Performance Shipping Inc 6-K, filed Nov 14, 2022
Performance Shipping Inc. (PSHG)
6-K
2022-11-14
For: 2022-11-14
View Original
Added on
April 07, 2026
About this 6-K
Performance Shipping Inc filed this 6-K on November 14, 2022.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of November 2022
Commission File Number: 001-35025
PERFORMANCE SHIPPING INC.
(Translation of registrant’s name into English)
373 Syngrou Avenue
175 64 Palaio Faliro
Athens, Greece
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ___
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)7: ___
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in
which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a
press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Attached to this Report on Form 6-K as Exhibit 99.1 is a copy of the
interim unaudited consolidated financial statements of Performance Shipping Inc. (the “Company”) for the nine months ended September 30, 2022.
Attached to this Report on Form 6-K as Exhibit 99.2 is a copy of the
press release of the Company dated November 14, 2022 titled “Performance Shipping Inc. Reports Record Net Income and Financial Results for the Third Quarter and Nine Months ended September 30, 2022.”
Attached to this Report on Form 6-K as Exhibit 99.3 is a copy of the
press release of the Company dated November 10, 2022 titled “Performance Shipping Inc. Announces Delivery of the LR2 Aframax Oil Product Tanker, M/T P. Aliki.”
Attached to this Report on Form 6-K as Exhibit 99.4 is a copy of the
press release of the Company dated November 9, 2022 titled “Performance Shipping Inc. Announces Acceptance of a Signed Offer Letter from Piraeus Bank S.A.”
Attached to this Report on Form 6-K as Exhibit 99.5 is a copy of the
press release of the Company dated November 8, 2022 titled “Performance Shipping Inc. Announces a US$32,000 per Day Time Charter Contract for about 24 Months.”
Attached to this Report on Form 6-K as Exhibit 99.6 is a copy of the
press release of the Company dated November 1, 2022 titled “Performance Shipping Inc. Announces New Loan Facility with Alpha Bank S.A. to Partially Finance the Acquisition of Seventh Vessel.”
Attached to this Report on Form 6-K as Exhibit 99.7 is a copy of the
press release of the Company dated October 27, 2022 titled “Performance Shipping Inc. Announces a US$30,000 per Day Time Charter Contract for about 24 Months.”
Attached to this Report on Form 6-K as Exhibit 99.8 is a copy of the
press release of the Company dated October 24, 2022 titled “Performance Shipping Inc. Announces the Sale of 2007 Built M/T P. Fos for US$ 34 Million.”
The information contained in this Report on Form 6-K (excluding Exhibit 99.2, other than the section titled “Results of Special Meeting of Shareholders and Reverse
Stock Split”) is hereby incorporated by reference into the Company’s registration statement on Form F-3 (File No. 333-197740), filed with the U.S. Securities and Exchange Commission (the “SEC”) with an effective date of August 13, 2014, and the
Company’s registration statement on Form F-3 (File No. 333-237637), filed with the SEC with an effective date of April 23, 2020.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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PERFORMANCE SHIPPING INC.
(Registrant)
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Dated: November 14, 2022
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/s/ Andreas Michalopoulos
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By:
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Chief Executive Officer
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Exhibit 99.1
Performance Shipping Inc.
Unless otherwise specified herein, references to the “Company” or “we”, “us” and “our” shall include Performance Shipping Inc. and its subsidiaries. The
following management’s discussion and analysis should be read in conjunction with our interim unaudited consolidated financial statements and their notes attached hereto. This discussion contains forward-looking statements that reflect our current
views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements. For additional information relating to our management’s discussion and analysis of
financial condition and results of operations, please see our annual report on Form 20-F for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on March 11, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Nine Months Ended September 30, 2022
Our Operations
We have historically chartered our vessels to customers primarily pursuant to short-term and long-term time charters and on spot voyages, and also through pool arrangements.
Under our time charters, the charterer typically pays us a fixed daily charter hire rate and bears all voyage expenses, including the cost of bunkers (fuel oil) and port and canal charges. Under spot charter arrangements, voyage expenses that are
unique to a particular charter are paid for by us. Under our pool arrangements, the pool manager charters our vessels, prices the charters, and is required to pay all voyage costs, including port charges, fuel and canal tolls and to collect
receivables. We receive a portion of the total revenues generated by the pool, net of expenses incurred by the pool, and the amount allocated to our participating vessel, is determined in accordance with an agreed-upon formula determined by the
margins allocated to our participating vessel based on her age, design and other performance characteristics. In all three types of charters, we remain responsible for paying the chartered vessel's operating expenses, including the cost of crewing,
insuring, repairing and maintaining the vessel, the costs of spares and consumable stores, tonnage taxes, environmental costs, and other miscellaneous expenses. We also pay commissions to unaffiliated shipbrokers, and to related party brokers when
they are involved, for the arrangement of the relevant charter.
Factors affecting our results of operations
We believe that the important measures for analyzing trends in our results of operations consist of the following:
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Ownership days. We define ownership days as the aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an
indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we record during a period.
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Available days. We define available days as the number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or
repairs under guarantee, vessel upgrades or special surveys, including the aggregate amount of time that we spend positioning our vessels for such events. The shipping industry uses available days to measure the number of days in a period
during which vessels should be capable of generating revenues.
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1
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Operating days, including ballast leg. We define operating days, including ballast leg, as the number of available days in a period less the aggregate number of days that
our vessels are off-hire. The specific calculation counts as on-hire the days of the ballast leg of the spot voyages, as long as a charter party is in place. The shipping industry uses operating days to measure the aggregate number of days in
a period during which vessels actually generate revenues.
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Fleet utilization. We calculate fleet utilization by dividing the number of our operating days during a period by the number of our available days during the period. The
shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs
under guarantee, vessel upgrades and special surveys, including vessel positioning for such events.
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Time Charter Equivalent (TCE) rates. We define TCE rates as our voyage and time charter revenues, less voyage expenses during a period divided by the number of our available
days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker (fuel) expenses, canal charges and commissions. TCE is a non-GAAP measure. TCE rate is a standard shipping industry performance
measure used primarily to compare daily earnings generated by vessels despite changes in the mix of charter types (i.e., voyage (spot) charters, time charters, and bareboat charters).
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Daily Operating Expenses. We define daily operating expenses as total vessel operating expenses, which include crew wages and related costs, the cost of insurance and vessel
registry, expenses relating to repairs and maintenance, the costs of spares and consumable stores, lubricant costs, tonnage taxes, regulatory fees, environmental costs, lay-up expenses and other miscellaneous expenses divided by total
ownership days for the relevant period.
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The following tables reflect our ownership days, available days, operating days, fleet utilization, TCE rate, and daily operating expenses for our total fleet, as well as a
calculation for our TCE rates, for the periods indicated.
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For the nine months ended
September 30,
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2022
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2021
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Ownership days
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1,453
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1,365
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Available days
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1,423
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1,324
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Operating days, including ballast leg
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1,384
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1,121
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Fleet utilization
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97.3
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%
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84.7
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%
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Time charter equivalent (TCE) rate
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$
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24,866
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$
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8,906
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Daily operating expenses
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$
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6,597
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$
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6,273
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For the nine months ended
September 30,
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2022
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2021
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(in thousands of U.S. dollars, except
for available days and TCE rate)
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Voyage and time charter revenues
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$
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47,406
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$
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26,844
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Less: voyage expenses
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(12,022
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)
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(15,053
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)
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Time charter equivalent revenues
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$
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35,384
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$
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11,791
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Available days
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1,423
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1,324
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Time charter equivalent (TCE) rate
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$
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24,866
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$
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8,906
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2
Voyage and Time Charter Revenues
Our revenues are driven primarily by the number of vessels in our fleet, the number of days that our vessels operate, and the amount of daily charter hire that our vessels earn
under charters which, in turn, are affected by a number of factors, including:
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the duration of our charters;
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our decisions relating to vessel acquisitions and disposals;
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the amount of time that we spend positioning our vessels;
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the amount of time that our vessels spend in drydock undergoing repairs;
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maintenance and upgrade work;
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the age, condition, and specifications of our vessels;
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levels of supply and demand in the shipping industry; and
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other factors affecting spot market charter rates for vessels.
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Vessels operating on time charters for a certain period of time provide more predictable cash flows over that period of time, but can yield lower profit margins than vessels
operating in the spot charter market during periods characterized by favorable market conditions. Vessels operating in the spot charter market, or through pool arrangements, generate revenues that are less predictable but may enable their owners to
capture increased profit margins during periods of improvements in charter rates, although their owners would be exposed to the risk of declining charter rates, which may have a materially adverse impact on financial performance. As we employ vessels
on time and spot charters, or through pool arrangements, we mitigate our charter rates fluctuation exposure.
Currently, the vessels in our fleet are employed on time charter voyages, spot voyages or through pool arrangements. Our charter agreements subject us to counterparty risk. In
depressed market conditions, charterers may seek to renegotiate the terms of their existing charter agreements or avoid their obligations under those contracts. Should a counterparty fail to honor its obligations under agreements with us, we could
sustain significant losses, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Voyage Expenses
We incur voyage expenses that include port and canal charges, bunker (fuel oil) expenses and commissions. Port and canal charges and bunker expenses primarily increase in periods
during which vessels are employed on voyage charters because these expenses are for the account of the owner of the vessels, while they are on the account of the charterer when vessels are time-chartered. Laid-up vessels, if any, do not incur bunkers
costs. However, at times when our vessels are off-hire due to other reasons, we incur port and canal charges and bunker expenses.
We have paid commissions ranging from 1.25% to 6.25% of the total daily charter hire rate of each charter to unaffiliated shipbrokers, depending on the number of brokers involved
with arranging the charter, and to Pure Brokerage and Shipping Corp. (or “Pure Brokerage”), a related party shipbroker. Our in-house fleet manager, UOT, our wholly-owned subsidiary, receives a commission that is equal to 2% of our gross revenues in
exchange for providing us with technical and commercial management services in connection with the employment of our fleet. However, this commission is eliminated from our consolidated financial statements as an intercompany transaction.
3
Vessel Operating Expenses
Vessel operating expenses include crew wages and related costs, the cost of insurance and vessel registry, expenses relating to repairs and maintenance, the cost of spares and
consumable stores, tonnage taxes, regulatory fees, environmental costs, lay-up expenses, and other miscellaneous expenses. Other factors beyond our control, some of which may affect the shipping industry in general, including, for instance,
COVID-related disruptions which could cause our crew costs and other operating expenses to increase, developments relating to market prices for crew wages and insurance, may also cause these expenses to increase. In conjunction with our senior
executive officers, UOT has established an operating expense budget for each vessel and performs the day-to-day management of our vessels under separate management agreements with our vessel-owning subsidiaries. We monitor the performance of UOT by
comparing actual vessel operating expenses with the operating expense budget for each vessel.
Vessel Depreciation
We depreciate all our vessels on a straight-line basis over their estimated useful lives, which we estimate to be 25 years for our tanker vessels from the date of their initial
delivery from the shipyard. Depreciation is based on the cost less the estimated salvage values. Each vessel's salvage value is the product of her light-weight tonnage and estimated scrap rate, which is estimated at $350 per light-weight ton for all
vessels in our fleet. We believe that these assumptions are common in the tanker industry.
General and Administrative Expenses
We incur general and administrative expenses, including our onshore related expenses such as legal and professional expenses. Certain of our general and administrative expenses
have been provided for under our Brokerage Services Agreement with Pure Brokerage. We also incur payroll expenses of employees and general and administrative expenses reflecting the costs associated with running a public company, including board of
director costs, director and officer insurance, investor relations, registrar and transfer agent fees, and legal and accounting costs related to our compliance with public reporting obligations.
Interest and Finance Costs
We have historically incurred interest expense and financing costs in connection with vessel-specific debt. As of September 30, 2022, our aggregate outstanding debt, including related party loan, amounted to $74.1 million. We expect to manage any exposure in interest rates through our regular operating and financing activities and, when deemed appropriate, through
the use of derivative financial instruments.
For purposes of both the following discussion and the Financial Statements, results of operations of the container vessels segment we exited during 2020, are reported as
discontinued operations for all periods presented.
4
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Results of Operations
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For the Nine Months Ended September 30,
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2022
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2021
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variation
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% change
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in millions of U.S. dollars
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Revenue
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47.4
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26.8
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20.6
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77
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%
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Voyage expenses
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-12.0
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-15.1
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3.1
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-21
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%
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Vessel operating expenses
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-9.6
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-8.6
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-1.0
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12
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%
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Depreciation and amortization of deferred charges
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-6.6
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-5.6
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-1.0
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18
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%
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General and administrative expenses
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-4.7
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-4.3
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-0.4
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9
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%
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Provision/ (Reversal) for credit losses and write offs
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0.0
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0.0
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0.0
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-
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Foreign currency gains / (losses)
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0.1
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-0.1
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0.2
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-200
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%
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Interest and finance costs
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-2.2
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-1.4
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-0.8
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57
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%
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Interest income
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0.1
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0.0
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0.1
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-
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Net income / (loss) from continuing operations
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12.5
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-8.1
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20.6
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-254
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%
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Net income from discontinued operations
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0.0
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0.4
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-0.4
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-100
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%
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For the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021
Net income / (loss) from continuing operations for the nine months ended September 30, 2022, amounted to $12.5 million, compared to a net loss of $8.1
million for the same period in 2021. The net income for the nine months ended September 30, 2022 was mainly a result of increased revenues contributed by our tankers fleet, which led our profitability to significantly increase. Specifically, we noted
a continuation in the tanker market recovery, supported by strong demand for crude oil and significant changes in trading patterns as a result of sanctions on Russian crude oil exports leading to longer-haul tanker voyages. In the first nine months
of 2021, the depressed market conditions in the tankers’ industry, being an impact of the ongoing COVID-19 pandemic, led our revenues to significantly lower levels that did not manage to exceed the level of the continuing operations' expenses.
Net Income from discontinued operations for the nine months ended September 30, 2022 was $Nil, while for 2021, it amounted to $0.4 million. The net income
of the first nine months of 2021 depicted solely the impact of $0.4 million of income from insurance settlements of one of our container vessels.
Voyage and Time Charter Revenues from continuing operations for the nine months ended September 30, 2022, amounted to $47.4 million, compared to $26.8
million for the same period in 2021. The increase in time charter revenues is mainly attributable to the increased time-charter equivalent rates (TCE rates, which was a combined result of the improved tanker charter rate environment achieved during
the quarter, of decreased voyage expenses as a consequence of the shift in the vessel’s employment strategy from spot to pool arrangements, and of the improvement in the vessels’ utilization.
Voyage Expenses from continuing operations for the nine months ended September 30, 2022, amounted to $12.0 million, compared to $15.1 million for the same
period in 2021. Voyage expenses of our tanker vessels mainly consist of bunkers costs, port and canal expenses, and commissions paid to third-party brokers. The decrease of the voyage expenses was mainly attributable to the decrease of spot charters
and the increase of pool charters, and also to the increase of the fleet utilization that contributed to the decrease of certain voyage expenses, such as the bunkers costs.
5
Vessel Operating Expenses from continuing operations for the nine months ended September 30, 2022 amounted to $9.6 million, compared to $8.6 million for
the same period of 2021 and mainly consist of expenses for running and maintaining our vessels, such as crew wages and related costs, consumables and stores, insurances, repairs and maintenance, environmental compliance costs and other miscellaneous
expenses. The increase noted in vessel operating expenses was mainly attributable to the increase in ownership days of our fleet following the acquisition of vessel “P. Sophia” in July 2022 and was also reinformed by the slight increase in the daily
operating expenses of our tanker vessels. The daily operating expenses mainly increased due to slightly increased daily crew, stores and spare costs.
Depreciation and amortization from continuing operations for the nine months ended September 30, 2022 amounted to $6.6 million, compared to $5.6 million
for the same period in 2021, and represents the depreciation and amortization expense of our tanker vessels. The noted increase of $1.0 million was attributable to the increase in the amortization expense by $0.4 million due to the drydocks performed
during the period, and an increase in depreciation of $0.6 million, due to the expansion of our fleet and the improvement costs that were capitalized as vessels’ costs during the period.
General and Administrative Expenses from continuing operations for the nine months ended September 30, 2022 amounted to $4.7 million, compared to $4.3
million for the same period in 2021, and mainly consist of payroll expenses of office employees, consultancy fees, brokerage services fees, compensation cost on restricted stock awards, legal fees and audit fees. The increase was mainly attributable
to increased bonuses partially counterbalanced by a decrease in compensation cost of stock awards.
Other Income from discontinued operations for the nine months ended September 30, 2021 amounted to $0.4 million and represents income from insurance
settlements of our container vessel Domingo, compared to $Nil for the nine months ended September 30, 2022.
Interest and Finance Costs from continuing operations were $2.2 million for the period ended September 30, 2022, compared to $1.4 million for the same
period in 2021. The increase is attributable to increased average debt, and also to increased average interest rates, which were 4.28% for the first nine months of 2022, compared to 2.91% in the first nine months of 2021, following the drawdown of
$5.0 million under our loan agreement with Mango in March 2022 and the significant increase of the LIBOR rates in the nine-months ended September 30, 2022 as compared to the same period of 2021.
