|
PERFORMANCE SHIPPING INC.
|
|
(Registrant)
|
|
|
Dated: August 4, 2023
|
|
|
|
|
/s/ Andreas Michalopoulos
|
|
By: Andreas Michalopoulos
|
|
Chief Executive Officer
|
• |
Ownership days. We define ownership days as the
aggregate number of days in a period during which each vessel in our fleet has been owned by us. Ownership days are an indicator of the size of our fleet over a period and affect both the amount of revenues and the amount of expenses that we
record during a period.
|
• |
Available days. We define available days as the
number of our ownership days less the aggregate number of days that our vessels are off-hire due to scheduled repairs or repairs under guarantee, vessel upgrades or special surveys, including the aggregate amount of time that we spend
positioning our vessels for such events. The shipping industry uses available days to measure the number of days in a period during which vessels should be capable of generating revenues.
|
• |
Operating days, including ballast leg. We
define operating days, including ballast leg, as the number of available days in a period less the aggregate number of days that our vessels are off-hire. The specific calculation counts as on-hire the days of the ballast leg of the spot
voyages, as long as a charter party is in place. The shipping industry uses operating days to measure the aggregate number of days in a period during which vessels actually generate revenues.
|
• |
Fleet utilization. We calculate fleet
utilization by dividing the number of our operating days during a period by the number of our available days during the period. The shipping industry uses fleet utilization to measure a company’s efficiency in finding suitable employment for
its vessels and minimizing the amount of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades and special surveys, including vessel positioning for such events.
|
• |
Time Charter Equivalent (TCE) rates. We define
TCE rates as our voyage and time charter revenues, less voyage expenses during a period divided by the number of our available days during the period, which is consistent with industry standards. Voyage expenses include port charges, bunker
(fuel) expenses, canal charges and commissions. TCE is a non-GAAP measure. TCE rate is a standard shipping industry performance measure used primarily to compare daily earnings generated by vessels despite changes in the mix of charter types
(i.e., voyage (spot) charters, time charters, and bareboat charters).
|
• |
Daily Operating Expenses. We define daily
operating expenses as total vessel operating expenses, which include crew wages and related costs, the cost of insurance and vessel registry, expenses relating to repairs and maintenance, the costs of spares and consumable stores, lubricant
costs, tonnage taxes, regulatory fees, environmental costs, lay-up expenses and other miscellaneous expenses divided by total ownership days for the relevant period.
|
For the six months ended June 30,
|
||||||||
2023
|
2022
|
|||||||
Ownership days
|
1,448
|
905
|
||||||
Available days
|
1,408
|
875
|
||||||
Operating days, including ballast leg
|
1,390
|
855
|
||||||
Fleet utilization
|
99
|
%
|
98
|
%
|
||||
Time charter equivalent (TCE) rate
|
$
|
41,526
|
$
|
18,888
|
||||
Daily vessel operating expenses
|
$
|
7,135
|
$
|
6,936
|
For the six months ended June 30,
|
||||||||
2023
|
2022
|
|||||||
(in thousands of U.S. dollars,
except for available days and TCE rate)
|
||||||||
Voyage and time charter revenues
|
$
|
60,984
|
$
|
25,275
|
||||
Less: voyage expenses
|
(2,515
|
)
|
(8,748
|
)
|
||||
Time charter equivalent revenues
|
$
|
58,469
|
$
|
16,527
|
||||
Available days
|
1,408
|
875
|
||||||
Time charter equivalent (TCE) rate
|
$
|
41,526
|
$
|
18,888
|
• |
the duration of our charters;
|
• |
our decisions relating to vessel acquisitions and disposals;
|
• |
the amount of time that we spend positioning our vessels;
|
• |
the amount of time that our vessels spend in drydock undergoing repairs;
|
• |
maintenance and upgrade work;
|
• |
the age, condition, and specifications of our vessels;
|
• |
levels of supply and demand in the shipping industry; and
|
• |
other factors affecting spot market charter rates for vessels.
