United Maritime Corp 6-K, filed Aug 10, 2023
United Maritime Corp (USEA)
6-K
2023-08-10
For: 2023-06-30
View Original
Added on
April 06, 2026
About this 6-K
United Maritime Corp filed this 6-K on August 10, 2023.
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of August 2023
Commission File Number: 001-41413
UNITED MARITIME CORPORATION
(Translation of registrant’s name into English)
154 Vouliagmenis Avenue
166 74 Glyfada, 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 Management’s Discussion and Analysis of Financial Condition and Results of Operations for the unaudited interim consolidated financial statements of United Maritime Corporation as of and for the six-month period
ended June 30, 2023 and for the period from inception (January 20, 2022) through June 30, 2022 and of the unaudited interim carve-out financial statements of Sea Glorius Shipping Co. (“United Maritime Predecessor”) as of and for the six-month
period ended June 30, 2022 and 2021.
This Report on Form 6-K and the exhibits hereto are hereby incorporated by reference into the Company's Registration Statement on Form F-3 (333-273116).
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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UNITED MARITIME CORPORATION
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(Registrant)
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Dated: August 10, 2023
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/s/ Stamatios Tsantanis
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By: Stamatios Tsantanis
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Chief Executive Officer
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EXHIBIT 99.1
Forward-Looking Statements
This report contains certain forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include,
but are not limited to, statements regarding our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future and other statements that are other than statements of historical fact. In addition, any statements
that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate”, “believe”, “continue”, “could”, “estimate”, “expect”,
“intend”, “may”, “might”, “plan”, “possible”, “potential”, “predict”, “project”, “should”, “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not
forward-looking.
The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s
examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to
significant uncertainties and contingencies that 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. As a result, you are cautioned
not to rely on any forward-looking statements.
Many of these statements are based on our assumptions about factors that are beyond our ability to control or predict. Any of these factors or a combination of these factors could materially
affect our future results of operations and the ultimate accuracy of the forward-looking statements. In addition to these important factors and matters discussed elsewhere herein and in the documents incorporated by reference herein, important
factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include, among other things:
| • |
changes in shipping industry trends, including charter rates, vessel values and factors affecting vessel supply and demand;
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changes in seaborne and other transportation patterns;
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changes in the supply of or demand for dry bulk commodities, including dry bulk commodities carried by sea, generally or in particular regions;
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changes in the number of newbuildings under construction in the dry bulk industry;
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1
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changes in the useful lives and the value of our vessels and other vessels we may acquire and the related impact on our compliance with loan covenants;
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the aging of our fleet and increases in operating costs;
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changes in our ability to complete future, pending or recent acquisitions or dispositions;
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our ability to achieve successful utilization of our expanded fleet;
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changes to our financial condition and liquidity, including our ability to pay amounts that we owe and obtain additional financing to fund capital expenditures, acquisitions and other
general corporate activities;
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risks related to our business strategy, areas of possible expansion or expected capital spending or operating expenses;
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our dependence on Seanergy Maritime Holdings Corp., its subsidiaries and our third-party managers to operate our business;
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changes in the availability of crew, number of off-hire days, classification survey requirements and insurance costs for our vessels and other vessels we may acquire;
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changes in our relationships with our contract counterparties, including the failure of any of our contract counterparties to comply with their agreements with us;
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loss of our customers, charters or vessels and other vessels we may acquire;
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damage to our vessels and other vessels we may acquire;
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potential liability from future litigation and incidents involving our vessels and other vessels we may acquire;
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our future operating or financial results;
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acts of terrorism and other hostilities, pandemics or other calamities;
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risks associated with the worldwide coronavirus, or COVID-19 pandemic, including its effects on demand for dry bulk products, crew changes and the transportation thereof;
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changes in global and regional economic and political conditions, including without limitation, increased inflationary pressures and increases in the interest rates set by central
banks;
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general domestic and international political conditions or events, including “trade wars” and the ongoing war between Russia and Ukraine and related sanctions;
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changes in governmental rules and regulations or actions taken by regulatory authorities, particularly with respect to the marine transportation industry; and
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other factors listed from time to time in registration statements, reports or other materials that we have filed with or furnished to the U.S. Securities and Exchange Commission, including our most recent
annual report on Form 20-F.
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Should one or more of the foregoing risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in
these forward-looking statements. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on,
us. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under
applicable laws. If one or more forward-looking statements are updated, no inference should be drawn that additional updates will be made with respect to those or other forward-looking statements.
2
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following management’s discussion and analysis should be read in conjunction with our unaudited interim consolidated financial statements of United Maritime Corporation and the unaudited
interim carve-out financial statements of United Maritime Predecessor and related notes included herein. Unless the context indicates otherwise, references to the “Company”, “we” or “our” refer to United Maritime Corporation and its subsidiaries.
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.
We undertake no obligation to publicly update or revise any forward-looking statement contained in this prospectus, whether as a result of new information, future events or otherwise, except as
required by law.
Operating Results of United Maritime Corporation
Factors Affecting our Results of Operations Overview
We are an international shipping company specializing in the worldwide seaborne transportation services. As of the day of this report, the company operates a fleet of seven
dry bulk vessels, comprising two Panamax, three Capesize and two Kamsarmax vessels with a cargo-carrying capacity of approximately 845,693 dwt and an age of 14.5 years. Upon the delivery of one additional Panamax dry bulk vessel (expected between
August and October 2023), our operating fleet will consist of eight dry bulk vessels with an aggregate cargo-carrying capacity of approximately 922,054 dwt.
3
Important Measures for Analyzing Results of Operations
We use a variety of financial and operational terms and concepts. These include the following:
Ownership days. Ownership days are the total number of calendar days in a period during which we owned or chartered in
on a bareboat basis the vessels in our fleet. 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 recorded during that period.
Available days. Available days are the number of ownership days less the aggregate number of days that our vessels are
off-hire due to major repairs, dry-dockings, lay-up or special or intermediate surveys. The shipping industry uses available days to measure the aggregate number of days in a period during which vessels are available to generate revenues.
Operating days. Operating days are the number of available days in a period less the aggregate number of days that our
vessels are off-hire due to unforeseen circumstances. Operating days include the days that our vessels are in ballast voyages without having fixed their next employment. The shipping industry uses operating days to measure the aggregate number of
days in a period during which vessels could actually generate revenues.
Fleet utilization. Fleet utilization is the percentage of time that our vessels were generating revenues and is
determined by dividing operating days by ownership days for the relevant period.
Off-hire. The period a vessel is not being chartered or is unable to perform the services for which it is required
under a charter.
Dry-docking. We periodically dry-dock each of our vessels for inspection, repairs and maintenance and any
modifications to comply with industry certification or governmental requirements.
Time charter. A time charter is a contract for the use of a vessel for a specific period of time (period time charter)
or for a specific voyage (trip time charter) during which the charterer pays substantially all of the voyage expenses, including port charges, bunker expenses, canal charges and other commissions. The vessel owner pays the vessel operating
expenses, which include crew costs, provisions, deck and engine stores and spares, lubricants, insurance, maintenance and repairs. The vessel owner is also responsible for each vessel’s dry-docking and intermediate and special survey costs. Time
charter rates are usually fixed during the term of the charter. Prevailing time charter rates do fluctuate on a seasonal and year-to-year basis and may be substantially higher or lower from a prior time charter agreement when the subject vessel
is seeking to renew the time charter agreement with the existing charterer or enter into a new time charter agreement with another charterer. Fluctuations in time charter rates are influenced by changes in spot charter rates.
Voyage charter. A voyage charter is generally a contract to carry a specific cargo from a load port to a discharge
port for an agreed-upon total amount. Under voyage charters, voyage expenses, such as port charges, bunker expenses, canal charges and other commissions, are paid by the vessel owner, who also pays vessel operating expenses.
TCE. Time charter equivalent, or TCE, rate is defined as our net revenue less voyage expenses during a period divided
by the number of our operating days during the period. Voyage expenses include port charges, bunker expenses, canal charges and other commissions.
4
Daily Vessel Operating Expenses. Daily Vessel Operating Expenses are calculated by dividing vessel operating expenses
less pre-delivery expenses by ownership days for the relevant time periods. Vessel operating expenses include crew costs, provisions, deck and engine stores, lubricants, insurance, maintenance and repairs. Vessel operating expenses before
pre-delivery expenses exclude one-time pre-delivery and pre-joining expenses associated with initial crew manning and supply of stores of Company’s vessels upon delivery.
Principal Factors Affecting Our Business
The principal factors that affect our financial position, results of operations and cash flows include the following:
| • | number of vessels owned and operated; |
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voyage charter rates;
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time charter trip rates;
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period time charter rates;
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the nature and duration of our voyage charters;
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vessels repositioning;
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vessel operating expenses and direct voyage costs;
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maintenance and upgrade work;
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the age, condition and specifications of our vessels and other vessels we may acquire;
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issuance of our common shares and other securities;
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amount of debt obligations; and
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financing costs related to debt obligations.
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We are also affected by the types of charters we enter into. Vessels operating on period time charters and bareboat time charters provide more predictable cash flows, but can
yield lower profit margins than vessels operating in the spot charter market, either on trip time charters or voyage charters, during periods characterized by favorable market conditions.
Vessels operating in the spot charter market generate revenues that are less predictable but can yield increased profit margins during periods of improvements in dry bulk
rates. Spot charters also expose vessel owners to the risk of declining dry bulk rates and rising fuel costs in case of voyage charters.
If economic conditions throughout the world decline, it will negatively impact our results of operations, financial condition and cash flows, and could
cause the market price of our common shares to decline.
The world economy is facing a number of actual and potential challenges, including the war between Ukraine and Russia, current trade tension between the United States and
China, political instability in the Middle East and the South China Sea region and other geographic countries and areas, terrorist or other attacks, war (or threatened war) or international hostilities, such as those between the United States and
North Korea or Iran, and epidemics or pandemics, such as COVID-19. For example, the continuing war in Ukraine led to increased economic uncertainty amidst fears of a more generalized military conflict or significant inflationary pressures, due to
the increases in fuel and grain prices following the sanctions imposed on Russia. Whether the present dislocation in the markets and resultant inflationary pressures will transition to a long-term inflationary environment remain uncertain, and
the effects of such a development on charter rates, vessel demand and operating expenses in the sector in which we operate cannot be defined precisely. The initial effect of the invasion in Ukraine on the dry bulk freight market ranged from
neutral to positive, despite the short-term volatility in charter rates and increases on specific items of operating costs, mainly in the context of increased crew costs. If these conditions are sustained, the longer-term net impact on the dry
bulk market and our business would be difficult to predict with any degree of accuracy. Such events may have unpredictable consequences, and contribute to instability in the global economy, a decrease in supply or cause a decrease in worldwide
demand for certain goods and, thus, shipping. We cannot predict how long current market conditions will last.
5
In Europe, concerns regarding the possibility of sovereign debt defaults by European Union member countries, including Greece, although generally alleviated, have in the past
disrupted financial markets throughout the world, and may lead to weaker consumer demand in the European Union, the U.S. and other parts of the world. The withdrawal of the U.K. from the European Union, or Brexit, further increases the risk of
additional trade protectionism. Brexit, or similar events in other jurisdictions, could continue to impact global markets, including foreign exchange and securities markets; any resulting changes in currency exchange rates, tariffs, treaties and
other regulatory matters could in turn adversely impact our business, cash flows and operations.
In addition, the recent economic slowdown in the Asia Pacific region, particularly in China, may exacerbate the effect of the weak economic trends in the rest of the world.
Before the global economic financial crisis that began in 2008, China had one of the world’s fastest growing economies in terms of gross domestic product, or GDP, which had a significant impact on shipping demand. China’s GDP growth rate for the
year ended December 31, 2022 was approximately 3.0%, one of its lowest rates in 50 years, thought to be mainly caused by the country’s zero-COVID policy and strict lockdowns, which was a marked decline from 8.4% growth recorded for the year ended
December 31, 2021. It is possible that China and other countries in the Asia Pacific region will continue to experience volatile, slowed or even negative economic growth in the near future. Changes in the economic conditions of China, and changes
in laws or policies adopted by its government or the implementation of these laws and policies by local authorities, including with regards to tax matters and environmental concerns (such as achieving carbon neutrality), could affect our vessels
that are either chartered to Chinese customers or that call to Chinese ports, our vessels that undergo dry docking at Chinese shipyards and the financial institutions with whom we have entered into financing agreements, and could have a material
adverse effect on our business, results of operations and financial condition.
Furthermore, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand. In particular, as
indicated, the United States has sought to implement more protective trade measures. There is significant uncertainty about the future relationship between the United States, China, and other exporting countries, including with respect to trade
policies, treaties, government regulations, and tariffs. Protectionist developments, or the perception that they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Moreover,
increasing trade protectionism may cause an increase in (i) the cost of goods exported from regions globally, particularly from the Asia-Pacific region, (ii) the length of time required to transport goods and (iii) the risks associated with
exporting goods. Such increases may further reduce the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse impact on our charterers’ business, operating results and
financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect on our business, results of
operations, financial condition and cash flows.
We face risks attendant to the trends in the global economy, such as changes in interest rates, instability in the banking and securities markets around the world, the risk
of sovereign defaults, reduced levels of growth, and trade protectionism, among other factors. Major market disruptions and the current adverse changes in market conditions and regulatory climate worldwide may adversely affect our business or
impair our ability to borrow under our loan agreements or any future financial arrangements. We cannot predict how long the current market conditions will last. However, these recent and developing economic and governmental factors, together with
depressed charter rates and vessel values, may have a material adverse effect on our results of operations, financial condition or cash flows and the trading price of our common shares. In the absence of available financing, we may also be unable
to complete vessel acquisitions, take advantage of business opportunities or respond to competitive pressures.
