Seanergy Maritime Holdings Corp.
Annual Report 2021

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549FORM 20-F(Mark One)☐REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934OR☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2021OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934OR☐SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report: Not applicableFor the transition period from _______ to _______Commission file number: 001-34848SEANERGY MARITIME HOLDINGS CORP.(Exact name of Registrant as specified in its charter)(Translation of Registrant’s name into English)Republic of the Marshall Islands(Jurisdiction of incorporation or organization)154 Vouliagmenis Avenue, 166 74 Glyfada, Greece(Address of principal executive offices)Stamatios Tsantanis, Chairman & Chief Executive OfficerSeanergy Maritime Holdings Corp.154 Vouliagmenis Avenue, 166 74 Glyfada, GreeceTelephone: +30 213 0181507, Fax: +30 210 9638404(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)Securities registered or to be registered pursuant to Section 12(b) of the Act:Title of classTrading Symbol(s)Name of exchange on whichRegisteredShares of common stock, par value $0.0001 per shareSHIPNasdaq Capital MarketPreferred Stock Purchase RightsNasdaq Capital MarketClass B WarrantsSHIPZNasdaq Capital MarketSecurities registered or to be registered pursuant to Section 12(g) of the Act: NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act: NoneIndicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: As of December 31,2021, there were 172,986,137 shares of the registrant’s common stock, $0.0001 par value, and 20,000 shares of the registrant’s Series B Preferred Stock, $0.0001 par value, outstanding.Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒ NoIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.☐ Yes ☒ NoIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ NoIndicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ NoIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “largeaccelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.Large accelerated filer ☐Accelerated filer ☒Non-accelerated filer ☐ Emerging growth company ☐If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extendedtransition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification afterApril 5, 2012.Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reportingunder Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.☒Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other ☐If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. ☐ Item 17 ☐ Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No  TABLE OF CONTENTSPART I ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS1 ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLE1 ITEM 3.KEY INFORMATION1 ITEM 4.INFORMATION ON THE COMPANY26 ITEM 4A.UNRESOLVED STAFF COMMENTS42 ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS42 ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES58 ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS61 ITEM 8.FINANCIAL INFORMATION62 ITEM 9.THE OFFER AND LISTING62 ITEM 10.ADDITIONAL INFORMATION63 ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK71 ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES71 PART II ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES72 ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS72 ITEM 15.CONTROLS AND PROCEDURES72 ITEM 16.[RESERVED]73 ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERT73 ITEM 16B.CODE OF ETHICS73 ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICES73 ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES73 ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS73 ITEM 16F.CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT74 ITEM 16G.CORPORATE GOVERNANCE74 ITEM 16H.MINE SAFETY DISCLOSURE74 ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.74 PART III ITEM 17.FINANCIAL STATEMENTS75 ITEM 18.FINANCIAL STATEMENTS75 ITEM 19.EXHIBITS75 Table of ContentsCAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This annual 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 otherstatements 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 astatement 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 werereasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond ourcontrol, 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-lookingstatements. Many of these statements are based on our assumptions about factors that are beyond our ability to control or predict and are subject to risks and uncertainties that aredescribed more fully in “Item 3. Key Information—D. Risk Factors.” Any of these factors or a combination of these factors could materially affect our future results of operations and theultimate accuracy of the forward-looking statements. In addition to these important factors, important factors that, in our view, could cause actual results to differ materially from thosediscussed 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; •changes in seaborne and other transportation patterns; •changes in the supply of or demand for dry bulk commodities, including dry bulk commodities carried by sea, generally or in particular regions; •changes in the number of newbuildings under construction in the dry bulk shipping industry; •changes in the useful lives and the value of our vessels and the related impact on our compliance with loan covenants; •the aging of our fleet and increases in operating costs; •changes in our ability to complete future, pending or recent acquisitions or dispositions; •our ability to achieve successful utilization of our expanded fleet; •changes to our financial condition and liquidity, including our ability to pay amounts that we owe and obtain additional financing to fund capital expenditures, acquisitionsand other general corporate activities; •risks related to our business strategy, areas of possible expansion or expected capital spending or operating expenses; •changes in our ability to leverage the relationships and reputation in the dry bulk shipping industry of V.Ships Limited, or V.Ships, and V.Ships Greece Ltd., or V.ShipsGreece, our technical managers, and Fidelity Marine Inc., or Fidelity, our commercial manager; •changes in the availability of crew, number of off-hire days, classification survey requirements and insurance costs for the vessels in our fleet;Table of Contents •changes in our relationships with our contract counterparties, including the failure of any of our contract counterparties to comply with their agreements with us; •loss of our customers, charters or vessels; •damage to our vessels; •potential liability from future litigation and incidents involving our vessels; •our future operating or financial results; •acts of terrorism and other hostilities, pandemics or other calamities (including, without limitation, the worldwide novel coronavirus, or COVID-19, outbreak; •risks associated with the length and severity of the ongoing COVID-19 outbreak, including its effects on demand for dry bulk products, crew changes and thetransportation thereof; •changes in global and regional economic and political conditions; •general domestic and international political conditions or events, including “trade wars” and the recent conflicts between Russia and Ukraine; •changes in governmental rules and regulations or actions taken by regulatory authorities, particularly with respect to the dry bulk shipping industry; •our ability to continue as a going concern; and •other factors discussed in “Item 3. Key Information—D. Risk Factors.”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 thoseprojected 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 substantiallyrealized, 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 update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be requiredunder 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. Table of ContentsPART I Unless the context otherwise requires, as used in this annual report, the terms “Company,” “Seanergy,” “we,” “us,” and “our” refer to Seanergy Maritime Holdings Corp.and any or all of its subsidiaries, and “Seanergy Maritime Holdings Corp.” refers only to Seanergy Maritime Holdings Corp. and not to its subsidiaries. We use the term deadweight tons, or “dwt,” in describing the size of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to themaximum weight of cargo and supplies that a vessel can carry. Unless otherwise indicated, all references to “U.S. dollars,” “dollars,” “U.S. $” and “$” in this annual report are tothe lawful currency of the United States of America. References in this annual report to our common shares are adjusted to reflect the consolidation of our common shares throughreverse stock splits, including the one-for-fifteen reverse stock split which became effective as of March 20, 2019, and the one-for-sixteen reverse stock split which became effective asof June 30, 2020. ITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERSNot applicable. ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot applicable. ITEM 3.KEY INFORMATIONA.[Reserved]B.Capitalization and IndebtednessNot applicable. C.Reasons for the Offer and Use of ProceedsNot applicable. D.Risk FactorsSome of the following risks relate principally to the industry in which we operate and others relate to our business in general or our common stock. If any of the following risksoccur, our business, financial condition, operating results and cash flows could be materially adversely affected and the trading price of our securities could decline. Summary of Risk Factors Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face.Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the headings “Risks Relating to Our Industry,” “RisksRelating to Our Company” and “Risks Relating to Our Common Shares” and should be carefully considered, together with other information in this Annual Report on Form 20-F and ourother filings with the Securities and Exchange Commission, before making an investment decision regarding our common stock. Risks Relating to Our Industry •Charter hire rates for dry bulk vessels are cyclical and volatile and the dry bulk market remains significantly below its historic high. This may adversely affect ourearnings, revenue and profitability and our ability to comply with our loan covenants or covenants in other financing agreements. •Outbreaks of epidemic and pandemic diseases, including COVID-19, and any relevant governmental responses thereto could adversely affect our business, results ofoperations or financial condition. •We are currently dependent on index-linked or fixed rate charters, while until the recent past a part of our fleet was employed on the spot market. Any decrease in spotcharter rates or indexes in the future may adversely affect our earnings. •An over-supply of dry bulk vessel capacity may depress the current charter rates and, in turn, adversely affect our profitability. •If economic conditions throughout the world decline, it will negatively impact our results of operations, financial condition and cash flows, and could cause the marketprice of our common shares to decline. •Terrorist attacks and international hostilities could affect our business, results of operations, cash flows and financial condition.1Table of Contents •Risks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and expenses. •Rising fuel prices may adversely affect our profits. •Our revenues are subject to seasonal fluctuations, which could affect our operating results and ability to service our debt or pay dividends. •Climate change and greenhouse gas restrictions may be imposed. •Increased scrutiny of environmental, social and governance matters may impact our business and reputation. •Our vessels may call on ports located in or may operate in countries that are subject to restrictions or sanctions imposed by the United States, the European Union orother governments that could result in fines or other penalties imposed on us and may adversely affect our reputation and the market price of our common stock. •Sulfur regulations to reduce air pollution from ships have required retrofitting of vessels and may cause us to incur significant costs. •We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income. •Regulations relating to ballast water discharge may adversely affect our revenues and profitability. •Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business. •Acts of piracy on ocean-going vessels have increased in frequency, which could adversely affect our business. •The operation of dry bulk vessels has particular operational risks. •If any of our vessels fails to maintain its class certification or fails any annual survey, intermediate survey, or special survey, or if any scheduled class survey takeslonger or is more expensive than anticipated, this could have a material adverse impact on our financial condition and results of operations. •Because seafaring employees we employ are covered by industry-wide collective bargaining agreements, failure of industry groups to renew those agreements maydisrupt our operations and adversely affect our earnings. •Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our cash flows. •Governments could requisition our vessels during a period of war or emergency, which could negatively impact our business, financial condition, results of operations,and available cash. •The shipping industry has inherent operational risks that may not be adequately covered by our insurances. Further, because we obtain some of our insurances throughprotection and indemnity associations, we have been and may in the future be retrospectively subject to calls or premiums in amounts based not only on our own claimrecords, but also on the claim records of all other members of the protection and indemnity associations. Risks Relating to Our Company •The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or trigger certain financial covenants under our loanagreements and other financing agreements, and we may incur an impairment or, if we sell vessels following a decline in their market value, a loss. •Newbuilding projects are subject to risks that could cause delays. •We may acquire additional vessels in the future, and if those vessels are not delivered on time or are delivered with significant defects, our earnings and financialcondition could suffer. •Substantial debt levels could limit our flexibility to obtain additional financing and pursue other business opportunities. •Our loan agreements and other financing arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, restrictivecovenants that may limit our liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition andresults of operations. In addition, because of the presence of cross-default provisions in our loan agreements and financing arrangements, a default by us under one loanor financing agreement could lead to defaults under multiple loans and financing agreements. •If we fail to manage our planned growth properly, we may not be able to successfully expand our market share. •Purchasing and operating secondhand vessels, such as our current fleet, may result in increased operating costs and vessel off-hire, which could adversely affect ourfinancial condition and results of operations. •Increased regulatory oversight and phasing out of LIBOR may adversely affect the amounts of interest we pay under our debt arrangements and our results of operations. •The failure of our counterparties to meet their obligations under our charter agreements could cause us to suffer losses or otherwise adversely affect our business. •Rising crew costs may adversely affect our profits. •We may not be able to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of ourmanagement and our results of operations. •Our vessels may suffer damage, and we may face unexpected repair costs, which could adversely affect our cash flow and financial condition. •We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations. •We maintain cash with a limited number of financial institutions including financial institutions that may be located in Greece, which will subject us to credit risk. •We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy financial obligations or to pay dividends.2Table of Contents •In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies with greaterresources, which may adversely affect our results of operations. •Due to our lack of fleet diversification, adverse developments in the maritime dry bulk shipping industry would adversely affect our business, financial condition, andoperating results. •We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us. •Failure to comply with the U.S. Foreign Corrupt Practices Act of 1977, or FCPA, could result in fines, criminal penalties, and an adverse effect on our business. •We depend significantly on third-party technical and commercial managers for crewing and certain aspects of technical and commercial management of some of ourvessels. Our operations could be negatively affected if third-party managers fail to perform their services satisfactorily. •Management fees will be payable to our managers regardless of our profitability, which could have a material adverse effect on our business, financial condition andresults of operations. •We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of our common stock. •We may have to pay tax on U.S. source income, which would reduce our earnings. •We may be subject to tax in the jurisdictions in which we or our vessel-owning subsidiaries are incorporated or operate. •We are a “foreign private issuer,” which could make our common stock less attractive to some investors or otherwise harm our stock price. •The Public Company Accounting Oversight Board inspection of our independent accounting firm could lead to adverse findings in our auditors’ reports and challengesto the accuracy of our published audited consolidated financial statements. •Changing laws and evolving reporting requirements could have an adverse effect on our business. •A cyber-attack could materially disrupt our business. •The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us. Risks Relating to Our Common Shares •We may issue additional common shares or other equity securities without shareholder approval, which would dilute our existing shareholders’ ownership interests andmay depress the market price of our common shares. •The market price of our common shares has been and may in the future be subject to significant fluctuations. Further, there is no guarantee of a continuing public marketto resell our common shares. •A possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to further price volatility in our commonshares. •The declaration and payment of dividends will always be subject to the discretion of our board of directors and will depend on a number of factors. Our board ofdirectors may not declare dividends in the future. •The superior voting rights of our Series B Preferred Shares may limit the ability of our common shareholders to control or influence corporate matters, and the interestsof the holder of such shares could conflict with the interests of common shareholders •Anti-takeover provisions in our restated articles of incorporation, as amended, and third amended and restated bylaws could make it difficult for shareholders to replaceor remove our current board of directors or could have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect themarket price of our common shares. •Issuance of preferred shares, such as our Series B Preferred Shares, may adversely affect the voting power of our common shareholders and have the effect ofdiscouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares. •We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law, which may negatively affect the ability ofshareholders to protect their interests. •As a Marshall Islands corporation with principal executive offices in Greece, and also having subsidiaries in the Republic of the Marshall Islands and other offshorejurisdictions such as Liberia, Bermuda and the British Virgin Islands, our operations may be subject to economic substance requirements. •It may not be possible for investors to serve process on or enforce U.S. judgments against us. Risks Relating to Our Industry Charter hire rates for dry bulk vessels are cyclical and volatile and the dry bulk market remains significantly below its historic high. This may adversely affect our earnings,revenue and profitability and our ability to comply with our loan covenants or covenants in other financing agreements. The volatility in the dry bulk charter market, from which we derive substantially all of our revenues, has affected the dry bulk shipping industry and has harmed our business.The Baltic Dry Index, or the BDI, a daily average of charter rates for key dry bulk routes published by the Baltic Exchange Limited, has long been viewed as the main benchmark tomonitor the movements of the dry bulk vessel charter market and the performance of the entire dry bulk shipping market and has been very volatile in recent years. The BDI, declinedfrom a high of 11,793 in May 2008 to a low of 290 on February 10, 2016, which represents a decline of 98%. In the following years volatility was also apparent, albeit less extreme. In 2021,the BDI ranged from a low of 1,303 on February 10, 2021 and a high of 5,650 on October 7, 2021. During 2022, the BDI has ranged from 1,296 to 2,727. 3Table of ContentsThe decline from historic highs and volatility in charter rates in the period following 2008 has been due to various factors, including the over-supply of dry bulk vessels, thelack of trade financing for purchases of commodities carried by sea, which resulted in a significant decline in cargo shipments, and trade disruptions caused by natural or other disasters,such as those that resulted from the dam collapse in Brazil in 2019 and the outbreak of the coronavirus infection in China. More recently, following Russia’s invasion of Ukraine inFebruary 2022, the U.S., the EU, the UK and other countries have announced sanctions against Russia. The sanctions announced by the U.S. and other countries against Russiainclude, among others, restrictions on selling or importing goods, services or technology in or from affected regions, travel bans and asset freezes impacting connected individuals andpolitical, military, business and financial organizations in Russia, severing large Russian banks from U.S. and/or other financial systems, and barring some Russian enterprises fromraising money in the U.S. market. The U.S., EU and other countries could impose wider sanctions and take other actions. This has resulted in higher freight market volatility and while theinitial effect on the dry bulk freight market has been positive, the long-term effects may be harder to ascertain at the date of this filing. These circumstances have had adverseconsequences from time to time for dry bulk shipping, including, among other developments: •decrease in available financing for vessels; •no active secondhand market for the sale of vessels; •charterers seeking to renegotiate the rates for existing time charters; •widespread loan covenant defaults in the dry bulk shipping industry due to the substantial decrease in vessel values; and •declaration of bankruptcy by some operators, charterers and vessel owners.The degree of charter hire rate volatility among different types of dry bulk vessels has varied widely. If we enter into a charter when charter hire rates are low, our revenues andearnings will be adversely affected and we may not be able to successfully charter our vessels at rates sufficient to allow us to operate our business profitably or meet our obligations.Further, if low charter rates in the dry bulk market decline further for any significant period, this could have an adverse effect on our vessel values and ability to comply with the financialcovenants in our loan agreements or other financing agreements. In such a situation, unless our lenders are willing to provide waivers of covenant compliance or modifications to ourcovenants, our lenders could accelerate our debt and we could face the loss of our vessels. We expect continued volatility in market rates for our vessels in the foreseeable future with aconsequent effect on our short and medium-term liquidity. Outbreaks of epidemic and pandemic diseases, including COVID-19, and any relevant governmental responses thereto could adversely affect our business, results of operations orfinancial condition.Global public health threats, such as the novel coronavirus first identified in China in the end of 2019, or COVID-19, influenza and other highly communicable diseases orviruses, outbreaks of which have from time to time occurred in various parts of the world in which we operate, including China, could adversely impact our operations, as well as theoperations of our customers. The ongoing COVID-19 pandemic has, among other things, caused factory closures and restrictions on travel, as well as labor shortages or lack of berths,delays and uncertainties relating to newbuildings, drydockings, vessel inspections, shortages or a lack of access to required spare parts and other functions of shipyards.The ongoing outbreak of COVID-19 has already caused severe global disruptions and may continue to negatively impact the economic conditions regionally as well as globallyand otherwise impact our operations and the operations of our customers and suppliers. Governments in affected countries continue to impose travel bans, quarantines and otheremergency public health measures. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closingbusinesses. These restrictions, and future prevention and mitigation measures, are likely to continue to have an adverse impact on global economic conditions, which could materiallyand adversely affect our future operations. Uncertainties regarding the economic impact of the COVID-19 outbreak is likely to result in sustained market turmoil, which could alsonegatively impact our business, financial condition and cash flows. As a result of these measures, our vessels may not be able to call on ports, or may be restricted from disembarkingfrom ports, located in regions affected by the outbreak. In addition we may experience severe operational disruptions and delays, unavailability of normal port infrastructure and servicesincluding limited access to equipment, critical goods and personnel, disruptions to crew changes, quarantine of ships and/or crew, counterparty solidity, closure of ports and customoffices, as well as disruptions in the supply chain and industrial production, which may lead to reduced cargo demand, amongst other potential consequences attendant to epidemic andpandemic diseases.COVID-19 and measures to contain its spread have negatively impacted regional and global economies and trade patterns in markets in which we operate, the way we operateour business, and the businesses of our charterers and suppliers. These negative impacts could continue or worsen, even after the pandemic itself diminishes or ends. Companies,including us, have also taken precautions, such as requiring employees to work remotely and imposing travel restrictions, while some other businesses have been required to closeentirely. Moreover, we face significant risks to our personnel and operations due to the COVID-19 pandemic. Our crews face risk of exposure to COVID-19 as a result of travel to ports inwhich cases of COVID-19 have been reported. Our shore-based personnel likewise face risk of such exposure, as we maintain offices in areas that have been impacted by the spread ofCOVID-19.4Table of ContentsMeasures against COVID-19 in a number of countries have restricted crew rotations on our vessels and other vessels we may acquire, which may continue or become moresevere. As a result, in 2021, vessel operators experienced and may continue to experience disruptions to normal vessel operations caused by increased deviation time associated withpositioning vessels to countries in which they can undertake a crew rotation in compliance with such measures. Our crews generally work on a rotation basis, relying exclusively oninternational air transport for crew changes plan fulfillment. Any such disruptions could impact the cost of rotating our crew further, and possibly impact our ability to maintain a fullcrew synthesis onboard our vessels and other vessels we may acquire at any given time. Delays in crew rotations have furthermore led to issues with crew fatigue and may continue todo so, which may result in delays or other operational issues. Additionally, we are particularly vulnerable to our crew members getting sick, as if even one of our crew members gets sick,local authorities could require us to detain and quarantine our vessels and their crew for an unspecified amount of time, disinfect and fumigate our vessels and cargo onboard, or takesimilar precautions, which would add costs, decrease our utilization, and substantially disrupt our cargo operations. We expect to incur increased expenses due to incremental fuelconsumption and days in which our vessels and other vessels we may acquire are unable to earn revenue in order to deviate to certain ports on which we would ordinarily not call duringa typical voyage. We may also incur additional expenses associated with testing, personal protective equipment, quarantines, and travel expenses such as airfare costs in order toperform crew rotations in the current environment.COVID-19 and measures in place against the spread of the virus have led to a highly difficult environment with regards to the disposal of vessels given the difficulty tophysically inspect vessels. The impact of COVID-19 has also resulted in reduced industrial activity in China with temporary closures of factories and other facilities, labor shortages andrestrictions on travel. We believe these disruptions along with other seasonal factors, including lower demand for some of the cargoes we carry such as iron ore and coal, contributed tolower drybulk rates in 2021.Epidemics may also affect personnel operating payment systems through which we receive revenues from the chartering of our vessels or pay for our expenses, resulting indelays in payments. Organizations across industries, including ours, are rightly focusing on their employees’ well-being, while making sure that their operations continue undisruptedand at the same time, adapting to the new ways of operating. As such employees are encouraged or even required to operate remotely which significantly increases the risk of cybersecurity attacks.Effects of the current pandemic may also in the future result in reduced access to capital, including the ability to refinance any existing obligations, as a result of any credittightening generally or due to continued declines in global financial markets, including to the prices of publicly-traded securities of us, our peers and of listed companies generally. Wenote that future impacts cannot be reasonably estimated at this time, may take some time to materialize and may not be fully reflected in the results for the year ended December 31, 2021At present, it is not possible to ascertain the overall impact of COVID-19 on our business. However, the occurrence of any of the foregoing events or other epidemics or anincrease in the severity or duration of the COVID-19 or other epidemics could have a material adverse effect on our business, results of operations, cash flows, financial condition, valueof our vessels, and ability to pay dividends.The extent of the COVID-19 outbreak’s effect on our operational and financial performance will depend on future developments, including the duration, spread and intensity ofthe outbreak, any resurgence or mutation of the virus, the continued availability of vaccines and their global deployment, the development of effective treatments, the imposition ofeffective public safety and other protective measures and the public’s response to such measures. There continues to be a high level of uncertainty relating to how the pandemic willevolve, how governments and consumers will react and progress on the approval and distribution of vaccines, all of which are uncertain and difficult to predict, considering the rapidlyevolving landscape. As a result, the ultimate severity of the COVID-19 outbreak is uncertain at this time and therefore we cannot predict the impact it may have on our future operations,which impact could be material and adverse, particularly if the pandemic continues to evolve into a severe worldwide health crisis.We are currently dependent on index-linked or fixed rate charters, while until the recent past a part of our fleet was additionally employed on the spot market. Any decrease in spotcharter rates or indexes in the future may adversely affect our earnings. We currently have 15 of our vessels employed on time charters whose daily rates are linked to the Baltic Capesize Index, or BCI. The other two are employed on time charterswith fixed rates. Although none of our vessels are currently operating in the spot market, we may employ any additional vessels we may acquire in the spot market, or on index-linked orfixed rate time charters. Although the number of vessels in our fleet that participate in the spot market or have index-linked or fixed rate charters will vary from time to time, we anticipate that asignificant portion of our fleet will be affected by the spot market or the BCI. As a result, our financial performance will be significantly affected by conditions in the dry bulk spot marketor the BCI and only our vessels that would operate under fixed-rate time charters would, during the period in which such vessels operate under such time charters, provide a fixed sourceof revenue to us. 5Table of ContentsHistorically, spot charter rates and dry bulk charter indexes have been volatile as a result of the many conditions and factors that can affect the price, supply of and demand fordry bulk capacity. The successful operation of our vessels in the competitive spot charter market depends upon, among other things, obtaining profitable spot charters and minimizing,to the extent possible, time spent waiting for charters and time spent traveling unladen to pick up cargo. The spot market is very volatile, and, in the past, there have been periods whenspot rates have declined below the operating cost of vessels. If future spot charter rates or the BCI decline, then we may be unable to operate our vessels trading in the spot market oron BCI-linked charters profitably or to meet our other obligations, including payments on indebtedness. Furthermore, as charter rates for spot charters are fixed for a single voyage,which may last up to several weeks, during periods in which spot charter rates are rising, we will generally experience delays in realizing the benefits from such increases. An over-supply of dry bulk vessel capacity may depress the current charter rates and, in turn, adversely affect our profitability. The market supply of dry bulk vessels had increased due to the high level of new deliveries in recent years. Dry bulk newbuildings were delivered in significant numbersstarting at the beginning of 2006 and continued to be delivered in significant numbers through 2017. In addition, the dry bulk newbuilding orderbook, which extends to 2023, wasapproximately 6.81% of the existing world dry bulk fleet as of January 31, 2022, according to Clarksons Research, and the orderbook may increase further in proportion to the existingfleet. Even though the overall level of the orderbook has declined over the past years, an over-supply of dry bulk vessel capacity could depress the current charter rates. Factors thatinfluence the supply of vessel capacity include: •number of new vessels’ deliveries; •scrapping rate of older vessels; •vessel casualties; •price of steel; •number of vessels that are out of service; •vessels’ average speed; •changes in environmental and other regulations that may limit the useful life of vessels; and •port or canal congestion.If dry bulk vessel capacity increases but the demand for vessel capacity does not increase or increases at a slower rate, charter rates could materially decline, which could havea material adverse effect on our business, financial condition, results of operations and cash flows. 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 ofour common shares to decline. The world economy is facing a number of actual and potential challenges, including the conflict between Ukraine and Russia, current trade tension between the United Statesand China, political instability in the Middle East and the South China Sea region and other geographic countries and areas, geopolitical events such as the withdrawal of the U.K. fromthe European Union, or Brexit, terrorist or other attacks, war (or threatened war) or international hostilities, such as those between the United States and North Korea or Iran, andepidemics or pandemics, such as COVID-19. For example, due in part to fears associated with the spread of COVID-19 (as more fully described above), global financial marketsexperienced volatility and a steep and abrupt downturn followed by a recovery, which volatility may continue as the pandemic or a new wave or mutations continue. In addition, therecent developments in Ukraine led to increased economic uncertainty amidst fears of a more generalized military conflict or significant inflationary pressures, due to the increases in fuelprices following the sanctions imposed on Russia. Such events may contribute to economic instability in global financial markets or cause a decrease in worldwide demand for certaingoods and, thus, shipping. We cannot predict how long current market conditions will last. The European Union, or EU, and other parts of the world were recently in a recession and uncertainty surrounds the potential for continued economic growth. Moreover, thereis uncertainty related to certain European member countries' ability to refinance their sovereign debt, including Greece, despite the country's return to the sovereign debt markets in 2019.As a result, the credit markets in the United States and Europe have recently experienced significant contraction, deleveraging and reduced liquidity, and the U.S. federal and stategovernments and European authorities have implemented a broad variety of governmental action and new regulation of the financial markets and may implement additional regulationsin the future. As a result, global economic conditions and global financial markets have been, and continue to be, volatile. Further, credit markets and the debt and equity capital marketshave been distressed and the uncertainty surrounding the future of the global credit markets has resulted in reduced access to credit worldwide. 6Table of ContentsIn Europe, large sovereign debts and fiscal deficits, low growth prospects and high unemployment rates in a number of countries have contributed to the rise of Euroskepticparties, which would like their countries to leave the Euro. Brexit further increases the risk of additional trade protectionism. Brexit, or similar events in other jurisdictions, could continueto impact global markets, including foreign exchange and securities markets; any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turnadversely 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 asignificant impact on shipping demand. The quarterly year-over-year growth rate of China's GDP was approximately 8.1% for the year ended December 31, 2021, 2.3% for the year endedDecember 31, 2020 and 6.0% for the year ended December 31, 2019. It is possible that China and other countries in the Asia Pacific region will continue to experience volatile, slowed oreven 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 ofthese 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 areeither 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 enteredinto 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, asindicated, 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) thecost 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 exportinggoods. 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 impacton 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 thenumber 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 ofsovereign defaults, reduced levels of growth, and trade protectionism, among other factors. Major market disruptions and the current adverse changes in market conditions andregulatory 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 howlong the current market conditions will last. However, these recent and developing economic and governmental factors, together with depressed charter rates and vessel values, mayhave a material adverse effect on our results of operations, financial condition or cash flows and the trading price of our common stock. In the absence of available financing, we mayalso be unable to complete vessel acquisitions, take advantage of business opportunities or respond to competitive pressures. Terrorist attacks and international hostilities could affect our business, results of operations, cash flows and financial condition. Continuing conflicts and recent developments in Ukraine, the Middle East, including tensions between the U.S. and Iran, as well as other geographic countries and areas,terrorist or other attacks, and war (or threatened war) or international hostilities, such as the ones currently in progress between Russia and Ukraine, China and Taiwan, or the U.S. andNorth Korea, have recently and may in the future lead to armed conflict or acts of terrorism around the world, which may contribute to further economic instability in the global financialmarkets and international commerce. The recent escalation of conflict between Russia and Ukraine may lead to further regional and international conflicts or armed action at an international level. This conflict hasdisrupted supply chains and cause instability in the energy markets and the global economy, with effects on shipping freight rates, which have experienced volatility. The United Statesand the European Union, among other countries, have announced various economic sanctions against Russia. The ongoing conflict could result in the imposition of further economicsanctions by the United States and the European Union or other countries against Russia, trade tariffs or embargoes with uncertain impacts on the markets in which we operate. Whilemuch uncertainty remains regarding the global impact of the conflict in Ukraine, it is possible that such tensions could adversely affect our business, financial condition, results ofoperation and cash flows. Since we employ Ukrainian and Russian seafarers, we may face problems in relation to their employment, repatriation, salary payments and be subject to claimsto this respect. Moreover, we will be subject to additional insurance premiums in case we transit through or call to any port or area designated as listed areas by the Joint War Committeeor other organizations. Furthermore, it is possible that third parties with whom we have charter contracts may be impacted by events in Russia and Ukraine, which could adversely affectour operations. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. In the past, political conflicts have also resulted inattacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. The ongoing conflict in Ukraine has recently resultedin missile attacks on commercial vessels in the Black Sea. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea, the Gulf of Aden off thecoast of Somalia, and in particular, the Gulf of Guinea region off Nigeria, which experienced increased incidents of piracy in recent years. Any of these occurrences could have a materialadverse impact on our operating results. 7Table of ContentsRisks associated with operating ocean-going vessels could affect our business and reputation, which could adversely affect our revenues and expenses. The operation of an ocean-going vessel carries inherent risks. These risks include the possibility of: •crew strikes and/or boycotts; •the damage or destruction of vessels due to marine disaster; •piracy or other detentions; •environmental accidents; •cargo and property losses or damage; and •business interruptions caused by mechanical failure, human error, war, terrorism, political action in various countries, labor strikes or adverse weather conditions.Any of these circumstances or events could increase our costs or lower our revenues. Such circumstances could result in death or injury to persons, loss of property orenvironmental damage, delays in the delivery of cargo, loss of revenues from or termination of charter contracts, governmental fines, penalties or restrictions on conducting business,litigation with our employees, customers or third parties, higher insurance rates, and damage to our reputation and customer relationships generally. Although we maintain hull andmachinery and war risks insurance, as well as protection and indemnity insurance, which may cover certain risks of loss resulting from such occurrences, our insurance coverage may besubject to deductibles, caps or not cover such losses and any of these circumstances or events could increase our costs or lower our revenues. The involvement of our vessels in anenvironmental disaster may harm our reputation as a safe and reliable vessel owner and operator. Any of these results could have a material adverse effect on business, results ofoperations and financial condition, as well as our cash flows. Rising fuel prices may adversely affect our profits. The cost of fuel is a significant factor in negotiating charter rates. As a result, an increase in the price of fuel may adversely affect our profitability. The price and supply of fuelis unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by members of the Organization ofthe Petroleum Exporting Countries and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns andregulations. Furthermore, fuel has and may become much more expensive in the future, including as a result of the recent developments in Ukraine and the sanctions against Russia, theimposition of recent sulfur oxide emissions limits in January 2020 and reductions of carbon emissions from January 2023 under new regulations adopted by the International MaritimeOrganization, or the IMO, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail. Upon redelivery of vessels at the end of a period of time or voyage time charter, we may be obligated to repurchase bunkers on board at prevailing market prices, which couldbe materially higher than fuel prices at the inception of the charter period. In addition, fuel is a significant, if not the largest, expense that we would incur with respect to vesselsoperating on voyage charter. Voyage charter contracts generally provide that the vessel owner bears the cost of fuel in the form of bunkers, which is a material operating expense. We currently cannotguarantee that we will hedge our fuel costs, and, therefore, an increase in the price of fuel may affect in a negative way our profitability and our cash flows, in case we consider voyagecharter contracts in the future. Our revenues are subject to seasonal fluctuations, which could affect our operating results and ability to service our debt or pay dividends. We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, in charter hire rates. This seasonality may result in quarter-to-quarter volatility in our operating results. The dry bulk shipping market is typically stronger in the fall and winter months in anticipation of increased consumption of coal and other rawmaterials in the northern hemisphere during the winter months. In addition, unpredictable weather patterns in these months tend to disrupt vessel schedules and supplies of certaincommodities. As a result, our revenues may be weaker during the fiscal quarters ending March 31 and June 30, and, conversely, our revenues may be stronger in fiscal quarters endingSeptember 30 and December 31. This seasonality should not affect our operating results if our vessels are employed on fixed rate period time charters, but because our vessels or thevessels we may acquire may be employed in the spot market or on index-linked or fixed rate charters, seasonality may materially affect our operating results and our ability to paydividends in the future. 8Table of ContentsClimate change and greenhouse gas restrictions may be imposed. Due to concern over the risk of climate change, a number of countries and the International Maritime Organization, or IMO, have adopted, or are considering the adoption of,regulatory frameworks to reduce greenhouse gas emissions. These regulatory measures may include, among others, the adoption of cap and trade regimes, carbon taxes, increasedefficiency standards and incentives or mandates for renewable energy. For instance, the International Maritime Organization imposed a global 0.5% sulfur cap on marine fuels whichcame into force on January 1, 2020. In addition, the International Maritime Organization has adopted an initial strategy which identifies “levels of ambition” toward reducing greenhousegas emissions, including (1) decreasing the carbon intensity from ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by atleast 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008 emission levels; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 comparedto 2008 while pursuing efforts towards phasing them out entirely. These regulations and any additional regulations addressing similar goals could cause us to incur additionalsubstantial expenses. See “Business Overview—Environmental and Other Regulations” for a discussion of these and other environmental regulations applicable to our operations. In addition, although the emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations FrameworkConvention on Climate Change (this task was delegated under the Kyoto Protocol to the IMO for action), which required adopting countries to implement national programs to reduceemissions of certain gases, a new treaty may be adopted in the future that includes restrictions on shipping emissions. Compliance with changes in laws, regulations and obligationsrelating to climate change could increase our costs related to operating and maintaining our vessels and require us to install new emission controls, acquire allowances or pay taxesrelated to our greenhouse gas emissions, or administer and manage a greenhouse gas emissions program. Revenue generation and strategic growth opportunities may also be adverselyaffected. Adverse consequences of climate change, including growing public concern about the environmental impact of climate change, may also adversely affect demand for ourservices. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for coal in the future, one of the primary cargoescarried by our vessels. In addition, the physical effects of climate change, including changes in weather patterns, extreme weather events, rising sea levels, and scarcity of waterresources, may negatively impact our operations. Any long-term economic consequences of climate change could have a significant financial and operational adverse impact on ourbusiness that we cannot predict with certainty at this time. Increased scrutiny of environmental, social and governance matters may impact our business and reputation. In addition to the importance of their financial performance, companies are increasingly being judged by their performance on a variety of environmental, social and governancematters, or ESG, which are considered to contribute to the long-term sustainability of companies' performance. A variety of organizations measure the performance of companies on such ESG topics, and the results of these assessments are widely publicized. In addition, investment infunds that specialize in companies that perform well in such assessments are increasingly popular, and major institutional investors have publicly emphasized the importance of suchESG measures to their investment decisions. Topics taken into account in such assessments include, among others, the company's efforts and impacts on climate change and humanrights, ethics and compliance with law, and the role of the company's board of directors in supervising various sustainability issues. We actively manage a broad range of such ESG matters, taking into consideration their expected impact on the sustainability of our business over time, and the potential impactof our business on society and the environment. As far as the environmental aspect is concerned, since 2018 we have commenced implementing technical and operational measuresaiming to improve the energy efficiency of our vessels and in extension reduce the CO2 emissions of the fleet. In 2021 we have completed an EEXI evaluation in accordance with IMO’sMEPC 75 and in cooperation with DNV, in preparation for the upcoming regulations. In addition, we have commenced biofuel trials in cooperation with leading charterers and operators.Scrubber and ballast water treatment system installations, Existing Vessel Design Index, or EVDI, upgrades, and Energy Saving Device and electronic performance monitoring systeminstallations constitute examples of the environmental practices we have adopted and aim to continue adopting on most of our vessels. We participate in various environmentalinitiatives in our industry and technical committees on ESG matters and have also managed to secured sustainability-linked financing for one of our vessels. However, in light ofinvestors' increased focus on ESG matters, there can be no certainty that we will manage such issues successfully, or that we will successfully meet society's expectations as to ourproper role. Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation and on our business, share price, financial condition, or results ofoperations, including the sustainability of our business over time. Our vessels may call on ports located in or may operate in countries that are subject to restrictions or sanctions imposed by the United States, the European Union or othergovernments that could result in fines or other penalties imposed on us and may adversely affect our reputation and the market price of our common stock. During the year ended December 31, 2021, none of our vessels called on ports located in countries subject to comprehensive sanctions and embargoes imposed by the U.S.government or countries identified by the U.S. government or other authorities as state sponsors of terrorism; however, our vessels may call on ports in these countries from time to timein the future on our charterers' instructions. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons orproscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. 9Table of ContentsWe believe that we are currently in compliance with all applicable sanctions and embargo laws and regulations. In order to maintain compliance, we monitor and review themovement of our vessels on a daily basis. We endeavor to provide that all or most of our future charters include provisions and trade exclusion clauses prohibiting the vessels from calling on ports where there is anexisting U.S. embargo. Furthermore, as of the date hereof, neither the Company nor its subsidiaries have entered into or have any plans to enter into, directly or indirectly, any contracts,agreements or other arrangements with the governments of Iran, Syria, North Korea, Cuba or any entities controlled by the governments of these countries. Due to the nature of our business and the evolving nature of the foregoing sanctions and embargo laws and regulations, there can be no assurance that we will be incompliance at all times in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines,penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, or beingrequired, to divest their interest, or refrain from investing, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holdingsecurities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or todivest from, our common stock may adversely affect the price at which our common stock trades. Moreover, our charterers may violate applicable sanctions and embargo laws andregulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market forour securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities in countries subject to U.S. sanctions andembargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third parties that areunrelated to those countries or entities controlled by their governments. Sulfur regulations to reduce air pollution from ships have required retrofitting of vessels and may cause us to incur significant costs. Since January 1, 2020, IMO regulations have required vessels to comply with a global cap on the sulfur in fuel oil used on board of 0.5%, down from the previous cap of 3.5%.The interpretation of “fuel oil used on board” includes use in main engine, auxiliary engines and boilers. Compliance with this regulation is achieved by (i) using 0.5% sulfur fuels onboard, which are available at a higher cost; (ii) installing “scrubbers” for cleaning of the exhaust gas; or (iii) retrofitting vessels to be powered by liquefied natural gas (LNG), which maynot yet be an economically viable option due to the lack of supply network and high costs involved in this process. We have installed scrubbers on six vessels of our current fleet incooperation with first-class charterers who currently employ the vessels on time charters. As part of these agreements, the charterers covered the installation costs. Furthermore, twovessels with scrubbers were purchased during 2021. The remaining nine vessels in our fleet comply by burning low sulfur fuel (0.5% or 0.1%). All engineering officers, engineering crewand deck officers employed on our vessels since January 1, 2020 have been required to undergo training and complete a certain e-module regarding the use of low sulfur fuels. We havefurther developed ship specific implementation plans for safeguarding the smooth transition with the usage of compliant fuels for such vessels that will not be equipped with scrubbers.Costs of ongoing compliance may have a material adverse effect on our future performance, results of operations, cash flows and financial position. See Item 4. “Information on theCompany—B. Business Overview— Environmental and Other Regulations—The International Maritime Organization.” We are subject to regulation and liability under environmental laws that could require significant expenditures and affect our cash flows and net income. Our business and the operation of our vessels are materially affected by government regulation in the form of international conventions, national, state and local laws andregulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration, including those governing oil spills, discharges to air andwater, ballast water management, and the handling and disposal of hazardous substances and wastes. These requirements include, but are not limited to, EU regulations, the U.S. OilPollution Act of 1990, or OPA, the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, the U.S. Clean Air Act, including its amendmentsof 1977 and 1990, or the CAA, the U.S. Clean Water Act, or the CWA, the U.S. Maritime Transportation Security Act of 2002, or the MTSA, and regulations of the IMO, including, butnot limited to, the International Convention on Civil Liability for Oil Pollution Damage of 1969, as from time to time amended and generally referred to as CLC, the IMO InternationalConvention for the Prevention of Pollution from Ships of 1973, as from time to time amended and generally referred to as MARPOL, including the designation of emission control areas,or ECAs, thereunder, the IMO International Convention for the Safety of Life at Sea of 1974, as from time to time amended and generally referred to as SOLAS, the IMO InternationalConvention on Load Lines of 1966, as from time to time amended and generally referred to as the LL Convention, the International Convention on Civil Liability for Bunker Oil PollutionDamage, generally referred to as the Bunker Convention, the IMO's International Management Code for the Safe Operation of Ships and for Pollution Prevention, generally referred to asthe ISM Code, the International Convention for the Control and Management of Ships' Ballast Water and Sediments, generally referred to as the BWM Convention, and the InternationalShip and Port Facility Security Code, or ISPS. 10Table of ContentsWe may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to the 0.5% sulfur cap onmarine fuels, air emissions including greenhouse gases, the management of ballast water, maintenance and inspection, development and implementation of emergency procedures andinsurance coverage or other financial assurance of our ability to address pollution incidents. These costs could have a material adverse effect on our business, results of operations,cash flows and financial condition and our available cash. Because such conventions, laws and regulations are often revised, we cannot predict the ultimate cost of complying withsuch conventions, laws and regulations or the impact thereof on the resale price or useful life of vessels we may acquire in the future. Additional conventions, laws and regulations maybe adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations. Regulations relating to ballast water discharge may adversely affect our revenues and profitability. The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel'sballast water. Depending on the date of the IOPP renewal survey, existing vessels constructed before September 8, 2017 must comply with the updated D-2 standard on or afterSeptember 8, 2019. For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Shipsconstructed on or after September 8, 2017 are to comply with the D-2 standards on or after September 8, 2017. Vessels are required to meet the discharge standard D-2 by installing anapproved Ballast Water Management System (or BWMS). Pursuant to the BWM Convention amendments that entered into force in October 2019, BWMSs installed on or after October28, 2020 shall be approved in accordance with BWMS Code, while BWMSs installed before October 23, 2020 must be approved taking into account guidelines developed by the IMO orthe BWMS Code. Ships sailing in U.S. waters are required to employ a type-approved BWMS which is compliant with USCG regulations. The USCG has approved a number of BWMS. Amendments to the BWM Convention will enter into force in June 2022 concerning commissioning testing of BWMS and the form of the International Ballast Water ManagementCertificate. Currently fourteen of our vessels comply with the updated guidelines and we have made arrangements for the installation of ballast water treatment systems in our remainingvessels, prior to the respective compliance deadlines. The costs of compliance may be substantial and affect our profitability. Furthermore, United States regulations are currently changing. Although the 2013 Vessel General Permit, or VGP, program and U.S. National Invasive Species Act, or NISA, arecurrently in effect to regulate ballast discharge, exchange and installation, the Vessel Incidental Discharge Act, or VIDA, which was signed into law on December 4, 2018, requires thatthe U.S. Coast Guard develop implementation, compliance, and enforcement regulations regarding ballast water. On October 26, 2020, the EPA published a Notice of ProposedRulemaking for Vessel Incidental Discharge National Standards of Performance under VIDA, and in November 2020, held virtual public meetings. The new regulations could require theinstallation of new equipment, which may cause us to incur substantial costs. Under VIDA, all provisions of the 2013 VGP and USCG ballast water regulations remain in force and effectas currently written until the EPA publishes standards and the corresponding Coast Guard regulations are published. Increased inspection procedures, tighter import and export controls and new security regulations could increase costs and disrupt our business. International shipping is subject to security and customs inspection and related procedures in countries of origin, destination and trans-shipment points. Since the events ofSeptember 11, 2001, there have been a variety of initiatives intended to enhance vessel security, such as the MTSA. These security procedures can result in delays in the loading,discharging or trans-shipment and the levying of customs duties, fines or other penalties against exporters or importers and, in some cases, vessels. Future changes to the existingsecurity procedures may be implemented that could affect the dry bulk sector. These changes have the potential to impose additional financial and legal obligations on vessels and, incertain cases, to render the shipment of certain types of goods uneconomical or impractical. These additional costs could reduce the volume of goods shipped, resulting in a decreaseddemand for vessels and have a negative impact on our business, revenues and customer relations. Acts of piracy on ocean-going vessels have increased in frequency, which could adversely affect our business. Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, Strait of Malacca, Arabian Sea, Red Sea, Gulf ofAden off the coast of Somalia, Indian Ocean and Gulf of Guinea. Sea piracy incidents continue to occur , particularly in the South China Sea, the Indian Ocean, in the Gulf of Guinea andthe Strait of Malacca, with dry bulk vessels particularly vulnerable to such attacks. Although the frequency of sea piracy worldwide has generally decreased since 2013, sea piracyincidents continue to occur. Acts of piracy could result in harm or danger to the crews that man our vessels. Additionally, if piracy attacks result in regions in which our vessels aredeployed being characterized as “war risk” zones by insurers or if our vessels are deployed in Joint War Committee “war and strikes” listed areas, premiums payable for insurancecoverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew and security equipment costs, including costs which may beincurred to employ onboard security armed guards, could increase in such circumstances. Furthermore, while we believe the charterer remains liable for charter payments when a vesselis seized by pirates, the charterer may dispute this and withhold charter hire until the vessel is released. A charterer may also claim that a vessel seized by pirates was not “on-hire” for acertain number of days and is therefore entitled to cancel the charterparty, a claim that we would dispute. We may not be adequately insured to cover losses from these incidents, whichcould have a material adverse effect on us. In addition, any detention hijacking as a result of an act of piracy against our vessels, or an increase in cost, or unavailability, of insurance forour vessels could have a material adverse impact on our business, financial condition and results of operations. 