcy act.

Our corporate affairs are governed by our articles of incorporation and bylaws and by the Marshall Islands Business Corporations Act, or BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the law of the Republic of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain U.S. jurisdictions. Stockholder rights may differ as well. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions, our public stockholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling stockholders than would stockholders of a corporation incorporated in a U.S. jurisdiction. The Marshall Islands has no established bankruptcy act, and as a result, any bankruptcy action involving our company would have to be initiated outside the Marshall Islands, and our public stockholders may find it difficult or impossible to pursue their claims in such other jurisdictions.

It may be difficult to enforce service of process and judgments against us and our officers and directors.

We are a Marshall Islands company, and our executive offices are located outside of the United States. All of our directors and officers reside outside of the United States, and most of our assets and their assets are located outside the United States. As a result, you may have difficulty serving legal process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside the United States, judgments you may obtain in the U.S. courts against us or these persons in any action, including actions based upon the civil liability provisions of U.S. federal or state securities laws.

There is also substantial doubt that the courts of the Marshall Islands would enter judgments in original actions brought in those courts predicated on U.S., federal or state securities laws.

Risks Related To Our Common Stock

The market price of our common stock has fluctuated and may continue to fluctuate in the future.

The market price of our common stock has fluctuated widely since our initial public offering in October 2005 and may continue to do so as a result of many factors, including our actual results of operations and perceived prospects, the prospects of our competition and of the shipping industry in general and in particular the LPG carrier sector, differences between our actual financial and operating results and those expected by investors and analysts, changes in analysts’ recommendations or projections, changes in general valuations for companies in the shipping industry, particularly the LPG carrier sector, changes in general economic or market conditions and broad market fluctuations.

If the market price of our common stock remains below $5.00 per share, under stock exchange rules, our stockholders will not be able to use such shares as collateral for borrowing in margin accounts. This inability to use shares of our common stock as collateral may depress demand and certain institutional investors are restricted from investing in or holding shares priced below $5.00, which could lead to sales of such shares creating further downward pressure on and increased volatility in the market price of our common stock.

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We may not pay dividends on our common stock.

We have not paid a dividend since the first quarter of 2009, when our Board of Directors decided to suspend dividend payments in light of the volatile global economic situation and conditions in the LPG shipping market. Our board of directors will evaluate our dividend policy consistent with our cash flows and liquidity requirements. In addition, other external factors, such as our existing loan agreements, future financing arrangements and capital expenditures, as well as Marshall Islands law, may also restrict or prohibit our declaration and payment of dividends under some circumstances. For instance, we are not permitted to declare or pay cash dividends, or repurchase shares, in any twelve month period that exceed 50% of our free cash flow in the preceding twelve month period. Due to these constraints on dividend payments we may not be able to pay regular quarterly dividends in the future. See “Item 5. Operating and Financial Review and Prospects—Credit Facilities—Financial Covenants.”

The declaration and payment of dividends will be subject at all times to the discretion of our Board of Directors. The timing and amount of future dividends will depend on the state of the LPG carrier and tanker markets, our earnings, financial condition, cash requirements and availability, fleet renewal and expansion, restrictions in our loan agreements or other financing arrangements, the provisions of Marshall Islands law affecting the payment of dividends and other factors. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment of such dividends.

Anti-takeover provisions in our organizational documents and other agreements could make it difficult for our stockholders to replace or remove our current Board of Directors or have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common stock.

Several provisions of our amended and restated articles of incorporation and bylaws could make it difficult for our stockholders to change the composition of our Board of Directors in any one year, preventing them from changing the composition of management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that stockholders may consider favorable.

These provisions include:

• authorizing our Board of Directors to issue “blank check” preferred stock without stockholder approval;

• providing for a classified Board of Directors with staggered three-year terms;

• prohibiting cumulative voting in the election of directors;

• authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of 80% of the outstanding shares of our common stock entitled to vote for the directors;

• limiting the persons who may call special meetings of stockholders;

• establishing advance notice requirements for nominations for election to our Board of Directors or for proposing matters that can be acted on by stockholders at stockholder meetings; and

• prohibiting certain transactions with interested stockholders.

Our current loan agreements also require that our Chief Executive Officer, Harry Vafias, together with his immediate family, at all times own at least 10% of our outstanding capital stock and certain of our loan agreements provide that it would be an event of default if Harry Vafias ceased to serve as an executive officer or director of our company, Harry Vafias together with his immediate family, ceased to control our company or any other person or group controlled 25% or more of the voting power of our outstanding capital stock. These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.

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Item 4. Information on the Company

A. History and Development of the Company

StealthGas Inc. was incorporated in December 2004 in the Republic of the Marshall Islands. Our registered address in the Marshall Islands is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960. The name of our registered agent at such address is The Trust Company of the Marshall Islands, Inc. Our principal executive offices are located at 331 Kifissias Avenue, Erithrea 14561 Athens, Greece. Our telephone number for calls originating from the United States is (011) (30) (210) 625-0001.

In October 2005, we completed an initial public offering of our common stock in the United States and our common stock began trading on the Nasdaq National Market and now trades on the Nasdaq Global Select Market under the symbol “GASS”.

Prior to the initial public offering, we owned nine LPG carriers. Since the initial public offering and as of December 31, 2019, we acquired an additional 66 LPG carriers, three product carriers and one Aframax crude oil tanker and we concluded with the sale of 38 LPG carriers, including 4 LPG carriers of which a 49.9% equity interest was sold to the JV arrangement. As of December 31, 2019, we had a fleet of 43 LPG carriers, including one charter-in LPG carrier and five JV vessels, three product carriers, and one Aframax crude oil tanker, and had contracted to acquire one LPG carrier newbuilding under construction with expected delivery in the first quarter of 2021. In the first quarter of 2020, we completed the acquisition of three 2010-built, 35,000 cbm LPG carriers pursuant to a joint venture arrangement, in which we have a 51% equity interest. As of April 1, 2020, our fleet is composed of 45 LPG carriers, including eight JV vessels which aggregate 165,121 cbm, with a total capacity of approximately 420,527 cbm, three medium range product carriers with a total capacity of 140,000 dwt and one 115,804 dwt Aframax tanker. We also have an agreement to acquire one 11,000 LPG carrier newbuilding with expected delivery in the first quarter of 2021.

Our company operates through a number of subsidiaries which either directly or indirectly own or charter in the vessels in our fleet. A list of our subsidiaries, including their respective jurisdiction of incorporation, as of April 1, 2020, all of which are wholly-owned by us other than as indicated therein, is set forth in Exhibit 8 to this Annual Report on Form 20-F.

B. Business Overview

We own a fleet of LPG carriers providing international seaborne transportation services to LPG producers and users, as well as crude oil and product carriers chartered to oil producers, refiners and commodities traders. Our LPG carriers carry various petroleum gas products in liquefied form, including propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer, which are all byproducts of the production of crude oil and natural gas. The three medium range product carriers in our fleet are capable of carrying refined petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, while our Aframax tanker is used for carrying crude oil. We believe that we have established a reputation as a safe, cost-efficient operator of modern and well-maintained LPG carriers. We also believe that these attributes, together with our strategic focus on meeting our customers’ chartering needs, has contributed to our ability to attract leading charterers as our customers and to our success in obtaining charter renewals. We are managed by Stealth Maritime, a privately owned company controlled by other members of the Vafias family, of which our Chief Executive Officer is a member.

As of April 1, 2020, our fleet consisted of 45 LPG carriers, including eight JV vessels, with an average age of 9.2 years, two 2008-built product carriers, one 2009-built product carrier and one 2010-built Aframax crude oil tanker. We also have an agreement to acquire one 11,000 LPG carrier newbuilding with expected delivery in the first quarter of 2021.

The table below describes our fleet and its deployment as of April 1, 2020.

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Owned LPG Carriers (37 Vessels)

Name	Year Built	Vessel Size (cbm)	Vessel Type	Employment Status	Expiration of Charter(1)
Eco Arctic	2018	22,363	semi-refrigerated	Time Charter	September 2020
Eco Ice	2018	22,358	semi-refrigerated	Time Charter	February 2022
Eco Freeze	2018	22,353	semi-refrigerated	Time Charter	July 2020
Eco Frost	2017	22,359	semi-refrigerated	Time Charter	February 2022
Eco Nical	2016	7,541	fully-pressurized	Time Charter	June 2020
Gas Husky	2012	7,516	fully-pressurized	Bareboat Charter	July 2020
Gas Esco	2012	7,514	fully-pressurized	Bareboat Charter	June 2020
Eco Dominator	2016	7,221	fully-pressurized	Time Charter	May 2020
Eco Galaxy	2015	7,213	fully-pressurized	Time Charter	December 2020
Eco Chios(4)	2014	7,211	fully-pressurized	Bareboat Charter	May 2022
Eco Stream(4)	2014	7,210	fully-pressurized	Bareboat Charter	March 2022
Gas Flawless	2007	6,337	fully-pressurized	Time Charter	March 2021
Gas Prodigy	2003	5,031	fully-pressurized	Time Charter	March 2021
Eco Enigma	2015	5,025	fully-pressurized	Time Charter	July 2020
Eco Universe	2015	5,025	fully-pressurized	Time Charter	February 2021
Eco Czar(6)	2015	5,020	fully-pressurized	Time Charter	January 2021
Eco Nemesis	2015	5,019	fully-pressurized	Time Charter	March 2021
Gas Monarch	1997	5,018	fully-pressurized	Spot	—
Gas Elixir	2011	5,018	fully-pressurized	Time Charter	July 2020
Gas Cerberus	2011	5,018	fully-pressurized	Time Charter	May 2020
Gas Myth(6)	2011	5,018	fully-pressurized	Time Charter	January 2021
Gas Inspiration	2006	5,018	fully-pressurized	Time Charter	August 2020
Eco Invictus	2014	5,016	fully-pressurized	Time Charter	November 2020
Eco Green(6)	2015	4,991	fully-pressurized	Time Charter	October 2020
Eco Dream(6)	2015	4,989	fully-pressurized	Time Charter	September 2020
Gas Spirit	2001	4,112	fully-pressurized	Time Charter	November 2020
Gas Nemesis II(ex. Gas Zael)(6)	2001	4,111	fully-pressurized	Spot	—
Eco Loyalty(7)(5)	2015	3,529	fully-pressurized	Bareboat Charter	June 2022
Eco Elysium(7)(5)	2014	3,526	fully-pressurized	Bareboat Charter	August 2021
Eco Royalty(7)(5)	2015	3,525	fully-pressurized	Bareboat Charter	April 2022
Eco Corsair(7)	2014	3,524	fully-pressurized	Bareboat Charter	December 2029
Gas Imperiale	2008	3,515	fully-pressurized	Spot	—
Gas Astrid(4)	2009	3,514	fully-pressurized	Bareboat Charter	March 2022
Gas Exelero(4)	2009	3,513	fully-pressurized	Bareboat Charter	June 2022
Gas Alice	2006	3,513	fully-pressurized	Time Charter	August 2021
Gas Galaxy	1997	3,312	fully-pressurized	Time Charter	January 2021
Gas Pasha	1995	3,310	fully-pressurized	Time Charter	June 2020
		255,406 cbm

JV LPG Vessels (8 vessels)

Eco Nebula(2)	2007	38,898	fully-refrigerated	Time Charter	September 2020
Gaschem Bremen(3)	2010	35,232	fully-refrigerated	Time Charter	July 2020
Gaschem Stade(3)	2010	35,214	fully-refrigerated	Time Charter	August 2020
Gaschem Hamburg(3)	2010	35,204	fully-refrigerated	Time Charter	April 2021
Gas Haralambos(2)	2007	7,020	fully-pressurized	Spot	—
Gas Defiance(2)	2008	5,018	fully-pressurized	Time Charter	May 2020
Gas Shuriken(2)	2008	5,018	fully-pressurized	Time Charter	December 2020
Eco Lucidity(2)	2015	3,517	fully-pressurized	Spot	—
		165,121 cbm

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Contracted Newbuilding LPG Carriers (1 Vessel)

Name		Vessel Size (cbm)	Vessel Type	Scheduled Delivery
To be named		11,000	fully-pressurized	Q1 2021
Total LPG Carrier Fleet:	46 vessels	431,527 cbm

(1) Earliest date charters could expire.

(2) JV vessel owned by a joint venture established in 2019 in which we own a 50.1% equity interest.

(3) JV vessel owned by a joint venture established in 2020 in which we own a 51% equity interest.

(4) Subject to a purchase option pursuant to which the charterer may purchase such vessel at any time during the charter at a price that declines over time by an agreed annual amount or pro-rated from the agreed value of the vessel at the time of entering into the charter in the first quarter of 2014.

(5) Charterer has option to extend charter for an additional three-year period.

(6) Charterer has option to extend charter for an additional year.

(7) Subject to purchase option pursuant to which charterer may purchase such vessel at the end of the charter at the price agreed at the time of entering into the agreement.

Product Carriers/Crude Oil Tanker (4 Vessels)

Name	Year Built	Vessel Size (dwt)	Vessel Type	Employment Status		Expiration of Charter(1)
Magic Wand (ex. Navig8 Fidelity)	2008	47,000	MR product carrier		Time Charter		May 2020
Clean Thrasher	2008	47,000	MR product carrier		Time Charter		June 2020
Falcon Maryam (ex.Stealth Bahla)	2009	46,000	MR product carrier		Bareboat Charter		September 2020
Stealth Berana (ex. Spike)	2010	115,804	Aframax oil tanker		Spot		—
		255,804 dwt

(1) Earliest date charters could expire.

In 2019, we sold a 49.9% equity interest in the subsidiaries owning four of our vessels, the Gas Haralambos, the Gas Defiance, the Gas Shuriken and the Eco Lucidity, to a leading maritime-focused investor, and acquired a 2007-built, 38,000 cbm LPG carrier, the Eco Nebula with this same investor, in which we also have a 50.1% equity interest. We and the investor each have certain rights to purchase or bid for the purchase of vessels subject to this arrangement in the event of their proposed sale. In the first quarter of 2020, we acquired three 2010-built Medium Gas Carriers, the Gaschem Bremen, the Gaschem Stade and the Gaschem Hamburg, of an aggregate capacity of 105,650 cbm pursuant to a separate joint venture arrangement with an unaffiliated third party, in which we have a 51% equity interest. These joint venture vessels are managed by us and our manager, Stealth Maritime, other than the technical management of the three medium range gas carriers acquired in 2020 which will be technically managed by a third party manager through the end of their current charters, at which time technical management is expected to be assumed by Stealth Maritime.

Commercial and Technical Management of Our Fleet

We have a management agreement with Stealth Maritime, pursuant to which Stealth Maritime provides us with technical, administrative, commercial and certain other services. Stealth Maritime is a leading ship-management company based in Greece, established in 1999 in order to provide shipping companies with a range of services. Our manager’s safety management system is ISM certified in compliance with IMO’s regulations by Lloyd’s Register. In relation to the technical services, Stealth Maritime is responsible for arranging for the crewing of the vessels, the day to day operations, inspections and vetting, maintenance, repairs, drydocking and insurance. Administrative functions include but are not limited to accounting, back-office, reporting, legal and

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secretarial services. In addition, Stealth Maritime provides services for the chartering of our vessels and monitoring thereof, freight collection, and sale and purchase. In providing most of these services, Stealth Maritime pays third parties and receives reimbursement from us. In addition, Stealth Maritime may subcontract technical management and crew management for some of our vessels to third parties, including Hellenic Manning Overseas Inc, formerly known as Navis Maritime Services Inc., in which an affiliate of Stealth Maritime has a 25% interest, and Jebsens Maritime Inc. – previously Selandia Crew Management Philippines Inc, all based in Manila, and Brave Maritime (an affiliate of Stealth Maritime) based in Greece. As of April 1, 2020, the technical management of two of our ships was subcontracted by Stealth Maritime to Brave Maritime. These crew and technical managers are supervised by Stealth Maritime. These crew and technical managers are supervised by Stealth Maritime. In addition, the three medium range gas carrier JV vessels acquired in the first quarter of 2020 will be technically managed by third party manager through the end of their current charters, at which time technical management is expected to be assumed by Stealth Maritime.

Under the November 2006 agreement, which was amended effective January 1, 2007, as approved by our Board of Directors, including all of our independent directors, we pay Stealth Maritime a fixed management fee of $440 per vessel operating under a voyage or time charter per day on a monthly basis in advance, pro-rated for the calendar days we own the vessels. We pay a fixed fee of $125 per vessel per day for each of our vessels operating on bareboat charter. We are also obligated to pay Stealth Maritime a fee equal to 1.25% of the gross freight, demurrage and charter hire collected from the employment of our vessels. Stealth Maritime will also earn a fee equal to 1.0% of the contract price of any vessel bought or sold by them on our behalf. In addition, as long as Stealth Maritime (or an entity with respect to which Harry N. Vafias is an executive officer, director or the principal shareholder) is our fleet manager or Harry N. Vafias is an executive officer or director of the Company, Stealth Maritime has granted us a right of first refusal to acquire any LPG carrier which Stealth Maritime may acquire in the future. In addition, Stealth Maritime has agreed that it will not charter-in any LPG carrier without first offering the opportunity to charter-in such vessels to us. This right of first refusal does not prohibit Stealth Maritime from managing vessels owned by unaffiliated third parties in competition with us, nor does it cover product carriers or crude oil tankers.

The initial term of our management agreement with Stealth Maritime expired in June 2010; however, unless six months’ notice of non-renewal is given by either party prior to the end of the then current term, this agreement automatically extends for additional 12 month periods. No such notice has been given, and accordingly, this agreement will extend to June 2021.

For additional information about the management agreement, including the calculation of management fees, see “Item 7. Major Shareholders and Related Party Transactions” and our consolidated financial statements which are included as Item 18 to this Annual Report.

Crewing and Employees

Stealth Maritime ensures that all seamen have the qualifications and licenses required to comply with international regulations and shipping conventions, and that our vessels employ experienced and competent personnel. In 2019, Hellenic Manning Overseas Inc, formerly known as Navis Maritime Services Inc., and Jebsens Maritime Inc.—previously Selandia Crew Management Philippines Inc., which are both based in Manila, were responsible for providing the crewing of our LPG fleet, to the extent that these vessels were not deployed on bareboat charters. These responsibilities include training, compensation, transportation and additional insurance of the crew.

Chartering of the Fleet

We, through Stealth Maritime, manage the employment of our fleet. We deploy our LPG carriers and tankers on period charters, including time and bareboat charters that can last up to several years, and spot market charters (through voyage charters and short-term time charters), which generally last from one to six months,

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subject to market conditions. Time and bareboat charters are for a fixed period of time. A voyage charter is generally a contract to carry a specific cargo from a loading port to a discharging port for an agreed-upon total charge. Under voyage charters we pay for voyage expenses such as port, canal and fuel costs. Under a time charter the charterer pays for voyage expenses while under a bareboat charter the charterer pays for voyage expenses and operating expenses such as crewing, supplies, maintenance and repairs including special survey and dry-docking costs.

Vessels operating in the spot market generate revenues that are less predictable but may enable us to capture increased profit margins during periods of improvements in LPG charter rates, although we are then exposed to the risk of declining LPG carrier charter rates. Typically spot market charters can last from a few days up to two months. If we commit vessels to period charters, future spot market rates may be higher or lower than those rates at which we have period chartered our vessels.

In formulating our chartering strategy, we evaluate past, present and future performance of the freight markets and balance the mix of our chartering arrangements in order to achieve optimal results for the fleet. As of April 1, 2020 and including our eight JV vessels, we had 6 vessels operating in the spot market, 21 vessels on time charters expiring in 2020, 11 on time charters expiring from 2021 to 2022 and 11 on bareboat charters expiring from 2020 to 2029. In terms of charter coverage as of April 1, 2020, we had 63% of the available calendar days fixed under period charters for 2020, and 24% for 2021.

While a significant part our fleet is operating in the Far East, we deploy vessels globally. Some of the areas where we usually operate are the Middle East, the Mediterranean, North West Europe, Africa and Latin America. According to industry reports, the United States is currently expected to continue to increase its exports of LPG products. In the event this creates more demand for vessels like ours, we would expect to deploy more vessels in the United States and the Caribbean. As freight rates usually vary between these areas as well as voyage and operating expenses, we evaluate such parameters when positioning our vessels for new employment.

Customers

Our assessment of a charterer’s financial condition and reliability is an important factor in negotiating employment for our vessels. Principal charterers include producers of LPG products, such as national, major and other independent energy companies and energy traders, and industrial users of those products. For the year ended December 31, 2019, we had three customers accountable for more than 10% of our total revenues. In addition, vessels under bareboat charter may be sub-chartered to third parties.

Environmental and other Regulations

Government regulations significantly affect the ownership and operation of our vessels. They are subject to international conventions and national, state and local laws and regulations in force in the countries in which they may operate or are registered.

A variety of governmental and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (United States Coast Guard, harbor master or equivalent), classification societies, flag state administration (country of registry), charterers and particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and financial assurances for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of operation of one or more of our vessels.

We believe that the heightened level of environmental and quality concerns among insurance underwriters, regulators and charterers is leading to greater inspection and safety requirements on all vessels and may accelerate the scrapping of older vessels throughout the industry. Increasing environmental concerns have created a demand for vessels that conform to the stricter environmental standards. We are required to maintain operating

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standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations. However, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, any future requirements may limit our ability to do business, increase our operating costs, force the early retirement of one or more of our vessels, and/or affect their resale value, all of which could have a material adverse effect on our financial condition and results of operations.

Environmental Regulations—International Maritime Organization (“IMO”)

The IMO, the United Nations agency for maritime safety and the prevention of pollution by ships, has negotiated international conventions relating to pollution by ships. In 1973, IMO adopted the MARPOL, which has been periodically updated with relevant amendments. MARPOL addresses pollution from ships by oil, noxious liquid substances carried in bulk, harmful substances carried by sea in packaged form, sewage, garbage, and air emissions. Our vessels are subject to standards imposed by the IMO.

In September 1997, the IMO adopted MARPOL Annex VI to address air pollution from ships. Effective in May 2005, Annex VI set limits on SOx and nitrogen oxide (“NOx”) emissions from ship exhausts and prohibited deliberate emissions of ozone depleting substances, such as chlorofluorocarbons. Annex VI also included a global cap on the sulfur content of fuel oil and allowed for special areas to be established with more stringent controls on emissions. Options for complying with the requirements of Annex VI include use of low sulfur fuels, modifications to vessel engines, or the addition of post combustion emission controls. Annex VI has been ratified by some, but not all IMO member states. Vessels that are subject to Annex VI must obtain an International Air Pollution Prevention Certificate evidencing compliance with Annex VI.

In October 2008, the IMO adopted amendments to Annex VI, and United States ratified the Annex VI amendments in October 2008. Beginning in 2011 the amendments required a progressive reduction of sulfur levels in bunker fuels to be phased in by 2020 and imposed more stringent NOx emission standards on marine diesel engines, depending on their date of installation. Since January 1, 2020, the amended Annex VI required that fuel oil contain no more than 0.50% sulfur. There have also been questions as to how the sulfur cap will be enforced, as it is up to individual parties to MARPOL to enforce fines and sanctions. We may incur costs to comply with the amended Annex VI requirements. We currently have no committed capital expenditure obligations for the installation of scrubbers.

More stringent emission standards apply in coastal areas designated by the IMO as SOx Emission Control Areas, or ECAs, such as the Baltic and North Seas, United States (including Hawaii) and Canadian (including the French territories of St. Pierre and Miquelon) coastal areas, and the United States Caribbean Sea (including Puerto Rico and the US Virgin Islands). Similar restrictions apply in Icelandic and inland Chinese waters. Vessels operating within an ECA or an area with equivalent standards must use fuel with a sulfur content that does not exceed 0.10%. Other ECAs may be designated, and the jurisdictions in which our vessels operate may adopt more stringent emission standards independent of IMO. We have obtained International Air Pollution Prevention Certificates for all of our vessels and believe they are compliant in all material respects with current Annex VI requirements.

Our LPG carriers must have an IMO Certificate of Fitness demonstrating compliance with construction codes for LPG carriers. These codes, and similar regulations in individual member states, address fire and explosion risks posed by the transport of liquefied gases. Collectively, these standards and regulations impose detailed requirements relating to the design and arrangement of cargo tanks, vents, and pipes; construction materials and compatibility; cargo pressure; and temperature control. All of our LPG carriers have Certificates of Fitness and we intend to obtain such certificates for the vessels that we have agreed to acquire.

Many countries have ratified and follow the liability plan adopted by the IMO and set out in the International Convention on Civil Liability for Oil Pollution Damage of 1969 (the “CLC”) (the United States,

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with its separate OPA regime described below, is not a party to the CLC). This convention generally applies to vessels that carry oil in bulk as cargo. Under this convention and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, the registered owner of a regulated vessel is strictly liable for pollution damage in the territorial waters or exclusive economic zone of a contracting state caused by the discharge of any oil from the ship, subject to certain defenses. Under an amendment to the 1992 Protocol that became effective on November 1, 2003, for vessels of 5,000 to 140,000 gross tons, liability per incident is limited to 4.51 million Special Drawing Rights (“SDR”) plus 631 SDR for each additional gross ton over 5,000. For a vessel over 140,000 gross tons, liability is limited to 89.77 million SDR. The SDR is an International Monetary Fund unit pegged to a basket of currencies. The right to limit liability under the CLC is forfeited where the spill is caused by the owner’s actual fault and, under the 1992 Protocol, where the spill is caused by the owner’s intentional or reckless conduct. Vessels trading in states that are parties to the CLC must provide evidence of insurance covering the liability of the owner. In jurisdictions where the CLC has not been adopted, various legislative schemes or common law regimes govern, and liability is imposed either on the basis of fault or in a manner similar to that convention. We believe that our protection and indemnity insurance will cover any liability under the CLC.

In 2001, the IMO adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, which imposes strict liability on ship owners for pollution damage caused by discharges of bunker oil in jurisdictional waters of ratifying states. The Bunker Convention also requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the Convention on Limitation of Liability for Maritime Claims of 1976, as amended). Because the Bunker Convention does not apply to pollution damage governed by the CLC, it applies only to discharges from any of our vessels that are not transporting oil. The Bunker Convention entered into force on November 21, 2008. Liability limits under the Bunker Convention were increased as of June 2015. In jurisdictions where the Bunker Convention has not been adopted, such as the United States, liability for spill or releases of oil from ship’s bunkers typically is determined by national or other domestic laws in the jurisdiction where the events occur.

Our LPG vessels and product carriers may also become subject to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea adopted in 1996 as amended by the Protocol to the HNS Convention, adopted in April 2010 (2010 HNS Protocol) (collectively, the “2010 HNS Convention”), if it enters into force. The Convention creates a regime of liability and compensation for damage from hazardous and noxious substances (or HNS), including liquefied gases. The 2010 HNS Convention sets up a two-tier system of compensation composed of compulsory insurance taken out by ship owners and an HNS Fund that will come into play when the insurance is insufficient to satisfy a claim or does not cover the incident. Under the 2010 HNS Convention, if damage is caused by bulk HNS, claims for compensation will first be sought from the ship owner up to a maximum of 100 million SDR. If the damage is caused by packaged HNS or by both bulk and packaged HNS, the maximum liability is 115 million SDR. Once the limit is reached, compensation will be paid from the HNS Fund up to a maximum of 250 million SDR. The 2010 HNS Convention has not been ratified by a sufficient number of countries to enter into force, and at this time we cannot estimate with any certainty the costs of compliance with its requirements should it enter into force.

The IMO adopted the BWM Convention in February 2004. The Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits. The BWM Convention took effect on September 8, 2017. Many of the implementation dates originally contained in the BWM Convention had already passed prior to its effectiveness, so that the period for installation of mandatory ballast water exchange requirements would be very short, with several thousand ships per year needing to install the systems. Consequently, the IMO Assembly passed a resolution in December 2013 revising the dates for implementation of the ballast water management requirements so that they are triggered by the entry into force date. In effect, this makes all vessels constructed

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before September 8, 2017 “existing” vessels, allowing for the installation of ballast water management systems on such vessels at the first renewal IOPP survey following entry into force of the BWM Convention. In July 2017, the implementation scheme was further changed to require vessels with International Oil Pollution Prevention (“IOPP”) certificates expiring between September 8, 2017 and September 8, 2019 to comply at their second IOPP renewal. All ships must have installed a ballast water treatment system by September 8, 2024. Each vessel in our current fleet has been issued or will be issued a ballast water management plan Statement of Compliance by the classification society with respect to the applicable IMO regulations and guidelines. The cost of compliance could increase for our vessels as a result of these requirements, although it is difficult to predict the overall impact of such a requirement on our operations.

The operation of our vessels is also affected by the requirements set forth in the ISM Code of the IMO. The ISM Code requires shipowners and bareboat charterers to develop and maintain an extensive SMS that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. Vessel operators must obtain a “Safety Management Certificate” from the government of the vessel’s flag state to verify that it is being operated in compliance with its approved SMS. The failure of a ship owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, decrease available insurance coverage for the affected vessels and result in a denial of access to, or detention in, certain ports. Currently, each of the vessels in our fleet is ISM code-certified. However, there can be no assurance that such certification will be maintained indefinitely.

The operations of our product carriers are subject to compliance with the IMO’s International Code for the Construction and Equipment of Ships carrying Dangerous Chemicals in Bulk (“IBC Code”) for chemical tankers built after July 1, 1986. The IBC Code includes ship design, construction and equipment requirements and other standards for the bulk transport of certain liquid chemicals. Amendments to the IBC Code pertaining to revised international certificates of fitness for the carriage of dangerous goods entered into force in June 2014, and additional requirements regarding stability, tank purging, venting and inerting requirements entered into force in January 2016. We may need to make certain expenditures to comply with these amendments.

Environmental Regulations—The United States Oil Pollution Act of 1990 (“OPA”) and the U.S. Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”)

The United States Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA applies to discharges of any oil from a vessel, including discharges of fuel oil (bunkers) and lubricants. OPA affects all owners and operators whose vessels trade in the United States, its territories and possessions or whose vessels operate in United States waters, which include the United States’ territorial sea and its two hundred nautical mile exclusive economic zone. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, which applies to the discharge of hazardous substances other than oil, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Accordingly, both OPA and CERCLA impact our operations.

Under OPA, vessel owners, operators and bareboat charterers are “responsible parties” and are jointly, severally and strictly liable (unless the discharge of pollutants results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of pollutants from their vessels. OPA broadly defines these other damages to include:

• natural resources damage and the costs of assessment thereof;

• real and personal property damage;

• net loss of taxes, royalties, rents, fees and other lost revenues;

• lost profits or impairment of earning capacity due to property or natural resources damage; and

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• net cost of public services necessitated by a spill response, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.

The current limits of OPA liability for double-hulled tank vessels larger than 3,000 gross tons are the greater of $2,300 per gross ton or $19,943,400, subject to periodic adjustment for inflation. These limits of liability do not apply if an incident was directly caused by violation of applicable United States federal safety, construction or operating regulations or by a responsible party’s gross negligence or willful misconduct, or if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with oil removal activities.

OPA requires owners and operators of vessels over 300 gross tons to establish and maintain with the United States Coast Guard evidence of financial responsibility sufficient to meet their potential liabilities under the OPA. Under the United States Coast Guard regulations implementing OPA, vessel owners and operators may evidence their financial responsibility by showing proof of insurance, surety bond, self-insurance, or guaranty. Under the OPA regulations, an owner or operator of a fleet of vessels is required only to demonstrate evidence of financial responsibility in an amount sufficient to cover the vessels in the fleet having the greatest maximum liability under OPA.

CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for cleanup, removal and remedial costs, as well as damage for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.

We currently maintain, for each of our vessels, pollution liability coverage insurance in the amount of $1 billion per vessel per incident. In addition, we carry hull and machinery and protection and indemnity insurance to cover the risks of fire and explosion. Under certain circumstances, fire and explosion could result in a catastrophic loss. While we believe that our present insurance coverage is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates. If the damages from a catastrophic spill exceeded our insurance coverage, it would have a severe effect on us and could possibly result in our insolvency.

OPA and CERCLA both require owners and operators of vessels to establish and maintain with the United States Coast Guard evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. Under the self-insurance provisions, the ship owner or operator must have a net worth and working capital, measured in assets located in the United States against liabilities located anywhere in the world, that exceeds the applicable amount of financial responsibility. We have complied with the United States Coast Guard regulations by providing a financial guaranty evidencing sufficient self-insurance.

OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, and some states have enacted legislation providing for unlimited liability for oil spills. In some cases, states, which have enacted such legislation, have not yet issued implementing regulations defining vessels owners’ responsibilities under these laws. We intend to comply with all applicable state regulations in the ports where our vessels call.

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Environmental Regulations—Other Environmental Initiatives

The EU has adopted legislation that: (1) requires member states to refuse access to their ports to certain sub-standard vessels, according to vessel type, flag and number of previous detentions; (2) creates an obligation on member states to inspect at least 25% of vessels using their ports annually and provides for increased surveillance of vessels posing a high risk to maritime safety or the marine environment; (3) provides the EU with greater authority and control over classification societies, including the ability to seek to suspend or revoke the authority of negligent societies; and (4) requires member states to impose criminal sanctions for certain pollution events, such as the unauthorized discharge of tank washings. It is impossible to predict what additional legislation or regulations, if any, may be promulgated by the EU or any other country or authority.

On March 23, 2012, the United States Coast Guard adopted ballast water discharge standards under the U.S. National Invasive Species Act, or NISA. The regulations, which became effective on June 21, 2012, set maximum acceptable discharge limits for living organisms and established standards for ballast water management systems, and they are consistent with the requirements under the BWM Convention described above. The requirements are being phased in based on the size of the vessel and its next drydocking date. As of the date of this report, the United States Coast Guard has approved twenty-five Ballast Water Treatment Systems. A list of approved equipment can be found on the Coast Guard Maritime Information Exchange web page. Several U.S. states, such as California, have also adopted more stringent legislation or regulations relating to the permitting and management of ballast water discharges compared to U.S. Environmental Protection Agency (“EPA”) regulations.

The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil or hazardous substances in navigable waters and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA. Under EPA regulations we are required to obtain a CWA permit to discharge ballast water and other wastewaters incidental to the normal operation of our vessels if we operate within the three mile territorial waters or inland waters of the United States. This permit, which the EPA has designated as the Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels, or VGP, incorporates the current United States Coast Guard requirements for ballast water management, as well as supplemental ballast water requirements, and includes requirements applicable to 26 specific discharge streams, such as deck runoff, bilge water and gray water. The United States Coast Guard and the EPA have entered into a memorandum of understanding which provides for collaboration on the enforcement of the VGP requirements. As a result, it is expected that the United States Coast Guard will include the VGP as part of its normal Port State Control inspections. The EPA issued a VGP that became effective in December 2013. Among other things, it contained numeric ballast water discharge limits for most vessels and more stringent requirements for exhaust gas scrubbers and required the use of environmentally friendly lubricants. We have submitted NOIs (Notices Of Intent) for Discharges Incidental to the Normal Operation of a Vessel under the 2013 VGP to the U.S. EPA for all our ships trading in U.S. waters. The 2013 VGP was set to expire on December 13, 2018; however, its provisions will remain in effect until the regulations under the 2018 Vessel Incidental Discharge Act (“VIDA”) are final and enforceable. VIDA, signed into law on December 4, 2018, establishes a new framework for the regulation of vessel incidental discharges under CWA Section 312(p). VIDA requires the EPA to develop performance standards for those discharges within two years of enactment, and requires the USCG to develop implementation, compliance, and enforcement regulations within two years of the EPA’s promulgation of its performance standards. All provisions of the 2013 VGP will remain in force and effect until the USCG regulations under VIDA are finalized. Compliance with the EPA and United States Coast Guard ballast water management regulations could require the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements at potentially substantial cost, or may otherwise restrict our vessels from entering United States waters.

Climate Control Initiatives

Although the Kyoto Protocol requires adopting countries to implement national programs to reduce emissions of greenhouse gases, emissions of greenhouse gases from international shipping are not currently

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subject to the Kyoto Protocol. The Kyoto Protocol was extended to 2020 at the 2012 United Nations Climate Change Conference, with the hope that a new climate change treaty would be adopted by 2015 and come into effect by 2020. The Paris Agreement adopted under the United Nations Framework Convention on Climate Change in December 2015 contemplates commitments from each nation party thereto to take action to reduce greenhouse gas emissions and limit increases in global temperatures but did not include any restrictions or other measures specific to shipping emissions. However, restrictions on shipping emissions are likely to continue to be considered and a new treaty may be adopted in the future that includes restrictions on shipping emissions. International or multi-national bodies or individual countries may adopt their own climate change regulatory initiatives. The IMO’s Marine Environment Protection Committee adopted two sets of mandatory requirements to address greenhouse gas emissions from shipping that entered into force in January 2013. The Energy Efficiency Design Index establishes minimum energy efficiency levels per capacity mile and applies to new vessels of 400 gross tons or greater. Currently operating vessels must develop and implement Ship Energy Efficiency Plans. By 2025, all new ships built must be 30% more energy efficient than those built in 2014, but it is likely that the IMO will increase these requirements such that new ships must be up to 50% more energy efficient than those built in 2014 by 2022. These new requirements could cause us to incur additional costs to comply. The IMO is also considering the development of market-based mechanisms for limiting greenhouse gas emissions from ships, but it is impossible to predict the likelihood of adoption of such a standard or the impact on our operations. In April 2015, the EU adopted regulations requiring the monitoring and reporting of greenhouse gas emissions from marine vessels (of over 5,000 gross tons) which went into effect in January 2018. The EPA has issued a finding that greenhouse gas emissions endanger the public health and safety and has adopted regulations under the Clean Air Act to limit emissions of greenhouse gases from certain mobile sources and proposed regulations to limit greenhouse gas emissions from large stationary sources, although the mobile source regulations do not apply to greenhouse gas emissions from vessels. Any passage of climate control initiatives by the IMO, the EU or the individual countries in which we operate that limit greenhouse gas emissions from vessels could require us to limit our operations or make significant financial expenditures that we cannot predict with certainty at this time. Passage of climate control initiatives that affect the demand for LPG products and oil may also materially affect our business. Even in the absence of climate control legislation and regulations, our business may be materially affected to the extent that climate change may result in sea level changes or more intense weather events.

On June 29, 2017, the Global Industry Alliance, or the GIA, was officially inaugurated. The GIA is a program, under the Global Environmental Facility-United Nations Development Program- IMO project, which supports shipping, and related industries, as they move towards a low carbon future. Organizations including, but not limited to, shipowners, operators, classification societies, and oil companies, signed to launch the GIA.

In addition, the United States is currently experiencing changes in its environmental policy, the results of which have yet to be fully determined. Additional legislation or regulation applicable to the operation of our ships that may be implemented in the future could negatively affect our profitability. Furthermore, recent action by the IMO’s Maritime Safety Committee and U.S. agencies indicate that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats, as described below. This might cause companies to cultivate additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. However, the impact of such regulations is difficult to predict at this time.