6
Results of Operations of United Maritime Corporation
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(In thousands of U.S. Dollars, except for share and per share data)
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Six-month
period ended
June 30, 2023
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From the date
of inception
(January 20, 2022)
to June 30, 2022
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Revenues:
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Vessel revenue, net
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12,832
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-
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Expenses:
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Voyage expenses
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(1,149
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)
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-
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Vessel operating expenses
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(9,137
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)
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-
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Management fees
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(263
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)
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-
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Management fees-related party
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(563
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)
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-
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General and administrative expenses
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(3,325
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)
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-
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Depreciation and amortization
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(3,569
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)
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-
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Operating loss
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(5,174
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)
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-
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Other expenses:
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Interest and finance costs, net
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(2,692
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)
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-
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Other, net
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(48
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)
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-
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Total other expenses, net:
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(2,740
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)
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-
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Net loss
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(7,914
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)
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-
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Net loss attributable to common shareholders
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(7,991
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)
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-
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Net loss per common share, basic & diluted
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(0.99
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)
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-
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Weighted average common shares outstanding, basic and diluted
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8,030,666
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500
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7
Results of Operations of United Maritime Predecessor
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(In thousands of U.S. Dollars)
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Six-month
period ended
June 30, 2022
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Revenues:
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Vessel revenue, net
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2,192
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Expenses:
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Voyage expenses
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(429
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)
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Vessel operating expenses
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(1,030
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)
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Management fees
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(65
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)
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Management fees-related party
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(131
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)
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General and administrative expenses
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(332
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)
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Depreciation and amortization
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(628
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)
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Operating loss
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(423
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)
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Other expenses:
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Interest and finance costs
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(315
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)
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Other, net
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12
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Total other expenses, net:
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(303
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)
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Net loss
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(726
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)
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Six-month period ended June 30, 2023 (the “2023 Company period”) as compared to the six-month period ended June 30, 2022 (the “2022 Predecessor Period”)
Vessel Revenue, Net – Vessel revenue, net increased by $10.6 million or 485% and is mainly attributable to the increase in the size of
our fleet resulting to an increase of operating days from 111 days in 2022 to 815 days in 2023 and is partially offset by a decrease in the TCE rate in 2023 compared to that of 2022. Please see the reconciliation below of TCE rate to net revenues
from vessels, the most directly comparable U.S. GAAP measure.
Voyage Expenses – Voyage expenses amounted to $1.1 million for the six-month period ended June 30, 2023 and to $0.4 million for the
respective period in 2022. The increase was attributable to the bunkers consumption during the ballast period until the delivery of the vessels to the charterers and the increased brokerage commission as a result of the increase in the size of
our fleet.
Vessel Operating Expenses – Operating expenses for the six-month period ended June 30, 2023 amounted to $9.1 million and to $1.0 million
for the respective period in 2022. The vessel operating expenses increased by 787% mainly due to the increase in ownership days from 181 days in 2022 to 916 days in 2023.
Management Fees – Management fees amounted to $0.3 million for the six-month period ended June
30, 2023 and $0.07 million for the respective period in 2022. The increase in 2023 is attributable to the increase in ownership days.
Management Fees-related party – Management fees to related party amounted to $0.6 million for the six-month period ended June 30, 2023 and
$0.1 million for the respective period in 2022 related to increase in ownership days from 181 days in 2022 to 916 days in 2023.
8
General and Administrative Expenses – General and administrative expenses amounted to $3.3 million for the six-month period ended June
30, 2023 and $0.3 million for the respective period in 2022. The 2023 Company period expenses were mainly attributable to stock-based compensation of $2.2 million, executive officers and directors compensation of $0.5 million, and other
professional fees of $0.3 million. General and administrative expenses of United Maritime Predecessor for 2022 Predecessor Period represent the allocation of the expenses incurred by Seanergy based on the number of ownership days of the fleet
vessel.
Depreciation and Amortization – Depreciation and amortization amounted to $3.6 million for the six-month period ended June 30, 2023 and
$0.6 million for the respective period in 2022. The increase is attributable to the increase in ownership days from 181 days in 2022 to 916 days in 2023.
Interest and Finance Costs – Interest and finance cost amounted to $3.0 million for the six-month period ended June 30, 2023 and $0.3
million for the respective period in 2022. The increase is attributable to the financing obtained for the acquisition of Company’s vessels and an increase of the weighted average interest rate on our outstanding debt from approximately 7.9% to
8.5% for six-month periods ended June 30, 2022 and 2023, respectively.
Performance Indicators
The figures shown below are non-GAAP statistical ratios used by management to measure performance of our vessels. For the “Fleet Data” figures, there are no comparable U.S.
GAAP measures.
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United Maritime Corporation
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Fleet Data:
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Six-month
period ended
June 30, 2023
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From the date
of inception
(January 20, 2022)
to June 30, 2022
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Ownership days
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916
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-
|
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Available days(1)
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839
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-
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Operating days(2)
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815
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-
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Fleet utilization
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89.0
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%
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-
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Average Daily Results:
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||||||||
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TCE rate(3)
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$
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14,335
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$
|
-
|
||||
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Daily Vessel Operating Expenses(4)
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$
|
7,063
|
$
|
-
|
||||
|
United Maritime
Predecessor
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||||
|
Six-month
period ended
June 30, 2022
|
||||
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Fleet Data:
|
||||
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Ownership days
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181
|
|||
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Available days(1)
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121
|
|||
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Operating days(2)
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111
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Fleet utilization
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61.3
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%
|
||
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Average Daily Results:
|
||||
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TCE rate(3)
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$
|
15,882
|
||
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Daily Vessel Operating Expenses(4)
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$
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5,689
|
||
9
| (1) |
During the six-month period ended June 30, 2023, we incurred 77 off-hire days for scheduled dry-dockings. During the six-month period ended June 30, 2022, we incurred 60 off-hire days for scheduled
dry-dockings.
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| (2) |
During the six-month period ended June 30, 2023, we incurred 24 off-hire days due to other unforeseen circumstances. During the six-month period ended June 30, 2022, we incurred 10 off-hire days due to
other unforeseen circumstances.
|
| (3) |
We include TCE rate, a non-GAAP measure, as we believe it provides additional meaningful information in conjunction with net revenues from vessels, the most directly comparable U.S. GAAP measure, because it
assists our management in making decisions regarding the deployment and use of our vessels and assists investors and our management in evaluating our financial performance. Our calculation of TCE rate may not be comparable to that
reported by other companies. The following table reconciles our net revenues from vessels to TCE rate.
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|
(In thousands of US Dollars, except operating days and TCE rate)
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United Maritime Corporation
|
|||||||
|
Six-month
period ended
June 30, 2023
|
From the date
of inception
(January 20, 2022)
to June 30, 2022
|
|||||||
|
Vessel revenue, net
|
$
|
12,832
|
$
|
-
|
||||
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Voyage expenses
|
$
|
(1,149
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)
|
$
|
-
|
|||
|
Time charter equivalent revenues
|
$
|
11,683
|
$
|
-
|
||||
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Operating days
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815
|
-
|
||||||
|
TCE rate
|
$
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14,335
|
$
|
-
|
||||
|
(In thousands of US Dollars, except operating days and TCE rate)
|
United Maritime
Predecessor
|
|||
|
For the
six-month
period ended
June 30, 2022
|
||||
|
Vessel revenue, net
|
$
|
2,192
|
||
|
Voyage expenses
|
$
|
(429
|
)
|
|
|
Time charter equivalent revenues
|
$
|
1,763
|
||
|
Operating days
|
111
|
|||
|
TCE rate
|
$
|
15,882
|
||
| (4) |
We include Daily Vessel Operating Expenses, a non-GAAP measure, as we believe it provides additional meaningful information in conjunction with vessel operating expenses, the most directly comparable U.S.
GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of Daily Vessel Operating Expenses may not be comparable to
that reported by other companies. The following table reconciles our vessel operating expenses to Daily Vessel Operating Expenses.
|
10
|
(In thousands of US Dollars, except ownership days and Daily Vessel Operating Expenses)
|
United Maritime Corporation
|
|||||||
|
Six-month
period ended
June 30, 2023
|
From the date
of inception
(January 20, 2022)
to June 30, 2022
|
|||||||
|
Vessel operating expenses
|
$ |
9,137
|
$ |
-
|
||||
|
Less: Pre-delivery expenses
|
2,667
|
-
|
||||||
|
Vessel operating expenses before pre-delivery expenses
|
$
|
6,470
|
$
|
-
|
||||
|
Ownership days
|
916
|
-
|
||||||
|
Daily Vessel operating expenses
|
$
|
7,063
|
$
|
-
|
||||
|
(In thousands of US Dollars, except ownership days and Daily Vessel Operating Expenses)
|
United Maritime
Predecessor
|
|||
|
For the
six-month
period ended
June 30, 2022
|
||||
|
Vessel operating expenses
|
$
|
1,030
|
||
|
Ownership days
|
181
|
|||
|
Daily Vessel operating expenses
|
$
|
5,689
|
||
EBITDA and Adjusted EBITDA
|
United Maritime Corporation
|
||||||||
|
(In thousands of U.S. Dollars)
|
Six-month
period ended
June 30, 2023
|
From the date
of inception
(January 20, 2022)
to June 30, 2022
|
||||||
|
EBITDA and Adjusted EBITDA reconciliation:
|
||||||||
|
Net loss
|
$
|
(7,914
|
)
|
$
|
-
|
|||
|
Add: Interest and finance costs, net
|
2,692
|
-
|
||||||
|
Add: Depreciation and amortization
|
3,569
|
$
|
-
|
|||||
|
EBITDA(1)
|
$
|
(1,653
|
)
|
$
|
-
|
|||
|
Add: Stock based compensation
|
2,175
|
-
|
||||||
|
Adjusted EBIDTA(1)
|
$
|
522
|
$
|
-
|
||||
11
|
United Maritime
Predecessor
|
||||
|
(In thousands of U.S. Dollars)
|
For the
six-month
period ended
June 30, 2022
|
|||
|
EBITDA and Adjusted EBITDA reconciliation:
|
||||
|
Net loss
|
$
|
(726
|
)
|
|
|
Add: Interest and finance costs
|
315
|
|||
|
Add: Depreciation and amortization
|
$
|
628
|
||
|
EBITDA(1)
|
$
|
217
|
||
(1) Earnings before interest, taxes, depreciation and amortization (“EBITDA”) represents the sum of net income/(loss), net interest and finance costs, depreciation and amortization and,
if any, income taxes during a period. EBITDA is not a recognized measurement under U.S. GAAP. Adjusted EBITDA represents EBITDA adjusted to exclude stock based compensation and loss on extinguishment of debt, if any, which is not indicative of
the Company’s ongoing performance of its core operations. EBITDA and Adjusted EBITDA are presented as we believe that these measures are useful to investors as a widely used means of evaluating operating profitability. EBITDA and Adjusted EBITDA
as presented here may not be comparable to similarly titled measures presented by other companies. These non-GAAP measure should not be considered in isolation from, as a substitute for, or superior to, financial measures prepared in accordance
with U.S. GAAP.
Liquidity and Capital Resources
Our principal source of funds have been our operating cash inflows, long-term borrowings from banks, sale and leaseback transactions, bareboat charter
agreements, vessels sales and equity provided by the capital markets. Our principal use of funds has primarily been capital expenditures to establish our fleet, maintain the quality of our vessels, comply with international shipping standards
and environmental laws and regulations, fund working capital requirements, dividend payments and make principal repayments and interest payments on our outstanding debt obligations, finance leases and other financial liabilities.
Our funding and treasury activities are conducted in accordance with corporate policies to maximize investment returns while maintaining appropriate liquidity
for both our short- and long-term needs. This includes arranging borrowing facilities on a cost-effective basis. Cash and cash equivalents are held primarily in U.S. dollars, with minimal amounts held in Euros.
As of June 30, 2023, we did not have any contractual obligations other than the loan agreements, finance leases, other financial liabilities and capital expenditures for
vessels acquisitions described below. In July 2023, we paid $0.7 million regular dividend to all our common shareholders of record as of June 22, 2023. On August 3, 2023, we announced a regular quarterly dividend of $0.075 per share for the
second quarter of 2023, payable on or about October 6, 2023 to all shareholders of record as of September 22, 2023.
Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. As at June 30, 2023, working capital
deficit amounted to $26.2 million. The deficit is primarily due to our Entrust Facilities which mature in the first quarter of 2024, with a total outstanding balance of $40.7 million as of June 30,
2023, including balloon payments of $35.2 million. The tranche secured by the Epanastasea shall remain blocked in favor of the security
agent for the period from the vessel’s delivery to her new owners until the acquisition of the Exelixsea as per the August 9, 2023 deed of
accession, amendment and restatement of the August 2022 Entrust Facility, pursuant to which Exelixsea Maritime Co. acceded thereto as borrowers. Thereby, the balloon installment for the Epanastasea tranche is not payable upon the sale of the Epanastasea.