11Table of ContentsThe operation of dry bulk vessels has particular operational risks. The operation of dry bulk vessels has certain unique risks. With a dry bulk vessel, the cargo itself and its interaction with the vessel can be an operational risk. By their nature,dry bulk cargoes are often heavy, dense, easily shifted, and react badly to water exposure. In addition, dry bulk vessels are often subjected to battering treatment during dischargingoperations with grabs, jackhammers (to pry encrusted cargoes out of the hold) and small bulldozers. This treatment may cause damage to the vessel. Vessels damaged due to treatmentduring discharging procedures may affect a vessel’s seaworthiness while at sea. Hull fractures in dry bulk vessels may lead to the flooding of the vessels’ holds. If a dry bulk vesselsuffers flooding in its forward holds, the bulk cargo may become so dense and waterlogged that its pressure may buckle the vessel’s bulkheads, leading to the loss of a vessel. If we areunable to adequately maintain our vessels, we may be unable to prevent these events. Any of these circumstances or events could negatively impact our business, financial condition,and results of operations. If any of our vessels fails to maintain its class certification or fails any annual survey, intermediate survey, or special survey, or if any scheduled class survey takes longer or is moreexpensive than anticipated, this could have a material adverse impact on our financial condition and results of operations. The hull and machinery of every commercial vessel must be certified by a classification society authorized by its country of registry. The classification society certifies that avessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and the SOLAS. A vessel must undergo annual, intermediate and special surveys. The vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyedperiodically over a five-year period. At the beginning, in between and in the end of this cycle, every vessel is required to undergo inspection of her underwater parts that usuallyincludes dry-docking. These surveys and dry-dockings can be costly and can result in delays in returning a vessel to operation. If any vessel does not maintain its class, the vessel will not be allowed to carry cargo between ports and cannot be employed or insured. Any such inability to carry cargo or beemployed, or any related violation of the covenants under our loans or other financing agreements, could have a material adverse impact on our financial condition and results ofoperations. Because seafaring employees we employ are covered by industry-wide collective bargaining agreements, failure of industry groups to renew those agreements may disrupt ouroperations and adversely affect our earnings. We employ a large number of seafarers. All the seafarers employed on the vessels in our fleet are covered by industry-wide collective bargaining agreements that set minimumstandards in wages and labor conditions. We cannot assure you that these agreements will be renewed as necessary or will prevent labor interruptions. Any labor interruptions coulddisrupt our operations and harm our financial performance. Maritime claimants could arrest or attach one or more of our vessels, which could interrupt our cash flows. Crew members, suppliers of goods and services to a vessel, shippers of cargo and other parties may be entitled to a maritime lien against a vessel for unsatisfied debts, claimsor damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. The arrest or attachment of one or more of ourvessels could interrupt our cash flow and require us to pay large sums of funds to have the arrest lifted, which would have a material adverse effect on our financial condition andresults of operations. In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel which is subject to the claimant’smaritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one of our vessels forclaims relating to another of our vessels. Governments could requisition our vessels during a period of war or emergency, which could negatively impact our business, financial condition, results of operations, andavailable cash. A government could requisition for title or hire one or more of our vessels. Requisition for title occurs when a government takes control of a vessel and becomes the owner.Also, a government could requisition a vessel for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charterrates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels could have a material adverse effect on our financialcondition and results of operations. 12Table of ContentsRisks Relating to Our Company The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or trigger certain financial covenants under our loan agreements andother financing agreements, and we may incur an impairment or, if we sell vessels following a decline in their market value, a loss. The fair market values of our vessels are related to prevailing freight charter rates. While the fair market value of vessels and the freight charter market have a very closerelationship as the charter market moves from trough to peak, the time lag between the effect of charter rates on market values of ships can vary. A decrease in the market value of ourvessels could require us to raise additional capital in order to remain compliant with our loan covenants or the covenants in the other financing agreements and could result in the lossof our vessels (including, through foreclosure by our lenders and lessors) and adversely affect our earnings and financial condition. •The fair market value of our vessels is dependent on other factors as well, including: general economic and market conditions affecting the shipping industry, includingchanges in global dry cargo commodity supply; •types and sizes of vessels; •number of newbuilding deliveries; •number of vessels scrapped or otherwise removed from the world fleet; •changes in environmental and other regulations that may limit the useful life of vessels; •decreased costs and increases in use of other modes of transportation; •cost of newbuildings or secondhand vessel acquisitions; •governmental and other regulations; •technological advances; and •the cost of retrofitting or modifying existing ships to respond to technological advances in vessel design or equipment, changes in applicable environmental or otherregulations or standards, or otherwise.In addition, as vessels grow older, they generally decline in value. If the fair market value of our vessels declines, we may not be in compliance with certain covenants in ourloan agreements and other financing agreements, and our lenders or lessors could accelerate our indebtedness or require us to pay down our indebtedness to a level where we are againin compliance with the covenants under our loans and other financing agreements. If any of our loans and other financing agreements are accelerated, we may not be able to refinanceour debt or obtain additional funding. We expect that we will enter into more loan agreements and other financing agreements in connection with our vessels or with future acquisitionsof vessels. For more information regarding our current loan facilities and other financing agreements, please see “Item 5. Operating and Financial Review and Prospects – B. Liquidityand Capital Resources – Loan Arrangements – Credit Facilities.” In addition, if vessel values decline, we may have to record an impairment adjustment in our financial statements, which could adversely affect our financial results.Furthermore, if we sell one or more of our vessels at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying value on our consolidated financialstatements, resulting in a loss on sale or an impairment loss being recognized, leading to a reduction in earnings. Newbuilding projects are subject to risks that could cause delays. We may enter into newbuilding contracts in connection with our vessel acquisition strategy. Newbuilding construction projects are subject to risks of delay inherent in anylarge construction project from numerous factors, including shortages of equipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials and equipment orshipyard construction, failure of equipment to meet quality and/or performance standards, financial or operating difficulties experienced by equipment vendors or the shipyard,unanticipated actual or purported change orders, inability to obtain required permits or approvals, design or engineering changes and work stoppages and other labor disputes, adverseweather conditions or any other events of force majeure. A shipyard’s failure to deliver a vessel on time may result in the delay of revenue from the vessel. Any such failure or delaycould have a material adverse effect on our operating results. 13Table of ContentsWe may acquire additional vessels in the future, and if those vessels are not delivered on time or are delivered with significant defects, our earnings and financial condition couldsuffer. We have recently expanded our fleet significantly and may acquire additional vessels in the future. A delay in the delivery of any vessels to us, the failure of the contractcounterparty to deliver a vessel at all, or us not taking delivery of a vessel could cause us to breach our obligations under a related time charter or could otherwise adversely affect ourfinancial condition and results of operations. In addition, the delivery of any vessel with substantial defects could have similar consequences. Substantial debt levels could limit our flexibility to obtain additional financing and pursue other business opportunities. As of December 31, 2021, we had $218.6 million of outstanding debt excluding the convertible note issued to a former principal shareholder of the Company, Jelco Delta HoldingCorp., or JDH. Moreover, we anticipate that we will incur future indebtedness in connection with the acquisition of additional vessels, although there can be no assurance that we will besuccessful in identifying further vessels or securing such debt financing. Significant levels of debt could have important consequences to us, including the following: •our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired, or such financing may beunavailable on favorable terms, or at all; •we may need to use a substantial portion of our cash from operations to make principal and interest payments on our bank debt and financing liabilities, reducing the fundsthat would otherwise be available for operations, future business opportunities and any future dividends to our shareholders; •our debt level could make us more vulnerable to competitive pressures or a downturn in our business or the economy generally than our competitors with less debt; and •our debt level may limit our flexibility in responding to changing business and economic conditions.Our ability to service our indebtedness will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economicconditions and financial, business, regulatory and other factors, some of which are beyond our control, as well as the interest rates applicable to our outstanding indebtedness. If ouroperating income is not sufficient to service our indebtedness, we will be forced to take actions, such as reducing or delaying our business activities, acquisitions, investments or capitalexpenditures, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We may not be able to effect any of these remedies on satisfactory terms, or at all.In addition, a lack of liquidity in the debt and equity markets could hinder our ability to refinance our debt or obtain additional financing on favorable terms in the future. For moreinformation regarding our current loan arrangements, please see “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements.” Our loan agreements and other financing arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, restrictive covenantsthat may limit our liquidity and corporate activities, which could limit our operational flexibility and have an adverse effect on our financial condition and results of operations.In addition, because of the presence of cross-default provisions in our loan agreements and financing arrangements, a default by us under one loan or financing agreement couldlead to defaults under multiple loans and financing agreements. Our loan agreements and other financial arrangements contain, and we expect that other future loan agreements and financing arrangements will contain, customary covenantsand event of default clauses, financial covenants, restrictive covenants and performance requirements, which may affect operational and financial flexibility. Such restrictions couldaffect, and in many respects limit or prohibit, among other things, our ability to pay dividends, incur additional indebtedness, create liens, sell assets, or engage in mergers oracquisitions. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. There can beno assurance that such restrictions will not adversely affect our ability to finance our future operations or capital needs. As a result of these restrictions, we may need to seek permission from our lenders and other financing counterparties in order to engage in some corporate actions. Our lenders'and other financing counterparties' interests may be different from ours and we may not be able to obtain their permission when needed. This may prevent us from taking actions that webelieve are in our best interests, which may adversely impact our revenues, results of operations and financial condition. A failure by us to meet our payment and other obligations, including our financial covenants and any security coverage requirements, could lead to defaults under ourfinancing arrangements. Likewise, a decrease in vessel values or adverse market conditions could cause us to breach our financial covenants or security requirements (the market valuesof dry bulk vessels have generally experienced high volatility). In the event of a default that we cannot remedy, our lenders and other financing counterparties could then accelerate theirindebtedness and foreclose on the respective vessels in our fleet. The loss of any of our vessels could have a material adverse effect on our business, results of operations and financialcondition. 14Table of ContentsBecause of the presence of cross-default provisions in our loan agreements and financing agreements, a default by us under a loan or financing agreement and the refusal ofany lender or financing counterparty to grant or extend a waiver could result in the acceleration of our indebtedness under our other loans and financing agreements. A cross-defaultprovision means that if we default on one loan, we would then default on our other loans containing a cross-default provision. In the recent past, we have obtained waivers, deferrals and amendments of certain financial covenants, payment obligations and events of default under our loan facilities withour lenders. However, there can be no assurance that we will obtain similar waivers and deferrals from our lenders in the future, if needed, as we have obtained in the past.For more information regarding our current loan facilities, see please see “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – LoanArrangements.” If we fail to manage our planned growth properly, we may not be able to successfully expand our market share. Our fleet currently consists of 17 Capesize vessels, and we may acquire additional vessels in the future. Our ability to manage our growth will primarily depend on our ability to: •generate excess cash flow so that we can invest without jeopardizing our ability to cover current and foreseeable working capital needs, including debt service; •finance our operations; •locate and acquire suitable vessels; •identify and consummate acquisitions or joint ventures; •integrate any acquired businesses or vessels successfully with our existing operations; •hire, train and retain qualified personnel and crew to manage and operate our growing business and fleet; and •expand our customer base.Growing any business by acquisitions presents numerous risks such as obtaining acquisition financing on acceptable terms or at all, undisclosed liabilities and obligations,difficulty in obtaining additional qualified personnel, managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. Wemay not be successful in executing our growth plans and we may incur significant additional expenses and losses in connection therewith. Purchasing and operating secondhand vessels, such as our current fleet, may result in increased operating costs and vessel off-hire, which could adversely affect our financialcondition and results of operations. All 17 of the vessels in our fleet are secondhand vessels. Our inspection of these or other secondhand vessels prior to purchase does not provide us with the same knowledgeabout their condition and the cost of any required or anticipated repairs that we would have had if these vessels had been built for and operated exclusively by us. We have not receivedin the past, and do not expect to receive in the future, the benefit of warranties on any secondhand vessels we acquire. As the vessels in our fleet or other secondhand vessels we may acquire age, they may become less fuel efficient and costlier to maintain and will not be as advanced as recentlyconstructed vessels due to improvements in design, technology and engineering, including improvements required to comply with government regulations. Rates for cargo insurance,paid by charterers, also increase with the age of a vessel, making older vessels less desirable to charterers. In addition, charterers actively discriminate against hiring older vessels. Rightship, the ship vetting service founded by Rio Tinto and BHP-Billiton, has become a major vettingservice in the dry bulk shipping industry, which ranks the suitability of vessels based on a scale of one to five stars. There are carriers that may not charter a vessel that Rightship hasvetted with fewer than three stars. Therefore, a potentially deteriorated star rating for our vessels may affect their commercial operation and profitability and vessels in our fleet withlower ratings may experience challenges in securing charters. Effective as of January 1, 2018, Rightship's age trigger for a dry cargo inspection for vessels over 8,000 dwt changed from18 years to 14 years, after which an annual acceptable Rightship inspection will be required. Rightship may downgrade any vessel over 18 years of age that has not completed asatisfactory inspection by Rightship, in the same manner as any other vessel over 14 years of age, to two stars, which significantly decreases its chances of entering into a charter. Nine,seven and one vessels in our fleet have five, four and three-star risk ratings from Rightship, respectively. Governmental regulations, safety or other equipment standards related to the age or condition of vessels may require expenditures for alterations, or the addition of newequipment, to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable usto operate our vessels profitably during the remainder of their useful lives. 15Table of ContentsIn addition, unless we maintain cash reserves for vessel replacement, we may be unable to replace the vessels in our fleet upon the expiration of their useful lives. We estimatethe useful life of our vessels to be 25 years from the date of initial delivery from the shipyard. Our cash flows and income are dependent on the revenues we earn by chartering ourvessels to customers. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives, our business, financial condition and results of operations will bematerially adversely affected. Any reserves set aside for vessel replacement would not be available for other cash needs or dividends. Increased regulatory oversight, uncertainty relating to the LIBOR calculation process and phasing out of LIBOR may adversely affect the amounts of interest we pay under ourdebt arrangements and our results of operations. The calculation of interest in most financing agreements in our industry has been based on published LIBOR rates. LIBOR has historically been volatile, with the spreadbetween LIBOR and the prime lending rate widening significantly at times. These conditions are the result of the disruptions in the international credit markets. Because the interest ratesborne by our outstanding indebtedness primarily fluctuate with changes in LIBOR, and if such volatility were to occur in the future, or if LIBOR is replaced as the reference rate underour debt obligations, it could affect the amount of interest payable on our debt which, in turn, could have an adverse effect on our profitability, earnings and cash flow. On July 27, 2017, the UK Financial Conduct Authority (“FCA”) announced that it would phase-out LIBOR by the end of 2021. On November 30, 2020, ICE BenchmarkAdministration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom’s Financial Conduct Authority, announced plans toconsult on ceasing publication of U.S. Dollar LIBOR on December 31, 2021 for only the one-week and two-month U.S. Dollar LIBOR tenors, and on June 30, 2023 for all other U.S. DollarLIBOR tenors. This announcement coincided with an announcement by the International Swaps and Derivatives Association (“ISDA”) that the IBA announcement was not a triggeringevent which would set the spread to be used in its derivative contracts as part of the risk-free rate determination process. As a result, lenders have insisted on fallback provisions thatentitle the lenders, in their discretion, to replace published LIBOR as the basis for the interest calculation with successor benchmark rates, such as their cost-of-funds rate. Variousalternative reference rates are being considered in the financial community. The Secured Overnight Financing Rate (“SOFR”) has been proposed by the Alternative Reference RateCommittee (“ARRC”), a committee convened by the U.S. Federal Reserve that includes major market participants and on which regulators participate, as an alternative rate to replaceU.S. dollar LIBOR. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement (repo) market. The dailytransaction volumes underlying SOFR are approximately $1 trillion, giving the ARRC confidence that SOFR will be reliable through a wide range of market conditions. SOFR is beingadopted by most lenders in our industry as replacement benchmark rate and one of our loan facilities has adopted SOFR as a benchmark rate. However, it is not possible at this time toknow the ultimate impact a phase-out of LIBOR and its potential replacement with SOFR may have, or how any such changes or alternative methods for calculating benchmark interestrates would be applied to any particular agreement containing terms based on LIBOR, which generally have alternative calculation provisions. All our floating rate financing agreements,currently in place, are linked to the 1-month and 3-months tenors of the U.S. dollar LIBOR which will continue to be published until June 30, 2023; additionally they contain benchmarkreplacement provisions that protect the lender from a mismatch between the cost of funding for the respective loan and a potential replacement benchmark rate. If, however, these areimplicated, the interest payable on these particular agreements could be subject to volatility and the underlying lending costs could increase, which would have an adverse effect on theborrowers’ profitability, earnings and cash flow. The failure of our counterparties to meet their obligations under our charter agreements could cause us to suffer losses or otherwise adversely affect our business. The ability and willingness of each of our counterparties to perform its obligations under charter agreements with us will depend on a number of factors that are beyond ourcontrol and may include, among other things, general economic conditions, the condition of the dry bulk shipping industry and the industries in which our counterparties operate andthe overall financial condition of the counterparties. From time to time, those counterparties may account for a significant amount of our chartering activity and revenues. In addition, inchallenging market conditions, there have been reports of charterers renegotiating their charters or defaulting on their obligations under charter agreements, and so our customers mayfail to pay charter hire or attempt to renegotiate charter rates. Should a counterparty fail to honor its obligations under agreements with us, it may be difficult to secure substituteemployment for such vessel, and any new charter arrangements we secure in the spot market or on time charters could be at lower rates. If our charterers fail to meet their obligations tous or attempt to renegotiate our charter agreements, we could suffer significant losses, which could have a material adverse effect on our business, financial condition, results ofoperations and cash flows. Rising crew costs may adversely affect our profits. Crew costs are expected to be a significant expense for us. Recently, the limited supply of and increased demand for highly skilled and qualified crew, due to the increase in thesize of the global shipping fleet, has created upward pressure on crewing costs. Increases in crew costs may adversely affect our profitability if we are not able to increase our rates. 16Table of ContentsWe may not be able to attract and retain key management personnel and other employees in the shipping industry, which may negatively affect the effectiveness of ourmanagement and our results of operations. Our success will depend to a significant extent upon the abilities and efforts of our management team, including our ability to retain key members of our management team andthe ability of our management to recruit and hire suitable employees. The loss of any of these individuals could adversely affect our business prospects and financial condition.Difficulty in hiring and retaining personnel could adversely affect our results of operations. Our vessels may suffer damage, and we may face unexpected repair costs, which could adversely affect our cash flow and financial condition. If our vessels suffer damage, they may need to be repaired at a shipyard facility. The costs of repairs are unpredictable and can be substantial. The loss of earnings while ourvessels are being repaired and repositioned, as well as the actual cost of these repairs, would decrease our earnings and reduce the amount of any dividends in the future. We may nothave insurance that is sufficient to cover all or any of these costs or losses and may have to pay repair costs not covered by our insurance. We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations. We generate all of our revenues and incur the majority of our operating expenses in U.S. dollars, but we currently incur many of our general and administration expenses incurrencies other than the U.S. dollar, primarily the euro. Because such portion of our expenses is incurred in currencies other than the U.S. dollar, our expenses may from time to timeincrease relative to our revenues as a result of fluctuations in exchange rates, particularly between the U.S. dollar and the euro, which could affect the amount of net income that wereport in future periods. We may use financial derivatives to operationally hedge some of our currency exposure. Our use of financial derivatives involves certain risks, including the riskthat losses on a hedged position could exceed the nominal amount invested in the instrument and the risk that the counterparty to the derivative transaction may be unable or unwillingto satisfy its contractual obligations, which could have an adverse effect on our results. We maintain cash with a limited number of financial institutions including financial institutions that may be located in Greece, which will subject us to credit risk. We maintain all of our cash with a limited number of financial institutions, including institutions that are located in Greece. These financial institutions located in Greece may besubsidiaries of international banks or Greek financial institutions. Economic conditions in Greece have been, and continue to be, uncertain as a result of recent sovereign weakness.Although Moody's Investor Services Inc. upgraded the bank financial strength ratings, as well as the deposit and debt ratings, of several Greek banks in September 2021 to reflectimproving prospects, the stand-alone financial strength of the banks and the anticipated additional pressures stemming from the legacy of the country's multi-year debt crisis and theCOVID-19 pandemic continue to create challenging economic prospects. We are a holding company and we depend on the ability of our subsidiaries to distribute funds to us in order to satisfy financial obligations or to pay dividends. We are a holding company and our subsidiaries, which are all wholly-owned by us either directly or indirectly, conduct all of our operations and own all of our operating assets.We have no significant assets other than the equity interests in our wholly-owned subsidiaries. As a result, our ability to make dividend payments depends on our subsidiaries and theirability to distribute funds to us. The ability of a subsidiary to make these distributions could be affected by the covenants in our loan agreements, a claim or other action by a third party,including a creditor, and the laws of Bermuda, the British Virgin Islands, Hong Kong, Liberia, Malta and the Republic of the Marshall Islands, where our vessel-owning subsidiaries areincorporated, which regulate the payment of dividends by companies. If we are unable to obtain funds from our subsidiaries, we may not be able to satisfy our financial obligations. In the highly competitive international shipping industry, we may not be able to compete for charters with new entrants or established companies with greater resources, whichmay adversely affect our results of operations. We employ our vessels in a highly competitive market that is capital intensive and highly fragmented. Competition arises primarily from other vessel owners, some of whom mayhave substantially greater resources than we do. Competition for the transportation of dry bulk cargoes by sea is intense and depends on price, location, size, age, condition and theacceptability of the vessel and its operators to the charterers. Due in part to the highly fragmented market, competitors with greater resources could enter the dry bulk shipping industryand operate larger fleets through consolidations or acquisitions and may be able to offer lower charter rates and higher quality vessels than we are able to offer. Although we believethat no single competitor has a dominant position in the markets in which we compete, we are aware that certain competitors may be able to devote greater financial and other resourcesto their activities than we can, resulting in a significant competitive threat to us. We cannot give assurances that we will continue to compete successfully with our competitors or thatthese factors will not erode our competitive position in the future. 17Table of ContentsDue to our lack of fleet diversification, adverse developments in the maritime dry bulk shipping industry would adversely affect our business, financial condition, and operatingresults. Our business currently depends on the transportation of dry bulk commodities, and our fleet consists exclusively of Capesize vessels. Our current lack of diversification couldmake us vulnerable to adverse developments in the maritime dry bulk shipping industry and demand for Capesize vessels in particular, which would have a significantly greater impacton our business, financial condition and operating results than it would if we maintained more diverse assets or lines of business. We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us. We may be, from time to time, involved in various litigation matters. These matters may include, among other things, contract disputes, personal injury claims, environmentalclaims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties, and other litigation that arises in the ordinary course of ourbusiness. Although we intend to defend these matters vigorously, we cannot predict with certainty the outcome or effect of any claim or other litigation matter, and the ultimate outcomeof any litigation or the potential costs to resolve them may have a material adverse effect on us. Insurance may not be applicable or sufficient in all cases or insurers may not remainsolvent, which may have a material adverse effect on our financial condition. The shipping industry has inherent operational risks that may not be adequately covered by our insurances. Further, because we obtain some of our insurances through protectionand indemnity associations, we have been and may in the future be retrospectively subject to calls or premiums in amounts based not only on our own claim records, but also on theclaim records of all other members of the protection and indemnity associations.We procure insurance for our fleet against risks commonly insured against by vessel owners and operators. Our current insurances include hull and machinery insurance, war risksinsurance, demurrage and defense insurance and protection and indemnity insurance (which includes environmental damage and pollution insurance). We do not expect to maintain forour vessels insurance against loss of hire, which covers business interruptions that result from the loss of use of a vessel, except in cases when our vessels transit through or call athigh risk areas. We may not be adequately insured against all risks or our insurers may not pay a particular claim. Even if our insurance coverage is adequate to cover our losses, we maynot be able to timely obtain a replacement vessel in the event of a loss. Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for ourfleet. Our insurance policies also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs. Ifour insurances are not enough to cover claims that may arise, the deficiency may have a material adverse effect on our financial condition and results of operations. We have been andmay in the future be retrospectively subject to calls, or premiums, in amounts based not only on our own claim records but also the claim records of all other members of the protectionand indemnity associations through which we receive indemnity insurance coverage for tort liability, including pollution-related liability. In the past, we paid approximately $0.3 million inresponse to these calls, and our payment of such calls could in the future result in significant expenses to us.Failure to comply with the U.S. Foreign Corrupt Practices Act of 1977, or FCPA, could result in fines, criminal penalties, and an adverse effect on our business. We operate throughout the world, including countries with a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption lawsand have adopted a code of business conduct and ethics which is consistent and in full compliance with the FCPA. We are subject, however, to the risk that we, our affiliated entities orour or their respective officers, directors, employees and agents may take action determined to be in violation of such anti-corruption laws, including the FCPA. Any such violationcould result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operationsor financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual oralleged violations is expensive and can consume significant time and attention of our senior management. We depend significantly on third-party technical and commercial managers for crewing and certain aspects of technical and commercial management of some of our ships. Ouroperations could be negatively affected if third-party managers fail to perform their services satisfactorily. Seanergy Shipmanagement Corp., or Seanergy Shipmanagement, our wholly owned ship management subsidiary, provides certain technical management services to theDukeship, Fellowship, Friendship, Goodship, Knightship, Lordship and Worldship and it is expected to undertake the technical management of more vessels of our fleet in the future.Seanergy Management Corp., or Seanergy Management, our wholly owned subsidiary, provides us with certain other management services. Moreover, we also depend significantly onthird-party technical and commercial managers. V.Ships and V.Ships Greece provide us with certain technical, general administrative and support services (including vessel maintenance,crewing, purchasing, shipyard supervision, assistance with regulatory compliance, accounting related to vessels and provisions). Anglo-Eastern Crew Management (Asia) Limited, orAnglo-Eastern, provide crew management services to the Worldship and Dukeship. Fidelity provides us with commercial management services for our vessels. 18Table of ContentsOur operational success depends significantly upon V.Ships’, V.Ships Greece’s, Anglo-Eastern’s and Fidelity’s satisfactory performance of these services. Our business wouldbe harmed if V.Ships, V.Ships Greece, Anglo-Eastern or Fidelity failed to perform these services satisfactorily. In addition, if our management agreements with any of V.Ships, V. ShipsGreece or Fidelity were to be terminated or if their terms were to be altered, our business could be adversely affected, as we may not be able to immediately replace such services, andeven if replacement services were immediately available, the terms offered could be less favorable than those under our existing management agreements. In addition, our ability to compete for and enter into new period time and spot charters and to expand our relationships with our existing charterers depends significantly on ourrelationship with our third-party commercial manager, Fidelity. If Fidelity fails to perform its obligations, it may harm our ability to renew existing charters upon their expiration, obtainnew charters, and maintain satisfactory relationships with our charterers and suppliers. The failure of our third-party managers to perform their obligations satisfactorily could have a material adverse effect on our business, financial condition and results ofoperations. Because our third-party managers are each privately held companies, we and our shareholders might have little advance warning of financial or other problems affectingthem even though their financial or other problems could have a material adverse effect on us. Although we may have rights against our third-party managers if they default on theirobligations to us, our shareholders will share that recourse only indirectly to the extent that we recover funds. Management fees will be payable to our managers regardless of our profitability, which could have a material adverse effect on our business, financial condition and results ofoperations. Pursuant to our technical and crew management agreements we pay management fees to our managers as described in “Item 4.B. History and Development – BusinessOverview – Management of our fleet” in exchange for provision of technical, support and administrative services. The management fees do not cover expenses such as voyageexpenses, vessel operating expenses, maintenance expenses and crewing costs, for which we reimburse the technical manager. The management fees are payable whether or not ourvessels are employed and regardless of our profitability, and we have no ability to require our managers to reduce the management fees if our profitability decreases, which could have amaterial adverse effect on our business, financial condition and results of operations. We may be classified as a passive foreign investment company, which could result in adverse U.S. federal income tax consequences to U.S. holders of our common stock. A foreign corporation will be treated as a “passive foreign investment company,” or PFIC, for U.S. federal income tax purposes if either (1) at least 75% of its gross income forany taxable year consists of certain types of “passive income” or (2) at least 50% of the average value of the corporation's assets produce or are held for the production of those typesof “passive income.” For purposes of these tests, “passive income” includes dividends, interest, gains from the sale or exchange of investment property, and rents and royalties otherthan rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from theperformance of services does not constitute “passive income.” U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the incomederived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC. Based upon our current and anticipated method of operations, we do not believe that we should be a PFIC with respect to our 2021 taxable year, and we do not expect tobecome a PFIC in any future taxable year. In this regard, we intend to treat our gross income from time charters as active services income, rather than rental income. Accordingly, ourincome from our time chartering activities should not constitute “passive income,” and the assets that we own and operate in connection with the production of that income should notconstitute passive assets. There is substantial legal authority supporting this position including case law and U.S. Internal Revenue Service, or IRS, pronouncements concerning thecharacterization of income derived from time charters and voyage charters as services income for other tax purposes. However, it should be noted that there is also authority whichcharacterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will acceptthis position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for anyfuture taxable year if the nature and extent of our operations change. If the IRS were to find that we are or have been a PFIC for any taxable year, our U.S. shareholders would face adverse U.S. federal income tax consequences and certaininformation reporting requirements. Under the PFIC rules, unless those shareholders make an election available under the United States Internal Revenue Code of 1986 as amended, orthe Code (which election could itself have adverse consequences for such shareholders), such shareholders would be liable to pay U.S. federal income tax at the then prevailing incometax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of their shares of our common stock, as if the excess distribution or gain hadbeen recognized ratably over the shareholder's holding period of the shares of our common stock. Similar consequences would apply to holders of our warrants. See “Item 10.E. TaxConsiderations – United States Federal Income Tax Consequences – United States Federal Income Taxation of U.S. Holders – Passive Foreign Investment Company Rules” for a morecomprehensive discussion of the U.S. federal income tax consequences to U.S. shareholders if we are treated as a PFIC. 19Table of ContentsWe may have to pay tax on U.S. source income, which would reduce our earnings. Under the Code, 50% of the gross shipping income of a vessel-owning or chartering corporation, such as us and our subsidiaries, that is attributable to transportation thatbegins or ends, but that does not both begin and end, in the United States, exclusive of certain U.S. territories and possessions, or “U.S. source gross shipping income” may be subjectto a 4% U.S. federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the applicable TreasuryRegulations promulgated thereunder. We believe that we qualify for exemption from the 4% tax under Section 883 of the Code for our 2021 taxable year. However, there are factual circumstances beyond our controlthat could cause us not to have the benefit of the tax exemption under Section 883 in 2022 or future years and thereby cause us to become subject to U.S. federal income tax on our U.S.source shipping income. For example, there is a risk that we could fail to qualify for exemption under Section 883 of the Code for a particular taxable year if “non-qualified” shareholderswith a five percent or greater interest in our stock were, in combination with each other, to own 50% or more of the outstanding shares of our stock on more than half the days during thetaxable year. See the description of the ownership tests which must be satisfied to qualify for exemption under Section 883 of the Code in “Item 10.E. Tax Considerations – United StatesFederal Income Tax Consequences – Exemption of Operating Income from United States Federal Income Taxation.” Because the availability of the exemption depends on factual circumstances beyond our control, we can give no assurances on the tax-exempt status of ourselves or that of anyof our subsidiaries for our 2022 or subsequent taxable years. If we or our subsidiaries are not entitled to exemption under Section 883, we or our subsidiaries will be subject to the 4%U.S. federal income tax on 50% of any shipping income such companies derive that is attributable to the transport of cargoes to or from the United States. This tax is a cost, which, ifunreimbursed, has a negative effect on our business and results in decreased earnings available for distribution to our shareholders. We may be subject to tax in the jurisdictions in which we or our vessel-owning subsidiaries are incorporated or operate. In addition to the tax consequences discussed herein, we may be subject to tax in one or more other jurisdictions where we or our vessel-owning subsidiaries are incorporatedor conduct activities. We are subject to a corporate flat tax for our subsidiaries in Malta for the period from January 1, 2021 to December 31, 2021 and could be subject to additionaltaxation in the future in Malta or other jurisdictions where our subsidiaries are incorporated or do business. The amount of any such tax imposed upon our operations or on oursubsidiaries' operations may be material and could have an adverse effect on our earnings. We are a “foreign private issuer,” which could make our common stock less attractive to some investors or otherwise harm our stock price. We are a “foreign private issuer,” as such term is defined in Rule 405 under the Securities Act. As a “foreign private issuer” the rules governing the information that we disclosediffer from those governing U.S. corporations pursuant to the Exchange Act. We are not required to file quarterly reports on Form 10-Q or provide current reports on Form 8-K disclosingsignificant events within four days of their occurrence. In addition, our officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 ofthe Exchange Act and related rules with respect to their purchase and sales of our securities. Our exemption from the rules of Section 16 of the Exchange Act regarding sales of commonstock by insiders means that you will have less data in this regard than shareholders of U.S. companies that are subject to the Exchange Act. Moreover, we are exempt from the proxyrules, and proxy statements that we distribute will not be subject to review by the Commission. Accordingly, there may be less publicly available information concerning us than there isfor other U.S. public companies. These factors could make our common stock less attractive to some investors or otherwise harm our stock price. The Public Company Accounting Oversight Board inspection of our independent accounting firm could lead to adverse findings in our auditors' reports and challenges to theaccuracy of our published audited consolidated financial statements. Auditors of U.S. public companies are required by law to undergo periodic Public Company Accounting Oversight Board, or PCAOB, inspections that assess their compliancewith U.S. law and professional standards in connection with performance of audits of financial statements filed with the SEC. For several years certain European Union countries,including Greece, did not permit the PCAOB to conduct inspections of accounting firms established and operating in such European Union countries, even if they were part of majorinternational firms. Accordingly, unlike for most U.S. public companies, the PCAOB was prevented from evaluating our auditor's performance of audits and its quality controlprocedures, and, unlike stockholders of most U.S. public companies, we and our stockholders were deprived of the possible benefits of such inspections. Since 2015, Greece agreed toallow the PCAOB to conduct inspections of accounting firms operating in Greece. In the future, such PCAOB inspections could result in findings in our auditors' quality controlprocedures, question the validity of the auditor's reports on our published consolidated financial statements and the effectiveness of our internal control over financial reporting, andcast doubt upon the accuracy of our published audited financial statements. 20Table of ContentsChanging laws and evolving reporting requirements could have an adverse effect on our business. Changing laws, regulations and standards relating to reporting requirements, including the European Union General Data Protection Regulation, or GDPR, may create additionalcompliance requirements for us. To maintain high standards of corporate governance and public disclosure, we have invested in, and continue to invest in, reasonably necessaryresources to comply with evolving standards. GDPR broadens the scope of personal privacy laws to protect the rights of European Union citizens and requires organizations to report on data breaches within 72 hours andbe bound by more stringent rules for obtaining the consent of individuals on how their data can be used. Non-compliance with GDPR may expose entities to significant fines or otherregulatory claims which could have an adverse effect on our business, and results of operations. A cyber-attack could materially disrupt our business. We rely on information technology systems and networks in our operations and administration of our business. Our business operations could be targeted by individuals orgroups seeking to sabotage or disrupt our information technology systems and networks, or to steal data. A successful cyber-attack could materially disrupt our operations, includingthe safety of our operations, or lead to unauthorized release of information or alteration of information in our systems. Any such attack or other breach of our information technologysystems could have a material adverse effect on our business and results of operations. In addition, the unavailability of the information systems or the failure of these systems toperform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating costs, causing our business and results ofoperations to suffer. Any significant interruption or failure of our information systems or any significant breach of security could adversely affect our business and results of operations. Additionally, any changes in the nature of cyber threats might require us to adopt additional procedures for monitoring cybersecurity, which could require additional expensesand/or capital expenditures. Most recently, the escalation in conflict between Russia and Ukraine has been accompanied by cyber-attacks against the Ukrainian government and othercountries in the region. It is possible that these attacks could have collateral effects on additional critical infrastructure and financial institutions globally, which could adversely affectour operations. It is difficult to assess the likelihood of such threat and any potential impact at this time. The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us. Our vessels may call in ports in South America and other areas where smugglers attempt to hide drugs and other contraband on vessels, with or without the knowledge of crewmembers. Under some jurisdictions, vessels used for the conveyance of illegal drugs could subject the vessels to forfeiture to the government of such jurisdiction. To the extent ourvessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any member of our crew, we may face reputationaldamage and governmental or other regulatory claims or penalties which could have an adverse effect on our business, results of operations, cash flows and financial condition, as wellas our ability to maintain cash flows, including cash available for distributions to pay dividends to our unitholders. Under some jurisdictions, vessels used for the conveyance of illegaldrugs could subject result in forfeiture of the vessel to forfeiture to the government of such jurisdiction. Risks Relating to Our Common Shares We may issue additional common shares or other equity securities without shareholder approval, which would dilute our existing shareholders' ownership interests and maydepress the market price of our common shares. We may issue additional common shares or other equity securities of equal or senior rank in the future without shareholder approval in connection with, among other things,future vessel acquisitions, the repayment of outstanding indebtedness, and the conversion of convertible financial instruments. Our issuance of additional common shares or other equity securities of equal or senior rank in these situations would have the following effects: •our existing shareholders' proportionate ownership interest in us would decrease; •the proportionate amount of cash available for dividends payable on our common shares could decrease; •the relative voting strength of each previously outstanding common share could be diminished; and •the market price of our common shares could decline.In addition, as of March 29, 2022, we may be obliged to issue additional common shares pursuant to the terms of outstanding warrants and convertible notes as follows: 21Table of Contents •301,875 common shares issuable upon the exercise of outstanding Class B warrants at an exercise price of $16.00 per share, which warrants trade on the Nasdaq CapitalMarket under the ticker symbol “SHIPZ” and expire in May 2022; •113,970 common shares issuable upon the exercise of Class B warrants issued to JDH pursuant to a Securities Purchase Agreement dated May 9, 2019, at an exercise priceof $16.00 per share; •13,125 common shares issuable upon the exercise of a representative’s warrant issued to Maxim Group LLC in connection with our public offering which closed on May 13,2019, at an exercise price per share of $16.00, which warrant expires in May 2022; •110,281 common shares issuable upon the exercise of a representative’s warrant issued to Maxim Group LLC in connection with our public offering which closed on April 2,2020, at an exercise price per share of $3.40, which warrant expires in March 2023; •273,046 common shares issuable upon the exercise of outstanding Class D warrants at an exercise price of $1.60 per share, which warrants were issued in our public offeringwhich closed on April 2, 2020 and expire in April 2025; •8,632,713 common shares issuable upon the exercise of outstanding Class E Warrants at an exercise price of $0.70 per share, which warrants were issued in our underwrittenpublic offering which closed on August 20, 2020 and which expire in August 2025; •9,304,166 common shares issuable upon the conversion of an outstanding convertible note that we issued to JDH, at a conversion price of $1.20 per common share.Our issuance of additional common shares upon the exercise of such warrants and convertible notes would cause the proportionate ownership interest in us of our existingshareholders, other than the exercising warrant or note holders, to decrease; the relative voting strength of each previously outstanding common share held by our existing shareholdersto decrease; and, depending on our share price when and if these warrants or notes are exercised, may result in dilution to our shareholders. The market price of our common shares has been and may in the future be subject to significant fluctuations. Further, there is no guarantee of a continuing public market to resellour common shares. The market price of our common shares has been and may in the future be subject to significant fluctuations as a result of many factors, some of which are beyond our control.Among the factors that have in the past and could in the future affect our stock price are: •quarterly variations in our results of operations; •changes in market valuations of similar companies and stock market price and volume fluctuations generally; •changes in earnings estimates or the publication of research reports by analysts; •speculation in the press or investment community about our business or the shipping industry generally; •strategic actions by us or our competitors such as acquisitions or restructurings; •the thin trading market for our common shares, which makes it somewhat illiquid; •regulatory developments; •additions or departures of key personnel; •general market conditions; and •domestic and international economic, market and currency factors unrelated to our performance.On December 31, 2021, the closing price of our common shares on the Nasdaq Capital Market was $0.9184 per share, as compared to $1.14, which was the closing price onMarch 29, 2022. In addition, there has been volatility in our intra-day common share price. For example, the high and low intra-day prices on March 7, 2022 were $1.27 and $1.14,respectively. As a result, there is a potential for rapid and substantial decreases in the price of our common shares, including decreases unrelated to our operating performance orprospects. 22Table of ContentsThe stock markets in general, and the markets for dry bulk shipping and shipping stocks in particular, have experienced extreme volatility that has sometimes been unrelated tothe operating performance of individual companies. These broad market fluctuations may adversely affect the trading price of our common stock. Additionally, there is no guarantee of a continuing public market to resell our common shares. Our common shares commenced trading on the Nasdaq Global Market onOctober 15, 2008. Since December 21, 2012, our common shares have traded on the Nasdaq Capital Market. We cannot assure you that an active and liquid public market for our commonshares will continue. On July 15, 2019, we received written notification from the Nasdaq Stock Market, indicating that because the closing bid price of our common stock for 30 consecutive businessdays, from May 31, 2019 to July 12, 2019, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we were not in compliancewith Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until January 13, 2020. On January14, 2020, we received written notification from the Nasdaq Stock Market, indicating that we were granted an additional 180-day grace period, until July 13, 2020, to cure our non-compliance with Nasdaq Listing Rule 5550(a)(2). We received written notification from the Nasdaq Stock Market dated April 17, 2020, granting an extension of the grace period to curesuch non-compliance from July 13, 2020 to September 25, 2020. The extension was granted as part of Nasdaq’s determination to toll the compliance periods for all public companies, notmeeting the continued listing requirements, such as the bid price requirement, due to the extraordinary market conditions and unprecedented turmoil in U.S financial markets. On June 30,2020, we conducted a 1-for-16 reverse stock split. On July 15, 2020, the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning theminimum bid price of the Company’s common stock. On September 30, 2020, we again received written notification from the Nasdaq Stock Market indicating that because the closing bid price of our common stock for 30consecutive business days, from August 18, 2020 to September 29, 2020, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq CapitalMarket, we were not in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, oruntil March 29, 2021. On February 11, 2021, the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price ofthe Company’s common stock and this matter is now closed. On January 26, 2022, we again received written notification from the Nasdaq Stock Market indicating that because the closing bid price of our common stock for 30 consecutivebusiness days, from December 13, 2021 to January 25, 2022, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we werenot in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until July 25,2022. On February 14, 2022, the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’scommon stock and this matter is now closed. A possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to further price volatility in our common shares. Investors may purchase our common shares to hedge existing exposure in our common shares or to speculate on the price of our common shares. Speculation on the price ofour common shares may involve long and short exposures. To the extent aggregate short exposure exceeds the number of common shares available for purchase in the open market,investors with short exposure may have to pay a premium to repurchase our common shares for delivery to lenders of our common shares. Those repurchases may in turn, dramaticallyincrease the price of our common shares until investors with short exposure are able to purchase additional common shares to cover their short position. This is often referred to as a“short squeeze.” Following such a short squeeze, once investors purchase the shares necessary to cover their short position, the price of our common shares may rapidly decline. Ashort squeeze could lead to volatile price movements in our shares that are not directly correlated to the performance or prospects of our company. The declaration and payment of dividends will always be subject to the discretion of our board of directors and will depend on a number of factors. Our board of directors may notdeclare dividends in the future. The declaration, timing and amount of any dividend is subject to the discretion of our board of directors and will be dependent upon our earnings, financial condition, marketprospects, capital expenditure requirements, investment opportunities, restrictions in our loan agreements, the provisions of Marshall Islands law affecting the payment of dividends toshareholders, overall market conditions and other factors. Our board of directors may not declare dividends in the future. Further, Marshall Islands law generally prohibits the payment of dividends if the company is insolvent or would be rendered insolvent upon payment of such dividend, anddividends may be declared and paid out of our operating surplus. Dividends may also be declared or paid out of net profits for the fiscal year in which the dividend is declared and forthe preceding fiscal year. We may be unable to pay dividends in any anticipated amount or at all. 23Table of ContentsThe superior voting rights of our Series B Preferred Shares may limit the ability of our common shareholders to control or influence corporate matters, and the interests of theholder of such shares could conflict with the interests of common shareholders.While our common shares have one vote per share, each of our 20,000 Series B Preferred Shares presently outstanding has 25,000 votes per share; however, the voting power ofthe Series B Preferred Shares is limited such that no holder of Series B Preferred Shares may exercise voting rights pursuant to any Series B Preferred Shares that would result in the totalnumber of votes a holder is entitled to vote on any matter submitted to a vote of shareholders of the Company to exceed 49.99% of the total number of votes eligible to be cast on suchmatter. The Series B Preferred Shares, however, have no dividend rights or distribution rights, other than the right upon dissolution to receive a payment equal to the par value per of$0.0001 per share.As of the date of this annual report, our Chairman and Chief Executive Officer can therefore control 49.99% of the voting power of our outstanding capital stock. Our Chairmanand Chief Executive Officer will have substantial control and influence over our management and affairs and over matters requiring shareholder approval, including the election ofdirectors and significant corporate transactions, even though he owns significantly less than 50% of the Company economically.The superior voting rights of our Series B Preferred Shares may limit our common shareholders’ ability to influence corporate matters. The interests of the holder of the Series BPreferred Shares may conflict with the interests of our common shareholders, and as a result, the holders of our capital stock may approve actions that our common shareholders do notview as beneficial. Any such conflicts of interest could adversely affect our business, financial condition and results of operations, and the trading price of our common shares.Anti-takeover provisions in our restated articles of incorporation, as amended, and third amended and restated bylaws could make it difficult for our shareholders to replace orremove our current board of directors or could have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of ourcommon shares. Several provisions of our restated articles of incorporation, as amended, and third amended and restated bylaws may have anti-takeover effects. These provisions are intendedto avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board to maximize shareholder value in connection with anyunsolicited offer to acquire our company. However, these anti-take-over provisions could make it difficult for our shareholders to change the composition of our board of directors in anyone year, preventing them from changing the composition of our management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that someshareholders may consider favorable. These provisions: •authorize our board of directors to issue “blank check” preferred stock without shareholder approval, including preferred shares with superior voting rights, such as theSeries B Preferred Shares; •provide for a classified board of directors with staggered, three-year terms; •permit the removal of any director only for cause; •prohibiting shareholder action by written consent unless the written consent is signed by all shareholders entitled to vote on the action; •limiting the persons who may call special meetings of shareholders; and •establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by shareholders at meetingsof shareholders.In addition, we have entered into a shareholders rights agreement that makes it more difficult for a third party to acquire us without the support of our board of directors. See“Description of Securities” filed as Exhibit 2.9 hereto for a description of our shareholders rights agreement. These anti-takeover provisions, along with provisions of our shareholdersrights agreement, could substantially impede the ability of our shareholders to impose a change in control and, as a result, may adversely affect the market price of our common sharesand your ability to realize any potential change of control premium.Issuance of preferred shares, such as our Series B Preferred Shares, may adversely affect the voting power of our common shareholders and have the effect of discouraging,delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares. 24Table of ContentsOur restated articles of incorporation, as amended, currently authorize our board of directors to issue preferred shares in one or more series and to determine the rights,preferences, privileges and restrictions, with respect to, among other things, dividends, conversion, voting, redemption, liquidation and the number of shares constituting any serieswithout shareholders' approval. Our board of directors has issued, and may in the future issue, preferred shares with voting rights superior to those of the common shares, such as theSeries B Preferred Shares. If our board of directors determines to issue preferred shares, such issuance may discourage, delay or prevent a merger or acquisition that shareholders mayconsider favorable. The issuance of preferred shares with voting and conversion rights may also adversely affect the voting power of the holders of common shares. This couldsubstantially impede the ability of public shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common shares and ourshareholders' ability to realize any potential change of control premium. We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law, which may negatively affect the ability of shareholdersto protect their interests. Our corporate affairs are governed by our restated articles of incorporation, as amended, our third amended and restated bylaws and by the Marshall Islands BusinessCorporations Act, or the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicialcases in the Republic of the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Republic of the Marshall Islands are not asclearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in certain U.S. jurisdictions. Shareholder rights may differ aswell. While the BCA does specifically incorporate the non-statutory law, or judicial case law, of the State of Delaware and other states with substantially similar legislative provisions,shareholders may have more difficulty in protecting their interests in the face of actions by the management, directors or controlling shareholders than would shareholders of acorporation incorporated in a U.S. jurisdiction. Additionally, the Republic of the Marshall Islands does not have a legal provision for bankruptcy or a general statutory mechanism for insolvency proceedings. As such, in theevent of a future insolvency or bankruptcy, our shareholders and creditors may experience delays in their ability to recover for their claims after any such insolvency or bankruptcy.Further, in the event of any bankruptcy, insolvency, liquidation, dissolution, reorganization or similar proceeding involving us or any of our subsidiaries, bankruptcy laws other thanthose of the United States could apply. If we become a debtor under U.S. bankruptcy law, bankruptcy courts in the United States may seek to assert jurisdiction over all of our assets,wherever located, including property situated in other countries. There can be no assurance, however, that we would become a debtor in the United States, or that a U.S. bankruptcycourt would be entitled to, or accept, jurisdiction over such a bankruptcy case, or that courts in other countries that have jurisdiction over us and our operations would recognize a U.S.bankruptcy court's jurisdiction if any other bankruptcy court would determine it had jurisdiction. As a Marshall Islands corporation with principal executive offices in Greece, and also having subsidiaries in the Republic of the Marshall Islands and other offshore jurisdictionssuch as Liberia, Bermuda and the British Virgin Islands, our operations may be subject to economic substance requirements. In March 2019, the Council of the European Union, or the Council, published a list of non-cooperative jurisdictions for tax purposes, the 2019 Conclusions. In the 2019Conclusions, the Republic of the Marshall Islands, among others, was placed by the E.U. on the list of non-cooperative jurisdictions for failing to implement certain commitmentspreviously made to the E.U. by the agreed deadline. However, it was announced by the Council in October 2019 that the Marshall Islands had been removed from the list of non-cooperative jurisdictions. E.U. member states have agreed upon a set of measures, which they can choose to apply against the listed countries, including, inter alia, increased monitoringand audits, withholding taxes and non-deductibility of costs. The European Commission has stated it will continue to support member states' efforts to develop a more coordinatedapproach to sanctions for the listed countries. E.U. legislation prohibits E.U. funds from being channelled or transited through entities in non-cooperative jurisdictions. We are a Marshall Islands corporation with principal executive offices in Greece. Several of our subsidiaries are organized in the Republic of the Marshall Islands, Liberia,Bermuda and the British Virgin Islands. The Marshall Islands have enacted economic substance regulations with which we are obligated to comply. The Marshall Islands economicsubstance regulations require certain entities that carry out particular activities to comply with a three-part economic substance test whereby the entity must show that it (i) is directedand managed in the Marshall Islands in relation to that relevant activity, (ii) carries out core income-generating activity in relation to that relevant activity in the Marshall Islands(although it is being understood and acknowledged by the regulators that income-generated activities for shipping companies will generally occur in international waters) and (iii) havingregard to the level of relevant activity carried out in the Marshall Islands has (a) an adequate amount of expenditures in the Marshall Islands, (b) adequate physical presence in theMarshall Islands and (c) an adequate number of qualified employees in the Marshall Islands. Bermuda and the British Virgin Islands have enacted similar legislation. If we fail to comply with our obligations under such legislation or any similar law applicable to us in any other jurisdictions, we could be subject to financial penalties andspontaneous disclosure of information to foreign tax officials, or could be struck from the register of companies, in related jurisdictions. Any of the foregoing could be disruptive to ourbusiness and could have a material adverse effect on our business, financial conditions and operating results. We do not know (i) if the E.U. will once again add the Marshall Islands, Liberia, Bermuda or the British Virgin Islands to the list of non-cooperative jurisdictions, (ii) how quicklythe E.U. would react to any changes in legislation of the relevant jurisdictions, or (iii) how E.U. banks or other counterparties will react while we or any of our subsidiaries remain asentities organized and existing under the laws of listed countries. The effect of the E.U. list of non-cooperative jurisdictions, and any noncompliance by us with any legislation adoptedby applicable countries to achieve removal from the list, including economic substance regulations, could have a material adverse effect on our business, financial conditions andoperating results. 