|
Results of Operations
|
For the Six Months Ended June 30,
|
|||||||||||||||
2023
|
2022
|
Variation
|
% change
|
|||||||||||||
in millions of U.S. dollars
|
||||||||||||||||
Revenue
|
61.0
|
25.3
|
35.7
|
141
|
%
|
|||||||||||
Voyage expenses
|
(2.5
|
)
|
(8.7
|
)
|
6.2
|
(71
|
%)
|
|||||||||
Vessel operating expenses
|
(10.3
|
)
|
(6.3
|
)
|
(4.0
|
)
|
63
|
%
|
||||||||
Depreciation and amortization of deferred charges
|
(7.5
|
)
|
(4.1
|
)
|
(3.4
|
)
|
83
|
%
|
||||||||
General and administrative expenses
|
(3.4
|
)
|
(3.3
|
)
|
(0.1
|
)
|
3
|
%
|
||||||||
Reversal / (Provision) for credit losses and write offs
|
0.1
|
(0.1
|
)
|
0.2
|
(200
|
%)
|
||||||||||
Foreign currency gains / (losses)
|
0.0
|
0.1
|
(0.1
|
)
|
(100
|
%)
|
||||||||||
Interest and finance costs
|
(5.4
|
)
|
(1.1
|
)
|
(4.3
|
)
|
391
|
%
|
||||||||
Interest income
|
1.2
|
0.0
|
1.2
|
-
|
||||||||||||
Changes in fair value of warrants’ liability
|
0.9
|
0.0
|
0.9
|
-
|
||||||||||||
Net income
|
34.1
|
1.8
|
32.3
|
1.794
|
%
|
Page
|
|
F-2
|
|
F-3
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
ASSETS
|
June 30, 2023
|
December 31, 2022
|
||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Accounts receivable, net of provision for credit losses (Note 3)
|
|
|
||||||
Deferred voyage expenses
|
|
|
||||||
Inventories
|
|
|
||||||
Prepaid expenses and other assets
|
|
|
||||||
Current assets from discontinued operations
|
|
|
||||||
Total current assets
|
|
|
||||||
FIXED ASSETS:
|
||||||||
Advances for vessel under construction and other vessels’ costs (Note 5)
|
||||||||
Vessels, net (Note 6)
|
|
|
||||||
Property and equipment, net
|
|
|
||||||
Total fixed assets
|
|
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Restricted cash, non-current (Note 7) |
||||||||
Right of use asset under operating leases (Note 8)
|
|
|
||||||
Deferred charges, net
|
|
|
||||||
Other non-current assets
|
|
|
||||||
Prepaid charter revenue |
||||||||
Total non-current assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Current portion of long-term bank debt, net of unamortized deferred fin. costs (Note 7)
|
$
|
|
$
|
|
||||
Accounts payable, trade and other
|
|
|
||||||
Due to (Note 4)
|
|
|
||||||
Accrued liabilities
|
|
|
||||||
Deferred revenue (Note 3) |
||||||||
Lease liabilities, current (Note 8)
|
|
|
||||||
Current liabilities from discontinued operations
|
|
|
||||||
Total current liabilities
|
|
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term bank debt, net of unamortized deferred financing costs (Note 7)
|
|
|
||||||
Other liabilities, non-current
|
|
|
||||||
Long-term lease liabilities (Note 8)
|
|
|
||||||
Commitments and contingencies (Note 8)
|
|
|
||||||
Fair value of warrants’ liability (Notes 9 and 11) | ||||||||
Total long-term liabilities
|
|
|
||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Preferred stock, $
|
|
|
||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital (Note 9)
|
|
|
||||||
Other comprehensive income
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
2023
|
2022
|
|||||||
REVENUE:
|
||||||||
Revenue (Note 3)
|
$
|
|
$
|
|
||||
EXPENSES:
|
||||||||
Voyage expenses
|
|
|
||||||
Vessel operating expenses
|
|
|
||||||
Depreciation and amortization of deferred charges (Note 6)
|
|
|
||||||
General and administrative expenses (Notes 4 and 9)
|
|
|
||||||
(Reversal) / Provision for credit losses and write offs (Note 3)
|
(
|
)
|
|
|||||
Foreign currency losses / (gains)
|
|
(
|
)
|
|||||
Operating income
|
$
|
|
$
|
|
||||
OTHER INCOME / (EXPENSES)
|
||||||||
Interest and finance costs (Notes 4 and 7)
|
(
|
)
|
(
|
)
|
||||
Interest income
|
|
|
||||||
Changes in fair value of warrants’ liability (Note 11)
|
||||||||
Total other expenses, net
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Net income