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the Maritime Transportation Security Act of 2002, or MTSA, came into effect in the United States. To implement certain portions of the MTSA, in July 2003, the United States Coast Guard issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. Similarly, in December 2002, amendments to the International Convention for the Safety of Life at Sea, or SOLAS, created a new chapter of

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the convention dealing specifically with maritime security. The chapter went into effect in July 2004, and imposes various detailed security obligations on vessels and port authorities, most of which are contained in the newly created International Ship and Port Facilities Security or, ISPS, Code. Among the various requirements are:

• on-board installation of automatic information systems, or AIS, to enhance vessel-to-vessel and vessel-to-shore communications;

• on-board installation of ship security alert systems;

• the development of vessel security plans; and

• compliance with flag state security certification requirements.

The United States Coast Guard regulation’s aim to align with international maritime security standards exempted non-United States vessels from MTSA vessel security measures provided such vessels have on board, by July 1, 2004, a valid International Ship Security Certificate (“ISSC”) that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code. We have obtained ISSCs for all of our vessels and implemented the various security measures addressed by the MTSA, SOLAS and the ISPS Codes to ensure that our vessels attain compliance with all applicable security requirements within the prescribed time periods. We do not believe these requirements will have a material financial impact on our operations.

IMO Cyber Security

The Maritime Safety Committee, at its 98th session in June 2017, adopted Resolution MSC.428(98) - Maritime Cyber Risk Management in Safety Management Systems. The resolution encourages administrations to ensure that cyber risks are appropriately addressed in existing safety management systems (as defined in the ISM Code) no later than the first annual verification of the company’s Document of Compliance after January 1, 2021. Owners risk having ships detained if they have not included cyber security in the SMS of ships by January 1, 2021.

Vessel Recycling Regulations

The EU has adopted a regulation that seeks to facilitate the ratification of the IMO Recycling Convention and sets forth rules relating to vessel recycling and management of hazardous materials on vessels. In addition to new requirements for the recycling of vessels, the new regulation contains rules for the control and proper management of hazardous materials on vessels and prohibits or restricts the installation or use of certain hazardous materials on vessels. The new regulation applies to vessels flying the flag of an EU member state and certain of its provisions apply to vessels flying the flag of a third country calling at a port or anchorage of a member state. For example, when calling at a port or anchorage of a member state, a vessel flying the flag of a third country will be required, among other things, to have on board an inventory of hazardous materials that complies with the requirements of the new regulation and the vessel must be able to submit to the relevant authorities of that member state a copy of a statement of compliance issued by the relevant authorities of the country of the vessel’s flag verifying the inventory. The new regulation will take effect on non-EU-flagged vessels calling on EU ports of call beginning on December 31, 2020.

Classification and Inspection

All our vessels are certified as being “in class” by a classification society member of the International Association of Classification Societies such as Lloyds Register of Shipping, Bureau Veritas, American Bureau of Shipping, RINA SpA, and Nippon Kaiji Kyokai. All new and secondhand vessels that we purchase must be certified prior to their delivery under our standard contracts and memoranda of agreement. If the vessel is not certified on the date of closing, we have no obligation to take delivery of the vessel. Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as “in class” by a classification society that is

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a member of the International Association of Classification Societies. Every vessel’s hull and machinery is “classed” by a classification society authorized by its country of registry. The classification society certifies that the vessel has been built and maintained in accordance with the rules of such classification society and complies with applicable rules and regulations of the country of registry of the vessel and the international conventions of which that country is a member. Each vessel is inspected by a surveyor of the classification society every year—an annual survey, every two to three years—an intermediate survey, and every four to five years—a special survey. Vessels also may be required, as part of the intermediate survey process, to be dry-docked every 30 to 36 months for inspection of the underwater parts of the vessel and for necessary repairs related to such inspection; alternatively, such requirements may be met concurrently with the special survey.

In addition to the classification inspections, many of our customers, including the major oil companies, regularly inspect our vessels as a precondition to chartering voyages on these vessels. We believe that our well-maintained, high quality tonnage should provide us with a competitive advantage in the current environment of increasing regulations and customer emphasis on quality of service.

All areas subject to surveys as defined by the classification society, are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years.

Vessels are drydocked for the special survey for inspection of the underwater parts and for repairs related to inspections. If any defects are found, the classification surveyor will issue a “recommendation” which must be rectified by the ship owner within the prescribed time limits.

Risk of Loss and Liability Insurance

General

The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. While we believe that our present insurance coverage is adequate, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.

Hull and Machinery Insurance

We have obtained marine hull and machinery and war risk insurance, which include the risk of actual or constructive total loss, for all of our vessels. The vessels are each covered up to at least fair market value, with deductibles of $100,000 per vessel.

We also maintain increased value insurance for most of our vessels. Under the increased value insurance, in case of total loss of the vessel, we will be able to recover the sum insured under the increased value policy in addition to the sum insured under the Hull and Machinery policy. Increased value insurance also covers excess liabilities which are not recoverable in full by the Hull and Machinery policies by reason of under insurance.

Protection and Indemnity Insurance

Protection and indemnity insurance, is a form of mutual indemnity insurance, which covers our third party liabilities in connection with our shipping activities. It is provided by non-profit-making protection and indemnity commonly known as P&I Associations or “clubs.” This insurance provides cover towards third-party liability and other related expenses of injury or death of crew, passengers and other third parties, loss or damage to cargoes, claims arising from collisions with other vessels, damage to third-party properties, pollution arising

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from oil or other substances, and salvage, towing and other related costs, including wreck removal. Subject to the “capping” discussed below, our coverage, except for pollution, is unlimited.

Our current protection and indemnity insurance provides cover for Oil Pollution up to $1.0 billion per vessel per incident. The 13 P&I Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. Claims pooling between the clubs is regulated by the Pooling Agreement which defines the risks that can be pooled and how losses are to be shared between the participating clubs. The Pool provides a mechanism for sharing all claims in excess of US$10 million up to, approximately US$8 billion.

Under the current structure, clubs’ contributions to claims in the lower pool layer from $10 million to $50 million are assessed on a tripartite formula which takes account of each club’s contributing tonnage, premium and claims record. For claims falling in the upper pool layer from $50 million to $100 million, 7.5% is retained by the club bringing the claim and 92.5% is shared by all on a tonnage-weighted basis.

The Group clubs arrange a common market reinsurance contract to provide reinsurance for claims which exceed the upper limit of the pool (US $100 million) up to an amount of US $3.1 billion any one claim (US $1 billion for Oil Pollution claims). It is said to be the largest single marine reinsurance contract in the market.

As members of Mutual P&I Associations, we may become subject to unbudgeted supplementary calls payable to the P&I Club depending on its financial year results that they are determined by 3 main parameters, i.e their exposure from payment of claims, the income through premium and the income arising from investments. Our aim at every renewal is to conclude our P&I insurance with “A rated” P&I clubs as this, amongst other benefits, eliminates the risk of unbudgeted supplementary calls being imposed.

Competition

We operate in a highly competitive global market based primarily on supply and demand of vessels and cargoes. While the worldwide LPG sector is comparatively smaller than other shipping sectors, consisting of vessels of varying sizes between 1,000 and 85,000 cbm, it is a diversified global market with many charterers, owners and operators of vessels. As of April 1, 2020, our LPG carrier fleet, including our eight JV vessels, had an average age of 9.2 years. Accordingly, we believe we are well positioned from a competitive standpoint in terms of our vessels meeting the ongoing needs of charterers. Also, as of April 1, 2020, we had one of the largest single-owned fleets in our primary sector segment (3,000 cbm to 8,000 cbm), which, in our view, also positions us well from the standpoint of charterers and competitors. We believe, however, that the LPG shipping sector will continue to be highly competitive, and will be driven by both energy production and consumption.

Ownership of medium range product carriers and crude oil tankers capable of transporting crude oil and refined petroleum products, such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, is highly diversified and is divided among many independent tanker owners. Many oil companies and other oil trading companies, the principal charterers of our product carriers and crude oil tankers, also operate their own vessels and transport oil for themselves and third party charterers in direct competition with independent owners and operators. Competition for charters, including for the transportation of oil and oil products, can be intense and depends on price as well as on the location, size, age, condition, specifications and acceptability of the vessel and its operator to the charterer and is frequently tied to having an available vessel with the appropriate approvals from oil majors. Principal factors that are important to our charterers include the quality and suitability of the vessel, its age, technical sophistication, safety record, compliance with IMO standards and the heightened industry standards that have been set by some energy companies, and the competitiveness of the bid in terms of overall price.

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Seasonality

The LPG carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of propane and butane for heating during the winter months. Tanker markets are typically stronger in the winter months as a result of increased oil consumption in the northern hemisphere, but weaker in the summer months as a result of lower oil consumption in the northern hemisphere and refinery maintenance. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. As a result, our revenues may be stronger in fiscal quarters ended December 31 and March 31 and relatively weaker during the fiscal quarters ended June 30 and September 30, as was generally the case in each of the last five fiscal years other than the fourth quarter of 2018 which did not reflect this typical strength mostly as a result of weak conditions in the Asian LPG market.

C. Organizational Structure

As of April 1, 2020, other than the entities owning the JV Vessels as indicated therein, we were the sole owner of all the outstanding shares of the subsidiaries listed in Exhibit 8.

D. Properties

Other than our vessels we do not have any material property. For information on our fleet, see “Item 4. Information on the Company—Business Overview.” Our vessels are subject to priority mortgages, which secure our obligations under our various credit facilities. For further details regarding our credit facilities, refer to “Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Credit Facilities.”

We have no freehold or material leasehold interest in any real property. We lease office space from an affiliated company of Stealth Maritime. See “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions—Office Space.”

Item 4A. Unresolved Staff Comments

None.

Item 5. Operating and Financial Review and Prospects

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this Annual Report. This discussion includes forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under “Item 3. Key Information—Risk Factors” and elsewhere in this Annual Report, our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

We are a provider of international seaborne transportation services to LPG producers and users, as well as crude oil and product carriers to oil producers, refineries and commodities traders. As of December 31, 2019, we operated a fleet of 43 LPG carriers, including one LPG carrier we charter-in and five JV vessels, that carry various petroleum gas products in liquefied form, including propane, butane, butadiene, isopropane, propylene and VCM (“Vinyl Chloride Monomer”), three medium range product carriers that carry refined petroleum products such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, and one Aframax tanker which is used for carrying crude oil, and had contracted to acquire one LPG carrier newbuilding under construction with expected delivery in the first quarter of 2021. In the first quarter of 2020, we completed the acquisition of three 2010-built, 35,000 cbm LPG carriers pursuant to a joint venture arrangement, in which we have a 51% equity interest. Accordingly, as of April 1, 2020, our fleet is composed of 45 LPG carriers including eight JV vessels which aggregate 165,121 cbm with a total capacity of approximately 420,527 cubic meters

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(cbm), three medium range product carriers with a total capacity of 140,000 dwt and one 115,804 dwt Aframax tanker. For the years ended December 31, 2017, 2018 and 2019, we owned an average of 52.6, 50.8 and 42.6 vessels, respectively, generating revenues of $154.3 million, $164.3 million and $144.3 million, respectively.

In the first quarter of 2019, we sold a 49.9% equity interest in the subsidiaries owning four of our vessels, the Gas Haralambos, the Gas Defiance, the Gas Shuriken and the Eco Lucidity, to a leading maritime-focused investor. We and our manager, Stealth Maritime, will continue to manage these vessels. These four vessels were classified as held for sale as of December 31, 2018, and following the closing date of these sales, the entities owning these vessels, including associated debt totaling $30.1 million, are no longer fully consolidated in our balance sheet as we and the investor have joint control over the vessels. In the third quarter of 2019 we acquired a 2007-built, 38,000 cbm LPG carrier, the Eco Nebula, with this same investor, in which we have a 50.1% equity interest. In the first quarter of 2020, a separate joint venture arrangement with an unaffiliated third party, in which we have a 51% equity interest, acquired three 2010-built Medium Gas Carriers, the Gaschem Hamburg, the Gaschem Stade and the Gaschem Bremen, of an aggregate capacity of 105,650 cbm. Our equity interest percentages in the entities owning these eight vessels, which we refer to as the JV Vessels, are accounted for under the equity method.

We, through Stealth Maritime, manage the employment of our fleet. We intend to continue to deploy our fleet under period charters including time and bareboat charters, which can last up to several years, and spot market or voyage charters, which generally last from one to six months, subject to market conditions. Period charters and short term time charters are for a fixed period of time.

• Charters and revenues. Under a time charter, the charterer pays a fixed rate per day over the term of the charter; a time charter, including a short term time charter, may provide for rate adjustments and profit sharing. Under a bareboat charter, the charterer pays us a fixed rate for its use of our ship for the term of the charter. Under a voyage charter, we agree to transport a specified cargo from a loading port to a discharging port for a fixed amount.

• Charters and expenses. Under a time charter, we are responsible for the vessel’s operating costs (crew, provisions, stores, lubricants, insurance, maintenance and repairs) incurred during the term of the charter, while the charterer pays voyage expenses (port, canal and fuel costs) that are unique to each particular voyage. Under a bareboat charter, the charterer is responsible for all vessel operating expenses and voyage expenses incurred during the term of the charter. Under a voyage or spot charter, we are responsible for both the vessel operating expenses and the voyage expenses incurred in performing the charter.

As of April 1, 2020 and excluding our JV vessels 10 of our LPG carriers, and one of our medium range product carriers were deployed on bareboat charters, under which the charterer is responsible for the costs associated with the operations of the vessels. Of the remaining vessels in our fleet excluding our JV vessels, as of April 1, 2020, 4 were employed in the spot market, with the remaining vessels deployed on time and charters. As of April 1, 2020 and excluding our JV vessels, 66% of our anticipated fleet days for were covered by period charter contracts for the remainder of 2020 and 28% for 2021. The corresponding forward coverage as of April 1, 2019 was 68% for the remainder of 2019 and 28% for 2020. We are, however, exposed to prevailing charter rate fluctuations for the remaining anticipated fleet days not covered by period charter contracts, as well as performance by our counterparties for the chartered days.

A. Operating Results

Factors Affecting Our Results of Operations

We believe that the important measures for analyzing trends in the results of our operations consist of the following:

• Calendar days. We define calendar days as the total number of days in a period during which each vessel in our fleet was in our possession including off-hire days associated with major repairs,

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drydockings or special or intermediate surveys. Calendar days are an indicator of the size of our fleet over a period and affect both the amount of revenue and the amount of expense that we record during that period. In the first quarter of 2019, we agreed to sell a 49.9% equity interest in the entities owning four of our LPG carriers. We may also elect to sell additional vessels in our fleet from time to time, generally older and smaller vessels, such as the one LPG carrier we agreed to sell in 2019 (excluding four of our vessels in which we sold a minority interest in our joint venture arrangement) and seven LPG carriers we agreed to sell in 2018. Four of our LPG carriers are subject to arrangements pursuant to which the charterer has options to purchase the vessels at declining stipulated prices at any time during the current charter for the respective vessels, which expire in 2022. In addition four of our vessels are subject to arrangements pursuant to which the charterer has options to purchase the vessels at the end of their current charters in 2021 and 2022 and 2029. If any of these purchase options were to be exercised, the expected size of our LPG carrier fleet would be reduced, and as a result our anticipated level of calendar days and revenues would be reduced.

• Voyage days. We define voyage days as the total number of days in a period during which each vessel in our fleet was in our possession net of off-hire days associated with major repairs, drydockings or special or intermediate surveys. The shipping industry uses voyage days (also referred to as available days) to measure the number of days in a period during which vessels are available to generate revenues.

• Fleet utilization; Fleet operational utilization. We calculate fleet utilization by dividing the number of our voyage days during a period by the number of our calendar days during that period, and we calculate fleet operational utilization by dividing the number of our voyage days-excluding commercially idle days-during a period, by the number of our calendar days during that period. The shipping industry uses fleet utilization to measure a company’s efficiency in minimizing the amount of days that its vessels are off-hire for reasons such as scheduled repairs, vessel upgrades or drydockings and other surveys, and uses fleet operational utilization to also measure a company’s efficiency in finding suitable employment for its vessels.

• Cyclicality. The international gas carrier market, including the transport of LPG, is cyclical with attendant volatility in profitability, charter rates and vessel values, resulting from changes in the supply of, and demand for, LPG carrier capacity. From the last quarter of 2011 until the third quarter of 2014, LPG carrier market conditions generally improved from low levels with higher LPG carrier charter rates and utilization levels, however, the impact of the dramatic decline in oil prices on demand for LPG adversely affected LPG carrier charter rates and utilization levels from the fourth quarter of 2014 until the latter part of 2017, particularly in the smaller vessel classes. In 2017, there were increases in oil prices and in the second half of 2017 some limited improvement in LPG carrier charter rates and utilization levels which continued in 2018 and until the beginning of 2020, when the broader shipping market was globally affected by the outbreak of the COVID-19 virus and the resulting disruptions to the international shipping industry and energy demand, including the recent sharp decline in the price of oil, have and could continue to negatively affect small and medium range LPG carrier charter rates.

As of April 1, 2020 and including our JV vessels, we had 6 vessels trading in the spot market and 21 LPG carriers with charters expiring in 2020. Charter rates currently face significant downside risks, including in the event of renewed weakness in the global economy and lower demand for the seaborne transport of LPG, particularly resulting from the COVID-19 outbreak and lower oil prices, as well as reduced supply in the event of lower oil and natural gas production. With regard to the vessels in the spot market, we are exposed to changes in spot rates for LPG carriers and such changes affect our earnings and the value of our LPG carriers at any given time. When LPG vessel prices are considered to be low, companies not usually involved in shipping may make speculative vessel orders, thereby increasing the global supply of LPG carriers, satisfying demand sooner and potentially suppressing charter rates. With regard to the four tankers in our fleet, two of our product carriers are employed on fixed-rate time charters expiring in May 2020 and June 2020, respectively, and one product carrier is deployed on fixed rate bareboat charter expiring in September 2020, while the Aframax tanker is

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operating in the spot market. We have had less exposure to fluctuations in charter rates for these vessels as we have historically employed them on multi-year charters; however, the charters for three of these vessels expire this year and one of these vessels is operating in the spot market, which exposes us to prevailing charter rates in the product and crude tanker sectors when these vessels’ existing charters expire. Currently tanker charter market rates are relatively strong, mainly due to reserve restocking and storage activity driven by very low oil prices which have been impacted by COVID-19 and increased production by Saudi Arabia and other oil producing countries prior to recent cuts; however, charter rates are subject to downside risks including the possibility of a prolonged downturn in global economic activity due to the COVID-19 outbreak which has reduced demand for oil and could reduce demand for the seaborne transportation of oil and oil products.

• Seasonality. The LPG carrier market is typically stronger in the fall and winter months in anticipation of increased consumption of propane and butane for heating during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel scheduling and supplies of certain commodities. As a result, our revenues may be stronger in fiscal quarters ending December 31 and March 31 and relatively weaker during the fiscal quarters ending June 30 and September 30, as was the case in 2016 and 2017, however, the fourth quarter of 2018 did not exhibit this strength mainly due to a weakness in the Asian LPG market. We have had limited exposure to seasonality with respect to our product carriers and Aframax tanker as these are deployed on long term or medium term fixed rate charters; however, the charters for three of these vessels expire this year and one of these vessels is operating in the spot market, which may expose us to seasonal changes in the tanker markets, which are typically stronger in the winter months as a result of increased oil consumption in the northern hemisphere but weaker in the summer months as a result of lower oil consumption in the northern hemisphere and refinery maintenance, to the extent we charter our tankers on shorter term charters.

Our ability to control our fixed and variable expenses, including those for commission expenses, crew wages and related costs, the cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses also affect our financial results. Factors beyond our control, such as developments relating to market premiums for insurance and the value of the U.S. dollar compared to currencies in which certain of our expenses, primarily crew wages, are denominated, can also cause our vessel operating expenses to increase. In addition, our net income is affected by our financing arrangements, including our interest rate swap arrangements.

Impact of COVID-19 on our Business

The spread of the COVID-19 virus, which was declared a pandemic by the World Health Organization in March 2020, has caused and will likely to continue to cause substantial disruptions in the global economy and trade, including reducing demand for energy, with many countries, ports and organizations, including those where we conduct a large part of our operations, having implemented measures to combat the outbreak, such as quarantines and travel restrictions. These conditions, particularly if they persist for prolonged period, could negatively affect our ability to secure charters at profitable rates, in a timely fashion without offhire time or at all, particularly for our vessels in the spot market or with charters expiring in 2020, as demand for additional charters could be severely affected. Our business, and the LPG shipping industry as a whole, is also likely to be impacted by delays in crew changes as well as delays in the construction of newbuild vessels, scheduled drydockings, intermediate or special surveys of vessels and ship repairs and upgrades, as well as reducing the availability of financing. The extent to which COVID-19 will impact our results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the duration and severity of the virus and the actions to contain or treat its impact.

Joint Ventures

As of April 1, 2020, eight of the vessels in our fleet were owned through two separate joint venture arrangements. Pursuant to one JV arrangement we sold a 49.9% equity interest in four JV vessels in the first

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quarter of 2019, and we acquired with the same JV arrangement a 38,000 cbm LPG carrier in the second quarter of 2019 in which we also have a 50.1% equity interest. See “Note 7 Investments in Joint Ventures” in our audited consolidated financial statements include elsewhere in this report, for additional information regarding this joint venture. In addition, we further acquired, through a separate joint venture, a 51% equity interest in three 35,000 cbm LPG carriers in the first quarter of 2020. We account for our equity interest in these joint ventures under the equity method of accounting.

Basis of Presentation and General Information

Revenues

Our voyage revenues are driven primarily by the number of vessels in our fleet, the number of voyage days during which our vessels generate revenues and the amount of daily charter hire that our vessels earn under charters which, in turn, are affected by a number of factors, including our decisions relating to vessel acquisitions and disposals, the amount of time that we spend positioning our vessels, the amount of time that our vessels spend in dry dock undergoing repairs, maintenance and upgrade work, the age, condition and specifications of our vessels and the levels of supply and demand in the LPG carrier, product carrier and crude oil tanker charter markets.

We employ our vessels under time, bareboat and spot charters. Bareboat charters provide for the charterer to bear the cost of operating the vessel and as such typically market rates for bareboat charters are lower than those for time charters. Vessels operating on period charters, principally time and bareboat charters, provide more predictable cash flows, but can yield lower profit margins than vessels operating in the spot charter market during periods characterized by favorable market conditions. As a result, during the time our vessels are committed on period charters we will be unable, during periods of improving charter markets, to take advantage of improving charter rates as we could if our vessels were employed only on spot charters. Vessels operating in the spot charter market generate revenues that are less predictable but may enable us to capture increased profit margins during periods of improving charter rates, although we are then exposed to the risk of declining LPG carrier, product carrier or crude oil tanker charter rates, which may have a materially adverse impact on our financial performance. If we commit vessels on period charters, future spot market rates may be higher or lower than those rates at which we have time chartered our vessels.

Voyage Expenses

Voyage expenses include port and canal charges, bunker (fuel oil) expenses and commissions. These charges and expenses increase in periods during which vessels are employed on the spot market, because under these charters, these expenses are for the account of the vessel owner. Under period charters, these charges and expenses, including bunkers (fuel oil) but excluding commissions which are always paid by the vessel owner, are paid by the charterer. Bunkers (fuel oil), the price of which declined beginning in the third quarter of 2014 into 2017 and then following a rise, decreased again in the beginning of 2020, accounted for 48.0% of total voyage expenses for the year ended December 31, 2019, 56.3% of total voyage expenses for the year ended December 31, 2018, and 42.4% of total voyage expenses for the year ended December 31, 2017. Commissions on hire are paid to our manager Stealth Maritime and/or third party brokers. Stealth Maritime receives a fixed brokerage commission of 1.25% on freight, hire and demurrage for each vessel based on our management agreement since 2005. In 2019, port and canal charges and bunker expenses represented a relatively small portion of our vessels’ overall expenses, 9.2%, because the majority of our vessels were employed under period charters, including time and bareboat charters, that require the charterer to bear such expenses. As of April 1, 2020, we had 4 vessels in the spot market for which we pay voyage expenses; the corresponding number as of April 1, 2019 was 7 and as of April 1, 2018 was 10.

Vessel Operating Expenses

Vessel operating expenses include crew wages and related costs, the cost of insurance, expenses for repairs and maintenance, the cost of spares and consumable stores, tonnage taxes and other miscellaneous expenses. Our

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ability to control these fixed and variable expenses, also affects our financial results. In addition, the type of charter under which our vessels are employed (time, bareboat or spot charter) also affects our operating expenses because we do not pay the operating expenses of vessels that we deploy on bareboat charters. Factors beyond our control, some of which may affect the shipping industry in general, including, for instance, developments relating to market prices for insurance and regulations related to safety and environmental matters may also cause these expenses to increase.

Management Fees

During each of the years ended December 31, 2017, 2018 and 2019, we paid Stealth Maritime, our fleet manager, a fixed rate management fee of $440 per day for each vessel in our fleet under spot or time charter and a fixed rate fee of $125 per day for each of the vessels operating on bareboat charter. These rates have been in effect since January 1, 2007. Stealth Maritime also receives a fee equal to 1.0% calculated on the price stated in the relevant memorandum of agreement for any vessel bought or sold by them on our behalf. From these management fees paid to Stealth Maritime, Stealth Maritime pays one technical manager that is responsible for the technical management of some of our vessels that are not technically managed by Stealth Maritime on a day-to-day basis.

General and Administrative Expenses

We incur general and administrative expenses that consist primarily of legal fees, audit fees, office rental fees, officers and board remuneration or reimbursement, directors and officers’ insurance, listing fees and other general and administrative expenses. Our general and administrative expenses also include our direct compensation expenses and the value of non-cash executive services provided through, and other expenses arising from, our management agreement with Stealth Maritime, our directors’ compensation and the value of the lease expense for the space we rent from Stealth Maritime. For our compensation expenses, pursuant to our management agreement, we currently reimburse Stealth Maritime for its payment of the compensation of our Chief Executive Officer, Chief Technical Officer and Internal Auditor. During the year ended December 31, 2019, such compensation was in the aggregate amount of $1.1 million plus $0.6 million of stock-based compensation expense relating to equity awards issued to our executive officers and non-executive members of our Board of Directors in August 2018 that vested in August 2019.

Inflation

Inflation has only a moderate effect on our expenses given current economic conditions. In the event that significant global inflationary pressures appear, these pressures would increase our operating, voyage, administrative and financing expenses.

Depreciation and Dry docking

We depreciate our vessels on a straight-line basis over their estimated useful lives, determined to be 30 years from the date of their initial delivery from the shipyard in the case of our LPG carriers and 25 years in the case of our product carriers and crude oil tanker. Depreciation is based on cost less the estimated scrap value of the vessels. We expense costs associated with dry dockings and special and intermediate surveys as incurred which may affect the volatility of our results. During 2019 and 2018, we dry docked 2 small LPG vessels and completed the docking survey of another small LPG vessel at a total cost of $1.1 million and 7 vessels at a total cost of $3.6 million, respectively. We expect that during 2020 our dry docking costs will be higher than in 2019, as 10 vessels are scheduled to be dry docked in 2020.

Impairment Loss

Based on the accounting standards followed by the Company, impairment losses are recognized on long-lived assets used in operations or held for sale, when indicators of impairment are present and the undiscounted

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cash flows estimated to be generated by those assets are less than their carrying amounts and the asset’s carrying value exceeds its fair value. The Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the consolidated statements of operations. For the years ended December 31 2019, 2018 and 2017, we recognized an impairment loss of $1.0 million on two of our oldest vessels, $11.4 million on eleven of our vessels and $6.5 million on seven of our oldest vessels, respectively.

Net (Gain)/Loss on Sale of Vessels

The carrying value of our vessels includes the original cost of the vessels plus capitalized expenses since acquisition relating to improvements and upgrading of the vessel, less accumulated depreciation and less any impairment. Depreciation is calculated using the straight line method, from the date the vessel was originally built, over an estimated useful life of 25 years for the tankers in our fleet and 30 years for the LPG carriers in our fleet. LPG carriers tend to trade for longer periods due to the less corrosive nature of the cargoes they carry. Residual values used in depreciation calculations are based on $350 per light weight ton.

In 2019, we sold and delivered to their new owners three of our small LPG vessels, the Gas Sincerity, the Gas Texiana and the Gas Ethereal, all for further trading. In addition, in 2019, we sold 49.9% equity stake of four of our small LPG vessels, the Gas Defiance, the Gas Shuriken, the Gas Haralambos and the Eco Lucidity to our joint venture arrangement. From these sales, we recognized an aggregate net loss of $0.5 million. In 2018, we sold and delivered to their new owners the Gas Enchanted, the Gas Evoluzione, the Gas Legacy, the Gas Sikousis, and the Gas Marathon, all for further trading; we recognized an aggregate loss of $0.8 million on the sale of these vessels. Another two of our vessels, the Gas Sincerity and the Gas Texiana, which were agreed to be sold in 2018, were delivered to their new owners in the first quarter of 2019. In 2017, we sold the Gas Moxie, the Gas Nirvana, the Gas Icon and the Gas Emperor, for further trading, for which we recognized an aggregate loss of $0.1 million.

During the year ended December 31, 2014, we sold two vessels, the Gas Cathar and the Gas Premiership, that were leased back by our Company on a bareboat hire basis. The aforementioned transaction is classified as a sale and lease back transaction and in accordance with US GAAP ASC 840-40, the net gain on sale of vessels of $0.8 million must be amortized throughout the lease period of the vessels. The lease for the Gas Cathar expired in the first quarter of 2020 while the lease for the Gas Premiership expired in the fourth quarter of 2018.

Loss on Derivatives

Six of our nine interest rate swaps, as of December 31, 2019, are accounted for as cash flow hedges and the changes in their fair values are recorded in “Accumulated other comprehensive income”. The remaining three interest rate swaps, as of December 31, 2019, do not qualify for hedge accounting and the changes in their fair values are recorded in earnings under “Loss on Derivatives”. All changes in the fair value of our cash flow interest rate swaps and foreign currency exchange agreements that are not accounted for as cash flow hedges, are recorded in earnings under “Loss on Derivatives.” To the extent we have interest rate swaps and foreign currency exchange agreements in this category, this increases the potential volatility in our reported earnings, in comparison to the case where such arrangements did qualify for hedge accounting, due to the recognition of non-cash fair value movements of our cash flow interest rate swaps and foreign currency exchange arrangements directly in our statement of operations.

Interest Expense and Finance Costs

We have entered into credit facilities to fund a portion of the purchase price of the vessels in our fleet, which are described in the “—Credit Facilities” section below. We incur interest expense on outstanding indebtedness under these credit facilities, which we include in interest expense. We also incurred financing costs

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in connection with establishing those facilities, which are deferred and amortized over the period of the facility, which we also include in interest expense. We will incur additional interest expenses under any new credit facilities we enter into to finance or refinance the purchase price of additional vessels as described in the “Liquidity and Capital Resources” section below.

Results of Operations

Year ended December 31, 2019 compared to the year ended December 31, 2018

The average number of vessels in our fleet was 42.6 for the year ended December 31, 2019 compared to 50.8 for the year ended December 31, 2018.

REVENUES—Voyage revenues for the year ended December 31, 2019 were $144.3 million compared to $164.3 million for the year ended December 31, 2018, a decrease of $ 20.0 million, primarily due to the strategic decision to sell mostly older small LPG vessels for further trading. Total calendar days for our fleet were 16,328 for the year ended December 31, 2019 compared to 19,554 for the year ended December 31, 2018; due to the decrease in the average number of vessels in our fleet. Of the total calendar days in 2019, 4,191 or 25.7% were bareboat charter days and 9,350 or 57.3% were time charter days and 2,689 or 16.5% were spot days. This compares to 4,691 or 24.0% bareboat charter days and 11,005 or 56.3%-time charter days and 3,667 or 18.8% were spot days in 2018. Our fleet operational utilization was 97.5% and 95.5% for the years ended December 31, 2019 and December 31, 2018, respectively.

VOYAGE EXPENSES—Voyage expenses were $17.0 million for the year ended December 31, 2019 compared to $20.7 million for the year ended December 31, 2018, a decrease of $3.7 million, or 17.9%. This was primarily due to the decreased number of spot days by 26.7%. Voyage expenses consisted largely of bunker charges in the amount of $8.2 million for 2019 compared to bunker charges in the amount of $11.6 million for 2018, a decrease of $3.4 million. Under spot charters we are responsible for paying the vessels’ bunkers consumption, as well as most expenses. Voyage expenses also included port expenses of $3.2 million for the year ended December 31, 2019 compared to $2.8 million for the year ended December 31, 2018, an increase of $0.4 million and commissions to third parties which were $2.7 million for the year ended December 31, 2019 and $2.8 million for the year ended December 31, 2018.

VESSEL OPERATING EXPENSES—Vessel operating expenses were $49.6 million for the year ended December 31, 2019 compared to $60.4 million for the year ended December 31, 2018, a decrease of $10.8 million, or 17.9%. The decrease in operating expenses, was due to the net reduction of the average number of our owned fleet by 8.2 vessels. Other components of vessel operating expenses were repairs and maintenance costs which decreased from $7.4 million in the year ended December 31, 2018 to $5.7 million in the year ended December 31, 2019 mainly due to our fleet contraction.

DRY DOCKING COSTS—Dry docking costs were $1.1 million for the year ended December 31, 2019 compared to $3.6 million for the year ended December 31, 2018, a decrease of $2.5 million, or 69.4%. Drydocking costs for the year ended December 31, 2019 related to the drydocking of two small LPG vessels and the docking survey of one small LPG vessel. For the year ended December 31, 2018, seven vessels were drydocked.

MANAGEMENT FEES—Management fees were $5.7 million for the year ended December 31, 2019 compared to $7.0 million for the year ended December 31, 2018, a decrease of $1.3 million or 18.6%. The decrease was due to the lower average number of vessels in the fleet. The daily management fees per vessel did not change during these periods and remained at $440 per day for vessels under time and spot charter and at $125 per day for vessels under bareboat charter.

GENERAL AND ADMINISTRATIVE EXPENSES—General and administrative expenses for the year ended December 31, 2019 were $3.7 million compared to $3.0 million for the year ended December 31, 2018, an

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increase of $0.7 million or 23.3%, mainly due to higher stock based compensation charges incurred within the year. Included in the general and administrative expenses for the years ended December 31, 2019 and December 31, 2018 are $1.1 million and $1.2 million respectively paid to our manager for the services of the Company’s executive officers pursuant to our management agreement. Stock based compensation expense for vested and non-vested shares granted as equity awards, which is also part of the general and administrative expenses, increased to $0.6 million during the year ended December 31, 2019 from $0.3 million during the year ended December 31, 2018.

DEPRECIATION—Depreciation expenses for the 42.6 average number of vessels in our fleet for the year ended December 31, 2019 were $37.7 million compared to $41.3 million for the 50.8 average number of vessels in our fleet for the year ended December 31, 2018 a decrease of $3.6 million or 8.7%. This decrease in depreciation expenses was due to the net reduction of the average number of vessels in our owned fleet.

IMPAIRMENT LOSS- During the year ended December 31, 2019 the Company recognized an impairment loss of $1.0 million for two of its oldest LPG vessels. During the year ended December 31, 2018 the Company recognized an impairment loss of $11.4 million for eleven of its vessels, six of which were classified as held for sale as of December 31, 2018. With regards to the remaining five vessels for which we incurred impairment charges, one was delivered to her new owners in the second quarter of 2018, three were delivered to their new owners in the third quarter of 2018 while the remaining one was delivered to her new owners in the fourth quarter of 2018.

NET (GAIN)/ LOSS ON SALE OF VESSELS—During the year 2019 we delivered to their new owners, the Gas Sincerity, the Gas Texiana and we agreed and concluded the sale of the Gas Ethereal from all of which we incurred a net loss on the sale of these of vessels of $0.5 million. During the year ended December 31, 2018 we agreed to the sale of seven vessels. Five of these vessels the Gas Enchanted, the Gas Evoluzione, the Gas Legacy, the Gas Sikousis, and the Gas Marathon were delivered to their new owners within 2018 and for these vessels we incurred a net loss on the sale of these vessels of $0.8 million. The remaining two vessels agreed to be sold within the year 2018, the Gas Sincerity and the Gas Texiana were as stated above, delivered to their new owners within the first quarter of 2019.

OTHER OPERATING COSTS/(INCOME)—During the year ended December 31, 2019 our other operating income was nil. During the year ended December 31, 2018 we received $0.6 million of legal claims. This income was partially offset by a $0.1 million charge related to the delay of the delivery of our new 22,000 cbm semi-refrigerated vessels.

INTEREST AND FINANCE COSTS—Interest and finance costs were $21.0 million for the year ended December 31, 2019 compared to $23.3 million for the year ended December 31, 2018, a decrease of $2.3 million, or 9.9%. The decrease in interest and finance cost was mostly attributed to the decrease of our leverage.

INTEREST INCOME—Interest income was $0.8 million for the year ended December 31, 2019 compared to $0.6 million for the year ended December 31, 2018, an increase of $0.2 million related mostly to a higher amount of time deposits and higher deposit rates offered compared to rates offered in the same period of last year.

EQUITY GAIN IN JOINT VENTURES- was $0.49 million in the year ended December 31, 2019 compared to nil in the year ended December 31, 2018, which related to the financial performance of our joint venture established in the first quarter of 2019, pursuant to which we sold a 49.9% equity interest in the subsidiaries owning four of our vessels, the Gas Haralambos, the Gas Defiance, the Gas Shuriken and the Eco Lucidity, and acquired a 2007-built, 38,000 cbm LPG carrier, the Eco Nebula, in the second quarter of 2019 in which we also have a 50.1% equity interest.

NET INCOME/(LOSS)—As a result of the above factors, we recorded a net income of $2.1 million for the year ended December 31, 2019, compared to net loss of $12.3 million for the year ended December 31, 2018.

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Year ended December 31, 2018 compared to the year ended December 31, 2017

The average number of vessels in our fleet was 50.8 for the year ended December 31, 2018 compared to 52.6 for the year ended December 31, 2017.

REVENUES—Voyage revenues for the year ended December 31, 2018 were $164.3 million compared to $154.3 million for the year ended December 31, 2017, an increase of $10.0 million, primarily due to improved market conditions. Total calendar days for our fleet were 19,554 for the year ended December 31, 2018 compared to 19,917 for the year ended December 31, 2017; due to the decrease in the average number of vessels in our fleet. Of the total calendar days in 2018, 4,691 or 24.0% were bareboat charter days and 11,005 or 56.3% were time charter days and 3,667 or 18.8% were spot days. This compares to 4,934 or 24.8% bareboat charter days and 11,838 or 59.4%-time charter days and 2,945 or 14.8% were spot days in 2017. Our fleet operational utilization was 95.5% and 96.2% for the years ended December 31, 2018 and December 31, 2017, respectively.

VOYAGE EXPENSES—Voyage expenses were $20.7 million for the year ended December 31, 2018 compared to $15.7 million for the year ended December 31, 2017, an increase of $5.0 million, or 31.8%. This was primarily due to the increased number of spot days and the higher bunker prices prevailing in 2018 compared to 2017. Voyage expenses consisted largely of bunker charges in the amount of $11.6 million for 2018 compared to bunker charges in the amount of $6.7 million for 2017, an increase of $4.9 million. Under spot charters we are responsible for paying the vessels’ bunkers consumption, as well as most expenses. Voyage expenses also included port expenses of $2.8 million for the year ended December 31, 2018 compared to $2.5 million for the year ended December 31, 2017, an increase of $0.3 million and commissions to third parties which were $2.8 million for the year ended December 31, 2018 and $2.7 million for the year ended December 31, 2017.