Inflation
Recently there has been a significant increase in inflation throughout the world economy. Such global inflationary pressures, and related central bank actions,
have also resulted in higher prevailing interest rates, increasing the interest rates payable under our floating rate financing agreements. To date, inflation has had a small impact on our operating and general administrative expenses. Inflation
has been increasing throughout the world economy and if these conditions continue could result in further increased operating and financing expenses.
6
Liquidity and Capital Resources
We have historically financed our capital requirements with cash flow from operations, equity contributions from shareholders, and long- and medium-term debt. Our operating cash
flow is generated from charters on our vessels, through our subsidiaries. Our main uses of funds have been capital expenditures for the acquisition of new vessels, expenditures incurred in connection with ensuring that our vessels comply with
international and regulatory standards, repayments of loans, and payments of dividends. At times when we are not restricted by our lenders from acquiring additional vessels, we will require capital to fund vessel acquisitions and debt service.
As of September 30, 2022 and December 31, 2021, our working capital, which is current assets minus current liabilities,
including the current portion of long-term debt, was $32.1 million and $4.2 million, respectively. We expect that we will fund our operations with cash on hand, cash generated from operations, bank debt and equity offerings, or a combination
thereof, in the twelve-month period ending one year after the financial statements' issuance.
Cash Flow (Continuing and Discontinued Operations)
As of September 30, 2022, cash and cash equivalents amounted to $35.5 million, compared to $9.6 million as of December
31, 2021. We consider highly liquid investments such as time deposits and certificates of deposit with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are primarily held in U.S. dollars.
For the presentation of the statement of cash flows in our financial statements, we elected to combine cash flows from discontinued operations with cash flows from continuing
operations within each cash flow statement category. The absence of cash flows from discontinued operations is not expected to affect our future liquidity and capital resources.
Net Cash Provided by/ (Used In) Operating Activities
Net cash provided by operating activities for the nine-month period ended September 30, 2022 amounted to $10.2 million, compared to $1.3 million used in operating activities for the nine-month period ended September 30, 2021. The increase of net cash provided by operating activities was mainly attributable to increased revenues, as a result of increased average time charter rates, partially counterbalanced by the increase in the
working capital outflow.
Net Cash Used In Investing Activities
Net cash used in investing activities in the nine months ended September 30,
2022 and 2021 was $34.8 million and $1.8 million respectively. The noted variance is mainly attributable to the increase in vessel acquisition costs by $27.8
million, increase in advances for vessel acquisitions by $5.5 million and the decrease of payments for vessels’ improvements by $0.3 million during the nine-month period ended September 30, 2022.
Net Cash Provided By / (Used In) Financing Activities
Net cash provided by financing activities in the nine months ended September
30, 2022 was $50.6 million and mainly consists of the proceeds of $31.9 million from long-term debt, $5.0 million from the related party loan and the proceeds from the issuance of common stock and units of $27.6 million, partially counterbalanced
by loan repayments of $13.0 million, payments of financing costs of $0.4 million and cash dividends on Series B preferred shares of $0.5 million.
Net cash used in financing activities in the nine months ended September 30,
2021 was $5.9 million and reflects the amounts that we repaid to our lenders for our outstanding loan facilities.
7
Capital Expenditures
Our future capital expenditures relate to the purchase of tanker vessels and vessel upgrades. We also expect to incur additional capital expenditures when our vessels undergo
surveys. This process of recertification may require us to reposition these vessels from a discharge port to shipyard facilities, which will reduce our operating days during the period. The loss of earnings associated with the decrease in operating
days, together with the capital needs for repairs and upgrades results in increased cash flow needs which we will fund with cash on hand.
Recent Developments
On October 6, 2022, we paid a 10% advance of $3.5 million, for the acquisition of “Phoenix Beacon” (tbr “P. Monterey”), which is expected to be delivered to us in December 2022. To partially finance this acquisition, we accepted on November 9, 2022 an offer letter from Piraeus Bank for a new loan facility of up to $37.4 million, which
will refinance the existing outstanding indebtedness of the vessel “P. Kikuma” by $7.8 million and will provide additional financing of up to $29.6 million for the “Phoenix Beacon”.
On October 17, 2022, we entered into a stock purchase agreement with Mango pursuant to which we agreed to issue to Mango in a private placement 1,314,792 Series C preferred
stock, par value $0.01 per share in exchange for (i) all 657,396 Series B Convertible Cumulative Perpetual Preferred Shares held by Mango and (ii) the agreement by Mango to apply $4.93 million (an amount equal to the aggregate cash conversion price
payable upon conversion of such Series B preferred shares into Series C preferred shares pursuant to their terms) as a prepayment by us of the unsecured credit facility agreement with Mango. We subsequently repaid the remaining amounts due and
terminated the credit facility. The transaction was approved by a special independent committee of our Board of Directors.
On October 21, 2022, we signed a memorandum of agreement to sell to unrelated parties the Aframax tanker vessel “P. Fos” for a gross
purchase price of $34.0 million, with expected delivery to the buyers during November 2022. As of September 30, 2022, the vessel’s net book value was $22.6 million.
On November 9, 2022, we took delivery of the vessel “P. Aliki” and paid the balance of its purchase price to the vessel’s sellers
with cash on hand and loan proceeds. In connection with this acquisition, we entered on November 1, 2022 into a new loan agreement with Alpha Bank SA, for a maximum loan amount of $18.25 million. The loan includes customary loan covenants, and its
terms are similar to the Company’s existing loan agreements.
On November 8, 2022, our Board of Directors determined to effect a reverse stock split of our common shares, par value $0.01 per share, at a ratio of one-for-fifteen. Our
shareholders had previously approved the reverse stock split at the Company’s Special Meeting of Shareholders held on November 7, 2022. The reverse stock split will take effect, and our common shares will begin trading on a split-adjusted basis on
the Nasdaq Capital Market, as of the opening of trading on November 15, 2022 under the existing trading symbol “PSHG.” A new CUSIP number will be assigned to our common shares when the reverse stock split becomes effective.
8
PERFORMANCE SHIPPING INC.
INDEX TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
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Page
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Consolidated Balance Sheets as at September 30, 2022 (unaudited) and December 31, 2021
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F-2
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Unaudited Interim Consolidated Statements of Operations for the nine months ended September 30, 2022 and 2021
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F-3
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Unaudited Interim Consolidated Statements of Comprehensive Income/ (Loss) for the nine months ended September 30, 2022 and 2021
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F-3
|
|
Unaudited Interim Consolidated Statements of Stockholders’ Equity for the nine months ended September 30, 2022 and 2021
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F-4
|
|
Unaudited Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021
|
F-5
|
|
Notes to Unaudited Interim Consolidated Financial Statements
|
F-6
|
F-1
PERFORMANCE SHIPPING INC.
Consolidated Balance Sheets as at September 30, 2022 (unaudited) and December 31, 2021
(Expressed in thousands of U.S. Dollars, except for share and per share data)
|
ASSETS
|
September 30, 2022
|
December 31, 2021
|
||||||
|
CURRENT ASSETS:
|
||||||||
|
Cash and cash equivalents
|
$
|
35,462
|
$
|
9,573
|
||||
|
Accounts receivable, net of provision for credit losses (Note 4)
|
7,716
|
3,792
|
||||||
|
Deferred voyage expenses
|
-
|
58
|
||||||
|
Inventories
|
570
|
4,286
|
||||||
|
Prepaid expenses and other assets
|
6,045
|
1,670
|
||||||
|
Current assets from discontinued operations (Note 3)
|
46
|
47
|
||||||
|
Total current assets
|
49,839
|
19,426
|
||||||
|
FIXED ASSETS:
|
||||||||
|
Advances for vessel acquisitions and other vessels' costs (Note 6)
|
5,481
|
-
|
||||||
|
Vessels, net (Note 7)
|
146,002
|
123,036
|
||||||
|
Property and equipment, net
|
87
|
151
|
||||||
|
Total fixed assets
|
151,570
|
123,187
|
||||||
|
NON-CURRENT ASSETS:
|
||||||||
|
Right of use asset under operating leases (Note 9)
|
176
|
84
|
||||||
|
Deferred charges, net
|
1,752
|
1,408
|
||||||
|
Other non-current assets (Note 7)
|
351
|
819
|
||||||
|
Total non-current assets
|
2,279
|
2,311
|
||||||
|
Total assets
|
$
|
203,688
|
$
|
144,924
|
||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
|
CURRENT LIABILITIES:
|
||||||||
|
Current portion of long-term bank debt, net of unamortized deferred fin. costs (Note 8)
|
$
|
9,976
|
$
|
7,788
|
||||
|
Related party financing, current, net of unamortized deferred fin. costs (Note 5)
|
4,915
|
-
|
||||||
|
Accounts payable, trade and other
|
1,285
|
5,742
|
||||||
|
Due to related parties (Note 5)
|
-
|
127
|
||||||
|
Accrued liabilities
|
1,411
|
1,342
|
||||||
|
Lease liabilities, current (Note 9)
|
76
|
66
|
||||||
|
Current liabilities from discontinued operations (Note 3)
|
116
|
120
|
||||||
|
Total current liabilities
|
17,779
|
15,185
|
||||||
|
LONG-TERM LIABILITIES:
|
||||||||
|
Long-term bank debt, net of unamortized deferred financing costs (Note 8)
|
58,701
|
42,110
|
||||||
|
Other liabilities, non-current
|
254
|
262
|
||||||
|
Long-term lease liabilities (Note 9)
|
100
|
18
|
||||||
|
Commitments and contingencies (Note 9)
|
-
|
-
|
||||||
|
Total long-term liabilities
|
59,055
|
42,390
|
||||||
|
STOCKHOLDERS' EQUITY:
|
||||||||
|
Preferred stock, $0.01 par value; 25,000,000 shares authorized, 793,657 and 0 issued and outstanding as at September 30, 2022 and December 31, 2021, respectively (Note
10)
|
8
|
-
|
||||||
|
Common stock, $0.01 par value; 500,000,000 shares authorized; 60,728,363 and 5,082,726 issued and outstanding as at September 30, 2022 and December 31, 2021,
respectively (Note 10)
|
607
|
51
|
||||||
|
Additional paid-in capital (Note 10)
|
493,704
|
457,439
|
||||||
|
Other comprehensive loss
|
(2
|
)
|
(2
|
)
|
||||
|
Accumulated deficit
|
(367,463
|
)
|
(370,139
|
)
|
||||
|
Total stockholders' equity
|
126,854
|
87,349
|
||||||
|
Total liabilities and stockholders' equity
|
$
|
203,688
|
$
|
144,924
|
||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-2
PERFORMANCE SHIPPING INC.
Unaudited Interim Consolidated Statements of Operations
For the nine months ended September 30, 2022 and 2021
(Expressed in thousands of U.S. Dollars – except for share and per share data)
|
2022
|
2021
|
|||||||
|
REVENUE:
|
||||||||
|
Revenue (Note 4)
|
$
|
47,406
|
$
|
26,844
|
||||
|
EXPENSES:
|
||||||||
|
Voyage expenses
|
12,022
|
15,053
|
||||||
|
Vessel operating expenses
|
9,586
|
8,563
|
||||||
|
Depreciation and amortization of deferred charges (Note 7)
|
6,566
|
5,561
|
||||||
|
General and administrative expenses (Notes 5 and 10)
|
4,705
|
4,313
|
||||||
|
Provision / (reversal) for credit losses and write offs (Note 4)
|
18
|
(15
|
)
|
|||||
|
Foreign currency (gains) / losses
|
(51
|
)
|
79
|
|||||
|
Operating income / (loss)
|
$
|
14,560
|
$
|
(6,710
|
)
|
|||
|
OTHER INCOME / (EXPENSES)
|
||||||||
|
Interest and finance costs (Notes 5 and 8)
|
(2,207
|
)
|
(1,362
|
)
|
||||
|
Interest income
|
112
|
16
|
||||||
|
Total other expenses, net
|
$
|
(2,095
|
)
|
$
|
(1,346
|
)
|
||
|
Net income / (loss) from continuing operations
|
$
|
12,465
|
$
|
(8,056
|
)
|
|||
|
Income allocated to participating securities (Note 11)
|
$
|
(2
|
)
|
$
|
-
|
|||
|
Deemed dividend on Series B preferred stock upon exchange of common stock (Notes 10 and 11)
|
(9,271
|
)
|
-
|
|||||
|
Deemed dividend to the July warrants holders due to triggering of a down-round feature (Notes 10 and 11)
|
(22
|
)
|
-
|
|||||
|
Dividends on preferred stock (Note 11)
|
(575
|
)
|
-
|
|||||
|
Net income / (loss) attributable to common stockholders from continuing operations
|
$
|
2,595
|
$
|
(8,056
|
)
|
|||
|
Net income attributable to common stockholders from discontinued operations (Note 3)
|
$
|
-
|
$
|
400
|
||||
|
Total net income / (loss) attributable to common stockholders
|
$
|
2,595
|
$
|
(7,656
|
)
|
|||
|
Earnings / (Loss) per common share, basic, continuing operations (Note 11)
|
$
|
0.16
|
$
|
(1.60
|
)
|
|||
|
Earnings / (Loss) per common share, diluted, continuing operations (Note 11)
|
$
|
0.04
|
$
|
(1.60
|
)
|
|||
|
Earnings per common share, basic and diluted, discontinued operations (Note 11)
|
$
|
-
|
$
|
0.08
|
||||
|
Earnings / (Loss) per common share, basic, total (Note 11)
|
$
|
0.16
|
$
|
(1.52
|
)
|
|||
|
Earnings / (Loss) per common share, diluted, total (Note 11)
|
$
|
0.04
|
$
|
(1.52
|
)
|
|||
|
Weighted average number of common shares, basic (Note 11)
|
16,570,048
|
5,024,144
|
||||||
|
Weighted average number of common shares, diluted (Note 11)
|
83,354,138
|
5,024,144
|
||||||
PERFORMANCE SHIPPING INC.
Unaudited Interim Consolidated Statements of Comprehensive Income / (Loss)
For the nine months ended September 30, 2022 and 2021
(Expressed in thousands of U.S. Dollars)
|
2022
|
2021
|
|||||||
|
Net income / (loss) from continuing and discontinued operations
|
$
|
12,465
|
$
|
(7,656
|
)
|
|||
|
Comprehensive income/ (loss) from continuing and discontinued operations
|
$
|
12,465
|
$
|
(7,656
|
)
|
|||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-3
PERFORMANCE SHIPPING INC.
Unaudited Interim Consolidated Statements of Stockholders' Equity
For the nine months ended September 30, 2022 and 2021
(Expressed in thousands of U.S. Dollars – except for share and per share data)
|
Common Stock
|
Preferred Stock
|
Additional
|
Other
|
|||||||||||||||||||||||||||||
|
# of
Shares
|
Par
Value
|
# of
Shares
|
Par
Value
|
Paid-in
Capital
|
Comprehensive
Income / (Loss)
|
Accumulated
Deficit
|
Total
|
|||||||||||||||||||||||||
|
Balance, December 31, 2020
|
5,082,726
|
$
|
51
|
-
|
$
|
-
|
$
|
457,171
|
$
|
8
|
$
|
(360,433
|
)
|
$
|
96,797
|
|||||||||||||||||
|
- Net loss
|
-
|
-
|
-
|
-
|
-
|
-
|
(7,656
|
)
|
(7,656
|
)
|
||||||||||||||||||||||
|
- Compensation cost on restricted stock and stock option awards (Note 10)
|
-
|
-
|
-
|
-
|
247
|
-
|
-
|
247
|
||||||||||||||||||||||||
|
Balance, September 30, 2021
|
5,082,726
|
51
|
-
|
-
|
457,418
|
8
|
(368,089
|
)
|
89,388
|
|||||||||||||||||||||||
|
Balance, December 31, 2021
|
5,082,726
|
$
|
51
|
-
|
$
|
-
|
$
|
457,439
|
$
|
(2
|
)
|
$
|
(370,139
|
)
|
$
|
87,349
|
||||||||||||||||
|
- Net income
|
-
|
-
|
-
|
-
|
-
|
-
|
12,465
|
12,465
|
||||||||||||||||||||||||
|
- Common shares exchanged for Series B preferred shares
|
(2,834,612
|
)
|
(28
|
)
|
793,657
|
8
|
9,291
|
-
|
(9,271
|
)
|
-
|
|||||||||||||||||||||
|
- Compensation cost on restricted stock awards (Note 10)
|
-
|
-
|
-
|
-
|
94
|
-
|
-
|
94
|
||||||||||||||||||||||||
|
- Issuance of common stock under ATM program, net of issuance costs (Note 10)
|
526,916
|
5
|
-
|
-
|
1,333
|
-
|
-
|
1,338
|
||||||||||||||||||||||||
|
- Issuance of units, net of issuance costs (Note 10)
|
7,620,000
|
76
|
-
|
-
|
7,050
|
-
|
-
|
7,126
|
||||||||||||||||||||||||
|
- Issuance of common stock and July warrants, net of issuance costs (Note 10)
|
17,000,000
|
170
|
-
|
-
|
5,101
|
-
|
-
|
5,271
|
||||||||||||||||||||||||
|
- Issuance of common stock and August warrants, net of issuance costs (Note 10)
|
33,333,333
|
333
|
-
|
-
|
13,374
|
-
|
-
|
13,707
|
||||||||||||||||||||||||
|
- Deemed dividend to the July warrants holders due to triggering of a down-round feature (Note 10)
|
-
|
-
|
-
|
-
|
22
|
-
|
(22
|
)
|
-
|
|||||||||||||||||||||||
|
- Dividends declared and paid on Series B preferred shares (at $0.625 per share) (Note 11)
|
-
|
-
|
-
|
-
|
-
|
-
|
(496
|
)
|
(496
|
)
|
||||||||||||||||||||||
|
Balance, September 30, 2022
|
60,728,363
|
$
|
607
|
793,657
|
$
|
8
|
$
|
493,704
|
$
|
(2
|
)
|
$
|
(367,463
|
)
|
$
|
126,854
|
||||||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-4
PERFORMANCE SHIPPING INC.