|
$
|
|
$
|
|
||||
Income allocated to participating securities |
( |
) | ||||||
Deemed dividend on Series B preferred stock upon exchange of common stock (Notes 9
and 10)
|
( |
) | ||||||
Deemed dividend to the Series C preferred stockholders due to triggering of a down-
round feature (Notes 9 and 10)
|
( |
) | ||||||
Deemed dividend to the July 2022 and August 2022 warrants’ holders due to triggering of
a down-round feature (Notes 9 and 10)
|
( |
) | ||||||
Dividends on preferred stock (Note 10)
|
( |
) | ( |
) | ||||
Net income / (loss) attributable to common stockholders
|
$
|
|
$
|
(
|
)
|
|||
Earnings / (Loss) per common share, basic, total (Note 10)
|
$
|
|
$
|
(
|
)
|
|||
Earnings / (Loss) per common share, diluted, total (Note 10) |
$ | $ | ( |
) | ||||
Weighted average number of common shares, basic (Note 10) |
||||||||
Weighted average number of common shares, diluted (Note 10) |
2023
|
2022
|
|||||||
Net income
|
$
|
|
$
|
|
||||
Comprehensive income
|
$
|
|
$
|
|
Common Stock
|
Preferred Stock
|
Additional
|
Other
|
|||||||||||||||||||||||||||||||||
# of
|
Par
|
# of
|
# of |
Par
|
Paid-in
|
Comprehensive
|
Accumulated
|
|||||||||||||||||||||||||||||
Shares | Value |
B Shares
|
C Shares |
Value | Capital |
Income / (Loss)
|
Deficit | Total | ||||||||||||||||||||||||||||
Balance, December 31, 2021
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||||||||||||
- Net income
|
- |
|
-
|
- |
|
|
|
|
|
|||||||||||||||||||||||||||
- Common shares exchanged for Series B preferred shares (Note 9)
|
(
|
)
|
(
|
)
|
|
- |
|
|
|
(
|
)
|
|
||||||||||||||||||||||||
- Compensation cost on restricted stock and stock option awards (Note 9)
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
- Issuance of common stock under ATM program, net of issuance costs
|
||||||||||||||||||||||||||||||||||||
- Issuance of units, net of issuance costs
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Balance, June 30, 2022
|
|
$
|
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||||||||||||||||
Balance, December 31, 2022
|
$ |
$ |
$ |
$ |
$ |
( |
) | $ |
||||||||||||||||||||||||||||
- Net income
|
- | - | - | |||||||||||||||||||||||||||||||||
- Compensation cost on restricted stock awards (Note 9)
|
||||||||||||||||||||||||||||||||||||
- Issuance of common stock under ATM program, net of issuance costs (Note 9)
|
||||||||||||||||||||||||||||||||||||
- Issuance of common stock and Series B warrants, net of issuance costs (Note 9)
|
||||||||||||||||||||||||||||||||||||
- Alternative cashless exercise of Series A Warrants (Note 9)
|
||||||||||||||||||||||||||||||||||||
- Series B preferred shares converted to Series C preferred shares, net of expenses (Note
9)
|
- | ( |
) | |||||||||||||||||||||||||||||||||
- Repurchase and retirement of common stock, including expenses (Note 9)
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
- Deemed dividend to the July 2022 warrants holders due to triggering of a down-round
feature (Note 9)
|
- | - | - | ( |
) | |||||||||||||||||||||||||||||||
- Deemed dividend to the August 2022 warrants holders due to triggering of a down-round
feature (Note 9)
|
- | - | - | ( |
) | |||||||||||||||||||||||||||||||
- Deemed dividend to the Series C stockholders due to triggering of a down-round feature
(Note 9)
|
- | - | - | ( |
) | |||||||||||||||||||||||||||||||
- Dividends declared and paid on Series B preferred shares (at $
|
- | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||
- Dividends declared and paid on Series C preferred shares (at $
|
- | - | - | ( |
) | ( |
) | |||||||||||||||||||||||||||||
Balance, June 30, 2023 |
$ |
$ |
$ |
$ |
$ |
( |
) | $ |
2023
|
2022
|
|||||||