VESSEL OPERATING EXPENSES—Vessel operating expenses were $60.4 million for the year ended December 31, 2018 compared to $59.4 million for the year ended December 31, 2017, an increase of $1.0 million, or 1.7%. The increase in operating expenses, in spite of the net reduction of the average number of our owned vessels by two, was mainly driven by the operation of three additional new 22,000 cbm semi-refrigerated LPG vessels not yet delivered in the same period of last year which are more expensive to operate compared to smaller LPG vessels. Other components of vessel operating expenses were repairs and maintenance costs which increased from $6.4 million in the year ended December 31, 2017 to $7.4 million in the year ended December 31, 2018 mainly due to some unforeseen technical needs of some older vessels.

DRY DOCKING COSTS—Dry docking costs were $3.6 million for the year ended December 31, 2018 compared to $3.5 million for the year ended December 31, 2017, an increase of $0.1 million, or 2.9%. For each of the year ended December 31, 2018 and the year ended December 31, 2017 seven vessels were dry docked.

MANAGEMENT FEES—Management fees were $7.0 million for the year ended December 31, 2018 compared to $7.2 million for the year ended December 31, 2017, a decrease of $0.2 million or 2.8%. The decrease was due to the lower average number of vessels in the fleet. The daily management fees per vessel did not change during these periods and remained at $440 per day for vessels under time and spot charter and at $125 per day for vessels under bareboat charter.

GENERAL AND ADMINISTRATIVE EXPENSES—General and administrative expenses for the year ended December 31, 2018 were $3.0 million compared to $2.9 million for the year ended December 31, 2017, an increase of $0.1 million or 3.4%. Included in the general and administrative expenses for the years ended December 31, 2018 and December 31, 2017 are $1.2 million and $1.1 million respectively paid to our manager for the services of the Company’s executive officers pursuant to our management agreement. Stock based compensation expense for the vested and non- vested shares, which is also part of the general and administrative expenses, increased to $0.3 million during the year ended December 31, 2018 from $0.1 million during the year ended December 31, 2017.

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DEPRECIATION—Depreciation expenses for the 50.8 average number of vessels in our fleet for the year ended December 31, 2018 were $41.3 million compared to $38.9 million for the 52.6 average number of vessels in our fleet for the year ended December 31, 2017 an increase of $2.4 million or 6.2%. This increase in depreciation expenses, in spite of the net reduction of the average number of our owned vessels by two was mainly due to the addition of three 22,000 cbm semi-refrigerated vessels which have significantly higher carrying values, and therefore associated annual depreciation expense compared to a smaller LPG vessel.

IMPAIRMENT LOSS—During the year ended December 31, 2018 the Company recognized an impairment loss of $11.4 million for eleven of its vessels, six of which were classified as held for sale as of December 31, 2018. With regards to the remaining five vessels for which we incurred impairment charges, one was delivered to her new owners in the second quarter of 2018, three were delivered to their new owners in the third quarter of 2018 while the remaining one was delivered to their new owners in the fourth quarter of 2018. During the year ended December 31, 2017, the Company recognized an impairment loss of $6.5 million for seven of its oldest vessels, four of which were sold in 2017.

NET (GAIN)/ LOSS ON SALE OF VESSELS—During the year ended December 31, 2018 we agreed to the sale of seven vessels. Five of these vessels the Gas Enchanted, the Gas Evoluzione, the Gas Legacy, the Gas Sikousis, and the Gas Marathon were delivered to their new owners within 2018 and for these vessels we incurred a net loss on the sale of these vessels of $0.8 million. The remaining two vessels agreed to be sold within the year 2018, the Gas Sincerity and the Gas Texiana were delivered to their new owners within the first quarter of 2019. During the year ended December 31, 2017 we sold four of our oldest vessels, the Gas Moxie, the Gas Nirvana, the Gas Icon and the Gas Emperor all for further trading. The net loss on the sale of these vessels was $77.3 thousands.

OTHER OPERATING COSTS/(INCOME) — During the year ended December 31, 2018 we received $0.6 million of legal claims. This income was partially offset by a $0.1 million charge related to the delay of the delivery of our new 22,000 cbm semi-refrigerated vessels.

INTEREST AND FINANCE COSTS—Interest and finance costs were $23.3 million for the year ended December 31, 2018 compared to $16.7 million for the year ended December 31, 2017, an increase of $6.6 million, or 39.5%. The increase in interest and finance cost was mainly due the increase in our bank debt and to an increase in Libor rates.

INTEREST INCOME—Interest income was $0.6 million for the year ended December 31, 2018 compared to $0.3 million for the year ended December 31, 2017, an increase of $0.3 million related mostly to a higher amount of time deposits and higher deposit rates offered compared to rates offered in the same period of last year.

NET INCOME/(LOSS)—As a result of the above factors, we recorded a net loss of $12.3 million for the year ended December 31, 2018, compared to net loss of $1.2 million for the year ended December 31, 2017.

B. Liquidity and Capital Resources

As of December 31, 2019, we had cash and cash equivalents of $68.5 million, restricted cash of $1.6 million classified as current assets and restricted cash of $12.1 million classified as non- current assets.

Our principal sources of funds for our liquidity needs are cash flows from operations and long-term bank borrowings. Additional sources of funds include proceeds from vessel sales and any equity offerings.

We had net proceeds from vessel sales of $18.7 million in 2019, $29.7 million in 2018 and $11.5 million in 2017. We last raised capital in 2014, through three registered common stock offerings with net proceeds of approximately $112.3 million. Our principal use of funds has been to acquire our vessels, maintain the quality of our vessels, service our debt and fund working capital requirements, as well as to repurchase shares of our common stock.

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Our liquidity needs, as of December 31, 2019 through the end of 2020, primarily relate to scheduled debt repayments, funding expenses for operating our vessels, general and administrative expenses and committed capital expenditures as well as any vessel acquisitions we elect to make either independently or in collaboration with a third party investor. As of December 31, 2019 our committed capital expenditures in 2020 consist of a further advance payment for the 11,000 cbm LPG carrier newbuilding to be delivered in August 2021, in an amount of approximately $2.9 million. In addition to this we have 10 scheduled drydockings for 2020, the costs of which are anticipated to be covered from our operating cash flows, while we do not have material expenditure requirements for water ballast system installations. In the first quarter of 2020, we invested $42.0 million from cash on hand for the acquisition of three MGC vessels through a joint venture arrangement, in which we have 51% equity interest. In the beginning of 2020 we received a term sheet to partially finance these vessels with the corresponding loan amount for our equity stake invested amounting to approximately $26.0 million, for which the Company would provide a corporate guarantee and receive the proceeds of such amount of borrowings. Generally, our primary sources of funds, in the short term, have been cash from operating activities and in 2019 proceeds from sale of vessels and in the long term, bank borrowings and equity financings.

As of December 31, 2019, our aggregate debt outstanding net of deferred finance charges was $366.0 million, of which $40.7 million was classified as current liability.

We believe our working capital is sufficient for our present short-term liquidity requirements. We believe our internally generated cash flows will be sufficient to fund our operations, including working capital requirements, for at least 12 months taking into account our existing capital commitments and debt service requirements, as well as the expected impact of the COVID-19 outbreak on the global economy and our business which could however, be even more severe than currently anticipated.

For a description of our credit facilities please refer to the discussion under the heading “—Credit Facilities” below. Our dividend policy and stock repurchases will also affect our liquidity position. See “Item 8. Financial Information—Dividend Policy.” On March 31, 2020, we announced the commencement of a tender offer to purchase up to 4,761,904 shares, or about 12.1%, of our outstanding common stock using funds available from cash and cash equivalents at a price of $2.10 per share. The tender offer expired at 5:00 P.M., New York City Time, on April 28, 2020. Based on the preliminary count by the depositary for the tender offer, the Company expects to repurchase a total of 1,366,045 shares of its common stock through the tender offer at a price of $2.10 per share, for a total cost of $2,868,694.50, excluding fees and expenses. The total of 1,366,045 shares that the Company expects to accept for repurchase represents approximately 3.5% of the Company’s total outstanding shares of common stock as of April 28, 2020. The number of shares of common stock expected to be purchased by the Company and the aggregate purchase price for the shares are preliminary and subject to final confirmation by the depositary and the proper delivery of shares tendered, including shares tendered pursuant to the guaranteed delivery procedure.

On May 23, 2019, we publicly announced that our Board of Directors had authorized the repurchase of up to $10,000,000 of shares of our common stock. As of April 1, 2020, 900,702 shares of common stock had been repurchased for an aggregate of $2.8 million (excluding commissions), with the average purchase price of $3.16 per share. No further repurchases will be conducted prior to the expiration of 10 business days following the expiration of the tender offer. We also repurchased, under a prior repurchase program, $20.3 million shares of common stock from 2014 through mid-2016.

Cash Flows

Net cash provided by operating activities—was $30.8 million for the year ended December 31, 2019, $37.8 million for the year ended December 31, 2018 and $52.4 million for the year ended December 31, 2017. This represents the net amount of cash, after expenses, generated by chartering our vessels. Net cash provided by operating activities decreased in 2019 compared to 2018, mainly due to our fleet contraction and some movements of our working capital items namely trade and other receivables, claims receivable and trade

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accounts payable that negatively impacted our operating cash flow. The reduction in our net cash provided by our operating activities in 2018 compared to the same period of 2017 was attributed mostly to the higher net losses incurred in 2018 driven primarily by the increased voyage expenses by $5.0 million and the increased finance costs by $6.6 million.

Net cash provided by/ (used in) investing activities—was an inflow of $33.5 million for the year ended December 31, 2019, while net cash used in investing activities were $78.6 million for the year ended December 31, 2018 and $48.9 million for the year ended December 31, 2017. During 2019 our net proceeds from sale of vessels were $18.7 million corresponding to the sale of three small LPG vessels, the Gas Sincerity, the Gas Texiana and the Gas Ethereal. In addition, during 2019 we sold to a Joint Venture scheme a 49.9% equity stake in four of our small LPG vessels, the Gas Defiance, the Gas Shuriken, the Eco Lucidity and the Gas Haralambos, with proceeds from the sale of interest in subsidiaries amounting to $20.7 million. With regard to vessel acquisitions, during 2019, we acquired, under our JV arrangement, a 50.1% equity stake in a 38,000 cbm LPG vessel the Eco Nebula for which we paid an amount of $10.6 million. Furthermore, an amount of $7.4 million was returned to us by the unconsolidated joint ventures, as a return of investment. Finally, within 2019 we made an advance payment of $3.0 million for an 11,000 cbm LPG vessel with expected delivery in August 2021.

During 2018, we acquired three 22,000 cbm new LPG semi-refrigerated vessels, the Eco Ice, the Eco Arctic and the Eco Freeze, for which we paid a total of $108.3 million. During 2017, we acquired one LPG vessels, the Eco Frost, for which we paid a total of $33.3 million, while we paid an amount of $27.3 million as advances related to the three remaining LPG newbuilding deliveries, two of which were delivered in January 2018 and one in April 2018. With regard to the sale of vessels, during 2018, we agreed to sell seven vessels, all for further trading. Five of these vessels, the Gas Enchanted, the Gas Evoluzione, the Gas Legacy, the Gas Sikousis, and the Gas Marathon were delivered to their new owners within 2018 with net sale proceeds of $29.1 million. In 2017, we sold four of our oldest vessels, the Gas Moxie, the Gas Nirvana, the Gas Icon and the Gas Emperor, all for further trading with net sale proceeds of $11.5 million.

Net cash (used in)/ provided by financing activities— net cash used in financing activities was $61.6 million for the year ended December 31, 2019, consisting mainly of $33.5 million in proceeds from long-term debt offset by $97.4 million in loan repayments, of which $42.1 million were regular loan period installments. The remaining $55.3 million includes mostly loan repayments associated with the vessels classified as held for sale as of December 31, 2018 and a small portion of debt repayment associated with some loan restructurings. Net cash provided by financing activities was $57.3 million for the year ended December 31, 2018, consisting mainly of $115.7 million in proceeds from long-term debt, while $56.7 million in loan repayments of which $46.7 million were regular loan installments and $10.0 million were voluntary repayments of existing credit facilities of two of our vessels agreed to be sold. Net cash used in financing activities was $14.1 million for the year ended December 31, 2017, consisting mainly of $56.3 million of loan repayments and $43.0 million of debt proceeds.

As and when we identify assets that we believe will provide attractive returns, we generally enter into specific term loan facilities and borrow amounts under these facilities as the vessels are delivered to us. This is the primary driver of the timing and amount of cash provided to us by our financing activities, however, from time to time to bolster our cash position and take advantage of financing opportunities, including to refinance the acquisition cost of vessels acquired earlier, we have entered into and may in the future borrow under credit facilities secured by previously unencumbered vessels in our then-existing fleet.

Credit Facilities

We, and certain of our subsidiaries, have entered into a number of credit facilities in connection with financing the acquisition of certain vessels in our fleet. The following summarizes certain terms of our credit facilities under which we had aggregate outstanding indebtedness net of deferred finance charges of $366.0 million, as of December 31, 2019, which is reflected in our balance sheet as “Long-term debt” and

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“Current portion of long-term debt.” For a description of our credit facilities also see Note 11 to our consolidated financial statements included elsewhere in this report.

Credit Facility Issue Date	Outstanding Principal Amount (in millions)		Maturity		Installment Frequency		Installment Amount (in millions)		Balloon (in millions)		Mortgaged Vessels
May 28, 2019	$	10.36		Apr 2024		Quarterly	$	0.32	$	4.60	Gas Astrid, Gas Exelero
December 14, 2018	$	11.89		Dec 2023		Quarterly	$	0.55	$	3.09	Stealth Berana,
	$	8.68		Dec 2023		Quarterly	$	0.20	$	5.48	Eco Invictus
August 6, 2019	$	21.90		Mar 2024		Quarterly	$	0.83	$	7.88	Gas Elixir Gas Cerberus Gas Myth
July 5, 2019	$	21.44		July 2026		Quarterly	$	0.79	$	0.0	Gas Husky Gas Esco
March 29, 2019	$	18.24		Dec 2022		Quarterly	$	1.13	$	4.63	Gas Alice, Gas Inspiration, Gas Imperiale
											Stealth Falcon
August 7, 2019	$	9.22		Mar 2021		Semi-Annual	$	0.63	$	7.33	Eco Stream
	$	9.22		Jun 2021		Semi-Annual	$	0.63	$	7.33	Eco Chios
	$	10.59		Jul 2022		Semi-Annual	$	0.54	$	7.33	Eco Galaxy
June 20, 2014	$	6.85		Jan 2023		Quarterly	$	0.17	$	4.64	Eco Corsair
	$	7.34		Jan 2023		Quarterly	$	0.19	$	4.93	Eco Elysium
July 29, 2014	$	8.19		Jul 2023		Quarterly	$	0.26	$	4.23	Eco Enigma
	$	8.19		Jul 2023		Quarterly	$	0.26	$	4.23	Eco Universe
July 4, 2014
	$	7.92		Aug 2021		Quarterly	$	0.20	$	6.50	Eco Czar
	$	7.92		Sep 2021		Quarterly	$	0.20	$	6.50	Eco Nemesis
August 6, 2019	$	11.75		Sep 2022		Quarterly	$	0.25	$	9.00	Eco Dream
	$	11.75		Sep 2022		Quarterly	$	0.25	$	9.00	Eco Green
	$	11.93		Feb 2023		Quarterly	$	0.25	$	8.74	Eco Nical
	$	12.17		Jun 2023		Quarterly	$	0.25	$	8.74	Eco Dominator
December 24, 2015	$	8.21		Dec 2022		Quarterly	$	0.19	$	5.97	Eco Royalty
	$	8.21		Dec 2022		Quarterly	$	0.19	$	5.97	Eco Loyalty
December 7, 2017	$	7.90		Dec 2022		Quarterly	$	0.33	$	4.00	Magic Wand
	$	8.87		Dec 2022		Quarterly	$	0.36	$	4.50	Stealth Bahla
May 18, 2016	$	27.42		May 2025		Quarterly	$	0.51	$	16.25	Eco Frost
	$	29.52		Dec 2025		Quarterly	$	0.52	$	16.57	Eco Ice
March 1, 2017	$	31.08		Jan 2026		Quarterly	$	0.63	$	15.23	Eco Arctic
	$	31.48		Apr 2026		Quarterly	$	0.63	$	15.11	Eco Freeze

The interest rates on the outstanding loans as of December 31, 2019 are based on LIBOR plus a margin which varies from 2.15% to 3.00%. The average interest rates (including the margin) on the above outstanding loans were 4.91% for the year ended December 31, 2019 and 5.34% for the year ended December 31, 2018. As of December 31, 2019, $111.8 million of our outstanding loans were covered by interest rate swap agreements paying fixed rates ranging from 1.52% to 2.89% and received floating rates based on LIBOR.

As of April 1, 2020, seven of our vessels, the Gas Prodigy, the Gas Flawless, the Gas Monarch, the Gas Pasha, the Gas Spirit, the Gas Galaxy and the Gas Nemesis II, were unencumbered. Other than the $26 million related to one of our JV arrangements, as discussed above in “—Liquidity and Capital Resources”, we had no undrawn borrowing capacity under our remaining credit facilities.

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Financial Covenants

Our credit facilities contain financial covenants requiring us to:

• ensure that our leverage, which is defined as total debt net of cash/total market adjusted assets, does not at any time exceed 80%;

• maintain a ratio of the aggregate market value of the vessels securing the loan to the principal amount outstanding under such loan (which we sometimes refer to as the value maintenance or security coverage clause) at all times in excess of a range from 125% to 135% depending on our different loan agreements;

• ensure that our ratio of EBITDA (as defined in the loan agreements) to interest expense over the preceding twelve months is at all times more than 2.5 times; and

• to maintain on a monthly basis a cash balance amounting to $1,589,768 representing a proportionate amount of the next installment and relevant interest plus a minimum aggregate cash balance amounting to $12,065,222 in the earnings account with the relevant banks.

We are also required to maintain at the end of each quarter a free cash balance of $10,000,000.

Our current loan agreements also require that our Chief Executive Officer, Harry Vafias, together with his immediate family, at all times own at least 10% of our outstanding capital stock and certain of our loan agreements provide that it would be an event of default if Harry Vafias ceased to serve as an executive officer or director of our company, Harry Vafias, together with his immediate family, ceased to control our company or any other person or group controlled 25% or more of the voting power of our outstanding capital stock. In addition, our loan agreements include restrictions on the payment of dividends in amounts exceeding 50% of our free cash flow in any rolling 12-month period.

Our existing credit facility agreements contain customary events of default with respect to us and our applicable subsidiaries, including upon the non-payment of amounts due under the credit facility; breach of covenants; matters affecting the collateral under such facility; insolvency proceedings and the occurrence of any event that, in light of which, the lender considers that there is a significant risk that the borrowers are, or will later become, unable to discharge their liabilities as they fall due.

Our credit facilities provide that upon the occurrence of an event of default, the lenders may require that all amounts outstanding under the credit facility be repaid immediately and terminate our ability to borrow under the credit facility and foreclose on the mortgages over the vessels and the related collateral. Our credit facilities also contain cross-default clauses.

C. Research and Development, Patents and Licenses

None.

D. Trend Information

Our results of operations depend primarily on the charter hire rates that we are able to realize. In turn, charter rates are determined by the underlying balance in demand and supply for our vessels. Demand for LPG transportation is influenced by various global economic factors and trade patterns, while the supply is primarily a factor of the fleet growth, determined by the number of vessels in the order book entering the fleet and the number of vessels exiting the fleet, primarily sold for demolition. As a result, the LPG shipping sector has been a highly cyclical industry experiencing volatility in charter hire rates and vessel values.

After a difficult period following the global financial crisis we saw some improvement from the fourth quarter of 2011 to the third quarter of 2014, charter rates subsequently declined sharply, due largely to the

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dramatic decline in oil prices, and despite some reasonable improvement between the second half of 2017 and until the first quarter of 2019 the charter rates remain well below levels reached in 2007 and 2008. Although prospects for the small LPG segment currently appear favorable mid and long term as the order book for 2020 and the next couple of years is negligible, future growth in the demand for LPG carriers and charter rates will depend on economic growth in the world economy and demand for LPG. Global financial conditions remain volatile, in particular due to the COVID-19 pandemic, which is expected to result in a recession in the global economy, the duration and severity of which is unpredictable, and have far reaching effects on the shipping industry, and has and could continue to negatively impact demand for seaborne LPG transportation which may further decrease in the future. The price of oil, which has declined sharply in 2020, also impacts demand for seaborne transportation of LPG, crude oil and oil products. We believe that the future growth in demand for LPG carriers and the charter rate levels will depend primarily upon the supply and demand for LPG particularly supply in the United States and the economies of the Middle East where large quantities are produced, and demand in the Far East and developing countries like Asia and Africa and in general upon seasonal and regional changes in supply/demand and changes to the capacity of the world fleet.

As a result of the volatility and rate declines witnessed in the overall shipping markets during the past few years and the global financial conditions, credit to finance vessel acquisitions has become scarcer. Companies in the shipping sector generally depend on credit facilities, to partially finance their acquisitions.

E. Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

F. Contractual Obligations

Contractual obligations as of December 31, 2019 were:

	Payments due by period (in thousands)
	Total		Less than 1 year (2020)		1-3 years (2021-2022)		3-5 years (2023-2024)		More than 5 years (After January 1, 2025)
Long-term debt obligations	$	368,229	$	41,421	$	154,600	$	92,934	$	79,274
Interest on principal amounts outstanding(1)		39,059		13,817		16,402		6,524		2,316
Interest on interest rate swap arrangements outstanding(1)		5,551		818		2,559		1,601		573
Management fees(2)		8,321		5,547		2,774		—		—
Vessel purchase commitments		26,021		2,891		23,130		—		—
Operating lease obligations		341		341		—		—		—
Executive fees		583		583		—		—		—
Total	$	448,105	$	65,418	$	199,465	$	101,059	$	82,163

(1) Based on assumed 3M LIBOR rates of 1.22% for 2020, 0.55% for 2021, 0.45% for 2022, 0.46% for 2023, and 0.51% for 2024 and thereafter and assumed 6M LIBOR rates of 1.23% for 2020, 0.39% for 2021, 0.55% for 2022, 0.72% for 2023 and 0.90% for 2024 and thereafter, and the effect of our interest rate swap arrangements.

(2) Based on our management agreement with Stealth Maritime, we pay them $125 per vessel per day for vessels on bareboat charter and $440 per vessel per day for vessels not on bareboat charter for our existing fleet (but excluding our contracted vessels). We also pay 1.25% of the gross freight, demurrage and charter hire collected from employment of our ships and 1.0% of the contract price of any vessels bought or sold on our behalf. The initial term of our management agreement with Stealth Maritime expired in June 2010 but is

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extended on a year-to-year basis thereafter unless six-months’ written notice is provided prior to the expiration of the term. No such notice was provided up to December 31, 2019, therefore the current term of our management agreement expires in June 2021.

Critical Accounting Policies

The discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amount of assets and liabilities, revenues and expenses and related disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. We have described below what we believe are our most critical accounting policies that involve a high degree of judgment and the methods of their application. For a description of all of our significant accounting policies, see Note 2 to our consolidated financial statements included elsewhere herein.

Impairment or disposal of long-lived assets:

We follow the Accounting Standards Codification (“ASC”) Subtopic 360-10, “Property, Plant and Equipment” (“ASC 360-10”), which requires long-lived assets used in operations be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. On a quarterly basis, in case an impairment indicator exists, we perform an analysis of the anticipated undiscounted future net cash flows of our long-lived assets. If the carrying value of the related asset exceeds the undiscounted cash flows and the fair market value of the asset, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the consolidated statement of operations.

We review certain indicators of potential impairment, such as vessel fair values, vessel sales and purchases, business plans and overall market conditions including any regulatory changes that may have a material impact on the vessel lives. The decline in the values of some of the vessels included in our LPG fleet was considered to be an indicator of potential impairment. As of the end of each respective quarter of 2019, we performed step one, the undiscounted cash flow test as required by the ASC guidance. We determined undiscounted projected net operating cash flows for each vessel with carrying value exceeding its fair value and compared it to the vessel’s carrying value. This assessment was made at the individual vessel level since separately identifiable cash flow information for each vessel was available. In developing estimates of future cash flows to be generated over remaining useful lives of the vessels, we made assumptions about the future, such as: (1) vessel charter rates, (2) vessel utilization rates, (3) vessel operating expenses, (4) dry docking costs, (5) vessel scrap values at the end of vessels’ remaining useful lives and (6) the remaining useful lives of the vessels. These assumptions were based on historical trends as well as future expectations in line with our historical performance and our expectations for future fleet utilization under our current fleet deployment strategy, vessel sales and purchases, and overall market conditions.

Projected cash flows were determined for the vessels by considering the revenues from existing charters for those vessels that have long term employment, and:

• revenue estimates based on nine-year historical average rates (base rate) for periods for which there is no charter in place for vessels of less than twenty years of age and,

• revenue estimates based on five-year historical average rates for periods for which there is no charter in place for vessels of twenty years of age and above,

with an annual 1% revenue increase for both categories.

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We also assumed an average annual inflation rate of 1.5% for operating expenses using as a base rate:

• the actual operating expenses as per vessel for each respective period for the vessels of less than twenty years of age, and

• the average operating expenses of the last five years for the vessels of twenty years of age and above.

Utilization rate was assumed to be:

• 94.0% for vessels of less than twenty years of age, and

• actual five-year historical average utilization rate for the vessels of twenty years of age and above.

Based on our historical experience and future expectations, we believe the use of different assumptions for these items depending on whether a vessel is less than 20 years old or 20 years old or more, provides a better estimate of the expected future chartering profile and associated operating expenses for vessels in these different age groups. Although we believe that the assumptions we use to calculate future cash flows are reasonable and appropriate, such assumptions are highly subjective.

During the first nine months of 2019, the Company identified and recorded no impairment loss for any of its vessels. As of December 31, 2019 the company recorded an impairment loss of $993,916 relating to two of its oldest vessels Gas Galaxy and Gas Pasha. In each of these cases the undiscounted net operating cash flows of each of these vessels did not exceed the respective vessel’s carrying value.

During the first nine months of 2018, the Company identified and recorded an impairment loss of $8,161,963 for seven of its vessels, the Gas Legacy, the Gas Enchanted, the Gas Evoluzione, the Gas Sikousis, the Gas Marathon, the Gas Sincerity and the Gas Texiana, which were agreed to be sold for further trading. As of December 31, 2018, the Company identified and recorded an additional impairment loss of $3,189,858 relating to vessels Gas Shuriken, Gas Defiance, Gas Haralambos and Eco Lucidity, following the decision to enter into, or potentially enter into, as applicable, joint venture agreements with a third party investor based on which the third party investor would acquire a 49.9% equity interest in these four vessel owning companies of the Company and the vessels were classified as vessels held for sale. For the three months ended December 31, 2018, no impairment loss was identified and recorded for the Company’s vessels that are held for use.

As of June 30, 2017, the Company identified and recorded an impairment loss of $897,965 relating to one of the oldest vessels of the fleet, Gas Monarch, and as of September 30, 2017, the Company identified and recorded an impairment loss of $1,258,037, relating to two of the oldest vessels of the fleet, Gas Pasha and Gas Evoluzione. In addition, during the first nine months of 2017, the Company identified and recorded an impairment loss of $4,305,271 for four of its oldest vessels, the Gas Moxie, the Gas Nirvana, the Gas Icon and the Gas Emperor which were sold during the year 2017, for further trading. For the three months ended December 31, 2017, no impairment loss was identified and recorded for the Company’s vessels that are held for use. Furthermore, as of December 31, 2017, the fair market value of each vessel of 20 years of age and above exceeded its carrying value. The total impairment loss identified and recorded by the Company was $993,916 as of December 31, 2019, $11,351,821 as of December 31, 2018 and $6,461,273 during the year ended December 31, 2017.

The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings.

Sensitivity Analysis.

The impairment test is highly sensitive to variances in future charter rates. When we conducted the analysis of the impairment test as of December 31, 2019 we also performed a sensitivity analysis related to the future cash flow estimates. Set forth below is an analysis, as of December 31, 2019, of the percentage difference between the

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current average rates for our fleet compared with the base rates used in the impairment test as described above, as well as an analysis of the impact on our impairment analysis if we were to utilize the most recent five-year, three-year and one-year historical average rates, which shows the number of vessels whose carrying value would not have been recovered and the related impairment charge.

	Percentage difference between our average 2019 rates as compared with the base rates for the vessels						5-year historical average rate				3-year historical average rate				1-year historical average rate
	of less than twenty years of age			of twenty years of age and above			No. of vessels		Amount ($ million)		No. of vessels		Amount ($ million)		No. of vessels		Amount ($ million)
LPG Carriers		-0.89	%		-1.66	%		2		1.0		2		1.0		2		1.0
Product Carriers		-20.81	%		—			3		32.1		3		32.1		3		32.1
Aframax Tanker		-33.34	%		—			—		—		—		—		1		5.3

Although we believe that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are highly subjective. There can be no assurance as to how long charter rates and vessel values will remain at their current levels or whether they will improve by any significant degree. Charter rates may remain at relatively low levels for some time, or decline, which could adversely affect our revenue and profitability, and future assessments of vessel impairment.

Based on the carrying value of each of our vessels held for use as of December 31, 2019 and what we believe the charter-free market values of each of these vessels was as of December 31, 2019, 24 of our 41 owned vessels in the water had current carrying values, before the impairment loss recorded in 2019, above their market values (20 of our 42 vessels in the water as at December 31, 2018). We believe that the aggregate carrying value of these vessels, assessed separately, exceeds their aggregate charter-free market value by approximately $62 million and $67 million as of December 31, 2019 and 2018, respectively. However, we believe that with respect to these 24 vessels except for the Gas Pasha and the Gas Galaxy for which we recorded an impairment loss as of December 31, 2019, we will recover their carrying values at the end of their useful lives, based on their undiscounted cash flows.

The Company’s estimates of market values assume that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified as being in class without recommendations of any kind. In addition, because vessel values are highly volatile, these estimates may not be indicative of either the current or future prices that the Company could achieve if it were to sell any of the vessels. The Company would not record an impairment charge for any of the vessels for which the fair market value is below its carrying value unless and until the Company either determines to sell the vessel for a loss or determines that the vessel’s carrying amount is not recoverable. The Company believes that the undiscounted projected net operating cash flows over the estimated remaining useful lives for those vessels that have experienced declines in estimated market values below their carrying values exceed such vessels’ carrying values as of December 31, 2019, and accordingly has not recorded an impairment charge other than the $1.0 million we incurred for the year related to vessels, Gas Pasha and Gas Galaxy.

Vessel depreciation: We record the value of our vessels at their cost (which includes acquisition costs directly attributable to the vessel and expenditures made to prepare the vessel for its initial voyage) less accumulated depreciation and impairment, if any. We depreciate our vessels on a straight-line basis over their estimated useful lives, estimated to be 25 or 30 years from date of initial delivery from the shipyard depending on the vessel type. We believe that a 30-year depreciable life is consistent with that of other gas vessel owners and reflects management’s intended use and a 25-year depreciable life is consistent with other product carrier vessel owners and reflects management’s intended use. Depreciation is based on cost less the estimated residual scrap value. An increase in the useful life of the vessel or in the residual value would have the effect of decreasing the annual depreciation charge and extending it into later periods. A decrease in the useful life of the vessel or in the

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residual value would have the effect of increasing the annual depreciation charge. No events or circumstances occurred in 2019 that would require us to revise estimates related to depreciation and such revisions are not expected to occur in the future.

Investments in joint ventures: Our investments in joint ventures are accounted for using the equity method of accounting since we have joint control over the joint venture entities. We do not consolidate the joint venture entities because we do not have a controlling financial interest. The significant factors considered and judgments made in determining that the power to direct the activities of the joint venture entities that most significantly impact their economic performance are shared, are that all significant business decisions over operating and financial policies of the joint venture entities, require unanimous consent from each joint venture investor.

Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and our proportionate share of earnings or losses and distributions. We evaluate our investments in joint ventures for impairment when events or circumstances indicate that the carrying value of such investments may have experienced other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered other than a temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the consolidated statements of operations.

G. Safe Harbor

See section “Forward-Looking Information” at the beginning of this annual report.

Item 6. Directors, Senior Management and Employees

A. Directors, Senior Management and Employees

The following table sets forth, as of April 1, 2020, information for each of our directors and executive officers.

Name	Age		Positions	Year Became Director		Year Director’s Current Term Expires
Harry N. Vafias		42	Chief Executive, President, Chief Financial Officer and Class III Director		2004		2021
Michael G. Jolliffe		70	Chairman of the Board, Class II Director		2004		2022
Markos Drakos		60	Class I Director		2006		2020
John Kostoyannis		54	Class II Director		2010		2022

Certain biographical information about each of these individuals is set forth below.

Harry N. Vafias has been our President and Chief Executive Officer and a member of our Board of Directors since our inception in December 2004 and our Chief Financial Officer since January 2014. Mr. Vafias has been actively involved in the tanker and gas shipping industry since 1999. Mr. Vafias worked at Seascope, a leading ship brokering firm specializing in sale and purchase of vessels and chartering of oil tankers. Mr. Vafias also worked at Braemar, a leading ship brokering firm, where he gained extensive experience in tanker and dry cargo chartering. Seascope and Braemar merged in 2001 to form Braemar Seascope Group plc, a public company quoted on the London Stock Exchange and one of the world’s largest ship brokering and shipping service groups. From 2000 until 2004, he worked at Brave Maritime and Stealth Maritime, companies providing comprehensive ship management services, where Mr. Vafias headed the operations and chartering departments of Stealth Maritime and served as manager for the sale and purchase departments of both Brave Maritime and Stealth Maritime. Mr. Vafias graduated from City University Business School in the City of London in 1999 with a B.A. in Management Science and from Metropolitan University in 2000 with a Masters degree in Shipping, Trade and Transport.

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Michael G. Jolliffe has been Chairman of our Board of directors since 2004. He is a Director of a number of companies in shipping, agency representation, shipbroking and capital services. Mr. Jolliffe is Co-Founder of Tsakos Energy Navigation Ltd, a crude oil and product carrier and LNG shipping company listed on the New York Stock Exchange. He is CEO of Tsakos Containers Navigation Ltd. He is also Chairman of the Wighams Group of companies, owning companies involved in shipbroking, agency representation and capital market businesses. Mr. Jolliffe is a Director of ColdHarbour Marine, a company manufacturing equipment for the marine industry. Mr. Jolliffe is also a Trustee of The Honeypot children’s charity.

Markos Drakos has been a member of our Board of Directors since 2006 and Chairman of our Audit Committee. In 1988, Mr. Drakos co-founded Touche Ross & Co (Cyprus), later renamed Deloitte & Touche, Nicosia, and served as co-managing partner of the company’s Nicosia office in Cyprus until 2002. Following the December 2002 reorganization of Deloitte & Touche, Nicosia, Mr. Drakos founded Markos Drakos Consultants Group, a consulting company, which served as successor to the consulting, special services and international business division of Deloitte & Touche, Nicosia. From 2000 until 2003, Mr. Drakos also served as Vice Chairman of the Cyprus Telecommunications Authority, the leading telecommunications company in Cyprus. Mr. Drakos has also served as a member of the Offshore, Shipping & Foreign Investment Committee of the Institute of Certified Public Accountants of Cyprus. Mr. Drakos received a Bachelor of Science degree in Economics from the London School of Economics and is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of the Institute of Certified Public Accountants of Cyprus.

John Kostoyannis joined our Board of Directors in 2010. Mr. Kostoyannis is a Managing Director at Allied Shipbroking Inc., a leading shipbroking house in Greece, providing Sale and Purchase and Chartering services in the shipping industry. Before joining Allied Shipbroking, from 1991 until September 2001, Mr. Kostoyannis worked in several prominent shipbroking houses in London and Piraeus. He is a member of the Hellenic Shipbrokers Association. Mr. Kostoyannis graduated from the City of London Polytechnic in 1988 where he studied Shipping and Economics.

B. Compensation of Directors and Senior Management

The Chairman of our Board of Directors receives annual fees of $70,000, plus reimbursement for his out-of-pocket expenses, while each of our other independent directors receives fees of up to $35,000 per annum, plus reimbursement of their out-of-pocket expenses. Executive directors received no compensation for their services as directors. We do not have service contracts with any of our directors. In addition, we have not paid any compensation to our executive officers. Under our management agreement with Stealth Maritime, we reimburse Stealth Maritime for its payment of the cash compensation to our Chief Executive Officer, Chief Financial Officer, Internal Auditor and our Chief Technical Officer, as well as prior to August 31, 2019, our Deputy Chairman and Executive Director. The aggregate of such cash compensation for the years ended December 31, 2017, 2018 and 2019 were $1.1 million, $1.2 million and $1.1 million, respectively.

Our executive officers and directors are also eligible to receive awards under our equity compensation plan described below under “—Equity Compensation Plan.” In August 2018, we awarded an aggregate of 264,621 restricted shares of common stock to directors and officers, all which vested in August 2019. We did not grant any awards under our equity compensation plan to directors or officers of the Company during the years ended December 31, 2017 and 2019. We recognized share-based compensation expense of $0.1 million, $0.3 million and $0.6 million in 2017, 2018 and 2019, respectively.

C. Board Practices

The Board of Directors may change the number of directors by a vote of a majority of the entire Board. Each director is elected to serve until the third succeeding annual meeting of stockholders and until his or her successor shall have been duly elected and qualified, except in the event of death, resignation or removal. A vacancy on the board created by death, resignation, removal (which may only be for cause), or failure of the

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stockholders to elect the entire class of directors to be elected at any election of directors or for any other reason, may be filled only by an affirmative vote of a majority of the remaining directors then in office, even if less than a quorum, at any special meeting called for that purpose or at any regular meeting of the board of directors. Our Board of Directors is divided into three classes with only one class of directors being elected in each year and each class serving a three-year term.

At December 31, 2019 and April 1, 2020, we had four members on our Board of Directors named above. Our Board of Directors has determined that Michael G. Jolliffe, Markos Drakos and John Kostoyannis are independent directors within the meaning of the applicable Nasdaq listing requirements and SEC independence requirements applicable to Audit Committee members since none of them has received any compensation from the Company except for director’s fees and restricted stock awards to directors, and none of them has any relationship or has had any transaction with the Company which the Board believes would compromise their independence. Officers are elected from time to time by vote of our Board of Directors and hold office until a successor is elected.

As of August 31, 2019, Lambros Babilis, the Deputy Chairman of the Board of Directors and Executive Director of the Company, resigned from these positions, which reduced the size of the Company’s Board of Directors to four directors. Lambros Babilis also resigned from his position as Chief Executive Officer of the Company’s manager, Stealth Maritime Corporation.

We have no service contracts with any of our directors that provide for benefits upon termination of employment.

During the fiscal year ended December 31, 2019, the full Board of Directors held four meetings. Each director attended all of the meetings of the Boardand all of the meetings of committees of which such director was a member in 2019, except for one director, who attended at least 75% of such meetings.