12
In April 2023, we entered into a bareboat charter agreement for a Panamax bulk carrier built in 2015, which was renamed Synthesea. Based on the
agreement, we made a downpayment of $3.5 million at signing of the bareboat charter agreement and an additional downpayment of $3.5 million upon the delivery of the vessel, on August 1, 2023. In May 2023, we entered into a memorandum of agreement for the sale of the Epanastasea, for a gross price of $37.5
million; the vessel was delivered to her new owners on August 10, 2023. In June 2023, we entered into a memorandum of agreement to acquire one Panamax vessel built in 2011, which will be renamed Exelixsea, for an aggregate purchase price of $17.8 million. The deposit paid in connection with the entry into the memorandum of agreement amounted to an aggregate of $1.8 million, with
the balance of the purchase price payable upon delivery of the vessel which is expected by October 2023. The additional downpayment for the Synthesea was funded through cash on hand, while the balance for the acquisition of the Exelixsea is expected to be funded through
cash on hand and a loan amount of $15.0 million reallocated from the August 2022 Entrust Facility following the sale of the Epanastasea
which previously secured the respective tranche of the facility.
The Company’s cash flow projections indicate that projected cash on hand and cash provided by operating activities, financing activities and investing activities or a
combination of any of those (i.e. debt agreements, vessels’ sales, sales and leaseback activities and finance leases), will be sufficient to cover the liquidity needs that become due in the twelve-month period ending one year after the financial
statements’ issuance, including obligations arising from purchase options in finance lease agreements and for vessel acquisitions.
Cash Flows of United Maritime Corporation
Cash and cash equivalents and restricted cash, non-current as of June 30, 2023 were $7.3 million. We consider highly
liquid investments such as time deposits and certificates of deposit with an original maturity of around three months or less to be cash equivalents. Cash and cash equivalents are held in U.S. dollars.
Net Cash from Operating Activities
Net cash used in operating activities in the six-month period ended June 30, 2023 amounted to $0.8 million.
Net Cash from Investing Activities
Net cash used in investing activities in the six-month period ended June 30, 2023 amounted to $75.8 million. The 2023 cash outflow is related to a $63.3 million payments for
the acquisition of three vessels, $10.7 million related to lease prepayments and $1.8 million payments related to advance for vessel acquisition.
Net Cash from Financing Activities
Net cash provided by financing activities in the six-month period ended June 30, 2023 amounted to $14.0 million. The 2023 cash inflow resulted from proceeds of $24.5 million
from secured long-term debt and $1.9 million proceeds from Class A warrant exercises. The 2023 cash inflow was partly offset by dividend payments of $8.0 million, debt repayments of $3.0 million, lease liabilities payments of $0.8 million, $0.4
million of loan finance fees payments in respect with the loan amendments and $0.2 million payments for repurchase of common stock.
Cash Flows of United Maritime Predecessor
Cash and cash equivalents as of June 30, 2022 were $0.25 million. We consider highly liquid investments such as time
deposits and certificates of deposit with an original maturity of around three months or less to be cash equivalents. Cash and cash equivalents are held in U.S. dollars.
Operating Activities: Net cash used in operating activities amounted to $0.6 million for the six-month period ended June 30, 2022. Net
cash used in operating activities in 2022 consisted of non-cash items of $0.7 million plus a decrease in working capital of $0.6 million.
13
Investing Activities: The 2022 cash outflow is related to vessel improvements consisting of payments for the installation of a ballast
water treatment system.
Financing Activities: The 2022 cash inflow resulted from parent investment of $1.1 million and was offset by debt repayments of $0.55
million.
Description of Indebtedness
Senior Facilities
July 2022 EnTrust Facility
On July 28, 2022, the previous loan facility entered into in July 2020 with Kroll agency Services Limited and Kroll Trustee Services Limited, as facility agent and security agent,
respectively, and certain nominees of EnTrust Global, as lenders was amended and restated with the purpose to (i) increase the facility from the total amount outstanding of $4.6 million to $14.0 million, (ii) change the maturity to February 2024,
(iii) alter the guarantor of the facility to the Company and (iv) cancel all applicable financial covenants with no material changes in the other terms of the loan facility. On August 1, 2022, the drawdown was completed resulting to a new balance
outstanding of $14.0 million. In connection with the sale of Parosea and Bluesea, the Company prepaid $2.0 million against the July 2022 EnTrust Facility, as
agreed with the lenders in November 2022 pursuant to a side letter. The facility bears a fixed interest of 7.90% and is repayable through two quarterly installments of $0.5 million and one of $1.0 million falling nine, twelve and fifteen months
after the drawdown and a final balloon of $10.0 million payable at maturity. The July 2022 EnTrust Facility is secured by a first priority mortgage over the Gloriuship, a general assignment covering
earnings, insurances and requisition compensation of the vessel, account pledge agreements concerning the earnings account of the vessel, a share pledge agreement concerning the vessel-owning subsidiary’s shares and relevant technical and
commercial managers’ undertakings. The facility agreement includes certain restrictions on dividends from the borrower’s accounts and other distributions. The facility does not include any financial covenants or security value maintenance
provisions.
As of June 30, 2023, $11.5 million was outstanding under the facility.
August 2022 EnTrust Facility
In August 2022, we entered into a secured loan new facility of $63.6 million with Kroll Agency Services Limited and Kroll Trustee Services Limited, as facility agent and security
agent, respectively, and certain nominees of EnTrust Global as lenders, to partially finance the acquisition of the Parosea, Bluesea, Minoansea and Epanastasea at a fixed rate of 7.90% per annum. The facility has a term of 18 months after the drawdown of the last tranche and would amortize through three quarterly
installments averaging $4.0 million commencing nine months from the drawdown date, followed by a $51.6 million balloon payable at maturity. Following the sale of the Parosea and Bluesea, we repaid their respective tranches for an aggregate amount of $32.4 million. The facility agreement includes certain restrictions on dividends from the borrower’s accounts and other distributions. The facility does not
include any financial covenants or security value maintenance provisions.
In December 2022, the Company reached an agreement with the lenders to replace the collateral under the August 2022 EnTrust Facility secured by the Minoansea with the Goodship and Tradership. Under the terms of the amended agreement, the $15.2
million tranche secured by the Minoansea remained blocked in favor of the security agent until the acquisition of the new vessels and the fixed interest rate was amended to 9.00% per annum. The $15.2
million tranche was replaced by two tranches of $7.0 and $8.2 million, secured by the Goodship and Tradership, respectively, upon their delivery pursuant to an
amendment and restatement of the subject facility which was entered into on January 30, 2023. On August 9, 2023, the Company entered into a deed of accession, amendment and restatement of the facility pursuant to which Exelixsea Maritime Co.
acceded thereto as borrower. Under the terms of the amended agreement, the $15.0 million tranche secured by the Epanastasea shall remain blocked in favor of the security agent for the period from the
vessel’s delivery to her new owners, on August 10, 2023, until the acquisition of the Santa Barbara tbr Exelixsea. In addition, the fixed interest rate of the Epanastasea tranche was amended to 9.00% per annum as of August 10, 2023.
14
Following the prepayment of the tranches secured by the Parosea and Bluesea, the facility
amortizes through three quarterly installments averaging $2.0 million commencing nine months after the original drawdown date, followed by a $25.2 million balloon payable at maturity. The facility is secured by first priority mortgages, general
assignments covering earnings, insurances and requisition compensation over each of the relevant vessels, account pledge agreements concerning the earnings accounts of the vessels, shares’ security agreements concerning the vessel-owning
subsidiaries’ shares and relevant technical and commercial managers’ undertakings. The facility agreement includes certain restrictions on dividends from the borrowers’ accounts and other distributions.
As of June 30, 2023, $29.2 million was outstanding under the facility.
New sale and leaseback transactions during the six-month period ended June 30, 2023
March 2023 Neptune Sale and Leaseback
On March 31, 2023, following the delivery of the Oasea,
we entered into a sale-and-leaseback agreement with a subsidiary of Neptune Maritime Leasing Ltd. (“Neptune”) for the purpose of partly financing the acquisition cost of the Oasea. The Company sold and chartered back the vessel from Neptune on a bareboat basis for a five-year period. The applicable interest rate is 3-month Term SOFR plus 4.25% per annum. The Company has continuous options to
repurchase the vessel throughout the duration of the charter, while at the end of the five-year bareboat period, the Company has the obligation to repurchase the vessel for $6.4 million. The Company is required to maintain a security cover
ratio (as defined therein) of at least 120% for the first twelve months and at least 130% thereafter. In addition, the Company is required to maintain minimum liquidity of approximately $0.4 million in
its operating account. The charterhire principal amortizes in sixty consecutive monthly installments of approximately $0.1 million along with a balloon payment of $6.4 million in March 2028.
As of June 30, 2023, $12.0 million was outstanding under the facility.
April 2023 Neptune Sale and Leaseback
On April 26, 2023, following the delivery of the Cretansea, we entered into a sale-and-leaseback agreement with a subsidiary of Neptune for the purpose of partly financing the acquisition cost of the Cretansea. The Company sold and chartered back the vessel from Neptune on a bareboat basis for a five-year period. The applicable interest rate is 3-month Term SOFR plus 4.25% per annum. The Company has continuous options to
repurchase the vessel throughout the duration of the charter, while at the end of the five-year bareboat period, the Company has the obligation to repurchase the vessel for $6.4 million. The Company is required to maintain a security cover
ratio (as defined therein) of at least 120% for the first twelve months and at least 130% thereafter. In addition, the Company is required to maintain minimum liquidity of approximately $0.4 million in
its operating account. The charterhire principal amortizes in sixty consecutive monthly installments of approximately $0.1 million along with a balloon payment of $6.4 million in April 2028.
As of June 30, 2023, $12.1 million was outstanding under the facility.
15
Bareboat Lease Agreements
New Bareboat Lease agreements during the six-month period ended June 30, 2023
Chrisea Bareboat Agreement
On February 9, 2023, the Company entered into a bareboat charter agreement for the 2013 Japanese-built Panamax bulk carrier, which was renamed Chrisea.
The vessel is chartered by the Company under an 18-month bareboat charter agreement, with a down payment of $3.5 million paid on signing of the agreement and a further down payment of $3.5 million paid at the vessel’s delivery on February 21,
2023, a daily charter rate of $7,300 over the period of the bareboat charter and a purchase option of $12.4 million at the end of the bareboat charter. In aggregate, the acquisition cost for the vessel, following exercise of the purchase option,
will be approximately $23.4 million.
Synthesea Bareboat Agreement
On April 19, 2023, the Company entered into a bareboat charter agreement for the 78,020 dwt Panamax bulk carrier built in 2015 in Japan, which was renamed Synthesea.
The vessel is chartered by the Company under a 12-month bareboat charter agreement, with a down payment of $3.5 million paid on signing of the agreement and a further down payment of $3.5 million which was paid at the vessel’s delivery, on August
1, 2023, a daily charter rate of $8,000 over the period of the bareboat charter and a purchase option of $17.1 million at the end of the bareboat charter. The bareboat charter commenced on August 1, 2023. In aggregate, the acquisition cost for
the vessel, following exercise of the purchase option, will be approximately $27.0 million.