25Table of ContentsIt may not be possible for investors to serve process on or enforce U.S. judgments against us. We and all of our subsidiaries are incorporated in jurisdictions outside the U.S. and substantially all of our assets and those of our subsidiaries are located outside the U.S. Inaddition, most of our directors and officers are non-residents of the U.S., and all or a substantial portion of the assets of these non-residents are located outside the U.S. As a result, itmay be difficult or impossible for U.S. investors to serve process within the U.S. upon us, our subsidiaries or our directors and officers or to enforce a judgment against us for civilliabilities in U.S. courts. In addition, you should not assume that courts in the countries in which we or our subsidiaries are incorporated or where our assets or the assets of oursubsidiaries are located (1) would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. federaland state securities laws or (2) would enforce, in original actions, liabilities against us or our subsidiaries based on those laws. ITEM 4.INFORMATION ON THE COMPANYA.History and Development of the CompanyOverview We are an international shipping company specializing in the worldwide seaborne transportation of dry bulk commodities. We currently operate 17 Capesize vessels with acargo-carrying capacity of approximately 3,011,083 dwt and an average fleet age of 12.1 years. We are the only pure-play Capesize shipowner publicly listed in the U.S. We believe we have established a reputation in the international dry bulk shipping industry for operating and maintaining vessels with high standards of performance, reliabilityand safety. We have assembled a management team comprised of executives who have extensive experience operating large and diversified fleets, and who have strong ties to a numberof international charterers. We were incorporated under the laws of the Republic of the Marshall Islands, pursuant to the BCA, on January 4, 2008, originally under the name Seanergy Merger Corp. Wechanged our name to Seanergy Maritime Holdings Corp. on July 11, 2008. Our executive offices are located at 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece and our telephone numberis + 30 213 0181507. Our website is www.seanergymaritime.com. The SEC maintains a website that contains reports, proxy and information statements, and other information that we fileelectronically at www.sec.gov. History and Development Business Development and Capital Expenditures and Divestitures At the opening of trading on March 20, 2019, we effected a one-for-fifteen reverse split of our common stock in order to cure the deficiency of the Nasdaq minimum bid pricerequirement originally communicated to us on April 23, 2018. In May 2019, we sold 262,500 units at a price of $54.40 per unit in a public offering. The gross proceeds were approximately $14.3 million. As of the date of this annual report,301,875 Class B warrants and a Representative Warrant to purchase 13,125 common shares, issued in connection with this public offering, are outstanding. These warrants areexercisable at an adjusted exercise price of $16.00 per share and expire on May 13, 2022. Concurrently with the public offering in May 2019, we sold 113,970 units in a private placement to JDH in exchange for, inter alia, the forgiveness of certain payment obligationsof ours. As of the date of this annual report, the 113,970 Class B Warrants issued in connection with this private placement remain outstanding. In December 2019, we completed our initial program of installation of scrubbers in anticipation of the IMO's low sulfur fuel oil requirements in effect from January 1, 2020. Weretrofitted five Capesize vessels with scrubbers. On April 2, 2020, we sold 2,536,468 units (including the full exercise of the over-allotment option of 330,843 units granted to the underwriters) at a price of $2.72 per unit in apublic offering for gross proceeds of $6.9 million. As of the date of this annual report, 4,368,750 Class D Warrants at an exercise price of $3.40, issued in connection with this offering,remain outstanding. The Class D Warrants expire on April 2, 2025. Between April 23, 2020 and June 26, 2020, we issued 2,263,421 of our common shares pursuant to exercises of outstanding Class D Warrants with gross proceeds of $4.1 million. 26Table of ContentsBetween April and May 2020, we sold 11,690,625 of our common shares in four registered direct offerings concurrently with private placements of 11,690,625 warrants for apurchase price ranging between $2.16 and $1.92 per common share and warrant. The gross proceeds were approximately $23.2 million. During May and June 2020, a total of 11,690,625 shares were issued pursuant to the exercises of all warrants issued under the four private placements, for gross proceeds ofapproximately $16.9 million. On May 26, 2020, we entered into a definitive agreement with an unaffiliated third party to purchase a Japanese 2005- built Capesize vessel having a cargo-carrying capacity ofapproximately 177,500 dwt, the Goodship. The vessel was delivered to us on August 7, 2020. The gross purchase price of $11.4 million was funded with cash on hand at delivery andsubsequently through the ABB Loan Facility (as defined below). At the opening of trading on June 30, 2020, we effected a one-for-sixteen reverse stock split of our common stock in order to cure the deficiency of the Nasdaq minimum bidprice requirement originally communicated to us on July 15, 2019. In August 2020, we sold 35,714,286 units at a price of $0.70 per unit in an underwritten public offering. As of the date of this annual report, 8,632,713 Class E warrants at anexercise price of $0.70 per share, issued in connection with this offering, remain outstanding. The Class E warrants expire on August 20, 2025. On September 30, 2020, we received written notification from the Nasdaq Stock Market indicating that because the closing bid price of our common stock for 30 consecutivebusiness days, from August 18, 2020 to September 29, 2020, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we werenot in compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until March 29,2021. On February 11, 2021, the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’scommon stock. Between January 15, 2021 and October 1, 2021, we issued 32,263,715 of our common shares pursuant to exercises of outstanding Class E warrants with gross proceeds of $22.6million. On February 12, 2021, we entered into a definitive agreement with an unaffiliated third party to purchase a Japanese 2006-built Capesize vessel having a cargo-carrying capacityof approximately 177,000 dwt, the Tradership. The vessel was delivered to us on June 9, 2021. The gross purchase price of $17 million was funded with cash on hand at delivery andsubsequently through the ABB Loan Facility (as defined below). On February 19, 2021, we issued 44,150,000 of our common shares in a registered direct offering for a purchase price of $1.70 per common share, for aggregate gross proceeds ofapproximately $75.0 million. On March 10, 2021, we entered into a definitive agreement with an unaffiliated third party to purchase a Japanese 2013-built Capesize vessel having a cargo-carrying capacity ofapproximately 176,500 dwt, the Flagship. The vessel was delivered to us on May 6, 2021. The gross purchase price of approximately $28.4 million was funded with cash on hand atdelivery and subsequently through a sale and leaseback transaction with Cargill. On March 11, 2021, we entered into a definitive agreement with unaffiliated third parties to purchase a Japanese 2010-built Capesize vessel having a cargo-carrying capacity ofapproximately 182,000 dwt, the Patriotship. The vessel was delivered to us on June 1, 2021. The gross purchase price of $26.6 million was funded with cash on hand at delivery andsubsequently through though a sale and leaseback agreement with CMB Financial Leasing Co., Ltd. (“CMBFL”). On March 19, 2021, we entered into a definitive agreement with an unaffiliated third party to purchase a Japanese 2012-built Capesize vessel having a cargo-carrying capacity ofapproximately 181,00 dwt, the Hellasship. The vessel was delivered to us on May 6, 2021. The gross purchase price of $28.6 million was funded with cash on hand at delivery andsubsequently through a sale and leaseback agreement with CMBFL. On March 24, 2021, we issued 955,730 common shares to JDH, following JDH’s exercise of its pre-funded warrants from the December 30, 2020 transaction. Please see “Item 5.Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements – JDH Transactions". On May 17, 2021, we entered into an agreement with unaffiliated third parties for the purchase of a Japanese 2012-built Capesize vessel having a cargo-carrying capacity ofapproximately 181,400 dwt, the Worldship. The vessel was delivered to us on August 30, 2021 and the gross purchase price of $33.7 million was funded with cash on hand at delivery andsubsequently through the Piraeus Bank Loan Facility (as defined below).On June 22, 2021, we entered into an agreement with an unaffiliated third party for the purchase of a Japanese 2009-built Capesize vessel having a cargo-carrying capacity ofapproximately 177,000 dwt, the Friendship. The vessel was delivered to us on July 27, 2021. The gross purchase price of $24.6 million was financed with cash on hand at delivery andsubsequently through the August 2021 Alpha Bank Loan Facility (as defined below).27Table of ContentsOn August 10, 2021, our board of directors authorized a share repurchase plan of up to $17 million of our outstanding common shares or other securities, which has been fullyutilized. Pursuant to the plan, we have repurchased common shares for $1.7 million, a common stock purchase warrant for $1.0 million and two convertible notes with an aggregateprincipal amount of $13.95 million (discussed below).On September 30, 2021, we sold the Leadership to an unaffiliated third party for a gross sale price of $12.6 million. On October 05, 2021, we entered into an agreement with an unaffiliated third party for the purchase of a Japanese 2010-built Capesize vessel having a cargo-carrying capacity ofapproximately 181,500 dwt, the Dukeship. The vessel was delivered to us on November 26, 2021 and the gross purchase price of $34.3 million was funded with cash on hand. As of thedate of this annual report this vessel remains unencumbered.On October 14, 2021 we issued 3,000,000 common shares to JDH following the conversion of $3,600,000 of the principal amount of the First JDH Note, at the conversion price of$1.20 per share.Through a series of transactions during the period of November and December 2021, we have repurchased 1,702,103 of our outstanding common shares at an average price ofapproximately $0.993.On December 7, 2021, we entered into a warrant repurchase agreement with JDH to repurchase a common stock purchase warrant to purchase 4,285,714 of our common sharesfor $1.0 million. On December 10, 2021, we prepaid the outstanding principal amount of the First JDH Note and the Third JDH Note in an aggregate amount of $13.95 million. Thesetransactions closed, all obligations were terminated under the two convertible notes and the warrant was cancelled, on December 10, 2021.On December 7, 2021, our board of directors authorized a new share repurchase plan pursuant to which we could repurchase up to $10 million of our outstanding commonshares or other securities. This share repurchase plan has been fully utilized. Pursuant to the plan, we repurchased $5.0 million on January 26, 2022 and an additional $5.0 million onMarch 10, 2022 in relation to a convertible note (discussed below). In connection with the first of these repurchases our cash sweep obligations for 2022 under the convertible note werewaived pursuant to a waiver letter signed on January 19, 2022.On December 10, 2021, we entered into a stock purchase agreement and issued 20,000 of our newly-designated Series B Preferred Shares, par value $0.0001 per share, to ourChairman and Chief Executive Officer, in return for cash consideration of $250,000.On December 13, 2021, our previously-issued Class A Warrants, trading under the symbol SHIPW, expired. On January 26, 2022, we voluntarily prepaid $5.0 million of the outstanding balance of the Second JDH Note using cash on hand.On January 26, 2022, we received written notification from the Nasdaq Stock Market indicating that because the closing bid price of our common stock for 30 consecutivebusiness days, from December 13, 2021 to January 25, 2022, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, we were notin compliance with Nasdaq Listing Rule 5550(a)(2). Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the applicable grace period to regain compliance was 180 days, or until July 25, 2022.On February 14, 2022, the Nasdaq Stock Market confirmed that we regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s commonstock.On February 28, 2022, we voluntarily prepaid the remaining balance of $1.85 million of the Second JDH Loan using cash on hand. All obligations under the Second JDH Loanwere irrevocably and unconditionally discharged pursuant to the deed of release dated February 28, 2022.On March 10, 2022, we voluntarily prepaid another $5.0 million of the outstanding balance of the Second JDH Note using cash on hand.On March 10, 2022, we initiated the payment of quarterly cash dividends and declared a quarterly dividend of $0.025 per share and a special dividend of $0.025 per share withrespect to the fourth quarter of 2021.B.Business OverviewWe are an international shipping company specializing in the worldwide seaborne transportation of dry bulk commodities. We currently operate 17 Capesize vessels, with acargo-carrying capacity of approximately 3,011,083 dwt and an average fleet age of 12.1 years. We are the only pure-play Capesize shipping company listed in the U.S. 28Table of ContentsWe believe we have established a reputation in the international dry bulk shipping industry for operating and maintaining vessels with high standards of performance, reliabilityand safety. We have assembled a management team comprised of executives who have extensive experience operating large and diversified fleets, and who have strong ties to a numberof international charterers. Our Current Fleet The following table lists the vessels in our fleet as of the date of this annual report: Vessel NameYear BuiltDwtFlagYardType of EmploymentPatriotship2010181,709MIImabariT/C – fixed rate(1)Dukeship2010181,453MISaseboT/C Index Linked(2)Worldship2012181,415MIKoyo-ImabariT/C – fixed rate(3)Hellasship2012181,325LIBImabariT/C Index Linked(4)Fellowship2010179,701MIDaewooT/C Index Linked(5)Championship2011179,238MISungdong SBT/C Index Linked(6)Partnership2012179,213MIHyundaiT/C Index Linked(7)Knightship2010178,978LIBHyundaiT/C Index Linked (8)Lordship2010178,838LIBHyundaiT/C Index Linked(9)Goodship2005177,536LIBMitsuiT/C Index Linked(10)Friendship2009176,952LIBNamuraT/C Index Linked(11)Tradership2006176,925MINamuraT/C Index Linked(12)Flagship2013176,387MIMitsuiT/C Index Linked(13)Gloriuship2004171,314MIHyundaiT/C Index Linked(14)Geniuship2010170,057MISungdong SBT/C Index Linked(15)Premiership2010170,024IoMSungdong SBT/C Index Linked(16)Squireship2010170,018LIBSungdong SBT/C Index Linked(17) (1)Chartered by a European cargo operator and delivered to the charterer on June 7, 2021 for a period of about 12 to about 18 months. The daily charter hire is fixed at $31,000.(2) Chartered by NYK and delivered to the charterer on December 1, 2021 for a period of about 13 to about 18 months. The daily charter hire is based on the BCI. In addition, thetime charter provides the option to convert the index linked rate to a fixed rate for a period of between two and 12 months priced at the then prevailing Capesize Forward FreightAgreement rate, or FFA for the selected period.(3)Chartered by a U.S. commodity trading company and delivered to the charterer on September 2, 2021 for a period of about 12 to about 16 months. The daily charter hire is fixedat $31,750.(4)Chartered by NYK and delivered to the charterer on May 10, 2021 for a period of minimum 11 to maximum 15 months. The daily charter hire is based on the BCI.(5)Chartered by Anglo American, a leading global mining company, and delivered to the charterer on June 18, 2021 for a period of minimum 12 to about 15 months. The dailycharter hire is based on the BCI. In addition, the time charter provides us with the option to convert the index linked rate to a fixed rate for a period of between three and 12months priced at the then prevailing Capesize FFA for the selected period.(6)Chartered by Cargill and delivered to the charterer on November 7, 2018 for a period of employment of 60 months, with an optional period of about 16 to about 18 months. Thedaily charter hire is based on the BCI plus a net daily scrubber premium of $1,740. In addition, the time charter provides us with the option to convert the index linked rate to afixed rate for a period of between three and 12 months priced at the then prevailing Capesize FFA for the selected period.(7)Chartered by a major European utility and energy company and delivered to the charterer on September 11, 2019 for a period of minimum 33 to maximum 37 months with anoptional period of about 11 to maximum 13 months. The daily charter hire is based on the BCI. In addition, the time charter provides us with the option to convert the indexlinked rate to a fixed rate for a period of between three and 12 months priced at the then prevailing Capesize FFA for the selected period.(8)Chartered by Glencore and delivered to the charterer on May 15, 2020 for a period of about 36 to about 42 months with two optional periods of 11 to 13 months. The daily charterhire is based on the BCI.29Table of Contents(9)Chartered by a major European utility and energy company and delivered on August 4, 2019 for a period of minimum 33 to maximum 37 months with an optional period of about11 to maximum 13 months. The daily charter hire is based on the BCI. In addition, the time charter provides us with the option to convert the index linked rate to a fixed rate for aperiod of between three and 12 months priced at the then prevailing Capesize FFA for the selected period.(10)Chartered by an international commodities trader and delivered to the charterer on November 12, 2021 for a period of about 9 to about 12 months. The daily charter hire is basedon the BCI. In addition, the time charter provides us with the option to convert the index linked rate to a fixed rate for a period of between two and 12 months priced at the thenprevailing Capesize FFA for the selected period.(11)Chartered by NYK and delivered to the charterer on July 29, 2021 for a period of minimum 17 to maximum 24 months. The daily charter hire is based on the BCI.(12)Chartered by a major South Korean industrial company and delivered to the charterer on June 15, 2021 for a period employment of minimum 11 to about 15 months. The dailycharter hire is based on the BCI. In addition, the time charter provides us with the option to convert the index linked rate to a fixed rate for a period of between two and ninemonths priced at the then prevailing Capesize FFA for the selected period.(13)Chartered by Cargill. The vessel was delivered to the charterer on May 10, 2021 for a period of 60 months. The daily charter hire is based at a premium over the BCI minus $1,325per day. In addition, the time charter provides us with the option to convert the index linked rate to a fixed rate for a period of between three and 12 months priced at the thenprevailing Capesize FFA for the selected period.(14)Chartered by Pacbulk Shipping and delivered to the charterer on April 23, 2020 for a period of about 11 to about 15 months. In December 2021, the time charter was furtherextended until minimum December 16, 2022 to maximum April 15, 2023. The daily charter hire is based on the BCI. In addition, the time charter provides us with the option toconvert the index linked rate to a fixed rate for a period of between three and 12 months priced at the then prevailing Capesize FFA for the selected period.(15)Chartered by NYK and delivered to the charterer on February 5, 2022 for a period of about 11 to about 15 months from the delivery date. The daily charter hire is based on theBCI. In addition, the time charter provides us with the option to convert the index linked rate to a fixed rate for a period of between three and 12 months priced at the thenprevailing Capesize FFA for the selected period.(16)Chartered by Glencore and delivered to the charterer on November 29, 2019 for a period of minimum 36 to maximum 42 months with two optional periods of minimum 11 tomaximum 13 months. The daily charter hire is based on the BCI plus a net daily scrubber premium of $2,055.(17)Chartered by Glencore and delivered to the charterer on December 19, 2019 for a period of minimum 36 to maximum 42 months with two optional periods of minimum 11 tomaximum 13 months. The daily charter hire is based on the BCI plus a net daily scrubber premium of $2,055.Key to Flags: IoM – Isle of Man, LIB – Liberia, MI – Marshall Islands. 30Table of ContentsOur Business Strategy We currently operate 17 Capesize vessels. We also intend to continue to review the market from time to time in order to identify potential acquisition targets which will beaccretive to our earnings per share. Our acquisition strategy focuses on newbuilding or secondhand Capesize dry bulk vessels, although we may acquire vessels in other sectors whichwe believe offer attractive investment opportunities. Management of Our Fleet We manage our vessel's operations, insurances and bunkering and have the general supervision of our third-party technical and commercial managers. Seanergy Shipmanagement, our wholly-owned subsidiary, provides certain technical management services to certain vessels of our fleet. In 2021 we paid a monthly fee of$14,000 and $10,000 per vessel for four and three vessels, respectively, to Seanergy Shipmanagement. Since January 1, 2022, we are paying a monthly fee of $14,000 and $10,000 pervessel for five and two vessels, respectively, to Seanergy Shipmanagement. These technical management services include, inter alia, general administrative and support services,bunkering, insurance arrangements and accounting related to vessels and provisions. These amounts are considered inter-company transactions and are, therefore, eliminated from ourconsolidated financial statements. Seanergy Shipmanagement is expected to undertake the technical management of more vessels of our fleet in the future. V.Ships and V.Ships Greece, independent third parties, provide technical management for certain of our vessels that includes general administrative and support services, suchas crewing and other technical management, accounting related to vessels and provisions. Pursuant to our technical management agreements with V.Ships and V.Ships Greece, we paidmonthly fees of $8,750 per vessel managed by V.Ships and $9,167 per vessel managed by V.Ships Greece in 2021. Since January 1, 2022, we are paying a monthly fee of $9,013 per vesselfor ten vessels managed by V.Ships and $9,167 per vessel for two vessels managed by V.Ships Greece in exchange for providing these technical, support and administrative services. Themanagement fees do not cover expenses such as voyage expenses, vessel operating expenses, maintenance expenses and crewing costs, which are reimbursed by us to V.Ships andV.Ships Greece. These technical management agreements are for an indefinite period until terminated by either party, giving the other notice in writing, in which event the applicableagreement shall terminate after one month from the date upon which such notice is received. Seanergy Management has entered into a commercial management agreement with Fidelity, an independent third party, pursuant to which Fidelity provides commercialmanagement services for all of the vessels in our fleet. Fidelity serves as a commercial broker for Capesize vessels exclusively to us. Under the commercial management agreement, wehave agreed to reimburse Fidelity for all reasonable running and/or out-of-pocket expenses, including but not limited to, telephone, fax, stationary and printing expenses, as well as anypre-approved travelling expenses. In addition, we have agreed to pay the following fees to Fidelity, (i) an annual fee of EUR 120,000 net payable in equal monthly payments and (ii)commission fees equal to 0.15% calculated on the collected gross hire/freight/demurrage payable when the relevant hire/freight/demurrage is collected. The fees under (i) and (ii) arecapped at $0.4 million per year. The commercial management agreement may be terminated by either party upon giving one-month prior written notice to the other party. V.Ships and Anglo-Eastern provide crew management services to certain vessels of our fleet. In 2021 we paid a monthly fee of $2,000 per vessel to each of V.Ships and Anglo-Eastern for two and two vessels, respectively. Since January 1, 2022, we are paying a monthly fee of $2,000 per vessel to each of V.Ships and Anglo-Eastern. Employment of Our Fleet As of the date of this report, fifteen of our vessels are employed under long-term time charters which have a charter hire calculated at an index-linked rate based on the 5-routesT/C average of the BCI. The remaining two of our vessels are employed under fixed rate charters. Under some of our time charter agreements we have the option to convert the indexlinked rate into a fixed rate corresponding to the prevailing value of the respective Capesize FFAs. In the future, we may opportunistically look to employ more of our vessels under timecharter contracts with a fixed rate, should rates become more attractive. The Dry Bulk Shipping Industry The global dry bulk vessel fleet is divided into four categories based on a vessel's carrying capacity. These categories are: Capesize. Capesize vessels have a carrying capacity of exceeding 100,000 dwt. Only the largest ports around the world possess the infrastructure to accommodate vessels ofthis size. Capesize vessels are primarily used to transport iron ore or coal and, to a much lesser extent, grains, primarily on long-haul routes. Panamax. Panamax vessels have a carrying capacity of between 60,000 and 100,000 dwt. These vessels are designed to meet the physical restrictions of the Panama Canal locks(hence their name “Panamax” — the largest vessels able to transit the Panama Canal prior to its 2016 expansion, making them more versatile than larger vessels). These vessels carrycoal, grains, and, to a lesser extent, minerals such as bauxite/alumina and phosphate rock. 31Table of ContentsHandymax/Supramax. Handymax vessels have a carrying capacity of between 30,000 and 60,000 dwt. These vessels operate on a large number of geographically dispersedglobal trade routes, carrying primarily grains and minor bulks. The standard vessels are usually built with 25-30 ton cargo gear, enabling them to discharge cargo where grabs arerequired (particularly industrial minerals), and to conduct cargo operations in countries and ports with limited infrastructure. This type of vessel offers good trading flexibility and can,therefore, be used in a wide variety of bulk and neobulk trades, such as steel products. Supramax are a sub-category of this category typically having a cargo carrying capacity ofbetween 50,000 and 60,000 dwt. Handysize. Handysize vessels have a carrying capacity of up to 30,000 dwt. These vessels almost exclusively carry minor bulk cargo. Increasingly, vessels of this type operateon regional trading routes, and may serve as trans-shipment feeders for larger vessels. Handysize vessels are well suited for small ports with length and draft restrictions. Their cargogear enables them to service ports lacking the infrastructure for cargo loading and discharging. The supply of dry bulk vessels is dependent on the delivery of new vessels and the removal of vessels from the global fleet, either through scrapping or loss. The level ofscrapping activity is generally a function of scrapping prices in relation to current and prospective charter market conditions, as well as operating, repair and survey costs. The demand for dry bulk vessel capacity is determined by the underlying demand for commodities transported in dry bulk vessels, which in turn is influenced by trends in theglobal economy. Demand for dry bulk vessel capacity is also affected by the operating efficiency of the global fleet, with port congestion, which has been a feature of the market since2004, absorbing tonnage and therefore leading to a tighter balance between supply and demand. In evaluating demand factors for dry bulk vessel capacity, we believe that dry bulkvessels can be the most versatile element of the global shipping fleets in terms of employment alternatives. Charter Hire Rates Charter hire rates fluctuate by varying degrees among dry bulk vessel size categories. The volume and pattern of trade in a small number of commodities (major bulks) affectdemand for larger vessels. Therefore, charter rates and vessel values of larger vessels often show greater volatility. Conversely, trade in a greater number of commodities (minor bulks)drives demand for smaller dry bulk vessels. Accordingly, charter rates and vessel values for those vessels are subject to less volatility. Charter hire rates paid for dry bulk vessels are primarily a function of the underlying balance between vessel supply and demand, although at times other factors may play arole. Furthermore, the pattern seen in charter rates is broadly mirrored across the different charter types and the different dry bulk vessel categories. However, because demand forlarger dry bulk vessels is affected by the volume and pattern of trade in a relatively small number of commodities, charter hire rates (and vessel values) of larger ships tend to be morevolatile than those for smaller vessels. In the time charter market, rates vary depending on the length of the charter period and vessel specific factors such as age, speed and fuel consumption. In the voyage charter market, rates are influenced by cargo size, commodity, port dues and canal transit fees, as well as commencement and termination regions. In general, alarger cargo size is quoted at a lower rate per ton than a smaller cargo size. Routes with costly ports or canals generally command higher rates than routes with low port dues and nocanals to transit. Voyages with a load port within a region that includes ports where vessels usually discharge cargo or a discharge port within a region with ports where vessels loadcargo also are generally quoted at lower rates, because such voyages generally increase vessel utilization by reducing the unloaded portion (or ballast leg) that is included in thecalculation of the return charter to a loading area. Within the dry bulk shipping industry, the charter hire rate references most likely to be monitored are the freight rate indexes issued by the Baltic Exchange. These referencesare based on actual charter hire rates under charters entered into by market participants as well as daily assessments provided to the Baltic Exchange by a panel of major shipbrokers. Competition We operate in markets that are highly competitive and based primarily on supply and demand. We compete for charters on the basis of price, vessel location, size, age andcondition of the vessel, as well as on its reputation. Fidelity negotiates the terms of our charters (whether voyage charters, period time charters, bareboat charters or pools) based onmarket conditions. We currently compete primarily with other owners of dry bulk vessels, many of which may have more resources than us and may operate vessels that are newer, andtherefore more attractive to charterers than vessels we may operate. Ownership of dry bulk vessels is highly fragmented and is divided among publicly listed companies, state-controlledcompanies and independent dry bulk vessel owners. We currently compete primarily with owners of dry bulk vessels in the Capesize class size. 32Table of ContentsCustomers Our customers include or have included national, regional and international companies. Customers individually accounting for more than 10% of our revenues during the yearsended December 31, 2021, 2020 and 2019 were: Customer 2021 2020 2019A 23% 23% -B 15% - -C 13% - -D 11% 18% 15%E - - 19%F - - 18%G 10% - -Total 72% 41% 52%Seasonality Coal, iron ore and grains, which are the major bulks of the dry bulk shipping industry, are somewhat seasonal in nature. The energy markets primarily affect the demand for coal,with increases during hot summer periods when air conditioning and refrigeration require more electricity and towards the end of the calendar year in anticipation of the forthcomingwinter period. The demand for iron ore tends to decline in the summer months because many of the major steel users, such as automobile makers, reduce their level of productionsignificantly during the summer holidays. Grain trades are completely seasonal as they are driven by the harvest within a climate zone. Because three of the five largest grain producers(the United States of America, Canada and the European Union) are located in the northern hemisphere and the other two (Argentina and Australia) are located in the southernhemisphere, harvests occur throughout the year and grains transportation requires dry bulk shipping accordingly. Environmental and Other Regulations Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and locallaws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage,handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources.Compliance with such laws, regulations and other requirements entails significant expense, including vessel modifications and implementation of certain operating procedures. A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicablenational authorities such as the United States Coast Guard, or USCG, harbor master or equivalent), classification societies, flag state administrations (countries of registry), terminaloperators and charterers. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintainnecessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of our vessels. Increasing environmental concerns have created a demand for vessels that conform to stricter environmental standards. We are required to maintain operating standards for allof our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with United States and international regulations. Webelieve that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations and that our vessels have all material permits, licenses,certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricterrequirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition,a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability. International Maritime Organization The IMO, the United Nations agency for maritime safety and the prevention of pollution by vessels, has adopted the International Convention for the Prevention of Pollutionfrom Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as MARPOL, the International Convention for the Safety ofLife at Sea of 1974, or SOLAS Convention, the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, or STCW, and the InternationalConvention on Load Lines of 1966, or LL Convention. MARPOL establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, thehandling and disposal of noxious liquids and the handling of harmful substances in packaged forms. MARPOL is applicable to dry bulk, tanker and LNG carriers, among other vessels,and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried inbulk in liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI wasseparately adopted by the IMO in September of 1997. In 2013, the IMO's Marine Environmental Protection Committee, or the MEPC, adopted a resolution amending MARPOL Annex I Condition Assessment Scheme, or CAS. Theseamendments became effective on October 1, 2014 and require compliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriersand Oil Tankers, or ESP Code, which provides for enhanced inspection programs. We may need to make certain financial expenditures to comply with these amendments. 33Table of ContentsAir Emissions In September of 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxideemissions from all commercial vessel exhausts and prohibits “deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatilecompounds from cargo tanks, and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas tobe established with more stringent controls on sulfur emissions, as explained below. Emissions of “volatile organic compounds” from certain vessels, and the shipboard incineration(from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or PCBs) are also prohibited. We believe that all our vessels are currentlycompliant in all material respects with these regulations. The MEPC adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozone depleting substances, which entered into forceon July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fueloil used on board ships. Effective January 1, 2020, there has been a global limit of 0.5% m/m sulfur oxide emissions (reduced from 3.50%). This limitation can be met by using low-sulfurcompliant fuel oil, alternative fuels, or certain exhaust gas cleaning systems. Ships are required to obtain bunker delivery notes and International Air Pollution Prevention, or IAPP,Certificates from their flag states that specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships becameeffective on March 1, 2020. Additional amendments to Annex VI revising, among other terms, the definition of “Sulphur content of fuel oil” and “low-flashpoint fuel” and pertaining tothe sampling and testing of onboard fuel oil, will become effective in 2022. These regulations subject ocean-going vessels to stringent emissions controls and may cause us to incursubstantial costs. Sulfur content standards are even stricter within certain “Emission Control Areas,” or ECAs. As of January 1, 2015, ships operating within an ECA were not permitted to use fuelwith sulfur content in excess of 0.1%. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portionsof the Baltic Sea area, North Sea area, North American area and United States Caribbean Sea area. Ocean-going vessels in these areas will be subject to stringent emission controls andmay cause us to incur additional costs. If other ECAs are approved by the IMO, or other new or more stringent requirements relating to emissions from marine diesel engines or portoperations by vessels are adopted by the U.S. Environmental Protection Agency, or EPA, or the states where we operate, compliance with these regulations could entail significantcapital expenditures or otherwise increase the costs of our operations. Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. Now Annex VIprovides for a three-tier reduction in NOx emissions from marine diesel engines, with the final tier (or Tier III) to apply to engines installed on vessels constructed on or after January 1,2016 and which operate in the North American ECA or the U.S. Caribbean Sea ECA as well as ECAs designated in the future by the IMO. At MEPC 70 and MEPC 71, the MEPC approvedthe North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built after January 1, 2021. The EPA promulgated equivalent (and in some senses stricter) emissions standards in late2009. Additionally, amendments to Annex II, which strengthen discharge requirements for cargo residues and tank washings in specified sea areas (including North West Europeanwaters, Baltic Sea area, Western European waters and Norwegian Sea), came into effect in January 2021. As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collectand report annual data on fuel oil consumption to an IMO database, with the first year of data collection commencing on January 1, 2019. The IMO intends to use such data as the firststep in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below. As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship EnergyEfficiency Management Plans, or SEEMPS, and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy EfficiencyDesign Index, or EEDI. Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014. We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require the installation ofexpensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition. Safety Management System Requirements The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims, orthe LLMC, sets limitations of liability for a loss of life or personal injury claim or a property claim against ship owners. We believe that our vessels are in substantial compliance withSOLAS and LLMC standards. 34Table of ContentsUnder Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or the ISM Code, ouroperations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safetymanagement system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vesselssafely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed forcompliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease availableinsurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel'smanagement with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document ofcompliance, issued by each flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management certificates for all of ourvessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed as required. Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International MaritimeDangerous Goods Code, or IMDG Code. Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from theInternational Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements. Amendments to theIMDG Code relating to segregation requirements for certain substances, and classification and transport of carbon, following incidents involving the spontaneous ignition of charcoal,come into effect in June 2022. The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, or STCW. As of February 2017, all seafarersare required to meet the STCW standards and be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classificationsocieties, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance. Furthermore, recent actions by the IMO's Maritime Safety Committee and United States agencies indicate that cybersecurity regulations for the maritime industry are likely to befurther developed in the near future in an attempt to combat cybersecurity threats. For example, effective January 2021, cyber-risk management systems must be incorporated byshipowners and managers. This might cause companies to create additional procedures for monitoring cybersecurity, which could require additional expenses and/or capitalexpenditures. The impact of such regulations is hard to predict at this time. Pollution Control and Liability Requirements The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. Forexample, the IMO adopted the International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWM Convention, in 2004. The BWMConvention entered into force on September 9, 2017. The BWM Convention requires ships to manage their ballast water to remove, render harmless, or avoid the uptake or discharge ofnew or invasive aquatic organisms and pathogens within ballast water and sediments. The BWM Convention's implementing regulations call for a phased introduction of mandatoryballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballastwater management certificate. Specifically, ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of ballast water only in open seas and away from coastal waters. The “D-2 standard” specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. For most ships,compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ballast Water Management systems (or BWMS),which include systems that make use of chemical, biocides, organisms or biological mechanisms, or which alter the chemical or physical characteristics of the Ballast Water, must beapproved in accordance with IMO Guidelines (Regulation D-3). Pursuant to the BWM Convention amendments that entered into force in October 2019, BWMS installed on or afterOctober 28, 2020 shall be approved in accordance with BWMS Code, while BWMS installed before October 23, 2020 must be approved taking into account guidelines developed by theIMO or the BWMS Code. Costs of compliance with these regulations may be substantial. The cost of compliance could increase for ocean carriers and may have a material effect on ouroperations. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmfulspecies via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternatemeasure, and to comply with certain reporting requirements. Amendments to the BWM Convention concerning commissioning testing of BWMS will become effective in 2022. The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage, or the Bunker Convention, to impose strict liability on ship owners(including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The BunkerConvention requires registered owners of ships over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable nationalor international limitation regime (but not exceeding the amount calculated in accordance with the LLMC). With respect to non-ratifying states, liability for spills or releases of oil carriedas fuel in ship's bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur. 35Table of ContentsShips are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions such as the United States where the BunkerConvention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis. Anti‑Fouling Requirements In 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships, or the “Anti‑fouling Convention.” The Anti‑foulingConvention entered into force in September 2008 and prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels.Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an InternationalAnti‑fouling System Certificate is issued for the first time; and subsequent surveys when the anti‑fouling systems are altered or replaced. In 2023, amendments to the Anti-foulingConvention will come into effect which include controls on the biocide cybutryne; ships shall not apply or re-apply anti-fouling systems containing this substance from January 1, 2023.We have obtained Anti‑fouling System Certificates for all of our vessels that are subject to the Anti‑fouling Convention. Compliance Enforcement Noncompliance with the ISM Code or other IMO regulations may subject the ship owner or bareboat charterer to increased liability, may lead to decreases in available insurancecoverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not incompliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the date of this report, each of our vessels isISM Code certified. However, there can be no assurance that such certificates will be maintained in the future. The IMO continues to review and introduce new regulations. It isimpossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations. United States Regulations The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act The U.S. Oil Pollution Act of 1990, or OPA, established an extensive regulatory and liability regime for the protection and clean-up of the environment from oil spills. OPAaffects all “owners and operators” whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.'sterritorial sea and its 200 nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act,or CERCLA, which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define “ownerand operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations. Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a thirdparty, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, includingbunkers (fuel). OPA defines these other damages broadly to include: (i) injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs; (ii) injury to, or economic losses resulting from, the destruction of real and personal property; (iii) loss of subsistence use of natural resources that are injured, destroyed or lost; (iv) net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources; (v) lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and (vi) net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards,and loss of subsistence use of natural resources. 36Table of ContentsOPA contains statutory caps on liability and damages; such caps do not apply to direct clean-up costs. Effective November 12, 2019, the USCG adjusted the limits of OPAliability for non-tank vessels, edible oil tank vessels, and any oil spill response vessels, to the greater of $1,200 per gross ton or $997,100 (subject to periodic adjustment for inflation).These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsibleparty (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party's gross negligence or willful misconduct. The limitation on liability similarlydoes not apply if the responsible party fails or refuses to (i) report the incident where the responsible party knows or has reason to know of the incident; (ii) reasonably cooperate andassist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) orthe Intervention on the High Seas Act. CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for clean-up, removal and remedial costs, as well as damages for injury to, ordestruction or loss of, natural resources, including the reasonable costs associated with assessing the same, and health assessments or health effects studies. There is no liability if thedischarge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 pergross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (renderingthe responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or theprimary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsibleperson fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA. OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA and CERCLA both require owners and operators of vessels toestablish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject.Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. Wecomply and plan to comply going forward with the USCG's financial responsibility regulations by providing applicable certificates of financial responsibility. The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulationsregarding offshore oil and gas drilling, and a pilot inspection program for offshore facilities. However, several of these initiatives and regulations have been or may be revised. Forexample, the U.S. Bureau of Safety and Environmental Enforcement's, or BSEE, revised Production Safety Systems Rule, or PSSR, effective December 27, 2018, modified and relaxedcertain environmental and safety protections under the 2016 PSSR. Additionally, the BSEE released a final Well Control Rule, which eliminated a number of provisions which could affectoffshore drilling operations. Compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels could negatively impact thecost of our operations and adversely affect our business. OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at aminimum, the levels of liability established under OPA and some states have enacted legislation providing for unlimited liability for oil spills. Many U.S. states that border a navigablewaterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardoussubstance. These laws may be more stringent than U.S. federal law. Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants withintheir waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining vessel owners' responsibilities underthese laws. The Company intends to comply with all applicable state regulations in the ports where the Company's vessels call. We currently maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the damages from a catastrophic spill were toexceed our insurance coverage, that could have an adverse effect on our business and results of operation. Other United States Environmental Initiatives The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990), or CAA, requires the EPA to promulgate standards applicable to emissions of volatile organiccompounds and other air contaminants. The CAA requires states to adopt State Implementation Plans, or SIPs, some of which regulate emissions resulting from vessel loading andunloading operations which may affect our vessels. The U.S. Clean Water Act, or CWA, prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters unless authorized by a duly-issued permit orexemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation anddamages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States,” or WOTUS, thereby expandingfederal authority under the CWA. In April 2020, the EPA and Department of the Army published the Navigable Waters Protection Rule to finalize a revised WOTUS definition, which rulebecame effective in June 2020. However, in light of a court order issued by the U.S. District Court for the District of Arizona on August 30, 2021, the EPA and U.S. Army Corps ofEngineers are interpreting WOTUS consistent with the pre-2015 regulatory regime. In November 2021, the EPA and U.S. Army Corps of Engineers announced the signing of a proposedrule to revise the definition of WOTUS, which proposes to put back into place the pre-2015 definition. 37Table of ContentsThe EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballastwater before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels fromentering U.S. Waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waterspursuant to the Vessel Incidental Discharge Act, or VIDA, which was signed into law on December 4, 2018 and will replace the 2013 Vessel General Permit, or VGP, program (as discussedabove) and current Coast Guard ballast water management regulations adopted under the U.S. National Invasive Species Act, or NISA, such as mid-ocean ballast exchange programsand installation of approved USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters. Non-military, non-recreational vesselsgreater than 79 feet in length must continue to comply with the requirements of the VGP, including submission of a Notice of Intent, or NOI, or retention of a PARI form and submissionof annual reports. We have submitted NOIs for our vessels where required. Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation of ballastwater treatment equipment on our vessels or the implementation of other port facility disposal procedures at potentially substantial cost or may otherwise restrict our vessels fromentering U.S. waters. European Union Regulations In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, ifcommitted with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting thedischarge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships orwhere human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims. Regulation (EU) 2015/757of the European Parliament and of the Council of 29 April 2015 (amended by Regulation (EU) 2016/2071 with respect to methods of calculating, inter alia, emission and consumption)governs the monitoring, reporting and verification of carbon dioxide emissions from maritime transport, and, subject to some exclusions, requires companies with ships over 5,000 grosstonnage to monitor and report carbon dioxide emissions annually, which may cause us to incur additional expenses. As of January 2019, large ships calling at EU ports have beenrequired to collect and publish data on carbon dioxide emissions and other information. The system entered into force on 1 March 2018. July 2020 saw the European Parliament’sCommittee on Environment, Public Health and Food Safety vote in favor of the inclusion of vessels of 5,000 gross tons and above in the EU Emissions Trading System (in addition tovoting for a revision to the monitoring, reporting and verification of CO2 emissions). In September 2020, the European Parliament adopted the proposal from the European Commission toamend the regulation on monitoring carbon dioxide emissions from maritime transport.On July 14, 2021, the European Commission published a package of draft proposals as part of its ‘Fit for 55’ environmental legislative agenda and as part of the wider EU GreenDeal growth strategy. The Proposals are not yet in final form and may be subject to amendment. There are two key initiatives relevant to maritime arising from the Proposals: (a) abespoke emissions trading scheme for the maritime sector (Maritime ETS) which is due to commence in 2023 and which is to apply to all ships above a gross tonnage of 5,000; and (b) aFuelEU draft regulation which seeks to require all ships above a gross tonnage of 5,000 to carry on board a ‘FuelEU certificate of compliance’ from 30 June 2025 as evidence ofcompliance with the limits on the greenhouse gas intensity of the energy used on-board by a ship and with the requirements on the use of on-shore power supply (OPS) at berth. Morespecifically, Maritime ETS is to apply gradually over the period from 2023-2025. The cap under the ETS would be set by taking into account EU MRV system emissions data for the years2018 and 2019, adjusted, from year 2021 and is to capture 100% of the emissions from intra-EU maritime voyages; 100% of emissions from ships at berth in EU ports; and 50% ofemissions from voyages which start or end at EU ports (but the other destination is outside the EU). More recent proposed amendments signal that 100% of non-EU emissions may becaught if the IMO does not introduce a global market-based measure by 2028. Furthermore, the proposals envisage that all maritime allowances would be auctioned and there will be nofree allocation. Both proposals are currently being negotiated and final drafts are expected in the summer of 2022.Responsible recycling and scrapping of ships is becoming an increasingly important issue for shipowners and charterers alike as the industry strives to replace old ships withcleaner, more energy efficient models. The recognition of the need to impose recycling obligations on the shipping industry is not new. In 2009, the IMO oversaw the creation of theHong Kong Ship Recycling Convention (the “Hong Kong Convention”), which sets standards for ship recycling. Concerned at the lack of progress in satisfying the conditions neededto bring the Hong Kong Convention into force, the EU published its own Ship Recycling Regulation 1257/2013 (SRR) in 2013, with a view to facilitating early ratification of the HongKong Convention both within the EU and in other countries outside the EU. As the Hong Kong Convention has yet to come into force, the 2013 regulations are vital to responsible shiprecycling in the EU. SRR requires that, from 31 December 2020, all existing ships sailing under the flag of EU member states and non-EU flagged ships calling at an EU port or anchoragemust carry on-board an Inventory of Hazardous Materials (IHM) with a certificate or statement of compliance, as appropriate. For EU-flagged vessels, a certificate (either an InventoryCertificate or Ready for Recycling Certificate) will be necessary, while non-EU flagged vessels will need a Statement of Compliance.38Table of ContentsThe European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age,and flag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and adefinitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements onclassification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to usereduced sulfur content fuel for their main and auxiliary engines. Since January 1, 2015, vessels have been required to burn fuel with sulfur content not exceeding 0.1% while within EUmember states' territorial seas, exclusive economic zones and pollution control zones that are included in “SOx Emission Control Areas.” EU Directive (EU) 2016/802 establishes limits onthe maximum sulfur content of gas oils and heavy fuel oil and contains fuel-specific requirements for ships calling at EU ports. EU Directive 2004/35/CE (as amended) regarding the prevention and remedying of environmental damage addresses liability for environmental damage (including damage towater, land, protected species and habitats) on the basis of the “polluter pays” principle. Operators whose activities caused the environmental damage are liable for the damage (subjectto certain exceptions). With regard to specified activities causing environmental damage, operators are strictly liable. The directive applies where damage has already occurred and wherethere is an imminent threat of damage. The directive requires preventative and remedial actions, and that operators report environmental damage or an imminent threat of such damage. International Labor Organization The International Labor Organization, or the ILO, is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006, or MLC 2006. A Maritime LaborCertificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. We believe thatall our vessels are in substantial compliance with and are certified to meet MLC 2006. Greenhouse Gas Regulation Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on ClimateChange (this task having been delegated to the IMO), which entered into force in 2005 and pursuant to which adopting countries have been required to implement national programs toreduce greenhouse gas emissions with targets extended through 2020. International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions onshipping emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force onNovember 4, 2016 and does not directly limit greenhouse gas emissions from ships. The United States rejoined the Paris Agreement in February 2021. At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions fromships was approved. In accordance with this roadmap, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initialstrategy identifies “levels of ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of theEnergy-Efficiency Design Index for new ships (while the Ship Energy-Efficiency Management Plan is mandatory for all vessels); (2) reducing carbon dioxide emissions per transportwork, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008 emission levels; and (3) reducing the total annualgreenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing them out entirely. The initial strategy notes that technological innovation,alternative fuels and/or energy sources for international shipping will be integral to achieve the overall ambition. These regulations could cause us to incur additional substantialexpenses. As noted above, the 70th MEPC meeting in October 2016 adopted a mandatory data collection system (DCS) which requires ships above 5,000 gross tonnes to reportconsumption data for fuel oil, hours under way and distance travelled. Unlike the EU MRV (see below), the IMO DCS covers any maritime activity carried out by ships, includingdredging, pipeline laying, ice-breaking, fish-catching and off-shore installations. The SEEMPs of all ships covered by the IMO DCS must include a description of the methodology fordata collection and reporting. After each calendar year, the aggregated data are reported to the flag state. If the data have been reported in accordance with the requirements, the flagstate issues a statement of compliance to the ship. Flag states subsequently transfer this data to an IMO ship fuel oil consumption database, which is part of the Global IntegratedShipping Information System (GISIS) platform. IMO will then produce annual reports, summarising the data collected. Thus, currently, data related to the GHG emissions of ships above5,000 gross tonnes calling at ports in the European Economic Area (EEA) must be reported in two separate, but largely overlapping, systems: the EU MRV – which applies since 2018 –and the IMO DCS – which applies since 2019. The proposed revision of Regulation (EU) 2015/757 adopted on 4 February 2019 aims to align and facilitate the simultaneousimplementation of the two systems however it is still not clear when the proposal will be adopted. IMO’s MEPC 76 adopted amendments to MAPROL Annex VI that will require ships to reduce their greenhouse gas emissions. Effective November 1, 2022, the RevisedMARPOL Annex VI will enter into force. The revised Annex VI includes carbon intensity measures (requirements for ships to calculate their Energy Efficiency Existing Ship Index (EEXI)following technical means to improve their energy efficiency and to establish their annual operational carbon intensity indicator and rating. MEPC 76 also adopted guidelines to supportimplementation of the amendments.39Table of ContentsIn 2021, the EU adopted a European Climate Law (Regulation (EU) 2021/1119), establishing the aim of reaching net zero greenhouse gas emissions in the EU by 2050, with anintermediate target of reducing greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. In July 2021, the European Commission launched the “Fit for 55” (describedabove) to support the climate policy agenda. As of January 2019, large ships calling at EU ports have been required to collect and publish data on carbon dioxide emissions and otherinformation.In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certainmobile sources, and proposed regulations to limit greenhouse gas emissions from large stationary sources. The EPA or individual U.S. states could enact environmental regulations thatcould negatively affect our operations. Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at theinternational level to succeed the Kyoto Protocol or Paris Agreement, that restricts emissions of greenhouse gases could require us to make significant expenditures which we cannotpredict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea levelchanges or certain weather events. Vessel Security Regulations Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. MaritimeTransportation Security Act of 2002, or MTSA. To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirementsaboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA. Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Shipand Port Facilities Security Code, or the ISPS Code. The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attainan International Ship Security Certificate, or ISSC, from a recognized security organization approved by the vessel's flag state. Ships operating without a valid certificate may be detained,expelled from, or refused entry at port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS Convention, include, for example, on-boardinstallation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations,including information on a ship's identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel butonly alert the authorities on shore; the development of vessel security plans; ship identification number to be permanently marked on a vessel's hull; a continuous synopsis record keptonboard showing a vessel's history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship'sidentification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance with flag state security certificationrequirements. The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vesselshave on board a valid ISSC that attests to the vessel's compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have asignificant negative financial impact on us. We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code. The cost of vessel security measures has also been affected by the escalation in the frequency of acts of piracy against ships, notably off the coast of Somalia, including theGulf of Aden and Arabian Sea area. Substantial loss of revenue and other costs may be incurred as a result of detention of a vessel or additional security measures, and the risk ofuninsured losses could significantly and negatively affect our business. Costs may be incurred in taking additional security measures in accordance with Best Management Practices toDeter Piracy, notably those contained in the BMP5 industry standard. Inspection by Classification Societies The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that avessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it acondition for insurance coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International Association of ClassificationSocieties, the IACS. The IACS has adopted harmonized Common Structural Rules, or the Rules, which apply to oil tankers and bulk carriers constructed on or after July 1, 2015. TheRules attempt to create a level of consistency between IACS Societies. All of our vessels are certified as being “in class” by all the applicable Classification Societies (e.g., AmericanBureau of Shipping, DNV, Lloyd's Register of Shipping, Bureau Veritas). 40Table of ContentsA vessel must undergo annual surveys, intermediate surveys, drydockings and special surveys. In lieu of a special survey, a vessel's machinery may be on a continuous surveycycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be drydocked every 30 to 36 months for inspection of theunderwater parts of the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable tocarry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carrycargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations. Risk of Loss and Liability Insurance General The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due topolitical circumstances in foreign countries, piracy incidents, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills andother environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which imposes virtually unlimited liability upon shipowners,operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liabilityinsurance more expensive for shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping industry. However, not all riskscan be insured, specific claims may be rejected and we might not be always able to obtain adequate insurance coverage at reasonable rates. Hull & Machinery and War Risks Insurances We maintain marine hull and machinery and war risks insurances, which include the risk of actual or constructive total loss, for all of our vessels. Each of our vessels is coveredup to at least its fair market value with deductibles of $150,000 per vessel per incident. We also maintain increased value coverage for our vessels. Under this increased value coverage,in the event of total loss of a vessel, we will be able to recover the sum insured under the increased value policy in addition to the sum insured under the hull and machinery policy. Increased value insurance also covers excess liabilities which are not recoverable under our hull and machinery policy by reason of under insurance. Protection and Indemnity Insurance Protection and indemnity insurance, provided by mutual protection and indemnity associations, or P&I Associations, covers our third-party liabilities in connection with ourshipping activities. This includes third-party liability and other related expenses of injury, illness or death of crew, passengers and other third parties, loss or damage to cargo, claimsarising from collisions with other vessels, damage to other third-party property such as fixed and floating objects, pollution arising from oil or other substances, salvage, towing andother related costs, including wreck removal. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity mutual associations, or“clubs.” Our coverage limit is as per the International Group’s rules, where there are standard sub-limits for oil pollution at $1 billion, passenger liability at $2 billion and seamen liabilitiesat $3 billion. The 13 P&I Associations that comprise the International Group insure approximately 90% of the world's commercial tonnage and have entered into a pooling agreement toreinsure each association's liabilities in excess of each association’s own retention of $10.0 million up to, currently, approximately $8 billion. As a member of P&I Associations, which area member of the International Group, we are subject to calls payable to the associations based on our claim records as well as the claim records of all other members of the individualassociations and members of the shipping pool of P&I Associations comprising the International Group. Permits and Authorizations We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The kinds of permits,licenses and certificates required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel's crew and theage of a vessel. We believe that we have obtained all permits, licenses and certificates currently required to permit our vessels to operate as planned. Additional laws and regulations,environmental or otherwise, may be adopted which could limit our ability to do business or increase the cost of us doing business in the future. 41Table of ContentsC.Organizational StructureSeanergy Maritime Holdings Corp. is the ultimate parent company of the following wholly-owned subsidiaries, either directly or indirectly, as of the date of this annual report: SubsidiaryJurisdiction of IncorporationSeanergy Management Corp.Republic of the Marshall IslandsSeanergy Shipmanagement Corp.Republic of the Marshall IslandsLeader Shipping Co.Republic of the Marshall IslandsSea Glorius Shipping Co.Republic of the Marshall IslandsSea Genius Shipping Co.Republic of the Marshall IslandsTraders Shipping Co.Republic of the Marshall IslandsGladiator Shipping Co.Republic of the Marshall IslandsPremier Marine Co.Republic of the Marshall IslandsEmperor Holding Ltd.Republic of the Marshall IslandsChampion Marine Co.Republic of the Marshall IslandsFellow Shipping Co.Republic of the Marshall IslandsPatriot Shipping Co.Republic of the Marshall IslandsFlag Marine Co.Republic of the Marshall IslandsWorld Shipping Co.Republic of the Marshall IslandsPartner Marine Co.Republic of the Marshall IslandsDuke Shipping Co.Republic of the Marshall IslandsUnited Maritime CorporationRepublic of the Marshall IslandsSquire Ocean Navigation Co.Republic of LiberiaLord Ocean Navigation Co.Republic of LiberiaKnight Ocean Navigation Co.Republic of LiberiaGood Ocean Navigation Co.Republic of LiberiaHellas Ocean Navigation Co.Republic of LiberiaFriend Ocean Navigation Co.Republic of LiberiaPartner Shipping Co. LimitedMaltaPembroke Chartering Services LimitedMaltaMartinique International Corp.British Virgin IslandsHarbour Business International Corp.British Virgin IslandsMaritime Grace Shipping LimitedBritish Virgin IslandsMaritime Glory Shipping LimitedBritish Virgin IslandsMaritime Capital Shipping LimitedBermudaMaritime Capital Shipping (HK) LimitedHong KongD.Property, Plants and EquipmentWe do not own any real estate property. We maintain our principal executive offices at Glyfada, Greece. Other than our vessels, we do not have any material property. See “Item4.B. Business Overview - Our Current Fleet” and “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources – Loan Arrangements.” ITEM 4A.UNRESOLVED STAFF COMMENTSNone. ITEM 5.OPERATING AND FINANCIAL REVIEW AND PROSPECTSThe following discussion of the results of our operations and our financial condition should be read in conjunction with the financial statements and the notes to thosestatements included in “Item 18. Financial Statements.” This discussion contains forward-looking statements that involve risks, uncertainties, and assumptions. Actual results maydiffer materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth in “Item 3. Key Information–D. Risk Factors.” A.Operating ResultsPrincipal 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; •voyage charter rates; •time charter trip rates;42Table of Contents •period time charter rates; •the nature and duration of our voyage charters; •vessels repositioning; •vessel operating expenses and direct voyage costs; •maintenance and upgrade work; •the age, condition and specifications of our vessels; •issuance of our common shares and other securities; •amount of debt obligations; and •financing costs related to debt obligations.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 canyield 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. As of the date of this report, all of the Company’s fleet istime chartered on long-term employment arrangements. Out of the seventeen long-term employment agreements in place as of December 31, 2021, nine were agreed during 2021 and theremaining eight between 2018 and 2020.Critical Accounting PoliciesCritical accounting policies are those that are both most important to the portrayal of the company's financial condition and results, and require management's most difficult,subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. We have described below and in Item 5.Operating and Financial Review and Prospects – E. Critical Accounting Estimates our critical accounting policies, because they potentially result in material different results underdifferent assumptions and conditions. For a description of all our significant accounting policies, see Note 2 to our annual audited financial statements included in this annual report. LeasesA time charter is a contract for the use of a vessel as well as vessel operations for a specific period of time and a specified daily charter hire rate, which is generally payable inadvance. A bareboat charter is a contract in which the vessel is provided to the charterer for a fixed period of time at a specified daily rate, which is generally payable in advance.Time charter revenue, including bareboat charter revenue, is recorded over the term of the charter agreement as the service is provided and collection of the related revenue isreasonably assured. Under a time charter, revenue is adjusted for a vessel’s off hire days due to major repairs, dry dockings or special or intermediate surveys.In February 2016, the FASB issued ASU No. 2016-02 - Leases (ASC 842), and as amended, it requires lessees to recognize most leases on the balance sheet. We early adoptedASC 842, as amended from time to time, retrospectively from January 1, 2018. We also elected to apply the additional and optional transition method to new and existing leases at theadoption date as well as all the practical expedients which allowed our existing lease arrangements, in which we were a lessee or lessor, classified as operating leases under ASC 840 tocontinue to be classified as operating leases under ASC 842. We concluded that the criteria for not separating lease and non-lease components of its time charter contracts are met, since(i) the time pattern of recognizing revenues for crew and other services for the operation of the vessels is similar to the time pattern of recognizing rental income, (ii) the lease componentof the time charter contracts, if accounted for separately, would be classified as an operating lease, and (iii) the predominant component in its time charter agreements is the leasecomponent. In this respect, we account for the combined component as an operating lease in accordance with ASC 842. We recognize income from lease payments over the lease term ona straight line basis. We assessed our new time charter contracts at the adoption date under the new guidance and concluded that these contracts contain a lease with the relatedexecutory costs (insurance), as well as non-lease components to provide other services related to the operation of the vessel, with the most substantial service being the crew cost tooperate the vessel. We recognize income for variable lease payments in the period when changes in facts and circumstances on which the variable lease payments occur. Rental incomeon our time charterers is mostly calculated at an index linked rate based on the five T/C routes rate of the Baltic Capesize Index.43Table of ContentsResults of Operations Year ended December 31, 2021 as compared to year ended December 31, 2020 (In thousands of U.S. Dollars, except for share and per share data) Year ended December31, Change 2021 2020 Amount % Revenues: Vessel revenue, net 153,108 63,345 89,763 142% Expenses: Voyage expenses (16,469) (18,567) 2,098 (11)%Vessel operating expenses (36,332) (22,347) (13,985) 63%Management fees (1,435) (1,052) (383) 36%General and administration expenses (13,739) (6,607) (7,132) 108%Depreciation and amortization (19,944) (15,040) (4,904) 33%Gain on sale of vessel, net 697 - 697 - Gain on forward freight agreements, net 24 - 24 - Operating (loss) / income 65,910 (268) 66,178 Other income / (expenses), net: Interest and finance costs (17,779) (23,425) 5,646 (24)%Loss on extinguishment of debt (6,863) - (6,863) - Gain on debt refinancing - 5,144 (5,144) (100)%Other, net 80 193 (113) (59)%Total other expenses, net: (24,562) (18,088) (6,474) 36%Net income / (loss) before income taxes 41,348 (18,356) 59,704 (325)%Income taxes - - - - Net income / (loss) 41,348 (18,356) 59,704 (325)% Net income / (loss) per common share, Basic 0.27 (0.55) Diluted 0.25 (0.55) Weighted average number of common shares outstanding Basic 153,321,907 33,436,278 Diluted 191,337,521 33,436,278 44Table of ContentsVessel Revenue, Net – The increase was attributable to both the increase in operating days and the increase in prevailing charter rates. We had 4,987 operating days in 2021, ascompared to 3,747 operating days in 2020. We acquired seven vessels within 2021 and sold one of our vessels in the third quarter of 2021. The operating days in 2021 were affected by153 off-hire and repair days compared to 61 days during 2020. The TCE rate increased by 129% in 2021 to $27,399, as compared to $11,950 in 2020. Please see the reconciliation below ofTCE rate to net revenues from vessels, the most directly comparable U.S. GAAP measure.Voyage Expenses – The decrease was primarily attributable to increased days that our vessels were chartered under time charter arrangements in 2021 (i.e. 85% of the operatingdays), since under these agreements, voyage expenses are borne by the charterer, additionally the vessel sold in the third quarter was operating in the spot market. We had 4,987operating days in 2021 as compared to 3,747 operating days in 2020 and 4,231 and 2,445 days under time-charter employment in the respective years. Vessel Operating Expenses - The increase was primarily attributable to an increase in ownership days due to the acquisition of seven vessels in 2021 and their incurred pre-delivery costs. Additionally, crew expenses and spares forwarding costs increased due to COVID-19 pandemic. In addition, we incurred additional insurance expenses due tosupplementary (retrospective) calls and premiums by our protection and indemnity associations, which are outside our control. Lastly, we incurred additional tonnage tax charges relatedto the vessels that were transitioned to our in-house management platforms and therefore were subject to Greek tonnage tax. We had 5,140 ownership days in 2021 as compared to 3,807ownership days in 2020. Management Fees - The increase was attributable to an increase in ownership days. We had 5,140 ownership days in 2021 as compared to 3,807 ownership days in 2020. General and Administration Expenses – The increase is mainly attributable to an increase in staff costs, as the total number of support staff at the end of 2021 were 47compared to 35 at the end of 2020. Stock based compensation amounted to $4.9 million in 2021 compared to $0.8 million in 2020. Depreciation and Amortization – For the year ended December 31, 2021, depreciation and amortization expense increased to $19.9 million from $15.0 million in 2020 mainly dueto the increase in the average number of vessels, as we added seven vessels to our fleet in 2021 and sold one vessel during the year. Gain on sale of vessel, net – The gain in the year ended December 31, 2021, is attributable to the sale of the Leadership.Gain on forward freight agreements – The gain in the year ended December 31, 2021, is attributable to the net realized gains of our positions on the forward freight agreementsentered within the year.Interest and Finance Costs – This decrease is primarily attributable to the decline in the average interest rate on our outstanding indebtedness, mainly driven by the refinancingor the prepayment of certain of our debt agreements and interest bearing securities. The weighted average interest rate on our outstanding debt and convertible notes for the yearsended 2021 and 2020 was approximately 4.81% and 6.09%, respectively. Loss on extinguishment of debt – The loss in the year ended December 31, 2021, is attributable to the write-off of unamortized deferred finance costs and debt discounts uponthe settlement of certain borrowing facilities, as follows: $0.4 million related to the Geniuship tranche of the July 2020 Entrust Loan Facility, $0.1 million related to the First JDH Loan, $0.1million related to the Fourth JDH Loan and $6.2 million related to the Third JDH Note.Gain on debt refinancing – The gain in the year ended December 31, 2020, is attributable to the settlement agreement entered into with Hamburg Commercial Bank AG on June26, 2020. Please see Item 5.A of our Form 20-F filed with the SEC on March 31, 2021 for a discussion of the year-to-year comparison between 2020 and 2019. B.Liquidity and Capital ResourcesOur principal source of funds have been our operating cash inflows, long-term borrowings from banks, and equity provided by the capital markets and JDH. Our principal use offunds has primarily been capital expenditures to establish our fleet, maintain the quality of our dry bulk vessels, comply with international shipping standards and environmental lawsand regulations, fund working capital requirements, and make principal repayments and interest payments on our outstanding debt obligations. 45Table of ContentsOur funding and treasury activities are conducted in accordance with corporate policies to maximize investment returns while maintaining appropriate liquidity for both ourshort- 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 heldin Euros. As of December 31, 2021, we had cash and cash equivalents of $41.5 million, as compared to $21.0 million as of December 31, 2020. Working capital is equal to current assets minus current liabilities, including the current portion of long-term debt. As of December 31, 2021, we had a working capital deficit of$40.9 million as compared to a working capital deficit of $0.2 million as of December 31, 2020. The deficit is primarily due to two of our loan facilities which mature in 2022: (i) $27.2 millionunder the UniCredit Bank Loan Facility and (ii) $15.1 million under the February 2019 ATB Loan Facility, which was repaid in full on February 28, 2022. The vessel which was previouslyfinanced by the February 2019 ATB Loan Facility was subsequently financed by the Chugoku Sale and Leaseback agreement. As of December 31, 2021, we had outstanding borrowings of $239.7 million (including long-term debt and other financial liabilities and convertible note) as compared to $212.0million as of December 31, 2020. In February 2021, we sold 44,150,000 common shares pursuant to a registered direct offering at a price of $1.70 per common share, in exchange for gross proceeds of $75.1million, or net proceeds of approximately $70.0 million. As of March 10, 2022, we had outstanding borrowings of $229.7 million (including long-term debt and other financial liabilities and convertible note), which includes theUniCredit Loan Facility maturing in December 2022. Our primary known and estimated liquidity needs for 2022 include obligations related to scheduled principal payments of outstandingborrowings and respective interest expenses payments and estimated drydocking expenditures. Our cash flow projections indicate that cash on hand and cash to be provided byoperating activities will be sufficient to cover the liquidity needs that become due in the twelve-month period ending one year after the financial statements' issuance. Additionalinformation on our annual scheduled obligations under our long-term debt and other financial liabilities are described in “Loan Arrangements” below and in Note 6 (“Long-Term Debtand Other Financial Liabilities”) and Note 7 (“Convertible Notes”) of our consolidated financial statements included in Item 18 of this Annual Report. Generally, we expect that, inaddition to the cash generated from our operations, our long-term funding sources will include bank borrowings, lease financings and the issuance of debt and equity securities. Cash Flows (In thousands of US Dollars) Year ended December 31, 2021 2020 2019 Cash Flow Data: Net cash provided by / (used in) operating activities 80,760 (9,735) 13,108 Net cash used in investing activities (184,620) (21,864) (12,349)Net cash provided by / (used in) financing activities 127,435 39,096 (6,351)Year ended December 31, 2021, as compared to year ended December 31, 2020 Operating Activities: Net cash provided by operating activities amounted to $80.8 million in 2021. The increase compared to 2020 is primarily attributable to the increase in ouroperating income following the improved market conditions that prevailed in 2021 compared to 2020. Net cash provided by operating activities in 2021 consisted of net income after non-cash items of $79.8 million, an adjustment of $0.7 million from gain on the sale of a vessel plus an increase in working capital of $1.7 million. Net cash used in operating activitiesamounted to $9.7 million in 2020, consisting of net loss after non-cash items of $0.6 million, an adjustment of $1.0 million of restructuring expenses plus a decrease in working capital of$10.1 million. Investing Activities: The 2021 cash outflow resulted from $197.2 million for the purchase of seven vessels, which was offset by $12.6 million from the proceeds from the sale ofone vessel. The 2020 cash outflow resulted mainly from the acquisition of MV Goodship and from the completion of installation of exhaust gas cleaning systems, or scrubbers, on one ofour vessels. Financing Activities: The 2021 cash inflow resulted mainly from: proceeds from issuance of common stock and warrants, net of underwriters' fees and commissions, of $98.3million, proceeds of $180.3 million from secured long-term debt and proceeds of $0.3 million obtained the issuance of preferred stock. The 2021 cash inflow was offset by total debtrepayments of $132.1 million, $14.0 million repayments of convertible notes, $1.7 million for common stock repurchases, $1 million for warrants repurchases and $2.7 million financing andstock issuance fees payments. The 2020 cash inflow resulted mainly from: proceeds from issuance of common stock and warrants, net of underwriters' fees and commissions, of $73.8million and proceeds of $22.5 million obtained from the New Entrust Loan Facility. The 2020 cash inflow was offset by total debt repayments of $53.5 million and $3.7 million financing andstock issuance fees payments. Please see Item 5.A of our Form 20-F filed with the SEC on March 31, 2021 for a discussion of the year-to-year comparison between 2020 and 2019. 46Table of ContentsLoan Arrangements Senior Facilities New Financing Activities during the year ended December 31, 2021 Aegean Baltic Bank S.A. (“ABB”) / ABB Loan FacilityOn April 22, 2021, we entered into a $15.5 million secured loan facility with ABB. The loan is divided in two tranches of $7.5 million (“Tranche A”) and $8.0 million (“Tranche B”)to partly finance the acquisition cost of the Goodship and Tradership, respectively. Each tranche bears interest at LIBOR plus a margin 4.0% and is repayable in eighteen consecutivequarterly installments of $0.2 million each, commencing three months after the drawdown of each tranche, with a final balloon payment of $3.9 million due on October 26, 2025, forTranche A and $4.4 million due on December 14, 2025, for Tranche B. The borrowers under the facility are the two applicable vessel-owning subsidiaries. The facility is secured, amongstothers, by a first priority mortgage over each of the vessels and a guarantee by the company. The Company is required to maintain a corporate leverage ratio, as defined in the loanagreement, that will not be higher than 85% until the maturity. In addition, the borrowers shall ensure that the market value of the vessels plus any additional security shall not be lessthan 130% of the total facility outstanding. As of December 31, 2021, $14.7 million was outstanding under the facility.May 2021 Alpha Bank Loan Facility On May 20, 2021, we entered into a $37.5 million secured loan facility with Alpha Bank S.A. for the purpose of (i) refinancing the outstanding indebtedness ofthe Leadership and Squireship and (ii) partly finance the previously unencumbered Lordship. The facility bore interest at LIBOR plus a margin of 3.5% and was repayable in sixteenconsecutive quarterly installments, the first four installments being $1.5 million each, the next four installments being $1.3 million each and the next eight quarterly installments being $0.9million each, with an interim balloon payment of $4.5 million concurrently with the eighth installment and a final balloon payment of $15.0 million due on May 21, 2025. The earliestmaturity date of the facility could be on December 31, 2024 and the final balloon payment on such date would have been $16.7 million. The facility was secured, amongst others, by a firstpreferred mortgage over each of the vessels and a guarantee by the Company. In addition, the borrowers had to ensure that the market value of the vessels plus any additional securitywould not be less than 125% of the total facility outstanding.On August 11, 2021, the facility was refinanced in full by the August 2021 Alpha Bank Facility. August 2021 Alpha Bank Loan Facility On August 9, 2021, we entered into a $44.1 million secured loan facility with Alpha Bank S.A. for (i) refinancing of the May 2021 Alpha Bank Loan Facility and (ii) financing ofthe previously unencumbered Friendship, effectively replacing the Leadership with the Friendship in the security structure and increasing the loan amount. The August 2021 AlphaBank Loan Facility is divided in two tranches, which were fully drawn on August 11, 2021: the first tranche of $31.1 million was used to partly refinance the outstanding indebtednessover the Squireship and the Lordship and the second tranche of $13.0 million was used to partly finance the acquisition cost of the Friendship. The first tranche bears interest at LIBORplus a margin of 3.5% and is repayable by four quarterly installments of $1.3 million each, followed by four quarterly installments of $1.0 million each, followed by eight quarterlyinstallments of $0.9 million each and a final balloon payment of $15.0 million due on May 21, 2025. The second tranche bears interest at LIBOR plus a margin of 3.25% and is repayable byinstallment four quarterly installments $0.7 million each, followed by twelve quarterly installments of $0.4 million each and a final balloon payment of $5.7 million due on August 11, 2025.The facility is secured by, amongst others, a first preferred mortgage over each of the relevant vessels and a guarantee by the Company. In addition, the borrowers shall ensure that themarket value of the vessels plus any additional security shall not be less than 125% of the total facility outstanding.As of December 31, 2021, $40.9 million was outstanding under the facility.Piraeus Bank Loan FacilityOn November 12, 2021 we entered into a $16.9 million secured loan facility with Piraeus Bank S.A. for the purpose of partially financing the acquisition of the Worldship. Thefacility bears interest at LIBOR plus a margin of 3.05% and is repayable in four quarterly installments of $1.0 million, followed by two quarterly installments of $0.8 million, followed byfourteen quarterly installments of $0.4 million each and a balloon installment of $6.1 million due on November 12, 2026. The facility is secured by, amongst others, a first preferredmortgage on the Worldship and a corporate guarantee by the Company. The Company is required to maintain a corporate leverage ratio (as defined therein) that will not be higher than85% until the maturity. In addition, the borrower shall ensure that the market value of the vessel plus any additional security shall not be less than 130% of the total facility outstanding.The margin of the Piraeus Bank Loan Facility is also subject to a sustainability pricing adjustment, whereby it may be decreased to 2.95% if the Worldship meets certain emissionreduction targets during the term of the facility.47Table of ContentsAs of December 31, 2021, $16.9 million was outstanding under the facility.Sinopac Loan FacilityOn December 20, 2021 we entered into a $15.0 million secured loan facility with Sinopac Capital International (HK) Limited for the purpose of refinancing the outstandingindebtedness of the Geniuship. The facility bears interest at LIBOR plus a margin of 3.5% and is repayable by four quarterly installments of $0.5 million, followed by sixteen quarterlyinstallments of $0.4 million and a balloon installment of $6.7 million due on December 20, 2026. The facility is secured by, amongst others, a first preferred mortgage over the Geniushipand a guarantee by the Company. In addition, the borrower shall ensure that the market value of the vessel plus any additional security shall not be less than 130% of the total facilityoutstanding.As of December 31, 2021, $15.0 million was outstanding under the facility.Pre - Existing Loan FacilitiesUniCredit Bank Loan Facility On September 11, 2015, we entered into a $52.7 million secured loan facility with UniCredit Bank AG to partly finance the acquisition of the Premiership, the Gladiatorship andthe Guardianship, referred to as the UniCredit Bank Loan Facility. On November 22, 2018, we entered into an amendment and restatement of the UniCredit Bank Loan Facility, followingthe sale of the Gladiatorship and the Guardianship and the financing of the Fellowship as replacement collateral. Following the supplemental agreement entered into on February 8,2021, the facility has an expiry date on December 29, 2022 and amortizes through six consecutive quarterly repayments of $1.2 million each, followed by a balloon installment of $22.4million on the maturity date. The applicable interest rate is LIBOR plus a margin of 3.5% per annum. The facility is secured by, amongst others, first preferred mortgages overthe Premiership and the Fellowship and a guarantee by the Company.As of December 31, 2021, $27.2 million was outstanding under the UniCredit Bank Loan Facility.February 2019 ATB Loan Facility On February 13, 2019, we entered into a $20.9 million secured loan facility with ATB in order (i) to refinance the existing indebtedness over the Partnership under a previousloan facility provided by the same lender and (ii) for general working capital purposes, and more specifically, for the financing of installation of open loop scrubber systems onthe Squireship and the Premiership. We refer to this facility as the February 2019 ATB Loan Facility. The borrower under the February 2019 ATB Loan Facility is the vessel-owningsubsidiary of the Partnership. The facility, as amended and/or supplemented from time to time, bears interest of LIBOR plus a margin of 4.65% and was divided in Tranche A relating tothe refinancing of the Partnership and Tranches B and C for the working capital purposes discussed above, respectively. Tranche A was repayable in six consecutive quarterlyinstallments of $0.2 million each and a balloon payment of $13.2 million on November 26, 2022. Tranche B and C was repayable in five consecutive quarterly installments of $0.2 millionwith the last one falling due on August 26, 2022. The Company was required to maintain a corporate leverage ratio (as defined therein), that would not be higher than 85% until thematurity. Following the supplemental agreement entered into on February 12, 2021, the borrower would ensure that the minimum required security cover (as defined therein) was 140%until June 30, 2021 (inclusive), 145% from July 1, 2021 until December 31, 2021 (inclusive) and 150% thereafter and until the maturity of the loan. The February 2019 ATB Loan Facility wassecured by, amongst others, a first priority mortgage over the Partnership and a guarantee by the Company. As of December 31, 2021, $15.1 million was outstanding under the facility.On February 28, 2022, the outstanding amount of $15.1 million was repaid in full.July 2020 Entrust Facility On July 15, 2020, we entered into a $22.5 million secured loan facility with Lucid Agency Services Limited and Lucid Trustee Services Limited as facility agent and securityagent, respectively, and certain nominees of EnTrust Global as lenders (the “July 2020 Entrust Facility”), for the purpose of partly refinancing the settlement amount of $23.5 million underthe HCOB Loan Facility discussed below. The borrowers under the July 2020 Entrust Facility were the Company’s applicable vessel-owning subsidiaries and the facility is guaranteed bythe Company. The July 2020 Entrust Facility was made available in two tranches, which were fully drawn on July 16, 2020: the first tranche of $6.5 million was used to partly refinance theoutstanding indebtedness over the Gloriuship and the second tranche of $16.0 million was used to partly refinance the outstanding indebtedness over the Geniuship. On December 20,2021, the second tranche was refinanced by the Sinopac Loan Facility secured by the Geniuship as described above. The July 2020 Entrust Facility matures on July 16, 2025 and issecured by, amongst others, a first priority mortgage over the Gloriuship and a guarantee by the Company. The July 2020 Entrust Facility bears fixed interest rate of 10.5% per annumwhile, following the prepayment of the second tranche, principal obligation amortizes through an instalment of $0.2 million and 14 consecutive quarterly instalments of $0.4 million each,followed by a balloon repayment of $0.4 million due at maturity. Moreover, the July 2020 Entrust Facility provides that: (i) the security cover percentage requirement (as defined therein)is required to be equal to 110% for the first 18 months following drawdown, 115% for months 19 – 24 following drawdown, 120% for months 25 – 36 following drawdown and 130% at alltimes thereafter until maturity, (ii) minimum liquidity of $0.3 million for the first three months following drawdown of the facility and $0.4 million at all times thereafter, as long as theGloriuship is not subject to a time-charter exceeding 12 months in duration, shall be maintained in the borrower’s earnings account. 48Table of ContentsAs of December 31, 2021, $5.5 million was outstanding under the July 2020 Entrust Facility. Certain of our loan facilities discussed above are secured by general assignments covering the respective vessels’ earnings, charter parties, insurances and requisitioncompensation; account pledge agreements covering the vessels’ earnings accounts; specific charterparty assignments, usually for charterparties exceeding twelve months in duration;technical and commercial managers’ undertakings; pledge agreements covering the shares of the applicable vessel-owning subsidiaries; and hedging assignment agreements. Loan Facilities repaid during the years ended December 31, 2020 and December 31, 2021 Leader Alpha Bank Loan Facility On March 6, 2015, we entered into a $8.8 million secured loan facility with Alpha Bank S.A. to partly finance the acquisition of the Leadership, referred to as the Leader AlphaBank Loan Facility. The facility, as amended and/or supplemented from time to time, was expiring on December 31, 2022, with repayments of $0.3 million per quarter followed by a ballooninstallment of $2.3 million on the maturity date. The interest rate of the facility was equal to LIBOR plus a margin of 3.75%. The Leader Alpha Bank Loan Facility, among others, wassecured by a first preferred mortgage over the Leadership and guarantee by the Company. On May 20, 2021, the facility was refinanced in full by the May 2021 Alpha Bank Loan Facility. Hamburg Commercial Bank AG (formerly HSH Nordbank AG) Loan Facility/Settlement Agreement On September 1, 2015, we entered into a $44.4 million secured loan facility with Hamburg Commercial Bank AG (formerly HSH Nordbank AG), referred to as the HCOB LoanFacility. The facility, as amended and/or supplemented from time to time, was expiring on June 30, 2020, with quarterly repayments followed by a balloon installment on the maturity date.The interest rate of the facility was equal to LIBOR plus a margin of 3.75%. The HCOB Loan Facility, among others, was secured by a first preferred mortgages over the Geniuship andGloriuship and guarantee by the Company. On June 26, 2020, we entered into a settlement agreement with HCOB. Pursuant to the terms of the settlement agreement, the Company, in order to fully settle its obligationsunder the subject facility was required to pay a total amount of $23.5 million out of the then outstanding amount of the loan agreement of $29.1 million until July 31, 2020. On July 17,2020, the Company settled the full amount of the HCOB Facility through a $23.5 million payment with the funds obtained from the proceeds of a new loan facility and cash on hand,following which all securities created in favor of HCOB were irrevocably and unconditionally released. As a result, the Company recognized a gain of $5.1 million. Squire Alpha Bank Loan Facility On November 4, 2015, we entered into a $33.8 million secured loan facility with Alpha Bank S.A. to partly finance the acquisition of the Squireship, referred to as the SquireAlpha Bank Loan Facility. The facility, as amended and/or supplemented from time to time, was expiring on December 31, 2022, with quarterly repayments followed by a ballooninstallment of $15.0 million on the maturity date. The interest rate of the facility was equal to LIBOR plus a margin of 3.50%. The Squire Alpha Bank Loan Facility, among others, wassecured by a first preferred mortgage over the Squireship, a guarantee by Leader Shipping Co., being the vessel-owning subsidiary of the Leadership, a second preferred mortgage overthe Leadership, and a guarantee by the Company. On May 20, 2021, the facility was refinanced in full by the May 2021 Alpha Bank Loan Facility. Entrust Loan Facility On June 11, 2018, we entered into a $24.5 million secured loan agreement with certain Blue Ocean maritime lending funds managed by EnTrustPermal. The facility was expiring onJune 13, 2023, or on June 13, 2025, subject to certain conditions with a balloon installment of $15.3 million or $9.5 million due at maturity, assuming a maturity date in June 2023 or in June2025, respectively. The weighted average all-in interest rate was equal to 11.4% or 11.2% assuming a maturity date in June 2023 or in June 2025, respectively. The Entrust Loan Facilitywas secured, among others, by a first priority mortgage over the Lordship and a guarantee by the Company. 49Table of ContentsOn March 5, 2021, the outstanding balance of $21.6 million of the Entrust Loan Facility was prepaid in full with cash on hand and all underlying securities were discharged.Subordinated & Other Loan Facilities First JDH Loan Facility On October 4, 2016, we entered into a $4.2 million loan facility with JDH to finance the initial deposits for the Lordship and the Knightship. The facility was amended andsupplemented on several occasions and along with the other facilities and convertible notes between the Company and JDH, was subject to comprehensive amendments that becameeffective on December 31, 2020 and the key applicable terms are described below. Following the amendments, the applicable interest rate was amended to a fixed rate of 5.5% per annumand the outstanding balance at that time was $5.9 million. Through two separate payments made on February 11, 2021 and February 22, 2021, the outstanding balance of $5.9 million of the First JDH Loan Facility was prepaid in full andall securities created in favor of JDH were also irrevocably and unconditionally released pursuant to a deed of release. Second JDH Loan Facility On May 24, 2017, we entered into an up to $16.2 million loan facility with JDH to partially finance the acquisition of the Partnership. The facility was amended andsupplemented on several occasions and along with the other facilities and convertible notes between the Company and JDH, was subject to comprehensive amendments that becameeffective on December 31, 2020 and the key applicable terms are described below. Following the amendments and relevant prepayments, the applicable interest rate was amended to afixed rate of 5.5% per annum and the outstanding balance at that time was $5.0 million. On February 22, 2021, the Second JDH Loan Facility was prepaid by $100,000 by proceeds from theCompany’s capital raising activities as provided for in the amendment agreement. On April 26, 2021, JDH exercised its option to purchase 4,285,714 additional Units (with each unitconsisting of one common share of the Company, or, at JDH’s option, one pre-funded warrant in lieu of such common share, and one warrant to purchase one common share at anexercise price of $0.70) at a price of $0.70 per Unit in exchange for the settlement of principal under the Second JDH Loan in an amount of $3.0 million (i.e., an amount equal to theaggregate purchase price of the units). As of December 31, 2021, $1.9 million was outstanding under the Second JDH Loan Facility. On February 28, 2022, the outstanding balance of $1.9 million of the Second JDHLoan Facility was prepaid in full and all securities created in favor of JDH were also irrevocably and unconditionally released pursuant to a deed of release. Fourth JDH Loan Facility On March 26, 2019, we entered into a $7.0 million loan facility with JDH, the proceeds of which were utilized (i) to refinance the $2.0 million outstanding under the Third JDHLoan Facility and (ii) for general corporate purposes. The facility was amended and supplemented on various occasions and along with the other facilities and convertible notes betweenthe Company and JDH, was subject to comprehensive amendments that became effective on December 31, 2020 and the key applicable terms are described below. Following theamendments, the applicable interest rate was amended to a fixed rate of 5.5% per annum and the outstanding balance at that time was $6.0 million. Through two separate payments madeon February 11, 2021 and February 22, 2021, the outstanding balance of $6.0 million of the Fourth JDH Loan Facility was prepaid in full. Other Financial Liabilities: Sale and Leaseback Transactions New Sale and Leaseback Activities during the year ended December 31, 2021 Flagship Cargill Sale and Leaseback On May 11, 2021, we entered into a $20.5 million sale and leaseback agreement with Cargill to partly finance the acquisition of the Flagship. The Company sold and charteredback the vessel from Cargill on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The implied average applicable interest rate is equivalentto 2% per annum. The sale and leaseback agreement does not include any financial covenants or security value maintenance provisions. The Company has continuous options to buyback the vessel during the whole five-year sale and leaseback period at predetermined prices as set forth in the agreement and at the end of such period it has a purchase obligation at$10.0 million. Additionally, at the time of repurchase, if the market value of the vessel exceeds certain threshold prices, as set out in the agreement, the Company will pay to Cargill 15% ofthe difference between the market price and such threshold prices. The charterhire principal will be amortized in sixty monthly installments averaging approximately $0.2 million eachalong with a balloon payment of $10.0 million at maturity on May 10, 2026. 50Table of ContentsThe charterhire principal, as of December 31, 2021, was $19.3 million. CMBFL Sale and Leaseback On June 22, 2021, we entered into a $30.9 million sale and leaseback agreement with CMBFL to partly finance the acquisition of the Hellasship and Patriotship. The Companysold and chartered back the vessels from two affiliates of CMBFL on a bareboat basis for a five-year period. The financings bear interest of LIBOR plus a margin of 3.5%. The Companyis required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 85% until the maturity. Each of bareboat charterers are required to maintain a valuemaintenance ratio (as defined therein) of at least 120% of the charterhire principal. The Company has continuous options to buy back the Hellasship and Patriotship at any timefollowing the second anniversary until the maturity of the bareboat charter at predetermined prices as defined in the agreement. The charterhire principal amortizes in twenty consecutiveequal quarterly installments of $0.8 million along with a balloon payment of $15.3 million due on June 28, 2026.The charterhire principal, as of December 31, 2021, was $29.3 million. Existing Sale and Leaseback ActivitiesHanchen Sale and Leaseback On June 28, 2018, we entered into a $26.5 million sale and leaseback agreement for the Knightship with Hanchen Limited (“Hanchen”), an affiliate of AVIC International LeasingCo., Ltd. The Company’s sold and chartered back the vessel on a bareboat basis for an eight-year period, having a purchase obligation at the end of the eighth year. The charterhireprincipal bears interest at LIBOR plus a margin of 4%. The Company has continuous options to buy back the Knightship at any time following the second anniversary of the bareboatcharter. Of the $26.5 million purchase price, $18.6 million were cash proceeds, $6.6 million were withheld by Hanchen as an upfront charterhire, and an amount of $1.3 million was paid bythe Charterer to Hanchen as security of the due observance and performance by the Charterer of its obligations and undertakings as per the sale and leaseback agreement, or theCharterer’s Deposit. The Charterer’s Deposit can be set off against the balloon payment at maturity. The Charterer is required to maintain a value maintenance ratio (as defined in theadditional clauses of the bareboat charter) of at least 120% of the charterhire principal minus the amount of the Charterer’s Deposit. The Company has continuous options to buy backthe Knightship at any time following the second anniversary of the bareboat charter and a purchase obligation of $5.3 million at the end of the leaseback period. The charterhire principalamortizes through thirty-two consecutive equal quarterly installments of approximately $0.5 million along with a balloon payment of $5.3 million due on June 29, 2026.The charterhire principal, as of December 31, 2021, was $13.5 million. Championship Cargill Sale and Leaseback On November 7, 2018, we entered into a $23.5 million sale and leaseback agreement for the Championship with Cargill. The Company sold and chartered back the vessel fromCargill on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. The cost of the financing is equivalent to an expected fixed interest rate of4.71% for five years. The Company is required to maintain an amount of $1.6 million from the $23.5 million proceeds as a performance guarantee, which amount of $1.6 million will be usedat the vessel’s repurchase. Moreover, under the subject sale and leaseback agreement, an additional tranche was provided to the Company for an amount of up to $2.8 million for thepurpose of financing the cost associated with the acquisition and installation on board the Championship of an open loop scrubber system. The sale and leaseback agreement does notinclude any financial covenants or security value maintenance provisions. The Company has continuous options to buy back the vessel during the whole five-year sale and leasebackperiod at the end of which it has a purchase obligation at $14.1 million. Additionally, at the time of repurchase, if the market value of the vessel is greater than certain threshold prices (asset out in the agreement), the Company will pay to Cargill 20% of the difference between the market price and such threshold price. The charterhire principal will be amortized in sixtymonthly installments averaging approximately $0.2 million each along with a balloon payment of $14.1 million, including the additional scrubber tranche, at maturity on November 7, 2023.The charterhire principal, as of December 31, 2021, was $19.2 million including the additional scrubber tranche.51Table of Contents New Sale and Leaseback Activities initiated after December 31, 2021 Chugoku Sale and LeasebackOn February 25, 2022 the Company entered into a $21.3 million sale and leaseback agreement with Chugoku to refinance the loan facilities secured by the Partnership. TheCompany sold and chartered back the vessel from Chugoku on a bareboat basis for an eight-year period starting from March 9, 2022. The financing’s applicable interest rate is SOFR +2.90% per annum. Following the second anniversary of the bareboat charter, the Company has continuous options to repurchase the vessel. The Company is required to maintain aminimum market value (as defined therein) of at least 120% of the charterhire principal. The charterhire principal amortizes in thirty-two consecutive quarterly installments averagingapproximately $0.6 million along with a balloon payment of $2.4 million at the expiry of the bareboat charter.Certain of the Company’s sale and leaseback agreements discussed above are secured by a guarantee from the Company; general assignments covering the respective vessels’earnings, insurances and requisition compensation; account pledge agreements; technical and commercial managers’ undertakings and pledge agreements covering the shares of theapplicable bareboat charterer subsidiary. Convertible Notes First JDH Note On March 12, 2015, we issued a $4.0 million convertible note to JDH, or the First JDH Note. As amended, the applicable interest rate was at a fixed rate of 5.5% per annum andthe outstanding balance at the time of the JDH Transactions (mentioned below) was $3.8 million. The First JDH Note was secured by a guarantee from the Company’s wholly ownedsubsidiary, Emperor Holding Ltd., or Emperor. On December 10, 2021, the First JDH Note was prepaid in full. In particular, following the exercise of JDH’s option, $3.6 million was repaid inOctober 2021 in common shares at a conversion price of $1.20 per share and $0.2 million was repaid in cash on December 10, 2021. The securities granted in favor of JDH were alsoirrevocably and unconditionally released. Second JDH Note On September 7, 2015, we issued an up to $6.8 million, revolving convertible note to JDH, or the Second JDH Note. As amended to date, the applicable interest rate was at afixed rate of 5.5% per annum and the outstanding balance at the time of the JDH Transactions (mentioned below) was $21.2 million. Emperor has provided a guarantee, dated September27, 2017, to JDH for the Company’s obligations under the Second JDH Note. As of December 31, 2021, $21.2 million was outstanding under the Second JDH Note. On January 26, 2022 and on March 10, 2022 the Company made two voluntary cash prepayments of $5.0 million each, reducing the outstanding amount of the Second JDH Noteto $11.2 million. We may by giving a five business days prior written notice to JDH at any time, prepay the whole or any part of the Second JDH Note in cash or, subject to JDH’s prior writtenagreement on the price per share, in a number of fully paid and nonassessable shares of the Company equal to the amount of the note being prepaid divided by the agreed price pershare. At JDH’s option, our obligation to repay the principal amount(s) under the Second JDH Note or any part thereof may be paid in common shares at a conversion price of $1.20 pershare. JDH also has received customary registration rights with respect to any shares to be received upon conversion of the Second JDH Note. Third JDH Note On September 27, 2017, we issued a $13.8 million convertible note to JDH, or the Third JDH Note. As amended, the applicable interest rate was at a fixed rate of 5.5% per annumand the outstanding balance at the time of the JDH Transactions (mentioned below) was $13.8 million. The Third JDH Note was secured by a second preferred mortgage and secondpriority general assignment covering earnings, insurances and requisition compensation over the Partnership and guarantees from Emperor and from the vessel-owning subsidiary ofthe Partnership. On December 10, 2021, the outstanding balance of $13.8 million of the Third JDH Note was prepaid in full in cash and all securities provided in favor of JDH were alsoirrevocably and unconditionally released. JDH Transactions Securities Purchase Agreement On December 30, 2020, we entered into a securities purchase agreement (the “Securities Purchase Agreement”) with JDH which sets forth the terms of the amendments agreedfor the First JDH Loan Facility, Second JDH Loan Facility, Fourth JDH Loan Facility (together, the “JDH Loan Facilities”), First JDH Note, Second JDH Note and Third JDH Note(together, the “JDH Notes”). 52Table of ContentsPursuant to the Securities Purchase Agreement: •The Company prepaid $6.5 million of the principal amount of the Second JDH Loan Facility on December 31, 2020. •In exchange for the settlement of all accrued and unpaid interest under the JDH Loan Facilities and JDH Notes through December 31, 2020 in an aggregate amount of $4.3million and an amendment fee of $1.2 million, the Company issued, on January 8, 2021, 7,986,913 units (“Units”) at a price of $0.70 per Unit, with each Unit consisting of onecommon share of the Company (or, at JDH’s option, one pre-funded warrant in lieu of such common share) and one warrant to purchase one common share at an exerciseprice of $0.70. •The Company granted JDH an option, exercisable only once until 45 days after the effectiveness of the resale registration statement described below, to purchase up to4,285,714 additional Units at a price of $0.70 per Unit in exchange for the forgiveness of principal under the Second JDH Loan Facility in an amount equal to the aggregatepurchase price of the Units. On April 26, 2021, JDH exercised this option to purchase 4,285,714 additional Units at a price of $0.70 per Unit in exchange for the settlement ofprincipal under the Second JDH Loan in an amount of $3.0 million. •The Company granted JDH customary registration rights covering common shares issuable pursuant to the Securities Purchase Agreement as well as common sharesunderlying the JDH Notes. The registration statement covering the resale of these common shares was filed on February 19, 2021. •The Company and JDH agreed to amend the terms of each of the JDH Loan Facilities and JDH Notes pursuant to the omnibus supplemental agreements described below,including to extend the maturity date to December 31, 2024, to reduce the annual interest rate to 5.5% and to amend the conversion price under the JDH Notes to $1.20 percommon share. •JDH agreed to a standstill undertaking, applicable for at least as long as the common shares are listed on Nasdaq, precluding any acquisition of the common shares,including through the exercise of warrants or the conversion of the JDH Notes, to the extent that it would result in JDH or its affiliates beneficially owning, includingcontrolling the voting or disposition of, more than 9.99% of the outstanding common shares after giving effect to the acquisition. •JDH waived any and all prior breaches and events of default under the JDH Loan Facilities and JDH Notes.The Securities Purchase Agreement and the transactions contemplated therein were approved by an independent committee of our board of directors. The terms of the warrant and pre-funded warrant issued as part of Units are substantially the same as those of the Class E warrants and pre-funded warrants issued in theCompany’s underwritten public offering in August 2020. Omnibus Loan Supplemental Agreement On December 31, 2020, the Company entered into an omnibus supplemental agreement (the “Omnibus Loan Supplemental Agreement”), amending each of the JDH LoanFacilities to reflect the changes agreed with JDH in the Securities Purchase Agreement, including: (i)accrued and unpaid interest of an aggregate of $1.9 million through December 31, 2020 was deemed fully and finally settled; (ii)the interest rate payable from January 1, 2021 through the maturity date was fixed at 5.5% per annum; (iii)the maturity date was extended to December 31, 2024; (iv)the addition of cash sweep provisions whereby the Company will make prepayments semi-annually commencing the fiscal quarter ending March 31, 2021 of the greaterof the Company’s cash balances in excess of $25.0 million or the revenue of the Company’s Capesize fleet attributable to a time charter equivalent rate in excess of$18,000 but not exceeding $21,000; (v)a mandatory prepayment on each of December 31, 2022 and December 31, 2023 of $8.0 million less any prepayments previously made under the cash sweep provisions; (vi)an option to apply the proceeds of any cash exercise of the warrants issued to JDH as part of Units as a prepayment; (vii)an amendment to the existing mandatory prepayment provisions in the First JDH Loan Facility and Fourth JDH Loan Facility such that the Company will make amandatory prepayment of an amount equal to 25% of the net proceeds of any future public offering and any cash exercise of the Company’s outstanding Class Ewarrants (the prepayment obligations set forth in (iv)-(vii) above, the “Mandatory Prepayment Obligations”); and (viii)a cap of $12.0 million on all Mandatory Prepayment Obligations in any calendar year.53Table of ContentsOmnibus Note Supplemental Agreement On December 31, 2020, the Company entered into an omnibus supplemental agreement (the “Omnibus Note Supplemental Agreement”), amending each of the JDH Notes toreflect the changes agreed with JDH in the Securities Purchase Agreement, including: (i)accrued and unpaid interest of an aggregate of $2.4 million through December 31, 2020 was deemed fully and finally settled; (ii)the interest rate payable from January 1, 2021 through the maturity date was fixed at 5.5% per annum; (iii)the maturity date was extended to December 31, 2024; (iv)the conversion price was amended to $1.20 per common share; (v)the existing conversion provision was amended to include a beneficial ownership limitation of 9.99% of the number of the common shares outstanding immediatelyafter giving effect to the issuance of common shares issuable upon conversion; and (vi)the addition of provisions analogous to the Mandatory Prepayment Obligations requiring mandatory prepayment of the JDH Notes following the full repayment of theJDH Loan Facilities, and a cap of $12.0 million on all such mandatory prepayment obligations in any calendar year.C.Research and development, patents and licenses, etc.Not applicable. D.Trend InformationOur results of operations depend primarily on the charter rates earned by our vessels. The widely accepted benchmark of charter market in the dry bulk industry is the Baltic DryIndex, or the BDI. Since the start of the financial crisis in 2008 the performance of the BDI has been characterized by high volatility, as the growth in the size of the dry bulk fleet outpaced growthin vessel demand for an extended period of time. Specifically, in the period from 2010 to 2020, the size of the fleet in terms of deadweight tons grew by an annual average of about 6.0% while the corresponding growth indemand for dry bulk carriers grew by 3.1%, resulting in a drop of about 61% in the value of the BDI over the period. In 2021, the volatility was apparent once again with the BDIregistering a low of 1,303 on February 10, 2021 and a high of 5,650 on October 7, 2021. However, as the total size of the dry bulk fleet rose by about 3.6%, compared to demand growth of3.8%, BDI increased by approximately 61%. According to tentative projections, the total size of the dry bulk fleet is expected to rise by about 2.1% in 2022, slightly above the expected demand growth of 1.9%. At the sametime the dry bulk orderbook as a percentage of the active fleet fell in 2021 to 7.3% from 10.5% in 2020, while the average figure for the period 2008-2020 was 33.3%. Meanwhile, the geopolitical tensions in Ukraine are likely to increase further the volatility of the charter market, with the overall ton-mile demand to be affected, as cargoesexported from Ukraine and Russia will need to be substituted by cargoes from different sources. As 88% of our fleet is based on index-linked charter contracts, while only two vessels have fixed rate agreements, we will be exposed to any near-term volatility in the chartermarket. We believe we have structured our capital expenditure requirements, debt commitments and liquidity resources in a way that will provide us with financial flexibility (see “Item 5.Operating and Financial Review and Prospects - B. Liquidity and Capital Resources” for more information). Since its outbreak in late 2019, the COVID-19 pandemic has caused severe global disruptions and may continue to negatively impact the economic conditions regionally as wellas globally and otherwise impact our operations and the operations of our customers and suppliers. The recent reopening of the global economy and consequent increased demandacross key dry bulk commodities has positively affected our revenues. However, there is still high uncertainty on how the pandemic will evolve, with new variants emerging, forcinggovernments in affected countries to impose travel bans, quarantines and other emergency public health measures depending on the severity of the situation on each case. An increasein the severity or duration or a resurgence of the Covid-19 pandemic and any significant disruption of wide-scale vaccine distribution could have an adverse impact on the Company’sbusiness, results of operations, cash flows, financial condition, the carrying value of the Company’s assets and the fair values of the Company’s vessels.Important Measures and Definitions 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 bareboat basis each vessel in our fleet. Ownershipdays 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. 54Table of ContentsAvailable 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 orspecial 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 theaggregate 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 therelevant 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 governmentalrequirements. 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 thecharterer pays substantially all of the voyage expenses, including port charges, bunker expenses, canal charges and other commissions. The vessel owner pays the vessel operatingexpenses, which include crew costs, provisions, deck and engine stores and spares, lubricants, insurance, maintenance and repairs. The vessel owner is also responsible for eachvessel'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 seasonaland 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 theexisting 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. Bareboat charter. A bareboat charter is generally a contract pursuant to which a vessel owner provides its vessel to a charterer for a fixed period of time at a specified dailyrate. Under a bareboat charter, the charterer assumes responsibility for all voyage and vessel operating expenses and risk of operation. 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. Daily Vessel Operating Expenses. Daily Vessel Operating Expenses are calculated by dividing vessel operating expenses less pre-delivery expenses by ownership days for therelevant time periods. Vessel operating expenses include crew costs, provisions, deck and engine stores, lubricants, insurance, maintenance and repairs. Vessel operating expenses beforepre-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. 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 comparableU.S. GAAP measures. Year Ended December 31, Fleet Data: 2021 2020 2019 Ownership days 5,140 3,807 3,650 Available days(1) 5,040 3,755 3,417 Operating days(2) 4,987 3,747 3,393 Fleet utilization 97.0% 98.4% 93% Average Daily Results: TCE rate(3) $27,399 $11,950 $14,694 Daily Vessel Operating Expenses(4) $6,211 $5,709 $5,172 55Table of Contents(1)During the year ended December 31, 2021, we incurred 100 off-hire days for four scheduled dry-dockings. During the year ended December 31, 2020, we incurred 52 off-hire daysfor a scheduled dry-docking and scrubber installation on one of our vessels.