Unaudited Interim Consolidated Statements of Cash Flows (continuing and discontinued operations)
For the nine months ended September 30, 2022 and 2021
(Expressed in thousands of U.S. Dollars)
|
2022
|
2021
|
|||||||
|
Cash Flows provided by / (used in) Operating Activities:
|
||||||||
|
Net income / (loss)
|
$
|
12,465
|
$
|
(7,656
|
)
|
|||
|
Adjustments to reconcile net income / (loss) to net cash provided by / (used in) operating activities:
|
||||||||
|
Depreciation and amortization of deferred charges (Notes 3 and 7)
|
6,566
|
5,561
|
||||||
|
Amortization of deferred financing costs
|
221
|
109
|
||||||
|
Compensation cost on restricted stock and stock option awards (Note 10)
|
94
|
247
|
||||||
|
(Increase) / Decrease in:
|
||||||||
|
Accounts receivable
|
(3,924
|
)
|
889
|
|||||
|
Deferred voyage expenses
|
58
|
(86
|
)
|
|||||
|
Inventories
|
3,716
|
(1,940
|
)
|
|||||
|
Prepaid expenses and other assets
|
(4,375
|
)
|
29
|
|||||
|
Right of use asset under operating leases
|
(92
|
)
|
75
|
|||||
|
Other non-current assets
|
242
|
-
|
||||||
|
Increase / (Decrease) in:
|
||||||||
|
Accounts payable, trade and other
|
(4,568
|
)
|
2,481
|
|||||
|
Due to related parties
|
(127
|
)
|
35
|
|||||
|
Accrued liabilities
|
46
|
(380
|
)
|
|||||
|
Other liabilities, non current
|
(8
|
)
|
18
|
|||||
|
Lease liabilities under operating leases
|
92
|
(75
|
)
|
|||||
|
Drydock costs
|
(239
|
)
|
(640
|
)
|
||||
|
Net Cash provided by / (used in) Operating Activities
|
$
|
10,167
|
$
|
(1,333
|
)
|
|||
|
Cash Flows used in Investing Activities:
|
||||||||
|
Advances for vessel acquisitions and other vessel costs (Note 6)
|
(5,481
|
)
|
-
|
|||||
|
Vessel acquisitions and other vessels' costs (Note 7)
|
(27,782
|
)
|
-
|
|||||
|
Payments for vessels' improvements (Note 7)
|
(1,550
|
)
|
(1,832
|
)
|
||||
|
Property and equipment additions
|
(16
|
)
|
(8
|
)
|
||||
|
Net Cash used in Investing Activities
|
$
|
(34,829
|
)
|
$
|
(1,840
|
)
|
||
|
Cash Flows provided by / (used in) Financing Activities:
|
||||||||
|
Proceeds from related party loans (Note 5)
|
5,000
|
-
|
||||||
|
Proceeds from long-term bank debt (Note 8)
|
31,933
|
-
|
||||||
|
Repayments of long-term bank debt (Note 8)
|
(13,022
|
)
|
(5,933
|
)
|
||||
|
Issuance of units, common stock and warrants, net of issuance costs (Note 10)
|
26,236
|
-
|
||||||
|
Issuance of common stock under ATM program, net of issuance costs (Note 10)
|
1,338
|
-
|
||||||
|
Payments of financing costs (Notes 5 and 8)
|
(439
|
)
|
-
|
|||||
|
Cash dividends on Series B preferred shares (Note 11)
|
(496
|
)
|
-
|
|||||
|
Net Cash provided by / (used in) Financing Activities
|
$
|
50,550
|
$
|
(5,933
|
)
|
|||
|
Net increase / (decrease) in cash, cash equivalents and restricted cash
|
$
|
25,888
|
$
|
(9,106
|
)
|
|||
|
Cash, cash equivalents and restricted cash at beginning of the year
|
$
|
9,574
|
$
|
21,378
|
||||
|
Cash, cash equivalents and restricted cash at end of the period
|
$
|
35,462
|
$
|
12,272
|
||||
|
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
||||||||
|
Cash and cash equivalents at the end of the period
|
$
|
35,462
|
$
|
12,272
|
||||
|
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
35,462
|
$
|
12,272
|
||||
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||
|
Non-cash financing activities
|
$
|
131
|
$
|
-
|
||||
|
Interest payments, net of amounts capitalized
|
$
|
1,777
|
$
|
1,229
|
||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-5
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
| 1. |
General Information
|
Company’s identity
The accompanying unaudited interim consolidated financial statements include the accounts of Performance Shipping Inc. (or “Performance”) and its wholly-owned subsidiaries (collectively, the “Company”). Performance was
incorporated as Diana Containerships Inc. on January 7, 2010, under the laws of the Republic of the Marshall Islands for the purpose of engaging in any lawful act or activity under the Marshall Islands Business Corporations Act. On February 19, 2019,
the Company’s Annual Meeting of Shareholders approved an amendment to the Company’s Amended and Restated Articles of Incorporation to change the name of the Company from “Diana Containerships Inc.” to “Performance Shipping Inc.”, which was effected
on February 25, 2019. The Company’s common shares trade on the Nasdaq Capital Market under the ticker symbol “PSHG”.
The Company is a global provider of shipping transportation services through the ownership of tanker vessels, while it owned container vessels since its incorporation through August 2020 (Note 3). The Company operates
its fleet through Unitized Ocean Transport Limited (the “Manager” or “UOT”), a wholly-owned subsidiary. The fees payable to UOT are eliminated in consolidation as intercompany transactions.
Financial Statements’ presentation
The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or U.S. GAAP, for interim financial information. Accordingly,
they do not include all the information and notes required by U.S. GAAP for complete financial statements. These unaudited interim consolidated financial statements have been prepared on the same basis and should be read in conjunction with the
financial statements for the year ended December 31, 2021 included in the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 11, 2022 and, in the opinion of management, reflect all adjustments, which
include only normal recurring adjustments considered necessary for a fair presentation of the Company's financial position, results of operations and cash flows for the periods presented. Operating results for the nine months ended September 30, 2022
are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2022.
The consolidated balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP
for complete financial statements.
Following the sale of all Company’s container vessels in 2020, the Company’s results of operations of the container vessels, as well as their assets and liabilities, are reported as discontinued operations for all
periods presented in the accompanying unaudited interim consolidated financial statements (Note 3). For the statement of cash flows, the Company elected the alternative of combining cash flows from discontinued operations with cash flows from
continuing operations within each cash flow statement category, and as such, no separate disclosure of cash flows from discontinued operations is presented in the statement of cash flows.
F-6
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
Other matters
On March 11, 2020, the World Health Organization declared the novel coronavirus (“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, travel restrictions, and other emergency public health measures in an effort to contain the outbreak. Such measures have resulted in a
significant reduction in global economic activity and extreme volatility in the global financial markets, which has reduced the global demand for oil and oil products, which the Company’s vessels transport, and has exposed the Company to the risk of
volatility in the near-term. During the global gradual recovery from COVID-19, the Company continues to take proactive measures to ensure the health and wellness of its crew and onshore employees while endeavoring to maintain effective business
continuity and uninterrupted service to its customers. During the nine-month periods ended September 30, 2022 and 2021, the Company incurred increased costs as a result of the restrictions imposed in various jurisdictions creating delays and
additional complexities with respect to port calls and crew rotations. The Company’s revenues are impacted by fluctuations in spot charter rates for Aframax tankers. During the nine months ended September 30, 2021, the Company’s revenue came under
pressure due to record OPEC+ oil production cuts and lower production from other oil producing countries, which reduced crude exports, and the unwinding of floating storage and the delivery of newbuilding vessels to the world tanker fleet. However,
during the nine months ended September 30, 2022, the Company’s revenues improved due to strength in spot charter rates on account of higher OPEC+ production and increased ton mile due to the sanctions on Russian crude oil exports. As of September 30,
2022, and during the nine-month period ended September 30, 2022, the Company’s financial results have not been adversely affected from the impact of COVID. Given the dynamic nature of these circumstances, the full extent to which the COVID-19 global
pandemic may have direct or indirect impact on the Company’s business and the related financial reporting implications cannot be reasonably estimated at this time, although it could materially affect the Company’s business, results of operations and
financial condition in the future. As of September 30, 2022, the impact of the outbreak of COVID-19 virus continues to unfold. As a result, many of the Company’s estimates and assumptions carry a higher degree of variability and volatility. As events
continue to evolve and additional information becomes available, the Company’s estimates may change in future periods. The overall impact of COVID-19 on the Company’s business, and the efficacy of any measures the Company takes in response to the
challenges presented by the COVID-19 pandemic, will depend on how the outbreak further develops, the duration and extent of the restrictive measures that are associated with the pandemic and their impact on global economy and trade, which is still
uncertain and may not be fully reflected in the Company’s financial results for the nine-month period ended September 30, 2022.
Furthermore, the recent outbreak of war between Russia and the Ukraine has disrupted supply chains and caused instability in the global economy, while the United States and
the European Union, among other countries, announced sanctions against Russia, including sanctions targeting the Russian oil sector, among those a prohibition on the import of oil from Russia to the United States. The ongoing conflict could result in
the imposition of further economic sanctions against Russia and given Russia’s role as a major global exporter of crude oil, the Company’s business may be adversely impacted. Currently, none of the Company’s
contracts have been affected by the events in Russia and Ukraine. However, it is possible that in the future third parties with whom the Company has or will have contracts may be impacted by such events. While in general much uncertainty remains
regarding the global impact of the conflict in Ukraine, it is possible that such tensions could adversely affect the Company’s business, financial condition, results of operation and cash flows.
F-7
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
| 2. |
Significant Accounting Policies and Recent Accounting Pronouncements
|
A discussion of the Company’s significant accounting policies and the recent accounting pronouncements can be found in Note 2 of the Company’s Consolidated Financial Statements included in the Annual Report on Form
20-F for the year ended December 31, 2021, filed with the SEC on March 11, 2022. There have been no material changes to these policies or pronouncements during the nine months ended September 30, 2022, except as disclosed below:
Exchange of Common Shares for Shares of Convertible Preferred Stock: The Company follows the provision of ASC 480 “Distinguishing Liabilities from Equity” and
ASC 815 “Derivatives and Hedging” to determine whether the preferred shares should be classified as permanent equity, temporary equity or liability. In cases of exchanges of common stock for preferred stock, the Company values separately the common
stock and the preferred stock on the date of the exchange. When the Company determines that on the measurement date there is an excess value of the preferred stock, as compared to the fair value of the common shares exchanged, that value represents a
dividend to the preferred holders, which should be deducted from the net income/(loss) from continuing operations to arrive at the net income/(loss) available to common stockholders from continuing operations.
Warrants Accounting: The Company follows the provision of ASC 480 “Distinguishing Liabilities from Equity” and ASC 815
“Derivatives and Hedging” to determine whether the warrants and pre-funded warrants issued should be classified as permanent equity, temporary equity or liability. The Company has determined that warrants and pre-funded warrants are free standing
instruments and are out of scope of ASC 480 and meet all criteria for equity classification. The Company has recorded the excess of the proceeds received over the par value of common stock to additional paid in capital, as applicable.
Accounting Pronouncements - Not Yet Adopted
Reference Rate Reform (Topic 848): In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference
Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. ASU 2020-04 applies to contracts that reference
LIBOR or another reference rate expected to be terminated because of reference rate reform. The amendments in this Update are effective for all entities as of March 12, 2020 through December 31, 2022. An entity may elect to apply the amendments for
contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to
March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this Update must be applied prospectively for all eligible contract modifications for that
Topic or Industry Subtopic. An entity may elect to apply the amendments in this Update to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered
into after the beginning of the interim period that includes March 12, 2020. An entity may elect certain optional expedients for hedging relationships that exist as of December 31, 2022 and maintain those optional expedients through the end of the
hedging relationship. ASU 2020-04 can be adopted as of March 12, 2020. As of September 30, 2022, the Company has not yet elected any optional expedients provided in the standard and the Company does not currently have any contracts that have been
changed to a new reference rate. The Company will apply the accounting relief as relevant contract and hedge accounting relationship modifications are made during the reference rate reform transition period and will continue to evaluate the potential
impact of this standard on its consolidated financial statements.
F-8
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
| 3. |
Discontinued Operations
|
Since August 2019, upon the delivery of the Company’s first tanker vessel “Blue Moon”, through August 2020, when the last container vessel “Domingo” was sold, the Company’s fleet was a mixture of
container and tanker vessels. Accordingly, the Company had determined that it would operate under two reportable segments, one relating to its operations of container vessels (containers’ segment) and one to the operations of tanker vessels (tankers’
segment). Concurrently with the acquisition of its first tanker vessels, as the market environment for the Company’s containers fleet continued to be negative and with difficult employment opportunities, management initiated a number of actions for
the gradual disposal of the whole container vessels’ fleet, although no decision at that time was reached for a strategic shift to a different segment. In the first months of 2020, the Company acquired two additional tanker vessels. In August 2020,
at the time when the fleet’s last container vessel was sold, the Company evaluated the results of the tanker vessels owned since 2019 and assessed the prospects of the specific segment as positive. At that time, the Company determined that its
decision to exit the container segment represented a strategic shift to the exclusive ownership of tanker vessels and further assessed that the disposal of all its container vessels constituted a disposal of an entity’s segment, that will have a
major effect on the Company’s operations and financial results. Furthermore, the Company determined that it would not have continuing involvement in the operation of the disposed assets. In this respect, the results of operations of the container
vessels, as well as their assets and liabilities, are reported since 2020 as discontinued operations for all periods presented in the accompanying consolidated financial statements.
F-9
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
Below are presented summarized the operating results of the discontinued operations for the nine months ended September 30, 2022 and 2021, as well as the balance sheet information on the Company's discontinued
operations as of September 30, 2022 and December 31, 2021:
|
September 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Items constituting net income from discontinued operations
|
||||||||
|
Other income
|
-
|
400
|
||||||
|
Net income from discontinued operations
|
-
|
400
|
||||||
|
September 30,
2022
|
December 31,
2021
|
|||||||
|
Carrying amounts of major classes of assets of discontinued operations
|
||||||||
|
Cash and cash equivalents
|
$
|
-
|
$
|
1
|
||||
|
Accounts receivable, trade
|
17
|
17
|
||||||
|
Prepaid expenses and other assets
|
29
|
29
|
||||||
|
Total major classes of current assets of discontinued operations
|
46
|
47
|
||||||
|
Carrying amounts of major classes of liabilities of discontinued operations
|
||||||||
|
Accounts payable, trade and other
|
115
|
115
|
||||||
|
Accrued liabilities
|
1
|
5
|
||||||
|
Total major classes of current liabilities of discontinued operations
|
116
|
120
|
||||||
| 4. |
Revenue, Accounts Receivable and Provision for Credit Losses
|
Revenue and Accounts Receivable
The Company’s tanker vessels have been employed since their acquisition under time and voyage charter contracts, and since 2021 the Company also charters some of its vessels under pool arrangements. Accordingly, the
Company disaggregates its revenue from contracts with customers by the type of charter (time charters, spot charters and pool charters).
For the nine months ended September 30, 2022, Revenue from continuing operations amounted to $18,719 from spot charters, to $1,887 from time-charters and to $26,800 from pool charters. For the nine months ended
September 30, 2021, Revenues from continuing operations amounted to $17,486 from spot charters, to $8,574 from time-charters and to $784 from pool charters.
As of September 30, 2022, the balance of Accounts receivable, net, for the continuing operations amounted to $1,354 for the spot charters (of which $161 relates to contract assets), to $2 for the time-charters and to
$6,360 for the pool charters. As of December 31, 2021, the balance of Accounts receivable, net, for the continuing operations amounted to $2,037 for the spot charters (of which $196 relates to contract assets), to $2 for the time-charters and to
$1,753 for the pool charters.