16
INDEX TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
Page
|
|
|
F-2
|
|
|
F-3
|
|
|
F-4
|
|
|
F-5
|
|
|
F-6
|
F-1
United Maritime Corporation
As of June 30, 2023 (unaudited) and December 31, 2022
(In thousands of US Dollars, except for share and per share data)
| Notes |
June 30, 2023
(Unaudited)
|
December 31,
2022
|
||||||||||
|
ASSETS
|
||||||||||||
|
Current assets:
|
||||||||||||
|
Cash and cash equivalents
|
4
|
|
|
|||||||||
|
Accounts receivable trade, net
|
11
|
|
|
|||||||||
|
Inventories
|
|
|
||||||||||
|
Prepaid expenses
|
|
|
|
|||||||||
|
Other current assets
|
|
|
||||||||||
|
Vessel held for sale
|
5
|
|
|
|||||||||
|
Total current assets
|
|
|
||||||||||
|
Fixed assets:
|
||||||||||||
|
Vessels, net
|
5
|
|
|
|||||||||
|
Right-of-use asset
|
6
|
|
|
|||||||||
|
Advances for vessel acquisition from third parties
|
5
|
|
|
|||||||||
|
Advances for vessels acquisitions from related parties
|
|
|
||||||||||
|
Total fixed assets
|
|
|
||||||||||
|
Other non-current assets:
|
||||||||||||
|
Restricted cash, non-current
|
4
|
|
|
|||||||||
|
Prepaid expense other, non-current
|
9 |
|||||||||||
|
Deferred charges and other investments, non-current
|
|
|
||||||||||
|
TOTAL ASSETS
|
|
|
||||||||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||
|
Current liabilities:
|
||||||||||||
|
Current portion of long-term debt and other financial liabilities, net of deferred finance costs and debt discounts of $
|
7
|
|
|
|||||||||
|
Due to
|
3
|
|
|
|||||||||
|
Trade accounts and other payables
|
|
|
||||||||||
|
Accrued liabilities
|
|
|
||||||||||
|
Finance lease liability-current portion
|
6
|
|
|
|||||||||
|
Deferred revenue
|
11
|
|
|
|||||||||
|
Dividends payable
|
10
|
|
|
|||||||||
|
Total current liabilities
|
|
|
||||||||||
|
Non-current liabilities:
|
||||||||||||
|
Long-term debt and other financial liabilities, net of current portion and deferred finance costs and debt discounts of $
|
7
|
|
|
|||||||||
|
Finance lease liability, non-current
|
6 |
|
|
|||||||||
|
Other liabilities, non-current
|
|
|
||||||||||
|
Total liabilities
|
|
|
||||||||||
|
Commitments and contingencies
|
9
|
|
|
|||||||||
|
STOCKHOLDERS’ EQUITY
|
||||||||||||
|
Preferred stock, $
|
10
|
|
|
|||||||||
|
Common stock, $
|
10
|
|
|
|||||||||
|
Additional paid-in capital
|
10
|
|
|
|||||||||
|
Retained earnings
|
|
|
||||||||||
|
Total Stockholders’ equity
|
|
|
||||||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-2
United Maritime Corporation
For the six-month period ended June 30, 2023 and for the period from inception (January 20, 2022) through June 30, 2022
(In thousands of US Dollars, except for share and per share data)
| Notes |
2023
|
2022
|
||||||||||
|
Vessel revenue, net
|
11
|
|
|
|||||||||
|
Expenses:
|
||||||||||||
|
Voyage expenses
|
11
|
(
|
)
|
|
||||||||
|
Vessel operating expenses
|
(
|
)
|
|
|||||||||
|
Management fees
|
(
|
)
|
|
|||||||||
|
Management fees- related party
|
3
|
(
|
)
|
|
||||||||
|
General and administration expenses
|
14
|
(
|
)
|
|
||||||||
|
Depreciation and amortization
|
5, 6
|
(
|
)
|
|
||||||||
|
Amortization of deferred dry-docking costs
|
(
|
)
|
|
|||||||||
|
Operating loss
|
(
|
)
|
|
|||||||||
|
Other income / (expenses), net:
|
||||||||||||
|
Interest and finance costs
|
12
|
(
|
)
|
|
||||||||
|
Interest and other income
|
|
|
||||||||||
|
Foreign currency exchange losses, net
|
(
|
)
|
|
|||||||||
|
Total other expenses, net
|
(
|
)
|
|
|||||||||
|
Net loss
|
(
|
)
|
|
|||||||||
| Dividends to non-vested participating securities | ( |
) | ||||||||||
| Net loss attributable to common shareholders | ( |
) | ||||||||||
|
Loss per common share, basic and diluted
|
13
|
(
|
)
|
|
||||||||
|
Weighted average common shares outstanding, basic and diluted
|
13
|
|
|
|||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-3
United Maritime Corporation
For the six-month period ended June 30, 2023 and for the period from inception (January 20, 2022) through June 30, 2022
(In thousands of US Dollars, except for share data)
|
Common stock
|
Additional
paid-in
capital
|
Retained Earnings
|
Total
stockholders’
equity
|
|||||||||||||||||
|
# of Shares
|
Par
Value
|
|||||||||||||||||||
|
Balance, January 20, 2022
|
|
|
|
|
|
|||||||||||||||
|
Issuance of common stock
|
|
|
|
|
|
|||||||||||||||
|
Balance, June 30, 2022
|
|
|
|
|
|
|||||||||||||||
|
Preferred stock Series B
|
Common stock
|
Additional
paid-in
capital
|
Retained earnings
|
Total
stockholders’
equity
|
||||||||||||||||||||||||
|
# of Shares
|
Par
Value
|
# of Shares
|
Par
Value
|
|||||||||||||||||||||||||
|
Balance, December 31, 2022
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Issuance of common stock (including exercise of warrants) (Note 10)
|
-
|
-
|
|
|
|
|
|
|||||||||||||||||||||
|
Repurchase of common stock (Note 10)
|
-
|
-
|
(
|
)
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||||
|
Dividends on common stock and participating non vested restricted stock awards (Note 10)
|
-
|
-
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
|
Stock based compensation (Note 14)
|
-
|
-
|
-
|
|
|
|
|
|||||||||||||||||||||
|
Net loss
|
-
|
-
|
-
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||||||||
|
Balance, June 30, 2023
|
|
|
|
|
|
|
|
|||||||||||||||||||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-4
United Maritime Corporation
For the six-month period ended June 30, 2023 and for the period from inception (January 20, 2022) through June 30, 2022
(In thousands of US Dollars)
|
2023
|
2022
|
|||||||
|
Net cash used in operating activities
|
(
|
)
|
|
|||||
|
Cash flows from investing activities:
|
||||||||
|
Vessels’ acquisitions and improvements
|
(
|
)
|
|
|||||
|
Advances for vessel acquisition from third parties
|
(
|
)
|
|
|||||
|
Lease prepayments and other initial direct costs
|
(
|
)
|
|
|||||
|
Net cash used in investing activities
|
(
|
)
|
|
|||||
|
Cash flows from financing activities:
|
||||||||
|
Proceeds from issuance of common stock and warrants exercises, net of underwriters fees and commissions
|
|
|
||||||
|
Payments for repurchase of common stock
|
(
|
)
|
|
|||||
|
Proceeds from long-term debt and other financial liabilities
|
|
|
||||||
|
Payments of financing and stock issuance costs
|
(
|
)
|
|
|||||
|
Payments of finance lease liabilities
|
(
|
)
|
|
|||||
|
Dividends paid
|
(
|
)
|
|
|||||
|
Repayments of long-term debt and other financial liabilities
|
(
|
)
|
|
|||||
|
Net cash provided by financing activities
|
|
|
||||||
|
Net decrease in cash and cash equivalents and restricted cash
|
(
|
)
|
|
|||||
|
Cash and cash equivalents and restricted cash at beginning of period
|
|
|
||||||
|
Cash and cash equivalents and restricted cash at end of period
|
|
|
||||||
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||
|
Cash paid during the period for:
|
||||||||
|
Interest paid
|
|
|
||||||
|
Noncash investing activities:
|
||||||||
|
Vessels’ improvements and acquisitions
|
(
|
)
|
||||||
|
Right-of use asset and initial direct costs
|
(
|
)
|
|
|||||
|
Noncash financing activities:
|
||||||||
|
Dividends on common stock and participating non vested restricted stock awards declared but not paid
|
(
|
)
|
|
|||||
|
Financing and stock issuance stocks
|
(
|
)
|
|
|||||
The accompanying notes are an integral part of these unaudited interim consolidated financial statements.
F-5
United Maritime Corporation
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
| 1. |
Basis of Presentation and General Information:
|
United Maritime Corporation (the “Company” or “United”) was incorporated by Seanergy Maritime Holdings Corp. (“Seanergy” or “Parent”) on January
20, 2022 under the laws of the Republic of the Marshall Islands, having a share capital of 500 registered shares, of no par value,
issued to the Parent. The Company completed the spin-off from Seanergy effective July 5, 2022 . United’s common shares are listed on the Nasdaq Capital Market and began trading on July 6, 2022 under the symbol “USEA”. The Company is engaged in the
ocean transportation of cargoes worldwide through the ownership and operation of vessels.
The accompanying unaudited interim consolidated financial statements include the accounts of United Maritime Corporation and its subsidiaries
(collectively, the “Company” or “United”).
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 period from inception (January 20, 2022) through December 31, 2022 included in the Company’s Annual Report on Form 20-F filed with the Securities and
Exchange Commission on April 4, 2023 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 six-month period ended June 30, 2023 are not necessarily indicative of the results that might be expected for the fiscal year ending December 31, 2023.
As of June 30, 2023, the Company had a working
capital deficit of $26,213 , incurred net losses of $7,914 and had negative operating cash flows of $844 .
The working capital deficit is mainly due to the planned loan payments under the July 2022 Entrust Facility and August 2022 EnTrust Facility totaling $40,700 ,
including balloon payments of $35,200 . The Company’s cash flow projections indicate that projected cash on hand and cash provided by operating activities, financing activities and investing activities or
a combination of any of those (i.e. debt agreements, vessels’ sales, sales and leaseback activities and finance leases), will be sufficient to cover the liquidity needs that become due in the twelve-month period ending one year after the
financial statements’ issuance, including obligations arising from purchase options in lease agreements (Note 9) and for vessel acquisitions (Note 5).
Consequently, the unaudited interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business.
Following Russia’s invasion of Ukraine in February 2022, the U.S., several European Union nations, the UK and other countries imposed sanctions
against Russia, which include, among others, restrictions on selling or importing goods, services or technology in or from affected regions, travel bans and asset freezes impacting connected individuals and political, military, business and
financial organizations in Russia, severing large Russian banks from U.S. and/or other financial systems, and barring some Russian enterprises from raising money in the U.S. market. In addition, the U.S. and certain other North Atlantic Treaty
Organization (NATO) countries have been supplying Ukraine with military aid. The U.S., EU nations and other countries could impose wider sanctions and take other actions. With uncertainty remaining at high levels with regards to the global impact
of the sanctions already imposed to date and the possibility of additional sanctions as well as retaliation measures from Russia’s side that may follow in the period to come, it is difficult to accurately assess any future impact it may have on our
Company. To date, no apparent consequences have been identified on the Company’s business, nor any specific implications on any of its existing counterparties, including clients, suppliers and lenders. The Company performs relevant due diligence
checks and appoints external sanctions specialists to assess any considerations where required. It should be noted however that since the Company employs Ukrainian and Russian seafarers, it may face problems in relation to their employment,
repatriation, salary payments and be subject to claims to this respect. The scope or intensity of the ongoing military conflict as well as sanctions and other actions undertaken in response to it could increase, potentially having negative effects
on the global economy and markets. Any of these occurrences, or the continuation or worsening of any such occurrences, could eventually have an adverse effect our business, financial condition, results of operations and cash flows.
| a. |
Subsidiaries in Consolidation:
|
United’s subsidiaries included in these unaudited interim consolidated financial statements as of June 30, 2023:
|
Company
|
Country of
Incorporation
|
Vessel name
|
Date of Delivery
|
Date of
Sale/Disposal
|
||||
|
United Management Corp. (1)(2)
|
|
N/A
|
N/A
|
N/A
|
||||
|
Sea Glorius Shipping Co. (1)
|
|
|
|
N/A
|
||||
|
Epanastasea Maritime Co. (1)
|
|
|
|
Note 5
|
||||
|
Parosea Shipping Co. (1)
|
|
|
|
|
||||
|
Bluesea Shipping Co. (1)
|
|
|
|
|
||||
|
Minoansea Maritime Co. (1)
|
|
|
|
|
||||
|
Good Maritime Co. (1)
|
|
|
|
N/A
|
||||
|
Traders Maritime Co. (1)
|
|
|
|
N/A
|
||||
|
Chrisea Maritime Co. (1)(3)
|
|
|
|
N/A
|
||||
|
Oasea Maritime Co. (1)(3)
|
|
|
|
|
||||
|
Cretansea Maritime Co. (1)(3)
|
|
|
|
|
||||
|
Synthesea Maritime Co. (1)(3)
|
|
Note 9
|
Note 15
|
N/A
|
||||
|
Exelixsea Maritime Co. (1)
|
|
Note 5
|
N/A
|
N/A
|
| (1) |
Subsidiaries wholly owned
|
| (2) |
Management company
|
| (3) |
Bareboat charterers
|
F-6
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
| 2. |
Significant Accounting Policies:
|
A discussion of the Company’s significant accounting policies can be found in the Company’s consolidated financial statements included in the
Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on April 4, 2023. There have been no material changes to these policies in the six-month period ended June 30, 2023, except as discussed below:
| (a) |
Sale and Leaseback Transactions
|
In accordance with ASC 842, the Company, as seller-lessee, determines whether the transfer of an asset should be accounted for as a sale in
accordance with ASC 606. The existence of an option for the seller-lessee to repurchase the asset precludes the accounting for the transfer of the asset as a sale unless both of the following criteria are met: (1) the exercise price of the option
is the fair value of the asset at the time the option is exercised and (2) there are alternative assets, substantially the same as the transferred asset, readily available in the marketplace; and the classification of the leaseback as a finance
lease or a sales-type lease, precludes the buyer-lessor from obtaining control of the asset. The existence of an obligation for the Company, as seller-lessee, to repurchase the asset precludes accounting for the transfer of the asset as sale as the
transaction would be classified as a financing arrangement by the Company as it effectively retains control of the underlying asset. If the transfer of the asset meets the criteria of sale, the Company, as seller-lessee recognizes the transaction
price for the sale when the buyer-lessor obtains control of the asset, derecognizes the carrying amount of the underlying asset and accounts for the lease in accordance with ASC 842. If the transfer does not meet the criteria of sale, the Company
does not derecognize the transferred asset, accounts for any amounts received as a financing arrangement and recognizes the difference between the amount of consideration received and the amount of consideration to be paid as interest.
| (b) |
Finance Lease Liabilities & Right-of-Use Assets
|
Bareboat charter-in agreements that the Company may enter
into are accounted for pursuant to ASC 842 and are classified as finance leases if they either involve a purchase obligation or a purchase option that is reasonably certain, at inception, that will be exercised. At the commencement date of the
finance lease, a lessee initially measures the lease liability at the present value, using the discount rate determined on the commencement, of the lease payments to be made over the lease term, including any amount for the purchase the vessel,
if applicable. Subsequently, the lease liability is increased by the interest on the lease liability and decreased by the lease payments during the period. The interest on the lease liability is determined in each period during the lease
term as the amount that produces a constant periodic discount rate on the remaining balance of the liability, taking into consideration the reassessment requirements.