(2)During the year ended December 31, 2021, we incurred 53 off-hire days due to unforeseen circumstances. During the year ended December 31, 2020, we incurred 8 off-hire daysdue to 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 directlycomparable U.S. GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financialperformance. 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. Year Ended December 31, (In thousands of US Dollars, except operating days and TCE rate) 2021 2020 2019 Net revenues from vessels $153,108 $63,345 $86,499 Voyage expenses (16,469) (18,567) (36,641)Time charter equivalent revenues $136,639 $44,778 $49,858 Operating days 4,987 3,747 3,393 Daily time charter equivalent rate $27,399 $11,950 $14,694 (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 evaluatingtheir financial performance. Our calculation of Daily Vessel Operating Expenses may not be comparable to that reported by other companies. The following table reconciles ourvessel operating expenses to Daily Vessel Operating Expenses.(In thousands of US Dollars, except ownership days and Daily Vessel Operating Expenses) Year Ended December 31, 2021 2020 2019 Vessel operating expenses $36,332 $22,347 $18,980 Less: Pre-delivery expenses (4,410) (611) (104)Vessel operating expenses before pre-delivery expenses 31,922 21,736 18,876 Ownership days 5,140 3,807 3,650 Daily Vessel Operating Expenses $6,211 $5,709 $5,172 Please also see “–B. Liquidity and Capital Resources.” E.Critical Accounting EstimatesThe discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S.GAAP. The preparation of those financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses andrelated disclosure of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions and conditions.Critical accounting estimates are those that reflect significant judgments of uncertainties and potentially result in materially different results under different assumptions andconditions. We have described below what we believe is our most critical accounting estimate, because it generally involves a comparatively higher degree of judgment in its application.For a description of all our significant accounting policies, see Note 2 to our annual audited financial statements included in this annual report.Impairment of long-lived assets We review our long-lived assets for impairment whenever events or changes in circumstances, such as prevailing market conditions, obsolescence or damage to the asset,business plans to dispose a vessel earlier than the end of its useful life and other business plans, indicate that the carrying amount of the assets, plus any unamortized dry-dockingcosts, and cost of any equipment not yet installed, may not be recoverable. The volatile market conditions in the dry bulk market with decreased charter rates and decreased vesselmarket values are conditions we consider to be indicators of a potential impairment for our vessels. We determine undiscounted projected operating cash flows, for each vessel andcompare it to the vessel's carrying value, plus any unamortized dry-docking costs and cost of any equipment not yet installed. When the undiscounted projected operating cash flowsexpected to be generated by the use of the vessel and/or its eventual disposition are less than its carrying value, plus any unamortized dry-docking costs and cost of any equipment notyet installed, we impair the carrying amount of the vessel. Measurement of the impairment loss is based on the fair value of the asset as determined by independent valuators and use ofavailable market data. The undiscounted projected operating cash inflows are determined by considering the charter revenues from existing time charters for the fixed fleet days and anestimated daily time charter equivalent for the non-fixed days (based on a combination of one year charter rates estimate and the average of the trailing 10-year historical charter rates,excluding the outliers) adjusted for commissions, expected off hires due to scheduled vessels' maintenance and estimated unexpected breakdown off hires. The undiscounted projectedoperating cash outflows are determined by applying various assumptions regarding vessel operating expenses, management fees and scheduled vessels' maintenance. Our assessment concluded that no impairment loss should be recorded as of December 31, 2021 and 2020. 56Table of ContentsOur Fleet – Illustrative Comparison of Possible Excess of Carrying Value Over Estimated Charter-Free Market Value of Certain Vessels Historically, the market values of vessels have experienced volatility, which from time to time may be substantial. As a result, the charter-free market value of certain of ourvessels may have declined below those vessels' carrying value, even though we would not impair those vessels' carrying value under our accounting impairment policy. The table setforth below indicates (i) the carrying value of each of our vessels as of December 31, 2021 and 2020, respectively, and (ii) which of our vessels we believe had a basic market value belowtheir carrying value. The carrying value includes, as applicable, vessel costs, plus any unamortized deferred dry-docking costs and costs of any equipment not yet installed. Thisaggregate difference between the carrying value of our vessels and their market value of $5.0 million and $63.1 million, as of December 31, 2021 and 2020, respectively, represents theamount by which we believe we would have had to reduce our net income if we sold all of such vessels, on industry standard terms, in cash transactions, and to a willing buyer where weare not under any compulsion to sell, and where the buyer was not under any compulsion to buy as of December 31, 2021 and 2020, respectively. For purposes of this calculation, weassumed that the vessels would be sold at a price that reflected our estimate of their charter-free market values as of December 31, 2021 and 2020, respectively. Our estimates of charter-free market value assume that our vessels were all in good and seaworthy condition without need for repair and if inspected would be certified in classwithout notations of any kind. Our estimates are based on information available from various industry sources, including: •reports by industry analysts and data providers that focus on our industry and related dynamics affecting vessel values; •news and industry reports of similar vessel sales; •offers that we may have received from potential purchasers of our vessels; and •vessel sale prices and values of which we are aware through both formal and informal communications with shipowners, shipbrokers, industry analysts and various othershipping industry participants and observers.As we obtain information from various industry and other sources, our estimates of basic market value are inherently uncertain. In addition, vessel values are highly volatile; assuch, our estimates may not be indicative of the current or future basic market value of our vessels or prices that we could achieve if we were to sell them. Carrying Value plus any unamortized dry-docking costs and cost of any equipment not yet installed as ofVessel Year Built Dwt December 31, 2021(in millions of U.S. dollars) December 31, 2020(in millions of U.S. dollars) Patriotship 2010 181,709 25.9 - Dukeship 2010 181,453 34.2* - Worldship 2012 181,415 33.2 - Hellasship 2012 181,325 27.8 - Fellowship 2010 179,701 27.4 26.6*Championship 2011 179,238 38.1* 37.7*Partnership 2012 179,213 30.8 32.1*Knightship 2010 178,978 21.1 22.2*Lordship 2010 178,838 20.9 22.1*Goodship 2005 177,536 13.2 11.2 Friendship 2009 176,952 24.3 - Tradership 2006 176,925 16.5 - Flagship 2013 176,387 27.7 - Gloriuship 2004 171,314 12.4 13.4*Geniuship 2010 170,057 23.6 22.6*Premiership 2010 170,024 27.1 28.8*Squireship 2010 170,018 30.5 32.5*Leadership 2001 171,199 - 11.9*TOTAL 434.7 261.1 * Indicates dry bulk carrier vessels for which we believe, as of December 31, 2021 and 2020, respectively, the basic charter-free market value was lower than the vessel's carrying valueplus any unamortized dry-docking costs and cost of any equipment not yet installed.We refer you to the risk factor entitled “The market values of our vessels may decrease, which could limit the amount of funds that we can borrow or trigger certain financialcovenants under our loan agreements and other financing agreements, and we may incur an impairment or, if we sell vessels following a decline in their market value, a loss.” Although we believe that the assumptions used to evaluate potential asset impairment are based on historical trends and are reasonable and appropriate, such assumptions arehighly subjective. To minimize such subjectivity, our analysis for the years ended December 31, 2021 and 2020 also involved sensitivity analysis to the model input we believe is moreimportant and likely to change. In particular, in terms of our estimates for the time charter equivalent for the unfixed period, we use a combination of one-year charter rates estimate andthe average of the trailing 10-year historical charter rates, excluding outliers. Although the trailing 10-year historical charter rates, excluding the outliers, cover at least a full businesscycle, we sensitized our model with regards to long-term historical charter rate assumptions for the unfixed period beyond the first year. Our sensitivity analysis revealed that, to theextent that going forward the 10-year historical charter rates, excluding the outliers, would not decline by more than 29% for Capesize vessels and we would not be required to recognizeimpairment. For the year ended December 31, 2021, indicators of impairment existed for two of our vessels as their carrying value plus any unamortized dry-docking costs and cost of anyequipment not yet installed was higher than their market value. The carrying value of the two vessels plus any unamortized dry-docking costs and cost of any equipment not yetinstalled for which impairment indicators existed as at December 31, 2021, was $72.3 million. 57Table of ContentsITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEESA.Directors and Senior ManagementSet forth below are the names, ages and positions of our current directors and executive officers. Members of our board of directors are elected annually on a staggered basis,and each director elected holds office for a three-year term. Officers are elected from time to time by vote of our board of directors and hold office until a successor is elected. Thebusiness address of each of our directors and executive officers listed below is 154 Vouliagmenis Avenue, 166 74 Glyfada, Greece. Name Age Position Director ClassStamatios Tsantanis 50 Chairman, Chief Executive Officer & Director A (term expires in 2022)Stavros Gyftakis 43 Chief Financial Officer Christina Anagnostara 51 Director* B (term expires in 2023)Elias Culucundis 79 Director* A (term expires in 2022)Dimitrios Anagnostopoulos 75 Director* C (term expires in 2024)Ioannis Kartsonas 50 Director* C (term expires in 2024)*Independent DirectorBiographical information with respect to each of our directors and our executive officers is set forth below. Stamatios Tsantanis has been a member of our board of directors and our Chief Executive Officer since October 1, 2012 and has led the Company's significant growth to a worldrenowned Capesize dry bulk company of more than 3 million dwt. In addition, Mr. Tsantanis has been the Chairman of our board of directors since October 1, 2013 and also served as ourInterim Chief Financial Officer from November 1, 2013 until October 2, 2018. Mr. Tsantanis brings more than 24 years of experience in shipping and finance and held senior managementpositions in prominent private and public shipping companies and financial institutions. Prior to that, he was an investment banker at Alpha Finance, a member of the Alpha Bank Group,with active roles in a number of major shipping corporate finance transactions in the U.S. capital markets. Mr. Tsantanis holds a Master of Science (MSc) in Shipping Trade and Financefrom Bayes Business School (formerly known as Cass Business School) of City University in London and a Bachelor of Science (BSc) in Shipping Economics from the University ofPiraeus. He is also a member of the board of directors of Breakwave Advisors (NYSE: BDRY & BSEA) and a fellow of the Institute of Chartered Shipbrokers. Stavros Gyftakis was appointed as our Chief Financial Officer on October 3, 2018, and previously served as Finance Director since November 2017. He has more than 16 yearsof experience in senior positions in the shipping finance industry. Before joining Seanergy, he was a Senior Vice President in the Greek shipping finance desk at DVB Bank SE. Mr.Gyftakis holds a BSc in Mathematics from the Aristotle University of Thessaloniki, a MSc in Business Mathematics awarded with Honors, from the Athens University of Economics andBusiness and a MSc in Shipping, Trade and Finance, awarded with Distinction, from Bayes Business School (formerly known as Cass Business School) of City University in London. Christina Anagnostara served as our Chief Financial Officer from November 17, 2008 until October 31, 2013 and has served as a member of our board of directors sinceDecember 2008. She has more than 24 years of maritime and international business experience in the areas of finance, banking, capital markets, consulting, accounting and audit. She hasserved in executive and board positions of publicly listed companies in the maritime industry and she was responsible for the financial, capital raising and accounting functions. SinceJune 2017 she is a Director of the Investment Banking Division of AXIA Ventures Group and from 2014 to 2017 she provided advisory services to corporate clients involved in all aspectsof the maritime industry. Between 2006 and 2008 she served as Chief Financial Officer and member of the board of directors of Global Oceanic Carriers Ltd, a dry bulk shipping companylisted on the Alternative Investment Market of the London Stock Exchange. Between 1999 and 2006, she was a senior management consultant of the Geneva-based EFG Group. Prior toEFG Group she worked for Eurobank EFG and Ernst & Young, the international accounting firm. Ms. Anagnostara studied Economics in Athens and is a Certified Chartered Accountant.She is a member of various industry organizations including ACCA, Propeller Club, WISTA, Shipping Finance Executives and American Hellenic Chamber of Commerce. Elias Culucundis has been a member of our board of directors since our inception. Since 1999, Mr. Culucundis has been the President, Chief Executive Officer and Director ofEquity Shipping Company Ltd., a company specializing in starting, managing and operating commercial and technical shipping projects. Additionally, from 1996 to 2000, he was aDirector of Kassian Maritime Shipping Agency Ltd., a vessel management company operating a fleet of ten bulk carriers. During this time, Mr. Culucundis was also a Director of PointClear Navigation Agency Ltd, a marine project company. From 1981 to 1995, Mr. Culucundis was a Director of Kassos Maritime Enterprises Ltd., a company engaged in vesselmanagement. While at Kassos, he was initially a technical Director and eventually ascended to the position of Chief Executive Officer, overseeing a large fleet of Panamax, Aframax andVLCC tankers, as well as overseeing new vessel building contracts, specifications and the construction of new vessels. From 1971 to 1980, Mr. Culucundis was a Director and the ChiefExecutive Officer of Off Shore Consultants Inc. and Naval Engineering Dynamics Ltd. In Off Shore Consultants Inc. he worked in Floating Production, Storage and Offloading vessel, orFPSO, design and construction and was responsible for the technical and commercial supervision of a pentagon-type drilling rig utilized by Royal Dutch Shell Plc. Seven FPSOs weredesigned and constructed that were subsequently utilized by Pertamina, ARCO, Total and Elf-Aquitaine. Naval Engineering Dynamics Ltd. was responsible for purchasing, re-buildingand operating vessels that had suffered major damage. From 1966 to 1971, Mr. Culucundis was employed as a Naval Architect for A.G. Pappadakis Co. Ltd., London, responsible fortanker and bulk carrier new buildings and supervising the technical operation of their fleet. He is a graduate of Kings College, Durham University, Great Britain, with a degree in NavalArchitecture and Shipbuilding. He is a member of the Hellenic National Committee of American Bureau of Shipping and he served in the Council of the Union of Greek Shipowners. Mr.Culucundis is a Fellow of the Royal Institute of Naval Architects and a Chartered Engineer. 58Table of ContentsDimitrios Anagnostopoulos has been a member of our board of directors since May 2009. Mr. Anagnostopoulos has over 48 years of experience in Shipping, Ship finance andBank Management. Mr. Anagnostopoulos obtained his BSc at the Athens University of Economics and Business. His career began in the 1970's as Assistant Lecturer at the sameUniversity followed by four years with the Onassis Shipping Group HQ in Monaco. Mr. Anagnostopoulos also held various posts at the National Investment Bank of IndustrialDevelopment (ETEBA), Continental Illinois National Bank of Chicago, the Greyhound Corporation, and with ABN AMRO, where he has spent nearly two decades with the Bank, holdingthe positions of Senior Vice-President and Head of Shipping. Since 2010 he is also an advisor and Board Member in the Aegean Baltic Bank S.A. Mr. Anagnostopoulos has been aspeaker and panelist in various shipping conferences in Europe, and a regular guest lecturer at the Bayes Business School (formerly known as Cass Business School) of City Universityin London, the Athens University of Economics and Business and the ALBA Graduate Business School. He is a member (and ex-vice chairman) of the Association of Banking andFinancial Executives of Greek Shipping and an Associate Member of the Institute of Energy of South East Europe. In 2008 he was named by the Lloyd's Organization as ShippingFinancier of the Year. Ioannis Kartsonas has been a member of our board of directors since May 2017. Mr. Kartsonas has more than 22 years of experience in finance and commodities trading. He iscurrently the Principal and Managing Partner of Breakwave Advisors LLC., a commodity-focused advisory firm based in New York. From 2011 to 2017, he was a Senior Portfolio Managerat Carlyle Commodity Management, a commodity-focused investment firm based in New York and part of the Carlyle Group, being responsible for the firm's Shipping and Freightinvestments. During his tenure, he managed one of the largest freight futures funds globally. Prior to his role, Mr. Kartsonas was a Co-Founder and Portfolio Manager at Sea AdvisorsFund, an investment fund focused in Shipping. From 2004 to 2009, he was the leading Transportation Analyst at Citi Investment Research covering the broader transportation spaceincluding Shipping. Prior to that, he was an Equity Analyst focusing on Shipping and Energy for Standard & Poor's Investment Research. Mr. Kartsonas holds an MBA in Finance fromthe Simon School of Business, University of Rochester. No family relationships exist among any of the directors and executive officers. As a foreign private issuer listed on the Nasdaq Capital Market, we are required to disclose certain self-identified diversity characteristics about our directors pursuant toNasdaq’s board diversity and disclosure rules approved by the Commission in August 2021. The Board Diversity Matrix set forth below contains the requisite information as of the dateof this annual report. Board Diversity Matrix (As of March 29, 2022)To be completed by Foreign Issuers (with principal executive offices outside of the U.S.) and Foreign Private IssuersCountry of Principal Executive OfficesGreeceForeign Private IssuerYesDisclosure Prohibited under Home Country LawNoTotal Number of Directors5 FemaleMaleNon-BinaryDid Not Disclose GenderPart I: Gender IdentityDirectors1400Part II: Demographic BackgroundUnderrepresented Individual in Home Country Jurisdiction0LGBTQ+0Did Not Disclose Demographic Background0B.CompensationFor the year ended December 31, 2021, the Company paid its executive officers and directors aggregate compensation of $1.4 million. The Company’s executive officers areemployed by it pursuant to employment and consulting contracts. 59Table of ContentsEach member of the Company’s board of directors received a fee of $0.1 million in 2021. The aggregate director fees paid by the Company for the years ended December 31, 2021,2020 and 2019 totalled $0.4 million, $0.3 million and $0.3 million, respectively. On January 12, 2011 our board of directors adopted the Seanergy Maritime Holdings Corp. 2011 Equity Incentive Plan, or the Plan. On January 18, 2021, the Plan, as previouslyamended, was further amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under the Plan to 4,000,000 shares. On August 2,2021, the Plan was further amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under the Plan to 3,500,000 shares. On January12, 2022, the Plan was further amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under the Plan to 5,500,000 shares. The Planis administered by the Compensation Committee of our board of directors. Under the Plan, our officers, key employees, directors, consultants and service providers may be grantedincentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, and unrestricted stock at the discretion of ourCompensation Committee. Any awards granted under the Plan that are subject to vesting are conditioned upon the recipient's continued service as an employee or a director of theCompany, through the applicable vesting date. On January 18, 2021, the Compensation Committee granted an aggregate of 3,600,000 restricted shares of common stock pursuant to the Plan. Of the total 3,600,000 sharesissued, 1,400,000 shares were granted to the non-executive members of the board of directors, 950,000 were granted to the executive officers, 1,100,000 shares were granted to certain ofthe Company’s non-executive employees and 150,000 shares were granted to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on thegrant date was $0.81. 1,200,030 shares vested on the grant date, 1,199,985 shares vested on October 1, 2021 and 1,199,985 shares will vest on October 1, 2022. On August 2, 2021, the Compensation Committee granted an aggregate of 3,100,000 restricted shares of common stock pursuant to the Plan. Of the total 3,100,000 sharesissued, 1,300,000 shares were granted to the non-executive members of the board of directors, 885,000 were granted to the executive officers, 790,000 shares were granted to certain of theCompany’s non-executive employees and 125,000 shares were granted to the sole director of the Company’s commercial manager, a non-employee and another non-employee. The fairvalue of each share on the grant date was $1.02. 1,033,352 shares vested on the grant date, 1,033,324 shares vested on October 1, 2021 and 1,033,324 shares will vest on October 1, 2022. On January 12, 2022, the Compensation Committee granted an aggregate of 5,337,000 restricted shares of common stock pursuant to the Plan. Of the total 5,337,000 sharesissued, 1,600,000 shares were granted to the non-executive members of the board of directors, 1,700,000 were granted to the executive officers, 1,887,000 shares were granted to certain ofthe Company’s non-executive employees and 150,000 shares were granted to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on thegrant date was $0.91. 1,779,028 shares vested on the grant date, 1,778,986 shares will vest on October 1, 2022 and 1,778,986 shares will vest on October 1, 2023. C.Board PracticesOur directors do not have service contracts and do not receive any benefits upon termination of their directorships. Our board of directors has an audit committee, acompensation committee and a nominating committee. Our board of directors has adopted a charter for each of these committees. Audit Committee Our audit committee consists of Messrs. Dimitrios Anagnostopoulos and Elias Culucundis. Our board of directors has determined that the members of the audit committee meetthe applicable independence requirements of the Commission and the Nasdaq Stock Market Rules. Our board of directors has determined that Mr. Dimitrios Anagnostopoulos is an“Audit Committee Financial Expert” under the Commission's rules and the corporate governance rules of the Nasdaq Stock Market. The audit committee has powers and performs the functions customarily performed by such a committee (including those required of such a committee by Nasdaq and theCommission). The audit committee is responsible for selecting and meeting with our independent registered public accounting firm regarding, among other matters, audits and theadequacy of our accounting and control systems. Compensation Committee Our compensation committee consists of Messrs. Dimitrios Anagnostopoulos and Elias Culucundis, each of whom is an independent director. The compensation committeereviews and approves the compensation of our executive officers. 60Table of ContentsNominating Committee Our nominating committee consists of Messrs. Elias Culucundis and Dimitrios Anagnostopoulos, each of whom is an independent director. The nominating committee isresponsible for overseeing the selection of persons to be nominated to serve on our board of directors. D.EmployeesAs of December 31, 2021, 2020 and 2019, we had two executive officers, Mr. Stamatios Tsantanis and Mr. Stavros Gyftakis, and we employed Ms. Theodora Mitropetrou, ourgeneral counsel. In addition, as of December 31, 2021, 2020 and 2019, we employed a support staff consisting of 46, 35 and 35 employees, respectively. E.Share OwnershipThe common shares beneficially owned by our directors and executive officers are disclosed below in “Item 7. Major Shareholders and Related Party Transactions.” ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONSA.Major ShareholdersThe following table sets out information as of the date of this annual report regarding the beneficial ownership of our common shares by (i) the owners of five percent or moreof our outstanding common shares and (ii) our directors and executive officers. The beneficial ownership information set forth in the table below is based on beneficial ownershipreports furnished to the Commission or information regarding the beneficial ownership of our common shares delivered to us. To the best of our knowledge, except as disclosed in thetable below or with respect to our directors and executive officers, we are not controlled, directly or indirectly, by another corporation, by any foreign government or by any other naturalor legal persons. All of our shareholders, including the shareholders listed in this table, are entitled to one vote for each common share held. Identity of Person or Group Numberof SharesOwned Percentof Class Stamatios Tsantanis(1)(2) 3,650,000 2.0%Stavros Gyftakis(1) — * Christina Anagnostara(1) — * Elias Culucundis(1) — * Dimitrios Anagnostopoulos(1) — * Ioannis Kartsonas(1) — * Directors and executive officers as a group (6 individuals)(1) 8,465,748 4.7%* Less than one percent.(1)Calculation of percent of class beneficially owned by each such person is based on 178,316,471 common shares outstanding as of March 29, 2022 and any additional shares thatsuch person may be deemed to beneficially own in accordance with Rule 13d-3 under the Exchange Act.(2)Stamatios Tsantanis also beneficially owns 20,000 Series B Preferred Shares, constituting 100% of our issued and outstanding Series B Preferred Shares, which were issued onDecember 10, 2021 pursuant to a stock purchase agreement between us and Stamatios Tsantanis. Through his ownership of common shares and Series B Preferred Shares,Stamatios Tsantanis controls 49.99% of the voting power of our outstanding capital stock. For a description of the Series B Preferred Shares, see “Description of Securities”filed as Exhibit 2.9 hereto.B.Related Party Transactions On December 10, 2021, we entered into a stock purchase agreement and issued 20,000 of our newly-designated Series B Preferred Shares, par value $0.0001 per share, to ourChairman and Chief Executive Officer, Stamatios Tsantanis, in return for cash consideration of $250,000. The issuance of the Series B preferred shares was approved by a specialindependent committee of the Board, which received a fairness opinion from an independent financial advisor. For a description of the Series B Preferred Shares, see “Description ofSecurities” filed as Exhibit 2.9 hereto. C.Interests of Experts and CounselNot applicable. 61Table of ContentsITEM 8.FINANCIAL INFORMATIONA.Consolidated Statements and Other Financial InformationSee Item 18. Legal Proceedings We have previously reported that between 2010 and 2017 certain of our then shareholders, including our former Chairman that served between 2008 to 2010, had brought suitsin Greece against certain other shareholders of the Company, our former Chief Financial Officer, and such Chairman's immediate successor that served between 2008 to 2013. Theplaintiffs withdrew their suits filed in 2010 and 2014 and therefore these are now closed. The hearing of the only two remaining suits that were filed in 2017 against, amongst other, the former Chairman's immediate successor, took place on November 15, 2018 and thecourt's final decision is expected to be issued. These suits seek damages from the defendants (including our former Chairman’s immediate successor that served between 2008 to 2013)for alleged wilful misconduct that purportedly caused the plaintiffs damage both by way of diminution of the value of their shares in the Company and harm to their reputations. Ourformer Chairman’s immediate successor that served between 2008 to 2013 has advised us that he does not believe the action has any merit. Neither we nor our directors nor our current executive officers are named in any of these 2017 actions. We have also notified our insurance underwriters of these actions, andour underwriters are advancing a portion of the defendants' legal expenses. Various claims, suits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. Other thanthe proceedings mentioned above, we are not a party to any material litigation where claims or counterclaims have been filed against us other than routine legal proceedings incidental toour business. Dividend Policy The declaration, timing and amount of any dividend is subject to the discretion of our board of directors and will be dependent upon our earnings, financial condition, marketprospects, capital expenditure requirements, investment opportunities, restrictions in our loan agreements, the provisions of the Marshall Islands law affecting the payment of dividendsto shareholders, overall market conditions and other factors. We have initiated the payment of quarterly cash dividends commencing with a quarterly dividend of $0.025 per share and aspecial dividend of $0.025 per share with respect to the fourth quarter of 2021. Our board of directors may review and amend our dividend policy from time to time in light of our plans forfuture growth and other factors. In addition, since we are a holding company with no material assets other than the shares of our subsidiaries and affiliates through which we conductour operations, our ability to pay dividends will depend on our subsidiaries and affiliates distributing to us their earnings and cash flow. Some of our loan agreements limit our ability topay dividends and our subsidiaries' ability to make distributions to us. B.Significant ChangesThere have been no significant changes since the date of the consolidated financial statements included in this annual report. ITEM 9.THE OFFER AND LISTINGA.Offer and Listing DetailsOur common shares and Class B warrants trade on the Nasdaq Capital Market under the symbol “SHIP” and “SHIPZ”, respectively. B.Plan of DistributionNot applicable. C.MarketsOur common shares and Class B warrants trade on the Nasdaq Capital Market under the symbol “SHIP” and “SHIPZ”, respectively. 62Table of ContentsD.Selling ShareholdersNot applicable. E.DilutionNot applicable. F.Expenses of the IssueNot applicable. ITEM 10.ADDITIONAL INFORMATIONA.Share CapitalNot applicable. B.Memorandum and Articles of IncorporationOur restated articles of incorporation have been filed as an exhibit to our report filed with the Commission on Form 6-K on August 30, 2019. An amendment to our restatedarticles of incorporation was filed as an exhibit to our registration statement on Form F-1 filed on February 19, 2021. Our restated articles of incorporation, as amended, contained in suchexhibits are incorporated by reference. Our third amended and restated bylaws have been filed with the Commission on Form 6-K on September 25, 2020, which we incorporate byreference. A description of the material terms of our restated articles of incorporation, as amended, and bylaws and of our capital stock is included in "Description of Securities" attachedhereto as Exhibit 2.9 and incorporated by reference herein. C.Material contractsAttached as exhibits to this annual report are the contracts we consider to be both material and outside the ordinary course of business and are to be performed in whole or inpart after the filing of this annual report. We refer you to “Item 4. Information on the Company – A. History and Development of the Company,” “Item 4. Information on the Company –B. Business Overview,” “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements” and “Item 7. Major Shareholders and RelatedParty Transactions–B. Related Party Transactions” for a discussion of these contracts. Other than as discussed in this annual report, we have no material contracts, other than contractsentered into in the ordinary course of business, to which we are a party. D.Exchange controlsUnder Marshall Islands law, there are currently no restrictions on the export or import of capital, including foreign exchange controls, or restrictions that affect the remittance ofdividends, interest or other payments to non-resident holders of our common shares. E.TaxationThe following is a summary of the material U.S. federal income tax and Marshall Islands tax consequences of the ownership and disposition of our common stock or warrants aswell as the material U.S. federal and Marshall Islands income tax consequences applicable to us and our operations. The discussion below of the U.S. federal income tax consequences to“U.S. Holders” will apply to a beneficial owner of our common stock and/or warrants that is treated for U.S. federal income tax purposes as: •an individual citizen or resident of the United States; •a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) that is created or organized (or treated as created or organized) in or under thelaws of the United States, any state thereof or the District of Columbia; •an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or •a trust if (i) a U.S. court can exercise primary supervision over the trust's administration and one or more U.S. persons are authorized to control all substantial decisions ofthe trust, or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.63Table of ContentsIf you are not described as a U.S. Holder and are not an entity treated as a partnership or other pass-through entity for U.S. federal income tax purposes, you will be considereda “Non-U.S. Holder.” The U.S. federal income tax consequences applicable to Non-U.S. Holders is described below under the heading “United States Federal Income Taxation of Non-U.S. Holders.” This discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our common stock or warrants through such entities. Ifa partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our common stock or warrants, the U.S. federal income taxtreatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. This summary is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, its legislative history, Treasury Regulations promulgated thereunder, publishedrulings and court decisions, all as currently in effect. These authorities are subject to change, possibly on a retroactive basis. This summary does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder's individual circumstances. Inparticular, this discussion considers only holders that will own and hold our common stock and warrants as capital assets within the meaning of Section 1221 of the Code and does notaddress the potential application of the alternative minimum tax or the U.S. federal income tax consequences to holders that are subject to special rules, including: •financial institutions or “financial services entities”; •broker-dealers; •taxpayers who have elected mark-to-market accounting for U.S. federal income tax purposes; •tax-exempt entities; •governments or agencies or instrumentalities thereof; •insurance companies; •regulated investment companies; •real estate investment trusts; •certain expatriates or former long-term residents of the United States; •persons that actually or constructively own 10% or more (by vote or value) of our shares; •persons that own shares through an “applicable partnership interest”; •persons required to recognize income for U.S. federal income tax purposes no later than when such income is reported on an “applicable financial statement”; •persons that hold our common stock or warrants as part of a straddle, constructive sale, hedging, conversion or other integrated transaction; or •persons whose functional currency is not the U.S. dollar.This summary does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, or state, local or non-U.S. tax laws. We have not sought, nor do we intend to seek, a ruling from the Internal Revenue Service, or the IRS, as to any U.S. federal income tax consequence described herein. The IRSmay disagree with the description herein, and its determination may be upheld by a court. Because of the complexity of the tax laws and because the tax consequences to any particular holder of our common stock and warrants may be affected by matters notdiscussed herein, each such holder is urged to consult with its tax advisor with respect to the specific tax consequences of the ownership and disposition of our common stock andwarrants, including the applicability and effect of state, local and non-U.S. tax laws, as well as U.S. federal tax laws. 64Table of ContentsUnited States Federal Income Tax Consequences Taxation of Operating Income in General Unless exempt from United States federal income taxation under the rules discussed below, a foreign corporation is subject to United States federal income taxation in respect ofany income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a shipping pool,partnership, strategic alliance, joint operating agreement, code sharing arrangements or other joint venture it directly or indirectly owns or participates in that generates such income, orfrom the performance of services directly related to those uses, which we refer to as “shipping income,” to the extent that the shipping income is derived from sources within the UnitedStates. For these purposes, 50% of the gross shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States,exclusive of certain U.S. territories and possessions, constitutes income from sources within the United States, which we refer to as “U.S. source gross shipping income.” Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the United States. We areprohibited by law from engaging in transportation that produces income considered to be 100% from sources within the United States. Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. Shippingincome earned by us that is derived from sources outside the United States will not be subject to any United States federal income tax. For our 2021 taxable year, we had U.S. source gross shipping income of approximately $3,741,888. We are subject to a 4% tax imposed without allowance for deductions for such taxable year, as described in “ – Taxation in Absence of Exemption,” unless we qualify forexemption from tax under Section 883 of the Code, the requirements of which are described in detail below. For our 2021 taxable year, we believe that we qualified for the exemption fromtax under Section 883 of the Code. Exemption of Operating Income from United States Federal Income Taxation Under Section 883 of the Code and the regulations thereunder, we will be exempt from United States federal income taxation on our U.S.-source shipping income if (i) we areorganized in a foreign country (our “country of organization”) that grants an “equivalent exemption” to corporations organized in the United States and (ii) one of the followingstatements is true: •more than 50% of the value of our stock is owned, directly or indirectly, by “qualified shareholders,” that are persons (i) who are “residents” of our country of organizationor of another foreign country that grants an “equivalent exemption” to corporations organized in the United States, and (ii) we satisfy certain substantiation requirements,which we refer to as the “50% Ownership Test”; or •our stock is “primarily” and “regularly” traded on one or more established securities markets in our country of organization, in another country that grants an “equivalentexemption” to United States corporations, or in the United States, which we refer to as the “Publicly-Traded Test.”The jurisdictions where we and our shipowning subsidiaries are incorporated grant “equivalent exemptions” to United States corporations. Therefore, we will be exempt fromUnited States federal income taxation with respect to our U.S. source shipping income if we satisfy either the 50% Ownership Test or the Publicly-Traded Test. 50% Ownership Test Under the regulations, a foreign corporation will satisfy the 50% Ownership Test for a taxable year if (i) for at least half of the number of days in the taxable year, more than 50%of the value of its stock is owned, directly or constructively through the application of certain attribution rules prescribed by the regulations, by one or more shareholders who areresidents of foreign countries that grant “equivalent exemption” to corporations organized in the United States and (ii) the foreign corporation satisfies certain substantiation andreporting requirements with respect to such shareholders. Holders of warrants will not be treated as constructive owners of shares for purposes of the 50% Ownership Test. We did not satisfy the 50% Ownership Test for our 2021 taxable year. Furthermore, these substantiation requirements are onerous and therefore there can be no assurance thatwe would be able to satisfy them, even if our share ownership would otherwise satisfy the requirements of the 50% Ownership Test. 65Table of ContentsPublicly-Traded Test The regulations provide that the stock of a foreign corporation will be considered to be “primarily traded” on an established securities market in a country if the number ofshares of each class of stock used to satisfy the Publicly Traded Test that is traded during the taxable year on all established securities markets in that country exceeds the number ofshares in each such class that is traded during that year on established securities markets in any other single country. Under the regulations, the stock of a foreign corporation will be considered “regularly traded” if one or more classes of its stock representing 50% or more of its outstandingshares, by total combined voting power of all classes of stock entitled to vote and by total combined value of all classes of stock, are listed on one or more established securities markets(such as the Nasdaq Capital Market), which we refer to as the “listing threshold.” The regulations further require that with respect to each class of stock relied upon to meet the listing requirement: (i) such class of the stock is traded on the market, other thanin minimal quantities, on at least sixty (60) days during the taxable year or one-sixth (1/6) of the days in a short taxable year; and (ii) the aggregate number of shares of such class of stocktraded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxableyear. Even if a foreign corporation does not satisfy both tests, the regulations provide that the trading frequency and trading volume tests will be deemed satisfied by a class of stock ifsuch class of stock is traded on an established market in the United States and such class of stock is regularly quoted by dealers making a market in such stock. Notwithstanding the foregoing, the regulations provide, in pertinent part, that a class of stock will not be considered to be “regularly traded” on an established securities marketfor any taxable year in which 50% or more of the vote and value of the outstanding shares of such class of stock are owned, actually or constructively under specified attribution rules,on more than half the days during the taxable year by persons who each own directly or indirectly 5% or more of the vote and value of such class of stock, whom we refer to as “5%Shareholders.” We refer to this restriction in the regulations as the “Closely-Held Rule.” For purposes of being able to determine our 5% Shareholders, the regulations permit a foreign corporation to rely on Schedule 13G and Schedule 13D filings with theCommission. The regulations further provide that an investment company that is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5%Shareholder for such purposes. Additionally, holders of warrants will not be treated as constructive owners of shares for purposes of the Closely-Held Rule. Based on our analysis of our shareholdings during 2021, we believe we satisfy the Publicly-Traded Test for the entire 2021 year in that less than 50% of our issued andoutstanding shares were held by 5% Shareholders for more than half the days during the 2021 taxable year. Due to the factual nature of the issues involved, there can be no assurance that we or any of our subsidiaries will qualify for the benefits of Section 883 of the Code for oursubsequent taxable years. Taxation in Absence of Exemption To the extent the benefits of Section 883 are unavailable, our U.S. source gross shipping income, to the extent not considered to be “effectively connected” with the conduct ofa U.S. trade or business, as described below, would be subject to a 4% tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, otherwise referred toas the “4% Tax.” Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S. sources, the maximum effectiverate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% Tax. To the extent the benefits of the Section 883 exemption are unavailable and our U.S. source gross shipping income is considered to be “effectively connected” with the conductof a U.S. trade or business, as described below, any such “effectively connected” U.S. source gross shipping income, net of applicable deductions, would be subject to the U.S. federalcorporate income tax currently imposed at a rate of 21%. In addition, we may be subject to the 30% “branch profits” tax on earnings effectively connected with the conduct of such tradeor business, as determined after allowance for certain adjustments, and for certain interest paid or deemed paid attributable to the conduct of our U.S. trade or business. Our U.S. source gross shipping income would be considered “effectively connected” with the conduct of a U.S. trade or business only if: •we have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and •substantially all of our U.S. source gross shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a publishedschedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States, or, in the case of income from the leasing ofa vessel, is attributable to a fixed place of business in the United States.66Table of ContentsWe do not intend to have, or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis, or earning income fromthe leasing of a vessel attributable to a fixed place of business in the United States. Based on the foregoing and on the expected mode of our shipping operations and other activities, webelieve that none of our U.S. source gross shipping income will be “effectively connected” with the conduct of a U.S. trade or business. United States Taxation of Gain on Sale of Vessels Regardless of whether we qualify for exemption under Section 883, we will not be subject to United States federal income taxation with respect to gain realized on a sale of avessel, provided the sale is considered to occur outside of the United States under United States federal income tax principles. In general, a sale of a vessel will be considered to occuroutside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale ofa vessel by us will be considered to occur outside of the United States. United States Federal Income Taxation of U.S. Holders Taxation of Distributions Paid on Common Stock Subject to the passive foreign investment company, or PFIC, rules discussed below, any distributions made by us with respect to common shares to a U.S. Holder will generallyconstitute dividends, which may be taxable as ordinary income or “qualified dividend income” as described in more detail below, to the extent of our current or accumulated earnings andprofits, as determined under U.S. federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a non-taxable return of capital to the extent of theU.S. Holder's tax basis in his common shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a U.S. corporation, U.S. Holders that are corporations willgenerally not be entitled to claim a dividends-received deduction with respect to any distributions they receive from us. Dividends paid on common shares to a U.S. Holder which is an individual, trust, or estate (a “U.S. Non-Corporate Holder”) will generally be treated as “qualified dividendincome” that is taxable to such shareholders at preferential U.S. federal income tax rates provided that (1) the common shares are readily tradable on an established securities market inthe United States (such as the Nasdaq Capital Market on which the common shares are currently listed); (2) we are not a passive foreign investment company, or PFIC, for the taxableyear during which the dividend is paid or the immediately preceding taxable year (which we do not believe we are or have been, and do not expect to be); (3) the U.S. Non-CorporateHolder has owned the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which the common shares become ex-dividend; and (4) certainother conditions are met. Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a U.S. Holder. Special rules may apply to any “extraordinary dividend”—generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder's adjusted basis in acommon share—paid by us. If we pay an “extraordinary dividend” on our common stock that is treated as “qualified dividend income,” then any loss derived by a U.S. Non-CorporateHolder from the sale or exchange of such common stock will be treated as long-term capital loss to the extent of such dividend. Sale, Exchange or other Disposition of Common Shares Assuming we do not constitute a PFIC for any taxable year, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our commonshares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder's tax basis in such stock.Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder's holding period in the common shares is greater than one year at the time of the sale, exchange orother disposition. A U.S. Holder's ability to deduct capital losses is subject to certain limitations. Exercise, Sale, Retirement or Other Taxable Disposition of Warrants Neither we nor a U.S. Holder of a warrant will recognize gain or loss as a result of the U.S. Holder's receipt of our common stock upon exercise of a warrant. A U.S. Holder'sadjusted tax basis in the common shares received will be an amount equal to the sum of (i) the U.S. Holder's adjusted tax basis in the warrant exercised plus (ii) the amount of the exerciseprice for the warrant. If the warrants lapse without exercise, the U.S. Holder will recognize capital loss in the amount equal to the U.S. Holder's adjusted tax basis in the warrants. A U.S.Holder's holding period for common shares received upon exercise of a warrant will commence on the date the warrant is exercised. 67Table of ContentsUpon the sale, retirement or other taxable disposition of a warrant, the U.S. Holder will recognize gain or loss to the extent of the difference between the sum of the cash and thefair market value of any property received in exchange therefor and the U.S. Holder's tax basis in the warrant. Any such gain or loss recognized by a holder upon the sale, retirement orother taxable disposition of a warrant will be capital gain or loss and will be long-term capital gain or loss if the warrant has been held for more than one year. The exercise price of a warrant is subject to adjustment under certain circumstances. If an adjustment increases a proportionate interest of the holder of a warrant in the fullydiluted common stock without proportionate adjustments to the holders of our common stock, a U.S. Holder of the warrants may be treated as having received a constructivedistribution, which may be taxable to the U.S. Holder as a dividend. Passive Foreign Investment Company Rules Special U.S. federal income tax rules apply to a U.S. Holder that holds stock or warrants in a foreign corporation classified as a PFIC for U.S. federal income tax purposes. Ingeneral, we will be treated as a PFIC with respect to a U.S. Holder if, for any taxable year in which such holder held our common shares or warrants, either: •at least 75% of our gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conductof a rental business); or •at least 50% of the average value of the assets held by us during such taxable year produce, or is held for the production of, passive income.For purposes of determining whether we are a PFIC, we will be treated as earning and owning our proportionate share of the income and assets, respectively, of any of oursubsidiary companies in which we own at least 25% of the value of the subsidiary's stock or other ownership interest. Income earned, or deemed earned, by us in connection with theperformance of services should not constitute passive income. By contrast, rental income, which includes bareboat hire, would generally constitute “passive income” unless we aretreated under specific rules as deriving rental income in the active conduct of a trade or business. Based on our current operations and future projections, we do not believe that we are or have been a PFIC during our 2021 taxable year, nor do we expect to become, a PFIC withrespect to our 2022 taxable year or any future taxable year. Although there is no legal authority directly on point, our belief is based principally on the position that, for purposes ofdetermining whether we are a PFIC, the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of our wholly-owned subsidiariesshould constitute services income, rather than rental income. Correspondingly, we believe that such income does not constitute passive income, and the assets that we or our wholly-owned subsidiaries own and operate in connection with the production of such income, in particular the vessels, do not constitute passive assets for purposes of determining whetherwe are a PFIC. We believe there is substantial legal authority supporting our position consisting of case law and Internal Revenue Service pronouncements concerning thecharacterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charterincome as rental income rather than services income for other tax purposes. It should be noted that in the absence of any legal authority specifically relating to the statutory provisionsgoverning PFICs, the Internal Revenue Service or a court could disagree with this position. In addition, although we intend to conduct our affairs in a manner so as to avoid beingclassified as a PFIC with respect to any taxable year, there can be no assurance that the nature of our operations will not change in the future. As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different taxation rules depending on whether the U.S.Holder makes an election to treat us as a “Qualified Electing Fund,” which election is referred to as a “QEF election.” As an alternative to making a QEF election, a U.S. Holder should beable to make a “mark-to-market” election with respect to the common shares, as discussed below. In addition, if we were to be treated as a PFIC, a U.S. Holder would be required to file anIRS Form 8621 with respect to such holder's common stock. Taxation of U.S. Holders Making a Timely QEF Election If a U.S. Holder makes a timely QEF election, which U.S. Holder is referred to as an “Electing Holder,” the Electing Holder must report each year for U.S. federal income taxpurposes its pro rata share of our ordinary earnings and its net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless ofwhether or not distributions were received from us by the Electing Holder. The Electing Holder's adjusted tax basis in the common shares will be increased to reflect taxed butundistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the commonshares and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of the common shares. AU.S. Holder would make a QEF election with respect to any year that we are a PFIC by filing IRS Form 8621 with his, her or its U.S. federal income tax return. After the end of each taxableyear, we will determine whether we were a PFIC for such taxable year. If we determine or otherwise become aware that we are a PFIC for any taxable year, we will use commercially bestefforts to provide each U.S. Holder with all necessary information, including a PFIC Annual Information Statement, in order to enable such holder to make a QEF election for such taxableyear. A U.S. Holder may not make a QEF election with respect to its ownership of a warrant. 68Table of ContentsTaxation of U.S. Holders Making a “Mark-to-Market” Election Alternatively, if we were to be treated as a PFIC for any taxable year and, as anticipated, our common stock is treated as “marketable stock,” a U.S. Holder would be allowed tomake a “mark-to-market” election with respect to our common shares. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess,if any, of the fair market value of the common shares at the end of the taxable year over such U.S. Holder's adjusted tax basis in the common shares. The U.S. Holder would also bepermitted an ordinary loss in respect of the excess, if any, of the U.S. Holder's adjusted tax basis in the common shares over its fair market value at the end of the taxable year, but only tothe extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder's tax basis in his common shares would be adjusted to reflect anysuch income or loss amount. Gain realized on the sale, exchange or other disposition of the common shares would be treated as ordinary income, and any loss realized on the sale,exchange or other disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included bythe U.S. Holder. The mark-to-market election is generally unavailable to U.S. Holders of warrants. Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a “mark-to-market” election for that year, whom we referto as a “Non-Electing Holder,” would be subject to special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-Electing Holder onour common stock or warrants in a taxable year in excess of 125 percent of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, ifshorter, the Non-Electing Holder's holding period for the common stock or warrants), and (2) any gain realized on the sale, exchange or other disposition of our common stock orwarrants. Under these special rules: •the excess distribution or gain would be allocated ratably over the Non-Electing Holders' aggregate holding period for the common stock or warrants; •the amount allocated to the current taxable year and any taxable year before we became a passive foreign investment company would be taxed as ordinary income; and •the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayer for that year, and aninterest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.These penalties would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection withits acquisition of our common stock or warrants. If a Non-Electing Holder who is an individual dies while owning our common stock, such Non-Electing Holder's successor generallywould not receive a step-up in tax basis with respect to such stock or warrants. Net Investment Income Tax A U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax on the lesser of (1) suchU.S. Holder's “net investment income” (or undistributed “net investment income” in the case of estates and trusts) for the relevant taxable year and (2) the excess of such U.S. Holder'smodified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual'scircumstances). A U.S. Holder's net investment income will generally include its gross dividend income and its net gains from the disposition of the common shares, unless suchdividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). Netinvestment income generally will not include a U.S. Holder's pro rata share of the Company's income and gain (if we are a PFIC and that U.S. Holder makes a QEF election, as describedabove in “—Taxation of U.S. Holders Making a Timely QEF Election”). However, a U.S. Holder may elect to treat inclusions of income and gain from a QEF election as net investmentincome. Failure to make this election could result in a mismatch between a U.S. Holder's ordinary income and net investment income. If you are a U.S. Holder that is an individual, estateor trust, you are urged to consult your tax advisor regarding the applicability of the net investment income tax to your income and gains in respect of your investment in our commonshares or warrants. United States Federal Income Taxation of Non-U.S. Holders Dividends paid to a Non-U.S. Holder with respect to our common stock generally should not be subject to U.S. federal income tax, unless the dividends are effectivelyconnected with the Non-U.S. Holder's conduct of a trade or business within the United States (and, if required by an applicable income tax treaty, are attributable to a permanentestablishment or fixed base that such holder maintains in the United States). In addition, a Non-U.S. Holder generally should not be subject to U.S. federal income tax on any gain attributable to a sale or other disposition of our common stock or warrantsunless such gain is effectively connected with its conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a permanentestablishment or fixed base that such holder maintains in the United States) or the Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxableyear of sale or other disposition and certain other conditions are met (in which case such gain from United States sources may be subject to tax at a 30% rate or a lower applicable taxtreaty rate). 69Table of ContentsDividends and gains that are effectively connected with the Non-U.S. Holder's conduct of a trade or business in the United States (and, if required by an applicable income taxtreaty, are attributable to a permanent establishment or fixed base in the United States) generally should be subject to tax in the same manner as for a U.S. Holder and, if the Non-U.S.Holder is a corporation for U.S. federal income tax purposes, it also may be subject to an additional branch profits tax at a 30% rate or a lower applicable tax treaty rate. A Non-U.S. Holder will not recognize any gain or loss on the exercise or lapse of the warrants. Backup Withholding and Information Reporting In general, information reporting for U.S. federal income tax purposes should apply to distributions made on our common stock within the United States to a non-corporate U.S.Holder and to the proceeds from sales and other dispositions of our common stock to or through a U.S. office of a broker by a non-corporate U.S. Holder. Payments made (and sales andother dispositions effected at an office) outside the United States will be subject to information reporting in limited circumstances. In addition, backup withholding of U.S. federal income tax, currently at a rate of 24%, generally should apply to distributions paid on our common stock to a non-corporate U.S.Holder and the proceeds from sales and other dispositions of our common stock by a non-corporate U.S. Holder, who: •fails to provide an accurate taxpayer identification number; •is notified by the IRS that backup withholding is required; or •fails in certain circumstances to comply with applicable certification requirements.A Non-U.S. Holder generally may eliminate the requirement for information reporting and backup withholding by providing certification of its foreign status, under penalties ofperjury, on a duly executed applicable IRS Form W-8 or by otherwise establishing an exemption. Backup withholding is not an additional tax. Rather, the amount of any backup withholding generally should be allowed as a credit against a U.S. Holder's or a Non-U.S. Holder'sU.S. federal income tax liability and may entitle such holder to a refund, provided that certain required information is timely furnished to the IRS. Individuals who are U.S. Holders (and to the extent specified in applicable Treasury regulations, certain individuals who are Non-U.S. Holders and certain U.S. entities) whohold “specified foreign financial assets” (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the asset for each taxable year in whichthe aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year (or such higher dollar amount as prescribed byapplicable Treasury regulations). Specified foreign financial assets would include, among other assets, our common shares, unless the shares are held through an account maintainedwith a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willfulneglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury regulations, an individual Non-U.S. Holder or a U.S. entity) that is requiredto file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes of such holder for the related tax year may not closeuntil three years after the date that the required information is filed. U.S. Holders (including U.S. entities) and Non-U.S. Holders are encouraged to consult their own tax advisorsregarding their reporting obligations under this legislation. Marshall Islands Tax Consequences We are incorporated in the Republic of the Marshall Islands. Under current Marshall Islands law, we are not subject to tax on income or capital gains, no Marshall Islandswithholding tax will be imposed upon payment of dividends by us to its shareholders, and holders of our common stock that are not residents of or domiciled or carrying on anycommercial activity in the Republic of the Marshall Islands will not be subject to Marshall Islands tax on the sale or other disposition of our common stock. F.Dividends and paying agentsNot applicable. G.Statement by expertsNot applicable. 70Table of ContentsH.Documents on displayWe file annual reports and other information with the Commission. You may inspect and copy any report or document we file, including this annual report and theaccompanying exhibits, at the Commission's public reference facilities located at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may obtain information on the operation ofthe public reference facilities by calling the Commission at 1-800-SEC-0330, and you may obtain copies at prescribed rates. Our Commission filings are also available to the public at thewebsite maintained by the Commission at http://www.sec.gov, as well as on our website at http://www.seanergymaritime.com. Information on our website does not constitute a part ofthis annual report and is not incorporated by reference. We will also provide without charge to each person, including any beneficial owner of our common stock, upon written or oral request of that person, a copy of any and all ofthe information that has been incorporated by reference in this annual report. Please direct such requests to Investor Relations, Seanergy Maritime Holdings Corp., 154 VouliagmenisAvenue, 166 74 Glyfada, Greece, telephone number +30 213 0181507 or facsimile number +30 210 9638404. I.Subsidiary informationNot applicable. ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInterest Rate Risk We are exposed to risks associated with changes in interest rates relating to our unhedged variable–rate borrowings, according to which we pay interest at LIBOR plus amargin; as such increases in interest rates could affect our results of operations and ability to service our debt. As of December 31, 2021, we had aggregate variable-rate borrowings, of$172.6 million. An increase of 1% in the interest rates of our variable-rate borrowings, as of December 31, 2021 would increase our interest payments $1.3 million per year. We have notentered into any hedging contracts to protect against interest rate fluctuations. Foreign Currency Exchange Rate Risk We generate all of our revenue in U.S. dollars. The minority of our operating expenses (approximately 4% in 2021) and less than half of our general and administration expenses(approximately 45% in 2021) are in currencies other than the U.S. dollar, primarily the Euro. For accounting purposes, expenses incurred in other currencies are converted into U.S. dollarsat the exchange rate prevailing on the date of each transaction. We do not consider the risk from exchange rate fluctuations to be material for our results of operations, as during 2021,these non-US dollar expenses represented 6% of our revenues. However, the portion of our business conducted in other currencies could increase in the future, which could expand ourexposure to losses arising from exchange rate fluctuations. We have not hedged currency exchange risks associated with our expenses. Inflation Risk We do not consider inflation to be a significant risk to direct expenses in the current and foreseeable future. However, in the event that inflation becomes a significant factor inthe global economy, inflationary pressures would result in increased operating, voyage and financing costs. ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIESNot applicable. 71Table of ContentsPART II ITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNone. ITEM 14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDSOn July 2, 2021, we adopted a shareholders rights agreement, pursuant to which each of our common shares includes one preferred stock purchase right that entitles the holderto purchase from us a unit consisting of one-thousandth of a share of our Series A Participating Preferred Shares if any third-party seeks to acquire control of a substantial block of ourcommon shares without the approval of our board of directors. See “Description of Securities” attached to this annual report as Exhibit 2.9 for a description of our shareholders rightsagreement. ITEM 15.CONTROLS AND PROCEDURES (1)Disclosure Controls and ProceduresManagement (our Chief Executive Officer and our Chief Financial Officer) has evaluated the effectiveness of the design and operation of the Company's disclosure controls andprocedures pursuant to Rules 13a-15(e) and 15d-15(e) under the U.S. Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by thisannual report (as of December 31, 2021). The term disclosure controls and procedures is defined under the Commission's rules as controls and other procedures of an issuer that aredesigned to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized andreported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed toensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company'smanagement (our Chief Executive Officer and our Chief Financial Officer, or persons performing similar functions) as appropriate to allow timely decisions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding ofthe controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures are effective as of theevaluation date. (2)Management's Annual Report on Internal Control over Financial ReportingOur management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is identified in Exchange Act Rule 13a-15(f). Ourinternal control over financial reporting is a process designed under the supervision of our Chief Executive Officer and our Chief Financial Officer and effected by our board of directors,management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reportingpurposes in accordance with U.S. GAAP. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordancewith U.S. GAAP, and that receipts and expenditures are being made only in accordance with the authorization of our management and directors; and (iii) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the consolidated financialstatements. Management (our Chief Executive Officer and our Chief Financial Officer), has assessed the effectiveness of our internal control over financial reporting as of December 31,2021, based on the framework established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basedon this assessment, management has determined that the Company's internal control over financial reporting is effective as of December 31, 2021. However, it should be noted that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements with certainty even whendetermined to be effective and can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate / obsolete because of changes in conditions, or that the degree of compliance with thepolicies and procedures may deteriorate. 72Table of Contents (3)Attestation Report of the Registered Public Accounting FirmThe independent registered public accounting firm, Ernst & Young (Hellas) Certified Auditors Accountants S.A., that audited our consolidated financial statements as at andfor the year ended December 31, 2021, included in this Annual Report, has issued an attestation report on our internal control over financial reporting which is provided on page F-2. (4)Changes in Internal Control over Financial ReportingThere have been no changes in our internal control over financial reporting during the year covered by this annual report that have materially affected, or are reasonably likelyto materially affect, our internal control over financial reporting. ITEM 16.[RESERVED]ITEM 16A.AUDIT COMMITTEE FINANCIAL EXPERTOur board of directors has determined that Mr. Dimitrios Anagnostopoulos, an independent director and a member of our audit committee, is an “Audit Committee FinancialExpert” under Commission rules and the corporate governance rules of the Nasdaq Stock Market. ITEM 16B.CODE OF ETHICSWe have adopted a Code of Business Conduct and Ethics that applies to our employees, officers and directors. Our Code of Business Conduct and Ethics is available on theCorporate Governance section of our website at www.seanergymaritime.com. Information on our website does not constitute a part of this annual report and is not incorporated byreference. We will also provide a hard copy of our Code of Business Conduct and Ethics free of charge upon written request. We intend to disclose any waivers to or amendments ofthe Code of Business Conduct and Ethics for the benefit of any of our directors and executive officers within 5 business days of such waiver or amendment. Shareholders may directtheir requests to the attention of Investor Relations, Seanergy Maritime Holdings Corp., 154 Vouliagmenis Avenue, 16674 Glyfada. ITEM 16C.PRINCIPAL ACCOUNTANT FEES AND SERVICESOur principal accountants are Ernst & Young (Hellas) Certified Auditors Accountants S.A. Audit, audit-related and non-audit services billed and accrued from Ernst & Young(Hellas) Certified Auditors Accountants S.A. are as follows: 2021 2020 Audit fees $345,000 $205,000 Audit related fees 144,000 234,000 Tax fees - - All other fees - - Total fees $489,000 $439,000 Audit fees for 2021 related to professional services rendered for the audit of our financial statements and the audit of internal control over financial reporting for the year endedDecember 31, 2021. Audit fees for 2020 related to professional services rendered for the audit of our financial statements for the year ended December 31, 2020. Audit related fees for 2021and 2020 related to services provided related to our equity offerings during 2021 and 2020, respectively. As per the audit committee charter, our audit committee pre-approves all audit,audit-related and non-audit services not prohibited by law to be performed by our independent registered public accounting firm and associated fees prior to the engagement of theindependent registered public accounting firm with respect to such services. ITEM 16D.EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESNot applicable. ITEM 16E.PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERSMonth TotalNumber ofShares(orUnits)Purchased AveragePrice Paidper Share (orUnits) Total Number of Shares(or Units) Purchased asPart of Publicly Announced Plans orPrograms Maximum Number (orApproximate Dollar Value) ofShares ( or Units) that May YetBe Purchased Under the Plansor Programs November 1 – 30, 2021 1,595,803 0.997 1,595,803 $15,408,942 December 1 – 31, 2021 106,300 0.939 106,300 $0 73Table of ContentsThe Company announced on August 11, 2021 that its board of directors authorized a share repurchase plan of up to $17 million of its outstanding common shares, expiringDecember 31, 2022. On December 7, 2021, the Company announced that the share repurchase plan was completed and that, in addition to the common share repurchases in the tableabove, certain outstanding warrants and convertible notes of the Company had been repurchased pursuant to the plan. On December 7, 2021 the Company announced that its board ofdirectors authorized an additional share repurchase plan of up to $10 million of its common shares, expiring December 31, 2022. The share repurchase plan was completed with therepurchases described above under “Item 5. Operating and Financial Review and Prospects – B. Liquidity and Capital Resources – Loan Arrangements – Convertible Notes – SecondJDH Note.” Additionally, the Company’s Chairman and Chief Executive Officer acquired during 2021 a total of 300,000 common shares in the open market. ITEM 16F.CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANTNone. ITEM 16G.CORPORATE GOVERNANCEAs a foreign private issuer, as defined in Rule 3b-4 under the Exchange Act, the Company is permitted to follow certain corporate governance rules of its home country in lieu ofNasdaq's corporate governance rules. The Company's corporate governance practices deviate from Nasdaq's corporate governance rules in the following ways: •In lieu of obtaining shareholder approval prior to the issuance of designated securities or the adoption of equity compensation plans or material amendments to suchequity compensation plans, we will comply with provisions of the BCA, providing that the board of directors approve share issuances and adoptions of and materialamendments to equity compensation plans. Likewise, in lieu of obtaining shareholder approval prior to the issuance of securities in certain circumstances, consistent withthe BCA and our restated articles of incorporation and third amended and restated bylaws, the board of directors approves certain share issuances. •The Company's board of directors is not required to have an Audit Committee comprised of at least three members. Our Audit Committee is comprised of two members. •The Company's board of directors is not required to meet regularly in executive sessions without management present. •As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq corporate governance rules or Marshall Islandslaw. Consistent with Marshall Islands law and as provided in our third amended and restated bylaws, we will notify our shareholders of meetings between 15 and 60 daysbefore the meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting.Other than as noted above, we are in full compliance with all other applicable Nasdaq corporate governance standards. ITEM 16H.MINE SAFETY DISCLOSURENot applicable. ITEM 16I.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.Not applicable.74Table of ContentsPART III ITEM 17.FINANCIAL STATEMENTSSee Item 18. ITEM 18.FINANCIAL STATEMENTSThe financial information required by this item, together with the report of Ernst & Young (Hellas) Certified Auditors Accountants S.A., is set forth on pages F-1 through F-47and are filed as part of this annual report. ITEM 19.EXHIBITSExhibit NumberDescription 1.1Restated Articles of Incorporation (1) 1.2Amendment to Restated Articles of Incorporation dated June 29, 2020 (2) 1.3Third Amended and Restated Bylaws (3) 2.1Specimen Common Stock Certificate (4) 2.2Statement of Designation of the Series A Participating Preferred Shares of the Company (5) 2.3Shareholders Rights Agreement, dated as of July 2, 2021, by and between Seanergy Maritime Holdings Corp. and Continental Stock Transfer & Trust Company, asRights Agent (6) 2.4Statement of Designation of the Series B Preferred Shares of the Company (7) 2.5Form of Class B Warrant Agreement by and between Continental Stock Transfer & Trust Company and the registrant (8) 2.6Form of Class B Warrant Certificate (9) 2.7Description of Securities* 4.1Registration Rights Agreement dated March 26, 2010 between the registrant, United Capital Investments Corp., Atrion Shipholding S.A., Plaza Shipholding Corp. andComet Shipholding Inc. (10) 4.2Registration Rights Agreement dated January 4, 2012 between the registrant, United Capital Investments Corp., Atrion Shipholding S.A., Plaza Shipholding Corp. andComet Shipholding Inc. (11) 4.3Registration Rights Agreement dated June 24, 2014 between the registrant, Comet Shipholding Inc. and Plaza Shipholding Corp. (12) 4.4Registration Rights Agreement dated September 29, 2014 between the registrant, Comet Shipholding Inc. and Plaza Shipholding Corp. (13) 4.5Amended and Restated 2011 Equity Incentive Plan of the registrant adopted on January 12, 2022*75Table of Contents4.6Amendment dated May 23, 2018 with respect to the Partnership, between Partner Shipping Co. Limited (formerly known as Partner Shipping Co.) and V.Ships Limitedwith respect to the Ship Technical Management Agreement dated May 15, 2017 (14) 4.7Amendment dated May 23, 2018 with respect to the Championship, between Champion Ocean Navigation Co. Limited (formerly known as Champion Ocean NavigationCo.) and V.Ships Limited with respect to the Ship Technical Management Agreement dated September 1, 2015 (15) 4.8Novation Agreement dated October 30, 2018 with respect to the Championship, between Champion Ocean Navigation Co. Limited (formerly known as Champion OceanNavigation Co.), Champion Marine Co. and V.Ships Limited with respect to the Ship Technical Management Agreement dated September 1, 2015 (16) 4.9Form of Ship Technical Management Agreement with V.Ships Limited (17) 4.10Form of Ship Technical Management Agreement with Seanergy Shipmanagement* 4.11Form of Ship Technical Management Agreement with Seanergy Shipmanagement for the Goodship and Friendship* 4.12Commercial Management Agreement dated March 2, 2015 between Seanergy Management Corp. and Fidelity Marine Inc. (18) 4.13Amendment No. 1 dated September 11, 2015 between Seanergy Management Corp. and Fidelity Marine Inc. with respect to the Commercial Management Agreementdated March 2, 2015 (19) 4.14Amendment No. 2 dated as of February 24, 2016 between Seanergy Management Corp. and Fidelity Marine Inc. with respect to the Commercial Management Agreementdated March 2, 2015 (20) 4.15Amendment No. 3 dated February 1, 2018 between Seanergy Management Corp. and Fidelity Marine Inc. with respect to the Commercial Management Agreement datedMarch 2, 2015 (21) 4.16Amendment No. 4 dated June 28, 2018 between Seanergy Management Corp. and Fidelity Marine Inc. with respect to the Commercial Management Agreement datedMarch 2, 2015 (22) 4.17Amendment No. 5 dated November 3, 2021 between Seanergy Management Corp. and Fidelity Marine Inc. with respect to the Commercial Management Agreementdated March 2, 2015* 4.18Registration Rights Agreement dated March 12, 2015 between the registrant and Stamatios Tsantanis (23) 4.19Revolving Convertible Note dated September 7, 2015 of the registrant to Jelco Delta Holding Corp. (24) 4.20First Amendment dated December 1, 2015 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7, 2015(25) 4.21Second Amendment dated December 14, 2015 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7,2015 (26) 4.22Third Amendment dated January 27, 2016 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7, 2015(27) 4.23Fourth Amendment dated March 7, 2016 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7, 2015(28) 4.24Fifth Amendment dated April 21, 2016 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7, 2015 (29) 4.25Sixth Amendment dated May 17, 2016 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7, 2015 (30) 4.26Seventh Amendment dated June 16, 2016 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7, 2015(31)76Table of Contents4.27Eighth Amendment dated March 28, 2017 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7, 2015(32) 4.28Mutual Consent dated September 8, 2017 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7, 2015(33) 4.29Ninth Amendment dated September 27, 2017 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7,2015 (34) 4.30Tenth Amendment dated September 1, 2018 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7,2015 (35) 4.31Eleventh Amendment dated March 26, 2019 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7,2015 (36) 4.32Twelfth Amendment dated May 29, 2019 between the registrant and Jelco Delta Holding Corp. with respect to the Revolving Convertible Note dated September 7,2015 (37) 4.33Omnibus Supplemental Agreement relating to convertible notes dated as of December 31, 2020 between the registrant, Partner Shipping Co. Limited (formerly known asPartner Marine Co.), Emperor Holding Ltd. and Jelco Delta Holding Corp. (38) 4.34Amended and Restated Facility Agreement dated November 22, 2018 between Premier Marine Co., Fellow Shipping Co., the registrant and UniCredit Bank AG withrespect to the Facility Agreement dated September 11, 2015 (39) 4.35Supplemental Agreement dated July 3, 2019 between Premier Marine Co., Fellow Shipping Co., the registrant and UniCredit Bank AG with respect to the FacilityAgreement dated September 11, 2015 (40) 4.36Supplemental Agreement dated February 8, 2021 between Premier Marine Co., Fellow Shipping Co., the registrant and UniCredit Bank AG with respect to the FacilityAgreement dated September 11, 2015 (41) 4.37Side Letter dated January 11, 2022 between Premier Marine Co., Fellow Shipping Co., the registrant and UniCredit Bank AG with respect to the Facility Agreement datedSeptember 11, 2015* 4.38Facility Agreement dated July 15, 2020 between the registrant, Sea Genius Shipping Co., Sea Glorius Shipping Co., the financial institutions listed in Part B of Schedule 1thereto, Lucid Trustee Services Limited and Lucid Agency Services Limited (42) 4.39Bareboat Charterparty dated June 28, 2018 between Knight Ocean Navigation Co. and Hanchen Limited (43) 4.40Guarantee dated June 28, 2018 between the registrant and Hanchen Limited (44) 4.41On Demand Guarantee dated September 14, 2018 by the registrant in favor of Uniper Global Commodities SE in respect of the charterparty for the Partnership (45) 4.42On Demand Guarantee dated March 8, 2022 by the registrant in favor of Uniper Global Commodities SE in respect of the charterparty for the Partnership* 4.43On Demand Guarantee dated September 14, 2018 by the registrant in favor of Uniper Global Commodities SE in respect of the charterparty for the Lordship (46) 4.44Sale and Purchase Agreement dated September 19, 2018 between Seanergy Management Corp. and Hyundai Materials Corporation (47) 4.45Addendum No. 1 to Sale and Purchase Agreement dated September 28, 2018 between Seanergy Management Corp. and Hyundai Materials Corporation in respect of theSale and Purchase Agreement dated September 19, 2018 (48) 4.46Bareboat Charter Agreement dated November 7, 2018 between Cargill International SA and Champion Marine Co. for the Championship (49)77Table of Contents4.47Sale and Purchase Agreement dated September 28, 2018 between Champion Marine Co. and Hyundai Materials Corporation (50) 4.48Registration Rights Agreement dated November 7, 2018 between the registrant and Cargill International SA (51) 4.49Guarantee and Indemnity dated November 7, 2018 between the registrant and Cargill International SA (52) 4.50Securities Purchase Agreement by and between the registrant and Jelco Delta Holding Corp. dated May 9, 2019 (53) 4.51Registration Rights Agreement by and between the registrant and Jelco Delta Holding Corp. dated May 9, 2019 (54) 4.52Facility Agreement dated April 22, 2021 between the registrant, Good Ocean Navigation Co., Traders Shipping Co., and Aegean Baltic Bank S.A.* 4.53Bareboat Charter Agreement dated May 11, 2021 between with Cargill International SA and Flag Marine Co. for the Flagship* 4.54Guarantee and Indemnity in respect of Flagship dated May 11, 2021 between the registrant and Cargill International SA* 4.55Bareboat Charter dated June 22, 2021 between Sea 241 Leasing Co. Limited and Hellas Ocean Navigation Co. for the Hellasship* 4.56Guarantee in respect of Hellaship dated June 22, 2021 between the registrant and Sea 241 Leasing Co. Limited* 4.57Bareboat Charter dated June 22, 2021 between Sea 242 Leasing Co. Limited and Patriot Shipping Co. for the Patriotship* 4.58Guarantee in respect of Patriotship dated June 22, 2021 between the registrant and Sea 242 Leasing Co. Limited* 4.59Facility Agreement dated August 9, 2021 between Friend Ocean Navigation Co., Lord Ocean Navigation Co., Squire Ocean Navigation Co. and Alpha Bank S.A.* 4.60First Supplemental Letter dated December 1, 2021 with respect to the Facility Agreement dated August 9, 2021* 4.61Facility Agreement dated November 12, 2021 between the registrant, World Shipping Co., and Piraeus Bank S.A.* 4.62Facility Agreement dated December 20, 2021 between the registrant, Sea Genius Shipping Co., and Sinopac Capital International (HK) Limited* 4.63Bareboat Charter Agreement dated February 25, 2022 between Artemis Lease 01 Limited and Partner Marine Co. for the Partnership* 4.64Performance Guarantee in respect of Partnership between the registrant and Artemis Lease 01 Limited* 4.65Class D Warrant Agency Agreement by and between Continental Stock Transfer & Trust Company and the registrant (55) 4.66Form of Class D Warrant Certificate (56) 4.67Form of Representative’s Warrant (57) 4.68Form of Representative’s Warrant (58) 4.69Form of Class E Warrant Agency Agreement by and between the registrant and Continental Stock Transfer & Trust Company (59) 4.70Form of Class E Warrant (60) 4.71Securities Purchase Agreement dated as of December 30, 2020 between the registrant and Jelco Delta Holding Corp. (61)78Table of Contents4.72Registration Rights Agreement dated as of December 31, 2020 between the registrant and Jelco Delta Holding Corp. (62) 8.1List of Subsidiaries* 12.1Certificate of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act* 12.2Certificate of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act* 13.1Certificate of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 13.2Certificate of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002* 15.1Consent of Ernst & Young (Hellas) Certified Auditors Accountants S.A.* 101The following financial information from the registrant’s annual report on Form 20-F for the fiscal year ended December 31, 2021, formatted in Extensible BusinessReporting Language (XBRL)*(1) Consolidated Balance Sheets as of December 31, 2021 and 2020;(2) Consolidated Statements of Income/(loss) for the years ended December 31, 2021, 2020 and 2019;(3) Consolidated Statements of Shareholders’ (Deficit) / Equity for the years ended December 31, 2021, 2020 and 2019; and(4) Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019.*Filed herewith (1)Incorporated herein by reference to Exhibit 3.1 to the registrant's report on Form 6-k filed with the Commission on August 30, 2019.(2)Incorporated herein by reference to Exhibit 3.2 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.(3)Incorporated herein by reference to Exhibit 99.2 to the registrant’s report on Form 6-K furnished with the Commission on September 25, 2020.(4)Incorporated herein by reference to Exhibit 4.1 to the registrant's report on Form 6-K filed with the Commission on March 19, 2019.(5)Incorporated herein by reference to Exhibit 3.1 to the registrant's report on Form 6-K filed with the Commission on July 2, 2021.(6)Incorporated herein by reference to Exhibit 4.1 to the registrant's report on Form 6-K filed with the Commission on July 2, 2021.(7)Incorporated herein by reference to Exhibit 99.4 to the registrant's report on Form 6-K filed with the Commission on December 10, 2021.(8)Incorporated herein by reference to Exhibit 4.2 to the registrant's registration statement on Form F-1/A filed with the Commission on May 2, 2019.(9)Incorporated herein by reference to Exhibit 4.2 to the registrant's registration statement on Form F-1/A filed with the Commission on May 2, 2019.(10)Incorporated herein by reference to Exhibit 4.1 to the registrant's annual report on Form 20-F filed with the Commission on April 28, 2017.(11)Incorporated herein by reference to Exhibit 4.2 to the registrant's annual report on Form 20-F filed with the Commission on April 28, 2017.79Table of Contents(12)Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed by United Capital Investments Corp. with the Commission on September 12,2014.(13)Incorporated herein by reference to Exhibit D to the Schedule 13D related to the registrant filed by Jelco Delta Holding Corp. with the Commission on March 12, 2015.(14)Incorporated herein by reference to Exhibit 4.10 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.(15)Incorporated herein by reference to Exhibit 4.11 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.(16)Incorporated herein by reference to Exhibit 10.10 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.(17)Incorporated herein by reference to Exhibit 4.12 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.(18)Incorporated herein by reference to Exhibit 4.52 to the registrant's annual report on Form 20-F filed with the Commission on April 21, 2015.(19)Incorporated herein by reference to Exhibit 4.14 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.(20)Incorporated herein by reference to Exhibit 4.15 to the registrant's annual report on Form 20-F filed with the Commission on April 20, 2016.(21)Incorporated herein by reference to Exhibit 4.13 to the registrant's annual report on Form 20-F filed with the Commission on March 7, 2018.(22)Incorporated herein by reference to Exhibit 4.19 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.(23)Incorporated herein by reference to Exhibit 4.58 to the registrant's annual report on Form 20-F filed with the Commission on April 21, 2015.(24)Incorporated herein by reference to Exhibit B to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on October 29, 2015.(25)Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on December 29, 2015.(26)Incorporated herein by reference to Exhibit D to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on December 29, 2015.(27)Incorporated herein by reference to Exhibit A to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on February 11, 2016.(28)Incorporated herein by reference to Exhibit A to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on March 14, 2016.(29)Incorporated herein by reference to Exhibit 10.1 to the registrant's report on Form 6-K filed with the Commission on August 5, 2016.(30)Incorporated herein by reference to Exhibit 10.2 to the registrant's report on Form 6-K filed with the Commission on August 5, 2016.(31)Incorporated herein by reference to Exhibit 10.3 to the registrant's report on Form 6-K filed with the Commission on August 5, 2016.(32)Incorporated herein by reference to Exhibit A to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on April 7, 2017.80Table of Contents(33)Incorporated herein by reference to Exhibit 10.34 to the registrant's registration statement on Form F-1 filed with the Commission on October 20, 2017.(34)Incorporated herein by reference to Exhibit C to the Schedule 13D/A related to the registrant filed by Jelco Delta Holding Corp. with the Commission on October 20, 2017.(35)Incorporated herein by reference to Exhibit 10.41 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.(36)Incorporated herein by reference to Exhibit 10.48 to the registrant's registration statement on Form F-1/A filed with the Commission on April 5, 2019.(37)Incorporated herein by reference to Exhibit 4.51 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.(38)Incorporated herein by reference to Exhibit 99.7 to the registrant’s report on Form 6-K furnished with the Commission on January 15, 2021.(39)Incorporated herein by reference to Exhibit 4.53 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.(40)Incorporated herein by reference to Exhibit 4.53 to the registrant’s annual report on Form 20-F filed with the Commission on March 5, 2020.(41)Incorporated herein by reference to Exhibit 10.98 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.(42)Incorporated herein by reference to Exhibit 10.81 to the registrant’s registration statement on Form F-1 filed with the Commission on February 19, 2021.(43)Incorporated herein by reference to Exhibit 10.82 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.(44)Incorporated herein by reference to Exhibit 4.77 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.(45)Incorporated herein by reference to Exhibit 10.87 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.(46)Incorporated herein by reference to Exhibit 10.88 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.(47)Incorporated herein by reference to Exhibit 10.89 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.(48)Incorporated herein by reference to Exhibit 10.90 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.(49)Incorporated herein by reference to Exhibit 4.92 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.(50)Incorporated herein by reference to Exhibit 10.96 to the registrant's registration statement on Form F-1 filed with the Commission on November 8, 2018.(51)Incorporated herein by reference to Exhibit 4.93 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.(52)Incorporated herein by reference to Exhibit 4.94 to the registrant's annual report on Form 20-F filed with the Commission on March 25, 2019.(53)Incorporated herein by reference to Exhibit 4.4 to the registrant's report on Form 6-K filed with the Commission on May 17, 2019.81Table of Contents(54)Incorporated herein by reference to Exhibit 4.5 to the registrant's report on Form 6-K filed with the Commission on May 17, 2019.(55)Incorporated herein by reference to Exhibit 4.1 to the registrant’s report on Form 6-K furnished with the Commission on April 3, 2020.(56)Incorporated herein by reference to Exhibit 4.2 to the registrant’s report on Form 6-K furnished with the Commission on April 3, 2020.(57)Incorporated herein by reference to Exhibit 4.3 to the registrant’s report on Form 6-K furnished with the Commission on May 17, 2019.(58)Incorporated herein by reference to Exhibit 4.4 to the registrant’s report on Form 6-K furnished with the Commission on April 3, 2020.(59)Incorporated herein by reference to Exhibit 4.1 to the registrant’s report on Form 6-K furnished to the Commission on August 19, 2020.(60)Incorporated herein by reference to Exhibit 4.2 to the registrant’s report on Form 6-K furnished to the Commission on August 19, 2020.(61)Incorporated herein by reference to Exhibit 99.2 to the registrant’s report on Form 6-K furnished with the Commission on January 15, 2021.(62)Incorporated herein by reference to Exhibit 99.3 to the registrant’s report on Form 6-K furnished with the Commission on January 15, 2021.82Table of ContentsSIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual reporton its behalf. SEANERGY MARITIME HOLDINGS CORP. By:/s/ Stamatios Tsantanis Name:Stamatios Tsantanis Title:Chairman & Chief Executive Officer Date: March 31, 2022 83Table of ContentsINDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Reports of Independent Registered Public Accounting Firm (PCAOB ID 1457)F-2 Consolidated Balance Sheets as of December 31, 2021 and 2020F-5 Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019F-6 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2021, 2020 and 2019F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019F-8 Notes to Consolidated Financial StatementsF-9F-1Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and the Board of Directors of Seanergy Maritime Holdings Corp.Opinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Seanergy Maritime Holdings Corp. (the Company) as of December 31, 2021 and 2020, the related consolidatedstatements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31,2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally acceptedaccounting principles.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financialreporting as of December 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (2013 framework), and our report dated March 31, 2022 expressed an unqualified opinion thereon.Basis for OpinionThese financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits.We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of thefinancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well asevaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MatterThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to theaudit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating thecritical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.F-2Table of Contents Recoverability assessment of vessels held and used Description of the matter At December 31, 2021, the carrying value of the Company’s vessels plus any unamortized dry-docking costs and cost of any equipment not yet installedwas $434.7 million, while the carrying value of the Company’s vessels plus any unamortized dry-docking costs and cost of any equipment not yet installedfor which impairment indicators existed as at December 31, 2021, was $72.3 million. As discussed in Note 2 to the consolidated financial statements, theCompany evaluates its vessels for impairment whenever events or changes in circumstances indicate that the carrying value of a vessel plus anyunamortized dry-docking costs and cost of any equipment not yet installed may not be recoverable in accordance with the guidance in ASC 360 –Property, Plant and Equipment (“ASC 360”). If indicators of impairment exist, management analyzes the future undiscounted net operating cash flowsexpected to be generated throughout the remaining useful life of each vessel and compares it to the carrying value of the vessel plus any unamortized dry-docking costs and cost of any equipment not yet installed. Where the vessel’s carrying value plus any unamortized dry-docking costs and cost of anyequipment not yet installed, exceeds the undiscounted net operating cash flows, management will recognize an impairment loss equal to the excess of thecarrying value of the vessels plus any unamortized dry-docking costs and cost of any equipment not yet installed over its fair value. Auditing management’s recoverability assessment was complex given the judgement and estimation uncertainty involved in determining certainassumptions in forecasting undiscounted net operating cash flows, specifically the future charter rates for non-contracted revenue days. These futurecharter rates are subjective as they involve the development and use of assumptions about the dry bulk shipping market through the end of the useful livesof the vessels. These assumptions are forward looking and subject to the inherent unpredictability of future global economic and market conditions. How we addressed thematter in our audit We obtained an understanding of the Company’s impairment process, evaluated the design, and tested the operating effectiveness of the controls overthe Company’s determination of future charter rates for non-contracted revenue days. We analyzed management’s recoverability assessment by comparing the methodology used to evaluate impairment of each vessel against the accountingguidance in ASC 360. To test management’s undiscounted net operating cash flow forecasts, our procedures included, among others, comparing the futurevessel charter rates for non-contracted revenue days against internal and external data sources, such as available market data from various analysts,historical data for the vessels, and recent economic and industry changes. In addition, we performed sensitivity analyses to assess the impact of changesto future charter rates for non-contracted revenue days in the determination of the net operating cash flows. Our procedures also included testing thecompleteness and accuracy of the future charter rate data used within the forecasts./s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.We have served as the Company’s auditor since 2012.Athens, GreeceMarch 31, 2022 F-3Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Stockholders and the Board of Directors of Seanergy Maritime Holdings Corp.Opinion on Internal Control over Financial ReportingWe have audited Seanergy Maritime Holdings Corp.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — IntegratedFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Seanergy Maritime Holdings Corp.(the “Company”) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021 based on the COSO criteria.We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Companyas of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period ended December 31,2021, and the related notes and our report dated March 31, 2022 expressed an unqualified opinion thereon.Basis for OpinionThe Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financialreporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’sinternal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Companyin accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whethereffective internal control over financial reporting was maintained in all material respects.Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our auditprovides a reasonable basis for our opinion.Definition and Limitations of Internal Control Over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, andthat receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to futureperiods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate./s/ Ernst & Young (Hellas) Certified Auditors Accountants S.A.Athens, GreeceMarch 31, 2022F-4Table of ContentsSeanergy Maritime Holdings Corp.Consolidated Balance SheetsDecember 31, 2021 and 2020(In thousands of US Dollars, except for share and per share data) 2021 2020 ASSETS Current assets: Cash and cash equivalents 3 41,496 21,011 Term deposits 1,500 1,600 Restricted cash 3 1,180 50 Accounts receivable trade, net 2 - 801 Inventories 4 1,448 4,650 Prepaid expenses 1,118 1,140 Other current assets 434 674 Deferred voyage expenses 2 - 621 Total current assets 47,176 30,547 Fixed assets: Vessels, net 5 426,062 256,737 Other fixed assets, net 405 373 Total fixed assets 426,467 257,110 Other non-current assets: Deposits assets, non-current 6 1,325 1,325 Deferred charges and other long-term investments, non-current 2 8,613 4,396 Restricted cash, non-current 3, 6 2,950 990 Right of use asset – leases 9 650 845 Other non-current assets 30 32 TOTAL ASSETS 487,211 295,245 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$1,347 and $995, respectively 6 68,473 19,417 Trade accounts and other payables 5,762 3,707 Convertible notes, net of deferred finance costs and debt discounts of $1,046 and $NIL, respectively 7 769 - Accrued liabilities 5,173 2,988 Lease liability 9 121 140 Deferred revenue 2 7,735 4,510 Total current liabilities 88,033 30,762 Non-current liabilities: Long-term debt and other financial liabilities, net of current portion and deferred finance costs and debt discounts of$2,030 and $2,532, respectively 6 146,701 150,345 Convertible notes, non-current, net of deferred finance costs and debt discounts of $1,597 and $5,839, respectively 7 6,804 14,516 Lease liability, non-current 9 529 705 Deferred revenue, non-current 2 538 2,773 Other liabilities, non-current 130 450 Total liabilities 242,735 199,551 Commitments and contingencies 9 STOCKHOLDERS EQUITY Preferred stock, $0.0001 par value; 25,000,000 shares authorized; 20,000 and NIL shares issued and outstanding as atDecember 31, 2021 and 2020, respectively 10 - - Common stock, $0.0001 par value; 500,000,000 authorized shares as at December 31, 2021 and 2020; 172,986,137 and68,314,985 shares issued and outstanding as at December 31, 2021 and 2020, respectively 10 17 7 Additional paid-in capital 10 597,708 490,284 Accumulated deficit (353,249) (394,597)Total Stockholders’ equity 244,476 95,694 TOTAL LIABILITIES AND STOCKHOLDERS EQUITY 487,211 295,245 The accompanying notes are an integral part of these consolidated financial statements.F-5Table of ContentsSeanergy Maritime Holdings Corp.Consolidated Statements of OperationsFor the years ended December 31, 2021, 2020 and 2019(In thousands of US Dollars, except for share and per share data) Notes 2021 2020 2019 Vessel revenue, net 2 153,108 63,345 86,499 Expenses: Voyage expenses 2 (16,469) (18,567) (36,641)Vessel operating expenses (36,332) (22,347) (18,980)Management fees (1,435) (1,052) (989)General and administration expenses (13,739) (6,607) (5,989)Amortization of deferred dry-docking costs (2,793) (2,319) (844)Depreciation (17,151) (12,721) (11,016)Gain on sale of vessel, net 5 697 - - Gain on forward freight agreements, net 24 - - Operating income / (loss) 65,910 (268) 12,040 Other income / (expenses), net: Interest and finance costs 11 (17,779) (12,342) (15,216)Interest and finance costs – related party 1, 11 - (11,083) (8,629)Loss on extinguishment of debt 6, 7 (6,863) - - Gain on debt refinancing 6 - 5,144 - Interest and other income 161 208 213 Foreign currency exchange losses, net (81) (15) (52)Total other expenses, net (24,562) (18,088) (23,684)Net income / (loss) before income taxes 41,348 (18,356) (11,644)Income taxes - - (54)Net income/ (loss) 41,348 (18,356) (11,698) Net income/(loss) per common share Basic 12 0.27 (0.55) (12.21)Diluted 12 0.25 (0.55) (12.21)Weighted average number of common shares outstanding Basic 12 153,321,907 33,436,278 958,297 Diluted 12 191,337,521 33,436,278 958,297 The accompanying notes are an integral part of these consolidated financial statements.F-6Table of ContentsSeanergy Maritime Holdings Corp.Consolidated Statements of Stockholders’ EquityFor the years ended December 31, 2021, 2020 and 2019 (In thousands of US Dollars, except for share data) Preferred Stock Series B Common stock Additional Total # of Shares ParValue # of Shares ParValue paid-incapital Accumulateddeficit stockholders’equity Balance, January 1, 2019 - - 166,636 - 385,846 (364,543) 21,303 Issuance of common stock andwarrants (Notes 6, 7, & 10) - - 1,505,638 - 18,847 - 18,847 Related parties liabilities released(Notes 6 & 7) - - - - 96 - 96 Stock based compensation (Note 13) - - 8,979 - 1,310 - 1,310 Net loss - - - - (11,698) (11,698)Balance, December 31, 2019 - - 1,681,253 - 406,099 (376,241) 29,858 Issuance of common stock(including the exercise ofwarrants) (Note 10) - - 66,477,489 7 71,828 - 71,835 Stock based compensation (Note 13) - - 156,243 - 869 - 869 Issuable units (Notes 6, 7 & 8) - - - - 6,021 - 6,021 Change in fair value of conversionoption (Note 8) - - - 4,924 - 4,924 Issuance of option for units (Note 8) - - - - 543 - 543 Net loss - - - - - (18,356) (18,356)Balance, December 31, 2020 - - 68,314,985 7 490,284 (394,597) 95,694 Issuance of common stock(including the exercise ofwarrants) (Note 10) - - 92,387,541 10 98,208 - 98,218 Issuance of common stock andwarrants for repayment ofsubordinated long-term debt(Note 6) - - 4,285,714 - 3,000 - 3,000 Issuance of common stock uponconversion of convertible notes(Note 7) - - 3,000,000 - 3,600 - 3,600 Issuance of preferred shares torelated party (Note 10) 20,000 - - - 250 - 250 Stock based compensation (Note 13) - - 6,700,000 - 5,097 - 5,097 Repurchase of common stock (Note10) - - (1,702,103) - 11,708 - (1,708)Repurchase of warrants (Notes 8 &10) - - - - 11,023 - (1,023)Net income - - - - - 41,348 41,348 Balance, December 31, 2021 20,000 - 172,986,137 17 597,708 (353,249) 244,476 The accompanying notes are an integral part of these consolidated financial statements.F-7Table of ContentsSeanergy Maritime Holdings Corp.Consolidated Statements of Cash FlowsFor the years ended December 31, 2021, 2020 and 2019(In thousands of US Dollars) 2021 2020 2019 Cash flows from operating activities: Net income/ (loss) 41,348 (18,356) (11,698)Adjustments to reconcile net income/(loss) to net cash provided by / (used in) operating activities: Depreciation 17,151 12,721 11,016 Amortization of deferred dry-docking costs 2,793 2,319 844 Amortization of deferred finance costs and debt discounts 3,659 1,107 1,140 Amortization of convertible note beneficial conversion feature 2,887 5,518 3,713 Stock based compensation 5,097 869 1,310 Amortization of deferred finance costs and debt discounts – related party - 201 3,745 Loss on extinguishment of debt 6,863 - - Gain on sale of vessel, net (697) - - Gain on debt refinancing, gross of deferred financing fees and expenses - (5,556) - Fair value measurement of units issued to former related party - 596 - Restructuring expenses - 1,015 - Changes in operating assets and liabilities: Accounts receivable trade, net 801 962 845 Inventories 3,202 (788) 1,427 Prepaid expenses 22 (740) 307 Other current assets 240 579 (212)Deferred voyage expenses 621 (525) 311 Deferred charges, non-current (6,433) (1,145) (2,297)Other non-current assets 2 (3) - Trade accounts and other payables 348 (12,398) 1,679 Accrued liabilities 2,187 3,526 (5,502)Deferred revenue 3,225 214 3,406 Deferred revenue, non-current (2,236) (301) 3,074 Other liabilities, non-current (320) 450 - Net cash provided by / (used in) operating activities 80,760 (9,735) 13,108 Cash flows from investing activities: Vessels acquisitions and improvements (197,214) (20,189) (12,349)Gross proceeds from sale of vessels 12,600 - - Term deposits 100 (1,600) - Other fixed assets, net (106) (75) - Net cash used in investing activities (184,620) (21,864) (12,349)Cash flows from financing activities: Proceeds from issuance of common stock and warrants, net of underwriters fees and commissions 98,302 73,750 13,225 Proceeds from issuance of preferred stock 250 - - Payments for repurchase of common stock (1,708) - - Payments for repurchase of warrants (1,023) - - Proceeds from secured long-term debt 180,320 22,500 6,422 Proceeds from related party debt - - 5,000 Payments of financing and stock issuance costs (2,698) (3,640) (698)Repayments of long-term debt and other financial liabilities (132,058) (52,514) (17,598)Repayments of convertible notes (13,950) - - Repayments of related party debt - (1,000) - Net cash provided by financing activities 127,435 39,096 6,351 Net increase in cash and cash equivalents and restricted cash 23,575 7,497 7,110 Cash and cash equivalents and restricted cash at beginning of period 22,051 14,554 7,444 Cash and cash equivalents and restricted cash at end of period 45,626 22,051 14,554 SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the period for: Interest 11,166 10,270 14,144 Noncash investing activities: Vessels acquisitions and improvements 837 - - Noncash financing activities: Units issued for repayment of subordinated long term-debt (Note 6) 3,000 - - Repayment of subordinated long term-debt by issuance of units (Note 6) (3,000) - - Common shares issued by conversion of notes (Note 7) 3,600 - - Notes reduction via conversion (Note 7) (3,600) - - Units / shares issued to settle unpaid interest in connection with financing – former related party (Note 1, 6, 7 & 8) - 4,814 2,115 Shares issued in lieu of interest payments in connection with financing – related party (Note 6, 7 & 8) - - 3,846 Units / shares issued to settle deferred finance cost in connection with financing – former related party (Note 1, 6 & 7) - 1,374 239 Change in fair value of conversion option (Note 8) - 4,924 - Issuance of option for units (Note 8) - 543 - Unpaid interest waived – related party (Note 6 & 7) - - 96 Related party debt drawdown (Note 6 & 7) - - 2,000 Related party debt refinanced (Note 6 & 7) - - (2,000)The accompanying notes are an integral part of these consolidated financial statements. F-8Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(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: Seanergy Maritime Holdings Corp. (the “Company” or “Seanergy”) was formed under the laws of the Republic of the Marshall Islands on January 4, 2008, with executive offices locatedin Glyfada, Greece. The Company provides global transportation solutions in the dry bulk shipping sector through its subsidiaries. The accompanying consolidated financial statements include the accounts of Seanergy Maritime Holdings Corp. and its subsidiaries (collectively, the “Company” or “Seanergy”).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. Thesanctions 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 affectedregions, 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 andtake other actions should the conflict further escalate. With uncertainty remaining at high levels with regards to the global impact of the sanctions already announced to date and thepossibility 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 ourCompany. 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 and Russian 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 these tensions might eventually have an adverse effect our business, financialcondition, results of operations and cash flows.On December 31, 2020, the Company concluded a series of amendment transactions of certain loan agreements and convertible notes entered into with Jelco Delta Holding Corp., or JDH,the Company’s creditor and a former affiliate and former related party (Notes 6 and 7). The Company considered JDH a related party up to the date that these amendments wereconcluded, since after that date, JDH did not meet the definition of related party as per ASC 850, on the basis that JDH was no longer able to significantly influence management nor heldmore than 10 per cent of the voting interests of the Company. As such, the Company no longer considers JDH a related party. As of December 31, 2021 and 2020, JDH Loans (as definedbelow) were classified in “Long-term debt and other financial liabilities” in the consolidated balance sheet. Amounts in the consolidated statement of operations and consolidatedstatement of cash flows for 2020 and 2019 until the date that JDH ceased to be a related party were presented as transactions with related party.On June 30, 2020, the Company’s common stock began trading on a split-adjusted basis, following a June 25, 2020 approval from the Company’s board of directors to reverse split theCompany’s common stock at a ratio of one-for-sixteen (Note 10). All share and per share amounts disclosed in the consolidated financial statements and notes give effect to this reversestock split retroactively, for all periods presented. No fractional shares were issued in connection with the reverse split. Shareholders who would otherwise hold a fractional share of theCompany’s common stock will receive a cash payment in lieu of such fractional share.On March 20, 2019, the Company’s common stock began trading on a split-adjusted basis, following a February 26, 2019 approval from the Company’s Board of Directors to reverse splitthe Company’s common stock at a ratio of one-for-fifteen. All share and per share amounts disclosed in the consolidated financial statements and notes give effect to this reverse stocksplit retroactively, for all periods presented. No fractional shares were issued in connection with the reverse split. Shareholders who would otherwise hold a fractional share of theCompany’s common stock received a cash payment in lieu of such fractional share.F-9Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)a. Subsidiaries in Consolidation: Seanergy’s subsidiaries included in these consolidated financial statements as of December 31, 2021: Company Country ofIncorporation Vessel name Date of Delivery Date ofSale/DisposalSeanergy Management Corp. (1)(3) Marshall Islands N/A N/A N/ASeanergy Shipmanagement Corp. (1)(3) Marshall Islands N/A N/A N/ASea Glorius Shipping Co. (1) Marshall Islands Gloriuship November 3, 2015 N/ASea Genius Shipping Co. (1) Marshall Islands Geniuship October 13, 2015 N/ALeader Shipping Co. (1) Marshall Islands Leadership March 19, 2015 September 30, 2021Premier Marine Co. (1) Marshall Islands Premiership September 11, 2015 N/AGladiator Shipping Co. (1)(5) Marshall Islands Gladiatorship September 29, 2015 October 11, 2018Squire Ocean Navigation Co. (1) Liberia Squireship November 10, 2015 N/AEmperor Holding Ltd. (1) Marshall Islands N/A N/A N/AKnight Ocean Navigation Co. (1)(6) Liberia Knightship December 13, 2016 June 29, 2018Lord Ocean Navigation Co. (1) Liberia Lordship November 30, 2016 N/APartner Shipping Co. Limited (1)(Note 14) Malta Partnership May 31, 2017 N/APembroke Chartering Services Limited (1)(4)(5) Malta N/A N/A N/AMartinique International Corp. (1)(5) British Virgin Islands Bremen Max September 11, 2008 March 7, 2014Harbour Business International Corp. (1)(5) British Virgin Islands Hamburg Max September 25, 2008 March 10, 2014Maritime Capital Shipping Limited (1) Bermuda N/A N/A N/AMaritime Capital Shipping (HK) Limited (1)(2)(3) Hong Kong N/A N/A N/AMaritime Glory Shipping Limited (1)(2) British Virgin Islands Clipper Glory May 21, 2010 December 4, 2012Maritime Grace Shipping Limited (1)(2) British Virgin Islands Clipper Glory May 21, 2010 October 15, 2012Fellow Shipping Co. (1) Marshall Islands Fellowship November 22, 2018 N/AChampion Marine Co. (1)(6)(Note 5) Marshall Islands Championship N/A N/AGood Ocean Navigation Co. (1) Liberia Goodship August 7, 2020 N/AFlag Marine Co. (1)(6) (Note 5) Marshall Islands Flagship May 6, 2021 May 11, 2021Hellas Ocean Navigation Co. (1)(6)(Note 5) Liberia Hellasship May 6, 2021 June 28, 2021Patriot Shipping Co. (1)(6)(Note 5) Marshall Islands Patriotship June 1, 2021 June 28, 2021Traders Shipping Co. (1) Marshall Islands Tradership June 9, 2021 N/AWorld Shipping Co. (1) Marshall Islands Worldship August 30, 2021 N/AFriend Ocean Navigation Co. (1) Liberia Friendship July 27, 2021 N/ADuke Shipping Co. (1) Marshall Islands Dukeship November 26, 2021 N/A(1)Subsidiaries wholly owned(2)Former vessel-owning subsidiaries owned by Maritime Capital Shipping Limited (or “MCS”)(3)Management companies(4)Chartering services company(5)Dormant companies(6)Bareboat chartersF-10Table of ContentsSeanergy Maritime Holdings Corp.Notes To The 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) Principles of ConsolidationThe accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) andinclude the accounts and operating results of Seanergy and its wholly-owned subsidiaries where Seanergy has control. Control is presumed to exist when Seanergy, through direct orindirect ownership, retains the majority of the voting interest. In addition, Seanergy evaluates its relationships with other entities to identify whether they are variable interest entitiesand to assess whether it is the primary beneficiary of such entities. If the determination is made that the Company is the primary beneficiary, then that entity is included in theconsolidated financial statements. When the Company does not have a controlling interest in an entity, but exerts a significant influence over the entity, the Company applies the equitymethod of accounting. All significant intercompany balances and transactions and any intercompany profit or loss on assets remaining with the Group have been eliminated in theaccompanying consolidated financial statements. The Company deconsolidates a subsidiary or derecognizes a group of assets when the Company no longer controls the subsidiary or group of assets specified in Accounting StandardsCodification (ASC or Codification) 810-10-40-3A. When control is lost, the Company derecognizes the assets and liabilities of the qualifying subsidiary or group of assets. The FinancialAccounting Standards Board (“FASB”) concluded that the loss of control and the related deconsolidation of a subsidiary or derecognition of a group of assets specified in ASC 810-10-40-3A is a significant economic event that changes the nature of the investment held in the subsidiary or group of assets. Based on this consideration, a gain or loss is recognized uponthe deconsolidation of a subsidiary or derecognition of a group of assets.(b) Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilitiesand disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.Actual results could differ from those estimates. Significant items subject to such estimates include evaluation of relationships with other entities to identify whether they are variableinterest entities, determination of vessel useful lives, allocation of purchase price in a business combination, determination of vessels’ impairment and determination of goodwillimpairment. (c) Foreign Currency TranslationSeanergy’s functional currency is the United States dollar since the Company’s vessels operate in international shipping markets and therefore primarily transact business in U.S.Dollars. The Company’s books of accounts are maintained in U.S. Dollars. Transactions involving other currencies are translated into the United States dollar using exchange rates thatare in effect at the time of the transaction. At the balance sheet dates, monetary assets and liabilities, which are denominated in other currencies, are translated to United States dollars atthe foreign exchange rate prevailing at year-end. Gains or losses resulting from foreign currency translation are reflected in the consolidated statement of loss. (d) Concentration of Credit RiskFinancial instruments, which potentially subject the Company to significant concentrations of credit risk, consist principally of cash and cash equivalents and trade accounts receivable.The Company places its cash and cash equivalents, consisting mostly of deposits, with high credit qualified financial institutions. The Company performs periodic evaluations of therelative credit standing of the financial institutions in which it places its deposits. The Company limits its credit risk with accounts receivable by performing ongoing credit evaluations ofthe financial condition of its customers, receives charter hires in advance and generally does not require collateral for its accounts receivable. (e) Cash and Cash EquivalentsSeanergy considers time deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents.F-11Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)(f) Term DepositsSeanergy classifies time deposits and all highly liquid investments with an original maturity of more than three months as Term Deposits. (g) Restricted CashRestricted cash is excluded from cash and cash equivalents. Restricted cash represents minimum cash deposits or cash collateral deposits required to be maintained with certain banksunder the Company’s borrowing arrangements or in relation to bank guarantees issued on behalf of the Company, which are legally restricted as to withdrawal or use. In the event thatthe obligation relating to such deposits is expected to be terminated within the next twelve months, these deposits are classified as current assets; otherwise they are classified as non-current assets. (h) Accounts Receivable Trade, NetAccounts receivable trade, net at each balance sheet date, includes receivables from charterers for hire, freight and demurrage billings, net of a provision for doubtful accounts.Receivables related to spot voyages are determined to be unconditional and are included in “Accounts Receivable Trade, Net”. At each balance sheet date, all potentially uncollectibleaccounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts. The Company also assessed the provisions of ASC 326, FinancialInstruments—Credit Losses, by assessing the counterparties’ credit worthiness and concluded that there is no material impact in the Company’s financial statements as of the date ofthe adoption of ASC 326 on January 1, 2020 and as of December 31, 2021 and 2020. No provision for doubtful accounts was established as of December 31, 2021 and 2020.(i) InventoriesInventory is measured at the lower of cost or net realizable value according to the provisions of ASU 2015-11, Inventory. Net realizable value is defined as estimated selling prices in theordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Cost is determined by the first in, first out method. (j) Insurance ClaimsThe Company records insurance claim recoveries for insured losses incurred on damage to fixed assets and for insured crew medical expenses and for legal fees covered by directors’and officers’ liability insurance. Insurance claim recoveries are recorded, net of any deductible amounts, at the time the Company’s fixed assets suffer insured damages or when crewmedical expenses are incurred, recovery is probable under the related insurance policies, the claim is not subject to litigation and the Company can make an estimate of the amount to bereimbursed. The classification of the insurance claims into current and non-current assets is based on management’s expectations as to their collection dates. On January 1, 2020, theCompany adopted and assessed the provisions of ASC 326, Financial Instruments—Credit Losses, by assessing the counterparties’ credit worthiness and concluded that there is nomaterial impact in the Company’s financial statements as of the date of the adoption. No provision for credit losses was recorded as of December 31, 2021 and 2020. (k) VesselsVessels acquired as a part of a business combination are recorded at fair market value on the date of acquisition. Vessels acquired as asset acquisitions are stated at historical cost, whichconsists of the contract price less discounts, plus any material expenses incurred upon acquisition (delivery expenses and other expenditures to prepare for the vessel’s initial voyage).Vessels acquired from entities under common control are recorded at historical cost. Subsequent expenditures for conversions and major improvements are capitalized when theyappreciably extend the life, increase the earning capacity or improve the efficiency or safety of the vessels. Expenditures for routine maintenance and repairs are expensed as incurred.F-12Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated) In addition, other long-term investments, relating to vessels’ equipment not yet installed, are included in “Deferred charges and other-long term investments, non-current” in theconsolidated balance sheets. Amounts paid for this equipment are included in “Vessels acquisitions and improvements” under “Cash flows from investing activities” in the consolidatedstatements of cash flows. (l) Vessel DepreciationDepreciation is computed using the straight-line method over the estimated useful life of the vessels (25 years), after considering the estimated salvage value. Salvage value is estimatedby the Company by taking the cost of steel times the weight of the ship noted in lightweight ton. Salvage values are periodically reviewed and revised to recognize changes inconditions, new regulations or for other reasons. Revisions of salvage values affect the depreciable amount of the vessels and affect depreciation expense in the period of the revisionand future periods. (m) Impairment of Long-Lived Assets (Vessels)The Company reviews its long-lived assets for impairment whenever events or changes in circumstances, such as prevailing market conditions, obsolescence or damage to the asset,business plans to dispose a vessel earlier than the end of its useful life and other business plans, indicate that the carrying amount of the assets, plus any unamortized dry-dockingcosts and cost of any equipment not yet installed, may not be recoverable. The volatile market conditions in the dry bulk market with decreased charter rates and decreased vesselmarket values are conditions that the Company considers to be indicators of a potential impairment for its vessels. The Company determines undiscounted projected operating cash flows for each vessel and compares it to the vessel’s carrying value, plus any unamortized dry-docking costs and costof any equipment not yet installed. When the undiscounted projected operating cash flows expected to be generated by the use of the vessel and/or its eventual disposition are lessthan the vessel’s carrying value, plus any unamortized dry-docking costs and cost of any equipment not yet installed, the Company impairs the carrying amount of the vessel.Measurement of the impairment loss is based on the fair value of the asset as determined by independent valuators and use of available market data. The undiscounted projectedoperating cash inflows are determined by considering the charter revenues from existing time charters for the fixed fleet days and an estimated daily time charter equivalent for the non-fixed days (based on a combination of one year charter rates estimates and the average of the trailing 10-year historical charter rates, excluding outliers) adjusted for commissions,expected off hires due to scheduled maintenance and estimated unexpected breakdown off hires. The undiscounted projected operating cash outflows are determined by applyingvarious assumptions regarding vessel operating expenses and scheduled maintenance.For the year ended December 31, 2021, indicators of impairment existed for two of the Company’s vessels as their carrying value plus any unamortized dry-docking costs and cost of anyequipment not yet installed was higher than their market value. The carrying value of the Company’s vessels plus any unamortized dry-docking costs and cost of any equipment not yetinstalled for which impairment indicators existed as at December 31, 2021, was $72,328. From the impairment exercise performed, the undiscounted projected operating cash flowsexpected to be generated by the use of these two vessels were higher than the vessels’ carrying value, plus any unamortized dry-docking costs and cost of any equipment not yetinstalled, and thus the Company concluded that no impairment charge should be recorded.