Note 3 - Vessels

3 Months Ended

Mar. 31, 2016

Property, Plant and Equipment Disclosure [Text Block]

Note 3. Vessels

Vessel and Vessel Improvements

At March 31, 2016, the Company’s operating fleet consisted of 44 drybulk vessels.

As of December 31, 2015, we determined that the future undiscounted cash flows did not exceed the net book value on six of our vessels. This is a result of our intention to divest six of our older vessels in the short term period. As a result, we reduced the carrying value of each vessel to its fair market value as of December 31, 2015 and recorded an impairment charge of $50,872,734.

As of March 31, 2016, due to further reduction in asset value during the first quarter of 2016, we determined that the future undiscounted cash flows of six of our vessels did not exceed their net book value. As a result, we reduced the carrying value of each vessel to its fair market value as of March 31, 2016 and recorded an impairment charge of $6,167,262.

On April 26, 2016, the Company sold the vessel Peregrine for $2.7 million, after brokerage commissions, and expects to record a net loss of approximately $150,000 in the second quarter of 2016. The Peregrine was not available for delivery prior to April 26, 2016. A portion of the proceeds was used towards repayment of the term loan under the First Lien Facility.

In April 2016, the Company decided to sell an additional two vessels, MV Harrier and MV Falcon and reached an agreement to sell the vessels for $3.3 million each before brokerage commissions. The Company expects to realize a loss on sale of approximately $0.1 million for each vessel. Both the vessels are not available for delivery until May, 2016. The Company expects fifty percent of the net sale proceeds to be used to repay the term loan under the First Lien Facility.

Vessel and vessel improvements consist of the following:


Vessels and Vessel Improvements, at December 31, 2015	$	733,960,731
Purchase of Vessel Improvements		112,488
Depreciation Expense		(8,879,086	)
Vessel Impairment Charge		(6,167,262	)
Vessels and Vessel Improvements, at March 31, 2016	$	719,026,871