To promote open discussion among the independent directors, a majority of the directors met four times in 2019 in regularly scheduled executive sessions without participation of our Company’s management and will continue to do so. Mr. Jolliffe has served as the presiding director for purposes of these meetings. Stockholders who wish to send communications on any topic to the Board of Directors or to the independent directors as a group, or to the presiding director, Mr. Jolliffe, may do so by writing to StealthGas Inc., 331 Kifissias Avenue, Erithrea 14561 Athens, Greece.

Corporate Governance

Our Board of Directors and our Company’s management reviews our corporate governance practices in order to oversee our compliance with the applicable corporate governance rules of the Nasdaq Stock Market and the SEC.

We have adopted a number of key documents that are the foundation of our corporate governance, including:

• a Code of Business Conduct and Ethics;

• a Nominating and Corporate Governance Committee Charter;

• a Compensation Committee Charter; and

• an Audit Committee Charter.

We will provide a paper copy of any of these documents upon the written request of a stockholder. Stockholders may direct their requests to the attention of Investor Relations, c/o Harry Vafias, StealthGas Inc., 331 Kifissias Avenue, Erithrea 14561 Athens, Greece. These documents are also available on our website at www.stealthgas.com under the heading “Corporate Governance.”

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Committees of the Board of Directors

The Board of Directors has established an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee. As of April 1, 2020, the Audit Committee consists of Messrs. Markos Drakos (Chairman), Michael Jolliffe, and John Kostoyannis. The Nominating and Corporate Governance Committee consists of Messrs. Michael Jolliffe (Chairman), Markos Drakos and John Kostoyannis. The Compensation Committee consists of Messrs. Michael Jolliffe (Chairman), Markos Drakos and John Kostoyannis. Each of the directors on these committees has been determined by our Board of Directors to be independent under the standards of the Nasdaq Stock Market, and, in the case of the Audit Committee, the SEC.

Audit Committee

The Audit Committee is governed by a written charter, which is approved and annually adopted by the Board. The Board has determined that the members of the Audit Committee meet the applicable independence requirements of the SEC and the Nasdaq Stock Market, that all members of the Audit Committee fulfill the requirement of being financially literate and that Mr. Drakos is an Audit Committee financial expert as defined under current SEC regulations.

The Audit Committee is appointed by the Board and is responsible for, among other matters, overseeing the:

• integrity of the Company’s financial statements, including its system of internal controls;

• Company’s compliance with legal and regulatory requirements;

• independent auditor’s appointment, qualifications and independence;

• retention, setting of compensation for, termination and evaluation of the activities of the Company’s independent auditors, subject to any required shareholder approval; and

• performance of the Company’s independent audit function and independent auditors, as well preparing an Audit Committee Report to be included in our annual proxy statement.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee is appointed by the Board and is responsible for, among other matters:

• reviewing the Board structure, size and composition and making recommendations to the Board with regard to any adjustments that are deemed necessary;

• evaluating and recommending to the Board the slate of nominees for directors to be elected by the stockholders at the Company’s next annual meeting of stockholders and, where applicable, to fill vacancies;

• recommending to the Board the responsibilities of the Board committees, including each committee’s structure, operations, and authority to delegate to subcommittees;

• evaluating and recommending to the Board those directors to be appointed to the various Board committees, including the persons recommended to serve as chairperson of each committee;

• reviewing annually the compensation of non-employee directors and the principles upon which such compensation is determined;

• consulting with the Chief Executive Officer, as appropriate, and other Board members to ensure that its decisions are consistent with the sound relationship among the Board, Board committees, individual directors and management;

• overseeing the Board’s annual evaluation of its own performance and the performance of other Board committees;

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• retaining, setting compensation and retentions terms for and terminating any search firm to be used to identify candidates; and

• developing and recommending to the Board for adoption a set of Corporate Governance Guidelines applicable to the Company and periodically reviewing the same.

Compensation Committee

The Compensation Committee is appointed by the Board and is responsible for, among other matters:

• establishing and periodically reviewing the Company’s compensation programs;

• administering the Company’s equity compensation plan;

• reviewing the performance of directors, officers and employees of the Company who are eligible for awards and benefits under any plan or program and adjust compensation arrangements as appropriate based on performance;

• reviewing and monitoring management development and succession plans and activities;

• from time to time when necessary, reviewing with the Chief Executive Officer the latter’s proposed succession plan for each executive officer and the Chief Executive Officer’s evaluation of each such executive officer;

• in case of unexpected unavailability, reviewing with the Board the Company’s succession plan for the CEO and other executive officers, including plans for emergency succession;

• retaining, setting compensation and retention terms for, and terminating any consultants, legal counsel or other advisors that the Compensation Committee determines to employ to assist it in the performance of its duties; and

• preparing any Compensation Committee report included in our annual proxy statement.

D. Employees

Our manager employs and provides us with the services of our Chief Executive Officer and Chief Financial Officer, our Internal Auditor and our Chief Technical Officer. In each case, their services are provided under the management agreement with Stealth Maritime. Stealth Maritime compensates each of these individuals for their services and we, in turn, reimburse Stealth Maritime for their compensation.

As of December 31, 2019, 292 officers and 310 crew members served on board the vessels in our fleet. However, these officers and crew are not directly employed by the Company.

E. Share Ownership

The shares of common stock beneficially owned by our directors and senior managers and/or companies affiliated with these individuals are disclosed in “Item 7. Major Shareholders and Related Party Transactions” below.

Equity Compensation Plan

We have an equity compensation plan, the 2015 Equity Compensation Plan (the “2015 Plan”), which was approved by our stockholders on September 17, 2015 and replaced our previous equity compensation plan (the “2007 Plan”) which expired in August 2015. The 2015 Plan is generally administered by the Compensation Committee of our Board of Directors, except that the full board may act at any time to administer the 2015 Plan, and authority to administer any aspect of the 2015 Plan, other than grants of awards to executive officers and as

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prohibited by law or stock exchange regulation, may be delegated by our Board of Directors or by the Compensation Committee to an executive officer or any other person. The 2015 Plan allows the plan administrator to grant awards of shares of our common stock or the right to receive or purchase shares of our common stock (including options to purchase common stock, restricted stock and stock units, bonus stock, share units, performance units, and stock appreciation rights) to officers, directors or other persons or entities providing significant services to us or our subsidiaries. The actual terms of an award, including the number of shares of common stock relating to the award, any exercise or purchase price, any vesting, forfeiture or transfer restrictions, the time or times of exercisability for, or delivery of, shares of common stock, are determined by the plan administrator and set forth in a written award agreement with the participant.

The aggregate number of shares of our common stock for which awards may be granted under the 2015 Plan cannot exceed 10% of the number of shares of our common stock issued and outstanding at the time any award is granted. Awards made under the 2015 Plan that have been forfeited (including our repurchase of shares of common stock subject to an award for the price, if any, paid to us for such shares of common stock, or for their par value), cancelled or have expired, will not be treated as having been granted for purposes of the preceding sentence. In November 2014, we awarded an aggregate of 230,713 restricted shares of common stock to directors and officers, 50% of which vested on November 20, 2015, 25% of which vested on November 20, 2016 and 25% of which vested on November 20, 2017, the third anniversary of grant. In August 2018, we awarded an aggregate of 264,621 restricted shares of common stock to directors and officers, all of which shares vested in August 2019. No equity awards were made for the years ended December 31, 2019, 2017, 2016 and 2015. As of April 1, 2020, awards with respect to an aggregate of 264,621 shares of our common stock had been granted under the 2015 Plan and awards with respect to 555,479 shares of our common stock were granted under our 2007 Plan from its adoption in 2005 to its expiration in August 2015. No additional awards can be granted under our 2007 Plan.

The 2015 Plan permits the plan administrator to make an equitable adjustment to the number, kind and exercise price per share of awards in the event of our recapitalization, reorganization, merger, spin-off, share exchange, dividend of common stock, liquidation, dissolution or other similar transaction or events. In addition, the plan administrator may make adjustments in the terms and conditions of any awards in recognition of any unusual or nonrecurring events.

Except in connection with a corporate transaction, including any stock dividend, distribution, stock split, extraordinary cash dividend, recapitalization, change in control, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of common shares or other securities, or similar transactions, we may not, without obtaining stockholder approval, (i) amend the terms of outstanding stock options or stock appreciation rights to reduce the exercise price of such outstanding stock options or base price of such stock appreciation rights, (ii) cancel outstanding stock options or stock appreciation rights in exchange for stock options or stock appreciation rights with an exercise price or base price, as applicable, that is less than the exercise price or base price of the original stock options or stock appreciation rights or (iii) cancel outstanding stock options or stock appreciation rights with an exercise price or base price, as applicable, above the current stock price in exchange for cash or other securities.

The 2015 Plan provides for “double trigger vesting” after a change in control. Unless the plan administrator determines otherwise, if a change in control occurs in which the Company is not the surviving corporation (or the Company survives only as a subsidiary of another corporation), all outstanding awards that are not exercised or paid at the time of the change in control will be assumed by, or replaced with awards that have comparable terms by, the surviving corporation (or a parent or subsidiary of the surviving corporation). Unless the award agreement provides otherwise, if a participant’s employment is terminated by us without cause, or the participant terminates employment for good reason, in either case within 12 months following the change in control, the participant’s outstanding awards will become fully vested as of the date of termination. If the vesting of any such award is based, in whole or in part, on performance, the applicable award agreement will specify how the portion of the award that becomes vested upon termination will be calculated.

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In the event of a change in control, if all outstanding awards are not assumed by, or replaced with awards with comparable terms by, the surviving corporation (or a parent or subsidiary of the surviving corporation), the plan administrator may take any of the following actions with respect to any or all outstanding awards, without the consent of any participant: (i) may determine that outstanding stock options and stock appreciation rights will automatically accelerate and become fully exercisable, and the restrictions and conditions on outstanding awards will immediately lapse; (ii) may determine that participants will receive a payment in settlement of outstanding awards in such amount and form as may be determined by the plan administrator; (iii) may require that participants surrender their outstanding stock options and stock appreciation rights in exchange for a payment, in cash or stock as determined by the plan administrator, equal to the amount (if any) by which the fair market value of the shares of common stock subject to the unexercised stock option and stock appreciation right exceed the stock option exercise price or base price and (iv) the plan administrator may terminate outstanding stock options and stock appreciation rights after giving participants an opportunity to exercise the outstanding stock options and stock appreciation rights. Such surrender, termination or payment will take place as of the date of the change in control or such other date as the plan administrator may specify. If the per share fair market value of our stock does not exceed the per share exercise price or base price, as applicable, we will not be required to make any payment to the participant upon surrender of the stock option or stock appreciation right.

Our Board of Directors may, at any time, alter, amend, suspend or discontinue the 2015 Plan. The 2015 Plan will automatically terminate ten years after it has been most recently approved by our stockholders.

Item 7. Major Shareholders and Related Party Transactions

A. Major Shareholders

The following table sets forth certain information regarding the beneficial ownership of our outstanding shares of common stock as of April 1, 2020 by:

• each person or entity that we know beneficially owns 5% or more of our shares of common stock;

• our Chief Executive Officer and our other members of senior management;

• each of our directors; and

• all of our current directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. In general, a person who has or shares voting power and/or dispositive power with respect to securities is treated as a beneficial owner of those securities. It does not necessarily imply that the named person has the economic or other benefits of ownership. For purposes of this table, shares subject to options, warrants or rights currently exercisable or exercisable within 60 days of April 1, 2020 are considered as beneficially owned by the person holding such options, warrants or rights. Each shareholder is entitled to one vote for each share held. The applicable percentage of ownership for

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each shareholder is based on 39,224,482 shares of common stock outstanding as of April 1, 2020. Information for certain holders is based on their latest filings with the Securities and Exchange Commission or information delivered to us.

	Shares of Common Stock Beneficially Owned
Name of Beneficial Owner	Number			Percentage
Principal Stockholders
Flawless Management Inc.(1)		7,105,453			18.1	%
Glendon Capital Management L.P.(2)		6,498,794			16.6	%
MSDC Management, L.P.(3)		3,708,819			9.5	%
Russell Investments Group, Ltd.(4)		2,780,001			7.1	%
Redwood Capital Management, LLC(5)		2,415,287			6.2	%
Renaissance Technologies LLC(6)		2,225,130			5.7	%
Executive Officers and Directors
Harry N. Vafias(1)		7,774,243			19.8	%
Michael G. Jolliffe		32,430	*
Markos Drakos		18,214	*
John Kostoyannis		7,296	*
All executive officers and directors as a group (four persons)		7,832,183			20.0	%

* Less than 1%.

(1) The shares beneficially owned by Harry N. Vafias consist of, according to Amendment No. 1 to Schedule 13D jointly filed with the SEC on March 27, 2020 by Flawless Management Inc. and Harry N. Vafias, 7,774,243 shares of common stock beneficially owned by Harry N. Vafias, of which 7,105,453 shares of common stock are owned by Flawless Management Inc. and Harry N. Vafias and 668,790 shares beneficially owned by Harry N. Vafias. Harry N. Vafias has sole voting power and sole dispositive power with respect to all such shares.

(2) Based on filings made by Glendon Capital Management L.P. with the SEC. According to these filings, these shares are directly owned by Glendon Opportunities Fund, L.P. (the “Fund”), Altair Global Credit Opportunities Fund LLC (the “Sub-Advised Fund”) and a separately managed account. According to these filings, (i) the Fund is beneficial owner of over 10% of the issuer’s securities on an individual basis, (ii) the Sub-Advised Fund and the separately managed account do not own 10% of the issuer’s securities on an individual basis and (iii) Glendon Capital Management LP is the investment manager to the Fund and the separately managed account and the investment sub-adviser to the Sub-Advised Fund, and may be deemed to beneficially own these securities under the Securities Exchange Act of 1934.

(3) According to Amendment No. 2 to a Schedule 13G jointly filed by and on behalf of each of MSDC Management, L.P. (“MSDC”) and MSD Credit Opportunity Master Fund, L.P. with the SEC on February 16, 2016, MSDC is the investment manager of, and may be deemed to beneficially own 3,708,819 shares of common stock beneficially owned by, MSD Credit Opportunity Master Fund, L.P. and has sole voting power and joint dispositive power with respect to all such shares.

(4) According to a Schedule 13G filed by Russell Investments Group, Ltd. on February 12, 2020.

(5) According to Amendment No. 2 to a Schedule 13G jointly filed by and on behalf of each Redwood Capital Management, LLC, Redwood Master Fund, Ltd. and Jonathan Kolatch, which may each be deemed to have shared voting power and joint dispositive power with respect to all such shares, on February 11, 2016.

(6) According to a Schedule 13G jointly filed by and on behalf of Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation on February 12, 2020.

On March 31, 2020, we announced the commencement of a tender offer to purchase up to 4,761,904 shares, or about 12.1%, of our outstanding common stock using funds available from cash and cash equivalents at a price of $2.10 per share. The tender offer expired at 5:00 P.M., New York City Time, on April 28, 2020. Based on the

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preliminary count by the depositary for the tender offer and in accordance with the terms and conditions of the tender offer, the Company expects to repurchase a total of 1,366,045 shares of its common stock through the tender offer at a price of $2.10 per share, for a total cost of $2,868,694.50, excluding fees and expenses. The total of 1,366,045 shares that the Company expects to accept for repurchase represents approximately 3.5% of the Company’s total outstanding shares of common stock as of April 28, 2020. The number of shares of common stock expected to be purchased by the Company and the aggregate purchase price for the shares are preliminary and subject to final confirmation by the depositary and the proper delivery of shares tendered, including shares tendered pursuant to the guaranteed delivery procedure.

Based on the 1,366,045 shares of common stock that we expect to repurchase, as described above, and none of our executive officers or directors selling shares in the tender offer, the total number of our common shares outstanding will be reduced to 37,858,437 and the beneficial ownership of our directors and executive officers named in the table above will change to 20.7% of our total issued and outstanding shares from 20.0% of our total issued and outstanding shares as of April 1, 2020, reflecting an aggregate increase in beneficial share ownership by all directors and officers of 0.7 percentage points.

We effected a registered public offering of our common stock and our common stock began trading on the Nasdaq Stock Market in October 2005. Our major stockholders have the same voting rights as our other shareholders. As of April 1, 2020, we had approximately 18 shareholders of record. Two of the stockholders of record were located in the United States and held in the aggregate 30,902,753 shares of common stock representing approximately 78.8% of our outstanding shares of common stock. However, the two United States shareholders of record include CEDEFAST, which, as nominee for The Depository Trust Company, is the record holder of 30,902,553 shares of common stock. Accordingly, we believe that the shares held by CEDEFAST include shares of common stock beneficially owned by both holders in the United States and non-United States beneficial owners. As a result, these numbers may not accurately represent the number of beneficial owners in the United States. We are not aware of any arrangements the operation of which may at a subsequent date result in a change of control of the Company.

On May 23, 2019, we publicly announced that our Board of Directors had authorized the repurchase of up to $10,000,000 of shares of our common stock. As of April 1, 2020, 900,702 shares of common stock had been repurchased for an aggregate of $2.8 million (excluding commissions), with the average purchase price of $3.16 per share. No further repurchases will be conducted prior to the expiration of 10 business days following the expiration of the tender offer. We also repurchased, under a prior repurchase program, $20.3 million of shares of common stock from 2014 through mid-2016.

B. Related Party Transactions

Pursuant to our Audit Committee Charter, our Audit Committee is responsible for establishing procedures for the approval of all related party transactions involving executive officers and directors, which procedures require the audit committee to approve any such transaction. Our Code of Business Conduct and Ethics requires our Audit Committee to review and approve any “related party” transaction as defined in Item 7.B of Form 20-F before it is consummated.

Management Affiliations

Harry Vafias, our president, chief executive officer and one of our directors, is an officer, director and the sole shareholder of Flawless Management Inc., our largest stockholder. He is also the son of the principal and founder of Brave Maritime, an affiliate of Stealth Maritime, which is our management company. Stealth Maritime subcontracts the technical management of some of our LPG carriers to Brave Maritime the fees for which technical management services are paid by Stealth Maritime out of the fees we pay to it as described below.

Management and Other Fees

We have a management agreement with Stealth Maritime, pursuant to which Stealth Maritime provides us with technical, administrative, commercial and certain other services. In relation to the technical services, Stealth

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Maritime is responsible for arranging for the crewing of the vessels, the day to day operations, inspections and vetting, supplies, maintenance, repairs, bunkering drydocking and insurance. Administrative functions include but are not limited to accounting, back-office, reporting, legal and secretarial services. In addition, Stealth Maritime provides services for the chartering of our vessels and monitoring thereof, freight collection, and sale and purchase. In providing most of these services, Stealth Maritime pays third parties and receives reimbursement from us. Under the management agreement Stealth Maritime may subcontract certain of its obligations.

Beginning in 2018, Stealth Maritime also provides crew management services to certain of our vessels. These services have been subcontracted by Stealth Maritime to an affiliated ship-management company, Hellenic Manning Overseas Inc. (formerly known as Navis Maritime Services Inc.), which is 25% owned by an affiliate of Stealth Maritime. The Company pays to Stealth Maritime a fixed monthly fee of $2,500 per vessel for these crew management services, all of which fees are passed on to Hellenic Manning Overseas Inc, For the years ended December 31, 2018 and 2019, this crew management fees were $0.4 million and $0.9 million, respectively. As of April 1, 2020, 33 vessels were being manned by Hellenic Manning Overseas Inc., with the intention of transferring the whole fleet to them.

In the year ended December 31, 2019, we paid Stealth Maritime a fixed management fee of $440 per vessel operating under a voyage or time charter per day, pro-rated for the calendar days we own the vessels. We paid a fixed fee of $125 per vessel per day for each of our vessels operating on bareboat charter. These fixed daily fees are based on the management agreement with Stealth Maritime and have not changed since 2007. Management fees for the years ended December 31, 2017, 2018 and 2019 were $7.2 million, $7.0 million and $5.7 million, respectively. In addition, our manager arranges for supervision onboard the vessels, when required, by superintendent engineers and when such visits exceed a period of five days in a twelve-month period we are charged $500 for each additional day. In the years ended December 31, 2017, 2018 and 2019 we paid $0.13 million, $0.14 million and $0.10 million, respectively, related to onboard supervision. We pay our manager, Stealth Maritime, a fee equal to 1.25% of the gross freight, demurrage and charter hire collected from the employment of our vessels. For the years ended December 31, 2017, 2018 and 2019, total brokerage commissions of 1.25% amounted to $1.9 million, $2.0 million and $1.8 million, respectively, and were included in our consolidated statements of operations under “Voyage expenses—related party.” Stealth Maritime also receives a fee equal to 1.0% calculated on the price as stated in the relevant memorandum of agreement for any vessel bought or sold by them on our behalf. For the years ended December 31, 2017, 2018 and 2019, the amounts of $0.5 million, $1.6 million and nil, respectively, were capitalized to the cost of the vessels in respect of the 1.0% purchase fee.

Annually, the Board reviews the management fees charged by Stealth Maritime as compared to the fees charged by the management companies of our publicly-listed peers. We believe the rates reflected are among the lowest of publicly listed companies.

For the years ended December 31, 2017, 2018 and 2019, the amounts of $0.1 million, $0.2 million and $0.1 million, respectively, were recognized as commission expenses relating to the sale of vessels and are included in our consolidated statements of operations under the caption “Net loss on sale of vessels”. For the years ended December 31, 2018 and 2019, commission expenses relating to the sale of vessels of $0.2 million and nil, respectively, are included in the consolidated statements of operation under the caption “Impairment Loss”.

We also reimburse Stealth Maritime for its payment for executive services related to our Chief Executive Officer, Deputy Chairman and Executive Director (until August 31, 2019), Chief Financial Officer, Internal Auditor and Chief Technical Officer. During the years ended December 31, 2017, 2018 and 2019, such compensation was in the aggregate amount of $1.1 million, $1.2 million and $1.1 million, respectively.

Additional vessels that we may acquire in the future may be managed by Stealth Maritime or other unaffiliated management companies.

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The initial term of our management agreement with Stealth Maritime expired in June 2010 but is extended on a year-to-year basis thereafter unless six-month written notice is provided prior to the expiration of the term. Such notice has not been given by either party. The current account balance with the Manager at December 31, 2018 and at December 31, 2019 was a liability of $7,930,642 and $2,084,871, respectively. The liability represents payments made by the Stealth Maritime on behalf of the ship-owning companies. Furthermore, the current account balance with entities that we own 50.1% equity interests, pursuant to a joint venture agreement with a financial investor, amounted to a liability of $4,958,250 as of December 31, 2019 and represents revenues collected by us on behalf of these entities.

On May 26, 2014, we entered into an agreement with Brave Maritime for the supervision of the construction of eight of our newbuilding vessels for a fixed fee of Euro 390,000 per vessel. On January 25, 2016, we entered into a new supervision agreement with Brave Maritime for the supervision of the construction of our four 22,000 cbm semi-refrigerated newbuilding vessels at Euro 490,000 per ship. We currently have one 11,000 cbm LPG vessel under construction to be delivered in August 2021. For the years ended December 31, 2017, 2018 and 2019, the supervision fees amounted to $535,864, $1,790,789 and nil, respectively, and were capitalized to the cost of the respective vessels. On April 1, 2020, we entered into an agreement with Brave Maritime for the supervision of the construction of the 11,000 cbm LPG vessel under construction, for a fixed fee of Euro 390,000.

Right of First Refusal

As long as Stealth Maritime (or an entity with respect to which Harry N. Vafias is an executive officer, director or shareholder) is our fleet manager or Harry N. Vafias, is an executive officer or director of the Company, Stealth Maritime has granted us a right of first refusal to acquire any LPG carrier, which Stealth Maritime may acquire in the future. Stealth Maritime has also agreed that it will not charter-in any LPG carrier without first offering the opportunity to charter-in such vessel to us. Our President and Chief Executive Officer Harry N. Vafias has granted us an equivalent right with respect to any entity that he is an executive officer, director or principal shareholder of, so long as he is an executive officer or director of us. This right of first refusal does not prohibit Stealth Maritime or an entity controlled by Mr. Vafias from managing vessels owned by unaffiliated third parties in competition with us, nor does it cover product carriers or crude oil tankers.

Office Space

We lease office space from an entity affiliated with Stealth Maritime. In the years ended December 31, 2017, 2018 and 2019, we made lease payments of $82,192, $84,686 and $87,192, respectively. The lease rate for 2020 is €78,000 per year as per renewed contract effective from January 2019.

Vessel Charters

In April 2012, we entered into time charter out agreements with an entity affiliated with members of the Vafias family for the vessels Alpine Endurance (renamed Stealth Bahla) and Gas Esco. The Alpine Endurance charter commenced in June 2012, upon its delivery from the previous charterer. The duration of the charter was four years and there was an option to extend the charter for an additional year. The charter was not extended and instead the vessel was fixed in August 2016 on a one-year bareboat charter to a charterer not related to the Company or the Vafias family. The five-year charter for the Gas Esco commenced in June 2012 and expired in June 2017. Following the charter expiration, Gas Esco was fixed on a two-year bareboat charter to a charterer not related to the Company or the Vafias family. Revenues from these two charters for the years ended December 31, 2017, 2018 and 2019 were $2.0 million, nil and nil, respectively, which are recorded in our consolidated statements of operations under “Revenues—related party”. The vessel operating expenses in accordance with the terms of the respective time charter agreements for the Stealth Bahla and the Gas Esco, for the years ended December 31, 2017, 2018 and 2019, were $0.8 million, nil and nil, respectively, which are recorded in our consolidated statements of operations under “Vessel Operating Expenses—related party.

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C. Interest of Experts and Counsel

Not applicable

Item 8. Financial Information

See “Item 18. Financial Statements” below.

Significant Changes. Other than as described in Note 21 “Subsequent Events” to our consolidated financial statements included in this Annual Report, no significant change has occurred since the date of such consolidated financial statements.

Legal Proceedings. To our knowledge we are not currently a party to any material lawsuit that, if adversely determined, would have a material effect on our financial position, results of operations or liquidity. From time to time in the future we may be subject to legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. Those claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. We have not been involved in any legal proceedings which may have, or have had a material effect on our financial position, results of operations or liquidity, nor are we aware of any proceedings that are pending or threatened which may have a significant effect on our financial position, results of operations or liquidity.

Item 9. The Offer and Listing

Trading on the Nasdaq Stock Market

Following our initial public offering in the United States in October 2005, our shares of common stock were quoted on the Nasdaq National Market, and are now listed on the Nasdaq Global Select Market, under the symbol “GASS”.

Item 10. Additional Information

A. Share Capital

Under our articles of incorporation, our authorized capital stock consists of 5,000,000 shares of preferred stock, $0.01 par value per share, none of which is issued or outstanding and 100,000,000 shares of common stock, $0.01 par value per share, of which 44,549,729 shares were issued, including 4,965,455 shares repurchased by the Company and held as treasury stock, and 39,584,274 shares outstanding and fully paid as of December 31, 2019 and 5,325,247 shares repurchased by the Company and held as treasury stock, and 39,224,482 shares outstanding and fully paid as of April 1, 2020. All of our shares of stock are in registered form.

Common Stock

Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of shares of common stock are entitled to receive ratably all dividends, if any, declared by our Board of Directors out of funds legally available for dividends. Holders of common stock do not have conversion, redemption or preemptive rights to subscribe to any of our securities. All outstanding shares of common stock are, and the shares to be sold in this offering when issued and paid for will be, fully paid and non-assessable. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of any shares of preferred stock which we may issue in the future.

Blank Check Preferred Stock

Under the terms of our articles of incorporation, our Board of Directors has authority, without any further vote or action by our stockholders, to issue up to 5,000,000 shares of blank check preferred stock. Our Board of

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Directors could issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.

Dividends

We have not paid a dividend since March 2009. In the first quarter of 2009, our Board of Directors determined to suspend the payment of cash dividends as a result of weak market conditions in the international shipping industry and to preserve the Company’s liquid cash resources. Our board of directors will evaluate our dividend policy consistent with our cash flows and liquidity requirements.

Declaration and payment of any dividend is subject to the discretion of our Board of Directors. The timing and amount of dividend payments will be dependent upon our earnings, financial condition, cash requirements and availability, restrictions in our loan agreements, or other financing arrangements, the provisions of Marshall Islands law affecting the payment of distributions to stockholders and other factors. Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to pay dividends to us. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment thereof.

Under the terms of our existing credit facilities, we are generally permitted to declare or pay cash dividends in any twelve-month period as long as the amount of the dividends and share repurchases do not exceed 50% of the Company’s free cash flow (as defined in our credit agreements) and provided we are not in default under the other covenants contained in these credit facilities. See “Item 3. Key Information—Risk Factors—Risks Related To Our Common Stock—We may not pay dividends on our common stock”.

B. Articles of Incorporation and Bylaws

Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Marshall Islands Business Corporations Act, or BCA. Our articles of incorporation and bylaws do not impose any limitations on the ownership rights of our stockholders.

Under our bylaws, annual stockholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held in or outside of the Marshall Islands. Special meetings may be called by the Board of Directors. Our Board of Directors may set a record date between 15 and 60 days before the date of any meeting to determine the stockholders that will be eligible to receive notice and vote at the meeting.

Directors. Our directors are elected by a plurality of the votes cast at a meeting of the stockholders by the holders of shares entitled to vote in the election. There is no provision for cumulative voting.

The Board of Directors may change the number of directors by a vote of a majority of the entire board. Each director shall be elected to serve until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. The Board of Directors has the authority to fix the amounts which shall be payable to the members of our Board of Directors for attendance at any meeting or for services rendered to us.

Dissenters’ Rights of Appraisal and Payment. Under the BCA, our stockholders have the right to dissent from various corporate actions, including any merger or sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. However, the right of a dissenting stockholder under the BCA to receive payment of the fair value of his shares is not available for the shares of any class or series of stock, which shares or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of the stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a securities exchange or admitted for

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trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. The right of a dissenting stockholder to receive payment of the fair value of his or her shares shall not be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation. In the event of any further amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the circuit court in the judicial circuit in the Marshall Islands in which our Marshall Islands office is situated. The value of the shares of the dissenting stockholder is fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser.

Stockholders’ Derivative Actions. Under the BCA, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.

Anti-takeover Provisions of our Charter Documents. Several provisions of our articles of incorporation and bylaws may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directors to maximize stockholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise, that a stockholder may consider in its best interest and (2) the removal of incumbent officers and directors.

Blank Check Preferred Stock. Under the terms of our articles of incorporation, our Board of Directors has authority, without any further vote or action by our stockholders, to issue up to 5,000,000 shares of blank check preferred stock. Our Board of Directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.

Classified Board of Directors. Our articles of incorporation provide for a Board of Directors serving staggered, three-year terms. Approximately one-third of our Board of Directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It could also delay stockholders who do not agree with the policies of the Board of Directors from removing a majority of the Board of Directors for two years.

Election and Removal of Directors. Our articles of incorporation and bylaws prohibit cumulative voting in the election of directors. Our bylaws require parties other than the Board of Directors to give advance written notice of nominations for the election of directors. Our bylaws also provide that our directors may be removed only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capital stock entitled to vote for those directors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Calling of Special Meetings of Stockholders. Our bylaws provide that special meetings of our stockholders may be called only by resolution of our Board of Directors.

Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our bylaws provide that stockholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of stockholders must provide timely notice of their proposal in writing to the corporate secretary.

Generally, to be timely, a stockholder’s notice must be received at our principal executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the previous year’s annual meeting. If,

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however, the date of our annual meeting is more than 30 days before or 60 days after the first anniversary date of the previous year’s annual meeting, a stockholder’s notice must be received at our principal executive offices by the later of (i) the close of business on the 90th day prior to the annual meeting date or (ii) the close of business on the tenth day following the date on which such annual meeting date is first publicly announced or disclosed by us. Our bylaws also specify requirements as to the form and content of a stockholder’s notice. These provisions may impede stockholders’ ability to bring matters before an annual meeting of stockholders or make nominations for directors at an annual meeting of stockholders.

Business Combinations. Our articles of incorporation prohibit us from engaging in a “business combination” with certain persons for three years following the date the person becomes an interested stockholder. Interested stockholders generally include:

• persons who are the beneficial owners of 15% or more of the outstanding voting stock of the corporation; and

• persons who are affiliates or associates of the corporation and who hold 15% or more of the corporation’s outstanding voting stock at any time within three years before the date on which the person’s status as an interested stockholder is determined.

Subject to certain exceptions, a business combination includes, among other things:

• certain mergers or consolidations of the corporation or any direct or indirect majority-owned subsidiary of the company;

• the sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets having an aggregate market value equal to 10% or more of either the aggregate market value of all assets of the corporation, determined on a consolidated basis, or the aggregate value of all the outstanding stock of the corporation;

• certain transactions that result in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

• any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation that is owned directly or indirectly by the interested stockholder; and

• any receipt by the interested stockholder of the benefit (except as a stockholder) of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

These provisions of our articles of incorporation do not apply to a business combination if:

• before a person becomes an interested stockholder, the board of directors of the corporation approves the business combination or transaction in which the stockholder became an interested stockholder;

• upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than certain excluded shares;

• following a transaction in which the person became an interested stockholder, the business combination is (a) approved by the board of directors of the corporation and (b) authorized at a regular or special meeting of stockholders, and not by written consent, by the vote of the holders of at least two-thirds of the voting stock of the corporation not owned by the stockholder; or

• a transaction with a stockholder that was or became an interested stockholder prior to the consummation of our initial public offering.

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C. Material Contracts

We refer to “Item 7. Major Shareholders and Related Party Transactions—B. Related Party Transactions” for a discussion of our material agreements outside the ordinary course of our business to which we are a party.

Other than the agreements discussed in the aforementioned section of this annual report, we have no material contracts, other than contracts entered into in the ordinary course of business, to which we or any member of the group is a party.

D. Exchange Controls and Other Limitations Affecting Stockholders

Under Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions that affect the remittance of dividends, interest or other payments to non-resident holders of our common stock.

We are not aware of any limitations on the rights to own our common stock, including rights of non-resident or foreign stockholders to hold or exercise voting rights on our common stock, imposed by foreign law or by our articles of incorporation or bylaws.

E. Tax Considerations

Marshall Islands Tax Consequences

We are incorporated in the Marshall Islands. Because we and our subsidiaries do not, and we do not expect that we and our subsidiaries will, conduct business or operations in the Republic of The Marshall Islands, under current Marshall Islands law we are not subject to tax on income or capital gains and no Marshall Islands withholding tax will be imposed upon payments of dividends by us to our stockholders so long as such stockholders do not reside in, maintain offices in, or engage in business in the Republic of The Marshall Islands. In addition, holders of shares of our common stock will not be subject to Marshall Islands stamp, capital gains or other taxes on the purchase, ownership or disposition of shares of our common stock and will not be required by the Republic of The Marshall Islands to file a tax return relating to such common stock.

United States Federal Income Tax Consequences

Except as otherwise noted, this discussion is based on the assumption that we will not maintain an office or other fixed place of business within the United States. We have no current intention of maintaining such an office. References in this discussion to “we” and “us” are to StealthGas Inc. and its subsidiaries on a consolidated basis, unless the context otherwise requires.

United States Federal Income Taxation of Our Company

Taxation of Operating Income: In General

Unless exempt from United States federal income taxation under the rules discussed below, a foreign corporation is subject to United States federal income taxation in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a pool, partnership, strategic alliance, joint operating agreement or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to as “shipping income,” to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources within the United States, which we refer to as “United States-source shipping income.”

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Shipping income attributable to transportation that both begins and ends in the United States is generally considered to be 100% from sources within the United States. We do not expect to engage in transportation that produces income which is considered to be 100% from sources within the United States.

Shipping income attributable to transportation exclusively between non-United States ports is generally considered to be 100% derived from sources outside the United States. Shipping income derived from sources outside the United States will not be subject to any United States federal income tax.

In the absence of exemption from tax under Section 883, our gross United States-source shipping income, unless determined to be effectively connected with the conduct of a United States trade or business, as described below, would be subject to a 4% tax imposed without allowance for deductions as described below.

Exemption of Operating Income from United States Federal Income Taxation

Under Section 883 of the Code, an entity, such as us and our vessel-owning subsidiaries, that is treated for United States federal income tax purposes as a non-United States on-United States corporation will be exempt from United States federal income taxation on its United States-source shipping income if:

(i) the entity is organized in a country other than the United States (an “equivalent exemption jurisdiction”) that grants an exemption to corporations organized in the United States that is equivalent to that provided for in Section 883 of the Code (an “equivalent exemption”); and

(ii) either (A) for more than half of the days in the relevant tax year more than 50% of the value of the entity’s stock is owned, directly or under applicable constructive ownership rules, by individuals who are residents of equivalent exemption jurisdictions or certain other qualified shareholders (the “50% Ownership Test”) and certain ownership certification requirements are complied with or (B) for the relevant tax year the entity’s stock is “primarily and regularly traded on an established securities market” in an equivalent exemption jurisdiction or the United States (the “Publicly-Traded Test”).

We believe, based on Revenue Ruling 2008-17, 2008-12 IRB 626, and the exchanges of notes referred to therein, that each of Cyprus, Liberia, Malta and the Marshall Islands, the jurisdictions in which we and our vessel-owning subsidiaries are organized, is an equivalent exemption jurisdiction with respect to income from bareboat and time or voyage charters. Under the rules described in the preceding paragraph, our wholly-owned vessel-owning subsidiaries that are directly or indirectly wholly-owned by us throughout a taxable year will be entitled to the benefits of Section 883 for such taxable year if we satisfy the 50% Ownership Test or the Publicly-Traded Test for such year. Due to the widely-held ownership of our stock, it may be difficult for us to satisfy the 50% Ownership Test. Our ability to satisfy the Publicly-Traded Test is discussed below.

The Section 883 regulations provide, in pertinent part, that stock of a foreign corporation will be considered to be “primarily traded” on an established securities market in a particular country if the number of shares of each class of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each such class that are traded during that year on established securities markets in any other single country. Our common stock, which is the sole class of our issued and outstanding stock, is “primarily traded” on the Nasdaq Global Select Market.

Under the regulations, our common stock will be considered to be “regularly traded” on an established securities market if one or more classes of our stock representing more than 50% of our outstanding shares, by total combined voting power of all classes of stock entitled to vote and total value, is listed on the market. We refer to this as the listing threshold. Since our common stock is our sole outstanding class of stock and is listed on the Nasdaq Global Select Market, we will satisfy the listing requirement.

It is further required that with respect to each class of stock relied upon to meet the listing threshold (i) such class of the stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable

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year or 1/6 of the days in a short taxable year; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year. We believe we will satisfy the trading frequency and trading volume tests. Even if this were not the case, the regulations provide that the trading frequency and trading volume tests will be deemed satisfied if, as we believe to be the case with our common stock, such class of stock is traded on an established market in the United States and such stock is regularly quoted by dealers making a market in such stock.

Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of our stock will not be considered to be “regularly traded” on an established securities market for any taxable year in which 50% or more of such class of our outstanding shares of the stock is owned, actually or constructively under specified stock attribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the value of such class of our outstanding stock, which we refer to as the “5% Override Rule.”

For purposes of being able to determine the persons who own 5% or more of our stock, or “5% Stockholders,” the regulations permit us to rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the United States Securities and Exchange Commission, or the “SEC,” as having a 5% or more beneficial interest in our common stock. The regulations further provide that an investment company which is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% Stockholder for such purposes.