(n) Dry-Docking and Special Survey CostsThe Company follows the deferral method of accounting for dry-docking costs and special survey costs whereby actual costs incurred are deferred and are amortized on a straight-linebasis over the period through the expected date of the next dry-docking which is scheduled to become due in 2 to 3 years. Dry-docking costs which are not fully amortized by the nextdry-docking period are expensed. Amounts are included in “Deferred charges and other long-term investments, non-current”. (o) Commitments and ContingenciesLiabilities for loss contingencies, arising from claims, assessments, litigation, fines and penalties, environmental and remediation obligations and other sources are recorded when it isprobable that a liability has been incurred and the amount of the loss can be reasonably estimated.F-13Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)(p) Revenue RecognitionRevenues are generated from time charters, bareboat charters and spot charters. A time charter is a contract for the use of a vessel as well as vessel operations for a specific period oftime and a specified daily charter hire rate, which is generally payable in advance. A bareboat charter is a contract in which the vessel is provided to the charterer for a fixed period of timeat a specified daily rate, which is generally payable in advance. Spot charter agreements are charter hires, where a contract is made in the spot market for the use of a vessel for a specificvoyage at a specified charter rate per ton of cargo.Time charter revenue, including bareboat charter revenue, is recorded over the term of the charter agreement as the service is provided and collection of the related revenue is reasonablyassured. Under a time charter, revenue is adjusted for a vessel’s off hire days due to major repairs, dry dockings or special or intermediate surveys.In February 2016, the FASB issued ASU No. 2016-02 - Leases (ASC 842), and as amended, it requires lessees to recognize most leases on the balance sheet. The Company early adoptedASC 842, as amended from time to time, retrospectively from January 1, 2018. The Company also elected to apply the additional and optional transition method to new and existing leasesat the adoption date as well as all the practical expedients which allowed the Company’s existing lease arrangements, in which it was a lessee or lessor, classified as operating leasesunder ASC 840 to continue to be classified as operating leases under ASC 842. The Company concluded that the criteria for not separating lease and non-lease components of its timecharter contracts are met, since (i) the time pattern of recognizing revenues for crew and other services for the operation of the vessels is similar to the time pattern of recognizing rentalincome, (ii) the lease component of the time charter contracts, if accounted for separately, would be classified as an operating lease, and (iii) the predominant component in its timecharter agreements is the lease component. In this respect, the Company accounts for the combined component as an operating lease in accordance with ASC 842. The Companyrecognizes income from lease payments over the lease term on a straight line basis. The Company assessed its new time charter contracts at the adoption date under the new guidanceand concluded that these contracts contain a lease with the related executory costs (insurance), as well as non-lease components to provide other services related to the operation of thevessel, with the most substantial service being the crew cost to operate the vessel. The Company recognizes income for variable lease payments in the period when changes in facts andcircumstances on which the variable lease payments occur. Rental income on the Company’s time charterers is mostly calculated at an index linked rate based on the five T/C routes rateof the Baltic Capesize Index.Spot charter revenue is recognized on a pro-rata basis over the duration of the voyage from loading to discharge, when a voyage agreement exists, the price is fixed or determinable,service is provided and the collection of the related revenue is reasonably assured. For voyage charters, the Company satisfies its single performance obligation to transfer cargo underthe contract over the voyage period. The Company has taken the practical expedient not to disclose the value of unsatisfied performance obligations for contracts with an originalexpected length of one year or less.Demurrage income, which is considered a form of variable consideration and is recognized as the performance obligation is satisfied, is included in voyage revenues, and representspayments by the charterer to the vessel owner when loading or discharging time exceeds the stipulated time in the voyage charter agreements. Demurrage income for the years endedDecember 31, 2021, 2020 and 2019 was $800, $819 and $1,528, respectively.Despatch expense, which is considered a form of variable consideration and is recognized as the performance obligation is satisfied, is included in voyage revenues, and representspayments to the charterer by the vessel owner when loading or discharging time is faster than the stipulated time in the voyage charter agreements. Despatch expense for the yearsended December 31, 2021, 2020 and 2019 was $110, $133 and $432, respectively.Charterers individually accounting for more than 10% of revenues during the years ended December 31, 2021, 2020 and 2019 were:Customer 2021 2020 2019 A 23% 23% - B 15% - - C 13% - - D 11% 18% 15%E - - 19%F - - 18%F 10% - - Total 72% 41% 52%F-14Table of ContentsSeanergy Maritime Holdings Corp.Notes To The 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 December 31, 2021, all of the Company’s fleet was time chartered on long-term employment arrangements. Out of the seventeen long-term employment agreements in place onDecember 31, 2021, nine were agreed during 2021 and the remaining eight between 2018 and 2020.Prior to 2021, the Company successfully installed exhaust gas cleaning systems, or scrubbers, on six of its vessels. A portion of the scrubbers cost was paid for by the charterers, wheresuch portion is provided for by the chartering agreements as an increased daily rate or as a prepayment, which the Company accounts for on a straight-line basis over the minimumduration of each charter party. Amounts received in advance related to scrubber increased daily rates are recorded in “Deferred revenue” in the consolidated balance sheets. Suchamount as of December 31, 2021, was $2,773, of which $2,235 is the current portion and $538 is the non-current porion. As of December 31, 2020, the current portion was $3,155 and thenon-current portion was $2,773.Disaggregation of RevenueThe following table presents the Company’s income statement figures derived from spot charters and time charters for the years ended December 31, 2021, 2020 and 2019: Year ended December 31, 2021 2020 2019 Vessel revenues from spot charters, net of commissions 28,264 27,033 55,701 Vessel revenues from time charters, net of commissions 124,844 36,312 30,798Total 153,108 63,345 86,499 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 accountsreceivable disaggregated by revenue source as at December 31, 2021 and 2020: December 31, 2021 2020 Accounts receivable trade, net from spot charters - 801 Accounts receivable trade, net from time charters - - Total - 801 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 underthe contract in periods after such date. The current portion of Deferred revenue as of December 31, 2021 was $7,735 and relates entirely to ASC 842. The non-current portion of Deferredrevenue as of December 31, 2021 was $538 and relates entirely to ASC 842 and is related to scrubber premiums (i.e. increased daily hire rates provided for by the chartering agreements)for scrubber-fitted vessels. The Deferred revenue is allocated on a straight-line basis over the minimum duration of each charter party, except for unearned revenue, which representscash received in advance of services which have not yet been provided. Revenue recognized in 2021 from amounts included in deferred revenue at the beginning of the period was$4,105.(q) Office LeaseIn April 2018, the Company moved into new office spaces. Under ASC 842, the lease is classified as an operating lease and a lease liability and right-of-use asset based on the presentvalue of future minimum lease payments have been recognized on the balance sheet. The monthly rent expense is recorded in general and administration expenses.The Company paid$134 for rent expense during 2021 and such amount is included in the consolidated statement of cash flows in operating activities. The Company has assessed the lease for impairment,and since no impairment indicators existed, no impairment charge was recorded. The Company recognized a right of use asset for rental of office space at the adoption date and electedthe practical expedient on not separating lease components from nonlease components.F-15Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)(r) Sale and Leaseback TransactionsIn 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 ofan 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 ofthe 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 themarketplace; 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 obligationfor 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 bythe 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 pricefor 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 thetransfer 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 thedifference between the amount of consideration received and the amount of consideration to be paid as interest.(s) CommissionsCommissions, which include address and brokerage commissions, are recognized in the same period as the respective charter revenues. Address commissions to third parties areincluded in “Vessel revenue, net” while brokerage commissions to third parties are included in “Voyage expenses”.(t) Vessel Voyage ExpensesVessel voyage expenses primarily consist of port, canal, bunker expenses and brokerage commissions that are unique to a particular charter and are paid for by the charterer under timecharter agreements, bareboat charters and other non-specified voyage expenses. Under a spot charter, the Company incurs and pays for certain voyage expenses, primarily consisting ofbunkers consumption, brokerage commissions, port and canal costs. Under ASC 606 and after implementation of ASC 340-40 “Other assets and deferred costs” for contract costs,incremental costs of obtaining a contract with a customer, and contract fulfillment costs, are capitalized and amortized as the performance obligation is satisfied, if certain criteria are met.The Company has adopted the practical expedient not to capitalize incremental costs when the amortization period (voyage period) is less than one year. Costs to fulfill the contract priorto arriving at the load port primarily consist of bunkers which are deferred and amortized during the voyage period. Costs amortized during 2021 to fulfill contracts were $1,475. Voyagecosts arising as performance obligation are expensed as incurred.The following table presents the Company’s income statement figures derived from spot charters and time charters for the years ended December 31, 2021, 2020 and 2019: Year ended December 31, 2021 2020 2019 Voyage expenses from spot charters 13,465 17,099 33,109 Voyage expenses from time charters 3,004 1,468 3,532Total 16,469 18,567 36,641 (u) Repairs and MaintenanceAll repair and maintenance expenses, including major overhauling and underwater inspection expenses are expensed in the year incurred. Such costs are included in “Vessel operatingexpenses”.F-16Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)(v) Financing CostsUnderwriting, legal and other direct costs incurred with the issuance of long-term debt or to refinance existing debt are deferred and amortized to interest expense over the life of therelated debt using the effective interest method under modification guidance. The Company presents unamortized deferred financing costs as a reduction of long-term debt in theaccompanying balance sheets. For the accounting of the unamortized deferred financing costs following debt extinguishment, see below (Note 2(ab)).(w) Income TaxesIncome taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized, when applicable, for the future tax consequences attributable todifferences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred taxassets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the effect ofincome tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50%likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognizedtax benefits in interest expense and penalties in general and administration expenses.Maritime Capital Shipping (HK) Limited, the Company’s former management company, is subject to Hong Kong profits tax at a rate of 16.5% on the estimated assessable profit for theyear. The estimated profits tax for the year ended December 31, 2021 is $NIL.Seanergy Management Corp. (“Seanergy Management”), the Company’s management company, established in Greece under Greek Law 89/67 (as amended to date), is subject to anannual contribution calculated on the total amount of foreign exchange annually imported and converted to Euros. The contribution to be paid in 2022 by Seanergy Management for 2021is estimated at $97 and is included in “General and administration expenses”.Seanergy Shipmanagement Corp. (“Seanergy Shipmanagement”), the Company’s second management company, established in Greece under Greek Law 89/67 (as amended to date), issubject to an annual contribution calculated on the total amount of foreign exchange annually imported and converted to Euros. The contribution to be paid in 2022 by SeanergyShipmanagement for 2021 is estimated at $NIL.Two of the Company’s subsidiaries are registered in Malta since May 23, 2018. These subsidiaries are subject to a corporate flat tax in Malta and could be subject to additional taxation inthe future in Malta or other jurisdictions where the subsidiaries are incorporated or do business. The amount of any such tax imposed upon the Company’s operations or on theCompany’s subsidiaries’ operations may be material and could have an adverse effect on earnings. No tax expense has been recognized for the years presented in these financialsstatements.Pursuant to the Internal Revenue Code of the United States (the “Code”), U.S. source income from the international operations of ships is generally exempt from U.S. tax if the companyoperating the ships meets both of the following requirements: (a) the Company is organized in a foreign country that grants an equivalent exception to corporations organized in theUnited States and (b) either (i) more than 50% of the value of the Company’s stock is owned, directly or indirectly, by individuals who are “residents” of the Company’s country oforganization or of another foreign country that grants an “equivalent exemption” to corporations organized in the United States (50% Ownership Test) or (ii) the Company’s stock is“primarily and regularly traded on an established securities market” in its country of organization, in another country that grants an “equivalent exemption” to United Statescorporations, or in the United States (Publicly-Traded Test).Notwithstanding the foregoing, the regulations provide, in pertinent part, that each class of the Company’s stock will not be considered to be “regularly traded” on an establishedsecurities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class are owned, actually or constructively under specified stockattribution rules, on more than half the days during the taxable year by persons who each own 5% or more of the value of such class of the Company’s outstanding stock (“5 PercentOverride Rule”).F-17Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)Based on the Company’s analysis of its shareholdings during 2021, the Publicly-Traded Test for the entire 2021 year has been satisfied in that less than 50% of the Company’s issuedand outstanding shares were held by persons who each own directly or indirectly 5% or more of the vote and value of such class of stock for more than half the days during the 2021taxable year. Effectively, the Company and each of its subsidiaries qualify for this statutory tax exemption for the 2021 taxable year.Certain charterparties of the Company contain clauses that permit the Company to seek reimbursement from charterers of any U.S. tax paid. The Company has in the past soughtreimbursement and has secured payment from most of its charterers. The Company’s U.S. federal income tax based on its U.S. source shipping income for 2021, 2020 and 2019, taking intoconsideration charterers’ reimbursement, was $NIL, $NIL and $22, respectively.(x) Stock-based CompensationStock-based compensation represents vested and non-vested common stock granted to directors and employees for their services as well as to non-employees. The Company calculatesstock-based compensation expense for the award based on its fair value on the grant date and recognizes it on an accelerated basis over the vesting period. The Company assumes thatall non-vested shares will vest. The Company does not include estimated forfeitures in determining the total stock-based compensation expense because it estimates the forfeitures ofnon-vested shares to be immaterial. The Company re-evaluates the reasonableness of its assumption at each reporting period. (y) Earnings (Losses) per ShareBasic earnings (losses) per common share are computed by dividing net income (loss) available to Seanergy’s shareholders by the weighted average number of common sharesoutstanding during the period. Unvested shares granted under the Company’s incentive plan, or else, are entitled to receive dividends which are not refundable, even if such shares areforfeited, and therefore are considered participating securities for basic earnings per share calculation purposes, using the two class method. Diluted earnings (losses) per share reflectsthe potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted at the beginning of the periods presented, or issuance date, iflater. The treasury stock method is used to compute the dilutive effect of warrants and shares issued under the Equity Incentive Plan. The if-converted method is used to compute thedilutive effect of shares which could be issued upon conversion of the convertible notes. Potential common shares that have an anti-dilutive effect (i.e. those that increase income pershare or decrease loss per share) are excluded from the calculation of diluted earnings per share.(z) Segment ReportingSeanergy reports financial information and evaluates its operations by total charter revenues and not by the length of vessel employment, customer, or type of charter. As a result,management, including the chief operating decision maker, reviews operating results solely by revenue per day and operating results of the fleet and thus, Seanergy has determined thatit operates under one reportable segment. Furthermore, when Seanergy charters a vessel to a charterer, the charterer is free to trade the vessel worldwide and, as a result, disclosure ofgeographic information is impracticable.(aa)Fair Value MeasurementsThe Company follows the provisions of ASC 820, Fair Value Measurement, which defines fair value and provides guidance for using fair value to measure assets and liabilities. Theguidance creates a fair value hierarchy of measurement and describes fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants in the market in which the reporting entity transacts. In accordance with the requirements of accounting guidance relating to Fair Value Measurements, theCompany classifies and discloses its assets and liabilities carried at the fair value in one of the following categories:•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-18Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)(ab)Debt Modifications and ExtinguishmentsThe Company follows the provisions of ASC 470-50, Modifications and Extinguishments, to account for all modifications or extinguishments of debt instruments, except debt that isextinguished through a troubled debt restructuring or a conversion of debt to equity securities of the debtor pursuant to conversion privileges provided in terms of the debt at issuance.This Subtopic also provides guidance on whether an exchange of debt instruments with the same creditor constitutes an extinguishment and whether a modification of a debt instrumentshould be accounted for in the same manner as an extinguishment. In circumstances where an exchange of debt instruments or a modification of a debt instrument does not result inextinguishment accounting, this Subtopic provides guidance on the appropriate accounting treatment. Costs associated with new loans or refinancing of existing loans, including feespaid to lenders or required to be paid to third parties on the lender’s behalf for obtaining new loans or refinancing existing loans, are recorded as deferred charges. Costs paid directly tothird parties are expensed as incurred. Deferred financing costs are presented as a deduction from the corresponding liability. Such fees are deferred and amortized to interest and financecosts during the life of the related debt using the effective interest method. Unamortized fees relating to loans repaid or refinanced, meeting the criteria of debt extinguishment, areexpensed in the period the repayment or refinancing is made. In particular, ASC 470-50-40-2 indicates that for extinguishments of debt, the difference between the reacquisition price andthe net carrying amount of the extinguished debt (which includes any deferred debt issuance costs) should be recognized as a gain or loss when the debt is extinguished and identifiedas a separate item.(ac)Troubled Debt RestructuringsA restructuring of a debt constitutes a troubled debt restructuring if the lender or creditor for economic or legal reasons related to the Company’s financial difficulties grants aconcession to the Company that it would not otherwise consider. Troubled debt that is fully satisfied by foreclosure, repossession, or other transfer of assets or by grant of equitysecurities by the Company is included in the term troubled debt restructuring and is accounted as such.The Company, when issuing or otherwise granting an equity interest to a lender or creditor to fully settle a payable or debt, accounts for the equity interest granted at its fair value. Thedifference between the fair value of the equity interest granted and the carrying amount of the payable or debt settled is recognized as a gain on restructuring of payables or debt. Legalfees and other direct costs incurred in granting an equity interest to a creditor reduce the fair value of the equity interest issued. All other direct costs incurred in connection with atroubled debt restructuring are deducted in measuring gain on restructuring or expensed for the period if no gain is recognized.(ad)Convertible Notes and related Beneficial Conversion FeaturesThe convertible notes are accounted for in accordance with ASC 470-20 “Debt with Conversion and Other Options.” The terms of each convertible note included an embeddedconversion feature which provided for a conversion at the option of the holder into shares of common stock at a predetermined rate. The Company determined that the conversionfeatures were beneficial conversion features (“BCF”) pursuant to ASC 470-20. The Company considered the BCF guidance only after determining that the features did not need to bebifurcated under ASC 815 “Derivatives and Hedging” or separately accounted for under the cash conversion literature of ASC 470-20.Accounting for an embedded BCF in a convertible instrument requires that the BCF be recognized separately at issuance by allocating a portion of the proceeds equal to the intrinsicvalue of the BCF to additional paid-in capital, resulting in a discount on the convertible instrument. This discount is accreted from the date on which the BCF is first recognized throughthe stated maturity date of the convertible instrument using the effective yield method. If the intrinsic value of the BCF is greater than the proceeds allocated to the convertibleinstrument, the amount of the discount assigned to the BCF is limited to the amount of the proceeds allocated to the convertible instrument. The intrinsic value of the BCF is determinedas the number of shares converted from the convertible note times the positive difference between the fair value of the stock on the commitment date and the contractual conversionprice. The BCF is not reassessed following any amendments to the terms of the convertible notes. If the modification or exchange of a convertible note is not accounted for as anextinguishment, the accounting for the change in the fair value of the conversion option follows the guidance of ASC 470-50-40-15.F-19Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)ASC 470-20-40-1 indicates that for instruments with beneficial conversion features all of the unamortized discount remaining at the date of conversion shall be recognized immediately atthat date as interest expense. ASC 470-20-40-3 indicates that if a convertible debt instrument containing an embedded beneficial conversion feature is extinguished before conversion,the amount of the reacquisition price to be allocated to the repurchased beneficial conversion feature shall be measured using the intrinsic value of that conversion feature at theextinguishment date. The residual amount, if any, would be allocated to the convertible security. Thus, the issuer shall record a gain or loss on extinguishment of the convertible debtsecurity. The amount allocated to the BCF is the intrinsic value of the conversion feature on the extinguishment date, which is computed by multiplying any excess of the conversion-date fair value of the common stock or other securities into which the instrument is convertible over the effective conversion price by the number of shares into which the instrument isconvertible.(ae)Distinguishing Liabilities from EquityThe Company follows the provisions of ASC 480 “Distinguishing liabilities from equity” to determine the classification of certain freestanding financial instruments as either liabilities orequity. The Company in its assessment for the accounting of the warrants issued in connection with the May 13, 2019 public offering, the concurrent private placement with JDH, theClass D warrants issued in connection with the April 2, 2020 public offering, the Class E warrants issued in connection with the August 20, 2020 underwritten public offering as well asthe restructuring agreement with JDH in December 2020 has taken into consideration ASC 480 “Distinguishing liabilities from equity” and determined that the warrants should beclassified as equity instead of liability. The Company further analyzed key features of the warrants to determine whether these are more akin to equity or to debt and concluded that thewarrants are equity-like. In its assessment, the Company identified certain embedded features, examined whether these fall under the definition of a derivative according to ASC 815applicable guidance or whether certain of these features affected the classification. Derivative accounting was deemed inappropriate and thus no bifurcation of these features wasperformed. Upon exercise of the warrants, the holder is entitled to receive common shares. ASC 480 requires that a warrant which contains an obligation that may require the issuer toredeem the shares in cash, be classified as a liability and accounted for at fair value. No warrants were classified as liabilities. (af)Going ConcernIn August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern. ASU No. 2014-15 provides guidance on management’s responsibility inevaluating whether there is substantial doubt about a company’s ability to continue as a going concern and on related required footnote disclosures. For each reporting period,management is required to evaluate whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year fromthe date the financial statements are issued.(ag)Derivatives - Forward Freight AgreementsFrom time to time, the Company may take positions in derivative instruments including forward freight agreements, or FFAs. Generally, FFAs and other derivative instruments may beused to hedge a vessel owner’s exposure to the charter market for a specified route and period of time. Upon settlement, if the contracted charter rate is less than the average of the ratesfor the specified route and time period, as reported by an identified index, the seller of the FFA is required to pay the buyer the settlement sum, being an amount equal to the differencebetween the contracted rate and the settlement rate, multiplied by the number of days in the specified period covered by the FFA. Conversely, if the contracted rate is greater than thesettlement rate, the buyer is required to pay the seller the settlement sum. The FFAs are not intended to serve as an economic hedge for the Company’s vessels that are being charteredin the spot market, but are assumed across all dry bulk vessel sectors based on the Company’s views of the underlying markets and short-term outlook. The Company measures the fairvalue of all open positions at each reporting date on this basis (Level 1). There were no open positions as of December 31, 2021. The Company’s FFAs do not qualify for hedgeaccounting and therefore gains or losses are recognized in the consolidated statements of operations under “Gain on forward freight agreements, net” and in the consolidatedstatements of cash flows in changes in operating assets and liabilities.(ah)Share and warrant repurchasesThe Company records the repurchase of its common shares and warrants at cost. The Company’s common shares repurchased for retirement, are immediately cancelled and theCompany’s common stock is accordingly reduced. Any excess of the cost of the shares over their par value is allocated in additional paid-in capital, in accordance with ASC 505-30-30,Treasury Stock. For warrants repurchased, if the instrument is classified as equity, any cash received in the settlement is recorded as a debit for the amounts received with an offset toadditional paid-in capital. The Company’s warrants are all classified as equity.F-20Table of ContentsSeanergy Maritime Holdings Corp.Notes To The 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 AdoptedIn August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity(Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. The ASU reduces the number of accounting models for convertible debt instrumentsby eliminating the cash conversion model. As compared with current U.S. GAAP, more convertible debt instruments will be reported as a single liability instrument and the interest rate ofmore convertible debt instruments will be closer to the coupon interest rate. The ASU also aligns the consistency of diluted Earnings Per Share ("EPS") calculations for convertibleinstruments by requiring that (1) an entity use the if-converted method and (2) share settlement be included in the diluted EPS calculation for both convertible instruments and equitycontracts when those contracts include an option of cash settlement or share settlement. The ASU is effective for fiscal years beginning after December 15, 2021, including interimperiods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. TheFASB has specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The FASB Board decided to allow entities to adopt the guidance through eithera modified retrospective method of transition or a fully retrospective method of transition. In applying the modified retrospective method, entities should apply the guidance totransactions outstanding as of the beginning of the fiscal year in which the amendments are adopted. Transactions that were settled (or expired) during prior reporting periods areunaffected. The cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings at the date of adoption. The Company will adoptASU 2020-06 in 2022 using the modified retrospective approach. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements andrelated disclosures. As of December 31, 2021, the unamortized $10,949 BCF subject to change is recorded in equity and concerns the Second JDH Note (Note 8). In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope. The ASU clarifies that all derivative instruments affected by changes to the interest ratesused for discounting, margining or contract price alignment due to reference rate reform are in the scope of ASC 848. As such, entities may apply certain optional expedients in ASC 848to derivative instruments that do not reference LIBOR or another rate expected to be discontinued as a result of reference rate reform if there is a change to the interest rate used fordiscounting, margining or contract price alignment. In addition, the ASU clarifies other aspects of the guidance in ASC 848 and provides new guidance on how to address the effects ofthe cash compensation adjustment that is provided as part of the above change on certain aspects of hedge accounting. The ASU is effective for all entities as of January 7, 2021, allowsfor retrospective or prospective application with certain conditions, and generally can be applied through December 31, 2022. The Company is currently evaluating its contracts and theimpact this optional guidance may have on its consolidated financial statements and related disclosures, taking into account that none of the Company’s floating rate credit facilities arebased on the U.S. dollar LIBOR rates that were discontinued as of January 1, 2022.In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation(Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the FASB Emerging Issues Task Force). The ASU addresses the diversity in practice in an issuer’s accounting for modifications orexchanges of freestanding equity-classified written call options (e.g., warrants) that remain equity classified after modification or exchange. Under the guidance, an issuer determines theaccounting for the modification or exchange based on whether the transaction was done to issue equity, to issue or modify debt or for other reasons. The ASU is effective for all entitiesfor fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but entities need to apply the guidance as of thebeginning of the fiscal year that includes the interim period in which they choose to early adopt the guidance. The guidance is applied prospectively to all modifications or exchangesthat occur on or after the date of adoption. The Company is currently evaluating the impact this guidance may have on its consolidated financial statements and related disclosures.In July 2021, the FASB issued ASU No. 2021-05 Leases (Topic 842): Lessors-Certain Leases with Variable Lease Payments. The ASU amends the lessor lease classification guidance inASC 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 forclassification 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. For public business entities that have adopted ASC 842 as of July 19, 2021, the amendments in ASU2021-05 are effective for fiscal years beginning after Dec 15, 2021 and for interim periods within those fiscal years. The Company is currently evaluating the impact this guidance mayhave on its consolidated financial statements and related disclosures.F-21Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)3.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 suchamounts shown in the consolidated statements of cash flows: December 31,2021 December 31,2020 Cash and cash equivalents 41,496 21,011 Restricted cash 1,180 50 Restricted cash, non-current 2,950 990 Total 45,626 22,051 Restricted cash as of December 31, 2021 includes $850 of minimum liquidity requirements as per the Piraeus Bank Loan Facility (Note 6), $500 of minimum liquidity requirements as per theFebruary 2019 ATB Loan Facility (Note 6), $500 of minimum liquidity requirements as per the August 2021 Alpha Bank Loan Facility (Note 6), $1,600 of minimum liquidity requirement asper the Championship Cargill Sale and Leaseback (Note 6), $630 in a dry-docking reserve account as per the February 2019 ATB Loan Facility and $50 of restricted deposits pledged ascollateral regarding credit cards balances with one of the Company’s financial institutions. The restricted cash amount that relates to the February 2019 ATB Loan Facility was classifiedas current due to the fact that the respective facility is repayable within the year ending December 31, 2022 (Note 6). Minimum liquidity, not legally restricted, as of December 31, 2021, of$7,100 as per the Company’s credit facilities’ covenants, is included in “Cash and cash equivalents”.Restricted cash as of December 31, 2020 includes $500 of minimum liquidity requirements as per the February 2019 ATB Loan Facility (Note 6), $490 in a dry-docking reserve account asper the February 2019 ATB Loan Facility and $50 of restricted deposits pledged as collateral regarding credit cards balances with one of the Company’s financial institutions. Minimumliquidity, not legally restricted, as of December 31, 2020, of $4,500 as per the Company’s credit facilities covenants, calculated as $500 per owned vessel, is included in “Cash and cashequivalents”.4.Inventories:The amounts in the accompanying consolidated balance sheets are analyzed as follows: December 31,2021 December 31,2020 Lubricants 1,448 591 Bunkers - 4,059 Total 1,448 4,650 As of December 31, 2021, there was no bunkers inventory as all vessels were employed under time charter agreements.F-22Table of ContentsSeanergy Maritime Holdings Corp.Notes To The 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: December 31,2021 December 31,2020 Cost: Beginning balance 307,870 292,280 - Additions 197,306 15,590 - Disposals (17,127) - Ending balance 488,049 307,870 Accumulated depreciation: Beginning balance (51,133) (38,499)- Depreciation for the period (17,076) (12,634)- Disposals 6,222 - Ending balance (61,987) (51,133) Net book value 426,062 256,737 On February 12, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, the Tradership, for a gross purchaseprice of $17,000. The vessel was delivered to the Company on June 9, 2021. The acquisition of the vessel was financed with cash on hand at the time of delivery and subsequentlythrough the ABB Loan Facility (Note 6).On March 10, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, the Flagship, for a gross purchase price of$28,385. The vessel was delivered to the Company on May 6, 2021. The acquisition of the vessel was financed with cash on hand at the time of delivery and subsequently through thesale and leaseback agreement entered into with Cargill International S.A., or Cargill, on May 11, 2021 (Note 6).On March 11, 2021, the Company entered into an agreement with unaffiliated third parties for the purchase of a secondhand Capesize vessel, the Patriotship, for a gross purchase price of$26,600. The vessel was delivered to the Company on June 1, 2021. The acquisition of the vessel was financed with cash on hand at the time of delivery and subsequently through thesale and leaseback agreement entered into with CMB Financial Leasing Co., Ltd., or CMBFL, on June 22, 2021 (Note 6).On March 19, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, the Hellasship, for a gross purchase priceof $28,600. The vessel was delivered to the Company on May 6, 2021. The acquisition of the vessel was financed with cash on hand at the time of delivery and subsequently through thesale and leaseback agreement entered into with CMBFL on June 22, 2021 (Note 6).On May 17, 2021, the Company entered into an agreement with unaffiliated third parties for the purchase of a secondhand Capesize vessel, the Worldship, for a gross purchase price of$33,700. The vessel was delivered to the Company on August 30, 2021. The acquisition of the vessel was financed with cash on hand at the time of delivery and subsequently throughthe Piraeus Bank Loan Facility (Note 6).On June 22, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, the Friendship, for a gross purchase price of$24,600. The vessel was delivered to the Company on July 27, 2021. The acquisition of the vessel was financed with cash on hand at the time of delivery and subsequently through theAugust 2021 Alpha Bank Loan Facility (Note 6).On October 5, 2021, the Company entered into an agreement with an unaffiliated third party for the purchase of a secondhand Capesize vessel, the Dukeship, for a gross purchase priceof $34,300. The vessel was delivered to the Company on November 26, 2021. The acquisition of the vessel was financed with cash on hand.F-23Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)During the year ended December 31, 2021, an amount of $3,973 of expenditures were capitalized that concern improvements on vessels performance and meeting environmental standardsmainly due to installation of ballast water treatment systems and other energy saving devices. During the year ended December 31, 2020, the Company installed an exhaust gas cleaningsystem, or scrubber, on one of its vessels. The cost of this scrubber amounted to $3,705 in the aggregate. The cost of the ballast water treatment systems, scrubbers and energy savingdevices are accounted as major improvement and are capitalized to vessels’ cost and depreciated over the remaining useful life of each vessel. Additionally, an amount of $148 and $485of expenditures were capitalized during the years ended December 31, 2021 and 2020, respectively. Amounts paid in each period in relation to the aforementioned additions are includedin “Vessels acquisitions and improvements” under “Cash flows from investing activities” in the consolidated statements of cash flows.As of December 31, 2021, the Knightship, the Championship, the Flagship, the Hellasship and the Patriotship are financed through other financial liabilities (sale and leasebackagreements) (Note 6). All vessels, except the ones financed through sale and leaseback agreements and the Dukeship, are mortgaged to secured loans of the Company (Note 6).Gain on sale of vessel, netOn June 30, 2021, the Company entered into an agreement with an unaffiliated third party for the sale of the Leadership for a gross sale price of $12,600. As of June 30, 2021, the vesselwas classified in current assets as “Vessels held for sale” in the consolidated balance sheet, according to the provisions of ASC 360, as all the criteria for this classification were met. Thespecific vessel was not impaired as of June 30, 2021, since its carrying amount plus unamortized dry-dock costs as at the balance sheet date was lower than its fair value less cost to sell.The vessel was delivered to her new owners on September 30, 2021. A gain on sale of vessel net of sale expenses amounting to $697 was recognized in the consolidated statement ofoperations, since its carrying amount plus unamortized dry-dock costs as at the balance sheet date was lower than its fair value less cost to sell and was presented as “Gain on vesselsale, net” in the consolidated statement of operations.6.Long-Term Debt and Other Financial Liabilities: The amounts in the accompanying consolidated balance sheets are analyzed as follows: December 31,2021 December 31,2020 Long-term debt and other financial liabilities 218,551 173,289 Less: Deferred financing costs and debt discounts (3,377) (3,527)Total 215,174 169,762 Less - current portion (68,473) (19,417)Long-term portion 146,701 150,345 Senior long-term debtNew Financing Activities during the year ended December 31, 2021Aegean Baltic Bank S.A. (“ABB”) / ABB Loan Facility On April 22, 2021, the Company entered into a facility agreement with Aegean Baltic Bank S.A. for a $15,500 term loan for the financing of the Goodship and the Tradership, or the ABBLoan Facility. The facility was available in two tranches: (i) Tranche A of $7,500 for the Goodship was drawn down on April 26, 2021 and (ii) Tranche B of $8,000 for the Tradership wasdrawn down on June 14, 2021. The loan bears interest of LIBOR plus a margin of 4%. Tranche A is repayable in 18 quarterly installments of $200 each, with the last installment, togetherwith a balloon installment of $3,900, payable in October 2025. Tranche B is repayable in 18 quarterly installments of $200 each, with the last installment, together with a balloon installmentof $4,400, payable in December 2025. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 85% until the maturity. Eachborrower is required to maintain minimum liquidity of $300 in its earnings account. In addition, the borrowers shall ensure that the market value of the vessels plus any additional securityshall not be less than 130% of the aggregate outstanding loan amount. As of December 31, 2021, the amount outstanding under the facility was $14,700.F-24Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)May 2021 Alpha Bank Loan Facility & August 2021 Alpha Bank Loan Facility On May 20, 2021, the Company entered into a facility agreement with Alpha Bank S.A. for a $37,450 term loan for the (i) refinancing of two existing loan facilities with Alpha Bank with anaggregate outstanding of $25,459 secured by the Leadership and the Squireship and (ii) partial financing of the previously unencumbered Lordship. On August 9, 2021, the Companyentered into another facility agreement with Alpha Bank S.A. for a $44,120 term loan for the (i) refinancing of the loan facility with Alpha Bank secured by the Leadership, the Squireshipand the Lordship and (ii) financing of the previously unencumbered Friendship, effectively replacing the Leadership with the Friendship in the security structure and increasing theloan amount. The loan is divided into two tranches as follows: Tranche A, secured by and corresponding to the Squireship and the Lordship and Tranche B, secured by andcorresponding to the Friendship. The applicable interest rate for is LIBOR plus 3.5% and LIBOR plus 3.25% for Tranche A and Tranche B respectively. Tranche A matures on May 21,2025, and Tranche B on August 11, 2025. Tranche A will be repaid through four quarterly installments of $1,250, followed by four quarterly installments of $1,040, followed by eightquarterly installments of $875 and a balloon of $14,960 payable together with the last installment. Tranche B will be repaid through four quarterly installments of $700 followed by twelvequarterly installments of $375 and a balloon of $5,700 payable together with the last installment. Each of the borrowers owning the Squireship and the Lordship are required to maintainaverage quarterly minimum free liquidity of $500, whereas the borrower owning the Friendship is required to maintain $500 at all times. In addition, the borrowers shall ensure that themarket value of the vessels plus any additional security shall not be less than 125% of the aggregate outstanding loan amount. Both facility agreements were assessed based onprovisions of ASC 470-50 and were treated as debt modifications. As of December 31, 2021, the amount outstanding under the facility was $40,920.Piraeus Bank Loan FacilityOn November 12, 2021, the Company entered into a $16,850 sustainability-linked loan facility with Piraeus Bank S.A. to finance part of the acquisition cost of the Worldship. The interestrate is 3.05% plus LIBOR, which can be decreased to 2.95% based on certain emission reduction thresholds (as described in detail therein) (Note 8). The principal will be repaid over afive-year term, through four installments of $1,000, followed by two installments of $750, followed by 14 installments of $375, followed by a balloon of $6,100 payable together with thelast installment. The Company is required to maintain a corporate leverage ratio (as defined therein), that will not be higher than 85% until the maturity. The borrower is required tomaintain minimum liquidity of $850 in its earnings account. In addition, the borrower shall ensure that the market value of the vessel plus any additional security shall not be less than130% of the aggregate outstanding loan amount. As of December 31, 2021, the amount outstanding under the facility was $16,850.Sinopac Loan Facility On December 20, 2021, the Company entered into a $15,000 loan facility with Sinopac Capital International (HK) Limited to refinance the previous loan facility of Entrust Global securedby the Geniuship. The interest rate is 3.5% plus LIBOR. The principal will be repaid over a five-year term, through four quarterly installments of $530 followed by 16 quarterlyinstallments of $385 and a final balloon payment of $6,720 payable together with the last installment. The borrower shall ensure that the market value of the vessel plus any additionalsecurity shall not be less than 130% of the aggregate outstanding loan amount. As of December 31, 2021, the amount outstanding under the facility was $15,000.security shall not be less than 130% of the aggregate outstanding loan amount. As of December 31, 2021, the amount outstanding under the facility was $15,000.Pre - Existing Loan FacilitiesUniCredit Bank Loan Facility On September 11, 2015, the Company entered into a facility agreement with UniCredit Bank AG, for a secured loan facility of $52,705 to partially finance the acquisition of thePremiership, Gladiatorship and Guardianship. On November 22, 2018 following the sale of the Gladiatorship and Guardianship, the Company entered into an amendment andrestatement of the facility in order to (i) release the respective vessel-owning subsidiaries of the Gladiatorship and the Guardianship as borrowers and (ii) include as replacementborrower the vessel-owning subsidiary of the Fellowship. On July 3, 2019, the Company entered into a supplemental agreement pursuant to which: (i) $2,208 of installments originallyfalling due within 2019 were deferred to the balloon installment on December 28, 2020, (ii) the applicable margin was increased by 1% from 3.20% to 4.20% with effect from March 26, 2019until December 27, 2019 inclusive and reinstated to the original levels subsequently and (iii) the requirement for each borrower to hold minimum liquidity of $500 cash was cancelled. OnFebruary 8, 2021, the Company entered into a supplemental agreement to the facility with UniCredit Bank AG. Pursuant to the supplemental agreement: (i) the application of the LeverageRatio, the ratio of EBITDA to interest payments and the Security Cover Ratio (each term as defined therein) were waived with retrospective effect from June 2020 onwards (January 2020for the Security Cover Ratio only) and for the remaining duration of the facility, (ii) quarterly installments were reduced from $1,550 to $1,200, effective as of the December 2020installment, (iii) the applicable margin was increased from 3.2% to 3.5% with effect as of December 29, 2020 until the maturity of the facility, and (iv) the maturity of the loan was extendedto December 29, 2022 from December 29, 2020 initially. As of December 31, 2021, the amount outstanding under this facility was $27,185.F-25Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)February 2019 ATB Loan Facility On February 13, 2019, the Company entered into a new loan facility with ATB, or the February 2019 ATB Loan Facility, in order to (i) refinance the existing indebtedness over thePartnership under the May 2017 ATB Loan Facility and (ii) for the financing of installation of open loop scrubber systems on the Squireship and Premiership. The February 2019 ATBLoan Facility is divided in Tranche A, relating to the refinancing of the Partnership, and Tranches B and C for the financing of the scrubber systems on the Squireship and thePremiership, respectively. Pursuant to the terms of the facility, Tranche A is repayable in eight equal quarterly installments being $200 each and a balloon payment of $13,190 payable onNovember 27, 2022 and each of Tranche B and C is repayable in seven quarterly installments of $189.8 until August 26, 2022. On February 12, 2021, the Company entered into asupplemental agreement to the facility with ATB. Pursuant to the supplemental agreement: (i) the Leverage Ratio (as defined therein) was amended to 85% from 75% previously, withretrospective effect from June 2020 onwards and for the remaining duration of the facility, (ii) the ratio of EBITDA to *interest payments (as defined therein) was waived withretrospective effect from June 2020 onwards and for the remaining duration of the facility and (iii) the minimum required security cover (as defined therein) was amended to (a) 140% untilJune 30, 2021 (inclusive), (b) 145% until December 31, 2021 (inclusive) and (c) 150% thereafter and until the maturity of the loan on November 26, 2022. On December 9, 2021, theCompany entered into a supplemental letter to the facility with ATB. Pursuant to the supplemental letter: the lender (i) provided its consent for the prepayment of the Third JDH Notesecured by the Partnership and being subject to an intercreditor agreement entered into between the Company, ATB and the holder of the convertible note, (ii) waived a breach of theborrower concerning the repayment of certain subordinated liabilities (as defined therein) in the amount of $1,080 and (iii) waived the borrower’s obligation to make an additionalrepayment (as defined therein) in the amount of $1,080. An amendment fee of $50 was paid in respect of the supplemental letter. As of December 31, 2021, the amount outstanding underthis facility was $15,129.July 2020 Entrust Facility On July 15, 2020, the Company entered into a secured loan facility of $22,500 with Lucid Agency Services Limited and Lucid Trustee Services Limited, as facility agent and security agent,respectively, and certain nominees of EnTrust Global as lenders, or the “July 2020 Entrust Facility”, the proceeds of which were used for the settlement of the HCOB Facility. TheCompany drew down the $22,500 on July 16, 2020. In addition, the July 2020 Entrust Facility was cross collateralized with an existing loan facility secured by the Lordship. The cross-collateral security structure was released following the full prepayment of the loan facility secured by the Lordship (discussed below under “Entrust Loan Facility”). On December 20,2021, the Company repaid the balance of $14,618 related to Tranche B for the Geniuship. All securities created for the Geniuship were irrevocably and unconditionally released. On thedate of repayment, $438 of unamortized debt discounts were written off according to the debt extinguishment guidance of ASC 470-50 “Debt Modifications and Extinguishments”. As ofDecember 31, 2021, $5,500 was outstanding under the July 2020 Entrust Facility.As of December 31, 2021, each of the facilities mentioned above was secured by a first priority mortgage over the respective vessel and a corporate guarantee by the Company. Inaddition, certain of these loan facilities are secured by general assignments covering the respective vessels’ earnings, charter parties, insurances and requisition compensation; accountpledge agreements covering the vessels’ earnings accounts; specific charterparty assignments, usually for charterparties exceeding 12 months in duration; technical and commercialmanagers’ undertakings; pledge agreements covering the shares of the applicable vessel-owning subsidiaries and hedging assignment agreements.F-26Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)Loan Facilities repaid during the years ended December 31, 2021, 2020 and 2019Leader Alpha Bank Loan Facility On March 6, 2015, the Company entered into a loan agreement with Alpha Bank S.A., for a secured loan facility in an amount of $8,750. The loan was used to partially finance theacquisition of the Leadership. The loan, among others, was secured by a first preferred mortgage over the Leadership and a corporate guarantee by the Company. The interest rate ofthe facility was equal to LIBOR plus a margin of 3.75%. On March 17, 2020, the Company entered into a fifth supplemental agreement with Alpha Bank S.A. regarding the subject facility.Pursuant to the terms of the supplemental agreement: (i) the maturity date was extended from March 18, 2020 to December 31, 2022, (ii) the repayment of the facility would be made byeight consecutive quarterly repayments of $250 each followed by a balloon installment of $2,303 to be made on the maturity date, (iii) the financial covenants at the corporate guarantorlevel would not be applicable any longer save for the minimum liquidity covenant and (iv) a 30-days moving average balance of $500 was required to be maintained in the EarningsAccount of the Leadership. An amendment fee of $50 was paid in respect of the fifth supplemental agreement. The fifth supplemental agreement was assessed based on provisions ofASC 470-50 and was treated as debt modification. The subject facility was refinanced in full on May 20, 2021. Hamburg Commercial Bank AG (formerly HSH Nordbank AG) Loan Facility/Settlement Agreement On September 1, 2015, the Company entered into a loan agreement with Hamburg Commercial Bank AG (formerly HSH Nordbank AG), or HCOB, for a secured loan facility of $44,430, orthe HCOB Facility. The loan was fully drawn down in 2015 and was used to pay for the acquisition of the Geniuship and the Gloriuship and had an original final maturity date of June 30,2020. The HCOB Facility, was secured, among others, by first preferred mortgages over the Geniuship and Gloriuship and a corporate guarantee by the Company. The interest rate of thefacility was equal to LIBOR plus a margin of 3.75%. On June 26, 2020, the Company entered into a settlement agreement with HCOB. Pursuant to the terms of the settlement agreement,the Company, in order to fully settle its obligations under the loan agreement was required to pay a total amount of $23,500 out of the then outstanding amount of the loan agreement of$29,056 until July 31, 2020. On July 17, 2020, the Company settled the full amount of the HCOB Facility through a $23,500 payment with the funds obtained from the proceeds of a newloan facility and cash on hand, following which all securities created in favor of HCOB were irrevocably and unconditionally released. As a result, the Company recognized a gain of$5,144. The settlement agreement was assessed based on provisions of ASC 470-60 and was treated as troubled debt restructuring.Squire Alpha Bank Loan FacilityOn November 4, 2015, the Company entered into a loan agreement with Alpha Bank S.A., for a secured loan facility of $33,750. The loan was used to partially finance the acquisition ofthe Squireship. The subject facility was secured, among others, by a first preferred mortgage over the Squireship, a corporate guarantee by Leader Shipping Co., being the vessel-owning subsidiary of the Leadership, a second preferred mortgage over the Leadership and a corporate guarantee by the Company. The interest rate of the facility was equal to LIBORplus a margin of 3.50%. On March 31, 2020, the Company entered into a fourth supplemental agreement with Alpha Bank S.A. regarding the subject facility. Pursuant to the terms of thesupplemental agreement: (i) the maturity date was extended from November 10, 2021 to December 31, 2022, (ii) the repayment of the facility would be made by two prepayments of $500each on August 26, 2020 and October 1, 2020 as well as eight consecutive quarterly repayments of $919 each followed by a balloon installment of $14,975 to be made on the maturitydate, (iii) the ratio of the market value of the Squireship plus any additional security to the total facility outstanding would not be less than 100% for 2020, not less than 110% starting for2021 and not less than 115% until maturity, (iv) the financial covenants at the corporate guarantor level would not be applicable any longer save for the minimum liquidity covenant and(v) a 30-days moving average balance of $500 was required to be maintained in the earnings account of the Squireship. An amendment fee of $75 was paid in respect of the fourthsupplemental agreement. The fourth supplemental agreement was assessed based on provisions of ASC 470-50 and was treated as debt modification. The subject facility was refinancedin full on May 20, 2021.May 2017 ATB Loan FacilityOn May 24, 2017, the Company entered into a loan agreement with ATB for a secured loan facility of up to $18,000 to partially finance the acquisition of the Partnership. On September25, 2017, in order to partially fund the refinancing of a previous loan facility with Natixis dated December 2, 2015, the facility was amended and restated (referred to hereunder as the“May 2017 ATB Loan Facility”), increasing the loan amount by an additional tranche of $16,500, or Tranche B. The amendment and restatement of the facility did not alter the interestrate, the maturity date, the amortization and the repayment terms of the existing tranche under the loan facility, or the financial covenants applicable to the Company as guarantor. OnNovember 7, 2018, ATB entered into a deed of release with respect to the Championship, releasing the underlying borrower in full after the settlement of the outstanding balance of$15,700 pertaining to the specific vessel tranche. The first-priority mortgage over the Championship and all other securities created in favor of ATB for the specific vessel’s tranche wereirrevocably and unconditionally released pursuant to the deed of release. On February 15, 2019, ATB entered into a further deed of release with respect to the Partnership resulting in acomplete release of the facility agreement after full settlement of the outstanding balance of $16,390.F-27Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)Entrust Loan Facility On June 11, 2018, the Company entered into a $24,500 loan agreement with certain Blue Ocean maritime lending funds managed by EnTrust Permal as lenders and Wilmington Trust,National Association as facility and security agent for the purpose of refinancing the outstanding indebtedness of the Lordship under a previous loan facility with Northern ShippingFund, of NSF. The facility was expiring on June 13, 2023, or on June 13, 2025, subject to certain conditions, and had a balloon installment of $15,300 or $9,500 due at maturity, assuming amaturity date in June 2023 or in June 2025, respectively. The weighted average all-in interest rate was equal to 11.4% or 11.2% assuming a maturity date in June 2023 or in June 2025,respectively. The subject facility was secured, among others, by a first priority mortgage over the Lordship and a corporate guarantee by the Company. On July 15, 2020, the Companyentered into an amendment and restatement of the $24,500 loan agreement mentioned above. The amended and restated facility is hereunder referred to us the “Entrust Loan Facility”.Pursuant to the terms of the Entrust Loan Facility (i) Wilmington Trust, National Association resigned as facility agent and security agent and Lucid Agency Services Limited and LucidTrustee Services Limited were appointed as successor facility agent and security agent, respectively and (ii) the facility was cross-collateralized with the July 2020 Entrust Facility . Theoriginal terms and securities of the subject facility agreement were not otherwise altered by the amendment and restatement. The amendment and restatement of the agreement wasassessed based on provisions of ASC 470-50 and was treated as debt modification. On March 5, 2021, the Company repaid the full balance of the Entrust Loan Facility and all securitiescreated to cross-collateralize the Entrust Loan Facility with the July 2020 Entrust Facility were irrevocably and unconditionally released. As of December 31, 2021, an amount of $438 wasrecognized as loss on debt extinguishment according to the debt extinguishment guidance of ASC 470-50 “Debt Modifications and Extinguishments” and was included in “Loss inextinguishment of debt” in the consolidated statement of operations.Other Financial Liabilities - Sale and Leaseback TransactionsNew Sale and Leaseback Activities during the year ended December 31, 2021Flagship Cargill Sale and Leaseback On May 11, 2021, the Company entered into a $20,500 sale and leaseback agreement with Cargill for the purpose of financing part of the acquisition cost of the Flagship. The Companysold and chartered back the vessel from Cargill on a bareboat basis for a five-year period, having a purchase obligation at the end of the fifth year. Under ASC 842-40, the transaction wasaccounted for as a financial liability. The implied average applicable interest rate is equivalent to 2% per annum. The sale and leaseback agreement does not include any financialcovenants or security value maintenance provisions. The Company has continuous options to buy back the vessel during the whole five-year sale and leaseback period atpredetermined prices as set forth in the agreement and at the end of such period it has a purchase obligation at $10,000. Additionally, at the time of repurchase, if the market value of thevessel exceeds certain threshold prices, as set forth in the agreement, the Company will pay to Cargill 15% of the difference between the market price and such threshold prices. TheCompany has concluded that such contingent payment shall not be accrued in the consolidated financial statements, since information available does not indicate that it is probable thata liability has been incurred (i.e., buy back option) as of the latest balance sheet date and cannot be estimated. The charterhire principal amortizes in sixty monthly installments averagingapproximately $175 each along with a balloon payment of $10,000, at maturity on May 10, 2026. The charterhire principal as of December 31, 2021, was $19,334.CMB Financial Leasing Co., Ltd. (“CMBFL”) Sale and Leaseback On June 22, 2021, the Company entered into sale and leaseback agreements for the Hellasship and the Patriotship in the total amount of a $30,900 with CMBFL for the purpose offinancing the outstanding acquisition price of both vessels. The Company sold and chartered back the vessels from two affiliates of CMBFL on a bareboat basis for a five-year period.The financings bear interest of LIBOR plus a margin of 3.5%. The Company is required to maintain a corporate leverage ratio (as defined therein) that will not be higher than 85% until thematurity. Additionally, each bareboat Charterer is required to maintain minimum liquidity of $550 in its earnings account. The bareboat charterers are also required to maintain a valuemaintenance ratio of at least 120% of the charterhire principals. The Company has the option to buy back the vessels between the end of the second year until the end of the fifth year atpredetermined prices as defined in the agreement. Under ASC 842-40, the transaction was accounted for as a financial liability as it was determined that the Company’s exercise of theoption to buy back the vessels was highly probable considering the Company’s significant equity participation in the project, and as a result, the expiry cost of each vessel will beconsiderably lower than the respective net book value at such time. The charterhire principal amortizes in twenty quarterly installments of $780 each along with a balloon payment of$15,300, at maturity on June 28, 2026. The charterhire principal as of December 31, 2021, was $29,340.F-28Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)Existing Sale and Leaseback AgreementsHanchen Sale and Leaseback On June 28, 2018, the Company entered into a $26,500 sale and leaseback agreement for the Knightship with Hanchen Limited (“Hanchen”), an affiliate of AVIC International Leasing Co.,Ltd.. The Company’s wholly-owned subsidiary, Knight Ocean Navigation Co (“Knight” or the “Charterer”) sold and chartered back the vessel on a bareboat basis for an eight yearperiod, having a purchase obligation at the end of the eighth year. The charterhire principal bears interest at LIBOR plus a margin of 4%. Under ASC 842-40, the transaction wasaccounted for as a financial liability. Of the $26,500, $18,550 were cash proceeds, $6,625 was withheld by Hanchen as an upfront charterhire upon the delivery of the vessel, and anamount of $1,325, or Charterer’s Deposit, included in “Deposits assets, non-current” in the consolidated balance sheets as of December 31, 2021 and 2020, was given as a deposit byKnight to Hanchen upon the delivery of the vessel in order to secure the due observance and performance by Knight of its obligations and undertakings as per the sale and leasebackagreement. The Charterer’s Deposit can be set off against the balloon payment at maturity. The Charterer is required to maintain a value maintenance ratio (as defined in the additionalclauses of the bareboat charter) of at least 120% of the charterhire principal minus the Charterer’s Deposit. The Company has continuous options to buy back the Knightship at any timefollowing the second anniversary of the bareboat charter and a purchase obligation of $5,299 at the end of the leaseback period. The charterhire principal amortizes in thirty-twoconsecutive equal quarterly installments of approximately $456 along with a balloon payment of $5,299 at maturity on June 29, 2026. The charterhire principal, as of December 31, 2021,was $13,498.Championship Cargill Sale and Leaseback On November 7, 2018, the Company entered into a $23,500 sale and leaseback agreement for the Championship with Cargill International SA (“Cargill”) for the purpose of refinancing theoutstanding indebtedness of the Championship under the May 2017 ATB Loan Facility. The Company sold and chartered back the vessel from Cargill on a bareboat basis for a five yearperiod, having a purchase obligation at the end of the fifth year. The cost of the financing is equivalent to a fixed interest rate of 4.71% for five years. Under ASC 842-40, the transactionwas accounted for as a financial liability. The Company is