A lessee initially measures the finance right-of-use asset
at cost which consists of the amount of the initial measurement of the lease liability; any lease payments made to the lessor at or before the commencement date, less any lease incentives received; and any initial direct costs incurred by the
lessee. Subsequently, the finance right-of-use asset is measured at cost less any accumulated amortization and any accumulated impairment losses, taking into consideration the reassessment requirements. A lessee shall amortize the finance
right-of-use asset on a straight-line basis (unless another systematic basis better represents the pattern in which the lessee expects to consume the right-of-use asset’s future economic benefits) from the commencement date to the earlier of
the end of the useful life of the finance right-of-use asset or the end of the lease term. However, if the lease transfers ownership of the underlying asset to the lessee or the lessee is reasonably certain to exercise an option to purchase the
underlying asset, the lessee shall amortize the right-of-use asset to the end of the useful life of the underlying asset. The Company elected the practical expedient on not separating lease components from nonlease components in accordance with
ASC 842-10-15-37.
F-7
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Recent Accounting Pronouncements – Not Yet Adopted
Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the
Company’s unaudited interim financial statements for the six-month period ended June 30, 2023.
| 3. |
Transactions with Related Parties:
|
Details of the Company’s transactions with related parties are discussed in Note 3 of the consolidated financial statements for the year ended December 31, 2022,
included in the Company’s 2022 annual report on Form 20-F filed with the SEC on April 4, 2023, and are supplemented by the below new activities within the period.
Related parties transaction incurred during the six-month period ended June 30, 2023
Management Agreements:
Master Management Agreement
For the six-month period ended June 30, 2023 and from January 20, 2022 until June 30, 2022, management fees charged from Seanergy amounted to $298 and $, respectively, and are
presented under “Management fees- related party” in the accompanying unaudited interim consolidated statement of operations. As of June 30, 2023 and December 31, 2022, the balance due to Seanergy amounted to $3,018 and $439 , respectively, and is
included in “Due to related parties” in the accompanying consolidated balance sheets.
Technical Management Agreements
In relation to the technical management, Seanergy Shipmanagement Corp. (“Seanergy Shipmanagement”) is responsible for arranging (directly or by subcontracting) for the
crewing of the vessels, the day-to-day operations, inspections, maintenance, repairs, drydocking, purchasing, insurance and claims handling for the Goodship, Gloriuship, Chrisea, Oasea and Cretansea.
Pursuant to the management agreements, a fixed management fee of $10 for the Goodship and $14 per month for the remaining
vessels is payable to Seanergy Shipmanagement for such services.
For the six-month period ended June 30, 2023 and from January 20, 2022 until December 31, 2022, management fees charged from Seanergy Shipmanagement amounted to $265 and $, respectively, and are
presented under “Management fees- related party” in the accompanying unaudited interim statements of operations. As of June 30, 2023 and December 31, 2022, the balance due to Seanergy Shipmanagement amounted to $265 and $, respectively, and is
included in “Due to related parties” in the accompanying consolidated balance sheets.
F-8
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Commercial Management Agreements
United had entered into a commercial management agreement with Seanergy Management Corp. (“Seanergy Management”) pursuant to which Seanergy Management acted as agent
for United’s subsidiaries (directly or through subcontracting) for the commercial management of their vessels, including chartering, monitoring thereof, freight collection, and sale and purchase up until March 31, 2023. United had agreed to pay to Seanergy Management a fee equal to 1.25 % of the gross freight, demurrage and charter hire
collected from the employment of United’s vessels, except for any vessels that were chartered-out to Seanergy. Seanergy Management earned a fee equal to 1 %
of the contract price of any vessel bought or sold by them on United’s behalf, except for any vessels bought or sold from or to Seanergy, or in respect of any vessel sale relating to a sale and leaseback transaction.
Effective as of April 1, 2023, the abovementioned agreement was terminated and United’s subsidiary, United Management Corp. (“United
Management”) has entered into a new commercial management agreement with Seanergy Management pursuant to which Seanergy Management acts as agent for United’s subsidiaries for the commercial management of United’s vessels, including voyage monitoring,
freight collection, postfixing, sale, purchase and bareboat chartering. United agreed to pay to Seanergy Management a fee equal to 0.75 % of the gross freight, demurrage and charter hire collected from the employment of United’s vessels. In addition, Seanergy Management earns a fee equal to 1 % of the contract price of any vessel bought, sold or bareboat chartered by them on United’s behalf (not including any vessels bought, sold or bareboat
chartered from or to Seanergy, or any vessel sale relating to a sale and leaseback transaction).
For the six-month period ended June 30, 2023 and from January 20, 2022 until June 30, 2022, fees charged under the commercial management
agreements amounted to $136 and $
and are included in “Vessels revenue, net” in the accompanying unaudited interim statement of operations.
For the six-month period ended June 30, 2023 and from January 20, 2022 until December 31, 2022 fees charged in relation to purchase services
amounted to $509 and $795
and are presented in “Right-of-use asset” (Note 6), “Vessels, net” (Note 5) and “Vessels, net” respectively.
For the six-month period June 30, 2023, and from January 20, 2022 until June 30, 2022, no
As of June 30, 2023 and December 31, 2022, balance due to Seanergy Management amounted to $647 and $390 and is included in “Due to related parties” in the accompanying
consolidated balance sheets.
On February 10, 2023 and February 28, 2023, the Company took delivery of two Capesize vessels from Seanergy for an aggregate purchase price of $36,250
(Note 5).
| 4. |
Cash and Cash Equivalents and Restricted Cash:
|
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets
that sum to the total of the same such amounts shown in the unaudited interim consolidated statement of cash flows:
|
June 30,
2023
|
December 31,
2022
|
|||||||
|
Cash and cash equivalents
|
|
|
||||||
|
Restricted cash, non-current
|
|
|
||||||
|
Cash and Cash equivalents and restricted cash
|
|
|
||||||
Restricted cash as June 30, 2023 includes $350
of minimum liquidity requirements as per the March 2023 Neptune Sale and Leaseback and $350 of minimum liquidity requirements as per the
April 2023 Neptune Sale and Leaseback. Restricted cash as of December 31, 2022 includes $15,200 that served as cash collateral under the
August 2022 EnTrust Facility and in relation to the August 2022 EnTrust Facility related to Minoansea. Such amount was restricted and was used to finance part of
the acquisition cost of the Goodship and Tradership upon their delivery to the Company in February 2023 (Notes 5 & 7).
F-9
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
| 5. |
Vessels, Net:
|
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
|
June 30,
2023
|
December 31,
2022
|
|||||||
|
Cost:
|
||||||||
|
Beginning balance:
|
|
|
||||||
|
- Vessel contributed by Seanergy
|
|
|
||||||
|
- Additions
|
|
|
||||||
|
- Transfer to “Vessel held for sale”
|
(
|
)
|
|
|||||
|
- Disposals
|
|
(
|
)
|
|||||
|
Ending balance:
|
|
|
||||||
|
Accumulated depreciation:
|
||||||||
|
Beginning balance:
|
(
|
)
|
|
|||||
|
- Depreciation for the period
|
(
|
)
|
(
|
)
|
||||
|
- Transfer to “Vessel held for sale”
|
|
|
||||||
|
- Disposals
|
|
|
||||||
|
Ending balance:
|
(
|
)
|
(
|
)
|
||||
|
Net book value
|
|
|
||||||
Acquisitions
On December 27, 2022, the Company entered into an agreement with an affiliated party for the purchase of a secondhand Capesize vessel, the Goodship, for a gross purchase price of $17,500 . On December 28, 2022, the Company paid an advance
of $6,125 according to terms of the agreement and it is included in “Advances for vessels acquisitions from related parties” in the
consolidated balance sheet as of December 31, 2022. On February 10, 2023, the Company took delivery of the vessel. The acquisition of the vessel was financed with cash on hand and $7,000 allocated from the August 2022 Entrust Facility (Note 7).
On December 27, 2022, the Company entered into an agreement with an affiliated party for the purchase of a secondhand Capesize vessel, the Tradership, for a gross purchase price of $18,750 . On December 28, 2022, the Company paid an advance
of $6,563 according to terms of the agreement and it is included in “Advances for vessel acquisitions from related parties” in the
consolidated balance sheet as of December 31, 2022. On February 28, 2023, the Company took delivery of the vessel. The acquisition of the vessel was financed with cash on hand and $8,200 allocated from the August 2022 EnTrust Facility (Note 7).
On February 7, 2023, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Kamsarmax vessel, the
Liberty K which was renamed Oasea, for a gross purchase price of $19,500 .
The vessel was delivered to the Company on March 27, 2023. The acquisition of the vessel was financed with cash on hand at delivery and subsequently through the sale and leaseback transaction entered into with Neptune Maritime Leasing Limited on
March 31, 2023 (Note 7).
On February 7, 2023, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Kamsarmax vessel, the
Hampton Bay which was renamed Cretansea, for a gross purchase price of $19,675 .
The vessel was delivered to the Company on April 26, 2023. The acquisition of the vessel was financed with cash on hand and through the sale and lease back transaction entered into with Neptune Maritime Leasing Limited on April 26, 2023 (Note 7).
For the six-month period ended June 30, 2023, an amount of $456 of expenditures related to vessels’ acquisition cost were capitalized and will be depreciated over the remaining useful life of each vessel. Amounts paid for these expenditures are
included in “Vessels’ acquisitions and improvements” under “Cash flows from investing activities” in the unaudited interim consolidated statement of cash flows.
During the six-month period ended June 30, 2023, an amount of $1,176 of expenditures were capitalized that concern improvements on vessels performance and meeting environmental standards. The cost of these additions was accounted as major improvement
and were capitalized over the vessels’ cost and will be depreciated over the remaining useful life of each vessel. Amounts paid for the additions are included in “Vessels acquisitions and improvements” under “Cash flows from investing activities”
in the unaudited interim consolidated statements of cash flows.
F-10
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
Advances for Vessels Acquisition
On June 9, 2023, the Company entered into an agreement with an unaffiliated party for the purchase of a secondhand Panamax vessel, the Santa Barbara, which will be named Exelixsea, for a gross purchase price of $17,815 .
On June 14, 2023, the company paid an advance of $1,782 according to terms of the agreement and the advance is included in “Advances for
vessel acquisition from third parties” in the consolidated balance sheet as of June 30, 2023. Delivery is expected to take place during the third quarter of 2023.
Vessel Held for Sale
On May 5, 2023, the Company entered into an agreement with an unaffiliated third party for the sale of the Epanastasea
for a gross sale price of $37,500 . Delivery of the vessel to her new owners is expected to take place within August 2023 (Note 15). As of
June 30, 2023, the vessel was classified in current assets as “Vessel held for sale” in the consolidated balance sheets, according to the provisions of ASC 360, as all the criteria for this classification were met. The specific vessel was not
impaired as of June 30, 2023, since its carrying amount as at the balance sheet date was lower than its fair value less cost to sell. The fair value of the vessel was determined based on the agreed sale price. As of June 30, 2023, the carrying
amount of the vessel includes the unamortized balance of vessel cost of $20,643 and the unamortized balance of drydocking cost of $2,802 and it is included in “Vessel held for sale” in the accompanying consolidated balance sheets.
| 6. |
Right-of-Use assets and Finance Lease Liabilities:
|
On February 9, 2023, the Company entered into a bareboat charter agreement with an unaffiliated third party for a secondhand Panamax
vessel, the Oceanic Power, which was renamed Chrisea. The vessel was delivered to the Company on February 21, 2023, under an 18 -month bareboat charter plus 30-days in lessee’s option at a daily rate of $7.3 .
The Company made a down payment of $3,500 on signing of the bareboat charter agreement and a payment of $3,500 upon commencement of the bareboat charter. At the end of the 18 -month bareboat period, the Company has an option to repurchase the vessel for $12,360 . The Company
has classified the above transaction as a finance lease. At the commencement date, the company recognized a finance lease liability equal to the present value of lease payments during the bareboat charter period using an implicit rate of 6.5 %. The Company recognized a finance lease liability of $15,067 and a corresponding right-of-use asset of $22,767 which also includes $700 of initial direct costs. The amount of the right-of-use-assets is
amortized on a straight-line method based on the estimated useful life of the vessel. During the six-month period ended June 30, 2023, the amortization of the right-of-use asset amounted to $536 and is presented in the Company’s unaudited interim consolidated statements of operations under “Depreciation and amortization”. Interest expense on the finance lease
liability for the same period amounted to $328 (Note 12). As of June 30, 2023, the right-of-use amounted to $22,230 and is presented under “Right-of-use asset” in the
accompanying consolidated balance sheets. The weighted average remaining lease term for the bareboat charter was 1.14 years as of June 30, 2023.
The annual lease payments under the Chrisea bareboat charter agreement are as follows:
|
Twelve month periods ending June 30,
|
Amount
|
|||
|
2024
|
|
|||
|
2025
|
|
|||
|
Total undiscounted lease payments
|
|
|||
|
Less: Discount based on implicit rate
|
(
|
)
|
||
|
Present value of finance lease liabilities
|
|
|||
|
Finance lease liabilities, current
|
|
|||
|
Finance lease liabilities, non-current
|
|
|||
|
Present value of finance lease liabilities
|
|
|||
F-11
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
| 7. |
Long-Term Debt and Other Financial Liabilities:
|
The amounts in the accompanying consolidated balance sheets are analyzed as follows:
|
June 30,
2023
|
December 31,
2022
|
|||||||
|
Long-term debt and other financial liabilities
|
|
|
||||||
|
Less: Deferred financing costs
|
(
|
)
|
(
|
)
|
||||
|
Total
|
|
|
||||||
|
Less - current portion
|
(
|
)
|
(
|
)
|
||||
|
Long-term portion
|
|
|
||||||
Details of the Company’s secured credit and other financial liabilities are discussed in Note 7 of the consolidated financial statements for the year ended December
31, 2022, included in the Company’s 2022 annual report on Form 20-F filed with the SEC on April 4, 2023, and are supplemented by the below new activities within the period.