F-10
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
For the nine months ended September 30, 2022 and 2021, charterers that accounted for more than 10% of the Company’s revenue, were as follows:
|
Charterer
|
2022
|
2021
|
||||||
|
A
|
-
|
28
|
%
|
|||||
|
B
|
-
|
20
|
%
|
|||||
|
C
|
10
|
%
|
-
|
|||||
|
D
|
47
|
%
|
-
|
|||||
The maximum aggregate amount of loss due to credit risk, net of related allowances, that the Company would incur if the aforementioned charterers failed completely to perform according to the terms of the relevant
charter parties, amounted to $6,360 and to $405 as of September 30, 2022 and December 31, 2021, respectively.
Credit Losses Provision
The Company, in estimating its expected credit losses, gathers annual historical losses on its freight and demurrage receivables since 2019 when the Company’s tanker vessels firstly
operated in the spot market, and makes forward-looking adjustments in the estimated loss ratio, which is re-measured on an annual basis. As of September 30, 2022 and December 31, 2021, the balance of the Company’s allowance for estimated
credit losses on its outstanding freight and demurrage receivables were $94 and $121, respectively, and is included in Accounts receivable, net of provision for credit losses in the accompanying consolidated balance sheets. For the nine months ended
September 30, 2022 and 2021, the Provision for credit losses and write offs in the accompanying consolidated statements of operations includes changes in the provision of estimated losses of $(27) and $(15), respectively, and for 2022 it also
includes an amount of $45 representing demurrages write offs. No allowance was recorded on insurance claims as of September 30, 2022 and December 31, 2021, as their balances were immaterial. In addition, no allowance was recorded for cash equivalents
as the majority of cash balances as of the balance sheet date was on time deposits with highly reputable credit institutions, for which periodic evaluations of the relative credit standing of those financial institutions are performed.
| 5. |
Transactions with Related Parties
|
(a) Pure Brokerage and Shipping Corp.
(“Pure Brokerage”): Pure Brokerage, a company controlled by the Company’s Chairperson of the Board Aliki Paliou, provides brokerage services to the Company since June 15, 2020, pursuant to a Brokerage Services Agreement for a fixed monthly
fee per each tanker vessel owned by the Company. Pure Shipbroking may also, from time to time, receive sale and purchase commissions and chartering commissions on the gross freight and hire revenue of the tanker vessels, depending on the respective
charter parties’ terms.
For the nine months ended September 30, 2022, commissions and brokerage fees to Pure Brokerage amounted to $523 and $144, and for the nine months ended September 30, 2021, to $322 and $135,
respectively, and are included in Voyage expenses and in General and administrative expenses in the accompanying unaudited interim consolidated statements of operations. As at September 30, 2022 and December 31, 2021, an amount of $0 and $63 was
payable to Pure Brokerage and is reflected in Due to related parties in the accompanying consolidated balance sheets.
F-11
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
(b) Mango Shipping Corp (“Mango”):
On March 2, 2022, the Company entered into an unsecured credit facility with Mango, whose beneficial owner is Aliki Paliou, of up to $5.0 million, for general working capital purposes. The loan has a term of one year from the date of the agreement,
bears interest of 9.0% per annum, and was drawn in arrears at the Company’s request. The agreement also provided for arrangement fees of $200 payable on the date of the agreement, and commitment fees of 3.00% per annum on any undrawn amount until
the maturity date. As of September 30, 2022, the full amount of $5,000 has been drawn under the credit facility, and it is included in Related party financing, current, net of unamortized deferred financing costs in the accompanying consolidated
balance sheets. For the nine months ended September 30, 2022, interest and commitment fees incurred in connection with the Mango loan amounted to $254 and are included in Interest and finance costs in the accompanying unaudited interim consolidated
statements of operations. Arrangement fees of $200 were capitalized contra to debt and are amortized over the facility period under the straight-line method, while amortization of arrangement fees for the nine months ended September 30, 2022,
amounted to $115 and are also included in Interest and finance costs in the accompanying unaudited interim consolidated statements of operations.
In December 2021, the Company commenced an offer to exchange up to 4,066,181 of its then issued and outstanding common shares, par value $0.01 per share, for newly issued shares of
the Company’s Series B Convertible Cumulative Perpetual Preferred Stock, par value $0.01, at a ratio of 0.28 Series B Preferred Shares for each common Share. The tender offer expired on January 27, 2022, and a total of 2,834,612 common shares were
validly tendered and accepted for exchange, which resulted in the issuance of 793,657 Series B Preferred Shares, out of which 657,396 were beneficially owned by Aliki Paliou through Mango, and 28,171 are beneficially owned by Andreas
Michalopoulos. On September 15, 2022, the Company paid to its Series B preferred stockholders cash dividends of $496, or $0.625 per each Series B preferred share, out of which $411 were dividends paid to Mango. On October 17, 2022, the Company entered into a stock purchase agreement with Mango pursuant to which it agreed to issue to Mango in a private placement Series C Preferred Stock in exchange for (i) all 657,396 Series B Preferred Shares held
by Mango, and (ii) the agreement by Mango to apply $4,930 (an amount equal to the aggregate cash conversion price payable upon conversion of such Series B Preferred Shares into Series C Preferred Shares pursuant to their terms) as a prepayment by
the Company of the unsecured credit facility. On October 19, the Company repaid the remaining amounts due, together with accrued interest, and terminated the credit facility (Note 13). Following the issuance of the Series C preferred shares in
October 2022 to Mango, the dividends on the Series B preferred shares held by Mango accrued until the last dividend payment date, which was September 15, 2022. The Series C Preferred stock held by Mango is entitled to a 5.00% annual dividend, that
starts accruing from September 15, 2022, as per the terms of the Statement of Designations (Note 10).
|
6.
|
Advances for Vessel Acquisitions and Other Vessels’ Costs
|
In August 2022, the Company, through a newly established subsidiary, entered into a memorandum of agreement with unrelated parties, to acquire the LR2 Aframax oil product tanker vessel “P. Aliki”
(ex “Alpine Amalia”), for the purchase price of $36,500. As of September 30, 2022, the Company had paid 15% advance, or $5,475, while the balance of the purchase price will be paid upon delivery of the vessel to the Company in November 2022 (Note
13). As of September 30, 2022, the amount presented in the accompanying consolidated balance sheets also included other costs capitalized in connection with the prospective acquisition of the tanker vessel and amounted to $6.
F-12
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
As of December 31, 2021, there were no advances for vessels’ acquisitions and other vessels’ costs.
|
September 30, 2022
|
||||
|
Advances for vessel acquisitions
|
$
|
5,475
|
||
|
Capitalized costs
|
6
|
|||
|
Total
|
$
|
5,481
|
||
| 7. |
Vessels, net
|
In June 2022, the Company, through a newly established subsidiary, entered into a memorandum of agreement with unrelated parties to acquire the Aframax tanker vessel “P. Sophia” (ex “Maran Sagitta”), for a purchase
price of $27,577. The vessel was delivered to the Company in July 2022. Pre-delivery costs capitalized in connection with this vessel’s acquisition amounted to $205.
The amounts of Vessels, net, in the accompanying consolidated balance sheets are analyzed as follows:
|
Vessels' Cost
|
Accumulated
Depreciation
|
Net Book Value
|
||||||||||
|
Balance, December 31, 2021
|
$
|
136,782
|
$
|
(13,746
|
)
|
$
|
123,036
|
|||||
|
- Vessels' acquisitions
|
27,782
|
-
|
27,782
|
|||||||||
|
- Transfer from other non-current assets
|
558
|
-
|
558
|
|||||||||
|
- Vessels' improvements
|
660
|
-
|
660
|
|||||||||
|
- Depreciation
|
-
|
(6,034
|
)
|
(6,034
|
)
|
|||||||
|
Balance, September 30, 2022
|
$
|
165,782
|
$
|
(19,780
|
)
|
$
|
146,002
|
|||||
During the nine months ended September 30, 2022, the Company capitalized an amount of $660, and also an amount of $558 was transferred from other non-current assets, representing costs for the installation of ballast
water treatment system on the vessel “Blue Moon”.
Furthermore, during the nine months ended September 30, 2022, the Company capitalized an amount of $351 in other non-current assets, representing advances paid for the installation of ballast water treatment system on
the vessel “P. Kikuma”, also included in line “Payments for vessels' improvements” in the accompanying unaudited interim consolidated statements of cash flows.
F-13
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
| 8. |
Long-Term Debt
|
The amount of long-term debt shown in the accompanying consolidated balance sheets is analyzed as follows:
|
September
30, 2022
|
Current
|
Non-
current
|
December
31, 2021
|
Current
|
Non-
current
|
|||||||||||||||||||
|
Nordea Bank secured term loan
|
$
|
21,598
|
$
|
3,740
|
$
|
17,858
|
$
|
24,403
|
$
|
3,740
|
$
|
20,663
|
||||||||||||
|
Piraeus Bank secured term loans
|
47,503
|
6,393
|
41,110
|
25,786
|
4,171
|
21,615
|
||||||||||||||||||
|
less unamortized deferred financing costs
|
(424
|
)
|
(157
|
)
|
(267
|
)
|
(291
|
)
|
(123
|
)
|
(168
|
)
|
||||||||||||
|
Total debt, net of deferred financing costs
|
$
|
68,677
|
$
|
9,976
|
$
|
58,701
|
$
|
49,898
|
$
|
7,788
|
$
|
42,110
|
||||||||||||
Secured Term Loans: The Company, through its vessel-owning subsidiaries, has entered into three long term loan agreements with certain financial institutions
(as described below) to partially finance the acquisition cost of its tanker vessels. The loans are repayable in quarterly installments plus one balloon installment per loan agreement to be paid together with the last installment, and bear variable
interest at LIBOR plus a fixed margin ranging from 2.70% to 2.85%. Their maturities fall due from July 2024 to July 2027, and at each utilization date, arrangement fees of 0.75% or 1.00% were paid. As of September 30, 2022, the term loans were
collateralized by the Company’s six tanker vessels, whose aggregate net book value was $146,002.
In July 2019, the Company, through two of its vessel-owning subsidiaries, entered into a loan agreement with Nordea Bank Abp, Filial i Norge (“Nordea Bank”) for a senior secured term loan facility of up to $33,000, to
partially finance the acquisition cost of the vessels “Blue Moon” and “Briolette”. In December 2019 and in March 2020, the Nordea Bank loan was twice amended and restated to increase the loan facility to up to $47,000 and $59,000, respectively, to
partially support the acquisition cost of the tanker vessels “P. Fos” and “P. Kikuma”, respectively. In December 2020, the Company entered a Deed of Release with Nordea Bank, according to which the borrowers of the vessels “P. Fos” and “P. Kikuma”
were released from all obligations under the agreement, in connection with the re-finance by Piraeus Bank S.A. (described below). Also in December 2020, the Company entered into a Supplemental Loan Agreement with Nordea Bank, to amend the existing
repayment schedules of the “Blue Moon” and “Briolette” tranches and to amend the major shareholder’s clause included in the agreement.
In December 2020, the Company, through three of its vessel-owning subsidiaries, entered into a loan agreement with Piraeus Bank S.A. (“Piraeus Bank”) for a senior secured term loan facility of up to $31,526, to
refinance the existing indebtedness of the vessels “P. Fos” and “P. Kikuma” with Nordea Bank, described above, and partially finance the acquisition cost of the vessel “P. Yanbu”. The three borrowers utilized in December 2020 an aggregate amount of
$29,958 under the loan agreement, and no amount remained available for drawdown thereafter. The “P. Yanbu” trance was released from the specific loan agreement in July 2022 as part of its refinancing under the new loan agreement with Piraeus Bank
signed on June 30, 2022 (see below).
F-14
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
In June 2022, the Company, through the vessel-owning subsidiaries of the vessels “P. Sophia” (Note 7) and “P. Yanbu”, entered into a new loan agreement with Piraeus Bank for a senior secured term loan facility of up to
$31,933. The purpose of this facility was to finance the acquisition of “P. Sophia” by up to $24,600 and refinance the existing indebtedness of $7,333 of the vessel “P. Yanbu”. The Company utilized the full amount of $31,933 in July 2022.
Finally, on November 1, 2022, the Company signed a loan agreement with Alpha Bank S.A, to support the acquisition of the vessel “P. Aliki” (ex “Alpine Amalia”) (Note 6) by providing a secured term loan of up to
$18,250. The loan was drawn down upon the vessels’ delivery to the Company in November 2022 (Note 13).
The Nordea and Piraeus Bank loans are guaranteed by Performance Shipping Inc. and are also secured by first priority mortgages over the financed fleet, first priority assignments of earnings, insurances and of any
charters exceeding durations of two years, pledge over the borrowers’ shares and over their earnings accounts, and vessels’ managers’ undertakings. The loan agreements also require a minimum hull value of the financed vessels, impose restrictions as
to dividend distribution following the occurrence of an event of default and changes in shareholding, include customary financial covenants and require at all times during the facility period a minimum cash liquidity. As at September 30, 2022 and
December 31, 2021, the maximum compensating cash balance required under the Company’s loan agreements amounted to $9,500 and $5,000, respectively, and is included in Cash and cash equivalents in the accompanying consolidated balance sheets. As at
September 30, 2022 and December 31, 2021, the Company was in compliance with all of its loan covenants.
The weighted average interest rate of the Company’s bank loans for the nine months ended September 30, 2022 and 2021, was 3.97% and 2.91%, respectively.
For the nine months ended September 30, 2022 and 2021, interest expense on long-term bank debt amounted to $1,677 and $1,218, respectively, and is included in Interest and finance costs in the accompanying unaudited
interim consolidated statement of operations. Accrued interest on bank debt as of September 30, 2022, and December 31, 2021, amounted to $199 and $51, respectively, and is included in Accrued liabilities in the accompanying consolidated balance
sheets.
As at September 30, 2022, the maturities of the drawn portions of the debt facilities described above, are as follows:
|
Principal Repayment
|
||||
|
October 1, 2022 through September 30, 2023
|
$
|
10,133
|
||
|
October 1, 2023 through September 30, 2024
|
24,252
|
|||
|
October 1, 2024 through September 30, 2025
|
12,382
|
|||
|
October 1, 2025 through September 30, 2026
|
3,200
|
|||
|
October 1, 2026 through September 30, 2027
|
19,134
|
|||
|
Total
|
$
|
69,101
|
||
F-15
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
| 9. |
Commitments and Contingencies
|
(a) Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary
course of the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. Currently, management is not aware of any claims or
contingent liabilities, which should be disclosed, or for which a provision should be established and has not in the accompanying unaudited interim consolidated financial statements.
The Company accrues for the cost of environmental liabilities when management becomes aware that a liability is probable and is able to reasonably estimate the probable exposure. Currently,
management is not aware of any such claims or contingent liabilities, which should be disclosed, or for which a provision should be established in the accompanying unaudited interim consolidated financial statements.
The Company’s vessels are covered for pollution in the amount of $1 billion per vessel per incident, by the protection and indemnity association (“P&I Association”) in which the Company’s
vessels are entered. The Company’s vessels are subject to calls payable to their P&I Association and may be subject to supplemental calls which are based on estimates of premium income and anticipated and paid claims. Such estimates are adjusted
each year by the Board of Directors of the P&I Association until the closing of the relevant policy year, which generally occurs within three years from the end of the policy year. Supplemental calls, if any, are expensed when they are announced
and according to the period they relate to. The Company is not aware of any supplemental calls outstanding in respect of any policy year.
(b) As discussed in Note 6, in August 2022, the Company, through a newly established subsidiary, entered into a memorandum of agreement with
unrelated parties, to acquire the LR2 Aframax oil product tanker vessel “P. Aliki” (ex “Alpine Amalia”), for the purchase price of $36,500, expected to be delivered to the Company in November 2022. As of September 30, 2022, the Company had paid a 15%
advance of $5,475, and the remaining balance to be paid under the contract was $31,025 and was settled upon vessel’s delivery to the Company with cash on hand and bank financing (Note 13).
Also, in September 2022, the Company, through a newly established subsidiary, entered into a memorandum of agreement with unrelated parties, to acquire the Aframax tanker vessel “Phoenix Beacon”
(tbr “P. Monterey”), for the purchase price of $35,000. As of September 30, 2022, no advance payment was made in connection with this vessel’s acquisition. Subsequent to the balance sheet date, a 10% advance of $3,500 was paid by the Company to the
sellers, and the remaining balance of $31,500 will be settled upon the vessel’s delivery, with cash on hand and bank financing. The delivery is expected to take place in December 2022 (Note 13).
(c) As of September 30, 2022, one of the Company’s operating vessels was time-chartered. The minimum contractual annual charter revenues, net
of related commissions to third parties, to be generated from the existing as of September 30, 2022 non-cancelable time charter contract are estimated at $8,395 until September 30, 2023, and at $6,210 until September 30, 2024.