Our shares of common stock have in the past and may in the future also be, owned, actually or under applicable attribution rules, such that 5% Stockholders own, in the aggregate, 50% or more of our common stock. In such circumstances, we will be subject to the 5% Override Rule unless we can establish that among the shares included in the closely-held block of our shares of common stock are a sufficient number of shares of common stock that are owned or treated as owned by “qualified share-holders” that the shares of common stock included in such block that are not so treated could not constitute 50% or more of the shares of our common stock for more than half the number of days during the taxable year. In order to establish this, such qualified share-holders would have to comply with certain documentation and certification requirements designed to substantiate their identity as qualified share-holders. For these purposes, a “qualified share-holder” includes (i) an individual that owns or is treated as owning shares of our common stock and is a resident of a jurisdiction that provides an exemption that is equivalent to that provided by Section 883 of the Code and (ii) certain other persons. There can be no assurance that we will not be subject to the 5% Override Rule.

Our Chief Executive Officer, who is treated under applicable ownership attribution rules as owning approximately 19.8% of our shares of common stock as of April 1, 2020, has entered into an agreement with us regarding his compliance, and the compliance by certain entities that he controls and through which he owns our shares, with the certification requirements designed to substantiate status as qualified stockholders. In certain circumstances, his compliance and the compliance of such entities he controls with the terms of that agreement may enable us and our subsidiaries to qualify for the benefits of Section 883 even where persons each of whom owns, either directly or under applicable attribution rules, 5% or more of our shares own, in the aggregate, more than 50% of our outstanding shares. There can be no assurance, however, that his compliance and the compliance of such entities he controls with the terms of that agreement will enable us or our subsidiaries to qualify for the benefits of Section 883.

There can be no assurance that we or any of our subsidiaries will qualify for the benefits of Section 883 for any year.

To the extent the benefits of Section 883 are unavailable, our United States-source shipping income and that at our subsidiaries, to the extent not considered to be “effectively connected” with the conduct of a United States trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions. Since under the sourcing rules described above, we expect that no

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more than 50% of our shipping income and that of our subsidiaries would be treated as being derived from United States-sources, we expect that the maximum effective rate of United States federal income tax on such gross shipping income would never exceed 2% under the 4% gross basis tax regime.

To the extent the benefits of the Section 883 exemption are unavailable and our United States-source shipping income or that of our subsidiaries is considered to be “effectively connected” with the conduct of a United States trade or business, as described below, any such “effectively connected” United States-source shipping income, net of applicable deductions, would be subject to the United States federal corporate income tax currently imposed at rates of up to 21%. In addition, we or our subsidiaries may be subject to the 30% “branch profits” taxes on earnings effectively connected with the conduct of such trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of a United States trade or business by us or our subsidiaries.

Our United States-source shipping income and that of our subsidiaries, other than leasing income, will be considered “effectively connected” with the conduct of a United States trade or business only if:

• we or our subsidiaries have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and

• substantially all (at least 90%) of our United States-source shipping income, other than leasing income or that of a subsidiary, is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.

We do not intend to have, or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis.

Our United States-source shipping income from leasing or that of our subsidiaries will be considered “effectively connected” with the conduct of a United States trade or business only if:

• we or our subsidiaries have, or are considered to have, a fixed place of business in the United States that is involved in the meaning of such leasing income; and

• substantially all (at least 90%) of our United States-source shipping income from leasing or that of a subsidiary is attributable to such fixed place of business.

For these purposes, leasing income is treated as attributable to a fixed place of business where such place of business is a material factor in the realization of such income and such income is realized in the ordinary course of business carried on through such fixed place of business. Based on the foregoing and on the expected mode of our shipping operations and other activities, we believe that none of our United States-source shipping income or that of our subsidiaries is “effectively connected” with the conduct of a United States trade or business.

United States Taxation of Gain on Sale of Vessels

Regardless of whether we qualify for exemption under Section 883, we will not be subject to United States federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel will be so structured that it will be considered to occur outside of the United States.

United States Federal Income Taxation of United States Holders

As used herein, the term “United States Holder” means a beneficial owner of common stock that is a United States citizen or resident, United States corporation or other United States entity taxable as a corporation, an

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estate the income of which is subject to United States federal income taxation regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust.

This discussion applies only to beneficial owners of common stock that own the common stock as “capital assets” (generally, for investment purposes) and does not comment on all aspects of U.S. federal income taxation that may be important to certain shareholders in light of their particular circumstances, such as shareholders subject to special tax rules (e.g., financial institutions, regulated investment companies, real estate investment trusts, insurance companies, traders in securities that have elected the mark-to-market method of accounting for their securities, persons liable for alternative minimum tax, broker-dealers, tax-exempt organizations, partnerships or other pass-through entities and their investors or former citizens or long-term residents of the United States) or shareholders that will hold common stock as part of a straddle, hedge, conversion, constructive sale or other integrated transaction for U.S. federal income tax purposes, all of whom may be subject to U.S. federal income tax rules that differ significantly from those summarized below.

If a partnership (or an entity treated as a partnership for United States federal income tax purposes) holds our common stock, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common stock, you are encouraged to consult your tax advisor.

Distributions

Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to our common stock to a United States Holder will generally constitute dividends, which may be taxable as ordinary income or “qualified dividend income” as described in more detail below, to the extent of our current or accumulated earnings and profits, as determined under United States federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a nontaxable return of capital to the extent of the United States Holder’s tax basis in his common stock on a dollar for dollar basis and thereafter as capital gain. Because we are not a United States corporation, United States Holders that are corporations will not be entitled to claim a dividends received deduction with respect to any distributions they receive from us. Dividends paid with respect to our common stock will generally be treated as passive category income or, in the case of certain types of United States Holders, general category income for purposes of computing allowable foreign tax credits for United States foreign tax credit purposes.

Dividends paid on our common stock to a United States Holder who is an individual, trust or estate (a “United States Individual Holder”) should be treated as “qualified dividend income” that is taxable to such United States Individual Holders at preferential tax rates provided that (1) the common stock is readily tradable on an established securities market in the United States (such as the Nasdaq Global Select Market); (2) we are not a passive foreign investment company, or PFIC, for the taxable year during which the dividend is paid or the immediately preceding taxable year see the discussion under the heading “PFIC Status and Significant Tax Consequences” below for a discussion of our potential qualification as a PFIC; and (3) the United States Individual Holder owns the common stock (and has not been protected from risk of loss) for more than 60 days in the 121-day period beginning 60 days before the date on which the common stock becomes ex-dividend. Special rules may apply to any “extraordinary dividend”. Generally, an extraordinary dividend is a dividend in an amount which is equal to or in excess of ten percent of a stockholder’s adjusted basis (or fair market value in certain circumstances) in a share of common stock paid by us. If we pay an “extraordinary dividend” on our common stock that is treated as “qualified dividend income,” then any loss derived by a United States Individual Holder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of such dividend. There is no assurance that any dividends paid on our common stock will be eligible for these preferential rates in the hands of a United States Individual Holder. Any dividends paid by us which are not eligible for these preferential rates will be taxed to a United States Individual Holder at the standard ordinary income rates. Legislation has been proposed which, if enacted into law in its present form, would likely preclude,

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prospectively from the date of enactment, our dividends from being treated as “qualified dividend income” eligible for the preferential tax rates described above.

Sale, Exchange or other Disposition of Common Stock

Assuming we do not constitute a PFIC for any taxable year, a United States Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common stock in an amount equal to the difference between the amount realized by the United States Holder from such sale, exchange or other disposition and the United States Holder’s tax basis in such stock. Such gain or loss will be treated as long-term capital gain or loss if the United States Holder’s holding period is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as United States-source income or loss, as applicable, for United States foreign tax credit purposes. A United States Holder’s ability to deduct capital losses is subject to certain limitations.

PFIC Status and Significant Tax Consequences

Special United States federal income tax rules apply to a United States Holder that holds stock in a foreign corporation classified as a PFIC for United States federal income tax purposes. In general, we will be treated as a PFIC with respect to a United States Holder if, for any taxable year in which such holder held our common stock, either:

• at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or

• at least 50% of the average value of our assets during such taxable year produce, or are held for the production of, passive income.

For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of our subsidiary corporations in which we own at least 25 percent of the value of the subsidiary’s stock. Income earned, or deemed earned, by us in connection with the performance of services will not constitute passive income. By contrast, rental income will generally constitute “passive income” unless we are treated under specific rules as deriving our rental income in the active conduct of a trade or business.

We may hold, directly or indirectly, interests in other entities that are PFICs (“Subsidiary PFICs”). If we are a PFIC, each United States Holder will be treated as owning its pro rata share by value of the stock of any such Subsidiary PFICs.

In connection with determining our PFIC status we treat and intend to continue to treat the gross income that we derive or are deemed to derive from our time chartering activities as services income, rather than rental income. We believe that our income from time chartering activities does not constitute “passive income” and that the assets that we own and operate in connection with the production of that income do not constitute assets held for the production of passive income. We treat and intend to continue to treat, for purposes of the PFIC rules, the income that we derive from bareboat charters as passive income and the assets giving rise to such income as assets held for the production of passive income. We believe there is substantial authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. There is, however, no legal authority specifically under the PFIC rules regarding our current and proposed method of operation and it is possible that the Internal Revenue Service, or IRS, may not accept our positions and that a court may uphold such challenge, in which case we and certain of our subsidiaries could be treated as PFICs. In this regard we note that a federal court decision, Tidewater Inc. and Subsidiaries v. United States, 565 F.3d 299 (5th Cir. 2009), held that income derived from certain time chartering activities should be treated as rental income rather than services income for purposes of the “foreign sales corporation” rules under the Code. The IRS has stated that it disagrees with and

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will not acquiesce to the Tidewater decision, and in its discussion stated that the time charters at issue in Tidewater would be treated as producing services income for PFIC purposes. However, the IRS’s statement with respect to the Tidewater decision was an administrative action that cannot be relied upon or otherwise cited as precedent by taxpayers. Consequently, in the absence of any binding legal authority specifically relating to the statutory provisions governing PFICs, there can be no assurance that the IRS or a court would agree with the Tidewater decision. In addition, in making the determination as to whether we are a PFIC, we intend to treat the deposits that we make on our newbuilding contracts and that are with respect to vessels we do not expect to bareboat charter as assets which are not held for the production of passive income for purposes of determining whether we are a PFIC. We note that there is no direct authority on this point and it is possible that the IRS may disagree with our position. However, if the principles of the Tidewater decision were applicable to our time charters, or our new build deposits were treated as assets producing passive income, we would likely be treated as a PFIC. Moreover, although we intend to conduct our affairs in a manner to avoid being classified as a PFIC, we cannot assure you that the nature of our assets, income and operations will not change, or that we can avoid being treated as a PFIC for any taxable year.

We do not believe that we were a PFIC for 2019. This belief is based in part upon our beliefs regarding the value of the assets that we hold for the production of or in connection with the production of passive income relative to the value of our other assets. Should these beliefs turn out to be incorrect, then we and certain of our subsidiaries could be treated as PFICs for 2019. There can be no assurance that the IRS or a court will not determine values for our assets that would cause us to be treated as a PFIC for 2019 or a subsequent year. In addition, although we do not believe that we were a PFIC for 2019, we may choose to operate our business in the current or in future taxable years in a manner that could cause us to become a PFIC for those years. Because our status as a PFIC for any taxable year will not be determinable until after the end of the taxable year, and depends upon our assets, income and operations in that taxable year, there can be no assurance that we will not be considered a PFIC for 2019 or any future taxable year.

As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a United States Holder would be subject to different taxation rules depending on whether the United States Holder makes an election to treat us as a “Qualified Electing Fund,” which election we refer to as a “QEF election.” As an alternative to making a QEF election, a United States Holder should be able to make a “mark-to-market” election with respect to our common stock, as discussed below. Regardless of whether a United States Holder makes a QEF election or a mark-to-market election, if we were to be treated as a PFIC for any taxable year ending on or after December 31, 2019, the United States Holder generally would be required to file an IRS Form 8621 reporting his ownership of shares in a PFIC.

Taxation of United States Holders Making a Timely QEF Election

If a United States Holder makes a timely QEF election, which United States Holder we refer to as an “Electing Holder,” the Electing Holder must report each year for United States federal income tax purposes his pro-rata share of our ordinary earnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not distributions were received from us by the Electing Holder. Generally, a QEF election should be made on or before the due date for filing the electing United States Holder’s U.S. federal income tax return for the first taxable year in which our common stock is held by such United States Holder and we are classified as a PFIC. The Electing Holder’s adjusted tax basis in the common stock will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the common stock and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common stock. A United States Holder would make a QEF election with respect to any year that our company and any PFIC Subsidiary is a PFIC by filing one copy of IRS Form 8621 with his United States federal income tax return and a second copy in accordance with the instructions to such form. If we were aware that we were to be treated as a PFIC for any taxable year, we would provide each United States Holder with all necessary information in order to make the QEF election described above with respect to our common stock and the stock of any Subsidiary PFIC.

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Taxation of United States Holders Making a “Mark-to-Market” Election

Alternatively, if we were to be treated as a PFIC for any taxable year and, as we anticipate, our common stock is treated as “marketable stock,” a United States Holder would be allowed to make a “mark-to-market” election with respect to our common stock, provided the United States Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. If that election is made, the United States Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the common stock at the end of the taxable year over such holder’s adjusted tax basis in the common stock. The United States Holder would also be permitted an ordinary loss in respect of the excess, if any, of the United States Holder’s adjusted tax basis in the common stock over its fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A United States Holder’s tax basis in his common stock would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of our common stock would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common stock would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included by the United States Holder. A mark-to-market election under the PFIC rules with respect to our common stock would not apply to a Subsidiary PFIC, and a United States Holder would not be able to make such a mark-to-market election in respect of its indirect ownership interest in that Subsidiary PFIC. Consequently, United States Holders of our common stock could be subject to the PFIC rules with respect to income of the Subsidiary PFIC, the value of which already had been taken into account indirectly via mark-to-market adjustments.

Taxation of United States Holders Not Making a Timely QEF or Mark-to-Market Election

If we were to be treated as a PFIC for any taxable year, a United States Holder who does not make either a QEF election or a “mark-to-market” election for that year, whom we refer to as a “Non-Electing Holder,” would be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder on our common stock in a taxable year in excess of 125 percent of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the common stock), and (2) any gain realized on the sale, exchange or other disposition of our common stock. Under these special rules:

• the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common stock;

• the amount allocated to the current taxable year or to any portion of the United States Holder’s holding period prior to the first taxable year for which we were a PFIC would be taxed as ordinary income; and

• the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection with its acquisition of our common stock.

Other PFIC Elections.

If a United States Holder held our stock during a period when we were treated as a PFIC but the United States Holder did not have a QEF election in effect with respect to us, then in the event that we were not treated as a PFIC for a subsequent taxable year, the United States Holder could elect to cease to be subject to the rules described above with respect to those shares by making a “deemed sale” or, in certain circumstances, a “deemed dividend” election with respect to our stock. If the United States Holder makes a deemed sale election, the United States Holder will be treated, for purposes of applying the rules described above under the heading

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“Taxation of United States Holders Not Making a Timely QEF or Mark-to-Market Election”, as having disposed of our stock for its fair market value on the last day of the last taxable year for which we qualified as a PFIC (the “termination date”). The United States Holder would increase his, her or its basis in such common stock by the amount of the gain on the deemed sale described in the preceding sentence. Following a deemed sale election, the United States Holder would not be treated, for purposes of the PFIC rules, as having owned the common stock during a period prior to the termination date when we qualified as a PFIC.

If we were treated as a “controlled foreign corporation” for United States federal income tax purposes for the taxable year that included the termination date, then a United States Holder could make a “deemed dividend” election with respect to our common stock. If a deemed dividend election is made, the United States Holder is required to include in income as a dividend his, her or its pro rata share (based on all of our stock held by the United States Holder, directly or under applicable attribution rules, on the termination date) of our post-1986 earnings and profits as of the close of the taxable year that includes the termination date (taking only earnings and profits accumulated in taxable years in which we were a PFIC into account). The deemed dividend described in the preceding sentence is treated as an excess distribution for purposes of the rules described above under the heading “Taxation of United States Holders Not making a Timely QEF or Mark-to-Market Election”. The United States Holder would increase his, her or its basis in our stock by the amount of the deemed dividend. Following a deemed dividend election, the United States Holder would not be treated, for purposes of the PFIC rules, as having owned the stock during a period prior to the termination date when we qualified as a PFIC. For purposes of determining whether the deemed dividend election is available, we generally will be treated as a controlled foreign corporation for a taxable year when, at any time during that year, United States persons, each of whom owns, directly or under applicable attribution rules, shares having 10% or more of the total voting power of our stock, in the aggregate own, directly or under applicable attribution rules, shares representing more than 50% of the voting power or value of our stock.

A deemed sale or deemed dividend election must be made on the United States Holder’s original or amended return for the shareholder’s taxable year that includes the termination date and, if made on an amended return, such amended return must be filed not later than the date that is three years after the due date of the original return for such taxable year. Special rules apply where a person is treated, for purposes of the PFIC rules, as indirectly owning our common stock.

United States Federal Income Taxation of “Non-United States Holders”

A beneficial owner of common stock that is not a United States Holder and is not treated as a partnership for United States federal income tax purposes is referred to herein as a “Non-United States Holder.”

Dividends on Common Stock

Non-United States Holders generally will not be subject to United States federal income tax or withholding tax on dividends received from us with respect to our common stock, unless that income is effectively connected with the Non-United States Holder’s conduct of a trade or business in the United States. If the Non-United States Holder is entitled to the benefits of a United States income tax treaty with respect to those dividends, that income generally is taxable only if it is attributable to a permanent establishment maintained by the Non-United States Holder in the United States.

Sale, Exchange or Other Disposition of Common Stock

Non-United States Holders generally will not be subject to United States federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common stock, unless:

• the gain is effectively connected with the Non-United States Holder’s conduct of a trade or business in the United States. If the Non-United States Holder is entitled to the benefits of an income tax treaty with respect to that gain, that gain generally is taxable only if it is attributable to a permanent establishment maintained by the Non-United States Holder in the United States; or

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• the Non-United States Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.

If the Non-United States Holder is engaged in a United States trade or business for United States federal income tax purposes, the income from the common stock, including dividends and the gain from the sale, exchange or other disposition of the stock that is effectively connected with the conduct of that trade or business will generally be subject to regular United States federal income tax in the same manner as discussed in the previous section relating to the taxation of United States Holders. In addition, in the case of a corporate Non-United States Holder, such holder’s earnings and profits that are attributable to the effectively connected income, which are subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30%, or at a lower rate as may be specified by an applicable income tax treaty.

Backup Withholding and Information Reporting

In general, dividend payments, or other taxable distributions, made within the United States to a non-corporate United States Holder will be subject to information reporting requirements and backup withholding tax if such holder:

• fails to provide an accurate taxpayer identification number;

• is notified by the Internal Revenue Service that you have failed to report all interest or dividends required to be shown on your federal income tax returns; or

• in certain circumstances, fails to comply with applicable certification requirements.

Non-United States Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on IRS Form W-8BEN, W-8ECI or W-8IMY, as applicable.

If a holder sells our common stock to or through a United States office or broker, the payment of the proceeds is subject to both United States backup withholding and information reporting unless the holder certifies that it is a non-United States person, under penalties of perjury, or the holder otherwise establishes an exemption. If a holder sells our common stock through a non-United States office of a non-United States broker and the sales proceeds are paid outside the United States then information reporting and backup withholding generally will not apply to that payment. However, United States information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if a holder sells our common stock through a non-United States office of a broker that is a United States person or has some other contacts with the United States.

Backup withholding tax is not an additional tax. Rather, a holder generally may obtain a refund of any amounts withheld under backup withholding rules that exceed such stockholder’s income tax liability by filing a refund claim with the Internal Revenue Service.

F. Dividends and Paying Agents

Not applicable.

G. Statement by Experts

Not applicable.

H. Documents on Display

We are subject to the informational requirements of the Exchange Act. In accordance with these requirements, we file reports and other information as a foreign private issuer with the SEC. The SEC maintains

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a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. You may access our public filings with the SEC without charge on this website.

I. Subsidiary Information

Not applicable.

Item 11. Quantitative and Qualitative Disclosures About Market Risk

Our risk management policy

Our primary market risks relate to adverse movements in freight rates for small LPG carriers and any declines that may occur in the value of our assets which are made up primarily of small LPG carriers. Our policy is to also continuously monitor our exposure to other business risks, including the impact of changes in interest rates, currency rates, and bunker prices on earnings and cash flows. We assess these risks and, when appropriate, enter into derivative contracts with credit-worthy counter parties to minimize our exposure to the risks. In regard to bunker prices, as our employment policy for our vessels has continued to be and is expected to continue with a high percentage of our fleet on period employment, we are not directly exposed for the majority of our fleet to increases in bunker fuel prices as these are the responsibility of the charterer under period charter arrangements. For the remainder of the fleet operating in the spot market we do not intend to enter into bunker hedging arrangements.

Interest rate risk

We are subject to market risks relating to changes in interest rates, because we have floating rate debt outstanding under our loan agreements on which we pay interest based on LIBOR plus a margin. In order to manage our exposure to changes in interest rates due to this floating rate indebtedness, we enter into interest rate swap agreements. Set forth below is a table of our interest rate swap arrangements converting floating interest rate exposure into fixed as of December 31, 2019 and 2020. The swap valuations in the table presented below are presented from the Company’s perspective.

	Effective Date	Termination Date	Notional Amount on Effective Date (in millions)		Fixed Rate (StealthGas pays)			Floating Rate (StealthGas Receives)	Fair Value December 31, 2019 (in millions)			Notional Amount December 31, 2019 (in millions)		Estimated Notional Amount December 31, 2020 (in millions)
Swap 1	September 30, 2015	September 30, 2020	$	17.6		2.60	%	3 month U.S. dollar LIBOR	$	(0.04	)	$	6.82	$	—
Swap 2	September 30, 2015	September 30, 2020	$	17.6		1.69	%	3 month U.S. dollar LIBOR	$	0.005		$	6.82	$	—
Swap 3	October 2, 2015	October 2, 2020	$	12.1		1.54	%	3 month U.S. dollar LIBOR	$	0.03		$	8.60	$	—
Swap 4	November 4, 2015	August 4, 2021	$	11.2		1.52	%	3 month U.S. dollar LIBOR	$	0.02		$	7.92	$	7.11
Swap 5	December 3, 2015	September 3, 2021	$	11.2		1.55	%	3 month U.S. dollar LIBOR	$	0.02		$	7.92	$	7.11
Swap 6	August 16, 2017	May 16, 2025	$	16.0		2.12	%	3 month U.S. dollar LIBOR	$	(0.25	)	$	13.71	$	12.70
Swap 7	March 12, 2018	December 11, 2022	$	21.6		2.74	%	3 month U.S. dollar LIBOR	$	(0.42	)	$	16.77	$	14.01
Swap 8	April 10, 2018	December 11, 2025	$	32.6		2.74	%	3 month U.S. dollar LIBOR	$	(1.37	)	$	29.52	$	27.45
Swap 9	February 16, 2019	February 16, 2024	$	14.5		2.89	%	3 month U.S. dollar LIBOR	$	(0.58	)	$	13.71	$	12.70
Total									$	(2.585	)	$	111.79	$	81.08

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As of December 31, 2019, total bank indebtedness of the Company was $368.2 million, of which $111.8 million was covered by the interest rate swap agreements described above. As set forth in the above table, as of December 31, 2019, we paid fixed rates ranging from 1.52% to 2.89% and received floating rates based on LIBOR of approximately 2.50% under our nine floating-to-fixed rate interest rate swap agreements. We have not and do not intend to enter into interest rate swaps for speculative purposes. Based on the amount of our outstanding indebtedness as of December 31, 2019, and our interest swap arrangements as of December 31, 2019, a hypothetical one percentage point increase in relevant interest rates (three and six month U.S. dollar LIBOR) would have increased our interest expense, on an annualized basis, by approximately $3.0 million (2018: $3.3 million) for the year ended December 31, 2019.

Foreign exchange rate fluctuation

We generate all of our revenues in U.S. dollars and incurred about 14.7% of our expenses in currencies other than U.S. dollars in 2019 (2018: 14%). For accounting purposes, expenses incurred in other currencies are converted into U.S. dollars at the exchange rate prevailing on the date of each transaction. Due to our relatively low percentage exposure of any particular currency other than our base currency, which is the U.S. dollar we believe that such currency movements will not otherwise have a material effect on us. As such, we do not hedge these exposures as the amounts involved do not make hedging economic. As of April 1, 2020 we have no payment obligations related to the building of vessels in currencies other than U.S. dollars.

We have not and do not intend to enter into foreign currency contracts for speculative purposes. Please read Note 2 (Significant Accounting Policies), Note 11 (Long Term Debt) and Note 12 (Derivative and Fair Value Disclosures) to our Financial Statements included herein, which provide additional information with respect to our derivative financial instruments and existing debt agreements.

Item 12. Description of Securities Other than Equity Securities

Not Applicable.

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PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

Not applicable.

Item 15. Controls and Procedures

a. Disclosure Controls and Procedures

StealthGas’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2019. Disclosure controls and procedures are defined under SEC rules as controls and other procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within required time periods. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Based on the Company’s evaluation, management concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2019.

b. Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, and for the assessment of the effectiveness of internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States (“GAAP”).

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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In making its assessment of the Company’s internal control over financial reporting as of December 31, 2019, management used the criteria set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and evaluated the internal control over financial reporting.

Management concluded that, as of December 31, 2019 the Company’s internal control over financial reporting was effective.

c. Attestation Report of the Registered Public Accounting Firm

The effectiveness of our internal control over financial reporting as of December 31, 2019 has been audited by Deloitte Certified Public Accountants S.A., an independent registered public accounting firm, as stated in their report which appears herein.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of StealthGas Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of StealthGas Inc. and subsidiaries (the “Company”) as of December 31, 2019, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2019 of the Company and our report dated April 30, 2020 expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Management’s Report on Internal Control over Financial Reporting.” Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the 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.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/S/ Deloitte Certified Public Accountants S.A.

Athens, Greece

April 30, 2020

94

d. Changes in Internal Control Over Financial Reporting

During the period covered by this Annual Report on Form 20-F, we have made no changes to our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

Item 16A. Audit Committee Financial Expert

The Board has determined that Markos Drakos is an Audit Committee financial expert as defined by the U.S. Securities and Exchange Commission and meets the applicable independence requirements of the U.S. Securities and Exchange Commission and the Nasdaq Stock Market.

Item 16B. Code of Ethics

We have adopted a Code of Business Conduct and Ethics, a copy of which is posted on our website, and may be viewed at http://www.stealthgas.com. We will also provide a paper copy free of charge upon written request by our stockholders. Stockholders may direct their requests to the attention of: Investor Relations, 331 Kifissias Avenue, Erithrea 14561 Athens, Greece. No waivers of the Code of Business Conduct and Ethics were granted to any person during the fiscal year ended December 31, 2019.

Item 16C. Principal Accountant Fees and Services

Remuneration of Deloitte Certified Public Accountants S.A. (“Deloitte”), an Independent Registered Public Accounting Firm (in thousands):

	2019		2018
Audit fees	$	359	$	455
Assurance/audit related fees		—		—
Tax fees		—		—
All other fees		—		—
Total	$	359	$	455

(1) Audit fees

Audit fees represent compensation for professional services rendered for (i) the audit of our financial statements included herein and (ii) the review of our quarterly financial information.

(2) Assurance / Audit Related Fees

Deloitte did not provide any services that would be classified in this category in 2019 and 2018.

(3) Tax Fees

Deloitte did not provide any tax services in 2019 and 2018.

(4) All Other Fees

Deloitte did not provide any other services that would be classified in this category in 2019 and 2018.

Non-audit services

The Audit Committee of our Board of Directors has the authority to pre-approve permissible audit-related and non-audit services not prohibited by law to be performed by our independent auditors and associated fees.

95

Engagements for proposed services either may be separately pre-approved by the audit committee or entered into pursuant to detailed pre-approval policies and procedures established by the audit committee, as long as the audit committee is informed on a timely basis of any engagement entered into on that basis.

Approval for other permitted non-audit services has to be sought on an ad hoc basis.

Where no Audit Committee meeting is scheduled within an appropriate time frame, the approval is sought from the Chairman of the Audit Committee subject to confirmation at the next meeting.

Item 16D. Exemptions from the Listing Standards for Audit Committees

None.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

On May 23, 2019, we publicly announced that our Board of Directors had authorized the repurchase of up to $10,000,000 of shares of our common stock. As of March 30, 2020, 900,702 shares of common stock had been repurchased for an aggregate of $2.8 million (excluding commissions), with the average purchase price of $3.16 per share.

Shares may be purchased from time to time in open market or privately negotiated transactions, which may include derivative transactions, at times and prices that are considered to be appropriate by the Company and the program may be discontinued at any time. The below table presents information about our stock repurchases through March 31, 2020. All purchases have been made on the open market within the safe harbor provisions of Regulation 10b-18 under the Exchange Act. No further repurchases will be conducted prior to the expiration of 10 business days following the expiration of the tender offer announced by the Company on March 31, 2020.

Period	Total Number of Shares Purchased (a)		Average Price Paid Per Share (b)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (c)		Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (d)
May 24 to 31, 2019		18,442	$	3.38		18,442	$	9,937,575
June 04 to 28, 2019		58,789		3.35		77,231		9,740,500
July 2 to 30, 2019		54,883		3.74		132,114		9,535,495
August 1 to 30, 2019		81,534		3.44		213,648		9,254,962
September 03 to 30, 2019		96,946		3.11		310,594		8,953,145
October 01 to 31, 2019		89,392		3.30		399,986		8,657,759
November 01 to 29, 2019		25,380		3.40		425,366		8,571,457
December 02 to 31, 2019		115,544		3.54		540,910		8,162,383
January 02 to 31, 2020		190,879		3.30		731,789		7,533,071
February 21 to 28, 2020		33,890		2.84		765,679		7,436,666
March 02 to 27, 2020		135,023		2.12		900,702		7,150,148

The tender offer announced by the Company on March 31, 2020, expired at 5:00 P.M., New York City Time, on April 28, 2020. Based on the preliminary count by the depositary for the tender offer, the Company expects to repurchase a total of 1,366,045 shares of its common stock through the tender offer at a price of $2.10 per share, for a total cost of $2,868,694.50, excluding fees and expenses. The number of shares of common stock expected to be purchased by the Company and the aggregate purchase price for the shares are preliminary and subject to final confirmation by the depositary and the proper delivery of shares tendered.

Item 16F. Change in Registrant’s Certifying Accountant

Not Applicable.

96

Item 16G. Corporate Governance

Statement of Significant Differences Between our Corporate Governance Practices and Nasdaq Corporate Governance Standards for Non-Controlled U.S. Issuers

As a foreign private issuer, we are not required to comply with certain of the corporate governance practices followed by U.S. companies under the Nasdaq corporate governance standards. We however, voluntarily comply with all applicable Nasdaq corporate governance standards other than that, while Nasdaq requires listed companies to obtain prior shareholder approval for certain issuances of authorized stock in transactions not involving a public offering, as permitted under Marshall Islands law and our articles of incorporation and bylaws, we do not need prior shareholder approval to issue shares of authorized stock.

Item 16H. Mine Safety Disclosures

Not Applicable

97

PART III

Item 17. Financial Statements

See Item 18

Item 18. Financial Statements

Reference is made to the financial statements beginning on page F-1, which are incorporated herein by reference.

Separate financial statements and notes thereto for Spacegas Inc. for the period from February 1, 2019 to December 31, 2019 are being provided as a result of Spacegas Inc. meeting a significance test pursuant to Rule 3-09 of Regulation S-X and, accordingly, the financial statements of Spacegas Inc. for the period from February 1, 2019 to December 31, 2019 are required to be filed as part of this Annual Report on Form 20-F and are set forth in Exhibit 15.3.

Item 19. Exhibits

Number	Description
1.1	Amended and Restated Articles of Incorporation of the Company(1)
1.2	Amended and Restated Bylaws of the Company(2)
2.1	Description of Securities
4.1	Amended and Restated Management Agreement between the Company and Stealth Maritime S.A., as amended(3)
4.2	Form of Right of First Refusal among the Company, Harry Vafias and Stealth Maritime S.A.(4)
4.3	StealthGas Inc.’s 2015 Equity Compensation Plan(5)
8	Subsidiaries
12.1	Certification of the Chief Executive Officer
12.2	Certification of the Chief Financial Officer
13.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002
13.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as added by Section 906 of the Sarbanes-Oxley Act of 2002
15.1	Consent of Independent Registered Public Accounting Firm
15.2	Consent of Independent Auditors
15.3	Financial Statements of Spacegas Inc.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

98

(1) Previously filed as Exhibit 3.1 to the Company’s Registration Statement on Form F-1 (File No. 333-127905) filed with the SEC and hereby incorporated by reference to such Registration Statement.

(2) Previously filed as Exhibit 99.1 to a Report on Form 6-K filed with the SEC on December 24, 2014.

(3) Previously filed as Exhibit 4.1 to the Company’s Annual Report on Form 20-F for the year ended December 31, 2006 filed with the SEC on June 5, 2007.

(4) Previously filed as Exhibit 10.2 to the Company’s Registration Statement on Form F-1 (File No. 333-127905) filed with the SEC and hereby incorporated by reference to such Registration Statement.

(5) Previously filed as Exhibit 4.4 to the Company’s Registration Statement on Form S-8 (File No. 333-207168) filed with the SEC on September 28, 2015.

99

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

STEALTHGAS INC.
By:	/s/ Harry N. Vafias
Name:	Harry N. Vafias
Title:	President and Chief Executive Officer

Date: April 30, 2020

100

StealthGas Inc.

Consolidated Financial Statements

Index to consolidated financial statements

	Pages
Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets—As of December 31, 2018 and 2019		F-3
Consolidated Statements of Operations for the years ended December  31, 2017, 2018 and 2019		F-4
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2017, 2018 and 2019		F-5
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2017, 2018 and 2019		F-6
Consolidated Statements of Cash Flows for the years ended December  31, 2017, 2018 and 2019		F-7
Notes to the Consolidated Financial Statements		F-9

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of StealthGas Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of StealthGas Inc. and subsidiaries (the “Company”) as of December 31, 2018 and 2019, the related consolidated statements of operations, comprehensive loss, stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 30, 2020 expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the 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.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the 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 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 financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte Certified Public Accountants S.A.

April 30, 2020

Athens, Greece

We have served as the Company’s auditor since 2005.

F-2

StealthGas Inc.

Consolidated Balance Sheets

(Expressed in United States Dollars, Except for Share Data)

			December 31,
	Note		2018			2019
Assets
Current assets
Cash and cash equivalents				64,498,442			68,465,342
Trade and other receivables				2,888,496			4,217,101
Other current assets		16		134,301			118,246
Claims receivable				—			314,217
Inventories		4		2,346,723			2,447,703
Advances and prepayments				1,089,539			749,681
Restricted cash				3,002,490			1,589,768
Assets held for sale		6		64,906,448			—
Fair value of derivatives		12		—			30,381
Total current assets				138,866,439			77,932,439
Non current assets
Advances for vessels under construction		5		—			2,988,903
Operating lease right-of-use assets		20		—			473,132
Vessels, net		6		884,748,691			835,152,403
Other receivables				108,930			286,915
Restricted cash				11,930,059			12,065,222
Investments in joint ventures		7		—			25,250,173
Fair value of derivatives		12		1,068,369			39,744
Total non current assets				897,856,049			876,256,492
Total assets				1,036,722,488			954,188,931
Liabilities and Stockholders’ Equity
Current liabilities
Payable to related parties		3		7,930,642			7,043,121
Trade accounts payable				10,349,358			9,032,690
Accrued liabilities		8		6,879,488			6,002,079
Operating lease liabilities		20		—			473,132
Customer deposits		10		1,336,000			968,000
Deferred income		9		5,191,654			2,843,994
Fair value of derivatives		12		—			37,567
Current portion of long-term debt		11		41,726,837			40,735,556
Current portion of long-term debt associated with vessels held for sale		11		30,076,356			—
Total current liabilities				103,490,335			67,136,139
Non current liabilities
Fair value of derivatives		12		465,389			2,618,250
Long-term debt		11		371,514,253			325,247,902
Total non current liabilities				371,979,642			327,866,152
Total liabilities				475,469,977			395,002,291
Commitments and contingencies		19
Stockholders’ equity
Capital stock, 5,000,000 preferred shares authorized and zero outstanding with a par value of $0.01 per share, 100,000,000 common shares authorized 44,549,729 shares issued and 40,125,184 shares outstanding at December 31, 2018 and 44,549,729 shares issued and 39,584,274 shares outstanding at December 31, 2019 with a par value of $0.01 per share		13		445,496			445,496
Treasury stock, 4,424,545 shares at December 31, 2018 and 4,965,455 at December 31, 2019 with a par value of $0.01 per share		13		(22,523,528	)		(24,361,145	)
Additional paid-in capital		13		501,807,478			502,419,122
Retained earnings				80,849,086			82,942,210
Accumulated other comprehensive income/(loss)				673,979			(2,259,043	)
Total stockholders’ equity				561,252,511			559,186,640
Total liabilities and stockholders’ equity				1,036,722,488			954,188,931

The accompanying notes are an integral part of these consolidated financial statements.

F-3

StealthGas Inc.

Consolidated Statements of Operations

For the Years Ended December 31, 2017, 2018 and 2019

(Expressed in United States Dollars, Except for Share Data)

		December 31,
	Note	2017			2018			2019
Revenues
Revenues			152,338,278			164,330,202			144,259,312
Revenues – related party	3		1,973,643			—			—
Total revenues	16		154,311,921			164,330,202			144,259,312
Expenses
Voyage expenses	17		13,804,032			18,649,258			15,201,978
Voyage expenses – related party	3,17		1,912,505			2,037,917			1,788,543
Charter hire expenses	19,20		3,524,770			6,150,780			6,268,988
Vessels’ operating expenses	17		58,618,526			59,920,278			48,619,594
Vessels’ operating expenses – related party	3,17		800,908			514,500			966,500
Dry-docking costs			3,529,047			3,617,577			1,094,306
Management fees – related party	3		7,205,490			7,027,195			5,730,910
General and administrative expenses (including $1,209,499, $1,294,722, and $1,205,683 to related party)			2,898,958			3,046,962			3,706,320
Depreciation	6		38,921,672			41,258,142			37,693,733
Impairment loss	3,6,12		6,461,273			11,351,821			993,916
Net loss on sale of vessels	3,6		77,314			763,925			485,516
Other operating costs/(income)	5		1,058,863			(549,804	)		—
Total expenses			138,813,358			153,788,551			122,550,304
Income from operations			15,498,563			10,541,651			21,709,008
Other (expenses)/income
Interest and finance costs			(16,661,464	)		(23,286,547	)		(20,978,065	)
Gain on deconsolidation of subsidiaries			—			—			145,000
Loss on derivatives	12		(403,943	)		(11,982	)		(107,550	)
Interest income and other income			322,868			587,477			846,271
Foreign exchange gain/(loss)			25,739			(107,119	)		(8,235	)
Other expenses, net			(16,716,800	)		(22,818,171	)		(20,102,579	)
(Loss)/Income before equity in income of investees			(1,218,237	)		(12,276,520	)		1,606,429
Equity gain in joint ventures	7		—			—			486,695
Net (Loss)/Income			(1,218,237	)		(12,276,520	)		2,093,124
(Loss)/earnings per share
– Basic and diluted	15		(0.03	)		(0.31	)		0.05
Weighted average number of shares
– Basic and diluted			39,809,364			39,860,563			39,800,434

The accompanying notes are an integral part of these consolidated financial statements.