Senior long-term debt
Loan Facilities amended during the six-month period ended June 30, 2023
August 2022 EnTrust Facility
Pursuant to a deed of accession, amendment and restatement of the subject facility which was entered into on January 30, 2023, the Tranche C was
replaced by two tranches, Tranche E for $7,000
and Tranche F for $8,200 , secured by the Goodship and Tradership,
respectively, upon their delivery (Note 5) and bearing a fixed interest rate of 9 one installment of $1,000 at the
twelfth month after the utilization date, one installment of $3,000 at the fifteenth month after the utilization date and a balloon payment of $25,200
at maturity. As of June 30, 2023, the amount outstanding under this facility was $29,200 .
Other Financial Liabilities - Sale and Leaseback Transactions
New Sale and Leaseback Activities during the six-month period ended June 30, 2023
March 2023 Neptune Sale and Leaseback
On March 31, 2023, following the delivery of the Oasea, the Company entered into a sale-and-leaseback agreement with a subsidiary of Neptune Maritime Leasing Ltd. for the purpose of partly financing the acquisition cost of the Oasea. The transaction was accounted for as a financial liability, since control remains with the Company and the Oasea will continue to be recorded as an asset on the Company’s balance sheet. The financing amount is $12,250 and the interest rate is 4.25 % plus 3-month term SOFR per annum. The charterhire principal will be repaid over a five-year term, through 60 monthly installments of $97.5 and a
balloon payment of $6,400 at the expiration of the bareboat charter. The Company is required to maintain a security coverage ratio
(as defined therein) of at least 120 % for the first twelve months and at least 130 % thereafter. In addition, the Company is required to maintain minimum liquidity of $350 in its operating account. The sale-and-leaseback agreement includes certain restrictions on dividends from the lessee’s accounts and other distributions. The Company has continuous options to repurchase the
vessel at predetermined prices as set forth in the agreement. At the end of the 5-year bareboat period, the Company has the
obligation to repurchase the vessel for $6,400 (balloon payment). As of June 30, 2023, the amount outstanding under the March 2023
Neptune Sale and Leaseback was $11,958 .
April 2023 Neptune Sale and Leaseback
On April 26, 2023, following the delivery of the Cretansea, the Company entered into a sale-and-leaseback agreement with a subsidiary of Neptune Maritime Leasing Ltd. for the purpose of partly financing the acquisition cost of the Cretansea. The transaction was accounted for as a financial liability, as control remains with the Company and the Cretansea will continue to be recorded as an asset on the Company’s balance sheet. The financing amount is $12,250 and the interest rate is 4.25 % plus 3-month term SOFR per annum. The charterhire principal will be repaid over a five-year term, through 60 monthly installments of $97.5 and a
balloon payment of $6,400 at the expiration of the bareboat. The Company is required to maintain a security coverage ratio (as
defined therein) of at least 120 % for the first twelve months and at least 130 % thereafter. In addition, the Company is required to maintain minimum liquidity of $350 in its operating account. The sale-and-leaseback agreement includes certain restrictions on dividends from the lessee’s accounts and other distributions. The Company has continuous options to repurchase the
vessel at predetermined prices as set forth in the agreement. At the end of the 5-year bareboat period, the Company has the
obligation to repurchase the vessel for $6,400 (balloon payment). As of June 30, 2023, the amount outstanding under the April 2023
Neptune Sale and Leaseback was $12,055 .
F-12
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
As of June 30, 2023, the Company was in compliance with all covenants relating to its loan facilities and other financial liabilities as at that
date.
As of June 30, 2023, four of the
Company’s owned vessels (including the vessel held for sale), having a net carrying value of $75,425 , were subject to first and second
priority mortgages as collaterals to their long-term debt facilities. In addition, the Company’s two bareboat chartered vessels, having
a net carrying value of $39,000 as of June 30, 2023, have been financed through sale and leaseback agreements. As customary in leaseback
agreements, the title of ownership is held by the registered owners.
The annual principal payments required to be made after June 30, 2023 for all long-term debt and other financial liabilities, are as follows:
|
Twelve month periods ending June 30,
|
Amount
|
|||
|
2024
|
|
|||
|
2025
|
|
|||
|
2026
|
|
|||
|
2027
|
|
|||
|
Thereafter
|
|
|||
|
Total
|
|
|||
| 8. |
Financial Instruments:
|
The guidance for fair value measurements applies to all assets and liabilities that are being measured and reported on a fair value basis. This
guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The same guidance
requires that assets and liabilities carried at fair value should be classified and disclosed in one of the following three categories based on the inputs used to determine its fair value:
| • |
Level 1: Quoted market prices in active markets for identical assets or liabilities;
|
| • |
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data;
|
| • |
Level 3: Unobservable inputs that are not corroborated by market data.
|
| (a) |
Significant Risks and Uncertainties, including Business and Credit Concentration
|
The Company places its temporary cash investments, consisting mostly of deposits, primarily with high credit qualified financial institutions. The
Company performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Company’s investment strategy. The Company limits its credit risk with accounts receivable by performing ongoing credit
evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk.
| (b) |
Fair Value of Financial Instruments
|
The fair values of the financial instruments shown in the consolidated balance sheets as of June 30, 2023 and December 31, 2022, represent
management’s best estimate of the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. Those fair value measurements maximize the
use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market
participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments:
| a. |
Cash and cash equivalents, accounts receivable trade, other current assets, prepaid expenses, trade accounts and other payables and accrued liabilities: the carrying amounts approximate fair value because of
the short maturity of these instruments. The carrying value approximates the fair market value for interest bearing cash classified as restricted cash, non-current.
|
| b. |
Long-term debt: The fair value of fixed interest long-term debt is estimated using prevailing market rates as of the period end. The carrying value of $
|
F-13
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
| 9. |
Commitments and Contingencies:
|
Contingencies
Various claims, lawsuits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of
the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. As of June 30, 2023, management is not aware of any material
claims or contingent liabilities, which have not been disclosed, or for which a provision has not been established in the accompanying 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 that should be disclosed, or for which a provision should be established in the accompanying consolidated financial statements. The
Company is covered for liabilities associated with the individual vessels’ actions to the maximum limits as provided by Protection and Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.
Commitments
The Company operates certain of its vessels under lease agreements. Time charters typically may provide for charterers’ options to extend the
lease terms and termination clauses. The Company’s time charters duration was approximately 12 months and extension periods vary from 2 to 4 months . In addition, the time
charters contain termination clauses which protect either the Company or the charterers from material adverse events. Variable lease payments in the Company’s time charters vary based on changes on freight market index. The Company has the option
to convert some of these variable lease payments to fixed based on the prevailing Capesize forward freight agreement rates.
As at June 30, 2023, the Company operates certain of its vessels under time charter agreements, considered as operating leases accounted for as
per ASC 842 requirements.
The following table sets forth the Company’s future minimum contractual charter revenue based on vessels committed to non-cancelable time charter
contracts as at June 30, 2023. For index-linked time charter contracts the calculation was made using the charter rates that prevail at the balance sheet date for index-linked time charters and the fixed rates for fixed periods time charters (these
amounts do not include any assumed off-hire).
|
Twelve month periods ending June 30,
|
Amount
|
|||
|
2024
|
|
|||
|
2025
|
|
|||
|
Total
|
|
|||
As at June 30, 2023, the Company had an aggregate amount of unrecognized unconditional purchase obligation amounting to $16,033 , in connection with the agreement to acquire a vessel from an unaffiliated third party, under which the Company had paid an advance of such
purchase price (Note 5) and the balance will be paid on the delivery of the vessel (Note 15).
At the end of Chrisea’s 18-month bareboat charter, the Company has an option to repurchase the vessel for $12,360 (Note 6).
On April 19, 2023, the Company entered into a bareboat charter agreement with an unaffiliated third party for a secondhand Panamax
vessel, the Ikan Kerapu, which was renamed Synthesea. The vessel was delivered to the Company on August 1, 2023 (Note 15). The Company made a down payment of $3,500
on signing of the bareboat charter agreement and is presented under “Prepaid expenses other, non-current” in the accompanying consolidated balance sheets and a payment of $3,500 upon commencement of the bareboat charter (Note 15). The duration of the bareboat is 12 months plus 30 days in the Company’s option. The daily charter rate is $8 , while the Company has an option to purchase the vessel at the end of the charter period for $17,100 .
F-14
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
| 10. |
Capital Structure:
|
Details of the Company’s common stock and warrants are discussed in Note 9 of the consolidated financial statements for the year ended December 31, 2022, included in
the Company’s 2022 annual report on Form 20-F filed with the SEC on April 4, 2023 and are supplemented by the below new activities into the six-month period ended June 30, 2023.
| i) |
Dividends
|
On January 10, 2023 , the Company
paid a special dividend of $7,373 ($1.00
per common share to all common stockholders, as of record date December 12, 2022 , in connection with the profitable sale of two tanker vessels in 2022) which was previously declared on November 29, 2022 .
On February 22, 2023 , the Company
announced the initiation of a regular quarterly dividend of $0.075 per common share and declared a dividend of $0.075 per common share for the fourth quarter of 2022. The quarterly dividend of $667 for the fourth quarter of 2022 was paid on April 6, 2023 .
On May 17, 2023 , the company declared a
dividend of $0.075 per common share for the first quarter of 2023 which was paid on July 6, 2023 to all shareholders of record as of June 22, 2023 .
The dividend declared amounted to $667 and is included in “Dividends payable” in the accompanying consolidated balance sheets.
| ii) |
Common stock buybacks
|
As of June 30, 2023, the Company has repurchased 67,294
of its outstanding common shares at an average price of approximately $2.85 and a total of $193 , inclusive of commissions and fees, pursuant to the share repurchase plan approved by the Company’s Board of Directors in October 2022, as extended. All the repurchased
shares were cancelled and restored to the status of authorized but unissued shares as of June 30, 2023.
| iii) |
Warrants
|
During the six-month period ended June 30, 2023, 779,200 shares were issued from Class A warrants’ exercises, for gross proceeds of $1,883 . As of June
30, 2023, 6,962,770 Class A warrants remained outstanding. All warrants are classified in equity, according to the Company’s
accounting policy. Following the payment of the special dividend of $1.00 per common share on January 10, 2023, the exercise price of
the Class A warrants was adjusted at a price of $2.25 per warrant effective on January 11, 2023 pursuant to the antidilution provisions
of the warrant agreement. 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 the warrant’s agreement.
As of June 30, 2023, the number of common shares that can potentially be issued under the outstanding Class A warrants are 6,962,770 .
F-15
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
| 11. |
Vessel Revenue, net and Voyage Expenses:
|
Disaggregation of Revenue
The Company disaggregates its revenue from contracts with customers by the type of charter (time and spot charters). The following table
presents the Company’s income statement figures derived from time charters for the six-month periods ended June 30, 2023 and from inception (January 20, 2022) to June 30, 2022:
|
June 30,
2023
|
From
January 20, 2022
to June 30, 2022
|
|||||||
|
Vessel revenues from time charters, net of commissions
|
|
|
||||||
|
Total
|
|
|
||||||
The Company disaggregates its revenue from contracts with customers by the type of charter (time and spot charters). The
following table presents the Company’s net trade accounts receivable disaggregated by revenue source as at June 30, 2023 and December 31, 2022:
|
June 30,
|
December 31,
|
|||||||
|
2023
|
2022
|
|||||||
|
Accounts receivable trade, net from spot charters
|
|
|
||||||
|
Accounts receivable trade, net from time charters
|
|
|
||||||
|
Total
|
|
|
||||||
Deferred revenue represents cash received in advance of performance under the contract prior to the balance sheet date and is realized when the
associated revenue is recognized under the contract in periods after such date. Deferred revenue as of June 30, 2023 and December 31, 2022 was $216
and $1,027 and relates entirely to ASC 842.
Charterers individually accounting for more than 10% of revenues for the six-month periods ended June 30, 2023 and for the period from inception
(January 20, 2022) through June 30, 2022:
|
Customer
|
2023
|
2022
|
||
|
A
|
|
|
|
|
|
B
|
|
|
|
|
|
C
|
|
|
|
|
|
D
|
|
|
|
|
|
Total
|
|
|
|
Voyage Expenses
The following table presents the Company’s statement of operations’ figures derived from time charters and for unfixed periods for the period from for
the six-month periods ended June 30, 2023 and for the period from inception (January 20, 2022) through June 30, 2022:
|
June 30,
2023
|
From
January 20, 2022
to June 30, 2022
|
|||||||
|
Voyage expenses from time charters
|
|
|
||||||
|
Voyage expenses for unfixed periods
|
|
|
||||||
|
Total
|
|
|
||||||
F-16
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
| 12. |
Interest and Finance Costs:
|
Interest and finance costs are analyzed as follows:
|
June 30, 2023
|
From
January 20, 2022
to June 30, 2022
|
|||||||
|
Interest on long-term debt and other financial liabilities
|
|
|
||||||
|
Amortization of debt finance costs and debt discounts
|
|
|
||||||
|
Interest on finance lease liability
|
|
|
||||||
|
Other
|
|
|
||||||
|
Total
|
|
|
||||||
| 13. |
Loss per Share:
|
The calculation of net loss per common share is summarized below:
|
June 30, 2023
|
From
January 20, 2022
to June 30, 2022
|
|||||||
|
Net loss
|
$
|
(
|
)
|
$
|
|
|||
|
Less: Dividends to non-vested participating securities
|
(
|
)
|
|
|||||
|
Net loss attributable to common shareholders, basic & diluted
|
$
|
(
|
)
|
$
|
|
|||
|
Weighted average common shares outstanding, basic & diluted
|
||||||||
|
Net loss per share attributable to common shareholders, basic & diluted
|
$ | ( |
) | $ | ||||
The Company calculates basic loss per share in conformity with the two-class method required for companies with participating securities. The
calculation of basic loss per share does not consider the non-vested shares as outstanding until the time-based vesting restrictions have lapsed. Net loss attributable to common shareholders for the six-month period ended June 30, 2023 is adjusted
by the amount of dividends on non-vested participating securities. Undistributed losses were not allocated to non-vested participating securities because they do not have a contractual obligation to share in losses. The Company calculated diluted
loss per share in conformity with the two-class method required for companies with participating securities since the two-class method was more dilutive. For the six-month period ended June 30, 2023, 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 outstanding warrants calculated with the
treasury stock method.
| 14. |
Equity Incentive Plan:
|
Details of the Company’s Equity Incentive Plan are discussed in Note 13 of the consolidated financial statements for the year ended December 31, 2022, included in
the Company’s 2022 annual report on Form 20-F filed with the SEC on April 4, 2023 and are supplemented by the below new activities into the six-month period ended June 30, 2023.