Cash Flows provided by / (used in) Operating Activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization of deferred charges (Note 6)
|
|
|
||||||
Amortization of deferred financing costs
|
|
|
||||||
Financing costs
|
||||||||
Changes in fair value of warrants’ liability
|
( |
) | ||||||
Amortization of prepaid charter revenue
|
||||||||
Compensation cost on restricted stock and stock option awards (Note 9)
|
|
|
||||||
(Increase) / Decrease in:
|
||||||||
Accounts receivable
|
|
(
|
)
|
|||||
Deferred voyage expenses
|
|
(
|
)
|
|||||
Inventories
|
|
|
||||||
Prepaid expenses and other assets
|
|
(
|
)
|
|||||
Right of use asset under operating leases
|
|
|
||||||
Other non-current assets
|
||||||||
Increase / (Decrease) in:
|
||||||||
Accounts payable, trade and other
|
(
|
)
|
(
|
)
|
||||
Due to related parties
|
(
|
)
|
(
|
)
|
||||
Accrued liabilities
|
(
|
)
|
|
|||||
Deferred revenue
|
||||||||
Other liabilities, non-current
|
|
(
|
)
|
|||||
Lease liabilities under operating leases
|
(
|
)
|
(
|
)
|
||||
Drydock costs
|
(
|
)
|
(
|
)
|
||||
Net Cash provided by / (used in) Operating Activities
|
$
|
|
$
|
(
|
)
|
|||
Cash Flows used in Investing Activities:
|
||||||||
Advances for vessel acquisition / under construction and other vessel costs (Note 5)
|
(
|
)
|
(
|
)
|
||||
Payments for vessels’ improvements (Note 6)
|
(
|
)
|
(
|
)
|
||||
Property and equipment additions
|
(
|
)
|
(
|
)
|
||||
Net Cash used in Investing Activities
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Cash Flows provided by Financing Activities:
|
||||||||
Proceeds from related party loans
|
||||||||
Proceeds from issuance of common shares, net offering costs | ||||||||
Repayments of long-term bank debt (Note 7)
|
(
|
)
|
(
|
)
|
||||
Issuance of common stock and warrants, net of issuance costs (Note 9) | ||||||||
Issuance of preferred stock, net of expenses (Note 9) |
||||||||
Common shares re-purchase and retirement, including expenses (Note 9) | ( |
) | ||||||
Issuance of common stock under ATM program, net of issuance costs (Note 9) |
||||||||
Payments of financing costs
|
|
(
|
)
|
|||||
Cash dividends (Note 10) |
( |
) | ||||||
Net Cash provided by Financing Activities
|
$
|
|
$
|
|
||||
Net increase in cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
||||
Cash, cash equivalents and restricted cash at beginning of the year
|
$
|
|
$
|
|
||||
Cash, cash equivalents and restricted cash at end of the period
|
$
|
|
$
|
|
||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
||||||||
Cash and cash equivalents at the end of the period
|
$
|
|
$
|
|
||||
Restricted cash at the end of the period
|
||||||||
Cash, cash equivalents and restricted cash at the end of the period
|
$
|
|
$
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION
|
||||||||
Interest payments, net of capitalized amounts
|
$
|
|
$
|
|
||||
Alternative cashless exercise of Series A Warrants
|
$ |
$ |
2.
|
Significant Accounting Policies and Recent Accounting Pronouncements
|
3.
|
Revenue, Accounts Receivable and Provision for Credit Losses
|
Charterer
|
2023 | 2022 | ||||||
A
|
|
%
|
|
|||||
B
|
% |
|
||||||
C
|
|
%
|
|
|||||
D
|
|
%
|
|
%
|
||||
E | % |
4.
|
Transactions with Related Parties
|
5.
|
Advances for Vessel Under Construction and Other Vessels’ Costs
|
June 30, 2023 |
December 31, 2022 |
|||||||
Pre-delivery installments
|
$
|
|
$
|
|
||||
Capitalized costs
|
|
|
||||||
Total
|
$
|
|
$
|
|
6.
|
Vessels, net
|
|
Vessels’ Cost
|
Accumulated Depreciation
|
Net Book Value
|
|||||||||
Balance, December 31, 2022
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
- Vessels’ improvements transferred from other non-current assets |
- | |||||||||||
- Vessels’ improvements
|
|
-
|
|
|||||||||
- Depreciation
|
-
|
(
|
)
|
(
|
)
|
|||||||
Balance, June 30, 2023
|
$
|
|
$
|
(
|
)
|
$
|
|
7.