F-4

StealthGas Inc.

Consolidated Statements of Comprehensive Loss

For the Years Ended December 31, 2017, 2018 and 2019

(Expressed in United States Dollars)

		December 31,
	Note	2017			2018			2019
Net (loss)/income			(1,218,237	)		(12,276,520	)		2,093,124
Other comprehensive income
Cash flow hedges
Effective portion of changes in fair value of interest swap contracts	12		592,460			56,084			(2,848,056	)
Reclassification adjustment	12		—			—			(84,966	)
Total other comprehensive income/(loss)			592,460			56,084			(2,933,022	)
Total comprehensive loss			(625,777	)		(12,220,436	)		(839,898	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

StealthGas Inc.

Consolidated Statements of Stockholders’ Equity

For the Years Ended December 31, 2017, 2018 and 2019

(Expressed in United States Dollars, Except for Number of Shares)

	Capital stock				Treasury stock
	Number				Number						Additional					Accumulated
	of				of						Paid-in					Other
	Shares		Amount		Shares			Amount			Capital		Retained			Comprehensive
	(Note 13)		(Note 13)		(Note 13)			(Note 13)			(Note 13)		Earnings			Income / (loss)			Total
Balance, January 1, 2017		44,285,108		442,850		(4,424,545	)		(22,523,528	)		501,342,523		94,688,024			25,435			573,975,304
Stock based compensation		—		—		—			—			129,245		—			—			129,245
Comprehensive loss for the year		—		—		—			—			—		(1,218,237	)		592,460			(625,777	)
Balance, December 31, 2017		44,285,108		442,850		(4,424,545	)		(22,523,528	)		501,471,768		93,469,787			617,895			573,478,772
Cumulative effect of accounting change – ASC 606		—		—		—			—			—		(344,181	)		—			(344,181	)
Balance, January 1, 2018		44,285,108		442,850		(4,424,545	)		(22,523,528	)		501,471,768		93,125,606			617,895			573,134,591
Issuance of restricted shares and stock based compensation		264,621		2,646		—			—			335,710		—			—			338,356
Comprehensive loss for the year		—		—		—			—			—		(12,276,520	)		56,084			(12,220,436	)
Balance, December 31, 2018		44,549,729		445,496		(4,424,545	)		(22,523,528	)		501,807,478		80,849,086			673,979			561,252,511
Stock based compensation		—		—		—			—			611,644		—			—			611,644
Stock repurchase		—		—		(540,910	)		(1,837,617	)		—		—			—			(1,837,617	)
Comprehensive loss for the year		—		—		—			—			—		2,093,124			(2,933,022	)		(839,898	)
Balance, December 31, 2019		44,549,729		445,496		(4,965,455	)		(24,361,145	)		502,419,122		82,942,210			(2,259,043	)		559,186,640

The accompanying notes are an integral part of these consolidated financial statements.

F-6

StealthGas Inc.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2017, 2018 and 2019

(Expressed in United States Dollars)

	December 31,
	2017			2018			2019
Cash flows from operating activities
Net (loss)/income for the year		(1,218,237	)		(12,276,520	)		2,093,124
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation		38,921,672			41,258,142			37,693,733
Amortization of deferred finance charges		690,842			858,582			885,191
Amortization of deferred gain on sale and leaseback of vessels		(195,040	)		(190,087	)		—
Amortization of operating lease right-of-use assets		—			—			1,572,943
Share based compensation		129,245			338,356			611,644
Change in fair value of derivatives		(27,372	)		(28,252	)		255,650
Equity gain in joint ventures		—			—			(486,695	)
Impairment loss		6,461,273			11,351,821			993,916
Net loss on sale of vessels		77,314			763,925			485,516
Gain on deconsolidation of subsidiaries		—			—			(145,000	)
Changes in operating assets and liabilities:
(Increase)/decrease in
Trade and other receivables		(179,036	)		531,796			(1,506,590	)
Other current assets		—			159,363			16,055
Claims receivable		(235,705	)		15,951			(1,307,763	)
Inventories		46,824			(302,873	)		617,468
Changes in operating lease liabilities		—			—			(1,572,943	)
Advances and prepayments		57,328			131,490			339,858
Increase/(decrease) in
Balances with related parties		6,434,290			(6,278,982	)		(5,845,771	)
Trade accounts payable		1,299,686			381,941			(1,316,668	)
Accrued liabilities		581,000			339,009			(217,409	)
Deferred income		(490,031	)		755,563			(2,347,660	)
Net cash provided by operating activities		52,354,053			37,809,225			30,818,599
Cash flows from investing activities
Insurance proceeds		219,754			—			993,546
Proceeds from sale of interests in subsidiaries		—			—			20,720,975
Vessels’ acquisitions and advances for vessels under construction		(60,612,867	)		(108,295,690	)		(2,988,903	)
Proceeds from sale of vessels, net		11,479,936			29,742,788			18,721,123
Investment in joint ventures		—			—			(11,322,600	)
Return of investments by joint ventures		—			—			7,363,147
Advances to joint ventures		—			—			(5,083,919	)
Advances from joint ventures		—			—			5,083,919
Net cash (used in)/provided by investing activities		(48,913,177	)		(78,552,902	)		33,487,288
Cash flows from financing activities
Stock repurchase		—			—			(1,837,617	)
Deferred finance charges paid		(815,256	)		(503,265	)		(477,201	)
Advances from joint ventures		—			—			4,958,250
Customer deposits paid		—			(1,220,700	)		(368,000	)
Loan repayments		(56,254,073	)		(56,717,059	)		(97,371,978	)
Proceeds from long-term debt		43,000,000			115,712,500			33,480,000
Net cash (used in)/provided by financing activities		(14,069,329	)		57,271,476			(61,616,546	)
Net (decrease)/increase in cash and cash equivalents		(10,628,453	)		16,527,799			2,689,341
Cash and cash equivalents and restricted cash at beginning of year		73,531,645			62,903,192			79,430,991
Cash and cash equivalents and restricted cash at end of year		62,903,192			79,430,991			82,120,332
Cash breakdown
Cash and cash equivalents		51,754,131			64,498,442			68,465,342
Restricted cash, current		3,231,323			3,002,490			1,589,768
Restricted cash, non-current		7,917,738			11,930,059			12,065,222

F-7

	December 31,
	2017		2018		2019
Total cash, cash equivalents and restricted cash shown in the statements of cash flows		62,903,192		79,430,991		82,120,332
Supplemental Cash Flow Information:
Cash paid during the year for interest, net of amounts capitalized		14,643,885		21,087,903		20,768,672
Non cash investing activity – Vessels under construction		605,800		63,752		63,752

The accompanying notes are an integral part of these consolidated financial statements.

F-8

StealthGas Inc.

Notes to the Consolidated Financial Statements

(Expressed in United States Dollars)

1. Basis of Presentation and General Information

The accompanying consolidated financial statements include the accounts of StealthGas Inc. and its wholly owned subsidiaries (collectively, the “Company”) which, as of December 31, 2019 owned a fleet of thirty seven liquefied petroleum gas (LPG) carriers, three medium range (M.R.) type product carriers and one Aframax tanker providing worldwide marine transportation services under long, medium or short-term charters. StealthGas Inc. was formed under the laws of Marshall Islands on December 22, 2004.

The Company’s vessels are managed by Stealth Maritime Corporation S.A. (the “Manager”), a related party. The Manager is a company incorporated in Liberia and registered in Greece on May 17, 1999 under the provisions of law 89/1967, 378/1968 and article 25 of law 27/75 as amended by article 4 of law 2234/94. (See Note 3).

During 2017 and 2018, no charterer accounted for 10% or more of the Company’s revenues while in 2019 three charterers accounted for 32%.

	Year ended December 31,
Charterer	2017		2018		2019
A		—		—		12	%
B		—		—		10	%
C		—		—		10	%

2. Significant Accounting Policies

Principles of Consolidation: The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of StealthGas Inc. and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated upon consolidation.

Use of Estimates: The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Actual results could differ from those estimates.

Other Comprehensive Income/(Loss): The Company follows the provisions of guidance regarding reporting comprehensive income which requires separate presentation of certain transactions, such as unrealized gains and losses from effective portion of cash flow hedges, which are recorded directly as components of stockholders’ equity.

Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar because the Company’s vessels operate in international shipping markets, which utilize the U.S. Dollar as the functional currency. The accounting books of the Company are maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated to reflect the period end exchange rates. Resulting gains or losses are separately reflected in the accompanying consolidated statements of operations.

Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with original maturity of three months or less to be cash equivalents.

Restricted Cash: Restricted cash mainly reflects deposits with certain banks that can only be used to pay the current loan installments or which are required to be maintained as a certain minimum cash balance per mortgaged vessel or cash held in restricted bank account for guarantees issued by the bank on the Company’s behalf. In the event that the obligation relating to such deposits is expected to be terminated within the next twelve months, these deposits are classified as current assets; otherwise they are classified as non-current assets.

Trade Receivables: The amount shown as trade receivables includes estimated recoveries from charterers for hire, freight and demurrage billings, net of allowance for doubtful accounts. At each balance sheet date, all potentially un-collectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No provision for doubtful accounts was required for any of the periods presented.

F-9

Claims Receivable: Claims receivable are recorded on the accrual basis and represent the claimable expenses, net of deductibles, incurred through each balance sheet date, for which recovery from insurance companies is probable and claim is not subject to litigation. Any remaining costs to complete the claims are included in accrued liabilities.

Inventories: Inventories consist of bunkers (for vessels under voyage charter) and lubricants which are stated at the lower of cost and net realizable value. The cost is determined by the first-in, first-out method. The Company considers victualing and stores as being consumed when purchased and, therefore, such costs are expensed when incurred.

Advances for vessels under construction: This represents amounts expended by the Company in accordance with the terms of the construction contracts for vessels as well as other expenses in connection with on-site supervision. In addition, interest costs incurred during the construction (until the asset is substantially complete and ready for its intended use) are capitalized.

Vessels Acquisitions: Vessels are stated at cost less depreciation and impairment, if any. Cost consists of the contract price less discounts and any material expenses incurred upon acquisition (initial repairs, improvements, acquisition and expenditures made to prepare the vessel for its initial voyage). 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 the vessels, or otherwise are charged to expenses as incurred. The Company records all identified tangible and intangible assets associated with the acquisition of a vessel or liabilities at fair value. Where vessels are acquired with existing time charters, the Company allocates the purchase price to the time charters based on the present value (using an interest rate which reflects the risks associated with the acquired charters) of the difference between (i) the contractual amounts to be paid pursuant to the charter terms and (ii) management’s estimate of the fair market charter rate, measured over a period equal to the remaining term of the charter. The capitalized above-market (assets) and below-market (liabilities) charters are amortized as a reduction and increase, respectively, to revenues over the remaining term of the charter.

Impairment or Disposal of Long-lived Assets: The Company follows the Accounting Standards Codification (“ASC”) Subtopic 360-10, “Property, Plant and Equipment” (“ASC 360-10”), which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If indicators of impairment are present, the Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets, quarterly. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the consolidated statements of operations. Various factors including anticipated future charter rates, estimated scrap values, future dry-docking costs and estimated vessel operating costs are included in this analysis. These factors are based on historical trends as well as future expectations. Undiscounted cash flows are determined by considering the revenues from existing charters for those vessels that have long term employment and when there is no charter in place the estimates based on historical average rates with an annual increase of 1%. The Company also assumes an average annual inflation rate of 1.50% for operating expenses. An impairment loss was identified and recorded for the years ended December 31, 2017, 2018 and 2019 (Note 6).

Vessels’ Depreciation: The cost of each of the Company’s vessels is depreciated on a straight-line basis over the vessel’s remaining economic useful life, after considering the estimated residual value. Management estimates the useful life of each of the Company’s LPG carriers to be 30 years and product and aframax tankers, to be 25 years, from the date of their construction.

Assets Held for Sale: The Company classifies vessels as being held for sale when the following criteria are met: (i) management possessing the necessary authority has committed to a plan to sell the vessels, (ii) the vessels are available for immediate sale in their present condition, (iii) an active program to find a buyer and other actions required to complete the plan to sell the vessels have been initiated, (iv) the sale of the vessels is probable, and transfer of the asset is expected to qualify for recognition as a completed sale within one year and (v) the vessels are being actively marketed for sale at a price that is reasonable in relation to their current fair value and 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. These vessels are not depreciated once they meet the criteria to be classified as held for sale. Furthermore, in the period a vessel meets the held for sale criteria in accordance with ASC 360-10, a loss is recognized for any reduction of the vessel’s carrying amount to its fair value less cost to sell. Concerning assets held for sale as of December 31, 2018, refer to Note 6. No assets were held for sale as of December 31, 2019.

Segment Reporting: The Company reports financial information and evaluates its operations by total charter revenues and not by the type of vessel, length of vessel employment, customer or type of charter. As a result, management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet, and thus, the Company has determined that it operates under one reportable segment as well as one operating segment. Furthermore, when the Company charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, the disclosure of geographical information is impracticable.

F-10

Accounting for Special Survey and Dry-docking Costs: Special survey and dry-docking costs are expensed in the period incurred.

Deferred Finance Charges: Fees incurred for obtaining new loans or refinancing existing ones are deferred and amortized to interest expense over the life of the related debt using the effective interest method. The unamortized deferred financing charges are presented as a direct deduction from the carrying amount of the related loan and credit facility in the consolidated balance sheet. Deferred financing costs relating to undrawn facilities are presented under non-current assets in the consolidated balance sheet.

Accounting for Revenue and Related Expenses: The Company generates its revenues from charterers for the charter hire of its vessels. Vessels are chartered on time charters, bareboat charters or voyage charters.

A time charter is a contract for the use of a vessel for a specific period of time and a specified daily charter hire rate, which is generally payable in advance. Operating costs incurred for running the vessel such as crew costs, vessel insurance, repairs and maintenance and lubricants are paid for by the Company under time charter agreements. A time charter generally provides typical warranties and owner protective restrictions. The performance obligations in a time charter are satisfied over the term of the contract beginning when the vessel is delivered to the charterer until it is redelivered back to the owner of the vessel. Some of the Company’s time charters may also contain profit sharing provisions, under which the Company can realize additional revenues in the event that spot rates are higher than the base rates in these time charters. A bareboat charter is a contract in which the vessel owner provides the vessel to the charterer for a fixed period of time at a specified daily rate, which is generally payable in advance, and the charterer generally assumes all risk and costs of operation during the bareboat charter period. The Company’s time charter and bareboat contracts are classified as operating leases pursuant to Accounting Standards Codification (“ASC”) 842 - Leases, and therefore do not fall under the scope of Accounting Standards Codification (“ASC”) 606 because (i) the vessel is an identifiable asset (ii) the owner of the vessel does not have substantive substitution rights and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives the economic benefits from such use. Time charter and bareboat revenues are recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Time charter and bareboat charter revenues are recognized as earned on a straight-line basis over the term of the charter as service is provided. Revenues from profit sharing arrangements in time charters are recognized in the period earned. Under time and bareboat charter agreements, all voyages expenses, except commissions are assumed by the charterer.

On implementation of ASC 842, the Company, elected to make use of a practical expedient for lessors, not to separate the lease and non-lease components included in the time charter revenue but rather to recognize operating lease revenue as a combined single lease component for all time charter contracts as the related lease component, the hire of a vessel, and non-lease component, the fees for operating and maintaining the vessel, have the same timing and pattern of transfer (both the lease and non-lease components are earned by passage of time) and the predominant component is the lease.

A voyage charter is a contract, in which the vessel owner undertakes to transport a specific amount and type of cargo on a load port-to-discharge port basis, subject to various cargo handling terms. The Company accounts for a voyage charter when all the following criteria are met: (1) the parties to the contract have approved the contract in the form of a written charter agreement and are committed to perform their respective obligations, (2) the Company can identify each party’s rights regarding the services to be transferred, (3) the Company can identify the payment terms for the services to be transferred, (4) the charter agreement has commercial substance (that is, the risk, timing, or amount of the Company’s future cash flows is expected to change as a result of the contract) and (5) it is probable that the Company will collect substantially all of the consideration to which it will be entitled in exchange for the services that will be transferred to the charterer. The Company determined that its voyage charters consist of a single performance obligation which is met evenly as the voyage progresses and begin to be satisfied once the vessel is ready to load the cargo. The voyage charter party agreement generally has a demurrage clause according to which the charterer reimburses the vessel owner for any potential delays exceeding the allowed lay-time as per the charter party clause at the ports visited which is recorded as demurrage revenue. Revenues from voyage charters are recognized on a straight line basis over the voyage duration which commences once the vessel is ready to load the cargo and terminates upon the completion of the discharge of the cargo. In voyage charters, vessel operating and voyage expenses are paid for by the Company. The voyage charters are considered service contracts which fall under the provisions of ASC 606 because the Company retains control over the operations of the vessels such as the routes taken or the vessels’ speed.

F-11

The Company adopted Accounting Standards Update 2014-09, “Revenue from Contracts with Customers” (“ASC 606”) as of January 1, 2018 utilizing the modified retrospective method of transition. The Company recorded an adjustment of approximately $0.3 million to decrease its opening retained earnings on its consolidated balance sheet on January 1, 2018.

Deferred revenue represents cash received for undelivered performance obligations and deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide for varying charter rates. The portion of the deferred revenue that will be earned within the next twelve months is classified as current liability and the remaining as long-term liability.

Vessel voyage expenses are direct expenses to voyage revenues and primarily consist of brokerage commissions, port expenses, canal dues and bunkers. Brokerage commissions are paid to shipbrokers for their time and efforts for negotiating and arranging charter party agreements on behalf of the Company and expensed over the related charter period and all the other voyage expenses are expensed as incurred except for expenses during the ballast portion of the voyage. Any expenses incurred during the ballast portion of the voyage (period between the contract date and the date of the vessel’s arrival to the load port) such as bunker expenses, canal tolls and port expenses are deferred and are recognized on a straight-line basis, in voyage expenses, over the voyage duration as the Company satisfies the performance obligations under the contract provided these costs are (1) incurred to fulfill a contract that the Company can specifically identify, (2) able to generate or enhance resources of the company that will be used to satisfy performance of the terms of the contract, and (3) expected to be recovered from the charterer. These costs are considered ‘contract fulfillment costs’ and are included in ‘other current assets’ in the accompanying consolidated balance sheets.

Vessel operating expenses comprise all expenses relating to the operation of the vessel, including crewing, repairs and maintenance, insurance, stores, lubricants and other operating expenses. Vessel operating expenses are expensed as incurred.

Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses, dry-docking expenses and risk of operation.

Equity Compensation Plan: Share-based compensation includes vested and non-vested shares granted to employees of the Company, to employees of the Manager and to non-employee directors, for their services as directors and is included in General and administrative expenses in the consolidated statements of operations. These shares are measured at their fair value, which is equal to the market value of the Company’s common stock on the grant date. The shares that do not contain any future service vesting conditions are considered vested shares and the total fair value of such shares is recognized in full on the grant date. The shares that contain a time-based service vesting condition are considered non-vested shares on the grant date and a total fair value of such shares is recognized over the vesting period on a straight-line basis over the requisite service period for each separate portion of the award as if the award was, in substance, multiple awards (graded vesting attribution method) (Note 14).

Earnings/(Loss) per Share: Basic earnings per share are computed under the two-class method by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised. Dilution is computed by either the treasury stock method or the two–class method, whichever results in the more dilutive effect. Under the treasury stock method, all of the Company’s dilutive securities are assumed to be exercised or converted and the proceeds used to repurchase common shares at the weighted average market price of the Company’s common stock during the relevant periods. The incremental shares (the difference between the number of shares assumed issued and the number of shares assumed purchased) are included in the denominator of the diluted earnings per share computation to the extent these are not anti-dilutive (Note 15).

Derivatives: The Company is party to interest swap agreements where it receives a floating interest rate and pays a fixed interest rate for a certain period in exchange. The Company designates its derivatives based on guidance on ASC 815, “Derivatives and Hedging” which establishes accounting and reporting requirements for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. The guidance on accounting for certain derivative instruments and certain hedging activities requires all derivative instruments to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in fair value recognized in earnings unless specific hedge accounting criteria are met.

(i) Hedge Accounting: At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy undertaken for the hedge. The documentation includes identification of the hedging instrument, hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting exposure to changes in the hedged item’s cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine whether they actually have been highly effective throughout the financial reporting periods for which they were designated.

F-12

Contracts which meet the strict criteria for hedge accounting are accounted for as cash flow hedges. A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognized asset or liability, or a highly probable forecasted transaction that could affect profit or loss.

The effective portion of the gain or loss on the hedging instrument is recognized directly as a component of “Accumulated other comprehensive income” in equity, while the ineffective portion, if any, is recognized immediately in current period earnings.

The Company discontinues cash flow hedge accounting if the hedging instrument expires and it no longer meets the criteria for hedge accounting or designation is revoked by the Company. At that time, any cumulative gain or loss on the hedging instrument recognized in equity is kept in equity until the forecasted transaction occurs. When the forecasted transaction occurs, any cumulative gain or loss on the hedging instrument is recognized in the statement of income. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in equity is transferred to net profit or loss for the year as a component of “Loss on derivatives”.

(ii) Other Derivatives: Changes in the fair value of derivative instruments that have not been designated as hedging instruments are reported in current period earnings.

Investments in joint ventures: The Company’s investments in joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and the Company’s proportionate share of earnings or losses and distributions. The Company evaluates its investments in joint ventures for impairment when events or circumstances indicate that the carrying value of such investments may have experienced other than temporary decline in value below their carrying value. If the estimated fair value is less than the carrying value and is considered other than a temporary decline, the carrying value is written down to its estimated fair value and the resulting impairment is recorded in the consolidated statements of operations.

Impact of Recently Adopted Accounting Standards

Leases: In February 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-2 (codified as ASC 842), which amends the existing accounting standard for lease accounting and adds additional disclosures about leasing arrangements. ASC 842 requires lessees to recognize on the balance sheet the assets and liabilities for the rights and obligations created by most leases, while lessor accounting remains largely unchanged. ASC 842, as amended, subject to certain transition relief options, requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, or allows entities to elect not to recast the comparative periods presented when transitioning to ASC 842 and to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASC 842 also provides a practical expedient to lessors by class of underlying asset, to not separate non lease components from the associated lease component, similar to the expedient provided for lessees, when the following criteria are met i) the timing and pattern of transfer for the lease component is the same as those for the non-lease component associated with that lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. ASC 842 is effective for public entities with reporting periods beginning after December 15, 2018, including interim periods within those fiscal periods. Early adoption is permitted for all entities. The Company adopted ASC 842 for its reporting period commencing January 1, 2019 which resulted in the recognition of operating lease right-of-use assets and related lease liabilities for operating leases of $1.9 million in Total Assets and Total Liabilities, respectively, on our consolidated balance sheet on January 1, 2019. The Company used the modified retrospective transition method and elected to apply the additional and optional transition method to existing leases at the beginning of the period of adoption through a cumulative effect adjustment to the opening retained earnings as of January 1, 2019. Also, the Company elected to apply a package of practical expedients under ASC 842, which allowed the Company, not to reassess (i) whether any existing contracts, on the date of adoption, contained a lease, (ii) lease classification of existing leases classified as operating leases in accordance with ASC 840 and (iii) initial direct costs for any existing leases. ASC 842 also provides a practical expedient to lessors by class of underlying asset, to not separate non lease components from the associated lease component when the following criteria are met (i) the timing and pattern of transfer for the lease component is the same as those for the non-lease component associated with that lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. The Company, making use of this practical expedient for lessors, has elected not to separate the lease and non-lease components included in the time charter revenue but rather to recognize operating lease revenue as a combined single lease component for all time charter contracts as the related lease component, the hire of a vessel, and non-lease component, the fees for operating and maintaining the vessel, have the same timing and pattern of transfer (both the lease and non-lease components are earned by passage of time) and the predominant component is the lease. Upon adoption of ASC 842, the timing and recognition of earnings from time charter contracts to which the Company acts as lessor did not change from previous practice and thus the adoption of this standard did not have an effect on the Company’s consolidated opening retained earnings, balance sheets and consolidated statements of operations.

The new lease standard will continue to classify leases as either financing or operating, with classification affecting the pattern of expense recognition. The accounting applied by a lessor under the new guidance will be substantially equivalent to current lease accounting guidance and has been discussed above under “Accounting for Revenue and Related Expenses”.

F-13

3. Transactions with Related Parties

The Manager provides the vessels with a wide range of shipping services such as chartering, technical support and maintenance, insurance, consulting, financial and accounting services, for a fixed daily fee of $440 per vessel operating under a voyage or time charter or $125 per vessel operating under a bareboat charter and a brokerage commission of 1.25% on freight, hire and demurrage per vessel, as per the management agreement between the Manager and the Company. The Manager has subcontracted the technical management of some of the vessels to an affiliated ship-management company, Brave Maritime Corp. Inc. (“Brave”). This company provides technical management to the Company’s vessels for a fixed annual fee per vessel which is paid by the Manager. For the years ended December 31, 2017, 2018 and 2019, total brokerage commissions of 1.25% amounted to $1,912,505, $2,037,917 and $1,788,543, respectively, and are included in “Voyage expenses – related party” in the consolidated statements of operations. For the years ended December 31, 2017, 2018 and 2019, the management fees were $7,205,490, $7,027,195 and $5,730,910, respectively and are included in “Management fees – related party” in the consolidated statements of operations. In addition, the Manager arranges for supervision onboard the vessels, when required, by superintendent engineers and when such visits exceed a period of five days in a twelve month period, an amount of $500 is charged for each additional day. For the years ended December 31, 2017, 2018 and 2019, the superintendent fees amounted to $125,500, $137,000 and $104,000, respectively, and are included in “Vessels’ operating expenses – related party” in the consolidated statements of operations.

Effective from 2018, the Manager provides crew management services to some of the Company’s vessels. These services have been subcontracted by the Manager to an affiliated ship-management company, Hellenic Manning Overseas Inc. (ex. Navis Maritime Services Inc.). The Company pays to the Manager a fixed monthly fee of $2,500 per vessel. For the years ended December 31, 2018 and 2019, the crew management fees were $377,500 and $862,500, respectively and are included in “Vessels’ operating expenses – related party” in the consolidated statements of operations.

The Manager also acts as a sales and purchase broker for the Company in exchange for a commission fee equal to 1% of the gross sale or purchase price of vessels or companies. For the years ended December 31, 2017, 2018 and 2019 commission fees relating to vessels purchased of $525,978, $1,598,858 and nil, respectively, were incurred and capitalized to the cost of the vessels. For the years ended December 31, 2017, 2018 and 2019 the amounts of $119,900, $184,000 and $109,000 were recognized as commission expenses relating to the sale of vessels and are included in the consolidated statements of operations under the caption “Net loss on sale of vessels”. For the year ended December 31, 2018, commission expenses relating to the sale of vessels of $212,650 are included in the consolidated statements of operations under the caption “Impairment loss”.

In addition to management services, the Company reimburses the Manager for compensation of its Chief Executive Officer, its Chief Financial Officer, its Internal Auditor, its Chief Technical Officer, its Finance Manager and its Deputy Chairman and Executive Director, which reimbursements were in the amounts of $1,127,307, $1,210,036 and $1,118,491, for the years ended December 31, 2017, 2018 and 2019, respectively, and are included in the consolidated statements of operations under the caption “General and administrative expenses”.

The current account balance with the Manager at December 31, 2018 and at December 31, 2019 was a liability of $7,930,642 and $2,084,871, respectively. The liability represents payments made by the Manager on behalf of the ship-owning companies.

Furthermore, the current account balance with entities that the Company owns 50.1% equity interests (Note 7) amounted to $4,958,250 as of December 31, 2019. The liability represents revenues collected by the Company on behalf of these entities.

The Company rents office space that is owned by an affiliated company of the Manager. Rental expense for the years ended December 31, 2017, 2018 and 2019 amounted to $82,192, $84,686 and $87,192, respectively, and is included in the consolidated statements of operations under the caption “General and administrative expenses”.

In April 2012, the Company entered into time charter agreements for two of the Company’s vessels with Emihar Petroleum Inc., a company affiliated with members of the Vafias family incorporated in the Marshall Islands. The above time charter agreements expired in August 2016 and June 2017. The time charter agreement that expired in June 2017 had a 5-year term at a monthly rate of $337,250. Revenue from the related party amounted to $1,973,643 for the year ended December 31, 2017 and nil for each of the years ended December 31, 2018, and 2019, respectively, and are included in the consolidated statements of operations under the caption “Revenues – related party”. In accordance with the time charter agreements for these vessels’ operating expenses, the Company paid to the Manager amounts of $675,408 for the year ended December 31, 2017, and nil for the years ended December 31, 2018 and 2019, respectively, which are included in the consolidated statements of operations under the caption “Vessels’ operating expenses – related party”.

F-14

On May 26, 2014, the Company entered into an agreement with Brave for the supervision of the construction of eight of its vessels for a fixed fee of Euro 390,000 per vessel. On January 25, 2016, the Company entered into a new supervision agreement with Brave for the supervision of the construction of four of its newbuilding vessels for a fixed fee of Euro 490,000 per vessel. For the years ended December 31, 2017, 2018 and 2019, the supervision fees amounted to $535,864, $1,790,789, and nil, respectively, and were capitalized to the cost of the respective vessels.

4. Inventories

The amounts shown in the accompanying consolidated balance sheets are analyzed as follows:

	December 31,
	2018		2019
Bunkers		1,082,384		1,112,667
Lubricants		1,264,339		1,335,036
Total		2,346,723		2,447,703

5. Advances for Vessels Under Construction and Acquisitions

The amount shown in the accompanying consolidated balance sheet as of December 31, 2019 of $2,988,903 mainly represents an advance payment to a shipbuilder for one LPG carrier under construction that the Company agreed to acquire in 2019 with expected delivery date in 2021.

On November 17, 2016 and on July 18, 2017, the Company agreed with the shipbuilder to postpone the delivery of four newbuildings for an additional charge. For the years ended December 31, 2017 and December 31, 2018, these charges of $863,333 and $146,667, respectively, were included in the accompanying consolidated statement of operations under the caption “Other operating costs/(income)”.

For the years ended December 31, 2018 and 2019, the movement of the account, advances for vessels under construction and acquisitions was as follows:

Balance, December 31, 2017	61,577,818
Advances for vessels under construction and acquisitions	102,597,821
Capitalized expenses	5,155,821
Vessels delivered	(169,331,460	)
Balance, December 31, 2018	—
Advance for vessel under construction	2,891,283
Capitalized interest	97,620
Balance, December 31, 2019	2,988,903

6. Vessels, net

The amounts shown in the accompanying consolidated balance sheets are analyzed as follows:

	Vessel cost			Accumulated Depreciation			Net Book Value
Balance, December 31, 2017		1,090,135,869			(228,073,963	)		862,061,906
Acquisitions (transfer from Advances for Vessels under Construction and Acquisitions)		169,331,460			—			169,331,460
Vessels held for sale		(64,188,000	)		—			(64,188,000	)
Impairment loss		(60,018,802	)		48,666,981			(11,351,821	)
Disposals		(29,846,712	)		—			(29,846,712	)
Depreciation for the year		—			(41,258,142	)		(41,258,142	)
Balance, December 31, 2018		1,105,413,815			(220,665,124	)		884,748,691
Impairment loss		(3,250,000	)		2,256,084			(993,916	)
Disposal		(14,561,832	)		3,653,193			(10,908,639	)
Depreciation for the year		—			(37,693,733	)		(37,693,733	)
Balance, December 31, 2019		1,087,601,983			(252,449,580	)		835,152,403

F-15

The additions in 2018 relate to the acquisition of vessels “Eco Arctic”, “Eco Ice” and “Eco Freeze”.

In March 2018, the Company entered into a memorandum of agreement for the disposal of the vessel “Gas Legacy”, to an unaffiliated third party for $4,990,000. The vessel, including her inventories on board, was classified as assets held for sale in the first quarter of 2018. As a result, the Company measured the vessel at the lower of its carrying amount and fair value less the cost associated with the sale and recognized an impairment charge of $1,418,672 in its consolidated statement of operations for the year ended December 31, 2018. The vessel was delivered to her new owners on August 31, 2018.

At March 31, 2018, the Company decided to seek to dispose of the vessel “Gas Enchanted”. As a result of this decision, the undiscounted net operating cash flows of this vessel did not exceed its carrying value and the Company identified and recognized an impairment charge of $1,937,822 in its consolidated statement of operations for the year ended December 31, 2018. In April 2018, the Company concluded a memorandum of agreement for the disposal of this vessel, to an unaffiliated third party for $8,950,000. The vessel was delivered to her new owners on May 7, 2018.

In April 2018, the Company entered into a memorandum of agreement for the disposal of the vessel “Gas Evoluzione”, to an unaffiliated third party for $3,575,000. The vessel, including her inventories on board, was classified as assets held for sale in the second quarter of 2018. The total impairment charge recognized in the Company’s consolidated statements of operations for the year ended December 31, 2018 amounted to $604,774. The vessel was delivered to her new owners on August 28, 2018.

On June 30, 2018, the Company decided to seek to dispose of the vessel “Gas Sikousis”. As a result of this decision, the undiscounted net operating cash flows of this vessel did not exceed its carrying value and the Company identified and recognized an impairment charge of $842,332 in its consolidated statement of operations for the year ended December 31, 2018. In July 2018, the Company concluded a memorandum of agreement for the disposal of this vessel, to an unaffiliated third party for $9,450,000. The vessel was delivered to her new owners on September 27, 2018.

In July 2018, the Company entered into three separate memoranda of agreement for the disposal of the vessels “Gas Marathon”, “Gas Sincerity and “Gas Texiana” to unaffiliated third parties for a total of $12,700,000. The vessels, including their inventories on board, were classified as vessels held for sale in the third quarter of 2018. The total impairment charge recognized in the Company’s consolidated statements of operations for the year ended December 31, 2018 amounted to $3,358,363. The vessels were delivered to their new owners on October 13, 2018, January 28, 2019 and February 13, 2019, respectively.

The Company disposed the above mentioned vessels as the agreed selling price was a suitable opportunity for the Company and realized an aggregate loss from the sale of these vessels of $763,925 which is included in the Company’s consolidated statement of operations under the caption “Net loss on sale of vessels” for the year ended December 31, 2018.

During the first quarter of 2019, the Company entered into four joint venture agreements with a third party investor based on which the third party investor acquired a 49.9% equity interest in four vessel owning companies of the Company and gained co-ownership and joint control of the vessels “Gas Defiance”, “Gas Shuriken”, “Gas Haralambos” and “Eco Lucidity”. These agreements are accounted for in the Company’s financial statements as an equity investment since the Company and the third party investor have joint control over these entities. As a result, the vessels were classified as assets held for sale in the fourth quarter of 2018. The Company measured the vessels at the lower of their carrying amount and fair value less the cost associated with the transaction and recognized an impairment charge of $3,189,858 in its consolidated statement of operations for the year ended December 31, 2018.

As of December 31, 2018, six vessels, together with their inventories on board amounting to $718,448, were classified as assets held for sale in the accompanying consolidated balance sheet.

F-16

In September 2019, the Company entered into a memorandum of agreement for the disposal of the vessel “Gas Ethereal”, to an unaffiliated third party for $10,900,000. The vessel was delivered to her new owners on September 27, 2019.

The Company decided to dispose the above mentioned vessels as the agreed selling price was a suitable opportunity for the Company and together with minor additional selling costs from the delivery to their new owners of “Gas Sincerity and “Gas Texiana”, realized an aggregate loss from the sale of these vessels of $485,516, which is included in the Company’s consolidated statement of operations under the caption “Net loss on sale of vessels” for the year ended December 31, 2019.

At December 31, 2019, the Company performed an impairment review of its vessels, due to the prevailing conditions in the shipping industry. As a result of the impairment review, undiscounted net operating cash flows exceeded each vessel’s carrying value with the exception of two vessels and therefore the Company identified and recorded an impairment loss of $993,916 which is presented under the caption “Impairment loss” in the consolidated statements of operations.

As of December 31, 2019 and 2018, 34 vessels with a carrying value of $787,185,762 (2018: 40 vessels with carrying value of $891,758,621) have been provided as collateral to secure the Company’s bank loans as discussed in Note 11.

7. Investments in joint ventures

During the first quarter of 2019, the Company entered into four joint venture agreements with a third party investor based on which the third party investor acquired for $20,720,975 a 49.9% equity interest in Space Gas Inc., Financial Power Inc., Cannes View Inc. and Colorado Oil and Gas Inc., four vessel owning companies of the Company, which own the vessels “Gas Defiance”, “Gas Shuriken”, “Gas Haralambos” and “Eco Lucidity”. The remaining 50.1% equity interest was valued at $20,804,025. The Company contributed funds for working capital purposes amounting to $751,500.

During the third quarter of 2019, Cannes View Inc. and Colorado Oil and Gas Inc., using the proceeds of a loan agreement that was entered into on July 9, 2019, returned an amount of $14,696,900 to the Company and the third party investor based on their equity interests. Amount returned to the Company amounted to $7,363,147.

On May 22, 2019, Frost Investments Corp Inc. was incorporated under the laws of the Marshall Islands. Frost Investments Corp Inc. acquired for $20,400,000 the vessel Eco Nebula and under a joint venture agreement is owned by the Company (50.1%) and by the third party investor (49.9%). The Company contributed funds for the acquisition of vessel Eco Nebula and for working capital purposes amounting to $10,571,100, as needed and proportionate to its 50.1% equity interests.

The Company’s exposure is limited to its share of the net assets of Space Gas Inc., Financial Power Inc., Cannes View Inc., Colorado Oil and Gas Inc. and Frost Investments Corp Inc. (collectively “the joint venture entities”) proportionate to its 50.1% equity interest in these companies. The Company shares the profits and losses, cash flows and other matters relating to its investments in the joint venture entities in accordance with its ownership percentage. The vessels are managed by the Manager, pursuant to management agreements. The Company accounts for investments in joint ventures using the equity method since it has joint control over the joint venture entities. The Company does not consolidate the joint venture entities because it does not have a controlling financial interest. The significant factors considered and judgments made in determining that the power to direct the activities of the joint venture entities that most significantly impact their economic performance are shared, are that all significant business decisions over operating and financial policies of the joint venture entities, require unanimous consent from each joint venture investor.