The related expense for shares granted to the
Company’s Board of Directors and certain of its service providers for the six-month period ended June 30, 2023 and from the period from inception (January 20, 2022) through June 30, 2022, amounted to $2,175 and $, respectively, and is included under “General and administration expenses” in the Company’s unaudited interim consolidated
statements of operations. During the six-month period ended June 30, 2023, 899,986 shares vested and 233,330 shares will vest on October 5, 2023, which were granted on
December 28, 2022.
The unrecognized cost for the non-vested shares granted to the Company’s Board of Directors and certain of its service providers for the
six-month period ended June 30, 2023 and from inception (January 20, 2022) through June 30, 2022 amounted to $348 and $, respectively. On June 30, 2023, the weighted-average period over which the total compensation cost related to non-vested awards granted to the
Company’s Board of Directors and certain of its service providers not yet recognized is expected to be recognized is 0.26 years.
F-17
United Maritime Corporation
Notes to the Unaudited Interim Consolidated Financial Statements
(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)
| 15. |
Subsequent Events
|
On July 6, 2023, the Company paid a dividend of $667
(Note 10).
On August 1, 2023, the Company took delivery of the vessel Synthesea. The
transaction was financed by a bareboat charter (Note 9) and two cash payments of $3,500
On August 3, 2023 , the Company
announced a regular quarterly dividend of $0.075 per share for the second quarter of 2023, payable on or about October 6, 2023 to all shareholders of record as of September 22, 2023 .
On August 9, 2023, the Company entered into a deed of accession, amendment and restatement of the August 2022 Entrust Facility pursuant to which Exelixsea Maritime
Co. acceded thereto as borrower. Under the terms of the amended agreement, the $15,000 tranche secured by the Epanastasea shall remain blocked in favor of the security agent for the period from the vessel’s delivery to her new owners until the acquisition of the Santa Barbara tbr Exelixsea. In addition, the fixed interest rate was amended to 9.00 % per annum as of the time of the Epanastasea’s
delivery to her new owner.
On August 10, 2023, the Company sold the Epanastasea to an unaffiliated third-party for a gross sale price of $37,500 . The estimated gain on the sale is expected to be approximately
$12,000 .
F-18
United Maritime Predecessor
INDEX TO UNAUDITED CARVE-OUT FINANCIAL STATEMENTS
|
Page
|
|
|
F-2
|
|
|
F-3
|
|
|
F-4
|
|
|
F-5
|
|
|
F-6
|
F-1
United Maritime Predecessor
June 30, 2022 (unaudited) and December 31, 2021
(In US Dollars)
|
Notes
|
June 30, 2022
|
December 31, 2021
|
||||||||||
|
ASSETS
|
||||||||||||
|
Current assets:
|
||||||||||||
|
Cash and cash equivalents
|
5
|
|
|
|||||||||
|
Accounts receivable trade
|
|
|
||||||||||
|
Inventories
|
|
|
||||||||||
|
Prepaid expenses
|
|
|
||||||||||
|
Total current assets
|
|
|
||||||||||
|
Fixed assets:
|
||||||||||||
|
Vessel, net
|
7
|
|
|
|||||||||
|
Total fixed assets
|
|
|
||||||||||
|
Other non-current assets:
|
||||||||||||
|
Deferred charges, net and other long-term investments
|
6
|
|
|
|||||||||
|
TOTAL ASSETS
|
|
|
||||||||||
|
LIABILITIES AND PARENT EQUITY
|
||||||||||||
|
Current liabilities:
|
||||||||||||
|
Current portion of long-term debt, net of deferred finance costs of $
|
8
|
|
|
|||||||||
|
Trade accounts and other payables
|
6
|
|
|
|||||||||
|
Accrued liabilities
|
|
|
||||||||||
|
Deferred revenue
|
|
|
||||||||||
|
Total current liabilities
|
|
|
||||||||||
|
Non-current liabilities:
|
||||||||||||
|
Long-term debt, net of current portion and deferred finance costs of $
|
8
|
|
|
|||||||||
|
Other liabilities, non-current
|
|
|
||||||||||
|
Total liabilities
|
|
|
||||||||||
|
Commitments and contingencies
|
10
|
|
|
|||||||||
|
PARENT’S EQUITY
|
||||||||||||
|
Parent investment, net
|
4
|
|
|
|||||||||
|
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||||||
|
Parent equity, net
|
|
|
||||||||||
|
TOTAL LIABILITIES AND PARENT EQUITY
|
|
|
||||||||||
The accompanying notes are an integral part of these unaudited interim carve-out financial statements.
F-2
United Maritime Predecessor
Unaudited Interim Carve-out Statements of Operations
For the six-month periods ended June 30, 2022 and 2021
(In US Dollars)
|
Notes
|
2022
|
2021
|
||||||||||
|
Revenues:
|
||||||||||||
|
Vessel revenue
|
9
|
|
|
|||||||||
|
Commissions - related party
|
3
|
(
|
)
|
(
|
)
|
|||||||
|
Commissions
|
(
|
)
|
(
|
)
|
||||||||
|
Vessel revenue, net
|
|
|
||||||||||
|
Expenses:
|
||||||||||||
|
Voyage expenses
|
(
|
)
|
(
|
)
|
||||||||
|
Vessel operating expenses
|
(
|
)
|
(
|
)
|
||||||||
|
Management fees - related party
|
3
|
(
|
)
|
(
|
)
|
|||||||
|
Management fees
|
(
|
)
|
(
|
)
|
||||||||
|
General and administration expenses
|
(
|
)
|
(
|
)
|
||||||||
|
Amortization of deferred dry-docking costs
|
6
|
(
|
)
|
(
|
)
|
|||||||
|
Depreciation
|
7
|
(
|
)
|
(
|
)
|
|||||||
|
Operating (loss) / income
|
(
|
)
|
|
|||||||||
|
Other (expenses) / income, net:
|
||||||||||||
|
Interest and finance costs, net
|
11
|
(
|
)
|
(
|
)
|
|||||||
|
Foreign currency exchange gain / (losses), net
|
|
(
|
)
|
|||||||||
|
Total other expenses, net
|
(
|
)
|
(
|
)
|
||||||||
|
Net loss
|
(
|
)
|
(
|
)
|
||||||||
The accompanying notes are an integral part of these unaudited interim carve-out financial statements.
F-3
United Maritime Predecessor
For the six-month periods ended June 30, 2022 and 2021
(In US Dollars)
|
Parent
Investment, Net
|
Accumulated
Deficit
|
Total Equity
|
||||||||||
|
Balance, December 31, 2020
|
|
(
|
)
|
|
||||||||
|
Parent investment, net (Note 4)
|
|
|
|
|||||||||
|
Net loss
|
|
(
|
)
|
(
|
)
|
|||||||
|
Balance, June 30, 2021
|
|
(
|
)
|
|
||||||||
|
Parent
Investment, Net
|
Accumulated
Deficit
|
Total Equity
|
||||||||||
|
Balance, December 31, 2021
|
|
(
|
)
|
|
||||||||
|
Parent investment, net (Note 4)
|
|
|
|
|||||||||
|
Net loss
|
|
(
|
)
|
(
|
)
|
|||||||
|
Balance, June 30, 2022
|
|
(
|
)
|
|
||||||||
The accompanying notes are an integral part of these unaudited interim carve-out financial statements.
F-4
United Maritime Predecessor
For the six-month periods ended June 30, 2022 and 2021
(In US Dollars)
|
2022
|
2021
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net loss
|
(
|
)
|
(
|
)
|
||||
|
Adjustments to reconcile net loss to net cash (used in) / provided by operating activities:
|
||||||||
|
Depreciation
|
|
|
||||||
|
Amortization of deferred dry-docking costs
|
|
|
||||||
|
Amortization of deferred finance charges
|
|
|
||||||
|
Changes in operating assets and liabilities:
|
||||||||
|
Accounts receivable trade, net
|
|
(
|
)
|
|||||
|
Inventories
|
(
|
)
|
(
|
)
|
||||
|
Prepaid expenses
|
(
|
)
|
|
|||||
| Deferred charges, net and other long-term investments |
(
|
)
|
|
|||||
|
Trade accounts and other payables
|
|
|
||||||
|
Accrued liabilities
|
|
|
||||||
|
Deferred revenue
|
(
|
)
|
(
|
)
|
||||
|
Net cash (used in) / provided by operating activities
|
(
|
)
|
|
|||||
|
Cash flows from investing activities:
|
||||||||
|
Vessel’s improvements
|
(
|
)
|
|
|||||
|
Net cash used in investing activities
|
(
|
)
|
|
|||||
|
Cash flows from financing activities:
|
||||||||
|
Parent investment, net
|
|
|
||||||
|
Repayments of long term debt
|
(
|
)
|
(
|
)
|
||||
|
Net cash provided by / (used in) financing activities
|
|
(
|
)
|
|||||
|
Net (decrease) / increase in cash and cash equivalents and restricted cash
|
(
|
)
|
|
|||||
|
Cash and cash equivalents and restricted cash at beginning of period
|
|
|
||||||
|
Cash and cash equivalents and restricted cash at end of period
|
|
|
||||||
|
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||
|
Cash paid during the period:
|
||||||||
|
Interest
|
|
|
||||||
|
Noncash investing activities
|
||||||||
|
Vessel’s improvements
|
(
|
)
|
|
|||||
The accompanying notes are an integral part of these unaudited interim carve-out financial statements.
F-5
United Maritime Predecessor
Notes to the Unaudited Interim Carve-out Financial Statements
June 30, 2022
(All amounts in US Dollars, unless otherwise stated)
| 1. |
Basis of Presentation and General Information:
|
United Maritime Corporation (the “Company” or “United”) was incorporated by Seanergy Maritime Holdings Corp. (or “Seanergy” or “Parent”) on January
20, 2022 under the laws of the Republic of the Marshall Islands, having a share capital of 500 registered shares, of no par value,
issued to the Parent. The Company following the completion of the spin-off in July 2022 (Note 12), serves as the holding company of the following vessel-owning company which was a subsidiary of Seanergy (the “Subsidiary”, or “United Maritime
Predecessor”):
|
•
|
Sea Glorius Shipping Co.
|
In particular, in July 2022, the Parent contributed the Subsidiary to United and, as the sole shareholder of the Company, distributed the Company’s
common shares to its shareholders on a pro rata basis (Note 12).
The accompanying unaudited interim predecessor carve-out financial statements are those of the Subsidiary for all periods presented using the
historical carrying costs of the assets and the liabilities of the ship-owning company above from the dates of its incorporation.
The Company is incorporated to provide global shipping transportation services through the ownership of vessels. The vessel is owned through a
separate wholly-owned subsidiary.
As of June 30, 2022, the Subsidiary reported a working capital deficit of $4,921,171 , which is mainly attributable to the current portion of the long-term debt of $1,400,000
(Note 8) and the increase in trade accounts and other payables and in accrued liabilities due to the vessel’s recent dry-docking. The projected cash flows of the Subsidiary indicate that it will be able to meet its liquidity requirements for
the twelve-month period ended following the date of issuance of these financial statements.
The accompanying unaudited interim carve-out 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 carve-out 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 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 six months ended June 30, 2022, are not necessarily indicative of
the results that might be expected for the fiscal year ending December 31, 2022.
The carve-out balance sheet as of December 31, 2021 has been derived from the audited predecessor carve-out 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 Russia’s invasion of Ukraine in February 2022, the U.S., several European Union nations, the UK and other countries have announced
sanctions against Russia. The sanctions announced by the U.S. and other countries against Russia include, among others, restrictions on selling or importing goods, services or technology in or from affected regions, travel bans and asset
freezes impacting connected individuals and political, military, business and financial organizations in Russia, severing large Russian banks from U.S. and/or other financial systems, and barring some Russian enterprises from raising money in
the U.S. market. The U.S., EU nations and other countries could impose wider sanctions and take other actions as a result of the war. With uncertainty remaining at high levels with regards to the global impact of the sanctions already
announced to date and the possibility of additional sanctions as well as retaliation measures from Russia’s side that may follow in the period to come, it is difficult to accurately assess the exact impact on the Company. To date, no apparent
consequences have been identified on the Company’s business, nor any specific implications on any of its existing counterparties, including clients, suppliers and lenders. It should be noted however that since the Company employs Ukrainian
seafarers, it may face problems in relation to their employment, repatriation, salary payments and be subject to claims to this respect. Notwithstanding the foregoing, it is possible that the war might eventually have an adverse effect our
business, financial condition, results of operations and cash flows.