required to maintain an amount of $1,600 which may be set-off against the vessel repurchase price (Note 3). Moreover, underthe subject sale and leaseback agreement, an additional tranche was provided to the Company for an amount of up to $2,750 for the purpose of financing the cost associated with theacquisition and installation on board the Championship of an open loop scrubber system which was fully drawn. The sale and leaseback agreement does not include any financialcovenants or security value maintenance provisions. Moreover, as part of the transaction, the Company issued 7,500 of its common shares to Cargill which were subject to customarystatutory registration requirements. The fair market value of the shares on the date issued to Cargill was $1,541 and amortize over the lease term using the effective interest method. Theunamortized balance is accounted for as a deferred finance cost and is classified in other financial liabilities on the consolidated balance sheets. The Company has continuous options tobuy back the vessel during the whole five-year sale and leaseback period at predetermined prices as set forth in the agreement and at the end of which period it has a purchase obligationat $14,051. Additionally, at the time of repurchase, if the market value of the vessel exceeds certain threshold prices, as set forth in the agreement, the Company will pay to Cargill 15% ofthe difference between the market price and such threshold prices. The Company has concluded that such contingent payment shall not be accrued in the consolidated financialstatements, since information available does not indicate that it is probable that a liability has been incurred (i.e., buy back option) as of the latest balance sheet date and cannot beestimated. The charterhire principal amortizes in sixty monthly installments averaging approximately $167 each along with a balloon payment of $14,051, including the additional scrubbertranche, at maturity on November 7, 2023. The charterhire principal and the scrubber tranche, as of December 31, 2021, was $17,594 and $1,652, respectively.F-29Table of ContentsSeanergy Maritime Holdings Corp.Notes To The 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 December 31, 2021, certain of the Company’s sale and leaseback agreements discussed above are secured by a guarantee from the Company; general assignments covering therespective vessels’ (i) earnings, (ii) insurances and requisition compensation; account pledge agreements; technical and commercial managers’ undertakings and pledge agreementscovering the shares of the applicable bareboat charterer subsidiary. All of the Company’s secured facilities (i.e., long-term debt and other financial liabilities) bear either floating interest at LIBOR plus a margin or fixed interest.Certain of the Company’s long-term debt and other financial liabilities contain financial covenants and undertakings requiring the Company to maintain various financial ratios, including:•a minimum borrower’s liquidity;•a minimum guarantor’s liquidity;•a borrower’s security coverage requirement; and•a guarantor’s leverage ratio.As of December 31, 2021, the Company was in compliance with all covenants relating to its loan facilities as at that date.As of December 31, 2021, eleven of the Company’s owned vessels, having a net carrying value of $253,276, were subject to first and second priority mortgages as collaterals to theirlong-term debt facilities. In addition, the Company’s five bareboat chartered vessels, having a net carrying value of $138,592 as of December 31, 2021, have been financed through saleand leaseback agreements. As of December 31, 2021, one of the Company’s owned vessels, having a net carrying value of $34,194, was not subject to any mortgage as collateral to along-term facility.Subordinated long-term debtThe Company refers to the First JDH Loan, the Second JDH Loan and the Fourth JDH Loan (all mentioned below) as the “JDH Loans”.Securities Purchase Agreements and Omnibus Supplemental Agreements:On May 9, 2019, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with JDH in exchange for, among other things, the full and final settlement ofcertain unpaid interest and the neutralization of the interest rate under the JDH Loans and the JDH Notes (Note 7) for the period of April 1, 2019 until December 31, 2019 inclusive and awaiver of a mandatory prepayment requirement under the Fourth JDH Loan. In particular, in exchange for: (a) 621,958 Units, JDH settled $2,115 of accrued unpaid interest through March31, 2019 and (b) 1,201,571 Units, JDH (i) amended the interest rate at 0% per annum under each of the JDH Notes and JDH Loans for the period between April 1, 2019 and December 31,2019 inclusive, resulting in an elimination of interest payments in an aggregate amount of $3,846 (which was accounted for as a deferred finance cost), and (ii) waived the mandatoryprepayment obligation under the Fourth JDH Loan to prepay the full or any part of the loan by utilizing at least 25% of the net proceeds of any public offering of securities, resulting in adeferred finance cost of $239. The $2,115 accrued unpaid interest settled was written off and an equal amount was recorded in equity at a price of $3.40 per unit which was determined asthe fair value of the units at the date of the transaction, by reference to the public offering of units that took place concurrently with the private placement. In this respect, no gain or losswas recognized in the accompanying consolidated financial statements in relation with this transaction. The Company considered the guidance under ASC 470-50 “Debt Modificationsand Extinguishments” regarding the elimination of interest payments and the deferred finance cost for the waiver of the prepayment of $3,846 and $239, respectively. Such amounts weredeemed equivalent to the fair value of the shares issued to JDH under the Purchase Agreement. The transaction was accounted for as debt modification, and as such, both amounts wererecorded in equity and were deferred and amortized over the duration of the related facilities (and presented on the balance sheet against the respective balances as “net of deferredfinance costs”).F-30Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)In December 2020, the Company and JDH entered into another securities purchase agreement, or SPA, an omnibus supplemental agreement with respect to the JDH Loans (as mentionedbelow), or Omnibus Loans Agreement, and an omnibus supplemental agreement with respect to the JDH Notes (as mentioned below), or Omnibus Notes Agreement, which set forth theterms of the amendments of the outstanding loan facilities and convertible notes between the Company and JDH. Pursuant to these agreements, all maturities under the JDH Loans andthe JDH Notes (as mentioned below) were extended to December 2024 and the interest rate was set at 5.5% until maturity. The conversion price under the JDH Notes was set to $1.20 percommon share. In connection with this transaction, the Company prepaid $6,500 of the principal amount of the Second JDH Loan on December 31, 2020. In exchange for the settlement ofall accrued and unpaid interest under the JDH Loans and JDH Notes through December 31, 2020, in an aggregate amount of $4,350, and an amendment fee of $1,241, the Company issued,on January 8, 2021, 7,986,913 units at a price of $0.70 per unit, with each unit consisting of one common share of the Company (or, at JDH’s option, one pre-funded warrant in lieu of suchcommon share) and one warrant to purchase one common share at an exercise price of $0.70. Furthermore, the Company granted to JDH an option, to purchase up to 4,285,714 additionalUnits at a price of $0.70 per Unit in exchange for the settlement of principal under the Second JDH Loan in an amount equal to the aggregate purchase price of the units. In addition,pursuant to the terms of the Omnibus Loans Agreement, in 2022 and 2023, two mandatory repayments of $8,000 will be made, which will be applied to the JDH Loans on a pro rata basisbased upon the principal amounts outstanding at that time. Any amounts outstanding after the two mandatory repayments will be repaid at the maturity date. Furthermore, the OmnibusLoans Agreement provides for certain prepayment provisions through a cash sweep mechanism, capturing (i) corporate liquidity in excess of $25,000 or (ii) Time Charter Equivalentrevenues in excess of $18,000 and up to $21,000. Lastly the JDH Loans are mandatorily prepaid on a pro rata basis from 25% of the net proceeds from any future equity offerings andwarrant exercises. Pursuant to the terms of the Omnibus Loans Agreement, the total repayments on the JDH Loans (including the mandatory repayments and any prepayments) shall notexceed $12,000 in any twelve-month period ending on December 31.The Company considered the troubled debt restructuring guidance regarding the December 31, 2020 JDH amendments and concluded that it was not met. The Company furtherconsidered the modification and extinguishment accounting guidance under ASC 470-50 and concluded that modification accounting was appropriate. The Company concluded: (i) amount of $1,015 was expensed as incurred in 2020, since it concerned amounts paid to third parties in relation to the JDH amendments, whereas the remaining amount of $166 wasincluded in additional paid-in capital, since these costs related to the issuance of units;(ii) the amendment fee of $1,241 has been accounted for as a debt deferred cost and will be amortized to each facility’s maturity;(iii) the fair value of the option granted to JDH to purchase up to 4,285,714 additional units was recorded as debt discount and will be amortized to Second JDH Loan’s maturity (Note 7);(iv) for the accounting treatment of the fair value of the units issued to JDH and the change in the fair value of the conversion option, refer to Note 7.All amounts regarding the JDH amendments discussed above were recorded as of December 31, 2020, the date of the closing of the transaction.First JDH Loan originally entered into on October 4, 2016On October 4, 2016, the Company entered into a loan facility with JDH to partly finance the acquisition of the Lordship and Knightship. As amended, the aggregate amount borrowedwas $12,800. As further amended, the facility was repayable in one bullet payment together with accrued interest on the maturity date. On February 13, 2019, the Company and JDHamended and restated the First JDH Loan, in order to, among other things, extend the final repayment date to June 30, 2020. On May 29, 2019, the Company and JDH further amended theFirst JDH Loan in order to reflect the changes agreed with JDH in the Purchase Agreement: (i) interest of $159 unpaid and accrued up to March 31, 2019 inclusive was deemed fully andfinally settled, (ii) the interest rate was amended to 0% per annum for the period between April 1, 2019 and December 31, 2019 inclusive, and (iii) the interest rate from January 1, 2020 untilmaturity was set at three-month LIBOR plus a margin of 8.5%. The Company obtained extension of the maturity of this facility which was originally due on June 30, 2020 until November13, 2020. Following the extension, the interest rate margin of the facility was increased by 1% per annum.Pursuant to the terms of the SPA, all unpaid interest accrued of $630 under the First JDH Loan through December 31, 2020 was deemed fully and finally settled. This facility was securedby a second preferred mortgage and second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and a guarantee from thevessel-owning subsidiary of the Partnership, all cross collateralized with the Third JDH Note and the Second JDH Loan, and a guarantee from the Company’s wholly-owned subsidiary,Emperor Holding Ltd. (“Emperor”), which is the holding company of the vessel-owning subsidiary that owns the Lordship and of the bareboat charterer of the Knightship.F-31Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)In February 2021, the Company fully repaid the outstanding balance of $5,900 of the First JDH Loan using proceeds from (i) Class E warrants exercises during 2021 (Note 10) and (ii) itsFebruary 2021 registered direct offering (Note 10), pursuant to the mandatory prepayment terms of the SPA and Omnibus Loans Agreement. On the date of repayment, $111 ofunamortized debt discounts were written off according to the debt extinguishment guidance of ASC 470-50 “Debt Modifications and Extinguishments” and was included in “Loss inextinguishment of debt” in the consolidated statement of operations.Second JDH Loan originally entered into on May 24, 2017 On May 24, 2017, the Company entered into a $16,200 loan facility with JDH to partially finance the acquisition of the Partnership. On February 13, 2019, the Company and JDH amendedthe Second JDH Loan, in order to, among other things, extend the final repayment date to December 30, 2020. On May 29, 2019, the Company and JDH further amended the Second JDHLoan to reflect the changes agreed with JDH in the Purchase Agreement: (i) interest of $354 unpaid and accrued up to March 31, 2019 was deemed fully and finally settled, (ii) the interestrate was amended to 0% per annum for the period between April 1, 2019 and December 31, 2019 inclusive and (iii) the interest rate from January 1, 2020 until maturity was set at three-month LIBOR plus a margin of 6.0%.Pursuant to the terms of the SPA, all unpaid interest accrued of $841 under the Second JDH Loan through December 31, 2020 was deemed fully and finally settled. The facility wassecured by a second preferred mortgage and second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and a guarantee fromthe vessel-owning subsidiary of the Partnership; all cross collateralized with the Third JDH Note and the First JDH Loan, and a guarantee from Emperor. The unamortized deferredfinancing costs as of December 31, 2020, include an amount of $543, being the fair value of the option granted to JDH to purchase additional securities (Note 8).In February 2021, the Company prepaid $100 of the outstanding balance of the Second JDH Loan, using proceeds from (i) Class E warrants exercises during 2021 (Note 10) and (ii) itsFebruary 2021 registered direct offering (Note 10). On April 26, 2021, JDH exercised its option to purchase 4,285,714 additional Units (with each unit consisting of one common share ofthe Company, or, at JDH’s option, one pre-funded warrant in lieu of such common share, and one warrant to purchase one common share at an exercise price of $0.70) at a price of $0.70per Unit in exchange for the settlement of principal under the Second JDH Loan in an amount of $3,000 (i.e., an amount equal to the aggregate purchase price of the units). The issuanceof units to JDH and associated reduction in debt balance took place on May 6, 2021. On the same date, the Company fully amortized the unamortized balance of $424 of the fair value ofthe option to purchase the 4,285,714 Units, in accordance with its original conversioin terms and recognized such amount in “Interest and Finance costs”. As of December 31, 2021, anamount of $1,850, gross of deferred financing costs of $44, was outstanding under the Second JDH Loan (Note 14).Fourth JDH Loan originally entered into on March 26, 2019On March 26, 2019, the Company entered into a $7,000 loan facility with JDH, the proceeds of which were utilized (i) to refinance a loan facility originally entered with JDH in April 2018and (ii) for general corporate purposes. The Company drew down the entire $7,000 on March 27, 2019. The facility had a maturity date of September 27, 2020 and was repayable throughone installment of $1,000 due on January 5, 2020 and a balloon installment of $6,000 payable at maturity. If the balance of Cash and Cash Equivalents (including Restricted Cash) as ofDecember 31, 2019 was lower than $7,500, the Company had the option to request the deferral of the first repayment installment to the balloon installment; the Company repaid the $1,000to JDH in January 2020. On May 29, 2019, the Company and JDH amended the Fourth JDH Loan to reflect the changes agreed with JDH in the Purchase Agreement: (i) interest of $6unpaid and accrued up to March 31, 2019 inclusive was deemed fully and finally settled, (ii) the interest rate was amended to 0% per annum for the period between April 1, 2019 andDecember 31, 2019 inclusive, (iii) the interest rate from January 1, 2020 until maturity was set at 6.0% per annum and (iv) the mandatory obligation to prepay the full or any part of theFourth JDH Loan by utilizing an amount equal to not less than 25% of the net proceeds of any public offering of securities was waived. The Company obtained an extension of thematurity of this facility which was originally due on September 27, 2020 until November 13, 2020.Pursuant to the terms of the SPA, all unpaid interest of $454 accrued under the Fourth JDH Loan through December 31, 2020 was deemed fully and finally settled. The Fourth JDH LoanFacility was secured by a guarantee from Emperor.F-32Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)In February 2021, the Company fully repaid the outstanding balance of $6,000 of the Fourth JDH Loan using proceeds from (i) Class E warrants exercises during 2021 (Note 10) and (ii) itsFebruary 2021 registered direct offering (Note 10), pursuant to the mandatory prepayment terms of the SPA and Omnibus Loans Agreement. On the date of repayment, $113 ofunamortized debt discounts were written off according to the debt extinguishment guidance of ASC 470-50 “Debt Modifications and Extinguishments” and was included in “Loss inextinguishment of debt” in the consolidated statement of operations.The annual principal payments required to be made after December 31, 2021 for all long-term debt and other financial liabilities are as follows:Twelve month periods ending December 31, Amount 2022 69,821 2023 35,731 2024 18,108 2025 45,041 Thereafter 49,850 Total 218,551 F-33Table of ContentsSeanergy Maritime Holdings Corp.Notes To The 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.Convertible Notes:The Company refers to the First JDH Note, the Second JDH Note and the Third JDH Note (mentioned below) as the “JDH Notes”.The amounts in the accompanying consolidated balance sheets are analyzed as follows: December 31,2021 December 31,2020 Convertible notes 21,165 38,715 Less: beneficial conversion feature (10,949) (18,360)Convertible notes, net of beneficial conversion feature 10,216 20,355 Less: Deferred financing costs (75) (915)Less: Change in fair value of conversion option (2,568) (4,924)Total 7,573 14,516 Less - current portion (769) - Long-term portion 6,804 14,516 On December 31, 2020, the Company entered into the Omnibus Notes Agreement pursuant to which the maturity of the JDH Notes were extended to December 31, 2024, the interest ratewas set at a fixed rate of 5.5% and the conversion price was adjusted to $1.20. In addition, pursuant to the terms of the Omnibus Notes Agreement, in 2022 and 2023, two mandatoryrepayments will be made towards the JDH Notes in an amount equal to the difference between $8,000 and any repayments made towards the First, Second and Fourth JDH Loans underthe Omnibus Loans Agreement. Amounts repaid will be applied to the JDH Notes on a pro rata basis based upon the principal amounts outstanding. Any amounts outstanding after thetwo mandatory repayments will be repaid at the maturity date. Furthermore, the Omnibus Notes Agreement provides for certain prepayment provisions through a cash sweep mechanism,capturing (i) corporate liquidity in excess of $25,000 or (ii) Time Charter Equivalent revenues in excess of $18,000 and up to $21,000. The total amount to be repaid on the JDH Notes(including the mandatory repayments and any prepayments) and on the JDH Loans shall not exceed $12,000 in any twelve-month period ending on December 31. Additionally, pursuantto the terms of the SPA, all unpaid interest accrued under the JDH Notes through December 31, 2020 of $2,425 was deemed fully and finally settled.F-34Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)March 12, 2015 - $4,000 Convertible Note (First JDH Note)On March 12, 2015, the Company issued a convertible note of $4,000 to JDH for general corporate purposes. The First JDH Note was secured by a guarantee from Emperor. On March 26,2019, the Company and JDH amended the First JDH Note, in order to, among other things, (i) extend the maturity to December 31, 2020 and (ii) provide that the aggregate outstandingprincipal amount along with accrued interest shall be repaid in one bullet payment on the maturity date. On May 29, 2019, the Company and JDH further amended the First JDH Note, inorder to reflect the changes agreed with JDH in the Purchase Agreement: (i) interest of $155 unpaid and accrued up to March 31, 2019 inclusive was deemed fully and finally settled, (ii)the interest rate was amended to 0% per annum for the period between April 1, 2019 and December 31, 2019 inclusive and (iii) the interest rate from January 1, 2020 until maturity was setat three-month LIBOR plus a margin of 5% with quarterly interest payments. Pursuant to the terms of the SPA, all unpaid interest accrued of $238 under the First JDH Note throughDecember 31, 2020 was deemed fully and finally settled.On October 5, 2021, JDH elected to convert $120 of the principal amount of the First JDH Note into 100,000 fully paid and non-assessable shares. On the date of conversion, $19 ofunamortized debt discounts were expensed as interest according to the debt conversion guidance of ASC 470-20-40-1.On October 8, 2021, JDH elected to convert an additional $3,480 of the principal amount of the First JDH Note into 2,900,000 fully paid and non-assessable shares. On the date ofconversion, $543 of unamortized debt discounts were expensed as interest according to the debt conversion guidance of ASC 470-20-40-1.On December 10, 2021, the Company redeemed at par the $200 outstanding balance of the First JDH Note with cash on hand by utilizing the note’s voluntary prepayment provisions (asdescribed therein). On the date of prepayment, $30 of unamortized debt discounts were written off according to the debt extinguishment guidance of ASC 470-20-40-3 and was includedin “Loss in extinguishment of debt” in the consolidated statement of operations. As of December 31, 2021, no amounts were outstanding under the First JDH Note.September 27, 2017 - $13,750 Convertible Note (Third JDH Note)On September 27, 2017, the Company issued a convertible note of $13,750 to JDH for, inter alia, general corporate purposes. The Third JDH Note was secured by a second preferredmortgage and second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and a guarantee from the Company’s vessel-owningsubsidiary that owns the Partnership; all cross collateralized with the First and the Second JDH Loans (Note 6) and by a guarantee from Emperor. On February 13, 2019, the Companyand JDH amended the Third JDH Note, in order to, among other things, (i) extend the note’s maturity to December 31, 2022, (ii) provide that the aggregate outstanding principal amountalong with unpaid and accrued interest shall be repaid in one bullet payment on the maturity date and (iii) record the second priority securities and the guarantee from Emperormentioned above. The second priority mortgage, second priority general assignment covering earnings, insurances and requisition compensation over the Partnership and theguarantee issued from the vessel’s owning subsidiary were executed on February 15, 2019. Additionally, an option was given to the Company to prepay at any time the whole or any partof the note in a number of fully paid and non-assessable shares in the Company equal to an amount of the note being prepaid divided by a price per share to be agreed with JDH. OnMay 29, 2019, the Company and JDH further amended the Third JDH Note, in order to reflect the changes agreed with JDH in the Purchase Agreement: (i) interest of $540 unpaid andaccrued up to March 31, 2019 inclusive was deemed fully and finally settled, (ii) the interest rate was amended to 0% per annum for the period between April 1, 2019 and December 31,2019 inclusive and (iii) the interest rate from January 1, 2020 until the note’s maturity was set at three-month LIBOR plus a margin of 5% with quarterly interest payments. Pursuant to theterms of the SPA, all unpaid interest accrued of $861 under the Third JDH Note through December 31, 2020 was deemed fully and finally settled.On December 10, 2021, the Company redeemed at par the $13,750 outstanding balance of the Third JDH Note with cash on hand by utilizing the note’s voluntary prepayment provisions(as described therein). On the date of prepayment, $6,171 of unamortized debt discounts, which included BCF, were written off according to the debt extinguishment guidance of ASC470-20-40-3 and was included in “Loss in extinguishment of debt” in the consolidated statement of operations. As of December 31, 2021, no amounts were outstanding under the ThirdJDH Note.F-35Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)The net debt at inception (i.e. initial applicable limit minus debt discount related to BCF), accumulated deficit and debt movement of the First and Third JDH Notes is presented below: Net debt atinception Accumulateddeficit Debt Balance, December 31, 2019 3,361 5,801 9,162 Amortization (Note 11) - 2,869 2,869 Balance, December 31, 2020 3,361 8,670 12,031 Repayments/ Conversions (17,550) - (17,550)Amortization (Note 11) - 995 995 Loss on extinguishment - 4,524 4,524 Balance, December 31, 2021 (14,189) 14,189 - The equity movement of the First and Third JDH Notes is presented below: Additionalpaid-in capital Balance, December 31, 2019 14,189 Balance, December 31, 2020 14,189 Balance, December 31, 2021 14,189 September 7, 2015 - $21,165 Revolving Convertible Note (Second JDH Note)On September 7, 2015, the Company issued a revolving convertible note of $6,765 (the “Applicable Limit”) to JDH for general corporate purposes. Following twelve amendments to theSecond JDH Note between December 2015 and May 2019, the Applicable Limit was raised to $24,665. Moreover, pursuant to the eleventh amendment entered into on March 26, 2019, theCompany was provided with the option to drawdown up to $3,500 by April 10, 2020, or the Final Revolving Advance Date. Since such request was not made by the Final RevolvingAdvance Date, the Applicable Limit was reduced to $21,165. The aggregate outstanding principal was repayable in December 2022. The Second JDH Note is secured by a guarantee fromEmperor. On May 29, 2019, the Company and JDH amended the Second JDH Note, in order to reflect the changes agreed with JDH in the Purchase Agreement: (i) interest of $901 unpaidand accrued up to March 31, 2019 inclusive was deemed fully and finally settled, (ii) the interest rate was amended to 0% per annum for the period between April 1, 2019 and December31, 2019 inclusive and (iii) the interest rate from January 1, 2020 until the note’s maturity was set at three-month LIBOR plus a margin of 5% with quarterly interest payments. Pursuant tothe terms of the SPA, all unpaid interest accrued of $1,326 under the Second JDH Note through December 31, 2020 was deemed fully and finally settled. As of December 31, 2021, $21,165was outstanding under the Second JDH Note. The Company voluntarily prepaid $5,000 of the Second JDH Note on January 26, 2022 and another $5,000 on March 10, 2022 (Note 14).The net debt at inception (i.e. initial applicable limit minus debt discount related to BCF), accumulated deficit and debt movement of the Second JDH Note is presented below: Net debt atinception Accumulateddeficit Debt Balance, December 31, 2019 3,500 5,675 5,675 Deductions (3,500) - - Amortization (Note 11) - 2,649 2,649 Balance, December 31, 2020 - 8,324 8,324 Amortization (Note 11) - 1,892 1,892 Balance, December 31, 2021 - 10,216 10,216 F-36Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)The equity movement of the Second JDH Note is presented below: Additionalpaid-in capital Balance, December 31, 2019 21,165 Balance, December 31, 2020 21,165 Balance, December 31, 2021 21,165 The Company may, by giving five business days prior written notice to JDH at any time, prepay the whole or any part of the JDH Notes in cash or, subject to JDH’s prior writtenagreement on the price per share, in a number of fully paid and nonassessable shares of the Company equal to the amount of the note(s) being prepaid divided by the agreed price pershare. At JDH’s option, the Company’s obligation to repay the principal amount(s) under the JDH Notes or any part thereof may be paid in common shares at a conversion price of $1.20per share. JDH has also received customary registration rights with respect to any shares to be received upon conversion of the JDH Notes. Refer above to discussion of the First JDHNote with regards to conversions within the year.The annual principal payments required to be made after December 31, 2021, are as follows:Twelve month periods ending December 31, Amount 2022 6,150 2023 8,000 2024 7,015 2025 - Thereafter - Total 21,165 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 financialstatements 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 todetermine 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 periodicevaluations 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 accountsreceivable by performing ongoing credit evaluations of its customers’ financial condition and generally does not require collateral for its accounts receivable and does not have anyagreements 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 December 31, 2021 and 2020, represent management’s best estimate of the amounts that wouldbe received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. F-37Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)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 aredeveloped 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, restricted cash, accounts receivable trade, other current assets and trade accounts and other payables: the carrying amounts approximate fair valuebecause 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 and other financial liabilities: The carrying value of long-term debt and other financial liabilities with variable interest rates approximates the fair market value as thelong-term debt and other financial liabilities bear interest at floating interest rate. The fair value of fixed interest long-term debt is estimated using prevailing market rates as of theperiod end. The Company believes the terms of its fixed interest long-term debt are similar to those that could be procured as of December 31, 2021, and the carrying value of $7,350is 2% lower than the fair market value of $7,523. The fair value of the fixed interest long-term debt has been obtained through Level 2 inputs (interest rate curves) of the fair valuehierarchy.c.The Piraeus Bank Loan Facility has a sustainability-linked clause, whereby the interest rate, currently set at 3.05% plus LIBOR, can be decreased to 2.95% based on certain emissionreduction thresholds. The potential reduction of the interest rate goes into effect in July 2023. The Company has concluded that the potential effect on its financial statements isimmaterial.As at December 31, 2020, the Company also considered the fair valuation measurement guidance regarding (i) the value of the units issued to JDH at $0.70 each, (ii) the value of theoption granted to JDH to purchase up to 4,285,714 additional units at a price of $0.70 per unit in exchange for the settlement of principal under the Second JDH Loan and (iii) the changein the fair value of the conversion option of the JDH Notes to $1.20 (from $216). The fair values are determined through Level 2 of the fair value hierarchy as defined in FASB guidancefor Fair Value Measurements and are derived principally from or corroborated by observable market data, interest rates, yield curves and other items that allow value to be determined.The Company used the Black-Sholes pricing model for the valuations. The Company concluded: i)the fair value of the units issued to JDH to be $0.77 each, whereby the difference to the issue price of $0.70 amounted to $596 and was immediately recognized in Interest andfinance costs and with a corresponding increase to additional paid-in capital; ii)the fair value of the option granted to JDH to purchase up to 4,285,714 additional units to be $0.13, whereby the carrying value of the Second JDH Loan was reduced by $543 asa debt discount with a corresponding increase to additional paid-in capital; and iii)the change in the fair value of the conversion option of the JDH Notes amounted to $4,924. The carrying value of the JDH Notes was reduced by this amount with acorresponding increase to additional paid-in capital. This change in the fair value will be amortized through the effective interest rate method to the notes’ maturities.9.Commitments and Contingencies:ContingenciesVarious claims, lawsuits, and complaints, including those involving government regulations and product liability, arise in the ordinary course of the shipping business. In addition, lossesmay arise from disputes with charterers, agents, insurance and other claims with suppliers relating to the operations of the Company’s vessels. As of December 31, 2021, management isnot 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 financialstatements. 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 accompanyingconsolidated 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. F-38Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)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. TheCompany’s time charters range from 9 to 60 months and extension periods vary from 11 to 27 months. In addition, the time charters contain termination clauses which protect either theCompany 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 theoption to convert some of these variable lease payments to fixed based on the prevailing Capesize forward freight agreement rates.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 December 31, 2021,using the initial charter rates for index-linked time charters (these amounts do not include any assumed off-hire): Twelve month periods ending December 31, Amount 2022 106,394 2023 20,800 2024 15,097 2025 15,056 2026 5,321 Total 162,668 In April 2018, the Company moved into its new office spaces under a five-year lease term, with a Company’s option to extend the lease term for another five-year term. On September 16,2020, the lease term was amended, whereby the lease term was set for ten years (i.e., April 2028), with a Company’s option to extend the lease term for two consecutive five-year termsthereafter. The monthly rent was Euro 13,000 (or $15 based on the Euro/U.S. dollar exchange rate of €1.0000: $1.1326 as of December 31, 2021) until the September 2020 renewal, and wasamended to a constant Euro 12,747 (or $14 based on the Euro/U.S. dollar exchange rate of €1.0000: $1.1326 as of December 31, 2021) thereafter. The monthly rent was adjusted annually byone percent for inflation until the September 2020 renewal. Under ASC 842, the lease is classified as an operating lease and a lease liability and right-of-use asset based on the presentvalue of future minimum lease payments have been recognized on the balance sheet. The monthly rent expense is recorded in general and administration expenses. The rent expense forthe years December 31, 2021, 2020 and 2019 was $179, $180 and $175, respectively.The following table sets forth the Company’s undiscounted office rental obligations as at December 31, 2021: Twelve month periods ending December 31, Amount 2022 136 2023 136 2024 136 2025 136 Thereafter 306 Total 850 Less: imputed interest (200)Present value of lease liabilities 650 Lease liabilities, current 121 Lease liabilities, non-current 529 Present value of lease liabilities 650 F-39Table of ContentsSeanergy Maritime Holdings Corp.Notes To The 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:(a)Preferred Stock The Company is authorized to issue up to 25,000,000 registered shares of preferred stock with a par value of $0.0001. The board of directors of the Company is expressly granted theauthority to issue preferred shares and to establish such series of preferred shares with such designations, preferences and relative participating, rights, qualifications, limitations orrestrictions at it determines. As at December 31, 2021 and 2020, the Company had 20,000 and NIL, respectively, series B preferred shares issued and outstanding with par value $0.0001per share. The series B preferred shares were issued on December 10, 2021, to the Company’s Chief Executive Officer, considered a related party, for a total cash consideration of $250.The issuance of the Series B preferred shares was approved by a special independent committee of the board of directors of the Company which obtained a fairness opinion from anindependent financial advisor regarding the value of the preferred shares. Each series B preferred shares entitle the holder to 25,000 votes per share on all matters submitted to a vote ofthe shareholders of the Company, provided however, that no holder of series B preferred shares may exercise voting rights pursuant to series B preferred shares that would result in theaggregate voting power of any beneficial owner of such shares and its affiliates to exceed 49.99% of the total number of votes eligible to be cast on any matter submitted to a vote ofshareholders of the Company. The holder of series B preferred shares shall have no special voting or consent rights and shall vote together as one class with the holders of the commonshares on all matters put before the shareholders. The series B preferred shares are not convertible into common shares or any other security, are not redeemable, are not transferable andhave no dividend rights. Upon any liquidation, dissolution or winding up of the Company, the series B preferred shares will rank pari-passu with the common shareholders and shall beentitled to receive a payment equal to the par value of $0.0001 per share. The Series B preferred holder has no other rights to distributions upon any liquidation, dissolution or windingup of the Company.(b)Common Stock i)NASDAQ Notification – Effect of Reverse Stock SplitOn September 30, 2020, the Company received written notification from The Nasdaq Stock Market (“Nasdaq”), indicating that because the closing bid price of the Company’s commonstock for 30 consecutive business days, from August 18, 2020 to September 29, 2020, was below the minimum $1.00 per share bid price requirement for continued listing on the NasdaqCapital Market, the Company was not in compliance with Nasdaq Listing Rule 5550(a)(2). On February 11, 2021, the Company received written notification from Nasdaq that the Companyhas regained compliance with Nasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock.On June 30, 2020, the Company’s common stock began trading on a split-adjusted basis, following a June 25, 2020 approval from the Company’s board of directors to reverse split theCompany’s common stock at a ratio of one-for-sixteen, in order to cure the deficiency of the minimum bid price requirement originally communicated to the Company on July 15, 2019. Allshare and per share amounts disclosed in the consolidated financial statements and notes give effect to this reverse stock split retroactively, for all periods presented. No fractionalshares were issued in connection with the reverse split. Shareholders who would otherwise hold a fractional share of the Company’s common stock received a cash payment in lieu ofsuch fractional share. On March 20, 2019, the Company’s common stock began trading on a split-adjusted basis, following a February 26, 2019 approval from the Company’s Board of Directors to reverse splitthe Company’s common stock at a ratio of one-for-fifteen. All share and per share amounts disclosed in the consolidated financial statements and notes give effect to this reverse stocksplit retroactively, for all periods presented. No fractional shares were issued in connection with the reverse split. Shareholders who would otherwise hold a fractional share of theCompany’s common stock received a cash payment in lieu of such fractional share.F-40Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated) ii)Equity OfferingsOn February 19, 2021, the Company sold 44,150,000 common shares under a registered direct offering at a price of $1.70 per common share, in exchange for gross proceeds of $75,055, ornet proceeds of approximately $69,971.During April through August 2020, the Company raised $73,750 in proceeds net of underwriters fees and commissions or $71,835 in proceeds net of underwriters fees, commissions andother expenses, from two follow-on public offering, four registered direct offerings, and from the partial exercises of Class D warrants issued in the follow-on public offering as well as thefull exercise of all warrants issued in four private placements that took place concurrently with the registered direct offerings (see below).On April 2, 2020, the Company completed a follow-on public offering of 2,536,468 units (including the full exercise of the over-allotment option of 330,843 units granted to theunderwriters), each unit consisting of one common share or pre-funded warrants in lieu of common shares and 40,583,500 Class D warrants to purchase an aggregate of 2,536,468common shares of the Company, at a combined price of $2.72 per share and Class D warrant. On April 22, 2020, the exercise price of the Class D warrants was lowered from $2.72 per shareinitially to $1.92 per share and on June 8, 2020 was further reduced to $1.60 per share. The gross proceeds from the follow-on public offering were $6,899. Each Class D warrant has anexercise price of $1.60, is exercisable upon issuance and expires in April 2025. On April 14, 2020, the Company sold 3,125,000 of its common shares in a registered direct offering at a price of $2.16 per share and private warrants to purchase an aggregate of 3,125,000common shares of the Company in a concurrent private placement. The gross proceeds from the registered direct offering were $6,750.On April 22, 2020, the Company sold 3,171,875 of its common shares in a registered direct offering at a price of $1.92 per share and private warrants to purchase an aggregate of 3,171,875common shares of the Company in a concurrent private placement. The gross proceeds from the registered direct offering were $6,090.On May 4, 2020, the Company sold 2,684,375 of its common shares in a registered direct offering at a price of $1.92 per share and private warrants to purchase an aggregate of 2,684,375common shares of the Company in a concurrent private placement. The gross proceeds from the registered direct offering were $5,154.On May 7, 2020, the Company sold 2,709,375 of its common shares in a registered direct offering at a price of $1.92 per share and private warrants to purchase an aggregate of 2,709,375common shares of the Company in a concurrent private placement. The gross proceeds from the registered direct offering were $5,202.On August 20, 2020, the Company completed an underwritten public offering of (i) 35,714,286 units, each unit consisting of 35,714,286 common shares or pre-funded warrants in lieu ofcommon shares and 35,714,286 Class E Warrants to purchase an aggregate of 35,714,286 common shares of the Company, at a combined price of $0.70 per share and Class E warrant and(ii) 5,182,142 Class E Warrants purchased by the underwriters under their over-allotment option at a price of $0.01. The gross proceeds from public offering were $25,000.On September 1, 2020, 2,582,142 common shares were issued following the partial exercise of the overallotment option granted to the underwriters related to the underwritten publicoffering which closed on August 20, 2020, in exchange for gross proceeds of $1,782.In October 2020, 2,000,000 common shares were issued following the partial exercise of the remaining outstanding pre-funded warrants related to the underwritten public offering whichclosed on August 20, 2020, in exchange for gross proceeds of $20.On May 13, 2019, the Company completed a public offering of 262,500 Units, each unit consisting of (i) one common share, par value $0.0001 per share (a “Common Share”) or a pre-funded warrant to purchase one Common Share at an exercise price equal to $0.01 per common share (a “Pre-Funded Warrant”), (ii) one Class B Warrant to purchase one common share(a “Class B Warrant”) and (iii) one Class C Warrant to purchase one common share (a “Class C Warrant”), for $54.40 per unit. Under (i) above, the Company issued 172,812 commonshares and 89,687 pre-funded warrants. All Pre-Funded Warrants have been exercised as of June 30, 2019 resulting in issuance of 89,687 Common Shares. The offering was consummatedin connection with the Company’s form F-1 originally filed with the SEC on October 20, 2017, which was further amended. The gross proceeds of the offering, before underwritingdiscounts and commissions and estimated offering expenses, were approximately $14,923. The net proceeds from the sale of common shares and warrants, after deducting underwriters’fees and expenses, were approximately $12,647, which proceeds were used for general corporate purposes, including, among other things, prepaying debt.On May 13, 2019, the Company sold 113,970 Units of the Company in a separate private placement to JDH, each Unit consisting of (i) one Common Share, (ii) one Class B Warrant, and(iii) one Class C Warrant, for $54.40 per unit, to JDH in exchange for, amongst others, the waiver or forgiveness of certain payment obligations of the Company, pursuant to the PurchaseAgreement (Notes 6 & 7).F-41Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)iii)Common stock issuances and buybacksOn April 26, 2021, JDH exercised its option to purchase 4,285,714 additional Units (with each unit consisting of one common share of the Company, or, at JDH’s option, one pre-fundedwarrant in lieu of such common share, and one warrant to purchase one common share at an exercise price of $0.70) at a price of $0.70 per Unit in exchange for the settlement of principalunder the Second JDH Loan in an amount of $3,000 (i.e., an amount equal to the aggregate purchase price of the units) (Note 6). 4,285,714 common shares were issued to JDH in thistransaction. On July 2, 2021, the Company’s board of directors declared a dividend of one preferred share purchase right (a “Right”) for each of the Company’s outstanding common shares andadopted a shareholder rights plan (the “Shareholders Rights Agreement”). The dividend was payable on July 19, 2021 to the shareholders of record on July 2, 2021. Each Right will allowits holder to purchase from the Company one one-thousandth of a Series A Participating Preferred Share (a “Preferred Share”) for $5.00 (the “Exercise Price”), once the Rights becomeexercisable. This portion of a Preferred Share will give the shareholder approximately the same dividend, voting and liquidation rights as would one common share. Prior to exercise, theRight does not give its holder any dividend, voting, or liquidation rights. The Rights will not be exercisable until ten days after the public announcement that a person or group hasbecome an “Acquiring Person” by obtaining beneficial ownership of 10% (15% in the case of a passive institutional investor) or more of the Company’s outstanding common shares.The Acquiring Person will not be entitled to exercise these Rights. If an Acquiring Person obtains beneficial ownership of 10% (15% in the case of a passive institutional investor) ormore of the Company’s common shares, then each Right will entitle the holder to purchase for the Exercise Price, in lieu of one one-thousandth of a share of Series A Preferred Stock, anumber of common shares having a then-current market value of twice the Exercise Price. In addition, if after an Acquiring Person obtains 10% (15% in the case of a passive institutionalinvestor) or more of the Company’s common shares, (i) the Company merges into another entity; (ii) an acquiring entity merges into the Company; or (iii) the Company sells or transfers50% or more of its assets, cash flow or earning power, then each Right will entitle the holder to purchase, for the Exercise Price, a number of common shares of the person engaging in thetransaction having a then-current market value of twice the Exercise Price. The board of directors may redeem the Rights for $0.0001 per Right under certain circumstances. The Rightsexpire on the earliest of (i) July 1, 2024; or (ii) the redemption or exchange of the Rights. As at December 31, 2021, no Rights were exercised.On October 5, 2021, JDH elected to convert $120 of the principal amount of the First JDH Note into 100,000 fully paid and non-assessable shares (Note 7).On October 8, 2021, JDH elected to convert an additional $3,480 of the principal amount of the First JDH Note into 2,900,000 fully paid and non-assessable shares (Note 7).During the fourth quarter of 2021, the Company repurchased 1,702,103 of its outstanding common shares at an average price of approximately $0.993 pursuant to its share repurchaseprogram for a total of $1,708, inclusive of commissions and fees. All the repurchased shares were cancelled as of December 31, 2021.(c) WarrantsIn connection with the public offering which closed on April 2, 2020, the Company granted to the representative of the underwriters 1,764,500 Class D warrants to purchase 110,281common shares, at an exercise price of $3.40. The warrants expire in March 2023.On May 20, 2020, the Company entered into a warrant exercise agreement with each holder of private warrants issued in the private placements in April and May 2020, pursuant to whichsuch holders agreed to exercise their warrants to purchase 2,507,812 of the Company’s common shares, and the Company agreed to reduce the exercise price of the warrants to $1.44 percommon share solely with respect to the exercise of the warrants pursuant to such agreements. The initial exercise price of such warrants was $1.92. The Company’s gross proceeds were$3,611.On May 26, 2020, the Company entered into a warrant exercise agreement with each holder of private warrants issued in the private placements in April and May 2020, pursuant to whichsuch holders agreed to exercise their warrants to purchase 4,953,813 of the Company’s common shares, and the Company agreed to reduce the exercise price of the warrants to $1.28 percommon share solely with respect to the exercise of the warrants pursuant to such agreements. The initial exercise price of such warrants ranged from $2.16 and $1.92. The Company’sgross proceeds were $6,341.On June 5, 2020, holders of private warrants issued in the private placements in April and May 2020 exercised their warrants to purchase 556,250 common shares at an exercise price of$1.92. The Company’s gross proceeds were $1,068.On June 8, 2020, the Company entered into a warrant exercise agreement with each holder of private warrants issued in the private placements in April and May 2020, pursuant to whichsuch holders agreed to exercise their warrants to purchase 3,672,750 of the Company’s common shares, and the Company agreed to reduce the exercise price of the warrants to $1.60 percommon share solely with respect to the exercise of the warrants pursuant to such agreements. The initial exercise price of such warrants was $1.92. The Company’s gross proceeds were$5,877. Following this exercise, no warrants under the private placements remained unexercised.F-42Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)On June 8, 2020, the company entered into a warrant exercise agreement with each holder of Class D warrants pursuant to which public warrants were exercised to purchase 614,046shares at a price of $1.60 per share. The Company’s gross proceeds were $982.As of December 31, 2020, out of the 40,583,500 Class D Warrants from the April 2020 follow-on public offering, the Company has issued 2,263,421 common shares in exchange for grossproceeds of $4,100, including the $982 received under the June 8, 2020 Class D warrant exercise agreement. 4,368,750 Class D Warrants remained unexercised as of December 31, 2021 and2020, for the issuance of 273,046 shares at an exercise price of $1.60.On August 20, 2020, the Company completed an underwritten public offering of (i) 35,714,286 units, each unit consisting of 35,714,286 common shares or pre-funded warrants in lieu ofcommon shares and 35,714,286 Class E Warrants to purchase an aggregate of 35,714,286 common shares of the Company, at a combined price of $0.70 per share and Class E warrant and(ii) 5,182,142 Class E Warrants purchased by the underwriters under their over-allotment option at a price of $0.01. Each Class E warrant has an exercise price of $0.70, is exercisable uponissuance and expires in August 2025. All pre-funded warrants have been exercised as of December 31, 2020. No Class E warrants were exercised within 2020. During the year endedDecember 31, 2021, 32,263,715 shares were issued from Class E warrants’ exercises, for proceeds of $22,585. 8,632,713 Class E warrants remain outstanding as of December 31, 2021.On December 31, 2020, the Company agreed to issue to JDH (i) 7,986,913 warrants to purchase one common share at an exercise price of $0.70 and (ii) 955,730 pre-funded warrants with anexercise price of $0.0001 in lieu of such common shares as part of the December 2020 JDH amendments. The 7,986,913 warrants were issued on January 8, 2021 and expire in January 2026.On March 24, 2021, the Company issued 955,730 common shares to JDH, following JDH’s exercise of its pre-funded warrants. On April 26, 2021, JDH exercised its option to purchase4,285,714 additional Units (with each unit consisting of one common share of the Company, or, at JDH’s option, one pre-funded warrant in lieu of such common share, and one warrant topurchase one common share at an exercise price of $0.70) at a price of $0.70 per Unit in exchange for the settlement of principal under the Second JDH Loan in an amount of $3,000 (i.e.,an amount equal to the aggregate purchase price of the units) (Note 6). The issuance of shares to JDH and associated reduction in debt balance took place on May 6, 2021 (Note 6). The4,285,714 warrants were issued on May 6, 2021 and had an expiration date of May 2026. On May 12, 2021, JDH exercised 7,986,913 warrants to purchase 7,986,913 common shares at anexercise price of $0.70. The Company received the funds of $5,591 on May 14, 2021 and the shares were issued to JDH on May 19, 2021. On December 10, 2021, the Company boughtback the warrant to purchase 4,285,714 common shares from JDH for $1,023.On May 13, 2019, the Company sold a total of 376,470 Units in connection with the public offering and the JDH Private Placement, with each Unit consisting of (i) one Common Share orPre-Funded Warrant, (ii) one Class B Warrant and (iii) one Class C Warrant. Each Class B Warrant had an exercise price of $59.84 per share, which was adjusted to $16.00 on December 13,2019 pursuant to the terms of the warrant agreement, is exercisable upon issuance and expires three years from issuance. The underwriters partially exercised an over-allotment optiongranted in connection with the offering and purchased an additional 630,000 Class B Warrants and 630,000 Class C Warrants, in each case to purchase 39,375 shares. In connection withthe Offering, the Company issued the representative of the underwriters a warrant to purchase 13,125 Common Shares (Representative Warrant). Each Class C Warrant had an exerciseprice of $59.84 per share, was exercisable upon issuance, and expired six months from issuance. Beginning on June 14, 2019, each Class C Warrant was exercisable on a cashless basisunder certain circumstances for a number of common shares calculated according to a formula based on the market price at the time of exercise. Each Representative Warrant had anexercise price of $68.00 per share, which was adjusted to $16.00 on December 13, 2019 pursuant to the terms of the warrant agreement, and is exercisable at any time between November 9,2019 and May 9, 2022.In connection to the public offering and private placement that took place on May 13, 2019, 415,845 Class C Warrants and 415,845 Class B Warrants were issued. As of December 31,2019, 6,594,029 Class C Warrants were exercised in a cashless exercise that resulted in the issuance of 1,129,226 common shares according to the terms of the Warrants’ Agreement. OnNovember 13, 2019, all remaining unexercised Class C Warrants expired. No Class B Warrants and Representative Warrant have been exercised.The Company may at any time during the term of its warrants reduce the then current exercise price of each warrant to any amount and for any period of time deemed appropriate by theboard of directors of the Company, subject to terms disclosed in each warrants’ agreements. The warrants also contain a cashless exercise provision, whereby if at the time of exercise,there is no effective registration statement, then the warrants can be exercised by means of a cashless exercise as disclosed in each warrants’ agreements.On December 13, 2021, the Company’s 47,916 Class A Warrants expired.All warrants are classified in equity, according to the Company’s significant accounting policy.F-43Table of ContentsSeanergy Maritime Holdings Corp.Notes To The 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 December 31, 2021, the number of common shares that can potentially be issued under each outstanding warrant are:Warrant Shares to be issued uponexercise of remainingwarrants Class B 415,845 Class D 273,046 Class E 8,632,713 Representative Warrants 123,406 Total 9,445,010 The Class B Warrants are listed on the Nasdaq Capital Market under the symbol “SHIPZ”.11.Interest and Finance Costs: Interest and finance costs are analyzed as follows: Year ended December 31, 2021 2020 2019 Interest on long-term debt and other financial liabilities 8,766 10,279 13,630 Convertible notes interest expense 2,067 - - Amortization of deferred finance costs and debt discounts 3,333 757 738 Amortization of deferred finance costs and debt discounts (shares issued to third party - non-cash) 326 350 402 Amortization of convertible note beneficial conversion feature (non-cash) 2,887 - - Fair value measurement of units issued to former related party - 596 - Other 400 360 446 Total 17,779 12,342 15,216 Interest and finance costs, related party, are analyzed as follows: Year ended December 31, 2021 2020 2019 Interest expense long term debt related party - 1,924 420 Amortization of deferred finance costs and debt discounts - - 240 Convertible notes interest expense - 2,425 751 Amortization of convertible note beneficial conversion feature (non-cash) - 5,518 3,713 Amortization of deferred finance costs and debt discounts (shares issued to JDH - non-cash) - 201 3,505 Restructuring expenses - 1,015 - Total - 11,083 8,629 F-44Table of ContentsSeanergy Maritime Holdings Corp.Notes To The 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.Earnings / (Losses) per Share:The calculation of net income / (loss) per common share is summarized below: For the years ended December 31, 2021 2020 2019 Net income / (loss) - basic 41,348 (18,356) (11,698)Interest effect of convertible notes 6,473 - - Net income / (loss) - diluted 47,821 (18,356) (11,698) Weighted average common shares outstanding – basic 153,321,907 33,436,278 958,297 Effect of dilutive securities: Dilutive effect of warrants 5,410,086 - - Dilutive effect of non-vested shares 1,695,220 - - Dilutive effect of convertible notes shares 30,910,308 - - 38,015,614 - - Weighted average common shares outstanding – diluted 191,337,521 33,436,278 958,297 Net income / (loss) per common share – basic $0.27 $(0.55) $(12.21)Net income / (loss) per common share – diluted $0.25 $(0.55) $(12.21)As of December 31, 2020 and 2019, securities that could potentially dilute basic loss per share (LPS) in the future that were not included in the computation of diluted LPS, because to doso would have anti-dilutive effect, are any incremental shares of non-vested equity incentive plan shares (Note 13) and of unexercised warrants (Note 10), both calculated with thetreasury stock method, as well as shares assumed to be converted with respect to the convertible notes (Note 7) calculated with the if-converted method.13.Equity Incentive Plan: On February 24, 2020, the Compensation Committee granted an aggregate of 156,250 restricted shares of common stock pursuant to the Plan. Of the total 156,250 shares issued, 45,000shares were granted to the non-executive members of the board of directors, 42,812 were granted to the executive officers, 60,626 shares were granted to certain of the Company’s non-executive employees and 7,812 shares were granted to the sole director of the Company’s commercial manager, a non-employee. The fair value of each share on the grant date was $5.12.All the shares vested over a period of two years. 52,084 shares vested on February 24, 2020, 52,083 shares vested on October 1, 2020 and 52,083 shares vested on October 1, 2021.On January 18, 2021, the Company’s Equity Incentive Plan was amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under thePlan to 4,000,000 shares. The same date, the Compensation Committee granted an aggregate of 3,600,000 restricted shares of common stock pursuant to the Equity Incentive Plan. Of thetotal 3,600,000 shares issued, 1,400,000 shares were granted to the non-executive members of the board of directors, 950,000 were granted to the executive officers, 1,100,000 shares weregranted to certain of the Company’s non-executive employees and 150,000 shares were granted to the sole director of the Company’s commercial manager, a non-employee. The fair valueof each share on the grant date was $0.81. 1,200,030 shares vested on the grant date, 1,199,985 shares vested on October 1, 2021 and 1,199,985 shares will vest on October 1, 2022.On August 2, 2021, the Company’s Equity Incentive Plan was amended and restated to increase the aggregate number of shares of the common stock reserved for issuance under thePlan to 3,500,000 shares. The same date, the Compensation Committee granted an aggregate of 3,100,000 restricted shares of common stock pursuant to the Equity Incentive Plan. Of thetotal 3,100,000 shares issued, 1,300,000 shares were granted to the non-executive members of the board of directors, 885,000 were granted to the executive officers, 790,000 shares weregranted to certain of the Company’s non-executive employees and 125,000 shares were granted to the sole director of the Company’s commercial manager, a non-employee and anothernon-employee. The fair value of each share on the grant date was $1.02. 1,033,352 shares vested on the grant date, 1,033,324 shares vested on October 1, 2021 and 1,033,324 shares willvest on October 1, 2022.F-45Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)The related expense for shares granted to the Company’s board of directors and certain of its employees for the years ended December 31, 2021, 2020 and 2019, amounted to $4,907, $826and $1,295, respectively, and is included under general and administration expenses. The related expense for shares granted to non-employees for the years ended December 31, 2021,2020 and 2019, amounted to $190, $43 and $15, respectively, and is included under voyage expenses.Restricted shares during 2021, 2020 and 2019 are analyzed as follows: Number ofShares WeightedAverageGrantDate Price Outstanding at December 31, 2018 2,157 $261.60 Granted 9,000 146.40 Vested (8,156) 112.32 Forfeited (20) 146.40 Outstanding at December 31, 2019 2,981 $133.76 Granted 156,250 5.12 Vested (107,139) 5.23 Forfeited (28) 5.12 Outstanding at December 31, 2020 52,064 $2.48 Granted 6,700,000 0.91 Vested (4,518,774) 0.96 Forfeited - - Outstanding at December 31, 2021 2,233,290 $0.79 The unrecognized cost for the non-vested shares granted to the Company’s board of directors and certain of its employees as of December 31, 2021 and 2020 amounted to $1,106 and$119, respectively. On December 31, 2021, the weighted-average period over which the total compensation cost related to non-vested awards granted to the Company’s board of directorsand its other employees not yet recognized is expected to be recognized is 0.75 years. 14.Subsequent EventsOn January 12, 2022, the Company’s Equity Incentive Plan, as previously amended, was further amended and restated to increase the aggregate number of shares of the common stockreserved for issuance under the Plan to 5,500,000 shares. The same date, the Compensation Committee granted an aggregate of 5,337,000 restricted shares of common stock pursuant tothe Equity Incentive Plan. Of the total 5,337,000 shares issued, 1,600,000 shares were granted to the non-executive members of the board of directors, 1,700,000 were granted to theexecutive officers, 1,887,000 shares were granted to certain of the Company’s non-executive employees and 150,000 shares were granted to the sole director of the Company’s commercialmanager, a non-employee. The fair value of each share on the grant date was $0.91. 1,779,028 shares vested on the grant date, 1,778,986 shares will vest on October 1, 2022 and 1,778,986shares will vest on October 1, 2023.On January 26, 2022, the Company voluntarily prepaid $5,000 of the outstanding balance of the Second JDH Note using cash on hand (Note 7). In connection with this prepayment theCompany’s cash sweep obligations for 2022 under the JDH Loans and JDH Notes were waived pursuant to a waiver letter signed on January 19, 2022.On January 26, 2022, the Company received written notification from Nasdaq, indicating that because the closing bid price of the Company’s common stock for 30 consecutive businessdays, from December 13, 2021 to January 25, 2022, was below the minimum $1.00 per share bid price requirement for continued listing on the Nasdaq Capital Market, the Company wasnot in compliance with Nasdaq Listing Rule 5550(a)(2). On February 14, 2022, the Company received written notification from Nasdaq that the Company has regained compliance withNasdaq Listing Rule 5550(a)(2) concerning the minimum bid price of the Company’s common stock.F-46Table of ContentsSeanergy Maritime Holdings Corp.Notes To The Consolidated Financial Statements(All amounts in footnotes in thousands of US Dollars, except for share and per share and warrants data, unless otherwise stated)On February 28, 2022, the Company voluntarily prepaid the remaining balance of $1,850 of the Second JDH Loan using cash on hand. All obligations under the Second JDH Loan wereirrevocably and unconditionally discharged pursuant to the deed of release dated February 28, 2022.On February 28, 2022, ATB entered into a deed of release with respect to the Partnership resulting in a complete release of the facility agreement after full settlement of the outstandingbalance of $15,129 of the February 2019 ATB Loan Facility.On March 9, 2022, the Company entered into a sale and leaseback transaction with Chugoku Bank, Ltd. to refinance the vessel which was previously financed by the February 2019 ATBLoan Facility and the Second JDH Loan secured by the Partnership through first and second priority mortgages respectively. The Company sold and chartered back the vessel fromChugoku Bank on a bareboat basis. The financing amount is $21,300 and the interest rate is 2.9% plus SOFR per annum. The principal will be repaid over an eight-year term, through 32quarterly installments averaging at approximately $590 and a balloon payment of $2,388 at the expiration of the bareboat. Following the second anniversary of the bareboat charter, theCompany has continuous options to repurchase the vessel.On March 10, 2022, the Company voluntarily prepaid another $5,000 of the outstanding balance of the Second JDH Note using cash on hand (Note 7).On March 10, 2022, the Company announced a regular quarterly dividend of $0.025 per share as well as a special dividend of $0.025 per share for the fourth quarter of 2021, both payablein the first week of April 2022 to all shareholders of record as of March 25, 2022.F-47

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