On June 21, 2023, the Company completed the
Spin-off (Note 1), and received 600,000 Series A Perpetual Convertible Preferred shares of C3is, having a liquidation preference of $25 per share and a par value of $0.01 per share. The Company is the holder
of all of the issued and outstanding Series A Perpetual Convertible Preferred shares of C3is (Note 1). The Series A Perpetual Convertible Preferred shares do not have voting rights. The Series A Perpetual Convertible Preferred are convertible into
common stock of C3is at the Company’s option at any time and from time to time on or after the date that is the date 90 days following the issuance date and currently have a conversion price equal to $1.2573. The conversion price will be
further adjusted to the lowest price of issuance of common stock by C3is in any registered offering of common stock of C3is after the original issuance of Series A Perpetual Convertible Preferred Shares. Furthermore, Imperial is entitled to receive
cumulative cash dividends, at the annual rate of 5.00% on the stated amount of $25 per share, of the 600,000 Series A Perpetual Convertible Preferred shares, receivable quarterly in arrears on the
15th day of January, April, July and October in each year, subject to C3is’s Board of Directors approval. The Company recognized for the six month period ended June 30, 2024 and for the
period from June 21, 2023 to June 30, 2023, the amount of $379,167 and $20,833, respectively, which is presented in ‘Dividend income from related party’ in the accompanying unaudited interim condensed consolidated statements of
comprehensive income.
As of December 31, 2023 and June 30, 2024, the aggregate value of investments in C3is amounted to
$12,798,500 and $12,796,417, including $162,500 and $160,417 of accrued dividends, respectively and are separately presented as ‘Investment in related party’ in the accompanying unaudited condensed consolidated balance sheets. As of
June 30, 2024, the Company did not identify any indications for impairment or any observable prices for identical or similar investments of the same issuer.
On July 7, 2023, the Company entered into a memorandum of agreement with C3is for the disposal of the vessel “Stealth Berana”
for an aggregate consideration of $43,000,000. The vessel was delivered to her new owners on July 14, 2023. 10% of the total consideration i.e. $4,300,000 was received in cash, while the remaining amount of $38,700,000 was received in July 2024
and had no stated interest. The Company’s receivable from C3is was recorded at its fair value of $35,700,000 (the “Remaining Selling Price”) on July 14, 2023. Since the collection of the remaining amount of $38,700,000 depended
only on the passage of time, this arrangement was accounted for as seller financing and the financing component amounting to $3,000,000, being the difference between the Remaining Selling Price of $35,700,000 and the amount of $38,700,000,
receivable in July 2024, was accounted for as interest income over the life of the receivable i.e. until July 2024. Interest income amounting to nil and $1,516,436 for the six-month periods ended June 30,
2023 and 2024, respectively, is included in “Interest income -related party” in the unaudited interim condensed consolidated statements of comprehensive income.
On September 5, 2023, the Company entered into memoranda of agreement with companies affiliated with members of the family of the
Company’s Chief Executive Officer (“CEO”) for the acquisition of two tanker vessels for an aggregate purchase price of $71,000,000. On February 18 and 28, 2024 the two tanker vessels “Aquadisiac” and “Gstaad Grace
II (ex. Stealth Haralambos)”, respectively, were delivered to the Company.
On May 17, 2024, the Company entered into memoranda
of agreement with companies affiliated with members of the family of the Company’s Chief Executive Officer for the acquisition of one handysize drybulk vessel and one product tanker vessel for an aggregate purchase price of $39,000,000. No
deposit was paid as of June 30, 2024. The handysize drybulk vessel was delivered to the Company in the third quarter of 2024 (Note 13). The product tanker vessel is expected to be delivered to the Company in the first quarter of 2025.
The current account balance with C3is at June 30, 2024 was a receivable of $39,423,256 (December 31, 2023: $37,906,821). The
receivable relates to the outstanding amount for the disposal of the vessel “Stealth Berana” which includes the Remaining Selling Price, accrued interest of $2,879,795 and receivable of $843,461 relating to inventory on board the
vessel.
The current account balance with the Manager at June 30, 2024 was a liability of $3,347,049 (December 31, 2023:
$2,324,334). The liability mainly represents payments made by the Manager on behalf of the Company.
The amounts charged by the
Company’s related parties comprised the following:
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For the six-month periods ended June 30, |
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Location in statement of comprehensive income |
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2023 |
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2024 |
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| Management fees |
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Management fees – related party |
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871,640 |
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805,640 |
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| Brokerage commissions |
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Voyage expenses – related party |
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1,546,799 |
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1,102,384 |
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| Superintendent fees |
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Vessels’ operating expenses – related party |
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1,000 |
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9,500 |
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| Crew management fees |
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Vessels’ operating expenses – related party |
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153,333 |
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150,000 |
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| Executive compensation |
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General and administrative expenses |
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198,000 |
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206,680 |
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| Commissions – vessels purchased |
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Vessels, net |
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355,000 |
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710,000 |
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| Commissions – vessel sold |
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Net loss on sale of vessel |
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— |
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420,000 |
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| Rental expense |
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General and administrative expenses |
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32,642 |
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38,738 |
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F-8