The outbreak of the COVID-19 virus has had a negative effect on the global economy and has adversely impacted the international dry-bulk shipping
industry into which the Subsidiary operates. As the situation continues to evolve, it is difficult to predict the long-term impact of the pandemic on the industry. The Subsidiary has not been significantly affected by COVID -19, and is
constantly monitoring the developing situation, to the extent possible, the impact of COVID-19 to the Subsidiary.
F-6
United Maritime Predecessor
Notes to the Unaudited Interim Carve-out Financial Statements
June 30, 2022
(All amounts in US Dollars, unless otherwise stated)
| 2. |
Significant Accounting Policies:
|
A discussion of the Company’s significant accounting policies can be found in the Company’s carve-out financial statements
included in the registration statement on Form F-1 for the year ended December 31, 2021, filed by the Company with the SEC on July 12, 2022. There have been no material changes to these policies in the six-month period ended June 30, 2022.
Recent Accounting Pronouncements Adopted
On January 1, 2022, the Company adopted ASU No. 2021-05 Leases (Topic 842): Lessors-Certain Leases with Variable
Lease Payments. The ASU amends the lessor lease classification guidance in ASC 842 for leases that include any amount of variable lease payments that are not based on an index or rate. If such a lease meets the criteria in ASC
842-10-25-2 through 25-3 for classification as either a sales-type or direct financing lease, and application of the sales-type or direct financing lease recognition guidance would result in recognition of a selling loss, then the amendments
require the lessor to classify the lease as an operating lease. The adoption of ASU No. 2021-05 did not have a material effect in the Company’s carve-out financial statements and disclosures.
| 3. |
Transactions with Related Parties:
|
The Subsidiary receives management services from Seanergy Management Corp. (“Seanergy Management”), a Marshall Islands corporation, a wholly owned
subsidiary controlled by Seanergy. Under the services agreement entered into on September 11, 2015, United Maritime Predecessor pays Seanergy Management a commission fee of 1.25 % on hire, freight and demurrage revenue earned for chartering and post fixture services provided. The commission expense for the six-month periods ended June 30, 2022
and 2021 amounted to $27,725 and $30,488 ,
respectively, and is separately reflected under Commissions - related party in the accompanying statements of operations. In addition, under the same agreement, the Subsidiary pays Seanergy Management a daily fee of $650 for the provision of certain other management services. Under a services agreement entered into on June 3, 2022, the Subsidiary pays Seanergy
Shipmanagement, a subsidiary of Seanergy, a fixed management fee of $14,000 per vessel per month starting in June 2022 for the
provision of certain services such as technical management and insurance arrangements. Management fees charged for the six-month periods ended June 30, 2022 and 2021 amounted to $130,717 and $117,650 , respectively, and are separately
reflected as Management fees - related party in the accompanying statements of operations. United Maritime Predecessor’s amounts due to Seanergy Management as of June 30, 2022 and December 31, 2021 are assumed by the Parent (Note 4).
| 4. |
Parent Investment, Net:
|
As of June 30, 2022 and December 31, 2021, Parent investment, net amounting to $8,998,552 and $7,868,678 , respectively, consists of the
amounts contributed by the Parent, to finance part of the acquisition cost of the vessel, commercial and management services, intercompany amounts due to or from the Parent for working capital purposes, which are forgiven and treated as
contributions or distributions of capital and other general and administrative expenses allocated to the United Maritime Predecessor by Parent. Allocated general and administrative expenses include expenses of the Parent such as executive’s
cost, legal, treasury, regulatory compliance and other costs. These expenses were allocated on a pro rata basis, based on the number of ownership days of the Subsidiary’s vessel compared to the number of ownership days of the total fleet of the
Parent. Such allocations are believed to be reasonable, but may not reflect the actual costs if the United Maritime Predecessor had operated as a standalone company.
As part of Parent, United Maritime Predecessor was dependent upon Parent for all of its working capital and financing requirements, as Parent uses
a centralized approach to cash management and financing of its operations. Financial transactions relating to United Maritime Predecessor are accounted for through the Parent equity account and reflected in the carve-out statements of Parent’s
equity as an increase or decrease in Parent investment, net. Accordingly, none of Parent’s cash, cash equivalents or debt at the corporate level have been assigned to the United Maritime Predecessor in the financial statements. Parent equity,
net represents Parent’s interest in the recorded net assets of the United Maritime Predecessor.
F-7
United Maritime Predecessor
Notes to the Unaudited Interim Carve-out Financial Statements
June 30, 2022
(All amounts in US Dollars, unless otherwise stated)
| 5. |
Cash and Cash Equivalents:
|
The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheets that sum to the
total of the same such amounts shown in the statements of cash flows:
|
June 30, 2022
|
December 31, 2021
|
|||||||
|
Cash and cash equivalents
|
|
|
||||||
|
Total
|
|
|
||||||
Minimum liquidity, not legally restricted, as of June 30, 2022, of $250,000 as per the Subsidiary’s credit facility covenants is included in “Cash and cash equivalents”.
| 6. |
Deferred Charges, Net and Other Long-Term Investments:
|
Deferred charges and other long-term investments, non-current, include dry-dock charges and investment on equipment not yet installed to vessels.
The amounts in the accompanying balance sheets are analyzed as follows:
|
Deferred charges
|
||||
|
Balance December 31, 2020
|
|
|
||
|
Additions
|
|
|||
|
Amortization
|
(
|
)
|
||
|
Balance December 31, 2021
|
|
|||
|
Additions
|
|
|||
|
Amortization
|
(
|
)
|
||
|
Transferred to Vessels, Net
|
(
|
)
|
||
|
Balance June 30, 2022
|
|
|||
The Gloriuship underwent its scheduled dry-dock during the
second quarter of 2022. A significant part of the Trade accounts and other payables balance as of June 30, 2022, relates to the vessel’s dry-docking.
Amount of $72,318 of expenditures relate to the
installation of ballast water treatment system completed during the six-month period ended June 30, 2022 and were transferred to Vessels, Net and included part of Additions in Note 7 below.
| 7. |
Vessel, Net:
|
The amounts in the accompanying balance sheets are analyzed as follows:
|
June 30, 2022
|
December 31, 2021
|
|||||||
|
Cost:
|
||||||||
|
Beginning balance
|
|
|
||||||
|
- Additions
|
|
|
||||||
|
Ending balance
|
|
|
||||||
|
Accumulated depreciation:
|
||||||||
|
Beginning balance
|
(
|
)
|
(
|
)
|
||||
|
- Additions
|
(
|
)
|
(
|
)
|
||||
|
Ending balance
|
(
|
)
|
(
|
)
|
||||
|
Net book value
|
|
|
||||||
On November 3, 2015, the Subsidiary acquired the Gloriuship for a purchase price of $16,833,520 , which was financed through a loan with Hamburg Commercial Bank AG (formerly known as HSH Nordbank AG). Additionally, expenditures of $92,025 were capitalized during the years ended December 31, 2017 through December 31, 2020 concerning vessel additions. Additionally, amounts of $1,044,143 and $ of expenditures
related to the installation of ballast water treatment system were capitalized during the six-month period ended June 30, 2022 and for the year ended December 31, 2021, respectively. Amounts paid in each period in relation to the aforementioned
additions are included in “Vessels improvements” under “Cash flows from investing activities” in the statement of cash flows.
The Gloriuship is mortgaged to the secured loan with EnTrust (Note 8).
F-8
United Maritime Predecessor
Notes to the Unaudited Interim Carve-out Financial Statements
June 30, 2022
(All amounts in US Dollars, unless otherwise stated)
| 8. |
Long-Term Debt:
|
Details of the Company’s secured credit and other financial liabilities are discussed in Note 7 of the carve-out financial statements for the year ended December 31, 2021, included in the Company’s registration statement on Form F-1 filed with the SEC on July 12, 2022, and are supplemented by the below new activities within the period.
The amounts in the accompanying balance sheets are analyzed as follows:
|
June 30, 2022
|
December 31, 2021
|
|||||||
|
Secured loan facilities
|
|
|
||||||
|
Less: Deferred financing costs
|
(
|
)
|
(
|
)
|
||||
|
Total
|
|
|
||||||
|
Less – current portion
|
(
|
)
|
(
|
)
|
||||
|
Long-term portion
|
|
|
||||||
Existing Loan Facilities
Entrust Facility dated July 15, 2020
As of June 30, 2022, the total amount outstanding under this facility was $4,950,000 .
The annual principal payments required to be made after June 30, 2022, not taking into consideration the refinancing discussed
in Note 12 are as follows:
|
Twelve month periods ended June 30,
|
Amount
|
|||
|
2023
|
|
|||
|
2024
|
|
|||
|
2025
|
|
|||
|
2026
|
|
|||
|
Thereafter
|
|
|||
|
Total
|
|
|||
| 9. |
Financial Instruments:
|
The guidance for fair value measurements applies to all assets and liabilities that are being measured and reported on a fair value basis. This
guidance enables the reader of the financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. The same
guidance requires that assets and liabilities carried at fair value should be classified and disclosed in one of the following three categories based on the inputs used to determine its fair value:
| • |
Level 1: Quoted market prices in active markets for identical assets or liabilities;
|
|
•
|
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data;
|
|
•
|
Level 3: Unobservable inputs that are not corroborated by market data.
|
F-9
United Maritime Predecessor
Notes to the Unaudited Interim Carve-out Financial Statements
June 30, 2022
(All amounts in US Dollars, unless otherwise stated)
| (a) |
Significant Risks and Uncertainties, including Business and Credit Concentration
|
The Subsidiary places its temporary cash investments, consisting mostly of deposits, primarily with high credit qualified financial institutions.
The Subsidiary performs periodic evaluations of the relative credit standing of those financial institutions that are considered in the Subsidiary’s investment strategy. The Subsidiary limits its credit risk with accounts receivable by
performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable and does not have any agreements to mitigate credit risk.
For the six month period ended June 30, 2022, one
charterer accounted for all of the Company’s time charter revenues. The maximum aggregate amount of loss due to credit risk that the Company would incur if this charterer failed completely to perform according to the terms of the relevant time
charter party, amounted to $ as of June 30, 2022.
| (b) |
Fair Value of Financial Instruments
|
The fair values of the financial instruments shown in the balance sheets as of June 30, 2022 and December 31, 2021, represent management’s best
estimate of the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date.
Those fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the
asset or liability at the measurement date, the fair value measurement reflects the Subsidiary’s own judgments about the assumptions that mark et participants would use in pricing the asset or liability. Those judgments are developed by the
Subsidiary based on the best information available in the circumstances.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments:
| a) |
Cash and cash equivalents, accounts receivable trade, net and trade accounts and other payables: the carrying amounts approximate fair value because of the short maturity of these
instruments.
|
| b) |
Long-term debt: The fair value of fixed interest long-term debt is estimated using prevailing market rates as of the period end. The Subsidiary believes the terms of its fixed
interest long-term debt are similar to those that could be procured as of June 30, 2022, and the carrying value of $
|
| 10. |
Commitments and Contingencies:
|
Commitments
The following table sets forth the Subsidiary’s future minimum contractual charter revenue based on vessel’s committed non-cancelable time charter
contracts as at June 30, 2022 using the charter rates that prevail at the balance sheet date for index-linked time charters (these amounts do not include any assumed off-hire):
|
Twelve month periods ending June 30,
|
Amount
|
|||
|
2023
|
|
|||
|
Total
|
|
|||
Contingencies
Various claims, lawsuits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of
the shipping business. In addition, losses may arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Subsidiary’s vessel. 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 financial statements.
The Subsidiary 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 financial statements. The
Subsidiary is covered for liabilities associated with its vessel’s actions to the maximum limits as provided by Protection and Indemnity (P&I) Clubs, members of the International Group of P&I Clubs.
F-10
United Maritime Predecessor
Notes to the Unaudited Interim Carve-out Financial Statements
June 30, 2022
(All amounts in US Dollars, unless otherwise stated)
| 11. |
Interest and Finance Costs, net:
|
Interest and finance costs are analyzed as follows:
|
June 30,
|
||||||||
|
2022
|
2021
|
|||||||
|
Interest on long-term debt
|
|
|
||||||
|
Amortization of debt issuance costs
|
|
|
||||||
|
Other, net
|
(
|
)
|
|
|||||
|
Total
|
|
|
||||||
| 12. |
Subsequent Events:
|
On July 6, 2022, the Parent announced that it has completed the spin-off of its wholly-owned subsidiary, United, effective July 5, 2022. Immediately prior to the
completion of the spin-off, the Parent contributed the Subsidiary to United.
On July 28, 2022, the Entrust Facility was amended and restated with the purpose to increase the facility from the total amount outstanding to $14,000,000 , change the maturity date to February 1, 2024 , alter the guarantor of the facility to United and cancel all applicable financial covenants. On August 1, 2022, the drawdown was completed resulting to a new balance outstanding of $14,000,000 . The amended and restated facility bears a fixed interest of 7.90 % per annum and is repayable through three installments
of $1,000,000 each on the dates falling nine, twelve and fifteen months after the drawdown and a final balloon payment of $11,000,000 payable on maturity date.
F-11