F-16
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
(d) The Company rents its office spaces in Greece under various lease agreements with unaffiliated parties. The durations of these agreements
vary from a few months to 3 years and certain of these contracts also bear the option for the Company to extend the lease terms for further periods. Under ASC 842, the Company, as a lessee, has classified these contracts as operating leases and
accordingly, a lease liability of $176 and $84, respectively, and an equal right-of-use asset based on the present value of future minimum lease payments for the fixed periods of each contract have been recognized on the September 30, 2022 and
December 31, 2021 balance sheets. The monthly rent cost under the existing as of September 30, 2022 lease agreements are $7 (based on the exchange rate of Euro/US Dollar $1.000 as of September 30, 2022). Rent costs have been reduced for the Company
during 2021 as a result of COVID 19-relief measures applied by the Greek government, as the lessor is partially reimbursed for these rent payments by the state. Accordingly, rent expenses amounted to $67 and $23 for the nine months ended September
30, 2022 and 2021, respectively, and are included in General and administrative expenses in the accompanying unaudited interim consolidated financial statements. The Company assessed in 2021 that the rent concession qualifies for the election and
elected to not evaluate whether a concession provided due to COVID-19 is a lease modification under ASC 842. The Company has assessed the right of use asset recognized for office leases for impairment and concluded that no impairment charge should be
recorded as September 30, 2022, as no impairment indicators existed.
The following table sets forth the Company’s undiscounted office rental obligations as at September 30, 2022:
|
Amount
|
||||
|
Year 1
|
$
|
80
|
||
|
Year 2
|
56
|
|||
|
Year 3
|
52
|
|||
|
Total
|
$
|
188
|
||
|
Less imputed interest
|
-12
|
|||
|
Present value of lease liabilities
|
$
|
176
|
||
|
Lease liabilities, current
|
76
|
|||
|
Lease liabilities, non- current
|
100
|
|||
|
Present value of lease liabilities
|
$
|
176
|
||
| 10. |
Changes in Capital Accounts
|
(a) Company’s Preferred Stock: As of September 30,
2022, and December 31, 2021, the Company’s authorized preferred stock consists of 25,000,000 shares of preferred stock, par value $0.01 per share. Of these preferred shares, 1,250,000 have been designated Series A preferred shares and
1,200,000 have been designated Series B preferred shares. Additionally, in October 2022, 1,587,314 preferred shares were designated as Series C Preferred Shares (see under (b) below). As of September 30, 2022, 793,657 Series B preferred shares were
issued and outstanding, while as of December 31, 2021, no preferred stock was issued and outstanding.
(b) Tender Offer to Exchange Common Shares for Shares of Series B Convertible Cumulative
Perpetual Preferred Stock: In December 2021, the Company commenced an offer to exchange up to 4,066,181 of its then issued and outstanding common shares, par value $0.01 per share, for newly issued shares of the Company’s Series B
Convertible Cumulative Perpetual Preferred Stock, par value $0.01, at a ratio of 0.28 Series B Preferred Shares for each common Share.
F-17
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
The Company pays a 4.00% annual dividend on the Series B Preferred Shares, on a quarterly basis, either in cash, or, at the Company’s option, through the issuance of additional common shares, valued at the
volume-weighted average price of the common stock for the 10 trading days prior to the dividend payment date. Each Series B Preferred Share has no voting rights and is convertible at the option of the holder during the applicable conversion period
and for additional cash consideration of $7.50 per converted Series B Preferred Share, into two Series C Preferred Shares (see description below). Each Series B Preferred Share will have a fixed liquidation preference of $25.00 per share. The Series
B Preferred Shares are not subject to mandatory redemption or to any sinking fund requirements, and will be redeemable at the Company’s option, at any time, on or after the date that is the date immediately following the 15-month anniversary of the
issuance date, at $25.00 per share plus accumulated and unpaid dividends thereon to and including the date of redemption. Finally, Series B Preferred Shares rank senior to common shares with respect to dividend distributions and distributions upon
any liquidation, winding up or dissolution of the Company. The tender offer expired on January 27, 2022, and a total of 2,834,612 common shares were validly tendered and accepted for exchange, which
resulted in the issuance of 793,657 Series B Preferred Shares (with aggregate liquidation preference of $19,841), out of which 657,396 were acquired by Aliki Paliou through Mango (Note 5), and 28,171 were acquired by Andreas Michalopoulos. For the
nine months ended September 30, 2022, declared and paid dividends on Series B preferred shares amounted to $496, which represented the dividends calculated for the period from February 2, 2022 (date of issuance of the Series B preferred shares) until
September 15, 2022. For the nine months ended September 30, 2022, accrued and not paid dividends on the Series B preferred shares held by holders other than Mango, amounted to $6.
The authorized number of Series C Preferred Shares, par value $0.01 and $25.00 liquidation preference, is 1,587,314, of which 1,314,792 Series C Preferred Shares (with aggregate liquidation preference of $32,870) have
been issued to Mango on October 17, 2022 (Note 13). The remaining Series C Preferred Shares will be issued not earlier than one year from the date of original issuance of the Series B Preferred Shares. The material terms of the Series C preferred
shares are as follows: Dividends on each Series C Preferred Share shall be cumulative and shall accrue at a rate equal to 5.00% per annum of the Series C liquidation preference per Series C Preferred Share from the dividend payment date immediately
preceding issuance; The Series C Preferred Shares are convertible into common shares (i) at the option of the holder: in whole or in part, at any time on or after the date that is the date immediately following the six-month anniversary of the
Original Issuance Date at a rate equal to the Series C liquidation preference, plus the amount of any accrued and unpaid dividends thereon to and including the date of conversion, divided by a conversion price of $0.50, subject to adjustment from
time to time, or (ii) mandatorily: on any date within the Series C Conversion Period, being any time on or after the date that is the date immediately following the six-month anniversary of October 17, 2022 (or “the Original Issuance Date”), on
which less than 25% of the authorized number of Series C Preferred Shares are outstanding and the volume-weighted average price of the common shares for the 10 trading days preceding such date exceeds 130% of the conversion price in effect on such
date, the Company may elect that all or a portion of the outstanding Series C Preferred Shares shall mandatorily convert into common shares at a rate equal to the Series C liquidation preference, plus the amount of any accrued and unpaid dividends
thereon to and including such date, divided by the conversion price. The conversion price is subject to adjustment for any stock splits, reverse stock splits or stock dividends, and shall also be adjusted to the lowest price of issuance of common
stock by the Company for any registered offering following the Original Issuance Date, provided that such adjusted conversion price shall not be less than $0.50. Each holder of Series C Preferred Shares is entitled to a number of votes equal to the
number of Common Shares into which such holder’s Series C Preferred Shares would then be convertible (notwithstanding the requirement that the Series C Preferred Shares are convertible only after six months following the Original Issuance Date),
multiplied by 10. The holders of Series C Preferred Shares shall vote together as one class with the holders of Common Shares on all matters submitted to a vote of the Company’s shareholders (with certain exceptions). For the nine months ended
September 30, 2022, accrued and not paid dividends on Series C preferred shares amounted to $73.
F-18
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
In its assessment for the accounting of the Series B preferred stock, the Company has taken into consideration the provisions of ASC 480 “Distinguishing Liabilities from Equity” and ASC 815 “Derivatives and Hedging”
and determined that the Series B preferred shares should be classified as permanent equity rather than temporary equity or liability. The preferred stock was measured as of the date of closing of the tender offer, being January 27, 2022, at fair
value on a non-recurring basis. Its fair value was determined through Level 3 inputs of the fair value hierarchy as determined by management and amounted to $18,030. The fair value of the preferred stock was estimated using the Black & Scholes
model and weighted the possibilities: a) that the Series B are not further exchanged for Preferred C shares, b) that the Series B are converted to Series C on the applicable conversion date and further assumed that there is no further conversion of
the Series C preferred shares to common shares and c) that the Series C are further converted to common shares. Moreover, the Company’s valuation used the following assumptions: (a) 4% dividend yield for the Series B preferred stock and 5% dividend
yield for the Series C preferred stock, assumed based on stated dividend policy for the Series B preferred shares, and expected dividend policy for the Series C preferred shares, (b) weighted average expected volatility of 65%, (c) risk free rate of
0.74% determined by management using the applicable 1-year treasury yield as of the measurement date, (d) market value of common stock of $3.09 and (e) expected life of convertibility option of the Series C preferred shares to common shares of 5
years as at September 2, 2023. The Company’s valuation determined that the exchange resulted in an excess value of the Series B preferred shares of $9,271, or $11.68 per preferred share, as compared to the fair value of the common shares exchanged,
that was transferred from the common holders to the preferred holders on the measurement date, and that that value represented a deemed dividend to the preferred holders that should be deducted from the net loss from continuing operations to arrive
to the net loss available to common stockholders from continuing operations (Note 11). The fair value of the common shares exchanged on the measurement date of $8,759 was determined through Level 1 inputs of the fair value hierarchy (quoted market
price on the date of the exchange).
(c) Compensation Cost on Stock Option Awards: On January 1, 2021, the Company granted to
its Chief Financial Officer stock options to purchase 120,000 of the Company’s common shares as share-based remuneration. The stock options, which were granted pursuant to, and in accordance with, the Company’s Equity Incentive Plan, have been
approved by the Company’s board of directors, and have a term of five years. The exercise prices of the options are as follows: 30,000 shares for an exercise price of $10.00 per share, 25,000 shares for an exercise price of $12.50 per share, 20,000
shares for an exercise price of $15.00 per share, 15,000 shares for an exercise price of $20.00 per share, 15,000 shares for an exercise price of $25.00 per share, and 15,000 shares for an exercise price of $30.00 per share.
F-19
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
In its assessment for the accounting of the stock options awards, the Company has taken into consideration the provisions of ASC 718 “Compensation – Stock Compensation” and determined that these stock options should be
classified as equity rather than liability. The award was measured on the grant date, being January 1, 2021, at fair value on a non-recurring basis. Its fair value was determined through Level 3 inputs of the fair value hierarchy as determined by
management and amounted to $134. The fair value of the stock option was estimated using the binomial-pricing model with the following assumptions: (a) 6% dividend yield, assumed based on Company’s stated dividend policy and existing capital
structure, (b) weighted average expected volatility of 75%, (c) risk free rate of 0.36% determined by management using the applicable 5-year treasury yield as of the measurement date, (d) market value of common stock of $4.64 and (e) expected life of
5 years as at January 1, 2021. Until September 30, 2022, no stock options were exercised, and in the nine months ended September 30, 2021, the full amount of $134 was recognized as compensation cost in General and administrative expenses in the
accompanying unaudited interim consolidated statements of operations.
(d) Compensation Cost on Restricted Common Stock: On December 30, 2020, the Company’s
Board of Directors approved an amendment to the 2015 Equity Incentive Plan (or the “Plan”), to increase the aggregate number of shares issuable under the plan to 538,830 shares, and further approved 67,225 restricted common shares to be issued on the
same date as an award to the Company’s directors. The fair value of the award was $320 and was calculated by using the share closing price of December 29, 2020. One fourth of the shares vested on December 30, 2020, and the remainder three fourths
would vest ratably over three years from the issuance date. As at September 30, 2022, 471,605 restricted common shares remained reserved for issuance under the Plan.
Following the resignation of four of the Company’s board members on February 28, 2022, the Company decided to accelerate the vesting of any unvested shares on the date of their resignation as a
severance benefit and the Company recognized the corresponding compensation cost during the first quarter of 2022. During the nine months ended September 30, 2022 and 2021, the aggregate compensation cost on restricted stock amounted to $94 and $113
respectively, and is included in General and administrative expenses in the accompanying unaudited interim consolidated statements of operations. As at September 30, 2022 and December 31, 2021, the total unrecognized compensation cost relating to
restricted share awards was $65 and $159, respectively.
During the nine months ended 2022 and 2021, the movement of the restricted stock cost was as follows:
F-20
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
|
Number of
Shares
|
Weighted
Average Grant
Date Price
|
|||||||
|
Outstanding at December 31, 2020
|
100,099
|
$
|
6.71
|
|||||
|
Granted
|
-
|
-
|
||||||
|
Vested
|
(49,681
|
)
|
8.70
|
|||||
|
Forfeited or expired
|
-
|
-
|
||||||
|
Outstanding at September 30, 2021
|
50,418
|
$
|
4.76
|
|||||
|
Granted
|
-
|
-
|
||||||
|
Vested
|
(16,807
|
)
|
4.76
|
|||||
|
Forfeited or expired
|
-
|
-
|
||||||
|
Outstanding at December 31, 2021
|
33,611
|
4.76
|
||||||
|
Granted
|
-
|
-
|
||||||
|
Vested
|
(23,107
|
)
|
4.76
|
|||||
|
Forfeited or expired
|
-
|
-
|
||||||
|
Outstanding at September 30, 2022
|
10,504
|
$
|
4.76
|
|||||
As at September 30, 2022, the weighted-average period over which the total compensation cost related to non-vested restricted stock, as presented above, is expected to be recognized, is 0.75 years.
(e) At The Market (“ATM”) Offering: On March 5, 2021, the Company entered into an At The Market (or “ATM”) Offering Agreement with H.C.
Wainwright & Co., LLC, as sales agent, pursuant to which the Company may offer and sell, from time to time, up to an aggregate of $5,900 of its common shares, par value $0.01 per share. During the nine months ended September 30, 2022, a total of
526,916 common shares were issued as part of the Company’s ATM offering, and the net proceeds received, after deducting underwriting commissions and other expenses, amounted to $1,338. The Company terminated its ATM offering effective August 23,
2022.
(f) Equity Offerings: On June 1, 2022, the Company completed its underwritten public offering of 7,620,000 units at a price of $1.05 per
unit. Each unit consists of one common share (or pre-funded warrant in lieu thereof) and one Class A warrant (the “June Warrants”) to purchase one common share and was immediately separated upon issuance. Each Class A warrant was immediately
exercisable for one common share at an exercise price of $1.05 per share and has a maturity of five years from issuance and can be either physically settled or through the means of a cashless exercise. The Company may at any time during the term of
its warrants reduce the then current exercise price of each warrant to any amount and for any period of time deemed appropriate by the board of directors of the Company, subject to terms disclosed in each warrants’ agreements. The warrants also
contain a cashless exercise provision, whereby if at the time of exercise, there is no effective registration statement, then the warrants can be exercised by means of a cashless exercise as disclosed in each warrants’ agreements. The Class A
warrants and the pre-funded warrants do not have any voting, dividend or participation rights, nor do they have any liquidation preferences. The Company had granted the underwriters a 45-day option to purchase up to an additional 1,143,000 common
shares and/or prefunded warrants and/or 1,143,000 Class A warrants, at the public offering price, less underwriting discounts and commissions. The offering closed on June 1, 2022, and the Company received net proceeds, after underwriting discounts
and commissions and expenses, of $7,126 including the partial exercise of the Over-allotment Option by the underwriters of 890,500 Class A Warrants to purchase up to 890,500 common shares at $0.01 per share.
F-21
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
Furthermore, on July 18, 2022, the Company completed a direct offering of 17,000,000 common shares and warrants to purchase up to 17,000,000 common shares (the “July Warrants”) at a concurrent
private placement. The combined effective purchase price for one common share and one warrant to purchase one common share was $0.35. Each warrant is immediately exercisable for one common share at an initial exercise price of $0.35 per share, and
will expire in five and a half years from issuance. The July Warrants have similar terms to the June Warrants, with the only significant difference being the existence of an exercise price adjustment clause (discussed below), which was assessed by
the Company as a down round feature. Further to the registered direct offering of August 12, 2022 (discussed below), the July warrants exercise price has been reduced to $0.3169, according to the terms of the Form of Warrant. The offering closed on
July 19, 2022, and the Company received net proceeds, after underwriting discounts and commissions and expenses, of approximately $5,271.
The exercise price adjustment clause of the July Warrants provides for a reduction in the warrants’ initial exercise price in case the company, subsequent to the warrants
issuance: a) issues equity securities at prices below the initial exercise price of the July Warrants, or b) the Company’s stock trades below the July Warrants’ exercise price during any of the five trading sessions following the issuance of such
equity securities. The Company concluded that the specific feature provides protection to investors in promising to give each warrant holder investor the lowest pricing available to any other investors, rather than protecting against true economic
dilution, and accordingly, this feature constitutes a down round feature. As of the date that the down round feature was triggered, the Company measured the value of the effect of the feature as the difference between (a) the fair value of the
financial instrument (without the down round feature) with a strike price corresponding to the currently stated strike price of the issued instrument and (b) the fair value of the financial instrument (without the down round feature) with a strike
price corresponding to the reduced strike price upon the down round feature being triggered. Following the Company’s registered offering in August (discussed below) during which common shares were also issued, the down round feature of the July
Warrants discussed was triggered. In this respect, the Company measured the value of the effect of the feature as of the date that the down round feature was triggered and determined an approximate measurement of the down round feature of $22, which
was accounted for as a deemed dividend (Note 11).