F-17

A condensed summary of the financial information for equity accounted investments 50.1% owned by the Company shown on a 100% basis are as follows:

		December 31, 2019
	Space Gas Inc.		Financial Power Inc.		Cannes View Inc.		Colorado Oil and Gas Inc			Frost Investments Corp Inc.
Current assets		2,237,644		1,745,681		2,560,065		2,265,263			13,693,747
Non-current assets		13,221,364		13,229,810		14,532,274		12,801,053			20,396,424
Current liabilities		1,426,128		1,583,998		1,702,293		2,488,495			2,653,152
Long-term liabilities		5,530,995		5,530,995		7,792,274		6,818,237			10,757,210
Revenues		3,362,478		3,281,896		2,707,338		2,032,648			2,047,026
Operating income/(loss)		1,122,467		477,559		872,331		(85,071	)		(370,748	)
Net income/(loss)		854,885		212,498		627,671		(303,415	)		(420,191	)

8. Accrued Liabilities

The amounts shown in the accompanying consolidated balance sheets are analyzed as follows:

	December 31,
	2018		2019
Interest on long-term debt		3,656,811		2,790,621
Administrative expenses		251,257		205,184
Other operating costs		660,000		—
Vessel operating and voyage expenses		2,311,420		3,006,274
Total		6,879,488		6,002,079

9. Deferred Income

The amounts shown in the accompanying consolidated balance sheets amounting to $5,191,654 and $2,843,994 represent cash related to time and bareboat charter revenues received in advance as of December 31, 2018 and as of December 31, 2019, respectively.

10. Customer Deposits

These amounts represent deposits received from charterers as guarantees and are comprised as follows:

(a) On October 12, 2015 an amount of $736,000 was received from the bareboat charterer of Product carrier “Stealth Falcon” (ex. “Navig8 Faith”) which is equal to three-months hire. On May 30, 2019 the amount of $368,000 was paid to the bareboat charterers. The remaining amount of $368,000 was kept as guarantee for a second vessel chartered to the same charterer.

(b) On February 21, 2015 an amount of $1,820,700 was received from the bareboat charterer of Aframax tanker “Stealth Berana” (ex. “Spike”) which is equal to five-months hire. An amount of $1,220,700 was returned to the charterer at the end of the bareboat charter on March 7, 2018. The remaining amount of $600,000 was kept as guarantee for the new bareboat charter commenced on March 7, 2018.

F-18

11. Long-term Debt

Term Loans		Drawn Amount		December 31, 2018		Movement in 2019					Deconsolidated (Note 7)			December 31, 2019
Issue Date/ Refinancing Date	Maturity Date					Additions		Repayments
February 12, 2008	February 19, 2020		40,250,000		11,875,000		—		(11,875,000	)		—			—
July 30, 2008	November 4, 2020		33,240,000		13,850,000		—		—			(13,850,000	)		—
December 14, 2018	December 18, 2023		14,094,184		14,094,184		—		(2,200,000	)		—			11,894,184
May 28, 2019	April 16, 2024		11,000,000		11,700,000		—		(1,340,000	)		—			10,360,000
August 6, 2019	March 1, 2024		27,675,000		25,200,000		—		(3,300,000	)		—			21,900,000
March 1, 2011	June 20, 2020		43,250,000		23,375,000		—		(23,375,000	)		—			—
July 5, 2019	July 11, 2026		22,230,000		—		22,230,000		(793,929	)		—			21,436,071
March 29, 2019	December 29, 2022		25,458,432		15,244,697		11,250,000		(8,257,649	)		—			18,237,048
August 7, 2019	July 31, 2022		50,225,000		35,630,000		—		(6,605,000	)		—			29,025,000
April 16, 2014	April 16, 2020		30,000,000		16,300,000		—		(16,300,000	)		—			—
December 14, 2018	December 18, 2023		9,480,000		9,480,000		—		(800,000	)		—			8,680,000
June 20, 2014	January 8, 2023		20,925,000		15,600,000		—		(1,420,000	)		—			14,180,000
August 6, 2019	June 30, 2023		67,200,000		51,555,000		—		(3,960,000	)		—			47,595,000
December 24, 2015	December 14, 2022		22,400,000		17,920,016		—		(1,493,328	)		—			16,426,688
July 4, 2014	September 3, 2021		22,750,000		17,468,750		—		(1,625,000	)		—			15,843,750
July 29, 2014	July 7, 2023		25,350,000		18,484,375		—		(2,112,500	)		—			16,371,875
December 7, 2017	December 11, 2022		22,275,000		19,520,000		—		(2,755,000	)		—			16,765,000
May 18, 2016	December 31, 2025		65,650,000		61,049,260		—		(4,103,320	)		—			56,945,940
March 1, 2017	April 17, 2026		70,787,500		67,624,999		—		(5,056,252	)		—			62,568,747
Total					445,971,281		33,480,000		(97,371,978	)		(13,850,000	)		368,229,303
Current portion of long-term debt					42,433,562										41,421,346
Current portion of long-term debt associated with vessels held for sale					30,150,000										—
Long term debt					373,387,719										326,807,957
Total debt					445,971,281										368,229,303
Current portion of deferred finance charges					706,725										685,790
Current portion of deferred finance charges associated with vessels held for sale					73,644										—
Deferred finance charges non-current					1,873,466										1,560,055
Total deferred finance charges					2,653,835										2,245,845
Total debt					445,971,281										368,229,303
Less: Total deferred finance charges					2,653,835										2,245,845
Total debt, net of deferred finance charges					443,317,446										365,983,458
Less: Current portion of long-term debt, net of current portion of deferred finance charges					41,726,837										40,735,556
Less: Current portion of long-term debt associated with vessels held for sale, net of current portion of deferred finance charges					30,076,356										—
					371,514,253										325,247,902

The below are changes in term loans during the years ended December 31, 2018 and 2019.

On May 18, 2016 the Company entered into a term loan with a bank to partially finance the acquisition of two LPG carriers under construction, by two of the Company’s wholly owned subsidiaries. The term loan is up to $74,480,000 and was drawn down in two tranches upon the delivery of each vessel. The first tranche amounting to $32,500,000 was drawn down on May 16, 2017 and the second tranche amounting to $33,150,000 was drawn down on January 10, 2018.

On March 1, 2017 the Company, entered into a term loan with the bank to partially finance the acquisition of two LPG carriers on their delivery. The aggregate term loan is up to $76,020,000 and was drawn down in two tranches upon the delivery of each vessel. The first tranche amounting to $35,525,000 was drawn down on January 4, 2018 and on January 10, 2018 and the second tranche amounting to $35,262,500 was drawn down on April 13, 2018 and on April 17, 2018.

On December 7, 2017, the Company entered into a term loan with a bank to repay amounts outstanding under existing loan and to refinance the cost of acquisition of one product carrier. The term loan is up to $22,500,000 and was drawn down in two tranches.

F-19

The first tranche amounting to $10,500,000 was drawn down on December 11, 2017 and the second tranche amounting to $11,775,000 was drawn down on February 8, 2018.

On March 27, 2018, the Company entered into a term loan amounting to $27,675,000 with the same bank to refinance the existing term loan dated February 1, 2011. An installment amounting to $275,000 was paid on January 22, 2018 relating to the existing term loan dated February 1, 2011. On August 6, 2019, the Company entered into a supplemental agreement with the bank based on which the margin of the existing loan changed from 2.7% to 2.5%.

On April 27, 2018, the Company voluntary repaid $4,122,370 being part of the outstanding balance of the term loan dated September 23, 2013.

On August 17, 2018, the Company voluntary repaid the outstanding balance of the term loan dated October 9, 2008, amounting to $5,920,000.

On December 14, 2018, the Company entered into a term loan with the same bank to refinance the existing term loans dated June 12, 2014 and September 15, 2016. The aggregate committed term loan is up to $23,574,184 and was drawn down in two tranches at the signing date of the term loan.

On January 30, 2019, the Company signed a side letter with the bank to reduce the margin of an existing loan dated July 4, 2014 from 3% to 2.5%.

On February 1, 2019, the Company sold 49.9% of the equity interests of two subsidiaries which had borrowed a loan dated July 30, 2008. Since the retained investments in these companies are accounted for under the equity method (Note 7), the loan is no longer included in the consolidated balance sheets of the Company.

On March 27, 2019, the Company voluntary repaid the outstanding balance of the term loan dated April 16, 2014, amounting to $15,780,000.

On March 29, 2019, the Company entered into a term loan with a bank to refinance the existing term loans dated February 12, 2008 and September 23, 2013. Two installments amounting to $625,000 and $1,036,265 were paid on February 19, 2019 and on March 29, 2019, respectively, relating to the existing term loans. The new term loan is $25,458,432 and will be repayable, with the first installment commencing three months after the drawdown, in fifteen consecutive quarterly installments. On September 30, 2019, the Company voluntary repaid $3,419,645 being part of the outstanding balance of the term loan.

On May 28, 2019, the Company entered into a term loan with the same bank to refinance the existing term loan dated April 14, 2014. Two installments amounting to $700,000 were paid on January 16, 2019 and April 16, 2019 relating to the existing term loan. The new term loan is $11,000,000 and will be repayable, with the first installment commencing three months after the drawdown, in twenty consecutive quarterly installments plus a balloon payment payable together with the last installment.

On July 5, 2019, the Company entered into a term loan with a bank to refinance the existing term loan dated March 1, 2011. Four installments amounting to $1,500,000 were paid on January 12, 2019, on March 20, 2019, on April 12, 2019 and on June 20, 2019, respectively, relating to the existing term loan. The new term loan is $22,230,000 and will be repayable, with the first installment commencing three months after the drawdown, in twenty eight consecutive quarterly installments.

On August 6, 2019, the Company entered into a supplemental agreement with the bank to reduce the margin of an existing loan dated December 20, 2013 from 2.9% to 2.5%.

On August 7, 2019, the Company entered into a supplemental agreement with the bank to amend the repayment schedule of the existing loan dated March 24, 2014 and reduce the margin from 2.8% to 2.3%. The Company prepaid $3,000,000 being part of the outstanding balance of the term loan.

The above loans are generally repayable in quarterly or semi-annual installments and a balloon payment at maturity and are secured by first priority mortgages over the vessels involved, plus the assignment of the vessels’ insurances, earnings and operating and retention accounts with the lenders, and the guarantee of ship-owning companies, as owners of the vessels. The term loans contain financial covenants requiring the Company to ensure that:

• the aggregate market value of the mortgaged vessels at all times exceeds a certain percentage of the amounts outstanding as defined in the term loans, ranging from 125% to 135%,

• the leverage of the Company defined as Total Debt net of Cash should not exceed 80% of total market value adjusted assets,

• the Interest Coverage Ratio of the Company which is EBITDA (as defined in the loan agreements) to interest expense to be at all times greater than 2.5:1,

• at least a certain percentage of the Company is to always be owned by members of the Vafias family,

F-20

• the Company should maintain on a monthly basis a cash balance amounting to $1,589,768 representing a proportionate amount of the next installment and relevant interest plus a minimum aggregate cash balance amounting to $12,065,222 in the earnings account with the relevant banks,

• dividends paid by the borrower will not exceed 50% of the Company’s free cash flow in any rolling 12 month period.

Gross deferred finance charges amounting to $8,374,435 and $8,851,636 as of December 31, 2018 and December 31, 2019, respectively, represent fees paid to the lenders for obtaining the related loans, and are presented on the balance sheet as a direct deduction from the carrying amount of the related loan and credit facility net of accumulated amortization. For the years ended December 31, 2017, 2018 and 2019, the amortization of deferred financing charges amounted to $690,841, $858,582 and $885,191, respectively, and is included in interest and finance costs in the consolidated statements of operations.

The interest rates on the outstanding loans as of December 31, 2019 are based on LIBOR plus a margin which varies from 2.15% to 3.00%. The average interest rates (including the margin) on the above outstanding loans for the applicable periods were:

Year ended December 31, 2017: 3.97%

Year ended December 31, 2018: 5.34%

Year ended December 31, 2019: 4.91%

Bank loan interest expense for the above loans for the years ended December 31, 2017, 2018 and 2019 amounted to $15,640,377, $22,150,386 and $19,999,902, respectively. Of these amounts, for the years ended December 31, 2017, 2018 and 2019, the amounts of $813,423, nil and $97,620, respectively, were capitalized as part of advances paid for vessels under construction. Interest expense, net of interest capitalized, is included in interest and finance costs in the consolidated statements of operations.

At December 31, 2019, the Company was in compliance with all of its debt financial covenants.

The annual principal payments to be made, for the abovementioned loans, after December 31, 2019 are as follows:

December 31,	Amount
2020		41,421,346
2021		67,415,096
2022		87,184,402
2023		66,658,845
2024		26,275,286
Thereafter		79,274,328
Total		368,229,303

12. Derivatives and Fair Value Disclosures

The Company uses interest rate swaps for the management of interest rate risk exposure. The interest rate swaps effectively convert a portion of the Company’s debt from a floating to a fixed rate. The Company is a party to nine floating-to-fixed interest rate swaps with various major financial institutions at December 31, 2019 (2018: nine swaps) covering notional amounts aggregating $111,789,084 at December 31, 2019 (2018: $111,477,920) pursuant to which it pays fixed rates and receives floating rates based on the London Interbank Offered Rate (“LIBOR”) (approximately 2.50% at December 31, 2019). These agreements contain no leverage features. As of December 31, 2019 six derivative contracts (2018: nine contracts) qualify for hedge accounting since their inception.

The following table presents information of the Company’s interest rate swap arrangements as of December 31, 2019.

	Effective Date	Termination Date	Fixed Rate (Company pays)			Floating Rate (Company Receives)	Fair Value Asset/(Liability) December 31, 2019			Notional Amount December 31, 2019
Swap 1	September 30, 2015	September 30, 2020		2.60	%	3 month U.S. dollar LIBOR	$	(37,567	)	$	6,816,917
Swap 2	September 30, 2015	September 30, 2020		1.69	%	3 month U.S. dollar LIBOR	$	4,938		$	6,816,917
Swap 3	October 2, 2015	October 2, 2020		1.54	%	3 month U.S. dollar LIBOR	$	25,443		$	8,600,000
Swap 4	November 4, 2015	August 4, 2021		1.52	%	3 month U.S. dollar LIBOR	$	22,838		$	7,921,875
Swap 5	December 3, 2015	September 3, 2021		1.55	%	3 month U.S. dollar LIBOR	$	16,906		$	7,921,875
Swap 6	August 16, 2017	May 16, 2025		2.12	%	3 month U.S. dollar LIBOR	$	(249,020	)	$	13,711,250
Swap 7	March 12, 2018	December 11, 2022		2.74	%	3 month U.S. dollar LIBOR	$	(419,160	)	$	16,765,000
Swap 8	April 10, 2018	December 11, 2025		2.74	%	3 month U.S. dollar LIBOR	$	(1,369,934	)	$	29,524,000
Swap 9	February 16, 2019	February 16, 2024		2.89	%	3 month U.S. dollar LIBOR	$	(580,136	)	$	13,711,250
Total							$	(2,585,692	)	$	111,789,084

F-21

The following tables present information on the location and amounts of derivatives’ fair values reflected in the consolidated balance sheets and with respect to gains and losses on derivative positions reflected in the consolidated statements of operations or in the consolidated balance sheets, as a component of accumulated other comprehensive income/(loss).

Tabular disclosure of financial instruments is as follows:

Derivatives designated as hedging instruments	Balance Sheet Location	December 31,
		2018				2019
		Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
Interest Rate Swap Agreements	Non current assets — Fair value of derivatives		1,068,369		—		39,744		—
Interest Rate Swap Agreements	Non current liabilities — Fair value of derivatives		—		465,389		—		2,618,250
Total derivatives designated as hedging instruments			1,068,369		465,389		39,744		2,618,250

Derivatives not designated as hedging instruments	Balance Sheet Location	December 31,
		2018				2019
		Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
Interest Rate Swap Agreements	Current assets — Fair value of derivatives		—		—		30,381		—
Interest Rate Swap Agreements	Current liabilities — Fair value of derivatives		—		—		—		37,567
Total derivatives not designated as hedging instruments			—		—		30,381		37,567

The effect of derivative instruments on the consolidated statements of operations for the years ended December 31, 2017, 2018 and 2019 is as follows:

Derivatives not designated as hedging instruments	Location of Gain/(Loss) Recognized	Year Ended December 31,
		2017		2018		2019
Interest Rate Swap — Reclassification from OCI	Loss on derivatives		—		—		84,966
Interest Rate Swap — Change in Fair Value	Loss on derivatives		—		—		(327,147	)
Interest Rate Swap — Realized income	Loss on derivatives		—		—		134,631
Total loss on derivatives			—		—		(107,550	)

Derivatives designated as hedging instruments	Location of (Loss)/Gain Recognized	Year Ended December 31,
		2017			2018			2019
Interest Rate Swap — (Loss) reclassified from OCI (Effective portion)	Loss on derivatives		(403,943	)		(11,982	)		—
Interest Rate Swap — Income reclassified from OCI (Effective portion)	Interest and finance costs		—			—			67,424
Total loss on derivatives			(403,943	)		(11,982	)		67,424

F-22

The components of accumulated other comprehensive income included in the accompanying consolidated balance sheets consist of unrealized gain / (loss) on cash flow hedges and are analyzed as follows:

	Unrealized Gain / (Loss) on cash flow hedges
Balance, January 1, 2017		25,435
Effective portion of changes in fair value of interest swap contracts		592,460
Balance, December 31, 2017		617,895
Effective portion of changes in fair value of interest swap contracts		56,084
Balance, December 31, 2018		673,979
Effective portion of changes in fair value of interest swap contracts		(2,848,056	)
Reclassification adjustment		(84,966	)
Balance, December 31, 2019		(2,259,043	)

The estimated net amount of existing gains at December 31, 2019, that will be reclassified into earnings within the next twelve months relating to previously designated cash flow hedges is $60,954.

Fair Value of Financial Instruments and Concentration of Credit Risk: Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, restricted cash, trade and other receivables, claims receivable, payable to related parties, trade accounts payable and accrued liabilities. The Company limits its credit risk with respect to accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its trade accounts receivable. The Company places its cash and cash equivalents, time deposits and other investments with high credit quality financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The Company is exposed to credit risk in the event of non-performance by its counterparties to derivative instruments; however, the Company limits its exposure by transacting with counterparties with high credit ratings. The carrying values of cash and cash equivalents, restricted cash, trade and other receivables, claims receivable, payable to related parties, trade accounts payable and accrued liabilities are reasonable estimates of their fair value due to the short term nature of these financial instruments. Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. The fair value of long term bank loans is estimated based on current rates offered to the Company for similar debt of the same remaining maturities. Their carrying value approximates their fair market value due to their variable interest rate, being LIBOR. LIBOR rates are observable at commonly quoted intervals for the full terms of the loans and hence floating rate loans are considered Level 2 items in accordance with the fair value hierarchy. Additionally, the Company considers the creditworthiness of each counterparty when determining the fair value of the derivative instruments. The Company’s interest rate swap agreements are recorded at fair value. The fair value of the interest rate swaps is determined using a discounted cash flow method based on market-based LIBOR swap yield curves. LIBOR swap rates are observable at commonly quoted intervals for the full terms of the swap and therefore are considered Level 2 items.

Fair Value Disclosures: The Company has categorized assets and liabilities recorded at fair value based upon the fair value hierarchy specified by the guidance. The levels of fair value hierarchy are as follows:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

F-23

The following table presents the fair values for assets and liabilities measured on a recurring basis categorized into a Level based upon the lowest level of significant input to the valuations as of December 31, 2018:

	Fair Value as of December 31, 2018			Fair Value Measurements Using
Description				Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets/(Liabilities):
Interest Rate Swap Agreements		1,068,369			—		1,068,369			—
Interest Rate Swap Agreements		(465,389	)		—		(465,389	)		—
Total		602,980			—		602,980			—

The following table presents the fair values for assets and liabilities measured on a recurring basis categorized into a Level based upon the lowest level of significant input to the valuations as of December 31, 2019:

	Fair Value as of December 31, 2019			Fair Value Measurements Using
Description				Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Assets/(Liabilities):
Interest Rate Swap Agreements		70,125			—		70,125			—
Interest Rate Swap Agreements		(2,655,817	)		—		(2,655,817	)		—
Total		(2,585,692	)		—		(2,585,692	)		—

The following tables present the fair values for assets measured on a non-recurring basis categorized into a Level based upon the lowest level of significant input to the valuations:

	Fair Value as of June 30, 2018		Fair Value Measurements Using
Description			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Loss
Long-lived assets held and used		9,400,000		—		9,400,000		—		(1,531,130	)
Total		9,400,000		—		9,400,000		—		(1,531,130	)

The vessels Gas Sincerity and Gas Texiana were recorded at their fair value of $9,400,000 as of June 30, 2018. Following the memorandum of agreement for the disposal of these vessels in July 2018, Gas Sincerity and Gas Texiana were classified as held for sale as of September 30, 2018 and were recognized at their fair value less costs to sell. Fair value amounted to $9,400,000 and costs to sell amounted to $442,000. The vessels are classified as held for sale as of December 31, 2018 at fair value less costs to sell of $8,958,000 in the accompanying consolidated balance sheet as of December 31, 2018.

F-24

	Fair Value as of December 31, 2018		Fair Value Measurements Using
Description			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Loss
Long-lived assets held for sale		55,230,000		—		55,230,000		—		(3,189,858	)
Total		55,230,000		—		55,230,000		—		(3,189,858	)

The vessels Gas Defiance, Gas Shuriken, Gas Haralambos and Eco Lucidity were classified as held for sale as of December 31, 2018 and were recognized at their fair value of $55,230,000 less costs to sell. Costs to sell amounted to nil.

During 2018, the Company recognized for eleven of its vessels an aggregate impairment charge of $11,351,821. Seven of the Company’s vessels were written down to their fair value as determined by the Company based on their transaction price, as the sale price was agreed with unaffiliated third parties. Remaining four vessels were written down to their estimated fair value as their carrying amount exceeded their fair value which was determined based on vessel valuations, obtained from independent third party shipbrokers, which are mainly based on recent sales and purchase transactions of similar vessels.

	Fair Value as of December 31, 2019		Fair Value Measurements Using
Description			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Impairment Loss
Long-lived assets held and used		6,000,000		—		6,000,000		—		(993,916	)
Total		6,000,000		—		6,000,000		—		(993,916	)

As a result of the impairment analyses performed for the year ended December 31, 2019, two of the Company’s vessels (held and used) were written down to their estimated fair value as determined by the Company based on vessel valuations, obtained from independent third party shipbrokers, which are mainly based on recent sales and purchase transactions of similar vessels, resulting in an impairment charge of $993,916.

13. Capital Stock, Treasury Stock and Additional Paid-in Capital

The amounts shown in the accompanying consolidated balance sheets as additional paid-in capital, represent payments made by the stockholders for the acquisitions of the Company’s vessels, or investments in the Company’s common stock.

F-25

On May 23, 2019, the Company’s Board of Directors approved the extension of the existing stock repurchase plan for an additional amount of $10,000,000 to be used for repurchasing the Company’s common shares. For the year ended December 31, 2019, the Company completed the repurchase of 540,910 shares paying an average price per share of $3.40. These shares are held as treasury stock by the Company. For the years ended December 31, 2017 and 2018, the Company did not make any repurchase of its common shares.

14. Equity Compensation Plan

In 2015 the Company’s shareholders and board of directors adopted an Equity Compensation Plan (“the Plan”), which replaced the Company’s previous equity compensation plan which was adopted in 2007 and expired in 2015 (the “2007 Plan”) under which the Company’s employees, directors or other persons or entities providing significant services to the Company or its subsidiaries are eligible to receive stock-based awards including restricted stock, restricted stock units, unrestricted stock, bonus stock, performance stock and stock appreciation rights. The Plan is administered by the Compensation Committee of the Company’s board of directors and the aggregate number of shares of common stock reserved under this plan cannot exceed 10% of the number of shares of Company’s common stock issued and outstanding at the time any award is granted. The Company’s Board of Directors may terminate the Plan at any time. As of December 31, 2019, a total of 555,479 restricted shares had been granted under the 2007 Plan since the first grant in the third quarter of 2007 and 264,621 awards have been granted under the Plan.

On November 20, 2014, the Company granted 230,713 of non-vested restricted shares under the 2007 plan to the Company’s CEO and non-executive members of Board of Directors of the Company. The fair value of each share granted was $7.58 which is equal to the market value of the Company’s common stock on that day. The restricted shares vest over 3 years from the grant date (115,357 restricted shares on November 20, 2015, 57,678 restricted shares on November 20, 2016 and 57,678 restricted shares on November 20, 2017).

On August 23, 2018, the Company granted 264,621 of non-vested restricted shares under the Plan to the Company’s CEO, non-executive members of Board of Directors of the Company and employees of the Manager. The fair value of each share granted was $3.59 which is equal to the market value of the Company’s common stock on that day. The restricted shares vested on August 23, 2019 i.e. one year after the grant date.

All unvested restricted shares are conditional upon the option holder’s continued service as an employee of the Company, or as a director until the applicable vesting date. Until the forfeiture of any restricted shares, the grantee has the right to vote such restricted shares, to receive and retain all regular cash dividends paid on such restricted shares and to exercise all other rights provided that the Company will retain custody of all distributions other than regular cash dividends made or declared with respect to the restricted shares.

The Company pays dividends on all restricted shares regardless of whether they have vested and there is no obligation of the employee to return the dividend when employment ceases. The Company did not pay any dividends in the years ended December 31, 2017, 2018 and 2019. The Company accounts for forfeitures as they occur.

Management has selected the accelerated method allowed by the guidance with respect to recognizing stock based compensation expense for restricted share awards with graded vesting because it considers this method to better match expense with benefits received.

F-26

The stock based compensation expense for the vested and non-vested shares for the years ended December 31, 2017, 2018 and 2019 amounted to $129,245, $338,356 and $611,644, respectively, and is included in the consolidated statements of operations under the caption “General and administrative expenses”.

A summary of the status of the Company’s non-vested restricted shares as of December 31, 2019, is presented below:

	Number of restricted shares			Weighted average grant date fair value per non-vested share
Non-vested, January 1, 2019		264,621			3.59
Vested		(264,621	)		3.59
Non-vested, December 31, 2019		—			—

The total fair value of shares vested during the years ended December 31, 2017, 2018 and 2019 was $220,907, nil and $844,141, respectively, based on the closing share price at each vesting date.

15. Earnings/(loss) per share

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share give effect to all potentially dilutive securities. All of the Company’s shares (including non-vested restricted stock issued under the Plan) participate equally in dividend distributions and in undistributed earnings.

The Company applies the two-class method of computing earnings per share (EPS) as the unvested share-based payment awards that contain rights to receive non forfeitable dividends are participating securities. Dividends declared during the period for non-vested restricted stock as well as undistributed earnings allocated to non-vested stock are deducted from net income for the purpose of the computation of basic earnings per share in accordance with the two-class method. The denominator of the basic earnings per common share excludes any non-vested shares as such they are not considered outstanding until the time-based vesting restriction has elapsed.

For purposes of calculating diluted earnings per share, dividends declared during the period for non-vested restricted stock and undistributed earnings allocated to non-vested stock are not deducted from net income as reported since such calculation assumes non-vested restricted stock is fully vested from the grant date.

The Company calculates basic and diluted earnings per share as follows:

	Year Ended December 31,
	2017			2018			2019
Numerator
Net (loss)/income		(1,218,237	)		(12,276,520	)		2,093,124
Less: Undistributed earnings allocated to non-vested shares		—			—			(8,922	)
Net (loss)/income attributable to common shareholders, basic		(1,218,237	)		(12,276,520	)		2,084,202
Denominator
Weighted average number of shares outstanding, basic and diluted		39,809,364			39,860,563			39,800,434
(Loss)/earnings per share, basic and diluted		(0.03	)		(0.31	)		0.05

Non-vested, participating restricted common stock does not have a contractual obligation to share in the losses and was therefore, excluded from the basic loss per share calculations.

The Company excluded the dilutive effect of 264,621 non-vested share awards in calculating dilutive EPS for its common shares as of December 31, 2018, as they were anti-dilutive.

F-27

16. Revenues

The amounts in the accompanying consolidated statements of operations are analyzed as follows:

	Year ended December 31,
	2017		2018		2019
Time charter revenues		96,339,915		104,099,818		97,249,537
Time charter revenues – related party		1,973,643		—		—
Bareboat revenues		27,647,268		24,646,311		21,764,102
Voyage charter revenues		26,924,708		34,266,082		24,018,198
Other income		1,426,387		1,317,991		1,227,475
Total		154,311,921		164,330,202		144,259,312

The amount of revenue earned as demurrage relating to the Company’s voyage charters for the years ended December 31, 2017, 2018 and 2019 was $4.3, $4.7 and $2.0 million, respectively and is included within “Voyage charter revenues” in the above table.

As of December 31, 2018 and 2019, the Company recognized $134,301 and $118,246, respectively, of contract fulfillment costs which mainly represent bunker expenses incurred prior to commencement of loading relating to the Company’s voyage charters. These costs are recorded in “Other current assets” on the consolidated balance sheets.

As of December 31, 2018 and 2019, revenues relating to undelivered performance obligations of the Company’s voyage charters amounted to $821,577 and $439,135, respectively. The Company recognized these amounts as revenues in the first quarter of 2019 and in the first quarter of 2020, respectively.

17. Voyage Expenses and Vessel Operating Expenses

The amounts in the accompanying consolidated statements of operations are analyzed as follows:

	Year ended December 31,
Voyage Expenses	2017		2018		2019
Port expenses		2,546,926		2,841,661		3,170,781
Bunkers		6,668,126		11,641,615		8,153,437
Commissions		4,584,612		4,796,483		4,443,642
Other voyage expenses		1,916,873		1,407,416		1,222,661
Total		15,716,537		20,687,175		16,990,521

	Year ended December 31,
Vessels’ Operating Expenses	2017		2018		2019
Crew wages and related costs		37,345,800		36,628,082		30,874,618
Insurance		2,016,647		2,068,485		2,162,523
Repairs and maintenance		6,424,557		7,359,816		5,677,033
Spares and consumable stores		8,508,276		8,907,211		7,783,902
Miscellaneous expenses		5,124,154		5,471,184		3,088,018
Total		59,419,434		60,434,778		49,586,094

18. Income Taxes

Under the laws of the countries of the companies’ incorporation and/or vessels’ registration, the companies are not subject to tax on international shipping income, however, they are subject to registration and tonnage taxes, which have been included in Vessel operating expenses in the consolidated statements of operations.

Pursuant to the Internal Revenue Code of the United States (the “Code”), U.S. source income from the international operations of ships is generally exempt from U.S. tax if the Company operating the ships meets certain requirements. Among other things, in order to qualify for this exemption, the Company operating the ships must be incorporated in a country which grants an equivalent exemption from income taxes to U.S. corporations. All the Company’s ship-operating subsidiaries satisfy these initial criteria. In addition, these companies must be more than 50% owned by individuals who are residents, as defined, in the country of incorporation or another foreign country that grants an equivalent exemption to U.S. corporations. These companies also currently satisfy the more than 50% beneficial ownership requirement.

F-28

In addition, the management of the Company believes that by virtue of a special rule applicable to situations where the ship-operating companies are beneficially owned by a publicly traded company like the Company, the more than 50% beneficial ownership requirement can also be satisfied based on the trading volume and the anticipated widely-held ownership of the Company’s shares, but no assurance can be given that this will remain so in the future, since continued compliance with this rule is subject to factors outside the Company’s control.

19. Commitments and Contingencies

• From time to time the Company expects to be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Company 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.

• Future minimum contractual charter revenues, gross of commissions, based on vessels committed to non-cancellable, time and bareboat charter contracts as of December 31, 2019, amount to $70,739,504 during 2020, $21,901,012 during 2021, $5,596,044 during 2022, $1,500,000 during 2023, $1,500,000 during 2024 and $7,436,644 from 2025 up to 2029.

• During 2019, the Company agreed to acquire an LPG carrier which is currently under construction, as described in Note 5. The Company has future outstanding commitments for installment payments for this agreement as follows:

December 31	Amount
2020		2,891,283
2021		23,130,260
Total		26,021,543

F-29

20. Leases — The Company as Lessee

In November and December 2014, the Company sold the vessels Gas Premiership and Gas Cathar and realized a total gain of $780,695. The Company entered into bareboat charter agreements to leaseback the vessels for a period of four years. The charter back agreements are accounted for as operating leases and the gain on the sale was deferred and is being amortized to income over the four-year lease period. For the years ended December 31, 2017, 2018 and 2019, the amortization amounted to $195,040, $190,087 and nil, respectively, and is included in Charter hire expenses in the consolidated statements of operations. Lease payments relating to the bareboat charters of the vessels amounted to $3,719,810, $3,434,250 and $1,560,000 for the years ended December 31, 2017, 2018 and 2019 and are included in Charter hire expenses in the consolidated statements of operations.

The Company charters in vessels to supplement its own fleet and employs them both on time charters and voyage charters. The time charter-in contracts range in lease terms from 1 year to 5 years. The Company elected the practical expedient of ASC 842 that allows for time charter-in contracts with an initial lease term of one year or less to be excluded from the operating lease right-of-use assets and lease liabilities recognized on our consolidated balance sheet. The Company recognized the operating lease right-of-use assets and the corresponding lease liabilities on the consolidated balance sheet for time charter-in contracts with a lease term of more than one year at the commencement of the lease. The Company will continue to recognize the lease payments for all vessel operating leases as charter hire expenses on the consolidated statements of operations on a straight-line basis over the lease term.

Under ASC 842, leases are classified as either finance or operating arrangements, with such classification affecting the pattern and classification of expense recognition in an entity’s income statement. For operating leases, ASC 842 requires recognition in an entity’s income statement of a single lease expense, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. Right-of-use assets represent a right to use an underlying asset for the lease term and the related lease liability represents an obligation to make lease payments pursuant to the contractual terms of the lease agreement.

The Company used the incremental borrowing rate which amounted to 5.6% at January 1, 2019 for the lease contract for which the Company recorded operating lease right-of-use assets and corresponding lease liabilities.

The Company had one time charter-in contract for one vessel which was greater than 12 months at lease commencement date as of the date of adoption of ASC 842. A brief description of this contract is below:

(i) On December 16, 2016, the Company amended the existing bareboat charter agreement for Gas Cathar resulting in the extension of the charter period to five years and three months from the delivery date i.e. until March 2020 at a monthly charter hire of $130,000.

The Company had entered into two time charter-in contracts in 2018 for the vessels Astrid and Kazak which were for a period of twelve months. Lease payments relating to the time charters of these vessels, amounted to $4,708,988 for the year ended December 31, 2019 and are included in Charter hire expenses in the consolidated statements of operations (2018: $2,906,617).

Office lease

In January 2019, the Company renewed its contract to lease office space from a related party (Note 3) for a period until December 2020 at an amount of EUR 6,500 ($7,345) per month. The Company determined the office lease to be an operating lease and recorded the lease expense within General and administrative expenses in the consolidated statement of operations for the years ended December 31, 2017, 2018 and 2019.

F-30

Adoption of ASC 842

Prior to January 1, 2019, the Company recognized lease expense in accordance with then-existing U.S. GAAP (“prior GAAP”). Because both ASC 842 and prior GAAP generally recognize operating lease expenses on a straight-line basis over the term of the lease arrangement and the Company only has operating lease arrangements, there were no differences between the timing and amount of lease expenses recognized under the two accounting methodologies for the years ended December 31, 2019, 2018 and 2017.

Lease Disclosures Under ASC 842

The objective of the disclosure requirements under ASC 842 is to enable users of an entity’s financial statements to assess the amount, timing and uncertainty of cash flows arising from lease arrangements. In addition to the qualitative leasing disclosures included above, below are quantitative disclosures that are intended to meet the stated objective of ASC 842.

Operating lease right-of-use assets and lease liabilities as of December 31, 2019 and January 1, 2019 are as follows:

Description	Location in balance sheet	December 31, 2019		January 1, 2019 (a)
Non current assets:
Chartered-in contract greater than 12 months	Operating lease right-of-use assets	$	386,388	$	1,879,085
Office leases	Operating lease right-of-use assets		86,744		—
		$	473,132	$	1,879,085
Liabilities:
Chartered-in contract greater than 12 months	Current portion of operating lease liabilities	$	386,388	$	1,492,697
Office leases	Current portion of operating lease liabilities		86,744		—
Lease liabilities - current portion		$	473,132	$	1,492,697
Chartered-in contract greater than 12 months	Operating lease liabilities	$	—	$	386,388
Lease liabilities - non current portion		$	—	$	386,388

⁽¹⁾ The Operating lease right-of-use asset and Operating lease liabilities represent the present value of lease payments for the remaining term of the lease.

The table below presents the components of the Company’s lease expenses and sub-lease income on a gross basis earned from chartered-in contracts greater than 12 months for the year ended December 31, 2019:

Description	Location in statement of operations	2019
Lease expense for chartered-in contracts 12 months or less	Charter hire expenses	$	4,708,988
Lease expense for chartered-in contracts greater than 12 months	Charter hire expenses		1,560,000
	Total charter hire expenses		6,268,988
Lease expense for office leases	General and administrative expenses		87,192
Sub lease income from chartered-in contracts greater than 12 months *	Revenues		3,091,390

* The sub-lease income represents only time charter revenue earned on the chartered-in contracts greater than 12 months. There is additional revenue of $482,879 earned from voyage charters on the same chartered-in contract which is recorded in Revenues in our consolidated statement of operations for the year ended December 31, 2019. Additionally, there is revenue earned from time charters from chartered-in contracts 12 months or less which is included in Revenues in our consolidated statements of operations for the year ended December 31, 2019.

F-31

The cash paid for operating leases with terms greater than 12 months is $1,647,192 for the year ended December 31, 2019.

The Company did not enter into any operating leases greater than 12 months for the year ended December 31, 2019 as a lessee.

The weighted average remaining lease term on our operating leases greater than 12 months is 7.5 months. The weighted average discount rate is 5.6% as of December 31, 2019.

The table below provides the total amount of lease payments on an undiscounted basis on our time chartered-in contracts and office leases greater than 12 months as of December 31, 2019:

Year	Chartered-in contracts greater than 12 months			Office leases			Total Operating leases
Discount rate upon adoption		5.6	%		5.6	%		5.6	%
2020 (undiscounted lease payments)	$	390,000		$	88,140		$	478,140
		390,000			88,140			478,140
Present value of lease liability		386,388			86,744			473,132
Lease liabilities - short term		386,388			86,744			473,132
Total lease liabilities		386,388			86,744			473,132
Discount based on incremental borrowing rate (Difference between undiscounted lease payments and present value of lease liability)	$	3,612		$	1,396		$	5,008

21. Subsequent Events

(a) On March 11, 2020, the World Health Organization declared the 2019 Novel Coronavirus (the “Covid-19”) outbreak, a pandemic. In response to the outbreak, many countries, ports and organizations, including those where the Company conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have and will likely continue to cause severe trade disruptions. The extent to which Covid-19 will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the virus and the actions to contain or treat its impact, among others. Accordingly, an estimate of the impact cannot be made at this time.

(b) On April 1, 2020, the Company entered into an agreement with Brave for the supervision of the construction of the vessel discussed in note 5 for a fixed fee of Euro 390,000.

(c) On February 13, 2020, the Company entered into a joint venture agreement with an unaffiliated third party, for the purpose of acquiring three medium gas carriers and the establishment of a new holding company, in which the Company will have a 51% equity interest. Pursuant to this joint venture arrangement, on February 28, 2020, two medium gas carriers, the Gaschem Hamburg and the Gaschem Stade, were acquired and on March 11, 2020, one medium gas carrier, the Gaschem Bremen, was acquired at an aggregate price of $80,550,000.

(d) During the three-month period ended March 31, 2020, the Company completed, pursuant to its existing stock repurchase plan (Note 13), the repurchase of an additional 359,792 shares paying an average price per share of $2.81. These shares are held as treasury stock by the Company.