|
Long-Term Debt
|
June 30, 2023
|
Current
|
Non-current
|
December 31, 2022
|
Current
|
Non-current
|
|||||||||||||||||||
Nordea Bank secured term loan
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Piraeus Bank secured term loans
|
|
|
|
|
|
|
||||||||||||||||||
Alpha Bank secured term loans
|
||||||||||||||||||||||||
less unamortized deferred financing costs
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||
Total debt, net of deferred financing costs
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Principal Repayment
|
||||
July 1, 2023 through June 30, 2024
|
$ |
|
||
July 1, 2024 through June 30, 2025
|
|
|||
July 1, 2025 through June 30, 2026
|
|
|||
July 1, 2026 through June 30, 2027 |
||||
July 1, 2027 through December 31, 2027 |
||||
Total
|
$
|
|
8.
|
Commitments and Contingencies
|
Amount
|
||||
Year 1
|
$
|
|
||
Year 2
|
|
|||
Year 3 |
||||
Total
|
$
|
|
||
Less imputed interest
|
(
|
)
|
||
Present value of lease liabilities
|
$
|
|
||
Lease liabilities, current
|
|
|||
Lease liabilities, non- current
|
|
|||
Present value of lease liabilities
|
$
|
|
Number
of Shares
|
Weighted
Average Grant
Date Price |
|||||||
Outstanding at December 31, 2021
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited or expired
|
|
|
||||||
Outstanding at June 30, 2022
|
|
$
|
|
|||||
Granted
|
|
|
||||||
Vested
|
(
|
)
|
|
|||||
Forfeited or expired
|
|
|
||||||
Outstanding at December 31, 2022
|
|
|
||||||
Granted
|
|
|
||||||
Vested
|
|
|
||||||
Forfeited or expired
|
|
|
||||||
Outstanding at June 30, 2023
|
|
$
|
|
10.
|
Earnings / (Loss) per Share
|
2023
|
2022
|
|||||||||||||||
Basic EPS
|
Diluted EPS
|
Basic EPS
|
Diluted EPS
|
|||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Income allocated to participating securities |
( |
) | ( |
) | ||||||||||||
less deemed dividends on Series B preferred stock upon exchange of common stock
|
|
|
(
|
)
|
(
|
)
|
||||||||||
less deemed dividend to the Series C preferred stockholders due to triggering of a down-round feature
|
(
|
)
|
-
|
|
|
|||||||||||
less deemed dividend to the July and August warrants’ holders due to triggering of a down-round feature
|
(
|
)
|
(
|
)
|
|
|
||||||||||
less dividends on preferred stock
|
(
|
)
|
-
|
(
|
)
|
(
|
)
|
|||||||||
less Changes in fair value of warrants’ liability | - | ( |
) | - | - | |||||||||||
Total net income / (loss) attributable to common stockholders
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Weighted average number of common shares, basic |
|
|
|
|
||||||||||||
Effect of dilutive shares | - | - | ||||||||||||||
Weighted average number of common shares, diluted |
|
|
|
|
||||||||||||
Earnings / (Loss) per common share
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
11.
|
Financial Instruments and Fair Value Disclosures
|
•
|
in a deemed dividend for the Company’s Series C Preferred Shares as of January 11, 2023, of $
|
•
|
in a deemed dividend for the Company’s Series C Preferred Shares as of January 12, 2023, of $
|
•
|
in a deemed dividend for the Company’s Series C Preferred Shares as of January 13, 2023, of $
|
•
|
in a deemed dividend for the Company’s Series C Preferred Shares as of January 19, 2023, of $
|
•
|
in a deemed dividend for the Company’s Series C Preferred Shares as of January 20, 2023, of $
|
•
|
in a deemed dividend for the Company’s Series C Preferred Shares as of January 25, 2023, of $
|
•
|
in a deemed dividend for the Company’s Series C Preferred Shares as of January 26, 2023, of $
|
•
|
in a deemed dividend for the Company’s Series C Preferred Shares as of March 1, 2023, of $
|
•
|
on March 7, 2023,
|
•
|
on March 8, 2023,
|
•
|
on March 9, 2023,
|
•
|
on March 10, 2023,
|
•
|
on March 17, 2023,
|
•
|
on June 15, 2023,
|
|
•
|
for the Company’s Series B Preferred Shares as of January 27, 2022, which was the date of the instrument’s issuance, to a fair value of $
|
|
•
|
for the Company’s Series C Preferred Shares as of October 17, 2022, which was the date of the instrument’s issuance, to a fair value of $
|
12.
|
Subsequent Events
|