Finally, on August 12, 2022, the Company entered into a securities purchase agreement with certain unaffiliated institutional investors to purchase 33,333,333 of its common shares and warrants to
purchase 33,333,333 common shares (the “August Warrants”) at a price of $0.45 per common share and accompanying warrant in a registered direct offering. The August Warrants are immediately exercisable, expire five years from the date of issuance, and
will have an initial exercise price of $0.45 per common share. The August Warrants have similar terms to the July Warrants, including the exercise price adjustment clause that constitutes a down-round feature, which has not been triggered as of
September 30, 2022. The offering closed on August 16, 2022, and the Company received net proceeds, after deducting underwriting discounts and commissions and expenses, of approximately $13,707.
F-22
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
As of September 30, 2022, the Company had 60,728,363 common shares outstanding, and none of the
June, July and August Warrants had been exercised.
(g) Receipt of NASDAQ Notice: On July 13, 2022, the Company received written notification from The NASDAQ Stock Market LLC (“NASDAQ”),
indicating that because the closing bid price of the Company's common stock for 30 consecutive business days was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, the Company was not in
compliance with Nasdaq Listing Rule 5450(a)(1). The applicable grace period to regain compliance is until January 9, 2023. To cure this deficiency, the Company will effect in November 2022 a reverse stock split (Note 13).
| 11. |
Earnings / (Loss) per Share
|
All common shares issued (including the restricted shares issued under the equity incentive plan, or else) are the Company’s common stock and have equal rights to vote and participate in dividends, subject to
forfeiture provisions set forth in the applicable award agreements. Unvested shares granted under the Company's incentive plan, or else, are entitled to receive dividends which are not refundable, even if such shares are forfeited, and therefore are
considered participating securities for basic earnings per share calculation purposes. For the nine months ended September 30, 2022 the Company paid dividends amounting to $496 to its Series B preferred stockholders, while for the nine months ended
September 30, 2021, the Company did not pay any dividends to its common stockholders. The calculation of basic earnings/ (loss) per share does not consider the non-vested shares as outstanding until the time-based vesting restrictions have lapsed.
The dilutive effect of share-based compensation arrangements and for unexercised warrants that are in-the money, is computed using the treasury stock method, which assumes that the “proceeds” upon exercise of these awards or warrants are used to
purchase common shares at the average market price for the period, while the dilutive effect of convertible securities is computed using the “if converted” method. In particular, for the preferred convertible stock that requires the payment of cash
by the holder upon conversion, the proceeds assumed to be received shall be assumed to be applied to purchase common stock under the treasury stock method and the convertible security shall be assumed to be converted under the “if-converted” method.
For the nine-months ended September 30, 2022, the computation of diluted earnings per share reflects the potential dilution from conversion of outstanding preferred convertible stock calculated with the "if converted" method described above and
resulted in 66,784,090 incremental shares. For the nine months ended September 30, 2022 and 2021, securities that could potentially dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share,
because to do so would have anti-dilutive effect, are any incremental shares resulting from the non-vested restricted share awards, outstanding warrants and the non-exercised stock options calculated with the treasury stock method.
F-23
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
Net income / (Loss) from continuing operations is adjusted as follows to arrive at the net income / (loss) attributable to common equity holders:
|
2022
|
2021
|
|||||||||||||||
|
Basic EPS
|
Diluted EPS
|
Basic LPS
|
Diluted LPS
|
|||||||||||||
|
Net income/ (loss) from continuing operations
|
$
|
12,465
|
$
|
12,465
|
$
|
(8,056
|
)
|
$
|
(8,056
|
)
|
||||||
|
less income allocated to participating securities
|
(2
|
)
|
(1
|
)
|
- |
- | ||||||||||
|
less deemed dividends on Series B preferred stock upon exchange of common stock
|
(9,271
|
)
|
(9,271
|
)
|
- |
-
|
||||||||||
|
less deemed dividend to the July warrants holders due to triggering of a down-round feature
|
(22
|
)
|
(22
|
)
|
-
|
-
|
||||||||||
|
less dividends on preferred stock
|
(575
|
)
|
-
|
-
|
-
|
|||||||||||
|
Net income / (loss) attributable to common stockholders from continuing operations
|
2,595
|
3,171
|
(8,056
|
)
|
(8,056
|
)
|
||||||||||
|
Net income from discontinued operations
|
-
|
-
|
400
|
400
|
||||||||||||
|
Total net income /(loss) attributable to common stockholders
|
2,595
|
3,171
|
(7,656
|
)
|
(7,656
|
)
|
||||||||||
|
Weighted average number of common shares, basic
|
16,570,048
|
16,570,048
|
5,024,144
|
5,024,144
|
||||||||||||
|
Weighted average number of incremental shares
|
-
|
66,784,090
|
-
|
-
|
||||||||||||
|
Weighted average number of common shares, diluted
|
16,570,048
|
83,354,138
|
5,024,144
|
5,024,144
|
||||||||||||
|
Earnings / (Loss) per common share, continuing operations
|
$
|
0.16
|
$
|
0.04
|
$
|
(1.60
|
)
|
$
|
(1.60
|
)
|
||||||
|
Earnings per common share, discontinued operations
|
$
|
-
|
$
|
-
|
$
|
0.08
|
$
|
0.08
|
||||||||
|
Earnings / (Loss) per common share, total
|
$
|
0.16
|
$
|
0.04
|
$
|
(1.52
|
)
|
$
|
(1.52
|
)
|
||||||
| 12. |
Financial Instruments and Fair Value Disclosures
|
The carrying values of temporary cash investments, accounts receivable and accounts payable approximate their fair value due to the short-term nature of these financial instruments. The fair values of long-term bank
loans approximate the recorded values, due to their variable interest rates. The Company is exposed to interest rate fluctuations associated with its variable rate borrowings and its objective is to manage the impact of such fluctuations on earnings
and cash flows of its borrowings. Currently, the Company does not have any derivative instruments to manage such fluctuations.
| 13. |
Subsequent Events
|
| (a) |
Advance Payment for the “Phoenix Beacon” (tbr “P. Monterey”) and New Term Sheet with Piraeus Bank: On October 6, 2022, the Company paid a 10% advance of
$3,500, for the acquisition of “Phoenix Beacon” (tbr “P. Monterey”), which is expected to be delivered to the Company in December 2022 (Note 9). To partially finance this acquisition, the Company accepted on November 9, 2022 an offer letter
of Piraeus Bank for a new loan facility of up to $37,400, which will refinance the existing outstanding indebtedness of the vessel “P. Kikuma” by $7,785 and will provide additional financing of up to $29,615 for the “Phoenix Beacon”.
|
F-24
PERFORMANCE SHIPPING INC.
Notes to Unaudited Interim Consolidated Financial Statements
September 30, 2022
(Expressed in thousands of US Dollars – except for share and per share data, unless otherwise stated)
| (b) |
Restructuring of Related Party Debt and Issuance of Series C Preferred Shares: On October 17, 2022, the Company entered into a stock purchase agreement
with Mango pursuant to which it agreed to issue to Mango in a private placement 1,314,792 Series C preferred stock, par value $0.01 per share (Note 10) in exchange for (i) all 657,396 Series B Convertible Cumulative Perpetual Preferred Shares
held by Mango and (ii) the agreement by Mango to apply $4,930 (an amount equal to the aggregate cash conversion price payable upon conversion of such Series B preferred shares into Series C preferred shares pursuant to their terms) as a
prepayment by the Company of the unsecured credit facility agreement with Mango (Note 5). The Company subsequently repaid the remaining amounts due and terminated the credit facility. The transaction was approved by a special independent
committee of the Company’s Board of Directors.
|
| (c) |
Agreement for the Sale of the “P. Fos”: On October 21, 2022, the Company signed a memorandum of agreement to sell to unrelated parties the Aframax tanker
vessel “P. Fos” for a gross purchase price of $34,000, with expected delivery to the buyers during November 2022. As of September 30, 2022, the vessel’s net book value was $22,618.
|
| (d) |
Delivery of the “P. Aliki” and New Loan Agreement with Alpha Bank S.A.: On November 9, 2022, the Company took delivery of the vessel “P. Aliki” and paid
the balance of its purchase price to the vessel’s sellers with cash on hand and loan proceeds. In connection with this acquisition, the Company entered on November 1, 2022 into a new loan agreement with Alpha Bank SA, for a maximum loan
amount of $18,250. The loan includes customary loan covenants, and its terms are similar to the Company’s existing loan agreements (Notes 6, 8 and 9).
|
| (e) |
Reverse Stock Split: On November 8, 2022, the Company’s Board of Directors determined to effect a reverse stock split of the Company’s common shares, par
value $0.01 per share, at a ratio of one-for-fifteen. The Company’s shareholders had previously approved the reverse stock split at the Company’s Special Meeting of Shareholders held on November 7, 2022. The reverse stock split will take
effect, and the Company’s common shares will begin trading on a split-adjusted basis on the Nasdaq Capital Market, as of the opening of trading on November 15, 2022 under the existing trading symbol “PSHG.” A new CUSIP number will be assigned
to the Company’s common shares when the reverse stock split becomes effective.
|
F-25
Exhibit 99.2
|
Corporate Contact:
|
|
|
Andreas Michalopoulos
|
|
|
Chief Executive Officer, Director and Secretary
|
|
|
Telephone: + 30-216-600-2400
|
|
|
Email: amichalopoulos@pshipping.com
Website: www.pshipping.com |
|
| For Immediate Release |
|
|
Investor and Media Relations:
|
|
|
Edward Nebb
|
|
|
Comm-Counsellors, LLC
|
|
|
Telephone: + 1-203-972-8350
|
|
|
Email: enebb@optonline.net
|
PERFORMANCE SHIPPING INC. REPORTS RECORD NET INCOME
AND FINANCIAL RESULTS FOR THE THIRD QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2022
ATHENS, GREECE, November 14, 2022 – Performance Shipping Inc. (NASDAQ: PSHG) (the “Company”), a global shipping company specializing in the ownership of tanker vessels, today reported a record net income from
continuing and discontinued operations of $10.7 million and net income from continuing and discontinued operations attributable to common stockholders of $10.4 million for the third quarter of 2022, compared to a net loss from continuing and
discontinued operations and net loss from continuing and discontinued operations attributable to common stockholders of $2.2 million for the same period in 2021. Earnings per share, basic and diluted, for the third quarter of 2022 was $0.26 and
$0.10, respectively, while loss per share for the third quarter of 2021 was $0.43.
Revenue from continuing and discontinued operations was $22.1 million ($18.8 million net of voyage expenses) for the third quarter of 2022, compared to $9.3 million ($4.3 million net of voyage expenses) for the same
period in 2021. This increase was attributable to the increased time-charter equivalent rates (TCE rates) achieved during the quarter. Fleetwide, the average time charter equivalent rate for the third quarter of 2022 was $34,411, compared with an
average rate of $9,335 for the same period in 2021. During the third quarter of 2022, net cash provided by operating activities of continuing and discontinued operations was $11.8 million, compared with $0.2 million for the third quarter of 2021.
Net income from continuing and discontinued operations for the nine months ended September 30, 2022 amounted to $12.5 million, compared to a net loss from continuing and discontinued operations of $7.7 million for the
nine months ended September 30, 2021. Net income from continuing and discontinued operations attributable to common stockholders for the nine months ended September 30, 2022 amounted to $2.6 million, and resulted in earnings per share, basic and
diluted, of $0.16 and $0.04, respectively. Net loss from continuing and discontinued operations attributable to common stockholders for the nine months ended September 30, 2021 amounted to $7.7 million, and resulted in a loss per common share of
$1.52.
Separately, the Company today announced that its Board of Directors has determined to effect a reverse stock split of the Company’s common shares, par value $0.01 per share, at a ratio of one-for-fifteen. The Company’s
shareholders authorized the Company’s Board of Directors to implement the reverse stock split at the Company’s Special Meeting of Shareholders held on November 7, 2022. The reverse stock split is intended to bring the Company into compliance with the
minimum $1.00 per share bid price requirement for maintaining its listing on the Nasdaq Capital Market.
1
The reverse stock split is expected to take effect, and the Company’s common shares to begin trading on a split-adjusted basis on the Nasdaq Capital Market under the existing trading symbol “PSHG,” as of the opening of
trading on November 15, 2022. For additional information, please see “Results of Special Meeting of Shareholders and Reverse Stock Split” below.
Commenting on the results of the third quarter of 2022, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“During the third quarter of 2022, tanker market fundamentals improved, supported by changes in trading patterns as a result of sanctions on Russian crude oil exports and shifts in refinery locations leading to long
haul tanker voyages. We took advantage of the improved tanker charter rate environment, resulting in fleetwide average time charter equivalent rates of $34,411 per day during the third quarter of 2022. As a result, we
generated revenues of $22.1 million and our highest-ever quarterly net income of $10.4 million, a 32% and a 184% increase from the previous quarter respectively. Our free cash balance at the end of the quarter was approximately $26 million
representing 1.4x our current market capitalization. Our basic earnings per share for the quarter annualized and compared to our current share price represent a price to earnings ratio of approximately 0.3.
“We believe that the encouraging tanker market developments experienced during the last few months and continuing into the current quarter, indicate a promising trend towards a sustainably high charter rate
environment. The three recent acquisitions of younger tankers with higher specifications, two of which have already been delivered to the Company and the third expected to be delivered by early December, and the concurrent sale of the oldest vessel
in our fleet, positions us to capture the strong prevailing market conditions and generate significant cash flow with the efficient operations of our expanding and renewed fleet. Within December, four of our tankers will be operating under time
charter contracts with first-class charterers and earning lucrative gross charter rates ranging from $23,000 to $45,000 per day, showcasing our ability to secure fixed revenue at high charter rates, while establishing solid partnerships with
reputable counterparties. Our current intention is that our remaining vessels will continue to operate in the spot market, where voyage charter rates for Aframax tankers are at historically high levels, currently in excess of $40,000 per day.
“Despite what we see as sustainably strong fundamental conditions in the charter market that should continue, we perceive the market valuation of our common shares to be extremely low, not just in relation to our
outsized earnings this quarter, but also in relation to the value of our assets, as our current market capitalization represents only 12% of our current estimated net asset value.”
Tanker Market Update for the third quarter of 2022:
|
•
|
Tanker fleet supply was 669.8 million dwt, up 0.8% from 664.3 million dwt from the previous quarter and up 2.7% from Q3 2021 levels of 652.3 million dwt.
|
|
•
|
Tanker demand in billion tonne-miles is projected to increase by a firm 4.5% in 2022, supported by new trading developments benefiting longer-haul routes and resulting from, among other things, the ongoing
Russia-Ukraine war and from European sanctions on Russian exports expected to come into force in December.
|
2
|
•
|
Tanker fleet supply in deadweight terms is estimated to grow by a moderate 3.2% in 2022.
|
|
•
|
Crude oil tanker fleet utilization was estimated at 79.5%, up from 79.0% in the previous quarter and up from 76.9% in Q3 2021.
|
|
•
|
Newbuilding tanker contracting was just 2.0 million dwt in the third quarter, resulting in a tanker orderbook to fleet ratio of 4.5%, the lowest level seen in the past 27 years.
|
|
•
|
Daily spot charter rates for Aframax tankers averaged $52,610, up 13.3% from the previous quarter average of $46,438 and up 1,412.3% from the Q3 2021 average of $3,479.
|
|
•
|
The value of a 10-year-old Aframax tanker at the end of the third quarter was $42.0 million, up 20.0% from $35.0 million in the previous quarter, and up 61.5% from $26.0 million in Q3 2021.
|
|
•
|
The number of tankers used for floating storage (excluding dedicated storage) was 174 (25.5 million dwt), down 0.6% from 175 (26.0 million dwt) in the previous quarter and up 3.0% from Q3 2021 levels of 169
(25.9 million dwt).
|
|
•
|
Global oil consumption was 99.5 million bpd, up 0.8% from the previous quarter level of 98.8 million bpd, and up 1.2% from Q3 2021 levels of 98.4 million bpd.
|
|
•
|
Global oil production was 101.2 million bpd, up 2.6% from the previous quarter level of 98.6 million bpd and up 4.6% from Q3 2021 levels of 96.8 million bpd.
|
|
•
|
OECD commercial inventories were 2,750.7 million barrels, up 3.8% from the previous quarter level of 2,650.8 million barrels, and down 0.2% from Q3 2021 levels of 2,755 million barrels.
|
|
•
|
During the global gradual recovery from COVID-19, we continue to take proactive measures to ensure the health and wellness of our crew and onshore employees while endeavoring to maintain effective business
continuity and uninterrupted service to our customers. While the situation is improving, we continue to incur increased costs as a result of the restrictions imposed in various jurisdictions creating delays and additional complexities with
respect to port calls and crew rotations.
|
The above market outlook update is based on information, data, and estimates derived from industry sources. There can be no assurances that such trends will continue or that anticipated developments in tanker demand,
fleet supply or other market indicators will materialize. While we believe the market and industry information included in this release to be generally reliable, we have not independently verified any third-party information or verified that more
recent information is not available.