(e) On March 31, 2020, the Company announced the commencement of a tender offer to purchase up to 4,761,904 shares using funds available from cash and cash equivalents at a price of $2.10 per share. This tender offer expired on April 28, 2020 and 1,366,045 shares were tendered.

F-32

Exhibit 2.1

DESCRIPTION OF STEALTHGAS INC.’S SECURITIES

REGISTERED PURSUANT TO SECTION 12

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

References in this description to the “Company,” “we,” “our,” “or “us” are to StealthGas Inc. Defined terms used but not defined herein have the meaning given to them in our Annual Report on Form 20-F to which this description is an exhibit.

The common stock of StealthGas Inc., par value $0.01 per share (the “Common Stock”) is the only security of the Company registered under Section 12 of the Securities Exchange Act of 1934, as amended. None of the Company’s preferred stock, par value $0.01 per share (the “Preferred Stock”) is so registered. This description does not describe every aspect of the Company’s capital stock and is subject to, and qualified in its entirety by reference to, the provisions of the Company’s Amended and Restated Articles of Incorporation and the Company’s Amended and Restated By-laws, each as currently in effect, each of which is incorporated by reference as an exhibit to the Annual Report on Form 20-F of the Company, to which this description is filed as Exhibit 2.1.

Share Capital

Under our articles of incorporation, our authorized capital stock consists of 5,000,000 shares of preferred stock, $0.01 par value per share, none of which is issued or outstanding and 100,000,000 shares of common stock, $0.01 par value per share, of which 44,549,729 shares were issued, including 4,965,455 shares repurchased by the Company and held as treasury stock, and 39,584,274 shares outstanding and fully paid as of December 31, 2019 and 5,325,247 shares repurchased by the Company and held as treasury stock, and 39,224,482 shares outstanding and fully paid as of April 1, 2020. All of our shares of stock are in registered form.

Based on the preliminary count by the depositary for the tender offer announced by the Company on March 31, 2020, which expired at 5:00 P.M., New York City Time, on April 28, 2020, the Company expects to repurchase 1,366,045 shares of its common stock through the tender offer at a price of $2.10 per share, which will reduce the number of shares of common stock outstanding to 37,858,437. The number of shares expected to be purchased by the Company is preliminary and subject to final confirmation by the depositary and the proper delivery of shares tendered.

Common Stock

Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Subject to preferences that may be applicable to any outstanding shares of preferred stock, holders of shares of common stock are entitled to receive ratably all dividends, if any, declared by our Board of Directors out of funds legally available for dividends. Holders of common stock do not have conversion, redemption or preemptive rights to subscribe to any of our securities. All outstanding shares of common stock are, and the shares to be sold in this offering when issued and paid for will be, fully paid and non-assessable. The rights, preferences and privileges of holders of common stock are subject to the rights of the holders of any shares of preferred stock which we may issue in the future.

Blank Check Preferred Stock

Under the terms of our articles of incorporation, our Board of Directors has authority, without any further vote or action by our stockholders, to issue up to 5,000,000 shares of blank check preferred stock. Our Board of Directors could issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.

Dividends

We have not paid a dividend since March 2009. In the first quarter of 2009, our Board of Directors determined to suspend the payment of cash dividends as a result of weak market conditions in the international shipping industry and to preserve the Company’s liquid cash resources. Our board of directors will evaluate our dividend policy consistent with our cash flows and liquidity requirements.

Declaration and payment of any dividend is subject to the discretion of our Board of Directors. The timing and amount of dividend payments will be dependent upon our earnings, financial condition, cash requirements and availability, restrictions in our loan agreements, or other financing arrangements, the provisions of Marshall Islands law affecting the payment of distributions to stockholders and other factors. Because we are a holding company with no material assets other than the stock of our subsidiaries, our ability to pay dividends will depend on the earnings and cash flow of our subsidiaries and their ability to pay dividends to us. Marshall Islands law generally prohibits the payment of dividends other than from surplus or while a company is insolvent or would be rendered insolvent upon the payment thereof.

Under the terms of our existing credit facilities, we are generally permitted to declare or pay cash dividends in any twelve month period as long as the amount of the dividends and share repurchases do not exceed 50% of the Company’s free cash flow (as defined in our credit agreements) and provided we are not in default under the other covenants contained in these credit facilities. See “Item 3. Key Information—Risk Factors—Risks Related To Our Common Stock—We may not pay dividends on our common stock”.

Articles of Incorporation and Bylaws

Our purpose is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the Marshall Islands Business Corporations Act, or BCA. Our articles of incorporation and bylaws do not impose any limitations on the ownership rights of our stockholders.

Under our bylaws, annual stockholder meetings will be held at a time and place selected by our Board of Directors. The meetings may be held in or outside of the Marshall Islands. Special meetings may be called by the Board of Directors. Our Board of Directors may set a record date between 15 and 60 days before the date of any meeting to determine the stockholders that will be eligible to receive notice and vote at the meeting.

Directors. Our directors are elected by a plurality of the votes cast at a meeting of the stockholders by the holders of shares entitled to vote in the election. There is no provision for cumulative voting.

The Board of Directors may change the number of directors by a vote of a majority of the entire board. Each director shall be elected to serve until his successor shall have been duly elected and qualified, except in the event of his death, resignation, removal, or the earlier termination of his term of office. The Board of Directors has the authority to fix the amounts which shall be payable to the members of our Board of Directors for attendance at any meeting or for services rendered to us.

Dissenters’ Rights of Appraisal and Payment. Under the BCA, our stockholders have the right to dissent from various corporate actions, including any merger or sale of all or substantially all of our assets not made in the usual course of our business, and receive payment of the fair value of their shares. However, the right of a dissenting stockholder under the BCA to receive payment of the fair value of his shares is not available for the shares of any class or series of stock, which shares or depository receipts in respect thereof, at the record date fixed to determine the stockholders entitled to receive notice of and to vote at the meeting of the stockholders to act upon the agreement of merger or consolidation, were either (i) listed on a securities exchange or admitted for trading on an interdealer quotation system or (ii) held of record by more than 2,000 holders. The right of a dissenting stockholder to receive payment of the fair value of his or her shares shall not be available for any shares of stock of the constituent corporation surviving a merger if the merger did not require for its approval the vote of the stockholders of the surviving corporation. In the event of any further amendment of our articles of incorporation, a stockholder also has the right to dissent and receive payment for his or her shares if the amendment alters certain rights in respect of those shares. The dissenting stockholder must follow the procedures set forth in the BCA to receive payment. In the event that we and any dissenting stockholder fail to agree on a price for the shares, the BCA procedures involve, among other things, the institution of proceedings in the circuit court in the judicial circuit in the Marshall Islands in which our Marshall Islands office is situated. The value of the shares of the dissenting stockholder is fixed by the court after reference, if the court so elects, to the recommendations of a court-appointed appraiser.

Stockholders’ Derivative Actions. Under the BCA, any of our stockholders may bring an action in our name to procure a judgment in our favor, also known as a derivative action, provided that the stockholder bringing the action is a holder of common stock both at the time the derivative action is commenced and at the time of the transaction to which the action relates.

Anti-takeover Provisions of our Charter Documents. Several provisions of our articles of incorporation and bylaws may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directors to maximize stockholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions, which are summarized below, could also discourage, delay or prevent (1) the merger or acquisition of our company by means of a tender offer, a proxy contest or otherwise, that a stockholder may consider in its best interest and (2) the removal of incumbent officers and directors.

Blank Check Preferred Stock. Under the terms of our articles of incorporation, our Board of Directors has authority, without any further vote or action by our stockholders, to issue up to 5,000,000 shares of blank check preferred stock. Our Board of Directors may issue shares of preferred stock on terms calculated to discourage, delay or prevent a change of control of our company or the removal of our management.

Classified Board of Directors. Our articles of incorporation provide for a Board of Directors serving staggered, three-year terms. Approximately one-third of our Board of Directors will be elected each year. This classified board provision could discourage a third party from making a tender offer for our shares or attempting to obtain control of our company. It could also delay stockholders who do not agree with the policies of the Board of Directors from removing a majority of the Board of Directors for two years.

Election and Removal of Directors. Our articles of incorporation and bylaws prohibit cumulative voting in the election of directors. Our bylaws require parties other than the Board of Directors to give advance written notice of nominations for the election of directors. Our bylaws also provide that our directors may be removed only for cause and only upon the affirmative vote of the holders of at least 80% of the outstanding shares of our capital stock entitled to vote for those directors. These provisions may discourage, delay or prevent the removal of incumbent officers and directors.

Calling of Special Meetings of Stockholders. Our bylaws provide that special meetings of our stockholders may be called only by resolution of our Board of Directors.

Advance Notice Requirements for Stockholder Proposals and Director Nominations. Our bylaws provide that stockholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of stockholders must provide timely notice of their proposal in writing to the corporate secretary.

Generally, to be timely, a stockholder’s notice must be received at our principal executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the previous year’s annual meeting. If, however, the date of our annual meeting is more than 30 days before or 60 days after the first anniversary date of the previous year’s annual meeting, a stockholder’s notice must be received at our principal executive offices by the later of (i) the close of business on the 90th day prior to the annual meeting date or (ii) the close of business on the tenth day following the date on which such annual meeting date is first publicly announced or disclosed by us. Our bylaws also specify requirements as to the form and content of a stockholder’s notice. These provisions may impede stockholders’ ability to bring matters before an annual meeting of stockholders or make nominations for directors at an annual meeting of stockholders.

Business Combinations. Our articles of incorporation prohibit us from engaging in a “business combination” with certain persons for three years following the date the person becomes an interested stockholder. Interested stockholders generally include:

• persons who are the beneficial owners of 15% or more of the outstanding voting stock of the corporation; and

• persons who are affiliates or associates of the corporation and who hold 15% or more of the corporation’s outstanding voting stock at any time within three years before the date on which the person’s status as an interested stockholder is determined.

Subject to certain exceptions, a business combination includes, among other things:

• certain mergers or consolidations of the corporation or any direct or indirect majority-owned subsidiary of the company;

• the sale, lease, exchange, mortgage, pledge, transfer or other disposition of assets having an aggregate market value equal to 10% or more of either the aggregate market value of all assets of the corporation, determined on a consolidated basis, or the aggregate value of all the outstanding stock of the corporation;

• certain transactions that result in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;

• any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series, or securities convertible into the stock of any class or series, of the corporation that is owned directly or indirectly by the interested stockholder; and

• any receipt by the interested stockholder of the benefit (except as a stockholder) of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

These provisions of our articles of incorporation do not apply to a business combination if:

• before a person becomes an interested stockholder, the board of directors of the corporation approves the business combination or transaction in which the stockholder became an interested stockholder;

• upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, other than certain excluded shares;

• following a transaction in which the person became an interested stockholder, the business combination is (a) approved by the board of directors of the corporation and (b) authorized at a regular or special meeting of stockholders, and not by written consent, by the vote of the holders of at least two-thirds of the voting stock of the corporation not owned by the stockholder; or

• a transaction with a stockholder that was or became an interested stockholder prior to the consummation of our initial public offering.

Registrar and Transfer Agent

The registrar and transfer agent for our common stock is American Stock Transfer & Trust Company.

Exhibit 8

Subsidiaries

Company	Country of Incorporation
ALASKAN GASES INC.**	Liberia
ARABIAN OIL SERVICES INC.	Marshall Islands
AURORA INVESTMENTS INC.	Marshall Islands
BAHLA BEAUTY INC.	Marshall Islands
BARONESS HOLDINGS INC.	Marshall Islands
CANNES VIEW INC.*	Marshall Islands
CALABASAS INDUSTRIES INC.	Marshall Islands
CALIFORNIA GASES INC.	Marshall Islands
CARINTHIA INC.	Liberia
CELSIUS TECHNOLOGIES INC.**	Liberia
CHIOS LEGACY INC.	Marshall Islands
CLEAN POWER INC.	Liberia
COLORADO OIL AND GAS INC.*	Marshall Islands
DAYTONA INDUSTRIES INC.	Marshall Islands
EAST PROPANE INC.	Marshall Islands
EASTERN EXPLORATION INC.	Marshall Islands
ECOBUTANE INC.	Marshall Islands
ECOGAS TRADING INC.	Marshall Islands
ECOPROPANE INC.	Marshall Islands
ECOVCM INC.	Marshall Islands
EMPIRE SPIRIT LTD.	Marshall Islands
ENERGETIC PENINSULA LIMITED	Liberia
EVOLUTION CRUDE INC.	Marshall Islands
FINANCIAL POWER INC.*	Marshall Islands
FROST INVESTMENT CORP*	Marshall Islands
GASTECH INC.	Marshall Islands
GOLDEN SHADOW INC.	Marshall Islands
ICELAND LIMITED	Malta
INTERNATIONAL GASES INC.	Liberia
ITALIA TRADES INC.	Marshall Islands
JAPANESE LEASING SCHEMES INC.	Marshall Islands
JUNGLE INVESTMENT LIMITED	Malta
K INVESTMENTS INC.	Marshall Islands
KAIZEN INDUSTRIES INC.	Marshall Islands
KING OF HEARTS INC.	Liberia
LUCKYBOY INC.	Marshall Islands
MANAMA PRIDE INC.	Marshall Islands
MATRIX GAS TRADING LTD.	Marshall Islands
MGC AGRESSIVE HOLDINGS INC**	Marshall Islands

Company	Country of Incorporation
MR. ROI INC.	Marshall Islands
NORTHERN CAPITAL HOLDING INC.	Liberia
OCTOPUS GAS INC.	Liberia
OXFORDGAS LTD.	Liberia
PELORUS INC.	Liberia
PETCHEM TRADING INC.	Marshall Islands
RADIANT ENTERPRISES INC.	Marshall Islands
REVOLUTION INC.	Marshall Islands
RISING SUN INC.	Liberia
SANTA BARBARA INC.	Marshall Islands
SANTA MONICA INC.	Marshall Islands
SEMICHLAUS EXPORTS LTD.	Malta
SENIOR INVESTMENTS INC.	Marshall Islands
SIKOUSIS LEGACY INC.	Marshall Islands
SOLEIL TRUST INC.	Liberia
SOUND EFFEX INC.	Marshall Islands
SPACEGAS INC.*	Marshall Islands
STEALTHGAS INC.	Marshall Islands
STEAM POWER INC.	Marshall Islands
SUB ZERO INC.**	Liberia
TANKPUNK, INC.	Marshall Islands
TATOOSH BEAUTY INC.	Liberia
TRIATHLON INC.	Marshall Islands
UNIVERSAL GAS SUPPLIES INC.	Marshall Islands
VENTSPILS GASES LTD.	Malta
WOLVERINES INC.	Marshall Islands

* In the first quarter of 2019, we sold a 49.9% equity interest in this entity and ceased to fully consolidate its results in our consolidated financial statements. These entities are now consolidated under the equity method.

** In the first quarter of 2020, we acquired a 51.0% equity interest in this entity, which will be consolidated in our financial statements under the equity method.

Exhibit 12.1

CERTIFICATIONS

I, Harry N. Vafias, certify that:

1. I have reviewed this annual report on Form 20-F of StealthGas Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have;

a.) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent function):

a.) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 30, 2020

/s/ Harry N. Vafias

Harry N. Vafias

President and Chief Executive Officer

Exhibit 12.2

CERTIFICATIONS

I, Harry N. Vafias, certify that:

1. I have reviewed this annual report on Form 20-F of StealthGas Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have;

a.) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.) evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.) disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent function):

a.) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: April 30, 2020

/s/ Harry N. Vafias

Harry N. Vafias

Chief Financial Officer

Exhibit 13.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 20-F of StealthGas Inc. (the “Company”) for the fiscal year ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company hereby certifies to the undersigned’s knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: April 30, 2020

/s/ Harry N. Vafias

Harry N. Vafias

President and Chief Executive Officer

Exhibit 13.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 20-F of StealthGas Inc. (the “Company”) for the fiscal year ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer of the Company hereby certifies to the undersigned’s knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date April 30, 2020

/s/ Harry N. Vafias

Harry N. Vafias

Chief Financial Officer

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-143804 on Form F-3 and Registration Statement Nos. 333-144240 and 333-207168 on Form S-8 of our reports dated April 30, 2020, relating to the consolidated financial statements of StealthGas Inc. and subsidiaries (the “Company”), and the effectiveness of the Company’s internal control over financial reporting, appearing in this Annual Report on Form 20-F for the year ended December 31, 2019.

/s/ Deloitte Certified Public Accountants S.A

Athens, Greece

April 30, 2020

Exhibit 15.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in Registration Statement No. 333-143804 on Form F-3 and Registration Statement Nos. 333-144240 and 333-207168 on Form S-8 of StealthGas Inc. of our report dated April 30, 2020, relating to the financial statements of Spacegas Inc., appearing in this Annual Report on Form 20-F for the year ended December 31, 2019.

/s/ Deloitte Certified Public Accountants S.A

Athens, Greece

April 30, 2020

Exhibit 15.3

Spacegas Inc.

Financial statements

Index to financial statements

	Page
Independent Auditor’s Report		F-2
Balance Sheet as of December 31, 2019		F-3
Statement of Comprehensive Income for the Period from February  1, 2019 (Transaction Date) to December 31, 2019		F-4
Statement of Stockholders’ Equity for the period from February  1, 2019 (Transaction Date) to December 31, 2019		F-5
Statement of Cash Flows for the period from February  1, 2019 (Transaction Date) to December 31, 2019		F-6
Notes to the Financial Statements		F-7

F-1

Independent Auditors’ Report

To the Board of Directors and Stockholders of

Spacegas Inc.

We have audited the accompanying financial statements of Spacegas Inc. (the “Company”), which comprise the balance sheet as of December 31, 2019, and the related statements of comprehensive income, stockholders’ equity, and cash flows for the period from February 1, 2019 (Transaction Date) to December 31, 2019, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the period from February 1, 2019 (Transaction Date) to December 31, 2019, in accordance with accounting principles generally accepted in the United States of America.

/s/ Deloitte Certified Public Accountants S.A.

April 30, 2020

Athens, Greece

F-2

Spacegas Inc.

Balance sheet

As of December 31, 2019

(Expressed in United States Dollars, Except for Share Data)

Assets
Current assets
Cash and cash equivalents	711,674
Restricted cash	77,673
Trade and other receivables	124,664
Due from related party (Note 3)	1,114,738
Advances and prepayments	13,671
Inventories (Note 4)	195,224
Total current assets	2,237,644
Non current assets
Vessel, net (Note 5)	13,221,364
Total non current assets	13,221,364
Total assets	15,459,008
Liabilities and stockholders’ equity
Current liabilities
Trade accounts payable	250,583
Payable to related party (Note 3)	439,723
Current portion of long-term debt (Note 7)	674,482
Accrued liabilities (Note 6)	61,340
Total current liabilities	1,426,128
Non current liabilities
Long-term debt (Note 7)	5,530,995
Total non current liabilities	5,530,995
Total liabilities	6,957,123
Commitments and contingencies (Note 13)
Stockholders’ equity:
Capital stock 0.0001 par value; 7,647,000 issued and outstanding (Note 9)	765
Additional paid-in capital (Note 9)	7,646,235
Retained earnings	854,885
Total stockholders’ equity	8,501,885
Total liabilities and stockholders’ equity	15,459,008

The accompanying notes are an integral part of these financial statements.

F-3

Spacegas Inc.

Statement of comprehensive income

For the period from February 1, 2019 (Transaction Date) to December 31, 2019

(Expressed in United States dollars)

	2019
Revenues
Revenues (Note 10)		3,362,478
Total revenues		3,362,478
Expenses
Voyage expenses (Note 11)		11,091
Voyage expenses-related party (Notes 3, 11)		42,031
Vessel operating expenses (Note 11)		1,409,047
Depreciation (Note 5)		600,636
Management fees (Note 3)		146,960
General and administrative expenses		30,246
Total expenses		2,240,011
Income from operations		1,122,467
Other (expenses)/income
Interest and finance costs		(266,586	)
Interest income and other income		610
Foreign exchange loss		(1,606	)
Other expenses, net		(267,582	)
Net income		854,885
Other comprehensive income		—
Total comprehensive income		854,885

The accompanying notes are an integral part of these financial statements.

F-4

Spacegas Inc.

Statement of stockholders’ equity

For the period from February 1, 2019 (Transaction Date) to December 31, 2019

(Expressed in United States Dollars, Except for Number of Shares)

	Number of common shares		Common stock par value (Note 9)		Additional paid in capital (Note 9)		Retained earnings		Total stockholders’ equity
Balance, February 1, 2019 (Transaction Date)		6,897,000		690		6,896,310		—		6,897,000
Issuance of share capital (Note 9)		750,000		75		749,925		—		750,000
Net income		—		—		—		854,885		854,885
Balance, December 31, 2019		7,647,000		765		7,646,235		854,885		8,501,885

The accompanying notes are an integral part of these financial statements.

F-5

Spacegas Inc.

Statement of cash flows

For the period from February 1, 2019 (Transaction Date) to December 31, 2019

(Expressed in United States Dollars)

	2019
Cash flows from operating activities:
Net income		854,885
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		600,636
Amortization of deferred finance charges		18,137
Changes in operating assets and liabilities: (Increase)/decrease in
Trade and other receivables		(124,664	)
Advances and prepayments		(13,671	)
Inventories		(195,224	)
Increase/(Decrease) in
Trade accounts payable		250,583
Balances with related party		439,723
Accrued liabilities		61,340
Net cash provided by operating activities		1,891,745
Cash flows from investing activities:
Cash to joint venture party		(1,114,738	)
Net cash used in investing activities		(1,114,738	)
Cash flows from financing activities
Issuance of capital		750,000
Deferred finance charges paid		(52,660	)
Loan repayments		(685,000	)
Net cash provided by financing activities		12,340
Net increase in cash, cash equivalents and restricted cash		789,347
Cash, cash equivalents and restricted cash at beginning of period		—
Cash, cash equivalents and restricted cash at end of period		789,347
Cash breakdown
Cash and cash equivalents		711,674
Restricted cash, current		77,673
Total cash, cash equivalents and restricted cash shown in the statement of cash flows		789,347
Supplemental cash flow information
Interest paid		199,076

The accompanying notes are an integral part of these financial statements.

F-6

Spacegas Inc.

Notes to the financial statements

(In thousands of United States dollars)

1. Basis of Presentation and General Information

The accompanying financial statements include the accounts of Spacegas Inc. (the “Company”) which, as of December 31, 2019 owned one liquefied petroleum gas (LPG) carrier, Gas Defiance, built on July 30, 2008, which provides worldwide marine transportation services under time charters. Spacegas Inc. was formed under the laws of the Marshall Islands on March 5, 2008. For the period from its incorporation to February 1, 2019, the Company was fully owned by StealthGas Inc. On February 1, 2019 (the “Transaction Date”), StealthGas Inc. (the “joint venture party”) entered into a Shareholder Agreement with MAAS GAS BV pursuant to which MAAS GAS BV acquired 49.9% of the shares of the Company and gained co-ownership and joint control of the vessel Gas Defiance.

The reporting and functional currency of the Company is the United States Dollar. The financial statements have been prepared in conformity with United States generally accepted accounting principles (“U.S. GAAP”) and present the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the period from the Transaction date to December 31, 2019.

The Company’s vessel is managed by Stealth Maritime Corporation S.A. (the “Manager”), a related party. The Manager is a company incorporated in Liberia and registered in Greece on May 17, 1999 under the provisions of law 89/1967, 378/1968 and article 25 of law 27/75 as amended by article 4 of law 2234/94. (See Note 3).

During the period ended December 31, 2019, one charterer accounted for 100% of the Company’s revenues.

2. Significant Accounting Policies

Use of Estimates: The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Foreign Currency Translation: The functional currency of the Company is the U.S. Dollar because the Company’s vessel operates in international shipping markets, which utilize the U.S. Dollar as the functional currency. The accounting books of the Company are maintained in U.S. Dollars. Transactions involving other currencies during the year are converted into U.S. Dollars using the exchange rates in effect at the time of the transactions. At the balance sheet date, monetary assets and liabilities, which are denominated in other currencies, are translated to reflect the period end exchange rates. Resulting gains or losses are separately reflected in the accompanying statement of comprehensive income.

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Cash and Cash Equivalents: The Company considers highly liquid investments such as time deposits and certificates of deposit with original maturity of three months or less to be cash equivalents.

Restricted Cash: Restricted cash mainly reflects deposits with certain banks that can only be used to pay the current loan installments or which are required to be maintained as a certain minimum cash balance per mortgaged vessel or cash held in restricted bank account for guarantees issued by the bank on the Company’s behalf. In the event that the obligation relating to such deposits is expected to be terminated within the next twelve months, these deposits are classified as current assets; otherwise they are classified as non-current assets.

Trade Receivables: The amount shown as trade receivables includes estimated recoveries from charterers for hire, net of allowance for doubtful accounts. At each balance sheet date, all potentially un-collectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. No provision for doubtful accounts was required for the period presented.

Claims Receivable: Claims receivable are recorded on the accrual basis and represent the claimable expenses, net of deductibles, incurred through each balance sheet date, for which recovery from insurance companies is probable and claim is not subject to litigation. Any remaining costs to complete the claims are included in accrued liabilities.

Inventories: Inventories consist of bunkers and lubricants which are stated at the lower of cost and net realizable value. The cost is determined by the first-in, first-out method. The Company considers victualing and stores as being consumed when purchased and, therefore, such costs are expensed when incurred.

Vessel Acquisition: Vessel is stated at cost less depreciation and impairment, if any. Cost consists of the contract price less discounts and any material expenses incurred upon acquisition (initial repairs, improvements, acquisition and expenditures made to prepare the vessel for its initial voyage). 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 the vessels, or otherwise are charged to expenses as incurred. The Company records all identified tangible and intangible assets associated with the acquisition of a vessel or liabilities at fair value.

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Impairment or Disposal of Long-lived Assets: The Company follows the Accounting Standards Codification (“ASC”) Subtopic 360-10, “Property, Plant and Equipment” (“ASC 360-10”), which requires impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. The Company performs an analysis of the anticipated undiscounted future net cash flows of the related long-lived assets, when an impairment indication exists. If the carrying value of the related asset exceeds the undiscounted cash flows, the carrying value is reduced to its fair value and the difference is recorded as an impairment loss in the statement of comprehensive income. Various factors including anticipated future charter rates, estimated scrap values, future dry-docking costs and estimated vessel operating costs are included in this analysis. These factors are based on historical trends as well as future expectations.

Vessel’s Depreciation: The cost of the Company’s vessel is depreciated on a straight-line basis over the vessel’s remaining economic useful life, after considering the estimated residual value. Management estimates the useful life of the Company’s vessel to be 30 years from the date of its construction.

Accounting for Special Survey and Dry-docking Costs: Special survey and dry-docking costs are expensed in the period incurred.

Deferred Finance Charges: Fees incurred for obtaining new loans or refinancing existing ones are deferred and amortized to interest expense over the life of the related debt using the effective interest method. The unamortized deferred financing charges are presented as a direct deduction from the carrying amount of the related loan and credit facility in the balance sheet. Deferred financing costs relating to undrawn facilities are presented under non-current assets in the balance sheet.

Accounting for Revenue and Related Expenses: The Company generates its revenues from charterers for the charter hire of its vessel. The Company’s vessel is chartered on time charters.

A time charter is a contract for the use of a vessel for a specific period of time and a specified daily charter hire rate, which is generally payable in advance. Operating costs incurred for running the vessel such as crew costs, vessel insurance, repairs and maintenance and lubricants are paid for by the Company under time charter agreements. A time charter generally provides typical warranties and owner protective restrictions. The performance obligations in a time charter are satisfied over the term of the contract beginning when the vessel is delivered to the charterer until it is redelivered back to the owner of the vessel. The Company’s time charter contracts are classified as operating leases pursuant to Accounting Standards Codification (“ASC”) 842 - Leases, and therefore do not fall under the scope of Accounting Standards Codification (“ASC”) 606 because (i) the vessel is an identifiable asset (ii) the owner of the vessel does not have substantive substitution rights and (iii) the charterer has the right to control the use of the vessel during the term of the contract and derives the economic benefits from such use. Time charter revenues are recognized when a charter agreement exists, the vessel is made available to the charterer and collection of the related revenue is reasonably assured. Time charter revenues are recognized ratably on a straight line basis over the period of the respective charter. Under time charter agreements, all voyages expenses, except commissions are assumed by the charterer.

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The Company has adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (codified as ASC 842), as amended from time to time, using the modified retrospective transition method. The Company elected to apply the additional and optional transition method to existing leases at the beginning of the period of adoption and no cumulative effect adjustment to the opening retained earnings was necessary as of the beginning of the period. Also, the Company elected to apply a package of practical expedients under ASC 842, which allowed the Company, not to reassess (i) whether any existing contracts, on the date of adoption, contained a lease, (ii) lease classification of existing leases classified as operating leases in accordance with ASC 840 and (iii) initial direct costs for any existing leases. ASC 842 also provides a practical expedient to lessors by class of underlying asset, to not separate non lease components from the associated lease component when the following criteria are met (i) the timing and pattern of transfer for the lease component is the same as those for the non-lease component associated with that lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. The Company, making use of this practical expedient for lessors, has elected not to separate the lease and non-lease components included in the time charter revenue but rather to recognize operating lease revenue as a combined single lease component for all time charter contracts as the related lease component, the hire of a vessel, and non-lease component, the fees for operating and maintaining the vessel, have the same timing and pattern of transfer (both the lease and non-lease components are earned by passage of time) and the predominant component is the lease. Upon adoption of ASC 842, the timing and recognition of earnings from time charter contracts to which the Company acts as lessor did not change from previous practice and thus the adoption of this standard did not have an effect on the Company’s opening retained earnings, balance sheet and statement of comprehensive income.

Deferred revenue represents cash received for undelivered performance obligations and deferred revenue resulting from straight-line revenue recognition in respect of charter agreements that provide for varying charter rates. The portion of the deferred revenue that will be earned within the next twelve months is classified as current liability and the remaining as long-term liability.

Vessel operating expenses comprise all expenses relating to the operation of the vessel, including crewing, repairs and maintenance, insurance, stores, lubricants and other operating expenses. Vessel operating expenses are expensed as incurred.

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3. Transactions with Related Parties

The Manager provides the vessel with a wide range of shipping services such as chartering, technical support and maintenance, insurance, consulting, financial and accounting services, for a fixed daily fee of $440 and a brokerage commission of 1.25% on hire, as per the management agreement between the Manager and the Company. For the period ended December 31, 2019, total brokerage commissions of 1.25% amounted to $42,031 and are included in “Voyage expenses – related party” in the statement of comprehensive income. For the period ended December 31, 2019, the management fees were $146,960 and are included in “Management fees” in the statement of comprehensive income.

The current account balance with the Manager at December 31, 2019 was a liability of $439,723. The liability represents payments made by the Manager on behalf of the ship-owning company.

The current account balance with StealthGas Inc. at December 31, 2019 was a receivable of $1,114,738. The receivable represents revenues collected by StealthGas Inc. on behalf of the Company.

4. Inventories

The amount shown in the accompanying balance sheet is analyzed as follows:

	December 31, 2019
Lubricants		63,749
Bunkers		131,475
Total		195,224

5. Vessel, Net

The amount shown in the accompanying balance sheet is analyzed as follows:

	Vessel cost		Accumulated depreciation			Net book value
Balance, Transaction date		13,822,000		—			13,822,000
Depreciation for the period		—		(600,636	)		(600,636	)
Balance, December 31, 2019		13,822,000		(600,636	)		13,221,364

At December 31, 2019, no impairment indication existed for the Company’s vessel since its fair value as determined by independent brokers exceeded its net book value.

As of December 31, 2019, the vessel has been provided as collateral to secure the Company’s bank loan as discussed in Note 7.

6. Accrued Liabilities

The amount shown in the accompanying balance sheet is analyzed as follows:

	December 31, 2019
Interest on long-term debt		39,371
Vessel operating and voyage expenses		21,969
Total		61,340

7. Long-Term Debt, Net

Long-term debt as of the Transaction date amounted to $6,925,000 and related to a loan issued on July 30, 2008. In May 2019, loan repayments amounting to $342,500 were made to the bank.

On June 25, 2019, the Company together with Financial Power Inc., a ship-owning company under common control, entered into a loan agreement for an amount of $13,165,000 with a bank, for the purpose of re-financing the then existing borrowings with the same bank. The loan bears interest at LIBOR plus a margin of 2% per annum. The loan allocated to the Company amounted to $6,582,500 and is repayable in nine instalments of $342,500 each, and a balloon instalment of $3,500,000, payable together with the last instalment in November 2023.

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Loan interest expense for the period ended December 31, 2019, amounted to $238,447 and is presented under “Interest and finance costs” in the accompanying statement of comprehensive income.

Weighted average interest rate on the Company’s long-term debt for the period ended December 31, 2019 was 3.8%.

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Long-term debt as at December 31, 2019 is analysed as follows:

	2019
Total long-term debt		6,240,000
Less: Deferred debt issuance costs		(34,523	)
Total long-term debt, net		6,205,477
Less: Current portion of long-term debt		(685,000	)
Add: Current portion of deferred debt issuance costs		10,518
Long-term debt net		5,530,995

The annual principal payments to be made, for the abovementioned loan, after December 31, 2019 are as follows:

	December 31, 2019
2020		685,000
2021		685,000
2022		685,000
2023		4,185,000
Total		6,240,000

The loan agreement contains customary ship finance covenants, including restrictions as to changes in management and ownership of the mortgaged vessels, the incurrence of additional indebtedness, the mortgaging of the vessels, the ratio of debt to the vessel’s Market Value and pledged cash deposits. As of December 31, 2019, the Company was in compliance with all the terms of its loan agreement.

8. Fair Value of Financial Instruments and Concentration of Credit Risk

Financial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents, restricted cash, trade and other receivables, due from related party, payable to related party, trade accounts payable and accrued liabilities. The Company limits its credit risk with respect to accounts receivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its trade accounts receivable. The Company places its cash and cash equivalents, time deposits and other investments with high credit quality financial institutions. The Company performs periodic evaluations of the relative credit standing of those financial institutions. The carrying values of cash and cash equivalents, restricted cash, receivables from related party, trade and other receivables, payable to related party, trade accounts payable and accrued liabilities are reasonable estimates of their fair value due to the short term nature of these financial instruments. Cash and cash equivalents and restricted cash are considered Level 1 items as they represent liquid assets with short-term maturities. The fair value of long term bank loan is estimated based on current rates offered to the Company for similar debt of the same remaining maturities. Its carrying value approximates their fair market value due to their variable interest rate, being LIBOR. LIBOR rates are observable at commonly quoted intervals for the full terms of the loans and hence floating rate loans are considered Level 2 items in accordance with the fair value hierarchy.

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9. Capital stock and Additional paid-in capital

The total authorized and issued share capital of the Company at the Transaction Date was 6,897,000 common shares with a value of 1 US Dollar per share.

During the period ended December 31, 2019, 750,000 shares were issued and capital amounting to $750,000 was contributed to the Company for working capital purposes.

10. Revenues

The amount in the accompanying statement of comprehensive income is analyzed as follows:

	2019
Time charter revenues		3,362,478
Total		3,362,478

11. Voyage Expenses and Vessel Operating Expenses

The amounts in the accompanying statements of comprehensive income are analyzed as follows:

Voyage Expenses	2019
Port expenses		8,700
Commissions		42,031
Other voyage expenses		2,391
Total		53,122

Vessel’s Operating Expenses	2019
Crew wages and related costs		815,797
Insurance		30,721
Repairs and maintenance		90,883
Spares and consumable stores		234,062
Miscellaneous expenses		237,584
Total		1,409,047

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12. Income Taxes

The Company is incorporated in the Marshall Islands where the laws do not impose tax on international shipping income. However, the Company is subject to registration and tonnage taxes in the country in which the vessel is registered and managed from, which have been included in vessel operating expenses in the accompanying statement of comprehensive income.

13. Commitments and Contingencies

From time to time the Company expects to be subject to legal proceedings and claims in the ordinary course of its business, principally personal injury and property casualty claims. Such claims, even if lacking merit, could result in the expenditure of significant financial and managerial resources. The Company 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.

As discussed in Note 7, the Company together with Financial Power Inc., a ship-owning company under common control, have entered into a loan agreement for an amount of $13,165,000. The portion of Financial Power Inc. from the outstanding loan balance and accrued interest as of December 31, 2019 amounted to $6,240,000 and $39,371, respectively. The Company is jointly and severally liable for the aforementioned portion in case of any defaults. The extent to which an outflow of funds will be required is dependent on the performance of Financial Power Inc. and compliance with the relevant terms included in the loan agreement.

14. Subsequent Events

Subsequent events have been evaluated through April 30, 2020. The most significant of these is the following:

On March 11, 2020, the World Health Organization declared the 2019 Novel Coronavirus (the “Covid-19”) outbreak, a pandemic. In response to the outbreak, many countries, ports and organizations, including those where the Company conducts a large part of its operations, have implemented measures to combat the outbreak, such as quarantines and travel restrictions. Such measures have and will likely continue to cause severe trade disruptions. The extent to which Covid-19 will impact the Company’s results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the virus and the actions to contain or treat its impact, among others. Accordingly, an estimate of the impact cannot be made at this time.

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CORPORATE DIRECTORY Directors and Executive Officers Michael G Jolliffe Chairman of the Board Corporate Office Chairman Stealthgas Inc. Wigham Richardson Group Harry N.Vafias 331 Kifissias Avenue Chief Executive Officer StealthGas Inc. Kifissia, 14561 Greece Tel.: +30 210 62 50 001 Markos Drakos Transfer Agent Director & Chairman of the Audit Com- American Stock Transfer & mittee Company Chief Executive Officer 6201 15th Avenue Markos Drakos Consultants Brooklyn, NY 11219 John Kostoyannis Tel: +1 212 446 4800 Director Legal Counsel Managing Director Morgan Lewis and Bockius Allied Shipbroking 101 Park Avenue New York, NY 10178 StealthGas Inc.’s common stock is Corporate Communications Tel: +1 212 309 6000 traded on the Nasdaq Global Select Harry N.Vafias Market Under the Symbol GASS Chief Executive Officer Auditors Stealthgas Inc. Deloitte Certified Public Accountants Website 331 Kifissias Avenue S.A. Corporate Investor information, press Kifissia, 14561 Greece 3a Fragoklissias & Granikou Str. releases, fleet information and SEC Tel.: +30 210 62 50 001 Marousi 15152, Athens Greece filings may be obtained through our info@stealthgas.com website at www.stealthgas.com FORWARD LOOKING STATEMENTS Matters discussed in this report may constitute forward-looking statements. Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although STEALTHGAS INC. believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, STEALTHGAS INC. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, liquefied petroleum gas and oil prices and production and supply and demand, general market conditions, including changes in charter hire rates and vessel values,charter counterparty performance, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled dry dockings, shipyard performance, changes in STEALTHGAS INC’s operating expenses, including bunker prices, dry-docking and insurance costs, ability to obtain financing and comply with covenants in our financing arrangements, or actions taken by regulatory authorities, potential liability from pending or future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists.

331 Kifissias Avenue | Kifissia, 14561 Greece Tel.: +30 2106250001-16 | Fax: +30 2106250018-19 www. stealthgas.com | info@stealthgas.com