3
Summary of Selected Financial & Other Data (Continuing and Discontinued Operations1 )
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||
|
STATEMENT OF OPERATIONS DATA (in thousands of US Dollars):
|
||||||||||||||||
|
Revenue
|
$
|
22,131
|
$
|
9,331
|
$
|
47,406
|
$
|
26,844
|
||||||||
|
Voyage expenses
|
3,274
|
5,037
|
12,022
|
15,053
|
||||||||||||
|
Vessel operating expenses
|
3,309
|
2,784
|
9,586
|
8,563
|
||||||||||||
|
Net income / (loss)
|
10,676
|
(2,156
|
)
|
12,465
|
(7,656
|
)
|
||||||||||
|
Net income / (loss) attributable to common stockholders
|
10,404
|
(2,156
|
)
|
2,595
|
(7,656
|
)
|
||||||||||
|
Earnings / (Loss) per common share, basic
|
0.26
|
(0.43
|
)
|
0.16
|
(1.52
|
)
|
||||||||||
|
Earnings / (Loss) per common share, diluted
|
0.10
|
(0.43
|
)
|
0.04
|
(1.52
|
)
|
||||||||||
|
FLEET DATA
|
||||||||||||||||
|
Average number of vessels
|
6.0
|
5.0
|
5.3
|
5.0
|
||||||||||||
|
Number of vessels
|
6.0
|
5.0
|
6.0
|
5.0
|
||||||||||||
|
Ownership days
|
548
|
460
|
1,453
|
1,365
|
||||||||||||
|
Available days
|
548
|
460
|
1,423
|
1,324
|
||||||||||||
|
Operating days (2)
|
529
|
416
|
1,384
|
1,121
|
||||||||||||
|
Fleet utilization
|
96.5
|
%
|
90.4
|
%
|
97.3
|
%
|
84.7
|
%
|
||||||||
|
AVERAGE DAILY RESULTS
|
||||||||||||||||
|
Time charter equivalent (TCE) rate (3)
|
$
|
34,411
|
$
|
9,335
|
$
|
24,866
|
$
|
8,906
|
||||||||
|
Daily vessel operating expenses (4)
|
$
|
6,038
|
$
|
6,052
|
$
|
6,597
|
$
|
6,273
|
||||||||
|
(1)
|
Discontinued Operations refer to our container vessels segment that we disposed of in 2020.
|
|
(2)
|
Operating days are the number of available days in a period less the aggregate number of days that our vessels are off-hire. The specific calculation counts as on-hire the days of the ballast leg of the spot
voyages, as long as a charter party is in place. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
|
4
Fleet Employment Profile (As of November 14, 2022)
Performance Shipping Inc.’s fleet is employed as follows:
|
Vessel
|
Year of Build
|
Capacity
|
Builder
|
Vessel
Type
|
Charter
Type
|
Notes
|
|
|
Aframax Tanker Vessels
|
|||||||
|
1
|
BLUE MOON
|
2011
|
104,623 DWT
|
Sumitomo Heavy Industries Marine & Engineering Co., LTD.
|
Crude
|
Time-Charter
|
|
|
2
|
BRIOLETTE
|
2011
|
104,588 DWT
|
Sumitomo Heavy Industries Marine & Engineering Co., LTD.
|
Crude
|
Spot
|
|
|
3
|
P. FOS
|
2007
|
115,577 DWT
|
Sasebo Heavy Industries Co. Ltd
|
Crude
|
Spot
|
1
|
|
4
|
P. KIKUMA
|
2007
|
115,915 DWT
|
Samsung Heavy Industries Co Ltd.
|
Crude
|
Pool
|
|
|
5
|
P. YANBU
|
2011
|
105,391 DWT
|
Sumitomo Heavy Industries Marine & Engineering Co., LTD.
|
Crude
|
Pool
|
2
|
|
6
|
P. SOPHIA
|
2009
|
105,071 DWT
|
Hyundai Heavy Industries Co., LTD
|
Crude
|
Pool
|
|
|
7
|
P. ALIKI
|
2010
|
105,304 DWT
|
Hyundai Heavy Industries Co., Ltd. - Ulsan, South Korea
|
Product
|
Time-Charter
|
|
|
8
|
PHOENIX BEACON
|
2011
|
105,525 DWT
|
Hyundai Heavy Industries Co., Ltd. - Ulsan, South Korea
|
Crude
|
-
|
3 |
| 1 |
Vessel P. Fos is sold and expected to be delivered to the new buyers during November 2022.
|
| 2 |
The previously announced time-charter of the vessel P. Yanbu is expected to commence in late November 2022.
|
| 3 |
Vessel Phoenix Beacon (tbr P. Monterey) is expected to be delivered to the Company in late November -early December 2022 and
its previously announced time-charter is expected to commence following delivery.
|
5
Results of Special Meeting of Shareholders and Reverse Stock Split
At the Special Meeting of Shareholders of the Company held on November 7, 2022, the Company’s shareholders approved a proposal granting the Company’s Board of Directors (the “Board”) the authority to effect one or more
reverse stock splits of the Company’s common stock at a ratio of not less than one-for-two and in the aggregate at a ratio of not more than one-for-250, with the exact ratio for any reverse stock split to be set at a whole number within this range to
be determined by the Board of Directors. The Board subsequently has determined to effect a 1-for-15 reverse split of the Company’s common stock.
The reverse stock split is expected to be effective, and the common stock to begin trading on a split-adjusted basis on the Nasdaq Capital Market under the existing trading symbol “PSHG,” at the opening of trading on
November 15, 2022. A new CUSIP number of Y67305 154 will be assigned to the Company’s common shares when the reverse stock split becomes effective. When the reverse stock split becomes effective, every fifteen shares of the Company’s issued and
outstanding common stock will be automatically combined into one issued and outstanding share of common stock without any change in the par value per share or the total number of authorized shares. This will reduce the number of outstanding shares of
the Company’s common stock from approximately 60,728,363 shares to approximately 4,048,557 shares, to be adjusted for the cancellation of fractional shares. The exercise price, and the number of shares issuable on exercise, of the Company’s
outstanding Class A warrants and the warrants issued pursuant to registered direct offerings on July 19, 2022 and August 12, 2022 will adjust proportionately.
No fractional shares will be issued in connection with the reverse stock split. Registered shareholders who would otherwise hold a fractional share of the Company’s common stock will receive a cash payment in lieu of
such fractional share at a price equal to the fraction to which such shareholder would otherwise be entitled multiplied by the closing price of the common stock on the Nasdaq on the last trading day prior to the effective date of the reverse stock
split, as adjusted for the reverse stock split as appropriate.
The reverse stock split will not affect any stockholder’s ownership percentage of the Company’s common stock (except as a result of the cancellation of fractional shares), alter the par value of the Company’s common
stock, have any direct impact on the market capitalization of the Company, or modify any voting rights or other terms of the common stock.
Shareholders with shares held in book-entry form or through a bank, broker, or other nominee are not required to take any action and will see the impact of the reverse stock split reflected in their accounts on or
after the effective date of the reverse stock split. Such beneficial holders may contact their bank, broker, or nominee for more information. Shareholders with shares held in certificated form will receive instructions from the exchange agent,
Computershare Trust Company, N.A., as to how to exchange existing share certificates for new certificates representing the post-reverse split shares.
Additional information about the reverse stock split can be found in the Company’s proxy statement furnished to the Securities and Exchange Commission on October 21, 2022, a copy of which is available at www.sec.gov.
About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of tanker vessels. The Company employs its fleet on spot voyages, through pool arrangements and on time charters.
6
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their business. Forward-looking statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical facts, including with respect to the delivery of the vessels we have agreed to acquire.
The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation.
The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “may,” “should,” “expect,” “pending,” and similar expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of
historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other 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, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter hire rates and vessel values, changes in demand for our vessels, changes in the supply of vessels, changes in worldwide oil
production and consumption and storage, changes in our operating expenses, including bunker prices, crew costs, dry-docking and insurance costs, our future operating or financial results, availability of financing and refinancing, including with
respect to the vessels we have agreed to acquire, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political
conditions, the length and severity of epidemics and pandemics, including the ongoing outbreak of the novel coronavirus (COVID-19) and its impact on the demand for seaborne transportation of petroleum and other types of products, changes in
governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions or events, including the impact of conflict in Ukraine, the
imposition of new international sanctions, “trade wars”, acts by terrorists or acts of piracy on ocean-going vessels, potential disruption of shipping routes due to accidents, labor disputes or political events, vessel breakdowns and instances of
off-hires and other important factors. Please see our filings with the U.S. Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
(See financial tables attached)
7
PERFORMANCE SHIPPING INC.
FINANCIAL TABLES
Expressed in thousands of U.S. Dollars, except for share and per share data
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUING AND DISCONTINUED OPERATIONS)
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
|
REVENUE:
|
||||||||||||||||
|
Revenue
|
$
|
22,131
|
$
|
9,331
|
$
|
47,406
|
$
|
26,844
|
||||||||
|
EXPENSES:
|
||||||||||||||||
|
Voyage expenses
|
3,274
|
5,037
|
12,022
|
15,053
|
||||||||||||
|
Vessel operating expenses
|
3,309
|
2,784
|
9,586
|
8,563
|
||||||||||||
|
Depreciation and amortization of deferred charges
|
2,496
|
1,908
|
6,566
|
5,561
|
||||||||||||
|
General and administrative expenses
|
1,416
|
1,304
|
4,705
|
4,313
|
||||||||||||
|
Provision / (Reversal) for credit losses and write offs
|
(59
|
)
|
5
|
18
|
(15
|
)
|
||||||||||
|
Foreign currency losses / (gains)
|
2
|
11
|
(51
|
)
|
79
|
|||||||||||
|
Operating income / (loss)
|
$
|
11,693
|
$
|
(1,718
|
)
|
$
|
14,560
|
$
|
(6,710
|
)
|
||||||
|
OTHER INCOME / (EXPENSES):
|
||||||||||||||||
|
Interest and finance costs
|
(1,117
|
)
|
(441
|
)
|
(2,207
|
)
|
(1,362
|
)
|
||||||||
|
Interest income
|
100
|
3
|
112
|
16
|
||||||||||||
|
Other income
|
-
|
-
|
-
|
400
|
||||||||||||
|
Total other expenses, net
|
$
|
(1,017
|
)
|
$
|
(438
|
)
|
$
|
(2,095
|
)
|
$
|
(946
|
)
|
||||
|
Net income / (loss)
|
$
|
10,676
|
$
|
(2,156
|
)
|
$
|
12,465
|
$
|
(7,656
|
)
|
||||||
|
Income allocated to participating securities
|
(3
|
)
|
-
|
(2
|
)
|
-
|
||||||||||
|
Deemed dividend on Series B preferred stock upon exchange of common stock
|
-
|
-
|
(9,271
|
)
|
-
|
|||||||||||
|
Deemed dividend to the July warrants’ holders due to triggering of a down-round feature
|
(22
|
)
|
-
|
(22
|
)
|
-
|
||||||||||
|
Dividends on preferred stock
|
(247
|
)
|
-
|
(575
|
)
|
-
|
||||||||||
|
Net income / (loss) attributable to common stockholders
|
$
|
10,404
|
$
|
(2,156
|
)
|
2,595
|
(7,656
|
)
|
||||||||
|
Earnings/ (Loss) per common share, basic
|
$
|
0.26
|
$
|
(0.43
|
)
|
$
|
0.16
|
$
|
(1.52
|
)
|
||||||
|
Earnings / (Loss) per common share, diluted
|
$
|
0.10
|
$
|
(0.43
|
)
|
$
|
0.04
|
$
|
(1.52
|
)
|
||||||
|
Weighted average number of common shares, basic
|
40,725,131
|
5,032,333
|
16,570,048
|
5,024,144
|
||||||||||||
|
Weighted average number of common shares, diluted
|
102,821,775
|
5,032,333
|
83,354,138
|
5,024,144
|
||||||||||||
8
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) (CONTINUING AND DISCONTINUED OPERATIONS)
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
|
Net income / (loss)
|
$
|
10,676
|
$
|
(2,156
|
)
|
$
|
12,465
|
$
|
(7,656
|
)
|
||||||
|
Comprehensive income / (loss)
|
$
|
10,676
|
$
|
(2,156
|
)
|
$
|
12,465
|
$
|
(7,656
|
)
|
||||||
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(Expressed in thousands of US Dollars)
|
September 30, 2022
|
December 31, 2021*
|
|||||||
|
ASSETS
|
(unaudited)
|
|||||||
|
Cash and cash equivalents
|
$
|
35,462
|
$
|
9,574
|
||||
|
Advances for vessel acquisitions and other vessels’ costs
|
5,481
|
-
|
||||||
|
Vessels, net
|
146,002
|
123,036
|
||||||
|
Other fixed assets, net
|
87
|
151
|
||||||
|
Other assets
|
16,656
|
12,163
|
||||||
|
Total assets
|
$
|
203,688
|
$
|
144,924
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
Long-term bank debt, net of unamortized deferred financing costs
|
$
|
68,677
|
$
|
49,898
|
||||
|
Related party financing, net of unamortized deferred financing costs
|
4,915
|
-
|
||||||
|
Other liabilities
|
3,242
|
7,677
|
||||||
|
Total stockholders’ equity
|
126,854
|
87,349
|
||||||
|
Total liabilities and stockholders’ equity
|
$
|
203,688
|
$
|
144,924
|
||||
* The balance sheet data as of December 31, 2021 has been derived from the audited consolidated financial statements at that date.
OTHER FINANCIAL DATA (CONTINUING AND DISCONTINUED OPERATIONS)
|
For the three months ended September 30,
|
For the nine months ended September 30,
|
|||||||||||||||
|
2022
|
2021
|
2022
|
2021
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
||||||||||||||
|
Net Cash provided by / (used in) Operating Activities
|
$
|
11,761
|
$
|
207
|
$
|
10,167
|
$
|
(1,333
|
)
|
|||||||
|
Net Cash used in Investing Activities
|
$
|
(30,810
|
)
|
$
|
(969
|
)
|
$
|
(34,829
|
)
|
$
|
(1,840
|
)
|
||||
|
Net Cash provided by / (used in) Financing Activities
|
$
|
41,241
|
$
|
(1,977
|
)
|
$
|
50,550
|
$
|
(5,933
|
)
|
||||||
9
Exhibit 99.3
|
Corporate Contact:
|
|
|
Andreas Michalopoulos
|
|
|
Chief Executive Officer, Director and Secretary
|
|
|
Telephone: +30-216-600-2400
|
|
|
Email: amichalopoulos@pshipping.com
|
|
|
Website: www.pshipping.com
|
|
|
For Immediate Release
|
|
|
Investor and Media Relations:
|
|
|
Edward Nebb
|
|
|
Comm-Counsellors, LLC
|
|
|
Telephone: + 1-203-972-8350
|
|
|
Email: enebb@optonline.net
|
PERFORMANCE SHIPPING INC. ANNOUNCES DELIVERY OF THE LR2 AFRAMAX OIL PRODUCT TANKER, M/T P. ALIKI
ATHENS, Greece, November 10, 2022 - Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, announced that, through a separate
wholly-owned subsidiary, it has taken delivery of the M/T P. Aliki (formerly “Alpine Amalia”), a 2010-built LR2 Aframax oil product tanker of 105,304 dwt that the Company entered into an agreement to purchase in August 2022.
As previously announced, the M/T P. Aliki was acquired for a total purchase price of US$36.5 million and financed with US$18.25 million cash on hand and US$18.25 million from the recently announced term loan facility
with Alpha Bank S.A. The vessel is the Company’s first LR2. Following the delivery, as previously disclosed, the vessel will enter into a time charter contract with Trafigura Maritime Logistics Pte Ltd. commencing in mid-November at a daily rate of
US$45,000 per day for a period of minimum seven (7) months to a maximum of ten (10) months at the option of the charterer.
Commenting on this delivery, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“As already stated, the acquisition of our first LR2 tanker, which is also BWTS and EGCS (scrubber) fitted, represents the entry of our Company into the refined petroleum product tanker sector, which we believe to be a
market segment with sustainable fundamentals. The lucrative level of fixed revenue ranging from a minimum of US$9.5 million to a maximum of US$13.7 million, depending on the duration of the charter, is indicative of the firming market environment and
our Company’s strong performance generating significant cash flows and achieving high utilization going forward.”
About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of tanker vessels. The Company employs its fleet on spot voyages, through pool arrangements and on time charters.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their business. Forward-looking statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical facts, including with respect to the delivery of the vessels we have agreed to acquire.
The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “targets,” “likely,” “would,” “could,” “seeks,” “continue,” “possible,” “might,”
“pending” and similar expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including, without limitation, our management’s examination of
historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs, or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to:
the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker shipping industry, changes in the supply of vessels,
changes in worldwide oil production and consumption and storage, changes in our operating expenses, including bunker prices, crew costs, drydocking and insurance costs, our future operating or financial results, availability of financing and
refinancing including with respect to the vessels we have agreed to acquire, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and
international political conditions, the length and severity of epidemics and pandemics, including the ongoing outbreak of the novel coronavirus (COVID-19) and its impact on the demand for seaborne transportation of petroleum and other types of
products, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions or events, including “trade wars”,
armed conflicts including the war in Ukraine, the imposition of new international sanctions, acts by terrorists or acts of piracy on ocean-going vessels, potential disruption of shipping routes due to accidents, labor disputes or political events,
vessel breakdowns and instances of off-hires and other important factors. Please see our filings with the U.S. Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Exhibit 99.4
|
Corporate Contact:
|
|
|
Andreas Michalopoulos
|
|
|
Chief Executive Officer, Director and Secretary
|
|
|
Telephone: +30-216-600-2400
|
|
|
Email: amichalopoulos@pshipping.com
|
|
|
Website: www.pshipping.com
|
|
|
For Immediate Release
|
|
|
Investor and Media Relations:
|
|
|
Edward Nebb
|
|
|
Comm-Counsellors, LLC
|
|
|
Telephone: + 1-203-972-8350
|
|
|
Email: enebb@optonline.net
|
PERFORMANCE SHIPPING INC. ANNOUNCES ACCEPTANCE OF A SIGNED OFFER LETTER FROM PIRAEUS BANK S.A.
ATHENS, Greece, November 9, 2022 - Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, announced that it has accepted an offer
letter whereby it intends to enter into an agreement for a term loan facility of up to US$37.4 million with Piraeus Bank S.A. (the “Facility”) through two separate wholly-owned subsidiaries of the Company. The Facility will be drawn in two
simultaneous advances upon delivery of the previously announced vessel the Company has agreed to acquire, the M/T Phoenix Beacon, to be renamed P. Monterey. Proceeds from the Facility will be used to refinance a portion of an existing term loan
facility for the M/T P. Kikuma through a first advance of up to about US$7.8 million and to partially finance the M/T P. Monterey, through a second advance of up to about US$29.6 million.
This Facility will carry an interest rate of SOFR plus 2.45% per annum and will be repayable in twenty (20) consecutive quarterly installments. The first four (4) installments will be equal to US$1.5 million each, the
remaining sixteen (16) installments will be equal to US$1 million each, and concurrent with the twentieth quarterly installment, within five years from the drawdown date, the Company will owe a balloon payment of US$15.4 million. This Facility is
subject to the completion of customary closing conditions and the execution of a final loan agreement by the Company and its lenders.
Commenting on this indicative offer, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“This offer letter from Piraeus Bank demonstrates the depth of our long term relationships with our lenders and the use of other collateral vessels to secure new loan facilities with long dated maturities and
competitive terms. We expect to drawdown the facility in early December to consummate the financing of M/T P. Monterey. The delivery of this new and BWTS fitted tanker in our fleet along with its 24 month time charter contract at US$32,000 per day
coupled with the competitive loan will contribute strong and predictable cashflows to our Company going forward.”
About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of tanker vessels. The Company employs its fleet on spot voyages, through pool arrangements and on time charters.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their business. Forward-looking statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical facts, including with respect to the delivery of the vessels we have agreed to acquire.
The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “targets,” “likely,” “would,” “could,” “seeks,” “continue,” “possible,” “might,”
“pending” and similar expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including, without limitation, our management’s examination of
historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs, or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to:
the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker shipping industry, changes in the supply of vessels,
changes in worldwide oil production and consumption and storage, changes in our operating expenses, including bunker prices, crew costs, drydocking and insurance costs, our future operating or financial results, availability of financing and
refinancing including with respect to the vessels we have agreed to acquire, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and
international political conditions, the length and severity of epidemics and pandemics, including the ongoing outbreak of the novel coronavirus (COVID-19) and its impact on the demand for seaborne transportation of petroleum and other types of
products, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions or events, including “trade wars”,
armed conflicts including the war in Ukraine, the imposition of new international sanctions, acts by terrorists or acts of piracy on ocean-going vessels, potential disruption of shipping routes due to accidents, labor disputes or political events,
vessel breakdowns and instances of off-hires and other important factors. Please see our filings with the U.S. Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Exhibit 99.5
|
Corporate Contact:
|
|
|
Andreas Michalopoulos
|
|
|
Chief Executive Officer, Director and Secretary
|
|
|
Telephone: +30-216-600-2400
|
|
|
Email: amichalopoulos@pshipping.com
|
|
|
Website: www.pshipping.com
|
|
|
For Immediate Release
|
|
|
Investor and Media Relations:
|
|
|
Edward Nebb
|
|
|
Comm-Counsellors, LLC
|
|
|
Telephone: + 1-203-972-8350
|
|
|
Email: enebb@optonline.net
|
PERFORMANCE SHIPPING INC. ANNOUNCES A US$32,000 PER DAY TIME CHARTER CONTRACT FOR ABOUT 24 MONTHS
ATHENS, Greece, November 8, 2022 - Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, announced that, through a separate
wholly-owned subsidiary, it has entered into a time charter contract with ST Shipping & Transport Pte Ltd. (the “Charterer), a wholly-owned subsidiary of Glencore, for the M/T Phoenix Beacon. The acquisition of the vessel, to be renamed M/T P.
Monterey, was previously announced. The gross charter rate will be US$32,000 per day for a period of twenty-four (24) months +/- 45 days at the option of the Charterer and will commence following the vessel's delivery to the Company in December. This
charter is expected to generate approximately US$22 million of gross revenue for the minimum duration of the charter.
The M/T P. Monterey is a 105,525 dwt Aframax tanker vessel built in 2011 by Hyundai Heavy Industries Co., Ltd. - Ulsan, South Korea.
Commenting on this charter, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“We are very pleased to announce that upon delivery of our newly acquired tanker in December, the M/T P. Monterey will commence service under a new time charter contract with a reputable counterparty and at a
lucrative charter rate. Upon commencement of this charter, more than half of our expanded fleet will be under time charter contracts resulting in fixed revenues of approximately US$68 million, based on the minimum durations, representing 4.2x our
current equity market capitalization.”
About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of tanker vessels. The Company employs its fleet on spot voyages, through pool arrangements and on time charters.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their business. Forward-looking statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical facts, including with respect to the delivery of the vessels we have agreed to acquire.
The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “targets,” “likely,” “would,” “could,” “seeks,” “continue,” “possible,” “might,”
“pending” and similar expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including, without limitation, our management’s examination of
historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs, or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited to:
the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker shipping industry, changes in the supply of vessels,
changes in worldwide oil production and consumption and storage, changes in our operating expenses, including bunker prices, crew costs, drydocking and insurance costs, our future operating or financial results, availability of financing and
refinancing including with respect to the vessels we have agreed to acquire, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and
international political conditions, the length and severity of epidemics and pandemics, including the ongoing outbreak of the novel coronavirus (COVID-19) and its impact on the demand for seaborne transportation of petroleum and other types of
products, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions or events, including “trade wars”,
armed conflicts including the war in Ukraine, the imposition of new international sanctions, acts by terrorists or acts of piracy on ocean-going vessels, potential disruption of shipping routes due to accidents, labor disputes or political events,
vessel breakdowns and instances of off-hires and other important factors. Please see our filings with the U.S. Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Exhibit 99.6
|
Corporate Contact:
|
|
|
Andreas Michalopoulos
|
|
|
Chief Executive Officer, Director and Secretary
|
|
|
Telephone: +30-216-600-2400
|
|
|
Email: amichalopoulos@pshipping.com
|
|
|
Website: www.pshipping.com
|
|
|
For Immediate Release
|
|
|
Investor and Media Relations:
|
|
|
Edward Nebb
|
|
|
Comm-Counsellors, LLC
|
|
|
Telephone: + 1-203-972-8350
|
|
|
Email: enebb@optonline.net
|
PERFORMANCE SHIPPING INC. ANNOUNCES
NEW LOAN FACILITY WITH ALPHA BANK S.A.
TO PARTIALLY FINANCE ACQUISITION OF SEVENTH VESSEL
ATHENS, GREECE, November 1, 2022 – Performance Shipping Inc. (NASDAQ: PSHG), (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, today announced that it has entered
into an agreement for a secured term loan facility of up to approximately US$18,250,000 with Alpha Bank S.A. (the “Facility”) through a separate wholly-owned subsidiary of the Company. Proceeds from the Facility will be used to partially finance up
to 50% of the purchase price of the previously-announced acquisition of the Company’s seventh tanker vessel, and its first LR2, to be renamed M/T P. Aliki.
The Facility will be repayable in twenty consecutive quarterly installments of US$500,000 each, and a balloon installment of US$8,250,000 payable concurrent with the twentieth quarterly installment. The Facility will
be secured by, among other things, a guarantee of the Company and a first priority mortgage over the M/T P. Aliki.
Commenting on the Facility, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“As we have already stated, the addition of Alpha Bank as a new lender to our Company demonstrates confidence in Performance Shipping Inc., with a 5-year term loan facility maturing in late 2027 which reduces our
cost of debt. We expect to drawdown this Facility upon delivery of our seventh vessel, the M/T P. Aliki.”
About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of tanker vessels. The Company employs its fleet on spot voyages, through pool arrangements and on time
charters.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their business. Forward-looking statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical facts, including with respect to the delivery of the vessels we have agreed to acquire.
The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “targets,” “likely,” “would,” “could,” “seeks,” “continue,” “possible,”
“might,” “pending” and similar expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including, without limitation, our management’s examination of
historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs, or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited
to: the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker shipping industry, changes in the supply of
vessels, changes in worldwide oil production and consumption and storage, changes in our operating expenses, including bunker prices, crew costs, drydocking and insurance costs, our future operating or financial results, availability of financing
and refinancing including with respect to the vessels we have agreed to acquire, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and
international political conditions, the length and severity of epidemics and pandemics, including the ongoing outbreak of the novel coronavirus (COVID-19) and its impact on the demand for seaborne transportation of petroleum and other types of
products, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions or events, including “trade wars”,
armed conflicts including the war in Ukraine, the imposition of new international sanctions, acts by terrorists or acts of piracy on ocean-going vessels, potential disruption of shipping routes due to accidents, labor disputes or political events,
vessel breakdowns and instances of off-hires and other important factors. Please see our filings with the U.S. Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Exhibit 99.7
|
Corporate Contact:
|
|
|
Andreas Michalopoulos
|
|
|
Chief Executive Officer, Director and Secretary
|
|
|
Telephone: +30-216-600-2400
|
|
|
Email: amichalopoulos@pshipping.com
|
|
|
Website: www.pshipping.com
|
|
|
For Immediate Release
|
|
|
Investor and Media Relations:
|
|
|
Edward Nebb
|
|
|
Comm-Counsellors, LLC
|
|
|
Telephone: + 1-203-972-8350
|
|
|
Email: enebb@optonline.net
|
PERFORMANCE SHIPPING INC. ANNOUNCES A US$30,000 PER DAY TIME CHARTER CONTRACT FOR ABOUT 24 MONTHS
ATHENS, Greece, October 27, 2022 - Performance Shipping Inc. (NASDAQ: PSHG) (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, announced that, through a separate
wholly-owned subsidiary, it has entered into a time charter contract with ST Shipping & Transport Pte Ltd. (the “Charterer”), a wholly-owned subsidiary of Glencore, for its vessel M/T P. Yanbu. The gross charter rate will be US$30,000 per day
for a period of twenty-four (24) months +/- 45 days at the option of the Charterer and is expected to commence in December 2022. This charter will generate approximately US$20.6 million of gross revenue for the minimum duration of the charter.
The M/T P. Yanbu is a 105,391 dwt Aframax tanker vessel built in 2011 by Sumitomo Heavy Industries Marine & Engineering Co. Ltd.
Commenting on this charter, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“With the P. Yanbu charter we now have three of our Aframax tankers under contract at very attractive charter rates ranging from $23,000 to $45,000 per day and with very reputable, credit-worthy counterparties. The
terms of our three charters are also staggered with maturities commencing mid-2023, mid- and late 2024, providing strong cashflow over and above our daily cash breakeven rates. This steady and predictable revenue is further supplemented by the
remaining four Aframax tankers in our fleet, which are operating in the spot market through their participation in pools and currently earning in excess of $40,000 per vessel per day.”
About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of tanker vessels. The Company’s current fleet is employed on spot voyages, through pool arrangements and on
time charters.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their business. Forward-looking statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical facts, including with respect to the delivery of the vessels we have agreed to acquire.
The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “targets,” “likely,” “would,” “could,” “seeks,” “continue,” “possible,”
“might,” “pending” and similar expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including, without limitation, our management’s examination of
historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs, or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited
to: the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker shipping industry, changes in the supply of
vessels, changes in worldwide oil production and consumption and storage, changes in our operating expenses, including bunker prices, crew costs, drydocking and insurance costs, our future operating or financial results, availability of financing
and refinancing including with respect to the vessels we have agreed to acquire, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and
international political conditions, the length and severity of epidemics and pandemics, including the ongoing outbreak of the novel coronavirus (COVID-19) and its impact on the demand for seaborne transportation of petroleum and other types of
products, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions or events, including “trade wars”,
armed conflicts including the war in Ukraine, the imposition of new international sanctions, acts by terrorists or acts of piracy on ocean-going vessels, potential disruption of shipping routes due to accidents, labor disputes or political events,
vessel breakdowns and instances of off-hires and other important factors. Please see our filings with the U.S. Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
Exhibit 99.8
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Corporate Contact:
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Andreas Michalopoulos
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Chief Executive Officer, Director and Secretary
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Telephone: +30-216-600-2400
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Email: amichalopoulos@pshipping.com
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Website: www.pshipping.com
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For Immediate Release
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Investor and Media Relations:
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Edward Nebb
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Comm-Counsellors, LLC
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Telephone: + 1-203-972-8350
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Email: enebb@optonline.net
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PERFORMANCE SHIPPING INC. ANNOUNCES THE SALE OF
2007 BUILT M/T P. FOS FOR US$34 MILLION
ATHENS, GREECE, October 24, 2022 – Performance Shipping Inc. (NASDAQ: PSHG), (“we” or the “Company”), a global shipping company specializing in the ownership of tanker vessels, today announced that it has signed,
through a separate wholly-owned subsidiary, a Memorandum of Agreement to sell to an unaffiliated third party the 2007-built Aframax tanker vessel “M/T P. Fos”, with delivery to the buyer during November 2022, for a gross sale price of US$34.0
million.
Commenting on the sale, Andreas Michalopoulos, the Company’s Chief Executive Officer, stated:
“Aframax tanker values have appreciated significantly during this year, and although the tanker market continues to enjoy strong fundamentals and prospects, we believe that the sale price we concluded for M/T P. Fos
renders the disposal tactically advantageous and financially attractive. The sale is part of our fleet renewal process as we expect to use the net cash proceeds from this disposition estimated at US$25 million, along with a marginal level of new
debt, to acquire a younger Aframax tanker with possibly higher specifications. With this sale, we also reduce the average age and increase the competitiveness of our fleet. These actions, when combined with the deliveries of our newly acquired
tankers, M/T P. Aliki and M/T P. Monterey, anticipated to take place during the next two months, will position our Company to take advantage of the promising charter rate environment and generate strong cash flow going forward.”
About the Company
Performance Shipping Inc. is a global provider of shipping transportation services through its ownership of tanker vessels. The Company’s current fleet is employed on spot voyages, through pool arrangements and on
time charters.
Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to
encourage companies to provide prospective information about their business. Forward-looking statements include, but are not limited to, statements concerning plans, objectives, goals, strategies, future events or performance, and underlying
assumptions and other statements, which are other than statements of historical facts, including with respect to the delivery of the vessels we have agreed to acquire.
The words “believe,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “plan,” “potential,” “will,” “may,” “should,” “expect,” “targets,” “likely,” “would,” “could,” “seeks,” “continue,” “possible,”
“might,” “pending” and similar expressions, terms or phrases may identify forward-looking statements.
The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including, without limitation, our management’s examination of
historical operating trends, data contained in our records and other data available from third parties. Although we believe 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, we cannot assure you that we will achieve or accomplish these expectations, beliefs, or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, but are not limited
to: the strength of world economies, fluctuations in currencies and interest rates, general market conditions, including fluctuations in charter rates and vessel values, changes in demand in the tanker shipping industry, changes in the supply of
vessels, changes in worldwide oil production and consumption and storage, changes in our operating expenses, including bunker prices, crew costs, drydocking and insurance costs, our future operating or financial results, availability of financing
and refinancing including with respect to the vessels we have agreed to acquire, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and
international political conditions, the length and severity of epidemics and pandemics, including the ongoing outbreak of the novel coronavirus (COVID-19) and its impact on the demand for seaborne transportation of petroleum and other types of
products, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions or events, including “trade wars”,
armed conflicts including the war in Ukraine, the imposition of new international sanctions, acts by terrorists or acts of piracy on ocean-going vessels, potential disruption of shipping routes due to accidents, labor disputes or political events,
vessel breakdowns and instances of off-hires and other important factors. Please see our filings with the U.S. Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.